Slides for today's call, as well as a copy of the earnings press release, are available on the Investor Relations section at flex.com. Please note, all growth metrics will be on a year-over-year basis unless stated otherwise. So beginning on slide 4, we had another exceptional quarter, delivering results above our guidance across all metrics. Revenue came in at $7.1 billion, up 8% versus last year, and adjusted operating margin was 6.5%.

We reported adjusted EPS of $0.87, up 13%, and that was another record for Flex. The growth we're seeing in data centers is being driven by rapidly expanding compute and AI workloads, and those demands are here to stay. We also deployed our advanced rack-level, vertically integrated liquid cooling solution at the Equinix Co-innovation Facility, demonstrating these capabilities in real-world environments. While our data center business growth reflects where the industry is headed, that momentum extends across our diversified portfolio.

Flex remains a trusted global manufacturing partner across a wide range of industries as we continue to move into higher value, more complex product categories that also help drive margin improvement. In Health Solutions, demand for medical devices remains strong, and we saw an improvement in the medical equipment category. In core industrial, we're seeing demand in productivity-driven areas like warehouse automation and robotics, along with strength in select semiconductor-related capital equipment programs. Third quarter revenue came in at $7.1 billion, up 8% year-over-year, driven by continued strong performance in data center and improving momentum in our industrial and health solutions businesses.

What went well
  • Third quarter revenue came in at $7.1 billion, up 8% year over year, driven by continued strong data center performance and improving momentum in industrial and health solutions.
  • Adjusted operating margin was 6.5%, up 40 basis points year over year and a record for Flex, with adjusted EPS of $0.87, up 13% and another record.
  • Adjusted gross margin improved 50 basis points to 9.8%.
  • Reliability revenue accelerated to $3.2 billion, up 10%, with adjusted operating margin of 7.2% (up 50 basis points) driven by power and core industrial.
  • Flex raised its full-year FY2026 revenue guidance by $350 million at the midpoint and lifted the adjusted EPS midpoint by $0.11.
  • The company announced milestones including modular data center systems with Nvidia, an LG thermal management partnership for gigawatt-scale data centers, and deployment of liquid cooling at the Equinix Co-Innovation Facility.
What went wrong
  • Agility operating margin was unchanged at 6.3% against a strong year-ago quarter, and revenue growth there was offset by softness in consumer-related end markets including consumer devices and lifestyle.
  • The full-year revenue guide for Agility was walked down a bit, primarily reflecting soft consumer end markets.
  • Memory companies are allocating supply toward data center end markets, though Flex sees no significant consumer demand or supply effect since those markets are already soft.

Guidance Changes

MetricPeriodCurrent guidance
RevenueFY2026$27.2 billion to $27.5 billion (midpoint raised by $350 million)
Adjusted operating marginFY2026approximately 6.3% (roughly maintained)
Adjusted EPSFY2026$3.21 to $3.27 (midpoint raised by $0.11)
RevenueQ4 FY2026$6.75 billion to $7.05 billion
Adjusted operating incomeQ4 FY2026$445 million to $475 million
Adjusted EPSQ4 FY2026$0.83 to $0.89

Performance Breakdown

MetricYoYNote
Total revenue up 8% Continued strong performance in data center and improving momentum in industrial and health solutions.
Reliability revenue up 10% Power continues to drive strong growth alongside core industrial and health solutions.
Agility revenue up 6% Data center-related end markets drove strong growth, partially offset by softness in consumer-related end markets.
Adjusted operating margin up 40 basis points to 6.5% Disciplined cost management and deliberate shift toward higher-value products and services; a record for Flex.
Adjusted EPS up 13% Strength in execution and margin expansion.

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Operating margin trajectory6% target reached a year ahead of long-term guide6.5% record margin, guided to approximately 6.3% for the full yearContinued expansion via mix
Power investment cadencepower-heavy capacity investment this yearexpect more compute capacity investment in coming years as AI programs come on board, with embedded power capacity added next yearShifting investment mix
Networking outside data center—high-speed networking and NIC cards driving agility upside but not counted in data center numbersGrowing ai-adjacent contribution
Automotiveprograms in flux across EV/hybrid/ICEstabilizing with greater clarity on platforms; growth driven by software-defined compute platformsStabilizing

Q&A Summary

Where is the bigger data center opportunity, power or compute, and where are investments focused given capacity needs?
Both power and compute are growing very strongly. Power has had heavier capacity investment this year; next year Flex expects to add more embedded power capacity (less critical power, which is being digested) and continue adding compute capacity as AI programs come online. It is described as a good problem to have.
Is there a ceiling on Flex's operating margin given the current business mix, and should Flex exit lower-margin consumer segments?
Management expects underlying business units to continue delivering year-on-year margin expansion plus positive mix impacts, consistent with prior years. Flex reached 6% a year ahead of its long-term guide, and is comfortable with its current portfolio; more on long-term margins will come at the May investor day.
Within power, how do embedded versus critical power differ competitively and where is the share gain opportunity?
Both are growing very strongly. Critical power competes with traditional electrical players and is driven by lead-time and installation/schedule management. Embedded power is undergoing a large technology shift to 800V DC and 1MW rack deployments with only a small set of competitors, giving Flex a significant advantage.
Why didn't compute provide more upside in agility to offset soft consumer markets?
Flex is pleased with agility growth; data center remains on track for the full-year guide. Additional upside is driven by high-speed networking and NIC cards, which are data center-related but not counted in the data center business. Softness is in consumer-related end markets (lifestyle and consumer devices).
Is Flex already seeing material upside from the Amazon warrant deal, and when does it become meaningful?
The warrants are not incremental and were not expected to be materially incremental to FY2026; upside is expected as that program scales over time. Growth with AWS is very strong and going as expected, and is expected to continue into the next few years, with more detail at the investor day.
Were Reliability's strong margins (over 7%) episodic or indicative of longer-term potential?
The strength reflects underlying mix impacts from continued power growth and year-on-year improvement in core industrial, partly tied to non-data-center end markets with secular AI exposure. It is mix and execution, not one-time, and those drivers are expected to continue into Q4.

More on Flex Ltd.

Reported 2026-02-04 · figures from the Flex Ltd. Q3 2026 earnings call.

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