Flex Ltd.

First quarter revenue was $7.9 billion, up 21% year over year. Adjusted gross profit was $761 million, with adjusted gross margin of 9.6%, up 50 basis points year over year. Adjusted operating profit was $534 million, with adjusted operating margin of 6.7%, up 70 basis points year over year. Adjusted EPS was $1.00, up 39% year over year. By segment, RMS revenue was $2.7 billion (+12%), ITS revenue was $3.1 billion (+20%), and cloud and power infrastructure revenue was $2.2 billion (+35%). For fiscal 2027, Flex guided to revenue of $33.7 billion to $35.2 billion, adjusted operating margin of 7.7% to 8.2%, adjusted EPS of $4.42 to $4.74, CapEx of $1.5 billion to $1.6 billion, and free cash flow conversion of about 40% after spin-off costs. For Q2, management guided to revenue of $7.95 billion to $8.25 billion, adjusted operating income of $535 million to $565 million, and adjusted EPS of $1.00 to $1.07.

Revathi Advaithi framed the quarter as evidence that Flex is executing well while preparing two standalone businesses for the next phase of growth. She emphasized that AI is turning into an infrastructure and power story, and said Flex’s early investments in power, thermal management, and systems integration position it well. Her tone was upbeat and confident, especially on CPI, where she said the company is still early in a long-cycle build-out and sees robust demand, strong customer conversations, and a meaningful opportunity in modular, power, and cooling solutions.

Kevin Krumm highlighted the core financial performance: $7.9 billion of revenue, $761 million of adjusted gross profit, 9.6% adjusted gross margin, $534 million of adjusted operating profit, 6.7% adjusted operating margin, and $1.00 of adjusted EPS. He also pointed to free cash flow of $41 million, which was reduced by $24 million of one-time spin-related cash costs, and said inventory was up 10% sequentially and 24% year over year, with inventory net of working capital advances at 56 days. For the full year, he guided to $33.7 billion to $35.2 billion of revenue, $1.5 billion to $1.6 billion of CapEx, and about 40% free cash flow conversion, versus a prior 60% conversion target that excluded spin-off costs.

Analysts focused heavily on CPI margins, second-half acceleration, and whether capacity or component constraints could limit growth. Management said CPI margins are tracking guidance and reiterated at least 100 basis points of margin improvement for the segment this year, while also saying demand visibility remains strong with 90%-plus booked business for the next three quarters. On growth, management said the CPI ramp is back-half loaded, capacity investments are being installed, and they do not see major constraints beyond executing those investments. Analysts also pressed on communications durability, cooling traction, and the transition to 400-volt and 800-volt systems; management said communications strength is broad-based and tied to data center AI spending, cooling is still nascent but strategically important, and the voltage transition is going well with no major limitations visible in the current guide.