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Flex: Flex's Q3 FY2026 Earnings: Strong Performance Across the Board

Flex reported a robust third quarter, with revenue coming in at $7.1 billion, up 8% year-over-year, and adjusted operating margin at 6.5%. The company also reported adjusted EPS of $0.87, a 13% increase from the previous year, marking another record for the company. The strong performance was driven by the data center business, as well as other diversified end markets, which are benefiting from long-term secular trends. As Revathi Advaithi, CEO, mentioned, "Our data center business growth reflects where the industry is headed, but that momentum extends across our diversified portfolio."

FLEX

USD 64.84

0.86%

A-Score: 5.5/10

Publication date: February 4, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Revenue Growth: Q3 revenue reached $7.1 billion, up 8% YoY, with full-year guidance raised to $27.2–$27.5 billion.
  • Margin Expansion: Adjusted operating margin hit 6.5% in Q3, exceeding the 6% annual target, driven by mix shifts and cost discipline.
  • Data Center Momentum: Strong growth in data center infrastructure, with embedded and critical power segments expanding rapidly, despite limited competition.
  • Strategic US Investments: Ongoing investments in US and Mexico manufacturing, fueled by customer demand and hyperscale projects like AWS partnerships.
  • EPS Record: Adjusted EPS of $0.87, a 13% YoY increase, reflecting higher-margin business mix and operational efficiency gains.

Segment Performance

The data center business was a key driver of growth, with both power and compute segments experiencing strong growth. The company's diversified portfolio is also seeing robust momentum across various end markets, including industrial and health solutions. The Industrial and Health Solutions businesses are improving, contributing to the overall growth.

Valuation and Outlook

With a P/E Ratio of 25.96 and an EV/EBITDA of 11.29, the market is pricing in a certain level of growth for Flex. The company's guidance for the full year is between $27.2 billion and $27.5 billion in revenue, which is $350 million higher at the midpoint versus the prior guide. Analysts estimate revenue growth at 5.8% for the next year, which may be a reasonable expectation given the company's diversified portfolio and growth drivers.

Cash Flow and Margin Sustainability

Flex is expected to maintain its strong cash generation, with a free cash flow conversion of 80% or higher for the year. The company's adjusted operating margin is expected to be around 6.3%, indicating a sustainable margin profile. As Kevin Krumm, CFO, mentioned, "We expect underlying business units to continue to drive margin improvement," suggesting that the company's margins are likely to remain stable.

Flex's A-Score