Flex (FLEX) UBS’s 2025 Global Technology and AI Conference summary

Key business drivers and trends

• AI and data center demand are major growth drivers, impacting cloud and power businesses.

• Digital infrastructure, automation, and health solutions (notably diabetes care) are additional growth areas.

• Data center business is projected to grow from $4.8B to $6.8B, with a 35%+ growth rate this year.

• Customers increasingly seek integrated solutions for compute, power, and cooling, accelerating modular deployments.

• Shorter innovation cycles and improved visibility from hyperscalers, colos, and silicon providers support long-term planning.

Financial strategy and capital allocation

• Significant investments are being made in capacity expansions in Dallas, South Carolina, Poland, UK, and Hungary.

• Capital allocation remains disciplined, with a focus on high-return, long-term opportunities across the portfolio.

• Data center and power businesses compete for capital with other high-return segments, ensuring portfolio balance.

• Commercial models are evolving, including co-investment structures with deep-pocketed partners.

• Margin expansion is prioritized by shifting away from low-margin, high-volume consumer devices to higher-margin, longer lifecycle products.

Margin performance and outlook

• Both Agility and Reliability segments now operate at or above 6% operating margin, a year ahead of plan.

• Data center business is the fastest-growing and highest-margin segment, with power products delivering mid-teen margins.

• Margin tailwinds are expected from continued growth in products and services, as well as productivity and automation.

• Regionalization and supply chain complexity are managed through a global footprint, with most cost increases passed through to customers.

• Industry-wide, there is a trend toward higher value-added services and less commodity-centric business.