FLEX REPORTS SECOND QUARTER FISCAL 2027 RESULTS

The raised full-year outlook includes recent acquisitions but does not give effect to the planned Cloud and Power Infrastructure spin-off.

Rhea-AI Summary

Flex (NASDAQ: FLEX) reported second-quarter fiscal 2027 net sales of $8.5 billion, up 25% from the prior year. For the quarter ended September 25, 2026, GAAP operating income was $414 million, with a 4.9% margin, versus $296 million and 4.4% a year earlier. GAAP earnings per share rose to $0.70 from $0.52; adjusted earnings per share increased to $1.18 from $0.79. Operating cash flow rose to $501 million, but free cash flow fell to $261 million from $305 million.

Flex raised fiscal 2027 sales guidance to $34.9 billion–$35.9 billion and adjusted earnings guidance to $4.84–$5.16 per share. The outlook includes recent acquisitions but excludes the planned Cloud and Power Infrastructure spin-off. Flex expects its EPC Power acquisition to be immediately accretive in fiscal 2027. Third-quarter guidance calls for sales of $8.87 billion–$9.17 billion and adjusted earnings of $1.19–$1.25 per share.

26 points · 1 major

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0 major · 14 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major point. Forward-looking: it has not happened yet and may not happen.Fiscal 2027 sales guidance raised to $34.9 billion–$35.9 billion from $33.7 billion–$35.2 billion.
• Moderate pointQ2 net sales of $8.5 billion increased 25% versus the prior year.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Q3 sales guidance of $8.87 billion–$9.17 billion implies company-projected growth of 28% at the midpoint.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Cloud and Power Infrastructure fiscal 2027 outlook targets 75%–85% sales growth and 11.5%–11.7% adjusted operating margin.
• Moderate point. Forward-looking: it has not happened yet and may not happen.RMS + ITS fiscal 2027 outlook targets 8%–11% sales growth and 5.9%–6.1% adjusted operating margin.
• Moderate pointQ2 GAAP operating income rose to $414 million from $296 million; margin increased to 4.9% from 4.4%.
• Moderate pointQ2 adjusted operating income rose to $607 million from $409 million; margin increased to 7.1% from 6.0%.
• Moderate pointQ2 GAAP net income increased to $263 million from $199 million.
• Moderate pointQ2 GAAP EPS increased to $0.70 from $0.52.
• Moderate pointQ2 adjusted net income increased to $443 million from $300 million.
• Moderate pointQ2 adjusted EPS increased to $1.18 from $0.79.
• Moderate pointQ2 operating cash flow increased to $501 million from $453 million.
• Moderate pointSix-month borrowing proceeds provided $2,830 million in funding, versus $500 million a year earlier. 9.2% of market cap

13 minor points

• Minor point. Forward-looking: it has not happened yet and may not happen.Fiscal 2027 adjusted EPS guidance raised to $4.84–$5.16 from $4.42–$4.74, with 52% midpoint growth.
• Minor point. Forward-looking: it has not happened yet and may not happen.Fiscal 2027 adjusted operating margin guidance raised to 7.6%–7.8% from 7.0%–7.2%.
• Minor point. Forward-looking: it has not happened yet and may not happen.Q3 adjusted EPS guidance of $1.19–$1.25 implies company-projected growth of 40% at the midpoint.
• Minor point. Forward-looking: it has not happened yet and may not happen.Q3 adjusted operating income is projected at $685 million–$715 million.
• Minor point. Forward-looking: it has not happened yet and may not happen.EPC Power acquisition is expected by Flex to be immediately accretive in fiscal 2027.
• Minor pointSix-month sales increased to $16,419 million from $13,379 million.
• Minor pointSix-month GAAP operating income rose to $806 million from $607 million; margin increased to 4.9% from 4.5%.
• Minor pointSix-month adjusted operating income rose to $1,141 million from $804 million; margin increased to 6.9% from 6.0%.
• Minor pointSix-month GAAP net income increased to $548 million from $391 million.
• Minor pointSix-month GAAP EPS increased to $1.47 from $1.03.
• Minor pointSix-month adjusted net income increased to $817 million from $574 million.
• Minor pointSix-month adjusted EPS increased to $2.18 from $1.51.
• Minor pointCash and equivalents rose to $3,083 million at September 25, 2026, from $2,389 million at March 31, 2026.

Negative

• Moderate pointQ2 free cash flow fell to $261 million from $305 million.
• Moderate pointSix-month operating cash flow declined to $777 million from $852 million.
• Moderate pointLong-term debt, excluding current maturities, rose to $5,213 million from $3,751 million between March 31 and September 25, 2026.
• Moderate pointQ2 interest expense increased to $69 million from $52 million.
• Moderate pointQ2 selling, general and administrative expenses rose to $371 million from $260 million.
• Moderate pointQ2 legal and other adjustments increased to $110 million from $9 million.
• Moderate pointQ2 capital spending increased to $241 million from $150 million.
• Moderate pointSix-month acquisition spending, net of cash acquired, totaled $1,134 million versus $43 million a year earlier. 3.7% of market cap

6 minor points

• Minor pointSix-month free cash flow fell to $302 million from $573 million.
• Minor pointSix-month interest expense increased to $129 million from $103 million.
• Minor pointSix-month selling, general and administrative expenses rose to $705 million from $493 million.
• Minor pointSix-month legal and other adjustments increased to $177 million from $15 million.
• Minor pointSix-month capital spending increased to $477 million from $283 million.
• Minor pointSix-month share repurchase payments were zero, versus $544 million a year earlier.

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Market move: FLEX +8.66% vs previous close. 2Q27 earnings report

$84.70 – $92.49 Day Range

$33.46B Mkt Cap at Last Price

On Oct 28, the day this news came out, the latest delayed price for FLEX is 8.66% above the previous close. Our momentum scanner has recorded 18 alerts for this stock so far that day. The latest delayed price is $90.56. Relative volume is exceptionally heavy at 64.6x the average.

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Key Figures

Q2 net sales: $8.5 billion Adjusted operating margin: 7.1% Adjusted EPS: $1.18 +5 more

Q2 net sales

$8.5 billion

Q2 fiscal 2027; up 25% versus prior year

Adjusted operating margin

7.1%

Q2 fiscal 2027; versus 6.0% in prior-year quarter

Adjusted EPS

$1.18

Q2 fiscal 2027; versus $0.79 in prior-year quarter

Net sales guidance

$8.87 billion to $9.17 billion

Q3 fiscal 2027 guidance; 28% growth at the midpoint

Adjusted EPS guidance

$1.19 to $1.25

Q3 fiscal 2027 guidance; 40% growth at the midpoint

Net sales guidance

$34.9 billion to $35.9 billion

Updated fiscal 2027 guidance; 27% growth at the midpoint

Adjusted operating margin guidance

7.6% to 7.8%

Updated fiscal 2027 guidance; prior range was 7.0% to 7.2%

Adjusted EPS guidance

$4.84 to $5.16

Updated fiscal 2027 guidance; 52% growth at the midpoint

Historical Context

1 past event · Latest: Oct 14

1 event

1. Oct 14

   Acquisition completion

   24h Move

   -9.5%

   Flex completed EPC Power acquisition for $4.4 billion cash, funded with debt facilities and cash.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

gaap, non-gaap, free cash flow, accretive, +1 more

5 terms

gaap financial

"Q2 GAAP operating margin of 4.9%"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

non-gaap financial

"reconciliation of GAAP financial measures to non-GAAP financial measures"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

free cash flow financial

"Free Cash Flow: $261 million"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

View in glossary

accretive financial

"will be immediately accretive in fiscal 2027"

"Accretive" describes a situation where a financial action, such as a purchase or investment, increases the value or earnings of a company. For investors, it signals that the move is likely to boost profitability and overall worth, much like adding a beneficial ingredient to a recipe that enhances the final taste. An accretive decision is generally seen as positive because it contributes to growth and financial health.

weighted average shares outstanding financial

"Weighted average shares outstanding: approximately 375 million"

The weighted average shares outstanding is the average number of a company’s common shares that were available during a reporting period, adjusted so each change (like new shares issued or shares bought back) counts only for the portion of the period it was in effect. Investors use it to calculate per-share measures such as earnings per share, so it shows how ownership dilution or buybacks affect what each share is entitled to—like averaging how many people were at a potluck over time to determine each person’s share of the food.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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• Reported Q2 net sales of $8.5 billion, up 25% versus the prior year.
• Delivered Q2 GAAP operating margin of 4.9%, and adjusted operating margin of 7.1%.
• Reported Q2 GAAP EPS of $0.70, and record adjusted EPS of $1.18.

AUSTIN, Texas, Oct. 28, 2026 /PRNewswire/ -- Flex (NASDAQ: FLEX) today announced results for its second quarter ended September 25, 2026.

"We continue to execute from a position of strength while advancing our planned spin-off of our Cloud and Power Infrastructure segment. Our acquisition of EPC Power further completes our end-to-end Power portfolio and will be immediately accretive in fiscal 2027, while the unveiling of the Axiom name and anticipated leadership marks another important step toward creating two focused companies positioned for long-term success," said Revathi Advaithi, CEO of Flex.

Second Quarter Fiscal Year 2027 GAAP Summary:

• Net Sales: $8.5 billion
• GAAP Operating Income: $414 million
• GAAP Net Income: $263 million
• GAAP Earnings Per Share: $0.70
• Cash provided by Operating Activities: $501 million

Second Quarter Fiscal Year 2027 Non-GAAP Summary:

• Adjusted Operating Income: $607 million
• Adjusted Net Income: $443 million
• Adjusted Earnings Per Share: $1.18
• Free Cash Flow: $261 million

An explanation and reconciliation of GAAP financial measures to non-GAAP financial measures is presented in Schedules II and V attached to this press release.

Third Quarter Fiscal Year 2027 Guidance:

• Net Sales: $8.87 billion to $9.17 billion, growth of 28% at the midpoint
• Adjusted Operating Income: $685 million to $715 million*
• Adjusted EPS: $1.19 to $1.25*, growth of 40% at the midpoint
• Interest & Other: approximately $120 million
• Adjusted income tax rate: 21%*
• Weighted average shares outstanding: approximately 375 million

Updated Fiscal Year 2027 Guidance†:

• Net Sales: $34.9 billion to $35.9 billion, growth of 27% at the midpoint
• Adjusted Operating Margin: 7.6% to 7.8%*
• Adjusted EPS: $4.84 to $5.16*, growth of 52% at the midpoint
• Adjusted income tax rate: 21%*

	Fiscal Year 2027 Guidance
	Prior		Updated		CPI		RMS + ITS
Net Sales	$33.7 - $35.2 billion		$34.9 - $35.9 billion		+75% - 85%		+8% - 11%
Adjusted Operating Margin*	7.0% - 7.2%		7.6% - 7.8%		11.5% - 11.7%		5.9% - 6.1%
Adjusted EPS*	$4.42 - $4.74		$4.84 - $5.16

*This is a forward-looking non-GAAP financial measure that cannot be reconciled to its equivalent GAAP financial measure without unreasonable effort for the reasons set forth in Schedule V attached to this press release.

†Reflects expected results for the full fiscal year and does not give effect to the planned spin-off of the Cloud and Power Infrastructure segment. Includes contributions from recent acquisitions closed subsequent to September 25, 2026.

Webcast and Conference Call

The Flex management team will host a conference call today, October 28, 2026, at 7:30 AM (CT) / 8:30 AM (ET), to review second quarter fiscal 2027 results. A live webcast of the event and slides will be available on the Flex Investor Relations website at http://investors.flex.com. An audio replay and transcript will also be available after the event on the Flex Investor Relations website.

About Flex

Flex (Reg. No. 199002645H) is the manufacturing partner of choice that helps leading brands design, build, and manage products that improve the world. With a global footprint spanning 30 countries, Flex delivers advanced manufacturing and supply chain solutions, innovative products and technology, and lifecycle services that support customers from concept to scale. In the AI era, Flex is helping customers accelerate data center deployment by solving power, heat, and scale challenges through cutting-edge power and cooling technology and scalable IT infrastructure solutions.

Contacts

Investors & Analysts
Michelle Simmons
Senior Vice President, Global Investor Relations and Public Relations
(669) 242-6332
Michelle.Simmons@flex.com

Media & Press
press@flex.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of U.S. securities laws, including statements related to our future financial results and our guidance for future financial performance (including expected revenues, operating income, margins and earnings per share). These forward-looking statements are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause the actual outcomes and results to differ materially from those anticipated by these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. These risks include: that we may not achieve our expected future operating results; risks related to our ability to successfully execute our strategic priorities, including the planned spin-off of our Cloud and Power Infrastructure segment into an independent, publicly traded company, and to achieve the anticipated benefits of such transaction, including risks that the spin-off may not be completed on the anticipated timeline or at all, that the spin-off may not achieve its intended benefits, that the transaction may have an adverse impact on existing business relationships, and that the costs of the spin-off may be greater than anticipated; the effects that the current and future macroeconomic environment, including inflationary pressures, currency volatility, stagflation, slower economic growth or recession, and high or rising interest rates, could have on our business and demand for our products; geopolitical uncertainties and risks, including impacts from trade conflicts, the termination and renegotiation of international trade agreements and trade policies, a further escalation of sanctions, tariffs or other trade tensions between the U.S. and China or other countries, or the ongoing conflicts between Russia and Ukraine and in the Middle East, including recent developments in Iran, any of which could lead to disruption, instability, and volatility in global markets and negatively impact our operations and financial performance; supply chain disruptions, including those involving suppliers who are sole or primary sources, logistical constraints, manufacturing interruptions or delays, or the failure to accurately forecast customer demand; the impact of fluctuations in the pricing or availability of raw materials and components, including semiconductors, labor and energy; our dependence on industries that continually produce technologically advanced products with short product life cycles; the short-term nature of our customers' commitments and rapid changes in demand may cause supply chain issues, excess and obsolete inventory and other issues which adversely affect our operating results; our dependence on a small number of customers; risks associated with acquisitions and divestitures, including the possibility that we may not fully realize their projected benefits, including the acquisitions of Electrical Power Products, Inc. and EPC Power Corp., and other events that could adversely impact the anticipated benefits of the acquisition, including industry or economic conditions outside of our control; our industry is extremely competitive; that the expected revenue and margins from recently launched programs may not be realized; the challenges of effectively managing our operations, including our ability to control costs and manage changes in our operations; the possibility that benefits of our restructuring actions may not materialize as expected; a breach of our IT or physical security systems, or violation of data privacy laws, may cause us to incur significant legal and financial exposure and adversely affect our operations; hiring and retaining key personnel; that recent changes or future changes in tax laws in certain jurisdictions where we operate could materially impact our tax expense; litigation and regulatory investigations and proceedings; the impact and effects on our business, results of operations and financial condition of union disputes or other labor disruptions as well as unforeseen or catastrophic events; the effects that current and future credit and market conditions could have on the liquidity and financial condition of our customers and suppliers, including any impact on their ability to meet their contractual obligations to us and our ability to pass through costs to our customers; the success of certain of our activities depends on our ability to protect our intellectual property rights and we may be exposed to claims of infringement, misuse or breach of license agreements; physical and operational risks from natural disasters, severe weather events, or climate change; we may be exposed to product liability and product warranty liability; we may be exposed to financially troubled customers or suppliers; our compliance with legal and regulatory requirements; changes in laws, regulations, or policies that may impact our  business, including those related to trade policy and tariffs and climate change; our ability to  meet sustainability, including environmental, social and governance, expectations or standards or achieve sustainability goals. Any references to the planned spin-off, including its timing, Form 10 status, and the leadership of each company following the separation, are forward-looking and remain subject to applicable approvals and completion of the spin-off.

Additional information concerning these and other risks is described under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent Annual Report on Form 10-K and in our subsequent filings with the U.S. Securities and Exchange Commission. Flex assumes no obligation to update any forward-looking statements, which speak only as of the date they are made.

SCHEDULE I
FLEX
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
		Three-Month Periods Ended
		September 25, 2026		September 26, 2025
GAAP:
	Net sales	$                 8,491		$                 6,804
	Cost of sales	7,664		6,181
	Restructuring charges	15		9
	Gross profit	812		614
	Selling, general and administrative expenses	371		260
	Restructuring and impairment charges	—		42
	Intangible amortization	27		16
	Operating income	414		296
	Interest expense	69		52
	Interest income	13		10
	Other charges (income), net	(7)		(13)
	Equity in earnings (losses) of unconsolidated affiliates	5		(5)
	Income before income taxes	370		262
	Provision for income taxes	107		63
	Net income	$                   263		$                   199
GAAP EPS
	Diluted earnings per share	$                   0.70		$                  0.52
	Diluted shares used in computing per share amounts	374		380
	See Schedule II for the reconciliation of GAAP to non-GAAP financial measures. See the accompanying notes on Schedule V attached to this press release.

 

FLEX
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
		Six-Month Periods Ended
		September 25, 2026		September 26, 2025
GAAP:
	Net sales	$                16,419		$               13,379
	Cost of sales	14,841		12,168
	Restructuring charges	19		25
	Gross profit	1,559		1,186
	Selling, general and administrative expenses	705		493
	Restructuring and impairment charges (reversal)	(2)		49
	Intangible amortization	50		37
	Operating income	806		607
	Interest expense	129		103
	Interest income	26		23
	Other charges (income), net	(44)		(6)
	Equity in earnings (losses) of unconsolidated affiliates	—		(25)
	Income before income taxes	747		508
	Provision for income taxes	199		117
	Net income	$                   548		$                   391
GAAP EPS
	Diluted earnings per share	$                   1.47		$                  1.03
	Diluted shares used in computing per share amounts	374		381
	See Schedule II for the reconciliation of GAAP to non-GAAP financial measures. See the accompanying notes on Schedule V attached to this press release.

 

SCHEDULE II
FLEX
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share amounts and percentages)
		Three-Month Periods Ended
		September 25, 2026			September 26, 2025
GAAP operating income and margin %		$                 414	4.9 %		$                 296	4.4 %
	Intangible amortization	27			16
	Stock-based compensation	43			37
	Restructuring and impairment charges	13			51
	Legal and other	110			9
Non-GAAP operating income and margin %		$                 607	7.1 %		$                 409	6.0 %
GAAP provision for income taxes		$                 107			$                  63
	Intangible amortization benefit	6			3
	Other tax related adjustments	5			14
Non-GAAP provision for income taxes		$                 118			$                  80
GAAP net income		$                 263			$                 199
	Intangible amortization	27			16
	Stock-based compensation	43			37
	Restructuring and impairment charges	13			51
	Legal and other	110			9
	Equity in losses of unconsolidated affiliates	—			8
	Interest and other, net	(2)			(3)
	Adjustments for taxes	(11)			(17)
Non-GAAP net income		$                 443			$                 300
Diluted earnings per share:
	GAAP	$                0.70			$                0.52
	Non-GAAP	$                1.18			$                0.79
Free Cash Flow:
	Net cash provided by operating activities	$                 501			$                 453
	Purchases of property and equipment	(241)			(150)
	Proceeds from the disposition of property and equipment	1			2
	Free Cash Flow	$                 261			$                 305
	See the accompanying notes on Schedule V attached to this press release.

 

FLEX
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share amounts and percentages)
		Six-Month Periods Ended
		September 25, 2026			September 26, 2025
GAAP operating income and margin %		$                 806	4.9 %		$                 607	4.5 %
	Intangible amortization	50			37
	Stock-based compensation	94			71
	Restructuring and impairment charges	14			74
	Legal and other	177			15
Non-GAAP operating income and margin %		$               1,141	6.9 %		$                 804	6.0 %
GAAP provision for income taxes		$                 199			$                 117
	Intangible amortization benefit	11			8
	Other tax related adjustments	7			28
Non-GAAP provision for income taxes		$                 217			$                 153
GAAP net income		$                 548			$                 391
	Intangible amortization	50			37
	Stock-based compensation	94			71
	Restructuring and impairment charges	14			74
	Legal and other	177			15
	Equity in losses of unconsolidated affiliates	—			25
	Interest and other, net	(48)			(3)
	Adjustments for taxes	(18)			(36)
Non-GAAP net income		$                 817			$                 574
Diluted earnings per share:
	GAAP	$                1.47			$                1.03
	Non-GAAP	$                2.18			$                1.51
Free Cash Flow:
	Net cash provided by operating activities	$                 777			$                 852
	Purchases of property and equipment	(477)			(283)
	Proceeds from the disposition of property and equipment	2			4
	Free Cash Flow	$                 302			$                 573
	See the accompanying notes on Schedule V attached to this press release.

 

SCHEDULE III
FLEX
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
		As of September 25, 2026		As of March 31, 2026
ASSETS
Current assets:
	Cash and cash equivalents	$                      3,083		$                2,389
	Accounts receivable, net of allowance	5,777		4,679
	Contract assets	1,443		1,063
	Inventories	7,323		5,845
	Other current assets	2,548		2,356
Total current assets		20,174		16,332
Property and equipment, net		2,849		2,505
Operating lease right-of-use assets, net		860		659
Goodwill		1,843		1,369
Other intangible assets, net		701		283
Other non-current assets		950		912
Total assets		$                    27,377		$               22,060
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Accounts payable	$                      9,707		$                8,055
	Accrued payroll and benefits	649		671
	Deferred revenue and customer working capital advances	2,534		2,156
	Other current liabilities	2,159		1,134
Total current liabilities		15,049		12,016
Long-term debt, net of current portion		5,213		3,751
Operating lease liabilities, non-current		770		565
Other non-current liabilities		538		584
Total liabilities		21,570		16,916
Total shareholders' equity		5,807		5,144
Total liabilities and shareholders' equity		$                    27,377		$               22,060

 

SCHEDULE IV
FLEX
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
	Six-Month Periods Ended
	September 25, 2026		September 26, 2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$                  548		$                  391
Depreciation, amortization and other impairment charges	296		298
Changes in working capital and other, net	(67)		163
Net cash provided by operating activities	777		852
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(477)		(283)
Proceeds from the disposition of property and equipment	2		4
Acquisition of businesses, net of cash acquired	(1,134)		(43)
Proceeds from divestiture of businesses, net of cash held in divested businesses	90		(4)
Other investing activities, net	(1)		(8)
Net cash used in investing activities	(1,520)		(334)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank borrowings and long-term debt	2,830		500
Payments of bank borrowings, long-term debt and other financing liabilities	(1,401)		(535)
Payments for repurchases of ordinary shares	—		(544)
Other financing activities, net	7		4
Net cash (used in) provided by financing activities	1,436		(575)
Effect of exchange rates on cash and cash equivalents	1		17
Net change in cash and cash equivalents	694		(40)
Cash and cash equivalents, beginning of period	2,389		2,289
Cash and cash equivalents, end of period	$                3,083		$                2,249

SCHEDULE V

FLEX AND SUBSIDIARIES
NOTES TO SCHEDULES I and II

To supplement Flex's unaudited selected financial data presented consistent with U.S. Generally Accepted Accounting Principles ("GAAP"), the Company discloses certain non-GAAP financial measures that exclude certain charges and gains, including non-GAAP operating income, non-GAAP net income and non-GAAP net income per diluted share. These supplemental measures exclude certain legal and other charges, restructuring charges, customer-related asset impairments (recoveries), stock-based compensation expense, intangible amortization, other discrete events as applicable and the related tax effects. These non-GAAP measures are not in accordance with or an alternative for GAAP and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Flex's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Flex's results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of the Company's performance.

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of the Company's operating performance on a period-to-period basis because such items are not, in our view, related to the Company's ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, for calculating return on investment, and for benchmarking performance externally against competitors. In addition, management's incentive compensation is determined using certain non-GAAP measures. Also, when evaluating potential acquisitions, we exclude certain items described below from consideration of the target's performance and valuation. Since we find these measures to be useful, we believe that investors benefit from seeing results "through the eyes" of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with the Company's GAAP financials, provide useful information to investors by offering:

• the ability to make more meaningful period-to-period comparisons of the Company's ongoing operating results;
• the ability to better identify trends in the Company's underlying business and perform related trend analysis;
• a better understanding of how management plans and measures the Company's underlying business; and
• an easier way to compare the Company's operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures.

We present forward‑looking non‑GAAP financial measures in our third quarter and full year fiscal 2027 guidance, including adjusted operating income, adjusted operating margin, adjusted income tax rate, and adjusted EPS. We do not provide a reconciliation of these measures to the most directly comparable GAAP measures because the information necessary to do so is not available without unreasonable effort due to the inherent variability, complexity, and uncertainty in forecasting certain items required for such a reconciliation. These items may include restructuring charges and impairment charges, among others. The information that is unavailable could be material and could significantly affect our GAAP results.

The following are explanations of each of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding each of these individual items in the reconciliations of these non-GAAP financial measures:

Stock-based compensation expense consists of non-cash charges for the estimated fair value of unvested restricted share units granted to employees and assumed in business acquisitions. The Company believes that the exclusion of these charges provides for more accurate comparisons of its operating results to peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, the Company believes it is useful to investors to understand the specific impact stock-based compensation expense has on its operating results.

Intangible amortization consists primarily of non-cash charges that can be impacted by, among other things, the timing and magnitude of acquisitions. The Company considers its operating results without these charges when evaluating its ongoing performance and forecasting its earnings trends, and therefore excludes such charges when presenting non-GAAP financial measures. The Company believes that the assessment of its operations excluding these costs is relevant to its assessment of internal operations and comparisons to the performance of its competitors.

Restructuring and impairment charges include severance charges at existing sites and corporate SG&A functions as well as asset impairment, and other charges related to the closures and consolidations of certain operating sites and targeted activities to restructure the business. These costs also include asset impairment charges related to assets significantly impacted by the geopolitical events on the basis of management's best estimate of the recoverable value of assets.  These costs may vary in size based on the Company's initiatives, are not directly related to ongoing or core business results, and do not reflect expected future operating expenses. These costs are excluded by the Company's management in assessing current operating performance and forecasting its earnings trends and are therefore excluded by the Company from its non-GAAP measures.

During the three and six-month periods ended September 25, 2026, the Company recognized $13 million,  most of which related to employee severance. During the three and six-month periods ended September 26, 2025 the Company recognized $10 million and approximately $33 million of restructuring charges, respectively, most of which related to employee severance.

During the six-month period ended September 25, 2026, the Company recognized $1 million and during three and six-month periods ended September 26, 2025, the Company recognized $41 million in asset impairments, inventory write-downs and other charges as a result of an August 21, 2025 missile strike on the Company's Mukachevo, Ukraine operations located in Western Ukraine.

Legal and other consist primarily of costs not directly related to core business results and may include matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims and other costs such as acquisition, portfolio optimization related costs and asset impairment. These costs are excluded by the Company's management in assessing current operating performance and forecasting its earnings trends and are therefore excluded by the Company from its non-GAAP measures. During the three and six-month periods ended September 25, 2026, the Company incurred approximately $91 million and $144 million, respectively, primarily related to the planned spin-off of its Cloud and Power Infrastructure segment into a separate publicly traded company as well as $19 million and $33 million, respectively, of acquisition costs. During the three and six-month periods ended September 26, 2025, the Company incurred approximately $9 million and $15 million, respectively, related to acquisition costs.

Equity in losses of unconsolidated affiliates consists of various other types of items that are not directly related to 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 Company's ongoing operating performance or do not affect core operations. Excluding these amounts provides investors with a basis to compare Company performance against the performance of other companies without this variability. During the three and six-month periods ended September 26, 2025, the Company recognized approximately $8 million and $25 million, respectively, of equity in losses from a reduced valuation of a certain non-core investment fund. No such costs were incurred in the first half of fiscal year 2027.

Interest and other, net consist of various other types of items that are not directly related to ongoing or core business results, such as the gain or losses related to certain divestitures, currency translation reserve write-offs upon liquidation of certain legal entities, debt extinguishment costs and impairment charges or gains associated with certain non-core investments. The Company excludes these items because they are not related to the Company's ongoing operating performance or do not affect core operations. During the three and six-month periods ended September 25, 2026, the Company recognized $2 million and $48 million, respectively, of gains on the divestiture of a subsidiary.

Adjustments for taxes relates to the tax effects of the various adjustments that we incorporate into non-GAAP measures in order to provide a more meaningful measure on non-GAAP net income and certain adjustments related to non-recurring settlements of tax contingencies or other non-recurring tax charges, when applicable. Effective in fiscal year 2026, the Company adopted an annual normalized tax rate for the purpose of determining the tax effect of non-GAAP adjustments. In estimating the normalized tax rate, the Company utilizes a full-year projection of earnings that considers the mix of earnings across tax jurisdictions, existing tax positions and other significant tax matters.

During the three and six-month periods ended September 25, 2026, the Company recognized a $11 million and $18 million net tax benefit, respectively. During the three and six-month periods ended September 26, 2025, the Company recognized a $17 million and $36 million net tax benefit, respectively, related to the tax effects of various adjustments that are incorporated into non-GAAP measures on restructuring and other.

Free cash flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to repay debt obligations, make investments, fund acquisitions, repurchase company shares and for certain other activities. The Company's free cash flow is defined as cash flows from operating activities, less net purchases of property and equipment and proceeds from the disposition of property and equipment ("net capital expenditures"), allowing us to present free cash flow on a consistent basis for investors.

During the three and six-month periods ended September 25, 2026, the Company recognized $261 million and $302 million of free cash inflow, respectively. During the three and six-month periods ended September 26, 2025, the Company recognized $305 million and $573 million of free cash inflow, respectively. Free Cash Flow for the three and six-month periods ended September 25, 2026, was negatively impacted by $61 million and $85 million respectively, of separation costs incurred in connection with the spin-off of Flex's Cloud & Power Infrastructure segment. Free cash flow is not a measure of liquidity under U.S. GAAP, and may not be defined and calculated by other companies in the same manner.

 

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SOURCE Flex

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Flex's second-quarter fiscal 2027 earnings?

Flex reported GAAP earnings of $0.70 per share and adjusted earnings of $1.18 per share for the quarter ended September 25, 2026. Those figures compare with $0.52 and $0.79, respectively, a year earlier.

What is Flex's updated fiscal 2027 guidance?

Flex expects sales of $34.9 billion–$35.9 billion, an adjusted operating margin of 7.6%–7.8%, and adjusted earnings of $4.84–$5.16 per share. The previous ranges were $33.7 billion–$35.2 billion, 7.0%–7.2%, and $4.42–$4.74, respectively.

What tax rate and share count does Flex assume for its fiscal 2027 third-quarter guidance?

Flex's third-quarter guidance assumes an adjusted income tax rate of 21% and approximately 375 million weighted average shares outstanding. It also projects approximately $120 million for interest and other items. The full-year adjusted income tax rate assumption is also 21%.