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Flex Ltd. (NASDAQ:FLEX) stock rose Wednesday after the manufacturing and technology company reported better-than-expected second-quarter fiscal 2027 results and raised its full-year forecast, supported by strong demand for AI infrastructure.
The company reported adjusted earnings of $1.18 per share, beating analysts’ expectations of $1.05.
Revenue climbed 25% year over year to $8.491 billion, topping the consensus estimate of $8.141 billion.
GAAP earnings rose to 70 cents per share from 52 cents a year earlier, while adjusted earnings jumped 49% to a record $1.18 per share.
GAAP operating income totaled $414 million. Adjusted operating income surged 48% to $607 million, with adjusted operating margin expanding 110 basis points to 7.1%.
Regulated Manufacturing Solutions revenue increased 9% to $2.7 billion, while Integrated Technology Solutions revenue climbed 22% to $3.3 billion.
Cloud and Power Infrastructure (CPI) revenue jumped 54% to $2.5 billion, driven by demand for AI infrastructure. The segment’s adjusted operating margin expanded 240 basis points to 10.7%.
Flex said continued investment in AI data centers supported demand for its cloud, cooling and power solutions.
During the earnings call, CEO Revathi Advaithi highlighted the company’s planned separation of its CPI business.
“The spin is about creating two stronger companies with distinct identities, focused strategies, and ability to pursue their respective opportunities,” Advaithi said.
She said Flex holds leading positions in compute and power technologies but remains in the early stages of expanding its cooling business.
The company plans to introduce new products over the next six months to strengthen its AI infrastructure offerings.
Flex also completed its acquisition of EPC Power on Oct. 14 and expects the deal to boost fiscal 2027 earnings.
Advaithi said the acquisition would help improve power efficiency ahead of broader adoption of solid-state transformers.
She noted that digital rectifiers can already achieve 97% power efficiency, a key factor behind the acquisition.
Operating cash flow totaled $501 million, while free cash flow reached $261 million, including a $61 million reduction from separation-related costs.
Flex ended the quarter with $3.083 billion in cash and cash equivalents and $5.213 billion in long-term debt, excluding the current portion.
For the third quarter, Flex forecast adjusted earnings of $1.19 to $1.25 per share, compared with analysts’ estimate of $1.22.
The company expects revenue of $8.87 billion to $9.17 billion, compared with the consensus estimate of $8.953 billion.
Flex raised its fiscal 2027 adjusted earnings forecast to $4.84 to $5.16 per share from $4.42 to $4.74, exceeding the $4.67 consensus estimate at the midpoint.
The company also increased its annual revenue forecast to $34.9 billion to $35.9 billion from $33.7 billion to $35.2 billion, compared with analysts’ expectations of $34.674 billion.
FLEX Price Action: Flex shares were up 10.11% at $91.78 at the time of publication on Wednesday, according to market data.
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