Flex closed fiscal 2027 with a top line that grew faster than anything in recent memory and a corporate structure that is about to be permanently redrawn. Net sales for the three months ended June 26, 2026 reached $7.9 billion, up 21% from $6.6 billion a year earlier, and GAAP net income jumped to $285 million from $192 million, or $0.76 of diluted earnings per share. The growth was genuinely broad: every one of the three reportable segments expanded, led by Cloud and Power Infrastructure, which grew 35% and carried the Electrical Power Products acquisition that closed on May 1, 2026. But the quarter that mattered most for the stock was not the operating print; it was the May 5, 2026 announcement that Flex intends to separate its Cloud and Power Infrastructure segment into an independent, publicly traded company, SpinCo, expected to close in the first calendar quarter of 2027.
The strategic logic is hard to argue with. The CPI segment produced $2.2 billion of net sales and 9.7% segment income margin in the quarter, the best margin of the three businesses, and it is the segment that owns Flex's most attractive exposure to data center power, liquid cooling, and the electrical backbone of American grid modernization. Keeping it inside a diversified electronics manufacturer forced the market to apply a conglomerate discount to both halves at once. The spin-off also let Flex ring-fence the cost of the transformation: $53 million of separation costs already ran through the quarter, the company raised $1.5 billion of net debt to fund the $1.2 billion EPP purchase, and it has stopped repurchasing shares, leaving 369.4 million ordinary shares outstanding at the July 24, 2026 count.
The counterargument is that the headline growth is flattered by pass-through economics that do not always land in the pocket. Memory prices stayed elevated in the quarter, which lifted reported net sales in both Communications and Lifestyle while compressing gross margin, and tariff costs paid to the U.S. government and recovered from customers touched roughly one percent of revenues and costs. Free cash flow of $41 million against $285 million of net income tells the same story in cash terms: the quarter's working capital build, driven largely by a $608 million rise in inventory, consumed most of the cash generated. The stock, at $110.45 on the August 28, 2026 close, sits between a 52-week low of $51.76 and a high of $166.86, a range that says the market is still working out how much to pay for the two companies it is about to own separately.