Flex Ltd. Reports Mixed Financial Results for Q3 and Nine-Month Period Ending December 31, 2024

Flex Ltd. reported its financial results for the three and nine-month periods ending December 31, 2024, revealing a mixed performance compared to the previous fiscal year. For the third quarter, the company achieved net sales of $6.56 billion, a 2% increase from $6.42 billion in the same period of 2023. However, for the nine-month period, net sales decreased by 4% to $19.42 billion from $20.25 billion year-over-year. The gross profit for the third quarter rose to $594 million, representing a gross margin of 9.1%, up from 6.7% in the prior year, while the nine-month gross profit increased to $1.60 billion, or 8.2% of net sales, compared to 7.1% in the previous year.

The company’s operating income for the third quarter was $334 million, significantly higher than the $198 million reported in the same quarter last year. For the nine-month period, operating income also improved to $864 million from $694 million. Net income from continuing operations for the third quarter was $263 million, compared to $129 million in the prior year, while for the nine-month period, it increased to $616 million from $477 million. Basic earnings per share from continuing operations rose to $0.68 for the third quarter, up from $0.30 a year earlier.

Flex Ltd. undertook strategic acquisitions during the quarter, acquiring Crown Technical Systems and JETCOOL Technologies, which are expected to enhance its capabilities in critical power solutions and liquid cooling technologies, respectively. The company also reported a decrease in its inventory levels, which fell to $5.27 billion from $6.21 billion as of March 31, 2024. This reduction reflects improved inventory management and a shift in customer demand dynamics.

Operationally, Flex's customer base remains robust, with its ten largest customers accounting for approximately 45% of net sales during the third quarter. The company continues to face challenges related to supply chain disruptions and geopolitical tensions, but it has managed to maintain a strong liquidity position, with cash and cash equivalents totaling $2.31 billion as of December 31, 2024. The company’s total liabilities increased to $13.28 billion, up from $12.93 billion, primarily due to increased short-term borrowings.

Looking ahead, Flex Ltd. anticipates continued demand for its services across various sectors, particularly in cloud and consumer devices. The company remains focused on optimizing its operational efficiencies and leveraging its global supply chain capabilities to navigate market challenges. The management expressed confidence in its ability to meet future commitments and maintain compliance with financial covenants, supported by a strong cash flow generation strategy.