FLEX LTD.
For the period ended Jun 27, 2025. Filed Jul 25, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 27, 2025 · Filed Jul 25, 2025
FLEX$69.78+4.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-01-31.
0000866374-25-000008
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-27; filed 2025-07-25.
0000866374-25-000043
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 103 previous paragraphs and 97 current paragraphs.
49 unchanged; 31 reworded; 17 added; 23 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
◦Lifestyle, including appliances, floorcare, smart living, Heating, Ventilation and Air-Conditioning ("HVAC"), and power tools
Current report
◦Industrial, including industrial devices, capital equipment, renewables, critical power and embedded power
Current report
◦Automotive, including compute platforms, power electronics, motion, and interface
Current report
In today’s business landscape, we are witnessing greater product diversification by many companies, primarily in the technology sector, along with increased product complexity. These companies now require unique and customized manufacturing and supply chain solutions that meet their evolving requirements.
Current report
Tariffs
Current report
In the fourth quarter of our fiscal year ended March 31, 2025, the U.S. implemented a series of global tariffs, including on a number of countries in which Flex operates. Although we have been and expect to continue to be able to pass tariff costs through to our customers, the global tariff landscape, which continues to evolve, has the potential to meaningfully impact end customer demand. During the quarter ended June 27. 2025, tariff costs paid and recoveries from our customers impacted our revenues and costs of goods sold by less than one percent and had a negligible impact on our profitability. If, in the future, we are no longer able to fully pass through these tariffs, our results from operations and cash flows would be negatively impacted. For further information, refer to Part I, Item 1A, Risk Factors -"Global economic conditions, including inflationary pressures, currency volatility, stagflation, slower economic growth or recession, high or rising interest rates, trade conflicts, tariffs, geopolitical uncertainty and instability in financial markets have in the past adversely affected, and may in the future adversely affect, our business, results of operations, financial condition, and access to capital markets." in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.
Current report
•global economic conditions, including inflationary pressures, currency volatility, stagflation, slower economic growth or recession, high or rising interest rates, trade conflicts, tariffs, geopolitical uncertainty and instability in financial markets;
Current report
•changes in tax legislation;
Current report
The Company's Chief Executive Officer is our Chief Operating Decision Maker ("CODM") who uses segment income in evaluating how we allocate resources, assess performance and make strategic and operational decisions.
Current report
Selling, general and administrative expenses (“SG&A”) was $0.2 billion, or 3.5% of net sales, during the three-month period ended June 27, 2025, remaining consistent with $0.2 billion or 3.4% of net sales, during the three-month period ended June 28, 2024. The percentage consistency in SG&A reflects ongoing cost control efforts.
Current report
Amortization of intangible assets increased to $21 million for the three-month period ended June 27, 2025, compared to $16 million in the same period in fiscal year 2025, primarily due to acquisitions during fiscal year 2025.
Current report
Interest expense decreased to $51 million for the three-month period ended June 27, 2025, from $56 million in the prior year, driven by a decrease in interest expense from lower commercial paper borrowings and reduced receivable factoring costs, partially offset by increased interest expense on our long-term debt.
Current report
Other charges (income), net was $7 million during the three-month period ended June 27, 2025 compared to $2 million during the three-month period ended June 28, 2024, primarily due to fluctuations in foreign exchange rates during the quarter.
Current report
Equity in earnings (losses) of unconsolidated affiliates
Current report
Equity in losses was $20 million during the three-month period ended June 27, 2025, compared to earnings of $1 million during the three-month period ended June 28, 2024, primarily due to a $17 million loss related to a specific venture capital fund during the first quarter of fiscal year 2026.
Current report
On July 4, 2025, The One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA makes permanent various provisions of the Tax Cuts and Jobs Act which otherwise would have expired as well as makes significant modifications to the U.S. international tax framework. The Company is in the process of evaluating the impact of the OBBBA to our consolidated financial statements.
Removed paragraphs (23)
Previous report
◦Lifestyle, including appliances, consumer packaging, floorcare, micro mobility and audio
Previous report
◦Automotive, including next generation mobility, autonomous, connectivity, electrification, and smart technologies
Previous report
◦Industrial, including capital equipment, industrial devices, embedded and critical power offerings and renewables and grid edge.
Previous report
Over the past few years, we have seen an increased level of diversification by many companies, primarily in the technology sector. Some companies that have historically identified themselves as software providers, Internet service providers or e-commerce retailers have entered the highly competitive and rapidly evolving technology hardware markets, such as mobile devices, home entertainment and wearable devices. This trend has resulted in a significant change in the manufacturing and supply chain solution requirements of such companies. While the products have become more complex, the supply chain solutions required by such companies have become more customized and demanding, and it has changed the manufacturing and supply chain landscape significantly.
Previous report
Update on Component Shortages and Logistical Constraints on our Business
Previous report
Component shortages experienced in the recent past have largely subsided, however, logistical constraints exist which have increased freight costs. We continue to monitor potential supply chain disruptions, including as a result of emerging and evolving geopolitical conflicts and tensions. Refer to “Risk Factors - Supply chain disruptions, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, have in the past affected, and may in the future affect, our ability to meet customer demand, lead to higher costs, or result in excess or obsolete inventory.”and“- Global economic conditions, including inflationary pressures, currency volatility, slower growth or recession, higher interest rates, geopolitical uncertainty (including arising from the ongoing conflict between Russia and Ukraine and the Israel-Hamas war) and instability in financial markets may adversely affect our business, results of operations, financial condition, and access to capital markets.”as disclosed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.
Previous report
•global economic conditions, including inflationary pressures, currency volatility, slower growth or recession, higher interest rates, and geopolitical uncertainty (including arising from ongoing conflict between Russia and Ukraine and the Israel-Hamas war);
Previous report
•changes in tax legislation; and
Previous report
Net sales during the nine-month period ended December 31, 2024 totaled $19.4 billion, representing a decrease of approximately $0.8 billion, or 4% from $20.2 billion during the nine-month period ended December 31, 2023. Net sales for our FAS segment decreased approximately $0.1 billion, or 1% from the nine-month period ended December 31, 2023, primarily driven by a low single-digit percentage decrease in our CEC business from softer demand in our non-cloud businesses and a mid single-digit percentage decrease in our Lifestyle business due to softer demand, partially offset by an increase in our Consumer Devices business due to higher demand. Net sales for our FRS segment decreased approximately $0.7 billion, or 7% from the nine-month period ended December 31, 2023, primarily driven by a low double digit percentage decrease in our Industrial business, along with low single-digit percentage decreases in both our Automotive and Health Solutions businesses, due to lower customer demand. The factors described above that decreased FAS and FRS revenues were partially offset by the impact of certain customer arrangements transitioning from point in time to over time revenue recognition. This transition also contributed to an increase in contract assets as of December 31, 2024. The impact of certain customers arrangements transitioning to over time revenue increased net sales by less than 2% for the nine-month period ended December 31, 2024. Net sales decreased $0.8 billion to $5.9 billion in Asia, decreased $0.1 billion to $4.1 billion in Europe, and increased $0.1 billion to $9.4 billion in the Americas.
Previous report
Cost of sales during the nine-month period ended December 31, 2024 totaled $17.8 billion, representing a decrease of approximately $1.0 billion, or 5% from $18.7 billion during the nine-month period ended December 31, 2023. The lower cost of sales for the nine-month period ended December 31, 2024 was primarily driven by decreased consolidated sales of $0.8 billion or 4% and favorable mix and cost efficiencies. Cost of sales in our FAS segment for the nine-month period ended December 31, 2024 decreased approximately $0.3 billion, or 3% from the nine-month period ended December 31, 2023, which is consistent with a 1% decrease in FAS revenue during the same period combined with favorable mix and cost efficiencies. Cost of sales in our FRS segment for the nine-month period ended December 31, 2024 decreased approximately $0.7 billion, or 8% from the nine-month period ended December 31, 2023, which is consistent with a 7% decrease in FRS revenue during the same period.
Previous report
Gross profit during the nine-month period ended December 31, 2024 increased $0.2 billion to $1.6 billion, or 8.2% of net sales, from $1.4 billion, or 7.1% of net sales, during the nine-month period ended December 31, 2023. Gross margin improved 110 basis points during the same period due to the same factors noted above in the three-month period discussion.
Previous report
Selling, general and administrative expenses (“SG&A”) was approximately $0.2 billion, or 3.7% of net sales, during the three-month period ended December 31, 2024, increasing $36 million from approximately $0.2 billion or 3.2% of net sales, during the three-month period ended December 31, 2023. SG&A was $0.7 billion, or 3.5% of net sales, during the nine-month period ended December 31, 2024, increasing $9 million from $0.7 billion or 3.3% of net sales, during the nine-month period ended December 31, 2023. The increase in SG&A is largely attributed to variable costs associated with improved financial performance.
Previous report
Amortization of intangible assets remained relatively flat at $17 million for the three-month period ended December 31, 2024, compared to the same period in 2023. For the nine-month period ended December 31, 2024, amortization decreased to $49 million from $54 million for the same period in 2023, primarily due to certain intangibles now being fully amortized.
Previous report
Interest expense increased to $57 million for the three-month period ended December 31, 2024, from $50 million in the prior year, driven by a new debt issuance in the second quarter of fiscal year 2025. For the nine-month period ended December 31, 2024, interest expense increased to $166 million from $155 million for the same period in 2023, primarily due to higher short-term borrowings and the new debt issuance, partially offset by savings from debt repurchases and repayments.
Previous report
Other charges (income), net was $5 million during the three-month period ended December 31, 2024 compared to an expense of $9 million during the three-month period ended December 31, 2023, primarily due to favorable foreign exchange partially offset by losses on classification of a business held for sale.
Previous report
Other charges (income), net was $2 million during the nine-month period ended December 31, 2024 compared to an expense of $34 million during the nine-month period ended December 31, 2023, primarily driven by lower foreign exchange transaction losses and a gain from a Nextracker tax receivable agreement payment, partially offset by losses upon the classification of a business held for sale and on certain non-core equity method investments in the current period.
Previous report
On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law, which includes a new corporate minimum tax, a stock repurchase excise tax, numerous green energy credits, other tax provisions, and significantly increased enforcement resources. While detailed regulations on some aspects of the act are still outstanding, we do not anticipate a material impact to our consolidated financial statements from these provisions.
Previous report
Net income from continuing operations
Previous report
Net income from discontinued operations
Previous report
Net income from discontinued operations was zero during the three-month period ended December 31, 2024, compared to $104 million during the three-month period ended December 31, 2023; net income from discontinued operations was zero during the nine-month period ended December 31, 2024 compared to $373 million during the nine-month period ended December 31, 2023, as Nextracker was spun off during the fourth quarter of fiscal year 2024.
Previous report
Net income attributable to noncontrolling interest
Previous report
Net income attributable to noncontrolling interest was zero during the three-month period ended December 31, 2024, compared to $36 million during the three-month period ended December 31, 2023; net income attribute to noncontrolling interest was zero during the nine-month period ended December 31, 2024 compared to $239 million during the nine-month period ended December 31, 2023, as Nextracker was spun off during the fourth quarter of fiscal year 2024.
Previous report
During the nine-month period ended December 31, 2024, we repurchased approximately $53 million of our 4.750% Notes due June 2025 under our 10b5-1 bond buyback program, resulting in an immaterial gain on our condensed consolidated statement of operations.
Reworded paragraphs (31)
Previous wording
We are the advanced, end-to-end manufacturing partner of choice that helps market-leading brands design, build, deliver and manage innovative products that improve the world. Through the collective strength of a global workforce across approximately 30 countries with responsible, sustainable operations, we support our customers' entire product lifecycle with a broad array of services in every major region. Our full suite of specialized capabilities includes design and engineering, supply chain, manufacturing, post-production and post-sale services. We partner with customers across a diverse set of industries including cloud, communications, enterprise, automotive, industrial, consumer devices, lifestyle and healthcare. As of December 31, 2024, our two operating and reportable segments were as follows:
Current wording
We are the advanced, end-to-end manufacturing partner of choice that helps a diverse customer base design, build, deliver and manage innovative products that improve the world. Through the collective strength of a global workforce across approximately 30 countries with responsible, sustainable operations, we deliver technology innovation, supply chain, and manufacturing solutions to diverse industries and end markets. Our full suite of specialized capabilities includes design and engineering, supply chain, manufacturing, post-production and post-sale services, and proprietary products. We partner with customers across a diverse set of industries including data center, communications, enterprise, consumer, automotive, healthcare, industrial and power. As of June 27, 2025, our two operating and reportable segments were as follows:
Previous wording
◦Communications, Enterprise and Cloud ("CEC"), including data infrastructure, edge infrastructure and communications infrastructure
Current wording
◦Communications, Enterprise and Cloud ("CEC"), including data center, edge, and communications infrastructure
Previous wording
We continue to monitor and respond to the conflict in Ukraine and the associated sanctions and other restrictions. We also are monitoring and responding to the ongoing conflicts in the Middle East, including the Israel-Hamas war. As of the date of this report, there is no material impact to our business operations and financial performance in Ukraine and Israel. The full impact of the conflicts on our business operations and financial performance remains uncertain and will depend on future developments, including the severity and duration of the conflicts and their impact on regional and global economic conditions. We will continue to monitor the conflicts and assess the related restrictions and other effects and pursue prudent decisions for our team members, customers, and business.
Current wording
We continue to monitor and respond to the conflict in Ukraine and the associated sanctions and other restrictions. We also are monitoring and responding to the Israel-Hamas war. As of the date of this report, there is no material impact to our business operations and financial performance in Ukraine and Israel. The full impact of the conflicts on our business operations and financial performance remains uncertain and will depend on future developments, including the severity and duration of the conflicts and their impact on regional and global economic conditions. We will continue to monitor the conflicts and assess the related restrictions and other effects and pursue prudent decisions for our team members, customers, and business.
Previous wording
We are one of the world's largest providers of global supply chain solutions, with revenues of $19.4 billion for the nine-month period ended December 31, 2024 and $26.4 billion in the fiscal year ended March 31, 2024. We have established an extensive network of manufacturing facilities in the world's major consumer and enterprise markets (Asia, the Americas, and Europe) to serve the growing outsourcing needs of both multinational and regional customers. We design, build, ship, and service consumer and enterprise products for our customers through a network of approximately 100 facilities in approximately 30 countries across four continents. The following tables set forth the relative percentages and dollar amounts of net sales by region and by country, and net property and equipment by country, based on the location of our manufacturing sites:
Current wording
We are one of the world's largest providers of global supply chain solutions, with revenues of $6.6 billion for the three-month period ended June 27, 2025 and $25.8 billion in the fiscal year ended March 31, 2025. We have established an extensive network of manufacturing facilities in the world's major consumer and enterprise markets (Asia, the Americas, and Europe) to serve the growing outsourcing needs of both multinational and regional customers. We design, build, ship, and service consumer and enterprise products for our customers through a network of approximately 100 facilities in approximately 30 countries across four continents. The following tables set forth the relative percentages and dollar amounts of net sales by region and by country, and net property and equipment by country, based on the location of our manufacturing sites.
Previous wording
We believe that the combination of our extensive open innovation platform solutions, design and engineering services, advanced supply chain management solutions and services, significant scale and global presence, and manufacturing campuses in low-cost geographic areas provide us with a competitive advantage and strong differentiation in the market for designing, manufacturing and servicing consumer and enterprise products for leading multinational and regional customers. Specifically, we offer our customers the ability to simplify their global product development, manufacturing process, and after-sales services, and enable them to meaningfully accelerate their time to market and cost savings.
Current wording
We believe that the combination of our extensive open innovation platform solutions, design and engineering services, advanced supply chain management solutions and services, significant scale and global presence, and manufacturing campuses, including many in low-cost geographic areas, provide us with a competitive advantage and strong differentiation in the market for designing, manufacturing and servicing products for leading multinational and regional customers. Specifically, we offer our customers the ability to simplify their global product development, manufacturing process, and after-sales services, and enable them to meaningfully accelerate their time to market and cost savings.
Previous wording
•the effects that current credit and market conditions (including as a result of the ongoing conflict between Russia and Ukraine and the Israel-Hamas war) could have on the liquidity and financial condition of our customers and suppliers, including any impact on their ability to meet their contractual obligations;
Current wording
•the effects that current credit and market conditions could have on the liquidity and financial condition of our customers and suppliers, including any impact on their ability to meet their contractual obligations;
Previous wording
•the impacts on our business due to supply chain issues, including transportation disruptions, increased freight costs, and other constraints;
Current wording
•the impacts on our business due to supply chain issues, including component shortages, disruptions in transportation or other supply chain related constraints including disruptions in international commerce as a result of attacks on shipping vessels in the Red Sea;
Previous wording
•changes in trade regulations and treaties, trade policies and tariffs, the potential impacts of which, including increased cost of goods sold, decreased margins, increased pricing for customers, and reduced demand, we may be unable to mitigate depending on their scope and duration;
Current wording
•changes in trade regulations and treaties; and
Previous wording
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Due to geopolitical conflicts (including the Russian invasion of Ukraine and the Israel-Hamas war), there has been and we expect there will continue to be uncertainty and disruption in the global economy and financial markets. We have made estimates and assumptions taking into consideration certain possible impacts due to the Russian invasion of Ukraine, the Israel-Hamas war, and other geopolitical conflicts. These estimates may change, as new events occur, and additional information is obtained. Actual results may differ from previously estimated amounts, and such differences may be material to the consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they occur.
Current wording
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Due to global economic conditions, including the impact of ongoing trade conflicts and tariffs, and geopolitical conflicts (including the Russian invasion of Ukraine and the Israel-Hamas war), there has been and we expect there will continue to be uncertainty and disruption in the global economy and financial markets. We have made estimates and assumptions taking into consideration certain possible impacts due to the foregoing factors. These estimates may change, as new events occur, and additional information is obtained. Actual results may differ from previously estimated amounts, and such differences may be material to the condensed consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they occur.
Previous wording
Net sales during the three-month period ended December 31, 2024 totaled $6.6 billion, representing an increase of approximately $0.1 billion, or 2% from $6.4 billion during the three-month period ended December 31, 2023. Net sales for our FAS segment increased approximately $0.1 billion or 4% from the three-month period ended December 31, 2023, primarily driven by a mid single-digit percentage increase in our CEC business as a result of higher demand in cloud and a high teen percentage increase in our Consumer Devices business, partially offset by a low single-digit decrease in our Lifestyle business due to softer demand. Net sales for our FRS segment remained relatively flat from the three-month period ended December 31, 2023. This was primarily driven by a mid single-digit percentage decrease in our Automotive business due to lower customer demand, which was offset by low single-digit percentage increases in both our Health Solutions and Industrial businesses, driven by continued strength in medical devices and data center power. Net sales decreased $8 million to $2.0 billion in Asia, increased $28 million to $1.4 billion in Europe, and increased $0.1 billion to $3.2 billion in the Americas.
Current wording
Net sales during the three-month period ended June 27, 2025 totaled $6.6 billion, representing an increase of approximately $0.3 billion, or 4% from $6.3 billion during the three-month period ended June 28, 2024. Net sales for our FAS segment increased approximately $0.3 billion, or 10% from the three-month period ended June 28, 2024, primarily driven by a strong increase in our CEC business from increased demand in data center cloud, partially offset by a significant decrease in our Consumer Devices business due to lower demand. Net sales for our FRS segment decreased approximately $0.1 billion, or 2% from the three-month period ended June 28, 2024, as growth in data center power combined with sales from our recent Crown acquisition was more than offset by weaker demand in our core Industrial, Automotive, and Health Solutions businesses. Net sales remained consistent in Asia at $1.9 billion, decreased $0.1 billion to $1.3 billion in Europe and increased $0.4 billion to $3.4 billion in the Americas.
Previous wording
Our ten largest customers during the three and nine-month periods ended December 31, 2024 accounted for approximately 45% and 44% of net sales, respectively. Our ten largest customers during the three and nine-month periods ended December 31, 2023 accounted for approximately 39% and 37% of net sales, respectively. No customer accounted for more than 10% of net sales during the three or nine-month periods ended December 31, 2024 or December 31, 2023.
Current wording
Our ten largest customers during the three-month periods ended June 27, 2025 and June 28, 2024 accounted for approximately 48% and 43% of net sales, respectively. No customer accounted for more than 10% of net sales during the three-month periods ended June 27, 2025 or June 28, 2024.
Previous wording
Cost of sales during the three-month period ended December 31, 2024 totaled $6.0 billion, representing an increase of approximately $25 million, or 0.4% from $5.9 billion during the three-month period ended December 31, 2023. The higher cost of sales for the three-month period ended December 31, 2024 was primarily driven by a $0.1 billion or 2% increase in consolidated sales, partially offset by cost efficiencies and favorable mix. Cost of sales in our FAS segment for the three-month period ended December 31, 2024 increased approximately $70 million, or 2% from the three-month period ended December 31, 2023, due to higher revenues in our CEC and Consumer Devices businesses net of favorable mix and FAS cost efficiencies. Cost of sales in our FRS segment for the three-month period ended December 31, 2024 decreased approximately $44 million, or 2% from the three-month period ended December 31, 2023, on relatively flat revenue due to favorable mix and cost efficiencies.
Current wording
Cost of sales during the three-month period ended June 27, 2025, totaled $6.0 billion, representing an increase of $0.2 billion, or 3% from $5.8 billion during the three-month period ended June 28, 2024. The higher cost of sales for the three-month period ended June 27, 2025, was primarily driven by a $0.3 billion or 4% increase in consolidated sales, partially offset by cost efficiencies and favorable mix. Cost of sales in our FAS segment for the three-month period ended June 27, 2025, increased approximately $0.3 billion, or 8% from the three-month period ended June 28, 2024, due to revenue growth of 10% offset by favorable mix and cost efficiencies. Cost of sales in our FRS segment for the three-month period ended June 27, 2025, decreased approximately $0.1 billion, or 4% from the three-month period ended June 28, 2024, outpacing a 2% revenue decline due to favorable mix and cost efficiencies.
Previous wording
Gross profit is affected by fluctuations in cost of sales elements as outlined above and further by a number of factors, including product lifecycles, unit volumes, product mix, pricing, competition, new product introductions, and the expansion or consolidation of manufacturing facilities, as well as specific restructuring activities initiated from time to time. The flexible design of our manufacturing processes allows us to manufacture a broad range of products in our facilities and better utilize our manufacturing capacity across our diverse geographic footprint and service customers from all markets. In the case of new programs, profitability normally lags revenue growth due to product start-up costs, lower manufacturing program volumes in the start-up phase, operational inefficiencies, and under-absorbed overhead. Gross margin for these programs often improves over time as manufacturing volumes increase, as our utilization rates and overhead absorption improve, and as we increase the level of manufacturing services content. As a result of these various factors, our gross margin varies from period to period.
Current wording
Gross profit is affected by fluctuations in net sales and cost of sales elements as outlined above and further by a number of factors, including product lifecycles, unit volumes, product mix, pricing, competition, new product introductions, and the expansion or consolidation of manufacturing facilities, as well as specific restructuring activities initiated from time to time. The flexible design of our manufacturing processes allows us to manufacture a broad range of products in our facilities and better utilize our manufacturing capacity across our diverse geographic footprint and service customers from all markets. In the case of new programs, profitability normally lags revenue growth due to product start-up costs, lower manufacturing program volumes in the start-up phase, operational inefficiencies, and under-absorbed overhead. Gross margin for these programs often improves over time as manufacturing volumes increase, as our utilization rates and overhead absorption improve, and as we increase the level of manufacturing services content. As a result of these various factors, our gross margin varies from period to period.
Previous wording
Gross profit during the three-month period ended December 31, 2024 increased $0.2 billion to $0.6 billion, or 9.1% of net sales, from $0.4 billion, or 6.7% of net sales, during the three-month period ended December 31, 2023. Gross margin improved 240 basis points during the three-month period ended December 31, 2024 primarily due to favorable mix and continued operational execution.
Current wording
Gross profit during the three-month period ended June 27, 2025 increased $0.1 billion to $0.6 billion, or 8.7% of net sales, from $0.5 billion, or 7.5% of net sales, during the three-month period ended June 28, 2024. Gross margin improved 120 basis points year over year primarily due to favorable mix and continued operational execution.
Previous wording
An operating segment's performance is evaluated based on its pre-tax operating contribution, or segment income. Segment income is defined as net sales less cost of sales, and segment selling, general and administrative expenses, and does not include intangible amortization, stock-based compensation, restructuring charges, customer related asset impairment (recoveries), legal and other, interest expense, and other charges (income), net. A portion of depreciation is allocated to the respective segments, together with other general corporate research and development and administrative expenses.
Current wording
An operating segment's performance is evaluated based on its pre-tax operating contribution, or segment income. Segment income is defined as net sales less cost of sales, and segment selling, general and administrative expenses, and does not include amortization of intangibles, stock-based compensation, certain restructuring charges, customer related asset impairment, legal and other, interest expense, interest income, other charges (income), net, and equity in earnings of unconsolidated affiliates. A portion of depreciation is allocated to the respective segments, together with other general corporate, research and development and administrative expenses.
Previous wording
FAS segment margin increased approximately 120 basis points to 6.3% for the three-month period ended December 31, 2024, and 130 basis points to 5.9% for the nine-month period ended December 31, 2024, compared to 5.1% and 4.6%, respectively, in the prior-year periods, primarily driven by continued mix improvement and strong cost execution.
Current wording
FAS segment margin increased approximately 120 basis points to 6.5% for the three-month period ended June 27, 2025, from 5.3%, for the three-month period ended June 28, 2024, primarily driven by continued mix improvement and strong operational execution.
Previous wording
FRS segment margin increased approximately 130 basis points to 6.7% for the three-month period ended December 31, 2024, and 50 basis points to 5.7% for the nine-month period ended December 31, 2024, compared to 5.4% and 5.2%, respectively, in the prior-year periods, primarily driven by favorable mix and strong cost execution.
Current wording
FRS segment margin increased approximately 100 basis points to 6.0% for the three-month period ended June 27, 2025, compared to 5.0%, for the three-month period ended June 28, 2024, primarily driven by favorable mix and strong operational execution.
Previous wording
We committed to targeted restructuring activities to improve operational efficiencies by reducing excess workforce capacity. During the three and nine-month periods ended December 31, 2024, we recognized approximately $12 million and $55 million of restructuring charges, respectively, primarily related to employee severance.
Current wording
We undertook targeted restructuring activities to improve operational efficiencies by reducing excess workforce capacity. During the three-month period ended June 27, 2025, we recognized approximately $23 million of restructuring charges primarily related to employee severance, compared to $25 million in the same period in fiscal year 2025.
Previous wording
Interest income for the three-month period ended December 31, 2024, increased to $16 million compared to $13 million for the same period in 2023. For the nine-month period ended December 31, 2024, interest income increased to $48 million compared to $44 million in the prior year. These results remain consistent with the equivalent prior year periods, reflecting higher average cash balances.
Current wording
Interest income for the three-month period ended June 27, 2025, decreased to $13 million compared to $16 million for the same period in fiscal year 2025. These results are the result of lower interest rates and lower average cash balances comparatively between the two periods.
Previous wording
The consolidated effective tax rate was 9% and 17% for the three and nine-month periods ended December 31, 2024, and 15% and 13% for the three and nine-month periods ended December 31, 2023, respectively. The effective rate varies from the Singapore statutory rate of 17% as a result of recognition of earnings in different jurisdictions (we generate most of our revenues and profits from operations outside of Singapore), operating loss carryforwards, income tax credits, release of previously established valuation allowances for deferred tax assets, liabilities for uncertain tax positions, as well as the effects of certain tax holidays and incentives granted to our subsidiaries primarily in China, Malaysia, the Netherlands and Israel. The effective tax rate for the three-month period ended December 31, 2024 was significantly lower than the effective tax rate for the three-month period ended December 31, 2023, primarily due to the recognition of approximately $26 million of interest recoverable on prior periods taxes paid by one of our Brazilian subsidiaries. The right to receive the interest became unconditional during the period. The effective tax rate for the nine-month period ended December 31, 2024 was higher than the effective tax rate for the nine-month period ended December 31, 2023 primarily due to the tax accrual required for our U.S. tax group after the U.S. tax group valuation allowance release in the fiscal year ended March 31, 2024 and the recognition of a withholding tax accrual on the undistributed earnings of our Chinese subsidiaries due to the decision in the fiscal year ended March 31, 2024 to not indefinitely reinvest our China earnings in China.
Current wording
The consolidated effective tax rate was 22% and 28% for the three-month periods ended June 27, 2025 and June 28, 2024, respectively. The effective rate varies from the Singapore statutory rate of 17% as a result of recognition of earnings in different jurisdictions (we generate most of our revenues and profits from operations outside of Singapore), operating loss carryforwards, income tax credits, release of previously established valuation allowances for deferred tax assets, liabilities for uncertain tax positions, as well as the effects of certain tax holidays and incentives granted to our subsidiaries primarily in China, Costa Rica, Malaysia, the Netherlands and Israel. The effective tax rate for the three-month period ended June 27, 2025 was lower than the effective tax rate for the three-month period ended June 28, 2024, for a variety of reasons, primarily favorable foreign exchange impacts, tax benefits on restructuring charges, and additional interest recoverable on prior periods taxes paid by one of our Brazilian subsidiaries.
Previous wording
The OECD Pillar Two Global Anti-Base Erosion (“GloBE”) model rules, issued under the OECD Inclusive Framework on Base Erosion and Profit Shifting, introduce a global minimum tax of 15% applicable to multinational enterprise groups with consolidated financial statement revenue in excess of €750 million. Numerous foreign jurisdictions have already enacted tax legislation based on the GloBE rules, with some effective as early as January 1, 2024. As of December 31, 2024, we recognized a nominal income tax expense for Pillar Two GloBE minimum tax. The Company is continuously monitoring the evolving application of this legislation and assessing its potential impact on our future tax liability.
Current wording
The OECD Pillar Two Global Anti-Base Erosion (“GloBE”) model rules, issued under the OECD Inclusive Framework on Base Erosion and Profit Shifting, introduce a global minimum tax of 15% applicable to multinational enterprise groups with consolidated financial statement revenue in excess of €750 million. Numerous foreign jurisdictions have already enacted tax legislation based on the GloBE rules, with some effective as early as January 1, 2024. As of June 27, 2025, the Company has reflected all estimated impacts of the Pillar Two GloBE minimum tax accordingly within its estimated annual effective tax rate for the year.
Previous wording
Net income from continuing operations was $263 million during the three-month period ended December 31, 2024, compared to $129 million during the three-month period ended December 31, 2023; net income from continuing operations was $616 million during the nine-month period ended December 31, 2024 compared to $477 million during the nine-month period ended December 31, 2023, driven by the factors discussed above.
Current wording
Net income was $192 million during the three-month period ended June 27, 2025, compared to $139 million during the three-month period ended June 28, 2024, driven by the factors discussed above.
Previous wording
We continuously evaluate our ability to meet our obligations over the next 12 months and beyond and proactively reset our capital structure to improve maturities and liquidity. We expect that our current financial condition, including our liquidity sources are adequate to fund current and future commitments. As of December 31, 2024, we had cash and cash equivalents of approximately $2.3 billion and bank and other borrowings of approximately $3.7 billion. We have a $2.5 billion revolving credit facility that is due to mature in July 2027, under which we had no borrowings outstanding as of December 31, 2024. We also issued $500 million of 5.250% Notes due January 2032 (the "2032 Senior Notes") in the second quarter of fiscal year 2025. As of December 31, 2024, we were in compliance with the covenants under all of our credit facilities and indentures; we also expect to remain in compliance with the covenants in the upcoming 12 months for our credit facilities and indentures.
Current wording
We continuously evaluate our ability to meet our obligations over the next 12 months and beyond and proactively reset our capital structure to improve maturities and liquidity. We expect that our current financial condition, including our liquidity sources are adequate to fund current and future commitments. As of June 27, 2025, we had cash and cash equivalents of approximately $2.2 billion and bank and other borrowings of approximately $3.7 billion and had a $2.5 billion revolving credit facility under which we had no borrowings outstanding as of June 27, 2025. In July 2025, the $2.5 billion revolving credit facility was replaced by a new $2.75 billion revolving credit facility, which matures in July 2030. We also drew down $500 million from our Delayed Draw Term Loan which is due December 31, 2027 ("the "2027 Delayed Draw Term Loan") in the first quarter of fiscal year 2026. During the first quarter of fiscal year 2026, we repaid the 4.750% Senior Notes due June 2025. As of June 27, 2025, we were in compliance with the covenants under all of our credit facilities and indentures; we also expect to remain in compliance with the covenants in the upcoming 12 months for our credit facilities and indentures. We do not anticipate that the new credit facility will impact our compliance with covenants.
Previous wording
Cash provided by operating activities was $1.1 billion during the nine-month period ended December 31, 2024, primarily driven by $0.6 billion of net income for the period plus $0.5 billion of non-cash charges such as depreciation, amortization, and stock-based compensation.
Current wording
Cash provided by operating activities was $0.4 billion during the three-month period ended June 27, 2025, primarily driven by $0.2 billion of net income for the period plus $0.2 billion of non-cash charges such as depreciation, amortization, and stock-based compensation.
Previous wording
We believe net working capital is a key metric that measures our liquidity. Net working capital is calculated as current assets less current liabilities. Net working capital decreased approximately $0.8 billion to $3.7 billion as of December 31, 2024, from $4.5 billion as of March 31, 2024. The decrease was primarily the result of the effect of a $0.5 billion increase in current liabilities as a result of growth in short-term debt of $0.5 billion and accounts payable of $0.6 billion offset in part by reductions in working capital advances. In addition, current assets decreased by $0.2 billion as a result of decreases in inventory offset in part by growth in contract assets and accounts receivable.
Current wording
We believe net working capital is a key metric that measures our liquidity. Net working capital is calculated as current assets less current liabilities. Net working capital increased approximately $0.5 billion to $3.5 billion as of June 27, 2025, from $3.0 billion as of March 31, 2025. The increase was primarily the result of a $0.5 billion decrease in the current portion of long-term debt driven by the repayment of the 4.750% Senior Notes during the first quarter. Other movements in working capital largely offset themselves with increases of $0.2 billion in accounts receivable, $0.2 billion in contract assets and $0.1 billion in inventory, against increases of $0.7 billion in accounts payable and $0.1 billion in other current liabilities.
Previous wording
Net cash used in investing activities was $0.6 billion during the nine-month period ended December 31, 2024. This was primarily driven by $0.3 billion of cash paid for the acquisitions of Crown Technical Systems and JETCOOL Technologies Inc. in November 2024, net of cash acquired, and $0.3 billion of net capital expenditures for property and equipment to continue expanding capabilities and capacity in support of primarily our Automotive, CEC, and Industrial businesses.
Current wording
Net cash used in investing activities was $0.2 billion during the three-month period ended June 27, 2025. This was primarily driven by $0.1 billion of net capital expenditures for property and equipment to continue expanding capabilities and capacity in support of our Automotive, CEC, and Industrial businesses as well as payment for a business acquisition during the period.
Previous wording
We believe adjusted free cash flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to repay debt obligations, make investments, fund acquisitions, repurchase company shares and for certain other activities. Our adjusted free cash flow is defined as cash from operations, less net purchases of property and equipment allowing us to present adjusted cash flows on a consistent basis for investors. Our adjusted free cash flow for the nine-month periods ended December 31, 2024 and December 31, 2023 was an inflow of $0.8 billion and $0.2 billion, respectively. Adjusted free cash flow is not a measure of liquidity under U.S. GAAP, and may not be defined and calculated by other companies in the same manner. Adjusted free cash flow should not be considered in isolation or as an alternative to net cash provided by operating activities. Adjusted free cash flows reconcile to the most directly comparable GAAP financial measure of cash flows from operations as follows:
Current wording
We believe adjusted free cash flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to repay debt obligations, make investments, fund acquisitions, repurchase company shares and for certain other activities. Our adjusted free cash flow is defined as cash from operations, less net purchases of property and equipment allowing us to present adjusted cash flows on a consistent basis for investors. Our adjusted free cash flow for the three-month periods ended June 27, 2025 and June 28, 2024 was an inflow of $0.3 billion and $0.2 billion, respectively. Adjusted free cash flow is not a measure of liquidity under U.S. GAAP, and may not be defined and calculated by other companies in the same manner. Adjusted free cash flow should not be considered in isolation or as an alternative to net cash provided by operating activities. Adjusted free cash flows reconcile to the most directly comparable GAAP financial measure of cash flows from operations as follows:
Previous wording
Cash used by financing activities was $0.5 billion during the nine-month period ended December 31, 2024, which was primarily driven by $1.0 billion of cash paid for the repurchase of our ordinary shares offset by $0.5 billion of proceeds from the issuance of the 2032 Senior Notes.
Current wording
Cash used by financing activities was $0.3 billion during the three-month period ended June 27, 2025, which was primarily driven by $0.2 billion of cash paid for the repurchase of our ordinary shares as our debt repayments and borrowings largely offset.
Previous wording
Our cash balances are generated and held in numerous locations throughout the world. Liquidity is affected by many factors, some of which are based on normal ongoing operations of the business and some of which arise from fluctuations related to global economics and markets. Local government regulations may restrict our ability to move cash balances to meet cash needs under certain circumstances; however, any current restrictions are not material. We do not currently expect such regulations and restrictions to impact our ability to pay vendors and conduct operations throughout the global organization. We believe that our existing cash balances, together with anticipated cash flows from operations and borrowings available under our credit facilities, will be sufficient to fund our operations through at least the next twelve months and beyond. As of December 31, 2024 and March 31, 2024, approximately 78% and 55%, respectively, of our cash and cash equivalents were held by foreign subsidiaries outside of Singapore. Although substantially all of the amounts held outside of Singapore could be repatriated under current laws, a significant amount could be subject to income tax withholdings. We provide for tax liabilities on these amounts for financial statement purposes, except for certain of our foreign earnings that are considered indefinitely reinvested outside of Singapore (approximately $0.7 billion as of March 31, 2024). Repatriation could result in an additional income tax payment; however, for the majority of our foreign entities, our intent is to permanently reinvest these funds outside of Singapore and our current plans do not demonstrate a need to repatriate them to fund our operations in jurisdictions outside of where they are held. Where local restrictions prevent an efficient intercompany transfer of funds, our intent is that cash balances would remain outside of Singapore and we would meet our liquidity needs through ongoing cash flows, external borrowings, or both.
Current wording
Our cash balances are generated and held in numerous locations throughout the world. Liquidity is affected by many factors, some of which are based on normal ongoing operations of the business and some of which arise from fluctuations related to global economics and markets. Local government regulations may restrict our ability to move cash balances to meet cash needs under certain circumstances; however, any current restrictions are not material. We do not currently expect such regulations and restrictions to impact our ability to pay vendors and conduct operations throughout the global organization. We believe that our existing cash balances, together with anticipated cash flows from operations and borrowings available under our credit facilities, will be sufficient to fund our operations through at least the next twelve months and beyond. As of June 27, 2025 and March 31, 2025, approximately 81% of our cash and cash equivalents were held by foreign subsidiaries outside of Singapore. Although substantially all of the amounts held outside of Singapore could be repatriated under current laws, a significant amount could be subject to income tax withholdings. We provide for tax liabilities on these amounts for financial statement purposes, except for certain of our foreign earnings that are considered indefinitely reinvested outside of Singapore (approximately $0.8 billion as of March 31, 2025). Repatriation could result in an additional income tax payment; however, for the majority of our foreign entities, our intent is to permanently reinvest these funds outside of Singapore and our current plans do not demonstrate a need to repatriate them to fund our operations in jurisdictions outside of where they are held. Where local restrictions prevent an efficient intercompany transfer of funds, our intent is that cash balances would remain outside of Singapore and we would meet our liquidity needs through ongoing cash flows, external borrowings, or both.
Previous wording
Under our current share repurchase program, our Board of Directors authorized repurchases of our outstanding ordinary shares for up to $1.7 billion in accordance with the share purchase mandate approved by our shareholders at the date of the most recent Annual General Meeting which was held on August 8, 2024. During the nine-month period ended December 31, 2024, we paid $958 million to repurchase shares under the current and prior repurchase plans at an average price of $31.36 per share. As of December 31, 2024, shares in the aggregate amount of $1.3 billion were available to be repurchased under the current plan.
Current wording
Under our current share repurchase program, our Board of Directors authorized repurchases of our outstanding ordinary shares for up to $1.7 billion in accordance with the share purchase mandate approved by our shareholders at the date of the most recent Annual General Meeting which was held on August 8, 2024. During the three-month period ended June 27, 2025, we paid $0.2 billion to repurchase shares under the current repurchase plan at an average price of $34.29 per share. As of June 27, 2025, shares in the aggregate amount of $0.8 billion were available to be repurchased under the current plan.
Previous wording
In August 2024, we issued the 2032 Senior Notes, and other than such issuance, there were no material changes in our contractual obligations and commitments as of December 31, 2024.
Current wording
In June 2025, the Company drew down the 2027 Delayed Draw Term Loan and repaid the 4.750% Senior Notes due June 2025. There were no other material changes in our contractual obligations and commitments as of June 27, 2025.