SHARE-BASED COMPENSATION AND WARRANTS

6 Months Ended

Sep. 26, 2025

Share-Based Payment Arrangement, Recognized Amount [Abstract]

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 Company’s share-based compensation expense for the 2017 Plan:


	Three-Month Periods Ended				Six-Month Periods Ended
	September 26, 2025		September 27, 2024		September 26, 2025		September 27, 2024
	(In millions)
Cost of sales	$	9	$	8	$	17	$	16
Selling, general and administrative expenses	28		20		54		44
Total share-based compensation expense	$	37	$	28	$	71	$	60

The 2017 Plan

During the six-month period ended September 26, 2025, the Company granted approximately 4.3 million restricted share unit ("RSU") awards. Of this amount, approximately 2.0 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 $43.92 per award. In addition, approximately 1.0 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 $45.09 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 2.4 million based on the level of achievement of these performance conditions. The awards will cliff vest after a period of three years, depending on the specific performance metrics, to the extent such performance conditions have been met. Further, approximately 0.2 million unvested shares represent the target amount of grants made to certain key employees whereby vesting is contingent on certain market conditions. The average grant date fair value of these awards that are contingent on certain market conditions was estimated to be $58.55 per award and was calculated using a Monte Carlo simulation. The number of shares contingent on market conditions that ultimately will vest will range from zero up to a maximum of approximately 0.4 million based on a measurement of the percentile rank of the Company’s total shareholder return over certain specified periods against the Company's peer companies, and will cliff vest after a period of three years, to the extent such market conditions have been met. The remaining balance of approximately 1.1 million represents the number of shares issued upon the vesting of RSU awards above target levels based on the achievement of certain market and performance conditions for awards granted in fiscal year 2023. These awards were issued and immediately vested in accordance with the terms and conditions of the underlying awards.

As of September 26, 2025, approximately 9.7 million unvested RSU awards under the 2017 Plan were outstanding, of which vesting for a targeted amount of approximately 0.8 million shares is contingent on meeting certain market conditions, and vesting for a targeted amount of approximately 1.7 million shares is contingent on meeting certain performance conditions. The number of shares tied to market conditions that will ultimately be issued can range from zero to approximately 1.7 million based on the achievement levels. The number of shares tied to performance conditions that will ultimately be issued can range from zero to approximately 3.9 million based on the achievement levels. During the six-month period ended September 26, 2025, approximately 2.3 million shares vested in connection with the awards with market and performance conditions granted in fiscal year 2023.

As of September 26, 2025, total unrecognized compensation expense related to unvested RSU awards under the 2017 Plan was approximately $265 million and will be recognized over a weighted-average remaining vesting period of 2.2 years.

Warrant

On August 15, 2025, the Company issued the Warrant to Amazon.com NV Investment Holdings LLC (“Warrantholder”), a wholly-owned subsidiary of Amazon.com, Inc. ("Parent") to purchase up to an aggregate of 3,859,851 Warrant Shares at an exercise price of $51.29 per share, which is the preceding 30 trading days Volume-Weighted Average Price. The Warrant allows for cashless exercise and expires on August 15, 2030; however, if there are unexercised Warrant Shares as of the expiration date, and the Company and Warrantholder maintain a continued commercial relationship, the Company shall negotiate in good faith with Warrantholder to agree to issue to Warrantholder a new two-year warrant as of the expiration date that provides the same exercise price and other terms for vested and unexercised Warrant Shares, that also takes into account the commercial relationship in effect at such time. The Warrant Shares are subject to vesting based on qualifying payments (as defined in the Warrant) for the purchase of all products and services by or on behalf of Parent and its affiliates over the term of the Warrant. Upon the consummation of an acquisition transaction (as defined in the related transaction agreement), subject to a specified condition, the unvested portion of the Warrant will vest in full. So long as the Warrant is unexercised, the Warrant does not entitle Warrantholder to any voting rights or any other shareholder rights. The exercise price and the number of Warrant Shares are subject to customary anti-dilution adjustments. The expense associated with the Warrant Shares will be recorded as a deduction to revenue as the customer purchases products and services over the vesting period.

The estimated fair value of the Warrant was determined as of the issuance date, using the Black-Scholes option pricing model. The following assumptions were used in the model:


	As of August 15, 2025
Expected volatility	45.8	%
Expected dividend yield	—	%
Expected life	7 years
Risk-free interest rate	4.0	%

The calculated fair value of each Warrant Share at the issuance date was $25.47. The Company recorded charges of $2 million during the three months ended September 26, 2025. No Warrant Shares vested, or were exercised, during the three months ended September 26, 2025.