Q4 2025 Flex Ltd Earnings Call Transcript
Key Points
- Flex Ltd (FLEX) reported a strong finish to the fiscal year with Q4 revenue of $6.4 billion, marking a 4% year-over-year growth.
- The company achieved a record annual adjusted operating margin of 5.7% despite macroeconomic challenges.
- Flex Ltd (FLEX) generated over $1 billion in free cash flow, exceeding their 80%-plus adjusted free cash flow conversion target for the second consecutive year.
- The data center business saw significant growth, with revenue increasing by about 50% year-over-year, reaching approximately $4.8 billion.
- Flex Ltd (FLEX) executed multiple program ramps, completed key acquisitions, and won two PACE awards in the automotive space, showcasing their operational efficiency and strategic direction.
- The company faces continued macroeconomic headwinds, particularly affecting core industrial, renewables, and medical equipment markets.
- Tariffs remain a concern, adding costs that Flex Ltd (FLEX) plans to pass through, potentially impacting cash flow timing.
- There is a potential slowdown in the broader economy, which could affect demand and pose risks to the company's performance.
- The automotive segment is expected to experience weakness due to tariff-related disruptions affecting customer volumes.
- Flex Ltd (FLEX) anticipates a sequential revenue decline in Q1 FY26, with lower fixed cost absorption and margin drag in the automotive business.
Thank you for standing by. Welcome to Flex's fourth quarter and fiscal year 2025 earnings conference call. (Operator Instructions) As a reminder, this call is being recorded.
I will now turn the call over to Mr. David Rubin, you may begin.
Thank you, Melissa. Good morning, and welcome to Flex's fourth quarter and fiscal 2025 earnings conference call. With me today is our Chief Executive Officer, Revathi Advaithi; and Chief Financial Officer, Kevin Krumm. We will give brief remarks followed by Q&A. Slides for today's call as well as a copy of the earnings press release and summary financials are available on the Investor Relations section of flex.com. This call is being recorded and will be available for replay on our corporate website.
As a reminder, today's call contains forward-looking statements, which are based on our current expectations and assumptions. These statements involve risks and uncertainties that could cause actual results to differ materially. For a full
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