A maker of electronics for other companies, Sanmina builds printed circuit boards, memory and storage systems, and defense products for original equipment manufacturers in industrial, medical, automotive, and communications markets. Founded in 1980 in Silicon Valley by Jure Sola and Milan Mandarić, the company's name blends the founders' names—"San" from Sola and "Mina" from Mandarić. It grew through a 2001 merger with SCI Systems, briefly becoming Sanmina-SCI before returning to the Sanmina name in 2012.
Q3 FY2026 revenue rose 69.7% to $3.46B after the ZT Systems acquisition
The ZT Systems acquisition lifted margins and profit well above last year's pace. rose 69.7% to $3.46B and rose 68.3% to $2.12 as widened 1.6 points to 10.5%, with up 130.7% on cloud and AI infrastructure demand. Sanmina is larger and more leveraged, and integration of ZT Systems now defines its trajectory.
Key takeaways
rose 69.7% to $3.46B and fell 13.7% sequentially, driven by the ZT Systems acquisition and new program wins in cloud and AI infrastructure.
widened 1.6 points to 10.5% as the IMS improved, while CPS gross margin fell to 12.8% from 14.7% on manufacturing inefficiencies.
rose 130.7% to $221.2M and rose 68.3% to $2.12, though $21M of acquisition and integration charges and $32M (up from $5M) weighed on results.
Section summaries
Management's Discussion and Analysis
Revenue surged 70% YoY to $3.5B in Q3 FY2026, driven by the ZT Systems acquisition and cloud/AI infrastructure demand.
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increased 70% to $3.46 billion in Q3 FY2026, primarily from the ZT Systems acquisition and new program wins in cloud and AI infrastructure.
Overall improved to 10.5% from 8.9% , driven by the IMS , while CPS gross margin fell to 12.8% from 14.7% due to manufacturing inefficiencies.
was $1,957.3M, up 581.6% from a year earlier from $2.2B term loan borrowings for the acquisition; cash and equivalents ended at $1,844.9M.
was $124.5M in the quarter, down 38.0% , while nine-month operating cash flow was $702M and $1.1B was used for the ZT acquisition plus $239M for repurchases.
A settlement in principle was reached in Q3 for a qui tam lawsuit related to an SCI subsidiary's government contracting, and interest rate swaps of $1.45B notional hedge part of the acquisition debt.
What changed
CPS fell to 12.8% from 14.7% a year earlier, reversing the rise flagged to watch after Q2's 2.3-point drop to 12.9%; manufacturing inefficiencies were the stated cause.
Q3 was $124.5M against $1,999.8M at Q2 end; the quarter's was $23.6M, down 85.6% as integration spend continued.
The IRS $503M worthless stock deduction audit drew no new recorded tax impact this quarter, carrying over from prior filings' watch list.
ZT Systems integration advanced with a qui tam settlement in principle, addressing the regulatory-outcome watch item from prior quarters; AMD AI product dependency was not restated as a new risk.
comparison against Q3 FY2025's $2,096.4M shows the acquisition-driven step-up persisted, but sequential decline of 13.7% from Q2's $4,013.3M reflects post-ramp normalization.
What to watch
CPS next quarter to see if 12.8% holds or recovers as ZT Systems manufacturing inefficiencies are resolved
Q4 FY2026 against $1,957.3M and remaining ZT integration spend
Any recorded tax impact or resolution from the IRS $503M worthless stock deduction audit
Final terms and court approval of the qui tam settlement related to the SCI subsidiary
Selling, general and administrative expenses rose to $109 million from $70 million , mainly due to the ZT Systems acquisition and higher professional fees.
Acquisition, integration and other charges were $21 million in Q3, including a $13 million adjustment for related to the ZT Systems deal.
increased to $32 million from $5 million , reflecting new term loan borrowings of $2.2 billion to fund the acquisition.
was $702 million for the nine-month period, while $1.1 billion was used for the ZT Systems acquisition and $239 million for share repurchases.
Quantitative and Qualitative Disclosures About Market Risk
Except as described below with respect to interest rate risk, there were no material changes in our primary risk exposures or management of market risks from those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 27, 2025. Our exposure to interest…
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Except as described below with respect to interest rate risk, there were no material changes in our primary risk exposures or management of market risks from those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 27, 2025.
Our exposure to interest rate risk increased during the nine months ended June 27, 2026 in connection with the financing of the ZT Acquisition. As of June 27, 2026, we had $2.2 billion of borrowings outstanding under the New Credit Facility, which bear interest at variable rates based on SOFR or a base rate, plus an applicable margin. To partially mitigate this exposure, we have entered into interest rate swap agreements, designated as cash flow hedges, with an aggregate notional amount of $1.45 billion as of June 27, 2026, which effectively convert a portion of our variable rate obligations to fixed rate obligations at an aggregate effective interest rate of approximately 4.9%. A hypothetical 10 percent change in interest rates would not have a significant impact on our results of operations. See Note 4, “Financial Instruments” and Note 5, “Debt” of the notes to the Condensed Consolidated Financial Statements contained in this report for details.
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For a description of our material legal proceedings, see Note 8, “Commitments and Contingencies” of the notes to the Condensed Consolidated Financial Statements contained in this report for details. 39
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For a description of our material legal proceedings, see Note 8, “Commitments and Contingencies” of the notes to the Condensed Consolidated Financial Statements contained in this report for details.
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Acquisition of ZT Systems amplifies dependence on cloud/AI hyperscaler spending, while tariffs, customer concentration, and operational variability remain key risks.
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The ZT Systems acquisition significantly increases reliance on the cloud and AI infrastructure market, where demand is driven by a few with unpredictable capital expenditure cycles.
Newly enacted or proposed U.S. tariffs on imports from China, Mexico, and elsewhere could reduce gross margins if unrecovered from customers or cause customers to shift manufacturing away from affected locations.
Sales to the ten largest customers historically represent about half of , and the loss or significant reduction of any major customer could substantially reduce revenue and margins.
A key strategy to grow higher-margin CPS businesses (components, design, and services) faces execution risk; failure could disproportionately hurt overall profitability.
A settlement in principle was reached in Q3 FY2026 for a related to SCI subsidiary government contracting matters, highlighting regulatory compliance exposure.
Operating results remain highly variable due to customer forecast inaccuracies, supply chain disruptions, component shortages, and the timing of new product ramps.