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

legacy

Sanmina

sanmina

This call is being recorded on Monday, 07/28/2025. I would now like to turn the conference over to Paige Mochin, Senior Vice President of Investor Communication. Please go ahead.

Thank you, Chloe. Good afternoon, ladies and gentlemen, and welcome to Sanmina's third quarter fiscal year twenty twenty five 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 in the slides provided on our website. Please turn to slide three 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 the 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, otherwise, unless otherwise required by law. Included in our press release and slides issued today, we have provided you with statements of operation for the third quarter ended 06/28/2025 on a GAAP basis, as well as certain non GAAP financial information. A reconciliation between the GAAP and non GAAP financial information is also provided in the press release and slides posted on our website. In general, our non GAAP information excludes restructuring costs, acquisition and integration costs, noncash stock based compensation expense, amortization expense, and other unusual or infrequent items.

Any comments we make on this call as it relates 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 leadership team, our employees for doing a great job. So to you, Sanmina's team, thank you for your dedication, hard work, and most important, delivering excellent service to our customers.

For the third quarter fiscal year twenty twenty five, you delivered solid revenue of $2,040,000,000 and non GAAP EPS of $1.0.5 per share. Again, to Samina employees, thank you. Let's keep it up. This is a hard work, and I know that. Now let's go to our agenda for today's call.

We have John, our CFO, to review details of the results for you. I will follow-up with additional comments about Salmina results and future goals. Then John and I will open for question and answers. And now I'd like to turn this call over to John. John?

Great. Thank you, Yuri, and good afternoon, ladies and gentlemen. We appreciate your participation in today's earnings call. Before I discuss our third quarter performance, I would like to thank the entire Sanmina team for their dedication, diligent execution, and support. In a highly dynamic environment, the team has demonstrated exceptional agility in meeting our customers' evolving needs.

Yuri and I, along with the entire Sanmina management team, commend these efforts, which have resulted in a solid third quarter and year to date fiscal twenty twenty five performance. Now please turn to slide five, where I'll speak to the financial highlights. We're very pleased to report that our fiscal third quarter results either met or exceeded our previously communicated outlook. More specifically, our revenue of $2,040,000,000 non GAAP gross margin of 9.1%, and our non GAAP diluted earnings per share of $1.53 all exceeded our outlook. Furthermore, our non GAAP operating margin of 5.7% was at the high end of our outlook.

These strong results, along with our Q1 and Q2 performance, have established a solid foundation for the fiscal year and have positioned us well to achieve our long term financial goals of driving growth and expanding margins. Now, please turn to slide six, where I'll speak to our P and L performance for the third quarter. As previously noted, we generated revenue of $2,040,000,000 which represents an increase of 10.9% year over year. This growth was primarily driven by broad based demand across all of our end markets, with particular strength in the communications networks and cloud infrastructure end markets, which Jerry will speak to in more detail in his prepared remarks. Non GAAP gross profit was $186,000,000 representing 9.1% of revenue and a 60 basis point improvement versus the same period last year.

This expansion in our gross margin was a result of favorable product mix and ongoing operational efficiencies. Non GAAP operating expenses totaled $70,300,000 slightly above our outlook, reflecting our continued strategic investments aimed at driving future growth. Non GAAP operating income was $115,700,000 or 5.7% of revenue, representing a 40 basis point improvement versus the same period last year. This improvement was driven by a combination of revenue growth, favorable mix, and disciplined execution. It is important to note that our non GAAP operating margin consistently remains within our previously communicated short term target range of 5% to 6%.

Non GAAP other income and expense resulted in a net expense of 4,500,000 which was slightly favorable to our guidance, largely due to our strong cash flow generation. Finally, non GAAP diluted earnings per share was $1.53 based on approximately 54,500,000.0 shares outstanding, representing a 22.8% increase versus the same period last year. Now, please turn to slide seven, where I'll speak to our P and L performance for the nine months of fiscal year twenty twenty five as compared to the same period last year. Revenue for the nine months increased by 8.7% year over year. This growth was driven by a solid performance across all end markets with notable improvements in the communications networks and cloud infrastructure end markets.

Non GAAP diluted earnings per share for the nine months increased by 13.5% year over year. As communicated at the start of the year and in our earnings call since then, we anticipated fiscal twenty twenty five to be a growth year for both revenue and profitability, and our nine months results puts us on the right trajectory to achieve this objective. Now, please turn to slide eight, where I'll speak to our segment results. IMS revenue came in at $1,650,000,000 up 11.6% year over year. This was driven by growth across all end markets with particular strength in the communications networks and cloud infrastructure end markets.

IMS non GAAP gross margin was 7.5%, down 10 basis points versus the same period last year. CPS revenue came in at $422,000,000 up 8.8% year over year, driven by increased demand across all end markets. DPS non GAAP gross margin was 14.7%, an impressive three twenty basis point improvement year over year. This performance was driven by higher revenue, favorable mix, and ongoing operational efficiencies. While we're pleased with the performance of both the IMS and CPS businesses this quarter, we recognize the ongoing opportunity for further improvement in both revenue growth and margin expansion, which will remain key focus areas going forward.

Now, please turn to slide nine, where I'll speak to the balance sheet highlights. For many years, Sanmina has had one of the strongest balance sheets in the industry, and we continued to add to that strong foundation this quarter. Cash and cash equivalents were $798,000,000 At quarter end, we had no outstanding borrowings on our $800,000,000 revolver, leaving us with substantial liquidity of approximately $1,700,000,000 We ended the quarter with inventory net of customer advances of 1,200,000,000 representing a 12% decrease in absolute dollar terms versus the same period a year ago. Inventory turns, net of customer advances, improved to 6.3 times for the quarter as compared to 5.1 times in the same period a year ago. While we're pleased with these results, we still see room for further optimization.

Our non GAAP pre tax ROIC for the quarter was 24.8%, well above our weighted average cost of capital and an improvement from 21.1% in the same period a year ago. The company continues to be in a net cash position and our gross leverage ratio was 0.38 times. This robust financial profile enables us to effectively execute on our strategic initiatives while still navigating macroeconomic uncertainties. Now, please turn to slide 10 where I'll speak to the cash flow highlights. As a direct result of our team's disciplined working capital management, cash flow from operations for the third quarter was a strong $2.00 $1,000,000 and $422,000,000 for the nine months of the fiscal year.

Capital expenditures for the quarter were $33,000,000 which was lower than our outlook driven by the timing of receipts and totaled $80,000,000 for the nine months of the fiscal year. As previously communicated, we remain committed to making strategic investments in the capabilities and technologies necessary to strengthen our market position and support our long term financial objectives. To that end, we anticipate ongoing targeted investments in both capacity and technology across our operations in The US, India, and Mexico. Based on our spend for the first nine months and our fourth quarter projections, we now expect full year capital expenditures to be about 1.8% of revenue. Free cash flow for the quarter was $168,000,000 bringing the nine months total to $341,000,000 During the quarter, we repurchased 200,000.0 shares for approximately $13,000,000 and year to date, we have repurchased 1,400,000.0 shares for $114,000,000 As of 06/28/2025, we have $239,000,000 remaining under our authorized share repurchase program.

Our strong cash flow performance has provided us with the financial flexibility to allow continued investments in the business while also returning capital to shareholders, all within a disciplined and balanced capital allocation framework. Now, turn to slide 11, where I'll cover our outlook for the fourth quarter. Our guidance is based on current customer forecasts and incorporates market uncertainties stemming from tariffs and the geopolitical landscape. Our fourth quarter outlook is as follows. We expect revenue between $2,000,000,000 to $2,100,000,000 At the midpoint of $2,050,000,000 that would put us up 6.8% on a full year basis, in line with our prior outlook.

Non GAAP gross margin is projected to be between 8.79.2% subject to mix considerations. Operating expenses of $64,000,000 to $68,000,000 Non GAAP operating margin of 5.5 to 6%. We expect other income and expense to be a net expense of approximately $4,000,000 an effective tax rate of 20% to 22%. We estimate an approximate $4,000,000 non cash reduction to our net income to reflect our India JV partners equity interest. Non GAAP diluted earnings per share in the range of $1.52 to $1.62 based on approximately 54,000,000 fully diluted shares outstanding.

At the midpoint of $1.57 that would put us up 9.8% as compared to the same period a year ago and up 12.9% on a full year basis. Capital expenditures are expected to be around $65,000,000 and finally, depreciation of approximately $30,000,000 In summary, we are very pleased with our Q3 performance despite the uncertainty around tariffs and the geopolitical landscape, and we're confident in our ability to deliver solid revenue and profitability growth in Q4 and beyond. Now please turn to slide 12, where I'll provide an update on our previously announced planned acquisition of the ZT Systems manufacturing business. We are progressing nicely and remain on track to close the transaction near the end of the twenty twenty five calendar year pending regulatory approvals. We are also on track with all of our required regulatory filings.

As we mentioned when we announced the transaction, we expect it will add 5,000,000,000 to $6,000,000,000 of annual net revenue on a run rate basis and anticipate it will double Sanmina's net revenue within the next three years. As a reminder, we expect the transaction to be accretive to non GAAP diluted earnings per share in the first year after closing with additional non GAAP EPS accretion from both growth and synergies over time. The syndication of our permanent debt financing is also on track and we'll provide further updates on that front very soon. I also want to briefly discuss what this transaction means for our balance sheet and how it fully aligns with our capital allocation strategy, which will continue to focus on growth and cash generation while following a disciplined ROI based approach. We've built one of the strongest balance sheets in the industry with a net positive cash position, strong liquidity, and a low gross leverage ratio of 0.38 times as of our third quarter.

I want to emphasize our commitment to maintaining a strong balance sheet, having ample liquidity to invest in the business, and execute on our strategy. This transaction is an investment in working capital, primarily inventory, property, plant, and equipment, and a critical set of capabilities, which we believe will generate solid returns over time. At the time the transaction closes, we expect our net leverage ratio to be well within our target range of one time to two time and in line with our peer group. For a period of time after closing, we expect working capital to build to support investment in the growth of the business, which we anticipate will temporarily push our net leverage ratio above two times. To reiterate, we are committed to preserving our existing credit rating and our goal is to become investment grade over time.

This is a compelling transaction for Sanmina as it positions the company to capitalize on long term growth trends in the data center and AI infrastructure end market. In summary, we're excited about the opportunities ahead and we look forward to discussing the financial profile of the business in more detail at the time the transaction closes. And with that, I will now turn the call over to Yuri.

Thank you, John. Ladies and gentlemen, let me add few more comments about our results for the third quarter and the rest of the fiscal year 2025. Please turn to Slide 14. As you heard from John, our team delivered solid execution and excellent service to our customers. Revenue, non GAAP gross margin, and non GAAP EPS exceeded our outlook.

We delivered non GAAP operating margin of 5.7%. And long term, we expect to improve our operating margin to greater than six plus percent. We generated a strong cash flow for the quarter, and we expect to continue to generate positive cash flow from operations to drive future growth. We delivered year over year growth for all end markets. So I can tell you that our customers are still positive about their future.

And we're starting to see strong pipeline of new opportunities. So overall, a good quarter, but there's still room, as you heard from John, for improvements. To talk more about it, please turn to slide 15. Let's look at the now revenue by end market for the third quarter. Industrial, energy, medical, defense, aerospace, and automotive segment came in at $1,256,000,000 growth of 6.2% year over year, very strong overall segment.

For communication networks and cloud infrastructure, they came in at $786,000,000 growth of 19.1% year over year. For the third quarter total revenue of 2.04, we delivered another solid quarter, up 11% year over year. Top 10 customers for the quarter was 52.8% of our revenue. Bookings continued to see solid demand overall. Book to bill came around one to one.

As you can see, we are well diversified company. We continue to see positive trends for fiscal year twenty five and beyond. For industrial and energy, we have very solid customer base that is doing well. We have some great opportunities in pipeline around energy and safety equipment. We see exciting new projects in the pipeline that should drive the growth in fiscal year twenty twenty six.

For medical, we see stable demand driven by medical devices and digital health. Again, we have strong customer base of customers, well diversified within market. We also see good pipeline of new opportunities for the future fiscal year twenty six and twenty seven. For defense and aerospace segments, we continue to see solid demand from critical defense projects. Our advanced printed circuit board fabrication business in this segment is doing well.

We are growing and expanding defense and aerospace segment in other capabilities of Sanmina. Overall, we expect this segment to continue to grow nicely from technology components all the way to full systems. For automotive and transportation segment, short term we see some softness in this market, overall slower demand. For this segment, long term, we have some good opportunities in pipeline that we expect to grow again in fiscal year twenty six. For communication networks and cloud infrastructure, we see very positive trend.

Solid demand for high performance routers and switches, optical network system, optical advanced packaging, and enterprise storage. We're also starting to see some positive signs about our mobile five g business, driven both by cloud and service providers. For this segment, Sanmina is well positioned and we should continue nice growth in '26 and beyond. Let me talk a little bit more about fourth quarter and fiscal year twenty twenty five outlook. As you heard from John, we are pleased with our performance for the first nine months of fiscal year twenty twenty five.

As revenue was up 8.7% compared to the same period a year ago, we have grown a non GAAP EPS for the first nine months to 13.5% and we generated strong cash flow from operations. Based on our results for the first nine months and outlook for the fourth quarter at midpoint, this puts us on a track to deliver nice growth in fiscal year twenty twenty five, we expect to see a growth of 6% to 8%. While we continue to manage through very dynamic environment, we remain focused on operational execution, customer satisfaction, cost management, and consistently delivering value to our customers. Please turn to slide 16. Now let me talk to you about our strategic acquisition of ZT Systems from AMD.

Let me add a few more comments to John's comments. This acquisition advances strategic data center AI strategy. It positions Sanmina to capitalize on a long term growth trends in data center AI infrastructure spend. If you look at the chart, next year the forecast is that global data center investments will be over $500,000,000,000 and as we go into 2028, that number could be over $800 potentially over $1,000,000,000,000 So there is plenty opportunity for us. I can tell you that we are getting a lot of great interest in our new capabilities, both from existing and new potential customers.

We do expect to expand our relationship with hyperscalers and OEM customers across all platforms and technologies in the industry. This strategic acquisition brings industry leading manufacturing capabilities and capacity here in US and Europe, reinforcing existing footprint. This complements Sanmina's well established vertical integration strategy. Our strategy is to provide end to end solution for data center, AI, end market. So please turn to slide 17 so I can tell you more about our end to end capabilities for data center AI.

On this slide, you can see Sanmina end to end solution for data center AI end markets. Data center AI requirements continue to evolve at a rapid pace and is driving technology advancement. Sanmina has been investing and expanding our capabilities to meet this present and future demand. We expanded and grown our high technology printed circuit boards. We've been assembling most advanced systems that are available out there, continue to fabricate and invest in mechanical racks and enclosures.

We're expanding our liquid cooling rack systems. We're investing in cooling manifolds and racks, buzz bars for racks. We're growing our ODM services and storage business, custom memory, and custom optical module. And with this strategic acquisition, our strategy now provides industry leading capabilities from design to full system, end to end solution for data center AI infrastructure end market. These strategic acquisitions from AMD complement Sanmina advanced data center AID technology and gives us ability to do a full system integration at scale.

I can also tell you that we will continue to invest in this market to drive the future growth. Please turn now to slide 18. In summary, we are executing well in this dynamic environment. Third quarter results were in line or exceeded our outlook. We delivered strong year to date and year to year performance across the majority of our end markets.

Fourth quarter twenty five outlook aligns with achieving our fiscal year twenty five growth and profitability objectives. As you heard both from John and I, third quarter was a busy time for us. We signed a definitive agreement with AMD to acquire ZT System. It's a strategic transaction for us, very exciting. This fits well with Sanmina's strategic growth priorities.

We feel good about our future, new programs win and we expect demand improvements to drive the growth in fiscal year twenty six. Sunmina is well positioned to be a bigger and stronger company in the future. And I'm personally excited about opportunities ahead. So ladies and gentlemen, now 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. Again, thank you again.

Thank you. Ladies and gentlemen, we will now conduct a question and answer session. If you would like to ask a question, please press star then the number one on your telephone keypad. If you would like to withdraw Our first question comes from the line of Ruplu Bhattacharya from Sanmina. Your line is open.

Thank you for taking my questions. Hi, Yuri, on slide hi, Yuri. On slide 12, you gave an update for the ZT Systems acquisition, and it still says 5 to 6,000,000,000 of net revenue run rate. Is that still your expectation for annual revenue? Is this still a declining revenue business, or have the revenues now stabilized?

And, Yuri, if you can also talk about your plan to turn this business around. Do you think you need to hire any sales force to go after hyperscale customers? And since AMD kept the design engineers, are you planning to hire any engineers to invest in this the rack configurations? So just talk about what what you see as the annual revenue run rate as of today? And what is your plan to turn and and expand this business?

Alright. Well, it's a great question, and and I will give you a lot of a lot of information. As you know, we are we're not the owners of this organization yet. So I have to be careful what I can say, what I cannot say. But first of all, Rupul, we are very excited today.

You know, we announced this deal in May 19, I believe. And personally, I'm more excited today than I was then. And I was very excited then. And the reason I'm more excited today, as we are, you know, talk to basically the critical customers out there with hyperscalers and critical OEM potential customers, we find out there's a lot of interest. Also, we find out a lot more about the ZT system itself.

We believe they have some advanced capabilities, some great people. In this business, it's all about people. I believe they've got some great people. And, you know, when I look at what's a potential, it's a great potential. You know, when AMD acquired this thing, their goal was to eventually, you know, find the right partner and separate engineering and manufacturing.

And I would say that we're fortunate that we're becoming a critical partner to AMD and taking over this operation. We believe working together, it will give us a lot of opportunity. Not believe, I see it today, all these key capabilities that we have and industry really needs capacity and capabilities that we have. So I'll be honest with you, I wish we can close this deal today because there's a I'll be able to tell you a lot more. Personally, I'm not worried about revenue, and John can comment later on on that.

I think the revenue is there. I think there's a lot more ZT has some older products that they've been doing it for a long time. This place is profitable. It was profitable. It is profitable today, and we expect it to continue to be profitable in the future.

But opportunities are bigger for the future than the past. Let leave it at that. Today, we are already selling Sanmina plus ET to our critical partners. That's going on every day across all our critical people. We are adding some technical support more about technology to add more value to our customers.

We know exactly what that is. But we also picking lot of great people from ZT. They got a lot of network people in the manufacturing, and also around testing and so on. So this is a very, very strong team. I think partnering with AMD is very critical.

They got a lot of exciting technology that's coming up. And again, I believe that we can help them get that product to the market at a faster rate with the technology that is required for hyperscalers and OEM customers. We are definitely investing in sales. As you can see, our SG and A is a little bit higher because of that. And again, I don't know what else to say except to tell you, I'm excited.

I think there's a lot of opportunity there. As I said before in my prepared statement, I think we're ready to build a lot bigger Sanmina from a very, very strong position. We have a strong foundation. So give us some time here at least for next six to twelve months to give you some good results. So with that, John, you want add comments to that?

Yes, just one point, Yuri, I'll add, Ruplu, just to help answer the question around revenue. So back at the time of the announcement on May 19, we said that we expected revenue run rate, the net revenue run rate, to be about 5,000,000,000 to $6,000,000,000 or between 5,000,000,000 and $6,000,000,000 at the time of the close. And we don't intend to change that forecast. We'll come out with a lot more details when we close the transaction, but that's still the case. The business has a very stable foundation of general purpose, kind of compute and also storage.

It's the accelerated compute component that's going through a transition, as we had mentioned. But we've got full confidence in what's happening on that part of the business, too. But more to come when we close the deal.

Just let me add to that. Didn't answer the question. At Viking, we have a very strong core engineering team that basically can do the same or similar thing that old ZT engineering team could have. Now ZT was a bigger scale. But we're expanding our team.

But we do have a core right now that specifically for this data center that it can do the job today, and we are gonna be expanding and growing that team.

Okay. No, I appreciate all the details. For my follow-up, can I ask, you had very strong growth I mean, you reported 11% year on year growth. When we look at the guide for fiscal 4Q, there seems to be somewhat of a meaningful slowdown.

I think the midpoint of the guidance implies 1.6% year on year growth. Can you just talk about if any markets are weaker than you expected? And then, like you said, Yuri, if you look at the full year, you're going to be growing revenues in fiscal twenty five at 7% almost year on year. Can you give us your early thoughts into fiscal twenty six? I mean, let's say, without ZT Systems, do you think the base business can continue this 7% year on year growth?

So just any thoughts you have on fiscal 4Q, what is driving that, and your thoughts on fiscal twenty six?

Yes. First of all, comparison from this fourth quarter to the last year to the 2024, you're right, it's not a huge growth. But the business is not slowing down. I will say the business expanding. If you look at the last year, we were kind of coming out of inventory.

It was a choppy it was a transition year. So it was really choppy for most of our competitors too. It just happened to be a fourth quarter last year better than what it was third and second. Today, the business is a lot more stable. Yes, we have some uncertainties out there with this geopolitical issue, the tariffs and so on.

Looks like that temperature is coming down, so we feel a little bit more comfortable and we can predict the future better. Our customers are a lot more positive about the future. If I look at the customers' forecast, they look very positive and we today, we're kind of discounting those. So for us to forecast twenty six, we like to wait more probably another ninety days. But I can tell you right now and what I said earlier in the prepared statement, we are excited.

We expect to grow our core business hopefully at the same or faster rate next year. But overall, we should have a unless something really falls off the cliff that we are completely out of our control, we expect to have a great year next year.

Okay. And if I can just put in one more quick question, John, CPS margins were up three twenty bps sequentially. Was there any one time items and can this continue? Thank you so much for taking my questions.

No, it's primarily driven just by the business mix, Ruplu. And as you know, CPS margins in that profile, that's an area that we've been focused on for a long time. We've been making a lot of investments there. So, we're very pleased with the results. From one quarter to the next, you can see some ups and downs just because of the nature of that business.

There's so many different components within it. But pretty much across the board, we've been looking to improve the margin profile of each individual division. So what I believe that we're seeing now is the result of some of those investments coming through to fruition. So very happy with the results, nothing one time in nature that we'd want to call out. As far as the future goes, we're going to continue to drive that profile.

Both Yuri and I have said before that we expect that business to be above 15%, and we're getting very close to that number already today.

Our next question comes from the line of Steven Fox from Fox Advisors. Your line is open.

Hi. Good First afternoon, of all, just I had another question on the ZT deal now that you've had a little bit more time with it. Can you just talk about the risk on the inventory side, John? I know it's a big piece of the valuation. Do you guys get a last look at valuing that the inventories before you close?

And I guess my bigger concern is like anything that you might inherit that could be sort of lagging generation on the GPU side that you might have write downs on. Can you just sort of talk about that risk? And I had a follow-up.

Yes, absolutely, Steve. Thanks for the question. Yes, we do have a working capital target of about $2,000,000,000 as a part of the transaction. We talked about that when we announced the deal back on May 19. You can basically think of that as primarily related to inventory.

There's the property, plant and equipment too of $250,000,000 but the $2,000,000,000 is primarily around inventory. As a part of the deal, we spent a lot of time evaluating that inventory position, a lot of discussions with AMD and ZT. And so we'll make sure just like we always do in this business and our business around manufacturing to make sure that that inventory is supported by customer demand and forecasts. So, there's always risk. There's some risk there, but our intent is to fully evaluate that, and both AMD and ZT are committed to that as well.

Great. That's helpful. And then on the legacy business, Yuri, I know you just mentioned what you've been doing on the CPS side. I was wondering if you could just sort of because I'm looking it looks like that was like a record CPS margin. So I was wondering if you can maybe sort of help us step back a little bit more, talk about how CPS is sort of helping your business by served markets a little bit.

Like it seems like it must be helping growth, not just margins. Any help there would be useful.

Yes, Steve, first of all, yes, we not everything is perfect at CPS today, but we believe, as John mentioned, we always target over 15%, but I would say that our target is higher than 15 right now because we know there's more opportunity. We still have some softness in some of the semiconductor business that typically we have. And but we also have some great opportunities in defense business. If you look at our advanced printed circuit boards here in North America, that's mainly high technology product for defense. That business is doing well.

We're expanding that business, and we expect to continue to to have at least few few grid gears in that segment when it comes to demand. Our mechanical business is doing well, especially around the data center. As I mentioned earlier, we are expanding, investing in liquid cooling racks. Demand for racks is very strong. It's all around for the data center, and we expect that business actually to increase now with acquisition of ZT.

So we see a lot of positive things there. We also expanding our precision machining into the military side of the business. We are expanding and been investing a fair amount, and hopefully we'll get a lot of returns on optical modules, specifically pluggables, custom memory around the military for jet fighters and so on. So there's a lot of exciting stuff that we have in our segment of what we call components technology group with a lot of upside potential and a lot of growth opportunities. So yes, we are very comfortable with our core business and we are still pushing those plans that we talked about a year ago.

We need to grow our core business at a higher rate and we expect we believe we are positioning right now that we are going to start seeing that nice growth in 2026 and beyond.

Our next question comes from the line of Andrea Soderstrom from Sidoti. Your line is open.

Congrats on the nice performance here in the third quarter. With the additional revenue that you from the CT acquisition doubling the revenue in three years, where do you expect the operating margins to be?

Well, first of all, we are improving our margin across existing business, and we believe that the end to end solution that we will be providing for data center, AI and market, we're adding a lot of value our customers and a lot of capabilities that will allow us to deliver the better margins than historical. So I'm saying today, higher than 6%, but I believe there's an upside to that, And we like to talk to you more about it ninety days from now, and hopefully we'll be in control of ZT by that time. So we'll talk more. But we're excited what's in front of us. Like I said, there's some great people at ZT.

We are committed. We're investing we've been investing a fair amount of money in these critical components that go for data center, and I think with now capabilities for full system integration at the scale, we should be able to continue to improve our margin going forward.

Okay, thank you. And for the Ingen joint venture, how is that progressing? It seems like you had a little bit higher payout to them or actually was in line with what you had expected. But you didn't really give a guidance for that for the fourth quarter either, think, or maybe I just missed it.

Yes. On that point, Anja, we always guide on the adjustment to our net income to reflect their equity interest. But the JV overall has done very well. We're very pleased. It's coming up on almost three years now that we've had the JV in place.

But India is a very important market to us. We expect to see a lot of growth in that market. And as far as the business goes, we're looking to expand the different end markets that we serve. It's an area that we're investing in as well. I mentioned that from a CapEx perspective, and Niri might want to comment on that as well.

But we see a lot of opportunity in there. But yeah, we do just guide and comment specifically on the net income adjustment to begin with.

India is a very exciting project for us. First couple of years, when you do a joint venture, takes to kind of get to know each other pretty well what are our goals. But I believe Reliance and Sanmina are on the same page. We're going to build something big in India. We are expanding, and we'll also make more comments on that end of this year.

But a lot of opportunities in India across all our markets from industrial, medical, India defense, automotive in India, transportation, definitely, for, you know, data center AI opportunities that will be, we believe, India, and we are positioned to play across all of those key markets. So a great decision on our part to go with the JV, with the Reliance. We still run that thing 100%, but I think having a good partner in a market like this is very critical, and I believe we have a great partner.

Okay. Thank you. And just one last one in terms of the tariffs. What are you seeing in terms of the tariffs and potential headwinds from that?

Sanmina (SANM) Q3 2025 Earnings Call Transcript

Company Participants