Flex Ltd Beats Q2 FY2027 Estimates on All Key Metrics and Raises Full-Year Guidance as Cloud and Power Unit Spin-Off Gets Name

Flex Ltd. delivered a strong second quarter for fiscal 2027, reporting revenue of $8.5 billion, up 25% year over year and well ahead of the $8.14 billion analyst estimate. Adjusted EPS surged 49% year over year to $1.18, beating the $1.05 consensus, while adjusted operating margin expanded 110 basis points to 7.1%. GAAP operating income came in at $414 million, GAAP net income at $263 million, and cash flow from operations at $501 million, with free cash flow of $261 million.

On the strength of the quarter, Flex raised its full-year FY2027 guidance across every major metric. Revenue guidance moved up to $34.9 billion to $35.9 billion from the prior range of $33.7 billion to $35.2 billion, topping the $34.67 billion analyst estimate. Adjusted EPS guidance rose to $4.84 to $5.16 from $4.42 to $4.74, above the $4.67 consensus. Full-year adjusted operating margin guidance was lifted to 7.6% to 7.8%, compared with the previous range of 7.0% to 7.2%. The company noted that FY2027 guidance includes recent acquisitions but excludes the planned spin-off.

For the third quarter of FY2027, Flex guided for net sales of $8.87 billion to $9.17 billion and adjusted EPS of $1.19 to $1.25, both roughly in line with analyst expectations of $8.95 billion and $1.22, respectively. Adjusted operating income for Q3 is projected at $685 million to $715 million.

Flex also announced two significant corporate developments. The company unveiled "Axiom" as the name for its planned spin-off of the Cloud and Power Infrastructure segment. Additionally, the acquisition of EPC Power was described as completing Flex's end-to-end power portfolio and is expected to be immediately accretive in FY2027. Shares gapped up roughly 9% to 11.5% in pre-market trading following the results.