Latest news with #RevathiAdvaithi
Yahoo
29-07-2025
- Business
- Yahoo
Flex's CEO took the job without industry experience. One battle-tested playbook guided every move
In 2019, when Revathi Advaithi took the CEO role at Singapore-based Flex (No. 10 on the Fortune Southeast Asia 500), the company's stock was trading at just under $7, its longtime CEO had recently been ousted, and the broader contract manufacturing industry lacked financial discipline. Advaithi, who had only interacted with Flex as a supplier, wasn't stepping into familiar terrain, but she didn't overthink it. 'It was a quant problem,' she says. 'I thought I could double the stock. And if it doesn't work in two years, I'll go do something else.' That kind of grounded pragmatism has defined her leadership philosophy for decades. No matter the role, she starts with a deceptively simple framework: Define the portfolio, clarify the value to customers, and understand why they're willing to pay for it. 'Strategy doesn't need to be flashy,' she says. 'Every job I've had, I've just focused on those two things.' Her first year at Flex was spent putting that into practice. She told the board not to expect decisions until she had completed a full strategic review. Upon completion, the diagnosis was clear: The company needed to exit hyper-commoditized segments, such as smartphones and laptops, where pricing power was weak and volatility was high. Flex would instead double down on complex manufacturing for sectors like health care, industrials, and automotive—areas where execution mattered and margins could follow. But even a disciplined plan was quickly stress-tested. Two months into Advaithi's tenure, the U.S. government placed Huawei—then one of Flex's largest customers—on the Entity List, forcing a rapid response across supply chains and customer relationships. Then came the pandemic and a global logistics crunch. Through it all, Advaithi says the basic playbook didn't change. 'Get your portfolio right. Make sure you can win for customers. Execute.' That consistency extended to how Flex presented itself to investors. The company made a conscious shift away from chasing growth for its own sake and began emphasizing capital discipline, margins, and long-term resilience. Advaithi's path to Flex came after a moment of career inflection. While running North America for Eaton in 2015, she was asked to take over its global electrical business following leadership turnover. She accepted, but was open with the incoming CEO that he should feel free to choose his own team. 'If a great CEO role comes your way,' he told her, 'I won't stop you.' She turned down another offer in the industrial sector before accepting Flex—a less regulated, more fragmented industry where she saw room to impose operational order. One of her more prescient bets was the early decision to invest in the intersection of compute and power, well before the current AI boom. 'Long before Nvidia and GPUs took off, I figured compute was going to become power-hungry,' she says. Flex began acquiring capabilities in power infrastructure for data centers. Today, roughly a quarter of its business supports AI infrastructure, putting it in a differentiated position among contract manufacturers. Ruth This story was originally featured on 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
24-07-2025
- Business
- Yahoo
Flex (NASDAQ:FLEX) Beats Expectations in Strong Q2, Full-Year Outlook Slightly Exceeds Expectations
Global manufacturing solutions provider Flex (NASDAQ:FLEX) reported Q2 CY2025 results topping the market's revenue expectations , with sales up 4.1% year on year to $6.58 billion. Guidance for next quarter's revenue was better than expected at $6.65 billion at the midpoint, 1.8% above analysts' estimates. Its non-GAAP profit of $0.72 per share was 12.3% above analysts' consensus estimates. Is now the time to buy Flex? Find out in our full research report. Flex (FLEX) Q2 CY2025 Highlights: Revenue: $6.58 billion vs analyst estimates of $6.27 billion (4.1% year-on-year growth, 4.9% beat) Adjusted EPS: $0.72 vs analyst estimates of $0.64 (12.3% beat) Adjusted EBITDA: $487 million vs analyst estimates of $491.7 million (7.4% margin, 1% miss) The company lifted its revenue guidance for the full year to $26.5 billion at the midpoint from $25.9 billion, a 2.3% increase Management raised its full-year Adjusted EPS guidance to $2.96 at the midpoint, a 1.7% increase Operating Margin: 4.7%, up from 3.7% in the same quarter last year Free Cash Flow Margin: 4%, similar to the same quarter last year Market Capitalization: $20.11 billion "Our first quarter results are a great start to FY26 and a testament to the strength of our strategic focus on high-growth end-markets like data center and power," said Revathi Advaithi, CEO of Flex. Company Overview Originally known as Flextronics until its 2016 rebranding, Flex (NASDAQ:FLEX) is a global manufacturing partner that designs, engineers, and builds products for companies across industries from medical devices to solar trackers. Revenue Growth Reviewing a company's long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. With $26.07 billion in revenue over the past 12 months, Flex is a behemoth in the business services sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because finding new avenues for growth becomes difficult when you already have a substantial market presence. To accelerate sales, Flex likely needs to optimize its pricing or lean into new offerings and international expansion. As you can see below, Flex's 2.4% annualized revenue growth over the last five years was sluggish. This shows it failed to generate demand in any major way and is a rough starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Flex's performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 4.2% annually. This quarter, Flex reported modest year-on-year revenue growth of 4.1% but beat Wall Street's estimates by 4.9%. Company management is currently guiding for a 1.6% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 1.4% over the next 12 months. Although this projection implies its newer products and services will catalyze better top-line performance, it is still below average for the sector. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Operating Margin Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. Flex was profitable over the last five years but held back by its large cost base. Its average operating margin of 3.8% was weak for a business services business. On the plus side, Flex's operating margin rose by 1 percentage points over the last five years, as its sales growth gave it operating leverage. This quarter, Flex generated an operating margin profit margin of 4.7%, up 1 percentage points year on year. This increase was a welcome development and shows it was more efficient. Earnings Per Share Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Flex's EPS grew at an astounding 19% compounded annual growth rate over the last five years, higher than its 2.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded. We can take a deeper look into Flex's earnings quality to better understand the drivers of its performance. As we mentioned earlier, Flex's operating margin expanded by 1 percentage points over the last five years. On top of that, its share count shrank by 24.1%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For Flex, its two-year annual EPS growth of 9.4% was lower than its five-year trend. We hope its growth can accelerate in the future. In Q2, Flex reported EPS at $0.72, up from $0.51 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. We also like to analyze expected EPS growth based on Wall Street analysts' consensus projections, but there is insufficient data. Key Takeaways from Flex's Q2 Results We enjoyed seeing Flex beat analysts' revenue and EPS expectations this quarter. We were also glad it raised its full-year revenue and EPS guidance. Zooming out, we think this was a good print with some key areas of upside. Investors were likely hoping for more, and shares traded down 4.7% to $51.29 immediately following the results. Big picture, is Flex a buy here and now? If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free.
Yahoo
11-07-2025
- Business
- Yahoo
Flex's Q1 Earnings Call: Our Top 5 Analyst Questions
Flex's first quarter results were met with a positive market response, driven by strong execution in its data center and cloud businesses and a sustained focus on operational efficiency. CEO Revathi Advaithi credited the nearly 4% year-over-year revenue growth to 'multiple program ramps' and the company's ability to shift its portfolio toward higher-value, margin-accretive segments. Management highlighted the success of its Flex Forward strategy in building a more resilient business, with adjusted operating margin reaching a record level, supported by disciplined cost control and a diversified end-market approach. Is now the time to buy FLEX? Find out in our full research report (it's free). Revenue: $6.40 billion vs analyst estimates of $6.23 billion (3.7% year-on-year growth, 2.6% beat) Adjusted EPS: $0.73 vs analyst estimates of $0.69 (5.2% beat) Adjusted EBITDA: $534 million vs analyst estimates of $514.1 million (8.3% margin, 3.9% beat) Revenue Guidance for Q2 CY2025 is $6.25 billion at the midpoint, below analyst estimates of $6.36 billion Adjusted EPS guidance for the upcoming financial year 2026 is $2.91 at the midpoint, beating analyst estimates by 1.8% Operating Margin: 4.8%, up from 2.6% in the same quarter last year Market Capitalization: $19.41 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Samik Chatterjee (JP Morgan) asked about the drivers behind strong margin guidance, to which CFO Kevin Krumm pointed to ongoing mix improvement from cloud and power, as well as growth in services and operational efficiency. Steven Fox (Fox Advisors) questioned Flex's scale advantages in data centers and inventory trends; CEO Revathi Advaithi detailed Flex's vertically integrated IT integration and engineering capabilities as unique differentiators, while Krumm discussed inventory normalization and targeted free cash flow conversion. Ruplu Bhattacharya (Bank of America) sought clarity on the sustainability of 30% data center growth and customer diversification, with Advaithi highlighting a broad hyperscaler and enterprise mix, and Krumm explaining margin benefits from customer-sourced inventory models. George Wang (Barclays) inquired about sequential margin step-down and networking share gains. Krumm attributed lower Q2 margins to seasonality and auto market softness, while Advaithi described networking growth as broad-based across geographies and customers. Mark Delaney (Goldman Sachs) pressed on the potential impact of tariffs on margins and demand, receiving confirmation from management that tariffs are expected to be pass-through with limited impact on operating profit, though some margin drag is possible if tariff levels persist. The StockStory team will be monitoring (1) Flex's ability to sustain rapid data center and power segment growth despite broader market volatility, (2) the company's execution on North American and European capacity expansions in response to regionalization trends, and (3) the impact of evolving trade and tariff policies on both customer demand and cost structure. Progress in value-added services and successful integration of recent acquisitions will also be key signposts. Flex currently trades at $52.38, up from $36.74 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
Bloomberg
16-06-2025
- Business
- Bloomberg
Manufacturing CEO Sees a Factory Resurgence
Flex is an advanced manufacturing company that builds products for industries including cloud computing, data centers, aerospace and defense. Flex CEO Revathi Advaithi joined Bloomberg Open Interest to talk about the trends she's seeing in US manufacturing as President Trump's tariffs reshape global trade. (Source: Bloomberg)
Yahoo
11-06-2025
- Business
- Yahoo
FLEX Q1 Earnings Call: Data Center Momentum and Tariff Uncertainty Shape Outlook
Global manufacturing solutions provider Flex (NASDAQ:FLEX) reported Q1 CY2025 results beating Wall Street's revenue expectations , with sales up 3.7% year on year to $6.4 billion. On the other hand, next quarter's revenue guidance of $6.25 billion was less impressive, coming in 1.7% below analysts' estimates. Its non-GAAP profit of $0.73 per share was 5.2% above analysts' consensus estimates. Is now the time to buy FLEX? Find out in our full research report (it's free). Revenue: $6.4 billion vs analyst estimates of $6.23 billion (3.7% year-on-year growth, 2.6% beat) Adjusted EPS: $0.73 vs analyst estimates of $0.69 (5.2% beat) Adjusted EBITDA: $534 million vs analyst estimates of $514.1 million (8.3% margin, 3.9% beat) Revenue Guidance for Q2 CY2025 is $6.25 billion at the midpoint, below analyst estimates of $6.36 billion Adjusted EPS guidance for the upcoming financial year 2026 is $2.91 at the midpoint, beating analyst estimates by 1.8% Operating Margin: 4.8%, up from 2.6% in the same quarter last year Market Capitalization: $16.37 billion Flex's first quarter results were driven by continued expansion in its data center and power businesses, as well as ongoing improvements in operational efficiency. CEO Revathi Advaithi highlighted that Flex's strategy to shift toward higher-value segments and expand its North American and European manufacturing footprint helped offset headwinds in traditional industrial and renewables segments. Advaithi also pointed to the company's ability to win new, more profitable business—particularly through vertical integration in the data center market—as a major contributor to margin expansion. CFO Kevin Krumm added that disciplined inventory management and capital expenditures further supported strong free cash flow performance. Management acknowledged challenging macroeconomic conditions but credited portfolio diversification and margin-focused execution as key reasons Flex delivered improved operating margins and profitability. Looking ahead, management cited ongoing demand for cloud and power solutions, as well as the company's expanding presence in North America, as central to its forward guidance. Advaithi noted that Flex's 'EMS + Products + Services' strategy is expected to drive additional value through proprietary product offerings and increased vertical integration. However, she cautioned that trade tariffs and potential disruptions in the automotive sector could temper growth, especially in the near term. Krumm stated that while tariffs are expected to be passed through to customers, they could impact reported margins, and that operating profit growth remains a focus. Management also indicated that a shift to customer-sourced inventory models, especially in the cloud segment, will affect reported revenue growth but should not hinder underlying profit expansion. In summary, Flex's outlook reflects both confidence in its core growth engines and recognition of industry-wide uncertainties. Management attributed first quarter growth primarily to rapid expansion of the data center segment, increased contribution from value-added services, and operational improvements across manufacturing sites. Data center acceleration: Flex's data center segment, encompassing both cloud and power solutions, grew approximately 50% year-over-year. Management credited this to successful execution on multiple customer ramps and proprietary product development, such as direct-to-chip liquid cooling technologies. These solutions address the growing needs of hyperscale customers and position Flex as a key supplier in the evolving AI-driven data center ecosystem. Margin expansion from mix shift: Operating margin improvement was largely driven by a continued portfolio shift toward higher-margin businesses, including advanced power products and value-added services. These areas benefit from greater vertical integration and customization, supporting sustained profitability even amid softness in legacy industrial and renewables markets. Operational efficiency gains: CFO Kevin Krumm highlighted disciplined inventory management, with net inventory days reduced by 14 days year-over-year. This working capital discipline, combined with below-average capital expenditure, contributed to record free cash flow generation and supported ongoing share repurchases. Regionalization and supply chain readiness: Flex's early investments in North American and European manufacturing capacity enabled the company to respond quickly to customer needs arising from tariffs and shifting trade policies. Management emphasized that over 90% of Mexican production is compliant with USMCA (United States-Mexico-Canada Agreement) rules, minimizing direct exposure to China tariffs. Tariff mitigation and customer partnerships: While tariffs on some raw materials remain a risk, management stated these are typically passed through to customers. Flex's proprietary supply chain simulation tools and experience with 'Tariff 1.0' have made it a go-to partner for clients seeking to regionalize and de-risk their supply chains, resulting in increased end-to-end outsourcing conversations and new program wins. Management expects ongoing data center demand, regionalization trends, and tariff-related uncertainties to shape revenue and margins in the coming quarters. Sustained data center and cloud growth: Flex anticipates mid-30% growth in data center revenue, with power products potentially outpacing this due to expanded domestic capacity. The diversification of customers across hyperscalers and regional cloud providers is seen as critical for maintaining momentum, though management cautioned that year-over-year comparisons may be challenging as the business scales. Tariff and trade dynamics: Management views tariffs as a pass-through cost, but acknowledged potential impacts on cash flow timing and reported operating margins. The company's footprint in North America and Europe, along with advanced supply chain tools, is expected to help mitigate longer-term risks. However, tariff-driven disruptions—especially in automotive—could cause short-term volatility in some segments. Shift to customer-sourced inventory models: An increasing number of cloud customers are adopting customer-sourced inventory arrangements, which result in lower reported revenue but higher margins for Flex. This shift is expected to continue, improving profit growth even if headline revenue growth appears muted. Management believes this contracting model supports operating profit and EPS expansion, but will require ongoing communication to ensure investors understand the underlying business health. Over the next few quarters, the StockStory team will track (1) sustained growth and profitability in the data center and power businesses, (2) the impact of tariff changes and related shifts in customer manufacturing footprints, and (3) the ongoing adoption of customer-sourced inventory models and their effect on reported revenue and margins. Execution on capacity expansions and the pace of regionalization efforts will also be key indicators to watch. Flex currently trades at a forward P/E ratio of 15.5×. Should you double down or take your chips? The answer lies in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. 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
