Flex (NASDAQ: FLEX) reported third-quarter fiscal 2026 results on Wednesday that exceeded its previous guidance across all key metrics, driven by a surge in demand for artificial intelligence (AI) infrastructure and high-performance data center solutions.
The manufacturing giant raised its full-year guidance for net sales, adjusted operating margin, and adjusted earnings per share (EPS), signaling confidence in its diversified business model despite broader macroeconomic shifts.
Record Margins and Profit Beat
For the quarter ended December 31, 2025, Flex reported net sales of $7.1 billion, representing an 8% increase compared to the prior year. This surpassed the company’s internal projections as it capitalized on momentum in its data center portfolio.
The company delivered a record adjusted operating margin of 6.5%, marking the fifth consecutive quarter the metric has remained at or above 6%. On a GAAP basis, the operating margin hit a record 5.5%.
Adjusted EPS reached a record $0.87, a 13% year-over-year increase, beating the top end of the company’s guidance. GAAP EPS stood at $0.64.
AI and Data Center Momentum
The strong performance to the company’s role as a “strategic enabler” for customers navigating complex technological shifts. Our performance reflects the strength of our diversified business model across industries, including Data Center.
The company has pivoted aggressively toward the AI era, providing power, cooling, and IT infrastructure solutions to accelerate data center deployments. During the quarter, Flex highlighted its partnership with NVIDIA to deploy modular data center systems for “giga-scale AI factories” and unveiled new liquid cooling technology designed for high-performance computing.
Segment Performance
• Flex Reliability Solutions: Revenue rose 10% year-over-year to $3.2 billion, with adjusted operating margins expanding 50 basis points to 7.2%. Growth was bolstered by medical devices and core industrial demand.
• Flex Agility Solutions: Revenue reached $3.8 billion, up 6% from the previous year, with an adjusted operating margin of 6.3%. Strength in the Cloud & Enterprise Communications (CEC) segment helped offset continued softness in consumer-facing lifestyle markets.
Raised Outlook
Citing strong demand and disciplined cost management, Flex updated its fiscal year 2026 guidance:
• Net Sales: Now expected between $27.2 billion and $27.5 billion, up from the previous range of $26.7 billion to $27.3 billion.
• Adjusted EPS: Raised to a range of $3.21 to $3.27, up from the prior $3.09 to $3.17.
• Adjusted Operating Margin: Forecasted at 6.3%, reaching the company’s long-term margin goal one year ahead of schedule.
For the upcoming fourth quarter, Flex expects revenue between $6.75 billion and $7.05 billion, with adjusted EPS ranging from $0.83 to $0.89.
Geopolitical Impacts
The company noted it continues to manage geopolitical risks, including the aftermath of a missile strike on its Mukachevo, Ukraine facility in August 2025. Flex recognized $5 million in asset impairments and charges related to the incident during the third quarter, though it has initiated contingency manufacturing plans at alternative sites to minimize disruption.
