Sanmina Corporation

11/13/2025 | Press release | Distributed by Public on 11/13/2025 13:30

Annual Report for Fiscal Year Ending September 27, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
This report on Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including any statements regarding trends in future revenue or results of operations, gross margin, operating margin, expenses, earnings or losses from operations, or cash flow; any statements of the plans, strategies and objectives of management for future operations and the anticipated benefits of such plans, strategies and objectives; any statements regarding future economic conditions or performance; any statements regarding litigation or pending investigations, claims or disputes; any statements regarding the timing of closing of, future cash outlays for, and benefits of acquisitions and other strategic transactions, including our India joint venture and our acquisition of ZT Group Int'l, Inc. ("ZT Systems"); any statements regarding expected restructuring costs and benefits; any statements concerning the adequacy of our current liquidity and the availability of additional sources of liquidity; any statements regarding the potential impact of any future pandemics on our business, results of operations and financial condition; any statements regarding the potential impact of supply chain shortages and inflation on our business; any statements regarding the future impact of tariffs, export controls and evolving trade policies on our business; any statements relating to future tax rates and tax policies and our expectations concerning developments in the audit by the IRS of certain tax returns filed by us, including the potential impact of the IRS revenue agent's report received by us in November 2023; any statements relating to the expected impact of accounting pronouncements not yet adopted; any statements regarding future repurchases of our common stock; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Generally, the words "anticipate," "believe," "plan," "expect," "future," "intend," "may," "will," "should," "estimate," "predict," "potential," "continue" and similar expressions identify forward-looking statements. Our forward-looking statements are based on current expectations, forecasts and assumptions and are subject to risks and uncertainties, including those contained in Part I, Item 1A of this report. As a result, actual results could vary materially from those suggested by the forward-looking statements. We undertake no obligation to publicly disclose any revisions to these forward-looking statements to reflect events or circumstances occurring subsequent to filing this report with the Securities and Exchange Commission (the "SEC"). Investors and others should note that Sanmina announces material financial information to our investors using our investor relations website (http://ir.sanmina.com/investor-relations/overview/default.aspx), SEC filings, press releases, public conference calls and webcasts. We use these channels to communicate with our investors and the public about Sanmina, its products and services and other issues. It is possible that the information we post on our investor relations website could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in Sanmina to review the information we post on our investor relations website. The contents of our investor relations website are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.
Overview
We are a leading global provider of integrated manufacturing solutions, components, products and repair, logistics and after-market services. Our revenue is generated from sales of our products and services primarily to original equipment manufacturers ("OEMs") that serve the industrial, medical, defense and aerospace, automotive, communications networks and cloud solutions industries.
Our operations are managed as two businesses:
1) Integrated Manufacturing Solutions ("IMS"). IMS is a single operating segment consisting of printed circuit board ("PCB") assembly and test, high-level assembly and test and direct-order-fulfillment.
2) Components, Products and Services ("CPS"). Components include advanced PCBs, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts. Products include optical, radio frequency ("RF") and microelectronic design and manufacturing services from our Advanced Microsystems Technologies division; multi-chip package memory solutions from our Viking Technology division; high-performance storage platforms for hyperscale and enterprise solutions from our Viking Enterprise Solutions division; defense and aerospace products, design, manufacturing, repair and refurbishment services from our SCI Technology, Inc. ("SCI") subsidiary; and cloud-based smart manufacturing execution software from our 42Q division. Services include design, engineering, and logistics and repair.
Our only reportable segment for financial reporting purposes is IMS, which represented approximately 80% of our total revenue in 2025. Our CPS business consists of multiple operating segments which do not individually meet the quantitative thresholds for being presented as reportable segments. Therefore, financial information for these operating segments is combined and presented in a single category called "CPS".
Our strategy is to leverage our comprehensive product and service offerings, advanced technologies and global capabilities to further penetrate diverse end markets that we believe offer significant growth opportunities and have complex products that require higher value-added services. We believe this strategy differentiates us from our competitors and will help drive more sustainable revenue growth and provide opportunities for us to achieve operating margins that exceed industry standards.
A core component of our business strategy is to secure and retain long-term customer partnerships with leading companies in growth industries, capitalizing on our global/regional footprint and unique value proposition in advanced electronics manufacturing. We provide tailored solutions by leveraging our technical capabilities in design, technology, assembly, integration, and after-sales services, aligning them with facilities globally. Historically, we have had substantial recurring sales to existing customers. Sales to our ten largest customers represent approximately 50% of net sales.
We typically enter into long-term supply agreements with our major OEM customers. These agreements generally have terms ranging from three to five years and cover the manufacture of a range of products. Under these agreements, we manufacture products to customers' unique specification leveraging our global factory footprint in locations chosen by our customers. However, these agreements generally do not obligate the customer to purchase minimum quantities of products. In addition, some customer contracts contain cost reduction objectives, which can have the effect of reducing revenue from such customers.
We generate about 80% of our net sales from products manufactured in our foreign operations. The concentration of foreign operations has resulted primarily from a desire on the part of many of our customers to manufacture in lower-cost locations in regions such as Latin America, Asia and Eastern Europe and we plan to expand our presence as appropriate to meet the needs of our customers. We also intend to continue to invest in factory automation, process improvements, robotics and artificial intelligence, keeping up with the trends in technology to further enhance our efficiency output.
Trends and Uncertainties
We believe our end-to-end manufacturing solutions combined with our global supply chain management expertise differentiate us from our competitors and enable us to better serve the needs of OEM customers. However, our business faces many challenges. For example, we compete with a number of companies in each of our key end markets. This includes companies that are much larger than we are and smaller companies that focus on a particular niche product, service or end market. Although we believe we are well-positioned in each of our key end markets and offer many advantages compared to our competitors, profitably growing revenues are often constrained by intense competition. Additionally, we are impacted by macroeconomic challenges such as tariffs, inflation, supply chain constraints, foreign currency fluctuations, high interest rates, market volatility and recession concerns that have been and could be in the future exacerbated by geopolitical environment such as the tensions between the U.S. and other nations, conflict in the Middle East and the war in Ukraine.
Further, uncertainties around U.S. tariffs, retaliatory tariffs from other countries, and import/export restrictions may impact customer decisions to use our services in certain manufacturing locations and increase the complexity and cost of our supply chain. Although our customers are generally liable for tariffs we pay for components and finished products, our gross margins could be impacted if we are unable to fully recover these costs. The timing of tariff recovery from customers could adversely affect our operating cash flow in a given period.
Despite these challenges, we remain focused on improving our operations, building flexibility and efficiencies in our processes and adjusting our business models to changing circumstances. We intend to continue diversifying into mission critical markets and creating a portfolio of more complex, higher technology products with longer product life cycles. As our end markets evolve and grow, our ability to optimize our product and portfolio mix towards higher value opportunities will continue to be an important driver for our business going forward.
Acquisition of ZT Systems
In line with our strategic intent to expand our presence in the Cloud and Artificial Intelligence ecosystem, we acquired the data center infrastructure manufacturing business, excluding certain research and development functions, of ZT Group Int'l, Inc. ("ZT Systems"), from AMD Design, LLC, a wholly owned subsidiary of Advanced Micro Devices, Inc. On October 27, 2025 (the "Closing Date"), we completed the acquisition of ZT Systems (the "ZT Acquisition") for an aggregate consideration of $1.6 billion consisting of $1.46 billion in cash consideration (subject to adjustment for certain working capital and other items), a number of shares of our common stock valued at $150 million and up to $450 million contingent cash consideration upon the achievement of certain financial metrics during the three-year period following the closing of ZT Systems acquisition.
See Note 16, "Business Combination" of the notes to the Consolidated Financial Statements contained in this report for more information.
Critical Accounting Policies and Estimates
Management's discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). We review the accounting policies used in reporting our financial results on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosure of contingent liabilities. On an ongoing basis, we evaluate the processes used to develop estimates related to accounts receivable, inventories, income taxes, environmental matters, litigation and other contingencies, as well as estimates related to costs expected to be incurred to satisfy performance obligations under long-term contracts and variable consideration related to such contracts. We base our estimates on historical experience and on various other assumptions that we believe are reasonable for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. We have considered information available to us as of the date of issuance of these financial statements and are not aware of any specific events or circumstances that would require an update to our estimates or judgments, or a revision to the carrying value of our assets or liabilities. Our estimates may change as new events occur and additional information becomes available. Our actual results may differ materially from these estimates.
We believe the following critical accounting policies reflect the more significant judgments and estimates used by us in preparing our consolidated financial statements:
Revenue Recognition- We recognize revenue for the majority of our contracts on an over time basis. This is primarily due to the fact that we do not have an alternative use for the end products we manufacture for our customers and have an enforceable right to payment, including a reasonable profit, for work in progress upon a customer's cancellation of a contract for convenience. In certain circumstances, we recognize over time because our customer simultaneously receives and consumes the benefits provided by our services or, our customer controls the end product as we perform manufacturing services (continuous transfer of control).
In our Defense and Aerospace division, we apply the cost-to-cost method for government contracts which requires the use of significant judgments with respect to estimated materials, labor and subcontractor costs included in the total estimated costs at completion. Additionally, we evaluate whether contract modifications for claims have been approved and, if so, estimate the amount, if any, of variable consideration that can be included in the transaction price of the contract.
Estimates of materials, labor and subcontractor costs expected to be incurred to satisfy a performance obligation are updated on a quarterly basis. These estimates consider costs incurred to date and estimated costs to be incurred over the remaining expected period of performance to satisfy a performance obligation. There is inherent uncertainty in estimating the amount of costs that will be required to complete a contract. Factors that contribute to the inherent uncertainty in estimates include, among others, (1) the long-term duration of contracts, (2) the highly-complex nature of the products we manufacture, (3) the readiness of our customer's design for manufacturing, (4) the cost and availability of purchased materials, (5) labor cost, availability and productivity, (6) subcontractor performance and (7) the risk of delayed performance/completion. Therefore, such estimates are reviewed each quarter by a group of employees that includes representatives from numerous functions such as engineering, materials, contracts, manufacturing, program management, finance and senior management. If a change in estimate is deemed necessary, the impact of the change is recognized in the period of change. Additionally, contract modifications for claims are assessed each quarter to determine whether the claims have been approved. If it is determined that a claim has been approved, the amount of the claim, if any, that can be included in transaction price is estimated considering a number of factors such as the length of time expected to lapse until uncertainty about the claim has been resolved and the extent to which our experience with claims for similar contracts has predictive value.
Changes in our estimates of transaction price and/or costs to complete may result in a favorable or unfavorable impact to revenue and operating income. The impact of changes in estimates on revenue and operating income resulting from application of the cost-to-cost method for recognizing revenue was as follows:
Year Ended
September 27,
2025 		September 28,
2024 		September 30,
2023
Revenue: (In thousands)
Favorable $ 23,740 $ 12,220 $ 6,023
Unfavorable (3,786) (2,697) (2,556)
Total $ 19,954 $ 9,523 $ 3,467
Year Ended
September 27,
2025 		September 28,
2024 		September 30,
2023
Operating Income: (In thousands)
Favorable $ 25,640 $ 21,229 $ 8,657
Unfavorable (19,510) (16,102) (44,838)
Total $ 6,130 $ 5,127 $ (36,181)
For contracts for which revenue is required to be recognized at a point-in-time, we recognize revenue when we have transferred control of the related goods, which generally occurs upon shipment or delivery of the goods to the customer. Revenue streams for which revenue is recognized at a point-in-time include our proprietary products and sales of raw materials.
Inventories-We state inventories at the lower of cost (based on standard cost, which approximates first-in, first-out method) and net realizable value. Cost includes raw materials, labor and manufacturing overhead. We regularly evaluate the carrying value of our inventories and make provisions to reduce excess and obsolete inventories to their estimated net realizable values. The ultimate realization of inventory carrying amounts is affected by changes in customer demand for inventory that customers are not contractually obligated to purchase and inventory held for specific customers who are experiencing financial difficulties. Inventory write-downs are recorded based on forecasted demand, past experience with specific customers, the ability to redistribute inventory to other programs or return inventories to our suppliers, and whether customers are contractually obligated and have the ability to pay for the related inventory.
We generally procure inventory based on specific customer orders and forecasts. Customers generally have limited rights of modification (for example, rescheduling or cancellations) with respect to specific orders. Customer modifications of orders affecting inventory previously procured by us and our purchases of inventory beyond customer needs may result in excess and obsolete inventory. Although we may be able to use some excess inventory for other products we manufacture, a portion of this excess inventory may not be returnable to vendors or recoverable from customers. In certain instances, in accordance with agreed terms, we receive advances from customers to offset our working capital investment in raw materials. Write-offs or write-downs of inventory could be caused by:
•changes in customer demand for inventory, such as cancellation of orders, and our purchases of inventory beyond customer needs that result in excess quantities on hand that we are not able to return to the vendor, use to fulfill orders from other customers or charge back to the customer;
•financial difficulties experienced by specific customers for whom we hold inventory; and
•declines in the market value of inventory.
Our raw materials inventories are generally acquired in anticipation of specific customer orders and pursuant to customer-specific design specifications. When we and our customers agree that the quantity of customer-specific inventory is in excess of anticipated demand, we may seek advance payments from our customers against such inventories. These advances are presented under deferred revenue and customer advances on the consolidated balance sheets. In the past, in some arrangements with some customers, we transferred control of excess inventories to our customers in exchange for a cash payment, which resulted in a derecognition of the inventory. Those transactions were reported as transfers of non-financial assets - i.e., reported on a net basis in the income statement - and not included in revenue.
Consolidation- In accordance with Accounting Standards Codification 810, we consolidate our Indian manufacturing entity, even though we only hold 49.9% of its outstanding shares. This is because we have the unilateral ability to make all significant financial and operating decisions for the entity. We concluded that, despite not having a majority ownership, we have a controlling financial interest, which requires us to consolidate the entity. We periodically assess this arrangement to determine if there is any change in facts and circumstances that might require us to deconsolidate the entity.
Income Taxes-We estimate our income tax provision or benefit in each of the jurisdictions in which we operate, including estimating exposures related to examinations by taxing authorities. We believe our accruals for tax liabilities are adequate for all open years based on our assessment of many factors, including past experience and interpretations of tax law applied to the facts of each matter. Although we believe our accruals for tax liabilities are adequate, tax regulations are subject to interpretation and the tax controversy process is inherently lengthy and uncertain; therefore, our assessments can involve a series of complex judgments about future events and rely heavily on estimates and assumptions. To the extent the probable tax outcome of these matters changes, such changes in estimate will impact our income tax provision in the period in which such
determination is made. We only recognize or continue to recognize tax positions that meet a "more likely than not" threshold of being upheld. Interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.
We must also make judgments regarding the realizability of deferred tax assets. The carrying value of our net deferred tax assets is based on our belief that it is more likely than not that we will generate sufficient future taxable income in certain jurisdictions to realize these deferred tax assets. We evaluate positive and negative evidence each reporting period when assessing the need for a valuation allowance. A valuation allowance is established for deferred tax assets if we believe realization of such assets is not more likely than not. Our judgments regarding future taxable income may change due to changes in market conditions, new or modified tax laws, tax planning strategies or other factors. If our assumptions, and consequently our estimates, change in the future, the valuation allowances we have established may be increased or decreased, resulting in a respective increase or decrease in income tax expense.
Our effective tax rate is highly dependent upon the amount and geographic distribution of our worldwide income or losses, the tax regulations, rates and holidays in each geographic region, the utilization of net operating losses, the availability of tax credits and carryforwards, and the effectiveness of our tax planning strategies.
Results of Operations
Refer to Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K for the fiscal year ended September 28, 2024 filed with the SEC on November 27, 2024 for discussion of our results of operations for the fiscal year ended September 28, 2024 compared to the fiscal year ended September 30, 2023.
The following table presents our key operating results.
Year Ended
September 27,
2025 		September 28,
2024 		September 30,
2023
(In thousands)
Net sales $ 8,128,382 $ 7,568,328 $ 8,935,048
Gross profit $ 716,357 $ 640,429 $ 743,211
Gross margin 8.8 % 8.5 % 8.3 %
Operating expenses $ 361,789 $ 304,935 $ 287,553
Operating income $ 354,568 $ 335,494 $ 455,658
Operating margin 4.4 % 4.4 % 5.1 %
Net income attributable to common shareholders $ 245,893 $ 222,536 $ 309,970
Net Sales
Net sales increased from $7.6 billion for 2024 to $8.1 billion for 2025, an increase of 7.4%. Sales by end market were as follows:
Year Ended
2025 vs. 2024
2024 vs. 2023
September 27,
2025 		September 28,
2024 		September 30,
2023 		Increase/(Decrease) Increase/(Decrease)
(Dollars in thousands)
Industrial, Medical, Defense and Aerospace, and Automotive $ 5,022,934 $ 4,915,880 $ 5,388,877 $ 107,054 2.2 % $ (472,997) (8.8) %
Communications Networks and Cloud Infrastructure 3,105,448 2,652,448 3,546,171 453,000 17.1 % (893,723) (25.2) %
Total $ 8,128,382 $ 7,568,328 $ 8,935,048 $ 560,054 7.4 % $ (1,366,720) (15.3) %
Comparison of 2025 to 2024 by End Market
The increase in sales was primarily due to new program wins and program ramp-ups in our communications networks and cloud infrastructure, as well as our medical end markets.
Gross Margin
Gross margin was 8.8%, 8.5% and 8.3% in 2025, 2024 and 2023, respectively. IMS gross margin increased slightly to 7.7% in 2025 from 7.5% in 2024. CPS gross margin increased to 13.9% in 2025 from 12.8% in 2024, primarily due to improved operating efficiencies partially offset by unfavorable product mix.
We have experienced fluctuations in gross margin in the past and may continue to do so in the future. Fluctuations in our gross margin may be caused by a number of factors, including:
•the impacts of supply chain constraints on our operations, the operations of our suppliers and on our customers' businesses;
•capacity utilization which, if lower, results in lower margins due to fixed costs being absorbed by lower volumes;
•changes in the mix of high and low margin products demanded by our customers;
•competition in the EMS industry and pricing pressures from OEMs due to greater focus on cost reduction;
•the amount of our provisions for excess and obsolete inventory, including those associated with distressed customers;
•levels of operational efficiency and production yields;
•our performance on long-term contracts, including our ability to recover claims for cost overruns; and
•our ability to transition the location of and ramp up manufacturing and assembly operations when requested by a customer in a timely and cost-effective manner.
Selling, General and Administrative
Selling, general and administrative expenses were $290 million and $266 million in 2025 and 2024, respectively. As a percentage of net sales, selling, general and administrative expenses were 3.6% and 3.5% for 2025 and 2024, respectively. The increase in absolute dollars in 2025 from 2024 was primarily attributable to higher employee compensation, largely due to increased stock compensation expense from new equity grants and variable compensation, as well as higher professional fees and increased expenditures supporting IT systems.
Research and Development
Research and development expenses were $31 million and $29 million in 2025 and 2024, respectively. As a percentage of net sales, research and development expenses were 0.4% for each of 2025 and 2024. The increase in absolute dollars in 2025 from 2024 was primarily due to higher expenses for design and engineering support for existing projects.
Acquisition and Integration Charges
Acquisition and integration charges were $34 million in 2025 and are related to the acquisition of ZT Systems. There were no such charges in prior years.
Other Income (Expense), Net
Other income (expense), net was $(11) million in 2025 and $(1) million in 2024. The increase in other expense in 2025 was primarily caused by a lower market-value gain on participant investment accounts in our deferred compensation plan compared to 2024 as a result of the total return swap contract ("TRS") entered in the second quarter of 2025 that substantially offsets changes in the deferred compensation plan liabilities elections made by plan participants.
Provision for Income Taxes
We recorded income tax expense of $73 million and $80 million in 2025 and 2024, respectively. Our effective tax rate was 22% and 25% for 2025 and 2024, respectively. The tax rate was lower in 2025 primarily due to the release of tax reserves.
As a result of an audit by the Internal Revenue Service ("IRS") for fiscal 2008 through 2010, we received a Revenue Agent's Report ("RAR") on November 17, 2023 asserting an underpayment of tax of approximately $8 million for fiscal 2009. The asserted underpayment results from the IRS's proposed disallowance of a $503 millionworthless stock deduction in fiscal 2009. Such disallowance, if upheld, would reduce our available net operating loss carryforwards and result in additional tax and interest attributable to fiscal 2021 and later years, which could be material. We disagree with the IRS's position as asserted in the RAR and are vigorously contesting this matter through the applicable IRS administrative and judicial procedures, as appropriate. We cannot predict with any certainty the timing of the resolution of this matter. Although the final resolution of this matter remains uncertain, we continue to believe that it is more likely than not our tax position will be sustained. However, an unfavorable resolution of this matter could have a material adverse impact on our consolidated financial statements.
The Organization for Economic Co-operation and Development ("OECD"), an international association of 38 countries including the United States, has proposed changes to numerous long-standing tax principles, namely, its Pillar Two framework, which imposes a global minimum corporate tax rate of 15%. Various countries have enacted or have announced plans to enact new tax laws to implement the global minimum tax and where enacted, the rules began to be effective for us in fiscal 2025. The Pillar Two rules are considered an alternative minimum tax and therefore deferred taxes would not be recognized or adjusted for the estimated effects of the future minimum tax. The adoption and effective dates of these rules may vary by country and could increase tax complexity and uncertainty and may adversely affect our provision for income taxes. There was no material impact from these tax law changes in fiscal 2025.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The majority of these changes take effect after our fiscal 2025 tax year. Those that did have an effect on our fiscal 2025, such as 100% bonus reinstatement, have been calculated and included in our provision for income taxes. There was no material impact from the OBBBA to fiscal 2025 financial statements.
Liquidity and Capital Resources
Year Ended
September 27,
2025 		September 28,
2024 		September 30,
2023
(In thousands)
Net cash provided by (used in):
Operating activities $ 620,657 $ 340,216 $ 235,168
Investing activities (108,207) (114,396) (192,458)
Financing activities (173,840) (269,707) 94,505
Effect of exchange rate changes 1,750 2,177 498
Increase (decrease) in cash and cash equivalents $ 340,360 $ (41,710) $ 137,713
Key Working Capital Management Measures
Management regularly reviews financial and non-financial performance indicators to assess our operating results. Our working capital requirements are dependent on the effective management of our sales cycle, as well as timing of payments. We believe the metrics set forth below are useful to investors in measuring our liquidity, as future liquidity needs will depend on fluctuations in levels of inventory, contract assets, customer inventory advances, accounts receivable and accounts payable.
In the second quarter of fiscal 2025, we changed the methodology for calculating key working capital management measures to standardize the number of days utilized in calculating the metrics, add a new metric for customer inventory advances days, and update the calculation of inventory turns to present inventory turns net of customer inventory advances, which is consistent with how we manage working capital. Prior period amounts have been conformed to the current period presentation.
As of
September 27,
2025 		September 28,
2024
Days in accounts receivable (1) 60 60
Contract asset days (2) 18 17
Days in inventory (3) 94 70
Days in accounts payable (4) 75 70
Customer inventory advance days (5) 40 7
Cash cycle days (6) 57 70
Net inventory turns (7) 7 6
(1) Days in accounts receivable (a measure of how quickly we collect our accounts receivable), or "DSO", is calculated as accounts receivable, net, at the end of the current quarter divided by net sales for the quarter multiplied by 90 days.
(2) Contract asset days (a measure of how quickly we transfer contract assets to accounts receivable) is calculated as contract assets at the end of the current quarter divided by net sales for the quarter multiplied by 90 days.
(3) Days in inventory (a measure of how quickly we turn inventory into sales) is calculated as inventory at the end of the current quarter divided by cost of sales for the quarter multiplied by 90 days.
(4) Accounts payable days (a measure of how quickly we pay our suppliers), or "DPO", is calculated as accounts payable at the end of the current quarter divided by cost of sales for the quarter multiplied by 90 days.
(5) Customer inventory advances days (a measure of how long customer deposits for inventory are held) is calculated as customer inventory advances at the end of the current quarter divided by cost of sales for the quarter multiplied by 90 days.
(6) Cash cycle days is calculated as the sum of days in accounts receivable, contract asset days and days in inventory, minus the sum of accounts payable days and customer inventory advances days.
(7) Net inventory turns (annualized) is calculated as 360 days divided by the days in inventory minus customer inventory advances days.
Cash and cash equivalents were $926 million at September 27, 2025 and $626 million at September 28, 2024. Our cash levels vary during any given period depending on the timing of collections from customers and payments to suppliers, borrowings under credit facilities, sales of accounts receivable under numerous programs we utilize, repurchases of capital stock and other factors. Our working capital was approximately $2.0 billion and $1.9 billion as of September 27, 2025 and September 28, 2024, respectively.
Net cash provided by operating activities was $621 million, $340 million and $235 million for 2025, 2024 and 2023, respectively. Our working capital metrics tend to fluctuate from quarter-to-quarter based on factors such as the linearity of our shipments to customers and purchases from suppliers, customer and supplier mix, the extent to which we factor customer receivables and the negotiation of payment terms with customers and suppliers. These fluctuations can significantly affect our cash flows from operating activities.
During 2025, we generated $432 million of cash from earnings, excluding non-cash items, and generated $189 million of cash primarily because of increases in accounts payable of $99 million, accrued liabilities and other of $75 million and deferred revenue and customer advances of $663 million, partially offset by increases in accounts receivable of $64 million, contract assets of $42 million and inventories of $543 million. These increases were consistent with the growth in business volume. The change in deferred revenue and customer advances is driven by increased customer deposits against raw material inventory purchases. During the third quarter of 2025, we initiated a program change with our customers that resulted in all inventory advance payments from customers to offset our working capital investment in raw materials inventory to be classified as deferred revenue and customer advances.
During 2024, we generated $447 million of cash from earnings, excluding non-cash items, and used $107 million of
cash primarily because of a decrease in accounts payable of $112 million and an increase in accounts receivable of $104 million, partially offset by an increase in deferred revenue and customer advances of $89 million. The decrease in accounts payable was primarily attributable to an unfavorable mix of supplier payment terms and lower inventory receipts. The increase in accounts receivable was primarily attributable to unfavorable customer payment terms mix. The change in deferred revenue and customer advances is driven by increased customer deposits against raw material inventory purchases.
Net cash used in investing activities was $108 million, $114 million and $192 million for 2025, 2024 and 2023, respectively. In 2025, we received $49 million from the liquidation of investments held in a former rabbi trust for our deferred compensation plan assets, purchased $15 million of long-term investments and used $147 million of cash for capital expenditures. In 2024, we used $111 million of cash for capital expenditures.
Net cash provided by (used in) financing activities was $(174) million, $(270) million and $95 million for 2025, 2024 and 2023, respectively. In 2025, we repurchased $114 million of common stock, paid $43 million in settlement of employee tax withholding obligations and repaid an aggregate of $18 million of long-term debt. In 2024, we repurchased $228 million of common stock, paid $26 million in settlement of employee tax withholding obligations and repaid an aggregate of $22 million of long-term debt.
Existing Credit Facility. The Fifth Amended and Restated Credit Agreement, dated as of September 27, 2022, as amended, (the "Existing Credit Agreement"), provides for an $800 million revolving credit facility and a $350 million secured term loan (the "Term Loan Due 2027"), together with an accordion feature by which we can obtain, subject to the satisfaction of specified conditions and commitment of the lenders, additional revolving commitments in an aggregate amount of up to $200 million. On June 6, 2025, we amended the Existing Credit Agreement to permit the ZT Acquisition. In connection with the closing of the ZT Acquisition, borrowings under the Credit Facilities (as defined below) were used to repay in full the amount remaining under the Term Loan Due 2027, and the Existing Credit Agreement was terminated.
Bridge Loan Facility. On May 18, 2025, in connection with the acquisition of ZT Acquisition, we entered into a commitment letter with certain financial institutions that have agreed to provide us with, subject to satisfaction of customary conditions and covenants, a senior secured 364-day bridge loan facility in an aggregate principal amount of up to $2.5 billion (the "Bridge Loan Facility") to fund a portion of the purchase consideration and to pay related fees and expenses. The commitment was intended to be drawn only to the extent that permanent financing was not obtained prior to closing the ZT Acquisition. On July 30, 2025, the Bridge Loan Facility was reduced from $2.5 billion to $800 million upon the Company entering into the New Credit Agreement (as defined below) and subsequently on the Closing Date, it was terminated in entirety.
New Credit Facility.On July 29, 2025, we entered into a credit agreement (the "New Credit Agreement") that provided for senior secured credit facilities in an aggregate principal amount of $3.5 billion (the "Credit Facilities"), consisting of a $1.5 billion revolving credit facility and a $2.0 billion term loan A facility. As of September 27, 2025, the commitments under the New Credit Agreement were completely unfunded, and the Existing Credit Agreement remained in effect until the Credit Facilities were drawn at the closing of the ZT Acquisition, as described below.
On October 20, 2025, we entered into Amendment No. 1 to the New Credit Agreement to permit and finance the ZT Acquisition, including adding necessary definitions, funding conditions, and providing a delayed draw term loan A of $600 million with same terms and conditions as the Credit Facilities. See Note 6 "Debt" of the notes to the Consolidated Financial Statements contained in this report for details.
Subsequent to the year ended September 27, 2025, we completed the acquisition of ZT Systems on the Closing Date for a purchase consideration of $1.6 billion (subject to adjustment for certain working capital and other items) consisting of $1.46 billion in cash consideration and a number of shares of our common stock valued at $150 million (at $130.32 market value representing 1.2 million shares). Pursuant to the acquisition agreement, the seller is also entitled up to $450 million in contingent cash consideration upon the achievement of certain financial metrics during the three-year period following the Closing Date. To finance the cash portion of the acquisition and to settle all outstanding amounts under our Existing Credit Agreement, we simultaneously amended our Credit Facilities. The amendment included a new $800 million term loan B facility. At the Closing Date, we drew $1.4 billion under the term loan A facility and the full $800 million under the term loan B facility. Concurrently, with closing, the Bridge Commitment letter was terminated in its entirety. See Note 6 and Note 16 of "Debt" and "Business Combination", respectively, of the notes to the Consolidated Financial Statements contained in this report for details. In addition, we entered into forward interest rate swap agreements with independent counterparties with an aggregate notional amount of $1.2 billion and a maturity date of October 31, 2030, effectively convert a portion of our variable interest rate obligations under the Credit Facilities to fixed interest rate obligations.
As of September 27, 2025, no borrowings and $9 million of letters of credit were outstanding under the Existing Credit Agreement, under which $791 million was available to borrow. There were no borrowings outstanding under the Existing Credit Agreement as of September 28, 2024.
Short-term Borrowing Facilities.We had no short-term borrowings outstanding as of September 27, 2025. Additionally, certain of our foreign subsidiaries had a total of $71 million of uncommitted short-term borrowing facilities available, under which no borrowings were outstanding as of September 27, 2025. Some of these facilities expire at various dates through the first quarter of 2027 and are expected to be renewed.
Other Liquidity Matters
During 2025, we repurchased 1.4 million shares of our common stock for $114 million (including commissions), under stock repurchase programs authorized by the Board of Directors. These programs have no expiration dates and the timing of repurchases will depend upon capital needs to support the growth of our business, market conditions and other factors. Although stock repurchases are intended to increase stockholder value, purchases of shares reduce our liquidity. As a result, the timing of future repurchases depends upon our future capital needs, market conditions and other factors. As of September 27, 2025, an aggregate of $239 million remains available under the stock repurchase program.
We are party to a Receivables Purchase Agreement, as amended (the "RPA"), with certain third-party banking institutions for the sale of trade receivables generated from sales to certain customers. The amount available under the RPA is uncommitted and, as such, is available at the discretion of our third-party banking institutions. Under the Existing Credit Agreement, the percentage of our total trade receivables that can be sold and outstanding at any time is 50%. Therefore, as of September 27, 2025, a maximum of $490 million of sold receivables could be outstanding at any point in time under this program, as amended, as required by our Credit Agreement. Trade receivables sold pursuant to the RPA are serviced by us.
In addition to the RPA, we participate in trade receivables sales programs that have been implemented by certain of our customers, as in effect from time to time. We do not service trade receivables sold under these other programs. The sale of
receivables under all of these programs is subject to the approval of the banks or customers involved and there can be no assurance that we will be able to sell the maximum amount of receivables permitted by these programs when desired. See Note 8, "Accounts Receivable Sale Programs" of the notes to the Consolidated Financial Statements contained in this report for details.
We enter into forward interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in the Secured Overnight Financing Rate benchmark interest rate associated with anticipated variable rate borrowings. In addition, in the second quarter of 2025, we entered into a TRS contract to manage the equity market risks associated with our deferred compensation plan liabilities. See Note 5 "Financial Instruments and Concentration of Credit Risk" of the notes to the Consolidated Financial Statements contained in this report for details.
In the ordinary course of business, we are or may become party to legal proceedings, claims and other contingencies, including environmental, regulatory, warranty and employee matters and examinations by government agencies. As of September 27, 2025, we had accrued liabilities of $39 million related to such matters. We cannot accurately predict the outcome of these matters or the amount or timing of cash flows that may be required to defend ourselves or to settle such matters or that these reserves will be sufficient to fully satisfy our contingent liabilities.
As of September 27, 2025, we had a liability of $53 million for uncertain tax positions. Our estimate of liabilities for uncertain tax positions is based on a number of subjective assessments, including the likelihood of a tax obligation being assessed, the amount of taxes (including interest and penalties) that would ultimately be payable, and our ability to settle any such obligations on favorable terms. Therefore, the amount of future cash flows associated with uncertain tax positions may be significantly higher or lower than our recorded liability and we are unable to reliably estimate when cash settlement may occur. It is reasonably possible that the balance of gross unrecognized tax benefits could decrease in the next 12 months by approximately $8 million due to payments, the resolution of audits and expiration of statutes of limitations. In addition, there could be a corresponding decrease in accrued interest and penalties of approximately $2 million.
Our liquidity is largely dependent on changes in our working capital, including sales of accounts receivable under our receivables sales programs and the extension of trade credit by our suppliers, investments in manufacturing inventory, facilities and equipment, repayments of obligations under outstanding indebtedness and repurchases of common stock. In 2025, we generated $621 million of cash from operations. Our primary sources of liquidity as of September 27, 2025 consisted of (1) cash and cash equivalents of $926 million (an aggregate of $215 million of our cash is held by Sanmina SCI India Private Limited ("SIPL") and Sanmina SCI Technology India Private Limited, our existing Indian manufacturing entity, which is designated to fund its operations use); (2) our Existing Credit Agreement, under which $791 million, net of outstanding borrowings and letters of credit, was available; (3) our foreign short-term borrowing facilities of $71 million, all of which was available; (4) proceeds from the sale of accounts receivable under our receivables sales programs; and (5) cash generated from operations. Subject to satisfaction of certain conditions, including obtaining additional commitments from existing and/or new lenders, we may increase the revolving commitments under the Existing Credit Agreement up to an additional $200 million.
We believe our existing cash resources and other sources of liquidity, together with cash generated from operations, will be sufficient to meet our working capital requirements through at least the next twelve months. However, should demand for our services decrease significantly over the next twelve months, should we be unable to recover on inventory obligations owed to us by our customers or should we experience significant increases in delinquent or uncollectible accounts receivable for any reason, our cash provided by operations could decrease significantly and we could be required to seek additional sources of liquidity to continue our operations at their current level.
We invest our cash among a number of financial institutions that we believe to be of high quality. However, there can be no assurance that one or more of such institutions will not become insolvent in the future, in which case all or a portion of our uninsured funds on deposit with such institutions could be lost.
As of September 27, 2025, 42% of our cash balance was held in the United States. Should we choose or need to remit cash to the United States from our foreign locations, we may incur tax obligations which would reduce the amount of cash ultimately available to the United States. We believe that cash held in the United States, together with liquidity available under our Existing Credit Agreement and cash from foreign subsidiaries that could be remitted to the United States without tax consequences, will be sufficient to meet our United States liquidity needs for at least the next 12 months.
Contractual Obligations
As part of our ongoing operations, we enter into contractual arrangements that obligate us to make future cash payments. These obligations impact our liquidity and capital resource needs. As of September 27, 2025, our estimated future obligations consist of leases, our Term Loan Due 2027, pension plan funding obligations and unrecognized tax benefits.
A summary of our operating lease obligations as of September 27, 2025 can be found in Note 7 "Leases" of the notes to the Consolidated Financial Statements contained in this report.
A summary of our long-term debt obligations as of September 27, 2025 can be found in Note 6 "Debt" of the notes to the Consolidated Financial Statements contained in this report.
We have defined benefit pension plans with an underfunded amount of $46 million as of September 27, 2025. We will be required to provide additional funding to these plans in the future if our returns on plan assets are not sufficient to meet our funding obligations. See Note 15 "Employee Benefit Plans" of the notes to the Consolidated Financial Statements contained in this report.
Our long-term liabilities arising from unrecognized tax benefits can be found in Note 10 "Income Tax" of the notes to the Consolidated Financial Statements contained in this report.
We also have outstanding firm purchase orders with certain suppliers for the purchase of inventory which are generally short-term in nature. Orders for standard, or catalog, items can typically be canceled with little or no financial penalty. Our policy regarding non-standard or customized items dictates that such items are only ordered specifically for customers who have contractually assumed liability for the inventory, although exceptions are made to this policy in certain situations. Accordingly, our liability from purchase obligations under these purchase orders is not expected to be significant. Lastly, pursuant to arrangements under which vendors consign inventory to us, we may be required to purchase such inventory after a certain period of time. To date, we have not been required to purchase a significant amount of inventory pursuant to these time limitations.
Off-Balance Sheet Arrangements
As of September 27, 2025, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC, that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
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