Flex's Q3 Earnings & Revenues Beat Estimates, Rise Y/Y, Stock Up

Core Viewpoint - Flex Ltd. reported strong third-quarter fiscal 2025 results, with adjusted earnings per share (EPS) of 77 cents, exceeding estimates by 20.3% and improving from 54 cents in the prior-year quarter [1][2]. Financial Performance - Revenues increased by 2.1% year over year to $6.6 billion, surpassing the consensus estimate by 5.5%, driven by strong demand in data center, medical device, and consumer-focused portfolios [2]. - Non-GAAP gross margin expanded by 150 basis points to 9.3%, while non-GAAP operating income rose to $399 million from $314 million in the previous year [5]. - The company generated cash flow from operating activities of $413 million and adjusted free cash flow of $306 million in the quarter [9]. Segment Performance - The Flex Reliability Solutions Group, which includes Health Solutions, Automotive, and Industrial businesses, maintained stable revenues at $3 billion, with strength in power and medical devices offsetting automotive sector challenges [3]. - The Flex Agility Solutions Group saw revenues increase by 4% to $3.6 billion, driven by robust cloud and consumer-related markets [4]. Outlook - For the fourth quarter of fiscal 2025, Flex expects revenues between $6 billion and $6.4 billion and adjusted earnings of 65-73 cents per share [10]. - The company anticipates full fiscal 2025 revenues between $25.4 billion and $25.8 billion, up from earlier projections of $24.9-$25.5 billion [11]. - Adjusted earnings for fiscal 2025 are now expected to be in the range of $2.57-$2.65 per share, an increase from previous estimates [12]. Shareholder Actions - In the quarter, Flex repurchased $200 million worth of stock, totaling nearly 5.5 million shares, with cumulative repurchases amounting to $950 million as of December 31, 2024 [9].