Sanmina(US:SANM)2026-01-26 23:02Financial Data and Key Metrics Changes - Revenue for the first quarter of Fiscal 2026 was $3.19 billion, representing a 59% increase compared to the same period a year ago [13][14] - Non-GAAP operating margin was 6%, consistent with the previous quarter and up 40 basis points year-over-year [14][19] - Non-GAAP diluted earnings per share reached $2.38, a 66.1% increase compared to the same period last year [14][19] Business Line Data and Key Metrics Changes - IMS revenue was $2.79 billion, up 72% year-over-year, driven by growth in communications networks and cloud and AI infrastructure [15][16] - CPS revenue was $434 million, a 4.3% increase year-over-year, with a non-GAAP gross margin of 12.9%, which is lower than recent performance due to investments in new programs [17][18] Market Data and Key Metrics Changes - The core Sanmina business in communication networks and cloud infrastructure grew approximately 20% year-over-year, contributing to 62% of total revenue [28] - Industrial, energy, medical, defense, aerospace, automotive, and transportation segments accounted for 38% of revenue, slightly down 3% year-over-year, but expected to stabilize and grow in the future [28][32] Company Strategy and Development Direction - The company aims to double revenue to $16 billion by 2027, focusing on AI opportunities and vertical integration in the AI data center market [34][36] - Strategic investments are being made in technologies and capabilities to support growth, particularly in the U.S., India, and Mexico [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory for Fiscal 2026, with expectations for strong demand in AI hardware and core business growth in high single digits [24][38] - The company is focused on maintaining a healthy balance sheet while investing in future growth opportunities [20][22] Other Important Information - Cash flow from operations was $179 million, with capital expenditures of $87 million for the quarter [20][21] - The company has a strong balance sheet with cash and cash equivalents of $1.42 billion and no outstanding borrowings on its $1.5 billion revolver [19][20] Q&A Session Summary Question: Can you help parse through the sequential revenue guidance for the March quarter? - Management indicated that the business is improving and that guidance is based on one quarter at a time, with expectations for strong performance from both core Sanmina and ZT Systems [41][44] Question: Can you clarify the revenue contributions from different parts of the ZT business? - Management confirmed that the transition is ongoing, and they are focused on future business opportunities while maintaining strong relationships with existing customers [46][49] Question: How do you see the communications market recovering? - Management noted strong demand in the communications market, with expectations for continued strength in the upcoming quarters [54][55] Question: What are the expectations for the industrial, medical, and automotive segments? - Management acknowledged some recent weakness in automotive but expects stabilization and growth in the second half of Fiscal 2026 [81][83]