10-QPeriod: Q1 FY2027

FLEX LTD. Quarterly Report for Q1 Ended Jun 26, 2026

Filed July 31, 2026For Securities:FLEX

Summary

Flex Ltd. reported a strong first quarter for fiscal year 2027, with net sales increasing by 21% year-over-year to $7.9 billion. This growth was driven by robust performance across all three segments: Integrated Technology Solutions (ITS), Regulated Manufacturing Solutions (RMS), and Cloud and Power Infrastructure (CPI), with CPI showing particularly strong growth of 35% largely due to the recent acquisition of Electrical Power Products, Inc. (EPP) and increased demand in Cloud and Cooling. Net income saw a significant increase to $285 million from $192 million in the prior year quarter, reflecting improved gross margins and operational execution. The company's strategic focus on providing end-to-end manufacturing and supply chain solutions continues to resonate in the market. Despite global economic uncertainties, Flex is executing well, demonstrating its ability to adapt and grow. The planned separation of the CPI segment into an independent company, SpinCo, is progressing, expected to be completed in the first quarter of calendar 2027, which will allow Flex to focus on its core ITS and RMS businesses. Management anticipates that current liquidity sources are adequate to fund future commitments.

Key Highlights

  • 1Net sales grew 21% to $7.9 billion in Q1 FY2027, driven by strong demand across all segments.
  • 2Net income increased significantly to $285 million, up from $192 million in the prior year quarter.
  • 3The Cloud and Power Infrastructure (CPI) segment experienced a substantial 35% revenue increase, boosted by the EPP acquisition and Cloud/Cooling demand.
  • 4Gross margin improved to 9.4% from 8.7% year-over-year, indicating better operational efficiency and favorable mix.
  • 5The company announced its intention to spin off its CPI segment into a new publicly traded company, SpinCo, expected in Q1 calendar 2027.
  • 6Cash and cash equivalents increased to $2.8 billion, and the company has no borrowings outstanding under its $2.75 billion revolving credit facility.
  • 7Acquisition of Electrical Power Products, Inc. (EPP) for $1.2 billion was completed in May 2026, contributing to CPI segment growth.

Frequently Asked Questions

Flex Ltd. reported a strong quarter with net sales of $7.9 billion, a 21% increase year-over-year. Net income rose to $285 million, up from $192 million in the same period last year, driven by increased sales and improved gross margins.

Flex announced its intention to separate the CPI segment into an independent company, SpinCo, expected to be completed in the first quarter of calendar 2027. This strategic move aims to allow Flex to focus on its core ITS and RMS businesses while SpinCo can concentrate on data center power, digital infrastructure, and thermal/compute integration.

The acquisition of EPP for $1.2 billion in May 2026 contributed significantly to the 35% revenue growth in the Cloud and Power Infrastructure (CPI) segment. This acquisition is expected to bolster the company's position in the power solutions market.

Flex maintains a solid liquidity position with $2.8 billion in cash and cash equivalents. The company has $2.75 billion available on its revolving credit facility with no outstanding borrowings, and its operating cash flows are expected to be sufficient to fund its obligations.