Flex Q2 Earnings & Revenues Top, Stock Up on Raised Outlook

Core Insights - Flex Ltd. reported second-quarter fiscal 2026 adjusted earnings per share (EPS) of 79 cents, exceeding the Zacks Consensus Estimate by 5.3% and up from 64 cents in the prior-year quarter [1][9] - Revenues increased 4% year over year to $6.8 billion, beating the consensus mark by 2%, driven by strong data center growth in cloud and power markets [2][9] Financial Performance - Flex's revenue guidance for fiscal 2026 has been revised to $26.7–$27.3 billion, an increase of $500 million from the prior midpoint, with an expected adjusted EPS of $3.09 to $3.17, raising the midpoint by 17 cents per share [3][9] - Non-GAAP gross profit rose to $632 million from $554 million year-over-year, with a non-GAAP gross margin expansion of 80 basis points to 9.3% [10] - Non-GAAP operating income increased to $409 million from $358 million year-over-year, with an operating margin expansion of 55 basis points to 6% [10] Segment Performance - The Flex Reliability Solutions Group saw revenues grow 3% to $3 billion, accounting for 45% of net sales, driven by strong power growth and steady gains in health solutions [7] - The Flex Agility Solutions Group's revenues increased 4% to $3.8 billion, representing 55% of net sales, supported by strong cloud demand [8] Future Guidance - For the third quarter of fiscal 2026, Flex expects revenues between $6.65 billion and $6.95 billion, with adjusted earnings projected at 74-80 cents per share [13] - Reliability Solutions revenue is anticipated to grow mid- to high-single digits, while Agility Solutions revenue is expected to range from slightly down to up low single digits [14] Stock Performance - Following the earnings announcement, Flex's shares rose 2.86%, closing at $66.10, with a year-over-year stock surge of 85.7% compared to the industry growth of 28.8% [5]