Plexus reported record fiscal third-quarter 2026 revenue as rapid growth across its Industrial business and a new data center battery energy storage program helped expand the company’s qualified manufacturing pipeline to an all-time high of $4.5 billion.
Industrial revenue increased approximately 42% to $589 million from $415 million in the prior-year quarter. The business represented 45% of Plexus’ total revenue, compared with 41% one year earlier, making it the company’s largest market sector during the period.
The Industrial results were supported by strengthening end-market demand, the launch of new manufacturing programs, and growth in semiconductor capital equipment.
Plexus also secured a new manufacturing partnership involving a battery energy storage system designed for data centers. The win expands the company’s exposure to infrastructure required to support growing data center electricity demand.
The company did not disclose the customer, contract value, production location, or expected timing of the battery storage program. However, Plexus included the partnership among its significant manufacturing wins for the quarter.
Plexus won 31 manufacturing programs representing approximately $255 million in annualized revenue once fully ramped into production. The results included significant Aerospace and Defense wins in addition to the data center energy storage partnership.
Its qualified manufacturing opportunity funnel increased to a record $4.5 billion. Management said the pipeline supports the potential for sustained long-term growth, particularly across the Industrial and Aerospace and Defense sectors.
Total fiscal third-quarter revenue reached a record $1.305 billion, increasing 28% from approximately $1.02 billion in the prior-year quarter and 12% sequentially.
Revenue exceeded Plexus’ guidance range of between $1.2 billion and $1.25 billion. The company attributed the performance to strengthening customer demand and the successful launch of numerous new programs.
Aerospace and Defense revenue increased to $233 million from $183 million, representing growth of approximately 27%. The sector accounted for 18% of total company revenue.
Healthcare and Life Sciences revenue increased 15% to $483 million from $420 million but declined as a share of total revenue to 37% from 41%. Industrial’s faster expansion therefore changed Plexus’ revenue mix during the quarter.
Geographically, Asia-Pacific remained Plexus’ largest operating segment, with revenue increasing to $774 million from $594 million.
Americas revenue rose to $428 million from $312 million, while revenue from Europe, the Middle East, and Africa declined to $109 million from $117 million.
Plexus reported a GAAP operating margin of 4.7%, compared with 5.3% in the prior-year quarter. GAAP diluted earnings declined to $1.58 per share from $1.64 despite the substantial increase in revenue.
The GAAP results included $0.74 per share of stock-based compensation expense, including accelerated compensation associated with previously announced executive retirement agreements.
Excluding stock-based compensation, Plexus generated a non-GAAP operating margin of 6.3%, reaching the upper end of its guidance range. Non-GAAP diluted earnings increased to $2.32 per share from $1.90 and exceeded management’s forecast of between $2.02 and $2.18.
Net income declined to approximately $43 million from $45.1 million. However, adjusted net income increased as the company excluded the unusually high stock-based compensation expense from its underlying results.
Plexus also achieved its strongest cash-cycle performance in more than five years. Its annualized cash cycle improved to 62 days from 69 days in the prior-year quarter, supported partly by a reduction in inventory days.
The company generated $25.9 million in operating cash flow and spent $26.6 million on capital expenditures, resulting in free cash flow usage of approximately $700,000.
Management said additional working-capital investments will be needed to support accelerating revenue growth. Plexus now expects to use free cash flow during fiscal 2026 before returning to meaningful free cash flow generation in early fiscal 2027.
Inventory increased to approximately $1.49 billion from $1.23 billion at the end of fiscal 2025. Accounts receivable rose to $795.2 million from $656.6 million as the company supported higher sales and new-program ramps.
Despite the additional working capital, return on invested capital reached 14.9%, increasing 110 basis points sequentially and reaching its highest level in nearly five years. The result exceeded Plexus’ estimated cost of capital by 590 basis points.
The company repurchased $20.6 million of its shares during the quarter at an average price of $258.75 per share. Approximately $21.4 million remained available under its existing $100 million authorization.
For the fiscal fourth quarter, Plexus expects revenue of between $1.33 billion and $1.38 billion. The midpoint represents projected growth of approximately 28% year-over-year and 4% sequentially.
The company expects a non-GAAP operating margin of between 6.1% and 6.5% and adjusted diluted earnings of between $2.47 and $2.63 per share.
Plexus now anticipates fiscal 2026 revenue growth of more than 20%, supported by market-share gains, stronger demand, and the launch of new programs. It also expects to generate a non-GAAP operating margin above 6%.
Management said fiscal 2027 revenue growth could exceed the company’s long-term objective of between 9% and 12%. The outlook is expected to be led by Aerospace and Defense and Industrial, including semiconductor capital equipment.
The strong Industrial performance and record opportunity funnel indicate that Plexus is benefiting from increasing demand for complex manufacturing across data centers, energy storage, defense, and semiconductor infrastructure.
However, the pace of expansion is also requiring substantial inventory and working-capital investment. The company’s ability to convert its $4.5 billion funnel and $255 million of quarterly wins into profitable revenue and renewed free cash flow will be an important measure of the growth cycle’s success.
KEY QUOTES:
“Our go-to-market team continued to drive strong performance with quarterly manufacturing wins of $255 million in annualized revenue. This result included significant wins for our Aerospace/Defense market sector as well as a new partnership in our Industrial market sector manufacturing a battery energy storage system for data centers.”
“Furthermore, we expanded our funnel of qualified manufacturing opportunities to $4.5 billion, a record level, supporting the potential to sustain robust long-term revenue growth.”
Todd Kelsey, President And Chief Executive Officer Of Plexus
“Driven by continued progress on our working capital initiatives, our cash cycle of 62 days exceeded expectations. This outstanding result is the best quarterly cash cycle performance in over five years.”
David Abuhl, Senior Vice President And Chief Financial Officer Of Plexus
