Financial Data and Key Metrics Changes - Revenue for the fiscal second quarter was $980 million, meeting guidance [11] - Non-GAAP operating margin was 5.7%, at the high end of guidance [12] - Non-GAAP EPS was $1.66, exceeding guidance due to strong operating margin performance and favorable tax rate [13] - Free cash flow generated was $16.5 million, significantly better than expectations [13] Business Line Data and Key Metrics Changes - Aerospace and defense sector revenue increased 8% sequentially, with healthy wins of $27 million [27][28] - Healthcare life sciences sector revenue was up 10% sequentially, with wins of $118 million, including the largest-ever award for sustaining services [32][33] - Industrial sector revenue decreased 10% sequentially, with wins of $60 million [36][38] - Semi cap sector showed robust growth, with high teens growth expected for the fiscal year [111] Market Data and Key Metrics Changes - Incremental strengthening in healthcare customer outlooks offset modest reductions in other markets [12] - Signs of inventory corrections peaking in the broader industrial market [23] - Demand in aerospace and defense is being offset by reduced near-term demand in the aerospace subsector [30] Company Strategy and Development Direction - Company is strategically investing in talent, technology, and facilities to navigate current market complexities [9] - Continued focus on sustainability and innovation as core values [16] - Anticipates $100 million of free cash flow for fiscal 2025, aiming for meaningful EPS growth [10][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledges macroeconomic uncertainty but remains optimistic about achieving meaningful EPS growth in fiscal 2025 [22][137] - Customers are currently taking a wait-and-see approach regarding tariffs, with no immediate impact on demand noted [66] - Company is well-positioned to adjust to customer needs and market conditions [64] Other Important Information - Company recognized as Manufacturer of the Year Mega Category by Wisconsin Manufacturers and Commerce [17] - New facility in Malaysia expected to open this summer, enhancing capacity [68] Q&A Session Summary Question: Impact of tariffs on operations - Management indicated that customers are taking a wait-and-see approach regarding tariffs, with no immediate demand degradation observed [62][66] Question: Capacity and new facilities - Current capacity is sufficient across regions, with new facility in Malaysia expected to enhance operations [68] Question: Cash cycle days target - Management aims for cash cycle days to improve to mid to low sixties, with each day of reduction freeing up $10 million in cash flow [75][76] Question: Dynamics behind outsourcing in aerospace and defense - Increased openness to outsourcing observed among customers due to changes in demand relative to capacity [80][82] Question: Details on healthcare sustainable services program - Program involves single-use capital equipment, with potential for significant ramp-up over two to three quarters [86] Question: Industrial market demand signals - Inventory corrections appear to have peaked, leading to stronger demand signals from industrial customers [98] Question: Engineering wins diversification - Engineering wins have diversified across multiple sectors, indicating strong future growth potential [118] Question: Currency hedging strategy - Company is actively hedging against currency volatility to mitigate potential impacts on P&L [124]

Core Viewpoint - Plexus Corp reported strong adjusted earnings per share (EPS) for the second quarter of fiscal 2025, exceeding expectations, but revenues slightly missed estimates due to mixed performance across sectors [1][2]. Financial Performance - Adjusted EPS for Q2 fiscal 2025 was $1.66, up from $1.19 in the same quarter last year, surpassing the Zacks Consensus Estimate of $1.54 [1]. - Revenues reached $980.2 million, a 1.4% year-over-year increase, but fell short of the Zacks Consensus Estimate of $980.5 million [2]. - Gross profit on a GAAP basis increased 11% year over year to $97.8 million, with a gross margin of 10%, up from 9.1% [6]. Revenue Breakdown - Healthcare/Life Sciences revenues rose 8.4% year over year to $411 million, contributing 42% to total revenues [5]. - Industrial sector revenues decreased 5% year over year to $397 million, accounting for 40% of total revenues [4]. - Revenues from Asia-Pacific increased by 12.5% to $587 million, while EMEA sales declined by 32% [2]. Operational Highlights - Plexus secured 42 manufacturing program wins in the quarter, expected to generate $205 million in annualized revenues once fully ramped [3]. - Selling and administrative expenses rose 3% year over year to $49 million, while adjusted operating margin expanded by 80 basis points to 5.7% [8]. Balance Sheet and Cash Flow - As of March 29, 2025, cash and cash equivalents were $310.5 million, down from $317.2 million as of December 28, 2024 [9]. - Free cash flow for the quarter was reported at $16.5 million [9]. Share Repurchase and Future Outlook - The company repurchased $12.2 million of shares at an average price of $141.18, with $25 million remaining under its $50 million buyback authorization [10]. - For Q3 fiscal 2025, revenues are anticipated to be between $1 billion and $1.04 billion, with non-GAAP EPS expected in the range of $1.65-$1.80 [11].

Core Insights - Plexus reported revenue of $980.17 million for the quarter ended March 2025, reflecting a year-over-year increase of 1.4% [1] - The company's EPS was $1.66, significantly higher than the $0.94 reported in the same quarter last year, indicating strong earnings growth [1] - The revenue slightly missed the Zacks Consensus Estimate of $980.47 million by 0.03%, while the EPS exceeded the consensus estimate of $1.54 by 7.79% [1] Revenue Performance by Sector - Healthcare/Life Sciences sector generated revenue of $411 million, surpassing the average estimate of $407.10 million, with a year-over-year increase of 8.4% [4] - Aerospace/Defense sector reported revenue of $172 million, slightly below the estimated $174.10 million, marking a year-over-year increase of 1.2% [4] - Industrial sector revenue was $397 million, falling short of the estimated $399.55 million, representing a year-over-year decrease of 5% [4] Stock Performance - Plexus shares have returned -6.1% over the past month, compared to a -6.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Group 1 - Plexus reported quarterly earnings of $1.66 per share, exceeding the Zacks Consensus Estimate of $1.54 per share, and showing a significant increase from $0.94 per share a year ago, representing an earnings surprise of 7.79% [1] - The company posted revenues of $980.17 million for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.03%, but showing growth from $966.9 million year-over-year [2] - Plexus has surpassed consensus EPS estimates in all four of the last quarters, but has only topped revenue estimates once during the same period [2] Group 2 - The stock has underperformed, losing about 20.7% since the beginning of the year, compared to a decline of 10.1% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $1.74 on revenues of $1.03 billion, and for the current fiscal year, it is $6.90 on revenues of $4.08 billion [7] - The Zacks Industry Rank for Electronics - Manufacturing Services is in the top 14% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] Group 3 - The estimate revisions trend for Plexus is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] - Celestica, another company in the same industry, is expected to report quarterly earnings of $1.11 per share, reflecting a year-over-year increase of 29.1%, with revenues projected at $2.55 billion, up 15.3% from the previous year [9][10]

Financial Performance - Plexus reported fiscal second quarter 2025 revenue of $980 million, with a GAAP operating margin of 5.0% and diluted EPS of $1.41[5] - Non-GAAP operating margin for the second quarter was 5.7%, and adjusted diluted EPS was $1.66, excluding $0.25 of stock-based compensation expense[5] - Net sales for the three months ended March 29, 2025, were $980.17 million, a 1.3% increase from $966.90 million for the same period in 2024[20] - Gross profit for the three months ended March 29, 2025, was $97.75 million, compared to $88.06 million for the same period in 2024, reflecting a 10.5% increase[20] - Operating income for the three months ended March 29, 2025, was $48.79 million, up 65.5% from $29.47 million in the same period last year[20] - Net income for the three months ended March 29, 2025, was $39.07 million, significantly higher than $16.24 million for the same period in 2024, representing a 140.5% increase[20] - Basic earnings per share for the three months ended March 29, 2025, were $1.44, compared to $0.59 for the same period in 2024, marking a 144.1% increase[20] - Adjusted operating income for the six months ended March 29, 2025, was $100.33 million, compared to $51.54 million for the same period in 2024[29] - Adjusted diluted earnings per share for the six months ended March 29, 2025, were $3.39, up from $2.42 for the same period in 2024, reflecting a 40.2% increase[24] Guidance and Future Outlook - The company initiated fiscal third quarter 2025 revenue guidance of $1.00 billion to $1.04 billion, with GAAP diluted EPS guidance of $1.40 to $1.55[5] Cash Flow and Capital Management - Free cash flow for the second quarter was $16.5 million, contributing to year-to-date free cash flow of $43.6 million[6] - The cash cycle for the second quarter was 68 days, consistent with the first quarter and showing improvement in inventory management[7] - Return on invested capital (ROIC) for the second quarter was 13.7%, exceeding the weighted average cost of capital by 480 basis points[12] - Return on invested capital (ROIC) for the six months ended March 29, 2025, was 13.7%, compared to 9.9% for the same period in 2024[29] Shareholder Actions - The company repurchased $12.2 million of its shares at an average price of $141.18 per share, with $25 million remaining under the share repurchase authorization[6] Revenue Composition - Revenue from the Aerospace/Defense sector was $172 million, accounting for 18% of total revenue, while Healthcare/Life Sciences contributed $411 million, or 42%[10] - Top 10 customers comprised 51% of revenue during the second quarter, an increase of 3 percentage points from the same quarter in the previous year[9] Balance Sheet Highlights - Total current assets decreased to $2,396.31 million as of March 29, 2025, from $2,477.15 million as of September 28, 2024[22] - Total liabilities decreased to $1,734.07 million as of March 29, 2025, from $1,828.99 million as of September 28, 2024[22]

Core Viewpoint - Plexus Corp. reported strong financial performance for the fiscal second quarter of 2025, achieving revenue of $980 million, exceeding guidance, and demonstrating operational efficiency [4][5]. Financial Performance - Revenue for Q2F25 was $980 million, with guidance for Q3F25 set between $1.00 billion and $1.04 billion [2][5]. - GAAP operating margin was 5.0%, while non-GAAP operating margin was 5.7%, exceeding guidance [5][6]. - Diluted EPS for Q2F25 was $1.41, with non-GAAP diluted EPS at $1.66, also exceeding guidance [5][6]. - Free cash flow for Q2F25 was $16.5 million, contributing to a year-to-date total of $43.6 million [6][13]. Business Wins and Market Segments - The company won 42 manufacturing programs during the quarter, representing $205 million in annualized revenue when fully ramped [6][7]. - Revenue breakdown by market sectors for Q2F25 included Aerospace/Defense at $172 million (18%), Healthcare/Life Sciences at $411 million (42%), and Industrial at $397 million (40%) [10]. Operational Efficiency - The cash cycle for Q2F25 was 68 days, consistent with the previous quarter and favorable compared to expectations [4][14]. - Return on invested capital (ROIC) was reported at 13.7%, exceeding the weighted average cost of capital by 480 basis points [7][12]. Shareholder Returns - The company repurchased $12.2 million of its shares at an average price of $141.18 per share, with $25 million remaining under the existing $50 million authorization [6][7]. Guidance and Future Outlook - For Q3F25, Plexus is guiding revenue of $1.00 billion to $1.04 billion, with non-GAAP operating margin expected between 5.7% and 6.1% and non-GAAP EPS between $1.65 and $1.80 [5][6]. - The company anticipates meaningful EPS growth for fiscal 2025, driven by revenue growth across market sectors and robust operating margin performance [4][7].

Core Viewpoint - Plexus Corp (PLXS) is expected to report second-quarter fiscal 2025 earnings on April 23, with revenue estimates of $980.5 million, reflecting a 1.4% year-over-year increase, and an EPS estimate of $1.54, indicating a 63.8% increase from the previous year [1] Revenue and Earnings Estimates - The company anticipates revenues between $960 million and $1 billion for the second quarter, with non-GAAP EPS expected in the range of $1.46 to $1.61 [2] - The Zacks Consensus Estimate for PLXS's revenues is $980.5 million, with an EPS estimate of $1.54 [1][2] Recent Performance and Growth Drivers - Plexus has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average earnings surprise of 12.77% [2] - The company secured 30 new manufacturing programs in the fiscal first quarter, projected to generate $212 million in annualized revenues, with $130 million from the Healthcare/Life Sciences sector [2] Segment Performance Expectations - Aerospace/Defense revenues are expected to increase by 2.1% year-over-year to $173.8 million, driven by broad-based demand increases [4] - Healthcare/Life Sciences revenues are anticipated to rise by 7.4% year-over-year to $406.5 million, supported by new program ramps [4] - The Industrial sector is forecasted to see a revenue decline of 4.3% year-over-year to $400.4 million, attributed to demand instability across several subsectors [5] Earnings Prediction Model - The current model does not predict an earnings beat for Plexus, as the Earnings ESP stands at 0.00% and the company holds a Zacks Rank of 3 [6][7]

Core Viewpoint - Plexus Corp. is set to release its fiscal second quarter 2025 results on April 23, 2025, followed by a conference call on April 24, 2025, to discuss the results [1]. Company Information - Plexus Corp. has been in operation since 1979, focusing on partnering with companies to create innovative products [3]. - The company employs over 20,000 individuals and specializes in Design and Development, Supply Chain Solutions, New Product Introduction, Manufacturing, and Sustaining Services [3]. - Plexus is recognized as a global leader in serving customers in industries that require highly complex products and adhere to demanding regulatory environments [3]. Event Details - The fiscal 2025 Q2 earnings conference call will take place on April 24, 2025, at 8:30 a.m. Eastern Time [4]. - Participants can join the live webcast through the investor relations section of the Plexus website [4].

Core Viewpoint - Plexus Corporation (PLXS) has experienced a significant decline in its stock price, down 16.8% year to date, which is notably worse than the Electronic Manufacturing Industry's decline of 3.6% and the S&P 500's loss of 3.3% [1][5]. Price Performance - The stock is currently trading below its 50-day moving average, indicating bearish sentiment among investors, with a recent closing price of $130.24, down 24.7% from its 52-week high of $172.89 [9]. Reasons for Decline - Continued demand weakness in the industrial market sector is a major concern, with revenues for the fiscal second quarter expected to decline by 4.3% year over year to $400.4 million [5]. - The Aerospace/Defense sector is also expected to see subdued growth in fiscal 2025, with revenues projected to increase by only 2% due to challenges in the commercial aerospace subsector [6]. - Geopolitical tensions and uncertainty in global trade policies may disrupt supply chains, increase costs, and delay production, negatively impacting revenues and margins [7]. - Analysts have revised earnings estimates downward, with a 0.7% decrease for the current quarter to $1.54 [8]. Long-Term Outlook - Plexus has secured 30 manufacturing programs in the fiscal first quarter, which could generate $212 million in annualized revenues once fully ramped up, including $130 million from the Healthcare/Life Sciences sector [10]. - The company has a strong pipeline of qualified manufacturing opportunities valued at $3.6 billion, which is expected to support revenue growth in fiscal 2025 [11]. - Plexus generated $27 million in free cash flow in the last reported quarter, exceeding expectations, and now anticipates generating $100 million in free cash flow for fiscal 2025 [12]. Investment Considerations - Despite a positive long-term outlook, the near-term expectations are uncertain due to bearish technical indicators and cautious management outlook for 2025, leading to a Zacks Rank 4 (Sell) [13]. - Other stocks in the same industry with better rankings include Celestica Inc (CLS), Jabil Inc. (JBL), and Sanmina Corporation (SANM), each carrying a Zacks Rank 2 (Buy) [14].

Core Points - Plexus Corp. will participate in the Raymond James 46th Annual Institutional Investors Conference on March 3, 2025, featuring a fireside chat with its management team [1][3] - The fireside chat is scheduled for 2:50 p.m. Eastern Time and will be available via live webcast [1][3] - A replay of the webcast will be accessible for 90 days after the live event [3] Company Overview - Plexus has been operational since 1979, focusing on designing, manufacturing, and servicing complex products in regulated environments [2] - The company serves various sectors, including Aerospace/Defense, Healthcare/Life Sciences, and Industrial, with a workforce of over 20,000 across 26 facilities globally [2] - Plexus emphasizes innovative solutions that merge advanced technology with human impact, catering to both market-leading and disruptive global companies [2]