Fabrinet’s FN optical communications business reported revenues of $833 million in the second quarter of fiscal 2026, up 29% year over year and an 11% increase on a sequential basis. This segment is the largest part of Fabrinet’s business and the primary driver that helped total revenues reach a record of $1.13 billion.
The telecom business was the biggest driver, with revenues reaching $554 million, up 59% year over year and 17% sequentially. Fabrinet is witnessing strong growth from data center interconnect ("DCI") products, which generated revenues of $142 million. Revenues surged 42% year over year, driven by higher shipments of advanced optical modules like 400ZR and 800ZR. These modules help transfer huge amounts of data between data centers at high speeds, which is increasingly needed for cloud services and AI.
The datacom business improved in the second quarter of fiscal 2026, as revenues increased 2% on a sequential basis, reaching $278 million. Demand remains solid because the company is shipping large volumes of high-speed transceivers essential for large-scale data centers. Fabrinet expects this segment to keep growing gradually in the upcoming quarters.
Looking ahead, Fabrinet expects both telecom and datacom end-markets to grow again in the third quarter of fiscal 2026, backed by strong demand in optical products. The Zacks Consensus Estimate for fiscal 2026 revenues is currently pegged at $4.55 billion, which indicates a year-over-year increase of 33.1%.