Financial Performance - Net sales for the three months ended January 3, 2026, increased by $93.8 million, or 9.6%, compared to the same period in 2024, reaching $1,069.9 million[83]. - Operating income for the three months ended January 3, 2026, increased by $7.6 million, or 16.2%, to $54.5 million, with an operating margin of 5.1%[94]. - Net income for the three months ended January 3, 2026, rose by $3.9 million, or 10.5%, to $41.2 million, primarily due to increased operating income[99]. - Diluted earnings per share increased to $1.51 for the three months ended January 3, 2026, up from $1.34 in the prior year[100]. Segment Performance - In the AMER segment, net sales increased by $70.9 million, or 25.9%, driven by production ramps of new products and increased customer demand[86]. - In the APAC segment, net sales increased by $4.6 million, or 0.8%, with production ramps partially offset by customer disengagements[87]. - In the EMEA segment, net sales increased by $17.2 million, or 17.0%, attributed to production ramps of new products[88]. Profitability and Margins - Gross profit for the three months ended January 3, 2026, increased by $5.4 million, or 5.4%, with a gross margin of 9.9%, down 40 basis points from the previous year[93]. - Cost of sales increased by $88.3 million, or 10.1%, primarily due to higher material and component costs[91]. Cash Flow and Liquidity - Cash and cash equivalents as of January 3, 2026, were $249.4 million, down from $306.8 million as of September 27, 2025[106]. - Cash flows used in operating activities for the three months ended January 3, 2026, were $(15.4) million, compared to $53.6 million for the same period in 2024[108]. - Free Cash Flow (FCF) for the three months ended January 3, 2026, was $(50.6) million, a decrease of $77.7 million compared to $27.1 million for the same period in 2024[114]. - Cash flows used in investing activities increased to $35.1 million for the three months ended January 3, 2026, from $26.4 million in the same period in 2024[117]. - Cash flows used in financing activities were $8.0 million for the three months ended January 3, 2026, compared to $52.8 million for the same period in 2024[119]. Capital Expenditures and Investments - Capital expenditures for fiscal 2026 are estimated to be approximately $100.0 million to $120.0 million to support new program ramps and replace older equipment[118]. - As of January 3, 2026, 91% of cash and cash equivalents were held outside the U.S. by foreign subsidiaries[107]. - The company has a share repurchase program with $62.6 million of authority remaining under the 2026 Program as of January 3, 2026[121]. Currency and Interest Rate Risks - As of January 3, 2026, 10% of net sales and 17% of total costs were denominated in currencies other than the U.S. dollar[132]. - A 10.0% change in the value of the U.S. dollar relative to other transactional currencies would not have a material effect on the company's financial position, results of operations, or cash flows[132]. - The only material interest rate risk as of January 3, 2026, was associated with the Credit Facility, which has various interest rate options based on different benchmarks[134]. - The borrowing rate under the Credit Facility was SOFR plus 1.00% as of January 3, 2026[135]. - Borrowings under the 2018 NPA are based on a fixed interest rate, mitigating much of the company's interest rate risk[135]. - A 10.0% change in interest rates would not have a material effect on the company's financial position, results of operations, or cash flows[135].

Company Overview - Plexus Corp., founded in 1979 and based in Neenah, WI, is a leading provider of electronic contract manufacturing services to original equipment manufacturers (OEMs) across various industries, including Healthcare/Life Sciences, Industrial, and Aerospace/Defense sectors [11]. Investment Ratings - Plexus Corp. currently holds a Zacks Rank of 3 (Hold) and has a VGM Score of A, indicating a solid overall performance [11]. - The company is considered a potential top pick for growth investors, with a Growth Style Score of A, forecasting a year-over-year earnings growth of 2.4% for the current fiscal year [12]. Earnings Estimates - In the last 60 days, two analysts have revised their earnings estimates higher for fiscal 2026, with the Zacks Consensus Estimate increasing by $0.12 to $7.61 per share [12]. - Plexus Corp. has demonstrated an average earnings surprise of +8.9%, suggesting a positive trend in earnings performance [12].

Market Performance - U.S. stocks closed lower on Friday, with the Nasdaq Composite dropping over 200 points during the session [1] - The S&P 500 experienced losses for the third consecutive session but recorded a gain of 1.4% for January [1] - The Dow Jones Industrial Average fell approximately 179 points, closing at 48,892.47, while the S&P 500 decreased by 0.43% to 6,939.03 and the Nasdaq Composite declined by 0.94% to 23,461.82 [1] - For January, the Dow added 1.7% and the Nasdaq recorded a monthly gain of 1% [1] Analyst Insights - Wall Street analysts frequently make new stock picks, but their track records in predicting market movements are often inconsistent [2] - There is significant variation in analyst ratings and price targets for individual stocks, leading to confusion among investors regarding which opinions to trust [2]

Group 1 - Benchmark raised the price target on Plexus (PLXS) to $220 from $195, maintaining a Buy rating on the shares [1] - The firm was surprised by the strength of the Q2 guidance and the upbeat tone around demand momentum for the remainder of FY26 and beyond [1]

Core Insights - Plexus Corp (PLXS) reported first-quarter fiscal 2026 adjusted earnings per share (EPS) of $1.78, surpassing the previous year's $1.73 and beating the Zacks Consensus Estimate of $1.77 per share [1][7] - Revenues reached $1.07 billion, reflecting a year-over-year increase of 9.6%, although it slightly missed the Zacks Consensus Estimate of $1.071 billion [1][7] - Management anticipates non-GAAP EPS to be in the range of $1.66-$1.81 and revenues between $1.05 billion and $1.09 billion for the upcoming quarter [1] Revenue Breakdown - Revenues from the Americas increased by 25.9% to $345 million, while revenues from EMEA and Asia-Pacific rose by 16.8% and 0.8%, respectively [2] - The company secured 22 manufacturing program wins, projected to contribute $283 million in annualized revenues once fully operational [2][7] Growth Outlook - Management indicated that program wins, market share gains, and increasing demand position the company to potentially exceed its revenue growth target of 9% to 12% for fiscal 2026 [3] - For the second quarter of fiscal 2026, revenues are expected to be between $1.11 billion and $1.15 billion, with non-GAAP operating margin anticipated to be between 5.6% and 6% [15] Segment Performance - Aerospace/Defense revenues grew by 11.3% year over year to $178 million, contributing 17% to total revenues [5] - Healthcare/Life Sciences revenues increased by 24.6% year over year to $466 million, accounting for 43% of total revenues [9] - Industrial sector revenues decreased by 3.6% year over year to $426 million, contributing 40% to total revenues [10] Financial Metrics - Gross profit on a GAAP basis rose by 5.4% year over year to $106.2 million, with a gross margin of 9.9%, down from 10.3% in the previous year [12] - Cash and cash equivalents stood at $248.8 million as of January 3, 2026, down from $306.5 million as of September 27, 2025 [13] - The company reported a negative free cash flow of $50.6 million after capital expenditures of $35.2 million [14]

Financial Data and Key Metrics Changes - Revenue for the fiscal first quarter was $1.07 billion, representing a 10% year-over-year increase and meeting the midpoint of guidance [6][22] - Non-GAAP EPS was $1.78, at the high end of guidance, reflecting strong operating performance despite significant near-term investments [7][22] - The company anticipates approximately $100 million in free cash flow for fiscal 2026, highlighting efforts to drive working capital efficiency [6][28] Business Line Data and Key Metrics Changes - Aerospace and defense sector revenue increased 3% sequentially, with expectations for mid-single-digit growth in the fiscal second quarter due to demand improvements [14][16] - Healthcare life sciences sector revenue increased 10% sequentially, with expectations for flat to low single-digit growth in the fiscal second quarter [16] - Industrial sector revenue declined 8% sequentially, but is expected to see high single to low double-digit growth in the fiscal second quarter driven by demand strength [18][19] Market Data and Key Metrics Changes - The funnel of qualified manufacturing opportunities remains robust at $3.6 billion, with significant momentum in the aerospace and defense sector [20] - The company secured 22 new manufacturing programs worth $283 million in annualized revenue during the fiscal first quarter [7] - The aerospace and defense sector's total funnel for engineering solutions reached an all-time high [20] Company Strategy and Development Direction - The company aims to meet or exceed the high end of its 9%-12% revenue growth goal for fiscal 2026, supported by ongoing market share gains and new program ramps [4][11] - Investments in talent, technology, and operational efficiency are prioritized to sustain future revenue growth [5][12] - The company is committed to innovation and sustainability, as evidenced by awards received for workplace excellence and environmental initiatives [9][10] Management's Comments on Operating Environment and Future Outlook - Management noted strong end-market demand and ongoing market share gains, particularly in healthcare and aerospace sectors [11][34] - There are expectations for robust operating performance in the fiscal second quarter, despite typical seasonal cost increases [11][12] - The company is optimistic about the potential for significant operating profit expansion and free cash flow in fiscal 2026 [12][28] Other Important Information - The cash cycle at the end of the fiscal first quarter was 69 days, with a slight increase attributed to inventory investments [24] - The company plans to increase capital spending to $100-$120 million to support revenue growth [28] Q&A Session Summary Question: What has changed over the last 3-6 months? - Management indicated a combination of strong program wins and improving end-market demand as key drivers of success [32][33] Question: How long does it typically take for semi-cap demand to translate into revenue? - Demand increases are expected to show up within one to two quarters, while capital investments may take over a year [36][37] Question: Can you elaborate on aerospace and defense demand and emerging areas? - Management noted strong demand in traditional defense and commercial aerospace, with potential upside in emerging areas like drones and commercial space [41][42] Question: What are the headwinds on gross margins from the new Malaysia facility? - The headwind was minimal in Q1, with expectations for improvement in Q2 as the facility approaches break-even [44][45] Question: Are you seeing increasing lead times from suppliers? - Management confirmed some supply-based commodities are experiencing increased lead times, but proactive measures are in place to mitigate risks [50][51] Question: How close are you to needing new capacity additions? - The company believes it can support about $6 billion in revenue with the existing footprint, with significant available capacity [56] Question: What is the expected impact of seasonal bonus pay on margins for Q2? - Seasonal bonus pay is expected to pressure margins by about 50-60 basis points [78]

Financial Data and Key Metrics Changes - Revenue for the fiscal first quarter was $1.07 billion, representing a 10% year-over-year increase and meeting the midpoint of guidance [6][22] - Non-GAAP EPS was $1.78, at the high end of guidance, reflecting strong operating performance despite significant near-term investments [7][22] - The company anticipates approximately $100 million of free cash flow for fiscal 2026, indicating ongoing efforts to drive working capital efficiency [6][28] Business Line Data and Key Metrics Changes - Aerospace and defense sector revenue increased 3% sequentially, with wins of $220 million in the fiscal first quarter, nearly matching prior record performances [14][15] - Healthcare life sciences sector revenue increased 10% sequentially, with wins of $40 million, and is expected to exceed the 9%-12% growth goal for fiscal 2026 [16][17] - Industrial sector revenue declined 8% sequentially, but the outlook for the second quarter is a high single to low double-digit increase driven by demand strength [18][19] Market Data and Key Metrics Changes - The funnel of qualified manufacturing opportunities remains robust at $3.6 billion, with significant momentum in the aerospace and defense sector [20] - The company is experiencing robust demand globally, particularly in healthcare and aerospace, with signs of stronger end-market demand [11][12] Company Strategy and Development Direction - The company aims to meet or exceed the high end of its 9%-12% revenue growth goal for fiscal 2026, supported by ongoing investments in talent, technology, and operational efficiency [4][5] - There is a commitment to innovation and sustainability, with initiatives to reduce environmental impact and enhance operational efficiency [9][10] Management's Comments on Operating Environment and Future Outlook - Management noted strong program wins and improving end-market demand as key drivers of success, particularly in healthcare and semi-cap markets [32][34] - The company is optimistic about the fiscal second quarter, expecting robust operating performance despite typical seasonal cost increases [11][12] Other Important Information - The company has been recognized for its workplace culture and sustainability efforts, receiving multiple awards [9] - Capital expenditures for fiscal 2026 are expected to be in the range of $100-$120 million, slightly higher than previous estimates [28] Q&A Session Summary Question: What has changed in the last 3-6 months? - Management indicated that both strong program wins and improving market conditions have contributed to the positive outlook [32][33] Question: How long does demand in semi-cap typically take to translate into revenue? - Demand increases are expected to show up within one to two quarters, while capital investments may take over a year [36][37] Question: Can you elaborate on aerospace and defense demand? - Management noted strong underlying demand in defense and incremental growth in commercial aerospace, with significant wins in the space sector [41][42] Question: What is the impact of the new Malaysia facility on margins? - The headwind from the Malaysia facility was minimal in Q1, with expectations for improvement in the back half of the year [44][45] Question: Are you seeing increasing lead times from suppliers? - Yes, there are increasing lead times for certain commodities, but the company is proactively managing inventory to mitigate risks [50][51] Question: How close is the company to needing new capacity additions? - The existing footprint can comfortably support about $6 billion in revenue, indicating sufficient capacity for current growth [55] Question: What are the expected impacts of seasonal bonus pay on margins? - Seasonal bonuses are expected to create a headwind of about 50-60 basis points for the second quarter [78]

Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $1.07 billion, representing a 10% year-over-year increase and meeting the midpoint of guidance [5][21] - Non-GAAP EPS was $1.78, at the high end of guidance, reflecting strong operating performance despite significant investments [6][21] - The company anticipates approximately $100 million in free cash flow for fiscal 2026, indicating ongoing efforts to drive working capital efficiency [5][12] Business Line Data and Key Metrics Changes - Aerospace and Defense sector revenue increased 3% sequentially, with wins of $220 million in Q1, nearly matching previous record annual wins [13][14] - Healthcare Life Sciences sector revenue grew 10% sequentially, with wins of $40 million, indicating robust demand [15] - Industrial sector revenue declined 8% sequentially, but the outlook for Q2 is a high single to low double-digit increase driven by semi-cap and industrial equipment demand [16][18] Market Data and Key Metrics Changes - The funnel of qualified manufacturing opportunities remains robust at $3.6 billion, with significant growth in aerospace and defense opportunities [18] - The company is experiencing strong demand globally, particularly in healthcare and aerospace sectors, with expectations to exceed the 9%-12% revenue growth goal for fiscal 2026 [11][19] Company Strategy and Development Direction - The company is focused on delivering customer success and gaining market share, with a commitment to innovation and sustainability [8][9] - Investments in talent, technology, and operational efficiency are prioritized to support sustained revenue growth [5][12] - The company aims to achieve a 6% non-GAAP operating margin while managing costs effectively [5][24] Management's Comments on Operating Environment and Future Outlook - Management noted strong program wins and improving end-market demand as key drivers of success, particularly in healthcare and semi-cap markets [32][33] - There is cautious optimism regarding the aerospace and defense sector, with expectations for modest improvements in commercial aerospace demand [40] - The company is prepared to manage supply chain challenges by pre-positioning inventory and enhancing partnerships with customers [48][50] Other Important Information - The company has been recognized for its workplace environment and sustainability efforts, receiving multiple awards [9] - The cash cycle at the end of Q1 was 69 days, with expectations for improvement in Q2 due to robust revenue forecasts [23][26] - Capital expenditures for fiscal 2026 are expected to be in the range of $100-$120 million, slightly higher than previous estimates [26] Q&A Session Summary Question: What has changed in the last 3-6 months to drive the strong performance? - Management indicated a combination of strong program wins and improving end-market demand, particularly in healthcare and semi-cap markets [32] Question: How long does it typically take for semi-cap demand to translate into revenue? - Demand increases are expected to show up within one to two quarters, while capital investments may take over a year [35] Question: What is the outlook for aerospace and defense demand? - Management noted strong underlying demand in defense and incremental growth in commercial aerospace, with potential upside in emerging areas like drones and commercial space [40][41] Question: What are the headwinds on gross margins from the new Malaysia facility? - The headwind was minimal in Q1, and margins are expected to improve in Q2 as the facility approaches break-even [42] Question: Are there any impacts from increasing lead times on supply? - Management acknowledged rising lead times for certain components but emphasized proactive measures to mitigate risks and ensure supply continuity [48][50] Question: How close is the company to needing new capacity additions? - The existing footprint can comfortably support about $6 billion in revenue, indicating sufficient capacity for anticipated growth [52] Question: What are the expected impacts of seasonal bonuses on margins? - Seasonal bonuses are expected to pressure margins by about 50-60 basis points in Q2, but improvements in productivity and revenue growth are anticipated to offset this [76]

FISCAL FIRST QUARTER 2026 HIGHLIGHTS January 28, 2026 PLEXUS CONFIDENTIAL FISCAL FIRST QUARTER THEMES Program wins, share gains and improving market demand position Plexus in F26 to meet or exceed high end of 912% revenue growth goal. Forecast strong F26 operating leverage inclusive of investments in talent, technology, facilities and advanced capabilities. PLEXUS CONFIDENTIAL SAFE HARBOR AND FAIR DISCLOSURE STATEMENT Some of the statements made and information provided during our call as well as informatio ...

Core Insights - Plexus (PLXS) reported revenue of $1.07 billion for the quarter ended December 2025, marking a year-over-year increase of 9.6% and an EPS of $1.78 compared to $1.73 a year ago [1] - The revenue matched the Zacks Consensus Estimate of $1.07 billion, resulting in a slight surprise of -0.11%, while the EPS exceeded the consensus estimate of $1.77 by +0.57% [1] Financial Performance Metrics - Plexus shares have returned +16% over the past month, outperforming the Zacks S&P 500 composite, which saw a change of +0.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Revenue Breakdown by Market Sector - Aerospace/Defense sector revenue was reported at $178 million, slightly below the two-analyst average estimate of $181.97 million, reflecting a year-over-year change of +11.3% [4] - Industrial sector revenue reached $426 million, slightly above the average estimate of $425.29 million, but showed a year-over-year decline of -3.6% [4] - Healthcare/Life Sciences sector revenue was $466 million, exceeding the estimated $464.32 million, with a significant year-over-year increase of +24.6% [4]