With today's earnings call, Todd will provide summary comments before turning the call over to Oliver, Pat, and David for further details. Second, I'm excited to announce that Todd will be appearing on CNBC's Fast Money this evening to discuss Plexus and our fantastic results and outlook. Pat has been instrumental in our growth journey, fostering, and cultivating a high-performing finance team that has played a significant role in Plexus's tremendous financial results over the years. I'm confident that as we continue our growth journey, David's extensive financial expertise, global perspective, and strategic mindset will position him to be an exceptional CFO.
We now expect to deliver mid-teens or greater fiscal 2026 revenue growth from the contribution of numerous program ramps, ongoing market share gains, and improving end market demand. Our team generated a record $355 million in new manufacturing program wins with broad-based contributions across our market sectors. We're delivering non-GAAP operating margin expansion while increasing our already significant investments focused on expanding operational efficiency and capitalizing on continuing revenue growth momentum. We are sustaining strong financial discipline, delivering better than expected working capital performance amid substantial acceleration in revenue growth and tightening supply chain conditions.
Fiscal second quarter revenue of $1.164 billion exceeded our guidance range, representing our fifth consecutive quarter of sequential revenue growth and a robust 19% year-over-year increase. We delivered a robust 6% non-GAAP operating margin while continuing to heavily invest in program ramps, operational efficiency initiatives, and technologies. For the fiscal second quarter, we secured 30 new manufacturing programs with a record $355 million in annualized revenue when fully ramped into production. We produced particularly notable growth in our industrial market sector, where we are generating significant interest in automation and robotics, data center and energy solutions, and our aerospace and defense market sector.
| Metric | Period | Current guidance |
|---|---|---|
| Revenue | Fiscal Q3 2026 | $1.2 billion - $1.25 billion (5% sequential and 20% year-over-year growth at midpoint) |
| Non-GAAP operating margin | Fiscal Q3 2026 | 5.9% - 6.3% |
| Non-GAAP EPS | Fiscal Q3 2026 | $2.02 - $2.18 |
| Gross margin | Fiscal Q3 2026 | 9.9% - 10.2% (slightly below last quarter at midpoint) |
| Selling and administrative expense | Fiscal Q3 2026 | $69 million - $70 million (higher including additional stock-based compensation from executive retirement) |
| Non-operating expense | Fiscal Q3 2026 | approximately $5.4 million (up on higher interest expense and FX comparisons) |
| Cash cycle days | Fiscal Q3 2026 | 67 - 71 days (higher to support accelerating revenue growth) |
| Effective tax rate | Fiscal Q3 2026 and fiscal 2026 | 16% - 18% (unchanged) |
| Capital spending | Fiscal 2026 | $100 million - $120 million (reconfirmed) |
| Free cash flow | Fiscal 2026 | $50 million - $75 million (lowered on increased working capital investment for accelerating growth) |
| Revenue growth | Fiscal 2026 | mid-teens or greater (raised) |
| Non-GAAP operating margin | Fiscal 2026 | 6% or greater |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +19% | Strong growth across all sectors with specific strength in aerospace and defense from increasing demand and supportive disruptive technologies, and in semi-cap from share gains amplifying surging market demand. |
| Aerospace and Defense revenue | — | Up 19% sequentially, significantly outperforming the mid-single-digit expectation, on improved end-market demand across all subsectors and expanded component availability. |
| Healthcare Life Sciences revenue | — | Up 1% sequentially, aligned to flat to low-single-digit expectation. |
| Industrial revenue | — | Up 12% sequentially, in line with forecast, on semi-cap and industrial equipment strength. |
| Gross margin | — | 10.2%, at the top end of guidance, from favorable service mix, fixed cost leverage, and productivity improvements offsetting seasonal compensation increases. |
| Return on invested capital | — | 13.8%, 480 basis points above weighted average cost of capital, healthy despite higher invested capital to support revenue growth. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Fiscal 2026 revenue growth | meet or exceed high end of 9%-12% goal | mid-teens or greater, with double-digit growth in every market sector and particularly strong A&D and industrial/semi-cap | Accelerating |
| Semi-cap / industrial | well into double-digit growth | ongoing share gains amplifying surging market demand; industrial outlook now well in excess of the 9%-12% goal | Accelerating |
| Aerospace and defense | exceed 9%-12% goal | growth well into double digits with exceptional defense subsector growth; record funnel up over 45% year-over-year | Accelerating |
| Supply chain conditions | lead times ticking up | tightening with allocation in portions of semiconductors, passives, memory, raw PCB fabs; proactive sourcing and AI tools mitigating; no undue risk in the forecast | Tightening |
| CFO transition | — | Patrick Jermain retiring after 12 years; David Abuhl, who joined last fall, becoming CFO | Transitioning |
| Operating leverage / margin target | 6% goal | 6% or greater for fiscal 2026; 10-12% drop-through on revenue growth; management likely to set a new margin target after the new CFO settles in | Improving |
| Free cash flow | approximately $100 million | $50-$75 million for fiscal 2026 due to increased working capital investment for accelerating growth | Lowered |