Plexus delivered first quarter results that met Wall Street’s revenue expectations but received a negative market reaction, as investors weighed the company’s cautious sector outlooks despite operational progress. Management attributed the quarter’s solid performance to robust new program wins—particularly in engineering solutions and sustaining services—and ongoing operational efficiency initiatives. CEO Todd Kelsey noted, “Our commitment to our customer’s success during dynamic market environments is enabling a growing breadth of new program wins across Plexus’s solutions.” The team highlighted that engineering wins were the strongest in more than five years, while the largest-ever sustaining services contract was signed with an industry-leading healthcare customer. These achievements, together with improved working capital efficiency, underpinned the quarter’s financial outcomes.
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Plexus (PLXS) Q1 CY2025 Highlights:
- Revenue: $980.2 million vs analyst estimates of $980.1 million (1.4% year-on-year growth, in line)
- Adjusted EPS: $1.66 vs analyst estimates of $1.54 (7.8% beat)
- Revenue Guidance for Q2 CY2025 is $1.02 billion at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for Q2 CY2025 is $1.73 at the midpoint, below analyst estimates of $1.74
- Operating Margin: 5%, in line with the same quarter last year
- Market Capitalization: $3.54 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.
Our Top 5 Analyst Questions Plexus’s Q1 Earnings Call
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David Williams (The Benchmark Company) asked how tariffs are impacting customer behavior and what support Plexus is providing. CEO Todd Kelsey said most customers are waiting for clarity, with limited production relocation so far, and emphasized that tariffs are passed through rather than absorbed.
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Melissa Fairbanks (Raymond James) questioned the sustainability of improved cash cycle days. CFO Pat Jermain said further improvements are possible, targeting mid-to-low 60s, and highlighted that each day reduced frees up $10 million in cash flow.
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Steven Fox (Fox Advisors LLC) sought details on the large healthcare services contract and margin trajectory. EVP Oliver Mihm described a multi-quarter ramp with potential for future expansion, while Jermain pointed to operational efficiencies accelerating margin improvement.
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Chris Grenga (Needham) inquired about margin headwinds from the upcoming Penang facility. Jermain responded that any impact will be minimal and temporary, citing Malaysia’s strong track record for rapid ramp-up to profitability.
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Anja Soderstrom (Sidoti) asked about engineering win diversification and share gains. CEO Todd Kelsey noted that engineering successes are now broad-based across sectors, and EVP Shawn Harrison described share gains as distributed across multiple markets and submarkets.
Catalysts in Upcoming Quarters
As we look ahead, the StockStory team will be monitoring (1) the ramp-up and customer adoption of the new healthcare sustaining services program, (2) progress in operational efficiency and automation initiatives across Plexus’s facilities, and (3) signs of sustained demand recovery in commercial aerospace and the broader industrial sector. Execution on margin targets and effective navigation of tariff-related supply chain adjustments will also be key performance markers.
Plexus currently trades at $133.95, up from $127.17 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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