Financial Analysis

"BUSINESS ACQUISITIONS & DISPOSITIONS On May 1, 2026, the Company completed the acquisition of 100% ownership of Electrical Power Products, Inc. (""EPP""), a U.S. leader in critical power solutions for a total estimated purchase consideration of $1.2 billion in cash. The allocation of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed is based on their estimated fair values as of the date of acquisition. The business is included in the CPI segment. Additional information which existed as of the acquisition date, may become known to the Company during the remainder of the measurement period, a period which is not to exceed 12 months from the date of the acquisition. Changes to amounts recorded as assets and liabilities may result in a corresponding adjustment to goodwill during the measurement period. The following represents the Company's initial allocation of the total purchase price to the acquired assets and liabilities of the acquired business (in millions): Amount ($M) ASSETS Current Assets: Cash $ 23 Accounts receivable 69 Inventory 99 Contract assets 62 Other current assets 5 Total current assets 258 Operating lease right-of-use assets, net 1 Property and equipment 44 Intangible assets 478 Goodwill 473 Total assets $ 1,254 LIABILITIES AND PURCHASE CONSIDERATION Current Liabilities: Accounts payable $ 10 Deferred revenue 36 Accrued liabilities 11 Operating lease liabilities 1 Other current liabilities 9 Total liabiliti …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

COMMITMENTS AND CONTINGENCIES Litigation and other legal matters In connection with the matters described below, the Company has accrued for loss contingencies where it believes that losses are probable and estimable. Although it is reasonably possible that actual losses could be in excess of the Companys accrual, the Company is unable to estimate a reasonably possible loss or range of loss in excess of its accrual, due to various reasons, including, among others, that: (i) the proceedings are in early stages or no claims have been asserted, (ii) specific damages have not been sought in all of these matters, (iii) damages, if asserted, are considered unsupported and/or exaggerated, (iv) there is uncertainty as to the outcome of pending appeals, motions, or settlements, (v) there are significant factual issues to be resolved, and/or (vi) there are novel legal issues or unsettled legal theories presented. Any such excess loss could have a material effect on the Companys results of operations or cash flows for a particular period or on the Companys financial condition. One of the Company's Brazilian subsidiaries received six assessments for certain sales and import taxes. Four of the assessments have been successfully definitively defeated. The Company was unsuccessful at the administrative level in two of the remaining assessments and filed annulment actions in federal court in Brasilia, Brazil. The first annulment action was filed on March 23, 2020; the updated value of that a …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

BANK BORROWINGS AND LONG-TERM DEBT Bank borrowings and long-term debt as of June 26, 2026 and March 31, 2026 are as follows: Maturity Date As of June 26, 2026 As of March 31, 2026 (In millions) 6.000% Notes (1) January 2028 $ 399 $ 398 4.875% Notes (1) June 2029 654 654 4.875% Notes (1) May 2030 670 671 5.250% Notes (1) January 2032 651 651 5.375% Notes (1) November 2035 598 598 Senior Term Loan (3) November 2027 1,450 Delayed Draw Term Loan December 2027 500 500 3.600% HUF Bonds (2) December 2031 318 296 Debt issuance costs (21) (17) 5,219 3,751 Current portion, net of debt issuance costs Non-current portion $ 5,219 $ 3,751 (1) The notes are carried at the principal amount of each note less any unamortized discount and unamortized debt issuance costs and inclusive of any unamortized premium. The notes are the Companys senior unsecured obligations and rank equally with all other existing and future senior unsecured debt obligations. (2) The bonds mature in December 203 1 with annual payments equal to 10% of the original principal amount thereof on each of the seventh, eighth, and ninth anniversaries of the bonds, with the remaining 70% due upon maturity. (3) In May 2026, the Company entered into a senior term loan agreement. The weighted-average interest rate for the Company's long-term debt was 4.8% and 4.9% as of June 26, 2026 and March 31, 2026, respectively. Scheduled repayments of the Company's bank borrowings and long-term debt as of June 26, 2026 are as follows: Fiscal …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table presents the Companys revenue disaggregated based on timing of transfer, point in time or over time: Three-Month Periods Ended June 26, 2026 June 27, 2025 Timing of Transfer (In millions) ITS Point in time $ 1,554 $ 1,760 Over time 1,502 798 Total 3,056 2,558 RMS Point in time 1,504 1,429 Over time 1,166 962 Total 2,670 2,391 CPI Point in time 1,530 1,565 Over time 672 61 Total 2,202 1,626 Flex Point in time 4,588 4,754 Over time 3,340 1,821 Total $ 7,928 $ 6,575 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

"SHARE-BASED COMPENSATION AND WARRANTS Flex historically maintains share-based compensation plans at the corporate level. The Company grants equity compensation awards under its 2017 Equity Incentive Plan (the ""2017 Plan""). Share-Based Compensation Expense The following table summarizes the Companys share-based compensation expense for the 2017 Plan: Three-Month Periods Ended June 26, 2026 June 27, 2025 (In millions) Cost of sales $ 7 $ 8 Selling, general and administrative expenses 44 26 Total share-based compensation expense $ 51 $ 34 The 2017 Plan During the three-month period ended June 26, 2026, the Company granted 1.7 million restricted share unit (""RSU"") awards. Of this amount, 0.8 million are plain-vanilla unvested RSU awards that vest over a period of three years, with no performance or market conditions, with an average grant date price of $151.88 per award. In addition, 0.3 million unvested shares represent the target amount of grants made to certain key employees whereby vesting is contingent on certain performance conditions, with an average grant date price of $151.99 per award. These performance-based RSUs include awards tied to the Company's adjusted earnings per share growth and awards tied to operating profit goals. The number of shares that will ultimately vest will range from zero up to a maximum of approximately 0.7 million based on the level of achievement of these performance conditions. The awards will cliff vest after a period of three years, depe …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability. The accounting guidance for fair value establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: Level 1 - Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 - Applies to assets or liabilities for which there are inputs other than quoted prices included within level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets) such as cash and cash equivalents and money market fu …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03 ""Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses"", which requires public entities to disclose specified information about certain costs and expenses. The guidance is effective for the Company beginning in the fourth quarter of fiscal year 2028 and will be applied retrospectively to all prior periods presented on its consolidated financial statements. The Company is currently evaluating the guidance to determine the impact on the Company's disclosures. In January 2025, the FASB issued ASU 2025-01 on the same topic to clarify the amendments for ASU 2024-03 are effective for the Company in the fourth quarter of fiscal year 2028. In December 2025, the FASB issued ASU 2025-12 ""Codification Improvements"", which includes numerous refinements and enhancements, including clarifications on the accounting for the retirement of treasury stock among others. The guidance is effective for the Company beginning in the first quarter of fiscal year 2028. The Company is currently evaluating the guidance to determine the method of adoption and impact on the Company's disclosures."

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RESTRUCTURING CHARGES The Company continued to improve operational efficiencies through targeted restructuring activities during the first quarter of fiscal year 2027. During the three-month periods ended June 26, 2026, the Company recognized $2 million of restructuring and impairment charges, of which $1 million related to employee severance and $1 million for impairment. The following table summarizes the provisions, respective payments, and remaining accrued balance for restructuring charges incurred as of June 26, 2026: Severance (In millions) Balance as of March 31, 2026 $ 63 Provision for net charges incurred 1 Cash payments (22) Non-cash reductions Balance as of June 26, 2026 42 Less: Current portion (classified as other current liabilities) 42 Accrued restructuring costs, net of current portion (classified as other non-current liabilities) $ …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

REVENUE Contract Balances A contract asset is recognized when the Company has recognized revenue but not issued an invoice for payment. Contract assets are classified separately on the condensed consolidated balance sheets and transferred to receivables when rights to payment become unconditional and invoiced. A contract liability is recognized when the Company receives payments in advance of the satisfaction of performance. Contract liabilities, identified as deferred revenue, were $441 million and $431 million as of June 26, 2026 and March 31, 2026, respectively, of which $370 million and $362 million, respectively, is included in deferred revenue and customer working capital advances under current liabilities. Disaggregation of Revenue The following table presents the Companys revenue disaggregated based on timing of transfer, point in time or over time: Three-Month Periods Ended June 26, 2026 June 27, 2025 Timing of Transfer (In millions) ITS Point in time $ 1,554 $ 1,760 Over time 1,502 798 Total 3,056 2,558 RMS Point in time 1,504 1,429 Over time 1,166 962 Total 2,670 2,391 CPI Point in time 1,530 1,565 Over time 672 61 Total 2,202 1,626 Flex Point in time 4,588 4,754 Over time 3,340 1,821 Total $ 7,928 $ 6,575 Concentration of Risk Sales of the Company's products are concentrated among specific customers. A significant customer accounted for 12% of net sales during the three-month period ended June 26, 2026. The majority of the revenue with this customer is included wi …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"SEGMENT REPORTING The Company reports its financial performance based on three operating and reportable segments, ITS, RMS, and CPI and analyzes operating income as the measure of segment profitability. The determination of these segments is based on several factors, including the nature of products and services, the nature of production processes, customer base, delivery channels and similar economic characteristics. An operating segment's performance is evaluated based on its pre-tax operating contribution, or segment income. Segment income is defined as net sales less cost of sales, and segment selling, general and administrative expenses, and does not include amortization of intangibles, stock-based compensation, certain restructuring and impairment charges, customer related asset impairment, legal and other, interest expense, interest income, other charges (income), net, and equity in earnings of unconsolidated affiliates. A portion of depreciation is allocated to the respective segments, together with other general corporate, research and development and administrative expenses. The Company's Chief Executive Officer is our Chief Operating Decision Maker (""CODM"") who compares actual segment income to budgeted financial performance in evaluating how we allocate resources, assess performance and make strategic and operational decisions. Selected financial information by segment for the three-month periods ended June 26, 2026 and June 27, 2025 are in the tables below: Hi …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing