Sanmina (SANM) Surges 23% to 52-Week High After Q3 Earnings Beat

Sanmina Corporation (SANM) delivered a strong fiscal Q3 2025 beat, but shares initially slipped in after-hours trading following a soft Q4 forecast. That quickly reversed: SANM opened at $105, dipped to $103.95, and then rocketed to $121.16 (+23.19%) intraday, hitting a new 52-Week high, as investors focused on long-term growth and AI infrastructure tailwinds.

📊 Q3 Fiscal 2025 Highlights (vs. YoY)

• Revenue: $2.04B (+10.9%) ✅ beat

• Non-GAAP EPS: $1.53 (+22.8%) ✅ beat

• Gross Margin: 9.1% (+60 bps)

• Operating Margin: 5.7% (+40 bps)

• Cash Flow from Operations: $201M

• Free Cash Flow: $168M

• Cash & Equivalents: $798M

• Inventory Turns: 6.3x (vs. 5.1x)

• Non-GAAP ROIC: 24.8% (vs. 21.1%)

🧾 Segment Performance

🔮 Q4 Outlook (Below Street)

• Revenue: $2.0B–$2.1B (vs. est. $2.13B)

• Non-GAAP EPS: $1.52–$1.62

• Gross Margin: 8.7%–9.2%

• Operating Margin: 5.5%–6.0%

Despite the weak guidance, the midpoint implies ~10% EPS growth YoY.

🧾 Sanmina (SANM) Q3 FY2025 Earnings Call Highlights

💼 CEO Jure Sola – Key Comments & Themes

• Performance Appreciation:

  “You delivered solid revenue of $2.04 billion and non-GAAP EPS of $1.53 per share. Again, to Sanmina employees, thank you.”

• Growth Drivers:

  • Communications networks and cloud infrastructure grew +19.1% YoY, leading sector strength.

  • All end markets showed YoY growth.

• ZT Systems Acquisition:

  “We expect the transaction will add $5–6 billion of annual net revenue and double Sanmina’s net revenue within the next three years.”

• Strategic Positioning:

  • Sanmina is investing to capitalize on data center and AI infrastructure trends (estimated $1T+ market by 2028).

  • Highlighted balanced customer base and a strong pipeline of new business.

  “We see new programs and demand improvements to drive growth in fiscal year ’26.”

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💰 CFO Jonathan Faust – Financial and Operational Insights

• Quarterly Beat:

  • Revenue: $2.04B, EPS: $1.53 — both exceeded guidance.

  • Operating margin improved to 5.7%, gross margin reached 9.1%.

  “Non-GAAP diluted earnings per share was $1.53… a 22.8% increase vs. same period last year.”

• ROIC & Cash:

  • Non-GAAP pre-tax ROIC: 24.8%, up from 21.1% last year.

  • Cash & equivalents: $798M, with $1.7B in total liquidity.

• Capital Return:

  • Repurchased 0.2M shares in Q3 for $13M; 1.4M YTD for $114M.

  • $239M remains in buyback authorization.

  “Our strong cash flow performance provides flexibility for investment and shareholder returns.”

• Leverage & Flexibility:

  • No borrowings on $800M revolver; gross leverage ratio: 0.38x.

  • Operating expenses: $70.3M, slightly up due to strategic investments.

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🔮 Q4 2025 Guidance

• Revenue: $2.0B–$2.1B (below $2.13B Street consensus)

• EPS: $1.52–$1.62 (midpoint implies +9.8% YoY)

• Gross margin: 8.7%–9.2%

• Operating margin: 5.5%–6.0%

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💬 Q&A Takeaways

• ZT Integration: Confidence in synergy, expanding sales and engineering for onboarding.

• CPS Margins: Record-high 14.7% gross margin due to favorable mix and strategic investments.

• Tariffs & Supply Chain: Cost pressures passed to customers; pursuing regional diversification.

• India JV: Performing well, slated for future expansion.

• Long-term Outlook: Targeting >6% operating margins over time.

🔧 Strategic Focus

• ZT Systems Acquisition: $5–6B annual run-rate, expected to double SANM revenue in 3 years.

• AI & Data Center Demand: Global data center buildout expected to surpass $1 trillion by 2028.

• Buybacks: $114M YTD; $239M remains in authorization.

⚠️ Risks Noted

• Softness in automotive.

• Geopolitical & tariff-related uncertainties.

• Integration of ZT Systems and inventory optimization in progress.

Takeaway:
Despite a cautious near-term guide, the market cheered Sanmina’s solid Q3, strong cash flow, and aggressive pivot into AI and data center infrastructure. Investors appear to be betting on long-term upside as the ZT Systems acquisition unfolds.