Electronic manufacturing services company Plexus (NASDAQ:PLXS) announced better-than-expected revenue in Q1 CY2026, with sales up 18.7% year on year to $1.16 billion. On top of that, next quarter’s revenue guidance ($1.23 billion at the midpoint) was surprisingly good and 6.5% above what analysts were expecting. Its non-GAAP profit of $2.05 per share was 8.8% above analysts’ consensus estimates.
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Plexus (PLXS) Q1 CY2026 Highlights:
- Revenue: $1.16 billion vs analyst estimates of $1.13 billion (18.7% year-on-year growth, 2.9% beat)
- Adjusted EPS: $2.05 vs analyst estimates of $1.88 (8.8% beat)
- Adjusted EBITDA: $89.02 million vs analyst estimates of $85.3 million (7.6% margin, 4.4% beat)
- Revenue Guidance for Q2 CY2026 is $1.23 billion at the midpoint, above analyst estimates of $1.15 billion
- Adjusted EPS guidance for Q2 CY2026 is $2.10 at the midpoint, above analyst estimates of $1.99
- Operating Margin: 5.3%, in line with the same quarter last year
- Market Capitalization: $6.71 billion
StockStory’s Take
Plexus delivered first quarter results that exceeded Wall Street’s expectations, driven by broad-based revenue growth across its key market sectors. Management attributed the strong quarter to a combination of new program ramps, ongoing market share gains, and rising end market demand—especially in aerospace and defense, as well as semiconductor capital equipment. CEO Todd Kelsey highlighted the contribution of a record $355 million in new manufacturing program wins and emphasized that operational discipline supported both margin expansion and working capital efficiency. The company also marked several organizational milestones, including a CFO transition and the 40th anniversary of its NASDAQ listing.
Looking ahead, Plexus’ guidance reflects confidence in sustaining double-digit revenue growth, with leadership citing robust demand in aerospace, defense, and industrial markets as primary drivers. Management expects the continued ramp of new programs and further share gains to outpace broader market trends. Outgoing CFO Patrick Jermain noted that ongoing productivity initiatives and disciplined capital allocation should help maintain operating margins around 6%. Newly appointed CFO David Abuhl added, “We are strategically increasing our working capital investments to support accelerating revenue momentum while maintaining a strong focus on operational efficiency.”
Key Insights from Management’s Remarks
Management attributed the quarter’s revenue momentum to successful customer program launches, market share gains, and rising demand in key sectors, offset slightly by ongoing supply chain tightness.
- Aerospace and defense outperformance: Revenue grew rapidly in this sector, supported by both new program wins and improving end market demand. Management cited follow-on awards from existing customers in defense and space, as well as expanding relationships in commercial aerospace.
- Industrial sector strength: New business wins in automation, robotics, and data center power solutions helped drive significant growth. The company highlighted a notable contract for data center power platforms and expanded partnerships in energy storage and robotics.
- Healthcare and life sciences stability: While sequential growth was modest, management emphasized strong customer engagement and new product launch capabilities, including a next-generation ultrasound system and support for robotic surgical platforms.
- Operational efficiency focus: Productivity improvements and fixed cost leverage contributed to margin performance. Ongoing investments in automation and operational technology helped offset seasonal compensation costs and positioned the company to sustain profitability.
- Supply chain management: While supply chain constraints persisted for certain components, management described proactive sourcing and inventory strategies, including early purchase order placement and the use of AI tools to identify component shortages, as key to avoiding disruption and supporting program ramps.
Drivers of Future Performance
Management expects a combination of new customer programs, sector diversification, and operational discipline to underpin revenue and margin performance in the coming quarters.
- Sustained demand in core sectors: Ongoing strength in aerospace, defense, and industrial segments is expected to continue, with management highlighting particularly strong growth forecasts in semicap and energy infrastructure applications. These areas are benefiting from both new customer wins and higher underlying market demand.
- Margin outlook and investments: The company expects operating margins to remain at or above 6%, supported by fixed cost leverage and continued efficiency initiatives. However, management acknowledged that initial program ramp costs and higher incentive compensation could create short-term margin variability.
- Working capital and capacity planning: Leadership plans to strategically increase working capital and capital expenditures to support accelerating revenue growth, while ongoing operational efficiency gains are expected to defer the need for major new facility investments. Management also noted that capacity is currently sufficient to support growth above $5 billion in annualized revenue.
Catalysts in Upcoming Quarters
In the coming quarters, our team will be watching (1) the pace and profitability of new program ramps in aerospace, defense, and industrial markets, (2) the company’s ability to maintain operating margins despite ongoing supply chain and compensation pressures, and (3) updates on working capital efficiency as revenue accelerates. The impact of continued investments in automation and capacity utilization will also be key signposts for sustained growth.
Plexus currently trades at $250.50, in line with $250.60 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).
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