Fabrinet Q2 2022 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : A quick question. So first on a clarification, I think you mentioned you expect the operating margins -- which, by the way, congrats on the strong gross margin and operating margin this quarter. Do you expect them to sort of come back in a bit and you said longer term? But I just want to clarify, are you saying those come back more in line with your historical levels from the third quarter itself? Or maybe if you can just clarify that comment for me first.

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Got it. Got it. Okay. So that leads me to my question essentially on the gross margin, I mean you had really strong gross margin this quarter. That is despite all the supply headwinds you're navigating through. How should we think about sustainability of these kind of gross margins, particularly as the volume leverage seems to be quite well assured as you'll continue to kind of benefit from the strong demand, as you've talked about?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Okay. And I don't know if you guys will allow me to squeeze in one more here. But like as we look at the first 3 quarters here, particularly with your guidance for March, you're doing above 20% year-on-year growth, which is a step function up from the 15% growth that you did in fiscal '21. Clearly looks like we are sort of going through a high point in the cycle in terms of optical. So maybe if you can share your thoughts, particularly as you now think about the capacity expansion and the capacity coming through as well, how sustainable are these sort of 20%-plus growth levels and in terms of what you're hearing from your customers? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2022 / 10:00PM, FN.N - Q2 2022 Fabrinet Earnings Call