Flex Ltd. Reports 21% Revenue Growth to $7.93 Billion, Plans Spin-Off of CPI Segment

Flex Ltd. reported a significant increase in financial performance for the three-month period ending June 26, 2026, with net sales reaching $7.93 billion, a 21% increase from $6.58 billion in the same period last year. The company's gross profit also rose to $747 million, up from $572 million, resulting in a gross margin of 9.4%, compared to 8.7% in the prior year. Net income for the quarter was $285 million, or $0.76 per diluted share, compared to $192 million, or $0.50 per diluted share, in the previous year. This growth was attributed to strong demand across various segments, particularly in the Integrated Technology Solutions (ITS) and Cloud and Power Infrastructure (CPI) segments.

The company experienced notable changes in its financial metrics compared to the previous fiscal period. Cost of sales increased by 20% to $7.18 billion, reflecting the rise in net sales. The ITS segment saw a 20% increase in sales, driven by growth in the communications sector, while the CPI segment's sales surged by 35%, bolstered by the recent acquisition of Electrical Power Products, Inc. (EPP). The Regulated Manufacturing Solutions (RMS) segment also contributed to the overall growth with a 12% increase in sales, primarily from the industrial sector.

Strategically, Flex announced its intention to spin off its CPI segment into a separate publicly traded company, expected to be completed in the first quarter of calendar 2027, pending necessary approvals. This move aims to enhance focus on its core manufacturing and supply chain solutions business. The acquisition of EPP for approximately $1.2 billion in cash was a significant operational development, expected to strengthen Flex's position in the critical power solutions market. The company also reported a gain of $46 million from the sale of a non-strategic North American business during the quarter.

Operationally, Flex's customer base remains concentrated, with its ten largest customers accounting for approximately 49% of net sales. The Americas region generated the most revenue, contributing $4.17 billion, followed by Asia at $2.34 billion and Europe at $1.41 billion. The company reported an increase in employee headcount, reflecting its growth strategy and operational expansions. As of June 26, 2026, cash and cash equivalents stood at $2.84 billion, with total assets increasing to $25.20 billion from $22.06 billion as of March 31, 2026.

Looking ahead, Flex's management expressed confidence in the company's ability to navigate ongoing global economic challenges, including geopolitical tensions and inflationary pressures. The company anticipates continued growth driven by strong demand across its segments and the successful execution of its strategic initiatives, including the planned spin-off and integration of acquired businesses. Flex remains committed to optimizing its capital structure and maintaining adequate liquidity to support future growth and operational needs.