May 5th, 2026

The call conveyed a broadly positive outlook driven by strong Q4 and full-year results, record margins, robust CPI revenue acceleration and major customer wins (including Google). Management announced a strategic spin of the Cloud & Power Infrastructure business to unlock value and highlighted an acquisition (EP2) to bolster power capabilities. Near-term negatives include CPI margin pressure from infrastructure investments and cloud ramp costs, softness in consumer/lifestyle markets, an elevated FY'27 CapEx plan and inventory build, and transactional uncertainty around the spin. Management expects to recoup CPI margin headwinds in FY'27 and to resume normalized CapEx in FY'28, supporting a constructive medium-term view.

Company Guidance

Management guided fiscal 2027 revenue of $32.3B–$33.8B (≈+18% at the midpoint) with adjusted operating margin of 7.0%–7.1% (≈+80 bps), adjusted EPS of $4.21–$4.51 (≈+32% at the midpoint), an adjusted tax rate of ~21%, CapEx of $1.4B–$1.6B and free cash flow conversion of ~60% (excluding spin costs). Segment guidance calls for CPI revenue growth of 65%–75% in FY27 (80%+ expected in FY28), RMS up low- to mid-single digits and ITS flat to up low-single digits; management said FY27 CapEx will be elevated for CPI but should normalize in FY28 with CPI CapEx ~2.5%–3% of revenue and ITS/RMS <2%. CPI margin dynamics: FY26 margin 9.2%, management expects to recoup ~100 bps of FY26 investment in FY27 and drive another 50–100 bps of expansion in FY28. Q1 guidance: total revenue $7.35B–$7.65B (≈+14% at midpoint), adjusted operating income $469M–$499M, adjusted EPS $0.86–$0.92 (≈+24% at midpoint on ~374M weighted shares), interest & other ≈ $65M, and Q1 segment comps of RMS up high-single to low-double digits, ITS up high-single to low-double digits, and CPI up 20%–30%.