Plexus Q3 2025 slides: revenue tops $1 billion as operating margin hits 6% target

Plexus Corp (NASDAQ:PLXS) presented its fiscal third quarter 2025 results on July 23, 2025, showcasing revenue exceeding $1 billion and achievement of its 6% operating margin target. The electronic manufacturing services provider reported growth across all market sectors while maintaining strong financial performance.

Quarterly Performance Highlights

Plexus delivered Q3 fiscal 2025 revenue of $1.051 billion, representing a 3.2% increase from the previous quarter’s $1.018 billion and a 9.4% year-over-year improvement. The company achieved a non-GAAP operating margin of 6.0%, meeting its stated goal and showing improvement from Q2’s 5.7%. Non-GAAP earnings per share reached $1.90, exceeding both the previous quarter’s $1.85 and the company’s guidance range of $1.65 to $1.80.

"Share gains, new program ramps and exciting growth technologies support growth outpacing our end markets," the company noted in its presentation, highlighting its continued focus on operational excellence.

As shown in the following chart of quarterly financial results:

The company’s business development metrics also showed positive momentum, with Q3 wins of $250 million, up 21.9% from Q2’s $205 million. The qualified manufacturing funnel remained robust at $3.612 billion, providing a strong pipeline for future growth.

The following chart illustrates the company’s wins and funnel performance:

Detailed Financial Analysis

Plexus reported a gross margin of 10.1% for Q3, slightly exceeding the midpoint of its guidance range of 9.9% to 10.2%. Selling and administrative expenses came in at $49.7 million, below the guidance range of $50.0 to $51.0 million, demonstrating effective cost control.

The company’s balance sheet continued to strengthen, with total debt decreasing to $143 million from $210 million in the previous quarter. Return on invested capital improved to 14.1% from 13.7% in Q2, reflecting efficient capital allocation. Cash cycle days increased slightly to 69 days from 68 days in the previous quarter.

The detailed income statement comparison reveals consistent improvement across key metrics:

Free cash flow for the quarter was $13.2 million, lower than the $16.5 million generated in Q2 but still contributing to the company’s projected $100 million in free cash flow for fiscal 2025. Plexus continued its shareholder return program with $18.4 million in share repurchases during Q3, up from $12.2 million in the previous quarter.

The following cash flow and balance sheet metrics highlight the company’s financial position:

Market Sector Performance

All three of Plexus’s market sectors showed sequential revenue growth in Q3, with aerospace/defense leading at 6% growth, followed by industrial at 4% and healthcare/life sciences at 2%.

The aerospace/defense sector generated $183 million in revenue, meeting expectations with particular strength in the defense subsector. The sector recorded $51 million in wins, including a new customer in support of satellite networks and broad-based wins in defense and space applications.

Healthcare/life sciences remained the largest sector with $420 million in revenue, though performance was slightly below expectations due to a customer design update. The sector recorded $116 million in wins, including an expanded relationship to support a global launch of new medical device technology.

The industrial sector delivered $415 million in revenue, meeting expectations as growth in broadband and energy offset semiconductor capital equipment push-outs. The sector recorded $83 million in wins, including continued share gains in semiconductor capital equipment.

Forward-Looking Statements

For the fiscal fourth quarter of 2025, Plexus provided guidance of:

• Revenue between $1.025 billion and $1.065 billion
• Non-GAAP operating margin of 5.7% to 6.1%
• Non-GAAP EPS of $1.82 to $1.97

This guidance represents continued strong performance, with the EPS midpoint of $1.90 maintaining the same level achieved in Q3. The company forecasts approximately $100 million in free cash flow for fiscal 2025.

As illustrated in the following guidance chart:

Looking ahead to fiscal 2026, Plexus expressed optimism across all sectors. The aerospace/defense sector is expected to see robust growth supported by new program ramps and customer additions. The healthcare/life sciences sector anticipates strong growth from ongoing and new program ramps. The industrial sector outlook is positive, benefiting from growth in energy and semiconductor capital equipment.

"Guidance midpoint represents F25 non-GAAP EPS growth of 26%," the company noted, highlighting the strong year-over-year performance expected for the full fiscal year.

Plexus also emphasized its sustainability achievements, including being named one of America’s Greatest Workplaces in Manufacturing 2025 by Newsweek and achieving customer satisfaction survey results at a 7-year high.

The company’s consistent financial execution, growing new business wins, and strong market positioning across diversified sectors suggest Plexus remains well-positioned for continued growth despite broader market challenges.

Full presentation:

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