Plexus Announces Fiscal Second Quarter Financial Results

NEENAH, WI, April 23, 2025 (GLOBE NEWSWIRE) -- Plexus Corp. (NASDAQ: PLXS) today announced financial results for our fiscal second quarter ended March 29, 2025, and guidance for our fiscal third quarter ending June 28, 2025.

• Reports fiscal second quarter 2025 revenue of $980 million, GAAP operating margin of 5.0% and GAAP diluted EPS of $1.41.
• Reports fiscal second quarter 2025 non-GAAP operating margin of 5.7% and non-GAAP diluted EPS of $1.66, excluding $0.25 of stock-based compensation expense.
• Initiates fiscal third quarter 2025 revenue guidance of $1.00 billion to $1.04 billion with GAAP diluted EPS of $1.40 to $1.55, including $0.25 of stock-based compensation expense. Fiscal third quarter non-GAAP EPS guidance of $1.65 to $1.80 excludes stock-based compensation expense.
  

Three Months Ended

Mar 29, 2025

Mar 29, 2025

Jun 28, 2025

Q2F25 Results

Q2F25 Guidance

Q3F25 Guidance

Summary GAAP Items

Revenue (in millions)

$

980

$960 to $1,000

$1,000 to $1,040

Operating margin

5.0

%

4.6% to 5.0%

5.0% to 5.4%

Diluted EPS

$

1.41

$1.22 to $1.37

$1.40 to $1.55

Summary Non-GAAP Items (1)

Adjusted operating margin (2)

5.7

%

5.3% to 5.7%

5.7% to 6.1%

Adjusted EPS (3)

$

1.66

$1.46 to $1.61

$1.65 to $1.80

Return on invested capital (ROIC)

13.7

%

Economic return

4.8

%

(1	)	Refer to Non-GAAP Supplemental Information tables for additional information regarding non-GAAP financial measures.
(2	)	Excludes stock-based compensation expense of approximately 70 bps for Q2F25 results,Q2F25 guidance and Q3F25 guidance.
(3	)	Excludes stock-based compensation expense, net of tax, of $0.25 for Q2F25 results,$0.24 for Q2F25 guidance and $0.25 for Q3F25 guidance.

Fiscal Second Quarter 2025 Information

• Won 42 manufacturing programs during the quarter representing $205 million in annualized revenue when fully ramped into production.
• Generated fiscal second quarter free cash flow of $16.5 million, contributing to fiscal year-to-date free cash flow of $43.6 million.
• Purchased $12.2 million of our shares at an average price of $141.18 per share under our 2025 Share Repurchase Program, leaving $25.0 million available under our existing $50.0 million authorization.
  

Todd Kelsey, President and Chief Executive Officer, commented, “Plexus generated strong fiscal second quarter financial performance, demonstrating the continued momentum of our operational and working capital efficiency initiatives. We achieved revenue of $980 million, in-line with guidance, with non-GAAP operating margin of 5.7% at the high-end of guidance and non-GAAP EPS of $1.66 exceeding guidance. In addition, free cash flow exceeded our expectations.”

Patrick Jermain, Executive Vice President and Chief Financial Officer, commented, "Fiscal second quarter cash cycle of 68 days was favorable to expectations and consistent with the fiscal first quarter. We continue to drive reductions in our gross inventory balance, with this quarter representing the fifth consecutive quarter of improvement. Our favorable cash cycle performance benefited our fiscal second quarter return on invested capital of 13.7%, which exceeded our weighted average cost of capital by 480 basis points. Finally, we delivered better than expected free cash flow of $16.5 million, which we utilized to repurchase $12.2 million of our shares during the fiscal second quarter in support of our commitment to return cash to shareholders."

Mr. Kelsey added, “We delivered 42 fiscal second quarter manufacturing wins, representing $205 million in annualized revenue. Notably, this result included our largest ever sustaining services win in support of creating success for an industry-leading healthcare customer. Additionally, our engineering solutions team delivered its best quarterly wins performance in more than 5 years, highlighting the breadth of our global capabilities and the effectiveness of our diversification efforts.”

Mr. Kelsey continued, “We are guiding fiscal third quarter revenue of $1.00 to $1.04 billion, non-GAAP operating margin of 5.7% to 6.1% and non-GAAP EPS of $1.65 to $1.80. Furthermore, while conservatively assessing the remainder of the fiscal year and acknowledging the uncertainty associated with tariffs, we continue to anticipate achieving meaningful EPS growth in fiscal 2025, capitalizing upon revenue growth in each of our market sectors, robust operating margin performance and ongoing free cash flow deployment.”

Mr. Kelsey concluded, “Plexus uniquely supports customer success, leveraging our comprehensive product lifecycle solutions and passion for operational excellence delivered through our globally united team. Our ongoing strategic investments in talent, technology, facilities and advanced capabilities position Plexus to proactively navigate evolving landscapes and dynamic environments to enable our customers’ success.”

Quarterly Comparison	Three Months Ended
(in thousands, except EPS)	Mar 29, 2025				Dec 28, 2024				Mar 30, 2024
Revenue	$	980,170			$	976,122			$	966,900
Gross profit		97,751				100,692				88,063
Operating income		48,791				46,860				29,470
Net income		39,073				37,267				16,239
Diluted EPS	$	1.41			$	1.34			$	0.58
Gross margin		10.0	%			10.3	%			9.1	%
Operating margin		5.0	%			4.8	%			3.0	%
ROIC (1)		13.7	%			13.8	%			9.9	%
Economic return (1)		4.8	%			4.9	%			1.7	%

(1	)	Refer to Non-GAAP Supplemental Information tables for non-GAAP financial measures discussed and/or disclosed in this release, such as adjusted operating margin, adjusted net income, adjusted diluted EPS, ROIC and economic return.

Business Segment and Market Sector Revenue

Plexus measures operational performance and allocates resources on a geographic segment basis. Plexus also reports revenue based on the market sector breakout set forth in the table below, which reflects Plexus’ market sector focused strategy. Top 10 customers comprised 51% of revenue during both the first and second quarter of fiscal 2025. This is up 3 percentage points from the second quarter of fiscal 2024.

Business Segments ($ in millions)		Three Months Ended
		Mar 29, 2025				Dec 28, 2024				Mar 30, 2024
Americas		$	295			$	274			$	296
Asia-Pacific			587				607				522
Europe, Middle East and Africa			103				101				152
Elimination of inter-segment sales			(5	)			(6	)			(3	)
Total Revenue		$	980			$	976			$	967

Market Sectors ($ in millions)	Three Months Ended
	Mar 29, 2025					Dec 28, 2024					Mar 30, 2024
Aerospace/Defense	$	172	18	%		$	160	16	%		$	170	18	%
Healthcare/Life Sciences		411	42	%			374	38	%			379	39	%
Industrial		397	40	%			442	46	%			418	43	%
Total Revenue	$	980				$	976				$	967

Non-GAAP Supplemental Information

Plexus provides non-GAAP supplemental information, such as ROIC, economic return and free cash flow, because such measures are used for internal management goals and decision-making, and because they provide management and investors with additional insight into financial performance. In addition, management uses these and other non-GAAP measures, such as adjusted operating income, adjusted operating margin, adjusted net income and adjusted diluted EPS, to provide a better understanding of core performance for purposes of period-to-period comparisons. Plexus believes that these measures are also useful to investors because they provide further insight by eliminating the effect of non-recurring items that are not reflective of continuing operations. For additional information on non-GAAP measures, please refer to the attached Non-GAAP Supplemental Information tables.

ROIC and Economic Return

ROIC for the second quarter of fiscal 2025 was 13.7%. Plexus defines ROIC as tax-effected annualized adjusted operating income divided by average invested capital over a three-quarter period for the second fiscal quarter. Invested capital is defined as equity plus debt and operating lease obligations, less cash and cash equivalents. Plexus' weighted average cost of capital for fiscal 2025 is 8.9%. ROIC for the second quarter of fiscal 2025 less Plexus’ weighted average cost of capital resulted in an economic return of 4.8%.

Free Cash Flow

Plexus defines free cash flow as cash flows provided by operations less capital expenditures. For the three months ended March 29, 2025, cash flows provided by operations was $36.7 million, less capital expenditures of $20.2 million, resulting in free cash flow of $16.5 million.

Cash Cycle Days			Three Months Ended
			Mar 29, 2025				Dec 28, 2024				Mar 30, 2024
Days in Accounts Receivable				57				56				61
Days in Contract Assets				12				12				12
Days in Inventory				132				134				158
Days in Accounts Payable				(70)				(69)				(65)
Days in Advanced Payments				(63)				(65)				(75)
Annualized Cash Cycle (1)				68				68				91

(1	)	Plexus calculates cash cycle as the sum of days in accounts receivable, days in contract assets and days in inventory, less days in accounts payable and days in advanced payments.

Conference Call and Webcast Information

What:	Plexus Fiscal 2025 Q2 Earnings Conference Call and Webcast
When:	Thursday, April 24, 2025 at 8:30 a.m. Eastern Time
Where:	Participants are encouraged to join the live webcast at the investor relations section of the Plexus website, plexus.com. Participants can also join utilizing the links below: Webcast link: https://events.q4inc.com/attendee/242810884
Replay:	The webcast will be archived on the Plexus website and will be available as on-demand for 12 months

Investor and Media Contact
Shawn Harrison
+1.920.969.6325
shawn.harrison@plexus.com

About Plexus
Since 1979, Plexus has helped create the products that build a better world. Driven by a passion for excellence, we partner with our customers to design, manufacture and service highly complex products in demanding regulatory environments. From life-saving medical devices and mission-critical aerospace and defense products to industrial automation systems and semiconductor capital equipment, our innovative solutions across the lifecycle of a product converge where advanced technology and human impact intersect. We provide these solutions to market-leading as well as disruptive global companies in the Aerospace/Defense, Healthcare/Life Sciences, and Industrial sectors, supported by a global team of over 20,000 members across our 26 facilities in the Americas ("AMER"), Asia-Pacific ("APAC") and Europe, Middle East and Africa ("EMEA") regions. For more information about Plexus, visit our website at www.plexus.com.

Safe Harbor and Fair Disclosure Statement
The statements contained in this press release that are guidance or which are not historical facts (such as statements in the future tense and statements including believe, expect, intend, plan, anticipate, goal, target and similar terms and concepts), including all discussions of periods which are not yet completed, are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include the effects of tariffs, trade disputes, trade agreements and other trade protection measures; the effect of inflationary pressures on our costs of production, profitability, and on the economic outlook of our markets; the effects of shortages and delays in obtaining components as a result of economic cycles, natural disasters or otherwise; the risk of customer delays, changes, cancellations or forecast inaccuracies in both ongoing and new programs; the ability to realize anticipated savings from restructuring or similar actions, as well as the adequacy of related charges as compared to actual expenses; the lack of visibility of future orders, particularly in view of changing economic conditions; the economic performance of the industries, sectors and customers we serve; the outcome of litigation and regulatory investigations and proceedings, including the results of any challenges with regard to such outcomes; the effects of the volume of revenue from certain sectors or programs on our margins in particular periods; our ability to secure new customers, maintain our current customer base and deliver product on a timely basis; the risks of concentration of work for certain customers; the particular risks relative to new or recent customers, programs or services, which risks include customer and other delays, start-up costs, potential inability to execute, the establishment of appropriate terms of agreements, and the lack of a track record of order volume and timing; the effects of start-up costs of new programs and facilities or the costs associated with the closure or consolidation of facilities; possible unexpected costs and operating disruption in transitioning programs, including transitions between Company facilities; the risk that new program wins and/or customer demand may not result in the expected revenue or profitability; the fact that customer orders may not lead to long-term relationships; our ability to manage successfully and execute a complex business model characterized by high product mix and demanding quality, regulatory, and other requirements; the risks associated with excess and obsolete inventory, including the risk that inventory purchased on behalf of our customers may not be consumed or otherwise paid for by the customer, resulting in an inventory write-off; risks related to information technology systems and data security; increasing regulatory and compliance requirements; any tax law changes and related foreign jurisdiction tax developments; current or potential future barriers to the repatriation of funds that are currently held outside of the United States as a result of actions taken by other countries or otherwise; the potential effects of jurisdictional results on our taxes, tax rates, and our ability to use deferred tax assets and net operating losses; the weakness of areas of the global economy; the effect of changes in the pricing and margins of products; raw materials and component cost fluctuations; the potential effect of fluctuations in the value of the currencies in which we transact business; the effects of changes in economic conditions, political conditions and regulatory matters in the United States and in the other countries in which we do business; the potential effect of other world or local events or other events outside our control (such as the conflict between Russia and Ukraine, conflict in the Middle East, escalating tensions between China and Taiwan or China and the United States, changes in energy prices, terrorism, global health epidemics and weather events); the impact of increased competition; an inability to successfully manage human capital; changes in financial accounting standards; and other risks detailed herein and in our other Securities and Exchange Commission filings, particularly in Risk Factors contained in our fiscal 2024 Form 10-K.

PLEXUS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
	Three Months Ended								Six Months Ended
	Mar 29,				Mar 30,				Mar 29,				Mar 30,
		2025				2024				2025				2024
Net sales	$	980,170			$	966,900			$	1,956,292			$	1,949,507
Cost of sales		882,419				878,837				1,757,849				1,773,304
Gross profit		97,751				88,063				198,443				176,203
Operating expenses:
Selling and administrative expenses		48,960				47,555				98,109				90,537
Restructuring and other charges, net		—				11,038				4,683				11,038
Operating income		48,791				29,470				95,651				74,628
Other income (expense):
Interest expense		(3,137	)			(8,293	)			(6,691	)			(15,910	)
Interest income		871				817				2,105				1,625
Miscellaneous, net		(1,502	)			(3,027	)			(2,548	)			(6,529	)
Income before income taxes		45,023				18,967				88,517				53,814
Income tax expense		5,950				2,728				12,177				8,360
Net income	$	39,073			$	16,239			$	76,340			$	45,454
Earnings per share:
Basic	$	1.44			$	0.59			$	2.82			$	1.65
Diluted	$	1.41			$	0.58			$	2.75			$	1.62
Weighted average shares outstanding:
Basic		27,109				27,542				27,098				27,513
Diluted		27,662				27,929				27,726				27,982

PLEXUS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
	Mar 29,				Sep 28,
		2025				2024
ASSETS
Current assets:
Cash and cash equivalents	$	310,531			$	345,109
Restricted cash		31				2,353
Accounts receivable		609,493				622,366
Contract assets		136,131				120,560
Inventories		1,280,385				1,311,434
Prepaid expenses and other		59,740				75,328
Total current assets		2,396,311				2,477,150
Property, plant and equipment, net		511,865				501,112
Operating lease right-of-use assets		76,217				74,360
Deferred income taxes		73,841				73,919
Other assets		27,506				27,280
Total non-current assets		689,429				676,671
Total assets	$	3,085,740			$	3,153,821
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and finance lease obligations	$	121,014			$	157,325
Accounts payable		680,078				606,378
Advanced payments from customers		611,590				709,152
Accrued salaries and wages		83,650				94,448
Other accrued liabilities		69,499				75,991
Total current liabilities		1,565,831				1,643,294
Long-term debt and finance lease obligations, net of current portion		88,761				89,993
Accrued income taxes payable		—				17,198
Long-term operating lease liabilities		32,720				32,275
Deferred income taxes		7,224				8,234
Other liabilities		39,529				38,002
Total non-current liabilities		168,234				185,702
Total liabilities		1,734,065				1,828,996
Shareholders’ equity:
Common stock		547				545
Additional paid-in-capital		680,880				680,638
Common stock held in treasury		(1,215,481	)			(1,190,115	)
Retained earnings		1,899,483				1,823,143
Accumulated other comprehensive (loss) income		(13,754	)			10,614
Total shareholders’ equity		1,351,675				1,324,825
Total liabilities and shareholders’ equity	$	3,085,740			$	3,153,821

PLEXUS CORP. AND SUBSIDIARIES
NON-GAAP SUPPLEMENTAL INFORMATION Table 1
(in thousands, except per share data)
(unaudited)
		Three Months Ended												Six Months Ended
		Mar 29,				Dec 28,				Mar 30,				Mar 29,				Mar 30,
			2025				2024				2024				2025				2024
Operating income, as reported		$	48,791			$	46,860			$	29,470			$	95,651			$	74,628
Operating margin, as reported			5.0	%			4.8	%			3.0	%			4.9	%			3.8	%
Non-GAAP adjustments:
Restructuring costs (1)			—				4,683				13,288				4,683				13,288
Other non-recurring income (2)			—				—				(2,250	)			—				(2,250	)
Stock-based compensation			7,132				6,990				7,096				14,122				12,431
Non-GAAP operating income		$	55,923			$	58,533			$	47,604			$	114,456			$	98,097
Non-GAAP operating margin			5.7	%			6.0	%			4.9	%			5.9	%			5.0	%
Net income, as reported		$	39,073			$	37,267			$	16,239			$	76,340			$	45,454
Non-GAAP adjustments:
Restructuring costs, net of tax (1)			—				4,191				11,893				4,191				11,893
Other non-recurring income, net of tax (2)			—				—				(2,014	)			—				(2,014	)
Stock-based compensation, net of tax			6,775				6,640				7,096				13,415				12,431
Adjusted net income		$	45,848			$	48,098			$	33,214			$	93,946			$	67,764
Diluted earnings per share, as reported		$	1.41			$	1.34			$	0.58			$	2.75			$	1.62
Non-GAAP per share adjustments:
Restructuring costs, net of tax (1)			—				0.15				0.43				0.15				0.43
Other non-recurring income, net of tax (2)			—				—				(0.07	)			—				(0.07	)
Stock-based compensation, net of tax			0.25				0.24				0.25				0.49				0.44
Adjusted diluted earnings per share		$	1.66			$	1.73			$	1.19			$	3.39			$	2.42

(1	)	During the three months ended December 28, 2024, restructuring costs of $4.7 million, or $4.2 million net of taxes, were incurred primarily for employee severance costs associated with a reduction in the Company's workforce in the EMEA and AMER regions.
		During the three and six months ended March 30, 2024, restructuring and impairment charges of $13.3 million, or $11.9 million net of taxes, were incurred for employee severance costs associated with a reduction in the Company's workforce as well as closure costs associated with a site in the Company's EMEA region.
(2	)	During the three and six months ended March 30, 2024, insurance proceeds of $2.3 million, or $2.0 million net of taxes, were received related to an arbitration decision associated with a contractual matter that occurred in the Company's EMEA region in fiscal 2023.

PLEXUS CORP. AND SUBSIDIARIES
NON-GAAP SUPPLEMENTAL INFORMATION Table 2
(in thousands)
(unaudited)
ROIC and Economic Return Calculations	Six Months Ended				Three Months Ended					Six Months Ended
	Mar 29,				Dec 28,					Mar 30,
	2025				2024					2024
Operating income, as reported	$	95,651				$	46,860				$	74,628
Restructuring and other charges, net		4,683			+		4,683			+		11,038
Adjusted operating income	$	100,334				$	51,543				$	85,666
		2			x		4			x		2
Adjusted annualized operating income	$	200,668				$	206,172				$	171,332
Adjusted effective tax rate		13	%		x		15	%		x		15	%
Tax impact		26,087					30,926					25,700
Adjusted operating income (tax-effected)	$	174,581				$	175,246				$	145,632
Average invested capital	$	1,276,742			÷	$	1,268,309			÷	$	1,478,062
ROIC		13.7	%				13.8	%				9.9	%
Weighted average cost of capital		8.9	%		-		8.9	%		-		8.2	%
Economic return		4.8	%				4.9	%				1.7	%

Average Invested Capital Calculations	Mar 29,				Dec 28,				Sep 28,				Jun 29,				Mar 30,				Dec 30,				Sep 30,
		2025				2024				2024				2024				2024				2023				2023
Equity	$	1,351,675			$	1,319,069			$	1,324,825			$	1,266,360			$	1,259,762			$	1,266,755			$	1,214,382
Plus:
Debt and finance lease obligations - current		121,014				121,977				157,325				258,175				245,964				251,119				240,205
Operating lease obligations - current (1)		9,968				14,875				14,697				7,990				8,281				9,172				8,363
Debt and finance lease obligations - long-term		88,761				88,728				89,993				90,715				192,025				192,118				190,853
Operating lease obligations - long-term		32,720				35,124				32,275				31,923				33,915				35,989				38,552
Less:
Cash and cash equivalents		(310,531	)			(317,161	)			(345,109	)			(269,868	)			(265,053	)			(231,982	)			(256,233	)
	$	1,293,607			$	1,262,612			$	1,274,006			$	1,385,295			$	1,474,894			$	1,523,171			$	1,436,122

(1

)

Included in other accrued liabilities on the Condensed Consolidated Balance Sheets.