Plexus Corp.

What they do

Plexus designs, manufactures, and services highly complex products in regulated industries, operating 26 facilities (27 as of the latest 10-Q) across the Americas, Asia-Pacific, and EMEA. The company provides services across the product lifecycle, including design and development, supply chain solutions, new product introduction, and manufacturing. It operates with a global team of over 20,000 members.

Revenue drivers

• Aerospace/Defense — One of the three primary market sectors; recently won significant manufacturing programs in this sector, contributing to record quarterly revenue.
• Healthcare/Life Sciences — Key market sector; management expects growth in the fiscal fourth quarter led by strength in this sector, along with Industrial.
• Industrial (including semiconductor capital equipment) — Includes semiconductor capital equipment subsector; recently added a new partnership manufacturing battery energy storage systems for data centers.

Recent performance

In the fiscal third quarter ended July 4, 2026, Plexus reported record revenue of $1.305 billion, up 12% sequentially and 28% year over year. GAAP diluted EPS was $1.58, with a GAAP operating margin of 4.7%. Non-GAAP diluted EPS was $2.32, excluding $0.74 of stock-based compensation, with a non-GAAP operating margin of 6.3%. Cash cycle improved to 62 days, the best in over five years, and ROIC reached 14.9%, up 110 basis points sequentially.

Strategy

Plexus aims for 9-12% compounded annual revenue growth and a 15% ROIC, with a stated economic return focus (ROIC minus WACC of 8.9% for fiscal 2025). The strategy is built on four pillars: Market Focus, Superior Execution, Passion Meets Purpose, and Discipline by Design. Management emphasizes operational excellence, working capital efficiency, and investing in new product launches and customer programs. In the latest quarter, the company repurchased $20.6 million of shares under its 2026 program.

Risks

• Customer order volatility — Customers do not provide firm long-term commitments and may cancel or change production requirements, impacting revenue and working capital.
• Tariff and trade policy — Tariffs, trade disputes, and protectionist measures could raise costs or disrupt supply chains.
• Component shortages and costs — Shortages, delays, and price fluctuations in components can disrupt production and hurt profitability.
• Concentration risk — A significant portion of revenue may come from a limited number of customers or programs, making results sensitive to their demand.

Outlook

For the fiscal fourth quarter ending October 3, 2026, Plexus guides revenue of $1.330 to $1.380 billion (up about 4% sequentially and 28% year over year at midpoint), GAAP diluted EPS of $2.18 to $2.34, and non-GAAP EPS of $2.47 to $2.63 (excluding $0.29 of stock-based compensation). Management expects continued revenue growth led by Healthcare/Life Sciences and Industrial, and a usage of free cash flow for fiscal 2026, with a return to meaningful free cash flow generation in early fiscal 2027.