Flex Ltd. Q3 FY2026 earnings call

• Revathi noted the company had an exceptional quarter with revenue at $7.1 billion, up 8% y/y, adjusted operating margin 6.5%, and adjusted EPS $0.87, up 13%. • Data center growth driven by AI workloads, with Flex's holistic approach in compute integration, cooling, and power resonating. Milestones included partnership with NVIDIA, LG, and deployment of advanced liquid cooling. • Beyond data centers, health solutions saw strong medical device demand, core industrial had productivity-driven areas like warehouse automation, and high-performance networking/satellite comm products were strong. • Kevin detailed financials: revenue $7.1B, up 8% y/y; adjusted gross profit $690M, margin 9.8%; adjusted operating profit $460M, margin 6.5%; adjusted EPS $0.87, up 13%. Cash flow $275M, net CapEx $145M, share repurchases $200M.

Reliability Solutions: Revenue totaled $3.2 billion, up 10% year-over-year. Adjusted operating income improved to $233 million, and adjusted operating margin was 7.2%, up 50 basis points year-over-year. Agility Solutions: Revenue totaled $3.8 billion, up 6% from the previous year. Adjusted operating income was $239 million, and adjusted operating margin for the segment was 6.3%, unchanged from a strong quarter in Q3 last year.

• Full-year Reliability Solutions expected mid-single digit revenue growth. Agility Solutions expected mid-single digit revenue growth. • Fourth quarter: Reliability Solutions expected low double digits to mid-teens growth; Agility Solutions expected low to mid-single digits. • Fiscal 2026 revised guidance: revenue $27.2B-$27.5B (midpoint $350M higher), adjusted operating margin ~6.3%, adjusted EPS $3.21-$3.27 (midpoint up $0.11), free cash flow conversion 80% plus.

Q: Ruplu Bhattacharya asked about where the bigger opportunity is in data center, power or compute, and Flex's investments.

A: Revathi said both power and compute growing strongly, this year more in power, next year more in compute capacity due to AI programs.

Q: Ruplu followed up on operating margin ceiling and portfolio focus.

A: Kevin said underlying business units continue to drive margin improvement with mix impacts; Revathi said focus on shifting mix to high return/growth areas, with more on margin guide at Investor Day.

Q: Samik Chatterjee asked about differentiating Embedded Power and Critical Power.

A: Revathi said Critical power on schedule management, Embedded power on 800-volt DC and large megawatt deployments with few competitors.

Q: Samik followed up on Agility's softness.

A: Revathi said data center growth on track, agility growth from data center-supported infrastructure like networking, offset by consumer end markets.

Q: Mark Delaney asked about Amazon warrant deal.

A: Kevin said warrants not materially incremental to FY 2026; Revathi said growth with AWS strong as expected.

Q: Mark asked about reliability margins.

A: Kevin said strong margins from power mix, core industrial performance.

Q: Steven Fox followed up on reliability margins.

A: Kevin said Q3 margins from power improvement, core industrial performance.

Q: Steven asked about US manufacturing retreat.

A: Revathi said not seeing retreat, investments in US manufacturing ongoing.

Q: Jacob Moore asked about automotive stabilization.

A: Revathi said stabilization from platform clarity, automotive growth from software-defined compute platforms.

Q: Jacob asked about memory prices.

A: Revathi said memory allocation baked into forecast, no significant effect on consumer end markets as they're soft already.