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Plexus (PLXS) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q3 FY26)· Information Technology· Jul 30, 2026

Source: earnings call transcript

Executive summary

Plexus Q3 FY26 — Record Revenue and Strong FY27 Outlook

Plexus delivered record Q3 FY26 revenue and strong profitability, driven by robust end-market demand and successful program launches across all sectors. The company provided an optimistic outlook for FY27, anticipating revenue growth exceeding its long-term goal and continued operating margin expansion, supported by strategic capacity additions and efficient working capital management. Supply chain tightness and inflationary pressures are being actively managed.

Highlights

5

  • Record revenue of $1.305 billion, exceeding guidance and representing a 28% YoY increase.

  • Non-GAAP operating margin of 6.3%, meeting the high end of guidance and increasing 30 bps YoY.

  • Non-GAAP EPS of $2.32, exceeding guidance.

  • Secured 31 new manufacturing programs with $255 million in annualized revenue when fully ramped.

  • Cash cycle of 62 days, the best quarterly result in over 5 years.

Concerns

2

  • Fiscal Q4 free cash flow forecast to be breakeven or a slight usage of cash due to timing of working capital investments.

  • Healthcare/Life Sciences sector expects short-term growth moderation in FY27 following a year of strong new product launches.

Guidance & targets

CategoryTargetConfidence
Revenue
$1.33 billion to $1.38 billion
high materiality
High
Non-GAAP operating margin
6.1% to 6.5%
high materiality
High
Non-GAAP EPS
$2.47 to $2.63
high materiality
High
Revenue growth
greater than 20%
high materiality
High
Non-GAAP operating margin
greater than 6%
high materiality
High
Revenue growth
in excess of our 9% to 12% goal
high materiality
High
Operating margin
expansion
high materiality
High
Aerospace Defense sector revenue growth
more than 20%
medium materiality
High
Aerospace Defense sector revenue growth
well exceed our 9% to 12% goal
medium materiality
High
Healthcare/Life Sciences sector revenue growth
high teens
medium materiality
High
Healthcare/Life Sciences sector revenue growth
at least mid-single-digit
medium materiality
Medium
Industrial sector revenue growth
20-plus percent
medium materiality
High
Industrial sector revenue growth
well exceed our 9% to 12% goal
medium materiality
High
Gross margin
10% to 10.3%
medium materiality
High
Selling and administrative expense
$57.5 million to $58.5 million
low materiality
High
Non-GAAP operating margin
at or above 6%
high materiality
High
Non-operating expense
approximately $6.3 million
low materiality
High
Non-operating expense quarterly run rate
slightly higher
low materiality
Medium
Non-GAAP effective tax rate
between 12% and 14%
low materiality
High
Non-GAAP effective tax rate
between 15% and 17%
low materiality
High
Non-GAAP effective tax rate
between 16% and 18%
low materiality
Medium
Cash cycle days
low to mid-60s
medium materiality
High
Cash cycle days
sustain this performance
medium materiality
High
Capital expenditures
2% to 3% of revenue
medium materiality
High
Capital expenditures
$100 million to $120 million
medium materiality
High
Free cash flow
breakeven or a slight usage of cash
medium materiality
High
Free cash flow generation
in excess of $100 million
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Aerospace and Defense
Revenue increased 10% sequentially, exceeding mid-single-digit expectations. Strong execution from supply chain and operations teams accelerated demand capture. Expected to be approximately flat sequentially in Q4 FY26, with a return to sequential growth in Q1 FY27. FY26 revenue growth expected to be more than 20%, led by defense and unmanned subsectors. FY27 potential for robust revenue growth well exceeding 9-12% goal, driven by program ramps, market share gains, and robust end-market demand in defense, unmanned, security, and space, plus continued commercial aerospace demand improvement.
——10%—
Healthcare/Life Sciences
Revenue increased 2% sequentially, exceeding flat forecast due to successful program ramps and improved customer demand. Expected to be approximately flat sequentially in Q4 FY26 due to delays in program ramps offsetting stronger customer demand. FY26 revenue expected to increase in the high teens YoY, well ahead of mid-single-digit market growth. FY27 potential for at least mid-single-digit revenue growth, benefiting from program ramps and strong demand for surgical robotics and therapeutic/monitoring solutions, but with short-term growth moderation expected after a year of numerous new product launches.
——2%—
Industrial
Revenue increased 23% sequentially, well ahead of low double-digit forecast. Outperformance driven by operational and supply chain excellence supporting expanding demand in semi-cap and other industrial subsectors. Expected high single-digit to low double-digit sequential revenue growth in Q4 FY26 due to strengthening end-market demand and program ramps. FY26 revenue expected to increase by 20-plus percent. FY27 potential for very strong revenue growth well exceeding 9-12% goal, with robust growth from semi-cap, industrial automation, robotics, test and measurement, and energy management/storage solutions.
——23%—

PLXS operating KPIs by quarter

PLXS operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q2 FY26This call 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

New manufacturing programs annualized revenue $255 million Q3 FY26

When fully ramped into production

Qualified manufacturing opportunities funnel $4.5 billion Q3 FY26

up 12% sequentially, up 23% YoY

Record level, supporting robust long-term revenue growth

Aerospace and Defense wins $135 million Q3 FY26

Part of the $255M total new programs

Aerospace and Defense wins year-to-date $400 million Q3 FY26

more than 2x combined FY24 and FY25 performance

Positions for long-term secular market outgrowth

Healthcare/Life Sciences wins $53 million Q3 FY26

Part of the $255M total new programs

Industrial wins $67 million Q3 FY26

Part of the $255M total new programs

Data center funnel (power and thermal management) around $0.5 billion Q3 FY26

Conservative estimate for active opportunities

Deals & partnerships

ASM Supplier Performance Award for overall Supplier Excellence and Prism Sustainability Award for circularity

Recognitions underscoring commitment to deep customer collaboration and advancing sustainable practices.

New defense and security customer Secure wireless communication system

Won by teams in Boise, Idaho, and Oradea, Romania. Dual region support ensures U.S. and EU regulatory compliance. Helps establish Oradea as a center of defense excellence in Continental Europe.

Existing customer Naval submarine electronics program

Awarded to the Boise team due to superior customer service.

Existing healthcare customer Prototype build of instruments for surgical robotics platform

Won by team in Neon, Wisconsin, for a platform Plexus currently supports.

Leading healthcare customer Production of a next-generation ultrasound platform

Won by teams in Haining, China, and Oradea, Romania. Driven by long-standing relationship and ability to provide global support, resulting in market share gain.

Existing customer Follow-on award for a market-leading patient monitoring device

Awarded to the team in Penang, Malaysia, due to strong engineering relationship and superior execution record.

New customer Build battery energy storage systems for data centers

Awarded to the Bangkok, Thailand team. Customer valued engagement, transparent communication, and expert technical insights. Initial production already underway.

Existing customer Follow-on award for an innovative vehicle imaging and inspection system

Won by the team in Guadalajara, Mexico.

Capital programs

Penang, Malaysia capacity expansion underway
Start: underway

Benefit:north of $0.5 billion of additional capacity

Expansion of existing facilities to deliver incremental capacity efficiently. Expected to maintain FY27 capital expenditures in the range of 2% to 3% of revenue. Will not have a meaningful impact to margin as it's part of an existing profitable facility.

Risks & headwinds

Tornado impact on local community Q3 FY26

No material impact to Plexus' operations or headquarters

Mitigation:Company operations were unaffected; focus on community support.

Supply chain tightening and inflationary pressures Q3 FY26 and ongoing

Offset by revenue leverage and operational productivity gains

Mitigation:Proactive management by supply chain teams, close collaboration with customers on forecasting and preplacement of inventory (often customer-funded).

Short-term growth moderation in Healthcare/Life Sciences FY27

FY27 growth potential of at least mid-single-digits vs. high teens in FY26

Mitigation:Expected as activity normalizes following a year of tremendous success in launching numerous new products; long-term growth algorithm expected to return.

Higher interest expense Q4 FY26 and FY27

Nonoperating expense up sequentially in Q4 FY26, quarterly run rate slightly higher in FY27

Mitigation:Factored into financial guidance.

What to watch in Q4 FY26

FY27 Revenue Growth

FY27
Current greater than 20% for FY26
Target in excess of 9% to 12% goal

Why it matters

This indicates continued strong top-line momentum and market share gains, crucial for the investment thesis.

For fiscal 2027, we currently see the potential to maintain quarterly sequential revenue expansion and generate revenue growth in excess of our 9% to 12% goal.

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

Q&A highlights

How will Plexus meet future demand given the positive FY27 outlook, and what is the confidence level in the growth trajectory?

Management expressed high confidence in the FY27 growth trajectory, noting that supply chain management is already factored into projections. They are pulling in expansion plans, specifically adding over $0.5 billion in capacity at the Penang, Malaysia site efficiently within existing facilities. They are also mindful of talent acquisition and retention.

“I would say, first of all, our confidence level in our growth trajectory that we put out there is high. Our supply chain team, and we take into account we're mindful of the tightness of the supply chain right now. And as we provide projections, whether it be for Q4 or for fiscal 2027, that has that in mind.”

asked by David Williams · answered by Todd Kelsey

2 min read 5 chapters

Detailed narrative

Record Performance and Strong Growth Outlook

Plexus achieved record revenue of $1.305 billion in Q3 FY26, a 28% YoY increase, exceeding guidance. Non-GAAP operating margin reached 6.3%, at the high end of expectations, and non-GAAP EPS was $2.32, also above guidance. The company anticipates over 20% revenue growth for FY26 and sees potential for FY27 revenue growth to exceed its 9% to 12% goal, driven by market share gains and new program ramps.

New Program Wins and Funnel Expansion

The company secured 31 new manufacturing programs in Q3, representing $255 million in annualized revenue when fully ramped. This included a significant new partnership in the industrial sector for battery energy storage systems for data centers and a robust contribution from aerospace and defense. The funnel of qualified manufacturing opportunities expanded to a record $4.5 billion, up 23% YoY, supporting long-term revenue growth.

Sustainability and Operational Excellence

Plexus received ASM's Supplier Performance and Prism Sustainability Awards, highlighting its commitment to customer collaboration and sustainable practices. All Penang facilities now operate on 100% renewable energy as of FY26. The company also released its annual sustainability report, establishing formal greenhouse gas emission reduction targets. Operational productivity gains and revenue leverage contributed to solid operating performance.

Capacity Expansion and Working Capital Efficiency

To support accelerating revenue momentum, Plexus is expanding production capacity at its Penang, Malaysia site, expecting to add over $0.5 billion in capacity efficiently within existing facilities. Despite increased working capital investments, the cash cycle improved to 62 days, the best in over five years. The company expects to sustain this efficiency into FY27 and return to meaningful free cash flow generation.

Market Sector Performance and Drivers

Aerospace and Defense revenue grew 10% sequentially, with FY26 growth expected over 20% and FY27 growth well exceeding the 9-12% goal, driven by defense, unmanned, security, and space subsectors. Healthcare/Life Sciences grew 2% sequentially, with FY26 growth in the high teens, but expects moderation in FY27. Industrial revenue surged 23% sequentially, with FY26 growth over 20% and FY27 growth well exceeding the goal, led by semi-cap, industrial automation, robotics, and energy management.

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