Flex Ltd. filed a Form 10 registration statement with the SEC on Monday, formalizing the separation of its cloud and power infrastructure business into a standalone public company named Axiom. The unit generated $4.2 billion in trailing twelve-month revenue as of March 2025, representing roughly 16% of Flex's consolidated sales. The spinoff targets a tax-free distribution to existing Flex shareholders, with the record date and final share ratio to be disclosed in an amended filing expected within 90 days.
The cloud and power infrastructure segment manufactures high-voltage AC/DC power conversion systems, liquid cooling infrastructure, and rack-level integration for hyperscale datacenter operators. Flex disclosed that 68% of Axiom's revenue in fiscal 2025 came from three customers—two U.S. hyperscalers and one European cloud platform—none named in the initial filing. The business operated at a 9.2% operating margin in the most recent quarter, 240 basis points above Flex's blended corporate average, driven by long-term supply agreements with minimum volume commitments that extend through December 2028. Axiom will retain $380 million in net tangible assets and assume $215 million in allocated debt at separation.
The spinoff isolates high-growth datacenter exposure from Flex's legacy consumer electronics and automotive segments, which face margin compression and longer cash conversion cycles. Axiom's forward order backlog stood at $6.8 billion as of March 31, 2025, with 89% scheduled for delivery before the end of fiscal 2027. Management disclosed that $1.9 billion of that backlog is tied to AI training cluster builds, a category that did not exist in Axiom's revenue mix three years ago. Flex expects the separation to unlock a 20-25% valuation premium for Axiom relative to the conglomerate multiple, based on comparable pure-play infrastructure providers trading at 18-22x forward EBITDA. The parent company will use proceeds from a $500 million term loan B, arranged but not yet drawn, to fund a one-time $650 million dividend to Flex shareholders contingent on spin completion.
Allocators should monitor three events. First, Flex's Innovation Day on November 10, 2026, where management will present standalone financial targets and capital allocation frameworks for both entities. Second, the amended Form 10 due within 90 days, which will disclose customer concentration by name and detail any transition service agreements that create post-spin dependencies. Third, rating agency commentary from Moody's and S&P, expected within two weeks of the amended filing, on whether Axiom will carry investment-grade ratings independently or require parent guarantees during the first 12-18 months of operation. Flex's stock closed Monday at $34.12, up 2.8%, implying the market assigns roughly $38-42 per share in sum-of-the-parts value if Axiom achieves peer-group multiples.
The filing arrives as hyperscale capital expenditure guidance for calendar 2025 runs 18% ahead of prior-year actuals, with power infrastructure cited as the primary bottleneck in six of the seven most recent earnings calls among top-tier cloud providers.