Austin, Texas, USA, October 28th / PRNewswire / -- Flex (Nasdaq ticker: FLEX) today announced its financial results for the second quarter of fiscal year 2027, which ended on September 25, 2026.

The company stated, "We continue to operate on a strong foundation while advancing the planned separation of our Cloud and Power Infrastructure business units. Our acquisition of EPC Power has further enhanced our end-to-end power product portfolio and will immediately increase earnings per share in the fiscal year 2027. At the same time, the announcement of the Axiom name and the anticipated leadership arrangements mark another important step towards creating two companies that are focused and positioned for long-term success." said Revathi Advaithi, the CEO of Flex.

2027 Fiscal Year Second Quarter GAAP Summary:

• Net sales: $8.5 billion
• GAAP Operating Profit: $414 million
• GAAP Net Profit: $263 million
• GAAP Earnings per share: $0.70
• Cash provided from operating activities: $501 million

2027 Fiscal Year Second Quarter Non-GAAP Summary:

• Adjusted operating profit: $607 million
• Adjusted net profit: $443 million
• Adjusted earnings per share: $1.18
• Free cash flow: $261 million

Explanations and adjustments to the financial indicators of GAAP and those of non-GAAP are provided in the appendix II and V of this press release.

2027 Fiscal Year Third Quarter Guidance:

• Net sales: $8.87 billion to $9.17 billion, with a median increase of 28% compared to the previous year.
• Adjusted operating profit: $685 million to $715 million*
• Adjusted earnings per share: $1.19 to $1.25*, with a median increase of 40% over the previous year.
• Interest and others: approximately $120 million
• Adjusted tax rate: 21%*
• Weighted average number of outstanding shares: approximately 375 million shares

Updated 2027 fiscal year guidelines†:

• Net sales: $34.9 billion to $35.9 billion, with a median increase of 27% compared to the previous year.
• Adjusted operating profit margin: 7.6% to 7.8%*
• Adjusted earnings per share: $4.84 to $5.16*, with a median increase of 52% over the previous year.
• Adjusted tax rate: 21%*

* These are forward-looking non-GAAP financial indicators, and due to the reasons stated in Appendix V of this press release, it is not possible to adjust them to correspond with the respective GAAP financial indicators without making unreasonable efforts.

† The figures reflect the expected results for the entire fiscal year and do not include the contributions from the divestitures planned by the Cloud and Power Infrastructure business units. This guidance also takes into account the contributions from recent acquisitions completed after September 25, 2026.

Live webcast and teleconference

Flex Management will hold a teleconference today, on October 28, 2026, at 7:30 AM (Central Time)/8:30 AM (Eastern Time), to review the performance for the second quarter of the 2027 fiscal year. The live broadcast and slides of the event will be available on the Flex Investor Relations website http :// investors.flex.com. After the event, the audio replay and transcript will also be posted on that website.

About Flex

Flex (Registration Number 199002645H) is the preferred manufacturing partner, helping leading brands to design, manufacture, and manage products that can improve the world. Flex's global presence covers 30 countries, providing advanced manufacturing and supply chain solutions, innovative products and technologies, as well as full lifecycle services to support customers from concept to scale-up. In the era of artificial intelligence, Flex is helping customers accelerate data center deployment and address challenges related to power, cooling, and scaling by leveraging cutting-edge power and cooling technologies, as well as scalable IT infrastructure solutions.

Forward-looking Statements

This press release contains forward-looking statements in the meaning of U.S. securities law, including statements regarding the company's future financial performance and guidance on future financial results (including expected revenue, operating profit, margin, and earnings per share). These forward-looking statements are based on current expectations, projections, and assumptions and involve risks and uncertainties that may result in significant differences between actual results and those anticipated in the forward-looking statements. Readers are advised not to rely excessively on these forward-looking statements.These risks include: the company may not be able to achieve the expected future operating results; risks related to the company's ability to successfully implement its strategic priorities, including the planned spin-off of the Cloud and Power Infrastructure business units into an independent listed company, as well as the ability to realize the expected benefits from such a transaction; the spin-off may not be completed on schedule or may not be completed at all, and may not achieve the expected benefits; the transaction may have an adverse effect on existing business relationships, and the cost of the spin-off may be higher than anticipated; the impact of current and future macroeconomic environments, including inflationary pressures, exchange rate fluctuations, stagflation, slowing economic growth or recession, and high or rising interest rates, which may affect the company's business and product demand; geopolitical uncertainties and risks, including trade conflicts, termination and renegotiation of international trade agreements and policies, further escalation of sanctions between the United States and China or other countries, or ongoing conflicts between Russia and Ukraine, as well as in the Middle East, including recent developments in Iran; any of these could lead to disruptions, instability, and volatility in global markets, and have a negative impact on the company's operations and financial performance; disruptions in the supply chain, including issues with single or major source suppliers, logistics restrictions, manufacturing interruptions or delays, or failure to accurately predict customer demand; fluctuations in the prices or availability of raw materials and components, including semiconductors, labor, and energy; the company's dependence on industries with continuously advanced production technologies and short product life cycles; short customer commitment periods and rapidly changing demand, which may lead to supply chain problems, excess inventory, and obsolescence; the company's dependence on a few customers; risks associated with acquisitions and divestitures, including the possibility of not being able to fully realize the expected benefits, including Electrical Power Products and Inc.Acquisitions such as that of EPC Power Corp, as well as other events that may adversely affect the expected earnings from the acquisition, including industry or economic conditions beyond the company's control; extremely fierce competition in the industry in which the company operates; the expected revenue and profit margins of recently launched projects may not be achieved; challenges in effectively managing operations, including the ability to control costs and manage operational changes; the benefits brought by reorganization actions may not be realized on schedule; if IT or the entity's security systems are compromised, or if data privacy laws are violated, it may lead to significant legal and financial risks and have an adverse impact on operations; recruitment and retention of key personnel; recent or future changes in tax laws in certain jurisdictions where the company operates may have a significant impact on taxes; litigation and regulatory investigations and procedures; union disputes or other labor disruptions, as well as the impact of unforeseeable or catastrophic events on business, operating results, and financial conditions; the current and future credit and market conditions on the liquidity and financial conditions of customers and suppliers, including their ability to fulfill their contractual obligations to the company and the company's ability to pass on costs to customers; the success of some of the company's activities depends on the ability to protect intellectual property, and the company may face claims for infringement, abuse, or violation of licensing agreements; physical and operational risks brought about by natural disasters, severe weather events, or climate change; the company may face product liability and product warranty responsibilities; the company may deal with customers or suppliers in financial difficulties; the company's compliance with legal and regulatory requirements; possible changes in laws, regulations, or policies that may affect the company's business, including changes related to trade policy, tariffs, and climate change; the company's ability to meet sustainable development requirements, including environmental, social, and governance expectations or standards, or the ability to achieve sustainable development goals.Any mention of the planned split, including its timing, the Form 10 status, and the leadership arrangements for the two companies after the split, is forward-looking information and is still subject to applicable approvals and the completion of the split.

For more information regarding these and other risks, please refer to the company's most recent 10-K annual report and the "Risk Factors" as well as the "Management's Discussion and Analysis of Financial Conditions and Operating Results" in subsequent documents submitted to the U.S. Securities and Exchange Commission. Flex assumes no obligation to update any forward-looking statements, which are valid only as of the date they are made.

Appendix V

FLEX and its subsidiaries

Appendix I and II Notes

To complement the unaudited selected financial data prepared in accordance with Generally Accepted Accounting Principles (GAAP) in the United States (“GAAP”), the company discloses several non-GAAP financial indicators. These indicators exclude certain expenses and revenues, including non-GAAP operating income, non-GAAP net profit, and non-GAAP diluted earnings per share. These supplementary indicators take into account certain legal and other expenses, restructuring costs, impairment of customer-related assets (recovers), stock-based incentive expenses, amortization of intangible assets, other applicable special items, and related tax effects. Such non-GAAP indicators do not comply with GAAP and cannot replace GAAP financial measures. Moreover, they may differ from the non-GAAP indicators used by other companies. The company recognizes that these non-GAAP indicators have limitations as they do not reflect all amounts related to the company’s operating results as determined under GAAP. Therefore, they should be used in conjunction with the corresponding GAAP indicators. The provision of this additional information does not imply that they should be considered in isolation or as a direct substitute for GAAP financial indicators. By relying on these non-GAAP indicators, the company aims to gain a more comprehensive understanding of its performance.

When calculating non-GAAP financial indicators, the company excludes certain items to facilitate a more comparable analysis of the company's performance from period to period, as it believes these items are not related to ongoing operational performance. The company uses non-GAAP indicators to assess business operations, compare with forecasts and strategic plans, calculate return on investment, and compare with external performance benchmarks of competitors. In addition, management incentive compensation is also determined based on certain non-GAAP indicators. When evaluating potential acquisitions, the company also excludes certain items when considering the performance and valuation of the target company. Since the company believes these indicators are useful, it believes that investors will benefit from viewing performance from a management perspective, in addition to the GAAP results. The company believes that when these non-GAAP indicators are read in conjunction with GAAP financial data, they can provide investors with the following useful information:

• To more meaningfully compare the performance of a company's ongoing operations from one period to another;
• To better identify the basic business trends of a company and conduct relevant trend analysis;
• To better understand how management plans and measures the company's core business; as well as
• It is easier to compare the company's operating results with those of analysts' financial models and competitors in the same industry, as these competitors also provide non-GAAP financial indicators in addition to the GAAP results.

In the third quarter and full-year guidance for the fiscal year 2027, the company provided forward-looking non-GAAP financial indicators, including adjusted operating profit, adjusted operating margin, adjusted tax rate, and adjusted earnings per share. The company did not provide adjustments to these indicators compared to the most directly comparable GAAP indicators, as certain items that require adjustment are inherently volatile, complex, and uncertain in their forecasts, making it impossible to obtain the required information without undue effort. These items may include restructuring costs and impairment charges, among others. The information that cannot be obtained may be material and could significantly affect the company's GAAP results.

The following are the adjustments to the indicators that the company has included, which are not part of the GAAP indicators, as well as the reasons for excluding these items in the adjustment of the non-GAAP financial indicators:

Equity incentive expenses include non-cash expenses arising from the estimated fair value of unvested restricted stock units granted to employees and acquired in business acquisitions. The company believes that excluding these expenses facilitates a more accurate comparison of its financial results with those of its peers, as valuation methods, subjective assumptions, and types of incentives vary among companies. Furthermore, the company feels that it is helpful for investors to understand the specific impact of equity incentive expenses on financial results.

Amortization of intangible assets mainly includes non-cash expenses that may be affected by factors such as the timing and scale of acquisition. When assessing ongoing performance and predicting profit trends, the company considers operating results that exclude these expenses. Therefore, when presenting non-GAAP financial indicators, these expenses are excluded. The company believes that the operating assessment after excluding these costs is relevant to its internal operational evaluation and comparison with the performance of its competitors.

Reorganization and impairment costs include layoff expenses for the existing locations and the SG &A functions, as well as asset impairments and other costs related to the closure and integration of certain business locations and business reorganization. These costs also include asset impairments provided for due to significant impacts on assets caused by geopolitical events, based on management's best estimates of the recoverable value of the assets. The magnitude of these costs will vary depending on the company's actions and are not directly related to ongoing or core business results, nor do they reflect expected future operating expenses. Management excludes these costs when evaluating current business performance and forecasting profit trends, therefore they are not included in the non-GAAP indicators.

During the three-month and six-month periods ending September 25, 2026, the company recognized expenses amounting to 13 million US dollars, of which the majority was related to employee severance compensation. During the corresponding three-month and six-month periods ending September 26, 2025, the company recognized reorganization expenses of 10 million US dollars and approximately 33 million US dollars, respectively, with the majority of these also being related to employee severance compensation.

During the six-month period ending September 25, 2026, the company recognized $1 million in expenses; whereas during the three-month and six-month periods ending September 26, 2025, the company recognized $41 million in asset impairments, inventory write-downs, and other expenses, which were due to missile attacks on the company's operational facilities in Mukachevo ( Mukachevo ) in western Ukraine on August 21, 2025.

Legal and other items mainly include costs that are not directly related to the core business results, and may include commercial disputes, government regulation and compliance, intellectual property, anti-monopoly, taxation, employment or shareholder issues, product liability claims, as well as costs related to acquisitions, portfolio optimization, and asset impairment, etc. The company's management excludes these costs when evaluating current operating performance and forecasting profit trends, and therefore they are not included in the non-GAAP indicators. During the three-month and six-month periods ending September 25, 2026, the company incurred approximately $91 million and $144 million in such expenses, respectively, which were mainly related to the plans to split its Cloud and Power Infrastructure business units into separate listed companies. In addition, there were acquisition costs of $19 million and $33 million, respectively. During the three-month and six-month periods ending September 26, 2025, the company incurred approximately $9 million and $15 million in acquisition costs, respectively.

The equity share in the consolidated profits and losses of associated enterprises includes various items that are not directly related to the ongoing or core business results, such as significant gains or losses associated with certain non-core investments. The company excludes these items because they are not related to the ongoing operations or do not affect the core business. Excluding these amounts provides investors with a basis for comparing the company's performance with that of other companies without being affected by such fluctuations. During the three-month and six-month periods ending September 26, 2025, the company recognized equity losses of approximately $8 million and $25 million, respectively, due to a decline in the valuation of a non-core investment fund. No such costs occurred in the first half of the fiscal year 2027.

Interest and other net amounts include various items that are not directly related to the ongoing or core business results, such as gains or losses related to certain divestitures, exchange reserve write-offs during the liquidation of certain legal entities, debt settlement costs, and impairments or gains related to certain non-core investments. The company excludes these items because they are not related to the ongoing operations or do not affect the core business. During the three-month and six-month periods ending September 25, 2026, the company recognized subsidiary divestiture gains of $2 million and $48 million, respectively.

Tax adjustments are related to the tax implications arising from various adjustments that are not included in the GAAP indicators. The purpose is to provide a more meaningful measure of non-GAAP net profit and to reflect adjustments related to one-time tax dispute settlements or other one-time tax expenses when applicable. Starting from the fiscal year 2026, the company adopts an annual standardized tax rate to determine the tax implications of non-GAAP adjustments. In estimating the standardized tax rate, the company uses annual profit forecasts and takes into account the profit structure of different tax jurisdictions, existing tax positions, and other significant tax matters.

During the three-month and six-month periods ending September 25, 2026, the company recognized net tax revenues of $11 million and $18 million, respectively. During the three-month and six-month periods ending September 26, 2025, the company recognized net tax revenues of $17 million and $36 million, respectively; these revenues are related to the tax impacts of adjustments incorporated into non-GAAP indicators due to reorganizations and other items.

Free cash flow is an important liquidity indicator, as it measures the amount of cash generated over a specific period that can be used to repay debts, make investments, fund acquisitions, repurchase company shares, and for other activities. A company's free cash flow is defined as operating cash flow minus net purchases of property and equipment, as well as proceeds from the disposal of property and equipment ("net capital expenditure"), in order to provide investors with a consistent measure of free cash flow.

During the three-month and six-month periods ending September 25, 2026, the company recorded free cash inflows of $261 million and $302 million, respectively. For the same periods ending September 26, 2025, the company reported free cash inflows of $305 million and $573 million, respectively. Due to separation costs related to the divestiture of businesses involving Flex Cloud and Power Infrastructure, free cash flows were adversely affected by $61 million and $85 million during the three-month and six-month periods ending September 25, 2026, respectively. Free cash flow is not a liquidity indicator under U.S. GAAP (Generally Accepted Accounting Principles) for GAAP, and other companies may not define and calculate this indicator in the same manner.