Flex (FLEX) Q4 FY26 earnings call: guidance and Q&A

How did you weigh the value-unlock of spinning off CPI against the scale, end-market diversification and customer concentration you give up?

Revathi called it a no-brainer given a onetime change in power and data-center architecture, and stressed the CPI portfolio is diversified across power, thermal and compute and across a broad customer base (hyperscalers, colos, neoclouds, utilities), making it well set up to run stand-alone.

“it definitely felt like it was a no-brainer to do it at this point in time with the business that we have built.”

asked by Samik Chatterjee · answered by Revathi Advaithi

How much of the CPI acceleration is attributable to the Google multiyear (power) agreement?

Revathi said the acceleration is driven by Google and multiple other hyperscalers plus colos and neoclouds — well distributed across power and cloud and across product lines — and reiterated the 65%-75% and 80%+ growth targets, noting the business is booked out on capacity and backlog for the next couple of years.

“we are also booked out in terms of capacity and backlog for the next couple of years.”

asked by Samik Chatterjee · answered by Revathi Advaithi

How should we think about the embedded and critical/distributed power subcomponents and their relative growth rates?

Revathi explained embedded power (power for the chip) is accelerating significantly with the 400V/800V DC transition, and that distributed power — low/medium-voltage switchgear, power pods, up to utility-grade substation infrastructure — is growing end-to-end; more segment-level financial detail will come as new segments are reported each quarter.

“with the acceleration and the focus on power density for chip, obviously, that business is accelerating pretty significantly looking forward.”

asked by Luke Junk · answered by Revathi Advaithi

Can you give more texture on the Google multiyear contract and whether these foundational awards are a different type of opportunity?

Revathi said the multiyear contract is with Google but also spans multiple hyperscalers, neoclouds, colos and utilities across multiple product lines (compute integration, racks/enclosures, 400V/800V DC architecture, distributed power), and that Flex is adding factory capacity to meet these multiyear commitments.

“these multiyear contracts are really across multiple product lines across multiple hyperscalers and other customers like neoclouds, colos and utilities.”

asked by Luke Junk · answered by Revathi Advaithi

As cloud scales through FY27, does cloud margin converge toward the segment average, and what is the margin spread between the two CPI business units in a normalized FY28?

Kevin said cloud margins are lower than power margins and will remain so; FY27 ramp costs and power infrastructure investment will be absorbed and grown into during FY28, driving the ~100 bps CPI margin improvement he flagged.

“our power margins are going to be and will continue to be higher than our cloud margins in that segment.”

asked by Unknown Analyst (on for Ruben Roy) · answered by Kevin Krumm

Directionally, how does RemainCo margin progress in FY27-FY28, and is the lifestyle deemphasis a meaningful revenue exit?

Michael pointed to FY26 ITS and RMS margins up 80 bps to 5.4% (with strength across the portfolio except lifestyle, which now includes consumer devices), and said the playbook — productivity, AI-enabled cost improvement and mix optimization — leaves room for continued expansion, with a balanced first-half/second-half view against a strong prior-year comparable.

“both ITS and RMS were up 80 basis points from 4.6% to 5.4%.”

asked by Unknown Analyst (on for Ruben Roy) · answered by Michael Hartung

Does the FY27-FY28 CPI growth represent full run-rate of signed deals, or do they ramp beyond FY28, and where can CPI margins go medium-term?

Kevin said the signed programs would continue to grow into FY29 beyond the FY28 numbers given today, and that CPI margins expand further in FY28 (50-100 bps) driven by product/power mix growing faster than cloud and continued products-margin improvement; Revathi added the growth-plus-margin-expansion framework applies to both companies.

“we would see some of those programs continue to grow into FY '29.”

asked by Mark Delaney · answered by Kevin Krumm

How much of CPI growth is the demand environment vs. your integrated product/service pitch, and what is the durable moat?

Revathi said most current growth is still individual-product based but technology roadmaps are migrating toward full grid-to-chip architecture, and described the moat as the ability to combine power, cooling and compute into one architecture and deliver it fully assembled and tested at scale — something very few companies can do.

“you can combine the complexity of power and cooling and compute and then put it together in 1 architecture [indiscernible] scale.”

asked by Steve Barger · answered by Revathi Advaithi