Earnings Recap — Q3 FY2026
CY Q3 2026 · Reported July 29, 2026 · Beat 7 of last 7 quarters
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Plexus's record revenue and raised guidance underscore accelerating demand for AI infrastructure, particularly in semiconductor capital equipment and data center power/storage solutions. The new battery energy storage win for data centers and the $0.5B data center funnel signal expanding opportunities in the AI buildout. The company's capacity expansion in Malaysia and strong free cash flow outlook position it to capture further growth.
Plexus delivered record Q3 revenue of $1.305B, up 28% YoY, with all three sectors contributing better-than-expected performance. Non-GAAP operating margin hit 6.3% at the high end of guidance, and EPS of $2.32 beat. The company secured $255M in new program wins, including a battery energy storage win for data centers and $135M in aerospace & defense wins. Cash cycle improved to 62 days, the best in over five years, and free cash flow was near breakeven. Management raised FY26 revenue growth outlook to over 20% and provided a bullish preliminary FY27 outlook.
Management raised fiscal 2026 revenue growth outlook to greater than 20% (from mid-teens or greater) and expects non-GAAP operating margin to exceed 6% for the year. For fiscal 2027, they see potential for revenue growth above the 9-12% goal, with operating margin expansion, disciplined working capital, and meaningful free cash flow generation exceeding $100M. They announced capacity expansion at a Malaysia site, adding over $0.5B in capacity while keeping capex at 2-3% of revenue. Demand signals remain strong across aerospace & defense, industrial (especially semi-cap and data center power/storage), and healthcare, with a record funnel supporting long-term growth.
“Our differentiated value proposition focused on unmatched quality and delivery is creating customer success. Plexus generated record revenue in the fiscal third quarter by capturing strengthening end market demands and successfully launching numerous new programs.”
on Record revenue and growth drivers
“We anticipate Plexus will sustain this momentum and currently see the potential to generate fiscal 2027 revenue growth in excess of our 9% to 12% goal.”
on Fiscal 2027 outlook
“We delivered a 62-day cash cycle in the fiscal third quarter, which is the best quarterly result in over 5 years.”
on Working capital efficiency
How should we think about your capability of supply and meeting that demand next year? Are there other additional capacity expansion plans?
Todd Kelsey expressed high confidence in the growth trajectory, noting the supply chain team is managing tightness well. They are adding capacity in Penang, Malaysia, and being thoughtful about other regions. David Abuhl added that operational efficiency improvements are unleashing capacity, and they can expand existing sites efficiently.
You're on track to exit the fiscal year at well over a $5 billion run rate. What structural changes are needed to get to $8-10 billion?
Todd Kelsey said they've been preparing for this scale for 2-3 years, with investments in processes like SIOP and NPI consistency. They favor the campus model for expansion. David Abuhl noted operational efficiency gains, including over 10% improvement in OEE, are unleashing capacity.
We've heard about extending lead times and price increases. How might preplacement of inventory impact cash conversion?
David Abuhl acknowledged supply chain tightening but said teams are managing well, with preplacement done in close collaboration with customers who typically fund it. Cash cycle days remain in the low-to-mid 60s, with 62 days in Q3 the best in five years. Shawn Harrison added that the supply chain team started preparing last fall.