What Plexus (PLXS) Said on Its Q4 Earnings Call

Key Points

• Record results and raised outlook: Plexus reported fourth-quarter revenue of $1.43 billion, up 35% year over year, with non-GAAP EPS of $2.84. Management expects fiscal 2027 revenue growth in the mid- to upper-teens range.
• Higher margin ambition: The company raised its long-term non-GAAP operating-margin target to 6.5%–7%, supported by revenue leverage, automation and efficiency improvements, while forecasting more than $100 million in fiscal 2027 free cash flow.
• Strong demand and pipeline: Plexus secured $290 million in quarterly manufacturing wins and expanded its qualified opportunity funnel to a record $4.9 billion. Aerospace and defense, industrial—including semiconductor equipment—and healthcare are expected to drive continued growth.

Plexus NASDAQ: PLXS reported record fourth-quarter revenue and raised its fiscal 2027 growth outlook, citing stronger end-market demand, program ramps and continued market-share gains across its aerospace and defense, healthcare and industrial businesses.

For the fiscal fourth quarter, revenue reached a record $1.43 billion, up 9% sequentially and 35% year over year. Fiscal 2026 revenue rose 23% to approximately $5 billion. President and CEO Todd Kelsey said the company now expects fiscal 2027 revenue growth in the mid- to upper-teens range.

Non-GAAP operating margin was 6.7% in the fourth quarter, improving 40 basis points sequentially and nearly 100 basis points from a year earlier. Non-GAAP diluted earnings per share totaled $2.84, exceeding the company’s guidance range. For the full fiscal year, non-GAAP operating margin increased 30 basis points to 6.2%.

New Margin Goal and Fiscal 2027 Outlook

Plexus introduced a new long-term non-GAAP operating-margin target of 6.5% to 7%, replacing its prior 6% goal after consistently exceeding that threshold. CFO David Abuhl said the new target reflects expected benefits from revenue leverage, operational efficiencies, automation initiatives and continuous-improvement efforts, balanced against ongoing investments in people, technology, capacity and capabilities.

For the fiscal first quarter, Plexus guided for revenue of $1.41 billion to $1.46 billion, representing 34% year-over-year growth at the midpoint. The company expects non-GAAP operating margin of 6% to 6.4% and non-GAAP EPS of $2.46 to $2.62.

Abuhl said first-quarter margin is expected to decline sequentially as Plexus increases investments to support its improved revenue outlook. Still, the company expects operating-margin expansion for fiscal 2027, with operating flow-through at the low end of its 8% to 12% target range.

The company forecast fiscal 2027 free cash flow of more than $100 million. Plexus ended fiscal 2026 with a 62-day cash cycle, its best performance on record and one day better than the prior year. Fourth-quarter return on invested capital was 15.8%, the company’s highest result in nearly a decade and above its 15% enduring goal.

Manufacturing Wins and Pipeline Reach Records

Plexus secured 36 new manufacturing wins in the fourth quarter, representing $290 million in annualized revenue once fully ramped. Fiscal 2026 wins totaled nearly $1.2 billion in annualized revenue.

Its funnel of qualified manufacturing opportunities grew by $1.2 billion, or 33% year over year, to a record $4.9 billion. Executive Vice President and COO Oliver Mihm said the increase was driven by record contributions from aerospace and defense and industrial opportunities.

• Aerospace and defense: Fourth-quarter wins totaled $90 million, bringing fiscal-year wins to $490 million. Revenue in the sector rose 23% for fiscal 2026, and Plexus expects more than 20% growth in fiscal 2027.
• Healthcare/Life Sciences: Revenue increased 19% during fiscal 2026, driven by therapeutics and imaging. Fourth-quarter wins were $74 million, including three new customers. The company now expects high-single-digit fiscal 2027 growth.
• Industrial: Revenue rose 27% for fiscal 2026, including a 50% increase in semiconductor-capital-equipment revenue. Fourth-quarter wins totaled $126 million, and Plexus expects fiscal 2027 sector growth to exceed 20%.

Within aerospace and defense, Mihm said growth was supported by defense, unmanned systems, commercial aerospace, security and space programs. He said the company sees a mix of increased defense spending and technology-driven opportunities, including engagement with “neo-primes.” Management also said potential demand benefits from Europe remain in the early stages.

In healthcare, Plexus cited growth in therapeutics and monitoring, along with opportunities in robotic surgery and pulsed-field ablation. Mihm added that engineering development activity in the Healthcare/Life Sciences business rose notably during the fourth quarter, which management views as a positive indicator for future demand.

Semi-Cap Strength and Efficiency Initiatives

The industrial sector’s fourth-quarter revenue rose 17% sequentially, exceeding the company’s expectations. Plexus attributed the upside to its ability to respond to stronger demand and market-share opportunities among semiconductor-capital-equipment, industrial equipment and communications customers.

Management said semi-cap growth reflects a combination of rising end-market demand, existing share gains from the prior downturn, additional share gains during the current upcycle and program activity. Kelsey said Plexus has reasonable visibility into customer pipelines for roughly the next year, while emphasizing that the market remains cyclical and that the company is taking a conservative approach to longer-term forecasting.

Plexus also highlighted operational efficiency initiatives. Mihm said equipment efficiency has improved by more than 10% over the past two years, while revenue per team member increased about 20% over the same period. In a later response, he said revenue per employee was up 25% comparing the fourth quarter of fiscal 2024 with the fourth quarter of fiscal 2026.

The company has also deployed an internal tool called Excellence Guide to help improve operator efficiency, agility and quality, with deployment increasing 110% year over year. Mihm said Plexus is using artificial intelligence to automate procurement of low-dollar purchase orders, with about 80% of relevant receipts now handled through the AI agent.

Plexus repurchased approximately $21 million of stock during the fourth quarter, completing its expanded fiscal 2026 repurchase program. Its board approved a new $100 million repurchase authorization in August for fiscal 2027, and repurchases have begun, Abuhl said.

About Plexus (NASDAQ:PLXS)

Plexus Corp. is an electronics manufacturing services company that helps customers design, develop, manufacture and service complex electronic products. The company provides an integrated product-realization process spanning engineering and design, supply-chain management, manufacturing, testing, logistics and aftermarket services.

Plexus supports original equipment manufacturers in industries including healthcare and life sciences, industrial and commercial, aerospace and defense, and communications.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.