Flex announces upcoming 2026 Investor Day

The road to Investor Day

The third quarter of fiscal 2025 to the second quarter of fiscal 2027 · latest results October 28, 2026

Quarter by quarter

Revenue and EPS link to the filing they come from. Growth is against the same quarter a year earlier; growth and gross margin are calculated by Opportunity Dispatch from the filed figures. ^† Worked out from the 10-K, less the first three quarters. ^‡ From the results release.

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Two companies in the making

Flex goes into its Innovation Day on November 10, 2026 with a split under way. On May 5, 2026 the company said it would separate its Cloud and Power Infrastructure segment, which supplies power, cooling and compute systems for AI data centers, into an independent public company, since named Axiom Solutions International. The spin-off is expected in the first quarter of calendar 2027, subject to approval by the board, shareholders and the High Court of Singapore. Revathi Advaithi, the chief executive, is expected to lead Axiom, and Michael Hartung, the president and chief commercial officer, is expected to run the remaining Flex.

The shares closed at $13.36 on November 5, 2021; on November 2, 2026 they closed at $84.20, more than six times that level. They closed at $161.94 on June 3, 2026 and by November 2 had lost nearly half of that, over months in which Flex agreed to buy EPC Power and filed Axiom's Form 10.

Data center power carries the growth

The table shows a business that turned. Revenue fell from a year earlier in the quarter to December 2024, then returned to growth and accelerated every quarter since, with gross margin widening over the same stretch. Flex gave one reason throughout: in October 2025 it raised fiscal 2026 guidance on strong data center demand in its power and cloud businesses, and the year ended with net sales of $27.9 billion, up 8%, a record adjusted operating margin of 6.3% and adjusted EPS of $3.30.

The engine is the segment about to leave. On the call for the quarter to September 2026, Flex said CPI revenue was $2.5 billion, up 54%, with an adjusted operating margin of 10.7%, up 240 basis points. Kevin Krumm, the chief financial officer, attributed the gain to mix, pricing and volume leverage. RMS revenue was $2.7 billion, up 9%, led by industrial; ITS revenue was $3.3 billion, up 22%, led by communications and held back by weak consumer-related markets.

The deals and the separation weigh on reported results and the balance sheet. In the quarter Flex incurred approximately $91 million primarily related to the planned spin-off and $19 million of acquisition costs, and free cash flow of $261 million was reduced by $61 million of separation costs. Flex took a $1.45 billion loan in April 2026 to buy Electrical Power Products, and Krumm said the EPC Power acquisition, closed October 14, added $4.4 billion of debt, about $2 billion of which is to be repaid from the sale of $2 billion of Axiom convertible preferred stock. Fiscal 2027 capital spending guidance is $1.5 billion to $1.6 billion, about two-thirds of it for CPI. One customer, mostly in CPI, accounted for 14% of net sales in the quarter.

Rivals are scaling just as fast

Axiom will enter a market where Vertiv, Schneider Electric and Eaton are already established, and Eaton has added liquid cooling by buying Boyd Thermal. Vertiv reported third-quarter 2026 net sales up 61%, organic orders more than double a year earlier, and raised its full-year net sales guidance. Eaton's electrical data-center revenue rose about 65% in the third quarter of 2026 and its electrical backlog kept climbing, up 46% from September 2025.

Among contract manufacturers, Jabil's fiscal 2026 revenue was $36.0 billion, up 21%, and it expects another year of growth in fiscal 2027 to $44.5 billion; on its call Jabil put fiscal 2026 AI-related revenue at about $14.4 billion and said it expects cloud and data center infrastructure revenue to climb again, by about 52%. Celestica's third-quarter 2026 revenue rose 83% to $5.83 billion and it expects growth to accelerate in 2027; on its call Celestica said hyperscalers were making longer-term commitments to secure components and capacity. Supply is the shared constraint: the chief executive of Synopsys told CNBC the memory chip crunch would run through 2027.

What the executives say

Advaithi framed the split on the second-quarter call: “While Axiom will be purpose-built to help power the AI infrastructure revolution, Flex will emerge as a more focused industrial technology, manufacturing, and supply chain leader.” She said compute and power are where Flex leads on market share, that cooling is still nascent with product launches planned over the next six months, and that component shortages are built into guidance. Pressed by analysts on Axiom's reliance on a few hyperscalers, she said that is where the spending is and that Flex aims to be diversified across products and programs within each.

Hartung said the quarter was the fourth in a row of year-on-year growth for RMS and ITS combined, driven by higher-value markets such as energy infrastructure, robotics and advanced networking, and that although lifestyle was weakening, “we're still delivering growth on top of growth.” Krumm declined to give a fiscal 2028 outlook for CPI: “While we're not going to offer a new guide for FY 2028 right now, I would just say that momentum, we expect it to carry through.”

The latest quarter and what to watch

The quarter to September 25, 2026 brought record adjusted EPS of $1.18 and an adjusted operating margin of 7.1%, against a GAAP operating margin of 4.9%. For the third quarter Flex expects net sales of $8.87 billion to $9.17 billion, growth of 28% at the midpoint, and adjusted EPS of $1.19 to $1.25. Fiscal 2027 guidance, which includes EPC Power and does not reflect the spin-off, was raised to net sales of $34.9 billion to $35.9 billion, from $33.7 billion to $35.2 billion in July, with an adjusted operating margin of 7.6% to 7.8% and adjusted EPS of $4.84 to $5.16, up 52% at the midpoint. Krumm said about half of the increase was underlying improvement and half EPC Power, with CPI revenue expected to grow 75% to 85% and RMS and ITS combined 8% to 11%.

On November 10 the open questions are the fiscal 2028 outlook for CPI, which Krumm said would be updated then; Axiom's margin path as cooling products arrive; and the shape of the standalone Flex, whose capital spending Hartung said should return to about 2% of revenue or below.