With today's earnings call, Todd Kelsey will provide summary comments before turning the call over to me and David Abuhl for further details. Plexus generated record revenue in the fiscal third quarter by capturing strengthening end market demand and successfully launching numerous new programs. As a result, we see Plexus positioned to deliver more than 20% revenue growth for fiscal 2026. We anticipate Plexus will sustain this momentum and currently see the potential to generate fiscal 2027 revenue growth in excess of our 9%-12% goal.
We expanded our funnel of qualified manufacturing opportunities to a record level, creating the potential to sustain strong long-term revenue growth. We delivered solid operating performance with a robust 6.3% non-GAAP operating margin for our fiscal third quarter. Consequently, we expect our fiscal 2026 non-GAAP operating margin to exceed 6% and see the potential for continued operating margin expansion in fiscal 2027. Finally, our working capital efficiency remains robust while supporting accelerated revenue growth.
We expect to sustain this performance into fiscal 2027 and anticipate a return to meaningful free cash flow generation. With all three of our market sectors contributing better than expected performance, fiscal third quarter revenue of $1.305 billion exceeded our guidance range, representing a 12% sequential and a 28% year-over-year increase. Additionally, non-GAAP operating margin of 6.3% met the high end of guidance, increasing 30 basis points year-over-year on continued efficiency gains and revenue leverage. For the third quarter, we secured 31 new manufacturing programs with $255 million in annualized revenue when fully ramped into production.
| Metric | Period | Current guidance |
|---|---|---|
| Revenue | Fiscal Q4 2026 | $1.33B-$1.38B (4% sequential, 28% YoY growth at midpoint) |
| Non-GAAP operating margin | Fiscal Q4 2026 | 6.1%-6.5% |
| Non-GAAP EPS | Fiscal Q4 2026 | $2.47-$2.63 |
| Revenue growth | FY2026 | Greater than 20% (raised) |
| Non-GAAP operating margin | FY2026 | Greater than 6% (met) |
| Revenue growth | FY2027 | Potential to exceed the 9-12% goal, with continued sequential expansion and operating-margin expansion |
| Capital expenditures | FY2026 / FY2027 | $100M-$120M FY2026; 2%-3% of revenue in FY2027 (Malaysia site expansion via campus model) |
| Free cash flow | FY2027 | Return to meaningful generation, in excess of $100 million |
| Non-GAAP effective tax rate | FY2026 / FY2027 | 15%-17% FY2026 (Q4 12%-14%); preliminary 16%-18% FY2027 |
| Metric | YoY | Note |
|---|---|---|
| Revenue | +28% to $1.305B (record) | Strengthening end-market demand and numerous successful new-program launches across all three sectors, plus supply-chain execution accelerating demand capture. |
| GAAP diluted EPS | $1.58 | GAAP figure below the $2.32 non-GAAP EPS due to stock-based compensation and executive-retirement expenses. |
| Non-GAAP EPS | $2.32 (above guidance) | Higher revenue, revenue leverage, operational efficiency and favorable non-operating expense (interest income). |
| Operating margin (GAAP) | 4.7% | Non-GAAP operating margin was 6.3% (up 30 bps YoY); GAAP lower on SBC/retirement costs. |
| Aerospace/Defense revenue | +10% sequential, >20% FY2026 | Outstanding supply-chain execution and robust demand across defense and unmanned subsectors; $135M of wins in the quarter. |
| Industrial revenue | +23% sequential, 20+% FY2026 | Semiconductor capital equipment strength plus new customers/technologies (data-center energy storage), outgrowing WFE. |
| Healthcare/Life Sciences revenue | +2% sequential, high-teens FY2026 | Program ramps and improved demand for surgical robotics and monitoring; ahead of a mid-single-digit market. |
| Cash cycle days | 62 days (best in 5+ years) | Working-capital discipline and notable improvement in days of inventory even amid accelerating revenue. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Aerospace & defense outgrowth | Building momentum | $400M of A&D wins year to date (>2x combined FY2024-25) position Plexus for secular outgrowth well beyond the 9-12% goal in FY2027, led by defense, unmanned, security and space (Plexus claims more electronics in orbit than any EMS peer), with commercial aerospace still an upside lever as Boeing/Airbus recover. | — |
| Semi-cap and industrial recovery | Inventory digestion | Semiconductor capital equipment is delivering robust growth expected to outgrow WFE again in FY2027; broader industrial is getting healthier with new customers and technologies (industrial automation, robotics, test and measurement, energy management/storage) amplifying growth beyond market health. | — |
| Data-center strategy | Power win last quarter | A deliberate data-center strategy targeting power (inside and outside the data center) and thermal management; a second consecutive quarterly win (energy storage) plus early-stage pilot programs, with a data-center funnel conservatively around half a billion dollars. | — |
| Capacity and scaling to $8-10B | ~$5B run rate | Expanding an existing Malaysia (Penang) site adds north of $500 million of capacity (existing sites can support close to $6 billion) via the efficient campus model with no meaningful margin drag; multi-year preparedness work (S&OP, NPI consistency, org alignment) positions Plexus for an eventual $8-10 billion scale. | — |
| Operational efficiency / OEE | Efficiency journey | Operating equipment effectiveness improved over 10% in some areas in the last 12 months, unlocking capacity and reducing the headcount needed to support revenue growth, supporting operating-margin expansion in FY2027. | — |
| Supply-chain management | Tightening | The supply-chain team began engaging customers on component pre-placement roughly nine months ago; customer-funded pre-placements let Plexus unlock rapid revenue growth while keeping cash-cycle days in the low-to-mid 60s. | — |
| Capital returns | Buyback program | $20.6M of stock repurchased in the quarter (~$21M remaining on authorization); a new authorization will be discussed with the board in August alongside continued growth investment. | — |