Flex (FLEX) 31 Jan 242024 Q3 Earnings call transcript

Good afternoon, and thank you for standing by. Welcome to Flex's Third Quarter Fiscal 2024 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Mr. David Rubin, you may begin.

Thank you, Diego. to Quarter welcome Conference XXXX and Call. afternoon, Flex's Fiscal Third Earnings Good is Officer, Chief our me our With today Executive Officer, Lundstrom. Chief Paul Revathi Financial and Advaithi; followed Both brief by Q&A. will remarks, give well Slides for press and Relations financials summary a Investor of available the at the release on as are section today's earnings copy as call flex.com. is on website. web our being and be will recorded call corporate This available replay for

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

and full For statements. our will can please in slides and we growth stated, a presentation as is Please a the year-over-year note, and full in in discussion Relations measures, unless forward-looking as of no the release website. with posted undertaken press have of provided summary The Investor all recent the these to non-GAAP the in information otherwise to risks will the statements most the on be well to appendix Factors update this these section on found be uncertainties, our in non-GAAP subject cautionary change, or obligation Risk see all GAAP presentation, metrics today's results filings financials basis. be reconciliations SEC.Note

XXXX, As shareholders. Flex to completed previously of the on interest January in Nextracker Flex its announced, X, spinoff remaining of all

company. year full economic excludes independent any and guidance for consolidate of and year of longer our result guidance Nextracker no quarter shares economic Flex public for QX fully a the interest directly As results. QX. Flex into no a or spin-off, completion for Nextracker will in the 'XX stock Nextracker holds Flex Please became longer through fiscal of financial common note, Nextracker its any includes indirectly interest in Nextracker XXXX fiscal fourth

fiscal it However, QX 'XX. also it excludes from

statements all now as Nextracker quarter call March be of Flex's in in discontinued assets to financial fourth results XXXX. like and turn will operations spin-off ending and reported that, included With Flex's I'd in CEO, historical the the our consolidated beginning certain the in Revathi? Lastly, to liabilities over XX,

tax-free in our them and the to growth. creating spin future independent continued occurred look on early success the watching wish we in great value. company, and fully Through January, making focus we the their unlock With forward Nextracker process, that approach this tremendous value long-term shareholder in reflects continued a

generating should to core course, own to of Of a that transition of wide in renewable committed revenue We our $X this use market. factories as for over I our applications, renewable energy in business. enabling Flex remains in the variety we net-zero journey. our serve to the billion and expand continue customers energy mention part of also

of was quarter strong to fiscal slide our X. Overall, on moving QX another Now execution. results

operating billion, total revenue adjusted EPS. $X.X adjusted For we of Flex, at in margin came X.X%, $X.XX and was delivered

year-over-year, was for results in environment. X.X%, and and operating to $X.XX in at Again, Nextracker, we Core well was Flex, Flex the Revenue we solid at Looking $X.X Core margin which up both this EPS. dynamic execute continue came record execution of quarter. billion. with a delivered very this sequentially exclude

Now the be clear. takeaway should

data very market driving driven I products and this position. EPS the across center Our and that through we in and network. AI value the comes our we significant changes margin and We markets our our we've our manufacture. well deep demonstrate fundamental in movement ability highlights the a and world-class our the the serve, with provide Despite changes is relationships show couple of share on quarter across to model to volume of deliver from the results want both Flex the and quality positioned data customers to industry. the resiliency continue strong to continued macro commitments. to remain from fluctuations,

Our a strength systems products embedded, hyperscale provider discrete talked success bespoke these scale. enablers key in and center EMS fully in before our We've customers' offering, only are data ranging and delivering multiple comprehensive infrastructure positioning to at the customers. from with of networking about center hyperscale our rack critical solutions, integrated with power including and up way power. the We're data all strong

and offer including services, metal, chain in we design, addition, supply In services economy. aftermarket value-added components, circular management integration

As offerings, to see growth our Cloud we a comprehensive continue very of our result strong in business.

Recently, also our company to Services partnership is building provide pluggable example Manufacturing were XX-year Buy XXXX good a production enabling U.S.-based of Year equity of broadband with and optical technologies high-volume receive the America the Award. deployment the side, of our networking Ciena Cisco. under America, networking ramp world-class on We're to BEAD, support honored we partnership to Ciena the Electronic On manufacturing with Partner their in and innovative services, capabilities and Build the supply access programs chain the requirements. its

automotive. looking Now at

very infrastructure remains designing vehicle long-term chain drivers advanced these for Flex supply systems across charging support including to a and role Next-gen OEMs, the including the co-designing leadership. bringing content onboard while and and mobility, compute manufacturing electronics, important key plays ecosystems or growth EV software-defined world-class

built of well-diversified the portfolio EV a across solutions have spectrum of assistance for full driver We and hybrid, ICE, and safety.

across that EVs. software-defined technology platform and compute advanced our hybrid vehicles agnostic powers ICE, example, For is

ADAS in electronics recently of previously the NVIDIA power partnership We utilizing as by evidenced STMicroelectronics, upstream EV applications, latest the announced our autonomous semiconductor carbide full technology. showcased MOSFET our established design capability relationships many have next-gen with and also and silicon for with with providers we

to and power, advantage also transition. So across multiple the experts you can long-term every well in very gives which complex stage It Flex positioned we markets. for is a compute see are is technology platform, important as us competitive remember this of

serve vertical and and capabilities renewables integration data centers, mobility. Our applications, including technology many hyperscale next-generation

the competitive customers to capabilities a us complexity Our them help navigate and these to implement them look give to advantage. integrated

excess some in current highly seeing the and inventory and remains rates others. elevated impact markets environment the interest Now dynamic, already we're from in

it crisis. supply made have chain through We the

and However, how we Red lines. carefully in could supply impact the watch that the Sea situation

continue in validates EPS to with business we of execute The the this have the cycle, through industry. change long-term top-tier and we well and our strong, greater drivers. positioned margins and are secular made in the evolution to very We markets EMS stability

optimistic financials. We through our are to take future. you pass our Paul call that, With to the I'll about over very

Thank shareholder Revathi Okay. great our Revathi. create like of by is I would path also a success you, This to great reiterate new start that their separation to example on commitment strong value. Nextracker something wishing and said.

the on may to shares. slide third over tax-efficient Jumping Nextracker and whole on As we quarter. and finally, our you performance recall, private another IPO, follow-on remaining quarter of it with was the investor-friendly the value-creating this multiple X, the process equity the investment, transactions solid executed spin

increased period. Gross Third quarter X.X%, up from increasing per at XX%, came includes year X.X% $X.X million revenue of prior billion. interest. the basis was non-controlling an was share which improved increase $X.XX XXX Operating and over of the $XXX million margin Nextracker income gross XX%, in to margin And points. in quarter, $XXX with at profit for operating earnings $X.XX

continued flex billion, with Core which -- stronger operating Core at me, were a a tough compare. in XX our strong delivered sequential actions Looking quarter Core with Flex of EPS, mix points expected reflective Flex from basis year-over-year including revenue another business up XX up up against results, Flex excuse execution, excludes $X.XX XX%, cost Flex X.X%, expansion, margin came margin improvements. Core and but at of down $X.X core of XX%. points results than basis QX. record down revenue The Nextracker, initially of is This

at and delivered X.X%. at in X% margin, record $XXX weakness very with operating $X services strong Operating in solid billion, commercial in we cost the and in In quarterly this came results next revenue Turning slide, demand we income of AI-driven headwinds on adoption management. value-added to and and demand. mix, auto sequentially as solar. came to was reliability segment segment improved year-over-year for million. while strong team further residential The operational favorable operating our solutions macro-driven medical continuing billion cloud and margin million, came $X.X $XXX a executed reflective Operating revenue continued on income industrial devices, Agility, in at saw in

operating Finally, Nextracker $XXX XX%. Nextracker of million, revenue $XXX delivered income delivering up margin. Operating at XX% million, was

goals, on advances. normal, In and improvement the again X, punctuated in and year-over-year. general, the cash further back continued sequentially Moving to inventory XX% inventory by to previous flow we that X% made shortages progress reductions largely we on semiconductor slide capital net reducing are working supply our expect and challenges chain inventory

increasing However, the pace adversely at reductions on Red net X% impact CapEx QX of $XXX revenue. the times. if Sea transit chains million situation those came at supply by in affected target of could are temporarily

We cash $XXX flow expect similar million. Free level investment in a maintain the was quarter in total to QX.

million QX to in We $XXX expect Core free be cash million and for Flex. $X between flow

QX. million. for $XXX fiscal to segment the that the quarter, the to Please through of next year $XXX in turn Fiscal returned ahead us approximately put Nextracker combined cash would that original assumed returned In had today, for are 'XX our guidance in the with we of shareholders full full the million FY flow Nextracker free where we repurchases we and Flex share given So Nextracker year-to-date, million of for fourth have the line slide separation. absence our a outlook despite $XXX quarter.

continued medical revenue teens automotive in we demand Solutions, be low Power equipment in For down Cloud life continued will sciences. demand Reliability mid-single expect and to Solutions, expect we stable strength digit as in and medical and mixed devices

macro-related in core industrial in further Agility low solar. teens to percent. XXs also weakness Revenue to be expect and also is low down We residential expected

QX Agility. spending XX On see to weakness quarterly consumer-related guidance. continue with markets. our quarter typically end to also We weakest enterprise strong seasonally AI-driven communications, our in slide across IT for Cloud and is

now consensus. X, and the is January financials Nextracker comparable QX Core on not separation to completed only based previous Flex is on guidance With

For billion be QX, income to with $XXX $XX estimated to operating billion in and million. $X.X $XXX range we million. the and million revenue of between around Interest expect others $X.X

the be around in XX% We rate expect quarter. the tax to

EPS million in of expected QX, charges. translates that $XXX based that restructuring looking and $X.XX at adjusted All for XXX weighted recall guidance, $XX between approximately GAAP million $X.XX shares of average about QX. And implemented our in we approximately outstanding. We on to million

expect million of least at QX. will into we those then $XX charges another So shift

guidance adjusted to the full our full margin Nextracker FY billion, to of not year operating $X.XX the guidance still X.X% the prior quarters. and comparable or and at expect now on note, separation following full guidance and million January year total Nextracker.So total a Flex, that and the between year in $XX.X is Looking share. our for impact between guidance slide, total previous 'XX revenue X.X% includes from consensus note Please between EPS Flex X due adjusted Flex $XX.X we $X.XX

quarter. last we this the full Core additional comparable we for only Core visibility, guidance with providing that and quarter, As to last year, expectations is Flex gave are for for our guidance Flex

Flex, from for unchanged guidance So our is quarter. Core essentially last

We expect $XX.X year billion. revenue $XX between million and full

expect to $X.XX We operating $X.XX X.X% we between expect a of adjusted margin be and share. X.X%, adjusted EPS between and and

continues the execute of in environment. into year, enter to the final we As our a quarter very challenging team well

we long-term and increasing shareholder trends is resilient Revathi results portfolio out, share, wallet to validate and customer As and we'll are opportunity remain intact, continue margin have on continue pointed that and Strong drive base to and to create ultimately a through our ample the more company. build we diversified value. wins Flex efficient expansion delivering and new

Lastly, hold with longer-term call update 'XX outlook. fiscal earnings conjunction provide this QX event we will where investor also in fiscal will our virtual we and year, guidance full our our

Diego, the now you, call please start So back the to over Q&A. for tuned turn to stay I'll that.

We'll session call. today's now of the Instructions]. question-and-answer [Operator begin portion

from first question Samik Chatterjee with comes JPMorgan. Our

support? for have Samik the [indiscernible] and end like regarding let the 'XX please ask the drivers versus respect with us FY X.XX both Core regarding visibility line you I revisit I to is expansion and operating the one buyback margins Flex This markets. to Can follow-up. top target EPS wanted versus regarding same Chatterjee. know updated And

pointed in Okay. start by ], and jump fiscal our first Paul in be here off I'll year and want I'll [ saying Investor we'll Day out, as Sumithe March, wherever April. start ends to. in doing is you Paul our that

talked for we'll start just saying, I'll be long about when to the long-term fiscal first, about of that we really So term. But targets XXXX talking think few we growth. ballpark. talked X% just things, that's go I kind 'XX we I'll guidance and Flex said, the We back in if EPS market say still right operating are that right? very dynamic. targets talked is mid-teens We Core about a And the about those margin. by

do. You that know we as as well

want full to beginning when FY done we a we'll have at guidance. I the quarter to 'XX what we give in just started. have years a that in right, back the to take like little I But take look last So X wait bit, said the for the complete the give next and we exact a to number transformation minute and step

alignments, lot So a transitions development that and corporate operational major portfolio includes of actions. shareholder-friendly

hit This margin operating of X.X%, quarter, and quarter. again which was we we next that to expect Flex Core record, improve

commitment, the transformation a the on and a more company. that's higher-value this delivering Flex more clearly, business. investable was have we focused more So make to a efficient on all goal of also But company agile

So the of on share with end earnings. our growth we're you our strong means in at the primary focused increasing about markets of also customers. trends, long-term that And with quality our wallet if fundamentals, drivers that it's look

adding like And good value-added that, it's executing services things So of top operationally. growth, right? we're and well then on

growth good the mid-teens said, the Nextracker, in development corporate in EPS we've in So going the we've and this. margin on done macro capital work – return. things expansion with order back we said work all done good the XXXX, despite to the we've

a say in to of resilient the what out, we about anything a fundamentals figure talked add? Paul, So macro it I XXXX. would but you'd we agile, strong, company, and remain of good few next about months use lot the feel we we'll uncertainties

Yes.

you think you the we down hit that well. you said And told X% I road. I and it more. like margins do think can said, we expect we mean, of do to X.X% we just

mid-teens have also We about talked growth. EPS

look we're reasonable, year, stock. that's ahead I I to back teens, think mid-teens. next And low buying As

to 'XX, what's growth really to or at is looks I going telecommunications' for macro. could And all look the that on kind same the We're the seems weak, enterprise of spending a bit continues FY calendar for are equipment slowing us be be all CapEx moment of go to down And too. think at capital industrial a the the to list listening to be you based earnings hard guys continue bit. revenue calls you so part I down,

would off you good I we're But for quarter. May. Investor more a about thinking I about talk So in Day it. it rather We'll in framework pretty the just detail at hold a here how think have

regarding the in activity you I that M&A? for And M&A end seeing of what landscape, are a the And follow-up markets the have area space? for in like sort you which this are of target is is currently terms

Sure.

focus scale is capability talk at There's really pipeline. the posture kind have talking just large I I to on looking But would acquisitions pretty would process, hopper. So about we frankly, the funded changed opportunities the think we us. Continuing to I always be make landscape sure enterprise, prioritize stock internal key to next on And about probably business would view, we well M&A, deal. the get large-scale a And great it's That's a and value. of really is not more organic unless shareholder the M&A. opportunity to the I priority think a I'll allocation. technology would capital M&A. sort that and opportunities. our but improve if other of how we make robust We're a last tuck-ins we can continue And sort have say good hasn't guess say can create say, in I nothing growth for for of to several broadly a over I robust of the and in of continues, We're that all years. our about investment the pretty

back to continue we're So going buy to stock.

power, good interested --which add place continue critical power Yes. sizable or have a embedded areas The related business that. be in center And the second customers, business of we services the to so only is portfolio. focused the be to be would products this the continued part growth in thing we around really business acquisitions out our tuck-in would this power, that and I'd that where things our would hyperscale if around and in technology and be of building data would in value-added add

would we Paul be be as would buyback. comes we on like the look keen it in -- second said, further but those we areas are and if So investing after

comes Sachs question from with Management. Asset Goldman next our And Delaney Mark

well. little today driven Maybe programs can believe have doing multiple mentioned [indiscernible] Flex you XX% in the been I have expecting to that how is Cloud, to meet you that hyperscaler is ramping. able about a relative how demand? more nearly Cloud Cloud, of on your by are bit XX% prior market talk Are those And growth growth Starting you operationally? been tracking going around in view growth?

well would talking about of really of North hedging North for to -- our the considerably bets well do Yes. we to It And that RAC the we well. power I business previously And and were overall, Cloud that. were that fiscal 'XX done, how strong doing our of and what as develop and 'XX XX% year all integration know markets the and also business kind our our we And this, power just in this look about be expect Cloud. business fiscal is CEC at and we of Mark, earlier. embedded that, have we But would there talked business. the of XX%. North when all terms grown be not our will said you of Cloud includes say facilities all also for but

for to enterprise start our as become at IT big Cloud So will our Cloud. almost as some -- significant business. pretty point growth as

So it's catching to that. up

to So I we good.Operationally, coming and expect say, really well. be would good doing Cloud, fiscal growth out 'XX of

a and the very We going. is on program and made ramps And it going we've well. large-scale are with how program, very are it progress pleased considerable

pleased I'm with it. So

think, think, in the the particular, I in the in though other over better of is I looks it to, was in million midpoint, dollars my EBIT mechanics did up fiscal the understand revenue third quarter is And some guide. trying fiscal the Core expecting little sequentially to million Flex $XXX $XXX about And dropping helpful. a company increase even XQ XQ just That's from, $XXX quarter-on-quarter. the question at like to

So for maybe revenue guidance? better allowing please, as EBIT falling dollars improve quarter much us coming in what's is help understand margin and you so if even to could the

a good question, it's Yes, Mark.

And so of give clarity a you little that. bit on

just of question So third back to sequential. to was because of go quarter first, that the kind your

we quarter, margin. So third for Core billion X.X% That Flex. operating did was $X.X

You're exactly right.

the at revenue X.X% QX here in that billion of would margin. expectation be Our be $X.X XXX, at would midpoint operating

the like A the it's you So less trajectory We piece One, nice is sequentially. it's of about down bit revenue, look semiconductor just improving would things. say recoveries. that, there. I couple if a certainly of -- of little sort at a talked probably a market. third the

We claims that pass-through kind probably less years. inflation backwards about effect that are talked of we've now that for going have X.X

bit I does And less drop is sequential from say a just The and through. volume, claims. rest so would that little revenue

the However, talked guy. Two, move $XX prepared were mix from improving. That -- as we the tailwind is about through remarks, in QX, That's of or programs we a those implemented we million be would you from have so as if at QX to QX one. lot at restructuring look we to move that good quarter. a the

And than in so have you're benefit quarter in fourth the going you have more to the third.

other sort a just guy. and we're then And that's in end actions. of our markets some good given volume markets, end taking of be one some contraction So choppy other cost the would the

to think a do. it's prudent thing just I

tailwind. better kind out, cost gets margin, to mix, you that So restructuring of

question Sheerin comes with Our from next Matt Stifel.

cuts. end very customer there where out to is weakness, ago, forward to a but several on based you your guidance and took a cut your order you pointed outlook, markets a big relative quarter Just

it expected. guidance of any what terms is or or at stabilized? in materially So looks like in your issues demand inventory we customers' sort things previously things have is with had worse the question line issues have Because gotten of cancellations

of was got would what channel going Yes. the playing understand say what a forward. would used what in Matt, use the and really end to at little inventories like, with -- of I thought. intelligence we to itself, previously to what said going correction has terms difference was took own not In markets watch Automotive We mixed. be be that's behave look in from be be, planning I'm a rates when heard looked are before was what and to these We say just I'd talk what we that we people that, we lot we way. you've lot we give been we forward-looking of come line seeing It it our to continues -- not we're said color health saw. out from had any We that Cloud customers. with we strong. say to I was a own be feedback had intelligence as did, care, say fairly would like several it's interest strong, of item in forecast a saying, up markets our but to we're said weak about. I how will line for industrial expected. to we continues and significant when that before. looked you with that

similar. There's no is, happy know, I'd And But overall, in I'm type very environment. what forecast do good say, news to it's of new deliver. to you hard no kind about this so as of

in going think we to came we we what said. thought markets we're So what end pretty line do, and it's to with close to predict our trying I

the cadence the about Paul, repurchase share should us how on program? could then the on is reduction cash your And authorization? inventory you Okay. flow, we expected And much how and remind left of think

top me know it I you kind what the head, quickly. I'm So tell can my of pull we're off thinking. left the but sure on authorization, let that, David don't of But

continue us cadence The steps about which quarter at -- It's put in I to say the or $XXX before. past just of billion. million, $X.X take, with $XXX expect in I I so. for do definitely close fiscal There's would would there, this year, full would the better I a kind were months. stepped-up about expected we've in go to year in amount order or placeholder here. of what fair somewhere that FY of we think a cadence give starts creation stock we'll year, talked in because opportunity put the a lot were here that and in transaction, we as million our twice buyback of we part probably some to the that the and that means value of believe up.If we So QX. in got for Nextracker a which stops last the is through calendar QX our process But own this blacked hence, nice move out

from question of next with America. Bhattacharya Bank Our comes Ruplu

September June in end you as My weaker that 'XX, their that half the even But half fiscal without Jabil revenues 'XX, either to took markets. what first guidance taken down is margin have fiscal earnings you, remind where that can imply if are $XXX fiscal half. mean, Paul, the Competitor so not, improvement the get second million question weakness even also to down to you are improvement quarter, margin guidance. for terms help what you do or your strange get of can I that of levers the the you thoughts restating to PPS thing have there are their 'XX, I the like quarter, you us is at to? of in than their what of year if want first to mean, your in some look they've would in I some more the

Ruplu, can Paul and start jump I'll in.

where either through our different overall. helped improved course, is a year, strong to cost factories it our and of and of are our mix of our manage this end in and then, driving we right, So terms management, ability markets you well, whether ways, in also we variety has have productivity efficiency participating really really I'll at tell through that shown decrementals is

versus look too but I I when So Ruplu, if even point, half like don't at huge know I frankly, about second it's has recovery. half, this talk mean, first second 'XX, FY of to a half kind at early

productivity, we will next I in have an interesting automation FY to that driving and this But out is drive that view we'll room year. factory terms have of our think seen 'XX and that tremendous I'd year, be into say in and general, continue we year. play

to operating by improvement part fundamental factory this. and So core productivity a be efficiency is driven going of

improve. continue Our mix will to

from value-added driven will services, areas we growth things like improvement by coming margin that. all are see those So where and power critical hyperscale,

those are improvement. that will the next tailwind So margin that through from I into also to think ways that did year. then flow And continue continue restructuring we see we we have to just

So improvement. those And all can deliver continued last we're that ways and are we think few have margin this proven thinking year the I years the it.

the Thanks Revathi. Right. for details

I For picture want question. you another ask broad my follow-up, to

So your now think end mean, beyond for But more or do Cloud I end or you example, drive will talked Is think this there? Agility would or you weakness growth your what investments CapEx? big customer in? the look you do a you've is about. want be both? areas, thoughts invest is any know, out it I mean, it Core got where near-term Flex sector? ex-Nextracker, where which And Flex to that that want segment? invest And markets, will which market to you Any market you for as which And in Flex? I which end Reliability you

for Ruplu, Yes. question. thanks that

hyperscale Day, more be a it us. related to continued and so will power talk and our growth just both going significantly part on to in We kind Cloud a are a growth. but to going itself for growth lot would of our preview capacity commercial about continue giving you for in this of to be, Investor in we'll investment segment, CEC would AI within be focused is Cloud, that considerable our say that's of and I invest

in discuss resources, say this good few what last share few tailwind Investor I had -- wallet very which of our us. Day, of wallet is continued talked for growth has and second also to recycling, end-to-end over So to then, we also. or that we'll we more And be a be area that you has of our be, combination about increase and across strategy, of and the focus services, that driver growth we growth would commitment around I a vertical additional value-added a line in but be we'll this electrification continue component would management, waste significant about last and proven talk macro growth is us, to automotive and share that -- be proven kind be will the -- a of market, that will a have to more major part that integration to like good a the expect more. but will services months, things theme customers and a with for mean, course, is of be everything our years, our has our in continue

are look those I drivers, I the line for that reflected are with but just the in if areas that good itself. think growth So, in very you the industry much Flex, at see macros, not

be So focus those areas. will our

[Operator Instructions].

next from Advisors. Steven comes Fox Our with Fox question

A couple me. of for questions

follow-up. flows Core a the on us at as a we down looking on all, especially then of First a give cash working I sort the Flex next business you we're sounds inventory? ahead, capital, And of sense looking had you can year, rule like finish thumbs into how some working up of fiscal now year, that -- it for some

Yes.

kind on see don't with only progress we still I working working simultaneously. be and FY not from that mean want And inventory momentum kind the news will through guide we at process, 'XX loosened good kind advances to I do of to but comes I I and certainly on up together, growth on the unwind a look more think But couple little continue like hedge is as see we of would sort this, come a of working supported the things bit. we're maybe the I forward those Steven, that to [ have My of on customers, years. to I yet, over cash do inventory. capital is of next but down same capital it ] here things good when time, generally expect because exactly those how yes, unwind come

interesting lot there's of And been then markets. on comments just a certain the

on seen noticed second. 'XX, for it leg justified other for back stepping reason like Just you haven't a also specific getting sort down. not too any of I sounds fiscal the but

your out biggest fiscal that what as like us of concerns to express are you year of are into sort control? your just you head can the So new

start? to want you do Paul,

I would -- about the and -- worry mine lots but little worry markets. I different, about maybe mean, slightly of we they're would -- end a -- but I be say and Revathi bit probably things, I

can see down, stops are a I one 'XX. that things demonstrated FY I those And you well in is of grow I it's I it going we think here not managed, levers year think But that and have we revenue end can pull going performance earnings operating we've that to think enough despite operations the market tough until contractions. great up. think despite

more little right And medical be lot CapEx so I a IT would bit a what's tailwinds of things infrastructure, in going seems about Cloud worry to now. which be equipment, going the happen And with centers.But do like quite there's telecommunications enterprise spending, boy, to medical well.

rates. think well despite I up automotive interest has held

and I bullish Flex. some I have continuity now. think chain business the EMS of for great and globally supply is such especially the tailwind on to that continue in for right opportunities, bad we pretty there's it's But maybe macro man, argument a the industrial parts be getting press

that's going the next think us to years. for I a guy be good over several

but anxious good specific that think companies We some just execute. there's overall, macro is for need in about, our I challenges a I'm the end to the bit little So industry. pretty market

that's to said. nothing I think add, have well I

from question comes Wang Barclays. with George last The

the quarter. Congrats on

I Just ones. two have quick

doubled of flex the click than Firstly, sequentially very from XQ especially -- the standpoint. for kind some just cash the factors a looking the and at you look of flow guidance just the so ] puts have more curious of Core advances you kind free can [ some as working for double some capital kind strong, seems takes Maybe ] [ co-inventory guys we 'XX? mentioned out Obviously, additional of driver. leverage FY from reduction, you aside and they on to

Sure, No problem. George.

we I'll cash So little one tend be to do out just point a thing seasonal flow. on is

December. year-end of fiscal Our a is year-end -- is lot you fiscal our March, have customers'

a can our QX. little timing there and between bit so customers' of And be QX

for year-end. And as customers side. tends of they on to get us be checks tends as light to QX much better their be to a so QX the some hold little sort

continue so mentioned Stephen. definitely giving couple I quarterly don't part on typical shortage to it. advances be would say a nice we of dealt guidance. don't And So expect little we years. now comment of bit CFO kind please is I progress I really the Working comment. only But a of people making important of down clear like that that will that here with were as last inventory simultaneously. QX prescriptive should other and That's inventory better. broad-brush, this seasonally, us My was, had it's I say, as I will of We're over chip on for how separation. some things some post sort from be think unwind forward. of they reason The understand for to sort Nextracker come we tailwind to inventory, capital to going a would we tend look and that

or now to But flow typically, of make feel cash I good And are expecting $XXX we that million and QX, $XXX of where the wouldn't generally sort pretty that. so we for minus million we're that plus free about year. in guide speaking,

Just a in exposure of AI kind of the kind on trying hyperscale power, to quick follow-up, just hone there.

are on taking sort well like share a to roughly given and they it's what's guys the they're the there -- not pie those. you kind growth. you industry versus strong large as able can segment? ODMs XX% Kind you incorporate maybe give Flex revenue? this a from additional for obviously over total enjoying some color Maybe mix of contribution -- particular such the revenue So other And growing as rate? out share so are a gain well, double-digit growth Just the AI of of for some guys of -- versus gains you quantify aside

you this bought little shared Yes. mean, revenue George, it's we we'll Mardix that but more Investor known, but a that it. talk know Day, dramatically so bought -- is I since grown in our bit and we we business, haven't about in because Anord

publicly hybrid into numbers our scale. services those that go shared power numbers our and value-added and haven't We embedded business

shared. been haven't those So

say, taking AI we major I So say, taken those comfortable power and growth In we're to would CEC segment. and hyperscale would say And these Yes, with have are who we've don't embedded the our of if way capability, I competitors strong. the growth very compete I have we in our margins. share capability. would in like overall with for segment, across not fact look really feel because right I that don't all ODM the really definitely in so product at us we the from ODMs fairly of capabilities, share, clearly kind

in terms I our being to So able overall value. say sell more of would

accretion So what for. looking the margin would line also is be with in we

kind us. So more would good to here for come us. really we'll feel data that as associated with But few AI growth the definitely focus and I a on on growth to relates in about say, that, of months, center we it but

was that think question. I the last

the Flex and want team, contributions. forward in globe would course, when Thank the So again earnings thank you. QX -- our speaking We my our I of thank call. event and to for to you shareholders and to investor I across on with our like we you hold of look support, you. team conjunction dedication to with our fiscal behalf leadership customers all their say their for a

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

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