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FLEX LNG Ltd.
11/12/2025
Thank you for standing by. Welcome to Flex's second quarter fiscal 2026 earnings conference call. Presently, all participants are in listen-only mode. After the speaker's remarks, there'll be a question and answer session. If you'd like to ask a question, please press star 1 on your phone. If you'd like to withdraw your question, please press star 2. As a reminder, this call is being recorded. I'll now turn the call over to Mrs. Michelle Simmons. You may begin.
Thank you, Kevin. Good morning, and thank you for joining us today for Flex's second quarter fiscal 2026 earnings conference call. With me today is our Chief Executive Officer, Ravithi Advisee, and Chief Financial Officer, Kevin Crum. We'll give brief remarks, followed by Q&A. Slides for today's call, as well as a copy of the earnings press release, are available on the Investor Relations section at flex.com. This call is being recorded and will be available for replay on our corporate website. Today's call contains forward-looking statements which are based on our current expectations and assumptions. These statements involve risks and uncertainties that could cause actual results to differ materially. For a full discussion of these risks and uncertainties, please see the cautionary statements in our presentation, press release, or in the risk factors section of our most recent filings with the SEC. Note, this information is subject to change, and we undertake no obligation to update these forward-looking statements. Please note, all growth metrics will be on a year-over-year basis unless stated otherwise. Additionally, all results will be on a non-gap basis unless we specifically state it's a gap result. The full non-gap-to-gap reconciliations can be found in the appendix slides of today's presentation, as well as in the summary financials posted on the Investor Relations website. Now I'd like to turn the call over to our CEO, Revathy.
Thanks, Michelle. Good morning, and thank you for joining us today. Before we get into the results, I want to start by thanking our Flex team around the world for their disciplined execution and commitment to delivering for our customers. In particular, I want to acknowledge our colleagues in Ukraine. As we shared in August, our Mukachevo facility was damaged during a missile strike. But thanks to our emergency protocols, all team members were safely evacuated. Their strength and resilience in the face of unthinkable circumstances reflect the best of our team in Ukraine and our company as a whole. We remain committed to our colleagues in Ukraine as we focus on rebuilding our operations. Starting on slide four, we had an exceptional quarter. delivering great results on all metrics. Revenue came in at 6.8 billion, growing 4% over last year. Operating margin was an impressive 6%, the fourth quarter in a row that we remained at or above this level, and we delivered adjusted EPS of 79 cents, up 23% over last year. Another record for Flex. This performance reflects the strength of our model. anchored in disciplined execution and a continued shift towards higher value technology-driven businesses. Now turning to slide five, our data center business continues to deliver outstanding results across both cloud and power. With proprietary products, deep systems expertise, and global manufacturing scale, we provide fully integrated power and IT solutions that help hyperscale co-location and silicon customers deploy faster, operate more efficiently while strengthening our margin profile. We remain bullish in our outlook and continue to expect our data center revenue to grow at least 35% this year. Sustaining this level of growth at our scale validates the value we're delivering to the world's leading technology companies and the strength of our execution in a dynamic market. We're outperforming industry growth rates and continuing to strategically shift our portfolio towards higher margin, critical technology-driven businesses, shaping today's market evolution. As we all know, AI is driving one of the largest infrastructure build-outs in modern history, and Flex is at the forefront of this transformation. We are partnering directly with the world's leading technology companies to design, build, and deliver the power, cooling, and systems infrastructure that that enables faster, more reliable data center deployments at scale. Our data center offerings span from the grid to chip, combining our product portfolio with advanced manufacturing capabilities and global scale to meet unprecedented demand for performance and efficiency. Some of this activity is already reflected in our current results, while other programs will ramp over the coming quarters and years. The broader trend is clear. AI is shaping industries for the long term, and Flex is positioned to be a driving force in its continuing infrastructure build-out. A couple of weeks ago at the OCP Global Summit, we unveiled Flex's new AI infrastructure platform, a unified approach that brings together power, cooling, and compute in pre-engineered, scalable design. The platform helps data center operators deploy up to 30% faster, reduce execution risk, and scale reliably to meet the pace of AI demand. We partnered with NVIDIA as part of their ecosystem on next-gen 800-volt DC AI factories. These systems improve energy efficiency, lower cooling costs, and eliminate points of failure as data centers grow in size and complexity. Looking ahead, I could not be more excited. The data center opportunity continues to expand and we're executing remarkably well as we support our customers through this next wave of growth. Beyond our strength in cloud and power, the rest of our diversified portfolio is performing well. In health solutions, we see steady medical device demand and anticipate improvement in medical equipment later this year. In communications and enterprise, we see strength in optical switches and SATCOM devices supporting next-generation connectivity requirements. And in automotive, we see the market stabilizing compared to prior quarters. In the first half of FY26, we added compute deals with new logos, validating our continued investment and focus on software-defined vehicles. As we look back over the first half, we are proud of our teams for their execution and persistence. We started the year with volatility from tariffs and the uncertainty that continues to this day. Despite this backdrop, we've been able to exceed our expectations and raise our guidance. Our customers depend on us for our scale, our technical depth, and our global footprint. That foundation positions us to keep delivering for our customers in any market environment. Now I'll turn the call over to Kevin to walk through the details of our financials. Kevin?
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