Flex(US:FLEX)2025-10-31 20:09Financial Performance - The company reported revenues of $13.4 billion for the six-month period ended September 26, 2025, and $25.8 billion for the fiscal year ended March 31, 2025[123]. - Net sales for the three-month period ended September 26, 2025, totaled $6.8 billion, an increase of approximately $0.3 billion, or 4%, from $6.5 billion for the same period in 2024[132]. - Net sales for the Flex Agility Solutions (FAS) segment increased by approximately $0.2 billion, or 4%, driven by a mid-teen percentage increase in the CEC business due to higher demand in data center cloud[132]. - Net sales for the Flex Reliability Solutions (FRS) segment increased by approximately $0.1 billion, or 3%, primarily due to low double-digit growth in the Industrial business[132]. - Gross profit for the three-month period ended September 26, 2025, increased to $0.6 billion, or 9.0% of net sales, compared to $0.5 billion, or 8.1% of net sales, for the same period in 2024[140]. - Net income for the three-month period ended September 26, 2025, was $199 million, a decrease from $214 million for the same period in 2024, while net income for the six-month period increased to $391 million from $353 million year-over-year[160]. Regional Sales Breakdown - Net sales by region for the three-month period ended September 26, 2025, were $3.4 billion (50%) in the Americas, $2.0 billion (30%) in Asia, and $1.4 billion (20%) in Europe[124]. - The U.S. accounted for $1.3 billion (20%) of net sales for the three-month period ended September 26, 2025, compared to $978 million (15%) for the same period in the previous year[124]. Operational Challenges - The company recognized $41 million in asset impairments and inventory write-downs due to a missile strike on its Mukachevo, Ukraine facility[121]. - The company expects to incur additional near-term inefficiencies as restoration activities progress in Mukachevo, Ukraine[121]. - The ongoing geopolitical conflicts, including the Russia-Ukraine conflict, may impact the company's business operations and financial performance[120]. Cost and Expenses - Tariff costs impacted revenues and costs of goods by approximately 1% during the three and six-month periods ended September 26, 2025[122]. - Selling, general and administrative expenses (SG&A) were $0.3 billion, or 3.8% of net sales, during the three-month period ended September 26, 2025, an increase of $44 million compared to the same period in 2024[148]. - Restructuring charges recognized during the three-month period ended September 26, 2025, totaled approximately $10 million, primarily related to employee severance[147]. - Interest expense decreased to $52 million for the three-month period ended September 26, 2025, from $53 million during the same period in 2024[150]. Cash Flow and Capital Structure - Cash provided by operating activities was $0.9 billion for the six-month period ended September 26, 2025, driven by $0.4 billion of net income and $0.3 billion of non-cash charges[162]. - Free cash flow for the six-month periods ended September 26, 2025, and September 27, 2024, was $0.573 billion and $0.451 billion, respectively[165]. - As of September 26, 2025, cash and cash equivalents totaled approximately $2.2 billion, with bank borrowings of approximately $3.7 billion and a $2.75 billion revolving credit facility with no borrowings outstanding[161]. - Net working capital increased by approximately $0.5 billion to $3.5 billion as of September 26, 2025, from $3.0 billion as of March 31, 2025[163]. - Net cash used in investing activities was $0.3 billion during the six-month period ended September 26, 2025, primarily for capital expenditures and a business acquisition[164]. Tax and Shareholder Returns - The consolidated effective tax rate was 24% for the three-month period ended September 26, 2025, compared to 19% for the same period in 2024[157]. - The company has authorized share repurchases of up to $1.7 billion, with $0.5 billion spent on repurchases at an average price of $42.35 per share during the six-month period[171]. - The company issued a warrant to Amazon.com to purchase up to 3,859,851 ordinary shares at an exercise price of $51.29 per share, expiring on August 15, 2030[172]. - The company expects to remain in compliance with covenants under all credit facilities and indentures for the upcoming 12 months[161]. Competitive Position - The company operates approximately 100 facilities in about 30 countries, serving both multinational and regional customers[123]. - The company has a competitive advantage due to its extensive open innovation platform solutions and significant scale in low-cost geographic areas[123].