Plexus (PLXS) Q2 2025 earnings summary

Executive summary

• Fiscal Q2 2025 revenue reached $980 million, in line with guidance, with non-GAAP operating margin at 5.7% and non-GAAP EPS of $1.66, both at or above guidance.

• Achieved 42 manufacturing program wins worth $205 million in annualized revenue, including the largest ever sustaining services win in healthcare and best engineering solutions wins in over five years.

• Net income for Q2 2025 was $39.1 million, up 141% year-over-year, driven by higher operating income and lower other expenses.

• Strategic investments in talent, technology (including AI), and facilities, notably a new Malaysia site, continue to drive sector growth and operational efficiency.

• Free cash flow for the quarter was $16.5 million, exceeding expectations, and $12.2 million was used for share repurchases.

Financial highlights

• Q2 2025 revenue was $980 million, up from $976 million in Q1 and $967 million in Q2 2024; gross margin improved to 10.0% from 9.1% year-over-year.

• Non-GAAP operating margin was 5.7%, at the high end of guidance; GAAP operating margin was 5.0%.

• Free cash flow was $16.5 million for the quarter and $43.6 million year-to-date; cash balance at $310.5 million, total debt at $210 million.

• ROIC was 13.7%, 480 basis points above WACC.

• Cash cycle improved to 68 days, down from 91 days a year ago.

Outlook and guidance

• Fiscal Q3 2025 revenue guidance is $1.00–$1.04 billion; non-GAAP EPS guidance is $1.65–$1.80; GAAP EPS guidance is $1.40–$1.55.

• Fiscal 2025 free cash flow expected up to $100 million; capital spending guidance $110–$130 million, including $60 million for Penang, Malaysia expansion.

• Sequential revenue growth and meaningful EPS growth expected for the remainder of fiscal 2025.

• Cash cycle days guided to 66–70 for Q3.

• Management expects annual effective tax rate for FY2025 to be 13.0%–15.0%.