Executive Summary

Q3 FY2025 delivered revenue of $2.04B, non-GAAP gross margin of 9.1%, and non-GAAP diluted EPS of $1.53; all were above management’s outlook and marked solid execution in a dynamic macro environment .
Versus Wall Street consensus, revenue and EPS were beats: revenue $2.04B vs. $1.98B*, EPS $1.53 vs. $1.415*; however EBITDA came in below consensus at $133.2M vs. $144.6M*; estimates based on 2 covering analysts* . Values retrieved from S&P Global.
Q4 FY2025 guidance implies revenue of $2.0–$2.1B and non-GAAP EPS of $1.52–$1.62, maintaining the full-year growth trajectory of ~6–8% and reinforcing margin discipline (non-GAAP operating margin 5.5–6.0%) .
Strategic catalyst: announced definitive agreement in May to acquire AMD’s ZT Systems data center infrastructure manufacturing business—expected to add $5–$6B annual net revenue run-rate and double Sanmina’s net revenue within three years; accretive to non-GAAP EPS in year 1 post-close .

What Went Well and What Went Wrong

What Went Well

Strong beat on EPS and revenue vs. guidance and consensus; CEO: “Revenue, non-GAAP gross margin, and non-GAAP diluted earnings per share exceeded our outlook” . Values retrieved from S&P Global.
CPS margin expansion to 14.7% (+320 bps YoY) on higher revenue, favorable mix, and operational efficiencies; CFO emphasized progress and target above 15% medium term .
Robust cash generation and balance sheet strength: CFFO $201M; FCF $168M; cash and equivalents $798M; revolver undrawn, ~$1.7B liquidity; pretax ROIC 24.8% .

What Went Wrong

EBITDA underperformed vs. Street despite top-line/EPS beats: actual ~$133.2M vs. consensus ~$144.6M*, suggesting mix and investment spend effects. Values retrieved from S&P Global.
IMS gross margin dipped slightly YoY to 7.5% (-10 bps), reflecting mix within the segment .
Automotive/transportation softness noted; CEO cited slower demand near-term, with recovery expected in FY2026 .

Financial Results

Consolidated Performance and Consensus vs. Actuals

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Billions)	$2.006	$1.984	$2.042
GAAP Diluted EPS ($)	$1.16	$1.16	$1.26
Non-GAAP Diluted EPS ($)	$1.44	$1.41	$1.53
Non-GAAP Gross Margin %	9.0%	9.1%	9.1%
Non-GAAP Operating Margin %	5.6%	5.6%	5.7%
Cash From Operations ($USD Millions)	$64	$157	$201
Free Cash Flow ($USD Millions)	$47	$126	$168

Q3 2025 vs. Prior Year and Consensus

Metric	Q3 2024	Q3 2025 Guidance (from Q2)	Q3 2025 Actual	Street Consensus (Q3 2025)
Revenue ($USD Billions)	$1.841	$1.925–$2.025	$2.042	$1.980*
GAAP Diluted EPS ($)	$0.91	$1.05–$1.15	$1.26	N/A
Non-GAAP Diluted EPS ($)	$1.25	$1.35–$1.45	$1.53	$1.415*
EBITDA ($USD Millions)	N/A	N/A	~$133.2*	~$144.6*

Values retrieved from S&P Global.

Segment and End-Market Breakdown

Segment / End-Market	Q1 2025	Q2 2025	Q3 2025
IMS Revenue ($USD Billions)	$1.62	$1.60	$1.65
IMS Non-GAAP Gross Margin %	7.9%	7.7%	7.5%
CPS Revenue ($USD Billions)	$0.416	$0.411	$0.422
CPS Non-GAAP Gross Margin %	12.5%	13.9%	14.7%
Industrial/Energy/Medical/Defense/Aerospace/Auto ($USD Billions)	$1.269	$1.251	$1.256
Communications Networks & Cloud Infrastructure ($USD Billions)	$0.737	$0.733	$0.786

Selected KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Cash & Equivalents ($USD Millions)	$642	$647	$798
Inventory Turns (net of customer advances)	N/A	5.9x	6.3x
Pretax ROIC (Non-GAAP)	23.5%	23%	24.8%
Gross Leverage Ratio	0.9x	0.48x	0.38x
Top 10 Customers (% of Revenue)	50.1%	51%	52.8%
Book-to-Bill	~1:1	~1:1	~1:1
Share Repurchases (Quarter)	$16M	$84M	$13M
Remaining Buyback Authorization	$37M pre-expansion	$253M	$239M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Billions)	Q3 2025	$1.925–$2.025	Actual: $2.042	Beat vs. outlook
Non-GAAP Diluted EPS ($)	Q3 2025	$1.35–$1.45	Actual: $1.53	Beat vs. outlook
Revenue ($USD Billions)	Q4 2025	N/A	$2.0–$2.1	New guidance
Non-GAAP Gross Margin %	Q4 2025	N/A	8.7–9.2	New guidance
Non-GAAP Operating Margin %	Q4 2025	N/A	5.5–6.0	New guidance
OpEx ($USD Millions)	Q4 2025	$62–$66 (Q3 outlook)	$64–$68	Slightly higher vs. prior quarter outlook
OI&E (Net Expense, $USD Millions)	Q4 2025	~$6 (Q3 outlook)	~$4	Lower expense
Effective Tax Rate	Q4 2025	20–22% (Q3 outlook)	20–22%	Maintained
India JV Net Income Adjustment ($USD Millions)	Q4 2025	~$4.5 (Q3 outlook)	~$4	Slightly lower
CapEx ($USD Millions)	Q4 2025	~$50 (Q3 outlook)	~$65	Higher
Depreciation ($USD Millions)	Q4 2025	~$30 (Q3 outlook)	~$30	Maintained
Full-Year Revenue Growth	FY2025	6–8%	~6.8% implied	Maintained trajectory

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
AI/Data Center & ZT Systems	Building end-to-end capabilities (PCBs, racks, liquid cooling, ODM storage/servers); expanding integration; targeted investments	Strategic acquisition of AMD’s ZT Systems manufacturing; expected $5–$6B net revenue run-rate; accretive EPS; double net revenue in 3 years; strengthens hyperscaler relationships	Accelerating and de-risking AI infrastructure strategy
Supply Chain/Tariffs	Tariff uncertainty; costs pass-through; agile regional footprint; customer programs largely unchanged; evaluation for new programs	Tariffs/geopolitical remain dynamic; regionalization continues; costs borne by customers; flexibility with single ERP/42Q; no material program shifts; ongoing evaluation	Stable stance; continued customer engagement
Segment Mix & Margins	IMS gross margin stable; CPS in 12–13% range; aim for higher CPS margins	IMS margin -10 bps YoY; CPS margin +320 bps YoY to 14.7%; management targets >15% CPS	Improving CPS margin profile
Regional Capacity/Investments	CapEx 1–2% of revenue; expansions in US, India, Mexico; high-tech PCBs; mechanical capacity	Continued targeted investments; FY25 capex ~1.8% of revenue; capacity/technology investments in U.S., India, Mexico	Sustained strategic capex
India JV	Positive JV performance; guidance for net income adjustment; expanding end markets	JV doing well; ~$4M noncash net income reduction guided for Q4; expanding with Reliance partnership	Scaling with local market growth
End-Market Demand	Comms & cloud strong; inventory correction nearing end; diversified industrial/medical/defense base	Comms/cloud +19.1% YoY; diversified end-markets; automotive softness short-term; pipeline strong into FY2026	Strength in core growth vectors; some auto softness

Management Commentary

CEO: “Revenue, non-GAAP gross margin, and non-GAAP EPS exceeded our outlook” .
CFO: “Our revenue of $2.04 billion, non-GAAP gross margin of 9.1%, and our non-GAAP diluted earnings per share of $1.53 all exceeded our outlook” .
CEO on AI strategy: “This acquisition advances Sanmina Strategic Data Center AI strategy…we expect to expand our relationship with hyperscalers and OEM customers…provide end-to-end solution for data center AI” .
CFO on balance sheet: “Cash and cash equivalents were $798 million…no outstanding borrowings on our $800 million revolver…substantial liquidity of approximately $1.7 billion” .
CFO on ZT Systems acquisition: “We expect it will add $5 billion–$6 billion of annual net revenue on a run rate basis and anticipate it will double Sanmina's net revenue within the next three years…accretive to non-GAAP diluted EPS in the first year after closing” .

Q&A Highlights

ZT Systems revenue run-rate and stabilization: Management reaffirmed $5–$6B net revenue run-rate at close; stable GP compute/storage foundation; accelerated compute transitioning; accretive EPS expected; expanding engineering/sales support including Viking and new hires .
CPS margin sustainability: No one-offs; mix/investments driving expansion; management expects CPS above 15% over time .
Inventory/working capital risk in acquisition: ~$2B working capital target (primarily inventory) with thorough evaluation and customer-supported forecasts; commitment from AMD/ZT to manage risk .
Tariffs: Costs borne by customers; regionalization trend; flexibility via global footprint and IT systems; no material shifts in current programs; evaluation for new programs ongoing .
India JV: JV performing well; continued investment; net income adjustment guided (~$4M Q4); long-term growth opportunities across multiple end-markets .

Estimates Context

Q3 2025 revenue beat: $2.042B actual vs. $1.980B consensus*; EPS beat: $1.53 actual vs. $1.415 consensus* . Values retrieved from S&P Global.
EBITDA miss: ~$133.2M actual vs. ~$144.6M consensus*, indicating margin/mix effects despite EPS beat. Values retrieved from S&P Global.
Coverage breadth: 2 estimates for revenue and EPS*, suggesting limited sell-side coverage and potentially higher revision sensitivity. Values retrieved from S&P Global.
Implications: Street likely to revise EPS and revenue upward for near term; EBITDA estimates may reflect cautious margin trajectory given ongoing investment and mix dynamics. Values retrieved from S&P Global.

Key Takeaways for Investors

Execution remains strong: Both revenue and EPS beat guidance and consensus, with sustained non-GAAP operating margin within the 5–6% target range—supportive of near-term estimate upgrades . Values retrieved from S&P Global.
Mix-driven margin expansion: CPS margin reached 14.7% with management targeting >15%, a lever for consolidated margin improvement into FY2026 .
AI/data center catalyst: ZT Systems acquisition should materially expand scale and hyperscaler exposure, with accretive EPS and potential to double net revenue over three years; financing/leveraging plan remains within target 1–2x net leverage, temporarily above post-close .
Cash generation and flexibility: Strong CFFO/FCF and liquidity underpin investments (U.S., India, Mexico) while enabling ongoing repurchases ($239M authorization remaining) .
Guidance steady: Q4 outlook supports full-year growth ~6–8% with maintained tax rate and lower OI&E versus prior quarter outlook; watch OpEx uptick tied to growth initiatives .
Watch items: Automotive softness, tariff/geopolitical dynamics, and acquisition integration (inventory/wcap build) are monitored risks; management’s regional footprint and pass-through model mitigate tariff cost impacts .
Trading and thesis: Near-term—stock should be supported by beats and AI catalyst narrative; medium-term—margin trajectory hinges on CPS >15% and successful ZT Systems integration, increasing exposure to cloud/AI spend cycles .

Non-GAAP adjustments in Q3 included stock-based comp ($16.1M), acquisition/integration costs ($7.1M), and restructuring/other (gain on sale offset, -$3.3M); these drove non-GAAP operating margin to 5.7% vs. GAAP 4.7% .