Flex 2025 Q4 Earnings Net Income Declines 43.8%

Flex (FLEX) reported its fiscal 2025 Q4 earnings on May 07th, 2025. Flex exceeded expectations with adjusted earnings per share of $0.73, surpassing analysts' estimates of $0.63. The company guided an adjusted EPS for FY2026 between $2.81 and $3.01, aligning with expectations. Looking ahead, Flex anticipates revenue for the upcoming fiscal year to range from $25 billion to $26.8 billion, showing positive growth potential.

Revenue
Flex reported a total revenue of $6.40 billion for Q4 2025, marking a 3.7% increase from $6.17 billion in the same quarter of the previous year.

Earnings/Net Income
Flex's EPS dropped significantly by 40.1% to $0.58 in Q4 2025 from $0.97 in Q4 2024, with net income falling by 43.8% to $222 million. The declining EPS indicates a challenging quarter for earnings.

Price Action
The stock price of Flex rose by 3.07% during the most recent trading day, increased 10.51% over the latest full trading week, and surged 42.24% month-to-date.

Post-Earnings Price Action Review
Investors following the strategy of purchasing Flex shares after a quarter of revenue growth and holding for 30 days experienced an 11.44% return over the past five years. This return considerably underperformed the benchmark, which achieved an 84.08% return during the same period. The strategy's Sharpe ratio was relatively low at 0.21, indicating less favorable risk-adjusted returns. Furthermore, the maximum drawdown was -16.36%, and volatility was observed at 10.68%. The strategy highlights challenges in capturing substantial gains compared to broader market indices, suggesting that while Flex's stock shows potential, it requires careful risk management and timing to maximize returns effectively.

CEO Commentary
Revathi Advaithi, Chief Executive Officer, noted a strong year-end performance, emphasizing nearly 4% revenue growth and record adjusted operating margins of 6.2%. She highlighted strategic growth in data centers, where revenue grew approximately 50% year-over-year, reinforcing the Flex Forward strategy's focus on more profitable segments.

Guidance
For fiscal 2026, Flex projects revenue between $25 billion and $26.8 billion, with adjusted operating margins between 6% and 6.1%. The company expects adjusted EPS between $2.81 and $3.01 per share and aims for an 80%-plus free cash flow conversion. Data center revenue growth is projected around mid-30%, with power revenue growth slightly above this rate.

Additional News
In recent developments, Northern Trust Corp has increased its stake in Flex Ltd., reflecting confidence in Flex's strategic direction and potential for growth. Additionally, Flex's leadership will participate in the J.P.Morgan 53rd Annual Global Technology, Media and Communications Conference, underscoring their commitment to engaging with investors and analysts to communicate their strategic vision. Furthermore, Flex announced its participation in an upcoming investor conference, signaling ongoing efforts to strengthen investor relations and transparency.