FLEXFlex Ltd.

Our operations or systems have been, and could be in the future be, disrupted by natural disasters, terrorist activity, public health issues, cybersecurity incidents, interruptions of service from utilities,or utilities, or transportation or telecommunications providers, political crises and geopolitical conflicts, conflicts (including armed conflicts such as the Russia-Ukraine conflict, which resulted in a missile strike on our Mukachevo, Ukraine facility in August 2025, as described under "International Risks-Global economic conditions and geopolitical uncertainty have in the past adversely affected, and could in the future adversely affect, our business, results of operations, financial condition, and access to capital markets." below), physical attacks on our senior leadership and/or our office locations, or other unforeseen or catastrophic events.

If unauthorized parties gain physical access to our facilities, operations, assets, or inventory, or information or if they gain electronic access to our information systems systems, or if such facilities, operations, assets, inventory inventory, or information are used in an unauthorized manner, misdirected, or lost or stolen during transmission or transport, any theft or misuse of such operations, assets, inventory or information incident could result in, among other things, unfavorable publicity, loss of competitive advantage, governmental inquiry and oversight, difficulty in marketing and selling our products and services, increased security and compliance costs, significant costs related to rebuilding internal systems, higher insurance premiums, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties including our customers parties, and possible financial regulatory fines, penalties, fines or obligations for damages related to the theft or misuse of such assets, inventory or information, and damages, any of which could have a material adverse effect on our profitability and cash flows.

Problems suffered by any of these common carriers, whether due to geopolitical issues issues, such as due to the Russian invasion of conflicts in Ukraine and conflict in the Middle East, disruptions in the Strait of Hormuz and the Red Sea, including as a result of attacks on shipping vessels in the Red Sea, a vessels, natural disaster, disasters, labor problems, increased energy prices, criminal activity or some other issue, issues, have in the past resulted, and may could in the future result result, in shipping delays, increased costs, or other supply chain disruptions, and therefore have in the past had, and may in the future have, a material adverse effect on our operations. could

However, third Third parties could also seek to hold us responsible for any of the liabilities that Nextracker has agreed to retain, and there can be no assurance we cannot assure that the indemnity Nextracker's indemnification obligations will be sufficient to insure us against the full amount of such liabilities, or that Nextracker’s ability to Nextracker will satisfy its indemnification obligation will not be impaired in the future. obligations.

For example, the ongoing conflict between Russia and conflicts in Ukraine and the Middle East, including the conflict in Israel and recent U.S. military operations in Iran, and related international sanctions and other measures imposed by the European Union, the U.S. and other countries and organizations in response countermeasures have led, and may continue to lead, to disruption and instability in global markets, supply chains chains, and industries industries, that could negatively impact our business, financial condition condition, and results of operations.

Due to increasing global geopolitical tensions and conflicts, including involving China, the ongoing Russia/Ukraine conflict, conflicts in Ukraine and the Middle East, including the conflict in the Middle East, Israel and recent U.S. military operations in Iran, we and the third parties upon which we rely may be vulnerable to a currently heightened risk of information technology breaches, computer malware, ransomware or other cyber attacks, cyberattacks, including attacks retaliatory acts of cyberwarfare by state-sponsored actors that could materially disrupt our systems and operations, supply chain chain, and ability to provide our products and services.

Defects or deficiencies, whether in the products we manufacture or design, whether caused by a design, engineering, manufacturing manufacturing, or component failure or error, or deficiencies in our manufacturing processes, sourcing, have occurred from time to time and, have in the past resulted, and may could in the future result in delayed shipments to customers, shipments, reduced or canceled customer orders, or product or component failures. failures, and reputational damage.

Our supply chain has in the past been, and may could in the future be, impacted by other events outside our control, including macro-economic events, tariffs and trade restrictions, political crises, social unrest, terrorism, and geopolitical conflicts (including the Russian invasion conflicts in Ukraine and the Middle East, including the conflict in Israel, recent U.S. military operations in Iran, disruptions in the Strait of Ukraine, the Israel-Hamas war, the Hormuz, attacks on shipping vessels in the Red Sea Sea, and other geopolitical conflicts), regional tensions), public health emergencies, or natural or environmental occurrences in locations where we or our customers and suppliers have manufacturing, research, engineering and other operations.

They Threat actors may attempt seek to gain access to our networks, data centers centers, or cloud resources - resources, including those managed by third parties - parties, or those of our customers, vendors vendors, or end users; steal proprietary information related to our business, products, employees, and customers; or interrupt disrupt our systems, operations operations, services, or services products (including software and firmware embedded in our products), or those of our customers, vendors or others. third-party service providers.

If However, our hedging strategy may not fully mitigate the impacts of changes to foreign exchange rates, and if our hedging activities are not successful, if counterparties to these hedging activities default on their obligations to us, obligations, or if we change or reduce these hedging activities in the future, we may experience significant unexpected expenses or fluctuations in our operating results as a result of changes in exchange rates. results.

Our success depends to a large extent upon on our ability to hire attract, develop, motivate and retain a workforce with the skills necessary for our business, including qualified executives, management, engineering, manufacturing, information technology, cybersecurity, supply chain, and business to develop and manufacture the products desired by our customers. development personnel.

Our operations and the execution of our business plans and strategies are subject to the effects of global economic trends, geopolitical risks and demand or supply shocks arising from events that could may include political crises crises, regional conflicts and conflict (including the Russian invasion of Ukraine, the Israel-Hamas war, the attacks on shipping vessels in the Red Sea), war, a major wars, terrorist attack, attacks, natural disasters disasters, or actual or threatened public health emergencies.

Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that materially adversely affect our business.

The following is a summary of the principal risks and uncertainties that management believes could materially adversely affect our business, financial condition, results of operations and prospects.

A significant percentage of our sales come from a small number of customers and a decline in sales to any of our largest customers has in the past adversely affected, and may could in the future adversely affect, our business.

Our inability to make scheduled shipments has in the past caused, and may could in the future cause us to experience a reduction in sales, increase in inventory levels and costs, and could adversely affect relationships with existing and prospective customers.

Component shortages have in the past and may could in the future also increase our cost of goods sold because we may be required to pay higher prices for components in short supply and redesign or reconfigure products to accommodate substitute components.

Our customers also may could experience component shortages which may could adversely affect customer demand for our products and services.

Our end markets have in the past been, and may could in the future be, adversely impacted by logistical constraints and increased freight and logistics costs around the world.

Purchasing components early has in the past caused, and may could in the future, cause us to incur additional inventory carrying costs and cause us to experience inventory obsolescence, both of which may not be recoverable from our customers and adversely affect our gross profit margins and results of operations.

Our margins and profitability have in the past been, and may could in the future be, adversely affected due to substantial investments, start-up and production ramp costs in our design and engineering services.

The expansion of our business, as well as business contractions and other changes in our customers' requirements, have in the past required, and may could in the future require, that we adjust our business and cost structures by incurring restructuring charges.

All of these changes have in the past placed, and may could in the future place, considerable strain on our financial and management control systems and resources, including decision support, accounting management, information systems and facilities.

Any future acquisitions Acquisitions may require additional equity financing, which could be dilutive to our existing shareholders, or additional debt financing, which could increase our leverage and potentially affect our credit ratings.

Fiscal Year Ended March 31, 2026 2025 2024 Net sales 100.0 % 100.0% 100.0% Cost of sales 90.6 91.4 92.4 Restructuring charges 0.2 0.5 0.2 Gross profit 9.2 8.4 7.1 Selling, general and administrative expenses 3.8 3.5 3.5 Restructuring and impairment charges 0.3 0.1 Intangible amortization 0.2 0.3 0.3 Restructuring charges 0.1 0.1 Operating income 4.9 4.5 3.2 Interest expense 0.8 0.8 Interest income 0.2 0.2 Other charges (income), net 0.1 (0.1) 0.2 Equity in earnings (losses) of unconsolidated affiliates (0.1) — 0.1 Income from continuing operations before income taxes 4.1 4.0 2.5 Provision for (benefit from) income taxes 0.9 0.8 (0.8) Net income from continuing operations 3.2 3.3 Net income from discontinued operations, net of tax — 1.4 Net income 3.2 4.7 Net income attributable to noncontrolling interest and redeemable noncontrolling interest — 0.9 Net income attributable to Flex Ltd. 3.2 % 3.8% 3.2% 3.2%

Refer For further information, refer to "Risk Factors - Supply chain disruptions, logistical constraints, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, disruptions and demand forecasting failures have in the past adversely affected, and may could in the future adversely affect, our ability to meet customer demand, and lead to higher costs, or result in excess or obsolete inventory" inventory." and "- Global "—Global economic conditions, including inflationary pressures, currency volatility, stagflation, slower economic growth or recession, high or rising interest rates, trade conflicts, tariffs, conditions and geopolitical uncertainty and instability in financial markets have in the past adversely affected, and may could in the future adversely affect, our business, results of operations, financial condition, and access to capital markets."

Bank borrowings and long-term debt $ 3,706 3,768 $ 1,209 — $ 398 928 $ 709 1,384 $ 1,390 1,456 Interest on long-term debt obligations 642 146 242 174 80 827 177 292 178 180 Operating leases, net of subleases 670 158 232 146 134 811 175 281 179 176 Capital expenditures 286 257 29 — — Restructuring costs 51 51 63 63 — — — Total contractual obligations $ 5,069 5,755 $ 1,564 672 $ 872 1,530 $ 1,029 1,741 $ 1,604 1,812

Due to global economic conditions, including the impact of ongoing trade conflicts Hamas conflict, and tariffs, and geopolitical conflicts (including the Russian invasion of Ukraine and the Israel-Hamas war), recent U.S. military operations in Iran), there has been and we expect there will continue to be uncertainty and disruption in the global economy and financial markets.

Cost of sales in FAS our ITS segment decreased $45 million, less than 1%, $0.3 billion, or 3%, from fiscal year 2024 and cost of sales in FRS for fiscal year 2025 decreased $0.8 billion, or approximately 7%, from fiscal year 2024, as a result of decreased sales and favorable product mix.

Net sales in our FRS RMS segment decreased $0.8 $0.9 billion, or 6%, 8%, from fiscal year 2024, driven primarily by a decrease in net sales of 10% 17% in our Industrial business which was driven by weaker demand in renewables, clean energy and industrial devices partially offset by strong growth and the Crown acquisition in critical power offerings, devices, a 3% decrease in our Automotive business, and a 3% decrease in our Health Solution business, primarily driven by softening demand in medical equipment, partially offset by increased demand for medical devices.

On In February 13, 2023, our former subsidiary, Nextracker Nextracker, completed an initial public offering (the "IPO") of its Class A common stock and on July 3, 2023 completed followed by a follow-on offering in July 2023, after which we continued to the IPO. consolidate Nextracker as an operating segment.

Due to global economic conditions, including the impact of ongoing trade conflicts and tariffs, and geopolitical conflicts (including the Russian invasion of Ukraine and Ukraine, the Israel-Hamas war), there has been and we expect there will continue to be uncertainty and disruption in the global economy and financial markets. Israel-

Net sales for our FAS ITS segment increased decreased $0.2 billion, or 1%, 2%, from fiscal year 2024, 2025, mainly due to a 1% increase 9% decrease in our CEC Lifestyle business as strength demand weakened in cloud outweighed softer demand in non-cloud. consumer end markets.

This was primarily driven by $0.4 billion of cash paid for the acquisitions of the Orangeburg manufacturing facility, Crown and JetCool, net of cash acquired, and $0.4 $0.6 billion of capital expenditures for property and equipment to continue expanding capabilities and capacity in support of our businesses. business growth.

FRS RMS segment margin increased 50 by 10 basis points, to 5.8% points for fiscal year 2025, from 5.3% 5.1% for fiscal year 2024. 2024, with an increase in Healthcare margins offsetting weakness in Industrial and Automotive.

Our adjusted free cash flow is defined as cash provided by operating activities, less purchases of property and equipment and proceeds from operations, less net purchases the disposition of property and equipment to present adjusted free cash flows on a consistent basis for investors. investor transparency.

As a result, we recognized approximately $86 $87 million of restructuring charges, primarily related to employee severance.