Financial Data and Key Metrics Changes - Revenue for the first quarter was $6.6 billion, an increase of 4% year over year [5][14] - Adjusted operating margin was 6%, with adjusted EPS reaching a record $0.72, reflecting a more than 40% increase [5][14] - Gross profit totaled $596 million, with gross margin improving to 9.1%, up 130 basis points [14] Business Line Data and Key Metrics Changes - Reliability Solutions revenue was $2.9 billion, down 2% year over year, impacted by macro pressures in Automotive and Renewables, but operating income improved to $172 million [15] - Agility Solutions revenue reached $3.7 billion, up 10% year over year, driven by strong cloud and AI demand, with operating income at $240 million [16] Market Data and Key Metrics Changes - Americas revenue rose to 49% in fiscal year 2025, up from 38% in fiscal year 2020, while Asia declined to 30%, down from 41% [11] - The company operates over 49 million square feet globally, with significant manufacturing footprints in North America [10] Company Strategy and Development Direction - The company is focusing on high-growth end markets such as data centers and power, aiming to transform from a contract manufacturer to a strategic end-to-end partner [12][13] - Investments are being made in advanced manufacturing capabilities, including AI and automation, to enhance productivity and meet evolving customer needs [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning despite market uncertainties, highlighting a strong start to fiscal year 2026 [12][19] - The updated fiscal year 2026 revenue guidance is between $25.9 billion and $27.1 billion, reflecting an increase in the midpoint by approximately $600 million [21] Other Important Information - Free cash flow for the quarter was $268 million, representing a conversion rate of 98% [16] - The company acquired a new manufacturing site in Poland to double its power capacity in Europe [18] Q&A Session Summary Question: Margin outlook for the year - Management maintained a margin guidance of 6% to 6.1%, citing tariff impacts and investments as factors affecting margin performance [27][28] Question: Data center revenue trends - Management confirmed a strong outlook for data center growth, with expectations of 35% year-over-year growth, driven by both cloud and power segments [31][32] Question: Market evolution and internal investments by hyperscalers - Management views the trend of hyperscalers investing in their own capabilities positively, emphasizing the importance of integrated solutions [36][38] Question: Full year guidance context - Management clarified that while Q1 results were strong, the full year guidance reflects a cautious approach and ongoing investments in growth [39][41] Question: Capacity constraints and investments - Management acknowledged capacity constraints but expressed confidence in new investments to meet demand, particularly in AI infrastructure [48][50] Question: Tariff impact on guidance - Management indicated that tariffs are largely pass-through costs and will not materially impact revenue growth rates, though they do affect margin performance [59][61] Question: Segment growth expectations - Management expects automotive and consumer markets to remain weak, while healthcare and industrial sectors are projected to grow [64][66]

Q1 FY26 Earnings Presentation Quarter End: June 27, 2025 Earnings Announcement: July 24, 2025 Risks and non-GAAP disclosures This presentation contains forward-looking statements within the meaning of U.S. securities laws, including statements related to our future financial results and our guidance for future financial performance (including expected revenues, operating income, margins and earnings per share). These forward-looking statements are based on current expectations, forecasts and assumptions inv ...

Financial Performance - Flex reported net sales of $6.575 billion for the first quarter of fiscal year 2026, an increase from $6.314 billion in the same period last year, representing a growth of approximately 4.2%[16] - The company achieved a GAAP operating income of $311 million, up from $233 million year-over-year, reflecting a growth of about 33.5%[16] - Adjusted net income for the quarter was $274 million, compared to $211 million in the prior year, marking a year-over-year increase of approximately 29.8%[18] - Flex's GAAP earnings per share (EPS) for the quarter was $0.50, an increase from $0.34 in the same quarter last year, representing a growth of approximately 47.1%[16] - The company updated its fiscal year 2026 revenue guidance to a range of $25.9 billion to $27.1 billion, with adjusted EPS guidance of $2.86 to $3.06[9] Cash and Assets - Cash and cash equivalents at the end of the quarter were $2.239 billion, a slight decrease from $2.289 billion at the beginning of the period[22] - Flex's total assets increased to $19.132 billion as of June 27, 2025, compared to $18.381 billion as of March 31, 2025[21] - The company reported a net cash provided by operating activities of $399 million for the quarter, compared to $340 million in the same period last year, indicating a growth of approximately 17.4%[22] - Flex's total liabilities increased to $14.043 billion, up from $13.379 billion at the end of the previous quarter[21] Strategic Focus - The company emphasized its strategic focus on high-growth end-markets such as data centers and power, which contributed to its strong performance in the first quarter[5] Restructuring and Costs - The company recognized approximately $23 million and $25 million in restructuring charges during the three-month periods ended June 27, 2025, and June 28, 2024, respectively, primarily related to employee severance[28] - In the first quarter of fiscal year 2026, the company accrued $6 million related to acquisition costs, while no such costs were incurred in the first quarter of fiscal year 2025[29] - The company reported approximately $17 million in equity losses from a reduced valuation of a non-core investment fund in the first quarter of fiscal year 2026, with no similar event in the first quarter of fiscal year 2025[30] Tax and Non-GAAP Measures - During the three-month periods ended June 27, 2025, and June 28, 2024, the company recognized a net tax benefit of $19 million and $1 million, respectively, related to the tax effects of various adjustments incorporated into non-GAAP measures[32] - The company uses non-GAAP measures to evaluate operating performance, which excludes stock-based compensation, intangible amortization, restructuring charges, and other non-recurring costs[1] - Non-GAAP measures are intended to provide a clearer view of the company's ongoing operational performance and facilitate comparisons with competitors[1] - The company adopted an annual normalized tax rate for fiscal year 2026 to determine the tax effect of non-GAAP adjustments, considering the mix of earnings across tax jurisdictions[31] - The exclusion of restructuring charges and legal costs from non-GAAP measures is aimed at providing a more accurate assessment of the company's core business performance[27] - The company believes that non-GAAP measures help investors understand the specific impacts of certain expenses on operating results[1] - Management's incentive compensation is determined using certain non-GAAP measures, highlighting their importance in internal assessments[1]

Core Insights - Flex reported strong first quarter results for fiscal year 2026, highlighting growth in high-demand markets such as data centers and power [4] - The company has updated its fiscal year 2026 guidance, reflecting its leadership position and the impact of recent acquisitions [4] Financial Performance - Net sales for the first quarter reached $6.6 billion, an increase from $6.3 billion in the same period last year [7] - GAAP operating income was $311 million, up from $233 million year-over-year, while adjusted operating income was $395 million compared to $306 million [12][13] - GAAP net income for the quarter was $192 million, compared to $139 million in the prior year, resulting in GAAP earnings per share of $0.50, up from $0.34 [12][13] Guidance and Outlook - For the second quarter of fiscal year 2026, revenue is projected to be between $6.5 billion and $6.8 billion, with GAAP EPS expected to range from $0.58 to $0.66 [8] - Full fiscal year 2026 guidance estimates revenue between $25.9 billion and $27.1 billion, with GAAP EPS projected between $2.27 and $2.47 [8] Operational Highlights - The company emphasized its strategic focus on high-growth end-markets and the integration of services to enhance its position as a comprehensive partner [4] - Flex operates with a global workforce across 30 countries, delivering technology innovation and manufacturing solutions [6]

Industry Overview - The technology sector experienced growth in Q2 2025, driven by the strong adoption of Artificial Intelligence (AI), machine learning, and Generative AI (GenAI) [1] - The ongoing digitalization wave is supporting the rapid adoption of technologies such as AI, cloud computing, 5G, and others [1] Earnings Reports - Several technology companies, including Meta Platforms, Lam Research, Flex, and Seagate Technology, are expected to report earnings soon, with potential to exceed estimates [2] AI and Cloud Computing Investments - The demand for AI is increasing, leading to a need for expanded data center capacity [3] - Major cloud providers like Amazon, Alphabet, Microsoft, and Meta Platforms have significant multi-year investment plans for cloud capacity and AI deployment, with Microsoft planning to invest $80 billion and Meta Platforms $64-$72 billion [3] Semiconductor Market - The advent of GenAI has spurred investments in chips, particularly GPUs, with semiconductor sales reaching $59 billion in May 2024, a 19.8% year-over-year increase [4] PC Market Growth - The PC segment saw growth in Q2 2025, with IDC estimating 68.4 million units sold, a 6.5% year-over-year increase [5] - Gartner estimates shipments at 63.2 million units, up 4.4% year-over-year, driven by an upgrade cycle and demand for AI-enabled PCs [5] Company-Specific Insights - Meta Platforms has an Earnings ESP of +1.83% and is expected to report Q2 2025 ad revenues of $43.94 billion, indicating a 14.6% year-over-year growth [8][9] - Lam Research has an Earnings ESP of +2.71% and is benefiting from shifts in semiconductor demand, with a consensus revenue estimate of $3.22 billion, suggesting 48.5% year-over-year growth [11][12] - Flex Ltd has an Earnings ESP of +2.77% and is expected to report Agility Solutions revenue of $3.52 billion, indicating 4.5% year-over-year growth [14][15] - Seagate Technology has an Earnings ESP of +2.34% and is projected to report Mass Capacity revenues of $2 billion, suggesting a 39.6% year-over-year growth [17][18]

Group 1: Zacks Premium Overview - Zacks Premium offers various tools for investors to enhance their stock market engagement, including daily updates on Zacks Rank and Industry Rank, access to the Zacks 1 Rank List, Equity Research reports, and Premium stock screens [1] - The service aims to help investors become more informed and confident in their investment decisions [1] Group 2: Zacks Style Scores - Zacks Style Scores are complementary indicators that rate stocks based on value, growth, and momentum, assisting investors in selecting stocks likely to outperform the market in the next 30 days [2] - Each stock receives a rating from A to F, with A indicating the highest potential for outperformance [3] Group 3: Value Score - The Value Style Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [4] Group 4: Growth Score - The Growth Style Score evaluates a company's financial strength and future outlook, considering projected and historical earnings, sales, and cash flow [5] Group 5: Momentum Score - The Momentum Style Score identifies optimal times to invest based on price trends and earnings estimate changes [6] Group 6: VGM Score - The VGM Score combines the Value, Growth, and Momentum Scores to highlight stocks with the best overall potential [7] Group 7: Zacks Rank Integration - The Zacks Rank utilizes earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks achieving an average annual return of +23.62% since 1988, significantly outperforming the S&P 500 [8][9] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [9][10] Group 8: Company Spotlight - Flex Ltd - Flex Ltd, based in Singapore, operates in advanced manufacturing solutions across 30 countries, providing services such as design, engineering, and circular economy solutions [11] - The company holds a Zacks Rank of 2 (Buy) and a VGM Score of A, indicating strong investment potential [11] - Flex has a Value Style Score of A, supported by a forward P/E ratio of 18.31, and has seen a positive earnings estimate revision for fiscal 2026 [12]

Core Insights - Flex Ltd. is set to report its first-quarter fiscal 2026 results on July 24, with revenue estimates at $6.25 billion, reflecting a 1% decline year-over-year, while earnings per share are expected to rise by 23.5% to 63 cents [1][2] Financial Performance - For the fiscal first quarter, Flex anticipates revenues between $6 billion and $6.5 billion, with adjusted earnings projected at 58-66 cents per share, excluding certain expenses [2] - The company has consistently beaten earnings estimates over the past four quarters, with an average surprise of 16.2%, and its shares have increased by 80.7% in the past year, contrasting with a 7.1% decline in the Zacks Electronics - Miscellaneous Products industry [3] Market Dynamics - Positive momentum for Flex is attributed to its expanding IP portfolio, recent design wins, acquisitions, and strong demand in data center, networking, and automotive power electronics markets [4] - Flex's strategic initiatives in cloud, power, and automotive segments have contributed to revenue growth in the previous quarter and are expected to continue supporting performance [4] Strategic Initiatives - At its recent Investor Day, Flex introduced the next phase of its EMS + Products + Services strategy, enhancing its manufacturing capabilities with proprietary products and value-added services [5] - The company’s power products position it uniquely as a comprehensive provider of data center solutions, which is expected to enhance customer value and support margin growth [5] Growth Projections - For fiscal 2026, Flex projects data center revenue growth of approximately mid-30%, with power growth slightly exceeding that, while cloud growth may be lower due to challenging year-over-year comparisons [7][10] - The Reliability Solutions business is expected to see flat to high-single-digit declines in sales due to automotive sector weaknesses, while Agility Solutions anticipates low-single-digit revenue changes [8][11] Operational Developments - Flex has a global footprint of over 48 million square feet across 110+ sites, which supports efficient manufacturing and reflects strong growth in the Americas [6] - Recent collaborations, such as with MIT on the Initiative for New Manufacturing, aim to enhance U.S. manufacturing through advanced technologies [13] - The introduction of the SmartPlate System by Flex's subsidiary JetCool offers significant efficiency improvements in data centers, achieving an average of 15% IT power savings [14] Challenges - The company faces challenges from an uncertain macro environment and changing trade policies, particularly tariff-related costs impacting margins and cash flow timing [12]

Core Insights - The article emphasizes the importance of the Zacks Rank system, which focuses on earnings estimates and revisions to identify strong stocks [1] - Value investing is highlighted as a preferred strategy for finding undervalued stocks through fundamental analysis and traditional valuation metrics [2] - Zacks has developed the Style Scores system to identify stocks with specific traits, particularly those with high grades in the "Value" category [3] Company Analysis: Flex (FLEX) - Flex (FLEX) currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong investment potential [4] - The stock is trading at a P/E ratio of 17.68, significantly lower than the industry average of 23.51, suggesting it may be undervalued [4] - FLEX's Forward P/E has fluctuated between 9.39 and 17.68 over the past 12 months, with a median of 13.66 [4] - The PEG ratio for FLEX is 1.69, compared to the industry average of 2.13, indicating a favorable valuation relative to expected earnings growth [5] - Over the past 52 weeks, FLEX's PEG has ranged from 1.28 to 2.24, with a median of 1.65 [5] - The P/S ratio for FLEX is 0.77, which is lower than the industry's average P/S of 1.27, further supporting the notion of undervaluation [6] - These metrics collectively suggest that FLEX is likely undervalued and presents an impressive value opportunity at the moment [7]

Company Overview - Flex Ltd. (NASDAQ: FLEX) is a company that manufactures the physical hardware for various technologies, including electric vehicles, medical equipment, and cloud data centers [1]. Investment Insights - The article emphasizes the importance of seeking new investment opportunities rather than relying on promotions or traditional career advancements [1].

Core Insights - Allison Transmission's eGen Flex hybrid propulsion system has been selected by the Maryland Department of Transportation for use in New Flyer buses in the Baltimore metropolitan area, with production set for 2025 [1][4] - The eGen Flex system aims to enhance public transportation efficiency and assist cities in reducing their carbon emissions [2][3] Technology and Benefits - The eGen Flex system features innovative geofencing technology, allowing buses to operate up to 50% of their route in engine-off mode, significantly lowering emissions and noise [3] - The system also provides improved fuel economy, achieving up to 25% better fuel efficiency compared to traditional diesel buses, which offers financial advantages for municipalities [3] Company Overview - Allison Transmission is a leading designer and manufacturer of propulsion solutions for commercial and defense vehicles, and is the largest global manufacturer of medium- and heavy-duty fully automatic transmissions [5] - The company, founded in 1915 and headquartered in Indianapolis, Indiana, operates in over 150 countries and has regional headquarters in the Netherlands, China, and Brazil, along with manufacturing facilities in the USA, Hungary, and India [5]