On July 24, 2024, Flex Ltd (FLEX, Financial) released its 8-K filing detailing the financial results for the first quarter of fiscal year 2025, ending June 28, 2024. Flex Ltd is a contract manufacturing company providing comprehensive electronics design, manufacturing, and product management services to electronics and technology companies. The company's operating segments include Flex Agility Solutions (FAS) and Flex Reliability Solutions (FRS).
Performance Overview
Flex Ltd (FLEX, Financial) reported net sales of $6.3 billion for Q1 FY2025, surpassing the analyst estimate of $5.9 billion. The company achieved a GAAP operating income of $233 million and an adjusted operating income of $306 million. GAAP net income attributable to Flex Ltd was $139 million, while adjusted net income was $211 million. The GAAP earnings per share (EPS) stood at $0.34, and the adjusted EPS was $0.51, significantly higher than the estimated EPS of $0.47.
Key Financial Achievements
Flex Ltd's financial achievements are noteworthy, particularly in the context of the hardware industry. The company demonstrated strong year-over-year margin expansion and EPS growth. CEO Revathi Advaithi commented,
We delivered another solid quarter, including year-over-year margin expansion and EPS growth. Our results show we continue to navigate through the dynamic cycle and drive value to our stakeholders."
Income Statement Highlights
| Metric | Q1 FY2025 | Q1 FY2024 |
|---|---|---|
| Net Sales | $6.3 billion | $6.9 billion |
| GAAP Operating Income | $233 million | $215 million |
| Adjusted Operating Income | $306 million | $293 million |
| GAAP Net Income | $139 million | $211 million |
| Adjusted Net Income | $211 million | $214 million |
| GAAP EPS | $0.34 | $0.41 |
| Adjusted EPS | $0.51 | $0.47 |
Balance Sheet and Cash Flow Highlights
Flex Ltd reported total assets of $17.7 billion as of June 28, 2024, compared to $18.3 billion as of March 31, 2024. The company's cash and cash equivalents stood at $2.2 billion, down from $2.5 billion at the end of the previous quarter. Net cash provided by operating activities was $340 million, a significant improvement from $6 million in the same period last year.
Guidance and CFO Transition
For the second quarter of fiscal 2025, Flex Ltd provided guidance with revenue expected to be between $6.2 billion and $6.8 billion. GAAP EPS is projected to range from $0.40 to $0.48, while adjusted EPS is expected to be between $0.52 and $0.60. For the full fiscal year 2025, the company anticipates revenue between $25.4 billion and $26.4 billion, with GAAP EPS ranging from $1.60 to $1.80 and adjusted EPS between $2.30 and $2.50.
Additionally, Flex Ltd announced a transition in its Chief Financial Officer position. Paul Lundstrom will step down as CFO effective July 31, 2024, and Jaime Martinez will assume the role of Interim CFO. CEO Revathi Advaithi expressed gratitude for Lundstrom's contributions, stating,
Paul has been a trusted partner and exceptional leader at Flex over the past four years. He has played a key role in delivering on our strategy, driving discipline across the organization, and creating value for our shareholders."
Conclusion
Flex Ltd's strong financial performance in Q1 FY2025, coupled with its positive guidance for the upcoming quarters, underscores the company's resilience and strategic execution in a dynamic market environment. Investors and stakeholders will be keenly watching how the company navigates the CFO transition and continues to drive value in the coming quarters.
Explore the complete 8-K earnings release (here) from Flex Ltd for further details.
