Flex reported a strong Q3 FY26, with revenue and EPS at records, and raised its full-year outlook on the back of explosive data center growth. Management emphasized its unique position in integrating power, cooling, and compute, and highlighted new partnerships with NVIDIA and LG. Data center remains the primary growth driver, with management reaffirming 35%+ growth for the year.
Flex reported a strong Q3 FY26, with revenue and EPS at records, and raised its full-year outlook on the back of explosive data center growth. Management emphasized its unique position in integrating power, cooling, and compute, and highlighted new partnerships with NVIDIA and LG. Data center remains the primary growth driver, with management reaffirming 35%+ growth for the year.
Management sounded confident, citing record performance, strong growth in data centers, and positive momentum across diversified end markets, while addressing challenges like consumer softness.
Investments this year have been heavier in power capacity, but management expects to increase compute capacity investments in the next few years due to new AI programs. They are also investing in expanding their manufacturing footprint, particularly in the U.S. and Mexico.
Management emphasized that AI-driven data center demand is strong and durable, with growth driven by expanding compute and AI workloads. They highlighted their integrated approach to power, cooling, and compute, and noted AI is also driving momentum in networking and satellite…
Data center growth remains on track with 35% growth guidance. Management sounded confident, citing record performance, strong growth in data centers, and positive momentum across diversified end markets, while addressing challenges like consumer softness.
Management emphasized that AI-driven data center demand is strong and durable, with growth driven by expanding compute and AI workloads. They highlighted their integrated approach to power, cooling, and compute, and noted AI is also driving momentum in networking and satellite communication products outside their core data center business.
Data center growth remains on track with 35% growth guidance. Management sounded confident, citing record performance, strong growth in data centers, and positive momentum across diversified end markets, while addressing challenges like consumer softness.
Investments this year have been heavier in power capacity, but management expects to increase compute capacity investments in the next few years due to new AI programs. They are also investing in expanding their manufacturing footprint, particularly in the U.S. and Mexico.
Management sounded confident, citing record performance, strong growth in data centers, and positive momentum across diversified end markets, while addressing challenges like consumer softness.
“Critical power is driven by, it's all about how quickly can you manage your lead times, how quickly can you manage installations.”
“it is going through a huge technology shift with what is happening in the 800 volt DC category, larger one megawatt deployments”
“we don't include those end markets in our data center business, but these are data center-related infrastructure deployments”
“volume of memory is procurement is happening by our customers directly from the memory suppliers”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| EPS | FY2026 | $3.21–$3.27 | $3.24 | RAISED |
| EPS | FY2026 Q4 | $0.83–$0.89 | $0.86 | GUIDED |
| Op margin | FY2026 | 6.3% | 6.3% | GUIDED |
| Revenue | FY2026 | $27.2B–$27.5B | $27.35B | RAISED |
| Revenue | FY2026 Q4 | $6.75B–$7.05B | $6.9B | GUIDED |
| UnitsDATA_CENTER | FY2026 | 35% | 35% | GUIDED |
| 제시 시점 | 지표 | 목표 기간 | 가이던스 | 실제 | 결과 |
|---|---|---|---|---|---|
| FY2026 Q4 | Revenue | FY2027 Q1 | $7.35B–$7.65B | $7.928B | Met / beat |
Flex is partnering with NVIDIA on modular data center systems, positioning Flex to capture more of the AI data center build-out and potentially gaining preferred status with NVIDIA's ecosystem.
“We announced the development of modular data center systems with NVIDIA to reimagine deployment for speed and scale”
… cooling, and power. At the same time, scaling IT infrastructure adds additional layers of complexity. To scale effectively, power cooling and IT infrastructure must be designed to move together and adapt as technologies and workloads evolve. While many companies address individual elements of this ecosystem, very few can integrate all three in a cohesive and end-to-end way. This quarter, we reinforced that leadership through several milestones. We announced the development of modular data center systems with NVIDIA to reimagine deployment for speed and scale, as well as a partnership with LG to advance thermal management solutions designed for gigawatt-scale data centers. We also deployed our advanced rack-level vertically integrated liquid cooling solution at the Equinix co-innovation facility, demonstrating these capabilities in real-world environments. In addition, we introduced a new AI infrastructure platform, the first globally manufactured data center platform to integrate power, cooling, compute, and services into modular design. And this is capable of accelerating deployment timelines by up to 30%. These milestones demonstrate what sets Flex apart, our ability to …
LG's partnership with Flex on thermal management for gigawatt-scale data centers signals growing demand for liquid cooling and power infrastructure, benefiting both parties through scale.
“a partnership with LG to advance thermal management solutions designed for gigawatt-scale data centers”
… power cooling and IT infrastructure must be designed to move together and adapt as technologies and workloads evolve. While many companies address individual elements of this ecosystem, very few can integrate all three in a cohesive and end-to-end way. This quarter, we reinforced that leadership through several milestones. We announced the development of modular data center systems with NVIDIA to reimagine deployment for speed and scale, as well as a partnership with LG to advance thermal management solutions designed for gigawatt-scale data centers. We also deployed our advanced rack-level vertically integrated liquid cooling solution at the Equinix co-innovation facility, demonstrating these capabilities in real-world environments. In addition, we introduced a new AI infrastructure platform, the first globally manufactured data center platform to integrate power, cooling, compute, and services into modular design. And this is capable of accelerating deployment timelines by up to 30%. These milestones demonstrate what sets Flex apart, our ability to understand the interdependencies and translate that insight into a comprehensive, differentiated offering that helps …
Flex's deployment at Equinix's co-innovation facility demonstrates its solution in real-world environments, suggesting an expanding relationship with Equinix for high-density data center deployments.
… evolve. While many companies address individual elements of this ecosystem, very few can integrate all three in a cohesive and end-to-end way. This quarter, we reinforced that leadership through several milestones. We announced the development of modular data center systems with NVIDIA to reimagine deployment for speed and scale, as well as a partnership with LG to advance thermal management solutions designed for gigawatt-scale data centers. We also deployed our advanced rack-level vertically integrated liquid cooling solution at the Equinix co-innovation facility, demonstrating these capabilities in real-world environments. In addition, we introduced a new AI infrastructure platform, the first globally manufactured data center platform to integrate power, cooling, compute, and services into modular design. And this is capable of accelerating deployment timelines by up to 30%. These milestones demonstrate what sets Flex apart, our ability to understand the interdependencies and translate that insight into a comprehensive, differentiated offering that helps customers move faster, scale with confidence, and stay ahead in a rapidly evolving industry. While our data center …
Flex explicitly said the Amazon warrant deal was not material to FY26 revenue, implying the significant revenue ramp is expected in FY27 and beyond. — Signals that Amazon's AI data center build-out with Flex is a late-FY26/FY27 event, and that current growth is coming from other programs.
Yes, good morning. Thank you very much for taking the questions. First, I was hoping to better understand if Flex is already seeing material upside that it would attribute specifically to the Amazon warrant deal that you reached in calendar 25, and if not, when might that be additive to your business in a more meaningful way?
Hey, Mark. This is Kevin. I'll take the first part of your question. Short answer is the warrants are not incremental, nor were they expected to be material incremental to FY26. So it's really that program as we move forward, you know, is where we'd expect to see that. Deployments are complex and they scale over time. And so that's kind of how we expect the upside and the additional revenue to come to us.
Flex sees a technology shift to 800V DC and 1MW+ rack power deployments in embedded power, a space with only a small set of competitors. — Highlights a critical inflection point in data center power architecture, positioning Flex as a leader in a niche market with high barriers to entry, potentially taking share from legacy power players.
Yep. Hi. Thank you for taking my questions. Maybe, Revati, I appreciate the comments on the power business doing robust growth right now. If you can help us differentiate a bit between embedded power and critical power, just in terms of what you're seeing from a comparative landscape perspective, where do you see sort of more opportunity for share gains, for flex? Is it more on embedded and critical, and where do you see more opportunity to, like, gain large customers, large cloud customers that would make a more material impact on that growth or inflection growth? Sort of help us just differentiate between the two as much as you sort of have a high-margin business across both of them and…
Yeah, so, again, we'll talk more about this in our investor day, but at a high level, I would say both businesses, embedded power and critical power, are growing very, very strongly through this year. So we feel good about that. Critical power is driven by, it's all about how quickly can you manage your lead times, how quickly can you manage installations. Innovation does play a role, but it's all about putting these large power pods in. Schedule management is a huge part of what people expect from that particular group of products. And that we compete with the traditional electrical players that you all know about. I would say the embedded power is very different in the sense that it is going through a huge technology shift with what is happening in the 800 volt DC category, larger one megawatt deployments in terms of rack power itself. So big technology shift that is happening there. We are in the forefront of that technology shift. There are only a very small group of competitors who play in that space, which is a significant advantage for us. And we're very excited about the changes that are happening in 800-volt DC and larger megawatt deployments that are happening across hyperscalers. So I would say that business is growing very well. We expect that to accelerate with these large power deployments and power-hungry data racks that are happening. So in both spaces, we're seeing strong growth. And the 35% guide this year is pretty strong. And if it continues at a pretty double-digit pace, I will be quite excited about the growth in these categories. But I would stay tuned for what comes out of embedded power just because of the technology shift that is happening and the very small set of competitors in that space.
Flex's growth in its Agility segment is being driven by high-speed networking and NIC card deployments, which are not included in its reported data center numbers. — Indicates robust demand for AI networking infrastructure beyond compute, with Flex as a key manufacturer, implying strength for networking chip suppliers.
Got it, got it. No, very helpful. And for my follow-up, the full year revenue guide expectation for agility was sort of walked down a bit, and I'm assuming it's the consumer and markets being soft that's sort of probably impacting it. But it's also a bit surprising on the flip side to see not more upside from the compute side to sort of offset that where you're clearly growing much faster in power and that's driving the reliability acceleration, but Agility didn't have as much upside on compute to offset that. I mean, anything going on specifically on that front? Because the cloud companies have obviously been pretty strong in their spending. So anything you can help us there? Thank you.
No, actually, I mean, we're very pleased with Agility's kind of growth. And if you think about first, as I'd say, Data center growth remains on track for what we have said for the full year guide, and we will update that when we finish the year. And so that remains on track, and we are comfortable with that. I think the additional upside that you are seeing in agility is driven by kind of what is happening in high-speed networking or network interface cards. And I'll just remind you that we don't include those end markets in our data center business, but these are data center-related infrastructure deployments that are happening that is really driving very good growth for agility. The place that I see softness for agility is basically consumer-related end markets, which is lifestyle and consumer devices. So very pleased with the growth in data centers. and data center-supported infrastructure deployment like networking or NIC cards that we don't report in our overall, that we don't talk about in our overall data center numbers. So, you know, I'd say really strong growth and agility just offset by consumer and markets.
While memory prices are skyrocketing, Flex is insulated as most memory is procured by customers directly, though it bakes allocation into forecasts. — Confirms that memory suppliers are prioritizing allocation to data centers, and that raw memory price inflation is not a major direct margin headwind for contract manufacturers like Flex.
Got it. Thanks. That's helpful. And then the second one from us is it's on the effect of skyrocketing memory prices. I think naturally more price sensitive markets like consumer are most vulnerable to that trend. Could you just talk through any dynamics that you're planning for as memory prices jump sharply? Are you seeing or anticipating any demand effects on consumer products or other high memory content platforms?
Yeah, I would say the good news for us, Jacob, is that most of our customers outside of what we use in our own products in the power side are all procured by our customers. Our volume of memory is procurement is happening by our customers directly from the memory suppliers. And so I'm sure, I mean, you hear this in the calls that the memory companies have, you know, they are selecting few end markets more than the others. So you are seeing a bigger distribution go to data centers and those types of end markets. That being said, we're not seeing a significant effect in terms of consumer end markets because those end markets are soft to begin with. So, you know, memory is not driving any kind of demand issue or supply issue in terms of consumer end markets. But I think, you know, you're hearing from memory companies that there is allocation of material that is happening, and, you know, we bake that into our forecasts.