Flex (FLEX) 25 Jan 232023 Q3 Earnings call transcript

Good afternoon, and thank you for standing by. Welcome to Flex's Fiscal Third Quarter 2023 Earnings Conference Call. Presently, all participants are in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded.

and call begin, to now will turn over the Mr. I Rubin. David

begin. You may

afternoon, Thank conference XXXX fiscal you, call. and to JP. Good welcome Flex's third quarter earnings

With give brief Revathi followed by Executive Financial me Paul remarks our our Officer, will and Chief Officer, Both Lundstrom. Q&A. today is Advaithi; Chief

be of recorded flex.com. are for for the available available Slides copy Investor call and This release corporate press Relations well as earnings today's at call in being is and will a section our on as the summary replay financials website.

on forward-looking could As statements and current today's to involve call a These actual cause reminder, statements, contains which assumptions. materially. that are based differ our risks results uncertainties and expectations

statements recent update in our statements. change presentation, or discussion in with subject information no release filings obligation our a to these uncertainties, risks For full cautionary of press most SEC. these we undertake to is forward-looking the Note, the and this and please see

call. metrics well as Unless otherwise the Investor as website. of presentation specified, summary the found today's be reconciliations appendix we'll non-GAAP non-GAAP Relations slides in in refer on GAAP can to posted The the in financials to the full

to and price and of with excuse other been market symbol for of under determined. relating initial ticker registration filed we offered year, on Form -- list is is to proposed the offering the In determined connection Exchange offering statement offering. public me, subject range number offering NXT. offering, S-X The XX not This timing, the publicly conditions. intends be this have to to yet proposed January the shares On Nextracker and this Securities proposed U.S. a Commission Nextracker's the with

to please information, more the filing. refer For S-X

the make quiet filing period, remain Nextracker additional regulation at on any questions in not SEC Following time. this or statements answer further we'll and a

over the CEO. With I'd to to of call that the way, turn like our out Revathi?

Good us and you joining thank today. Thank you, for afternoon, David.

filing the for the you've S-X Nextracker probably now, public all by So, seen IPO.

shareholders from unlock in said, full process, on the operate was, for potential of the standalone process first long-term I pandemic. and to crisis This company. to very the beginning is this the brought course, chain by our supply the by delayed it Nextracker a as step As for value creating of of

Despite challenges discipline achieved growth transition. difference this in we energy a have time, way, all margins. of we multiple a making and partnered team Rise the TPG Along of renewable during maintained with and the improving who's quarters Climate, the real

It important critical robust opportunity including moving to number said, continue energy transitions technology forward. ever. represents sector. help to now will global the drive So, this That also long-term renewable a Flex trackers, and most of we're one involved growth solar technologies, is of be a for

Flex, resiliency XX% solid to year-over-year, fantastic operating with was for strong the the to Overall, our drove X.X%. Moving Slide QX results quarter And fiscal at another year-over-year. please diverse in EPS adjusted another margin Revenue of performance portfolio. of validation our X. results, overall turn adjusted $X.XX, and up grew XX% at

markets the quarter, industrial environment. we in factory be in through and transitions technology Turning surprise shouldn't Consumer trends automation, with in challenges security network along EV I'll strong on many continued secular end the that in but ADAS, with driven in see seeing fiscal growth We in and touch and X. with touch. cloud current to minute. that of remained few weakness dynamics communications, applications We're Many in a strong positive Slide demand which the we expansion weak, automotive the to renewables, backlog. and also by QX ongoing expect of continue a a

situation on the chain and overall a continues global supply logistic quarter, to Similar level. improve to last

as node the However, automotive, liability such within particularly healthcare applications a products. challenge, large higher some remain semiconductors in industrial shortages and

causes this capital absorption this how about driver of requirements. screw costs, working primary is before inefficiencies talked of golden also higher have and and the effect their We

growth on opportunities so margins. higher very was on net growth, result pressure the made skilled have bullish this remain increases in labor. We this investments additional Reliability, The including quarter in long-term to Reliability additional near-term support operating operational

these However, will our positioning, the growth worth and of benefit will driver bigger investments Reliability the as story. has longer-term focus is long-term and market be our

and consumer demonstrated strong The demand great Agility very but given in also effective had another broader quarter team cost execution, delivered lifestyle, turndown. meeting in growth of management CEC the

the we We made improvements both the and portfolio of over have benefits recognize last years. operational continue changes the to several

We five power of portfolio. accelerated remain of and in business six a It yet well-diversified macro the delivered is growth challenging and Nextracker. units core at to a balanced environment important highlight in growth and

Slide minute, Paul year-over-year QX to on in discuss XXXX. Now we track as revenue XX% X. our a in comes guidance assuming deliver but fiscal growth will expected, remain looking in to

revenue can path watermark high chart see of margin left, amount see consistent and substantial all pruned the a beat made can As of Adding and our we company. steady have in will have in also lower-quality this we you as of improvements before operational on you the means, the expansion, this business. a previous initiatives, a our we reflects

With the out still a evolving dynamic macroeconomic there. highly it's uncertainty, environment

At these what the XXXX. However, many consumer-related our holding believe are to weaknesses IT early we point, enough seeing offset been spending. share fiscal slowing enterprise We including of and next-gen headwinds and talking indicators are I as we've we're want strong into like trends to this healthcare. to mobility, an cloud about, for demand renewables, multiyear up view look

year, XXXX. expect to So, at next it was thought this point, state we fiscal to important in we grow

We next call. XXXX will quarter's on full guidance discuss fiscal our

X. Slide to Turning

step Lastly, taking a back.

flow Investor cash free conversion. margin mid-teens us financial CAGR, fiscal year, revenue gave without Day X%-plus XXXX last is XX% core high said framework adjusting single-digit look at you Flex, growth we the will to to I in $X.XX EPS in and which we lead Nextracker, Flex, adjusted As which with getting core for our operating adjusted

areas right a these It our execution to coupled us combination and drivers get with that will multiyear strong is targets. on of our focus growth the

that, I'll take turn over you Paul With financials. to it our Paul? through to

afternoon, Okay, great. Thanks, Revathi, and everyone. good

results. with in review will our basis, GAAP of all Please and X growth otherwise. quarter third provided I'll the begin metrics unless reconciliations all year-over-year can be results a of appendix a found stated Slide on be non-GAAP earnings The on be will note, the presentation.

improving XX% with growth profit million, strong, $X.X totaled Revenue billion. margins improved million points XX margin was gross was at Gross basis up profit at to year-over-year. Operating and $XXX X.X%. operating X.X%, $XXX

creating in last Lastly, a year, earnings number if of But had of $X.XX this an we non-GAAP-ed diverse pleased the resiliency growth out, strong QX we quarter, up a the $X.XX, we're the result share with difficult for EPS recall, and portfolio markets at our non-operating compelling in we The our to proposition serve. in of that is the value small of year-over-year. increase per that GAAP comp. XX%. the brings came at performance X% Overall, Flex gains came quarter. of you

segment next operating to support X.X%, results of was operational semi to $XXX on was XX% by persisting income some the billion, $X Turning increased Reliability an $X.X was and for was impacted Operating margin Operating increased quarter revenue $XXX our Agility, X.X%. XX%, In income with the revenue and investments million, XX%. billion. future made to slide. growth. operating up X%, segment third up million, margin up shortages

income Nextracker operating million, of a $XX XXX%, up now points revenue margin up Finally, expansion. impressive at very of year-over-year. at That's in significant XX% $XXX was came at three million, over margins sequential quarters improvement Nextracker XX.X%. and X.X Operating with sequential

is inventory low concerns, auto still is macro In Reliability, despite stable. customer backlog and

profitability. demand and for However, Demand in semi growth. automation notable and efficiency increased invest strength was specialty and future Industrial steady expedite remains solid the continue space to other with tempering impacted we shortages contributed in costs, healthcare renewables, to programs.

was driven at in the Looking business quarter ongoing now of consumer-related significant by this gains. the multiple up We've Agility, share despite lifestyle outperformance our seen quarters weakness. slightly

expected, consumer trends infrastructure. to last was by overall driven a finally, markets. again devices showed of continued strong quarter what with execution As excellent continuation device CEC performance, in end -- cloud network we and And saw down and soft consumer similar

QX quarter. on on at was totaled Slide flow cash $XXX CapEx Moving to X% approximately net Free flow cash $XXX the XX. in of revenue. target million, million

the on year. our today, fourth put in expect screw it visibility us to we previous free flow the below situation With to our par the with given full which degree $XXX be of would we in what for golden the has, quarter and cash QX, target continuing delivered million

the We are, net and capital however, inventory inflect. up gross of Inventory on advances beginning curve X% to working only sequentially. decreased flattened X% we see sequentially, trends

to to it's that So, we some on see see are nice starting inventory. progress

Lastly, we to repurchases. quarter this through million $XX shareholders returned share

for our Slide XX fiscal for fourth the our to expectations. segment turn outlook growth year-over-year and Please for quarter

but Health remain while and they dominant industry growth trends tailwinds, a the For trends ramps. regionalization EV up to progress a and auto, near in opportunities we mid-teens. ADAS transition to often about these single on also Reliability making from IRA, contribute energy program talk in should high driver. renewable continue the outsourcing with Industrial further Reliability remains longer-term we strong, term. positive opportunities out to providing solutions the secular factory continues in Solutions, revenue overall trends is with playing more automation. theme. to the grow And digits transition the on And overall clarity benefit are and awaits the Collectively,

fundamentals, CEC is within consumer markets. expected will be grow For driven and particularly we on product both end communications. be Agility underlying cloud down, expect and weakness revenue consumer flat. to Solutions, the But healthy by relatively to lifestyle devices in based

our guidance. to On for Slide XX quarterly

with million. in is Interest be $XXX revenue around the We to between adjusted and $XXX expect of income $X and billion, $XX to billion estimated operating $X.X range million other million.

between expect weighted based expect quarter $X.XX $X.XX outstanding. XXX and million tax shares around adjusted EPS rate this be to We we and XX% on approximately the

full $XX.X growth to revenue We would let's 'XX fiscal which over Now result mid-teens expectations the in our on to billion, increased following $XX.X year year-over-year. guidance go our slide. billion

consistent now We quarter's margins between $X.XX around operating what be X.X%, adjusted last guidance share. we've is and from and And up told adjusted $X.XX expect before. with is you EPS to a

just remain thoughts I that the Q&A, begin I we ahead about of us. to Before excited want opportunities Revathi's echo

As factors and continue external is are team Flex has macro portfolio areas challenges. are of all been demonstrate, resiliency still of deliver growth delivering against our we remain number our to strengthened growth results to our at and slow our to long-term facing a -- There strategic we value diversification, The key stakeholders. our and by and on in meeting executing pressures able excellence. but our focused play, investments strategy industry-wide for operational despite targets

I'd Q&A. that, turn begin the to to like the operator to call With over

call. portion We The [Operator from of Steven line the the from Fox Instructions] now comes question-and-answer will of question begin Fox today's first Advisors.

You question. may ask your

Can me hear Good Hi. you afternoon. okay?

we can hear Yes, you.

Okay. you. Thank

can provide I on semiconductor the you And little margins Solutions. you quantify if for First also Can the for talk of wondering a more you going hit segment? then, of all, on follow-up. about Reliability investing and I from was the had a future margin for that the the path what pressures kind color of sort forward area, see and

by we ramps pull supports have to when is some multiyear program company to And forward some how room to trends and start XX% talked aware. weigh I'll all continues the like. about, I'd the challenges. all what year diversity this my to to performing us he issues make regionalization, those of I'd also and the growth and do program kinds is, decided Steven, absorption as can we we investments operational Reliability cetera, seeing et support and continue supply of try see because have growth, then comes three We're is, growth opening business. we macro front-end to Reliability in around could very put in growth in then and first we is our pleased the that some I costs Yes, And you're the we gives can segments driven first right? Paul if forward, and of it, to afford say with make chain pretty tremendous say and all portfolio in much said feels remarks, like our moving decisions. the the continue growth under with

And then, course, for skilled Steven, there's nuances liability labor the that also, tight. you market well, is that of know is

continuously comes world very provides feel of different this. to that keep how have we and available But the the the of in pressure. And to right kind of kind trajectory about labor we labor ways margins hire of of Reliability that good regions so, some find out

has margin to I -- changed. of these and make itself. expansion think longer-term choose we we the long-term all ramps that feel and are like driver program are of because how of decisions growth hasn't sector about the overall, bullish the We growth longer-cycle

very extra do. for But some decisions the that But invest So, we the to commitments strategy is about make I to a longer-term. I've feel and chose made room intact. had liability we good

And theme. There's of follow-up, a you headlines say, the helpful. That's anything if and last just you versus so related wondering over then, than or China, either India, highlight, et that that regionalization days would related Great. XX as been on I was ago? you bad electrification, would good quarter a a playing less lot to cetera. have anything more in much. very you theme to that's call thought out Is Thank or there's

opening going now, Steven, hearing in and whether of anything, accelerate. to this up is if or I say, it on is what conversation matter would China, it I the the on ups continues India. you're Yes. doesn't or say, only regionalization country would whether downs the

quite amount -- right chain, trend, driven by U.S., Southeast a of programs Mexico, particularly is and by biggest just growth that our Asia. in that supply We resiliency in kind areas, regionalization now then, reducing resiliency of are in two significant some -- in driven which supporting the is increasing are

we trajectory the trying it's If (ph) more [beat] of accelerated, to figure seen forward. can kind anything, out how change. and really we're this absorb moving haven't do where So, much

is more we're is seeing. quickly do the on and it So, customers do what to pressure from

Great. Thank That's you. helpful.

the Your Suisse. next from of question Cross comes from Credit line Shannon

question. may You ask the

longer holding know, time. Can conversion you period a know I'm it growth mean, had. guessing has maybe visibility, I'm cash bit But a manage you the Thank related of wondering, been -- I to of you've working improve better, what has I to internally don't XX% what cash flow? golden some very that on been it's gone what's I you your inventory obviously because talk just over some doing capital screw. are much. you're about of of the to, And

of I'm going So, over the your because changed knocks the you is as XX%, you're couple I now the just conversion. business that that's has at your so back get this, cash last managing of few can right about look think stock wondering how you one the how on years, to

happy I have I'd underlying say, And I there, with, out. would we're of whole our that we're working in the I to because things the flattening feel would good part we direction is kind let's customers. this And that kit feel I say, we're Shannon, see first, have say, change a Yes. overall general trajectory the start issue, while here capital with see we still starting incomplete we managing really the track good missing and inventory. to that trends about how Reliability, particularly I'm inventory about with and right seeing. overall, in

sticking continues cash of kind business cash So, flow this, with kind target, we that improve. to out to terms do going conversion with cash. reason slips, think why think that generate is you're coming obviously that our comfortable we've is start of in seeing the our That of this this of overall and because feel and quarter the we flow of

-- thing well Flex I'd become in burning view terms that longer-term, Shannon, say last is, have of it. have four the years with we my really the and is done about have we disciplined more platform every taken we

get this customers and to This And in touch, better more better helping are that implications make be the chains and to aspiration across we're inflection comfortable how become underlying all to customers think sticking we of is theme have But a our us some longer-term planning. more but managed, planning. us the us, than we We're seeing is I dear at company time. in we will my in point think and be makes that these my chain not it. really heart, will XX% will targets. and good with near supply have So, that right? for company points disciplined that And supply with here, terms

it then, Okay. going you. Nextracker talk just there, excess bit but in you cash about necessarily, cash have you'll a cash. utilization? I And have talk cash, not on understand generation about you terms just can move Thank back, assuming to You you're again of out

like what cash back can you've of to looks your been So, you about landscape but general maybe potential to the stock, shareholders? talk returning in Obviously, just in a buying bit approach acquisitions? Thank you. terms

No problem, Shannon.

now just So, when I prioritization, comes allocation. it first, number look and say, a I'll years, that's right very next to investments supporting or the with comes pipeline. to some our have last internal to the be judicious we priority M&A, high top-line because us CapEx, capital to we capital disciplined whether a But sure you've that to path priority, is Specific us if say, process we I allocation, over at growth, solid ahead if funded business in years, that. strong clear we've seen think performance several terms the when and of want very capital it would very of it's one make a robust organic you for and robust or working over for have growth few

So that's one.

Stock of us been last priority for years. buyback has couple the a

valuation that. about I views think we've leaned vocal into we've been on pretty our and

And M&A I guess I so, last. put would

allocation remain we opportunistic, have to going at priority. again, that's the be moment, but Although pipeline, our a we're we disciplined, lowest probably

you. Thank

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

your ask question. may You

for In there. taking heard good afternoon. question. correctly, the Thanks guiding Yes, I was the for if segment, growth CEC much the very company,

been a market. reporting the I in infrastructure pretty companies comms have number think of weakness broad-based

else from? that that's perhaps on companies a gain elaborate not seen infrastructure a more there perhaps benefiting And comms tailwind the are what something bit markets? Flex other maybe Flex has for in little or So, share is

you in think there's and segment you about say enterprise that all enterprise, noise But three If performing. happening. first, are for are of how it, happening, we're a a cloud, while communications lot still CEC, couple the in segments I'd about things segments us, is seeing growth No, and right? things three of two Yes. of seeing that

is changing, about that we has helped market it clearly, people that gains, have for us with talked cloud, we've growth growth. continued that's cloud, it growth see still while and And rate share show In along And and of forward. significant the playing important. pretty

and similarly, specific cleared in growth. I is we're But growth. say there's that has happened enough that being share seeing we gain communications backlog the space, supporting customers supporting in that business have would also that seen we're also with underlying

So, overall, I'd is gain a particularly and the share CEC, in communications say story of story big cloud. there,

So we a switches still like feel a for little rate of -- and very if story bit, it's of the growth positive overall, change growth us.

add you'd anything? Paul,

No, think I that clear. was

when they coming you recent And the customers, what that's this more dynamics COVID expecting the Thanks. China Flex could occurring the up bit second Revathi. your you elaborate China? to year, in seeing in a talk demand my has hoping pick was question been also, in And on given was to I China, months. on reopening operationally are Thanks, given unfortunate market. potential

No Mark. problem,

Chinese little were effect was half back of thought manage high on was spike December. couple we to probably December. ago you sort this bit through very started us, was to way absenteeism were had I we the And high But of kind I'll the about particularly see cases of that post COVID months be we So, to December, as move COVID but open out. it. think quite we big a able in one. expected of a how as timeframe. thought the played we a tell November-December our there another That Year, -- in we'd then, just of New things up,

originally been at back week, end very, to but had every call post Year, pleased track by to be that has what's very Chinese high, And here higher And this to to XXX%. we're think than happen anticipated of I on to this New we Chinese stuff from day. New what work we Too going returning say early coming going people Year. I'm the

good that's So news.

that has helps, Mark. Hopefully, color that some

you. thank Yes,

comes Your next of Stifel. question Sheerin Matt line from from the

question. your ask You may

segment afternoon. Yes, to where you're and program wanted thanks. in got and confident the another of Good in sounds question it subsegments growth ask Reliability those ramps. you've growth, good I most on terms like of

weakness industrial of of semi incremental but of some not some some markets, have about I hearing exposure, broader as in cap. you as those your are know much some We particularly peers.

end markets those versus about any talk demand concern of there? pockets ramps you could program and So,

Yes.

demand, kind across we Matt, really share Reliability, have market we're the by strong of driven fundamentals of good the continued markets gains. end also So, underlying but in,

little thing. We a so in good caps, have very semi that's

And doesn't of affect so, that we and in down see the fluctuations our and up the don't overall that, portfolio.

very grow seeing good automation. we're have in and to seeing growth really in industrial, opportunities in of In strong to areas We're continue we renewables lot renewables. a growth like

there industrial much and So, and basic the to cap are between automation, fundamentals the we have equipment. semi very renewables, business strong, exposure don't power

very, because And dealer then, have we while strong, for in growth there. very of more, new in is strong filled year-over-year EV a very we on -- ADAS bit program path and And little a is terms even lot auto, EV inventory particularly up see forward getting going automation. ramps maybe lot of a

And health going is steady going right? well. along growth is rate predicted, So, and we pretty as

a have to growth other So, Reliability. that. we just We this to on really equation, are in have execute of side lot the of we

And expansion I for Reliability, on Thanks that. because under whole assume know we have How about which for would Okay. a going the explained. the company, business sort margin pressure in to margin reasons Agility You're range. within that been X%-plus be that that the business, that? to you is do get within nice which then, the imply that of margins I for talking

issues other supply when start logistics So, in these or margins those move do issues, timing what's and see to up? And we the playing terms off of like these investments there?

this gradual margins, even spreadsheet, the you that nice timeframe Matt. we back look February-March for ultimately together it the always a inflation acceleration when it's but putting plan be us would large Yes, as don't framework persistent with shared that a -- we're I of any as as has good has. of we to it In and our shortages Day. been, a into anticipated the nice we semiconductor long I with and question, as as sticky Investor did anticipate line, nor going sticky smooth year persisting think

both with what put say more pressure business, talked would the because puts before, have so node course. stops components larger on And those resources Reliability, and on waiting including technology starts so, that we've idled, Reliability, I of margins. about you pressure of the where have for definitely And on

inflation And how better so, seen and core All else we'll slowly being items. and both have look impacts one-time I out things I that of accelerate. I you see performance ahead, at effect the And look start the we'll the margin those margins component abate factories see think equal, shortage ultimately to think business. we effect Flex the and sort of would as as

margins And to with feel today target, where are from upside Reliability target right? performing Matt, the are is reason about I Flex pressure, clear at more our think Because bullish all long-term that. under the we we core if

really we about anything, So, it. long-term If targets remain intact. feel good

Thanks Okay. very much.

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

may your question. You ask

that? that, if you assuming about consumer-facing some weaker, I what business, recession end weaker single-digit medium-term would what think? revenue one can the of year, most you the the have some of part are the then, tell I of is my a long-term we medium-term us the about is maybe Hi, confidence concern -- do Can follow-up revenues? you part, part of have in what on markets the than the about on a giving XX Can I target high you about And giving most the you and talk you or that you what to have other you the Agility margins. concern? the are So, talk next gives look ask like if that reiterated questions. for taking you growth. you is things that offset like you are this the thanks that levers management. risk out mean, into think it you're thinking in confidence wanted just When giving here months, And Revathi, is if the you how what

portfolio where I'd significantly you we to are say has is, if Ruplu, Yes. today. from changed first history our look

in and resilient in have in have portfolio at smart We the forward terms longer it of we cycles planful overall being moved of a very our the and way, looked and economy. more

regionalization in itself, numbers we really that says in when shared we the and Whether of Flex is continue have that so how our that have you, portfolio in favor, and favor. terms And end we trajectory the looks, we is good the right, overall those macro transitions, right? our with to it trajectory. are are why be supported, that's look that's have those long-term the going continued or all to on be really of reliability in And growth forward, long-term are technology we focused that need to because markets

downs, and still We've months, have you consumer portfolio and Agility, significantly, -- minimized always on can the see but we grew. have comms that we'll took really markets ups pretty we the the already is, right? way few some as the last

committing really have about to story portfolio we makes this And very delivered growth. of of So, the diversity of the our kind why that. strong feel longer-term we on it real

look was you trade it growth being doesn't and trajectory the crisis four business. portfolios last to really or this get COVID up about we've chain matter executed how we've Ruplu, if If or with able crises, exiting built this years, supply is whether to large on it

this very what is we're making comfortable So, why the of big diversity portfolio with commitment. the you the reason tell really I is

a Revathi. details I If the on ask for can margins. thanks Okay, there, follow-up

think I about just segment Reliability the you So, Agility talked being X.X% and X.X%.

take basis likely basis are like points And right? much mean, out the already. at I XX margins inflation if you're So, to pretty we pass-through, those XX mid-X%-s, points higher

at you've done the that bit over of like target look I long-term the XX basis more look basis I a year mean, past 'XX, for you points. improvement. seems years, little I when points X% a fiscal two of be XX if mean, conservative. So, would like margin This

Is Or years? the to you can it levers trying get that the is wouldn't what maybe the you improvement? over about X% two margin come from? some to what improvement of improvement than is it have why And So, getting -- where I'm that higher margin next margin going how harder to be at. for -- talk get the

were we Yes, longer-term last the that for I in that the and to longer-term question to those you nail on obviously, could kind try so, margin one -- afford Reliability margins, business, answered to. I the -- about commitment bit of of of head, we with on this And is the little right? the investment to definitely make think, Ruplu, we we hit make right, as decisions we expect those that a as even taper the off, because can commit investments, we able

upside have to of next see the Investor what terms X%, next to think I wait In Day. in and is the that you

it's we to what and too I'd driving for lots growth say program think kinds to is I see big lots can there. efficiency do early But say opportunities room around of I do. for how that, we commit. for efficiency us. continue more manufacturing drive. There's all there's I'd there. productivity I room tons of to of see

points said, upside And drive six hasn't important The the of in that us. continuing help. does XX you out, changed, all course, the for you mix-up basis if business take story of basis continues That like inflation right? XX to units. to that be We're points on to

sticking just say, you. with commitment. I to have the long-term I want any are to don't commitment we thesis. your giving agree we're make with I would So,

square revenues has we billion, years, If I not Okay. you total since the for more one talk just you mentioned much. sneak grown right, looking can about manufacturing can I your -- efficiency, your over I'm manufacturing efficiency, four increased have foot that that. $X but past in. If Thank

technically foot looking better. much So, revenue is I the per mean, square

ever you've I of you existing any and they factories. you've since should to revenue there -- do add, the be about year had the fiscal support? fiscal mean, about -- efficiencies where think can more much How more come from? how efficiencies? infrastructure more Are can CapEx? a we as talk how manufacturing think about And efficiency you the 'XX So, like, you've lot -- 'XX about, much you in, come in target, driven talk Can

first goal. be growth. Absolutely. significant couple talked year. less, in thank the regionalization Well, PP&E trends, there for significant growth of going things. Revathi Sure. Ruplu. growth in that's all, to the significant A growth the have U.S., you, incremental We're more of Mexico, Malaysia to about this Will expenditures? Do in facilitize with

You'll rate. those in the be few to another K the see in going months. growth But it Flex overall regions growing probably are Xx

be will pressure productivity we remained to again, that's asset factory there high And high, problem. some laser-focused on a high-class invest, but utilization. and So,

for details. Appreciate it. Thanks the all

Ruplu. thanks, No,

J.P. the Your Morgan. comes Instructions] Paul line [Operator from next Chung question of from

your may question. You ask

taking for Thanks question. my Hi.

that the the we have kind So, where an space? of to you see from same business winning specific margins other has material deals acquisitions, you've some just and and acquisition Can so incremental how of would you can on talk a And on think performed Anord this about of of for be of about of And about Anord had and the the as kind been revenues looking verticals to thinking acquisition Mardix, year. future we kind are should been has Mardix? how in about kind cross-sell? complementary which that benefits playbook find value

has say, I'd acquisition Yes. the Paul, very gone well.

space on And the was centers, long-term strong well the focused business footprint Anord grow wanted we they colo and expand recall, macro that really because our -- has a us them that, we has more and you expanding done wanted revenue their focus backlog. on both for terms portfolio in of have and really important. power it's a hyperscale, Mardix and we their get growth, to to faster. We're strategy helping in felt particularly in bigger If and data was

and overall And colo, say, and And in to win in really offer is differentiator our hyperscale focus to space. that of we our where I of able have a to comprehensive helped would on really it us in has it see has the business, in that portfolio terms schedule delivery more to helps a else how customers. be schedule, nobody as

it definitely data has in focused the servers storage. sector, center and space conversation and power the changed enclosures and so, and IT on we're is terms how with And whether racks of on

of would, see and overall So, expansion there. out in seeing it growth our that we we're our the It's and how playing it. cloud exactly thought you effect

would for I say, asset, been good really us. The fantastic. has growth So, story

golden on follow-up And just end taking timing a get in the how flow. you advantage And and that to are view? most close kind to offset it's see do there with cash? XX% then, partially you. 'XX of about we then, of great. the more screws? kind are early, on Okay, in can cash issues markets of we more meaningful And of Which having your know mark Thank customer some think deposits as you well? conversion I but of And conversion

Sure.

So, there. in I think questions three

have more an larger face the on end shortages more First But older and little the continued from or the that headwind Things so has technology solutions the pressure the to the consumer not have and automotive of extent, late. have bit commoditized, markets. those to biggest technology end and a gotten been markets, easier industrial, health been helpful. node

effect as But in itself we that manifesting the also an and has flow. inventory absolutely it on that talked right, ultimately an effect also P&L you're see today. You on about cash has -- Paul, earlier

our second I capital in support net pleased we came prepared actually customers inventory, we as was, our in first very net that. say heard partnerships working are trends sequentially. have the and Well, probably things with can see you down we what been part the to from to in do saw helpful. time, time think has our was and I from that for inventory of customers, remarks, the offset that a advances definitely And long less I gross of advances that

and to of a was see. that So source great cash

that of see But trend. at don't the like light end I'd there tunnel? the Is certainly, to know. I

are from we getting customers. support So, the some

would before Shannon of what's asked changed, that well, the last a be I think couple years question about one change.

think better voracious I for inventory. supporting a with customers partnership in appetite our very

capital, going But third, mean inventory I is working organic that come abate. to job our some understands comment Look, year. to timing down should start I XXXX, everybody that. on the probably ultimately, little yes, manage guide growth. with would definitely but a grow That on a XX% balance on is shortages to I think to it's and it's to then, Long-term, that this issue this that. looking pressure And puts premature Flex ahead these as a all

early little this think target I really 'XX, overall is timing. on a -- So, it's just but to

Great. Thank you.

Yes. Thanks, Paul.

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

ask your may question. You

picture be South you much. that very or of North America is it a and America bigger a you [ones] on facilities, whether (ph) you or load or now cost-plus factories Europe are Thank This make is facilities, question. accretive as out little strategic customer, utilized, build this doesn't the Guadalajara those more also onshoring Revathi, more be margin to rate a your better just plus the which or help doesn't to long-term operating work also? maybe it goals higher, that to I bit end wanted labor you sure way. model, passed

would I the say, all that you've parts we Mexico, growth think U.S., Malaysia, picked the Jim, that out right ones, first, in trajectories, I biggest the our definitely areas some said have Asia. are of Southeast are

complex big U.S. there's you we programs because this programs, it, about people The the start right we're it, in think can execute those take some you and challenges liability when growing. always these I on. are all right, see we are that they these in way areas few I execute particularly complex mean, with programs. to those see So, now, very Mexico And to choosing and is type what the of are

pressure, So, our as Reliability you some challenges margins you now. which see of that see execution

that work as we do say, I a that won't those model for call of it one keep industry expanding is a customers, the X% margins. to efficient about, model, expect the There's and is we be a monetizing just you a mature, efficient our we right? lot different and And question to more more that of feel tailwind as this of cost-plus model, and we answering them. good that's get ways why within that something programs But I margins, definitely but as it's

agree with I you. So,

Thank so all details, to your the teams. and Great. congratulations for much and and you clarification you

Thanks, Jim.

Okay.

course, a just close support, So, and, of to our Flex that thank and to thanks behalf of to sincere Flex world. team, on you, their leadership by our across to team everyone. saying I the all the the for want shareholders customers

wouldn't here Your without be makes today hard this work all. possible. We you

you thank and much, Bye. so you So, soon. see

This Thank today's conference joining. call. for you concludes

may disconnect. You now