Sanmina beats its growth plan. The factory bill is climbing.
A strong sales and earnings beat comes with a larger investment bill as the manufacturer sets its next growth targets.
Sanmina ended its financial year with sales and adjusted earnings above the targets it set in July. More money came in from operations, too. But investment in factories and equipment absorbed much of that cash as the electronics manufacturer prepared for further growth.
Revenue reached $3.86 billion in the quarter ended October 3, above the $3.3 billion to $3.6 billion forecast. Adjusted earnings of $4.43 a share beat the $3.05 to $3.35 range. The business is expanding beyond the boost it received from buying ZT Systems: Sanmina says sales in its core operations grew 41.9% to $2.97 billion.
More operating cash, less left after investment
Research by Ticker Byline shows that capital spending absorbed about two-thirds of Sanmina's quarterly operating cash, compared with less than one-third a year earlier. We compared its cash-flow statements to measure how much of the stronger cash generation remained after buying property and equipment.
| Measure | 2026 | 2025 |
|---|---|---|
| Operating cash flow | 242.1 | 199.1 |
| Net capital spending | 159.1 | 62.3 |
| Free cash flow | 83.0 | 136.8 |
The result was a 39% decline in quarterly free cash flow despite the higher operating inflow. Across the full financial year, the picture was stronger: free cash flow increased 13% to $540.8 million.
The latest quarter had 14 weeks, against 13 a year earlier. That longer period is part of the reported comparison; both July's forecast and the actual results cover the same quarter.
Sanmina makes products for other equipment companies, including cloud and AI systems, communications hardware, medical devices and industrial equipment. Management says it is adding capabilities and capacity to serve demand that it expects to keep growing.
The next sales target is much larger
For fiscal 2027, Sanmina expects revenue of $17.5 billion to $19.5 billion, against $14.53 billion in the year just completed. The midpoint would mean about 27% growth. Its adjusted earnings forecast is $15.50 to $17.50 a share, compared with $13.28 in fiscal 2026.
Cloud & AI Systems revenue is forecast to rise to $7.5 billion to $9 billion from $5.35 billion. That category includes ZT Systems and other platforms and services. It is broader than the acquired business alone.
The adjusted profit figures remove stock compensation, acquisition-related costs and other items. One substantial fourth-quarter adjustment was a $78 million increase in the estimated value of contingent acquisition payments. Reported earnings were $2.14 a share, up from $0.88 a year earlier, while adjusted earnings were $4.43.
Funding growth while buying back shares
Sanmina ended the year with $1.68 billion in cash and $2.09 billion of debt at its balance-sheet carrying value. It also reported $154 million of share repurchases during the quarter, giving investment another competing use for cash.
The sales and profit beat supports management's confidence in demand. The cash-flow comparison shows the cost of preparing to meet it. As the next expansion takes shape, the question is how quickly the new capacity starts contributing cash alongside higher sales.
The Sanmina company profile tracks its financial record, acquisition, debt and new forecasts.