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

Q3 2025

Q2 24/25

Q1 2025

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

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Sanmina

sanmina

This call is being recorded on Monday, January 27, 2025. I would now like to turn the conference over to Paige Melching, Senior Vice President of Investor Communications.

Thank you, Konstantin. Good afternoon, ladies and gentlemen, and welcome to Sanmina's Q1 fiscal 2025 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 Yuri Sola, Chairman and Chief Executive Officer.

And John Faust, Executive Vice President and Chief Financial Officer.

Before I turn the call over to Yuri, 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 with the slides provided on our website. Please turn to slide 3 of our 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 our Safe Harbor statement. The company is under no obligation to 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 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 operations for the Q1 ended December 28, 2024 on a GAAP basis as well as certain non GAAP financial information. A reconciliation between GAAP and non GAAP financial information is also provided in the press release and slides posted on our website. In general, on 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 they relate 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 Yuri.

Thanks, Paige. Good afternoon, ladies and gentlemen. Welcome and thank you all for being here with us today. First, I would like to take this opportunity to recognize Sanmina's leadership team and our employees for doing a great job. So to you, Sanmina's team, thank you for your dedication and delivering excellent service to our customers.

For the Q1 fiscal year 2025, we delivered solid revenue of $2,010,000,000 and non GAAP EPS of $1.44 per share. Again to Sanmina's employees, thank you and let's keep it up. Now let's go to our agenda for today's call. We have John, our CFO to review details of our results for you. I will follow-up with additional comments about Sanmina results and future goals.

Then John and I will open questions and answers. And now I would like to turn this call over to John. John?

Great. Thank you, Yuri, and good afternoon, ladies and gentlemen, and thank

you for joining us here today. Before I review our results for the Q1, I want to acknowledge the entire Sanmina team for their focused execution and thank them for delivering a solid start to the new fiscal year. Now please turn to Slide 5, where I'll speak to the financial highlights. We're very pleased with our Q1 results, which as you can see either met or exceeded all of our outlook commitments. Our revenue of $2,010,000,000 and our non GAAP operating margin of 5.6 percent each came in towards the high end of our outlook.

Also, our non GAAP gross margin of 9.0% and our non GAAP diluted earnings per share of $1.44 each exceeded our outlook. These results combined with how we exited the last fiscal year puts us on a good trajectory for the new fiscal year and sets us on the right path towards achieving our long term financial goals of driving growth and expanding margins. Now please turn to Slide 6, where I'll speak to the P and L performance. As I just mentioned, we delivered revenue of $2,010,000,000 which was up 7.0% compared to the same period a year ago. This was primarily driven by growth in the communications networks and cloud infrastructure end markets, which Yuri will speak to in more detail as a part of his prepared remarks.

Non GAAP gross profit was $180,100,000 or 9.0 percent of revenue, up 20 basis points compared to the same period a year ago. This was driven by favorable mix as well as operational efficiencies. Non GAAP operating expenses were $67,400,000 slightly above our outlook as we continued to make targeted investments to drive future growth. Non GAAP operating profit was $112,700,000 or 5.6 percent of revenue, up 10 basis points compared to the same period a year ago, driven by mix, focused execution and effective cost management. It's important to note that our non GAAP operating margin continues to be in line with the 5% to 6% short term target range that we have previously communicated.

Non GAAP other income and expense was $2,300,000 of net expense favorable to our guidance driven by our strong cash flow results. Non GAAP diluted earnings per share came in at $1.44 based on approximately 56,000,000 shares outstanding, up 10.8% compared to the same period a year ago or up 16.2% if you normalize for the tax rate change. As we mentioned on our prior call, we expect fiscal 2025 to be a growth year and our results for the Q1 represent a solid start towards achieving that objective. Now please turn to Slide 7, where I'll speak to the segment results. IMS revenue came in at $1,620,000,000 up 7.8% compared to the same period a year ago, driven by growth in the majority of our end markets, but primarily in the communications networks and cloud infrastructure end markets.

IMS non GAAP gross margin was 7.9%, up about 30 basis points compared to the same period a year ago due primarily to favorable mix and operational efficiencies. CPS revenue came in at $416,000,000 up 5.4% compared to the same period a year ago, driven by higher demand in most of our end markets. EPS non GAAP gross margin was 12.5%, down about 40 basis points compared to the same period a year ago, driven by unfavorable mix. While we're pleased with the performance of the IMS and CPS businesses this quarter, there is still room to improve, both in terms of revenue growth and margin expansion. And as such we will continue to focus on doing those going forward.

Now please turn to Slide 8 where I'll speak to the balance sheet highlights. As with the P and L results, we maintained a very strong balance sheet in the Q1. Cash and cash equivalents were $642,000,000 At the end of the quarter, we had no outstanding borrowings on our $800,000,000 revolver, leaving us with substantial liquidity of approximately $1,500,000,000 We ended the quarter with inventory, net of customer advances, of 1 $300,000,000 which was down approximately 5 percent versus the same period a year ago. When you look at our inventory reduction from either an inventory turns or days of inventory perspective, it represents a notable improvement from a year ago. While we're pleased with these results, there is still more work to be done when you look at where we've been historically.

So inventory will continue to be an area of focus for us going forward. Our non GAAP pre tax ROIC was 23.5 percent for the quarter, well above our weighted average cost of capital and an improvement from the 22.7% from the same period a year ago. As I've mentioned many times before, we have one of the strongest balance sheets in the industry with no net debt and a low gross leverage ratio of 0.49 times, which puts us in a great position to execute on our long term financial goals to drive growth and expand margins. Now please turn to Slide 9, where I'll speak to the cash flow highlights. As a result of the team's disciplined working capital management, our Q1 cash flow from operations came in at a solid $64,000,000 Capital expenditures were $17,000,000 for the quarter, below our outlook largely due to timing.

We continue to expect capital expenditures to be between 1% to 2% of revenue on a full year basis consistent with historical practice. Also, as I've mentioned before, we will continue to make strategic investments in the technology and capabilities needed to strengthen our position in the market and support our long term financial goals. Free cash flow was $47,000,000 During the quarter, we repurchased 206,000 shares for approximately $16,000,000 As of December 28, 2024, we had $37,000,000 remaining on our current share repurchase program. We're pleased with our strong cash flow performance as it gives us the flexibility to continue to invest in the business and return capital to our shareholders all through a disciplined and balanced capital allocation approach. Now please turn to Slide 10, where I'll speak to our capital allocation priorities.

When it comes to capital allocation, it's incredibly important to have a clear strategy and a well defined set of priorities when making decisions. Each quarter, we evaluate our capital allocation options and look for opportunities to maximize shareholder value, all while taking a disciplined ROI based approach. As I mentioned before, our long term financial goals are to drive growth and expand margins. And as such, 2 key capital allocation priorities are number 1, funding investments in organic growth and number 2, investing in strategic M and A and partnerships. It's also important to manage our leverage ratio, so we closely monitor our debt level and take the appropriate actions.

And lastly, another key capital allocation option that can help us drive shareholder value is share repurchases. We believe that our stock is undervalued in the market and as such share repurchases remain an attractive capital allocation option. To that end, earlier today, we announced that our Board of Directors authorized an additional $300,000,000 of share repurchases, which is incremental to the amount remaining on our prior program. This authorization has no expiration date as we intend to continue to repurchase shares opportunistically and in the context of the capital allocation strategy I just outlined. Now please turn to Slide 11, where I'll provide our outlook for the Q2, which is based on what we were seeing in the market, the forecast from our customers and takes into consideration our typical seasonality.

Our Q2 outlook is as follows. We expect revenue between $1,900,000,000 to $2,000,000,000 which at the midpoint of $1,950,000,000 puts us up 6.3% compared to the same period a year ago. Non GAAP gross margin of 8.4% to 8.8% dependent on mix. Operating expenses of $60,000,000 to $64,000,000 non GAAP operating margin of 5.3% to 5.7%. We expect other income and expense to be a net expense of approximately $5,000,000 a tax rate of 20% to 22%.

This is in line with our prior tax rate outlook, which as a reminder is up from the prior year due to the final utilization of our U. S. Federal net operating losses, the impact of the Pillar 2 global minimum tax, mix of jurisdictional earnings and other tax credits and incentives. We estimate an approximate $3,000,000 to $3,500,000 non cash reduction to our net income to reflect our India JV Partners equity interest. Non GAAP EPS in the range of $1.30 to 1 point $4.0 based on approximately 56,000,000 fully diluted shares outstanding.

At the midpoint of $1.35 that would put us up 3.5% compared to the same period a year ago or up 9.5% if you normalize for the tax rate change. Capital expenditures to be around $30,000,000 and finally, depreciation of approximately $30,000,000 In summary, based on the demand signals from our customers and our 2nd quarter outlook, we continue to expect FY 2025 to be a growth year. We believe we have the right set of customers and capabilities to be successful and are well positioned to take advantage of the opportunities ahead. And with that, let me turn the call over to Yuri.

Thank you, John. Ladies and gentlemen, let me add a few more comments about our results for the Q1 and the rest of the fiscal year 2025 and beyond. As you heard from John, our team delivered solid execution and excellent service to our customers. Revenue, gross margin, operating margin and non GAAP earnings per share were either met or exceeded our outlook. So overall, a good quarter.

I can also tell you that our customers' inventories continue to come down. We're also starting to see new programs ramp up as we plan beginning of the year and we see more positive trends from our customers. To talk more about it, please turn to Slide 14. Let's look at our outlook at the revenue by end markets for the Q1. Industrial and energy, medical, defense, Aerospace and Automotive was 63% of our revenue came at $1,269,000,000 It grew slightly 1% year over year.

Communication Network and Cloud Infrastructure was 37% of our revenue, dollars 737,000,000 growth of 19% year over year. For the Q1, total revenue of $2,000,000,000 plus is a solid start to a new year, a year over year growth of 7%. As you can see, top 10 customers for the quarter was 50.1% of our revenue. Bookings were solid, book to bill came 1 to 1. Please turn to Slide 15.

We continue to invest in key markets to drive the future growth. Industrial and Energy, we have strong customer base and we see new projects in the pipeline to drive the growth. Medical, as always, we have solid customer base, well diversified within the market, and we see positive trends for our long term growth. Defense and Aerospace, we continue to see strong market opportunities, and we expect new programs to drive the growth. Automotive and transportation, we continue to see solid demand.

We see positive trends and opportunities for a long term growth. High density, high performance networks, AI is driving these opportunities around these high performance networks and optical business. For cloud infrastructure, we see exciting opportunities. For cloud infrastructure, we're expanding our capabilities to meet present and future demand. Sanmina provides industry leading capabilities end to end solution from design to systems.

For this segment, we provide high technology printer circuit boards where we fabricate here in the United States and Singapore. We assemble this product. We also fabricate and manufacture the rock enclosure and open rocks, I would say, and liquid cooling systems. We provide design and server for storage systems. We provide optical modules.

End of the day, we put all these things together and we deliver fully integrated systems to our customers. Please turn to Slide 16. Let me add a few more comments about fiscal year 2025 outlook. For fiscal year 2025, we're forecasting revenue growth in the high single digits. We expect growth to come from new and existing programs.

We are also adding new customers with higher margin opportunities. We are focused on margin expansion and earnings growth. Earnings per share should grow at faster rate than revenue in fiscal year 2025. Short term, as John mentioned, our operating margin will be stable at that 5% to 6%. But as you see for the Q1, we delivered operating margin of 5.6% compared to the last quarter of 5.3%, very nice improvement quarter over quarter.

Long term for our business model, we expect to deliver operating margin of 6 plus percent. Again, for the fiscal year 2025, we expect to continue to generate strong cash flow and we'll continue to maximize shareholders' value short term and long term. Please turn to slide 17. In summary, we are focused on growing diversification in the key markets to drive profitable growth. Our manufacturing footprint is well aligned with the customer needs for the future.

Tardmina will deliver consistent cash generation to fund the business with disciplined approach. We remain focused on fundamentals and future financial performance. Sanmina continues to be a partner of our choice with our customers, the market leaders. We continue to execute on our strategy We continue to execute on our strategy and we

are positioning Sanmina to be a bigger company in the future.

Again, we are confident we will grow revenue, expand margin, grow earnings per share and generate cash in fiscal year 2025 beyond. We're excited about Sanmina's future. So ladies and gentlemen, I would like to thank you all for your time and support. Operator, we're now ready to open the lines for question and answers. Thank you all again.

Your first question comes from the line of Ruplu Bhattacharya from Bank of America. Your line is now open.

Hi, thank you for taking my questions. Hi, Yuri. I wanted to ask you about the guidance for fiscal 2025. So you're guiding for high single digit growth on revenues. One aspect of that is the cloud infrastructure business.

Can you remind us how much of this growth high single digits do you think comes from this cloud infrastructure segment? And you talked about adding new capabilities. So what is it that you're doing today? What is the capability that you're adding? And how many customers do you have?

Do you have one customer in cloud infrastructure? And how do you see that business growing?

Well, first of all, Ruplu, excellent question. Number 1, Samina is well diversified across the key markets that I just talked about. Industrial and Energy is our largest single market. Then it's communication networks, then medical and defense and aerospace and then cloud infrastructure. So as you can see, we're well diversified.

We have our industry leading customer base that's been with Cimina for a long time. Specific question regarding cloud infrastructure, I think what we bring to this segment is the end to end solution. We continue to invest. It's the market that we see more upside for growth based on what we offer to this market. We provide services here that are end to end from design to full system.

We provide high technology boards that we fabricate here in North America or Singapore for North America and European market. We ship into this segment today rock enclosures out of our California operations and out of Mexico, including liquid cooling. We design through our Viking Enterprise Storage Group. We design storage product and servers. We've been in that business for a long time.

We are establishing that business to grow. So we the key for us here at Ruplu is not just to do integration, but to offer some critical components that go inside of the rock and then fully integrate that and test and deliver that product fully assembled to the customer side. That's the model. So we are supplying not every hyperscaler or data center, we supply everything, but we're starting to expand into this market. But at the same time, we've been supporting this market through our components for a long time.

So it's opportunity for us to grow. We've been investing fairly, especially in last 12 months and we'll continue because we have some great customer opportunity that I believe will allow us to grow. But we're not just dependent on this segment. We are well diversified and we have no customer today over 10%. So well diversified And the most important, we got some new exciting customer that are top customers today.

to add to that, Fuqua, if I can, this is John. So just a couple of other things to note. If you look at the Q1 performance specifically, the communication networks and cloud infrastructure end markets, they grew 19% year over year. Now the other category, industrial, energy, medical, defense and aerospace and automotive was more flat. But in my prepared remarks, I mentioned how the majority of our end markets grew.

So there was one that's still under pressure. But all in all, we expect that growth, back to your first question, to come from all. And then on the capabilities point, I'll just add to Yuri's comments. We are making targeted investments in R and D, certain programs to build out those capabilities. You've got you know that we've got some of our own IP, Viking Enterprise Solutions, for example.

So looking at programs like that, that can help us drive that future growth that I mentioned.

Got it. Can I ask on the communication segment? I think Yuri, you made a statement that the inventory at customers is going down. This segment has been going through an inventory correction for the last year plus. Do you think that that inventory correction is over?

And how do you see your communication segment revenues growing this year?

First of all, I would say, as I said in my prepared statement, Ruplu, the inventory continued to come down. I still believe there's a little bit left, but it's let's use the I think we're in the last inning, let's say, if there's a 9 inning in this game, I think we're in an 8 or 9 inning depends on our customers. So definitely, there's a lot more excitement. And But how do I see this business? We But how do I see this business?

We expect this business definitely to grow a fair amount this year, at least what we've seen today and what we've seen from our key customers.

Okay. Maybe I'll ask a question to John. You announced that the board had authorized a new $300,000,000 buyback. You also laid out your priorities for cash. Given that, I mean, do you see more opportunity to have M and A in organic growth?

And how should we think about the pace of the buybacks?

Yes. So as I was mentioning in my comments, Ruplu, like when we think about capital allocation, we're all about driving growth. That's why the first two that I mentioned was investing in organic growth and then looking for opportunities and strategic M and A and partnerships, right? So we kind of lean more towards that because we really want to drive growth. But if we don't see immediate opportunities, right, like that's when we can go towards share repurchases.

And I think everybody's seen, you've seen our debt levels. We don't have a lot of long term debt. So we service that, but it's at attractive rates. And that's why if you look at like last year, for example, we returned almost 100% of free cash flow to shareholders because that was an attractive option, the share repurchases, and we felt that our stock was undervalued. And like I was saying earlier, we still believe that we're undervalued today.

So it remains to be attractive option. But as opportunities come up quarter to quarter, Yuri and I will look at those and we'll make decisions on an ROI basis to say, hey, what's the best place to use or the best way to use our cash.

Thank you for all the details. Appreciate it.

Your next question comes from the line of Steven Fox from Fox Advisors. Please go ahead.

Hi. I'm very good. Thank you. I guess, first off, you mentioned mix a bunch of times in terms of influencing, I think, generally positively the margins for the quarter and looking forward. Can you just be more specific on what the positive mix drivers were and maybe any negative mix drivers in the quarter that were partial offsets?

Sure. Yes. So let me speak to it from a segment perspective, Steve, right? So on the IMS side, you look at our gross margin profile, and we did pretty well year over year and sequentially, right? And we've talked long term what's the expectations for IMS margins and CPS.

And so IMS is more trending to the high end and it's really the mix of the programs, right? Yuri talked about the customers that we have. We think we've got good diversification in customers and we're always targeting high end programs and every year we look to add more and more of those, right? So this past quarter, IMS did well, had a good mix of programs. And then we're always focused, the culture of Sanminas, around operational efficiencies, right?

So a lot of the capital investments that we made last year, for example, were about driving those efficiencies. If you go all the way back to 2023, we were putting incremental capacity in place and we still do that. But I would say last year, it was more trended more towards the efficiency side, so good outcome for IMS. On the CPS side, we were pleased with the gross margin performance there too at about 12.5%, but that was down year over year from about 13%. So I mentioned the 40 basis points.

So we had a couple of programs there that were on the lower end, but still pleased with where CPS is at. If you look at the last year, we are hovering between the 12%, 13% of gross margin there, and that was in a down year. So we were pleased with that performance. And Q1 is a solid start. But as Yuri and I have talked about before, we think that there's more upside in that gross margin profile for CPS.

So that's a big area where we're making investments too because we think longer term we should be able to do a couple of points better there.

That's helpful. But I'm just curious, is there any specific certain markets that were most responsible? Or John, are you saying that it was mainly because you're the mix of new programs is more attractive? I just want to make sure I understand the drivers there. And then I had a follow-up.

Yes. I would say on the IMS side, we were pretty balanced between the end markets. I wouldn't say, Steve, that there was one or another that drove it to be much different. CPS side, that business is a little bit different, the components, products and services, right? And so that's really just a mix between the divisions from time to time, but not much of a difference there in terms of end markets either.

Steve, just to add to that, if you look at our markets, we came basically plus and minus 1% comparing to the last quarter from the mix.

Right, right, right. That's helpful. And then, I guess, obviously, there's been a lot of talk today about the future of cloud computing architectures. And you just obviously had a great quarter there. Can you just maybe give us a little more insight into what your customer needs are overstated this?

let me qualify that I'm not a 100% export. My job is service our customers. There's a lot of positive trends out there with the key customers. And Stephen, as you know, we provide wide services from our fabricating high technology, high speed printer circuit boards for designing custom storage product. We're also expanding into servers.

Fabricating rocks, we've been fabricating rocks for this industry for hyperscalers for last 10 years. We're now expanding into more liquid cooling. We're working with our customers by providing more value to those rocks. We custom designed some of these. So we're well diversified, but we are really pushing more and more to provide a fully integrated rocks at a high level.

So we still believe there's opportunities and we're just starting to really expand that business. It's not a major impact of growth for us today or last 12 months. And but we believe it's going to be more positive at 25%. But as we look at longer terms, we think there's more opportunity just the way Samina is set up.

Great. That's super helpful, Yuri. Thank you.

Your next question comes from the line of Anja Soderstrom from Sidoti. Please go ahead.

Hi. Thank you for taking my questions here. I'm I'm just wondering for the revenue target for fiscal 2025, is there a specific end market you think is going to be a main driver for that? Or is it going to be more broad based?

I think for us, Anja, right now what we're seeing today more broad based. Industrial energy is still very strong market for us. That's a percentage wise our largest segment. We've got a lot of great customers there and then some good new opportunities in pipeline. Medical for us is stable to a solid base, maybe short term it's a slower growth, but the long term we got a customer base that I believe will be able to expand longer term.

Area that we are counting on more on and we're investing a lot in defense and aerospace. We see a lot of strong market opportunities. We added additional management in that segment and we'll continue to invest in that segment going forward. So in next couple of years, we see a lot of opportunities there. For automotive and transportation, as I said earlier, we have a very strong customer base there with a lot of growth.

We continue to see some solid stable demand and we expect to have a overall good year. Back to that cloud communication networks, what we call high performance networks and cloud infrastructure, I think we always were well positioned there, both on enterprise side, private data center and we're starting to expand into hyperscaler. I think there's some good opportunity. So I'm more think, 2025 will be a growth year for us as we said in our prepared statements. But we are really positioned company to be a lot bigger company than what we are today and we're a lot more excited what we see in the future.

Hopefully, we are right that we'll exit a strong 2025 and there will be should be a lot more in 2016 and beyond.

Okay. And when you talk about the long term operating margin target of 6% plus, what kind of timeframe are you talking about there? What kind of revenue level do you need to achieve this?

Well, we like to get there right away. I think that we believe that our business model allowed us to get there, especially if we've been expanding our component businesses. We will continue to invest in that side of the business because that delivers, as you can see, better margin. Yes, we like to see our revenue run rate around another 10%. I think once we get about run rate about $9,000,000,000 plus, I think we should be at that 6% plus and go from there.

to add to that, Anja, this is John. If you go back in time, it was back in Q1 of 2023 when we did about $2,350,000,000 of revenue that we had posted an operating margin of 6%. But even this quarter here in Q1, our gross margin was about 9%, just shy of 9%. Now Yuri and I made some targeted investments in our OpEx profile, right? So operating margin was at 5.6%.

And we did that because Yuri mentioned we're trying to drive the company to become much bigger, right? So we need to make those types of investments. So we're in that ballpark like Yuri said, but we're always focused on the long term. And when we see those good investments to make, we'll do those because we're really focused on the long term success.

Okay. And have you seen any changes to the competitive landscape at all or?

Well, you never underestimate your competitors. I think there's more discipline in industry. I think industry itself understands we add a lot of value to our customers. This is not a simple business when it comes to global supply chain and managing material and technology. To be good in this business, you have to invest strategically.

So our customers understand that. It's more we're building strong partnership, and I personally believe that industry has a better future than what we saw, let's say, in last 3 years.

Sanmina (SANM) Q1 2025 Earnings Call Transcript

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