Flex(US:FLEX)2025-10-29 12:10Financial Performance - Reported net sales for Q2 FY 2026 reached $6.8 billion, a 4% increase year-over-year[5] - GAAP operating margin was 4.4%, while adjusted operating margin improved to 6.0%, marking the fourth consecutive quarter above 6%[5] - Adjusted EPS for Q2 FY 2026 was a record $0.79, compared to $0.64 in the same quarter last year[6] - GAAP net income for Q2 FY 2026 was $199 million, down from $214 million in Q2 FY 2025[14] - GAAP operating income for the six-month period ended September 26, 2025, was $607 million, representing a margin of 4.5%, compared to $530 million and 4.1% for the same period in 2024[20] - Non-GAAP operating income increased to $804 million with a margin of 6.0%, up from $664 million and 5.2% year-over-year[20] - GAAP net income rose to $391 million, compared to $353 million in the prior year, while non-GAAP net income increased to $574 million from $466 million[20] - Diluted earnings per share (EPS) for GAAP was $1.03, up from $0.87, and non-GAAP EPS was $1.51, compared to $1.15 in the previous year[20] Cash Flow and Assets - Free cash flow for Q2 FY 2026 was $305 million, up from $219 million in the prior year[18] - Cash provided by operating activities was $453 million, compared to $319 million in the same quarter last year[18] - Free cash flow for the six-month period was $573 million, an increase from $451 million year-over-year[20] - Total current assets increased to $13,842 million as of September 26, 2025, from $12,841 million as of March 31, 2025[23] - Total assets grew to $19,546 million, up from $18,381 million[23] - Total liabilities increased to $14,511 million, compared to $13,379 million in the previous period[23] - The Company reported free cash inflow of $305 million and $573 million for the three and six-month periods ended September 26, 2025, respectively[40] - In comparison, for the same periods ended September 27, 2024, the Company recognized free cash inflow of $219 million and $451 million, respectively, indicating a year-over-year increase[40] - Free cash flow is defined as cash flows from operating activities minus net capital expenditures, providing a consistent measure for investors[39] Guidance and Projections - The company raised full-year net sales guidance to a range of $26.7 billion to $27.3 billion, reflecting strong demand in data center operations[10] - The company expects adjusted EPS for the full year to be between $3.09 and $3.17[10] - Interest and other expenses are projected to be approximately $180 million to $190 million for the full year[10] Operational Challenges - The company recognized approximately $41 million in asset impairments due to a missile strike on its Mukachevo, Ukraine operations[32] - Restructuring charges for the six-month period were approximately $74 million, compared to $42 million in the same period last year[20] Tax Benefits - For the three and six-month periods ended September 26, 2025, the Company recognized a net tax benefit of $17 million and $36 million, respectively[38] - The Company recognized a net tax benefit of $19 million and $20 million for the three and six-month periods ended September 27, 2024, respectively[38] Strategic Focus - The company continues to focus on higher margin businesses and integrated solutions for data centers amid the AI era[3]