Plexus' Q3 Earnings Surpass Estimates, Revenues Increase Y/Y

In the fiscal third quarter, Plexus announced 31 manufacturing program wins, which are estimated to contribute $255 million in annualized revenues once fully ramped into production. 

Shares are up 2.3% in the pre-market trading session today. In the past year, shares have gained 88.6% compared with the Electronics- Manufacturing Services industry’s growth of 49%.

Price Performance

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Looking at PLXS’ Segment Details

Aerospace/Defense revenues climbed 27.3% year over year and 10% sequentially to $233 million, accounting for 18% of the total. Broad demand and strong operational execution supported revenue growth. Fiscal 2026 revenues are now projected to grow more than 20%, buoyed by defense demand, while fiscal fourth-quarter revenues are expected to be flat. 

Healthcare/Life Sciences revenues increased 15% year over year and 2% sequentially to $483 million, contributing 37% of total revenues. Program ramps remained a growth driver. Fiscal 2026 revenues are projected to be in the high teens, while fiscal fourth-quarter revenues are expected to be flat. 

Industrial revenues surged 41.9% year over year and 23% sequentially to $589 million. The sector represented 45% of total revenues, up from 41% in both the prior quarter and the year-ago period. Semiconductor capital equipment and broader industrial demand and program ramps supported the growth. Management expects Industrial revenues to rise in the high-single to low-double digits sequentially in the fiscal fourth quarter while overall fiscal 2026 revenues are projected to grow more than 20%.  

Our estimates for revenues from the Industrial, Healthcare/Life Sciences and Aerospace/Defense were $533.1 million, $473 million and $222 million, respectively. 

Revenues from the Americas increased 37.2% year over year to $428 million. Asia-Pacific revenues increased 30.3% while EMEA revenues declined 6.8%. The company’s top 10 customers accounted for 55% of net revenues in the fiscal third quarter.

Plexus’ Operating Details

Gross profit on a GAAP basis was up 27.2% year over year to $131.4 million. Gross margin was 10.1%, unchanged from the year-ago quarter. 

Selling and administrative expenses increased 41.1% from the year-ago quarter’s actuals to $70.1 million.

Adjusted operating margin expanded 30 basis points to 6.3%.

PLXS’ Cash Flow & Balance Sheet Position

As of July 4, 2026, Plexus had cash & cash equivalents worth $314.1 million compared with $303.1 million as of April 4. 

PLXS had long-term debt and finance lease obligations, net of the current portion of $91.6 million as of July 4, 2026, compared with $91 million as of April 4. 

For the quarter under review, cash flows generated from operations were $25.9 million. Plexus reported a free cash outflow of $0.7 million after incurring capital expenditures of $26.6 million. 

The company repurchased $20.6 million worth of shares at an average price of $258.75 per share under its repurchase program in the fiscal third quarter. Out of the $100 million authorization, $21.4 million remains available.

PLXS' Q4 Guidance Signals More Growth

For the fiscal fourth quarter, revenues are projected between $1.33 billion and $1.38 billion. At the midpoint, the revenue outlook implies a 4% sequential rise and 28% year-over-year growth. 

Non-GAAP EPS is expected to be in the band of $2.47-$2.63, while adjusted operating margin is forecasted in the 6.1-6.5% range.

Management now expects fiscal 2026 revenue growth above 20% and adjusted operating margin  greater than 6%. Fiscal 2027 revenue growth is expected to exceed the 9-12% goal, alongside further margin expansion.

The stronger outlook also requires more working capital investments. Management now anticipates fiscal 2026 free cash flow usage.  Earlier, Plexus projected free cash flow to be $50-$75 million for fiscal 2026. The company expects to return to meaningful free cash flow generation early in fiscal 2027.

Zacks Rank of PLXS

Plexus currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies in Tech Space

Jabil Inc JBL reported third-quarter fiscal 2026 results wherein core earnings of $3.16 per share increased 23.9% year over year and topped the Zacks Consensus Estimate of $3.12 by 1.28%. Net revenues rose 11.8% to $8.75 billion and exceeded the consensus mark of $8.63 billion by 1.39%. Jabil’s Intelligent Infrastructure remained the key growth engine, with segment revenues climbing 21% year over year. Over the past year, shares of JBL have gained 26.8%.

Sanmina Corporation SANM reported third-quarter fiscal 2026 earnings, wherein non-GAAP EPS stood at $3.31, beating the Zacks Consensus Estimate of $2.78. Revenues of $3.46 billion exceeded the Zacks Consensus Estimate of $3.43 billion. Management added that strong execution across both core Sanmina operations and the ZT Systems business supported expansion. Over the past year, shares of SANM have gained 41.4%.

Celestica’s CLS second-quarter 2026 adjusted earnings were $2.54 per share, which surged 82.7% year over year, and topped the Zacks Consensus Estimate by 10.9%. Revenues increased 62.4% to $4.7 billion and topped the consensus mark by 8.1%. Momentum in Connectivity & Cloud Solutions remained the key catalyst for Celestica. Over the past year, shares of CLS have gained 61.6%.

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This article originally published on Zacks Investment Research (zacks.com).

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