Plexus raises annual revenue guidance on record quarterly sales
The company raised its full-year revenue growth forecast to in excess of 20% following a record quarterly revenue of $1.305 billion.
Plexus (PLXS) reported record quarterly revenue of $1.305 billion in its third fiscal quarter. The result represents a 12% increase from the $1.164 billion reported in the second quarter and a 28% increase compared to the $1.018 billion recorded in the same period last year.
The electronics manufacturing services provider is seeing an acceleration in its growth trajectory. The company raised its full-year revenue growth guidance to in excess of 20%. This follows a second-quarter projection of mid-teens or greater and a first-quarter forecast that the company expected to meet or exceed the high end of a 9% to 12% range.
Growth was driven largely by the industrial market sector, which generated $589 million in revenue. This segment now accounts for 45% of total revenue, up from 41% in both the prior quarter and the prior year. The company also reported a record funnel of qualified manufacturing opportunities totaling $4.5 billion.
Profitability metrics showed divergent trends. Non-GAAP operating margin expanded to 6.3%, up from 6.0% in the previous two comparable periods. However, GAAP operating margin compressed to 4.7%, down from 5.3% in the second quarter and the prior year. This gap was partly due to $12.9 million of accelerated stock-based compensation expense related to executive retirement agreements.
Efficiency and capital returns improved during the quarter. Return on invested capital rose to 14.9%, an increase of 110 basis points from 13.8% in the second quarter. The company also shortened its cash cycle to 62 days, down from 64 days in the prior quarter and 69 days a year ago.
Despite the revenue growth, the company lowered its fiscal 2026 free cash flow guidance to a usage of free cash flow. This is a decrease from the $50 million to $75 million projected in the second quarter and the approximately $100 million guided in the first quarter.
Customer concentration increased as the top 10 customers accounted for 55% of revenue. This is a 1 percentage point increase from the second quarter and a 7 percentage point increase from the third quarter of the previous year.