Plexus Corp Q3 2025 Earnings Call Transcript

Plexus Corp's Q3 2025 earnings call transcript highlights revenue, gross margin, and operating margin forecasts. The call will cover financial performance and future business outlook. Investors can ask questions during the Q&A session.

Plexus Corp. (PLXS) recently held its Q3 2025 earnings call, providing insights into the company's financial performance and future outlook. The call emphasized Plexus' strong revenue growth, improved operating margins, and robust free cash flow.

Financial Performance

Plexus reported revenue of $1.018 billion for the third quarter, in line with guidance. The company's non-GAAP operating margin reached 6%, up 30 basis points sequentially, and non-GAAP EPS was $1.90. Free cash flow for the quarter was $13.2 million, contributing to a year-to-date total of $56.8 million. The company's return on invested capital reached 14.1%, the highest in nearly four years.

Growth and Opportunities

CEO Todd P. Kelsey highlighted Plexus' "ongoing strength in new program wins and opportunities to gain share in support of delivering growth outpacing our end markets." The company secured 41 new manufacturing programs for the quarter, with $250 million in annualized revenue potential when fully ramped. Kelsey also noted improved order activity from industrial and European customers, with early signs of increasing European defense sector activity.

Outlook

Plexus projects fiscal Q4 revenue between $1.025 billion and $1.065 billion, non-GAAP operating margin of 5.7% to 6.1%, and non-GAAP EPS of $1.82 to $1.97. The company now forecasts approximately $100 million of free cash flow for fiscal 2025 and expects "healthy year-over-year revenue growth from each of our market sectors without assuming end market demand improvement" for fiscal 2026.

Risks and Challenges

Management cited evolving program ramp timelines, tariff-related uncertainties, and modest end market demand as ongoing challenges. CEO Kelsey noted, "We anticipate delivering this revenue expansion through share gains, new program ramps and growth with new customers, overcoming modest end market demand, evolving new product ramp time lines and uncertainties created by tariffs."

Q&A Session

During the Q&A session, analysts probed for more detail on market-specific demand and the effects of macro headwinds. Management addressed concerns about semicap demand pushouts, tariff impacts on customer behavior, and the initial margin drag from the new Malaysian facility. CEO Kelsey emphasized operational flexibility, passing through tariff costs, and the expectation of rapid profitability for new facilities.

Final Takeaway

Plexus management highlighted steady sequential revenue growth, strong operating margin achievement, and robust free cash flow, supported by diversified sector wins and new customer additions. The company raised its EPS outlook for the next quarter and reaffirmed a $100 million free cash flow forecast for fiscal 2025, while signaling continued growth into fiscal 2026 across all market sectors.

References

[1] https://seekingalpha.com/news/4471937-plexus-targets-100m-in-fy25-free-cash-flow-and-sequential-revenue-growth-amid-strong-sector
[2] https://investor.plexus.com/news/news-details/2025/Plexus-Announces-Fiscal-Third-Quarter-Financial-Results/default.aspx