Core Insights - Plexus (PLXS) reported quarterly earnings of $1.78 per share, exceeding the Zacks Consensus Estimate of $1.77 per share, and showing an increase from $1.73 per share a year ago, resulting in an earnings surprise of +0.57% [1] - The company posted revenues of $1.07 billion for the quarter ended December 2025, slightly missing the Zacks Consensus Estimate by 0.11%, but up from $976.12 million year-over-year [2] - Plexus has outperformed the S&P 500, gaining about 18% since the beginning of the year compared to the S&P 500's gain of 1.9% [3] Earnings Outlook - The future performance of Plexus stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.79 on revenues of $1.08 billion, and for the current fiscal year, it is $7.49 on revenues of $4.35 billion [7] Industry Context - The Electronics - Manufacturing Services industry, to which Plexus belongs, is currently ranked in the top 23% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Performance - Plexus reported fiscal first quarter 2026 revenue of $1.070 billion, a 1% sequential increase and a 10% year-over-year growth[5]. - The company achieved a GAAP operating margin of 5.1% and a diluted EPS of $1.51 for the first quarter[5]. - Non-GAAP operating margin was reported at 5.8% with an adjusted EPS of $1.78, excluding $0.27 of stock-based compensation expense[5]. - Plexus reported negative free cash flow of $50.6 million for the first quarter, with cash flows used in operations at $15.4 million and capital expenditures at $35.2 million[13]. - Net sales for the three months ended January 3, 2026, increased to $1,069,852 thousand, up 9.6% from $976,122 thousand for the same period in 2024[19]. - Gross profit for the same period was $106,138 thousand, representing a gross margin of 9.9%, compared to $100,692 thousand and a gross margin of 10.3% in the prior year[19]. - Operating income rose to $54,464 thousand, with an operating margin of 5.1%, compared to $46,860 thousand and an operating margin of 4.8% in the previous year[19]. - Net income for the quarter was $41,182 thousand, an increase of 10.4% from $37,267 thousand year-over-year[19]. - Diluted earnings per share increased to $1.51, up from $1.34 in the same quarter last year, reflecting a growth of 12.7%[19]. - Adjusted net income for the quarter was $48,559 thousand, compared to $48,098 thousand in the same quarter last year, showing a year-over-year increase of 1.0%[24]. Revenue Guidance and Market Performance - Plexus initiated fiscal second quarter 2026 revenue guidance of $1.110 billion to $1.150 billion, representing a 6% sequential and 15% year-over-year growth at the midpoint[7]. - The company won 22 manufacturing programs during the quarter, representing $283 million in annualized revenue when fully ramped into production[6]. - The Aerospace/Defense market sector generated $178 million in revenue, accounting for 17% of total revenue for the quarter[10]. - Top 10 customers comprised 52% of revenue during the first quarter, an increase of 3 percentage points from the previous quarter[9]. Capital and Investment Metrics - Return on invested capital (ROIC) for the first quarter was 13.2%, exceeding the weighted average cost of capital by 420 basis points[7]. - The company reported a return on invested capital (ROIC) of 13.2% for the quarter, down from 14.6% in the previous year[27]. - The fiscal first quarter cash cycle was 69 days, reflecting working capital investments to support significant program ramps and increased customer demand[7]. Balance Sheet Highlights - Total assets as of January 3, 2026, were $3,185,967 thousand, a slight increase from $3,137,110 thousand as of September 27, 2025[22]. - Current liabilities increased to $1,543,632 thousand from $1,518,683 thousand in the previous quarter, indicating a rise of 1.6%[22]. - Total shareholders' equity reached $1,481,063 thousand, up from $1,454,588 thousand, reflecting a growth of 1.8%[22].

Group 1 - Plexus Corp. will release its fiscal first quarter 2026 results after market close on January 28, 2026 [1] - A conference call to discuss the results is scheduled for January 29, 2026, at 8:30 a.m. Eastern Time [2] - An audio webcast of the call will be available on the investor relations section of the Plexus website [1][2] Group 2 - Plexus Corp. specializes in designing, manufacturing, and servicing complex products in regulated environments [3] - The company operates in sectors such as Aerospace/Defense, Healthcare/Life Sciences, and Industrial [3] - Plexus has a global workforce of over 20,000 members across 26 facilities [3]

Core Viewpoint - Plexus (PLXS) shares experienced a significant increase of 7.5%, closing at $172.35, driven by strong trading volume and broader strength in the electronics manufacturing services (EMS) sector related to AI and industrial demand [1][2]. Group 1: Company Performance - Plexus ended fiscal 2025 with 141 manufacturing wins, translating to $941 million in annualized revenues, and anticipates new program ramps across all segments to support revenue growth in fiscal 2026 [2]. - The company is projected to report quarterly earnings of $1.77 per share, reflecting a year-over-year increase of 2.3%, with expected revenues of $1.07 billion, marking a 9.7% rise from the previous year [3]. Group 2: Market Context - Elevated global geopolitical tensions have led to increased defense budgets, which bolster long-cycle demand for mission-critical electronics, an area where Plexus excels [3]. - The consensus EPS estimate for Plexus has remained stable over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [5]. Group 3: Industry Comparison - Plexus is part of the Zacks Electronics - Manufacturing Services industry, where Celestica (CLS) also operates, having closed 4.4% higher at $328.56, with a 3.9% return over the past month [6]. - Celestica's consensus EPS estimate has increased by 1.2% over the past month to $1.73, representing a substantial year-over-year change of 55.9% [7].

Core Insights - Plexus Corporation's share performance has been underwhelming, with a 14.5% gain over the past six months, significantly lagging behind the Electronic Manufacturing Industry's 47.5% growth and the S&P 500's 16.2% return [1][7] Price Performance - Other competitors in the electronics manufacturing services sector, such as Jabil, Sanmina, and Flex, have shown gains of 9.5%, 61.9%, and 30.1%, respectively, raising questions about Plexus's potential for a rebound in 2026 [3] Tailwinds for Plexus - Plexus is expected to benefit from new program ramps, focusing on high-demand sectors like healthcare, aerospace, and industrial markets, with 28 manufacturing program wins projected to contribute $274 million to annualized revenues [4][5] - The company has a strong pipeline with a funnel of qualified manufacturing opportunities valued at $3.7 billion, supporting its revenue growth target of 9-12% for fiscal 2026 [5] - In fiscal 2025, Plexus generated $154 million in free cash flow, allowing for debt reduction and share repurchases, with expectations to generate $100 million in free cash flow for fiscal 2026 [10][11] Sector Performance - The aerospace sector, particularly defense and space, experienced double-digit growth, while healthcare and life sciences revenues increased by 5% for the fiscal year, with expectations for further acceleration [8][9] Headwinds for Plexus - Revenue growth for fiscal 2026 is contingent on modest improvements in end-market demand, with challenges in the industrial sector due to weaknesses in industrial equipment and vehicle electrification [12] - Plexus relies heavily on a few large customers, with the top 10 customers accounting for 49% of revenues, exposing the company to customer concentration risks [13] - Macro uncertainties from shifting trade policies and competition from other electronics manufacturers pose additional challenges [14] Valuation - Plexus is trading at a forward 12-month price/sales ratio of 0.93, slightly above the sector's average of 0.89, while competitors like Flex, Jabil, and Sanmina have lower multiples [17][18] Investment Outlook - While Plexus has a healthy long-term outlook, near-term expectations are uncertain, suggesting that new investors should wait for a better entry point, while existing investors may consider holding the stock [19]

Core Insights - Evolv Technologies Holdings Inc. has entered a strategic partnership with Plexus Corp to enhance its manufacturing and supply chain capabilities, aiming to meet the increasing demand for its security screening products [1][2]. Group 1: Partnership Details - The collaboration combines Evolv's product expertise with Plexus' design, supply chain, and manufacturing capabilities, facilitating large-scale production and distribution [2]. - The partnership is expected to provide increased capacity, a scalable platform for global expansion, and long-term cost-saving opportunities through Plexus' manufacturing scale and procurement efficiencies [2][3]. Group 2: Market Opportunities and Support - The partnership will open new market opportunities through Plexus' sustaining services solution and enhance resiliency with geographic coverage, redundancy, and 24/7 global support [3]. - Evolv currently has sufficient inventory and committed production capacity to ensure uninterrupted service and consistent delivery to customers during the integration with Plexus [3]. Group 3: Company Background - Evolv Technologies specializes in AI-based weapons detection for security screening both in the US and internationally [4]. - Plexus Corp provides electronic manufacturing services across various regions including the US, Asia-Pacific, Europe, the Middle East, and Africa [4].

Financial Performance - Net sales for fiscal 2025 increased by $72.2 million, or 1.8%, to $4,033.0 million compared to fiscal 2024[171] - Gross profit for fiscal 2025 increased by $28.0 million, or 7.4%, with a gross margin of 10.1%, up 50 basis points from fiscal 2024[181] - Operating income for fiscal 2025 rose by $34.7 million, or 20.7%, to $202.4 million, with an operating margin of 5.0%, an increase of 80 basis points[182] - Net income for fiscal 2025 increased by $61.1 million, or 54.7%, to $172.9 million, driven by higher operating income and lower other expenses[190] - Diluted earnings per share increased to $6.26 in fiscal 2025 from $4.01 in fiscal 2024[190] - The company's return on invested capital (ROIC) for fiscal 2025 was 14.6%, reflecting an economic return of 5.7%[194] - Cash and cash equivalents decreased to $306.8 million as of September 27, 2025, from $347.5 million as of September 28, 2024[197] - Cash flows provided by operating activities decreased to $249.2 million in fiscal 2025 from $436.5 million in fiscal 2024, a decline of 42.9%[200] - Free cash flow (FCF) for fiscal 2025 was $154.0 million, down from $341.3 million in fiscal 2024, representing a decrease of $187.3 million[207] - Cash flows used in financing activities decreased to $196.4 million in fiscal 2025 from $255.6 million in fiscal 2024, a reduction of 23.1%[211] Market and Customer Base - In fiscal 2025, Plexus served approximately 190 customers, with no single customer accounting for over 10% of total sales[24] - The distribution of net sales by market sectors in fiscal 2025 was 17% Aerospace/Defense, 40% Healthcare/Life Sciences, and 43% Industrial[25] - The company's 10 largest customers accounted for 49.1% and 47.8% of net sales in fiscal 2025 and 2024, respectively, indicating a high customer concentration risk[74] Operational Strategy - Plexus aims for a long-term revenue growth rate of 9-12% and a return on invested capital (ROIC) of 15%, exceeding its weighted average cost of capital (WACC) of 8.9% for fiscal 2025[17] - Plexus operates 26 facilities totaling approximately 5.0 million square feet, strategically located to support global supply chains[23] - The company has a dedicated team for new product introduction, focusing on decreasing time to market and transitioning products to full volume manufacturing[26] - The company maintains a flexible workforce strategy, utilizing skilled temporary labor alongside full-time employees to maximize efficiency[56] - The company conducts regular talent reviews to assess performance, potential, and retention rates, ensuring a strong leadership pipeline[45] Sustainability and Compliance - The company focuses on reducing emissions, waste, and water usage while transitioning to renewable energy and optimizing operations through new technologies[37] - The company has 17 out of 18 manufacturing facilities certified to ISO 14001 Environmental Management standards, and 3 certified to ISO 45001 Occupational Health and Safety Management standards[53] - The company is committed to human rights, prohibiting discrimination, child labor, and forced labor, while supporting fair wages and humane treatment of workers[44] - The company’s operations are subject to various compliance obligations, including environmental and product safety regulations, to mitigate risks of non-compliance[60] - Compliance with evolving data privacy regulations, such as GDPR, is critical, with potential legal and reputational risks for non-compliance[103] Risks and Challenges - The company faces significant competition, which may lead to price reductions, reduced sales, and loss of market share due to competitors with greater resources and market presence[73] - The company relies on timely payments from major customers, and any failure to meet obligations could adversely affect its financial condition and results[77] - The Healthcare/Life Sciences sector is significantly impacted by government reimbursement rates and health crises, which could affect customer purchasing behavior and margins[82] - The company has experienced component shortages and delays, which can reduce revenue and operating profit due to supply chain constraints[93] - Operations outside the U.S. represent a majority of net sales and operating income, particularly concentrated in Malaysia, exposing the company to geopolitical risks[86] - Cybersecurity threats pose significant risks, including potential data breaches that could disrupt operations and lead to financial liabilities[101] - Labor availability issues, including wage pressure and high turnover rates, may adversely affect operations and financial results[119] - Inflationary pressures and increased personnel costs could materially impact operating results and cash flows if not offset by price increases or operational efficiencies[120] Shareholder and Financial Management - As of September 27, 2025, the company repurchased a total of 160,582 shares at an average price of $134.07 per share[164] - The company has authorized a share repurchase program of up to $100.0 million under the 2026 Program, which became effective upon completion of the 2025 Program[165] - The cumulative total return on Plexus common stock increased from $100 in 2020 to $202 in 2025, outperforming the S&P MidCap 400 Index and Nasdaq-Electronic Components Index[161] - The company anticipates retaining the majority of earnings for capital expenditures and working capital requirements, with no cash dividends paid in the past[163] - The effective tax rate for fiscal 2026 is expected to be approximately 17.0% to 19.0%[189] Inventory and Cash Management - Days in inventory decreased by nine days to 118 days for the three months ended September 27, 2025, compared to 127 days for the same period in 2024[204] - Days in accounts receivable increased by three days to 57 days for the three months ended September 27, 2025, compared to 54 days for the same period in 2024[201] - The annualized cash cycle days decreased by one day to 63 days as of September 27, 2025, compared to 64 days as of September 28, 2024[202]

Core Insights - Plexus Corp (PLXS) reported fourth-quarter fiscal 2025 adjusted earnings per share (EPS) of $2.14, an increase from $1.85 in the same quarter last year, surpassing the Zacks Consensus Estimate of $1.84 per share [1][7] - Revenues for the quarter reached $1.058 billion, reflecting a year-over-year increase of nearly 0.7%, exceeding the Zacks Consensus Estimate of $1.046 billion [1][7] - For fiscal 2025, PLXS reported total revenues of $4.03 billion, up 1.8% from fiscal 2024, and adjusted EPS of $7.43, marking a 29.9% increase [3] Revenue Breakdown - Revenues from the Americas increased by 9.4% to $336 million, while revenues from EMEA and Asia-Pacific declined by 7% and 2.1%, respectively [2] - The Industrial sector's revenues rose by 2% year over year to $461 million, contributing 44% to total revenues, with expectations for low single-digit growth in the current quarter [4] - Healthcare/Life Sciences revenues increased by 2.2% to $424 million, accounting for 40% of total revenues, with anticipated low single-digit growth [5] - Aerospace/Defense revenues fell by 6% year over year to $173 million, contributing 16% to total revenues, with management guiding for flat revenue growth in this sector [8] Operational Performance - Gross profit on a GAAP basis decreased by 2.9% year over year to $104.8 million, with a gross margin of 9.9%, down from 10.3% in the previous year [10] - Selling and administrative expenses declined by 4.4% to $51.7 million, while adjusted operating margin contracted by 40 basis points to 5.8% [10] Cash Flow and Balance Sheet - As of September 27, 2025, Plexus had cash and cash equivalents of $307 million, up from $237.6 million as of June 28 [11] - Long-term debt and finance lease obligations were $91.9 million, slightly down from $92.2 million [11] - Cash flows from operations for the quarter were $132 million, with free cash flow reported at $97.2 million [11] Share Repurchase - The company repurchased $21.5 million worth of shares at an average price of $134.07 per share, with a total of $65 million repurchased in fiscal 2025 [12] Q1 Outlook - For the first quarter of fiscal 2025, revenues are expected to be between $1.05 billion and $1.09 billion, with non-GAAP EPS anticipated in the range of $1.66 to $1.81 [13]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Financial Data and Key Metrics Changes - Revenue for fiscal 2025 was $1.058 billion, marking the third consecutive quarter of sequential growth and approaching the high end of guidance [7] - Non-GAAP EPS grew over 30% to $2.14, substantially exceeding guidance due to favorable discrete tax items [7][25] - Non-GAAP operating margin expanded by 40 basis points to 5.8% [8][24] - Free cash flow for fiscal 2025 was $154 million, significantly exceeding projections, with a total of $495 million generated over the past two fiscal years [8][25] Business Line Data and Key Metrics Changes - Aerospace and Defense sector revenue decreased 6% sequentially in Q4, with flat revenue for fiscal 2025 due to delays in new product launches [16][18] - Healthcare Life Sciences sector revenue increased 1% sequentially in Q4 and 5% for fiscal 2025, driven by strength in imaging and monitoring subsectors [18][19] - Industrial sector revenue was up 11% sequentially in Q4, but flat for fiscal 2025, with strong wins of $165 million in Q4 [20][22] Market Data and Key Metrics Changes - The funnel of qualified manufacturing opportunities increased by 2% sequentially to $3.7 billion, with a record high in aerospace and defense sector opportunities [22] - The company expects mid-single-digit growth in the Aerospace and Defense sector for Q1, driven by new program ramps [17] - The Healthcare Life Sciences sector is anticipated to grow high single to low double digits in Q1 due to ongoing program ramps [18] Company Strategy and Development Direction - The company aims for revenue growth in excess of 9%-12% in fiscal 2026, supported by new program ramps and market share gains [7][13] - Investments will focus on talent, technology, and facilities to enhance operational efficiency and support sustained revenue growth [7][12] - The company is committed to driving positive change and promoting sustainability through its operations and community engagement [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in future growth potential, citing substantial new program ramps and modest improvements in end markets [40] - The company is monitoring the impact of government shutdowns but has not seen any indications of slowdown in major market verticals [48] - There is optimism regarding the defense sector's growth, with expectations of increased military spending in the U.S. and Europe [114] Other Important Information - The company achieved a gross margin of 9.9% in Q4, consistent with guidance, and experienced improved fixed cost leverage [24] - The cash cycle improved to 63 days, the best result in five years, due to reduced inventory days and improved working capital management [27] Q&A Session Summary Question: Growth trajectory and investments - Management indicated increased confidence in growth trajectory due to substantial new program ramps and modest market improvements [36][40] Question: AI opportunities - The company is seeing opportunities in AI, particularly in power generation and healthcare, with several programs leveraging AI technology [41][44] Question: Impact of government shutdown - No indications of slowdown due to the government shutdown have been observed, and customer conversations remain stable [48][49] Question: Semicap and energy growth - The outlook for semicap remains similar to previous forecasts, with expectations of share gains, while energy growth is driven by infrastructure and power generation [51][52] Question: Healthcare life sciences strength - Strength in the healthcare sector is attributed to both new program ramps and the resolution of inventory overhang [55][56] Question: Customer visibility and tariffs - Customer visibility is stable, with ongoing focus on mitigating tariff-related challenges [66] Question: Margin expansion outlook - Management expects to overcome near-term headwinds and achieve better fixed cost leverage with revenue growth [102] Question: Program ramp timing - Minor delays in defense programs contributed to Q4 results, but growth is expected in Q1 and beyond [109][110]