Slides
Page 1
Benchmark Electronics Fourth Quarter and Fiscal Year 2025 Results February 3rd, 2026
Page 2
| 2 | 2 Forward-Looking Statements This document contains forward-looking state ments within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts and may incl ude words such as “anticipate,” “believe,” “intend,” “plan,” “project,” “forecast,” “strategy,” “position,” “continue,” “estimate,” “expect,” “may,” “will,” “could,” “predict,” and similar expressions of the negative or other variations thereof. In particular, statements, expressed or implied, concerning th e Company’s outlook and guidance for first quarter and fiscal year 2026 results, future operating resul ts or margins, the ability to generate sales and income or cash flow, expected revenue mix, the Company’s business strategy and strategic initiatives, the Company’s repurchases of shares of its common stock, regarding enterprise AI opportunities, anticipated growth in bookings, the Company’s expectations regarding restructuring charges, stock-based compensation expense, amortization of intangibles, capital expenditures, and the Company’s intentions concerning the payment of dividends, among others, are forward-looking statements. Although the Company believes thes e statements are based on and derived from reasonable assumptions, they involve risks, uncer tainties and assumptions that are beyond the Company’s ability to control or predict, relating to operations, markets and the business environment generally, including those discussed under Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and in any of the Company’s subsequent reports filed with the Securities and Exchange Commission. Events relating to the possibility of customer demand fluc tuations, supply chain constrai nts, continuing inflationary pressures, the effects of foreign currency fluct uations and high interest rates, the potential of another U.S. government shutdown and the economic impacts, volatilit y and uncertainty resulting therefrom, geopolitical uncertainti es including continuing hostilities and tensions, trade restrictions and sanctions, tariffs and retaliatory countermeasures, the ability to utilize the Company’s manufacturing facilities at sufficient levels to cover its fixed operating costs, or write-downs or write- offs of obsolete or unsold inventory, may have resulting impacts on the Company’s business, financial condition, results of operations, and the Company’s ability (or inability) to execute on its plans. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes, including the future results of the Company’s operations, may vary materially from those indic ated. Undue reliance should not be placed on any forward-looking statements. Forward-lookin g statements are not guarantees of performance. All forward-looking statements included in this doc ument are based upon information available to the Company as of the date of this document, and the Company assumes no obligation to update. Non-GAAP Financial Information Management discloses certain non-GAAP information to provide investors with additional information to analyze the Company’s performance and underlying trends. These non-GAAP financial measures exclude restructuring charges, stock-based compensation expense, amortization of intangible assets acquired in business combinations, certain legal and other settlement losses (gains), customer insolvency losses (recoveries), asset impairments, other significant non-recurring costs and the related tax impacts, including discrete tax items, and other non-GAAP tax adjustments, of all of the above. A detailed reconciliation between GAAP results and results excluding certain items (“non-GAAP”) is included in the following tables attached to this document. In situations where a non-GAAP reconciliation has not been provided, the Company was unable to provide such a reconciliation without unreasonable effort due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the non-GAAP adjustments may be recognized. Management uses non-GAAP measures that exclude certain items in order to better assess operating performance and help investors compare results with our previous guidance. This document also references “free cash flow”, a non-GAAP measure, which the Company defines as cash flow from operations less additions to property, plant and equipment and purchased software. The Company’s non-GAAP information is not necessarily comparable to the non-GAAP information used by other companies. Non-GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as a measure of the Company’s profitability or liquidity. Readers should consider the types of events and transactions for which adjustments have been made. Immaterial Correction of an Error During the fourth quarter of fiscal 2025, we identified immaterial errors related to our income tax calculation. We evaluated the effects of these errors and concluded that they were not material to any previously issued annual or interim financial statements. Accordingly, prior year amounts presented herein for 2024 have been adjusted to correct the immaterial error, which as of December 31, 2024 and for the year then ended (i) understated income tax expense by $2.2 million, income tax receivable by $2.2 million, current taxes payable by less than $0.1 million, deferred tax liabilities by $3.7 million, and (ii) overstated deferred tax assets by $7.2 million and shareholder’s equity by $8.7M.
Page 3
Today’s Speakers Bryan Schumaker EVP and Chief Financial Officer Jeff Benck Chief Executive Officer David Moezidis President
Page 4
| 4 Fourth Quarter 2025 Overview GAAP AND NON- GAAP REVENUE $704M NON-GAAP GROSS MARGIN 10.6% NON-GAAP EPS $0.71 NON-GAAP OPERATING MARGIN 5.5% HIGHLIGHTS • Strong year-over-year revenue performance led by double-digit growth in AC&C, Medical and A&D • Continued to deliver gross margin at or above 10% • Sequential operating margin expansion of 70 basis points equaled a multi-year high • Earnings per share grew over twice the rate of revenue, exceeding prior guidance range * See APPENDIX 1 for a reconciliation of GAAP to non-GAAP Financial Results
Page 5
| 5 Fiscal Year 2025 Overview GAAP AND NON- GAAP REVENUE $2,659M NON-GAAP GROSS MARGIN 10.2% NON-GAAP EPS $2.40 NON-GAAP OPERATING MARGIN 4.9% HIGHLIGHTS • Returned to year-over-year growth in the 2nd half of the year • Delivered two consecutive years of greater than 10% gross margin • Drove sequential operating margin expansion each quarter during the year * See APPENDIX 1 for a reconciliation of GAAP to non-GAAP Financial Results
Page 6
| 6 Business Highlights Strategic focus continues to drive results • Well-balanced sector portfolio in growth markets • Driving improved revenue growth and delivering strong gross margin performance New business momentum • 2025 bookings strength across the enterprise • Increased conviction around 2026 revenue growth Financial discipline remains at the forefront • Inventory turns continue to improve with cash cycles at multi-year record • Generated $48M of Free Cash Flow in the quarter and $85M in the year Continuing to invest in growth • Global PT and cleanroom investments well-timed for Semi-Cap recovery cycle • US-based liquid cooling infrastructure supports AI opportunities
Page 7
| 7 Financial Results (Non-GAAP) THREE MONTHS ENDED December 31 2025 THREE MONTHS ENDED September 30 2025 THREE MONTHS ENDED December 31 2024 ($ MILLIONS) $704$681$657Revenue 10.6%10.1%10.4%Gross Margin 5.5%4.8%5.1%Operating Margin 25.4%24.5%22.4%Effective Tax Rate $0.71$0.62$0.61EPS * See APPENDIX 1 for a reconciliation of GAAP to non-GAAP Financial Results
Page 8
| 8 Financial Results (Non-GAAP) TWELVE MONTHS ENDED December 31 2025 TWELVE MONTHS ENDED December 31 2024 ($ MILLIONS) $2,659$2,656Revenue 10.2%10.2%Gross Margin 4.9%5.1%Operating Margin 24.8%23.5%Effective Tax Rate $2.40$2.29EPS * See APPENDIX 1 for a reconciliation of GAAP to non-GAAP Financial Results
Page 9
| 9 Fourth Quarter 2025 Sector Performance 21% 24% 20% 15% 20% $704 MILLION Sales $MM Q/QSector Mix Semi-Cap $171 (8%) Industrial (6%)$144 Aerospace & Defense $137 7% Medical $144 14% AC&C $108 22%
Page 10
| 10 Fiscal Year 2025 Sector Performance 18% 28% 19% 13% 22% Sales $MM Y/YSector Mix Semi-Cap $741 2% Industrial 0%$575 Aerospace & Defense $514 19% Medical $484 7% AC&C $345 (27%) $2,659 MILLION
Page 11
| 11 Trended Non-GAAP Results (Dollars in Millions, except EPS) * See APPENDIX 1 for a reconciliation of GAAP to non-GAAP Financial Results
Page 12
| 12 Balance Sheet and Cash Flow Update Q4-25Debt Structure (In Millions) $148Senior Secured Term Loan $65Revolving Credit Facility Drawn Amount $481Borrowing Capacity Available under Revolver 0.01xLeverage Ratio (2) FY 2025FY 2024Q4-25Q3-25Q4-24(In Millions) $124$189$59$37$46Cash Flows from Operations $85$156$48$25$37Free Cash Flow (1) $27$5$1$10$0Share Repurchases $322$328$322$286$328Cash (1) Free Cash Flow (FCF), a non-GAAP measure, is defined as net cash provided by (used in) operations less capex (2) Leverage ratio is Net Debt / LTM Adjusted EBITDA, as defined in the credit facility, which is a non-GAAP measure • Focus on working capital management supported achieving Free Cash Flow objective • Balance sheet remains strong, with net cash above $110 million • Repurchased $27 million in stock during the year, offsetting annual dilution • Continued to support the quarterly dividend, including $6 million paid in the quarter and $24 million for the full year
Page 13
| 13 Working Capital Trends Q4-25Q3-25Q2-25Q1-25Q4-24 5050525357Accounts Receivable Days 2326252523Contract Asset Days 6975838985Inventory Days (58)(56)(55)(61)(54)Accounts Payable Days (17)(18)(20)(20)(22)Advance Payments from Customers Days 6777858689Cash Conversion Cycle Days
Page 14
| 14 First Quarter 2026 Guidance Q1-26E $655M to $695MNet Sales 10.0% to 10.4%Gross Margin – non-GAAP 4.7% to 4.9%Operating Margin – non-GAAP ~$4.7MInterest and Other Expenses, Net $5.1M to $5.5MNon-operating Expenses ~$5.4MStock-Based Compensation Expense 26% to 27%Effective Tax Rate $0.31 to $0.37Diluted EPS – GAAP $0.53 to $0.59Diluted EPS – non-GAAP ~36.3MDiluted Weighted-Average Shares
Page 15
| 15 Sector Outlook Semi-Cap • Increased confidence in WFE market improvement in 2026 • New building in Penang supports 2025 bookings momentum • Expecting improved Y/Y performance throughout the year Industrial • Expect to return to Y/Y growth in 2026 supported by existing program ramps • Transportation, HVAC and automation showing strength • Improved global macro could bolster performance • Sector momentum expected to continue into 1H:26 • Led by ramp of announced Enterprise AI- program wins Advanced Computing & Communications • Demand has steadily improved through 2H:25 driven by end-market strength and new program ramps • Expecting continued momentum in 2026 • 2025 MedTech bookings support longer- term revenue growth Medical • Commercial air expected to remain stable • Program timing may moderate defense growth near-term after years of double-digit performance • Broad-based momentum in space applications improves long-term outlook Aerospace & Defense
Page 16
| 16 Summary 1. Business Momentum in 2025 Shapes Future Growth Potential • Solid year of bookings with both new and existing customers • End-markets within Medical and Semi-Cap appear to be improving into 2026 • Space, MedTech and AI-related computing opportunities are promising • Industrial positioned for return to growth in the back half of the year 2. Operational Execution Continues to be a Top Priority • Potential leverage from operating efficiencies implemented in 2025 as revenue grows • Ongoing working capital discipline and net income growth help drive full year Free Cash Flow generation while continuing to invest in our growth • Longer-term potential to structurally improve tax rate 3. Disciplined Capital Allocation • Supporting our regular quarterly dividend while offsetting dilution with share repurchases • Reduced revolving debt by $70 million Y/Y with year-end net cash of $111 million • Increasing capital investment to support new wins
Page 17
| 17 Appendix
Page 18
| 18 APPENDIX 1 – Reconciliation of GAAP to Non-GAAP (Dollars in thousands, except per share data – Unaudited) Dec 31, Mar 31, June 30, Sep 30, Dec 31, 2024 2025 2025 2025 2025 2024 2025 Income from operations (GAAP) 28,524$ 11,759 $ 20,486 $ 23,661 $ 20,143 $ 109,411 $ 76,049 $ Restructuring charges and other costs 727 1,342 1,939 1,211 2,952 6,336 7,444 Stock-based compensation expense 2,626 4,397 5,335 5,345 2,121 13,366 17,198 Amortization of intangible assets 1,204 1,204 1,204 1,205 1,204 4,817 4,817 Asset impairments — — — — 11,102 — 11,102 Legal and other settlement loss (1) 239 10,275 799 816 1,174 1,778 13,064 Other — — 311 357 60 — 728 Customer insolvency (recovery) — — — — — ( 3 1 6 ) — Non-GAAP income from operations 33,320$ 28,977 $ 30,074 $ 32,595 $ 38,756 $ 135,392 $ 130,402 $ GAAP operating margin 4.3% 1.9% 3.2% 3.5% 2.9% 4.1% 2.9% Non-GAAP operating margin 5.1% 4.6% 4.7% 4.8% 5.5% 5.1% 4.9% Gross profit (GAAP) 67,925$ 63,180 $ 64,772 $ 67,943 $ 74,169 $ 270,024 $ 270,064 $ Stock-based compensation expense 503 431 514 515 498 1,668 1,958 Customer insolvency (recovery) — — — — — ( 3 1 6 ) — Non-GAAP gross profit 68,428$ 63,611 $ 65,286 $ 68,458 $ 74,667 $ 271,376 $ 272,022 $ GAAP gross margin 10.3% 10.0% 10.1% 10.0% 10.5% 10.2% 10.2% Non-GAAP gross ma rgin 10.4% 10.1% 10.2% 10.1% 10.6% 10.2% 10.2% Selling, general and administrative expenses 37,470$ 38,800 $ 40,569 $ 41,520 $ 38,769 $ 149,460 $ 159,658 $ Stock-based compensation expense (2,123) (3,966) (4,821) (4,830) (1,623) (11,698) (15,240) Legal and other settlement loss (1) (239) (200) (225) (471) (1,173) (1,778) (2,069) Other — — (311) (357) (60) — (728) Non-GAAP selling, general and administrative expenses 35,108$ 34,634 $ 35,212 $ 35,862 $ 35,913 $ 135,984 $ 141,621 $ Net income (GAAP) 16,222$ 3,644 $ 972 $ 14,263$ 5,973 $ 61,126 $ 24,852 $ Restructuring charges and other costs 727 1,342 1,939 1,211 2,952 6,336 7,444 Stock-based compensation expense 2,626 4,397 5,335 5,345 2,121 13,366 17,198 Amortization of intangible assets 1,204 1,204 1,204 1,205 1,204 4,817 4,817 Asset impairments — — — — 11,102 — 11,102 Legal and other settlement loss (1) 239 10,275 799 816 1,174 1,778 13,064 Refinancing of Credit Facilities — — 2 2 4 — — — 2 2 4 Other — — 311 357 60 — 728 Customer insolvency (recovery) — — — — — ( 3 1 6 ) — Income tax adjustments (2) 1,230 (1,645) 9,208 (905) 1,182 (3,006) 7,840 Non-GAAP net income 22,248$ 19,217 $ 19,992 $ 22,292 $ 25,768 $ 84,101 $ 87,269 $ Diluted earnings per share: Diluted (GAAP) 0.44$ 0.10 $ 0.03 $ 0.39 $ 0.17 $ 1.66 $ 0.68 $ Diluted (Non-GAAP) 0.61$ 0.52 $ 0.55 $ 0.62 $ 0.71 $ 2.29 $ 2.40 $ Weighted-average number of shares used in calculating diluted earnings per share: Diluted (GAAP) 36,659 36,605 36,258 36,182 36,193 36,759 36,300 Diluted (Non-GAAP) 36,659 36,605 36,258 36,182 36,193 36,759 36,300 Net cash provided by operations 45,916$ 31,503 $ (2,823) $ 36,608 $ 58,676 $ 189,225 $ 123,964 $ Additions to property, plant and equipment and software (9,032) (4,156) (12,304) (11,494) (10,590) (33,253) (38,544) Free cash flow 36,884$ 27,347 $ (15,127) $ 25,114 $ 48,086 $ 155,972 $ 85,420 $ (1) Includes settlement of the tax asses sment in Mexico that was previously disclosed under Note 15 in Part II, Item 8 of the Comp any’s Annual Report on Form 10-K for the year ended December 31, 2024. (2) This amount re prese nts the tax im pact of the non-GA A P adjustme nts, including discre te tax item s, using the applicable e ffe ctive tax rates. For the three months and year ended December 31, 2025, $4.7 m illion and $16.0 m illion, res pectively, in discrete tax charges relating to tax impacts that are non-recurring, event-dri ven, or attributable to prior pe ri ods, and not refl ecti ve of the Company’s current-year operati ng performance. Three Months Ended Year Ended Dec 31,