Sanmina's Q3 2025 Earnings Call: Unpacking Contradictions in Market Demand and ZT Systems Acquisition Strategy

Market demand and forecasts, ZT Systems acquisition and growth strategy, ZT Systems acquisition and revenue expectations, sales and market growth expectations, ZT Systems acquisition and revenue expectations are the key contradictions discussed in Sanmina's latest 2025Q3 earnings call.



Revenue Growth Across End Markets:
- Sanmina Corporation reported revenue of $2.04 billion for Q3 FY2025, an 11% increase year-over-year.
- The growth was primarily driven by broad-based demand across all end markets, especially in communications networks and cloud infrastructure.

Operating Margin Improvement:
- Sanmina's non-GAAP operating margin was 5.7% of revenue, representing a 40 basis point improvement year-over-year.
- This improvement was due to a combination of revenue growth, favorable mix, and disciplined execution.

Strategic Acquisition of ZT Systems:
- Sanmina announced plans to acquire ZT Systems from AMD, aiming to add $5 billion to $6 billion of annual net revenue.
- The acquisition is part of Sanmina's strategic growth initiatives to enter the data center and AI infrastructure end market, leveraging ZT Systems' capabilities.

Strong Financial Position and Cash Flow:
- Sanmina ended the quarter with $798 million in cash and cash equivalents, maintaining a net cash position and a gross leverage ratio of 0.38x.
- Cash flow from operations was $201 million for Q3, reflecting the company's ability to generate positive cash flow amidst uncertainties.