Electronics manufacturing services company Sanmina (NASDAQ: SANM) announced better-than-expected revenue in Q2 CY2026, with sales up 69.7% year on year to $3.46 billion. On the other hand, next quarter’s revenue guidance of $3.45 billion was less impressive, coming in 2.1% below analysts’ estimates. Its non-GAAP profit of $3.31 per share was 18.5% above analysts’ consensus estimates.

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"We delivered another great quarter. Revenue was at the high end of our outlook, while non-GAAP operating margin and non-GAAP diluted EPS exceeded our outlook," stated Jure Sola, Chairman and CEO of Sanmina Corporation.

Company Overview

Founded in 1980, Sanmina (NASDAQ: SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Sanmina grew its sales at an excellent 12.8% compounded annual growth rate. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Sanmina’s annualized revenue growth of 29.6% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Sanmina reported magnificent year-on-year revenue growth of 69.7%, and its $3.46 billion of revenue beat Wall Street’s estimates by 1.8%. Company management is currently guiding for a 64.6% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 20.4% over the next 12 months, a deceleration versus the last two years. Still, this projection is eye-popping given its scale and indicates the market is forecasting success for its products and services.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Sanmina was profitable over the last five years but held back by its large cost base. Its average operating margin of 4.8% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

On the plus side, Sanmina’s operating margin rose by 1.3 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Sanmina generated an operating margin profit margin of 6.4%, up 1.3 percentage points year on year. Since its gross margin expanded more than its operating margin, we can infer that leverage on its cost of sales was the primary driver behind the recently higher efficiency.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sanmina’s EPS grew at 20.6% compounded annual growth rate over the last five years, higher than its 12.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Sanmina’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Sanmina’s operating margin expanded by 1.3 percentage points over the last five years. On top of that, its share count shrank by 18.1%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Sanmina, its two-year annual EPS growth of 41.3% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q2, Sanmina reported adjusted EPS of $3.31, up from $1.53 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Sanmina’s full-year EPS to grow 17.2% from $10.52 to $12.33.

Key Takeaways from Sanmina’s Q2 Results

We were impressed by Sanmina’s optimistic EPS guidance for next quarter, which blew past analysts’ expectations. We were also excited its adjusted operating income outperformed Wall Street’s estimates by a wide margin. On the other hand, its revenue guidance for next quarter missed. Overall, we think this was a solid quarter with some key areas of upside. The market seemed to be hoping for more, and the stock traded down 5.5% to $197.44 immediately after reporting.

So should you invest in Sanmina right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).