Flex Plans Cloud and Power Unit Spin-Off

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Flex announced that its Board of Directors has unanimously approved moving forward with a plan to spin off its Power and Cloud portfolio from Flex, creating two independent, publicly traded companies, each optimally positioned to serve their customers and create value for their shareholders.

"Today's announcement is the next step in a deliberate transformation that has reshaped Flex into a technology-focused industrial company over the past seven years," said Revathi Advaithi, Chief Executive Officer of Flex. "By creating two focused, independent companies, we are giving SpinCo the platform to build and scale the products and digital infrastructure that the world's most demanding AI workloads depend on, and Flex the focus to deliver advanced manufacturing solutions at global scale for diversified industries. We believe each company will have the strategic clarity and dedicated leadership to drive exceptional outcomes for its respective customers and shareholders. I'm excited to be part of the journey for both companies."

Benefits of the spin-off

As separate companies, SpinCo and Flex are expected to benefit from:

• Sharpened strategic focus and execution
• Distinct financial profiles and capital allocation policies
• Improved transparency around performance and expectations
• Unique investment approaches to fund long-term profitable growth

Two leading companies with distinct growth strategies

SpinCo: A global leader in critical digital infrastructure, delivering end-to-end power and thermal management technologies for AI data centers and mission-critical applications

SpinCo enables the scalable and reliable deployment of high-density digital and electrical infrastructure for diverse end markets like AI data centers and utilities. By integrating power, cooling, and compute at the system level, SpinCo delivers coordinated, system-level solutions designed to replace fragmented, multi-vendor approaches—enabling customers to achieve faster time-to-capacity, improved infrastructure reliability, and scalable performance as power densities and thermal complexity continue to increase.

SpinCo is well positioned to benefit from long-duration secular trends, including electrification, rising power intensity, and increasing infrastructure complexity. These dynamics are driving a sustained, multi-year buildout of digital infrastructure, particularly as artificial intelligence adoption accelerates. With a differentiated technology portfolio spanning power distribution, thermal management, and integrated infrastructure systems, from grid to chip, deep customer relationships, and a globally integrated engineering, manufacturing, and service model spanning 22 engineering and manufacturing centers, SpinCo is positioned to grow share and pursue targeted acquisitions to expand its capabilities.

As an independent company with experienced leadership and dedicated capital allocation, SpinCo will have the operational focus and strategic flexibility to execute on its growth opportunities. Flex is targeting SpinCo to generate approximately 65% - 75% revenue growth in fiscal 2027, with an acceleration to 80%+ in fiscal 2028.

Flex: A future-ready manufacturing partner designed for speed, scale, and resilience

Following the spin-off, Flex will continue to operate as a leading global manufacturing partner organized into two segments—Integrated Technology Solutions and Regulated Manufacturing Solutions—delivering design, vertically integrated manufacturing, and supply chain solutions enabled by automation, digital factories, and advanced processes. The company will serve the healthcare, industrial, automotive, communications, and lifestyle end markets. As customers face increasing product complexity, tighter development timelines, and growing regionalization requirements, Flex will help accelerate time to market and enable global scale through its end-to-end capabilities. With more than 75 manufacturing and logistics sites across 30 countries, Flex provides customers with sourcing flexibility and operational resilience amid ongoing supply chain and geopolitical disruptions. Following the spin-off, the company is expected to continue to be well-positioned to benefit from long-term secular growth trends, including the expansion of connected medical devices, drug delivery systems, energy infrastructure, robotics, satellite communications, and advanced networking. With a simplified portfolio and sharper strategic focus, we believe Flex is positioned to expand margins and actively optimize its portfolio toward higher-growth opportunities—driving strong cash flow and shareholder returns over the next few years.

Flex, excluding SpinCo, is expected to be strongly positioned for low-to-mid-single-digit growth, continued margin expansion, cash generation, and a robust capital return framework.

"After more than 20 years with the company, I'm honored to help lead Flex into its next chapter," said Michael Hartung. "We're well positioned to build on our longstanding foundation of global scale, operational excellence, and deep customer partnerships across regulated and technology-driven industries. By remaining focused on our strategic priorities and executing our proven playbook, we will continue to be the global manufacturer behind the products and systems that keep the world running, while delivering meaningful, long-term value for our customers and shareholders."