Sanmina Q1 FY2026 Earnings Surpass Projections with 59% Revenue Surge

Sanmina Corporation (SANM), a California-based electronics manufacturing solutions provider, delivered impressive results in its Q1 fiscal 2026, with both revenue and profitability metrics outpacing analyst expectations. The company’s top-line growth of 59% year-over-year signals robust demand across its key markets, while improved operational efficiency and cash generation demonstrate strengthening business fundamentals.

Strong Profitability Metrics Highlight Bottom-Line Resilience

On a GAAP basis, Sanmina reported net income of $49.3 million or 89 cents per share, compared with $65 million or $1.16 per share in the prior-year quarter. While the headline earnings declined, the non-GAAP figures paint a more compelling picture. Non-GAAP net income in Q1 reached $132.4 million or $2.38 per share, substantially higher than the $80.2 million or $1.44 per share reported a year earlier. This $2.38 per-share result exceeded the Zacks Consensus Estimate of $2.15, underscoring the company’s ability to drive profitability despite elevated operating costs.

The disconnect between GAAP and non-GAAP earnings reflects higher operating expenses that absorbed some of the top-line gains, yet the underlying operating performance remains solid with non-GAAP operating income climbing to $192 million from $112.7 million year-over-year.

Revenue Acceleration: Q1 Delivers $3.19 Billion, Crushing Estimates

Net sales surged to $3.19 billion in Q1, nearly doubling the $2 billion posted in the prior-year quarter and exceeding consensus estimates by $90 million. This expansion was fueled by broad-based demand across multiple end markets and operational excellence.

The Integrated Manufacturing Solutions (IMS) segment, which contributed 87.5% of total revenues, generated $2.79 billion, reflecting a 72.2% year-over-year surge. This segment benefited from strong customer orders, elevated end-market demand, and improved operational efficiency. In contrast, the Components, Products, and Services segment posted $434 million in revenues, a more modest 4.33% increase year-over-year.

By end market, the standout performer was Communications Networks and Cloud & AI Infrastructure, which skyrocketed to $1.964 billion from $737 million year-ago. This segment’s explosive growth reflects surging demand for AI and cloud infrastructure. Meanwhile, Industrial & Energy, Medical, Defense & Aerospace, and Automotive & Transportation collectively declined slightly to $1.226 billion from $1.269 billion, indicating sector-specific headwinds.

Margin Expansion and Operating Leverage Drive Profitability

Non-GAAP gross profit climbed to $297.9 million from $180.1 million in the prior-year quarter, benefiting from higher sales volumes, improved product mix, enhanced operational efficiency, and disciplined cost management. Non-GAAP operating income reached $192 million versus $112.7 million a year earlier, with the operating margin improving to 6% from 5.6%, suggesting Sanmina is successfully translating revenue growth into bottom-line gains.

Cash Generation Accelerates, Reinforcing Financial Strength

Sanmina’s Q1 cash flow performance underscores the quality of its earnings growth. Operating cash flow surged to $178.7 million from $63.9 million in the prior-year quarter—a 179% increase that demonstrates the company’s ability to convert revenue into cash. As of December 27, 2025, the company maintained a fortress balance sheet with $1.42 billion in cash and cash equivalents, offset by $2 billion in long-term debt.

Management remained shareholder-friendly during the quarter, repurchasing 0.5 million shares for $79 million, signaling confidence in the company’s valuation and commitment to capital returns.

Q2 Guidance Signals Continued Momentum Ahead

Looking forward to Q2 fiscal 2026, Sanmina projects revenues in the $3.1-$3.4 billion range, suggesting slightly flatter sequential growth but continued momentum. Management estimates non-GAAP earnings per share between $2.25 and $2.55, with non-GAAP operating margins expected between 5.7% and 6.2%. This guidance indicates the company anticipates sustaining elevated profitability levels despite potential seasonal or market dynamics that could emerge.

Sanmina’s Q1 results demonstrate that the company is well-positioned to capitalize on secular growth trends in cloud computing and AI infrastructure while maintaining disciplined cost controls and generating strong cash returns to shareholders.