Flex Ltd.

What they do

Flex designs, engineers, manufactures, and services products for customers in data center, healthcare, industrial, automotive, communications, and lifestyle end markets, with operations across approximately 30 countries. Its three reportable segments are Integrated Technology Solutions (ITS), covering communications and lifestyle; Regulated Manufacturing Solutions (RMS), covering industrial, automotive, and healthcare; and Cloud and Power Infrastructure (CPI), covering cloud and cooling plus power infrastructure. Capabilities span design and engineering, supply chain, manufacturing, integrated services, and a portfolio of power and cooling products.

Revenue drivers

• Cloud and Power Infrastructure (CPI) — Builds integrated compute systems, advanced liquid cooling for high-density racks, and utility- and facility-level electrical infrastructure for cloud, data center, and AI-enabled deployments. This segment is the subject of the planned spin-off and is positioned as Flex's high-growth platform.
• Integrated Technology Solutions (ITS) — Serves communications (high speed networking, enterprise, satellite) and lifestyle (premium commercial, home, and personal products) customers requiring fast innovation cycles. Together with RMS it forms the core advanced manufacturing and supply chain business.
• Regulated Manufacturing Solutions (RMS) — Provides regulated manufacturing for industrial (automation, energy, infrastructure), automotive (compute and power electronics platforms), and healthcare (medical devices, drug delivery, equipment) end markets. These are safety-critical, compliance-intensive programs with longer product lifecycles.
• Customer concentration — In fiscal year 2026, the ten largest customers accounted for 45% of net sales, with no single customer above 10%, reflecting a diversified but concentrated customer base.

Recent performance

For the first quarter of fiscal 2027, ended June 26, 2026, Flex reported net sales of $7.9 billion, up 21% year over year, GAAP operating income of $392 million, GAAP net income of $285 million, and GAAP EPS of $0.76. Adjusted operating income was $534 million, adjusted net income $374 million, and adjusted EPS $1.00, which the company described as a record. Cash provided by operating activities was $276 million and free cash flow was $41 million. This follows full fiscal year 2026 revenue of $27.91 billion and net income of $880 million.

Strategy

Flex's stated priority is to separate into two independent, publicly traded companies: one comprising the CPI segment and the other comprising the ITS and RMS advanced manufacturing and supply chain business. The transaction is intended to be tax-free to U.S. shareholders and is targeted for completion in the first quarter of calendar 2027, subject to Board, shareholder, and High Court of Singapore approvals and SEC requirements. Management frames the separation as positioning both companies to pursue distinct opportunities, and it is also expanding its role in AI infrastructure with power and cooling technology. The company plans an Investor Day on November 10, 2026.

Risks

• Spin-off execution — The planned separation of the Cloud and Power Infrastructure business may not be completed on the terms or timeline contemplated, if at all, and may not achieve intended benefits.
• Trade and tariff policy — Tariffs, trade restrictions, export controls, and heightened trade volatility have adversely affected and could continue to affect results and financial condition.
• Customer concentration and demand variability — A significant percentage of sales comes from a small number of customers, and order cancellations, production changes, and demand variability could adversely affect the business.
• Macroeconomic and geopolitical conditions — Global economic conditions and geopolitical uncertainty have in the past adversely affected, and could in the future adversely affect, operations, financial condition, and access to capital markets.

Outlook

For the second quarter of fiscal 2027, Flex guides net sales of $7.95 billion to $8.25 billion, adjusted operating income of $535 million to $565 million, and adjusted EPS of $1.00 to $1.07. For the full fiscal year 2027, the company updated guidance to net sales of $33.7 billion to $35.2 billion, adjusted operating margin of 7.0% to 7.2%, and adjusted EPS of $4.42 to $4.74. These figures do not give effect to the planned spin-off of the Cloud and Power Infrastructure segment.