Revenue and EPS Beat
Q1 revenue of $677 million, up 7% year-over-year, and non-GAAP EPS of $0.58, which was at the higher end of prior guidance ($0.53–$0.59). Quarterly results came in toward the higher end of expectations.
Benchmark Electronics
· BHE
April 29th, 2026
Summary
- Earnings Call Date:
- 2026-04-29
- Change Since:
- +26.91%
- Next Earnings Date:
- 2026-08-05
Earnings Call Sentiment
PositiveThe call presented a predominantly positive picture: the company beat Q1 expectations on revenue and EPS, raised full-year revenue guidance materially (to 9%–10%), reported strong YoY growth in Medical (+24%) and AC&C (+41%), highlighted improving Semi‑Cap momentum and maintained solid cash generation and a healthy balance sheet. Headwinds were present but generally manageable — sequential margin compression due to seasonality and variable compensation, modest YoY declines in Industrial and A&D, supply‑chain pockets and some ambiguity around the exact magnitude of Semi‑Cap sequential growth. Overall, the positives (guidance raise, sector outperformance, cash flow, bookings and strategic wins) outweigh the negatives.
Company Guidance
Benchmark raised full‑year revenue guidance to 9%–10% (up from mid‑single digits) and said operating income and earnings should grow faster than revenue, backed by Q1 results of $677M revenue and $0.58 non‑GAAP EPS (non‑GAAP gross margin 10.3%, operating margin 4.8%, effective tax rate 27.4%). For Q2 they guide revenue $700M–$740M (≈+12% YoY at the midpoint), non‑GAAP gross margin 10.4%–10.6%, non‑GAAP operating margin 5.1%–5.3%, non‑GAAP diluted EPS $0.65–$0.71, an effective tax rate of 26%–27%, weighted average shares ~36.3M, interest/other ≈$3.5M, with GAAP including ~$6.1M stock‑based comp and $0.8M–$1.2M of other non‑operating items. The company also reiterated strength in Semi‑Cap (expecting mid‑teens sector growth and Penang‑4 online in Q3), affirmed continued investment (Q1 capex ~$18M; full‑year capex expected at the higher end of 2.0%–2.5% of revenue), and highlighted healthy liquidity and cash flow (Q1 operating cash flow $47M, free cash flow $29M, net cash +$120M, cash $325M, $486M available borrowing capacity), plus working‑capital improvements (cash conversion 67 days, inventory days down 14, turns 4.8 vs 4.0).
Raised Full-Year Guidance
Company raised full-year revenue growth outlook to 9%–10% (up from prior mid-single-digit expectation) and expects EPS to grow faster than revenue due to execution and disciplined expense management.
Strong Performance in Medical and AC&C
Medical revenue grew 24% year-over-year. AC&C (Advanced Cooling & Compute) grew 41% year-over-year, driven by AI-related ramps (liquid cooling/HPC and clustered AI solutions); company expects strong growth from AC&C in 2026 and was named HPE's 2026 Manufacturing Partner of the Year.
Semi-Cap Momentum and Capacity Investment
Semi-Cap showed sequential improvement and management described a recovery: CEO cited double-digit sequential growth and the company indicated underlying momentum. Management expects mid-teens growth in the Semi-Cap sector for the year and Penang PT building 4 is on track to begin operations in Q3 to support capacity.
Year-over-Year Margin and Profitability Improvement
Non-GAAP gross margin improved 20 basis points year-over-year to 10.3%. Non-GAAP operating margin improved 20 basis points year-over-year to 4.8%, reflecting operational leverage and disciplined execution despite seasonal effects.
Strong Cash Flow and Healthy Balance Sheet
Generated $47 million in operating cash flow and $29 million in free cash flow in Q1. Company is $120 million net cash positive with $325 million in cash and $486 million of available borrowing capacity. Cash conversion cycle improved to 67 days (19-day improvement YoY); inventory days declined 14 days YoY; turns improved to 4.8 from 4.0.
Capital Allocation and Shareholder Returns
Invested ~$18 million in capex in Q1 and expects full-year capex toward the higher end of 2.0%–2.5% of revenue. Returned capital via $6 million in cash dividends and $6 million in share repurchases in the quarter, with ~$117 million remaining under the repurchase authorization.
Positive Bookings and Order Momentum
Management reported another quarter of solid bookings which supports confidence in pacing for the year and sustainability of the growth outlook across multiple end markets.
Operator
Thank you for standing by. Welcome to the Benchmark Q1 Fiscal Year 2026 Earnings Call and Webcast. [Operator Instructions] I would now like to turn the conference over to Paul Mansky, Benchmark Investor Relations. You may begin.
Paul Mansky
Thank you, operator, and thanks, everyone, for joining us today for Benchmark's First Quarter 2026 Earnings Call. With us today are David Moezidis, our President and CEO; and Bryan Schumaker, our CFO. After the market closed, we issued an earnings release pertaining to our financial performance for the first quarter of 2026, along with a presentation, which we will reference on this call. Both are available under the Investor Relations section of our website. This call is being webcast live, a replay of which will be available approximately 1 hour after we conclude. The company has provided a reconciliation of our GAAP to non-GAAP measures in the earnings release as well as in the appendix to the presentation. Please take a moment to review the forward-looking statements disclosure on Slide 2 of the presentation. During our call, we will discuss forward-looking information.
As a reminder, any of today's remarks which are not historical statements of fact are forward-looking statements, which involve risks and uncertainties as described in our press releases and SEC filings. Actual results may differ materially from these statements. Benchmark undertakes no obligation to update any forward-looking statements. For today's call, David will start with an overview, followed by Bryan's further detail of our Q1 results and guidance. We'll then turn the cal...
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