Sanmina Corporation Q3 2026 Earnings Call Summary

Sanmina Corporation Q3 2026 Earnings Call Summary Moby Intelligence Tue, July 28, 2026 at 2:24 AM GMT+2 3 min read NVDA SANM Sanmina Corporation Q3 2026 Earnings Call Summary - Moby Strategic Performance Drivers Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here.

Performance was driven by broad-based strength across all end markets in the core business, complemented by the successful integration of ZT Systems. The Communications Networks, Cloud, and AI Infrastructure segment grew 173. 2% year-over-year, primarily fueled by surging demand for AI-related compute and networking solutions.

Management attributed margin outperformance to a favorable product mix and a significant contribution from non-recurring engineering (NRE) services related to pre-production validation. Strategic investments in metal fabrication for AI racks and high-technology printed circuit boards (PCBs) are beginning to yield results, evidenced by sequential margin improvement in the CPS segment. The company is leveraging ZT Systems' large-scale integration capabilities alongside Sanmina's sub-assembly expertise to capture a larger share of the AI data center market.

Operational focus has shifted toward vertical integration, utilizing internal components like liquid cooling, manifolds, and busbars to enhance the value proposition for hyperscale customers. Outlook and Strategic Roadmap Management expressed high confidence in achieving revenue of $16 billion-plus in fiscal year 2027, with growth expected to accelerate in the second half of that year. Next-generation accelerated compute programs are on track to begin contributing to revenue in Q1 fiscal 2027, following current pre-production and validation phases.

Working capital is expected to increase significantly in the coming quarters to support the inventory requirements of ramping large-scale AI infrastructure programs. Capital expenditures are projected at $135 million for Q4 as the company continues to invest in liquid cooling, test cell capacity, and automation for next-gen compute. The company anticipates continued growth in the Industrial and Energy segments for fiscal 2027, specifically targeting power distribution and grid-scale transformers for AI data centers.

Strategic Risks and Structural Items Inventory levels increased 87. 2% year-over-year, primarily due to the ZT Systems acquisition and the capital-intensive nature of the systems integration business. The Q4 outlook for ZT Systems was moderated due to timing variability in legacy storage and general-purpose compute programs.

Management noted that while demand is strong, the business remains somewhat constrained by industry-wide component shortages in specific categories. The net leverage ratio is expected to move toward the long-term target of 1. 0x to 2.

0x as the company utilizes liquidity to fund working capital for AI ramps. Story Continues Q&A Insights Sustainability of operating margins as AI revenue mix increases One stock. Nvidia-level potential.

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Management expects long-term margins to stabilize in the 6% to 7% range as high-volume accelerated compute ramps, which carries a different profile than NRE services. Operating margins were temporarily boosted by labor-intensive pre-production work that carries high margins but low relative revenue. Expansion into non-AMD AI platforms and new customer wins Management confirmed new program wins with additional platforms, including Cerebras, as part of a broader strategy to support multiple AI chip architectures.

The company is seeing success in winning business that will be manufactured in core Sanmina factories rather than just ZT Systems facilities. Working capital requirements for large-scale AI rack production Working capital will build in advance of revenue growth, representing a strategic investment in the business to support customer production schedules. Final operating models and cash flow dynamics for the 2027 ramp are still being finalized with customers and will be detailed in the next earnings call.

Growth prospects for high-technology printed circuit board (PCB) business Demand for advanced PCBs (up to 70-plus layers) is exceeding current capacity, leading to ongoing investments in North America and Singapore facilities. This business is noted to be more profitable than the corporate average, driven by AI and military aerospace requirements.