Sanmina (SANM) Bank of America 2026 Global Technology Conference summary

ZT Systems integration and business evolution

• ZT Systems acquisition followed a phased plan: initial integration, business retention, and expansion into CPU, storage, and GPU platforms.

• Pre-production testing is underway, with production expected to ramp up at the end of the calendar year and into next year.

• ZT’s legacy focus on final system integration is complemented by expanded vertical integration capabilities.

• Revenue run rate for ZT is tracking at $5–$6 billion, with plans to double overall company revenue to $16 billion+ by fiscal 2027.

• Facilities in New Jersey, Texas, and the Netherlands have been retrofitted for next-gen accelerated compute, including power and liquid cooling upgrades.

Capacity, revenue, and margin outlook

• Current facilities provide sufficient capacity for $16 billion+ revenue targets, with flexibility to shift workloads as needed.

• Margin profile for ZT is similar to core business, with recent quarters exceeding 6% operating margin.

• Mix of consignment and non-consignment models impacts revenue recognition but not underlying profitability.

• Working capital is expected to build as production scales, with a target leverage ratio of 1–2x net.

• Execution in pre-production and customer validation is the key risk for the current fiscal year.

Broader business segments and growth strategy

• Communication networks and cloud infrastructure have grown 20%+ for seven consecutive quarters, with continued strong demand.

• Aerospace and defense is a growing, accretive segment, with new customers and capacity investments.

• Industrial markets are recovering, with growth expected in the back half of the year.

• Capital allocation prioritizes growth, maintaining a strong balance sheet, and opportunistic M&A.

• Diversification across end markets and vertical integration are central to long-term strategy.