Jabil (JBL) 15 Jun 232023 Q3 Earnings call transcript

Hello, and welcome to the Jabil Third Quarter and Fiscal Year 2023 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded.

It's now my pleasure to turn the call over to Adam Berry. Adam. ahead, go Please

welcome third and XXXX of earnings call. to morning, quarter Jabil's fiscal Good

today's Chief call Wilson; on me Joining are Financial Mike and Executive Officer, Dastoor. Chief Kenny Officer,

will and be referencing At of To today's being call visit Please that slides, with our be now slides. prepared Investor conclusion jabil.com follow posted note for statements. the will of the webcast with I'd ask website. within today's follow that the audio live, the we with presentation remarks, like earnings during entirety to on the website, you call, our is playback. please along slides our portion the there Relations the beginning forward-looking

filings. those or materially. the regarding or whether An anticipated on risks our disclaims any conference uncertainties risks our expected based such and XXst, uncertainties these or earnings. for call, currently and and extensive and the ended for as a and of as intention update of could will forward-looking fiscal otherwise. list expectations, identified August XXXX, other business, actual are statements differ involving future this and quarter on result Form net forward-looking revenue we any current events, outcomes year things, forecasts, cause year report are the and obligation statements, on annual information, These to fiscal fourth to making outlook During XX-K other statements be Jabil including revise results new that among assumptions

earnings in is points at end delivered the revenue our the revenue. the quarter quarter or XX now in range. our expense to share was in basis. $X.XX, came on of was GAAP towards quarter basis quarter, million better Core third upper results, at range. of approximately quarter operating our the up to over by share lower Core guidance perspective, billion team million shift guidance Net of during team. $X.X and I'd diluted diluted at that, the $XXX working than GAAP $X.XX. interest inventory year-over-year From our and $XXX our in income reflecting per end like came resulting a improvement management expected $XX the was for prior-year million, of in top a With the the X.X% a XX% levels earnings better capital where focus This income operating per

turning quarter the markets. volume, Automotive to as our XX to well driven a was Now normal XX% XX a team XX% but same came In segments. an as and end in which the on $X.XX our basis, down margin higher X.X%, the increase from operating than grew performed and extremely it's segment points segment the year-over-year Healthcare seasonal continue particular, worth expand. as ago, DMS year-over-year pattern Core our year approximately points basis content, in the strength for of Revenue sequentially business, brands highlighting given the for Mobility billion, business. basis by at typical Automotive within

that energy driven by end as our $X.X increased business expectations. demand driven business, components Industrial and saw at to noting and model move certain also X% in billion, our renewable year-over-year. Revenue in came by consignment our for down XX% previously-announced by for worth line our Wireless Cloud expected, shift approximately segment revenue with Also a within XG It's our EMS year-over-year that global in market. a we for

a aforementioned up an were model. growth for impressive For points the in consignment and basis quarter, segment the the shift Industrial EMS X.X%, XX basis year-over-year strong core points sequentially, XX margins to reflecting and

to which begin our metrics of as XX improvement beginning sheet of the with days. flow with to inventory, sequentially update cash QX, Next, end a balance on I'd like an and great saw

for More improvement from of us, deposits net days seven QX, in were sequentially. of an customers, inventory days importantly our XX inventory

at net came cash flows quarter million operations million, during $XXX third $XXX while from free capital the expenditures million, flows quarter. in Our cash in resulting totaled in $XXX

we on X.X $XXX core levels and for With times. approximately with the debt us this, X.X million million, approximately shares billion balances repurchase cash the XXst. In current EBITDA as million $XXX our we May with of leaving quarter repurchased quarter, $X.X of total ended authorization remaining to of

the turn Mike additional thoughts team Kenny to XXXX. the to fiscal summary, and provide and in our a QX. update moment, another our on performance delivered impressive In In call for the outlook performance quarter I'll some over in

like quarter strategy Annual Xth our and we'll But it for plan I'd over, before XXXX. I financial our fourth and for Briefing your where scheduled September out our lay Investor fiscal to announce mark calendars. Please hand earnings call XXth,

of support Additionally, feel end tours, and and Investor deep expectations. to Please for the that an drivers going we're XXXX today. stay perspective, thanks factory from market in where active fiscal our some with tuned. Relations time be we we plan growth discuss meetings, to And longer-term showcase your dives,

call to over my to turn the Mike. now It's pleasure

and solid Good XX%, also Through expanding has the core XX by core twice top-line posted pace EPS year, more nine improved solid by performance operating morning, while grew first everyone. team team. a growth, Adam. points, the the core by operating than margins the Thanks, fiscal by months revenue basis of income of growth,

our final enter from to energy and as electric cloud. FY renewable heard XXXX. gives from secular our continues driven like healthcare, our of growth of areas you growth All-in-all, be and excellent improved solid year-to-date profitability infrastructure, the quarter vehicles, momentum Adam, business we year by benefiting performance As us this

slide, guidance. see With quarter next the our that, fourth you'll on

is total be earnings $XXX the expect income operating $X.X be billion, in of billion. to of the range range million. midpoint, estimated EMS income expected in earnings to is million lower management be million. estimated company anticipates in to Core $X.XX be to revenue be the the million be of working the better is fourth diluted range be billion $XXX the to of we $X.X revenues share respectively. and to quarter $XXX At $XXX $X.X $X.XX. QX, $X.X capital $X.XX the in and For DMS Core which is per reflecting this billion of estimated March, expense is range operating GAAP is to by to we $X.XX. than Interest in in to to million expected the forecasted to $XX GAAP share in per diluted to team. range

an March to our how consistent largely our FY Moving high our a offer update market assumptions end expectations. translate revenue remain and demand where level, to slide these At next on assumptions the I'll update. with our XXXX

be markets approach given macroeconomic slightly our offset lower from current in in markets some our the strong expect dynamics by secular and to of in We Semi-Cap. consumer-facing and conservative continue our growth be to demand

from exploring expectations energy higher In continues end-market, our out geographies capabilities. as production activity manufacturing have for Industrials continues to our OEMs. be with only improved Growth several play also robust, since business across limited we trend the we multiple Automotive EV increased renewable by outsourcing In scale to up interest at OEMs of multiple by driven the are growth pace can Healthcare, infrastructure. our which seeing with March,

our power market has weakness been growth in This business. incremental solar up energy than be in and offset our end good Industrials more XX% expect inverters, seeing slightly by business We and now growth in we're building storage, to meters, FY management Semi-Cap solutions. Specifically, smart XXXX.

which outlook year-over-year strong. feel billion, we many for $XX.X summary, end across markets for solid is be to million, what business thought expect of In March. to remain now X% expect up our about demand is we XXXX revenue the in our and We FY $XXX

turn let's revenue. of to year-on-year. of income Notably, of core increase approximately next to at XXXX. through outlook, while X.X% our a guidance growth a year-over-year get Considering represents with this of This we slide, expect to for holding deliver to updated now a coming core the income updated now FY the operating XX see basis points We billion, X.X%. approximately XX%, margins $X.XX increase growth view

EPS additional million than to the flow committed we generating remain cash this free are year. anticipating We be With $X.XX. core will more income, $XXX in now

our secular by internal our drive margins AI continue ML of continue and markets technologies. operational believe I also and to end-markets of efficiencies Beyond to use expand mix-shift higher-margin we to FY combination and positive growth. driven XXXX, will the automation with expect our towards

our vigilant on and team the well. to executing summary, is cautious although near-term conditions. extremely expect momentum continue strong macroeconomic into I In the remain FY we XXXX,

that, turn now the Kenny. With I'll call over to

joining today. Good thanks morning, us and for

our underpinning our business capabilities across we continue of across our year you As is multiple to teams' executed are shape proof success leverage from to diversify our our point be continues in environment. key business as end offerings, what service and markets, heard financial disparate in team The improving ability performance. to a Adam good a operating the seeing is this dynamic well we and has Mike,

the to where slide next updated outlook you'll our for Let's year see XXXX. turn fiscal

year-over-year XXXX. than delivering fiscal and by firm to and expect for growth operating core cash to which remain our $XXX this also free $X.XX. in further We same cash million year more foundation we we EPS focused continue It to on as leverage flow to look gives confidence for At us the a free $X.XX the highly expectations time, flow. raise good margin year, sets expansion

XG electric markets and highlighting In growth, [indiscernible] year, fact, with vehicles, business our in the XX% worth nearly when this I growth cloud. energy, secular of that healthcare, the renewable it's look specifically, and at our portfolio strong

Our to to as content continues scale healthy addressable our team in well-positioned its navigates introductions, their complex customers and EVs multiple vehicle. business the increasing Jabil Automotive per be transition extremely the coming as both rate years. support to growth accelerate our they program continues

towards are Industrial our they rapid energy. navigate in the And transition customers supporting business, we as clean

power years, are conversion, in deployed management across which support months at scale. several we've heavily and grid-level to energy multiple storage, last the capabilities energy been solutions, invested now Over

like days in extremely this policies are and Inflation government mature growth in scale, is early Reduction Jabil we to support in the space, customers US coming our Although the the the well-positioned of as in years. Act

In us capitalize space credibility manufacturing, Healthcare, the to OEMs we our some well future positioned for this the outsource leading in to trend growth. of on with and continue has

coming that is also area to This markets, AI growth multiple focus into the both our for business across internal space. end the factory drive potential the across on but increasingly implications and has in side our us efficiencies and processes ML has is network. Another of

data capturing help internal to to and are our we using it As our toolkits improve relates latest operations. the processes,

continuous path initiative. [indiscernible] don't years. we've next for view and know on the many new been a step as We this a improvement

to and simplify, system us which operating with to data big conjunction our ultimately ability and mine drives improvements. automate processes drives Our sustainable standardize, naturally optimize, in enhanced this

margins core of offer we to our event, plan cash September, our fiscal Investor Briefing. to deeper team XXXX prioritize growth we continue Jabil these in outlook that areas at all go year and will as In in the financial flows. At

will lay return year continuing in we our provide to margins growth. we Specifically, plan flow We provide invest also another we and X%, on capital revenue, expanding of to increase while operating free plan frameworks. core beyond finally, an update increase by out how growth, EPS and core solid cash to

that capabilities, possible support the have final In strong culture quarter right Jabil as fiscal ever be into strongly And momentum closing, and which today is been. has of we I XXXX team, thriving it the beyond. portfolio as strong and diversified would to without year a unified feel and none this of

the and your interest joining will I over in now for to you Adam. turn us today Jabil. Thank call

we're Kenny. ready Operator, now for Q&A. Thanks,

Bank coming session. now from is a conducting America. question-and-answer Instructions] We'll of you. Our be from today first [Operator Ruplu Bhattacharya Thank question

line live. Your is now

above Hi, questions. past the I been It strong past really reported invested thanks strong. few mean, return like has over on quarters, looks capital XX% taking years. the or few my calculate it's over ROIC ROIC. we for Jabil

as strong that well. are and was what you factors will Can influence going remind ROIC forward? quarter This the target this you us what

We that Hey, that in we is XX%. XX%, range. reported the Ruplu. Yes, XX% the in ROIC target normally

coming on If factors at way The management, we're CapEx, capital are and our our working extremely capital, all our use returns in. that that. look makeup disciplined you we the capital, the invested invested

can robust ROIC and ROIC and So, quite as and numerator is you the denominator going expect well, on ROIC strong, forward those or calculation levels of the the calculator Ruplu. actually

Thanks right. All that, for Mike.

a mean As weak me -- maybe about market let are now follow-up, end is the down ask I semiconductor your ask right revenues I end and market. capital that year-on-year. can equipment

segment than about think it, corporate margins. offers I that average higher when However,

and what in So, take of when move into keep think capacity to in the invest advantage do segment have enough upwards more that to happens, do you CapEx end when deciding market you market? that that things mind

the Hey, so that I is that Ruplu, good semiconductor XXXX, AI and equipment to in XXXX, just covered and increases through a and that that right this article about yours Yes, question, the we demand space a second going we are the XXXX, morning, going pick-up half consistent wafer say think just fabrication was it's an that's and the Kenny, view how XXXX probably morning. and and our the with about I fact reading quite the -- talked now, to and and -- it's that's it's great beyond. would low although of calendar it in

the So, we when our year, that of to diversify and remember the so the team the are through anticipation pickup ready picks our back-end back-end very across build ready up and this expanding and also demand of customers from world through a to for demand that been got there the back-end year. next we we're in and competent well-diversified markets we all pretty footprint demand next try a the in end perspective. front-end we're We've market of

really, So perspective. where are we about Semi-Cap we feel good a really from

Okay. the the Thanks execution on quarter. congrats for the And all strong you. details. in Thank

Yes, you're welcome.

Thank you.

coming question Matt Next is Sheerin Stifel. from from

Your live. line now is

you, of little you're back but the some Are consumer down going confidence consumer the like on It market gives your or some bottoming thank you for outlook end of little took particularly and guidance point? side. to devices wanted that here deeper seeing up morning. growth you still any to actually looks a good I bit connected double-digits. signs any to dig on Yes, a the you that year, commentary, at some get

we at as I quite We're that have the we like bottom. think bumped of rates and in fair it in our macro. probably that space. surprises his and That said, than Mike kind XXXX, and this level. connected at were had still well the we -- that I we're choppy sometimes QX, mentioned we more in also we we here, look the of you devices would very that effectively cautious did well-diversified we're the prepared the and very, a along we're about in think in near-term it's run pickup in mention, upside get opportunities but but spotty get Matt, remarks pleasant Yes, our we business think COVID XXXX, XXXX, share run of won space

right being a short and I'd pickup expect do in say, should the we is macro we connected So, devices. as But cautious. visibility corrects, really that quite see just really, now, we're

and general some And I also Great. to you've in signs the your Auto that wanted environment. Okay. that for certainly some I or other to talk Auto, markets, a you've Thank other had still are you factor about EV, that. starting is of reduction some or just you in inventory supply seen headwinds supply and know the of easing see gating some businesses?

a did go sequentially days, So, by has fantastic team inventory the Matt, down seven done the job.

that we're of term. inventory last to lot easing patchy. supply between by I We're others. in think expect remains we offset short-to-medium mentioned, days seeing But down the the that. longer term, of sort of had I in sort It XX is through. and coming XX the bounce chain in I can quarter XXs, of a the areas, take it mid-to-high confident into constraints In

be So components, if look to MCUs, at Semiconductors, look all at seem Automotive, constrained them look you a of situation. in you power-related still any you at

the golden it's gone on chain not a issue supply mixed still screw there. easing is That's here are we seeing bit. although a So, bag side. little The away,

to is, easing, it nowhere normal but the characterize So best way is near yet. this

to on it. watching, keep something we'll to chain with just supply continue out changes. evolve we're the And So, focused

support that, give to have I you comment and to context. Mike's that of some just on just a

for now semiconductor we months navigate. assemblies, whereas issue space, in the that screws as XX number us number but a it's tracking, ago that were still and X,XXX were it's down are automotive different we to semiconductors, the so half an tracking we managing, that the is classed that components continue So, golden for as we're lot, probably

So, for gone but yet. not it's it's getting better sure,

it. Got

very Thanks much. Okay.

welcome. You're

Thank you.

coming from Fox Next Advisors. Fox from question is Steven

Your now line is live.

questions Two from well. morning. good Hi, as me

for off, Industrial on extra the Auto. First and disclosure thanks

if I mentioned that in give XX% that's beyond what's a a growth? could changed piece, wondering you sort those driving Industrial differentiating was some color the Jabil know programs us you've in the been to little the markets. follow-up. more you is while, quite for how I I as of And then of a secular On have

so, thanks, Yes, Steve.

long-range five out So, plan firstly, we three, process plan, through Steve, a and get look at we our four, will year, years. we every where

capabilities been just has Tompkins an that on, Brent a to hasn't things EMS us like appeared grid-level also from really at this side So, suddenly runs but focused a opportunity looking We've be storage, in our historically of the the for which time. group we really, leaning us. into things would new energy to done who need as just for perspective, long support business. for this we've develop scaling been

bit like opened Lake been it's facility over, we So, for City. a new Salt in a example, little

that's a pretty expand So, is much in the we're multiple it's good. years that now, which full looking few making, to been customers with

just support we customers' we're to be energy area in capabilities us, power at smart it have, as a pretty it's we're things roadmaps, looking like, for grid-level and we've other capabilities management, feeling capabilities the -- able into right that foreseeable conversion, the and good able leaning customers really for mentioned, augmenting key so got our that see to energy support our been that with we developed to future. which storage So, been as the we

margins to seem be possible, you Auto whatever that. overall imagine an that's on then at XX%, is, give mature super sort it how I that Thank Auto the perspective these so when on you're can tremendous just sector growth producing But maybe opposite give which for question, a the helpful. hurting within end financial yes, spectrum all. you're and the of doesn't just sort of margins of us sense growing aren't us Great. That's and And is little the would a you.

Yes, fact to it's that it's about industry that, and look is hard it's thing the for -- the difficult Auto the us Steven, hard engage. and people means good for

mean, So, our I facilities. seen you've

So you to standards, consistently, complex where expected to same that's products up use And ability your the in where get through kind to difficult. ability quality -- normalizes the introduce of into talked you as short the averages. speed lean quickly the can automation, this then expectations ramp and the your term. go above about in corporate margins as we've under globally, is When margin that profile Mike

we're So, little bit, we're that introduced you we a expanding know. starting get obviously to and through as products our although and footprint, new new programs

So ability to margins a going them, effective be say. but globally dictate I'd I albeit to to going is them think our reasonable are, product, take doing ramp how there, we're deploy it's our new and what's job a

land also OEMs will the remind multiple So, pretty future. that across I'd here. in about we active we bullish we're are where you

So, out with we've opportunities customers, future. about our bullish feel got world quite which coming makes different across us the

if And just can to lifecycle the in six or product Automotive seven out years. Steve, I extends add,

into operational drive get product Kenny it bulk we've where long As really market with such introduced, end deeper efficiencies of that as beyond continue the the even to automotive you sort some life-cycle that of impact. products automation of margin -- that mentioned suits

of drives again So, the well. upwards operational longer something a to keep result that lifecycle, a higher automation, in product as margins just efficiencies which the mind the as

you. Thank That's very all Great. helpful.

you. Thank

from Shannon Cross coming Suisse. is question Credit Next from

is now live. line Your

to business. solid seeing relationship you and talk given the demographics the surgeries business a much. you've continues done [indiscernible] Healthcare best needs, a be bit unfortunately pretty Thank they wondering because opportunity will I that assume everybody well forward, you're get would with grower older. grow. very the where I wanted and I'm all as about looking to this Clearly,

I can then if bit just you provide more So question had margin. a a on there you. and Thank

we see device, focus, we look kind the you. Hey, relationships as diagnostic, we with approach with areas And whether or a of real markets well, connected each sensors broad Healthcare capabilities, -- lot pharma. a continuous need and those a med for we've got and in and and good so what opportunities, got the there's those we of really that Shannon. Yes, just see whether areas with really in it's growth hear glucose from them base monitoring continue we to customer we as firstly, that of it's and Nice to opportunity. so in to healthcare, we serve think of our base current so expand three customers, that

about so mean, And with I with of and the ability you weight as we see broad-based, we making a look the of our we out hundreds auto-injectors -- then for be, the you feel would opportunity drug millions we're really are look them diabetes to that really -- well-positioned we the are for an it's at year. that make at example quite you there, reduction and grow and that. bullish comes

about we're to us and BXB a same did, see I kind that term. moves will discussions and opportunities we've at JJ do come deal -- healthcare tell us of for But the of longer our MV something also about got scale opportunities as credibility our not you the in some for we slower in is businesses. having other there's than pace we more in but where

have a bullish business us we we longer-term for feeling runs team Andrew that we're up -- in end done the quite yes, wonderful Healthcare. and his think about Priestley in So, where and job

I renewables focused. you within a was Great. kind Steve as talk margin quarterly of follow-up or what of asking as some sub-categories, can And the seen your margin about more basis, some about of you've don't on it I whether mix amount industrial in know, to becomes maybe the that changes networking movement other revenue Auto, significant from of understand of margin a then perspective, a drives but a

in an Thank of the below to you. Just happening sort of what's terms margins. idea covers give the of

Yes. Yes, sure.

help a swing take can me and that Mike Let then at also.

feeling so And for We got are think our pretty good profile I margin around, trajectory. obviously, basis XX year, we if we're XX points. look up and the points about we're we've basis year-over-year,

and think we term. that of above business my I in I grow got Semi-Cap that to as will in good done XX% business being to Healthcare be renewables And to we think tidy actually of that is running, Automotive especially can corporate think operations, helps our us. should operations. remarks, is give will got sure and covers our lot business, also -- the to we If that we've a of I've are, grow in run what we We think like we -- our prepared Automotive good customers mentioned operations, run to which is mean, we Things we then lower, do that averages. said going make rest up continue think we're be make be, and sure We the then think we good longer we we our value.

So, that's I hopefully know, don't helpful.

Mike, any you comment? got

had sort one macro comment. I of just

trend outsourcing I secular of think well as the us, end for manufacturing whole trends more which but driving a -- that market drives than above are a growth prospect sits margins. obviously as huge

strong this design forward at manufacturing, look requirements market, you with today, the chain supply well. lot knowledge, automation driving multiple we manufacturing, of If have localization manufacturing a at you have and and as geographies complex of the of the regionalization local then scale, dynamic

from specifically, a then industry leads I into seeing -- as then from entire sort And well So, suggest of are which would itself sort of some of of behavior Jabil, outsourcing margin and for which stickiness, a our that this standpoint driving that standpoint. by expansion almost end some in capability we all as leads as here is into that an manufacturing well. present change markets trend,

So, all good going Shannon. of drivers margin forward,

Thank you.

Thank you.

Morgan. Paul from JP coming is question Next from Chung

Your line is live. now

questions. taking thanks the Hi, for

kind grow flow inventory, growth time. of and guide of the free XXXX level flow of kind nice maybe there, hitting there So, your from pace $X free north of kind and potentially billion to on conversion for cash progress for continues cash rebounding suggests improved first

about think pace the you across some working dynamics into of do how XXXX So, and the cap?

you Paul, to team then XXXX undervalued to completely driving provide flow flow in feel on but do be the to continue we'll free guidance because flow, using we free cash some September, cash driving think, and the we're cash continue buybacks can margins, -- we expect We'll focused provide still. free to on

cash So conversion, will change. AR, down, some capital because up flow, as I free of all don't we cash means through return think go we I that the that expect inventory of continue goes offsetting a dynamics one-for-one other have through of to well get mean to as of flow doesn't doing if working think we've free which in days pretty AP that flow sort effectively. through been inventory

cash free way the forward, going more up to basis guidance an expect on go annual flows describe September. to is So, continue best Paul, And to in it. we'll provide

how on for to and components into Thank prices then And margins about as separately, on Okay. Great. think evidence XXXX there revenue of do the Thanks end some that. kind impact of you starting markets and and deflationary seeing you. which impact we are see are you ease? some bigger impact

it's we'll that impact going not overly takes seeing it's Yes. our not is We're think that that and X% north and We concerned really something there mean sometimes, that's driving for outlook we're obviously, is we XXXX, our Paul September, in not puts margins that and yet XXXX. thoughts think we'll a something to something occupying update that, I not it's of about for right to lot but now. of

Thank Okay. you. Great.

Thank you.

Fairbanks from from James. coming Melissa question Raymond Next is

now Your line live. is

should requirements seasonality, maybe a little interest impact Hi, first of basis? expense a capital correct? on tick does had by what such working We're the quarter more thanks, really guys. earnings. expense, going on a just the all, I and higher in the then it And to have see tied second, inventory August because Congrats big assuming it a I'm the on to is that's on management. driven expect core interest quick question August, for quarter. another that great great beyond normalized we

clarify, cost interest to QX million Melissa, The million. $XX $XX guidance in our for we So, range. QX just was the in provided is

actually not going bit. up, going down it's a So little it's

team benefit capital continue I management. focused. to highly working think The we is from

much as as Some on the we'd of easing, the golden screw like, path. issues right not still but are

feel So, for sort might quarters of in especially continue three run entire that, run-rate, Fed or the year XXXX after that all-in-all, two sort FY first be rate well. of of a we comments, it XXXX the that in FY as yesterday's

Okay.

drivers to it of Sorry just AI a I a AI/ML there. highlight as cloud sure topic as the for had In snafu the so talk these about you some and about you wanted be modeling hot automation growth days, Little is that. being the to slides, it. chance XXXX. follow-up, seems Maybe

things, you're You and side talked but seeing a what little address maybe bit in AI? about of the cloud automation

And Melissa. we’ve internally inspection get will was and et I'm I blown quickly going within preparing the pre-pandemic tour -- yes, away improvements by when hadn't kind actually, help cetera, with few I away just us was to by a I back thanks, better here products AI an Asian was help were blown there we and cetera, of et you non-value introduce from cetera. and added been to using for algorithms [indiscernible] et facilities new from leaning just activities Yes, I years call, our the automation, really into an made and perspective, for because that robotics, us

going models, But teach be And into out you've we what short-term of you by is leading lot and that. the say AI to need process using these in we you requirements cloud. So, I and in do obviously, language see of are many need need about advanced and it AI network more engine taken was a know a is longer an our the term. of people you that got -- automation and obviously people talk seeing, to that overhyped that beneficial for lot but large support and how unbelievable to some just we've processes we that

other longer high-speed pick developing but the in parts that large the multiple of So a ability cloud that running ability from a to we've where perspective request products that going bullish think to going our interconnects, in period able see companies that's advanced up why networks they in to the as customers liquid your because we them to which cooling, in that is, But require over business to support is optical quite what we we devices the to we in support to been require plays capabilities models time it's they of that we're and capabilities make over long help the space. and AI produce language longer-term term. to developed and began space, cloud we're bring have are

think sure that it's for another short growth longer real us. we opportunity we to be So, the in term, think secular overheads term, in but the for going

much. Thanks Great. very

welcome. You're

Thank you.

Mark Delaney is question from Next Goldman from coming Sachs.

now is line Your live.

and morning, taking you the thank for good question. Yes,

XXXX. for macroeconomic mentioned You in environment planning you're a challenging

are today, is macroeconomic of continuation things next more year you've or the see seeing? of difficult thinking you is been more a environment the you incrementally As challenges it kind of

Hey, Mark.

I any used, consumer cautious chat vigilant. seen I we've behind a just comes of patchy, clarify, not meaning that. instance, anything give think QX there. QX concerns. little being seeing Just for my only would markets, comments down, being cautious major we're end around the the to that's a and some up, was of just markets it standpoint, and in us vigilant, that from words our end up I consumer was a us bit of any we're lot There's down, it for was It's goes actually

right grows conditions secular seeing much, vigilant markets they're that we at cautious gets renewables, growing just moving might cloud, want not look by growth-oriented, of be we're that of so And all macroeconomic they're if maybe now. the that direction, all be the slowed and right the today, overall, instead think in we're healthcare, I by But by down single-digits. well. that don't double-digits, EV, And it XG, all that -- you any in as to

continue may other given that running you those into you've and Thanks. steps labor rate good like growth, my in such growth are question couple either operationally renewables, and you, factory that been in certain EVs have to order is, other That's as take And growth seeing capacity, markets be undergoing helpful. there finding you're more a more constraints Mike. you markets? key of in Thank to the

in so in we example, where Yes, expanding we for the to expand Americas, EV we're Europe, expanding we're on the yes, are in our have side expanding operations Asia.

when don't just we're disciplined. opened requirements not definitely to overall [indiscernible], trend thoughtful, hype watching, we some but long-term yes, the We new are more sure CapEx temporary. geographies. which we a to as bit trends continue carefully the is we're expand is is our sustainable we'll But Healthcare is and in factory make -- a trends are there to there feel and the we there. of very and it in in just in over-invest is are -- steady we've very something still very being and need little want to but we're watching Renewables, upwards. grow footprint the So, US,

to is, answer the your question yes, yes. So,

always And up company is we and that, on talk single example, that, of also follow critically for ACP that, I in having instance our about becomes important. a call it Mark,

get to look a Creadon having introduce of looking products, we I single geographies, our of from ACP factory got culture mentioned. customers important, introduce teams We and across that, sure kind multiple his consistently processes. requests be but unified as them are the with more instance table than that JJ to new we'd critically is at As making operates same that network

lends to ability or to deploy our part model. of new our be network able across in really rest new capabilities at world the of that our to itself So, business one and then incubate scale the

invoked. And well-positioned so be we're our to manufacturing of support as quite customers the the bullish know, really we're feeling in to needs you where more seems geographical world that

Thank you.

Thank you.

UBS. from question Vogt David is coming from Next

live. now Your line is

in technological of times data that markets center are and obviously concept back end and customers but sort early this changes and it's know probably in Great. you base, customer to deployment? does September whether know the for of into in what want generally, morning. Thanks days, you're of your terms what's the sort your some businesses to of work how the just from when lead going winning of the provide and to be network conversation. I new in to potentially technological I for color go AI happening, it's shifts taking my a effectively types in you new discussion with you or about I there's question, the stack, good going think in on of automation lot terms

I a here roll-in as follow-up can just maybe I well. on then have margins, which And

forward it efficiency like Thanks. own fair is that term, AI for next So, from a sounds fair? that is business near in way year? fiscal opportunity Is the your going potentially, automation to XXXX the from gains think about

Yes.

for question, So, I and answer lot if David, like there was sure, a this there. don't

So, been previously standardize, you there automate. had that internally, forever. simplify, processes, mentioned internal will optimize, are mentioned. We've This accelerate and that, I doing us that for we helps of know, sure, I as some

be So, going products, is introduce ability new we therefore help definitely margins. and drive see this to ability be our more to that efficient, to us from

that. for we see So, sure,

in whether any introduce driving mean, isn't of new don't them the whatever, our that autonomous customers, our end it's products. conjunction with with quite and technology terms we help in I And going We engagement are of them that access healthcare markets favorable to and or see we in with have deep-rooted roadmaps or one be relationships their for customers. to

of them, the have going will looking this comes some there. for I acceleration engagement our that customers how to our got think engaging felt be that customers, so business at usual with the isn't and actively as their customers. technical I it's which But with then roadmaps our that us, be what change think to expense across almost company, support we model So are we model, can for like there'll engaged sure it have as the with we we

of can just No, re-prioritize you -- would roadmaps know sense customers a that's jump it's maybe legacy those on or I spending roadmaps on some lines, do that sort ask and AI of some have for large along quick advantage I long-term the get helpful. driver maybe anybody some existing de-emphasized? really early products you days, secular that [indiscernible] the follow-up take get Maybe do and maybe in sort to this new

I talk term. that term, hyped don't it's about that's short mean press think the I in been I in hyped think been think so. I when people short the

this I up have idea, on everyone they our who yesterday, in hype on. been continuation yesterday think they've a roadmap for years, roadmaps the good you has multiple know, bit little it's who haven't like I industry, we've and just it's press. involved think I AMD and industry the been about been involved so just this decided talked the working industry, mean, of I the think are to in those in of a NVIDIA, working woke But a it there's

Got it.

additive. helpful, you. an Thank Kenny. it's So, it sounds That's like

Yes, yes.

comments. to We further floor over management reached like the Thank for session. to question-and-answer of closing I'd end or you. turn the our back any

reach the any out is have further Please you This if joining. our Thank you. you of call. end Thank for questions.

webcast. That teleconference today's does you. Thank conclude

disconnect time, and your this may day. your participation We have for You a you wonderful line at thank today.