Benchmark Electronics raised its fourth-quarter and full-year 2026 outlook after reporting record third-quarter revenue of $811 million, up 19% from a year earlier. For the full year, it projects revenue growth of about 16%, taking annual sales above $3 billion.
Non-GAAP gross margin was 10. 5%, while operating margin rose to 5. 5% from 4. 8% a year earlier. Benchmark generated $30 million in operating cash flow and $14 million in free cash flow, ended the quarter with $291 million in cash and $133 million of net debt, and returned $14 million to investors through dividends and share repurchases.
Growth was broad across the company’s portfolio. Semiconductor-capital-equipment revenue rose 30% year over year to $241 million, industrial revenue increased 13% to $172 million, medical revenue grew 9% to $138 million, and advanced computing and communications revenue jumped 50% to $132 million. Management expects semiconductor-related revenue to accelerate again in the fourth quarter and continue growing in 2027, while aerospace and defense is expected to return to growth next year as recently awarded programs ramp.
The company’s cash-conversion cycle improved to 54 days, five days better than the previous quarter and 23 days better than a year earlier. Inventory days increased to 78 from 72 in the second quarter as multiple programs moved into ramps, but management said the buildup was tied to customer demand and remained subject to controls on inventory turns. Benchmark also added a $45 million revolver in Malaysia, bringing total available borrowing capacity to $576 million, and expects 2026 capital spending to remain between 2% and 2. 5% of revenue.
Those programs, previously discussed as potentially beginning in late 2026 or early 2027, are now expected to start contributing in mid- to late 2027 because of timing at an end customer. The company said the HPC work would supplement existing activity rather than replace it. Executives also identified ASIC availability as a supply-chain pressure point and said Benchmark is working with suppliers and customers, including making selective investments ahead of ramps. Capacity additions in Penang and Thailand are intended to support expansion, with management saying it remains comfortable supporting demand through 2027.