Electronics manufacturing services company Sanmina (NASDAQ: SANM) announced better-than-expected revenue in Q4 CY2025, with sales up 59% year on year to $3.19 billion. On the other hand, next quarter’s revenue guidance of $3.25 billion was less impressive, coming in 7.6% below analysts’ estimates. Its non-GAAP profit of $2.38 per share was 11% above analysts’ consensus estimates.

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"Fiscal 2026 is off to a great start, with Q1 revenue and non-GAAP operating margin at the high-end of our outlook and non-GAAP EPS exceeding our outlook. In addition, the team did an excellent job delivering solid cash flow from operations," stated Jure Sola, Chairman and CEO of Sanmina Corporation.

Company Overview

Founded in 1980, Sanmina (NASDAQ: SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Sanmina’s 6.3% annualized revenue growth over the last five years was mediocre. This was below our standard for the industrials sector and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Sanmina’s recent performance shows its demand has slowed as its annualized revenue growth of 5% over the last two years was below its five-year trend.

This quarter, Sanmina reported magnificent year-on-year revenue growth of 59%, and its $3.19 billion of revenue beat Wall Street’s estimates by 3.3%. Company management is currently guiding for a 63.8% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 59.4% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and indicates its newer products and services will fuel better top-line performance.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Sanmina’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 4.5% over the last five years. This profitability was lousy for an industrials business and caused by its suboptimal cost structureand low gross margin.

Analyzing the trend in its profitability, Sanmina’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Sanmina generated an operating margin profit margin of 2.3%, down 2.2 percentage points year on year. Since Sanmina’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sanmina’s EPS grew at a spectacular 16.2% compounded annual growth rate over the last five years, higher than its 6.3% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.

Diving into the nuances of Sanmina’s earnings can give us a better understanding of its performance. A five-year view shows that Sanmina has repurchased its stock, shrinking its share count by 16.9%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Sanmina, its two-year annual EPS growth of 9.2% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q4, Sanmina reported adjusted EPS of $2.38, up from $1.44 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Sanmina’s full-year EPS of $6.99 to grow 45.1%.

Key Takeaways from Sanmina’s Q4 Results

We enjoyed seeing Sanmina beat analysts’ revenue expectations this quarter. We were also glad its adjusted operating income outperformed Wall Street’s estimates. On the other hand, its revenue guidance for next quarter missed and its EBITDA fell short of Wall Street’s estimates. Zooming out, we think this was a mixed quarter. The market seemed to be hoping for more, and the stock traded down 8.2% to $167.55 immediately after reporting.

So should you invest in Sanmina right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).