Sanmina Corporation reported first‑quarter fiscal 2026 revenue of $3.19 billion, a 59% year‑over‑year increase that surpassed the consensus estimate of $3.10 billion. The surge was driven by a 60% jump in the company’s Cloud & AI Infrastructure segment, where demand for data‑center hardware has accelerated, and a 45% rise in the Communications Networks segment, reflecting strong orders for high‑speed networking equipment. The revenue beat was amplified by the recent integration of ZT Systems, which added $200 million in recurring revenue and broadened Sanmina’s footprint in the AI‑driven data‑center market.
The company’s non‑GAAP diluted earnings per share rose to $2.38, outpacing the analyst estimate of $2.15 by $0.23, or 11%. The earnings beat was largely attributable to disciplined cost management and a favorable mix shift toward higher‑margin CPS contracts, which offset the impact of a modest increase in raw‑material costs. Management highlighted that the company’s operating leverage has improved as production volumes scale, allowing it to spread fixed costs over a larger revenue base.
Sanmina’s non‑GAAP operating margin held steady at 6.0%, matching the prior quarter’s 6.0% and reflecting a 0.5‑percentage‑point improvement in gross margin driven by higher CPS mix. Cash flow from operations reached $179 million, up from $199 million in the fourth quarter of fiscal 2025, a decline that the company attributes to the integration of ZT Systems’ capital‑intensive manufacturing lines. The company’s CFO, Jon Faust, noted that “the ZT Systems integration is on track and has already begun to contribute to our operating cash flow, even as we invest in capacity to meet growing AI demand.”
For the second quarter of fiscal 2026, Sanmina guided revenue to $3.1 billion–$3.4 billion, with a midpoint of $3.25 billion, below the consensus estimate of $3.58 billion. The guidance miss was the primary driver of a sharp after‑hours sell‑off, as investors weighed the lower revenue outlook against the strong first‑quarter performance. EPS guidance for Q2 was $2.25–$2.55, with a midpoint of $2.40, which exceeded the consensus estimate of $2.27, reflecting confidence in margin maintenance.
In its earnings call, CEO Jure Sola emphasized that “we are pleased with the momentum in our core markets, especially the AI‑driven data‑center segment, and the ZT Systems integration is progressing as planned.” He added that Sanmina’s long‑term strategy is to double revenue over the next two years and capture AI opportunities that could reach $16 billion by calendar year 2027. The company’s segment performance shows that the Integrated Manufacturing Solutions (IMS) unit remains a stable revenue base, while the CPS unit continues to grow rapidly, underscoring Sanmina’s shift toward higher‑margin, technology‑centric services.
The combination of a robust first‑quarter earnings beat, a cautious revenue outlook for the next quarter, and a clear long‑term growth strategy positions Sanmina as a company that is executing well on its AI and data‑center initiatives while managing integration costs. Investors will likely monitor the company’s ability to sustain the revenue growth trajectory and to translate the ZT Systems integration into higher operating margins in the coming quarters.
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