With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are computers, internet services, IT services, semiconductors, and software companies.

Fortune Sector Leaders: Technology

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

With nearly 80 manufacturing sites, Sanmina is one of the world’s largest independent manufacturers of printed circuit boards and backplanes, along with a range of other electronic products. The company collected nearly $7 billion in revenue in fiscal year 2020.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-385-Sanmina

Sanmina designs, manufactures, and repairs a wide range of electronic products; it has operations in 25 countries.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Sanmina Corporation is a provider of manufacturing solutions, components, products, design, repair, logistics, and aftermarket services. Sanmina primarily operates in the communications, defense and aerospace, industrial and semiconductor systems, medical, multimedia, computing and storage, automotive and clean technology sectors.

Q3 2026

Q2 25/26

Q1 2026

Q4 2025

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Q2 24/25

Q1 2025

Sanmina (SANM): Company Profile, Stock Price, News, Rankings

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Sanmina

sanmina

Ladies and gentlemen, welcome to Sanmina third quarter fiscal 2026 earnings conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Monday, July 27, 2026. I would now like to turn the conference over to Paige Melching. Please go ahead.

Thank you, Mark. Good afternoon, ladies and gentlemen, welcome to Sanmina's third quarter fiscal 2026 earnings call. A copy of our press release and slides for today's discussion are available on our website at sanmina.com in the investor relations section. Joining me on today's call is Jure Sola, Chairman and Chief Executive Officer.

Jon Faust, Executive Vice President and Chief Financial Officer.

Before I turn the call over to Jure, let me remind everyone that today's call is being webcasted and recorded and will be available on our website. You can follow along with our prepared remarks in the slides provided on our website. Please turn to slide three of the presentation and take note of our safe harbor statement. During this conference call, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We caution you that such statements are just projections. The company's actual results could differ materially from those projected in these statements as a result of factors set forth in the safe harbor statement.

The company is under no obligation and expressly disclaims any such obligation to update or alter any of the forward-looking statements made in this earnings release, the earnings presentation, the conference call, or in the Investor Relations section of our website, whether as a result of new information, future events, or otherwise, unless otherwise required by law. Included in our press release and slides issued today, we have provided you with statements of operation for the third quarter ended June 27, 2026, on a GAAP basis, as well as certain non-GAAP financial information. A reconciliation between the GAAP and non-GAAP financial information is also provided in the press release and slides posted on our website. In general, our non-GAAP information excludes restructuring costs, acquisition and integration costs, non-cash stock-based compensation expense, amortization expense, and other unusual or infrequent items.

Any comments we make on this call as it relates to the income statement measures will be directed at our non-GAAP financial results. Accordingly, unless otherwise stated in this conference call, when we refer to gross profit, gross margin, operating income, operating margin, taxes, net income, and earnings per share, we are referring to our non-GAAP information. I'd now like to turn the call over to Jure.

Thanks, Paige. Good afternoon, ladies and gentlemen, welcome. Thank you all for being here with us today. First, I would like to take this opportunity to recognize our employees and Sanmina leadership team for doing a great job. To you, Sanmina's team, thank you for your dedication, hard work, and delivering strong execution for our customers. Please turn to slide four. Ladies and gentlemen, I can tell you that I'm very pleased with our performance. We delivered another great quarter. Revenue came in at $3.46 billion, non-GAAP operating margin at 8%, non-GAAP diluted EPS at $3.31, and cash flow from operations of $124 million. Overall, we are executing according to our plan, with strong execution in both core Sanmina and Sanmina AI group, ZT Systems. Let's go to our agenda for today's call.

We have Jon, our CFO, to review details of our results for you. I will follow up with additional comments about the results and future goals. Jon and I will open for question and answers. Now, I'd like to turn this call over to Jon. Jon?

Great. Thank you, Jure. Good afternoon, ladies and gentlemen. Thank you for joining today's earnings call. Before I review our financial results for the quarter, I want to acknowledge the entire Sanmina team for their focused execution and thank them for delivering a strong third quarter. Please turn to slide six, where I will speak to the financial highlights. As Jure just mentioned, we are very pleased with our results for the quarter, which as you can see, either met or exceeded our previously communicated outlook. Our revenue of $3.46 billion came in at the high end of our outlook range. This was driven by both the core Sanmina business, which exceeded its outlook range, with growth coming from all end markets, and the ZT Systems business, which came in at the midpoint of its outlook range.

Additionally, our non-GAAP operating margin of 8.0% and our non-GAAP diluted earnings per share of $3.31 both exceeded our outlook, driven by strong execution, mix, and disciplined cost management, as well as contribution from new product launch services or what we commonly refer to as non-recurring engineering services. Please turn to slide seven, where I will speak to our non-GAAP P&L performance. As I just mentioned, we delivered revenue of $3.46 billion, which was up 69.7% versus the same period a year ago. Our core Sanmina business revenue of $2.4 billion grew 17.0% versus the same period a year ago, exceeding our outlook with broad-based strength across all of our end markets and continued strength in the cloud and AI infrastructure end market. Our ZT Systems business revenue of $1.1 billion was at the midpoint of our outlook with a solid performance across all product categories.

Our non-GAAP gross profit was $370 million, or 10.7% of revenue. This was up 160 basis points versus the same period a year ago, driven by both favorable mix and non-recurring engineering services. Our non-GAAP operating expenses were $94.7 million, or 2.7% of revenue, in line with our expectations. These strong revenue and non-GAAP gross profit results, along with ongoing cost discipline and operating leverage, enabled us to achieve non-GAAP operating profit of $275.8 million, or 8.0% of revenue, up 230 basis points versus the same period a year ago. Our non-GAAP operating income and expense was a net expense of $29.5 million, in line with our outlook. Our non-GAAP diluted earnings per share was $3.31, based on approximately 55 million shares outstanding.

This strong non-GAAP diluted earnings per share performance represents a 116.0% increase versus the same period a year ago and showcases the high potential of our combined core Sanmina and ZT Systems businesses. Now, please turn to slide eight, where I will speak to the segment results. IMS revenue came in at $2.96 billion, up 79.4% versus the same period a year ago, driven by growth in all end markets and including the strong contribution from the ZT Systems business. Core Sanmina IMS revenue was $1.9 billion for the quarter, up 14.1% versus the same period a year ago. ZT Systems revenue was $1.1 billion for the quarter. Total IMS non-GAAP gross margin was 10.2%, up 270 basis points versus the same period a year ago. This was driven primarily by favorable mix, including the impact from the addition of the ZT Systems business and non-recurring engineering services.

CPS revenue came in at $546 million, up 29.2% versus the same period a year ago. This was driven by strong growth in our metal fabrication business for AI system racks and our high-technology printed circuit board business for aerospace and defense-related products, both of which we've been investing in since the end of last fiscal year. CPS non-GAAP gross margin was 12.8%, down 190 basis points versus the same period a year ago, but up 120 basis points on a sequential basis. The decrease year-over-year was primarily driven by depreciation and other expenses related to investments to support new programs. The sequential increase and solid revenue growth are proof points of how these investments are starting to pay off. Now, please turn to slide nine, where I will speak to the balance sheet highlights.

We continue to have a very strong balance sheet with prudent leverage and ample liquidity, giving us the capacity to invest in support of our growth objectives. Cash and cash equivalents were $1.84 billion, which includes the final net working capital adjustment associated with the ZT Systems acquisition. At the end of the quarter, we had no outstanding borrowings on our $1.5 billion revolver, leaving us with substantial liquidity of approximately $4.0 billion, including the term loan A delayed draw to support the future growth of the business. We entered the quarter with inventory of $2.2 billion, net of customer advances, which is up 87.2% versus the same period a year ago, driven by the ZT Systems acquisition. Inventory turns, net of customer advances, were 5.6x for the quarter, down from 6.3x in the same period a year ago.

Our non-GAAP pre-tax ROIC was 39.1% for the quarter, well above our weighted average cost of capital and an improvement from the 24.8% from the same period a year ago. We continue to have one of the strongest balance sheets in the industry with a net leverage ratio of 0.29x. This ratio is calculated conservatively by annualizing our EBITDA results for the first three quarters, as using the pro forma trailing 12 months for ZT Systems wouldn't accurately represent the current run rate of the business. As we have previously communicated, our long-term target net leverage range is 1.0x-2.0x. We still expect our leverage to increase into our long-term range over time as we invest in working capital to support the growth of our business.

That being said, we remain committed to maintaining a healthy balance sheet, which means carefully managing the liquidity needed to invest in the business and capitalize on the strategic opportunities that further strengthen our position in the market. Now, please turn to slide 10, where I will speak to our cash flow highlights. Our third quarter cash flow from operations came in at $124.5 million. As a reminder, we expect working capital to grow in advance of the growth of both the core Sanmina and ZT Systems businesses, which will impact cash flow from operations. Capital expenditures were $100.9 million for the quarter, in line with our outlook, and free cash flow was $223.7 million. For the last several quarters, we've been making strategic investments in capabilities and incremental capacity across both the core Sanmina and ZT Systems businesses, and we will continue to do so to support future growth.

In the core Sanmina business, these investments include metal fabrication capacity for AI system racks, new capabilities for high technology printed circuit boards for both AI and aerospace and defense-related products, and capacity and new equipment for the new medium-voltage transformer business. In the ZT Systems business, the focus has been on incremental power, liquid cooling, test cell capacity, and automation for the next generation of accelerated compute. We believe these strategic investments will help drive profitable growth and future cash flows and generate an attractive ROI for the company and shareholders. We did not repurchase any shares within the quarter and had approximately $600 million available in our board-authorized share repurchase program as of the end of the third quarter.

With the current growth trajectories and profitability profiles of the core Sanmina and ZT Systems businesses, we're confident in our ability to generate future cash flows and therefore will continue to make both working capital and other strategic investments while balancing our commitment to a healthy balance sheet in line with our prudent fiscal policies. Now, please turn to slide 11, where I will provide an update on the ZT Systems business. As we mentioned last quarter, the Sanmina and ZT Systems leadership teams have been working together to ensure a successful and seamless integration of the business with a clear objective to realize the full value of combining the two companies. In order to do this, we put a three-phase plan in place, which we continue to execute against. Since last quarter, we've continued to streamline processes, improve the way we work, and drive efficiencies for our customers.

We've also continued to make the necessary capital investments such as incremental power, liquid cooling capabilities, test cell capacity, and new automation capabilities to be production-ready for the next generation of accelerated compute. Last quarter, we communicated that we secured orders for the next generation accelerated compute business with both hyperscale and OEM customers, and I'm pleased to announce that we continued to secure more customer orders in the third quarter, expanding our overall customer base. Customer validation process is going well, and we're working in very close collaboration with AMD and our joint customers to support almost all pre-production activities, providing the quality, delivery, and services to support customer needs. While we're still working with customers to finalize their production schedules and operating models, we are exactly where we expected to be at this point in the process.

We've also made progress with the third and final phase of the plan, which is about realizing synergies through vertical integration and increasing our addressable market by expanding on our existing engineering capabilities to support all platforms. As a result of our broader focus on the cloud and AI infrastructure end market since the announcement of the ZT Systems acquisition, we've now won incremental programs in the core Sanmina business, including with new customers and additional platforms. We expect those wins to expand in scale in the coming quarters. Our close collaboration with customers during the pre-production validation process has given us the opportunity to showcase our unique value proposition. By combining ZT Systems' large-scale systems integration capabilities with Sanmina's extensive sub-assembly expertise, we can deliver a full suite of offerings that includes our Components, Products and Services.

It's also important to note that as we continue to grow the cloud and AI infrastructure business, leveraging ZT Systems capabilities and Sanmina's global footprint, some of these new business wins will be manufactured in core Sanmina factories, which we saw in our actual Q3 results, and we expect to accelerate going forward. Please turn to slide 12, where I will provide our outlook for the fourth quarter. Our outlook is based on current customer forecasts and includes an extra week and takes into account ongoing market uncertainties and the geopolitical environment. With that said, we expect revenue between $3.3 billion-$3.6 billion. We expect core Sanmina revenue to be in the range of $2.5 billion-$2.6 billion, and ZT Systems revenue to be between $0.8 billion-$1.0 billion.

This ZT Systems range is lower than the implied guidance we provided last quarter and is driven completely by a few legacy programs, which, as I've mentioned before, can vary from quarter to quarter based on customer timing needs. Keep in mind that while the new next-generation accelerated compute program is on track, we haven't included it in our Q4 outlook due to revenue recognition timing. We expect it to begin contributing to revenue in Q1 fiscal 2027 and to ramp over time. At the midpoint, total Sanmina revenue would be $3.45 billion, which reflects 64.6% growth versus the same period a year ago. Non-GAAP operating margin of 7.5%-8.0%, driven by mix and continued contribution from the non-recurring engineering services that I referenced earlier. We expect other income and expense to be a net expense of approximately $30 million.

We expect our non-GAAP effective tax rate to be between 21%-23%. We estimate an approximate $6 million non-cash reduction to our net income to reflect our India joint venture partner's equity interest. Non-GAAP diluted earnings per share in the range of $3.05-$3.35, based on approximately 55 million fully-diluted shares outstanding. At the midpoint of $3.20, that represents a 92.0% increase compared to the same period a year ago. We expect capital expenditures to be $135 million as we continue to invest strategically to support our future growth expectations. Finally, depreciation of approximately $50 million. Please turn to slide 13, where I will provide our outlook for the full fiscal year 2026. With our results for the third quarter and our outlook for the fourth, we expect fiscal 2026 revenue to be in the range of $14.0 billion-$14.3 billion.

We expect core Sanmina revenue to be in the range of $9.1 billion-$9.2 billion. At the midpoint of $9.15 billion on a full year basis, this represents 12.6% growth, which exceeds the expectations we set at the beginning of the year for the core Sanmina business to grow into high single-digits. We expect ZT Systems revenue between $4.8 billion-$5.0 billion for the 11 months, which falls within the $5 billion-$6 billion annualized run rate range that we communicated when we first announced the acquisition of the ZT Systems business. Non-GAAP operating margin between 6.85%-7.25%. Non-GAAP diluted earnings per share in the range of $11.90-$12.20, based on approximately 55 million fully-diluted shares outstanding. At the midpoint of $12.05, that represents an almost 100% increase compared to the same period a year ago.

In summary, I am very pleased with our results for the third quarter and our fiscal 2026 results to date. There is still a lot of work to do, but we're on a great trajectory for both the core Sanmina and ZT Systems businesses. Based on what is in front of us, we are more confident than ever in our ability to achieve revenue of $16+ billion in 2027, and we believe we're setting a strong foundation for future growth beyond that in the current strong demand environment. With that, I would now like to turn the call back over to Jure.

Thank you, Jon. Ladies and gentlemen, as you heard from Jon, we delivered strong results for the third quarter. Most important is that we are executing to our plan. We are expanding existing partnerships. We're adding new customers and new projects to drive future growth. Please turn to slide 15. Let's look at the revenue by end market for the third quarter, fiscal year 2026. Communication networks, cloud, and AI infrastructure was 62% of our revenue, or $2.148 billion. That's up 173.2% year-over-year. Industrial, energy, medical, defense, aerospace, automotive, and transportation came in at 38% of our revenue, or $1.316 billion. That was nicely up 4.8% year-over-year. Core Sanmina revenue grew, as you heard from Jon, 17% year-over-year at $2.4 billion per quarter. Bookings in the third quarter were strong, book-to-bill better than 1.1.

As you can see, we are well-diversified within the market leaders. At this time, we are seeing very positive trends in our end markets. To tell you more about it, please turn to slide 16. Let me talk more about each of these key markets. Communication networks, cloud, AI infrastructure, I can tell you that AI is driving growth in this entire end market. Bookings continue to be strong, and we are adding new customers. Strong pipeline of new projects for fiscal year 2027 and 2028 is very exciting. We are well positioned to drive the growth in this segment. Let me share with you some of the products that we are focused in this segment. Around cloud AI infrastructure, we focus on accelerated compute, general purpose compute, storage, and high-performance networks around IP switching and routing and optical systems. Again, we continue to see strong demand in this segment.

Now, let me talk to you about industrial and energy. This segment is doing well. We expect the growth to accelerate in fiscal year 2027. We are expanding energy business for AI data centers from engineering to design to full system with vertical integration. Some of the key products that we focused on is power generation distribution, medium voltage, grid scale transformers, power storage and management, safety and surveillance equipment such as airport security, video surveillance, emergency communications, and semiconductor capital equipment, primarily around lithography equipment. Let me talk to you about medical. This segment has been very stable end market for us. We expect more growth to accelerate in fiscal year 2027, and we continue to leverage our regulatory knowledge and experience to expand customer base in this segment, and we continue to win the new programs that we believe will drive the growth.

Some of the key areas that we focus on is disposable, wearable, and consumable products, such as glucose sensors, drug delivery. For hospital laboratory diagnosing research equipment around surgical robots, diagnostic imaging, patient monitoring, et cetera. Again, very good customer base and continue to expand. Let me tell you more about defense and aerospace. For this segment, we expect the growth in traditional U.S.A. defense and aerospace business to continue. We are expanding our customer base in satellite market, and we continue to see strong demand in 2027, 2028, and beyond. The key products that we are focused around is defense equipment, such as advanced military communications, missile control and guidance systems, satellite control and communication, drones, and defense and commercial aerospace. Let me give you more insight on automation and transportation. Overall, this segment is stable for us, and we will see continued growth from new and existing customers.

New programs are driving the growth. Area of focus is automotive, electrical vehicle, and autonomous vehicles, and transportation. Please turn to slide 17. At Sanmina, we have diverse set of capabilities, and we provide end-to-end solution for all our key markets. The key for our business to grow is that we get involved in early stage of the product development, where we provide our customer full system architecture to fabrication of high technology printed circuit boards, product assembly, mechanical racks, including liquid cooling, manifolds, busbars. Also, we provide paramount ODM and joint development products around compute and storage system, custom memory, custom optical modules, all the way to full-system integration to global fulfillment services. Overall business update is that we are expanding our customer base. We are winning new AI platform business.

We're increasing our addressable market to vertical integration engineering, and we continue to invest in capabilities and capacity to support future growth for fiscal year 2027, 2028. Again, I want to tell you that AI demand is very strong. Please turn to slide 18. As you can see, Sanmina has a very efficient manufacturing footprint in North America, Europe, and Asia. Sanmina manufacturing footprint is strategically positioned to support our customers. We are well-aligned with our customer requirements, supported with very strong U.S.A. presence. Sanmina supply chain, it's industry leading, managed by Sanmina One IT system and smart MES. We are leveraging our established global infrastructure to deliver the right solutions to our customers with quality, speed, flexibility, and scale. It's our competitive advantage for our customers. Please turn to slide 19. In summary, as you heard both from Jon and myself, we delivered a great third quarter results.

We're finishing fiscal year 2026 better than forecast. Our outlook for fiscal year 2026 is to be in a range of $14 billion-$14.3 billion. At midpoint, we should see a growth of 75% year-over-year. We're also planning to deliver non-GAAP EPS at the midpoint of guidance, and that should be up, as you heard from Jon, 100% year-over-year. Sanmina core business is doing well. We expect to see growth over 12.6% in fiscal year 2026, and we are well diversified across all end markets. Now, let me give you few more comments about fiscal year 2027. At this time, we're very confident in shipping $16+ billion in fiscal year 2027, and we'll talk to you more about it in end of the year.

We see higher revenue growth in the second half of fiscal year 2027, and that growth should continue into the fiscal year 2028. This is driven by strong demand from AI data center customers. Also, we see positive trends in other markets. Again, with opportunities ahead of us, I'm personally very excited about our future. Ladies and gentlemen, I would like to say thank you all for your time and support. Operator, we're now ready to open the lines for question and answers. Thank you again.

Thank you. Ladies and gentlemen, we'll now be conducting a question-and-answer session. If you'd like to ask question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We'll wait for a moment while we poll for questions. Your first question comes from Ruplu Bhattacharya from Bank of America. Please go ahead.

Hi. Thanks for taking my questions. Jure, Jon, 3Q operating margin came in much higher than expected. Looks like you're guiding 4Q operating margin 25 basis points lower, but still strong. However, it seems to me that that's because the mix of the business is less ZT than originally expected. How should we think about operating margins going forward as ZT-related AI revenues become a higher part of the mix? For this quarter, what was the margin impact of the non-recurring engineering services? I have a couple of follow-ups.

Hey, Ruplu, this is Jure. I'll turn the call over to Jon, but I just want to say we work very hard in this business to make extra bucks. With that, I'll turn it over to Jon.

Ruplu, hope you're doing well. Thanks for the question. We're definitely very pleased with the margin performance this quarter. Certainly was a beat versus our expectations, a lot of that is due to mix, like you say. On the core Sanmina side, just to start with that, we did very well, both in IMS and CPS and just with the growth of CPS, like that was a big contributor. Core Sanmina doing better than what we had expected, or at least on the high end of the range, probably a little bit better. ZT did very well, too. That's part of the mix story, as well as the engineering services that we talked about. That was something where we didn't expect to do quite as much as what we did. We did forecast some of that, we did quite a bit.

This is a great thing for us because it basically means that we're doing a lot, almost all of the pre-production work for the new accelerated compute program. The way that works, just to help explain, is there's not a whole lot of revenue associated with it, but a lot of labor charges. That drove the margin profile. As we work to ramp that program, we expect it to continue into Q4, that's why it's part of our guide. It will ramp down a little bit over time. Longer term, as we look ahead, much like Jure and I have communicated before, we'd still expect margin to be in that 6%-7% range.

As we start to see growth come back on the accelerated compute side, we think we'll be no real change to that profile yet, but more to come when we announce our results at the end of the fiscal year and guide fiscal 2027 formally.

If I can add to that on operating margin, I think we're going to continue to be focused on a mix, improving our margins through a lot of the new capabilities that we deliver, and I believe those things will help us in the future.

Thanks for the details there. I think you talked about some legacy programs coming in lower than expected. Do you still have backlog of older systems? How should we think about ZT revenue growth in fiscal 2027? I think you said you have strong bookings and pipeline. Is it reasonable for investors to think that ZT revenues can grow 50% year-on-year in fiscal 2027?

It's still too early to formally guide fiscal year 2027, either on the core Sanmina side or the ZT Systems side. We're getting close to that, locking down production schedules with customers and all the other details that we would normally need. When you think just about ZT Systems this past quarter and even our guide for Q4, not a lot of accelerated compute, and that was as expected. The legacy platform for accelerated compute had pretty much gone to zero, even as of last quarter. We're really focused on the future. When it comes to the other product categories like storage and general purpose compute, that can vary from quarter to quarter, as we've said, and that's what we're seeing in our Q4.

It's really just a timing shift because we still do have some legacy programs in those two product categories, and that'll be an area of focus for us to grow into the future as well. First things first, though, we were always focused on winning the future of accelerated compute. That was priority number one. As I talked about in my prepared remarks, as soon as we did the ZT Systems deal, we've had a broader focus on cloud and AI infrastructure and winning programs more broadly, and we've started to see some of that, even on the core Sanmina side of the business, and that's where I'll point you to our communication networks and cloud infrastructure end market. Even with ZT Systems not included, that grew 33%, that's an acceleration. A lot of opportunity that we're focused on for the future.

Got it. I'm going to throw one more question at you, Jon.

As you build these production racks, how should we model working capital and free cash flow? Just if you can give us your thoughts on that. Thanks, both of you, for all the details.

Thank you, Ruplu, for the question. We do expect working capital to build. That's an investment in the business, and you started to see that dynamic a little bit this quarter, and that'll start to accelerate. We expect it to as we go into Q4 in the beginning of the next year as that program ramps. I do expect some pressure on our overall working capital numbers. Again, that's a positive thing. That's an investment in our business. Some of the final operating model details with the customers haven't been sorted out yet, so we'll talk more about that in our Q4 earnings call when we announce those results and formally guide fiscal year 2027. Jure and I will be sure to speak about the cash flow dynamics and the working capital dynamics.

To provide a little bit of insight now, that working capital we do expect to build.

Thank you. Next question comes from Manmohanpreet Singh from JPMorgan. Please go ahead.

Hi. Thank you for taking my question. For my first one, I just wanted to ask that you highlighted new customer wins or new programs related to your AMD business. Beyond that, can you double-click on new wins relative to alternate chip designers or rack manufacturers, particularly Cerebras, which announced yourself as a contract manufacturer, and then broader TAM relative to all these new age chip manufacturing companies and rack building companies? I have a follow-up. Thank you.

Thanks for the question, MP. You're right. We're very pleased with our results. Everything as it relates to ZT Systems and our partnership with AMD there is very much on track. In line with expectations. As you know, we don't normally talk customer names, but given you brought it up, that is the additional platform business that we were referring to when we talked about that within the core Sanmina business with Cerebras. We're very excited about that too, and it goes along with the comments in my prepared remarks about our broader focus on the cloud and AI infrastructure end market. We've talked for a while now, Jure and myself, about wanting to do business across multiple platforms, different lines of business. We are starting to see that. We are seeing some success of that with new program wins.

We're very happy with that. You even saw it in our Q3 results, as we started to accelerate the core Sanmina results for the communication networks and cloud infrastructure end market. That'll continue to be an area of focus for us going forward because, as Jure and I both mentioned, very strong demand environment out there, and we think we've got all the capabilities to be successful in that end market, and that's why we're focused on it.

MP, this is Jure. Just to add a few more things. In addition to that, there's a lot of interest in our capabilities, especially now as we expanded our engineering capabilities and investments that we've been making in the last 12 months. We have some capabilities that basically go across multiple platforms very fast.

Just one last comment too to add to what Jure was saying. You see it not only in our IMS segment of the core Sanmina business, but also the CPS segment. I talked about the metal fabrication and the investments that we've made for AI system racks. That's been an area of focus for us in high-technology printed circuit boards too.

Got it. Thank you. For my follow-up, I just wanted to ask about the legacy communication networks and cloud and AI infrastructure business, which I think was growing year-over-year at 30%+ growth rate. Just wanted to check what are the product categories that are driving the growth there, and how sustainable is the growth rate which you are seeing in that? Thank you.

Great question. You're right. We did grow over 30% this quarter. If you look back in history, I think the last six, seven quarters in a row, we've been growing that segment of the business about 20% year-over-year. That accelerated this quarter, and it's primarily due to the incremental programs and the new customers that we're adding in the core Sanmina business, and that's that whole broader focus, and it's across multiple different product types. Jure gave a few examples, but I think you know the ZT Systems product categories between accelerated compute, general purpose compute, and storage. But we're also seeing benefits on the communication network side with those types of customers. Talk optical systems or IP switching and routing, data center networking. A lot of opportunity out there. Frankly, we could probably do even better.

Jure commented on the demand that we're seeing in book-to-bill. We're still a little bit constrained by component shortages, all the standard things that I'm sure you've heard out there, but really the new program wins and the new customers is helping us to get out of that 20% year-over-year trajectory up into the 30% range. We're happy about that.

Our core business, MP, should continue to grow nicely based on the forecast and the backlog that we have right now.

Thank you. Next question comes from Steven Fox from Fox Advisors. Please go ahead.

Good afternoon, everyone. Hi. First question was sort of thinking about the outlook for next year. You mentioned that you're doing a lot of the pre-production work for the AMD racks. Last week, AMD talked about sort of a measured approach to ramping to make sure their manufacturing partners are prepared for the volumes. I guess I'm throwing that out there to wonder about what kind of share do you think we should consider for you guys having next year around sort of just general AMD Helios production. How does that sort of change? Can you give us more color on how that might change H1 to H2 next year?

Steve, Jure. Let me start with you there. First of all, as I look at opportunities that we have that we already made arrangement with end customers. We're going to have plenty of business for next year. I think so for us, it's all about timing. That's basically what we had in prepared statement, that if you look at next year, we are very confident about delivering 16+. We'll talk more about it in 90 days from now. Lot of exciting things, because we've been also expanding our capabilities. From our side, we believe we can deliver more than what we thought, let's say, a year ago.

Just to add to that, Steve, thanks for joining the call. We get the share question a lot, and frankly, it's pretty tough to gauge because they continue, our partner, AMD, continues to add more customers, which is great. That brings a bigger and broader addressable market, and we're very much focused on winning as much of that business as possible. We're going to continue to keep our go-to-market efforts going, to win the customers that we think are going to be the most successful in the market, but that's definitely a good thing for us. It is true, we do expect to ramp. As Jure mentioned, we commented, both of us did, in our prepared remarks about how we expect that business to ramp over time. That's what we're seeing from the customer forecasts too.

We're very pleased to be doing a lot of that pre-production work because on the manufacturing side, our responsibility is to make sure that we can build these products very well and on time, and we're learning more and more about it every single day, every single week. We're laser-focused on that. We are very much prepared. We've been making the necessary investments for quite a while now, doing all that production work. More to come in our Q4 earnings call. We'll lay out that schedule. As both Jure and I said, we expect revenue to ramp over time throughout 2027, and put us on a great trajectory going into fiscal year 2028 too, if all goes to plan.

Great. That's super helpful. Then as a follow-up, can you talk a little bit more about your printed circuit board fabrication operations? You've been investing, like you said. It seems like there's increasing demand for high-end boards, and you have some new sort of positive dynamics on aerospace and defense, which are unfortunately related to the conflict in Iran. Can you talk about the prospects for that going forward, and how much is that kind of helping margins over time? Love to get some more color there. Thanks.

Our printed circuit boards business today, Steve, is doing really well. Both here in North America, Singapore, as our three main sites. In addition to that, we have a factory in China. All our factories are designed to do high technology advanced stuff. We do boards up to 70+ layers. The factories are doing well right now. I wish I had more capacity to do it, but we're adding capacity. We're investing in multiple sites right now, and we'll continue to invest. It's more profitable than our average, let's put it that way. It's the business that will continue to drive, and between AI and military, that's our key focus.

Just to add to that, Steve, too, you've seen in our CPS results, just talk about the margin profile. That's been down a little bit year-over-year as we've gone throughout this fiscal year. That was intentional. We were bringing on board a lot of this capacity and these investments for boards, for metal fabrication. For the AI system racks, and even the new medium-voltage transformer business too. In this quarter, we started to see the payout on some of those investments. You can see the accelerated growth. Over time, once we start to fill up those plants and factories, we do expect the margin profile for CPS, depending on mix, to get back above in that 15% range, and being a big contributor to the overall margin profile and expansion of the company.

Great. That's all very helpful. Thank you.

Thank you. Next question comes from Mehdi Hosseini from SIG. Please go ahead.

Hi, this is Bastien, filling in for Mehdi. Within the ZT run rate of $5 billion-$6 billion, can you talk a little bit about where you see the timing and the size of the inference opportunity? Have you included that opportunity into the run rate, or is it incremental to your current run rate?

Hey, Bastien. I can answer that for you. This year, if you remember, is a bit of a transition year from ZT, because at the front end of the fiscal year, we had some of the legacy accelerated compute that we knew that would go down to zero, and now we're working to ramp the new next generation of accelerated compute. It's not the best annualized run rate to look at. What we did say all the way back when we first announced the ZT deal back in May of 2025, we thought that this first year, fiscal year 2026, would be somewhere in a $5 billion-$6 billion run rate. If you take the midpoint of our Q4 guide, along with the Q1 through Q3 actuals, you get to an annualized view like in the middle of that $5 billion-$6 billion range.

We're happy with that. Going forward, there's a lot of opportunity. We do expect the accelerated compute side of the business to accelerate. You'll see a whole different dynamic next year. Again, it's still too early to talk about a formal fiscal 2027 guide, but what Jure and I have been talking about for several quarters now is what we said all the way back when we announced the ZT deal. As a reminder was we thought that we could double the size of Sanmina within three years. Shortly after that, we accelerated that. That's where the implied $16 billion came from. That implied that in 2028. Soon after that announcement, we said that we accelerated that to fiscal 2027, the $16+ billion. We're feeling very good about the opportunity. Nothing's changed on that front.

Everything is very much on track. More to come on our formal 2027 guide.

Got it. Thanks. That's very helpful. As a follow-up, how should we think about your CPU and storage business going forward? Is $3 billion-$4 billion as an annual run rate a reasonable way to think about the business in fiscal year 2027?

A couple of things. If you think about the legacy platforms, we've talked about that being anywhere in the range of, say, $3 billion-$4 billion, changing from quarter to quarter. That's just for the legacy platforms that'll continue on here in short order or in the near term. Longer term, as I mentioned in my prepared remarks, and Jure touched on it, too, we've got a broader focus on the cloud and AI infrastructure and market. That's both across what we can do in core Sanmina facilities and in ZT Systems facilities. You're already starting to see that. We'll talk more about that in our 2027 guide, but we do remain interested in those product categories, both storage, and general purpose compute or CPU-based platforms, because there's a lot of opportunity there, and we think we have the capabilities to win it.

Operator, we have time for one more question, please.

Noted. Last question comes from Anja Soderstrom from Sidoti. Please go ahead.

Hi, everyone. Thank you for squeezing me in. Most of my questions have been addressed already. I'm just curious, with the joint venture with India, it was a lot higher payout than we had expected for the quarter, and then it's coming down. What's driving that up for the quarter?

We're very pleased with the performance of the joint venture, working closely with Reliance and our local India team there. A lot of opportunity in that geography and across multiple end markets. That's a huge area of opportunity for us that we've invested in. I think Jure and I both commented before about how we've expanded our footprint there. We put a new building in place that got in there around towards the end of our Q1 of the fiscal year. Now, we've been focused on filling that up. If you look at the Q4 guide and what I laid out there, too, Anja, we expect that to continue. It'll continue to be an area of focus for us across all end markets.

It's a growing area for us, Anja, and it looks good.

Thanks, Anja. First of all, I would like to thank everybody for joining us. I appreciate your time. Our company is doing well. This is a different company than a year ago. We are in a very strong position to build new Sanmina, and we're excited what's in front of us. Looking forward to catching up with you at any time. In the meantime, we're going to talk 90 days from now. With that, all the best.

Thank you. Ladies and gentlemen, the conference has now been concluded. Thank you for your participation. You may now disconnect your lines.

Sanmina (SANM) Q3 2026 Earnings Call Transcript

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