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Yahoo
3 minutes ago
- Yahoo
Sanmina Corp (SANM) Q3 2025 Earnings Call Highlights: Strong Revenue Growth and Strategic ...
Revenue: $2.04 billion, up 10.9% year over year. Non-GAAP Gross Margin: 9.1%, a 60 basis point improvement year over year. Non-GAAP Operating Margin: 5.7%, a 40 basis point improvement year over year. Non-GAAP Diluted EPS: $1.53, a 22.8% increase year over year. IMS Revenue: $1.65 billion, up 11.6% year over year. CPS Revenue: $422 million, up 8.8% year over year. CPS Non-GAAP Gross Margin: 14.7%, a 320 basis point improvement year over year. Cash and Cash Equivalents: $798 million. Free Cash Flow: $168 million for the quarter. Inventory Turns: Improved to 6.3 times from 5.1 times year over year. Non-GAAP Pretax ROIC: 24.8%, up from 21.1% year over year. Share Repurchase: 0.2 million shares for $13 million during the quarter. Fourth Quarter Revenue Outlook: $2.0 billion to $2.1 billion. Fourth Quarter Non-GAAP EPS Outlook: $1.52 to $1.62. Warning! GuruFocus has detected 4 Warning Sign with RMBS. Release Date: July 28, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Sanmina Corp (NASDAQ:SANM) reported solid revenue of $2.04 billion for the third quarter, exceeding their outlook. Non-GAAP diluted earnings per share increased by 22.8% year over year, reaching $1.53. The company achieved a non-GAAP operating margin of 5.7%, at the high end of their outlook. Sanmina Corp (NASDAQ:SANM) generated strong cash flow from operations, totaling $201 million for the third quarter. The planned acquisition of ZT Systems is expected to add $5 billion to $6 billion of annual net revenue, potentially doubling Sanmina's revenue within three years. Negative Points Non-GAAP operating expenses were slightly above outlook, reflecting continued strategic investments. The automotive and transportation segment experienced some softness with slower demand. There are ongoing uncertainties related to tariffs and the geopolitical landscape, which could impact future performance. The acquisition of ZT Systems involves a significant investment in working capital, primarily inventory, which carries inherent risks. The company's guidance for the fourth quarter suggests a slowdown in year-over-year revenue growth compared to the third quarter. Q & A Highlights Q: Can you provide an update on the ZT Systems acquisition and its expected revenue impact? Is the business still experiencing declining revenues, and what are your plans to turn it around? A: Jure Sola, CEO: We remain excited about the ZT Systems acquisition, expecting it to add $5 billion to $6 billion in annual net revenue. The business is stable, and we see significant potential for growth. We are already engaging with critical customers and plan to enhance our sales force and technical support to capitalize on opportunities. The business is profitable, and we anticipate further growth post-acquisition. Q: Your Q3 showed strong growth, but Q4 guidance suggests a slowdown. Can you explain this and provide insights into fiscal 2026 expectations? A: Jure Sola, CEO: The business remains stable, and the Q4 guidance reflects a more predictable environment compared to last year's choppy conditions. We are optimistic about fiscal 2026, expecting to maintain or exceed the current growth rate, barring any unforeseen macroeconomic disruptions. Q: CPS margins improved significantly. Were there any one-time factors contributing to this? A: Jon Faust, CFO: The margin improvement was primarily due to business mix and ongoing investments. There were no one-time factors. We aim to maintain margins above 15% and continue to drive improvements across all divisions. Q: What are the risks associated with the inventory in the ZT Systems acquisition? A: Jon Faust, CFO: We have a $2 billion working capital target, primarily inventory, and have thoroughly evaluated it with AMD. While there are inherent risks, we are confident in the inventory's alignment with customer demand and forecasts. Q: With the expected revenue from the ZT acquisition, where do you see operating margins heading? A: Jure Sola, CEO: We anticipate operating margins to exceed 6%, with potential upside as we integrate ZT Systems and leverage our end-to-end solutions for data center and AI markets. We will provide more detailed guidance post-acquisition closure. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
3 minutes ago
- Yahoo
Rexel SA (RXEEY) H1 2025 Earnings Call Highlights: Navigating Growth and Challenges in a ...
H1 2025 Sales: EUR9.8 billion, up 1.6% on a same-day basis. Q2 2025 Sales: Almost EUR5 billion, up 0.6% on a reported basis. Free Cash Flow Before Interest and Tax: EUR251 million, 42% conversion rate. Adjusted EBITDA Margin H1 2025: 5.8%. Gross Margin: Maintained at 25%. North America Q2 2025 Sales Growth: 8.7% same-day sales growth. Europe Q2 2025 Sales: Down 3% same-day sales. Recurring Net Income H1 2025: EUR308 million. Net Debt: Close to EUR3.1 billion. Indebtedness Ratio: 2.4 times. Digital Sales Q2 2025: 34% of total sales, up nearly 200 basis points year-on-year. Non-Cable Selling Prices Q2 2025: Up 0.9%. Financial Expense H1 2025: EUR107 million. Tax Rate H1 2025: 34.5%. Warning! GuruFocus has detected 3 Warning Signs with GOVX. Release Date: July 28, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Rexel SA (RXEEY) reported strong sales growth in North America, driven by higher volumes in data centers and broadband infrastructure, contributing significantly to Q2 growth. Digital sales accounted for approximately 34% of total sales in Q2, up nearly 200 basis points year-on-year, supporting top-line growth and future productivity gains. The company achieved a free cash flow conversion rate of 42%, significantly above the five-year H1 average, providing flexibility for strategic investments. Rexel SA (RXEEY) maintained a resilient adjusted EBITDA margin of 5.8% in H1, despite a challenging macroeconomic environment, supported by cost initiatives and a reduction in FTEs. The company completed five acquisitions in 2025, strengthening its footprint in North America and expanding into higher-margin businesses in Canada and Italy. Negative Points The European market remained challenging, with sales declining due to softer demand, a difficult base effect, and lower solar market contributions. Currency effects negatively impacted sales by 2.3% in Q2, primarily due to US dollar depreciation, with an anticipated full-year impact of minus 2.1%. Adjusted EBITDA margin in Europe decreased by 55 basis points, mainly due to under-absorption of fixed costs and competitive pressures. The company faced a EUR124 million fine from the French Competition Authority, impacting free cash flow despite an appeal. Sales in the Asia-Pacific region, particularly in China and Australia, declined due to competitive market conditions and lower volumes in residential and non-residential segments. Q & A Highlights Q: Can you clarify the growth contribution from data centers and broadband in North America? It seems like it's growing at more than 40%. A: Guillaume Texier, CEO: There was a slight acceleration in Q2, but the growth is primarily due to the Talley acquisition, which is growing in strong double digits. Data centers now represent about 5% of our US business, with initiatives in place to increase market penetration, resulting in strong double-digit growth in this segment. Q: How did US tariffs impact pricing in Q2, and what are your expectations for Q3? A: Guillaume Texier, CEO: We saw price increases between 4% and 20% in some categories due to tariffs. However, steel piping experienced double-digit deflation, offsetting some gains. Overall, non-cable prices increased by 2.2% in North America. We expect continued progression in pricing, with potential additional increases depending on tariff developments. Q: Can you elaborate on the early signs of a rebound in Europe? A: Guillaume Texier, CEO: While figures remain negative, we see slight positive trends in residential markets in Switzerland and the UK. Indicators like residential transactions and loan activity are rebounding, suggesting potential market stabilization. However, our H2 assumptions do not anticipate a European rebound. Q: How does increased exposure to data centers and infrastructure in the US impact margins? A: Guillaume Texier, CEO: Margins on these projects are not significantly different from other businesses. Large projects typically have slightly lower gross margins but also lower costs to serve, resulting in equivalent EBITA margins. The volume increase aids fixed cost absorption, making it slightly beneficial overall. Q: Why is the backlog in North America stable despite strong growth in data centers and datacom? A: Guillaume Texier, CEO: The stable backlog is due to improved supply situations, allowing us to service existing orders while receiving new ones. The backlog represents about two to three months of sales, similar to last year, indicating a balanced supply and demand. Q: What actions are being taken to ensure productivity and efficiency in Europe amidst weaker sales? A: Laurent Delabarre, CFO: We are intensifying OpEx discipline and executing restructuring plans, particularly in the UK and Germany. These efforts, along with our Accelerate 2028 program, are expected to yield more savings in H2 compared to H1, with around 20 basis points of savings anticipated for the full year. Q: How do you view the potential for data center sales growth in North America? A: Guillaume Texier, CEO: Data centers currently account for 5% of our North American sales, with potential to grow further. While competitors may have higher exposure, we aim to increase our share through proven value and service delivery, although reaching double-digit percentages organically may be ambitious. Q: Can you provide more details on the current M&A pipeline? A: Guillaume Texier, CEO: The M&A landscape is not very active due to economic uncertainties. We completed five small to mid-sized acquisitions in H1 and continue to pursue opportunities, but 2025 may not be a record year for M&A activity. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 minutes ago
- Yahoo
BetMGM raises 2025 forecast on strong iGaming, sports betting growth
(Reuters) -U.S. sports-betting service BetMGM, a joint venture between Entain and MGM Resorts, has raised its full-year 2025 revenue and core earnings forecast after posting a 35% rise in first-half revenue, helped by strong demand in online sports betting and its iGaming division. Growth in player volumes and engagement helped lift iGaming revenue by 28% in the first half, Entain said. Founded in 2018, BetMGM has been expanding its digital footprint to tap into the fast-growing U.S. e-betting market amid stiff competition. BetMGM now expects revenue of at least $2.7 billion and core earnings of at least $150 million in fiscal year 2025, Entain said. It had earlier forecast revenue of at least $2.6 billion, and earnings before interest, taxes, depreciation, and amortization of at least $100 million. Sign in to access your portfolio
