Core Viewpoint - Flex Ltd (FLEX) reported Q3 '26 results that were perceived as slightly disappointing, with the only positive aspect being the significant investment from major tech companies into the market [1] Financial Performance - The Q3 '26 results of Flex Ltd were described as lackluster, indicating potential challenges in performance [1] Investment Sentiment - The ongoing investment from big tech companies is seen as a crucial factor that may support the market and provide a positive outlook for long-term investors [1]

Core Insights - Flex Ltd (FLEX) reported Q3 '26 results that were perceived as slightly disappointing, with the only positive aspect being significant investments from major tech companies [1] Financial Performance - The Q3 '26 results of Flex Ltd were described as lackluster, indicating potential challenges in performance [1] Investment Sentiment - The article reflects a long-term investment perspective, emphasizing a preference for a diversified portfolio that includes growth, value, and dividend-paying stocks, with a particular focus on value [1]

Company Overview - Celestica Inc. (NYSE:CLS) is a provider of supply chain and manufacturing solutions, offering services such as design, engineering, assembly, logistics, and after-market support [2]. Stock Performance - Celestica's stock has seen a remarkable increase, tripling in value over the year, which translates to a 253% rise as of the latest report [1]. - The stock jumped nearly $25 or 8% in response to a strong quarterly performance and a positive investor day presentation [1]. Market Position and Growth Drivers - The company is benefiting from the data center boom, as it manufactures a significant amount of hardware for data centers [1]. - Celestica has begun designing its own equipment, which is seen as a lucrative opportunity for the company [1]. Future Outlook - The company provided a strong forecast for 2026, indicating confidence in its growth trajectory [1].

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]

Core Insights - Flex published its 2025 sustainability report, detailing its performance against 2030 sustainability goals for the calendar year 2024 [1][2] - The company's sustainability strategy emphasizes reducing environmental impact, uplifting communities, and fostering a safe work environment [1][2] Sustainability Performance - Flex achieved a 43% decrease in absolute scope one and two emissions from the 2019 base year [6] - 32% of electricity used was powered by renewable energy [6] - 47% of sites within scope are verified as zero waste [6] - There was a 10% decrease in total case incident rate year over year [6] - 58% of preferred suppliers had emission reduction targets, and 100% of specified customers had science-based targets [6][7] Recognition and Awards - Flex received an A- CDP Score for Climate and was listed on Times and Statista's World's Best Companies List for the second consecutive year [3] - The company was honored as a 2025 World's Most Ethical Company® by Ethisphere for the third straight year [3] - Awards were received for advancing sustainability with value chain partners, including a Supplier Pledge Award from HP and an Excellence in ESG award from Cisco [3] Company Overview - Flex operates as a manufacturing partner across 30 countries, providing advanced manufacturing and supply chain solutions [4] - The company is focused on accelerating data center deployment through innovative power and cooling technology [4]

Industry Overview - The global cannabis market is experiencing growth, with increasing demand for cannabis products, particularly in the US, which has the largest cannabis market in the world [3] - Despite a downtrend in publicly traded cannabis companies, the sector is still progressing, leading to optimism for long-term gains [2] Company Highlights - **Planet 13 Holdings Inc.** has expanded its retail operations by opening a new dispensary in Pensacola, Florida, aiming to serve local communities with high-quality cannabis products [7][8] - **Ascend Wellness Holdings, Inc.** is set to report its Q3 2025 earnings, with a conference call scheduled for November 10, 2025, indicating ongoing operational transparency and engagement with investors [10] - **FLUENT Corp.** has unified its New York retail network by rebranding its Manhattan and White Plains dispensaries, marking a strategic move to enhance its presence in the state [11]

Core Insights - Flex reported quarterly earnings of $0.79 per share, exceeding the Zacks Consensus Estimate of $0.75 per share, and up from $0.64 per share a year ago, representing an earnings surprise of +5.33% [1] - The company achieved revenues of $6.8 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.13% and increasing from $6.55 billion year-over-year [2] - Flex has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Performance - The earnings surprise for the previous quarter was +14.29%, with actual earnings of $0.72 per share compared to an expected $0.63 [1] - The current consensus EPS estimate for the upcoming quarter is $0.75, with projected revenues of $6.65 billion, and for the current fiscal year, the EPS estimate is $2.99 on revenues of $26.52 billion [7] Stock Performance - Flex shares have increased approximately 67.4% since the beginning of the year, significantly outperforming the S&P 500's gain of 17.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Outlook - The Electronics - Miscellaneous Products industry, to which Flex belongs, is currently in the top 20% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Revenue for the second quarter was $6.8 billion, representing a 4% year-over-year growth [5][12] - Operating margin was 6%, maintaining this level for four consecutive quarters, with adjusted EPS of $0.79, up 23% year-over-year [6][12] - Gross profit totaled $632 million, with a gross margin improvement to 9.3%, up 80 basis points [12] Business Line Data and Key Metrics Changes - In the Reliability Solutions segment, revenue was $3 billion, up 3% year-over-year, driven by strong growth in power and moderate growth in health solutions [12][13] - Agility Solutions revenue totaled $3.8 billion, an increase of 4% year-over-year, primarily due to robust cloud demand [13] - Operating income for Reliability Solutions improved to $197 million, with a segment margin expansion to 6.5% [13] Market Data and Key Metrics Changes - The data center business is expected to grow at least 35% this year, reflecting strong demand in cloud and power sectors [7][8] - Medical device demand remains steady, with expectations for improvement in medical equipment later this year [10] - The automotive market is stabilizing, with new compute deals validating investments in software-defined vehicles [10] Company Strategy and Development Direction - The company is strategically shifting its portfolio towards higher-margin, technology-driven businesses, particularly in AI and data center infrastructure [8][9] - Flex unveiled a new AI infrastructure platform aimed at enhancing data center deployment efficiency [9] - The company is committed to rebuilding operations in Ukraine following facility damage, emphasizing resilience and support for employees [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate a dynamic tariff landscape and maintain strong top-line momentum [15] - The company raised its full-year revenue guidance to between $26.7 billion and $27.3 billion, reflecting strong performance despite challenges [15][16] - Management highlighted the importance of partnerships with leading technology companies to drive future growth [46][47] Other Important Information - Free cash flow for the quarter increased to $305 million, with net CapEx totaling $148 million [13][14] - The company repurchased $297 million of stock, approximately 5.6 million shares [14] Q&A Session Summary Question: Why was there no upside to data center revenues despite strong performance? - Management clarified that data center growth is not updated quarterly, but they expect at least 35% growth for the year, which is strong compared to industry standards [22] Question: How does the mix of custom silicon versus merchant silicon impact the cloud business? - Management indicated that they benefit significantly from hyperscale growth and will provide updated guidance in May regarding the mix of custom versus merchant silicon [26][27] Question: What is driving margin improvements in the second half? - Management noted that growth in products and services businesses, which have higher margins, is expected to drive margin improvements [33][34] Question: How does the company view the automotive market's growth potential? - Management stated that they are cautiously optimistic about stabilizing growth in the automotive sector, with a focus on long-term commitments [55] Question: What is the outlook for data center capacity and potential supply constraints? - Management expressed confidence in capacity and capability across regions, with plans for significant CapEx investments to support growth [70][71] Question: How is AI and automation being utilized in operations? - Management highlighted ongoing efforts to deploy AI and robotics to enhance efficiency and productivity in manufacturing and logistics [76][77]

Financial Data and Key Metrics Changes - Revenue for the second quarter was $6.8 billion, representing a 4% year-over-year growth [5][12] - Operating margin was 6%, maintaining this level for four consecutive quarters, with adjusted EPS of $0.79, up 23% year-over-year [6][12] - Gross profit totaled $632 million, with a gross margin improvement to 9.3%, up 80 basis points [12] Business Line Data and Key Metrics Changes - In the Reliability Solutions segment, revenue was $3 billion, up 3% year-over-year, driven by strong growth in power and moderate growth in health solutions [12] - Agility Solutions revenue totaled $3.8 billion, an increase of 4% year-over-year, primarily due to robust cloud demand [12][13] - Operating income for Reliability Solutions improved to $197 million, with a segment margin expansion to 6.5% [13] Market Data and Key Metrics Changes - The data center business is expected to grow at least 35% this year, reflecting strong demand in cloud and power sectors [7][8] - Medical device demand is steady, with anticipated improvements in medical equipment later this year [10] - The automotive market is stabilizing compared to prior quarters, with new compute deals validating investments in software-defined vehicles [10] Company Strategy and Development Direction - The company is strategically shifting its portfolio towards higher-margin, technology-driven businesses, particularly in AI and data center infrastructure [8][9] - Flex unveiled a new AI infrastructure platform aimed at enhancing data center deployment efficiency [9] - The company is committed to rebuilding operations in Ukraine following facility damage, emphasizing resilience and support for employees [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate a dynamic tariff landscape and raised full-year revenue guidance to between $26.7 billion and $27.3 billion [15][16] - The company anticipates strong cash generation and maintains an 80%+ free cash flow conversion target for FY2026 [16] - Management highlighted the importance of partnerships with leading technology companies to support growth in the data center space [46] Other Important Information - Free cash flow for the quarter increased to $305 million, with net CapEx totaling $148 million [13][14] - The company repurchased $297 million of stock, approximately 5.6 million shares [14] Q&A Session Summary Question: Why was there no upside to data center revenues despite strong performance? - Management clarified that data center growth is not updated quarterly, but they expect at least 35% growth for the year, which is strong compared to industry standards [20][22] Question: How does the mix of custom silicon versus merchant silicon impact the cloud business? - Management indicated that they benefit significantly from hyperscale growth and will provide updated guidance in May regarding the mix of custom versus merchant silicon [25][27] Question: What is driving margin improvements in the second half? - Management noted that growth in higher-margin businesses, particularly products and services, is expected to drive margin improvements [33][34] Question: How does the company view the automotive market's growth potential? - Management stated that they are cautiously optimistic about stabilizing growth in the automotive sector, with opportunities across various platforms [55][56] Question: What is the outlook for data center capacity and potential supply constraints? - Management expressed confidence in capacity and capability across regions, with plans for significant CapEx investments to support growth [70][71] Question: How is AI and automation being utilized in operations? - Management highlighted ongoing efforts to deploy AI and robotics to enhance productivity and efficiency in manufacturing and logistics [72][76]

Financial Data and Key Metrics Changes - Revenue for the second quarter was $6.8 billion, representing a 4% year-over-year growth [5][12] - Operating margin was 6%, maintaining this level for four consecutive quarters [6][12] - Adjusted EPS increased by 23% to $0.79, marking a record for the company [6][12] - Gross profit totaled $632 million, with gross margin improving to 9.3%, an increase of 80 basis points [12] Business Line Data and Key Metrics Changes - In the Reliability Solutions segment, revenue was $3 billion, up 3% year-over-year, driven by strong growth in power and moderate growth in health solutions [12] - Agility Solutions revenue totaled $3.8 billion, an increase of 4% year-over-year, primarily due to robust cloud demand [12][13] - Operating income for Reliability Solutions improved to $197 million, with segment margin expanding by 105 basis points to 6.5% [13] - Operating income for Agility Solutions was $227 million, with operating margin slightly down to 6% [13] Market Data and Key Metrics Changes - The data center business is expected to grow at least 35% this year, reflecting strong demand in cloud and power sectors [6][10] - Medical device demand is steady, with anticipated improvements in medical equipment later this year [10] - The automotive market is stabilizing compared to prior quarters, with new compute deals validating investments in software-defined vehicles [10] Company Strategy and Development Direction - The company is strategically shifting its portfolio towards higher-margin, technology-driven businesses [6][10] - Flex is positioned to benefit from the AI-driven infrastructure buildout, partnering with leading technology companies to enhance data center capabilities [7][9] - The company is committed to rebuilding operations in Ukraine following facility damage, emphasizing resilience and support for employees [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to maintain strong top-line momentum in the second half of FY2026, with an acceleration expected in Q4 [15] - The company raised its full-year revenue guidance to between $26.7 billion and $27.3 billion, reflecting a $500 million improvement from previous estimates [15][16] - Management highlighted the importance of partnerships, particularly with Amazon, in driving long-term growth in the data center space [48][49] Other Important Information - Free cash flow for the quarter increased to $305 million, with net CapEx totaling $148 million [13][14] - The company repurchased $297 million of stock, approximately 5.6 million shares [14] - The impact of the Ukraine facility shutdown is estimated to be slightly over $100 million in revenue for the back half of the year [45] Q&A Session Summary Question: Why was there no upside to data center revenues despite strong performance? - Management clarified that data center growth is not updated quarterly, but they expect at least 35% growth for the year, which is strong compared to industry standards [21][22] Question: How does the mix of custom silicon versus merchant silicon affect the cloud business? - Management indicated that they benefit significantly from hyperscale growth and will provide updated guidance in May regarding the mix of custom versus merchant silicon [26][27] Question: What is driving margin improvements in the second half? - Management noted that growth in products and services businesses, which have higher margins, is expected to drive margin improvements [35][36] Question: How does the company view the automotive market's growth potential? - Management expressed cautious optimism, noting that they are platform agnostic and continue to see compute wins across various platforms [60][61] Question: What is the company's capacity to support data center growth? - Management confirmed strong capacity in EMEA and North America, with plans for significant CapEx investments to support growth in data centers [74][75] Question: What innovations are being pursued with AI and automation? - Management highlighted a partnership with Nvidia to deploy modular infrastructure for data centers and emphasized ongoing efforts to enhance factory efficiency through AI and robotics [76][80]