Flex Ltd. (NASDAQ:FLEX) reported its third-quarter fiscal 2026 results on Wednesday, revealing net sales of $7.058 billion, an 8% increase compared to the prior year, exceeding company guidance. Despite the positive results, the stock was trading lower following the announcement.
Sales of $7.058 billion beat the analyst estimate of $6.844 billion, and adjusted EPS reached a record 87 cents, beating the analyst estimate of 79 cents.
The company posted record GAAP and adjusted operating margins of 5.5% and 6.5%, respectively. GAAP earnings per share (EPS) were 64 cents. Operating income for the quarter was $389 million, and net income was $239 million.
Flex’s non-GAAP operating income was $460 million, reflecting a margin of 6.5%. Adjusted net income was $326 million, and free cash flow was $275 million. The company’s cash flow from operations was $420 million.
Flex also reported a solid cash position, ending the quarter with $3.06 billion in cash and cash equivalents, while long-term debt stood at $3.76 billion.
The company faces macroeconomic risks, including inflationary pressures, currency volatility, and geopolitical tensions, such as the ongoing conflict between Russia and Ukraine.
These factors may impact operations, particularly in Flex’s Ukraine facility, where a missile strike in August 2025 caused significant damage and disrupted normal operations.
The company said it continues to see strong momentum in its data center business, driven by growing demand for next-generation AI power, computing and cooling solutions from major customers and technology partners.
Growth also continued across Medical Devices, Medical Equipment, Core Industrial and Networking segments, reflecting the strength of its diversified portfolio. The Automotive business showed signs of stabilization.
Outlook
Looking ahead, Flex expects fourth-quarter fiscal 2026 net sales of $6.75 billion to $7.05 billion, with adjusted EPS of 83 cents to 89 cents. This guidance is slightly below analyst estimates of $6.896 billion in sales and 85 cents for adjusted EPS.
For fiscal 2026, Flex raised its adjusted EPS guidance from $3.09-$3.17 to $3.21-$3.27, surpassing the analyst estimate of $3.15. The sales guidance was also raised to a range of $27.2 billion to $27.5 billion, in line with analysts’ expectations of $27.119 billion.
The segment outlook calls for mid-single-digit growth in both Reliability Solutions and Agility Solutions, supported by rising data center power needs and steady cloud momentum, even as consumer device demand stays weak.
Revathi Advaithi, CEO of Flex, stated, “Our strong performance continued in the third quarter, with results exceeding our guidance across all metrics. This performance reflects the strength of our diversified business model across industries, including Data Center. As we look ahead, we are confident in our ability to serve as a strategic enabler for our customers as they navigate an increasingly complex and dynamic world.”
FLEX Price Action: Flex shares reversed earlier gains and were down 13.85% at $56.85 in Wednesday trading at the time of publication, according to Benzinga Pro data.
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