Plexus Corp. Q1 FY2026 earnings call

Management Statement and Operational Highlights

• Plexus achieved significant momentum with strong year-over-year revenue growth in Q1 2026, meeting the midpoint of revenue guidance and having potential to exceed the 9%-12% goal for fiscal 2026.
• Secured 22 new manufacturing programs worth $283 million in annualized revenue, with a record $220 million from Aerospace and Defense.
• Demonstrated commitment to responsible innovation, with Penang, Malaysia team recognized for workplace awards and reducing environmental impact.
• Voluntary Time Off charitable giving program saw donations to 24 global charities.

Segment Performance

• Aerospace and Defense: Fiscal first quarter revenue increased 3% sequentially. Fiscal second quarter expected to be up mid-single digits. Fiscal first quarter wins were $220 million. Anticipated 2026 revenue growth to exceed the 9%-12% goal.
• Healthcare/Life Sciences: Fiscal first quarter revenue increased 10% sequentially. Fiscal second quarter expected flat to up low single digits. Fiscal first quarter wins of $40 million.
• Industrial: Fiscal first quarter revenue declined 8% sequentially. Fiscal second quarter expected high single to low double-digit increase. Fiscal first quarter wins of $23 million. Funnel of qualified manufacturing opportunities at $3.6 billion.

Guidance

• Fiscal second quarter revenue guided $1.11 billion to $1.15 billion (6% sequential, 15% year-over-year at midpoint).
• Non-GAAP operating margin guided 5.6%-6.0%, non-GAAP EPS $1.80-$1.95.
• Fiscal 2026 potential to meet/exceed the 9%-12% revenue growth goal.
• Expected free cash flow of approximately $100 million for fiscal 2026.
• Capital spending for fiscal 2026 now expected $100 million-$120 million.

Risks

• Supply chain lead time issues could impact program ramps and working capital.
• Seasonal factors and variable compensation expenses may affect margins.
• Global economic and market conditions could impact end market demand and revenue growth.

Question and Answer

• Q: What's changed over the last 3-6 months driving success? A: Todd Kelsey stated it's a combination of strong program wins and improved end markets, including semicap and Healthcare, with some Aerospace and Defense subsectors showing improvement.
• Q: How long for semicap demand to translate to revenue? A: Todd Kelsey said demand increases show up in 1-2 quarters; capital/footprint changes take longer.
• Q: Quantify Malaysia facility margin impact and outlook? A: Patrick Jermain said minimal headwind in Q1, close to breakeven in Q2, with Thailand facility expected to benefit margins 25-30 basis points.
• Q: Impact of seasonal bonus on Q2 margins? A: Patrick Jermain said ~50-60 basis points headwind, offset by productivity improvements and revenue growth.
• Q: Robotics program win in Industrial? A: Oliver Mihm said the customer is not new, but new region win with further opportunities in funnel.