Flex Q4 Earnings & Revenues Surpass Estimates, Rise Y/Y, Stock Up

Flex Ltd. FLEX reported fourth-quarter fiscal 2025 adjusted earnings per share (EPS) of 73 cents, which surpassed the Zacks Consensus Estimate by 5.8%. The bottom line compared favorably with 57 cents posted in the prior-year quarter.

Revenues increased 3.7% year over year to $6.4 billion. Also, it beat the consensus mark by 2.7%. The uptick was driven by strong demand across its data center, networking and automotive power electronics.

For fiscal 2026, the company anticipates sustained strong demand from its data center customers as it continues to shift its portfolio toward higher-margin businesses.

In response to the better-than-anticipated results, shares jumped 3.2% and closed the session at $37.95 on May 7, 2025. In the past year, the stock has surged 32.2% against the Zacks Electronics - Miscellaneous Products industry’s decline of 52.5%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Segment Details

The Flex Reliability Solutions Group encompasses Health Solutions, Automotive and Industrial businesses. Revenues fell 1.3% to $2.9 billion, due to challenges in the core industrial and renewables, partially offset by sustained strength in power.

The Flex Agility Solutions Group comprises Communications & Enterprise Compute or CEC and Lifestyle and Consumer Devices businesses. Revenues were up 8.2% to $3.5 billion. This uptick was driven by robust cloud and networking share gains offset by weakness in enterprise IT and consumer-related markets.

FLEX’s Operating Details

Management highlighted ongoing margin expansion, which was driven by a favorable mix and increased efficiency across both its business units.

Non-GAAP gross margin expanded 80 basis points (bps) year over year to 9.4% in the reported quarter.

Non-GAAP operating income came in at $396 million, up 19% year over year. Non-GAAP operating margin expanded 80 bps to 6.2%. This was fueled by robust gross margin performance and sustained cost efficiency.

Flex Ltd. Price, Consensus and EPS Surprise

Flex Ltd. price-consensus-eps-surprise-chart | Flex Ltd. Quote

The adjusted operating margins of the Flex Reliability Solutions Group were 6.2%, up 40 bps from the prior-year level. The adjusted operating margins of the Flex Agility Solutions Group improved 100 bps to 6.6%.

Selling, general & administrative expenses totaled $234 million, down 10.3% year over year.

Balance Sheet & Cash Flow

As of March 31, 2025, cash & cash equivalents and long-term debt (net of current portion) were $2.29 billion and $2.48 billion, respectively, compared with $2.47 billion and $3.26 billion a year ago.

The company generated a fourth-quarter fiscal 2025 cash flow from operating activities of $433 million and an adjusted free cash flow of $325 million.

In the quarter, the company repurchased $299 million worth of stock, amounting to nearly 8 million shares. As of March 31, 2025, FLEX repurchased shares worth $1.3 billion.

Outlook

For the first quarter of fiscal 2026, Flex expects revenues to be between $6 billion and $6.5 billion.

Management expects adjusted earnings of 58-66 cents per share, excluding 7 cents for net stock-based compensation expense and 5 cents for net intangible amortization. Adjusted operating income is projected to be between $330 million and $370 million.

For the Reliability Solutions business, management forecasts sales to remain flat to down high-single digits owing to weakness in the automotive sector, due to tariff-related disruptions adversely impacting customer volumes. Agility Solutions’ revenues are anticipated to be down by low-single digits to up mid-single digits, with steady growth expected in cloud markets, balanced against softer enterprise, IT and consumer-related end markets.

For fiscal 2026, Flex expects revenues to be between $25 billion and $26.8 billion. In fiscal 2025, Flex’s revenues totaled $25.8 billion, down 2.3% year over year.
For fiscal 2026, it anticipates adjusted earnings in the range of $2.81-$3.01 per share. In fiscal 2025, Flex’s adjusted earnings were $2.65 per share, up 23.3% year over year.

Reliability Solutions revenues are expected to range from down to up mid-single digits. Strong data center power demand continues to support Industrial, offset by softness in renewables and core industrial markets. Health Solutions remains steady with sustained medical device demand and a projected recovery in medical equipment by late fiscal 2026. In Automotive, broader demand trends and evolving tariff developments pose ongoing uncertainties.

Agility Solutions revenues are projected to range from down low-single digits to up mid-single digits. CEC is supported by strong cloud demand and networking share gains. Lifestyle is benefiting from a new strategic manufacturing partnership, though indirect tariff exposure may affect consumer sentiment. Consumer Devices is expected to face softer demand due to ongoing tariff uncertainty.

FLEX’s Zacks Rank

Flex currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies in the Broader Space

Infosys INFY ended fiscal 2025 on a mixed note, with its fourth-quarter earnings surpassing the Zacks Consensus Estimate while revenues fell short of the same. For the quarter, the company reported earnings of 20 cents per share, beating the consensus mark by a penny. However, Infosys’ bottom line registered a year-over-year decline of 15.3%.

In the past year, shares of INFY have gained 3.7%.

Microsoft MSFT reported third-quarter fiscal 2025 earnings of $3.46 per share, which beat the Zacks Consensus Estimate by 8.13% and increased 17.7% on a year-over-year basis. Revenues of $70.06 billion jumped 13.3% year over year and beat the Zacks Consensus Estimate by 2.46%.

In the past six months, shares of MSFT have inched up 3.7%.

ServiceNow NOW reported first-quarter 2025 adjusted earnings of $4.04 per share, which beat the Zacks Consensus Estimate by 6.60% and increased 18.5% year over year. NOW’s revenues of $3.09 billion surpassed the consensus mark by 0.18% and increased 18.6% year over year.

Shares of NOW have soared 36% in the past year.

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