Flex reported second-quarter fiscal 2027 sales of $8.5 billion, up 25% from a year earlier, with record adjusted earnings per share of $1.18. The company also gave third-quarter forecasts and raised its full-year sales outlook, while advancing plans to separate its Cloud and Power Infrastructure business under the Axiom name.
CEO Revathi Advaithi said the acquisition of EPC Power strengthens Flex’s power portfolio and is expected to add to earnings in fiscal 2027. Flex did not provide transaction value or further details on the planned spin-off in the announcement.
Second-quarter results
- Sales were $8.5 billion, up 25% year over year.
- GAAP operating income was $414 million, with a 4.9% operating margin. On an adjusted basis, operating income was $607 million and the margin was 7.1%.
- GAAP net income was $263 million, or $0.70 per share. Adjusted net income was $443 million, or a record $1.18 per share.
- Cash from operating activities was $501 million; free cash flow was $261 million.
Outlook
- For the third quarter, Flex forecast sales of $8.87 billion to $9.17 billion, representing 28% growth at the midpoint.
- The company projected third-quarter adjusted operating income of $685 million to $715 million and adjusted EPS of $1.19 to $1.25. The EPS range implies 40% growth at the midpoint.
- Other third-quarter assumptions include about $120 million in interest and other expense, a 21% adjusted tax rate, and approximately 375 million weighted-average shares.
- Flex’s updated fiscal 2027 sales outlook is $34.9 billion to $35.9 billion, or 27% growth at the midpoint.
Business changes
- Flex is proceeding with plans to spin off its Cloud and Power Infrastructure segment. The company has unveiled Axiom as the name for the planned business and said anticipated leadership announcements mark another step toward creating two focused companies.
- Flex said its acquisition of EPC Power completes more of its end-to-end power portfolio and is expected to be immediately accretive in fiscal 2027.
The results show higher sales alongside a wider gap between GAAP and adjusted operating income and EPS. The announced separation would divide Flex’s operations into two companies, while the EPC Power acquisition adds to the power business that is part of the company’s strategic focus.