Plexus (NASDAQ:PLXS) reported fourth-quarter financial results on Thursday. The transcript from the company’s fourth-quarter earnings call has been provided below.
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Summary
Plexus reported record fiscal fourth-quarter revenue of $1.43 billion, leading to a 23% increase in fiscal 2026 revenue year over year to approximately $5 billion.
The company forecasts fiscal 2027 revenue growth in the mid to upper teens, supported by strong manufacturing wins and a record funnel of opportunities.
Non-GAAP operating margin for fiscal 2026 reached 6.2%, exceeding the goal of 6%, and the company has set a new target of 6.5% to 7% for fiscal 2027.
Plexus achieved significant wins in aerospace and defense, healthcare/life sciences, and industrial sectors, with a total of $1.2 billion in new manufacturing wins for fiscal 2026.
The company received several recognitions for operational excellence and community engagement, including awards from Eaton and GE Vernova.
Plexus reduced its absolute scope 1 and scope 2 greenhouse gas emissions by more than 50% compared to its fiscal 2023 baseline.
Guidance for the fiscal first quarter of 2027 includes revenue of $1.41 to $1.46 billion and a non-GAAP EPS of $2.46 to $2.62.
Plexus expects to generate over $100 million in free cash flow for fiscal 2027 and remains focused on expanding operating margins and sustaining working capital efficiency.
Full Transcript
OPERATOR
After today’s prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press Star 1 to raise your hand. To withdraw your question, press Star 1 again. On the call today to answer your questions after the presentation are Todd Kelsey, President and CEO; David Abel, CFO and Senior Vice President; and Oliver Mihm, Executive Vice President and COO. I will now hand the conference over to Sean Harrison, VP of Investor Relations.
Sean, please go ahead.
Sean Harrison (Vice President of Investor Relations)
Good morning and thank you for joining us today. Some of the statements made and information provided during our call today will be forward-looking statements, including without limitation those regarding revenue, gross margin, selling and administrative expense, operating margin, other income and expense, taxes, cash cycle, capital allocation and future business outlook. Forward-looking statements are not guarantees, since there are inherent difficulties in predicting future results, and actual results could differ materially from those expressed or implied in the forward-looking statements.
For a list of factors that could cause actual results to differ materially from those discussed, please refer to the Company’s periodic SEC filings, particularly the risk factors in our Form 10-K filing for the fiscal year ended September 27, 2025, and the safe harbor and fair disclosure statement in our press release. We encourage participants on the call this morning to access the live webcast and supporting materials at the Plexus website at www.plexus.com, clicking on Investors at the top of that page. Joining me today are Todd Kelsey, President and Chief Executive Officer; Oliver Mihm, Executive Vice President and Chief Operating Officer; and David Abel, Senior Vice President and Chief Financial Officer. With today’s earnings call, Todd will provide summary comments before turning the call over to Oliver and David for further details.
Before turning the call over to Todd, please note that Plexus will attend Baird’s Global Industrial Conference in Chicago on November 11 and Raymond James TMT and Consumer Conference in New York City on December 7. With that, let me now turn the call over to Todd.
Todd Kelsey (President and Chief Executive Officer)
Thank you, Sean. Good morning, everyone. Please advance to slide 3. Plexus delivered an outstanding fiscal 2026 that exceeded expectations. Our differentiated value proposition, anchored by unmatched quality and delivery, creates significant opportunities for new and expanded customer relationships, positioning Plexus to generate robust financial returns and shareholder value. Plexus generated record fiscal fourth quarter revenue of $1.43 billion.
This resulted in fiscal 2026 revenue increasing 23% year over year to approximately $5 billion. We are now forecasting fiscal 2027 revenue growth in the mid to upper teens. Our wins performance remained strong while our funnel of qualified manufacturing opportunities reached another record level, expanding $1.2 billion year over year to nearly $5 billion. Supporting our diversified and accelerating revenue growth momentum, we delivered fantastic operating performance that exceeded our guidance.
Fiscal fourth quarter non-GAAP operating margin of 6.7% increased 40 basis points sequentially and nearly 100 basis points year over year. Plexus exceeded its 6% non-GAAP operating margin goal for fiscal 2026, expanding non-GAAP operating margin 30 basis points to 6.2%. We’re introducing a new non-GAAP operating margin goal of 6.5% to 7% given our expectation of continued revenue growth and ongoing dividends from efficiency investments and our continuous improvement culture.
Finally, fiscal 2026 ROIC exceeded our 15% enduring goal, supported by continued robust working capital efficiency and disciplined capital investment. We anticipate another strong ROIC result for fiscal 2027 and, at the anticipated revenue growth rate, continue to forecast free cash flow for fiscal 2027 exceeding $100 million. Please advance to Slide 4. Record revenue in the fiscal fourth quarter of $1.43 billion substantially exceeded our guidance range and increased 9% sequentially and 35% year over year. Excellent performance by our supply chain and operations teams helped our customers gain market share and Plexus capture stronger-than-anticipated end-market demand. In addition, non-GAAP operating margin of 6.7% and non-GAAP EPS of $2.84 substantially exceeded our guidance ranges on strong operating leverage from the revenue upside and continued efficiency gains.
Please advance to slide 5. Our go-to-market team secured 36 fiscal fourth quarter new manufacturing wins worth $290 million in annualized revenue when fully ramped into production. Each market sector delivered strong performance and secured exciting new customer programs and relationships that Oliver will discuss in more detail. With the strong fiscal fourth quarter performance, Plexus captured new manufacturing wins for fiscal 2026 worth nearly $1.2 billion in annualized revenue when fully ramped into production.
This outstanding result reflected share gains with long-standing customers, the addition of exciting new customers that support growth technologies, and continued expansion into attractive secular growth markets such as aerospace and defense, where we generated fiscal 2026 manufacturing wins of nearly half a billion dollars. The team generated these very strong wins while also expanding Plexus’ funnel of qualified manufacturing opportunities by an exceptional $1.2 billion, or 33% year over year, to reach another record of $4.9 billion.
The combination of our strong manufacturing wins performance and significantly expanded funnel of qualified manufacturing opportunities positions Plexus to sustain our diversified and accelerating revenue growth momentum. Please advance to slide 6. Plexus’ culture is foundational to our success and embodied by our team as they live our vision to help create the products that build a better world. Supporting our customers as the most trusted partner is central to our strategy. During the fiscal fourth quarter, Eaton recognized our team for operational excellence and honored Plexus with a Supplier Excellence Award at its Global Supplier Conference, a distinction granted to only 30 of Eaton’s 30,000 global suppliers.
And early in fiscal 2027, GE Vernova’s power and conversion and storage business honored Plexus with its Lean Manufacturing Excellence Award. GE Vernova recognized the strong execution, continuous improvement culture and exceptional delivery performance by our sites in Aradia, Romania and Xiamen, China. I’m also incredibly proud to share that our Kelso, Scotland operations were named Manufacturing Business of the Year at the 2026 Scottish Borders Business Excellence Awards, while also earning high commendations for both Innovation in Business and Large Business of the Year.
These recognitions celebrate our Kelso team’s operational leadership, technological innovation and role as an employer and partner of choice in the EMEA region. Our team members’ dedication also extends deeply into our communities. For fiscal 2026, our global team shared its time and talents with various local causes, donating approximately 35,000 hours of paid volunteer time off. Further, the Plexus Community Foundation granted $1.5 million in charitable donations to nonprofits globally, expanding our community impact and demonstrating how we actively live our vision of building a better world. Finally, we continue to take proactive steps to reduce our environmental impact.
In fiscal 2026, we generated an incredible result and reduced our absolute scope 1 and scope 2 greenhouse gas emissions by more than 50% across our global manufacturing sites compared to our fiscal 2023 baseline. I continue to be immensely proud of our global team members as we deliver excellence, live our values and create a lasting positive impact for our customers, our communities and the world. Please advance to Slide 7. For our fiscal first quarter, we are guiding revenue of $1.41 to $1.46 billion, representing 1% sequential and 34% year over year growth. At the midpoint, we anticipate strong year over year revenue growth from each of our market sectors, with sequential revenue expansion in aerospace and defense and healthcare/life sciences market sectors, balancing a demand normalization in our industrial market sector. We’re also guiding non-GAAP operating margin of 6.0% to 6.4%, an increase of 40 basis points year over year, and a non-GAAP EPS of $2.46 to $2.62.
We remain focused on expanding operating margin and delivering robust returns even as we are increasing our investments in our people and technology to support stronger-than-anticipated revenue growth for fiscal 2027. We are increasing our revenue growth forecast to reflect our robust fiscal 2026 finish, stronger end-market demand and continued program ramps. We now anticipate delivering mid to upper teens revenue growth with expansion in operating margin and sustained working capital efficiency. We continue to see exceptionally strong growth from our aerospace and defense and industrial market sectors, including semiconductor capital equipment associated with our support of growth technologies and the benefit of ongoing market share gains.
In addition, we now anticipate stronger growth from our healthcare/life sciences market associated with increased end-market demand, particularly from new programs we launched during fiscal 2026. Finally, through our aligned focus on innovation and continuous improvement culture, Plexus is creating customer success, scaling the company for the future and developing substantial long-term efficiencies that will generate robust financial returns and shareholder value.
I will now turn the call over to Oliver for additional analysis of the performance of our market sectors.
David Abuhl (SVP & Chief Financial Officer)
Thank you, Oliver, and good morning everyone. Our fiscal fourth quarter results are summarized on Slide 12. Gross margin of 10.2% met our guidance, benefiting from leverage on higher revenue and continued operational efficiency gains. Selling and administrative expense of $59.7 million included typical stock-based compensation as well as expenses related to executive retirement. Excluding these expenses, we gained 30 basis points of sequential leverage.
Our fiscal fourth quarter non-GAAP operating margin of 6.7% exceeded our guidance, benefiting from end-of-year fixed cost leverage on the stronger-than-anticipated customer demand, operational efficiencies, and continued cost discipline. Non-GAAP diluted earnings per share of $2.84 exceeded the top end of our guidance due to higher revenue and the other items mentioned, partially offset by a tax rate at the upper end of guidance. Turning to our cash flow and balance sheet on Slide 13: for the fiscal fourth quarter, we delivered better-than-expected free cash flow of $6 million, reflecting $29 million in cash from operations and $23 million in capital expenditures. We repurchased approximately $21 million of our stock in the quarter, completing the expanded 2026 share repurchase program. The 2027 share repurchase program was approved by our board in August for $100 million, all of which is available for fiscal 2027, and our repurchases are underway.
We ended the fourth quarter in a net cash position and we had $159 million outstanding under our revolving credit facility with over $340 million available to borrow. Return on invested capital was 15.8% in the fiscal fourth quarter, 680 basis points above our weighted average cost of capital. Our fiscal fourth quarter result was the highest in nearly a decade and above our enduring goal of 15%. While continuing to increase invested capital to support our robust revenue growth, we anticipate to continue to generate healthy ROIC for fiscal 2027 from our expanding margins and working capital efficiency.
Now, turning to working capital trends on Slide 14, we ended fiscal 2026 at a 62-day cash cycle, our best performance on record and down one day compared to the prior year. I’m very pleased with how our teams are partnering closely with our customers and suppliers and driving improvements across all areas of working capital while continuing to make the investments needed to fuel our robust revenue growth. Please advance to Slide 15. I would like to take a moment to commend our teams on delivering a really great year and I’m especially pleased to see the progress on expanding our margins for fiscal 2026.
We delivered non-GAAP operating margins of 6.2%, a 30 basis point increase from the prior year, including a tremendous result in the fourth quarter. Going forward, having consistently exceeded our previous 6% goal, we are introducing a new non-GAAP operating margin goal of 6.5% to 7%. This new goal will be supported by our strong operational momentum, continued anticipated revenue leverage, and a balanced ongoing approach toward investments in growth, people, and technology. We take a methodical approach to setting our financial goals and our expectation is to consistently meet and then progress through the goal.
We expect to deliver on our 6.5% to 7% non-GAAP operating margin goal from continued revenue leverage and operational efficiencies. While we expect a fairly muted impact from price and mix, we will balance these benefits with continued investments in our people, technology, capacity, and capabilities. This new target represents a larger step up than we have historically provided, as we have growing confidence in the dividends from our efficiency and automation initiatives and our continuous improvement culture.
Over the past two years, our team’s efforts have driven a greater than 10% gain in our equipment efficiency, allowing our operations to generate greater revenue and profitability without significantly expanding capital spending. We’ve also seen revenue per team member expand by approximately 20% over the same time period. And while the revenue outlook is an important backdrop for our new margin goal, we are seeing dividends from our investments in operational efficiency and we expect to continue to accrue benefits.
Now let me turn to our fiscal first quarter guidance summarized on Slide 16. As Todd has already provided the revenue and EPS guidance, I will review some additional details. Fiscal first quarter gross margin is expected to be in the range of 9.7% to 10%, including expansion of investments in people and technology. For fiscal 2027, we expect gross margins to remain at approximately 10%. Our outlook for selling and administrative expense for the fiscal first quarter is in the range of $61 million to $62 million including stock-based compensation.
Excluding these expenses, we expect the percent of revenue to be flat compared to the prior quarter, while for fiscal 2027 we expect to gain leverage on higher revenue and continued cost discipline. Fiscal first quarter non-GAAP operating margin is expected to be in the range of 6% to 6.4%, exclusive of stock-based compensation. At the midpoint, this would represent a sequential decline compared to the fiscal fourth quarter as we expand investments in people and technology, given the improved fiscal year revenue outlook.
Given the timing of the investments and our revenue momentum, we currently anticipate minimal to no decline in our fiscal second quarter operating margins from typical seasonal cost increases. And finally, for fiscal year 2027, we continue to expect our ongoing investments will result in operating flow-through at the low end of our 8% to 12% target range, driving expansion in non-GAAP operating margin compared to the prior year. We’re estimating a non-GAAP effective tax rate of between 16% and 18% for the fiscal first quarter and a similar range for fiscal 2027. In support of our accelerating revenue momentum, we continue to strategically increase our working capital investments and expect our fiscal first quarter cash cycle to be in the range of 66 to 70 days. We typically experience around a six-day sequential increase in our fiscal first quarter cash cycle days associated with the end of many of our customers’ fiscal years.
For fiscal 2027, we continue to expect cash cycle days to be in the low to mid-60s. Turning to capital expenditures, long term, we continue to target spending in the range of 2% to 3% of revenue. Given our robust revenue growth trends, capital expenditures for fiscal 2027 will likely fall toward the upper end of that range. We remain committed to deploying capital diligently and are pleased with the very strong returns our investments in capabilities, capacity, and technology are generating.
As a result of these factors and the timing of our working capital investments, we are forecasting a use of free cash flow in the fiscal first quarter, including the annual payments for our incentive compensation program. For fiscal 2027, we still expect to generate in excess of $100 million of free cash flow, benefiting from our sustained robust profitability and our focus on working capital efficiency. With that, Jen, let’s open the call for questions.
OPERATOR
Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.
Your first question comes from the line of David Williams with Needham and Company. Your line is open. Please go ahead.
Patrick Muth (Analyst)
Hi, good morning, this is Patrick Muth on for David Williams at Needham. Thank you for taking my question and congrats on the quarter. To jump right into it, how much of the demand acceleration reflects customer forecast increases versus pulling orders forward to secure capacity or components? And are you guys seeing forecasts revised upwards that may give you more confidence in the durability of demand? Thank you.
Todd Kelsey (President and Chief Executive Officer)
Yeah, good morning. I would say that customer demand increases is forming a substantial part of our outlook and the increase that you saw in outlook relative to last quarter. And then relative to our ability to pull in materials, you know, you saw the results from Q4. Certainly from a materials perspective, we consider the environment to be challenged. We’re always working the angle here to help support our customers: close partnership with our customers, a number of tools we have in place to help ensure that we can capture those materials.
I can go into more detail there if you’d like, but in general I think our assessment of risk associated with materials is already contemplated in the forecast.
Patrick Muth (Analyst)
Okay, great. Thank you for that. And then maybe quickly as a follow-up, in semi cap, how much of that growth is driven by increase in demand on existing programs versus new customer programs, or is that also coming from share gains? And if the demand in the wafer fabrication equipment environment moderates, how quickly will that flow through to your business? Thank you and congrats again.
Todd Kelsey (President and Chief Executive Officer)
Yeah, thanks again, Patrick. This is Todd. This time within semi cap, there’s a number of factors that are driving our revenue growth there. There certainly is increasing end market demand, but we took a significant amount of share, particularly through the last downturn within the semi cap market, and that’s coming to bear right now. We also continue to take some additional share as we’re going through this upcycle because of our ability to be able to outperform.
And if you take a look at our results, as Oliver mentioned, for the fiscal year, we’re up about 50% within the semi cap space, way above WFE. And we expect we’ll continue to do that as we go through fiscal 2027.
Sean Harrison (Vice President of Investor Relations)
And I think to the downturn question, Patrick, this is Sean Harrison. The surprising thing is typically we take more share during the downturn, as Todd mentioned, and you see less share gains during an upturn as customers are just looking to secure demand and fulfill demand. And so the fact that we’re taking share during an upturn is a positive sign. And we would expect, as we’ve seen in last cycles, to be able to outperform the market because of the share capture we generate.
Patrick Muth (Analyst)
Okay, great. Thank you for that.
Sean Harrison (Vice President of Investor Relations)
Thanks, Patrick.
OPERATOR
Your next question comes from the line of Steve Barger with KeyBanc Capital Markets. Your line is open. Please go ahead.
Steve Barger (Analyst)
Hi. Thanks. Good morning. I wanted to start with free cash flow. You expect $100 million in FY27 despite raising revenue to the mid to upper teens. If demand exceeds that outlook again, does free cash flow necessarily decline because of working cap, or are you seeing customer funding and operating efficiency that kind of changes that relationship and you can maintain that level on revenue upside?
David Abuhl (SVP & Chief Financial Officer)
Hi Steve, this is David. Good morning. We’re pleased with the outlook at the moment. And if you looked at the delivery on cash cycle days and we ended at a record low, our teams are really performing well in terms of the efficiency of the capital investments we’re making in working capital. And we usually say we need about 15 to 20 cents of working capital for revenue growth, and we’re right in that maybe 17% range. In fact, we’ve added nearly $1.5 billion of revenue growth in the last year on an annualized basis, but we’ve added $250 million of working capital to support that.
And so as we go through the year, we’re confident in generating that $100 million of free cash flow. And let’s see how we do as we re-rate the year, but so far so good. And I think we’re pretty confident in this business generating great free cash flow this year.
Todd Kelsey (President and Chief Executive Officer)
And Steve and Sean, just to follow up on that, we and the team are very diligent in trying to offset investments in working capital with corresponding commensurate investments by our customers in that inventory to make sure that we’re continuing to hit these record-low cash cycle days, which, as David said, is the best we’ve seen on record. So it was a fantastic result.
Steve Barger (Analyst)
Yeah. And it’s a good, good outcome. And just thinking about the operating margin goal of 6.5% to 7%, can you frame up what brings you to the low versus the high end? Is it mix versus leverage, or Penang maturation, or just what are the swing factors that you see in that range?
David Abuhl (SVP & Chief Financial Officer)
Yeah, Steve, on these targets we like to consistently exceed but then progress through these targets. We have a track record of doing that with the last couple that we’ve set. And in the moment you’ll see our flow-through rate; we’ve stated 8% to 12% flow-through on revenue growth. And at the moment we’re tracking toward the lower end of that given the investments we’re making to support accelerating revenue momentum. And so as you model in that flow-through rate, I think that will get you a pretty good balance of what we think margins will look like for the quarter, for the year, etc. But our teams are really working hard to consistently meet this next target and then progress through it.
I’d say that the growth elements are there. The up elevators, as I like to call them, on margin are strong in terms of leverage on revenue growth. The operational efficiency gains are really coming through strong as well. And then we just need to balance that with the investments needed for the kind of the next chapter of growth that’s ahead of us. But overall it’s upward momentum for us and we’d like to progress through this target. So I’d say to answer that, watch that 8% to 12% kind of closely, as the investments are the balancing factor there.
Steve Barger (Analyst)
Got it. Thank you.
Sean Harrison (Vice President of Investor Relations)
Thanks for the question.
OPERATOR
A reminder, if you would like to ask a question, please press star-1 on your telephone. To withdraw your question, please press star-1 again. Your next question comes from the line of Melissa Fairbanks with Raymond James. Your line is open. Please go ahead.
Melissa Fairbanks (Analyst)
Hey, guys. Good morning. I would wish you congratulations on the Brewers’ win last night, but I’m still a little bit sore as a Rays fan. So, anyway, congratulations on a great quarter. I have a question probably for Oliver. Looking into the aerospace and defense, some of these new wins—I think a quarter or a couple of quarters ago, some of the commentary had been that you haven’t yet seen an uptick in NATO spending. Wondering what some of the dynamics are there—if these are new spending, understanding that these are very long term, but if these are new spending programs or if this is just an extension of newer technologies that are moving into this space.
Oliver Mihm (Executive Vice President and Chief Operating Officer)
Good morning, Melissa. Yeah, I’ll say it’s a bit of both. So we do see that defense spending flowing through to an extent. But then as we noted, some of the technology wins here that we had recently in this past quarter—also seeing new technology, new entrants. One of the things that we like is our engagement with new primes. I’ll say within this space, we think that’s a really good fit and a tailwind as we look forward here. And then I’ll put that also over to Europe and say from an EU side, still early days and still seeing a potential tailwind as we look forward from an EU perspective.
And we think we’re well positioned there as well.
Melissa Fairbanks (Analyst)
Okay, perfect. And maybe I’ll kind of stretch that same question into the healthcare life sciences business. We know that historically you guys have had really strong engagements on the imaging and the diagnostics and surgical side. It sounds as though you may be extending into newer types of engagements. Wondering if you could comment there.
Oliver Mihm (Executive Vice President and Chief Operating Officer)
Yeah, a couple things there. I think our optimism, our confidence in our growth outlook here certainly stems from coming off a really strong 26 to 19%, well ahead of market, which we think is mid-single digits. As you noted, the strength in therapeutics and monitoring underscores that. And so that’s kind of maybe your point about we’ve historically seen—certainly seeing now—our engagement with secular growth technology. So, like robotic surgical, like pulse field ablation. I think those things give us further optimism here as we look forward into the coming year. Yeah. One other comment I’ll make, which isn’t directly related to your question but I think provides us some optimism on future tailwinds, is historically, our engineering development work has been a bit of a leading indicator for us, and our funnel inside engineering for healthcare life sciences took a marked uptick in Q4.
So that gives us also some optimism here in terms of future outlook.
Melissa Fairbanks (Analyst)
Excellent. Okay, great. Thanks so much, guys.
Sean Harrison (Vice President of Investor Relations)
Thanks, Melissa.
OPERATOR
Your next question comes from the line of Anya Soderstrom with Sidoti. Your line is open. Please go ahead.
Anya Soderstrom (Analyst)
Hi, and thank you for taking my questions, and congratulations on the great quarter here on the air. Just curious, in the aerospace and defense—first of all, the commercial airspace, commercial air—what are you seeing there?
Oliver Mihm (Executive Vice President and Chief Operating Officer)
Yeah, we’re seeing slightly incremental demand improvements in commercial aerospace. I think it still hasn’t hit the levels that we think it’s capable of once we see the Boeing demand flow all the way through to us.
Anya Soderstrom (Analyst)
And is that included in your guidance now, or the more meaningful comeback there, or—
Oliver Mihm (Executive Vice President and Chief Operating Officer)
No, no, it’s not. We’re still taking a conservative approach on when that happens and to what level it happens.
Anya Soderstrom (Analyst)
Okay, thank you. And then within space, are you exposed—do you have an exposure to the LEOs at all, or—
Oliver Mihm (Executive Vice President and Chief Operating Officer)
Yeah. So, Anya, in space we, as we like to say, have more electronics on orbit than any other EMS provider, and probably by a considerable amount. We play strongly in LEO satellites and communication systems. And so, you know, unmatched quality and delivery is paramount in generating success in that market. And so, very strong position and would anticipate seeing strong growth as that market continues to expand.
Anya Soderstrom (Analyst)
Okay, thank you. And then within semi-cap, where do you think we are there now in the cycle? What are you seeing? What kind of visibility do you have in the coming quarters or years?
Oliver Mihm (Executive Vice President and Chief Operating Officer)
Yeah, I guess I’ll start by saying we talked on the call in our prepared remarks about our growth here in the past fiscal year being 50%. As we contemplate the calendar year, which will be coming up here at the end of this quarter, we expect that growth rate to be even stronger. And so our demand continues to show improvement. I mentioned that here for the current quarter outlook, we continue to see strength of demand. So generally, I would say still strong and still growing.
David Abuhl (SVP & Chief Financial Officer)
Yeah, we probably have—I mean, I would say we have reasonable visibility for the next year or so within the pipeline of our customers.
Todd Kelsey (President and Chief Executive Officer)
And, Anya, I would say that visibility came into view probably a little bit earlier than normal. We talked about that last quarter, which gave us some of the confidence in providing an early fiscal year view back in July. I know some of the industry forecasts are strengthening throughout years. Being conservative as we are, we also understand that semi-cap is cyclical, and so just taking a cautious approach of how that market will sustain the growth, but also very focused in on capturing the market share which drives our outgrowth.
Anya Soderstrom (Analyst)
Okay, thank you. And then have you seen any changes to the competitive environment at all?
Oliver Mihm (Executive Vice President and Chief Operating Officer)
Not really, no. It’s pretty similar.
Anya Soderstrom (Analyst)
Okay, thank you. That was all for me.
OPERATOR
Your next question comes from the line of David Williams with Needham. Your line is open. Please go ahead.
David Williams (Analyst)
Hey, good morning everyone. Thanks for taking my follow-ups here and certainly appreciate it. Congrats on the really solid results.
Sean Harrison (Vice President of Investor Relations)
Thank you. Thanks. David,
David Williams (Analyst)
Just quickly wanted to ask maybe on the semi-cap visibility—and I think you touched on this a bit earlier—but one of your competitors, or maybe another peer, had mentioned that the demand forecasts are certainly firming and they’re seeing forecasts out to 2029 and 2030. Do you think that, I mean, is it fair to say you’re probably seeing the same things and that that demand is fairly sustainable? And, you know, it’s always cyclical and I think Sean, you talked about that earlier, but just kind of curious what you’re seeing from that demand environment.
It feels like those elongated forecasts are getting maybe more prevalent.
Todd Kelsey (President and Chief Executive Officer)
Yeah, the demand environment’s good, but I think to project out several years would probably be a little bit too far at this point. I would say we feel comfortable with fiscal ’27, but I wouldn’t want to look out any further than that.
Sean Harrison (Vice President of Investor Relations)
We’ve seen the industry forecast strength, as everybody has, in terms of the third-party forecasters. I would just go back to the earlier statement that we take a conservative approach in understanding a market that historically has had some cyclicality. That makes sense.
David Williams (Analyst)
And I think that’s very fair. Then maybe secondly, just maybe across the customer base, is there a way to maybe disaggregate the revenue by maybe customers that are increasing their demand forecasts or existing programs versus maybe how much of the demand or the growth that you’re seeing is coming from new programs?
Oliver Mihm (Executive Vice President and Chief Operating Officer)
Yeah, I’ll give that a shot, David. Broadly, especially given the strength of our outlook here on the fiscal year, customers are strengthening their forecast. We gave some specific commentary that we’re seeing uplift there in the healthcare life sciences. That was a bit of a turning of a corner for us and we are seeing an improvement—maybe a better word choice. And then within industrial and aerospace that’s generally been strong. Obviously there’s always puts and takes, but I would say that net-net quite strong in terms of supporting our outlook here for fiscal ’27.
David Williams (Analyst)
Fantastic. Thanks so much for the help.
Sean Harrison (Vice President of Investor Relations)
Thank you.
OPERATOR
Our next question comes from the line of Steve Barger with KeyBanc Capital Markets. Your line is open. Please go ahead.
Steve Barger (Analyst)
Hey, thanks for the follow-up. Just wanted to ask about the top 10 customers. I think that increased from 49% in fiscal ’25 to 56% in fiscal 4Q26. And I get it, you’re seeing some really significant ramps from large programs. But when you look at the funnel, are you becoming structurally more concentrated as you scale, or how should we think about that?
David Abuhl (SVP & Chief Financial Officer)
I would say in general, Steve, the answer is no. The 56% is kind of a historical number that we’ve had if you go back over time, and 49% is a little bit on the low side. But we did get some pretty good growth from our top 10 customers this year. So we’re certainly aware of that and appreciative of that from our customers.
Steve Barger (Analyst)
Got it. Okay. And then last one, can you give us an update on some of the AI investments or the productivity initiatives and how you’re thinking about increasing revenue per square foot in North America versus Europe versus Asia? Just any update operationally on how you’re getting more throughput through the plants?
Oliver Mihm (Executive Vice President and Chief Operating Officer)
Yeah, sure. Happy to handle that or talk to that. So I’d like to provide a couple of examples, because I think it makes it very poignant for folks, right. So just as an example, one of the tools that we have internally that we call Excellence Guide is a tool that enables operator efficiency, agility, and quality, and enables us to turn over the line quickly as we move from one assembly to the next. And our deployment on that front saw 110% pick-up year over year.
So those are the kinds of things that we’re doing to drive efficiency. We talk about specific outcomes to that. For instance, revenue per employee up 25% if you compare Q4 fiscal ’24 to Q4 fiscal ’26. And so those are the types of activities that are driving both to improve our labor efficiency, our labor output, as well as driving improvement from an, I’ll say, asset utilization, whether that’s bricks and mortar or machine capacity. We’ve talked historically about, from a machine capacity perspective over that same time period, a 12% increase in how we’re utilizing those machines and getting more efficiency out of the capital.
Well, there’s certainly still sizable opportunity in front of us. So we continue to focus on this. This isn’t a thing that we did last year and we’re done. I would say that it’s fairly consistent across the organization. But, as you can imagine, there are things that we pilot in one organization and then we propagate that more globally. And so, by way of example, there, we use AI to automate the procurement of low POs to our suppliers. We’re currently handling about 80% of our receipts through that AI agent. That started in the AMER region and is now deploying out into our Asia Pacific and EMEA region. And what that enables us to do, it enables our procurement folks to instead work on closing the gaps, find the material, secure the parts for challenging dynamics, and hit the upside for our customers and potentially help them to capture share gain.
Does that help answer that?
OPERATOR
There are no further questions at this time. I will now turn the call back to Todd Kelsey for closing remarks.
Todd Kelsey (President and Chief Executive Officer)
Thank you, Jen. In closing, thank you to our Plexus Global team for their passion and leadership in delivering a fantastic fiscal 2026. Additionally, thank you to our customers for their partnership as we help create the products that build a better world. I’m excited for fiscal 2027 and the positive momentum created by our team. I expect they’ll generate a fantastic performance in fiscal 2027 and I look forward to speaking with everyone early next year.
Thank you to all who joined our call today. Have a nice day.
OPERATOR
This concludes today’s call. Thank you for attending. You may now disconnect.
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