Sanmina’s third-quarter results saw a strong positive market reaction, reflecting broad-based revenue growth and upside on non-GAAP earnings per share versus Wall Street expectations. Management attributed the quarter’s outperformance to heightened demand in the communication networks and cloud and AI infrastructure segments, as well as benefits from favorable product mix and operational efficiencies. CEO Jure Sola pointed to consistent execution across the business and highlighted that ongoing investments in technology and capacity have positioned Sanmina for continued growth.
Is now the time to buy SANM? Find out in our full research report (it’s free for active Edge members).
Sanmina (SANM) Q3 CY2025 Highlights:
- Revenue: $2.10 billion vs analyst estimates of $2.05 billion (3.9% year-on-year growth, 2.2% beat)
- Adjusted EPS: $1.67 vs analyst estimates of $1.57 (6.7% beat)
- Adjusted EBITDA: $154.9 million vs analyst estimates of $151.5 million (7.4% margin, 2.2% beat)
- Revenue Guidance for Q4 CY2025 is $3.05 billion at the midpoint, above analyst estimates of $2.13 billion
- Adjusted EPS guidance for Q4 CY2025 is $2.10 at the midpoint, above analyst estimates of $1.69
- Operating Margin: 5.2%, in line with the same quarter last year
- Market Capitalization: $9.07 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Sanmina’s Q3 Earnings Call
- Ruplu Bhattacharya (Bank of America) asked for clarity on ZT Systems’ revenue run rate and margin profile. CFO Jonathan Faust confirmed ZT Systems is operating at a $5–6 billion annual run rate with margins in line with Sanmina’s 5.6–6.1% guidance.
- Ruplu Bhattacharya (Bank of America) inquired about acceleration in legacy business growth. Faust stated that mid-single-digit growth is expected in the first quarter, with acceleration to high single digits later, driven by end-market opportunities.
- Steven Fox (Fox Advisors) questioned the timeline for rebuilding ZT’s accelerated compute business. CEO Jure Sola responded that Sanmina is immediately expanding engineering and integrating teams to pursue these opportunities in partnership with AMD.
- Steven Fox (Fox Advisors) asked about the purchase price of ZT Systems and cash flow expectations. Faust assured the final price will not materially change and legacy cash flow remains strong, with ZT’s future impact to be clarified in coming quarters.
- Anja Soderstrom (Sidoti) sought details on AI opportunities for ZT. Sola highlighted the pipeline’s strength and noted that expanded capabilities position Sanmina to compete in data center AI for the next several years.
Catalysts in Upcoming Quarters
In the quarters ahead, our analysts will track (1) the pace and success of ZT Systems integration and its contribution to cloud and AI infrastructure revenue, (2) progress on margin expansion as Sanmina aligns its product mix and operational footprint, and (3) the ramp-up of new programs in both legacy and acquired segments. Developments in India and execution on new customer opportunities will also act as key indicators of future momentum.
Sanmina currently trades at $170.12, up from $140.53 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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