CPI growth expected to accelerate to 65-75% in FY27 and 80%+ in FY28.
Flex reported a strong Q4 FY26 and guided to +18% revenue growth and +32% EPS growth for FY27, driven by a massive acceleration in its Cloud & Power Infrastructure (CPI) segment, which is being spun off. The company gave extremely bullish long-term growth targets for CPI, underpinned by a large multi-year deal with Google, and indicated heavy capex investment is required in FY27. Announced spin-off of Cloud & Power Infrastructure (CPI) segment into a new publicly traded company, expected to complete in Q1 calendar 2027; CEO Revathy Advisey will lead SpinCo, Michael Hartung becomes CEO of Flex.
Buzzberg readCPI growth expected to accelerate to 65-75% in FY27 and 80%+ in FY28.Flex reported a strong Q4 FY26 and guided to +18% revenue growth and +32% EPS growth for FY27, driven by a massive acceleration in its Cloud & Power Infrastructure (CPI) segment, which is being spun off. The company gave extremely bullish long-term growth targets for CPI, underpinned by a large multi-year deal with Google, and indicated heavy capex investment is required in FY27. Announced spin-off of Cloud & Power Infrastructure (CPI) segment into a new publicly traded company, expected to complete in Q1 calendar 2027; CEO Revathy Advisey will lead SpinCo, Michael Hartung becomes CEO of Flex.Read full analysisCollapse analysis
Flex reported a strong Q4 FY26 and guided to +18% revenue growth and +32% EPS growth for FY27, driven by a massive acceleration in its Cloud & Power Infrastructure (CPI) segment, which is being spun off. The company gave extremely bullish long-term growth targets for CPI, underpinned by a large multi-year deal with Google, and indicated heavy capex investment is required in FY27. Announced spin-off of Cloud & Power Infrastructure (CPI) segment into a new publicly traded company, expected to complete in Q1 calendar 2027; CEO Revathy Advisey will lead SpinCo, Michael Hartung becomes CEO of Flex.
CPI FY27 revenue growth guided at 65-75%, with FY28 growth of +80%, driven by multi-year deals with Google and other customers.
Total FY27 growth guided at 18% to $32.3-33.8B, driven by CPI, with adjusted EPS growth of 32% to $4.21-4.51.
Acquired Electrical Power Products (EP2) to strengthen utility-grade power infrastructure portfolio.
CPI revenue$1.8B
reported
Revenue$7.477B
+6% QoQ
EPS$0.67
-23% QoQ
Gross margin9.76%
reported
What changed this quarter
01
Guidance
CPI growth expected to accelerate to 65-75% in FY27 and 80%+ in FY28.
Guidance · revenue to $33.05B
02
Demand
Multi-year contract with Google secured, spanning power and compute integration.
Management expressed strong conviction in the spin-off and robust growth outlook, highlighting significant customer wins and confident in execution.
03
AI
AI driving need for integrated power and thermal systems from grid to chip.
Management emphasized AI as the primary driver of demand for data center infrastructure, with the spin-off and investments in power and thermal management positioned to capitalize on the 'generational transformation' in compute density and electrical architecture.
04
Capex
CapEx to remain elevated in FY27, normalize by FY28.
Management guided to elevated capex in fiscal 2027 ($1.4-1.6 billion) to fund capacity for new data center contracts, expecting investments to normalize in fiscal 2028, with CPI returning to 2.5-3% of revenue.
AI, capex & demand read
AI
Platform & monetization
Management emphasized AI as the primary driver of demand for data center infrastructure, with the spin-off and investments in power and thermal management positioned to capitalize on the 'generational transformation' in compute density and electrical architecture.
Demand
Bookings & conversion
Multi-year contract with Google secured, spanning power and compute integration.. Management expressed strong conviction in the spin-off and robust growth outlook, highlighting significant customer wins and confident in execution.
Capex
Investment and capacity
Management guided to elevated capex in fiscal 2027 ($1.4-1.6 billion) to fund capacity for new data center contracts, expecting investments to normalize in fiscal 2028, with CPI returning to 2.5-3% of revenue.
Tone · Confident
Management expressed strong conviction in the spin-off and robust growth outlook, highlighting significant customer wins and confident in execution.
Bottlenecks
Power & grid
Power or grid availability is constraining capacity
“These capabilities are becoming critical as data center growth places greater demands on power availability and reliability.”
CPI revenue is guided to grow 65-75% in FY27 and 80%+ in FY28, but Q1 growth is only 20-30%, implying a very back-half-loaded ramp as new capacity comes online.
“We expect CPI growth to ramp in the second half of fiscal 27 as investments made in fiscal 26 allow us to deliver against robust demand from recent program wins.”
Management has 'line of sight' into FY28/29 capex requirements and expects FY27's elevated capex ($1.4-1.6B vs $625M in FY26) to be temporary, normalizing in FY28.
CPI revenue is guided to grow 65-75% in FY27 and 80%+ in FY28, but Q1 growth is only 20-30%, implying a very back-half-loaded ramp as new capacity comes online. — The shape of the guide means nearly all upside to the growth outlook is concentrated in the second half, making the pace of capacity additions the key swing factor.
“we've recently secured substantial incremental business with several hyperscaler and data center customers, including Google.”
… critical as data center growth places greater demands on power availability and reliability. Combined with our existing power distribution, switchgear, thermal management, and integrated rack scale capabilities, EP2 enhances our ability to deliver end-to-end solutions for utility and infrastructure customers, and it increases our exposure to long-cycle, margin-of-creative programs that support grid resiliency. To put a point on that momentum, we've recently secured substantial incremental business with several hyperscaler and data center customers, including Google. These are not single-product manufacturing engagements. They span power infrastructure, thermal systems, and complex hardware manufacturing deployed at scale across our global footprint. Capital deployment for these projects is already underway and it will remain elevated through FY27 as this growth alongside broader CPI growth requires expanded investment. We expect this level of investment to be unique to fiscal year 27. We have line of sight into fiscal year 28 and 29 requirements and expect CapEx to normalize in fiscal year 28. Awards of this scope are exactly why we believe the SPIN is the right move. These …
Management has 'line of sight' into FY28/29 capex requirements and expects FY27's elevated capex ($1.4-1.6B vs $625M in FY26) to be temporary, normalizing in FY28. — The heavy short-term capex is a bottleneck for the AI data center build-out; suppliers and investors should watch for a potential capacity glut if other players make similar moves.
… customers, including Google. These are not single-product manufacturing engagements. They span power infrastructure, thermal systems, and complex hardware manufacturing deployed at scale across our global footprint. Capital deployment for these projects is already underway and it will remain elevated through FY27 as this growth alongside broader CPI growth requires expanded investment. We expect this level of investment to be unique to fiscal year 27. We have line of sight into fiscal year 28 and 29 requirements and expect CapEx to normalize in fiscal year 28. Awards of this scope are exactly why we believe the SPIN is the right move. These deployments require the integrated end-to-end capability that SPINco will deliver as a focused company. Now turning to slide eight. Let me put some numbers around the growth opportunity. For SPINCO, we're targeting revenue growth of 65% to 75% in fiscal year 2027, a significant step up from fiscal year 2026. And for FY28, we expect further acceleration with growth of over 80%. Going to slide nine, FLEX post-SPIN is targeting low to mid single-digit revenue growth in that same timeframe and will invest in areas where growth is accelerating, …
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