Flex reported third quarter net sales of $7.1 billion, an 8 percent increase over the prior year, surpassing consensus guidance. The company delivered GAAP operating income of $389 million and GAAP net income of $239 million. On a non-GAAP basis, adjusted operating income reached $460 million and adjusted EPS was $0.87, topping the Zacks estimate of $0.79 and up from $0.77 a year earlier. Flex also achieved a record adjusted operating margin of 6.5%, marking its fifth consecutive quarter above 6%.

Buoyed by robust data center and AI-related orders, Flex lifted its full-year fiscal 2026 outlook. Net sales are now expected to total $27.2 billion to $27.5 billion, reflecting 6 percent year-over-year growth at the midpoint. Adjusted EPS guidance was raised to a range of $3.21 to $3.27 per share, up 22 percent at the midpoint versus the prior forecast. Fourth quarter net sales are projected between $6.75 billion and $7.05 billion, with adjusted EPS of $0.83 to $0.89. Management cited accelerating deployment of power and cooling solutions as key drivers.

Despite the double beat and enhanced outlook, Flex shares declined by 14 percent following the earnings release. Investors expressed concern over slowing sequential revenue growth and the company’s heavy reliance on AI and data center end markets. The concentration risk raised questions about diversification of Flex’s business model, prompting analysts to warn that any downturn in a single vertical could weigh on margins in 2026.