PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements for Q1 FY2026 show increased net sales to $6.6 billion, net income to $192 million, and total assets to $19.1 billion [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $19.13 billion and total liabilities to $14.04 billion as of June 27, 2025, with shareholders' equity at $5.09 billion Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 27, 2025 | March 31, 2025 | | :--- | :--- | :--- | | **Total current assets** | $13,467 | $12,841 | | **Total assets** | **$19,132** | **$18,381** | | **Total current liabilities** | $9,921 | $9,850 | | **Total liabilities** | **$14,043** | **$13,379** | | **Total shareholders' equity** | $5,089 | $5,002 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 FY2026 net sales increased to $6.58 billion, operating income to $311 million, and net income to $192 million, with diluted EPS at $0.50 Statement of Operations Summary (in millions, except per share data) | Metric | Q1 FY2026 (ended June 27, 2025) | Q1 FY2025 (ended June 28, 2024) | | :--- | :--- | :--- | | Net sales | $6,575 | $6,314 | | Gross profit | $572 | $471 | | Operating income | $311 | $233 | | Net income | $192 | $139 | | Diluted EPS | $0.50 | $0.34 | [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for Q1 FY2026 significantly increased to $300 million, driven by higher net income and positive other comprehensive income Comprehensive Income Summary (in millions) | Component | Q1 FY2026 (ended June 27, 2025) | Q1 FY2025 (ended June 28, 2024) | | :--- | :--- | :--- | | Net income | $192 | $139 | | Foreign currency translation adjustments | $69 | $(16) | | Unrealized gain (loss) on derivatives | $39 | $(27) | | **Comprehensive income** | **$300** | **$96** | [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity increased to $5.09 billion, influenced by net income and other comprehensive income, partially offset by share repurchases - Key changes in shareholders' equity for the quarter included a **$192 million** increase from net income and a **$247 million** decrease due to share repurchases[25](index=25&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow was $399 million, with $179 million used in investing and $283 million in financing, resulting in a $50 million net cash decrease Cash Flow Summary (in millions) | Cash Flow Activity | Q1 FY2026 (ended June 27, 2025) | Q1 FY2025 (ended June 28, 2024) | | :--- | :--- | :--- | | Net cash provided by operating activities | $399 | $340 | | Net cash used in investing activities | $(179) | $(82) | | Net cash used in financing activities | $(283) | $(468) | | **Net change in cash and cash equivalents** | **$(50)** | **$(231)** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment information, debt instruments, a $35 million acquisition, contingencies, and a new $2.75 billion credit facility - The company operates through two segments: **Flex Agility Solutions (FAS)** and **Flex Reliability Solutions (FRS)**[32](index=32&type=chunk)[37](index=37&type=chunk) - On April 30, 2025, the company acquired a manufacturing business in Poland for an estimated **$35 million**, included in the FRS segment[85](index=85&type=chunk) - Subsequent to the quarter end, on July 15, 2025, the company established a new **$2.75 billion** credit facility maturing in July 2030, replacing its previous facility[105](index=105&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a 4% revenue increase to $6.6 billion, improved gross margin to 8.7%, strong operating cash flow, and robust liquidity with $2.2 billion cash [Overview](index=24&type=section&id=Overview) Flex operates as a global end-to-end manufacturing partner through two segments, offering vertically-integrated supply chain solutions from design to service - Flex operates through two reportable segments: **Flex Agility Solutions (FAS)** and **Flex Reliability Solutions (FRS)**[108](index=108&type=chunk)[113](index=113&type=chunk) - The company's strategy is to offer a full range of vertically-integrated global supply chain solutions, from design to post-sale services[109](index=109&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Q1 FY2026 net sales increased 4% to $6.6 billion, gross margin improved to 8.7%, and net income rose to $192 million with a 22% effective tax rate Net Sales by Segment (in millions) | Segment | Q1 FY2026 | Q1 FY2025 | % Change | | :--- | :--- | :--- | :--- | | Flex Agility Solutions | $3,691 | $3,365 | 10% | | Flex Reliability Solutions | $2,884 | $2,949 | -2% | | **Total** | **$6,575** | **$6,314** | **4%** | - Gross margin improved by **120 basis points** year-over-year to **8.7%**, attributed to favorable product mix and continued operational execution[132](index=132&type=chunk) Segment Income and Margin | Segment | Q1 FY2026 Income | Q1 FY2026 Margin | Q1 FY2025 Income | Q1 FY2025 Margin | | :--- | :--- | :--- | :--- | :--- | | Flex Agility Solutions | $240M | 6.5% | $179M | 5.3% | | Flex Reliability Solutions | $172M | 6.0% | $147M | 5.0% | - The consolidated effective tax rate for the quarter was **22%**, down from **28%** in the prior-year period, primarily due to favorable foreign exchange impacts and tax benefits[146](index=146&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Flex maintains strong liquidity with $2.2 billion cash, generated $399 million operating cash flow, and established a new $2.75 billion credit facility - The company had cash and cash equivalents of approximately **$2.2 billion** and total debt of approximately **$3.7 billion** as of June 27, 2025[151](index=151&type=chunk) Adjusted Free Cash Flow (in millions) | Metric | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | Net cash provided by operating activities | $399 | $340 | | Net purchases of property and equipment | $(131) | $(108) | | **Adjusted free cash flow** | **$268** | **$232** | - In July 2025, the company established a new **$2.75 billion** revolving credit facility, maturing in July 2030[151](index=151&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposure, including interest rate and foreign currency risks, were reported for the quarter - There were no material changes in the company's exposure to market risks for changes in interest and foreign currency exchange rates during the quarter[164](index=164&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[165](index=165&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the quarter[167](index=167&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) Material legal proceedings, including a commercial dispute settlement and tax assessments, are detailed in Note 13 of the financial statements - For details on material legal proceedings, the report refers to Note 13, "Commitments and Contingencies"[169](index=169&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported compared to the Annual Report on Form 10-K - The company states there are no material changes from the risk factors discussed in its Annual Report on Form 10-K for the fiscal year ended March 31, 2025[170](index=170&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Flex repurchased 7.2 million ordinary shares for $247 million, with $0.8 billion remaining for future repurchases under current authorization Issuer Purchases of Equity Securities (Q1 FY2026) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - May 3, 2025 | 5,001,483 | $30.66 | | May 4 - May 31, 2025 | 1,191,921 | $40.72 | | June 1 - June 27, 2025 | 1,009,205 | $44.68 | | **Total** | **7,202,609** | **-** | - As of June 27, 2025, approximately **$0.8 billion** was available for future share repurchases under the existing plan[171](index=171&type=chunk) [Other Information](index=37&type=section&id=Item%205.%20Other%20Information) Two officers adopted Rule 10b5-1 trading plans for potential sales of company shares during the quarter - Two officers, Daniel J. Wendler and Michael P. Hartung, adopted Rule 10b5-1 trading plans during the quarter for selling company shares[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) Exhibits include incentive plans, award agreements, officer certifications, and XBRL data files filed with the Form 10-Q - The exhibits include various compensation plan documents, officer certifications (Sections 302 and 906), and XBRL interactive data files[178](index=178&type=chunk)

Core Insights - Flex Ltd. reported first-quarter fiscal 2026 adjusted earnings per share (EPS) of 72 cents, exceeding the Zacks Consensus Estimate by 14.3% and up from 51 cents in the prior-year quarter [1][9] - Revenues increased by 4.1% year over year to $6.6 billion, beating the consensus mark by 5.6%, driven by strong data center growth in cloud and power markets [1][9] Management Commentary - Management highlighted that the strong first-quarter results indicate a solid start to fiscal 2026, emphasizing the effectiveness of the strategic focus on high-growth markets like data centers and power [2] Stock Performance - Following the results announcement, shares declined by 7.7%, closing at $49.67 on July 24, 2025, despite a 55.2% increase in stock value over the past year compared to a 6.6% decline in the Zacks Electronics - Miscellaneous Products industry [2] Segment Performance - The Flex Reliability Solutions Group, which includes Health Solutions, Automotive, and Industrial businesses, saw revenues fall by 2% to $2.9 billion due to macroeconomic pressures, although strong performance in the power segment partially offset this decline [3] - The Flex Agility Solutions Group, comprising Communications & Enterprise Compute and Lifestyle and Consumer Devices, experienced a 10% revenue increase to $3.7 billion, driven by strong demand in cloud and AI [4] Operating Metrics - Non-GAAP gross profit was $596 million, up 20.4% year over year, with a gross margin expansion of 130 basis points to 9.1% [5] - Non-GAAP operating income rose to $395 million, a 29.1% increase year over year, with operating margin expanding by 120 basis points to 6% [5] Financial Overview - As of June 30, 2025, cash and cash equivalents were $2.24 billion, while long-term debt was $3 billion, compared to $2.29 billion and $2.48 billion a year ago [10] - The company generated $399 million in cash flow from operating activities and $268 million in adjusted free cash flow during the first quarter [10] Future Guidance - For Q2 fiscal 2026, Flex expects revenues between $6.5 billion and $6.8 billion, with adjusted earnings projected at 70-78 cents per share [11] - For fiscal 2026, the revenue forecast has been raised to between $25.9 billion and $27.1 billion, with adjusted earnings anticipated in the range of $2.86-$3.06 per share [14]

Group 1 - Flex reported quarterly earnings of $0.72 per share, exceeding the Zacks Consensus Estimate of $0.63 per share, and up from $0.51 per share a year ago, representing an earnings surprise of +14.29% [1] - The company achieved revenues of $6.58 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.22%, and an increase from $6.31 billion year-over-year [2] - Flex has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Group 2 - Flex shares have increased approximately 40.1% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4][6] - The current consensus EPS estimate for the next quarter is $0.73 on revenues of $6.5 billion, and for the current fiscal year, it is $2.91 on revenues of $26 billion [7] Group 3 - The Zacks Industry Rank places Electronics - Miscellaneous Products in the top 29% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Revenue for the first quarter was $6.6 billion, an increase of 4% year over year [6][15] - Adjusted operating margin was 6%, with adjusted EPS reaching a record $0.72, reflecting a more than 40% increase [6][15] - Gross profit totaled $596 million, with gross margin improving to 9.1%, up 130 basis points [15] Business Line Data and Key Metrics Changes - Reliability Solutions revenue was $2.9 billion, down 2% year over year, impacted by macro-related pressures in Automotive and Renewables [16] - Agility Solutions revenue totaled $3.7 billion, up 10% year over year, driven by strong cloud and AI demand [17] - Operating income for Reliability Solutions improved to $172 million, while Agility Solutions saw operating income of $240 million [16][17] 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% [12] - The company operates over 49 million square feet globally, with significant manufacturing footprints in the U.S. and Mexico [11] Company Strategy and Development Direction - The company is focusing on high-growth end markets such as data centers and power, positioning itself as a strategic end-to-end partner rather than just a contract manufacturer [14] - Investments are being made in advanced manufacturing capabilities, including AI and automation, to enhance productivity [13] 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 [14] - The updated fiscal year 2026 guidance anticipates revenue between $25.9 billion and $27.1 billion, with adjusted EPS between $2.86 and $3.06 [21] Other Important Information - Free cash flow for the quarter was $268 million, representing a conversion rate of 98% [17] - The company acquired a new manufacturing site in Poland to double its power capacity in Europe [19] Q&A Session Summary Question: Margin outlook for the year - Management maintained a margin guidance range of 6% to 6.1%, citing tariff impacts and investments as factors affecting margins [28][30] 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][33] Question: Market evolution and internal investments by hyperscalers - Management views the trend of hyperscalers investing in their own capabilities as positive, emphasizing the importance of integrated solutions [38][39] Question: Capacity constraints and investments - Management acknowledged capacity constraints but expressed confidence in new investments to meet demand, particularly in AI infrastructure [50][51] Question: End market growth expectations - Management indicated that automotive and consumer markets are expected to remain weak, while healthcare and industrial sectors are projected to grow [67][68]

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 ...

P R E S S R E L E A S E EXHIBIT 99.1 FLEX REPORTS FIRST QUARTER FISCAL 2026 RESULTS Austin, Texas, July 24, 2025 - Flex (NASDAQ: FLEX) today announced results for its first quarter ended June 27, 2025. First Quarter Fiscal Year 2026 Highlights: • Revenue: $6.5 billion to $6.8 billion • GAAP Operating Income: $322 million to $362 million • Adjusted Operating Income: $375 million to $415 million • GAAP EPS: $0.58 to $0.66 • Adjusted EPS: $0.70 to $0.78 which excludes $0.09 for net stock-based compensation exp ...

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]