Loading...
01/11 03:17
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Sanmina's earnings report shows strong financial performance with revenue and margin improvements, particularly in CPS. The Q&A indicates stable growth and strategic investments in ZT Systems and the Indian joint venture, despite some uncertainties. The positive analyst sentiment and strategic partnerships, like with AMD, suggest a favorable outlook. However, the lack of detailed guidance in some areas tempers expectations slightly. Overall, the company's performance and strategic moves point to a positive stock price movement, especially given its market cap.
Revenue $2.04 billion, representing an increase of 10.9% year-over-year. This growth was primarily driven by broad-based demand across all end markets, with particular strength in the communications networks and cloud infrastructure end markets.
Non-GAAP Gross Margin 9.1%, a 60 basis point improvement versus the same period last year. This expansion was a result of favorable product mix and ongoing operational efficiencies.
Non-GAAP Operating Income $115.7 million or 5.7% of revenue, representing a 40 basis point improvement versus the same period last year. This improvement was driven by a combination of revenue growth, favorable mix, and disciplined execution.
Non-GAAP Diluted Earnings Per Share (EPS) $1.53, representing a 22.8% increase versus the same period last year. This was driven by strong cash flow generation and overall financial performance.
IMS Revenue $1.65 billion, up 11.6% year-over-year. This was driven by growth across all end markets, with particular strength in the communications networks and cloud infrastructure end markets.
IMS Non-GAAP Gross Margin 7.5%, down 10 basis points versus the same period last year.
CPS Revenue $422 million, up 8.8% year-over-year, driven by increased demand across all end markets.
CPS Non-GAAP Gross Margin 14.7%, an impressive 320 basis point improvement year-over-year. This performance was driven by higher revenue, favorable mix, and ongoing operational efficiencies.
Cash and Cash Equivalents $798 million at quarter end, with no outstanding borrowings on the $800 million revolver, leaving substantial liquidity of approximately $1.7 billion.
Inventory Net of Customer Advances $1.2 billion, representing a 12% decrease in absolute dollar terms versus the same period a year ago. Inventory turns net of customer advances improved to 6.3x for the quarter as compared to 5.1x in the same period a year ago.
Non-GAAP Pretax ROIC 24.8%, an improvement from 21.1% in the same period a year ago.
Cash Flow from Operations $201 million for the quarter and $422 million for the 9 months of the fiscal year. This was a result of disciplined working capital management.
Capital Expenditures $33 million for the quarter, totaling $80 million for the 9 months of the fiscal year. This was lower than the outlook due to the timing of receipts.
Free Cash Flow $168 million for the quarter, bringing the 9 months total to $341 million.
ZT Systems Acquisition: Sanmina is acquiring ZT Systems from AMD, which is expected to add $5-6 billion in annual net revenue and double Sanmina's net revenue within three years. This acquisition enhances Sanmina's capabilities in data center and AI infrastructure, providing end-to-end solutions.
End Market Growth: Revenue increased by 10.9% year-over-year, driven by strong demand in communications networks and cloud infrastructure, which grew by 19.1%. Other segments like industrial, energy, medical, and defense also showed growth.
Operational Efficiencies: Non-GAAP gross margin improved to 9.1%, a 60 basis point increase year-over-year, due to favorable product mix and operational efficiencies. Inventory turns improved to 6.3x from 5.1x year-over-year.
Strategic Investments: Sanmina is making targeted investments in the U.S., India, and Mexico to enhance capacity and technology. The ZT Systems acquisition aligns with their strategy to expand in the data center and AI markets.
Tariffs and Geopolitical Landscape: The company acknowledges market uncertainties stemming from tariffs and geopolitical issues, which could impact operations and financial performance.
Automotive and Transportation Segment: Short-term softness in demand has been observed, indicating potential challenges in revenue generation from this segment.
Inventory Management: While inventory turns have improved, there is still room for further optimization, which could impact operational efficiency.
ZT Systems Acquisition: The acquisition involves significant investment in working capital and may temporarily increase the net leverage ratio above 2x, posing financial risks.
Regulatory Approvals for Acquisition: The planned acquisition of ZT Systems is pending regulatory approvals, which could delay or complicate the transaction.
Dynamic Market Environment: The company operates in a highly dynamic environment, requiring agility to meet evolving customer needs, which could strain resources.
Capital Expenditures: Ongoing targeted investments in capacity and technology could strain financial resources if not managed effectively.
Revenue Expectations: Sanmina expects Q4 2025 revenue to be between $2.0 billion to $2.1 billion, with a midpoint of $2.05 billion, representing a 6.8% increase on a full-year basis.
Margin Projections: Non-GAAP gross margin for Q4 2025 is projected to be between 8.7% and 9.2%, with a non-GAAP operating margin of 5.5% to 6.0%.
Earnings Per Share (EPS): Non-GAAP diluted EPS for Q4 2025 is expected to range from $1.52 to $1.62, with a midpoint of $1.57, representing a 9.8% increase compared to the same period last year and a 12.9% increase on a full-year basis.
Capital Expenditures: Full-year capital expenditures are expected to be approximately 1.8% of revenue, with Q4 2025 capital expenditures projected at $65 million.
Strategic Acquisition: The acquisition of ZT Systems manufacturing business is expected to close by the end of 2025, adding $5 billion to $6 billion in annual net revenue on a run-rate basis and doubling Sanmina's net revenue within three years. The transaction is expected to be accretive to non-GAAP EPS in the first year after closing.
Market Trends and Growth: Sanmina anticipates strong growth in the data center and AI infrastructure markets, with global data center investments forecasted to exceed $500 billion in 2026 and potentially over $1 trillion by 2028. The company expects to expand relationships with hyperscalers and OEM customers.
End Market Performance: Positive trends are expected in communication networks, cloud infrastructure, industrial, energy, medical, and defense/aerospace markets. Automotive and transportation markets are expected to recover and grow in fiscal year 2026.
Share Repurchase Program: During the quarter, we repurchased 0.2 million shares for approximately $13 million, and year-to-date, we have repurchased 1.4 million shares for $114 million. As of June 28, 2025, we have $239 million remaining under our authorized share repurchase program. Our strong cash flow performance has provided us with the financial flexibility to allow continued investments in the business while also returning capital to shareholders, all within a disciplined and balanced capital allocation framework.
The earnings call summary and Q&A indicate strong financial performance with increased margins and cash flow. The strategic acquisition of ZT Systems is expected to significantly boost revenue, and management is optimistic about growth in key markets. While some guidance details were deferred, the overall sentiment is positive with potential for revenue doubling in three years. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction (2% to 8%).
Sanmina's earnings report shows strong financial performance with revenue and margin improvements, particularly in CPS. The Q&A indicates stable growth and strategic investments in ZT Systems and the Indian joint venture, despite some uncertainties. The positive analyst sentiment and strategic partnerships, like with AMD, suggest a favorable outlook. However, the lack of detailed guidance in some areas tempers expectations slightly. Overall, the company's performance and strategic moves point to a positive stock price movement, especially given its market cap.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
