Flex (NASDAQ: FLEX) executives announced plans for a spin-off, referred to as “SpinCo,” during a J.P. Morgan fireside chat, targeting sectors related to data center power, cooling, and electrical infrastructure. CEO Revathi Advaithi emphasized that this move is driven by the distinct capital requirements of the company’s CPI segment, projecting growth rates of 65% to 75% in fiscal 2027 and 80% or more in fiscal 2028, with approximately 90% of fiscal 2027 revenue already booked.
SpinCo is expected to focus on integrated solutions for hyperscalers and colocation providers, leveraging existing investments in thermal architecture emerging before the AI surge. Flex anticipates high demand for these solutions, with its power business expected to grow at rates above CPI growth by 75% or more in fiscal 2027. The remaining Flex entity will maintain over $22 billion in revenue, diversifying into sectors like healthcare, automotive, and robotics.
Flex’s peak capital investment is expected to hit $1.4 billion to $1.6 billion in fiscal 2027, significantly above the typical 2% revenue benchmark. Executives highlighted this investment as essential to secure power, capacity, and cooling infrastructure to support awarded business, primarily within the CPI segment.
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