Oct 28, 2026 earnings call — Spin-off focus and CPI power growth
Flex reported Q2 revenue of $8.5 billion and record adjusted EPS of $1.18 per share.
Revenue $8.5B (est $8.2B) · EPS $1.18 (est $1.06) · Next-quarter revenue outlook $9.0B
Key quotes
"Last month, Axiom filed a Form 10 registration statement providing a more detailed view of Axiom's strategy, financial profile, leadership team, and growth opportunities."
"Earlier this month, we announced the closing of our acquisition of EPC Power which further strengthens Axiom's portfolio of end to end and EPC's engineering expertise complements our existing research and development into 800-volt architecture and solid state transformers."
Analyst Q&A 8
Guidance split: organic vs deals
Q (Ruben Roy · Stifel): Analyst asked how much of the $950 million guide increase is organic growth versus growth from acquisitions like EPC.
A: Management said CPI guidance for the year was raised to a range of 75% to 85%. They said about 10 percentage points of that increase are from acquisitions completed this year, including the EP2 acquisition and EPC.
"And inside of that I would say about 10 percentage points of that is going to be growth related to acquisitions we have completed during the year." — Kevin S. Krumm (CFO)
Power strategy vs other tech
Q (Ruben Roy · Stifel): Analyst asked whether Flex should focus mainly on power or on a broader set of technologies (compute, cooling, power) and whether that mix helps wins and margins.
A: Management said all three areas—compute, cooling, and power—matter for their systems capability. They said compute and power are current strengths and market-share leaders, while cooling is nascent and will grow with new product launches planned over the next 6 months.
"Today, our areas of strength where we are market share leaders and our technology leaders are both in compute and in power." — Revathi Advaithi (CEO)
Power positioning and CPI outlook
Q (Mark Delaney · Goldman Sachs): Analyst asked about Flex's competitive position and market share in power (embedded and critical) and how CPI is tracking versus the prior 80%+ growth outlook for FY 2028; also asked what drove the strong incremental EBIT margins.
A: Management said both embedded and critical power are well positioned technologically and growing ahead of peers. They said CPI momentum this year has been north of original expectations and they expect that momentum to carry through, and that power growth, mix, pricing and volume leverage helped drive strong incremental margins (power margins finished in the mid teens).
"While we are not going to offer a new guide for FY 2028 right now, I would just say that momentum we expect it to carry through." — Kevin S. Krumm (CFO)
R&D focus: 800V, SST, and RMS margins
Q (Ruplu Bhattacharya · BofA): First, analyst asked where Acxiom will focus R&D (800 volt, solid-state transformers) and how they will attack the market versus bigger rivals. Second, asked why RMS revenues were flat but margins declined and which end markets are recovering.
A: Management said they are committed to 800 volt technology and have an organic SST program now augmented by the EPC acquisition, and they emphasize solutions deployable today (digital rectifiers) while waiting for broader SST transitions. On RMS/ITS, they said both businesses have delivered year-on-year growth for four consecutive quarters driven by high-value markets; communications and industrial are strong and they expect both revenue growth and margin expansion for the year.
"When you think about Q2, very strong result, high value markets driving that growth across both RMS and ITS" — Michael Hartung
CPI capacity, parts, and cloud details
Q (Timothy Long · Barclays): Analyst asked whether capacity, components, CapEx and power availability support the strong CPI growth guides, and asked which cloud subsegments (rack, custom ASIC, liquid cooling) are driving growth.
A: Management said capacity plans were put in place starting last year and teams are executing detailed project plans (including utility connections) to meet CPI ramps. They said component shortages remain a factor but Flex plans for that and pursues suppliers; for cloud they focus on custom configurations, vertical integration (rack work), and aftermarket services, with cooling product launches coming months ahead.
"The capacity plans were already, you know, in place starting last year." — Revathi Advaithi (CEO)
Hard-to-copy businesses and customer mix
Q (Steven Fox · Fox Advisors): Analyst asked what makes the legacy businesses (health, energy, communications) hard to replicate and then asked how concentrated Axiom will be with top customers and how diversified they are across hyperscalers.
A: Management said high-value markets combine fast end-market growth and complex solutions that earn above-average margins, with barriers like regulation (FDA certifications) and long product life cycles. They said hyperscaler concentration is unavoidable because spend is concentrated there, but they aim to be diversified across many hyperscalers and across multiple products and programs inside each hyperscaler.
"So our focus around hyperscalers is we want to be very diversified in these hyperscalers." — Revathi Advaithi (CEO)
Supply chain buffers and power portfolio
Q (Luke Junk · Baird): Analyst asked which levers Flex is using on supply chain (inventory, customer support, buffers included in guidance) and for views on embedded vs critical power margins now that the Form 10 is out.
A: Management said they expected a difficult sourcing year and reflected that in guidance; inventory builds will occur and customers generally participate, and the teams keep working capital balanced. They said embedded, critical, and EPC power each have roles in the power chain, and building an end-to-end 800-volt solution reduces step-ups/step-downs and maximizes future power efficiency; they will show details at Innovation Day.
"As we looked towards our guide in Q1 when we gave our full year guide, we had understood it was gonna be a difficult year from a supply chain sourcing standpoint." — Kevin S. Krumm (CFO)
CapEx needs and robotics outlook
Q (Steve Barger · KeyBanc): Analyst asked about capital intensity for Acxiom and any change to Flex CapEx/revenue, and then asked whether robotics (AMR, humanoids) is a multiyear production ramp.
A: Management said this year is an outsized CapEx year and they guided to about $1.5 to $1.6 billion, with roughly two thirds of this year's investment related to CPI and one third to ITS and RMS; post-spin RMS and ITS CapEx should revert to historical levels near 2% or below. On robotics, they said this is the start of a long-term trend: Flex is deploying its own automation, supplying cobots, and has roadmaps for humanoids though deployment of humanoids is not expected in the next year or two.
"We have guided to a number about $1.5 to $1.6 billion." — Kevin S. Krumm (CFO)