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Flex’s 75% CPI Growth Potential: Is The Spin-Off Coming At The Right Time?

Flex Ltd. reported a strong start to fiscal year 2027, driven by robust execution across its three business segments as it prepares for the upcoming spin-off of its Cloud and Power Infrastructure (CPI) segment scheduled for the first quarter of calendar 2027. The company posted revenue growth of 21% year-over-year in the first quarter, reaching $7.9 billion, with adjusted gross margin improving 50 basis points to 9.6%. Adjusted operating profit was $534 million, up 35% year-over-year, with operating margins expanding 70 basis points to 6.7%. Adjusted earnings per share rose 39% to $1.00. Segment-wise, CPI led with a 35% revenue increase to $2.2 billion and adjusted operating margin growing 20 basis points to 9.7%, reflecting strength in power infrastructure and cloud cooling programs. Integrated Technology Solutions (ITS) grew 20% to $3.1 billion, propelled by communications, though offset partially by weakness in consumer end markets, with a slight margin increase.