AUSTIN - Flex (NASDAQ: NASDAQ:FLEX), a global manufacturing partner, announced the acquisition of FreeFlow, a specialist in asset disposition and digital circular economy tracking for secondary markets. This move, revealed today, is intended to enhance Flex's product lifecycle services and promote sustainability by enabling the sale of surplus and returned inventory through FreeFlow's B2B digital marketplace, while safeguarding primary sales channels.
FreeFlow's platform complements Flex's existing services, which span from design and supply chain management to advanced manufacturing and post-sale solutions like repair, refurbishment, and recycling. With this acquisition, Flex aims to offer its customers, ranging from cloud services to lifestyle brands, the opportunity to generate additional revenue and support environmental commitments by extending the life of their products.
Michael Hartung, president of Agility Solutions at Flex, stated, "The acquisition of FreeFlow reaffirms Flex's commitment to deliver the highest value to our customers, addressing their evolving business and sustainability needs across the product lifecycle while increasing our addressable market."
FreeFlow has been enhancing profitability for over 20 years by allowing clients to manage their surplus and returned goods effectively. The company's independently-hosted digital platform has recently been upgraded to include circular economy tracking and reporting features, which provide valuable insights into product manufacturing, reuse, and recycling, as well as the associated carbon impact.
Flex plans to broaden the reach of FreeFlow's services into additional industry segments and regions, helping more customers gain secure access to secondary markets and adopt sustainable solutions more rapidly.
This strategic acquisition is part of Flex's larger effort to meet the growing demand for circular economy solutions and to support its diverse customer base in creating products that contribute positively to the world. The information is based on a press release statement.
In other recent news, Flex has reported its Q4 and fiscal year 2024 results, revealing a resilient growth despite a dip in revenue. The company's Q4 revenue was $6.2 billion, a 12% year-over-year decrease, and the full-year revenue was $26.4 billion, a 7% drop. However, profitability metrics such as gross profit, operating income, and earnings per share (EPS) showed an increase. The gross profit for the quarter improved to $532 million, and for the year, it reached $2.1 billion. Operating income rose by 3% to $1.3 billion, and EPS saw an 11% increase to $2.15.
These developments come in the wake of Flex's strategic focus on digitization, regionalization, and sustainability, as well as its differentiation in power and compute. The company's outlook for fiscal 2025 includes a prediction of flat to 3% decline in revenue, with adjusted operating margins between 5.2% and 5.4%, and an adjusted EPS between $2.30 and $2.50.
Flex also reported significant share buybacks in fiscal year 2024, totaling $1.3 billion. The company expects its power and compute-based revenue to account for 40% of total revenue by 2029, with significant growth in the cloud business. Flex's strong financial performance and optimistic outlook for the power and compute sectors signal resilience and potential for future growth.
The company's CEO, Revathi Advaithi, discussed the Flex Forward strategy, aiming for mid-single-digit revenue growth and 20% EPS growth. Flex anticipates continued growth in the cloud business by around 20% per year for the next few years. The company has experienced strong demand and share gains, particularly in the cloud and automotive sectors.
InvestingPro Insights
In light of Flex's (NASDAQ: FLEX) recent acquisition of FreeFlow, a dive into the company's financial health and market performance can provide additional context for investors. InvestingPro data shows that Flex has a market capitalization of 13.57 billion USD, reflecting its significant presence in the Electronic Equipment, Instruments & Components industry. A key metric that stands out is the P/E ratio, currently at 14.72, which, when paired with the company's near-term earnings growth, indicates that Flex is trading at a low P/E ratio relative to its growth - a potentially attractive point for value investors.
Flex's aggressive approach to share buybacks, as highlighted in one of the InvestingPro Tips, suggests a management team that is confident in the company's value proposition and future prospects. Moreover, a high shareholder yield is often indicative of a company's commitment to returning value to its shareholders, which could be seen as a positive signal amidst the strategic expansion moves such as the FreeFlow acquisition.
However, it is worth noting that six analysts have revised their earnings downwards for the upcoming period, which could be a point of concern for potential investors. Additionally, the company does not pay dividends, which might influence the investment decisions for those seeking regular income from their investments.
Investors interested in a deeper analysis can find additional InvestingPro Tips for Flex, which can offer further insights into the company's financials and market position. There are a total of 17 additional tips available on InvestingPro, and users can take advantage of an exclusive offer by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.