v3.25.4
SEGMENT REPORTING
 9 Months Ended
Dec. 31, 2025
Segment Reporting [Abstract]  
SEGMENT REPORTING SEGMENT REPORTING
The Company reports its financial performance based on two operating and reportable segments, Flex Agility Solutions and Flex Reliability Solutions, and analyzes operating income as the measure of segment profitability. The determination of these 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, and segment selling, general and administrative expenses, and does not include amortization of intangibles, stock-based compensation, certain restructuring and impairment 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.
The Company's Chief Executive Officer is our Chief Operating Decision Maker ("CODM") who uses segment income in evaluating how we allocate resources, assess performance and make strategic and operational decisions.
Selected financial information by segment for the three and nine-month period ended December 31, 2025 and 2024 are in the tables below:
FASFRSCorporate & OtherTotal
Three-Months Ended December 31, 2025(In millions)
Net Sales$3,818 $3,240 $— $7,058 
Cost of inventory(2,795)(2,137)1 (4,931)
Manufacturing expenses(695)(758)16 (1,437)
Segment selling, general and administrative expenses(89)(112)(29)(230)
      Segment income$239 $233 $(12)$460 
Reconciling items:
Intangible amortization$15 
Stock-based compensation37 
Restructuring and impairment charges (1)9 
Customer related asset recoveries (2)(2)
Legal and other (3)12 
Interest expenses58 
Interest income15 
Other charges (income), net25 
Equity in earnings (losses) of unconsolidated affiliates(1)
Income before income taxes$320 
(1)Certain restructuring charges of $2 million are excluded from the reconciling amount of $9 million as they are included within segment income.
(2)Customer related asset impairments (recoveries) 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.
(3)Legal and other consists of costs not directly related to core business results and including matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims, impairments and other costs such as acquisition and portfolio optimization related costs. During the third quarter of fiscal year 2026, costs primarily related to other costs.
FASFRSCorporate & OtherTotal
Nine-Months Ended December 31, 2025(In millions)
Net Sales$11,275 $9,162 $— $20,437 
Cost of inventory(8,307)(6,020)— (14,327)
Manufacturing expenses(1,996)(2,207)11 (4,192)
Segment selling, general and administrative expenses(266)(333)(55)(654)
Segment income$706 $602 $(44)$1,264 
Reconciling items:
Intangible amortization$52 
Stock-based compensation108 
Restructuring and impairment charges (1)83 
Customer related asset recoveries (2)(2)
Legal and other (3)27 
Interest expenses161 
Interest income38 
Other charges (income), net19 
Equity in earnings (losses) of unconsolidated affiliates(26)
Income before income taxes$828 
(1)During the nine-month period ended December 31, 2025, the Company recognized a total of $46 million in asset impairments, inventory write-downs and other related charges as a result of a missile strike on its Mukachevo, Ukraine facility on August 21, 2025. Refer to note 1 "Organization of the Company and Basis of Presentation" for further details. Certain restructuring charges of $2 million are excluded from the reconciling amount of $83 million as they are included within segment income.
(2)Customer related asset impairments (recoveries) 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.
(3)Legal and other consists of costs not directly related to core business results and including matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims, impairments and other costs such as acquisition and portfolio optimization related costs. During fiscal year 2026, legal and other costs primarily related to other costs.
FASFRSCorporate & OtherTotal
Three-Months Ended December 31, 2024(In millions)
Net Sales$3,599 $2,957 $— $6,556 
Cost of inventory(2,650)(1,967)— (4,617)
Manufacturing expenses(637)(685)(7)(1,329)
Segment selling, general and administrative expenses(85)(107)(19)(211)
Segment income$227 $198 $(26)$399 
Reconciling items:
Intangible amortization$17 
Stock-based compensation33 
Restructuring charges12 
Customer related asset recoveries (1)(2)
Legal and other (2)5 
Interest expenses57 
Interest income16 
Other charges (income), net5 
Income before income taxes$288 
(1)Customer related asset impairments (recoveries) 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 the three-month period ended December 31, 2024, the Company recognized $2 million of customer related asset recoveries.
(2)Legal and other consists of costs not directly related to core business results and including matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims, impairments and other costs such as acquisition and portfolio optimization related costs. During the third quarter of fiscal year 2025, the Company accrued for a $5 million asset impairment where losses were considered probable and estimable.
FASFRSCorporate & OtherTotal
Nine-Months Ended December 31, 2024(In millions)
Net Sales$10,570 $8,845 $— $19,415 
Cost of inventory(7,826)(5,958)— (13,784)
Manufacturing expenses(1,875)(2,076)(21)(3,972)
Segment selling, general and administrative expenses(245)(307)(44)(596)
      Segment income$624 $504 $(65)$1,063 
Reconciling items:
Intangible amortization$49 
Stock-based compensation93 
Restructuring charges54 
Customer related asset recoveries (1)(2)
Legal and other (2)5 
Interest expenses166 
Interest income48 
Other charges (income), net(1)
Equity in earnings (losses) of unconsolidated affiliates(3)
Income before income taxes$744 
(1)Customer related asset impairments (recoveries) 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 the nine-month period ended December 31, 2024, the Company recognized $2 million of customer related asset recoveries.
(2)Legal and other consists of costs not directly related to core business results and including matters relating to commercial disputes, government regulatory and compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims, impairments and other costs such as acquisition and portfolio optimization related costs. During the first three quarters of fiscal year 2025, the Company accrued for a $5 million asset impairment where losses were considered probable and estimable.
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 reportable 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.
Total depreciation expense, including amounts allocated to the reportable segments and Corporate and Other for the three and nine-month period ended December 31, 2025 and 2024 are as follows:
Three-Month Periods EndedNine-Month Periods Ended
December 31, 2025December 31, 2024December 31, 2025December 31, 2024
(In millions)(In millions)
Depreciation expense:
   Flex Agility Solutions$44 $45 $138 $134 
   Flex Reliability Solutions67 62 195 188 
   Corporate and Other2 3 9 9 
        Total depreciation expense$113 $110 $342 $331