Plexus Corp. (PLXS) Q3 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended July 4, 2026, and the nine-month period ended on the same date. Plexus Corp. is a global contract manufacturer serving the Aerospace/Defense, Healthcare/Life Sciences, and Industrial sectors. The company operates 27 facilities with over 20,000 employees. As of August 4, 2026, there were 26,652,099 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q3 2026 (3 Months) | Q3 2025 (3 Months) | YTD 2026 (9 Months) | YTD 2025 (9 Months) |
|---|---|---|---|---|
| Net Sales | $1,304.8 million | $1,018.3 million | $3,538.4 million | $2,974.6 million |
| Gross Profit | $131.4 million | $103.3 million | $356.7 million | $301.7 million |
| Gross Margin | 10.1% | 10.1% | 10.1% | 10.1% |
| Operating Income | $61.3 million | $53.6 million | $177.6 million | $149.3 million |
| Operating Margin | 4.7% | 5.3% | 5.0% | 5.0% |
| Net Income | $43.0 million | $45.1 million | $134.0 million | $121.5 million |
| Diluted EPS | $1.58 | $1.64 | $4.90 | $4.39 |
| Cash from Operations (YTD) | $39.0 million | $117.2 million | $39.0 million | $117.2 million |
| Free Cash Flow (YTD) | $(35.3) million | $56.8 million | $(35.3) million | $56.8 million |
| Total Debt (Current + Long-term) | $275.5 million | $137.8 million (Sep 2025) | $275.5 million | $137.8 million (Sep 2025) |
| Cash & Equivalents | $314.1 million | $306.5 million (Sep 2025) | $314.1 million | $306.5 million (Sep 2025) |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 28.1% quarter-over-quarter and 19.0% year-to-date, driven by production ramps of new products and increased end-market demand, particularly in the APAC and AMER segments.
- Segment Performance:
- APAC: Sales up 30.4% (Q3) and 14.0% (YTD), driven by semiconductor capital equipment wins.
- AMER: Sales up 37.2% (Q3) and 32.8% (YTD), driven by new product ramps.
- EMEA: Sales down 6.6% (Q3) due to customer disengagements, though up 7.0% YTD.
- Profitability: While gross margin remained flat at 10.1%, operating margin decreased 60 basis points to 4.7% in Q3. This was primarily due to a $14.9 million increase in selling and administrative expenses, largely driven by $12.9 million in accelerated stock-based compensation related to executive retirement agreements.
- Cash Flow: Operating cash flow decreased significantly to $39.0 million YTD (from $117.2 million prior year) due to a $297.5 million increase in inventory to support ramping programs and a $102.9 million increase in accounts receivable. Free cash flow turned negative at $(35.3) million YTD.
- Debt: Total debt obligations increased to $275.5 million from $137.8 million at the end of fiscal 2025. The company refinanced its credit facility in June 2026, extending maturity to 2031 with a $500 million commitment.
Guidance, Outlook, and Risks
- Capital Expenditures: Management estimates fiscal 2026 capital expenditures will be between $100.0 million and $120.0 million to support new program ramps.
- Tax Rate: The annual effective tax rate for fiscal 2026 is expected to be approximately 16.0% to 18.0%, higher than the prior year due to the implementation of global minimum tax.
- Share Repurchases: Under the "2026 Program," the company has repurchased $63.6 million of stock YTD. Approximately $21.4 million of authorization remains.
- Risks: Key risks include supply chain constraints, component shortages, geopolitical tensions (specifically China/Taiwan and Middle East conflicts), and the impact of tariffs. The company notes that customer orders may not lead to long-term relationships and that new program wins may not result in expected profitability.
Investor Verification Checklist
- Inventory Build: Verify the sustainability of the $259.9 million increase in inventory (YTD) and its impact on future working capital requirements.
- Executive Compensation Impact: Confirm the one-time nature of the $12.9 million accelerated stock-based compensation expense and its effect on future operating margins.
- Debt Utilization: Monitor the utilization of the new $500 million credit facility, which saw average daily borrowings of $127.6 million YTD.
- Free Cash Flow: Assess the timeline for the return to positive free cash flow given the current negative YTD position of $(35.3) million.
- Segment Mix: Track the continued growth in the APAC semiconductor sector versus potential headwinds in the EMEA region.