10-QPeriod: Q3 FY2026

FLEX LTD. Quarterly Report for Q3 Ended Dec 31, 2025

Filed February 6, 2026For Securities:FLEX

Summary

Flex Ltd. (FLEX) reported a solid third quarter for fiscal year 2026, with net sales increasing by 8% year-over-year to $7.1 billion. This growth was driven by robust performance in both the Flex Agility Solutions (FAS) and Flex Reliability Solutions (FRS) segments, with FAS up 6% and FRS up 10%. The company demonstrated improved profitability, with gross margin increasing to 9.6% and operating income rising to $389 million. Net income for the quarter was $239 million, slightly down from the prior year's $263 million, impacted by a $19 million tax expense related to an audit settlement. The company also strengthened its balance sheet, with cash and cash equivalents growing to $3.1 billion and a significant increase in net working capital. Management highlighted continued focus on operational execution, favorable business mix, and cost efficiencies as key drivers of performance.

Financial Highlights

49 data points
Beta

Revenue

$7.06B

9.6% Gross Margin

Net Income

$239.00M

3.4% Net Margin

EPS (Diluted)

$0.64

Total Assets

$20.82B

Cash & Equivalents

$3.06B

Free Cash Flow

$272.00M

Financial Statements
Beta
Revenue$7.06B
Cost of Revenue$6.37B
Gross Profit$679.00M
SG&A Expenses$270.00M
Operating Income$389.00M
Interest Expense$54.00M
Net Income$239.00M
EPS (Basic)$0.65
EPS (Diluted)$0.64
Shares Outstanding (Basic)369.00M
Shares Outstanding (Diluted)376.00M

Key Highlights

  • 1Net sales increased by 8% year-over-year to $7.1 billion for the third quarter ended December 31, 2025.
  • 2Gross profit increased by $0.1 billion to $0.7 billion, with gross margin improving by 50 basis points to 9.6%.
  • 3Operating income rose to $389 million from $334 million in the prior year's comparable period.
  • 4Net income for the quarter was $239 million, compared to $263 million in the prior year, reflecting a $19 million tax expense from an audit settlement.
  • 5Cash and cash equivalents increased significantly to $3.1 billion as of December 31, 2025.
  • 6Net working capital saw a substantial increase to $4.3 billion as of December 31, 2025, up from $3.0 billion at the fiscal year-end.
  • 7The company executed a $50 million tax settlement agreement and expects to make a $20 million cash payment in Q4 FY2026.

Frequently Asked Questions

Flex Ltd.'s revenue growth in the third quarter was primarily driven by strong performance in the Communications, Enterprise and Cloud (CEC) business within the Flex Agility Solutions (FAS) segment due to increased demand, and growth in the Industrial and Health Solutions businesses within the Flex Reliability Solutions (FRS) segment.

The missile strike on the Mukachevo, Ukraine facility resulted in $5 million in charges for the third quarter and $46 million for the nine-month period ended December 31, 2025. These charges included asset impairments, inventory write-downs, and other related costs.

Flex Ltd. issued $600 million of 5.375% Notes due November 2035 and $150 million of 5.250% Notes due January 2032 in the third quarter. The company also repaid the 4.750% Senior Notes due June 2025. As of December 31, 2025, the company had $4.4 billion in bank and other borrowings and a $2.75 billion revolving credit facility with no borrowings outstanding, indicating a strong liquidity position.

The warrant issued to Amazon.com NV Investment Holdings LLC on August 15, 2025, allows for the purchase of up to approximately 3.9 million shares at an exercise price of $51.29 per share. The shares are subject to vesting based on qualifying payments over the term of the warrant. The expense associated with these shares will be recorded as a deduction to revenue as qualifying purchases occur. As of December 31, 2025, no warrant shares had vested or were exercised, and the company recorded $5 million in charges related to this warrant for the nine-month period.