Summary
- Flex’s fiscal second-quarter revenue reached $8.5bn, increasing 25%.
- The company is progressing the proposed spin-off of its Cloud and Power Infrastructure segment as Axiom.
- Its acquisition of EPC Power expands electrical infrastructure capabilities used in demanding computing applications.
Flex reported revenue of $8.5bn for its second quarter of fiscal 2027, an increase of 25% year on year, as the manufacturer advanced plans to separate its Cloud and Power Infrastructure business into a standalone company.
The proposed business will operate under the Axiom name. Flex has progressed its intended leadership arrangements and corporate identity, although completion of the spin-off remains subject to the necessary transaction requirements.
The Cloud and Power Infrastructure segment supplies technology and manufacturing services for data centre infrastructure, including systems associated with electricity distribution, power conversion, thermal management, and equipment integration.
Flex also highlighted its acquisition of EPC Power, adding technology and engineering capabilities relevant to electrical conversion and infrastructure applications.
The transaction supports a wider strategy to provide more of the equipment required between incoming electricity supplies and the computing systems installed inside data centres. Its contribution to future financial results remains subject to integration and market demand.
Flex recorded GAAP operating income of $414m during the quarter, alongside adjusted operating income of $607m. GAAP earnings per share reached $0.70, while adjusted earnings per share were $1.18.
Operating cash flow totalled $501m, with free cash flow of $261m. These figures cover the wider group, so they should not be interpreted as the standalone financial performance of the proposed Axiom business.
Flex increased its fiscal-year guidance, including an updated forecast for consolidated revenue of between $34.9bn and $35.9bn. The outlook incorporates contributions from acquisitions and the anticipated performance of its operating segments.
The company expects its Cloud and Power Infrastructure business to deliver substantial growth. Nevertheless, the proposed separation has not yet taken effect, and the final capital structure and standalone financial profile remain to be established.
Data centre development increasingly involves integrating multiple complex electrical and mechanical systems. Computing equipment may arrive as assembled racks or modules, but those systems still require suitable facility power, cooling, connections, controls, and maintenance access.
Higher-density computing introduces further requirements. Technologies such as high-voltage DC distribution and factory-integrated cooling can change how equipment is designed, assembled, and tested before delivery to a site.
Flex has previously introduced modular cooling and 800V power products for these applications. Those developments form part of the business’s existing infrastructure portfolio rather than representing new launches within the latest financial results.
The acquisition of EPC Power extends the range of conversion technologies available to the group. Power conversion efficiency, thermal performance, protection, and equipment compatibility can all influence the electrical losses and operating characteristics of a complete installation.
Manufacturing scale is also becoming important as several large data centre projects seek similar equipment during overlapping construction periods. Component availability, specialised engineering capacity, factory throughput, and quality assurance can affect delivery schedules.
A business concentrating on integrated cloud and power infrastructure may be able to coordinate more of those processes. The commercial outcome depends on whether customers value that integration and whether the supplier can meet project schedules without compromising manufacturing or commissioning quality.
By creating Axiom as a distinct business, Flex intends to establish a clearer organisational structure around these infrastructure activities while retaining its remaining manufacturing operations separately.
Management’s updated annual guidance expects Cloud and Power Infrastructure revenue growth of 75% to 85%, compared with 8% to 11% for the company’s remaining Reliability, Manufacturing and Technology Solutions and Industrial and Technology Solutions operations. The figures describe different business segments and should not be conflated with the 25% consolidated quarterly increase.
For the third fiscal quarter, Flex forecasts consolidated net sales between $8.87bn and $9.17bn and adjusted operating income of $685m to $715m. These projections include the performance anticipated after the latest reporting period; they are not completed sales.
Earlier securities disclosures describe an intended separation in the first quarter of 2027. The timetable and final terms remain subject to the company’s transaction process. The proposed structure would make a fast-growing physical computing infrastructure business separately identifiable from Flex’s other manufacturing activities.
The stated 75% to 85% growth outlook is for the full fiscal year and does not describe a single quarter. The spin-off timetable and the company’s latest forecast also concern separate decisions: one establishes corporate structure and the other projects commercial performance.
The next transaction milestones will establish the timetable, governance, financing, and financial disclosures associated with the planned separation. Until those details are finalised, Axiom remains a proposed independent business rather than a completed corporate spin-off.
