Sanmina Q4 Earnings Call Highlights

Key Points

• Sanmina forecast strong fiscal 2027 growth, with revenue of $17.5 billion to $19.5 billion and adjusted EPS of $15.50 to $17.50, driven by AI and cloud programs including AMD Helios shipments.
• Fiscal Q4 revenue climbed 84% year over year to $3.86 billion, while adjusted EPS rose 166% to $4.43. Results included a one-time $30 million tariff recovery that added about 75 basis points to adjusted operating margin.
• The company plans about $450 million in fiscal 2027 capital expenditures to expand AI-related capacity, while citing new-program complexity, supply shortages and execution as risks to its outlook.

Sanmina NASDAQ: SANM forecast fiscal 2027 revenue of $17.5 billion to $19.5 billion as it begins shipping AMD’s Helios accelerated-compute systems and prepares to ramp additional cloud and artificial intelligence programs.

The outlook followed a fiscal fourth quarter in which revenue rose 84% from a year earlier to $3.86 billion. The company’s results exceeded its guidance, although a $30 million tariff recovery provided a one-time boost to profitability.

For the fiscal year ended Oct. 3, revenue increased 79% to $14.53 billion, while adjusted diluted earnings per share rose 120% to $13.28. Adjusted operating margin expanded to 7.4% from 5.7% a year earlier.

AI Systems Ramp Drives Outlook

Sanmina expects fiscal 2027 adjusted earnings of $15.50 to $17.50 per diluted share and an adjusted operating margin of 7% to 7.5%. At the midpoint, the revenue forecast implies growth of 27.4% from fiscal 2026.

The company expects $7.5 billion to $9 billion in revenue from Cloud & AI Systems, a category that includes ZT Systems, additional platforms and related products and services. That business is a subset of the broader Cloud & AI Infrastructure end market.

Chief Financial Officer Jon Faust said revenue from the AI systems business is expected to be weighted toward the second half of the fiscal year. Much of the annual forecast relates to ZT Systems, graphics processing units and Helios, he said.

Sanmina has begun shipping Helios products in small quantities, Faust said, and has won business from hyperscale, frontier AI lab and original equipment manufacturer customers. The company also won programs on a second platform separate from AMD that are included in its forecast.

Discussions for a third platform are at an early stage and are not included in the guidance. Faust said the opportunity could provide upside later in the year if a deal is completed and the timing of revenue allows.

For the fiscal first quarter, Sanmina forecast revenue of $3.8 billion to $4.1 billion, including $1.3 billion to $1.5 billion from Cloud & AI Systems. It projected adjusted earnings of $3.50 to $3.85 per share.

Fourth-Quarter Results and Tariff Recovery

Fourth-quarter adjusted earnings were $4.43 per diluted share, up 166% from a year earlier. Adjusted operating margin was 9%, an improvement of 300 basis points.

Faust said approximately $30 million in tariff recoveries, primarily associated with legacy ZT Systems products, was not included in the company’s outlook. The recovery contributed about 75 basis points to adjusted operating margin and $0.42 to adjusted earnings per share. He described it as a one-time item.

Core Sanmina revenue rose 42% to $2.97 billion in the quarter, while ZT Systems contributed $884 million. Faust said the core business exceeded its outlook, with growth across all end markets, while ZT Systems revenue was in line with expectations.

Chairman and Chief Executive Officer Jure Sola said fourth-quarter Cloud & AI Infrastructure revenue rose 179% to $2.37 billion. Revenue from the combined industrial, energy, medical, defense, aerospace and automotive markets increased 19% to $1.49 billion.

Investment and Supply Chain Risks

Sanmina plans fiscal 2027 capital expenditures of approximately $450 million, up from $404 million in fiscal 2026. Investments have included AI rack fabrication, advanced circuit boards, transformer manufacturing, liquid cooling and testing capacity.

The company generated $944 million in operating cash flow and $541 million in free cash flow during fiscal 2026. It ended the fourth quarter with $1.68 billion in cash and cash equivalents and more than $3.83 billion in total available liquidity.

Faust said Sanmina expects working capital to increase as the business grows. He attributed the relatively wide full-year guidance range partly to the number and complexity of new programs. Sola added that supply shortages and uncertainty are also factors.

While management said it sees demand extending into fiscal 2028, it did not provide a formal forecast for that year. Faust said execution and supply chain coordination with partners and customers would be important to capturing that demand.

About Sanmina (NASDAQ:SANM)

Sanmina Corporation is a provider of integrated manufacturing solutions for companies that develop complex electronic, optical, and electromechanical products. Its services span product design and engineering, supply-chain management, manufacturing, and logistics, as well as repair and other aftermarket support.

The company serves customers in markets that include communications networks, cloud and data-center infrastructure, medical and life sciences, automotive, industrial equipment, and aerospace and defense.

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