Revenue came in at $3.19 billion non-GAAP operating margin at 6% and non-GAAP diluted earnings per share of $2.38.
— Jure Sola
03Detailed Report
SANM
Company SANM
Period
Q1 2026
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 14, 2026
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Executive Summary
Sanmina delivered a strong first quarter of FY2026 (qq1 2026) with revenue of $3.19 billion and non-GAAP operating margin of 6.0%, alongside non-GAAP diluted earnings per share of $2.38. The quarter reflected the contributions from both the core Sanmina business and the ZT Systems (ZT) acquisition, underscoring management’s thesis that 2026 is a growth year built on margin discipline and strategic capacity expansion. The IMS segment led top-line growth, aided by the ZT Systems addition, while CPS margins benefited from strategic investments designed to drive future margin accretion. The balance sheet remains exceptionally strong with cash of about $1.42 billion, no borrowings on the revolver, and a net leverage of ~0.8x, supporting ongoing investments in capacity and technology.
Management reiterated a disciplined ROI-based capital allocation framework focused on organic growth, selective M&A partnerships, balance-sheet health, and shareholder returns. The second-quarter guide implies continued strength into FY2026 with revenue guidance of $3.1–$3.4 billion and non-GAAP operating margin of 5.7–6.2%, signaling a favorable mix and ongoing investments to grow higher-margin programs. Management also highlighted a longer-term objective to double Sanmina’s revenue over the next two years aided by AI data-center opportunities (ZT integration) and vertical integration initiatives. Overall, Sanmina appears well-positioned to capitalize on the AI/data-center opportunity while expanding margins through a more selective CPS investment path and enhanced operating discipline.
Key Performance Indicators
Revenue
Increasing
3.19B
QoQ: 60.76% | YoY: 73.22%
Gross Profit
Increasing
242.36M
7.60% margin
QoQ: 37.52% | YoY: 57.85%
Operating Income
Decreasing
73.60M
QoQ: -19.67% | YoY: -12.55%
Net Income
Decreasing
49.29M
QoQ: -23.24% | YoY: -4.49%
EPS
Decreasing
0.91
QoQ: -22.88% | YoY: -2.15%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability
- QQ1 2026 revenue: $3.189 billion, up 59% YoY (four-quarter data shows normalization post-ZT acquisition). Gross profit: $242.362 million; gross margin: 7.60%. Non-GAAP gross margin expanded 30 bps YoY to 9.3%. Operating income: $73.598 million; non-GAAP operating margin: 6.0% (second quarter at 6% for two consecutive quarters).
- Net income: $49.286 million; net income margin: 1.55%; Non-GAAP diluted EPS: $2.38; GAAP EPS: $0.91; shares outstanding (diluted): ~55.5 million.
- EBITDA: $73.598 million; EBITDAR: 2.31% of revenue; ROIC (non-GAAP pre-tax): 32.1%.
Segment and end-market mix
- IMS (Integrated Manufacturing Solutions) revenue: $2.79 billion, up 72% YoY; gross margin: 8.7% (up 80 bps YoY).
- CPS (Components, Products & Services) revenue: $434 million, up 4.3% YoY; CPS non-GAAP gross margin: 12.9% (up 40 bps YoY).
- End-market mix: Communications networks, cloud and AI infrastructure accounted for ~62% of revenue; Industrial, energy, medical, defense/aerospace, automotive, and transportation accounted for ~38% (Q1 2026).
Cash flow and capital allocation
- CFO: $178.7 million; capex: $86.8 million; free cash flow: $91.9 million.
- Shares repurchased: 516,000 shares for ~$79 million; remaining authorization about $160 million.
- Cash and equivalents: ~$1.42 billion; revolver: no borrowings outstanding; net leverage: 0.8x.
- Balance sheet: Total assets ~$9.80 billion; total liabilities ~$2.52 billion; total debt ~$2.17 billion; net debt ~$755 million.
Guidance and outlook
- Q2 FY2026 guidance: Revenue $3.1–$3.4 billion (midpoint $3.25B, +62% YoY); non-GAAP operating margin 5.7–6.2%; non-GAAP diluted EPS $2.25–$2.55 (~$2.40 midpoint); capex around $95 million; depreciation ~$45 million. Tax rate guidance 21–23%.
- Management commentary: FY2026 is off to a great start; core Sanmina growth expected to be in the high single digits; ZT Systems margins in line with core Sanmina; integration of ZT is accretive to EPS; capacity expansion in the US, India, and Mexico to support growth targets.
Key takeaways
- The combination of core Sanmina and ZT Systems has materially expanded the total addressable market and provided a powerful growth engine for 2026 and beyond, with a clear path to higher margins through focused investments and mix optimization.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
3.19B
73.22%
60.76%
Gross Profit
242.36M
57.85%
37.52%
Operating Income
73.60M
-12.55%
-19.67%
Net Income
49.29M
-4.49%
-23.24%
EPS
0.91
-2.15%
-22.88%
Key Financial Ratios
Management Insights Available for Members
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