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To compare EMS stocks, measure customer dependence and cash conversion separately, then check how they interact. Start with each company’s latest annual filing: record revenue concentration and receivables concentration, review receivables, contract assets, inventory, payables and customer advances, and reconcile those balances with operating cash flow. A low concentration percentage or a small working-capital balance is not, by itself, evidence that a stock is attractive.
Why do customer concentration and working capital belong in the same analysis?
Electronics manufacturing services (EMS) companies make products for other businesses, often through customer-specific programs. A large customer can support substantial, recurring production, but that relationship can also leave an EMS provider exposed if demand falls, a customer changes suppliers, or production moves in-house. Customer concentration helps describe that dependence; working-capital analysis helps show how much cash the provider must commit to serve its programs and how reliably it collects what it is owed.
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Working capital is also easy to misread. A balance-sheet measure can change because of debt maturities, acquisitions, customer payment terms, inventory timing or receivables financing—not just because operations became more or less efficient. A useful comparison therefore combines customer disclosures, operating balance-sheet accounts and cash-flow information, while preserving each company’s reporting period and definitions.
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How should I build a comparable EMS peer group?
Use a transparent peer set and explain that the businesses are not identical. A reasonable starting list is Jabil (JBL), Flex (FLEX), Celestica (CLS), Sanmina (SANM), Plexus (PLXS), Benchmark Electronics (BHE) and Kimball Electronics (KE). The filings identify several of these companies as competitors, but competition does not make their customer mix, end markets or program economics interchangeable.
For each company, begin with its latest annual report available to you and write down the fiscal year-end beside every figure. The examples below span different periods: Jabil’s fiscal year ended August 31, 2026; Flex’s ended March 31, 2026; Kimball Electronics’ ended June 30, 2026; Sanmina’s ended December 27, 2025; and Celestica’s cited filing covers the year ended December 31, 2024. These are not same-period observations, so do not treat the figures as a synchronized ranking.
Use the same checklist for each issuer, even when disclosures differ:
- Largest disclosed customer share of revenue; whether the customer is named or anonymized.
- Top-five or top-ten revenue share, if reported, and the trend across several years.
- Customer share of accounts receivable, aging information and allowance for doubtful accounts, where disclosed.
- End-market and segment mix, which can help explain demand exposure not visible in customer percentages alone.
- Contract terms relevant to purchase orders, forecasts, customer advances, inventory ownership, unused inventory and program replacement.
- Fiscal year-end, acquisitions or divestitures, and any company-specific definition of working capital or cash-conversion metrics.
When a filing does not provide a value, mark it “not disclosed.” Do not infer a zero from silence. A disclosure threshold can conceal several individually smaller customer relationships, and a named-customer table may not identify every customer. Compare trends within the same company before drawing conclusions across issuers.
What do the filings show about customer concentration?
The disclosed examples illustrate why it is better to preserve the exact measure and period than to reduce customer risk to a single score.
| Company and period | Revenue concentration disclosed | Receivables concentration disclosed | Context |
|---|---|---|---|
| Jabil, FY2026 ended August 31, 2026 | Five largest customers: approximately 37% of net revenue; 76 customers: approximately 90%; Customer A: 20%. | Customer A: below 10% at August 31, 2026, versus 33% at August 31, 2025. | Revenue and receivables percentages describe different exposures. Jabil’s FY2026 Form 10-K also describes receivables-sale programs. |
| Kimball Electronics, FY2026 ended June 30, 2026 | Nexteer Automotive: 18%; Philips: 11%; ZF: 11% of net sales. | Not stated in the cited customer-share figures. | Customer identities and percentages are disclosed for these three customers. Kimball’s FY2026 Form 10-K discusses program-related inventory fluctuations. |
| Celestica, FY2024 ended December 31, 2024 | Top ten customers: 73%; two individual customers were at or above 10%, at 28% and 11%. | Not stated in the cited concentration figures. | This is an older period than the Jabil, Flex and Kimball examples. Celestica’s FY2024 annual filing discusses segment competition and customer agreements. |
| Flex, FY2026 ended March 31, 2026 | Not stated in the cited working-capital figures; obtain concentration data from the full filing. | Not stated in the cited working-capital figures. | Flex’s FY2026 annual report is the source for its working-capital disclosure below. |
| Sanmina, FY2025 ended December 27, 2025 | Not stated in the cited competitive-risk disclosure. | Not stated in the cited competitive-risk disclosure. | Sanmina’s FY2025 Form 10-K describes a highly competitive sector and warns customer consolidation may result in lost business. |
These figures are examples of what a filing can reveal, not a complete cross-company ranking. In particular, a missing concentration figure in this table means it was not available in the cited research details; it does not mean the company has no large customers or no receivables exposure. For an investment comparison, extract the corresponding disclosure from each full, current filing and use matching definitions where possible.
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Jabil’s FY2026 disclosure makes the distinction concrete: Customer A accounted for 20% of revenue, but less than 10% of accounts receivable at year-end. A year earlier, the same customer represented 33% of receivables. That change may matter for the snapshot of unpaid balances, but it does not erase the revenue dependence. Nor does a lower year-end receivable share prove that collection quality improved permanently; it may reflect the timing of sales, payments or other transactions.
Celestica’s FY2024 filing adds a contract caveat: customer agreements generally do not guarantee a particular level of business, and specific volumes and timing are commonly set through purchase orders. The filing also says a majority of its supply agreements require customers to purchase unused inventory acquired for forecasted demand. That provision can shift some inventory risk, but it is not a guarantee of future sales or a reason to ignore program-level terms.
How do I measure working capital without confusing the numbers?
First distinguish reported net working capital from operating working capital. Reported net working capital is current assets minus current liabilities: a point-in-time accounting measure. For operating analysis, separately examine receivables, contract assets, inventory, accounts payable and customer advances, then assess how changes in those items affect operating cash flow.
Do not assume a reported increase means a business has become less efficient, or that a lower balance is automatically favorable. For example, Flex reported net working capital of $4.3 billion at March 31, 2026, compared with $3.0 billion at March 31, 2025. Its annual report identified a $1.2 billion decrease in current debt as the primary driver of the increase, as amounts due within twelve months were repaid. It also described offsetting movements involving receivables, customer-controlled inventory, inventory and payables. The headline movement therefore cannot be read as an operating-efficiency verdict on its own. See Flex’s FY2026 annual report for the company’s definition and explanation.
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For an operating working-capital bridge, compare the opening and closing balances of the major operating accounts and read the cash-flow statement’s working-capital adjustments. In broad terms, a rise in receivables, contract assets or inventory usually absorbs cash, while a rise in payables or customer advances can provide cash in the period. These movements can reverse later, and their meaning depends on the program, customer terms and timing. Label the bridge clearly; do not present it as the company’s reported net-working-capital figure if it uses a different definition.
If you calculate receivable days, inventory days or payable days, use a consistent period and denominator across peers and preferably average balances rather than a single period-end snapshot. For example, receivable days should be tied to a clearly stated sales denominator; inventory and payable days need a consistent cost-of-sales basis. If the issuer publishes a non-GAAP or company-defined measure, record its formula and compare it with your own only after reconciling the difference. A ratio with inconsistent denominators can look precise while being misleading.
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What is special about inventory and customer programs in EMS?
Inventory is not simply a pile of unsold products. An EMS provider may purchase components ahead of production, build inventory around customer forecasts, and carry different balances as programs start, ramp, pause or change. Component availability and lead times can affect both the level and timing of inventory, while the program’s contract terms determine who bears the cost if forecasted demand does not materialize.
Kimball Electronics states in its FY2026 annual report that it and the industry have working-capital conditions that matter for understanding the business, including inventory fluctuations that may increase with new-program start-ups and component availability. The company also says customers may make advance payments for inventory and share excess-and-obsolete inventory risk. Those arrangements are important mitigants to investigate, but they do not eliminate the need to check actual inventory balances, reserves, customer advances and contract terms.
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How can receivables financing affect the comparison?
Receivables-sale, factoring or securitization programs can change what appears on the balance sheet and how cash flows are presented. Jabil reports that receivables sold under certain programs are removed from balance-sheet accounts receivable, with proceeds reflected in operating cash flow. That means a lower reported receivables balance or stronger operating-cash-flow presentation may partly reflect financing activity rather than only faster customer collections.
For each issuer, look for the relevant accounting policy and disclosures about amounts sold, outstanding commitments, recourse or other obligations, and cash-flow classification. Use the company’s own disclosures; do not assume all programs work the same way. If data permit, explain the reported figures alongside the effect of receivables sales rather than silently adjusting one company and not its peers. This is especially important when comparing cash conversion or customer receivables exposure across different reporting practices.
What comparison framework should I use?
A useful analysis has five axes. Keep them separate in your notes before combining them into an overall view of business risk.
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| Axis | What to record | Why it matters |
|---|---|---|
| Customer dependency | Largest customer, top-five or top-ten share, and trend across at least three years. | A customer loss, insourcing decision or demand shift can affect revenue and factory utilization. |
| Collection exposure | Customer receivables share, aging and allowance disclosures, contract assets, and reporting date. | Revenue share alone does not show how much cash is unpaid at the balance-sheet date. |
| Inventory funding | Inventory trend, excess-and-obsolete reserves, customer advances, customer-controlled inventory and unused-stock terms. | Program starts and component constraints can require cash; contract terms may shift some costs or risk. |
| Cash conversion | Operating cash flow, operating-account movements and any receivables-sale effects. | Cash-flow context helps explain whether earnings are accompanied by cash, while recognizing timing and financing effects. |
| Comparability | Fiscal date, business and segment mix, acquisitions or divestitures, currency and calculation definitions. | Differences in period and business model can make a simple rank misleading. |
Then describe trade-offs rather than assigning unsupported winners. A company with a concentrated customer base may have durable multi-program relationships, but that cannot be assumed from longevity alone. A less concentrated company can still face weak collections, high inventory needs or exposure to a particular end market. Celestica says its CCS market segment faces aggressive competition and technology-driven demand shifts; that kind of segment context belongs beside the customer figures, not in a separate, unrelated risk box.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What are the most common comparison mistakes?
Mixing fiscal periods: A percentage for a fiscal year and a receivables share on a different date answer different questions. Put the period beside each number and avoid presenting Jabil, Flex, Celestica and Kimball figures as if they cover the same twelve months.
Confusing revenue with cash exposure: Revenue concentration is a period measure; receivables concentration is a point-in-time measure. Include both where available and state the date for receivables.
Calling every working-capital increase an operating problem: Check current debt, acquisitions, foreign exchange, customer-controlled inventory, payment terms, advances and receivables programs before interpreting the change. Flex’s disclosed current-debt repayment is a clear example of why a headline net-working-capital increase needs explanation.
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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteAssuming long relationships guarantee business: Forecasts and supply agreements are not necessarily firm volume commitments. Purchase orders, program-specific terms and customer decisions still matter. Disclosed protections for unused inventory should be described with their scope, rather than treated as a guarantee of revenue or margin.
Over-reading a threshold: A customer below a reporting threshold is not necessarily immaterial to operations, and several smaller customers can collectively represent substantial exposure. Read the surrounding risk-factor and segment discussion, not only the concentration table.
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Using a single ratio as a ranking: Days metrics and net working capital depend on definitions, denominators and timing. Explain formulas, use consistent methods, and show the cash-flow context before interpreting a difference as superior performance.
How do I turn the comparison into an investor judgment?
Use the analysis to identify the conditions under which each company’s cash generation and customer relationships could become more fragile—not to infer a stock recommendation from one filing metric. Start by asking whether concentration is rising or falling within each company, whether receivables exposure broadly tracks revenue exposure, and whether working-capital growth is funded by operations, customers or financing arrangements.
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Next, assess the quality of the evidence. A company that discloses a customer-share table, receivable concentration and program-level inventory terms provides more visibility on those specific risks than one that does not. That is a disclosure difference, not proof that the less transparent company has greater underlying risk. Note missing information explicitly and avoid filling gaps with estimates.
Finally, keep business mix and period comparability in view. Demand in different end markets can move on different schedules; acquisitions can alter the customer base; and fiscal year-ends vary. Refresh figures from the latest annual filings available when making a real comparison, and use a common date or clearly labeled periods. No customer-concentration percentage or working-capital balance, considered alone, establishes valuation, future returns or whether an EMS stock suits an investor.
Frequently Asked Questions
What does it mean when an EMS company’s largest customer is anonymized?
A filing may identify a customer by a letter or category rather than name while still reporting its revenue or receivables share. The percentage remains useful for measuring dependence, but the anonymization limits an outside investor’s ability to connect that exposure to a named customer’s business or credit profile.
Can customer concentration be useful even if a company has many customers?
Yes. The count of customers does not show how much revenue the largest accounts generate: Jabil reported approximately 90% of FY2026 revenue from 76 customers, while its five largest accounted for approximately 37%. Concentration and customer count answer different questions.
Why might operating cash flow look strong when receivables are still a concern?
Cash-flow timing can change from period to period, and receivables-sale programs may affect both reported receivables and operating-cash-flow presentation. Read the cash-flow statement together with the financing disclosures and the period-end receivables information rather than relying on one figure.
Does a customer advance count as revenue?
An advance is not automatically revenue; its accounting treatment depends on the arrangement and whether the company has performed the obligations required for revenue recognition. For working-capital analysis, treat customer advances as a separate balance and examine the related program obligations and inventory terms.
