管理層發言
Afternoon, ladies and gentlemen. And welcome to Sanmina Third Quarter Fiscal 2026 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press zero. For the operator. This call is being recorded on Monday, July 27, 2026. I would now like to turn the conference over to Paige Melching. Please go ahead.
Thank you, Marco. Good afternoon, ladies and gentlemen, and welcome to Sanmina's third quarter fiscal 2026 earnings call. A copy of our press release and slides for today's discussion are available on our website at sanmina.com in the Investor Relations section. Joining me on today's call is Jure Sola, Chairman and Chief Executive Officer. Good afternoon. And Jonathan Faust, Executive Vice President and Chief Financial Officer. Good afternoon. Before I turn the call over to Jure, let me remind everyone that today's call is being webcast and recorded and will be available on our website. You can follow along with our prepared remarks in the slides provided on our website. Please turn to slide 3 of the presentation and take note of our safe harbor statement. During this conference call, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We caution you that such statements are just projections. The company's actual results could differ materially from those projected in these statements as a result of factors set forth in the safe harbor statement. The company is under no obligation and expressly disclaims any such obligation to update or alter any of the forward-looking statements made in this earnings release, the earnings presentation, the conference call or in the Investor Relations section of our website, whether as a result of new information, future events or otherwise, unless otherwise required by law. Included in our press release and slides issued today, we have provided you with statements of operation for the third quarter ended June 27, 2026 on a GAAP basis as well as certain non-GAAP financial information. A reconciliation between the GAAP and non-GAAP financial information is also provided in the press release and slides posted on our website. In general, our non-GAAP information excludes restructuring costs, acquisition and integration costs, non-cash stock-based compensation expense, amortization expense, and other unusual or infrequent items. Any comments we make on this call as it relates to the income statement measures will be directed at our non-GAAP financial results. Accordingly, unless otherwise stated in this conference call, when we refer to gross profit, gross margin, operating income, operating margin, taxes, net income, and earnings per share, we are referring to our non-GAAP information. I would now like to turn the call over to Jure.
Thanks, Paige. Afternoon, ladies and gentlemen, and welcome and thank you all for being here with us today. First, I would like to take this opportunity to recognize our employees and Sanmina leadership team for doing a great job. So to you, Sanmina's team, thank you for your dedication, hard work, and delivering strong execution for our customers. Now please turn to slide 4. Ladies and gentlemen, I can tell you that I am very pleased with our performance. We delivered another great quarter. Revenue came in at $3.46 billion, non-GAAP operating margin at 8% and non-GAAP diluted EPS at $3.31, and cash flow from operations of $124 million. Overall, we are executing according to our plan, with strong execution in both Core Sanmina and the Sanmina AI Group ZT Systems. Now let's go to our agenda for today's call. We have Jonathan, our CFO, to review details of our results for you. I will follow up with additional comments about the results and future goals. Then Jonathan and I will open for questions and answers. And now I would like to turn this call over to Jonathan. Jonathan?
Great. Thank you, Jure. Good afternoon, ladies and gentlemen, and thank you for joining today's earnings call. Before I review our financial results for the quarter, I want to acknowledge the entire Sanmina team for their focused execution and thank them for delivering a strong third quarter. Now please turn to slide 6. I will speak to the financial highlights. As Jure just mentioned, we are very pleased with our results for the quarter which, as you can see, either met or exceeded our previously communicated outlook. Our revenue of $3.46 billion came in at the high end of our outlook range. This was driven by both the core Sanmina business, which exceeded its outlook range with growth coming from all end markets, and the ZT Systems business, which came in at the midpoint of its outlook range. Additionally, our non-GAAP operating margin of 8% and our non-GAAP diluted earnings per share of $3.31 both exceeded our outlook driven by strong execution, mix, and disciplined cost management, as well as contribution from new product launch services, or what we commonly refer to as non-recurring engineering services. Now please turn to slide 7. I will speak to our non-GAAP P&L performance. As I just mentioned, we delivered revenue of $3.46 billion which was up 69.7% versus the same period a year ago. Our core Sanmina business revenue of $2.4 billion grew 17% versus the same period a year ago, exceeding our outlook with broad-based strength across all of our end markets and continued strength in the cloud and AI infrastructure end market. Our ZT Systems business revenue of $1.1 billion was at the midpoint of our outlook with a solid performance across all product categories. Our non-GAAP gross profit was $370 million or 10.7% of revenue. This was up 160 basis points versus the same period a year ago, driven by both favorable mix and non-recurring engineering services. Our non-GAAP operating expenses were $94.7 million or 2.7% of revenue in line with our expectations. These strong revenue and non-GAAP gross profit results along with ongoing cost discipline and operating leverage enabled us to achieve non-GAAP operating profit of $275.8 million or 8% of revenue, up 230 basis points versus the same period a year ago. Our non-GAAP other income and expense was a net expense of $29.5 million, in line with our outlook. Our non-GAAP diluted earnings per share was $3.31 based on approximately 55 million shares outstanding. This strong non-GAAP diluted earnings per share performance represents a 116% increase versus the same period a year ago and showcases the high potential of our combined core Sanmina and ZT Systems businesses. Now please turn to slide 8, where I will speak to the segment results. IMS revenue came in at $2.96 billion, up 79.4% versus the same period a year ago, driven by growth in all end markets, and including the strong contribution from the ZT Systems business. Core Sanmina IMS revenue was $1.9 billion for the quarter, up 14.1% versus the same period a year ago. ZT Systems revenue was $1.1 billion for the quarter. Total IMS non-GAAP gross margin was 10.2%, up 270 basis points versus the same period a year ago. This was driven primarily by favorable mix including the impact from the addition of the ZT Systems business and non-recurring engineering services. CPS revenue came in at $546 million, up 29.2% versus the same period a year ago. This was driven by strong growth in our metal fabrication business for AI system racks and our high-technology printed circuit board business for aerospace and defense related products, both of which we have been investing in since the end of last fiscal year. CPS non-GAAP gross margin was 12.8%, down 190 basis points versus the same period a year ago, but up 120 basis points on a sequential basis. The decrease year-over-year was primarily driven by depreciation and other expenses related to investments to support new programs. But the sequential increase and solid revenue growth are proof points of how these investments are starting to pay off. Now please turn to slide 9, where I will speak to the balance sheet highlights. We continue to have a very strong balance sheet with prudent leverage and ample liquidity giving us the capacity to invest in support of our growth objectives. Cash and cash equivalents were $1.84 billion which includes the final net working capital adjustment associated with the ZT Systems acquisition. At the end of the quarter, we had no outstanding borrowings on our $1.5 billion revolver, leaving us with substantial liquidity — approximately $4 billion including the term loan A delayed draw to support the future growth of the business. We ended the quarter with inventory of $2.2 billion net of customer advances, which is up 87.2% versus the same period a year ago, driven by the ZT Systems acquisition. Inventory turns, net of customer advances, were 5.6x for the quarter down from 6.3x in the same period a year ago. Our non-GAAP pretax ROIC was 39.1% for the quarter, well above our weighted average cost of capital and an improvement from the 24.8% from the same period a year ago. We continue to have one of the strongest balance sheets in the industry, with a net leverage ratio of 0.29x. This ratio is calculated conservatively by annualizing our EBITDA results for the first three quarters as using the pro forma trailing 12 months for ZT Systems would not accurately represent the current run rate of the business. As we have previously communicated, our long-term target net leverage range is 1.0x to 2.0x. We still expect our leverage to increase into our long-term range over time as we invest in working capital to support the growth of our business. That being said, we remain committed to maintaining a healthy balance sheet which means carefully managing the liquidity needed to invest in the business and capitalize on the strategic opportunities that further strengthen our position in the market. Now please turn to slide 10, where I will speak to our cash flow highlights. Our third quarter cash flow from operations came in at $124.5 million. As a reminder, we expect working capital to grow in advance of the growth of both the core Sanmina and ZT Systems businesses which will impact cash flow from operations. Capital expenditures were $100.9 million for the quarter, in line with our outlook and free cash flow was $23.6 million. For the last several quarters, we have been making strategic investments in capabilities and incremental capacity across both the core Sanmina and ZT Systems businesses, and we will continue to do so to support future growth. In the core Sanmina business, these investments include metal fabrication capacity for AI system racks, new capabilities for high-technology printed circuit boards for both AI and aerospace and defense related products, and capacity and new equipment for the new medium-voltage transformer business. In the ZT Systems business, the focus has been on incremental power, liquid cooling, test cell capacity, and automation for the next-generation of accelerated compute. We believe these strategic investments will help drive profitable growth and future cash flows and generate an attractive ROI for the company and shareholders. We did not repurchase any shares within the quarter, and had approximately $600 million available in our Board-authorized share repurchase program as of the end of the third quarter. With the current growth trajectories and profitability profiles of the core Sanmina and ZT Systems businesses, we are confident in our ability to generate future cash flows and therefore will continue to make both working capital and other strategic investments while balancing our commitment to a healthy balance sheet, in line with our prudent fiscal policies. Now please turn to slide 11, where I will provide an update on the ZT Systems business. As we mentioned last quarter, the Sanmina and ZT Systems leadership teams have been working together to ensure a successful and seamless integration of the business, with a clear objective to realize the full value of combining the two companies. In order to do this, we put a three-phase plan in place, which we continue to execute against. Since last quarter, we have continued to streamline processes, improve the way we work, and drive efficiencies for our customers. We have also continued to make the necessary capital investments such as incremental power, liquid cooling capabilities, test cell capacity, and new automation capabilities, to be production ready for the next-generation of accelerated compute. Last quarter, we communicated that we secured orders for the next-generation accelerated compute business with both hyperscale and OEM customers, and I am pleased to announce that we continue to secure more customer orders in the third quarter, expanding our overall customer base. The customer validation process is going well, and we are working in very close collaboration with AMD and our joint customers to support almost all pre-production activities providing the quality, delivery, and services to support customer needs. While we are still working with customers to finalize their production schedules and operating models, we are exactly where we expected to be at this point in the process. We have also made progress with the third and final phase of the plan, which is about realizing synergies through vertical integration, and increasing our addressable market by expanding on our existing engineering capabilities to support all platforms. As a result of our broader focus on the cloud and AI infrastructure end market, since the announcement of the ZT Systems acquisition, we have now won incremental programs in the core Sanmina business including with new customers and additional platforms, and we expect those wins to expand and scale in the coming quarters. Our close collaboration with customers during the pre-production validation process has given us the opportunity to showcase our unique value proposition. By combining ZT Systems' large-scale systems integration capabilities with Sanmina's extensive sub-assembly expertise we can deliver a full suite of offerings that includes our components, products, and services. It is also important to note that as we continue to grow the cloud and AI infrastructure business, leveraging ZT Systems capabilities and Sanmina's global footprint, some of these new business wins will be manufactured in core Sanmina factories, which we saw in our actual Q3 results and we expect to accelerate going forward. Now please turn to slide 12, where I will provide our outlook for the fourth quarter. Our outlook is based on current customer forecasts and includes an extra week and takes into account ongoing market uncertainties and the geopolitical environment. With that said, we expect revenue to be between $3.3 billion and $3.6 billion. We expect Core Sanmina revenue to be in the range of $1.5 billion to $1.6 billion and ZT Systems revenue to be between $0.8 billion to $1.0 billion. This ZT Systems range is lower than the implied guidance provided last quarter and is driven completely by a few legacy programs which, as I have mentioned before, can vary from quarter to quarter based on customer timing needs. Also, keep in mind that while the new next-generation accelerated compute program is on track, we have not included it in our Q4 outlook due to revenue recognition timing. We expect it to begin contributing to revenue in Q1 fiscal 2027 and to ramp over time. At the midpoint, total Sanmina revenue would be $3.45 billion which reflects 64.6% growth versus the same period a year ago. Non-GAAP operating margin of 7.5% to 8% driven by mix and continued contribution from non-recurring engineering services that I referenced. We expect other income and expense to be a net expense of approximately $30 million. We expect our non-GAAP effective tax rate to be between 21% and 23%. We estimate an approximate $6 million non-cash reduction to our net income to reflect our India joint venture partners' equity interest. Non-GAAP diluted earnings per share to be $3.05 to $3.35 based on approximately 55 million fully diluted shares outstanding. At the midpoint of $3.20, that represents a 92% increase compared to the same period a year ago. We expect capital expenditures to be $135 million as we continue to invest strategically to support our future growth expectations. And finally, depreciation of approximately $50 million. Now please turn to slide 13, where I will provide our outlook for the full fiscal year 2026. With our results for the third quarter and our outlook for the fourth, we expect fiscal 2026 revenue to be in the range of $14.0 billion to $14.3 billion. We expect Core Sanmina revenue to be in the range of $9.1 billion to $9.2 billion. At the midpoint of $9.15 billion on a full-year basis, this represents 12.6% growth, which exceeds the expectations we set at the beginning of the year for the core Sanmina business to grow in the high-single digits. We expect ZT Systems revenue between $4.8 billion to $5.0 billion for the 11 months, which falls within the $5 billion to $6 billion annualized run rate range that we communicated when we first announced the acquisition of the ZT Systems business. Non-GAAP operating margin between 6.85% and 7.25%. Non-GAAP diluted earnings per share in the range of $11.90 to $12.20 based on approximately 55 million fully diluted shares outstanding. At the midpoint of $12.05, that represents an almost 100% increase compared to the same period a year ago. In summary, I am very pleased with our results for the third quarter and our fiscal 2026 results to date. There is still a lot of work to do, but we are on a great trajectory for both the Core Sanmina and ZT Systems businesses. Based on what is in front of us, we are more confident than ever in our ability to achieve revenue of $16 billion-plus in 2027, and we believe we are setting a strong foundation for future growth beyond that in the current strong demand environment. And with that, I would now like to turn the call back over to Jure.
Thank you, Jonathan. Ladies and gentlemen, as you heard from Jonathan, we delivered strong results for the third quarter. Most important is that we are executing to our plan. We are expanding existing partnerships and we are adding new customers and new projects to drive future growth. Please turn to slide 15. Let's look at the revenue by end market for the third quarter, fiscal year 2026. Communications networks, cloud and AI infrastructure was 62% of our revenue, or $2.148 billion. That is up 173.2% year-over-year. Industrial, energy, medical, defense, aerospace, automotive, and transportation came in at 38% of our revenue or $1.316 billion. That was up 4.8% year-over-year. Core Sanmina revenue grew, as you heard from Jonathan, 17% year-over-year, at $2.4 billion per quarter. Bookings in the third quarter were strong; book-to-bill better than 1.1. And as you can see, we are well diversified within our market leaders. At this time, we are seeing varying trends in our end markets. To tell you more about it, please turn to slide 16. Let me talk more about each of these key markets. Communications networks, cloud and AI infrastructure: AI is driving growth in this entire end market. Bookings continue to be strong and we are adding new customers. There is a strong pipeline of new projects for fiscal year 2027 and 2028 that is very exciting. We are well positioned to drive the growth in this segment. Let me share with you some of the products that we are focused on in this segment. Around cloud and AI infrastructure, we focus on accelerated compute, general purpose compute, storage, and high-performance networks around IP switching, routing, and optical systems. Again, we continue to see strong demand in this segment. Now let me talk to you about industrial and energy. This segment is doing well. We expect the growth to accelerate in fiscal year 2027. We are expanding the energy business for AI data centers from engineering to design to full system with vertical integration. Some of the key products that we are focused on are power generation and distribution, medium-voltage grid scale transformers, power storage and management, safety and surveillance equipment such as airport security, video surveillance, emergency communications, and semiconductor capital equipment primarily around lithography equipment. Let me talk to you about medical. This segment is a very stable end market for us. We expect more growth to accelerate in fiscal year 2027. And we continue to leverage our regulatory knowledge and experience to expand customer base in this segment and we continue to win new programs that we believe will drive the growth. Some of the key areas that we focus on are disposable, wearable, and consumable products such as glucose sensors and drug delivery; for hospital, laboratory, diagnostic and research equipment around surgical robots, diagnostic imaging, patient monitoring, etc. Again, very good customer base, and we continue to expand. Let me tell you more about defense and aerospace. For this segment, we expect growth in traditional U.S. defense and aerospace business to continue. We are expanding our customer base in the satellite market and we continue to see strong demand in 2027, 2028 and beyond. The key products that we are focused on are defense equipment such as advanced military communications, missile control and guidance systems, satellite control and communication, drones, and defense and commercial aerospace. So let me give you more insight on automotive and transportation. Overall, this segment is stable for us, and we will see continued growth from new and existing customers. New programs are driving the growth. Areas of focus are automotive, electric vehicles, autonomous vehicles, and transportation. So now please turn to slide 17. At Sanmina, we have a diverse set of capabilities and we provide end-to-end solutions for all our key markets. The key for our business to grow is that we get involved in the early stage of product development where we provide our customers full system architecture to fabrication, high-technology printed circuit boards, product assembly, mechanical including liquid cooling, manifolds, busbars. Also, we provide ODM and joint development products around compute and storage systems, custom memory, custom optical modules, all the way to full system integration and global fulfillment services. So the overall business update is that we are expanding our customer base, we are winning new AI platform business, we are increasing our addressable market through vertical integration and engineering, and we continue to invest in capabilities and capacity to support future growth for fiscal years 2027 and 2028. Also again, I want to tell you that AI demand is very strong. Please turn to slide 18. As you can see, Sanmina has a very efficient manufacturing footprint in North America, Europe, and Asia. Sanmina's manufacturing footprint is strategically positioned to support our customers. We are well aligned with our customer requirements and supported with a very strong U.S. presence. Sanmina's supply chain is industry-leading, managed by the Sanmina One IT system and smart MES. We are leveraging our established global infrastructure to deliver the right solutions to our customers with quality, speed, flexibility, and scale. It is our competitive advantage for our customers. Please turn to slide 19. In summary, as you heard both from Jonathan and myself, we delivered a great third quarter result. We are finishing fiscal year 2026 better than forecast. Our outlook for fiscal year 2026 is to be in a range of $14 billion to $14.3 billion. At the midpoint, we should see growth of 75% year-over-year. We are also planning to deliver non-GAAP EPS at the midpoint of guidance and that should be up, as you heard from Jonathan, approximately 100% year-over-year. Sanmina core business is doing well. We expect to see growth over 12.6% in fiscal year 2026, and we are well diversified across all end markets. Now let me give you a few more comments about fiscal year 2027. At this time, we are very confident in shipping $16 billion-plus in fiscal year 2027, and we will talk to you more about it at the end of the year. We see higher revenue growth in the second half of fiscal year 2027 and that growth should continue into fiscal year 2028. This is driven by strong demand from AI data center customers and also positive trends in other markets. Again, with opportunities ahead of us, I am personally very excited about our future. Ladies and gentlemen, now I would like to say thank you all for your time and support. Operator, we are now ready to open the lines for questions and answers. Thank you again.
分析師問答
Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and 2 to withdraw your question. It may be necessary to pick up your handset before pressing the star keys. We will wait for a moment while we pull up our questions. Your first question comes from Ruplu Bhattacharya from Bank of America. Please go ahead.
Hi. Thanks for taking my questions. Jure, Jonathan, Q3 operating margin came in much higher than expected, and it looks like you are guiding Q4 operating margin 25 basis points lower but still strong. However, it seems to me that is because the mix of the business is less ZT than originally expected. How should we think about operating margins going forward as ZT-related AI revenues become a higher part of the mix? And for this quarter, what was the margin impact of the non-recurring engineering services? And I have a couple of follow-ups.
Hey, Ruplu. This is Jure. I will turn the call over to Jonathan, but I just want to say we work very hard in this business to create additional value. Jonathan?
Yeah. Ruplu, hope you are doing well. Thanks for the question. We are definitely very pleased with the margin performance this quarter. Certainly it was a beat versus our expectations, and a lot of that is due to mix like you say. On the core Sanmina side, we did very, very well both in IMS and CPS and with the growth of CPS was a big contributor. So Core Sanmina did better than we had expected at the high end of the range. And then ZT did very well too, and that is part of the mix story, as well as the engineering services that we talked about. Now that was something where we did not expect to do quite as much as we did. We did forecast some of it, but we did quite a bit. This is a great thing for us because it basically means that we are doing a lot of the pre-production work for the new accelerated compute program. The way that works, just to help explain, is there is not a whole lot of revenue associated with it but there are a lot of labor charges. So that drove the margin profile and, as we work to ramp that program, we expect it to continue into Q4 and that is why it is part of our guide. But it will ramp down a little bit over time. Longer term, as we look ahead, much like we have communicated before, we would still expect margins to be in that 6% to 7% range. As we start to see growth come back on the accelerated compute side, we think we will be consistent with that profile for now, and we will provide more detail when we announce our results at the end of the fiscal year and formally guide fiscal 2027.
Okay. Thanks for the details there. I think you talked about some legacy programs coming in lower than expected. Do you still have backlog of older systems? And how should we think about ZT revenue growth in fiscal 2027? I think you said you have strong bookings and pipeline. So is it reasonable for investors to think that ZT revenues can grow 50% year-over-year in fiscal 2027?
Yeah. So, you know, it is still too early to formally guide fiscal year 2027, either on the core Sanmina side or the ZT Systems side, but we are getting close to that, locking down production schedules with customers and all the other details that we would normally need. When you think just about ZT Systems, this past quarter, and even our guide for Q4, there was not a lot of accelerated compute, and that was as expected. The legacy platform for accelerated compute had pretty much gone to zero even as of last quarter. We are really focused on the future. And when it comes to the other product categories like storage and general purpose compute, that can vary from quarter to quarter, as we have said. That is what we are seeing in our Q4. So it is really just a timing shift. We still do have some legacy programs in those two product categories, and that will be an area of focus for us to grow into the future as well. First things first, though, we are always focused on winning the future of accelerated compute. That was priority number one. But I talked about in my prepared remarks, as soon as we did the ZT Systems deal, we have had a broader focus on cloud and AI infrastructure and winning programs more broadly. We started to see some of that even on the core Sanmina side of the business. That is where I would point you to our communications networks and cloud infrastructure end market. Even with ZT Systems not included, that grew 33%, so that is an acceleration. There is a lot of opportunity that we are focused on for the future.
I'm going to throw one more question at you, Jonathan. As you build these production racks, how should we model working capital and free cash flow? Just if you can give us your thoughts on that. Thanks, both of you, for all the details.
Yeah. Thank you, Ruplu, for the question. We do expect working capital to build; that is an investment in the business and you started to see that dynamic a little bit this quarter, and that will start to accelerate. We expect it to as we go into Q4 and the beginning of the next year as that program ramps. So I do expect some pressure on our overall working capital numbers. But again, that is a positive thing — that is an investment in our business. Some of the final operating model details with the customers have not been sorted out yet. So we will talk more about that in our earnings call when we announce those results and formally guide fiscal year 2027. Jure and I will be sure to speak about the cash flow dynamics and the working capital dynamics. But to provide a little bit of insight now, working capital will build.
Thank you.
Next question comes from Samik Chatterjee from J.P. Morgan. Please go ahead.
Hi. Thank you for taking my question. For my first one, I just wanted to ask that you highlighted new customer wins or new programs relative to your AMD business. But beyond that, can you double-click on new wins relative to alternate chip designers or rack manufacturers, particularly Cerebras, which announced you as a contract manufacturer, and then broader TAM relative to all these new-age chip manufacturing companies and rack building companies? And I have a follow-up. Thank you.
Yeah. Thanks for the question, Samik. So you are right. We are very pleased with our results. Everything as it relates to ZT Systems and our partnership with AMD is very much on track. So in line with expectations. And as you know, we do not normally talk customer names, but given you brought it up, that is the additional platform business that we were referring to when we talked about that with the core Sanmina business with Cerebras. We are very excited about that too, and it goes along with the comments in my prepared remarks about our broader focus on the cloud and AI infrastructure end market. We have talked for a while about wanting to do business across multiple platforms and different lines of business, and we are starting to see that. We are seeing some success of that with new program wins. We are very happy with that and even saw it in our Q3 results as we started to accelerate the core Sanmina results for the communications networks and cloud infrastructure end market. So that will continue to be an area of focus for us going forward because, as Jure and I both mentioned, there is a very strong demand environment out there and we think we have all the capabilities to be successful in that end market. Thank you.
And Samik, just to add a few more things. In addition to that, there is a lot in our capabilities, especially now as we expanded our engineering capabilities and investments that we have made in the last 12 months. We have capabilities that translate across multiple platforms very quickly.
And just one last comment to add what Jure was saying. You see it not only in our IMS segment of the core Sanmina business, but also the CPS segment. I talked about the metal fabrication and the investments that we have made for AI system racks. That has been an area of focus for us, along with high-technology printed circuit boards.
Got it. Thank you. And for my follow-up, I just wanted to ask about the legacy communications networks and cloud and AI infrastructure business, which I think was growing year-over-year at a 30% plus growth rate. Just wanted to check what are the product categories that are driving the growth there, and how sustainable is the growth rate which you are seeing in that? Thank you.
Great question. You are right. We did grow over 30% this quarter. If you look back in history, over the last six to seven quarters we have been growing that segment about 20% year-over-year, and that accelerated this quarter. It is primarily due to incremental programs and the new customers that were added in the core Sanmina business. It is across different product types. Jure gave a few examples, but the ZT Systems product categories between accelerated compute, general purpose compute, and storage are all part of it. We are also seeing benefits on the communications network side with customers in optical systems or IP switching and routing, data center networking. There is a lot of opportunity out there. We are still a little bit constrained by component shortages like many others, but the new program wins and the new customers are helping us move from that 20% year-over-year trajectory up into the thirties. We are happy about that.
And our core CPS business should continue to grow nicely based on the forecast and the backlog that we have right now. Thank you, Samik.
Next question comes from Steven Fox from Fox Advisors. Please go ahead.
Thanks. Good afternoon, everyone. First question was sort of thinking about the outlook for next year. You mentioned that you are doing a lot of the pre-production work for the AMD racks. And last week, AMD talked about a measured approach to ramping to make sure their manufacturing partners are prepared for the volumes. So I guess, throwing that out there to wonder about what kind of share do you think we should consider for you guys having next year around sort of general AMD Helios production? And how has that sort of changed — give us more color on how that might change H1 to H2 next year?
Steven, let me start with that. First of all, as I look at opportunities that we have and the arrangements we have made with end customers, we are going to have plenty of business for next year. For us, it is all about timing. That is basically what we had in our prepared statement — if you look at next year, we are very confident about delivering $16 billion-plus. We will talk more about it in 90 days from now. There are a lot of exciting things because we have been expanding our capabilities. From our side, we believe we can deliver more than we thought a year ago.
And just to add to that, Steven, thanks for joining the call. We get the share question a lot, and it is pretty tough to gauge because customers continue to add more customers, which is great because it broadens the addressable market. We are very much focused on winning as much of that business as possible. We'll continue our go-to-market efforts to win the customers we think will be the most successful. We do expect to ramp. As Jure mentioned, we expect that business to ramp over time. That is what we are seeing from the customer forecast, too. We are pleased to be doing a lot of that pre-production work because on the manufacturing side our responsibility is to make sure we can build these products very well and on time, and we are learning more every day. We have been making the necessary investments for quite a while now and doing the production work. So more to come in our Q4 earnings call. We will lay out that schedule, but as both Jure and I said, we expect revenue to ramp over time throughout 2027 and put us on a great trajectory going into fiscal year 2028 if all goes to plan.
Great. That is super helpful. And then as a follow-up, can you talk a little bit more about your printed circuit board fabrication operations? You have been investing, like you said. It seems like there is increasing demand for high-end boards. And you have some new positive dynamics in aerospace and defense. Can you talk about the prospects for that going forward and how much is that helping margins over time? Love to get some more color there. Thanks.
Our printed circuit board business today, Steven, is doing really well across North America, Singapore, and our China site. All our factories are designed to do high-technology, advanced boards up to 70-plus layers. The factories are doing well right now. We wish we had more capacity, but we are adding capacity and investing in multiple sites right now, and we will continue to invest. It is more profitable than our average, and it is business that will continue to drive growth between AI and military, which is our key focus.
And just to add to that, Steven, you have seen in our CPS results the margin profile. It has been down a little bit year-over-year as we brought on a lot of this capacity and these investments for boards, for metal fabrication for AI system racks, and the new medium-voltage transformer business. In this quarter we started to see the payout on some of those investments. You can see the accelerated growth, and over time, once we start to fill up those plants and factories, we do expect the margin profile for CPS, depending on mix, to get back above the mid-teens and be a big contributor to the overall margin profile and expansion of the company.
Great. That is all very helpful. Thank you.
Next question comes from Mehdi Hosseini from SIG. Please go ahead.
Hi. This is Mehdi calling from SIG. Within the ZT run rate of $5 billion to $6 billion, can you talk a little bit about where you see the timing and the size of the inference opportunity? Have you included that opportunity into their run rate, or is it incremental to your current run rate?
Hey, Mehdi. I can answer that. This year is a transition year from ZT because at the front end of the fiscal year we had some of the legacy accelerated compute that we knew would go down to zero. Now we are working to ramp the new next-generation of accelerated compute. So it is not the best annualized run rate to look at. What we did say when we first announced the ZT deal back in May 2025 is that this first year, fiscal 2026, would be somewhere in a $5 billion to $6 billion run rate. If you take the midpoint of our Q4 guide along with the Q1 through Q3 actuals you get to an annualized view in the middle of that 5 to 6 range. We are happy with that. Going forward, there is a lot of opportunity and we do expect the accelerated compute side of the business to accelerate. You will see a different dynamic next year. It is still too early to talk about a formal fiscal 2027 guide, but Jure and I have been discussing the opportunity. When we announced the ZT deal, we thought we could double the size of Sanmina within three years and then we accelerated that. That is where the implied $16 billion came from. We are feeling very good about the opportunity; everything is on track. We will provide more on our formal 2027 guide when appropriate.
Got it. Thanks. That is very helpful. And how should we think about your CPU and storage business going forward? Is $3 billion to $4 billion as an annual run rate a reasonable way to think about the business?
That is a good reference for 2027.
A couple of things. If you think about the legacy platforms, we have discussed that being in the range of $3 billion to $4 billion and changing from quarter to quarter. That is just for the legacy platforms that will continue in the near term. Longer term, as I mentioned in my prepared remarks and Jure touched on, we have a broader focus on the cloud and AI infrastructure market across what we can do in core Sanmina facilities and ZT Systems facilities. You are already starting to see that. We will talk more about that in our 2027 guide, but we remain interested in those product categories, both storage and general purpose compute, because there is a lot of opportunity and we have the capabilities to win it.
Got it. Thank you, Jure. Thank you, Jonathan.
Operator, we have time for one more question, please.
Last question comes from Anja Soderstrom from Sidoti. Please go ahead.
Yep. Hello, Anja.
Hi, everyone. Thank you for squeezing me in. Most of my questions have been addressed already, but I am just curious with the joint venture in India. It was a lot higher payout than we had expected for the quarter, and then it is coming down. What is driving that up for the quarter?
Yes. We are very pleased with the performance of the joint venture, working closely with Reliance and our local India team. There is a lot of opportunity in that geography across multiple end markets. We invested there; we expanded our footprint and put a new building in place toward the end of Q1 of the year, and we have been focused on filling that up. If you look at the Q4 guide and what I laid out there, we expect that to continue and it will remain an area of focus across all end markets.
Yeah. It is a growing area for us, Anja, and it looks good.
Thank you. That was all for me.
First of all, I would like to thank everybody for joining us. I appreciate your time. Our company is doing well. This is a different company than a year ago. We are in a very strong position to build the new Sanmina, and we are excited about what is in front of us. Looking forward to catching up with you at any time. In the meantime, we are going to talk 90 days from now. So with that, all the best. Thank you. Bye.
Thank you. Ladies and gentlemen, the conference has now been concluded. Thank you for your participation. You may now disconnect your lines.