FLEX LTD.FLEX
FLEX LTD. Segments Disclosure
SEGMENT REPORTING
No other country accounted for more than 10% of property and equipment, net for the fiscal periods presented in the table above.
The Company's Chief Executive Officer is our Chief Operating Decision Maker ("CODM") who evaluates how we allocate resources, assess performance and make strategic and operational decisions. Based on such evaluation, the Company determined as of and for the period ended March 31, 2025, that Flex has two operating and reportable segments. During the fourth quarter of fiscal year 2024, following the Nextracker spin-off, the Company classified the pre spin-off results of Nextracker, formerly our Nextracker segment, as discontinued operations in our consolidated statements of operations. See note 7 "Discontinued Operations" for additional information.
The FAS segment is optimized for speed to market based on a highly flexible supply and manufacturing system. FAS is comprised of the following end markets that represent reporting units:
•Communications, Enterprise and Cloud, including data center, edge, and communications infrastructure
•Lifestyle, including appliances, floorcare, smart living, HVAC, and power tools
•Consumer Devices, including mobile and high velocity consumer devices.
The FRS segment is optimized for longer product lifecycles requiring complex ramps with specialized production models and critical environments. FRS is comprised of the following end markets that represent reporting units:
•Industrial, including industrial devices, capital equipment, renewables, critical power, and embedded power.
•Automotive, including compute platforms, power electronics, motion, and interface
•Health Solutions, including medical devices, medical equipment, and drug delivery
The determination of the separate operating and reporting 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 (disaggregated below into cost of inventory and manufacturing expenses), and segment selling, general and administrative expenses, and does not include amortization of intangibles, stock-based compensation, certain restructuring 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.
Selected financial information by segment is in the tables below.
| Fiscal Year Ended March 31, 2025 | FAS | FRS | Corporate & Other | Total | |||||||||||||||||||
| Net Sales | $ | 14,074 | $ | 11,739 | $ | — | $ | 25,813 | |||||||||||||||
| Cost of inventory | (10,378) | (7,866) | — | (18,244) | |||||||||||||||||||
| Manufacturing expenses | (2,508) | (2,774) | (26) | (5,308) | |||||||||||||||||||
| Segment selling, general and administrative expenses | (334) | (415) | (53) | (802) | |||||||||||||||||||
| Segment income | $ | 854 | $ | 684 | $ | (79) | $ | 1,459 | |||||||||||||||
| Intangible amortization | $ | 70 | |||||||||||||||||||||
| Stock-based compensation | 125 | ||||||||||||||||||||||
| Restructuring charges | 84 | ||||||||||||||||||||||
| Customer related asset impairment (1) | 2 | ||||||||||||||||||||||
| Legal and other (2) | 9 | ||||||||||||||||||||||
| Interest expenses | 218 | ||||||||||||||||||||||
| Interest income | 61 | ||||||||||||||||||||||
| Other charges (income), net | (14) | ||||||||||||||||||||||
| Equity in earnings (losses) of unconsolidated affiliates | (3) | ||||||||||||||||||||||
| Income from continuing operations before income taxes | $ | 1,023 | |||||||||||||||||||||
(1)Customer related asset impairments may consist of non-cash impairments of property and equipment to estimated fair value for customers from whom we have disengaged or are in the process of disengaging as well as additional provisions for doubtful accounts receivable for customers that are experiencing financial difficulties and inventory that is considered non-recoverable that is written down to net realizable value. In subsequent periods, the Company may recover a portion of the costs previously incurred related to assets impaired or reduced to net realizable value. During fiscal year 2025, the Company recognized approximately $2 million of customer related asset impairments.
(2)Legal and other consists of costs not directly related to core business results including matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims and other issues on a global basis as well as acquisition related costs and asset impairment. During fiscal year 2025, the Company accrued for $5 million related to asset impairments and $4 million is related to acquisition costs.
| Fiscal Year Ended March 31, 2024 | FAS | FRS | Corporate & Other | Total | |||||||||||||||||||
| Net Sales | $ | 13,923 | $ | 12,492 | $ | — | $ | 26,415 | |||||||||||||||
| Cost of inventory | (10,549) | (8,610) | 10 | (19,149) | |||||||||||||||||||
| Manufacturing expenses | (2,382) | (2,796) | (28) | (5,206) | |||||||||||||||||||
| Segment selling, general and administrative expenses | (323) | (420) | (50) | (793) | |||||||||||||||||||
| Segment income | $ | 669 | $ | 666 | $ | (68) | $ | 1,267 | |||||||||||||||
| Intangible amortization | $ | 70 | |||||||||||||||||||||
| Stock-based compensation | 113 | ||||||||||||||||||||||
| Restructuring charges | 172 | ||||||||||||||||||||||
| Customer related asset impairment (1) | 14 | ||||||||||||||||||||||
| Legal and other (2) | 45 | ||||||||||||||||||||||
| Interest expenses | 207 | ||||||||||||||||||||||
| Interest income | 56 | ||||||||||||||||||||||
| Other charges (income), net | 44 | ||||||||||||||||||||||
| Equity in earnings (losses) of unconsolidated affiliates | 8 | ||||||||||||||||||||||
| Income from continuing operations before income taxes | $ | 666 | |||||||||||||||||||||
(1)Customer related asset impairments may consist of non-cash impairments of property and equipment to estimated fair value for customers from whom we have disengaged or are in the process of disengaging as well as additional provisions for doubtful accounts receivable for customers that are experiencing financial difficulties and inventory that is considered non-recoverable that is written down to net realizable value. In subsequent periods, the Company may recover a portion of the costs previously incurred related to assets impaired or reduced to net realizable value. During fiscal year 2024, the Company recognized approximately $14 million of customer related asset impairments.
(2)Legal and other consists of costs not directly related to core business results including matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims and other issues on a global basis as well as acquisition related costs and customer related asset recoveries. During fiscal year 2024, the Company recognized a $50 million loss contingency for a commercial dispute related to a construction matter with related production objectives.
| Fiscal Year Ended March 31, 2023 | FAS | FRS | Corporate & Other | Total | |||||||||||||||||||
| Net Sales | $ | 15,769 | $ | 12,733 | $ | — | $ | 28,502 | |||||||||||||||
| Cost of inventory | (12,256) | (9,067) | 19 | (21,304) | |||||||||||||||||||
| Manufacturing expenses | (2,485) | (2,655) | (30) | (5,170) | |||||||||||||||||||
| Segment selling, general and administrative expenses | (334) | (404) | (58) | (796) | |||||||||||||||||||
| Segment income | $ | 694 | $ | 607 | $ | (69) | $ | 1,232 | |||||||||||||||
| Intangible amortization | $ | 81 | |||||||||||||||||||||
| Stock-based compensation | 101 | ||||||||||||||||||||||
| Restructuring charges | 27 | ||||||||||||||||||||||
| Customer related asset impairment | — | ||||||||||||||||||||||
| Legal and other (1) | 6 | ||||||||||||||||||||||
| Interest expenses | 230 | ||||||||||||||||||||||
| Interest income | 30 | ||||||||||||||||||||||
| Other charges (income), net | 6 | ||||||||||||||||||||||
| Equity in earnings (losses) of unconsolidated affiliates | (4) | ||||||||||||||||||||||
| Income from continuing operations before income taxes | $ | 807 | |||||||||||||||||||||
(1)Legal and other consists of costs not directly related to core business results including matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims and other issues on a global basis as well as acquisition related costs and customer related asset recoveries. During fiscal year 2023, the Company accrued for certain loss contingencies where losses are considered probable and estimable offset by a gain upon successful settlement of certain supplier claims.
Corporate and Other primarily includes corporate service costs that are not included in the CODM's assessment of the performance of each of the identified reporting segments.
The Company provides an overall platform of assets and services, which the segments utilize for the benefit of their various customers. The shared assets and services are contained within the Company's global manufacturing and design operations and include manufacturing and design facilities. Most of the underlying manufacturing and design assets are co-mingled in the operating campuses and are compatible to operate across segments and highly interchangeable throughout the platform. Given the highly interchangeable nature of the assets, they are not separately identified by segment nor reported by segment to the Company's CODM.
Property and equipment on a segment basis is not separately identified and is not internally reported by segment to the Company's CODM as described above. During fiscal years 2025, 2024 and 2023, total depreciation expense, including amounts allocated to the reportable segments and Corporate and Other, is as follows:
| Fiscal Year Ended March 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In millions) | |||||||||||||||||
| Depreciation expense: | |||||||||||||||||
| Flex Agility Solutions | $ | 179 | $ | 171 | $ | 177 | |||||||||||
| Flex Reliability Solutions | 249 | 241 | 217 | ||||||||||||||
| Corporate and Other | 11 | 16 | 17 | ||||||||||||||
| Total depreciation expense | $ | 439 | $ | 428 | $ | 411 | |||||||||||
Geographic information of net sales is as follows:
| Fiscal Year Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||||||||
| Net sales by region: | |||||||||||||||||||||||||||||||||||
| Americas | $ | 12,656 | 49 | % | $ | 12,232 | 46 | % | $ | 11,906 | 42 | % | |||||||||||||||||||||||
| Asia | 7,701 | 30 | % | 8,540 | 32 | % | 10,384 | 36 | % | ||||||||||||||||||||||||||
| Europe | 5,456 | 21 | % | 5,643 | 22 | % | 6,212 | 22 | % | ||||||||||||||||||||||||||
| $ | 25,813 | $ | 26,415 | $ | 28,502 | ||||||||||||||||||||||||||||||
Revenues are attributable to the country in which the product is manufactured or service is provided.
During fiscal years 2025, 2024 and 2023, net sales generated from Singapore, the country of domicile, were approximately $266 million, $660 million and $552 million, respectively.
The following table summarizes the countries that accounted for more than 10% of net sales in fiscal years 2025, 2024, and 2023:
| Fiscal Year Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||||||||
| Net sales by country: | |||||||||||||||||||||||||||||||||||
| Mexico | $ | 6,854 | 27 | % | $ | 6,935 | 26 | % | $ | 6,626 | 23 | % | |||||||||||||||||||||||
| China | 4,319 | 17 | % | 5,117 | 19 | % | 6,562 | 23 | % | ||||||||||||||||||||||||||
| U.S. | 4,162 | 16 | % | 3,598 | 14 | % | 3,394 | 12 | % | ||||||||||||||||||||||||||
No other country accounted for more than 10% of net sales for the fiscal periods presented in the table above.
Geographic information of property and equipment, net is as follows:
| As of March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Property and equipment, net: | |||||||||||||||||||||||
| Americas | $ | 1,292 | 55 | % | $ | 1,220 | 54 | % | |||||||||||||||
| Asia | 555 | 24 | % | 565 | 25 | % | |||||||||||||||||
| Europe | 483 | 21 | % | 484 | 21 | % | |||||||||||||||||
| $ | 2,330 | $ | 2,269 | ||||||||||||||||||||
As of March 31, 2025 and 2024, property and equipment, net held in Singapore was approximately $4 million and $5 million, respectively.
The following table summarizes the countries that accounted for more than 10% of property and equipment, net in fiscal years 2025 and 2024:
| Fiscal Year Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Property and equipment, net: | |||||||||||||||||||||||
| Mexico | $ | 815 | 35 | % | $ | 793 | 35 | % | |||||||||||||||
| U.S. | 376 | 16 | % | 334 | 15 | % | |||||||||||||||||
| China | 293 | 13 | % | 307 | 14 | % | |||||||||||||||||
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About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.