Plexus (PLXS) closed fiscal 2026 with record annual revenue of $5 billion and projected mid- to upper-teen revenue growth for fiscal 2027, supported by program ramps, market-share gains and demand across its aerospace and defense, healthcare and industrial markets.
Fiscal fourth-quarter revenue reached $1.427 billion, above the company’s guidance range of $1.330 billion to $1.380 billion. Revenue increased 9% sequentially and 35% from a year earlier.
Quarterly gross margin was 10.2%, compared with 10.1% in the preceding quarter and 9.9% a year earlier. GAAP operating margin rose to 6.0% from 4.7% in the third quarter and 5.0% in the prior-year period. Non-GAAP operating margin was 6.7%, exceeding the guided range of 6.1% to 6.5%.
GAAP diluted earnings per share were $2.51, up from $1.58 sequentially and $1.87 a year earlier. Non-GAAP diluted EPS reached $2.84, above the company’s $2.47-to-$2.63 guidance and compared with $2.32 in the third quarter and $2.14 in the year-earlier quarter. Plexus’ non-GAAP measures exclude stock-based compensation expense.
For the full fiscal year, operating margin was 6.2%, exceeding the company’s 6.0% objective. Plexus now has a non-GAAP operating margin goal of 6.5% to 7.0% and expects further margin expansion in fiscal 2027.
Sector growth broadens
Industrial was the strongest sequential performer in the fourth quarter, with revenue increasing 17% from the preceding period. The result exceeded the company’s guidance, which Plexus attributed to stronger customer demand and supply-chain and operational execution. Industrial revenue grew 27% for fiscal 2026. The company expects growth of more than 20% in fiscal 2027, citing core industrial activity and continued strength in semiconductor capital equipment programs. First-quarter industrial revenue is expected to decline by a low-single-digit percentage sequentially.
Healthcare and Life Sciences revenue rose 6% sequentially in the fourth quarter, also exceeding guidance as Plexus supported stronger customer demand. Full-year revenue increased 19%, while fiscal 2027 growth is expected to be in the high-single digits. The company anticipates low-single-digit sequential growth in the first quarter. Recent wins included a new surgical robotics relationship and a cardiac defibrillation program drawing on Plexus’ medical-device, regulatory and regionalization capabilities.
Aerospace and Defense revenue declined 4% sequentially in the fourth quarter, missing guidance because of materials timing. The sector still delivered 23% growth for fiscal 2026. Plexus expects revenue growth to exceed 20% in fiscal 2027, supported by program ramps, market-share gains and broad-based end-market demand. First-quarter revenue is projected to rise by a high-single-digit percentage sequentially. Fourth-quarter wins in the sector increased about 60% year over year and included combat-training and flight-refueling programs.
Plexus recorded $290 million of wins during the quarter, with contributions across its market sectors. Its qualified manufacturing opportunity funnel, including sustaining services, expanded 33% year over year to a record level.
Fiscal 2027 outlook
For the fiscal first quarter of 2027, Plexus expects revenue of $1.410 billion to $1.460 billion. GAAP diluted EPS is projected at $2.16 to $2.32, while non-GAAP diluted EPS is expected to range from $2.46 to $2.62.
The company forecasts a first-quarter gross margin of 9.7% to 10.0%, a GAAP operating margin of 5.5% to 5.9% and a non-GAAP operating margin of 6.0% to 6.4%. Selling and administrative expense, including stock-based compensation, is expected to be $61 million to $62 million. Management also anticipates a non-GAAP effective tax rate of 16% to 18% and non-operating expense of about $6.8 million.
Plexus expects sustained working-capital efficiency and disciplined capital spending to support strong returns on invested capital in fiscal 2027. Fourth-quarter return on invested capital was 15.8%, above the company’s long-term goal of more than 15%, while the net cash cycle remained at 62 days. The company expects the cash cycle to rise to between 66 and 70 days in the first quarter.
Fourth-quarter free cash flow was $6.4 million, compared with an outflow of $0.7 million in the preceding quarter and inflow of $97.2 million a year earlier. Plexus ended the period with $281 million in cash and $261 million in total debt and repurchased $21.4 million of shares during the quarter.
The outlook remains subject to execution and forecasting risks identified in the company’s regulatory filings. Near-term considerations disclosed in the presentation include materials timing in Aerospace and Defense, the expected sequential decline in Industrial revenue, a lower first-quarter margin range than the fourth-quarter result and a projected increase in cash-cycle days.
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