FabrinetFN

Fabrinet Leases Disclosure

10-KFiled Aug 19, 20252 min read
Leases
The Company leases facilities under non-cancelable operating lease agreements. The Company leases a portion of its capital equipment and vehicles, certain land and buildings for its facilities in Thailand, the Cayman Islands, the PRC, the U.S., Israel and Singapore under operating lease arrangements that expire at various dates through 2034. Certain of these lease arrangements provide the Company the ability to extend the lease term following the expiration of the current term. However, the Company has excluded all lease extension options from its right of use (“ROU”) assets and lease liabilities as the Company is not reasonably assured that it will exercise these options. None of the lease agreements contain residual value guarantees provided by the lessee.
Operating leases
As of June 27, 2025, the maturities of the Company’s operating lease liabilities were as follows:
(in thousands)
2026$2,082 
20271,323 
2028838 
2029796 
2030440 
Thereafter979 
Total undiscounted lease payments6,458 
Less: imputed interest(987)
Total present value of lease liabilities$5,471 
(1)
(1)Includes current portion of operating lease liabilities of $1.8 million.
Rental expense related to the Company’s operating leases is recognized on a straight-line basis over the lease term.
Rental expense for long-term leases for the years ended June 27, 2025, June 28, 2024 and June 30, 2023 was $1.9 million, $2.4 million and $2.4 million, respectively.
Rental expense for short-term leases for the years ended June 27, 2025, June 28, 2024 and June 30, 2023 was $0.3 million, $0.9 million and $0.8 million, respectively.
The following summarizes additional information related to the Company’s operating leases:
As of June 27, 2025As of June 28, 2024
Weighted-average remaining lease term (in years)5.55.6
Weighted-average discount rate6.6 %5.6 %
The following information represents supplemental disclosure for the statement of cash flows related to operating leases:
(in thousands)Year Ended June 27, 2025Year Ended June 28, 2024Year Ended June 30, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$1,979 $3,027 $2,477 
Financing cash flows from finance leases$— $— $9 
ROU assets obtained in exchange for lease liabilities$2,015 $5,797 $312 
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Historical Timeline

Fiscal YearFiled
2025Aug 19, 2025Showing above
2024Aug 20, 2024
2023Aug 22, 2023
2022Aug 16, 2022
2021Aug 17, 2021
2020Aug 18, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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