Flex (FLEX) 27 Jan 222022 Q3 Earnings call transcript

Good afternoon, and thank you for standing by. Welcome to Flex's Fiscal Third Quarter 2022 Earnings Conference Call. [Operator Instructions].

As a reminder, this call is being recorded. I will now turn the call over to Mr. Rubin. David

sir. begin, may You

by Chief you, Grace. Quarter today to Third and and our will Lundstrom. give Good XXXX Earnings afternoon, our call Relations are presentation remarks website. if the Advaithi; webcast Investor Fiscal And Revathi me of is Executive available welcome and our Officer, today's followed brief have Conference Paul slides Chief not for being Both Flex's Officer, Thank Financial Call. is With recorded. section flex.com you already Q&A. This received them, on

to contains reminder, today's are obligation no statements, a uncertainties, on information results As these change, based update risks materially. to subject our to expectations call so statements. and and forward-looking assumptions, we differ which and events such could and undertake are forward-looking actual and current Also, subject is

For see discussion of be This for as please as reconciliations The the risks our the on today's well and references GAAP of most the non-GAAP a uncertainties, SEC. of section appendix slides with measures in the Relations website. financial quarter. call filings full our presentation, the current found Investor recent can

registration and of and announcement conditions that Commission to Lastly, stock. discussed, Rule public this on announced and offering with under other are SEC's We initial as a XX, NEXTracker to relating A we The SEC. public XXX April on offering its market common accordance Class of the its initial S-X timing statement draft confidentially review proposed we've Flex in we subject the made the Form U.S. Securities submitted Exchange previously business, with regard and the to process.

our With additional NEXTracker this or any filing further regulations, Revathi, to call CEO. SEC not time. we like on Thank you. the Following I'd the to answer turn questions over at statements will that, make

I $X.X had emphasize QX another billion, top our was macro that came review easier anticipated. our anticipated than Flex's previously Slide chain the also new at Thank you, Adjusted to just We us. results than quickly. up the in cash than in sequentially today would joining our expected for the supply free previous execution Adjusted challenge in in another X% fiscal of overcome and that's our operating major EPS from By our $X.XX, I'll we was Total I QX challenges. progress X, strong add this up to achieved quarter in revenue that flow and strong briefly and adjusted demonstrate Please guidance fiscal Good margin want our challenges quarterly range. $XX better thank afternoon, million. $X.XX last record the this outcome to and of for macro call. results. QX, about earnings made in more despite for above at environment. came adapt you We us ability year. David. way, have performance of turn end X.X%,

Of these. course, our us relationship suppliers like helps long-standing during times with deep definitely our and

continued growth performance, of industrial these diversity and result driven businesses communications as acceleration disciplined years We another with our our in the for The of and of and of execution. our cloud, of businesses. portfolio, Strong new sequential our growth along bookings a successful our and ramps team. win of important the are is it's the proud performance consistency strong couple last yet our by

in center solutions accelerate investments XG to also and products helping year. growth this technology, data electrification and are Our optical our

secular over more investments detail, to center is I vector talk drive Paul to our trends to a turn it We about and also back growth portfolio, you of guidance. the full and little end now will team. growth overall drivers our in take come combination recently financials welcomed see the performance to really the through bit We're growth the data high Anord our going I'll for the us. a acquisition which excited This these Mardix forward. and strong adds at but to

Thank and Great. afternoon, good everyone. you, Revathi,

how execution best start possible are and challenging Let with we by delivering impressed such our the team's environment. to the saying commitment all service in customers me just a for

of down So the was X, X% up SG&A down share And income our in X% year-over-year. Slide about In profit year-over-year sequentially. $X.X $XXX operating was X% Flex's X% thank quarter, period down resulting end in million of $XXX operating $XXX team. of on came million, of per with finally, to X% hard adjusted adjusted operating earnings $XXX to the impact operating happy about was op quarter the our the the adjusted sequentially. were billion, X% quarter, of at down presentation. income million, about decreased reconciliations rate. X.X% up million on the will our Adjusted work. Reliability revenue $X business. slightly, X.X% performance On adjusted the point the $X but considering down margin up very to financials margin, to and of year $X.XX, was at a In range year-over-year, December, earnings of the each non-GAAP is down adjusted points Anord focus we end X.X% XX prior X, to of was On X% XX% and billion Demand and Impact guidance. X, the results. Mardix the a and year-over-year. compared welcome $XXX from income in and immaterial about was period Slide appendix increase sales you third markets. gross the X% The year-over-year supply Overall, was X of across at was in our the up $XXX my targeted be X% center the but revenue for note, gross we Beginning fast-growing end an prior all our from top year and will strong have margin quite million, sequentially. growth found the adjusted X.X%. the tightness million, was the Adjusted are last in income strong potential year. was $XX net GAAP but million it upbeat in in data about chain Adjusted QX at million, I better Slide lower sequentially. on continued please total, basis remarks X% can

fiscal be in April. adjusted We to mid-single begins expect mid-teens the and it healthy this EPS to continue in Automotive which underlying margins revenue to digits EBITDA decreased with deliver XXXX, quarter accretive Health comps year's related to by continued care COVID-related year, peak. tough to revenue Solutions prior by driven offset but than critical better supply last was slightly expected, compared challenges. demand the down

we cost Reliability sales growth we Fundamentals with Due saw global The Lastly, up were NEXTracker, as at NEXTracker strong, decline logistics it what sales margins. margins have drove headwinds, strong including up but view to temporary. remain the board, been strong. teens. largely at high is Industrial pressure the NEXTracker, mid-teens pressured where in in across the

wins optical. very Agility. led was underlying driven increase Lifestyle, was in was revenue delivered $X.X And the record Consumer decline. robust, upside healthy by the indicated In a which about margin. limited led Segment Within and Agility, demand cloud, was revenue to adjusted project completion. year-over-year to income, digits double planned CEC ramps, we comp finally, customer largely year-over-year. product X%, of was which billion, up caused by segment Devices a difficult X.X% slightly total, new and as to component last constraints, revenue modest In down But quarter, demand. particularly in quarter Moving XG a operating despite a X.X% of operating $XXX the million Agility by sales down

on to Turning X. cash Slide flow

Our expenditures $XX adjusted and $XXX for cash net the flow million, capital was totaled quarter million. free

in at business totaling we Mardix a acquisition to profile and the the closing approaching paid $XXX December net million. $XXX debt opportunities we both low quarter, on We took Anord rates of of our had support In cash at in our quarter, X maturities. expansion million This advantage regional out X. cases, to very changes the

on have In roughly $XXX we At million fiscal million of totaling the $X spent the end fiscal last at quarter, turns from our were down X.X, quarter, we current the X.X repurchasing approximately million. million, quarter. During Board third was the $XX turns of for XX X 'XX, $XXX repurchased million total, Inventory remaining the had we quarter shares billion. authorization. end shares. Inventory

in customer term, reiterate While near end to I'll have high remain shortages a the priority. and waiting comments about delivering high strong we market to fulfill customers expect demand remains inventory Revathi's demand. Chip demand on

position of All higher the and fiscal over generation free totaling cash so our will we stated segment our inventory generation $XXX pleased abate, for several a cash key Cash free So XXXX. Flex approximately than growth. usual in things we'll in that year-to-date, considered, Slide with areas target outlook. allocation million On invest flow $XXX continue to with quarters, remains And our X, levels. million priority. will as we're to capture last alignment strategy, fiscal to continue capital flow shortages

Solutions Reliability will to with Health Automotive with is Industrial. mid- and outstrip flat to be flat high to double-digit single to similar strong continuing expected in to leading year-over-year. Agility Solutions down be growth the trends in up supply, revenue demand expect digits to Solutions relatively QX. We business be marginally essentially

to Devices, trends the XG. CEC and following in to to in XX. in up Full up We Slide similar should and revenue a expect strength mid- high planned aforementioned with quarter, be program Lifestyle QX, setting difficult on on line guidance cloud year growth Consumer due compare. single-digit based slightly, completion, last

full we've and updated see You'll that narrowed range. guidance year our

our reflects At top secular combination or previous the of The adjusted improving of updated we a midpoint to would be guidance midpoint. Our at revenue continue results, at trends the EPS guidance the year-over-year to of year-on-year. the and billion XX% reflects $XX.X the our the up billion of see. $X.XX growth of strong strength execution range, new the end of now $XX.X X% range, trajectory,

Slide XX. to Turning

and fourth high range billion in operating roughly the of to adjusted our $XX and fiscal expect $XXX is to rate $X.X estimated of between quarter remain with XX% million, at be expenses to million Interest be billion, income end $XXX and should revenue guidance the XX% million. range. $X.X tax to other the We

over adjusted EPS intangible to range call I'll with in impact about $X.XX back million stock-based shares of that, and outstanding. compensation net Revathi. to the amortization, the expense $X.XX, turn be the to expect of We $X.XX weighted With XXX excluding

Thank you.

you into XXXX. our unfolding, As quarter long-term held In I Paul, the from came fiscal first financial our strong was we COVID another In and guidance of with for since Investor when uncertainty, improved company. early you Day see shared XXXX, framework. the can we just our midst

GDP growth EPS of see and As we XX-plus growth on you would above said and operating organic get here deliver margins percent. mid-single-digit XX, Slide we can to

lapping while at major Looking a have in guide even our we of we our you XXXX, and can accelerated FY have full on And goals. 'XX. delivered long-term year portfolio see margin change EPS growth FY

and late our XX. most be to diagnostics strong optical, how have discuss Flex's point-of-care will we accelerate investments We these combination to potential. continues customers. secular our plan win commercial coupled in transitions Turning electrification Slide programs this XG, have growth position to investments and in Day to technology March, And with us driver our of major will Investor in capabilities, helped continues like trends the us where technologies Technology strongly market. for a major of and in an

that found by commitments the -- effectively and to have several chain these chains, market the solidified deliver expanding can for for services. themselves. meet manufacturing manage Many and so can they last available supply companies customer the companies need challenges this have of need products market supply robust addition is their global transitions, total to This advanced they In the technology can't that years

us. is bullish products Other that secular and digitalization, for to and on a we're driving the Now in to strong sector scale, utility in the about energy our manufacture growth, new local few and data trends the scale. business global driving companies center becoming only growth Again, infrastructure investments, wins this closer accomplish a residential both is efficiently to priority. have desire also a capabilities demand and

bookings see and as in drivers Now been pipeline this growth growth year's these you fueling secular results. have can our

our the in investments going technology accelerated our strong well As of potential positioned has secular growth on combination and earlier, has capabilities trends us to forward. said capitalize I commercial and

and to customers for and suppliers execution, and Q&A. strong your shareholders our and course, want support. value on trust Now our behalf come. track combined employees our years entire of partnership, our shareholder will over the contributions execution, their to turn that, I the call to continued with leadership, With I'd On for strong create record this their thank for of in the to operational the start and like

[Operator Instructions].

Your of Bank of first Ruplu question comes from the Bhattacharya line from America.

the like which reported far, -- My fiscal of given you've the had on so on fiscal very revenues are 'XX, X 'XX, strong, year looks full first NEXTracker is compares you quarters growth. growing for for around first to year-on-year, question only X% Based disclosures XX% NEXTracker. the

guess, logistics So part side, XX% growth? year. bit this can It that strong on the -- that forward? costs X% is driving you I margin the X and like quarters, full from, it's that the But first for what a for sustain freight the operating is the for think margin of question suffering And is you're then going looks business growth the little costs. versus do rate first

last about it's So half of year.

longer you you where think impacting can that on that? Is So it and You if thoughts think and -- mentioned the to on? is So revenue of a do it can give business. cost? improvement temporary. in your this pass you this is revenue growth Does logistics it pass cost business us kind on Why that? take you that just just margin the that's

a can the COVID are course, then in question. through growth you're coming be installations growth pipeline of that because But rates. last just little utility sector, now very Yes, say also this bullish everything Yes, we start is like things I say year, obviously, COVID very first our committed but are back, And year. the reflected that you kind and been business strong Ruplu, being that and jump and has to energy country. hear I'll for I'd and projects to not And that, about comparison growth And with that with bookings things is, in that installation. get in. to the seeing that around this infrastructure for on start of globe, did going continue of investments I'll grade even pause on times. the strong would solar terms Paul as

Bookings strong. are if is continue, strong, pipeline growth we where not to So are is expected more accelerate, from rate even today.

about it. So good very feel very,

margin, of point first, performance the terms is that sector. than I'll better this In all much peers our as in out is

So that's one.

logistics, would able kind freight that to inflation Second just this are And what issue seen freight the costs about on say, involved with talked we is, things gone those passing quarter-over-quarter-over-quarter. is Ruplu, course, before also. that, has happen steel there timing and but But with we a inflation you've pass on. costs and is, have of of like up I and not logistics

there's to including So continue that. as all a we that's also we are of catch-up as passing inflation, this the that things and see of on, availability shippers required, like

that that transitionary we think comfortable forward. but we this as a facing, very I that will business challenge are improve we we is margins move the So that, is are very, of and

system. terms This strong. business their this other very like time of has are fundamentals on to Our is any in that passing

catch their up margin rates they are very to they it's forward. that So very we terms similar in move fundamentals will as And and the comfortable that. strong, feel of

is business, the on specifically CEC question portion. the second on cloud My Okay.

mentioned that, was demand quarter. cloud particular -- was very this that from strong You -- the

can a continue that of think Some we building move the your and customers rack? next to you seeing like standpoint, has Or out as their Flex's that, business look peers that model, business, of from have revenues. consignment whole that you you your in into are impacted from seen customers? Do anything the that quarters? couple grow to Are

year, correction I'll of is CEC business. of business. cloud play kind pruning you we and ago, In growth cloud a did and years the in the XG seeing all with our first, of CEC if So the that say recall, last we business, some and in growing through associated you're have our of the XG. in And a lot invested kind terms couple

all are our and very investments with major colos. good the we feeling about in So business hyperscalers cloud the

the where of So to whether to right say what best value of on feeling is then right? kind right model the any if not model terms or the really that model, we good out one is the having we customers It's let a approach it's find are that. usually consignment do. consignment value, in figuring drive And of I'd usually our because model. partnership a driven, consignment kind where about not engagement is value, depends we really model so is the itself,

to a So a we with our like have partnership customers with in right the what collaboration up answer come of to the model. is

around of have kind a business that significant it. So a it's approach. don't And as pretty moved scale others balanced seen we you a we some have do where

our to to really make we model, think on approach work that, to as drives I and with value, figure in allow and very who is customers this. out our then And the best we the we're consistent the what decision. based us

Congrats on strong the execution.

of comes question from next from Delaney Goldman Mark Sachs. the line Your

supply First clarity seen? there's I been has provide question Omicron more chain variant. could same At Hoping time, a was you Flex chain. quite now realize the while on supply a bit now. for challenges there's on what

So is can may any any you what forward? the And incremental expectations details that company going how progress for currently? on share seeing

I of love that see But as right? a yours because of say my yes, this. ball terms as on question, in, process And helps I some in coming this data Mark, crystal ton thoughts obviously, we us good -- would in this. is

is feel from in frankly, to abate. see anywhere You've supply seen you seen in now consistent. that the there are with challenges haven't on, because we line XXXX to say XXXX, suppliers way. We still would I thinking and abate those issues hey, any significant supply like thoughts And that, customers give late start our that and

to makes supply team, and in for suppliers chain demand right, to XX,XXX fulfilled us our our way work supply a that sense So very, we're big people, able our get a we with have really very forward, But our would say committed having that of make I on to to the made. of based investments looking suppliers capacity that customers. kind 'XX half of second sense, are 'XX and -- and and seems kind

kind all, to have of vaxxed performance is, line going would XX% thinking with dose. we're and our kind the this them of least of XX% all late of type in employees Omicron, forward a situation. fully calendar XXX,XXX is 'XX in impact terms because at of around is the and at into wasn't of looking in itself So where say the we reasons significant terms Mark, of I one our with of industry one probably 'XX

culture important you have to which hold driven and have through and of COVID why performance our a take these you understanding has downs of focusing have we really able And been just this that So on your way. a recently. us this that, family, seen long we because of is really ups to helped kind

just helpful. very in the the in charging. was I a prepared remarks, my follow-up was of business with business, Industrial also That's could but you and And a around And to you of is coming Automotive EV not alluded it question times bit it couple a the in outlook from much is more seeing revenue you're to you hoping elaborate point getting company's there? size how EVs can on and where what the the EVs?

-- I our Mark, about this will Investor more Day. talk we Yes, in

deeper electrification And growth into kind for big of drivers so like we'll go us.

autonomous, with core looking about high-voltage for battery think of converters, then really both dollars lot you also long-range terms spending have battery a management been and partners inverters, developing in into partnership solution. our our own for together, solutions own technology on of EV portfolio investing solutions. of we If And

working time into pretty and a with really up. large we relationship ramp of those electrification. putting players, knew already of to almost it you autonomous started we're before on lot money Autonomous, that strong had So matter a was a technology

electrification is larger And to our unfair volume, We more drive forward, overall in as starting an as ICE start will and to about will kind business. terms kind growth. in we our larger talk It part say and Investor autonomous become of of share we do vehicles reduce of look we'd see of of that a Day. it

a this like is bookings it then even what winning electrification growth at a as look I'd because pivoted we year, market electrification markets. really of about also And geography, our you this China, largest towards been are has in mainly. the lot you If is more which know, all one

but say, do and our doubled to that because win to that really America. North scale, us we've electrification effort we in want China, So to also Europe we provides in kind want in of

good. geography. one tied geography to not one distributed We really the are the So really We're player across distribution globe. is or more just in

share So at feeling This our more very be March of sure. macro our themes Investor good we'll about growth in will Day. for one and it, details

Your Shannon the from of Research. comes Cross from Cross next question line

curious, that's improvement bit And I see better? Omicron a maybe any have we've past holiday times? changed customers behaviors demand bit a in moved and non-holiday Do two a little overall? to I'm lead are happened. as follow-up. with questions. little buying seeing everything Have season, I'm the then able slower customer you have just obviously else plan balancing you I

Shannon. I Maybe Sure. be I'll season, holiday levels, continues too, say significant inventory the lead customer are Lifestyles times. at at Particularly to interesting about is just talk very business change of what see very, continuing then or level the But the low. to think times to moved channel lead that's of we've phenomenon kind with customer no in because stocking would out we the as start I an and

to in have X would don't and Lifestyle to X of particularly business, I X. they between customers, the somewhere see, know, weeks' worth inventory, Our like and X

remarks, expect, to that see continue we I particular. signals mentioned is be demand think prepared to coupled do going a the in the we replenish need I to So with strong And inventory positive in next for in of couple the that, over us tailwind quarters. as business,

available consumer. that's add that would reshoring the we on, lot have segment, work also a of going Lifestyle, terms has that I as it, in thing the capacity other segment -- end call only of Consumer the is, the right, the Shannon, you then, And to close of kind

for of that driving is also So ramp and program bookings lot us. a

kind they're maybe answered clearing, holiday changes being program better, has up in I'd But general, times, are is Paul lead backed are a ports then again. So the that, of levels driving lot all depleted. of though, say, reshoring there still demand too. inventory I would And say managed like

And I'm obviously couple Paul, that's everything think just up, which curious, you're how specifically but working in capital happened years, then inventory, in last about should of we Okay. the given and managing you is if general, assume working down time needs higher manufacturing? as capital with work at kind things to run forward maybe back distributed a is Or a more over the working level there way again capital to going of normalize?

Yes. I is your think I see move then. is mean, ramp inventory meeting as fiscal that point positive point, come I inventory customer level also to million And we and 'XX flow flow -- down constraints again, $XXX as do just fast that. generate big would supply priority I Look, cash we need higher But the to elevated, To a you'll see I cash into that inventory do. and of to move I continue. this year. cash normalize. down I demand, say And hold inventory to will starting through but roughly inventory improve running to guess with to our free as now think flow. we our right do in but is starting hot, just and we I'll XXXX, our levels continue

well. pretty it managing we're think I So

next Steven Your comes Advisors. of line Fox from from Fox question the

Two questions.

what ability March March revenues? the to right now, in secondly, the slides? but quarter, around color in just isn't terms the to understand then demand in portfolio new and on talked some exceeding seasonality if the business. Lifestyle Paul, is I about you you closer And give your expansion quarter December guidance if I you logos of First, the why wondering more supply posted was could

Yes.

XX% you take points from can QX I about decline, from maybe the years in done QX, I the now, than some maybe don't to the seasonality, label. it's X% to better about based At to as can question data talk sequential what just XX last step Historically, On on, a a looking at we're move so. QX past, the and been know, midpoint down we've we you. or right historically. So seasonality That's the for QX.

improving ramps. also think, things, customer couple shortages, of by I driven component by hopefully, but a some some driven

we chagrin, about chips, had QX much, point, we think good I to to QX feel access would So To be unfettered just, take step. out much first QX of But this immediately if we to much don't away we several pretty our here into my your as to part see work It's calendar of higher. this quarters way to going shortage move it. challenge year. our going the

we'll we going Steve, about would And QX. and but think really be part I while right? to talked pull get resourcing weren't in QX, able of that, same a in we do able like so we estimate also things about way the of in to large do some QX, work suppliers, were for able some our we customers, thought do we is to And when -- were it things happen the what to were to to from which helped kind QX we which and

do days, do based to all So we easy be, think absolutely better it's what be So pin to based make guide than to right? hard a commitment but that to down better of the able we will kind we we're revenue working see suppliers our time think giving on our but is with our but our we're much on to than it's a good obviously, you these things, hard supply that, what customers we're situation and that. where working a guide -- suppliers

and large have again, portfolio earlier like on -- small in focused on XXXX, refocused clear XXXX things terms that. technology a add when did of we we, value lot and where business our start-ups our And logos, itself, In -- we really we perspective. FY from changes logos a of really we've logos were kind doing of

on to also we adding where a have So just with very not penetration on deeper but logos, want clear logos, our focus existing our to we is new add logos. are

is an manufacturing feel as dispensing on on because So important. winning, a all very managing on very of example, kind what large quality much of is we problem on the fluids process liquids dispensing our logos, are we of of technical focused Lifestyle kind capability

liquid focus Care. So space. with same -- that want logos to we Floor on on the adding adding on Even

world's As like We an logos we're market technology share. of on really gives already we care. you adding focused one largest are we know, manufacturers of advantage. there, floor we capability us That a have the large feel process that have manufacturing

kind growth, growth adding last existing has deeper really of growth, Lifestyle, support. technology kind focusing of you penetrate which right, services is more, our where we more them and And more feel as looking with penetration manufacturing cycle a -- been logos. geographies logos, life holistic fantastic years for then capabilities providing on of like So should of business, few as other with the really we they're

of business, we've focused business it's that's Lifestyle where So really couple last working. kind I from in performance and the that fantastic years. growth of our mean, really

line from comes question next Your the Citigroup. Jim of Suva from

supply? still get want securing seem And getting case? components, able while were do to don't times lead and and of help prepared that I but was execution us struggle that's on was other than it know a components? challenges. strong to understand mentioned really if it Revathi, with just you how it right, Revathi that, And to think I pleased the leapfrog, If with how I of all are why because easing she you the comments, -- more is stated, parts team heard execution about supply got can and right, the function she OEMs jump chain a the more her the long was specifically, I you

in have seen One change nailed haven't material correct, question. right components for all I right? say, very, very And you, all is supply of we're of because say, And I we And would absolutely manage is, Thank absolutely or right? we're would pretty still in able anything that across fact. my yes, this. statement at. major major demand, bottlenecked it terms Supply is to the why kind -- demand I that still looking Jim, think strong, that is you is

our really very our like within push with quarter, have Should One we us that factories. really what be us should closely understand X at helps of how can bring All scale, qualifying countries, really call which lift scale, Significant different? phone course. and give We work we prioritize, scale, So is to work the say, is helps relationship something us things we to there and of what supplier are deep looking prioritize, right? those our we the our helps substitution? with environment an priorities. in up this. Every customers will there suppliers. we XX-plus in, really what with out, suppliers XXX-plus top with we our

lines that commitments. that, moving between work So around partnership thousands day. every right. our top complex on customers ourselves in Hundreds a happens the of in to their meet we we a suppliers, what then because What very boat stuff is we're plan or of and the And Jim, stopped to didn't -- arrive, arrives, it of arrive. we single real environment, had somewhere and arrive, weren't expecting a for doesn't supplier

nimble So terms the start super, stop, of be factories super and all that. to have doing of in

another So capability that is we also have. fantastic

that others no unbelievable. is say, would I like machine, execution It's seen. factory have I Our

to and it no take And are able that done. the there's have parts, can execute. we get so question If we they

be at hasn't you Jim, So feel comfortable as saying and time, demand our same also that's And supply do they're that the results. efficient that very can changed. see I why able to with

it all fantastic We the factory the adapt I situation. They I for say away are factories, our can resourcing, what have our their mean couple of as on very blown then redesigning our just that of They last years. customers, execution. have kind focused doing just supply about with to execution. we of And

And to. comes so it that's down what

Chung line question And last JPMorgan. from the our Paul of comes from

So of free of the relative 'XX, half more to I or think expect kind little normalization 'XX difficult in -- of more Should know about we flow. flow? on outsized bit towards cash it's How kind to end first expect the we seasonality a cash 'XX? maybe of generation, just follow-up on of should of predict.

Yes.

elevated. And many is, levels down, customers we that come the way right about good And to levels that inventory they down advances a it here the growth. bit XXXX. that see this work cash news several so think the had you have, as to is do burden that cases, if I Shannon, customer advances. inventory ramp inventory as offset have will mechanically, in we're that of the Paul, over at we'll next The the moving into So of quarters are now, from cash mentioned kind helped

little offset a so an of there's And bit there.

about Day suspect. we've way March, to what seen more talk I'm won't past. Investor the the so And and the I in we'll be in thinking seasonality thinking different XXXX, this at But I'm than too much

think tend much probably XXXX back to and loaded, the more look half you years, be If several be will the I we back over same. last

would position. a Paul, sheet, I We're balance still fantastic in is, right? a then, only the add And thing strong

fantastic on want on And meeting really and job in Our them. said lot have our I just we managing as cash yeoman's support we a because say time, for that our delivering in customers, terms understand flow, for course, to with job customers, our done is them. what would of best we're from we're trying for focus of demand to focus our get fully who doing of

So as think stabilizes out. we're balances and the with really pleased with where situation we it, are we it

where really So pleased with we are.

then certain And you're are And How kind most kind passing kind of prioritizing prioritizing component about also you're dynamics? dynamics? of with of incremental pricing segments? certain you Great. any question the prioritization customers? I capturing the shortages. How talk Are is higher-margin you believe of but of certain could of cost, last some for on if customers? those dealing you are you on margins there

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gentlemen, presenters. joining. all today's so much, call. And Thank conference you this and concludes Thank you ladies for

now You disconnect. may

Goodbye.