Flex (FLEX) Q2 2026 earnings summary

Executive summary

• Q2 FY26 net sales reached $6.8 billion, up 4% year-over-year, driven by strong data center, Power, and Cloud demand, and disciplined execution.

• Adjusted EPS hit a record $0.79, up 23% year-over-year, while GAAP EPS was $0.52, impacted by $41 million in costs from a missile strike at the Ukraine facility.

• Portfolio is shifting toward higher-margin businesses, with confidence in data center positioning and integrated solutions for technology clients.

• The company is capitalizing on AI-driven infrastructure buildouts, launching new platforms and partnerships, notably with Nvidia and Amazon, to accelerate data center deployments.

• Named to TIME's World's Best Companies List for the third consecutive year.

Financial highlights

• Adjusted operating income was $409 million (6.0% margin), GAAP operating income was $296 million (4.4% margin), and adjusted net income was $300 million.

• Gross profit was $632 million, with gross margin improving to 9.3% year-over-year.

• Free cash flow for Q2 was $305 million; six-month free cash flow was $573 million, up from $451 million year-over-year.

• Cash and cash equivalents stood at $2.25 billion as of September 26, 2025, with $3.7 billion in total debt.

• $297 million of stock was repurchased in Q2, with $544 million repurchased in the first half of FY26.

Outlook and guidance

• FY26 revenue guidance raised to $26.7–$27.3 billion, with adjusted operating margin of 6.2%–6.3% and adjusted EPS of $3.09–$3.17.

• Free cash flow conversion expected to exceed 80%.

• Q3 FY26 guidance: net sales $6.65–$6.95 billion, adjusted operating income $405–$435 million, adjusted EPS $0.74–$0.80.

• Data center revenue expected to grow at least 35% year-over-year, with further updates at year-end.

• Management expects current liquidity and capital structure to be sufficient for future commitments and covenants.