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Flex Q1 Earnings & Revenues Beat Estimates, Up Y/Y, Stock Down
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Key Takeaways
FLEX posted Q1 EPS of $0.72 and revenues of $6.6B, beating estimates and up year over year.
Strong demand in cloud and power drove growth in Agility Solutions and offset auto sector weakness.
FLEX raised its fiscal 2026 guidance for both revenues and EPS amid momentum in key growth markets.
Flex Ltd. (FLEX - Free Report) reported first-quarter fiscal 2026 adjusted earnings per share (EPS) of 72 cents, which surpassed the Zacks Consensus Estimate by 14.3%. The bottom line compared favorably with 51 cents posted in the prior-year quarter.
Revenues increased 4.1% year over year to $6.6 billion. Also, it beat the consensus mark by 5.6%. The uptick was driven by strong data center growth in both the cloud and power end markets.
Management stated that the company’s strong first-quarter results mark a solid start to fiscal 2026 and highlight the effectiveness of its strategic focus on high-growth markets such as data centers and power.
After the announcement of the results, shares lost 7.7% and closed the session at $49.67 on July 24, 2025. In the past year, the stock has surged 55.2% against the Zacks Electronics - Miscellaneous Products industry’s decline of 6.6%.
Image Source: Zacks Investment Research
Segment Details
The Flex Reliability Solutions Group encompasses Health Solutions, Automotive and Industrial businesses. Revenues fell 2% to $2.9 billion in line with the company’s expectations. This was due to ongoing macroeconomic pressures in the automotive and renewables sectors, partially offset by strong performance in the power segment.
The Flex Agility Solutions Group comprises Communications & Enterprise Compute or CEC and Lifestyle and Consumer Devices businesses. Revenues were up 10% to $3.7 billion. This uptick was driven by strong demand in cloud and AI, which more than compensated for ongoing weakness in traditional telecom and consumer-facing end markets.
Non-GAAP gross profit came in at $596 million, up 20.4% year over year. Non-GAAP gross margin expanded 130 basis points (bps) to 9.1% in the reported quarter. Non-GAAP operating income came in at $395 million, up 29.1% year over year. Non-GAAP operating margin expanded 120 bps to 6%. This was fueled by robust gross margin performance and sustained cost efficiency.
The adjusted operating margins of the Flex Reliability Solutions Group were 6%, up 100 bps from the prior-year level. The adjusted operating margins of the Flex Agility Solutions Group improved 120 bps to 6.5%.
Selling, general & administrative expenses totaled $233 million, up 9.4% year over year.
Balance Sheet & Cash Flow
As of June 30, 2025, cash & cash equivalents and long-term debt (net of current portion) were $2.24 billion and $3 billion, respectively, compared with $2.29 billion and $2.48 billion a year ago.
The company generated a first-quarter fiscal 2026 cash flow from operating activities of $399 million and an adjusted free cash flow of $268 million. In the quarter, the company repurchased $247 million worth of stock.
Outlook
For the second quarter of fiscal 2026, Flex expects revenues to be between $6.5 billion and $6.8 billion.
Management expects adjusted earnings of 70-78 cents per share, excluding 9 cents for net stock-based compensation expense and 3 cents for net intangible amortization. Adjusted operating income is projected to be between $375 million and $415 million.
For Reliability Solutions, the company expects revenues to range from a low single-digit decline to a mid-single-digit increase, representing a slight improvement from its previous outlook of flat to down high-single digits. Ongoing strength in data center power continues to help counterbalance macroeconomic softness in automotive, core industrial and renewables.
For Agility Solutions, the company anticipates modest year-over-year growth in the low-to-mid-single-digit range, marking a slight upward revision from the prior forecast of down by low-single digits to up mid-single digits. This growth is expected to be driven by steady cloud demand, continued benefits from earlier lifestyle wins and strategic share gains in networking. These positive factors will likely be partially offset by persistent weakness in enterprise IT, telecom and consumer device markets.
For fiscal 2026, Flex expects revenues to be between $25.9 billion and $27.1 billion. Earlier, the company anticipated revenues to be between $25 billion and $26.8 billion.
For fiscal 2026, it anticipates adjusted earnings in the range of $2.86-$3.06 per share. Earlier, the company anticipated adjusted earnings in the range of $2.81-$3.01 per share.
Reliability Solutions revenues are expected to range from a slight decline to a slight increase, as ongoing weakness in the automotive sector and parts of the health segment is balanced by solid performance in its Power business.
Agility Solutions revenues are projected to grow from the low single digits to mid-single digits, driven by strong demand in cloud and sustained momentum in networking, partially offset by continued softness in traditional telecom and consumer-facing end markets.
Badger Meter, Inc. (BMI - Free Report) reported earnings per share of $1.17 for second-quarter 2025, which missed the Zacks Consensus Estimate by 3.3%. However, the bottom line compared favorably with the year-ago quarter’s EPS of $1.12.
Quarterly net sales were $238.1 million, up 10% from $216.7 million in the year-ago quarter, driven by higher utility water sales and the contribution from the SmartCover acquisition. The Zacks Consensus Estimate was pegged at $234.3 million.
In the past, shares of BMI have lost 8%.
Simulations Plus, Inc. (SLP - Free Report) reported third-quarter fiscal 2025 adjusted earnings of 45 cents per share, which expanded 66.7% year over year. The figure also surpassed the Zacks Consensus Estimate of 26 cents per share.
Quarterly revenues jumped 10% year over year to $20.4 million, driven by continued momentum across its software and services business segments, along with a $2.4 million boost from the Pro-ficiency acquisition.
In the past, shares of SLP have declined 66.9%
SAP SE (SAP - Free Report) reported second-quarter 2025 non-IFRS earnings of €1.50 ($1.70) per share, climbing 37% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.63.
Driven by robust cloud growth, disciplined cost control, and expanding AI capabilities, SAP reported total revenues on a non-IFRS basis of €9.03 billion ($10.24 billion), representing a 9% year-over-year increase (up 12% at constant currency or cc). The Zacks Consensus estimate was pegged at $10.37 billion.
Shares of SAP have surged 34% in the past year.
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Flex Q1 Earnings & Revenues Beat Estimates, Up Y/Y, Stock Down
Key Takeaways
Flex Ltd. (FLEX - Free Report) reported first-quarter fiscal 2026 adjusted earnings per share (EPS) of 72 cents, which surpassed the Zacks Consensus Estimate by 14.3%. The bottom line compared favorably with 51 cents posted in the prior-year quarter.
Revenues increased 4.1% year over year to $6.6 billion. Also, it beat the consensus mark by 5.6%. The uptick was driven by strong data center growth in both the cloud and power end markets.
Management stated that the company’s strong first-quarter results mark a solid start to fiscal 2026 and highlight the effectiveness of its strategic focus on high-growth markets such as data centers and power.
After the announcement of the results, shares lost 7.7% and closed the session at $49.67 on July 24, 2025. In the past year, the stock has surged 55.2% against the Zacks Electronics - Miscellaneous Products industry’s decline of 6.6%.
Image Source: Zacks Investment Research
Segment Details
The Flex Reliability Solutions Group encompasses Health Solutions, Automotive and Industrial businesses. Revenues fell 2% to $2.9 billion in line with the company’s expectations. This was due to ongoing macroeconomic pressures in the automotive and renewables sectors, partially offset by strong performance in the power segment.
The Flex Agility Solutions Group comprises Communications & Enterprise Compute or CEC and Lifestyle and Consumer Devices businesses. Revenues were up 10% to $3.7 billion. This uptick was driven by strong demand in cloud and AI, which more than compensated for ongoing weakness in traditional telecom and consumer-facing end markets.
Flex Ltd. Price and EPS Surprise
Flex Ltd. price-eps-surprise | Flex Ltd. Quote
FLEX’s Operating Details
Non-GAAP gross profit came in at $596 million, up 20.4% year over year. Non-GAAP gross margin expanded 130 basis points (bps) to 9.1% in the reported quarter.
Non-GAAP operating income came in at $395 million, up 29.1% year over year. Non-GAAP operating margin expanded 120 bps to 6%. This was fueled by robust gross margin performance and sustained cost efficiency.
The adjusted operating margins of the Flex Reliability Solutions Group were 6%, up 100 bps from the prior-year level. The adjusted operating margins of the Flex Agility Solutions Group improved 120 bps to 6.5%.
Selling, general & administrative expenses totaled $233 million, up 9.4% year over year.
Balance Sheet & Cash Flow
As of June 30, 2025, cash & cash equivalents and long-term debt (net of current portion) were $2.24 billion and $3 billion, respectively, compared with $2.29 billion and $2.48 billion a year ago.
The company generated a first-quarter fiscal 2026 cash flow from operating activities of $399 million and an adjusted free cash flow of $268 million.
In the quarter, the company repurchased $247 million worth of stock.
Outlook
For the second quarter of fiscal 2026, Flex expects revenues to be between $6.5 billion and $6.8 billion.
Management expects adjusted earnings of 70-78 cents per share, excluding 9 cents for net stock-based compensation expense and 3 cents for net intangible amortization. Adjusted operating income is projected to be between $375 million and $415 million.
For Reliability Solutions, the company expects revenues to range from a low single-digit decline to a mid-single-digit increase, representing a slight improvement from its previous outlook of flat to down high-single digits. Ongoing strength in data center power continues to help counterbalance macroeconomic softness in automotive, core industrial and renewables.
For Agility Solutions, the company anticipates modest year-over-year growth in the low-to-mid-single-digit range, marking a slight upward revision from the prior forecast of down by low-single digits to up mid-single digits. This growth is expected to be driven by steady cloud demand, continued benefits from earlier lifestyle wins and strategic share gains in networking. These positive factors will likely be partially offset by persistent weakness in enterprise IT, telecom and consumer device markets.
For fiscal 2026, Flex expects revenues to be between $25.9 billion and $27.1 billion. Earlier, the company anticipated revenues to be between $25 billion and $26.8 billion.
For fiscal 2026, it anticipates adjusted earnings in the range of $2.86-$3.06 per share. Earlier, the company anticipated adjusted earnings in the range of $2.81-$3.01 per share.
Reliability Solutions revenues are expected to range from a slight decline to a slight increase, as ongoing weakness in the automotive sector and parts of the health segment is balanced by solid performance in its Power business.
Agility Solutions revenues are projected to grow from the low single digits to mid-single digits, driven by strong demand in cloud and sustained momentum in networking, partially offset by continued softness in traditional telecom and consumer-facing end markets.
FLEX’s Zacks Rank
Flex currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies
Badger Meter, Inc. (BMI - Free Report) reported earnings per share of $1.17 for second-quarter 2025, which missed the Zacks Consensus Estimate by 3.3%. However, the bottom line compared favorably with the year-ago quarter’s EPS of $1.12.
Quarterly net sales were $238.1 million, up 10% from $216.7 million in the year-ago quarter, driven by higher utility water sales and the contribution from the SmartCover acquisition. The Zacks Consensus Estimate was pegged at $234.3 million.
In the past, shares of BMI have lost 8%.
Simulations Plus, Inc. (SLP - Free Report) reported third-quarter fiscal 2025 adjusted earnings of 45 cents per share, which expanded 66.7% year over year. The figure also surpassed the Zacks Consensus Estimate of 26 cents per share.
Quarterly revenues jumped 10% year over year to $20.4 million, driven by continued momentum across its software and services business segments, along with a $2.4 million boost from the Pro-ficiency acquisition.
In the past, shares of SLP have declined 66.9%
SAP SE (SAP - Free Report) reported second-quarter 2025 non-IFRS earnings of €1.50 ($1.70) per share, climbing 37% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.63.
Driven by robust cloud growth, disciplined cost control, and expanding AI capabilities, SAP reported total revenues on a non-IFRS basis of €9.03 billion ($10.24 billion), representing a 9% year-over-year increase (up 12% at constant currency or cc). The Zacks Consensus estimate was pegged at $10.37 billion.
Shares of SAP have surged 34% in the past year.