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Plexus (PLXS) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q2 FY26)· Information Technology· Apr 30, 2026

Source: earnings call transcript

Executive summary

Plexus Q2 FY26 — Record Wins and Accelerated Revenue Growth Outlook

Plexus delivered strong Q2 FY26 results, driven by record program wins and broad-based market sector strength, leading to an increased full-year revenue growth forecast. The company is expanding investments in operational efficiency and technology while maintaining financial discipline, positioning for sustained momentum beyond FY26 despite some supply chain tightening and increased working capital needs in the near term. The call also marked the retirement of the long-serving CFO, Pat Jermain, and the appointment of David Abuhl as his successor.

Highlights

5

  • Secured a record $355 million in new manufacturing program wins in Q2 FY26.

  • Q2 FY26 revenue of $1.164 billion exceeded guidance, representing a robust 19% year-over-year increase.

  • Non-GAAP EPS of $2.05 in Q2 FY26 exceeded guidance.

  • Achieved a robust 6% non-GAAP operating margin in Q2 FY26, at the top end of guidance.

  • Funnel of qualified manufacturing opportunities expanded 11% sequentially to $4 billion in Q2 FY26.

Concerns

2

  • Supply chain tightening observed in specific commodities including semiconductors, passives, memory, raw PCB fabs, high-performance passives, magnetics, and microcontrollers, with lead times extending.

  • Anticipated higher investments in working capital for Q3 FY26 to support accelerating revenue growth, expecting a usage of free cash flow for the quarter.

Guidance & targets

CategoryTargetConfidence
Q3 FY26 Revenue
$1.2 billion to $1.25 billion
high materiality
High
Q3 FY26 Non-GAAP Operating Margin
5.9% to 6.3%
medium materiality
High
Q3 FY26 Non-GAAP EPS
$2.02 to $2.18
high materiality
High
FY26 Revenue Growth
mid-teens or greater
high materiality
High
FY26 Non-GAAP Operating Margin
6% or greater
high materiality
High
FY26 Non-GAAP Effective Tax Rate
16% and 18%
medium materiality
High
FY26 Capital Expenditures
$100 million to $120 million
medium materiality
High
FY26 Free Cash Flow
$50 million to $75 million
high materiality
Medium
FY26 Cash Cycle Days
low 60s
medium materiality
High
Aerospace and Defense FY26 Revenue Growth
well into the double digits
medium materiality
High
Healthcare/Life Sciences FY26 Revenue Growth
exceed our 9% to 12% goal
medium materiality
High
Industrial FY26 Revenue Growth
well in excess of our 9% to 12% growth goal
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Aerospace and Defense
Revenue increased 19% sequentially in Q2 FY26, significantly outperforming expectations. Improved end market demand across all subsectors and expanded component availability drove the result. Q3 FY26 revenue expected to be up mid-single digits. FY26 revenue growth anticipated to be well into double digits, exceeding the 9% to 12% goal, supported by strong demand in commercial aerospace, space, and exceptional growth in defense.
Q2 FY26 Wins: $44 million
——19%—
Healthcare/Life Sciences
Revenue increased 1% sequentially in Q2 FY26, aligned with expectations. Q3 FY26 revenue expected to be flat, with an anticipated return to sequential growth in Q4 FY26. FY26 revenue growth anticipated to exceed the 9% to 12% goal, supported by ongoing and new program ramps, share gains, and strong end market demand across therapeutics and monitoring subsectors.
Q2 FY26 Wins: $116 million
——1%—
Industrial
Revenue increased 12% sequentially in Q2 FY26, in line with forecasts. Q3 FY26 outlook is for a low double-digit increase, supported by substantial growth in the semicap subsector and strength in industrial equipment. FY26 revenue growth anticipated to be well in excess of the 9% to 12% growth goal, supported by new program ramps and robust growth in semicap, offsetting pockets of demand softness.
Q2 FY26 Wins: $195 million (record high)
——12%—

PLXS operating KPIs by quarter

PLXS operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q2 FY26 Jun 2026 Q3 FY26Change vs prior quarter
Manufacturing program wins
$355M Our team generated a record $355 million in new manufacturing program wins with broad-based contributions across our market sectors. Source: earnings call transcript
$255M For the third quarter, we secured 31 new manufacturing programs with $255 million in annualized revenue when fully ramped into production. Source: earnings call transcript
-28.2%
New manufacturing programs
30 For the fiscal second quarter, we secured 30 new manufacturing programs with a record $355 million in annualized revenue when fully ramped into production. Source: earnings call transcript
31 For the third quarter, we secured 31 new manufacturing programs with $255 million in annualized revenue when fully ramped into production. Source: earnings call transcript
+3.3%
Manufacturing program wins Aerospace and Defense
$44M Our fiscal second quarter wins for the aerospace and defense sector were $44 million. Source: earnings call transcript
$135M This result included an exciting new partnership in our industrial market sector supporting battery energy storage systems for data centers as well as another robust contribution from our aerospace and defense market sector of $135 million. Source: earnings call transcript
+206.8%
Funnel of qualified manufacturing opportunities
$4B As evidence, our funnel of qualified manufacturing opportunities expanded 11% sequentially in the fiscal second quarter and is now $4 billion. Source: earnings call transcript
$4.5B Finally, our funnel of qualified manufacturing opportunities expanded to a record $4.5 billion in support of sustaining robust long-term revenue growth. Source: earnings call transcript
+12.5%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Funnel of Qualified Manufacturing Opportunities $4 billion end of Q2 FY26

expanded 11% sequentially

Includes record high funnels in aerospace and defense and industrial sectors, which expanded in excess of 45% compared to Q2 FY25.

Annualized Revenue from New Manufacturing Program Wins $355 million Q2 FY26

record

Represents annualized revenue when fully ramped into production from 30 new manufacturing programs.

Deals & partnerships

Existing customer (Kelso, Scotland site) Follow-on share gain award in the defense subsector.

Customer noted the strength of partnership and operational excellence as factors in their decision.

Existing unmanned defense customer (Boise, Idaho facility) Significant follow-on award.

Relationship strength and operational excellence were factors in the award.

Existing customer (Xiamen, China site) Next-generation point-of-care ultrasound system.

Won due to the strength of new product launch capabilities and seamless engineering to production transition.

Existing customer (Neenah, Wisconsin facility) Significant award for a robotic surgical platform.

Seamless engineering to production transition capabilities contributed to the award.

Existing customer (Bangkok, Thailand facility) Substantial award for a new product line for data center power solutions.

Long-term strategic partnership and strength of value proposition contributed to the win.

Existing robotics customer (Guadalajara, Mexico campus) Substantial follow-on award.

Strength of execution and ability to quickly ramp to fulfill demand supported the win.

New customer (Guadalajara, Mexico campus) Selected to support production of an energy storage system for electric commercial vehicles.

Welcoming a new customer to Plexus for electric commercial vehicle energy storage.

Capital programs

Capital Expenditures underway $100 million to $120 million

Benefit:higher throughput on existing production lines, increasing site revenue capacity

Reconfirmed guidance for fiscal 2026. Teams have improved throughput of assets by 10%, avoiding approximately $20 million of capital investments, allowing growth on a very similar capital base.

Risks & headwinds

Supply chain tightening Current

Lead times extending for semiconductors, passives, memory, raw PCB fabs, high-performance passives, magnetics, and microcontrollers.

Mitigation:Proactive identification of risk, consultative engagement with customers, extending forecast visibility, expanding alternates, advanced materials planning, early PO placement, extended PO horizon, and use of AI tools to find supply.

Increased working capital investments Q3 FY26

Higher investments in working capital expected for Q3 FY26, leading to anticipated usage of free cash flow.

Mitigation:Focus on working capital efficiency, with an expectation to end FY26 with cash cycle days in the low 60s.

What to watch in Q3 FY26

FY26 Revenue Growth

Next quarter (Q3 FY26 earnings call)
Current mid-teens or greater
Target Confirmation of 'mid-teens or greater' or further upward revision

Why it matters

This is a core thesis driver, indicating continued strong demand and execution, and any revision would significantly impact investor sentiment.

Accordingly, for fiscal 2026, we now expect to deliver mid-teens or greater revenue growth overall, a substantially increased forecast from our initial expectations last October.

Find out whether PLXS delivers this. Inve re-checks your case every morning.

Q&A highlights

How should investors think about longer-term working capital investment to support growth, considering the strong acceleration and CapEx efficiencies?

Pat Jermain stated that low to mid-60s days is a good range for cash cycle going forward, with approximately 10% to 15% additional working capital dollars associated with any revenue growth. David Abuhl added that efficiency gains, such as a 10% improvement in asset throughput, have avoided about $20 million in capital investments, allowing revenue growth on a similar capital base.

“I'd say 2 things, Melissa. I think from a days perspective, I think we're in a really good spot in this low to mid-60s going forward. I think that would carry into fiscal '27. I think the other thing to look at is with revenue growth, we're probably around 10% to 15% additional working capital dollars associated with any growth in revenue.”

asked by Melissa Dailey Fairbanks · answered by Patrick Jermain

2 min read 6 chapters

Detailed narrative

Record Program Wins and Funnel Expansion

Plexus secured 30 new manufacturing programs in Q2 FY26, representing a record $355 million in annualized revenue when fully ramped into production. All market sectors contributed to this performance, including broad-based opportunities in aerospace and defense, expanded relationships in surgical and imaging platforms, and new engagements in data center power solutions. The funnel of qualified manufacturing opportunities expanded 11% sequentially to $4 billion, driven by record high funnels in the aerospace and defense and industrial sectors, which expanded over 45% compared to Q2 FY25.

Strong Q2 Performance and Increased FY26 Outlook

Fiscal Q2 revenue of $1.164 billion exceeded guidance, marking the fifth consecutive quarter of sequential growth and a robust 19% year-over-year increase. Non-GAAP EPS of $2.05 also surpassed expectations, with a 6% non-GAAP operating margin at the top end of guidance. Due to this momentum, Plexus now expects to deliver mid-teens or greater revenue growth for fiscal 2026, a substantial increase from initial expectations, alongside robust profitability of 6% or greater non-GAAP operating margin.

Operational Efficiency and Strategic Investments

The company is expanding significant investments in operational efficiency initiatives and technologies to support ongoing revenue growth and drive greater long-term operational efficiency. These efforts have already yielded tangible benefits, with teams improving throughput on existing production lines by 10%, avoiding approximately $20 million in capital investments. This focus allows Plexus to grow revenue on a similar capital base and increase site revenue capacity.

Working Capital Management and Free Cash Flow

Plexus delivered better-than-expected working capital performance in Q2 FY26, with cash cycle at 64 days, a 5-day sequential improvement. Days in receivables improved by 3 days, and days in inventory improved by 4 days. While Q3 is expected to see higher working capital investments, leading to anticipated free cash flow usage, the company remains confident in ending FY26 with cash cycle days in the low 60s and generating $50 million to $75 million in free cash flow for the year.

Market Sector Dynamics and Growth Drivers

Aerospace and Defense revenue increased 19% sequentially, driven by improved demand and component availability, with FY26 growth expected well into double digits. Industrial revenue was up 12% sequentially, supported by substantial growth in the semicap subsector and strength in industrial equipment, with FY26 growth anticipated well in excess of goals. Healthcare/Life Sciences revenue was up 1% sequentially, expected to be flat in Q3, but with a return to sequential growth in Q4 and FY26 growth exceeding goals, supported by new program ramps and strong end market demand.

CFO Transition and Leadership Confidence

The call highlighted the retirement of Pat Jermain after 12 years as CFO, with Todd Kelsey and Oliver Mihm expressing gratitude for his leadership. David Abuhl was introduced as the new CFO, with confidence expressed in his extensive financial expertise and strategic mindset to lead the finance organization and support Plexus's continued growth journey.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.