PLXS

Looking back on electronic components & manufacturing stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Plexus (NASDAQ:PLXS) and its peers. The sector could see higher demand as the prevalence of advanced electronics increases in industries such as automotive, healthcare, aerospace, and computing. The high-performance components and contract manufacturing expertise required for autonomous vehicles and cloud computing datacenters, for instance, will benefit companies in the space. However, headwinds include geopolitical risks, particularly U.S.-China trade tensions that could disrupt component sourcing and production as the Trump administration takes an increasingly antagonizing stance on foreign relations. Additionally, stringent environmental regulations on e-waste and emissions could force the industry to pivot in potentially costly ways. The 10 electronic components & manufacturing stocks we track reported an exceptional Q2. As a group, revenues beat analysts’ consensus estimates by 4% while next quarter’s revenue guidance was 6% above. While some electronic components & manufacturing stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.3% since the latest earnings results. With over 20,000 team members across 26 global facilities, Plexus (NASDAQ:PLXS) designs, manufactures, and services complex electronic products for companies in aerospace/defense, healthcare, and industrial sectors. Plexus reported revenues of $1.30 billion, up 28.1% year on year. This print exceeded analysts’ expectations by 5.8%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ EPS guidance for next quarter estimates and revenue guidance for next quarter exceeding analysts’ expectations. Todd Kelsey, President and Chief Executive Officer, commented, “Plexus generated record quarterly revenue in the fiscal third quarter by capturing strengthening end market demand and successfully launching numerous new programs. Fiscal third quarter revenue of $1.305 billion exceeded guidance, increasing 12% sequentially and 28% year over year. In addition, non-GAAP operating margin of 6.3% met the high end of guidance, non-GAAP EPS of $2.32 exceeded guidance and we again delivered healthy working capital efficiency.” Interestingly, the stock is up 2% since reporting and currently trades at $245.34. We think Plexus is a good business, but is it a buy today? Read our full report here, it’s free. With over 90 years of connecting the world's technologies, Amphenol (NYSE:APH) designs and manufactures connectors, cables, sensors, and interconnect systems that enable electrical and electronic connections across virtually every industry. Amphenol reported revenues of $8.76 billion, up 55% year on year, outperforming analysts’ expectations by 5.6%. The business had an incredible quarter with revenue guidance for next quarter exceeding analysts’ expectations. Amphenol achieved the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 11.7% since reporting. It currently trades at $160.69. Is now the time to buy Amphenol? Access our full analysis of the earnings results here, it’s free. With roots dating back to 1832, making it one of America's oldest continuously operating companies, Rogers (NYSE:ROG) designs and manufactures specialized engineered materials and components used in electric vehicles, telecommunications, renewable energy, and other high-performance applications. Rogers reported revenues of $216.8 million, up 6.9% year on year, exceeding analysts’ expectations by 0.8%. Still, it was a mixed quarter as it posted a significant miss of analysts’ EPS estimates. Rogers delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Interestingly, the stock is up 8.5% since the results and currently trades at $129.33. Read our full analysis of Rogers’s results here. Created through the 2022 rebranding of II-VI Incorporated, a company with roots dating back to 1971, Coherent (NYSE:COHR) develops and manufactures advanced materials, lasers, and optical components for applications ranging from telecommunications to industrial manufacturing. Coherent reported revenues of $2.05 billion, up 33.7% year on year. This result beat analysts’ expectations by 2.9%. Overall, it was an exceptional quarter as it also recorded a solid beat of analysts’ EPS guidance for next quarter estimates and revenue guidance for next quarter exceeding analysts’ expectations. The stock is down 18.2% since reporting and currently trades at $290.92. Read our full, actionable report on Coherent here, it’s free. With roots dating back to 1946 and a focus on components that must perform flawlessly in critical situations, Knowles (NYSE:KN) designs and manufactures specialized electronic components like high-performance capacitors, microphones, and speakers for medical technology, defense, and industrial applications. Knowles reported revenues of $166.8 million, up 14.3% year on year. This number topped analysts’ expectations by 6.3%. It was a stunning quarter as it also put up a solid beat of analysts’ EPS guidance for next quarter estimates and revenue guidance for next quarter exceeding analysts’ expectations. Knowles pulled off the biggest analyst estimate beat in the group. The stock is down 10% since reporting and currently trades at $34.95. Read our full, actionable report on Knowles here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

It has been about a month since the last earnings report for Plexus (PLXS). Shares have added about 1.4% in that time frame, underperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Plexus due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts. Plexus reported third-quarter fiscal 2026 adjusted earnings per share (EPS) of $2.32 compared with the year-ago quarter’s $1.90. The figure beat the Zacks Consensus Estimate of $2.10 per share. Management expected non-GAAP EPS to be in the band of $2.02-$2.18.Revenues increased 28.1% to $1.305 billion and surpassed the consensus mark of $1.228 billion by 6.3%. Management expected revenues to be between $1.2 billion and $1.25 billion. Broad end-market demand, new program ramps and Industrial strength drove the performance. In the fiscal third quarter, Plexus announced 31 manufacturing program wins, which are estimated to contribute $255 million in annualized revenues once fully ramped into production. Aerospace/Defense revenues climbed 27.1% year over year and 10% sequentially to $233 million, accounting for 18% of the total. Broad demand and strong operational execution supported revenue growth. Fiscal 2026 revenues are now projected to grow more than 20%, buoyed by defense demand, while fiscal fourth-quarter revenues are expected to be flat.  Healthcare/Life Sciences revenues increased 15% year over year and 2% sequentially to $483 million, contributing 37% of total revenues. Program ramps remained a growth driver. Fiscal 2026 revenues are projected to be in the high teens, while fiscal fourth-quarter revenues are expected to be flat.  Industrial revenues surged 42.2% year over year and 23% sequentially to $589 million. The sector represented 45% of total revenues, up from 41% in both the prior quarter and the year-ago period.Semiconductor capital equipment and broader industrial demand and program ramps supported the growth. Management expects Industrial revenues to rise in the high-single to low-double digits sequentially in the fiscal fourth quarter while overall fiscal 2026 revenues are projected to grow more than 20%.  Our estimates for revenues from the Industrial, Healthcare/Life Sciences and Aerospace/Defense were $533.1 million, $473 million and $222 million, respectively. Revenues from the Americas increased 37.2% year over year to $428 million. Asia-Pacific revenues increased 30.4% while EMEA revenues declined 6.6%.The company’s top 10 customers accounted for 55% of net revenues in the fiscal third quarter. Gross profit on a GAAP basis was up 27.2% year over year to $131.4 million. Gross margin was 10.1%, unchanged from the year-ago quarter. Selling and administrative expenses increased 41.1% from the year-ago quarter’s actuals to $70.1 million.Adjusted operating margin expanded 30 basis points to 6.3%. As of July 4, 2026, Plexus had cash & cash equivalents worth $314.1 million compared with $303.1 million as of April 4. Long-term debt and finance lease obligations, net of the current portion were $91.6 million as of July 4, 2026, compared with $91 million as of April 4. For the quarter under review, cash flows generated from operations were $25.9 million. Plexus reported a free cash outflow of $0.7 million after incurring capital expenditures of $26.6 million. The company repurchased $20.6 million worth of shares at an average price of $258.75 per share under its repurchase program in the fiscal third quarter. Out of the $100 million authorization, $21.4 million remains available. For the fiscal fourth quarter, revenues are projected between $1.33 billion and $1.38 billion. At the midpoint, the revenue outlook implies a 4% sequential rise and 28% year-over-year growth. Non-GAAP EPS is expected to be in the band of $2.47-$2.63, while adjusted operating margin is forecasted in the 6.1-6.5% range.Management now expects fiscal 2026 revenue growth above 20% and adjusted operating margin greater than 6%. Fiscal 2027 revenue growth is expected to exceed the 9-12% goal, alongside further margin expansion.The stronger outlook also requires more working capital investments. Management now anticipates fiscal 2026 free cash flow usage.  Earlier, Plexus projected free cash flow to be $50-$75 million for fiscal 2026. The company expects to return to meaningful free cash flow generation early in fiscal 2027 In the past month, investors have witnessed a upward trend in estimates review. The consensus estimate has shifted 60.95% due to these changes. At this time, Plexus has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Plexus has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. Plexus is part of the Zacks Electronics - Manufacturing Services industry. Over the past month, Sanmina (SANM), a stock from the same industry, has gained 10.8%. The company reported its results for the quarter ended June 2026 more than a month ago. Sanmina reported revenues of $3.46 billion in the last reported quarter, representing a year-over-year change of +69.7%. EPS of $3.31 for the same period compares with $1.53 a year ago. Sanmina is expected to post earnings of $3.20 per share for the current quarter, representing a year-over-year change of +91.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged. Sanmina has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Plexus Corp. (PLXS) : Free Stock Analysis Report Sanmina Corporation (SANM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Plexus (PLXS) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company. Analysts' growing optimism on the earnings prospects of this electronic manufacturing services company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. For Plexus, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The company is expected to earn $2.44 per share for the current quarter, which represents a year-over-year change of +14.0%. Over the last 30 days, two estimates have moved higher for Plexus compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 62.14%. For the full year, the earnings estimate of $8.51 per share represents a change of +14.5% from the year-ago number. In terms of estimate revisions, the trend for the current year also appears quite encouraging for Plexus. Over the past month, two estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 12.55%. Thanks to promising estimate revisions, Plexus currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. Investors have been betting on Plexus because of its solid estimate revisions, as evident from the stock's 7% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Plexus Corp. (PLXS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 30, 2026 at 5:00 p.m. ET Vice President of Investor Relations - Shawn Harrison President and Chief Executive Officer - Todd Kelsey Senior Vice President and Chief Financial Officer - David Abuhl Operator: Good morning, everyone. Thank you for joining us for the Plexus Third Quarter Earnings Conference Call. [Operator Instructions] On the call today to answer your questions after the presentation are Todd Kelsey, President and CEO; and David Abuhl, CFO and Senior Vice President. I will now hand the conference over to Shawn Harrison, Vice President of Investor Relations. Shawn, please go ahead. Shawn Harrison: Good morning, and thank you for joining us today. Some of the statements made and information provided during our call today will be forward-looking statements, including, without limitation, those regarding revenue, gross margin, selling and administrative expense, operating margin, other income and expense, taxes, cash cycle, capital allocation and future business outlook. Forward-looking statements are not guarantees since there are inherent difficulties in predicting future results, and actual results could differ materially from those expressed or implied in the forward-looking statements. For a list of factors that could cause actual results to differ materially from those discussed, please refer to the company's periodic SEC filings, particularly the risk factors in our Form 10-K filed for the fiscal year ended September 27, 2025, and the safe harbor and fair disclosure statement in our press release. We encourage participants on the call this morning to access the live webcast and supporting materials at Plexus' website at www.plexus.com, clicking on Investors at the top of that page. Joining me today are Todd Kelsey, President and Chief Executive Officer; and David Abuhl, Senior Vice President and Chief Financial Officer. Unfortunately, Oliver Mihm, our Executive Vice President and Chief Operating Officer, is unexpectedly feeling unwell and could not make the call today. Oliver will join us on our fiscal fourth quarter call. With today's earnings call, Todd will provide summary comments before turning the call over to me and David for further details. With that, let me now turn the call over to Todd Kelsey. Todd? Todd Kelsey: Thank you, Shawn. Good morning, everyone. Earlier this week, a devastating tornado struck near our corporate headquarters, causing significant damage to our local community. Our thoughts and prayers go out to all of those impacted. Thankfully, no fatalities or missing persons were reported. There was no material impact to Plexus' operations or our headquarters. Please advance to Slide 3. Our differentiated value proposition focused on unmatched quality and delivery is creating customer success. Plexus generated record revenue in the fiscal third quarter by capturing strengthening end market demands and successfully launching numerous new programs. As a result, we see Plexus positioned to deliver more than 20% revenue growth for fiscal 2026. We anticipate Plexus will sustain this momentum and currently see the potential to generate fiscal 2027 revenue growth in excess of our 9% to 12% goal. Furthermore, we expanded our funnel of qualified manufacturing opportunities to a record level, creating the potential to sustain strong long-term revenue growth. We delivered solid operating performance with a robust 6.3% non-GAAP operating margin for our fiscal third quarter. We anticipate further strong operating results for our fiscal fourth quarter. Consequently, we expect our fiscal 2026 non-GAAP operating margin to exceed 6% and see the potential for continued operating margin expansion in fiscal 2027. Finally, our working capital efficiency remains robust while supporting accelerated revenue growth. Fiscal third quarter cash cycle exceeded our expectations and was the best in more than five years. We expect to sustain this performance into fiscal 2027 and anticipate a return to meaningful free cash flow generation. Please advance to Slide 4. With all three of our market sectors contributing better-than-expected performance, fiscal third quarter revenue of $1.305 billion exceeded our guidance range, representing a 12% sequential and a 28% year-over-year increase. Additionally, non-GAAP operating margin of 6.3% met the high end of guidance, increasing 30 basis points year-over-year on continued efficiency gains and revenue leverage. Finally, non-GAAP EPS of $2.32 exceeded our guidance range. Please advance to Slide 5. Our go-to-market team continued to drive strong performance. For the third quarter, we secured 31 new manufacturing programs with $255 million in annualized revenue when fully ramped into production. This result included an exciting new partnership in our industrial market sector supporting battery energy storage systems for data centers as well as another robust contribution from our aerospace and defense market sector of $135 million. Year-to-date, our $400 million of aerospace and defense wins represents a result more than 2x our combined fiscal 2024 and 2025 performance. This positions us for long-term secular market outgrowth. Furthermore, aerospace and defense engineering solutions wins were significant. Finally, our funnel of qualified manufacturing opportunities expanded to a record $4.5 billion in support of sustaining robust long-term revenue growth. Please advance to Slide 6. At Plexus, we are committed to advancing sustainability through our value of innovating responsibly. Our customer partnerships are central to our strategy. During our fiscal third quarter, ASM honored Plexus with its Supplier Performance Award for overall Supplier Excellence and Prism Sustainability Award for circularity. These recognitions underscore our commitment to deep customer collaboration and advancing sustainable practices across our value chain. We also continue to take proactive steps to reduce our environmental footprint. Earlier in July, we were thrilled to receive the Gold Award for renewable energy at the Positive Impact Awards in Malaysia, highlighting our dedication to renewable energy adoption and sustainable manufacturing. As of fiscal 2026, all of our Penang facilities operate on 100% renewable energy through a combination of on-site generation and purchased renewable energy. Finally, we continue to build trust through transparency. In June, we released our annual sustainability report that showcases our commitment to innovating responsibly and establishes our formal greenhouse gas emission reduction targets. I'm grateful for the continued recognition by our customers and our communities of our global team members' efforts to live our values, deliver excellence and create a lasting positive impact. Please advance to Slide 7. For our fiscal fourth quarter, we forecast continued revenue strength led by our industrial market sector. We are guiding revenue of $1.33 billion to $1.38 billion, representing 4% sequential and 28% year-over-year growth at the guidance midpoint. We are also guiding non-GAAP operating margin of 6.1% to 6.5% and non-GAAP EPS of $2.47 to $2.63. Due to success in launching numerous new programs, market share gains and support of disruptive technologies, we are driving sustained momentum and revenue growth in excess of market growth. As a result, we now anticipate generating greater than 20% revenue growth for fiscal 2026 with greater than 6% non-GAAP operating margin and disciplined working capital efficiency. Finally, our differentiated value proposition focused on providing unmatched quality and delivery is resulting in robust performance. This focus has positioned Plexus to sustain momentum for fiscal 2027 and beyond. For fiscal 2027, we currently see the potential to maintain quarterly sequential revenue expansion and generate revenue growth in excess of our 9% to 12% goal. Supporting our bullish outlook is continued strong growth from our aerospace and defense and industrial markets, including semiconductor capital equipment with continued growth in Healthcare/Life Sciences. Finally, during fiscal 2027, we anticipate delivering operating margin expansion while continuing to make important investments in talent and technology in support of future growth and operational efficiency. We also expect disciplined working capital efficiency, prudent capital expenditures and a return to meaningful free cash flow generation. I will now turn the call over to Shawn for additional analysis of the performance of our market sectors. Shawn? Shawn Harrison: Thank you, Todd. For each of our market sectors, I will discuss our fiscal third quarter performance and our expectations for our fiscal fourth quarter, provide an updated fiscal 2026 growth outlook, review the annualized revenue contribution of our quarterly wins performance and offer preliminary growth commentary for fiscal 2027. I will also provide an overview of our record funnel of qualified manufacturing opportunities. Beginning with our aerospace defense sector on Slide 8, following robust 19% sequential growth last quarter, fiscal third quarter revenue increased 10% sequentially. Growth was better than our expectation of a mid-single-digit increase. The common theme for this quarter, outstanding execution from our supply chain and operation teams helped to accelerate the capture of robust demand from multiple customers. For our fiscal fourth quarter, following three consecutive quarters of strong sequential revenue growth, we expect revenue to be approximately flat versus our fiscal third quarter and to increase more than 30% year-over-year. We anticipate a return to sequential revenue growth in our fiscal first quarter 2027. Finally, for fiscal 2026, we now expect our aerospace defense sector to deliver outstanding revenue growth of more than 20%, led by our defense and unmanned subsectors. Fiscal third quarter wins for the sector were a very strong $135 million. Our teams in Boise, Idaho, and Oradea, Romania won a secure wireless communication system with a new defense and security customer. Our ability to provide dual region support will ensure U.S. and EU regulatory compliance for the customer. Furthermore, the win helps in establishing our Oradea, Romania site as our center of defense excellence in Continental Europe. Our focus on superior customer service also led an existing customer to award our Boise team a naval submarine electronics program. As we look ahead to our fiscal 2027, we see the potential for continued robust revenue growth for our aerospace defense sector that should well exceed our 9% to 12% goal. We anticipate exceptional growth from our defense, unmanned, security and space subsectors associated with program ramps, market share gains and robust end market demand as well as continued commercial aerospace demand improvement. Please advance to Slide 9. Healthcare/Life Sciences market sector revenue increased 2% sequentially for our fiscal third quarter. The result exceeded our flat revenue growth forecast due to our successful support of program ramps and improved customer demand. For the fiscal fourth quarter, we expect approximately flat sequential revenue with delays in program ramps offsetting stronger customer demand. For fiscal 2026, we now anticipate revenue to increase in the high teens year-over-year, an excellent result and well ahead of our estimate of mid-single-digit healthcare life sciences market growth. We generated fiscal third quarter wins of $53 million. Our team in Neon, Wisconsin won a prototype build of instruments utilized in the customer's surgical robotics platform that Plexus currently supports. Next, our teams in Haining, China, and Oradea, Romania won the production of a next-generation ultrasound platform. Our long-standing relationship with this leading healthcare customer and our ability to provide global support drove the market share gain. Finally, our strong engineering relationship and long-term record of superior execution resulted in a follow-on award for our team in Penang, Malaysia to produce a market-leading patient monitoring device. As we consider fiscal 2027 for our Healthcare/Life Sciences sector, we see the potential to achieve at least mid-single-digit revenue growth against a market estimated to again grow in the mid-single digits. We expect to continue to benefit from program ramps and strong demand for surgical robotics and therapeutic and monitoring solutions. However, we expect short-term growth moderation as activity normalizes following a year of tremendous success in helping numerous customers launch new products. Advancing to the industrial sector on Slide 10. Fiscal third quarter revenue increased 23% sequentially, well ahead of our forecast for low double-digit growth. Our team's ongoing delivery of operational and supply chain excellence in support of expanding demand in our semi-cap and other industrial subsectors drove the outperformance. For the fiscal fourth quarter, we expect high single-digit to low double-digit sequential revenue growth associated with strengthening end market demand and program ramps. As a result, we now anticipate revenue for fiscal 2026 to increase by a very strong 20-plus percent. Market sector generated $67 million in wins for the fiscal third quarter. The wins included a new partnership to build battery energy storage systems used by data centers and awarding the program to our Bangkok, Thailand team, a customer valued engagement by Plexus' leadership, our transparent communication and expert technical insights. Initial production for this program is already underway. Our team in Guadalajara, Mexico also won a follow-on award for an innovative vehicle imaging and inspection system. Lastly, we see the potential for a very strong fiscal 2027 from our industrial sector with revenue growth that should well exceed our 9% to 12% goal. We expect another year of robust growth from our semi-cap sub-sector along with strong demand for industrial automation and robotics, test and measurement and energy management and storage solutions. Please advance to Slide 11 for a review of our funnel of qualified manufacturing opportunities. The funnel reached another record this quarter. For our fiscal third quarter, our funnel was $4.5 billion, an increase of 12% sequentially and 23% year-over-year or growth of more than $800 million. Within this performance, our aerospace, defense and industrial market sectors also achieved record funnels. Our differentiated value proposition, which is focused on providing unmatched quality and delivery continues to create opportunities in support of sustaining a strong and durable long-term revenue growth trajectory. I will now turn the call over to David. David? David Abuhl: Thank you, Shawn, and good morning, everyone. Our fiscal third quarter results are summarized on Slide 12. Gross margin of 10.1% was in line with our guidance. Benefits from revenue leverage and continued operational productivity gains more than offset inflationary pressures and other cost increases. Selling and administrative expense of $70.1 million was in line with guidance and included typical stock-based compensation expenses as well as those related to executive retirement. Excluding these expenses, we gained nearly 50 basis points of leverage compared to our fiscal second quarter. Our non-GAAP operating margin of 6.3% met the top end of our guidance, benefiting from leverage on revenue growth, operational efficiencies and continued cost discipline. Nonoperating expense of $4.8 million was favorable to expectations, driven by additional interest income. Non-GAAP diluted EPS of $2.32 exceeded the top end of our guidance due to higher revenue and the other items mentioned, partially offset by a tax rate at the upper end of our guidance. Turning to our cash flow and balance sheet on Slide 13. For the fiscal third quarter, we delivered $25.9 million in cash from operations and spent $26.6 million on capital expenditures, resulting in a better-than-expected free cash flow usage of just under $1 million. We repurchased $20.6 million of our stock in the quarter, and we have approximately $21 million remaining on the current repurchase authorization. As we continue to invest in our growth trajectory, we will also return cash to shareholders through our repurchase program. We will discuss our next share repurchase authorization with our Board in August. We ended the third quarter in a net cash position, and we had $172 million outstanding under our revolving credit facility with over $320 million available to borrow. Return on invested capital was 14.9% in the fiscal third quarter, which was the highest in several years and 590 basis points above our weighted average cost of capital. Despite an increase in invested capital to support our robust revenue growth, we continue to generate healthy ROIC. Now turning to cash cycle days on Slide 14. We delivered a 62-day cash cycle in the fiscal third quarter, which is the best quarterly result in over 5 years. Our team continues to drive improvements across all areas of working capital, including notable progress in days of inventory. Now let me turn to our guidance for the fiscal fourth quarter summarized on Slide 15. As Todd has already provided the revenue and EPS guidance, I will review some additional details. Fiscal fourth quarter gross margin is expected to be in the range of 10% to 10.3%. At the midpoint, gross margin will be modestly higher than the fiscal third quarter as we expect ongoing productivity improvements and leverage from higher revenue to offset investments in capabilities and IT as well as other cost increases. Our outlook for selling and administrative expense for the fiscal fourth quarter is in the range of $57.5 million to $58.5 million. We expect to gain leverage versus the prior quarter on higher revenue. Fiscal fourth quarter non-GAAP operating margin is expected to be in the range of 6.1% to 6.5%, exclusive of stock-based compensation expense. At the midpoint, Plexus would demonstrate another quarter of good progress toward our goal of consistently delivering non-GAAP operating margin at or above 6%. We also anticipate meeting this goal for fiscal 2026. As we consider fiscal 2027, we anticipate expansion in operating margin to accompany our robust revenue growth outlook. We continue to benefit from leverage on higher revenue and our prior investments in operational efficiency while concurrently making strategic investments in incremental operational efficiency, expanding our competitive moat, especially in aerospace and defense and investing in our people. We will discuss more about our fiscal 2027 outlook, including future expectations for operating margin with our fiscal fourth quarter earnings call. Nonoperating expense in the fiscal fourth quarter is anticipated to be approximately $6.3 million, up sequentially primarily due to higher interest expense. And for fiscal 2027, we would expect the quarterly run rate to be slightly higher due to higher interest expense. We are estimating a non-GAAP effective tax rate of between 12% and 14% for the fiscal fourth quarter, bringing the full fiscal year 2026 rate to between 15% and 17%. For our fiscal 2027, our preliminary view is a non-GAAP effective tax rate between 16% and 18%. In support of our accelerating revenue momentum, we continue to strategically increase our working capital investments. Yet through our focus on working capital efficiency, we still expect to end the fiscal year with cash cycle days in the low to mid-60s. We would expect to sustain this performance during fiscal 2027. Additionally, given our robust revenue outlook, we've made the decision to expand production capacity at one of our sites in Malaysia. Because of our ability to expand existing facilities, we expect to be able to deliver incremental capacity and maintain fiscal 2027 capital expenditures in a range of 2% to 3% of revenue. For fiscal 2026, our capital expenditures forecast is unchanged at $100 million to $120 million. As a result of these factors and the timing of our working capital investments, we are now forecasting free cash flow in the fiscal fourth quarter to be breakeven or a slight usage of cash. However, we would expect to return to meaningful free cash flow generation in excess of $100 million for fiscal 2027, benefiting from our sustained robust profitability, prudent capital expenditures and our focus on working capital efficiency. With that, Dara, let's open the call for questions. Operator: [Operator Instructions] Your first question comes from David Williams with Needham & Co. David Williams: Maybe first, just kind of thinking about, obviously, the outlook and your commentary is very positive as we look out into 2027. I guess as you kind of think about those trends, how should we maybe think about your capability of supply and meeting that demand next year? Are there other additional capacity expansion plans that we'll need or any other things we should be thinking about and maybe your confidence level in kind of that growth trajectory? Todd Kelsey: Yes. I would say, first of all, our confidence level in our growth trajectory that we put out there is high. Our supply chain team, and we take into account we're mindful of the tightness of the supply chain right now. And as we provide projections, whether it be for Q4 or for fiscal 2027, that has that in mind. Our team is doing a great job of managing through those, as you saw with our Q3 results and the reason why we got upside was the job that our supply chain team did in managing through that. And with respect to capacity, I mean, given the substantial growth, we're certainly pulling in our expansion plans. As David mentioned, we'll be adding additional capacity to our new site in Penang, Malaysia, which we're able to do rather efficiently. And we're, I guess, being thoughtful about other regions about when and if we need to expand within those regions. Probably the final category with regards to expansion is around people and making sure we have the right people in place. Now our efforts around efficiency have helped us in that area in that we don't need to add as many people as we would have previously needed to, to support the revenue growth, but we continue to add people. And as of right now, everything looks fine from that perspective as well, too. So I would say we feel good about the projections of exceeding our 9% to 12% revenue growth target for '27. David Williams: Okay. And then maybe just on the semi-cap equipment space and maybe the broader industrial, it sounds like everything there is improving, even maybe broadening out a bit on the demand side. How do you think about the semi-cap equipment? And as you look and talk to your customers, are your forecast and visibility, is that expanding or contracting? How do you think about maybe that just that semi-cap equipment specifically and then maybe the broader industrial as well? Shawn Harrison: David, it's Shawn. So semi-cap equipment, we're delivering robust growth this fiscal year. We anticipate robust growth next fiscal year. I think we've been pretty straightforward that we expect to outgrow WFE as we have historically based upon additional customer acquisitions as well as just market share gains that we had during the last up cycle as well as the time period that cycle flattened out. So really strong growth. Visibility has improved into fiscal 2027 as well, which does help give us that confidence and allows us to make sure that we're getting materials in place to support that growth. So doing extremely well in that market sector and market sub-sector outperforming the market. In broader industrials, the market is getting a little bit healthier. We had a long period of inventory digestion. But I think that the key for us is we're expanding our customer base, expanding into technologies where we didn't play previously. Last quarter, you heard about power into the data center. This quarter, you're hearing about energy storage outside the data center. But adding new and exciting customers in addition to the market health is giving us confidence for growth in 2027. Operator: Your next question comes from Ruben Roy with Stifel. Ruben Roy: Congrats team on the strong momentum into the fiscal year-end. I guess, Todd, to start and maybe a follow up on David's question, you guys are on track to exit the fiscal year at well over a $5 billion run rate. I'm just wondering, Todd, if we kind of build this out over the next several years, three, four years and Plexus sort of grows even after next year back to sort of your stated compounded annual growth goal of 9% to 12%. I mean you guys are probably going to be start thinking about $8 billion to $10 billion revenue company. And I'm wondering if you could talk a little bit more about if there are structural changes needed to get there, manufacturing, engineering, sustaining services, geographic balance of the manufacturing footprint, anything else that you're thinking about today as sort of the business is inflecting in a lot of your markets? Todd Kelsey: Yes, Ruben, it's interesting because we've been really starting to think about that growth trajectory probably two to three years ago. So a lot of the energy we've been putting in is thinking about what do we need to do to scale to be this $8 billion, $10-plus billion company. So some of the internal processes that we put in place like our sales inventory operations planning process, for instance, some efforts that we put in around driving consistency through the NPI process across the globe and driving stronger performance in that area have played into that. We've also done some things from an organizational standpoint with the way we've aligned the organization. We think from a standpoint of services, we're in pretty good shape right now from what we can see. And what we like about footprint is we like this whole idea of the campus model. So I think you'll continue to see us, for the most part, expand in areas where we're already located because we think that works really well from an efficiency standpoint as well. But we're taking a number of steps to make sure that we're prepared for that level of growth. David Abuhl: Yes. And Ruben, this is David. Maybe just a quick build. On our last call, we talked about the efficiency that our teams are driving in operations. And as Todd mentioned this, we've been on this journey of preparedness for a little while. And in the last 12 months, our teams have been able to improve our operating equipment effectiveness tremendously in some areas over 10%. And that's unleashing capacity, and we're not done yet. Even on our internal footprint, much less the additions we're talking about to our campuses. So we like where the dots are on the map, so to speak, from a manufacturing standpoint, and we're able to add ample capacity to our existing sites through either turning on a cold shell and warming that up or even expanding the throughput on existing sites, we're really pleased with. Ruben Roy: Great. For a follow-up, maybe I'll ask a question to Shawn here. And if you look at the guide for next year and you look at the segments, aerospace and defense and industrial now, Shawn, are over 60% of revenue. You guys have typically targeted healthcare at sort of mid-single-digit growth. So that's not going to drive a lot of the growth next year if that ends up happening. So maybe you could just talk through kind of what you're seeing to get to what we would assume would be sort of strong double-digit growth in those -- in the aerospace and defense and industrial businesses. And I guess if you could talk, Shawn, a little bit about how much of that growth you think is coming from just the market dynamics, especially in places like semi-cap versus maybe share growth? Shawn Harrison: Yes. Thanks, Ruben. So you're correct. We're going to need strong growth from aerospace and defense. I'll let you do the math to back into what the percentage must be to get us above 12% for next fiscal year, but it's going to be very, very strong growth. Within industrial and specifically semi-cap, we would expect to outgrow WFE again next year. So that could help you triangulate a little bit the growth profile there. Within our industrial markets, I mentioned earlier that it is getting healthier, but we are adding new customers that are amplifying that growth profile. Within aerospace and defense, the one sector or subsector that still isn't fully growing rapidly is commercial aerospace. We still think there's upside for that subsector in fiscal 2027 as Boeing and Airbus continue to get healthier, and that is around 1/3 of that market sector. And so there's some upside there, but just tremendous growth in defense, unmanned, security and space. We have clear leadership positions. Todd mentioned $400 million of wins year-to-date. Some of those actually will ramp in fiscal 2027, amplifying that growth outlook in addition to just the markets there, in particular, in defense and unmanned are quite strong, but our leadership is amplifying that growth. And then finally, in healthcare, we would expect to get back to our normal growth algorithm after fiscal 2027. We had a tremendous year this year in launching new products, substantially outgrowing the market, growing in the high teens. And typically, when you launch new products, there's a little bit of a digestion period, and we'll see that in fiscal 2027 before growth gets on track. But we do expect that sector to again grow in the 9% to 12% long term. So hopefully, I answered all the questions. I know there's a lot to cover. Operator: Your next question comes from Melissa Fairbanks with Raymond James. Melissa Dailey Fairbanks: Congrats on the record results, and I am sorry to hear Oliver is not feeling well. I hope he gets better very soon. I had kind of a more general question. We've heard a lot about extending lead times for components, price increases in semis, obviously, higher memory costs. So a lot of companies are starting to preplace inventory ahead of where they see their demand going. And I believe that you've commented that you do have some preplacement going on maybe a quarter or two ago. Just wondering how that might impact cash conversion or cash cycle? David Abuhl: Melissa, this is David. Yes, so to your point, the supply chain is tightening and yet we're very pleased, as Todd said, at how our supply chain teams are managing through that. And there are some components where we're working very closely with our customers on the forecast, on which components we need to get ahead of. And so we've been taking action on that. And so hence, you're seeing our ability to unlock revenue growth in a rapid sense. But there are tight spots. We're not going to gloss over that. And yet we're also very pleased with the discipline that our teams are using to approach this. Our sales inventory and operating plan process that Todd alluded to as well is really paying dividends for us. And so we're pleased to see that overall cash cycle days are in the low to mid-60s. And honestly, a result that we're super pleased with in the quarter at 62 days, the best we've done in five years. And that included great improvement in inventory and days of inventory on hand improving even sequentially versus last quarter. So I'd say there are issues, Melisa, we're getting ahead of, but it's nothing that's insurmountable and cash cycle days are in a really good spot. Todd Kelsey: Yes. One of the things I would add, Melissa, is that typically in situations like this where we're preplacing inventory, well, we're always working with our customers on those decisions, and they're typically funding those replacements. Shawn Harrison: And Melissa, it's Shawn, because I feel like I want to chime in as well. Our supply chain team started this process last fall. And so they started seeing tightening in certain components, and they stepped up with leadership and engaging with our customers none months ago or even longer than that to make sure that we were able to support this really strong growth that we're delivering this year. Melissa Dailey Fairbanks: Fantastic. I love it. Maybe going into a little bit of detail on the aerospace and defense side of things. I know that one of the areas you're particularly excited about is space, commercial space. So I was wondering, are you able to give us a breakdown of what the contribution from your space business is versus your traditional Boeing, Airbus business and defense? Shawn Harrison: Yes. So this is Shawn again. As I mentioned, commercial aerospace is about 1/3 of the portfolio. Defense and unmanned is about the same size. That business will more than double in revenue versus where it was 2 years ago. And then the remainder of the portfolio is kind of equally split between security and commercial space. Now we're seeing rapid growth in all of those, but just the even more rapid growth we're seeing in defense and unmanned isn't changing the split. We're really happy with our clear leadership in commercial space as our market sector leader there likes to say we have more electronics in orbit than any other EMS provider, and that leadership is helping us create additional opportunities. So it's growing. It's growing rapidly, but our defense and unmanned business is growing even more rapidly, which is exciting. Operator: [Operator Instructions] Your next question comes from Steve Barger with KeyBanc Capital Markets. Jacob Moore: This is Jacob on for Steve this morning. The first one, sorry to belabor the point on capacity expansion, but maybe a little bit more detail could be helpful here. Could you just help us understand the timeline for the expansion that you've announced today? What that's going to get you in terms of top line capacity versus your prior commentary for capacity in excess of $5 billion? And then how you think that, that spend and ramp will affect your margin cadence as we head into fiscal '27? Todd Kelsey: Yes. So it's already underway, the expansion, and it would be somewhere north of $0.5 billion of additional capacity we would add through this. And we wouldn't expect it to have a meaningful impact to margin because it's part of an existing facility that's already profitable. David Abuhl: Yes. And Jacob, maybe a build there as well. We're able to do this and maintain our capital expenditures as a percent of revenue between 2% to 3%. So that's true as of fiscal '25, '26. We're looking in 2027, we think we can maintain that same range while we add this capacity, just given the campus approach. It's not a new dot on the map, which would require more capital-intensive work. So we're pleased to be able to keep capital expenditures in that range as we go through here. Shawn Harrison: And Jacob, it's Shawn. We can do if the revenue lands in the right place, close to $6 billion of revenue today. And so we do have upside potential in terms of our sites depending upon where the revenue lands and this incremental capacity is to ensure we meet the strong demand we see from our customers. Jacob Moore: Okay. Got it. That's really helpful color. I appreciate it. My follow-up here is actually on non-semi-cap industrial. I guess, are you starting to see any pickups in the sort of more traditional industrial end markets as it appears that the broader industrial landscape gets a little bit better. What sort of trends are you seeing there in those other submarkets? Shawn Harrison: I would say a small pickup, but our non-semi-cap industrial is a cross-section of technologies we support from industrial automation and robotics to energy management and storage to broadband communications and test and measurement. So -- some pickup in the traditional industrial markets. But for us, it's a cross-section of technologies, and we're generally seeing stronger trends there. I wouldn't just tie it solely to industrial production, but I think just the cross-section of technologies we support as well as I mentioned earlier, just the new customers and new technologies that we've been adding over the past few years. Operator: The next question comes from Ruben Roy with Stifel. [Audio Gap] Ruben Roy: I got my follow-up Todd, I wanted to circle back on the data center power win. This is the second quarter in a row that you talked about that type of win. Is this -- how is this working? Is this opportunistic? Or is it a strategy to sort of expand in that marketplace? How large is that data center funnel today? And maybe if you could talk about the capabilities that Plexus is bringing to the marketplace that's enabling you to win there, that would be helpful. Todd Kelsey: Sure, sure. So Ruben, it is part of a broader data center strategy. Now the areas of focus for us in the data center are power, and that could be power inside the data center or power external to the data center as is the case of the win this quarter and thermal management. So we have a number of active opportunities -- well, a number of active programs to begin with. And beyond the ones we've announced, there's a few that are in very early stages of pilot type production right now, but I would call them pre-win stage right now. Then we have the two active ones that we've announced, and we have an overall funnel that's conservatively somewhere around $0.5 billion right now. Operator: There are no further questions at this time. I will now turn the call back to Todd Kelsey for closing remarks. Todd Kelsey: All right. Thank you, Dara. Thank you to the shareholders, investors, analysts and Plexus team members who joined the call this morning. In closing, as we leverage our differentiated value proposition, fiscal 2026 will be a great year for Plexus with exceptional revenue growth, solid operating margin and robust return on invested capital. We're also well positioned for strong results in fiscal 2027 with revenue growth exceeding our 9% to 12% goal, expanding operating margin, meaningful free cash flow and outstanding return on invested capital. Have a nice day. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Plexus, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Plexus wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Plexus (PLXS) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Plexus Corp (NASDAQ:PLXS) delivered record fiscal third quarter revenue of $1.305 billion, exceeding guidance with 28% year-over-year growth. The company raised its fiscal 2026 outlook to more than 20% revenue growth and anticipates fiscal 2027 growth to exceed its 9% to 12% goal. Non-GAAP operating margin of 6.3% met the high end of guidance, with expectations for fiscal 2026 margins to exceed 6% and further expansion in 2027. The qualified manufacturing opportunities funnel reached a record $4.5 billion, up 23% year-over-year, supporting a strong long-term growth trajectory. Cash cycle days improved to 62 days, the best result in over five years, and the company expects to return to meaningful free cash flow generation in fiscal 2027. Aerospace and defense wins totaled $400 million year-to-date, more than double the combined fiscal 2024 and 2025 performance, positioning the company for secular outgrowth. Plexus Corp (NASDAQ:PLXS) faces a tightening supply chain with extended lead times and price increases for components, requiring proactive inventory pre-placement. The company expects fiscal fourth quarter free cash flow to be breakeven or a slight usage of cash due to strategic working capital investments. Healthcare life sciences sector growth is expected to moderate in fiscal 2027 as activity normalizes following a year of successful new product launches. Fiscal 2027 non-GAAP effective tax rate is projected to increase to between 16% and 18%, up from the fiscal 2026 estimate of 15% to 17%. The company anticipates higher interest expense in fiscal 2027, with non-operating expenses expected to rise sequentially in the fiscal fourth quarter. Commercial aerospace, a key subsector, has not yet fully recovered to rapid growth, though it is expected to improve in fiscal 2027. Warning! GuruFocus has detected 2 Warning Sign with PLXS. Is PLXS fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more detail on the capacity expansion announced today, its timeline, the top-line capacity it will add versus the prior $5 billion capacity commentary, and how the spend and ramp will affect margin cadence heading into fiscal 2027?A: Todd Kelsey (President and CEO) confirmed the expansion is already underway and will add north of $0.5 billion in additional capacity. He noted it will not have a meaningful impact on margins because it is part of an existing, already-profitable facility. David Abel (CFO) added that the company can maintain capital expenditures at 2% to 3% of revenue through fiscal 2027 due to the campus model, avoiding more capital-intensive new site builds. Sean Harrison (VP of IR) clarified that the company can currently support close to $6 billion in revenue, and this incremental capacity ensures they meet strong customer demand. Q: Given the strong momentum and outlook for fiscal 2027, how should we think about your capability to supply and meet that demand? Are there additional capacity expansion plans needed, and what is your confidence level in the growth trajectory?A: Todd Kelsey (President and CEO) expressed high confidence in the growth trajectory, noting the supply chain team is managing tightness effectively, as evidenced by Q3 upside. He mentioned the company is pulling in expansion plans, including adding capacity in Penang, Malaysia, and being thoughtful about other regions. He also highlighted that efficiency efforts have reduced the need for proportional headcount growth, and the company feels good about exceeding its 9% to 12% revenue growth target for fiscal 2027. Q: Can you elaborate on the data center power win, which is the second consecutive quarter you've discussed this type of win? Is this opportunistic or part of a broader strategy, how large is the data center funnel, and what capabilities enable Plexus to win there?A: Todd Kelsey (President and CEO) stated this is part of a broader data center strategy focused on power (both inside and external to the data center) and thermal management. He noted there are several active programs, including two announced wins, and a few in very early pilot stages. The overall funnel for data center opportunities is conservatively around $0.5 billion. Q: With the company on track to exit the fiscal year at a run rate well over $5 billion, what structural changes are needed to scale to an $8 billion to $10 billion revenue company, particularly regarding manufacturing, engineering, sustaining services, and geographic footprint?A: Todd Kelsey (President and CEO) said the company began preparing for this growth trajectory two to three years ago, implementing processes like sales inventory operations planning and driving consistency in NPI processes. He noted the company favors a campus model for expansion, preferring to expand in existing locations for efficiency. David Abel (CFO) added that operational efficiency improvements, such as over 10% gains in operating equipment effectiveness in the last 12 months, are unleashing capacity, and the company can add capacity through warming up cold shells or expanding existing sites. Q: Can you provide a breakdown of the aerospace and defense sector, specifically the contribution from space versus traditional Boeing/Airbus and defense?A: Sean Harrison (VP of IR) explained that commercial aerospace is about one-third of the portfolio, with defense and unmanned at a similar size, and the remainder split between security and commercial space. He noted defense and unmanned revenue will more than double versus two years ago, and while commercial space is growing rapidly, defense and unmanned is growing even faster. He highlighted the company's clear leadership in commercial space, stating they have more electronics in orbit than any other EMS provider. Q: Regarding the semicap equipment space and broader industrial markets, are you seeing improving and broadening demand? How is visibility and forecasting with customers, and how much of the growth is from market dynamics versus share gains?A: Sean Harrison (VP of IR) stated semicap equipment is delivering robust growth this year and next, with expectations to outgrow WFE based on customer acquisitions and market share gains. Visibility for fiscal 2027 has improved, helping with material planning. For broader industrials, the market is getting healthier after inventory digestion, but the key driver is expanding the customer base and entering new technologies, such as power into data centers and energy storage, which provides confidence for 2027 growth. Q: Can you discuss the impact of extended lead times, price increases, and higher memory costs on cash conversion and cash cycle, given that some companies are pre-placing inventory?A: David Abel (CFO) acknowledged the supply chain is tightening but expressed satisfaction with how the supply chain teams are managing it, working closely with customers on forecasts and components needing to be secured ahead of time. He noted the company delivered a 62-day cash cycle in Q3, the best in five years, with notable improvement in days of inventory. Todd Kelsey (President and CEO) added that in such situations, customers typically fund pre-placed inventory. Sean Harrison (VP of IR) noted the supply chain team began addressing tightening components last fall, engaging with customers nine months ago to support the strong growth. Q: Are you seeing any pickups in more traditional industrial end markets as the broader industrial landscape improves, and what trends are you seeing in non-semicap industrial submarkets?A: Sean Harrison (VP of IR) said there is a small pickup in traditional industrial markets, but the non-semicap industrial portfolio is a cross-section of technologies, including industrial automation, robotics, energy management, storage, broadband communications, and test and measurement. He noted stronger trends across this cross-section, driven not just by industrial production but also by new customers and technologies added over the past few years. Q: Can you provide more detail on the fiscal 2027 growth outlook, particularly the contributions from aerospace and defense and industrial sectors, and how much is from market dynamics versus share gains?A: Sean Harrison (VP of IR) explained that to achieve growth above the 9% to 12% goal, aerospace and defense and industrial will need very strong growth. In semicap, the company expects to outgrow WFE again. In aerospace and defense, commercial aerospace (about a third of the sector) still has upside as Boeing and Airbus recover, while defense, unmanned, security, and space are experiencing tremendous growth driven by market strength and the company's leadership positions. He noted $400 million in year-to-date wins, some of which will ramp in fiscal 2027. Healthcare is expected to moderate in fiscal 2027 after a year of launching new products, but For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record fiscal third quarter revenue by capturing strengthening end-market demand and successfully launching numerous new programs across all three market sectors. Aerospace and defense wins reached $400 million year-to-date, more than doubling the combined performance of fiscal 2024 and 2025, positioning the company for long-term secular outgrowth. Industrial sector outperformance was driven by operational excellence in supporting expanding demand for semiconductor capital equipment and new data center energy storage partnerships. Operating margin expansion to 6.3% was achieved through revenue leverage and continued productivity gains, which successfully offset ongoing inflationary pressures. Working capital efficiency reached a five-year high with a 62-day cash cycle, supported by improved inventory management despite the need to support rapid revenue growth. Differentiated value proposition focusing on unmatched quality and delivery is enabling market share gains in disruptive technologies like surgical robotics and battery energy storage. Management anticipates fiscal 2026 revenue growth exceeding 20% with non-GAAP operating margins sustained above 6%. Fiscal 2027 revenue growth is projected to exceed the long-term goal of 9% to 12%, supported by continued momentum in semi-cap equipment and defense ramps. Capacity expansion is underway at the Penang, Malaysia site to support the $4.5 billion record funnel, with capital expenditures expected to remain disciplined at 2% to 3% of revenue. Free cash flow is expected to return to meaningful levels exceeding $100 million in fiscal 2027 as profitability sustains and working capital investments normalize. Healthcare/Life Sciences growth is expected to moderate to mid-single digits in fiscal 2027 as the sector enters a digestion period following a year of significant new product launches. Management is proactively managing a tightening supply chain by pre-placing inventory for critical components, often with customer funding to mitigate cash flow impact. A significant tornado near corporate headquarters caused no material impact to operations or facilities, though management noted the impact on the local community. Executive retirement and stock-based compensation expenses impacted SG&A in the third quarter, though underlying leverage improved by nearly 50 basis points. The tax rate is expected to trend slightly higher in fiscal 2027, with a preliminary range of 16% to 18% compared to 15% to 17% in fiscal 2026. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expressed high confidence in the growth trajectory, noting that supply chain tightness is factored into projections and managed through early engagement with customers. Capacity expansion in Penang will add over $0.5 billion in additional revenue potential efficiently by utilizing existing facility shells, avoiding the need for new geographic 'dots on the map'. Defense and unmanned subsectors are expected to more than double in revenue compared to two years ago, while commercial aerospace (1/3 of the sector) still has recovery upside. Plexus claims a leadership position in commercial space, stating they have more electronics in orbit than any other EMS provider, which is driving further opportunity. The company is executing a formal data center strategy focused on power and thermal management, with a qualified funnel currently estimated at approximately $0.5 billion. Recent wins include battery energy storage systems for data centers, representing a shift into technologies external to the traditional data center rack.

Interested in Plexus Corp.? Here are five stocks we like better. Record Q3 results: Plexus reported $1.305 billion in revenue, up 28% year over year, while non-GAAP operating margin reached 6.3% and EPS of $2.32 exceeded guidance. Raised growth outlook: The company expects fiscal 2026 revenue growth above 20% and sees fiscal 2027 growth potentially exceeding its 9%–12% long-term target, with operating-margin expansion and more than $100 million in free cash flow. Strong demand and pipeline: Aerospace and defense and industrial markets drove results, with a record $4.5 billion manufacturing opportunity funnel and $135 million of aerospace and defense wins during the quarter. Plexus is also expanding capacity in Malaysia to support more than $500 million of additional production. This mid-cap tech stock just jumped 30%...and is still cheap Plexus (NASDAQ:PLXS) reported record fiscal third-quarter revenue of $1.305 billion, exceeding its guidance range and rising 12% sequentially and 28% from a year earlier, as demand strengthened across its aerospace and defense, healthcare life sciences, and industrial markets. President and Chief Executive Officer Todd Kelsey said the company’s performance was supported by new program launches, market-share gains and supply-chain execution. Non-GAAP operating margin reached 6.3%, at the high end of guidance and 30 basis points above the prior-year period, while non-GAAP diluted earnings per share of $2.32 exceeded the company’s outlook. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Kelsey also said a tornado near the company’s corporate headquarters earlier in the week caused significant damage in the local community but had no material impact on Plexus operations or headquarters. For the fiscal fourth quarter, Plexus forecast revenue of $1.33 billion to $1.38 billion, which would represent 4% sequential growth and 28% year-over-year growth at the midpoint. The company guided for non-GAAP operating margin of 6.1% to 6.5% and non-GAAP EPS of $2.47 to $2.63. → 3 Value ETFs to Consider as Growth Stocks Lag Behind The company now expects fiscal 2026 revenue growth of more than 20%, along with non-GAAP operating margin above 6%. Looking ahead, Kelsey said Plexus sees the potential for fiscal 2027 revenue growth exceeding its long-term 9% to 12% target, accompanied by operating-margin expansion and a return to meaningful free-cash-flow generation. “Supporting our bullish outlook is continued strong growth from our aerospace and defense and industrial markets, including semiconductor capital equipment, with continued growth in Healthcare Life Sciences,” Kelsey said. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Chief Financial Officer David Abuhl said the company expects fiscal 2027 capital expenditures to remain within a range of 2% to 3% of revenue. Plexus expects fiscal 2026 capital expenditures of $100 million to $120 million and projects fiscal fourth-quarter free cash flow to be break-even or slightly negative due to working-capital investment timing. For fiscal 2027, it expects free cash flow to exceed $100 million. Aerospace and defense revenue rose 10% sequentially in the fiscal third quarter, exceeding the company’s expectation for a mid-single-digit increase. Plexus expects fourth-quarter revenue in the sector to be approximately flat sequentially but up more than 30% year over year. For fiscal 2026, it now expects aerospace and defense revenue growth of more than 20%, led by defense and unmanned systems. The sector secured $135 million in new program wins during the quarter, including a secure wireless communications system for a new defense and security customer and a naval submarine electronics program. Plexus said its aerospace and defense wins totaled $400 million year to date, more than twice its combined fiscal 2024 and fiscal 2025 performance. Healthcare life sciences revenue increased 2% sequentially, exceeding the company’s forecast for flat growth. Plexus expects flat sequential revenue in the fourth quarter, as delays in program ramps are expected to offset stronger customer demand. The company raised its fiscal 2026 expectation for the sector to high-teens year-over-year growth, while its preliminary fiscal 2027 view calls for at least mid-single-digit growth as activity normalizes after a period of product launches. Industrial revenue increased 23% sequentially, well ahead of the company’s low-double-digit forecast. Plexus attributed the outperformance to demand in semiconductor capital equipment and other industrial subsectors, as well as operational and supply-chain execution. It expects high-single-digit to low-double-digit sequential industrial growth in the fiscal fourth quarter and more than 20% growth for fiscal 2026. Industrial wins totaled $67 million during the quarter and included a new battery energy storage systems program for data centers. Initial production of that program is underway, according to the company. Kelsey said data-center power and thermal management are part of a broader strategy, with a data-center opportunity funnel of approximately $500 million. Plexus said its qualified manufacturing opportunity funnel reached a record $4.5 billion, up 12% sequentially and 23% from a year earlier. The funnel increased by more than $800 million year over year, with aerospace and defense and industrial both reaching record levels. To support anticipated growth, Plexus is expanding production capacity at an existing site in Penang, Malaysia. Kelsey said the project is already underway and is expected to add more than $500 million of capacity without a meaningful margin impact because it is part of an existing profitable facility. Executives said the company could support close to $6 billion in revenue with its current footprint, depending on where revenue is generated. Third-quarter cash from operations totaled $25.9 million, while capital expenditures were $26.6 million, resulting in free cash flow usage of just under $1 million. Plexus repurchased $20.6 million of stock during the quarter and had about $21 million remaining under its current authorization. The company ended the quarter in a net cash position, with $172 million outstanding on its revolving credit facility and more than $320 million available to borrow. Its cash cycle improved to 62 days, the best quarterly result in more than five years, while return on invested capital reached 14.9%. Plexus Corp. (NASDAQ: PLXS) is a global provider of electronics manufacturing services (EMS) and precision engineered electronics solutions. Headquartered in Neenah, Wisconsin, the company partners with original equipment manufacturers across industries such as medical, industrial, aerospace and defense, computing, and communications. Plexus offers a full suite of services that span new product introduction, product lifecycle management, supply chain management, printed circuit board assembly, system integration, and aftermarket support. Founded in 1979, Plexus has grown from a regional electronics assembler into a multinational organization with manufacturing and engineering centers across North America, Europe, and Asia. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Plexus Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Plexus Corp PLXS reported third-quarter fiscal 2026 adjusted earnings per share (EPS) of $2.32 compared with the year-ago quarter’s $1.90. The figure beat the Zacks Consensus Estimate of $2.10 per share. Management expected non-GAAP EPS to be in the band of $2.02-$2.18.Revenues increased 28.1% to $1.305 billion and surpassed the consensus mark of $1.228 billion by 6.3%. Management expected revenues to be between $1.2 billion and $1.25 billion. Broad end-market demand, new program ramps and Industrial strength drove the performance. Plexus Corp. price-consensus-eps-surprise-chart | Plexus Corp. Quote In the fiscal third quarter, Plexus announced 31 manufacturing program wins, which are estimated to contribute $255 million in annualized revenues once fully ramped into production. Shares are up 2.3% in the pre-market trading session today. In the past year, shares have gained 88.6% compared with the Electronics- Manufacturing Services industry’s growth of 49%. Image Source: Zacks Investment Research Aerospace/Defense revenues climbed 27.3% year over year and 10% sequentially to $233 million, accounting for 18% of the total. Broad demand and strong operational execution supported revenue growth. Fiscal 2026 revenues are now projected to grow more than 20%, buoyed by defense demand, while fiscal fourth-quarter revenues are expected to be flat.  Healthcare/Life Sciences revenues increased 15% year over year and 2% sequentially to $483 million, contributing 37% of total revenues. Program ramps remained a growth driver. Fiscal 2026 revenues are projected to be in the high teens, while fiscal fourth-quarter revenues are expected to be flat.  Industrial revenues surged 41.9% year over year and 23% sequentially to $589 million. The sector represented 45% of total revenues, up from 41% in both the prior quarter and the year-ago period. Semiconductor capital equipment and broader industrial demand and program ramps supported the growth. Management expects Industrial revenues to rise in the high-single to low-double digits sequentially in the fiscal fourth quarter while overall fiscal 2026 revenues are projected to grow more than 20%.  Our estimates for revenues from the Industrial, Healthcare/Life Sciences and Aerospace/Defense were $533.1 million, $473 million and $222 million, respectively. Revenues from the Americas increased 37.2% year over year to $428 million. Asia-Pacific revenues increased 30.3% while EMEA revenues declined 6.8%. The company’s top 10 customers accounted for 55% of net revenues in the fiscal third quarter. Gross profit on a GAAP basis was up 27.2% year over year to $131.4 million. Gross margin was 10.1%, unchanged from the year-ago quarter. Selling and administrative expenses increased 41.1% from the year-ago quarter’s actuals to $70.1 million.Adjusted operating margin expanded 30 basis points to 6.3%. As of July 4, 2026, Plexus had cash & cash equivalents worth $314.1 million compared with $303.1 million as of April 4. PLXS had long-term debt and finance lease obligations, net of the current portion of $91.6 million as of July 4, 2026, compared with $91 million as of April 4. For the quarter under review, cash flows generated from operations were $25.9 million. Plexus reported a free cash outflow of $0.7 million after incurring capital expenditures of $26.6 million. The company repurchased $20.6 million worth of shares at an average price of $258.75 per share under its repurchase program in the fiscal third quarter. Out of the $100 million authorization, $21.4 million remains available. For the fiscal fourth quarter, revenues are projected between $1.33 billion and $1.38 billion. At the midpoint, the revenue outlook implies a 4% sequential rise and 28% year-over-year growth. Non-GAAP EPS is expected to be in the band of $2.47-$2.63, while adjusted operating margin is forecasted in the 6.1-6.5% range.Management now expects fiscal 2026 revenue growth above 20% and adjusted operating margin  greater than 6%. Fiscal 2027 revenue growth is expected to exceed the 9-12% goal, alongside further margin expansion.The stronger outlook also requires more working capital investments. Management now anticipates fiscal 2026 free cash flow usage.  Earlier, Plexus projected free cash flow to be $50-$75 million for fiscal 2026. The company expects to return to meaningful free cash flow generation early in fiscal 2027. Plexus currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Jabil Inc JBL reported third-quarter fiscal 2026 results wherein core earnings of $3.16 per share increased 23.9% year over year and topped the Zacks Consensus Estimate of $3.12 by 1.28%. Net revenues rose 11.8% to $8.75 billion and exceeded the consensus mark of $8.63 billion by 1.39%. Jabil’s Intelligent Infrastructure remained the key growth engine, with segment revenues climbing 21% year over year. Over the past year, shares of JBL have gained 26.8%.Sanmina Corporation SANM reported third-quarter fiscal 2026 earnings, wherein non-GAAP EPS stood at $3.31, beating the Zacks Consensus Estimate of $2.78. Revenues of $3.46 billion exceeded the Zacks Consensus Estimate of $3.43 billion. Management added that strong execution across both core Sanmina operations and the ZT Systems business supported expansion. Over the past year, shares of SANM have gained 41.4%.Celestica’s CLS second-quarter 2026 adjusted earnings were $2.54 per share, which surged 82.7% year over year, and topped the Zacks Consensus Estimate by 10.9%. Revenues increased 62.4% to $4.7 billion and topped the consensus mark by 8.1%. Momentum in Connectivity & Cloud Solutions remained the key catalyst for Celestica. Over the past year, shares of CLS have gained 61.6%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Plexus Corp. (PLXS) : Free Stock Analysis Report Jabil, Inc. (JBL) : Free Stock Analysis Report Celestica, Inc. (CLS) : Free Stock Analysis Report Sanmina Corporation (SANM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Electronic manufacturing services company Plexus (NASDAQ:PLXS) reported Q2 CY2026 results exceeding the market’s revenue expectations , with sales up 28.1% year on year to $1.30 billion. On top of that, next quarter’s revenue guidance ($1.36 billion at the midpoint) was surprisingly good and 6.5% above what analysts were expecting. Its non-GAAP profit of $2.32 per share was 8.5% above analysts’ consensus estimates. Is now the time to buy Plexus? Find out in our full research report. Revenue: $1.30 billion vs analyst estimates of $1.23 billion (28.1% year-on-year growth, 5.8% beat) Adjusted EPS: $2.32 vs analyst estimates of $2.14 (8.5% beat) Revenue Guidance for Q3 CY2026 is $1.36 billion at the midpoint, above analyst estimates of $1.27 billion Adjusted EPS guidance for Q3 CY2026 is $2.55 at the midpoint, above analyst estimates of $2.27 Operating Margin: 4.7%, in line with the same quarter last year Market Capitalization: $6.69 billion Todd Kelsey, President and Chief Executive Officer, commented, “Plexus generated record quarterly revenue in the fiscal third quarter by capturing strengthening end market demand and successfully launching numerous new programs. Fiscal third quarter revenue of $1.305 billion exceeded guidance, increasing 12% sequentially and 28% year over year. In addition, non-GAAP operating margin of 6.3% met the high end of guidance, non-GAAP EPS of $2.32 exceeded guidance and we again delivered healthy working capital efficiency.” With over 20,000 team members across 26 global facilities, Plexus (NASDAQ:PLXS) designs, manufactures, and services complex electronic products for companies in aerospace/defense, healthcare, and industrial sectors. Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. With $4.60 billion in revenue over the past 12 months, Plexus is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions. As you can see below, Plexus grew its sales at a decent 6% compounded annual growth rate over the last five years. This shows its offerings generated slightly more demand than the average business services company, a helpful starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Plexus’s annualized revenue growth of 8.1% over the last two years is above its five-year trend, suggesting its demand recently accelerated. This quarter, Plexus reported robust year-on-year revenue growth of 28.1%, and its $1.30 billion of revenue topped Wall Street estimates by 5.8%. Company management is currently guiding for a 28% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 12.4% over the next 12 months, an improvement versus the last two years. This projection is admirable and indicates its newer products and services will spur better top-line performance. ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all. Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE. Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes. Plexus was profitable over the last five years but held back by its large cost base. Its average adjusted operating margin of 5.6% was weak for a business services business. On the plus side, Plexus’s adjusted operating margin rose by 1.5 percentage points over the last five years, as its sales growth gave it operating leverage. In Q2, Plexus generated an adjusted operating margin profit margin of 6.3%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable. Plexus’s EPS grew at 10.8% compounded annual growth rate over the last five years, higher than its 6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded. We can take a deeper look into Plexus’s earnings to better understand the drivers of its performance. As we mentioned earlier, Plexus’s adjusted operating margin was flat this quarter but expanded by 1.5 percentage points over the last five years. On top of that, its share count shrank by 6.1%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For Plexus, its two-year annual EPS growth of 30.5% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base. In Q2, Plexus reported adjusted EPS of $2.32, up from $1.90 in the same quarter last year. This print beat analysts’ estimates by 8.5%. Over the next 12 months, Wall Street expects Plexus’s full-year EPS to grow 11.4% from $8.29 to $9.24. We were impressed by how significantly Plexus blew past analysts’ EPS guidance for next quarter expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. The stock remained flat at $242.81 immediately following the results. Plexus had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.