Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 29, 2026 · Beat 5 of last 7 quarters
The Buildout is a website built on agentic AI tools, currently in beta, and could have factual errors.
Benchmark's AC&C segment grew 71% YoY, driven by AI-related program ramps, and management expects HPC to add further growth in 2027. The company is expanding capacity in Penang and Thailand to support this demand, reinforcing its role in the AI infrastructure supply chain. Supply chain tightness, particularly in memory and complex components, could signal broader constraints in the AI buildout.
Q2 revenue of $756M grew 18% YoY and EPS of $0.75 grew 36% YoY, both beating guidance. Growth was broad-based with Semi-Cap +17% YoY, Industrial +13%, Medical +22%, and AC&C +71%, while A&D declined 12% on program transitions. Bookings were record, with A&D the largest contributor and a competitive takeaway in Industrial. The company generated $35M operating cash flow and $22M free cash flow, with cash conversion cycle improving to 59 days.
Management raised full-year 2026 revenue outlook to $3.0 billion, representing ~13% growth and a company record. Q3 guidance calls for revenue of $755-795M (+14% YoY at midpoint) and non-GAAP EPS of $0.76-0.82, with gross margin of 10.5-10.7% and operating margin of 5.3-5.5%. Semi-Cap growth is expected to accelerate in the second half, A&D is expected to return to growth in 2027, and AC&C remains strong with HPC expected to contribute more in 2027. Management continues to target operating income and EPS growth at 1.5x-2x revenue growth, with capex of 2-2.5% of revenue expected to continue into next year.
“Demand in the majority of our markets continues to improve. We are winning. And while there's always room for improvement, we are executing well operationally. Combined, this gives us the confidence to increase our 2026 revenue outlook to $3 billion, representing approximately 13% growth and achieving a historical high for the company.”
on Full-year guidance raise
“We expect HPC to start picking up very late in Q4 and into 2027. So from that perspective, I think we could start seeing it contribute more in '27 than we will in '26.”
on HPC ramp timing
“The supply chain environment is tight. I signaled that a couple of quarters ago. We started seeing that tightness in memory. So we're working the supply chain proactively.”
on Supply chain tightness
On the Aerospace business, can you give us a little more color into the new bookings that you're talking about, especially as it relates to maybe current events in Iran or government budgets changing, et cetera?
David Moezidis noted the defense environment remains strong, citing replenishment and continued wins in defense and space. He highlighted that A&D led the company in bookings for the quarter.
Can you help size up sort of the next-gen HPC opportunities, how they're different? And then sort of -- I mean, I would assume we expect to see accelerating growth in 2027 from that program starting to ramp here in Q4.
David Moezidis said it's tough to size, but confirmed HPC will pick up late Q4 and into 2027, contributing more in 2027 than 2026. He remains optimistic about AC&C prospects combining clustered AI, on-prem, and HPC.
With the expansions in Penang and Thailand, how much revenue is that expected to support? And what's the margin profile there?
Bryan Schumaker said they don't give individual factory revenue, but Penang is a PT facility with Semi-Cap margin profile, while Thailand is an EMS facility complementary to existing factories. CapEx of 2-2.5% of revenue is expected to continue into next year.