Flex(US:FLEX)2026-02-06 21:11Financial Performance - Flex reported revenues of $20.4 billion for the nine-month period ended December 31, 2025, compared to $25.8 billion for the fiscal year ended March 31, 2025[133]. - Net sales for the three-month period ended December 31, 2025, totaled $7.1 billion, an increase of $0.5 billion, or 8%, from $6.6 billion in the same period of 2024[142]. - Net sales for the nine-month period ended December 31, 2025, reached $20.4 billion, representing an increase of $1.0 billion, or 5%, from $19.4 billion in the same period of 2024[143]. - Gross profit for the three-month period ended December 31, 2025, increased to $0.7 billion, or 9.6% of net sales, compared to $0.6 billion, or 9.1% of net sales, in the same period of 2024[150]. - Gross profit for the nine-month period ended December 31, 2025, rose to $1.9 billion, or 9.1% of net sales, up from $1.6 billion, or 8.2% of net sales, in the same period of 2024[151]. - Net income for the three-month period ended December 31, 2025, was $239 million, a decrease from $263 million in the same period of 2024, while net income for the nine-month period increased to $630 million from $616 million year-over-year[171]. Regional Sales - Net sales by region for the three-month period ended December 31, 2025, were $3.37 billion (48%) in the Americas, $2.23 billion (32%) in Asia, and $1.45 billion (20%) in Europe[134]. Costs and Expenses - Cost of sales for the three-month period ended December 31, 2025, totaled $6.4 billion, an increase of $0.4 billion, or 7%, from $6.0 billion in the same period of 2024[147]. - Selling, general and administrative expenses for the three-month period ended December 31, 2025, were $0.3 billion, or 3.8% of net sales, an increase of $29 million from the same period in 2024[158]. - Restructuring charges during the three-month period ended December 31, 2025, amounted to $6 million, primarily related to employee severance[157]. - Interest expense for the three-month period ended December 31, 2025, increased to $58 million from $57 million in the same period of 2024[160]. - Other charges, net for the three-month period ended December 31, 2025, were $25 million, compared to $5 million in the same period of 2024, primarily due to an impairment recorded on an investment[163]. Cash Flow and Capital - Cash provided by operating activities was $1.3 billion for the nine-month period ended December 31, 2025, driven by $0.6 billion of net income and $0.4 billion of non-cash charges[173]. - Free cash flow for the nine-month periods ended December 31, 2025, and December 31, 2024, was $848 million and $757 million, respectively[176]. - As of December 31, 2025, cash and cash equivalents totaled approximately $3.1 billion, with bank borrowings of approximately $4.4 billion and a $2.75 billion revolving credit facility with no outstanding borrowings[172]. - Cash used in investing activities was $0.5 billion during the nine-month period ended December 31, 2025, primarily for capital expenditures and a business acquisition[175]. Assets and Liabilities - Flex's property and equipment, net, totaled $2.39 billion as of December 31, 2025, an increase from $2.33 billion as of March 31, 2025[134]. - Net working capital increased by $1.3 billion to $4.3 billion as of December 31, 2025, from $3.0 billion as of March 31, 2025[174]. Strategic Initiatives - Flex's strategy focuses on providing vertically-integrated global supply chain solutions to meet diverse customer needs[124]. - The company operates approximately 100 facilities across 30 countries, serving both multinational and regional customers[133]. - Flex's business model allows for flexibility in reallocating resources to optimize operating results based on customer requirements[126]. - The company activated contingency manufacturing plans and transitioned production to alternative facilities following the missile strike in Ukraine[131]. Risks and Challenges - The ongoing geopolitical conflicts, including the Russia-Ukraine conflict, continue to pose risks and uncertainties affecting business operations and financial performance[130]. - Tariff costs impacted revenues and costs of goods by approximately 1% during the three and nine-month periods ended December 31, 2025[132]. Financing Activities - The company issued $600 million of 5.375% Notes due November 2035 and $150 million of 5.250% Notes due January 2032 during the third quarter of fiscal year 2026[172]. - The company has a share repurchase program authorized for up to $1.7 billion, with $0.7 billion spent on repurchases at an average price of $46.22 per share during the nine-month period[182]. Equity and Affiliates - Equity in losses of unconsolidated affiliates was $1 million during the three-month period ended December 31, 2025, compared to zero in the same period of 2024[165]. - Equity in losses of unconsolidated affiliates was $26 million for the nine-month period ended December 31, 2025, compared to $3 million in the same period of 2024[166]. Taxation - The consolidated effective tax rate was 25% for the three-month period ended December 31, 2025, compared to 9% for the same period in 2024, influenced by various factors including an audit settlement[168].