Company Announcements

SCHEDULE I

‌

FLEX

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

‌

Three-Month Periods Ended

June 27, 2025

June 28, 2024

GAAP:

Net sales

$                           6,575

$                           6,314

Cost of sales

5,987

5,827

Restructuring charges

16

16

Gross profit

572

471

Selling, general and administrative expenses

233

213

Restructuring charges

7

9

Intangible amortization

21

16

Operating income

311

233

Interest expense

51

56

Interest income

13

16

Other charges (income), net

7

2

Equity in earnings (losses) of unconsolidated affiliates

(20)

1

Income before income taxes

246

192

Provision for (benefit from) income taxes

54

53

Net income

$                              192

$                              139

‌

GAAP EPS

Diluted earnings per share

$                             0.50

$                             0.34

Diluted shares used in computing per share amounts

381

411

See Schedule II for the reconciliation of GAAP to non-GAAP financial measures. See the accompanying notes

on Schedule V attached to this press release.

SCHEDULE II

‌

FLEX

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In millions, except per share amounts)

‌

Three-Month Periods Ended

June 27, 2025

June 28, 2024

‌

GAAP operating income

$                              311

$                              233

Intangible amortization

21

16

Stock-based compensation expense

34

32

Restructuring charges

23

25

Legal and other

6

—

Non-GAAP operating income

$                              395

$                              306

‌

GAAP provision for income taxes

$                                 54

$                                 53

Intangible amortization benefit

5

3

Other tax related adjustments

14

(2)

Non-GAAP provision for income taxes

$                                 73

$                                 54

‌

GAAP net income

$                              192

$                              139

Intangible amortization

21

16

Stock-based compensation expense

34

32

Restructuring charges

23

25

Legal and other

6

—

Equity in losses of unconsolidated affiliates

17

—

Adjustments for taxes

(19)

(1)

Non-GAAP net income

$                              274

$                              211

‌

Diluted earnings per share:

GAAP 

$                             0.50

$                             0.34

Non-GAAP

$                             0.72

$                             0.51

‌

See the accompanying notes on Schedule V attached to this press release.

SCHEDULE III

‌

FLEX

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

‌

As of June 27, 2025

As of March 31, 2025

ASSETS

Current assets:

Cash and cash equivalents

$                                   2,239

$                            2,289

Accounts receivable, net of allowance

3,924

3,671

Contract assets

751

616

Inventories

5,208

5,071

Other current assets

1,345

1,194

Total current assets

13,467

12,841

‌

Property and equipment, net

2,329

2,330

Operating lease right-of-use assets, net

686

562

Goodwill

1,369

1,341

Other intangible assets, net

330

343

Other non-current assets

951

964

Total assets

$                                 19,132

$                         18,381

‌

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Bank borrowings and current portion of long-term debt

$                                       677

$                            1,209

Accounts payable

5,799

5,147

Accrued payroll and benefits

494

560

Deferred revenue and customer working capital advances

1,876

1,957

Other current liabilities

1,075

977

Total current liabilities

9,921

9,850

‌

Long-term debt, net of current portion

3,004

2,483

Operating lease liabilities, non-current

583

456

Other non-current liabilities

535

590

Total liabilities

14,043

13,379

Total shareholders' equity

5,089

5,002

Total liabilities and shareholders' equity

$                                 19,132

$                         18,381

SCHEDULE IV

‌

FLEX

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

‌

Three-Month Periods Ended

June 27, 2025

June 28, 2024

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$                            192

$                            139

Depreciation, amortization and other impairment charges

142

126

Changes in working capital and other, net

65

75

Net cash provided by operating activities

399

340

‌

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(133)

(111)

Proceeds from the disposition of property and equipment

2

3

Acquisition of businesses, net of cash acquired

(41)

2

Other investing activities, net

(7)

24

Net cash used in investing activities

(179)

(82)

‌

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from bank borrowings and long-term debt

500

—

Payments of bank borrowings, long-term debt and other financing liabilities

(532)

(41)

Payments for repurchases of ordinary shares

(247)

(457)

Other, net

(4)

30

Net cash used in financing activities

(283)

(468)

‌

Effect of exchange rates on cash and cash equivalents

13

(21)

Net change in cash and cash equivalents

(50)

(231)

Cash and cash equivalents, beginning of period

2,289

2,474

Cash and cash equivalents, end of period

$                         2,239

$                        2,243

FLEX AND SUBSIDIARIES

NOTES TO SCHEDULES I and II

To supplement Flex's unaudited selected financial data presented consistent with U.S. Generally Accepted Accounting Principles ("GAAP"), the Company discloses certain non-GAAP financial measures that exclude certain charges and gains, including non-GAAP operating income, non-GAAP net income and non-GAAP net income per diluted share. These supplemental measures exclude certain legal and other charges, restructuring charges, customer-related asset impairments (recoveries), stock-based compensation expense, intangible amortization, other discrete events as applicable and the related tax effects. These non-GAAP measures are not in accordance with or an alternative for GAAP and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Flex's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Flex's results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of the Company's performance.

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of the Company's operating performance on a period-to-period basis because such items are not, in our view, related to the Company's ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, for calculating return on investment, and for benchmarking performance externally against competitors. In addition, management's incentive compensation is determined using certain non-GAAP measures. Also, when evaluating potential acquisitions, we exclude certain items described below from consideration of the target's performance and valuation. Since we find these measures to be useful, we believe that investors benefit from seeing results "through the eyes" of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with the Company's GAAP financials, provide useful information to investors by offering:

•

the ability to make more meaningful period-to-period comparisons of the Company's ongoing operating results;

•

the ability to better identify trends in the Company's underlying business and perform related trend analysis;

•

a better understanding of how management plans and measures the Company's underlying business; and

•

an easier way to compare the Company's operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures.

The following are explanations of each of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding each of these individual items in the reconciliations of these non-GAAP financial measures:

Stock-based compensation expense consists of non-cash charges for the estimated fair value of unvested restricted share units granted to employees and assumed in business acquisitions. The Company believes that the exclusion of these charges provides for more accurate comparisons of its operating results to peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, the Company believes it is useful to investors to understand the specific impact stock-based compensation expense has on its operating results.

Intangible amortization consists primarily of non-cash charges that can be impacted by, among other things, the timing and magnitude of acquisitions. The Company considers its operating results without these charges when evaluating its ongoing performance and forecasting its earnings trends, and therefore excludes such charges when presenting non-GAAP financial measures. The Company believes that the assessment of its operations excluding these costs is relevant to its assessment of internal operations and comparisons to the performance of its competitors.

Restructuring charges include severance charges at existing sites and corporate SG&A functions as well as asset impairment, and other charges related to the closures and consolidations of certain operating sites and targeted activities to restructure the business. These costs may vary in size based on the Company's initiatives, are not directly related to ongoing or core business results, and do not reflect expected future operating expenses. These costs are excluded by the Company's management in assessing current operating performance and forecasting its earnings trends and are therefore excluded by the Company from its non-GAAP measures.

During the three month periods ended June 27, 2025 and June 28, 2024, the Company recognized approximately $23 million of restructuring charges and $25 million of restructuring charges, respectively, most of which related to employee severance.

Legal and other consist primarily of costs not directly related to core business results and may include matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims and other issues on a global basis as well as acquisition related costs and asset impairment. During the first quarter of fiscal year 2026, the Company accrued for $6 million related to acquisitions costs. No such costs were incurred in the first quarter of fiscal year 2025. These costs are excluded by the Company's management in assessing current operating performance and forecasting its earnings trends and are therefore excluded by the Company from its non-GAAP measures.

Equity in losses of unconsolidated affiliates consists of various other types of items that are not directly related to ongoing or core business results, such as losses associated with certain non-core investments. The Company excludes these items because they are not related to the Company's ongoing operating performance or do not affect core operations. Excluding these amounts provides investors with a basis to compare Company performance against the performance of other companies without this variability. In the first quarter of fiscal year 2026, the Company recognized approximately $17 million equity in losses from a reduced valuation of a certain non-core investment fund. No such event occurred in the first quarter of fiscal year 2025.

Adjustments for taxes relates to the tax effects of the various adjustments that we incorporate into non-GAAP measures in order to provide a more meaningful measure on non-GAAP net income and certain adjustments related to non-recurring settlements of tax contingencies or other non-recurring tax charges, when applicable. Effective in fiscal year 2026, the Company adopted an annual normalized tax rate for the purpose of determining the tax effect of non-GAAP adjustments. In estimating the normalized tax rate the Company utilizes a full-year projection of earnings that considers the mix of earnings across tax jurisdictions, existing tax positions and other significant tax matters.

During the three month periods ended June 27, 2025, and June 28, 2024, the Company recognized a $19 million and $1 million net tax benefit, respectively, related to the tax effects of various adjustments that are incorporated into non-GAAP measures on restructuring and other.