PLEXUS CORP Q4 FY2026 earnings call

• Record Financial Performance: Fiscal 2026 revenue reached ~$5 billion (up 23% YoY), with Q4 revenue hitting a record $1.43 billion (up 35% YoY). Non-GAAP operating margin improved to 6.2% for FY2026 and 6.7% in Q4, exceeding guidance.
• Strong Win Rate and Funnel Growth: Secured nearly $1.2 billion in new manufacturing wins for FY2026. The funnel of qualified opportunities expanded 33% YoY to a record $4.9 billion, driven by Aerospace/Defense ($490M wins) and Industrial ($126M wins).
• Operational Excellence Awards: Received Supplier Excellence Award from Eaton (top 30 of 30,000 suppliers), Lean Manufacturing Excellence Award from GE Vernova, and Manufacturing Business of the Year from Scottish Borders Business Excellence Awards.
• Sustainability and Community: Reduced Scope 1 and 2 GHG emissions by >50% vs. FY2023 baseline. Donated ~35,000 volunteer hours and $1.5 million via the Plexus Community Foundation.
• Efficiency Gains: Achieved >10% gain in equipment efficiency and ~20% expansion in revenue per team member over two years through automation and continuous improvement culture.

The transcript does not provide a breakdown of financial performance by specific product segment (e.g., Aerospace, Healthcare, Industrial) in terms of absolute revenue figures or revenue contribution percentages for the fiscal year. It reports consolidated total revenue of approximately $5 billion for Fiscal 2026 (up 23% YoY) and $1.43 billion for the Q4 (up 35% YoY). While operational highlights discuss growth rates within sectors (Aerospace/Defense +23%, Healthcare Life Sciences +19%, Industrial +27%), no absolute dollar values or % revenue mix are provided for these segments.

• Q1 FY2027 Revenue: Guided at $1.41–$1.46 billion (midpoint up 34% YoY, +1% sequentially).
• Q1 FY2027 Operating Margin: Non-GAAP operating margin guided at 6.0%–6.4% (midpoint up 40 bps YoY).
• Q1 FY2027 EPS: Non-GAAP diluted EPS guided at $2.46–$2.62.
• FY2027 Revenue Growth: Raised forecast to mid-to-upper teens growth (previously lower), driven by strong end-market demand and program ramps.
• FY2027 Operating Margin: New goal set at 6.5%–7.0% (up from previous 6% goal), supported by revenue leverage and efficiency dividends.
• FY2027 Free Cash Flow: Forecast to exceed $100 million.
• FY2027 Gross Margin: Expected to remain stable at approximately 10%.
• FY2027 Tax Rate: Non-GAAP effective tax rate expected between 16% and 18%.
• Cash Cycle: FY2027 cash cycle expected in the low-to-mid 60s days.

• Working Capital Usage: Forecasted use of free cash flow in Q1 FY2027 due to timing of working capital investments and annual incentive compensation payments.
• Demand Normalization: Industrial sector faces demand normalization, particularly in communications, which may offset semi-cap strength in Q1.
• Cyclicality: Semiconductor capital equipment (semi-cap) is cyclical; management maintains a conservative approach regarding long-term sustainability despite current strength.
• Material Availability: Materials environment remains challenging, though risks are contemplated in forecasts.
• Commercial Aerospace Lag: Commercial aerospace demand has not yet fully recovered to potential levels, specifically waiting on Boeing's supply chain flow-through.

Q: Patrick Muth (Needham) asked if demand acceleration was driven by customer forecast increases or pulling orders forward, and how sensitive Semicap growth is to wafer fabrication equipment (WFE) moderation.

A: Oliver Mihm noted that customer demand increases form a substantial part of the outlook, with material risks already factored into forecasts. Todd Kelsey added that Semicap growth (up 50% YoY) is driven by both end-market demand and significant share gains made during the downturn, which continue in the upcycle. Management expects to outperform WFE growth trends even if the market moderates, citing historical resilience and current share capture.