Plexus delivered results in Q3 that were in line with market expectations, with management attributing the flat year-on-year revenue to the timing of new program ramps and minor delays in its aerospace and defense segment. CEO Todd Kelsey highlighted that late-quarter demand from semi-capital equipment and energy customers offset these delays, while the company’s strong free cash flow performance benefited from ongoing efforts to reduce working capital. Management also noted operational improvements, particularly in inventory management and automation, as drivers of stable operating margins.
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Plexus (PLXS) Q3 CY2025 Highlights:
- Revenue: $1.06 billion vs analyst estimates of $1.05 billion (flat year on year, 1.1% beat)
- Adjusted EPS: $2.14 vs analyst estimates of $1.86 (14.8% beat)
- Adjusted EBITDA: $79.75 million vs analyst estimates of $79.4 million (7.5% margin, in line)
- Revenue Guidance for Q4 CY2025 is $1.07 billion at the midpoint, above analyst estimates of $1.05 billion
- Adjusted EPS guidance for Q4 CY2025 is $1.73 at the midpoint, below analyst estimates of $1.81
- Operating Margin: 5%, in line with the same quarter last year
- Market Capitalization: $3.88 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Plexus’s Q3 Earnings Call
- David Williams (Benchmark Company) asked about management’s growing confidence in revenue growth, to which CEO Todd Kelsey cited substantial new program ramps and share gains, especially in semi-cap, as drivers of momentum for the upcoming year.
- Melissa Fairbanks (Raymond James) questioned whether the recent healthcare growth was due to resolving inventory overhang or new programs. Executive Vice President Oliver Mihm replied that both factors contributed, with inventory normalization allowing new program ramps to drive growth.
- Ruben Roy (Stifel) asked about customer visibility and the impact of tariffs. Kelsey answered that customer demand and programs are progressing well, with ongoing efforts to address trade compliance and sourcing for future programs.
- Steven Fox (Fox Advisors) inquired about the nature and impact of current investments. Mihm clarified that investments are focused on automation and operational efficiency, and Kelsey emphasized any margin drag would be short term, mainly from the new Malaysia facility.
- Steve Barger (KeyBanc Capital Markets) asked about long-term margin expansion. CFO Patrick Jermain stated that sustained revenue growth and productivity improvements from automation could prompt a reevaluation of margin targets after overcoming near-term incentive compensation headwinds.
Catalysts in Upcoming Quarters
In the upcoming quarters, the StockStory team will focus on (1) the pace and profitability of new program ramps in defense, semi-cap, and healthcare, (2) margin trends amid ongoing investments and incentive costs, and (3) the effectiveness of automation and operational efficiency initiatives in driving working capital improvement. Additional signals will include any acceleration in commercial aerospace demand and updates on large-scale facility utilization.
Plexus currently trades at $143.68, down from $145.88 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).
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