Jabil (JBL) 20 Jun 242024 Q3 Earnings call transcript

Greetings, and welcome to the Jabil's Third Quarter of Fiscal Year 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Adam Berry, Vice President of Investor Relations. Thank you.

You may begin.

Good morning, and thank you for joining Jabil's Third Quarter Fiscal 2024 Earnings Call.

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

Over the on next briefing. following: preview review few Xth minutes, we QX our provide will results, an virtual update annual current and our demand investor review the

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

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

of year-over-year. $XXX like end the through begin the the expense privilege quarter delivered management a to operating expected per the at X.X% was during at $XX where of capital better-than-expected points diluted million, better inventory basis levels earnings $X.XX. our came call quarter in reflecting our XX of the improved networking guidance Net $X.X storage this and improvement in quarter, a of QX morning in diluted and came devices Thanks, Adam. today. range in midpoint the a by to on be working for great walking $XXX an interest Good million above million part billion share morning, $X.XX was third midpoint approximately perspective, was GAAP team income lower GAAP million. due This results, operating by revenue, our above It's growth of of $XXX share to markets. Core I'd income per team. From our was $X.XX, the connected guidance or range. earnings and revenue, for the Core everyone. than

by end reflective billion, $X.X by of in came our revenue expectations, approximately revenue shift cloud. storage EMS $XXX print, the from above EMS good offset for in prior offset in XX higher revenue and for lower-than-anticipated driven markets Now roughly a down business, revenue businesses. On our renewable segment XX%, energy in basis, at driven DMS quarter. Compared end turning by the quarter. than in in the Devices markets and for X.X%, our approximately came health in operating automotive was a the ago, the business. Revenue slightly lower was driven same segment care mix year-over-year Revenue our billion, mobility growth like mainly segment in down quarter growth to in million margins basis within DMS DMS our by above to better-than-expected revenue performance XX%, our digital Core divestiture. by at the Connected points at our by XG, and networking segment came expectations, year the the $X.X by driven our segment the $XX million within ongoing year quarter, higher-than-anticipated slightly primarily

up X.X%, margins core quarter, at year-over-year. basis XX came EMS in the For points for the segment

I'd like sheet on begin with flow balance Next, update our cash metrics. to and an

the at lower inventory improvement deposits Net XX sequentially days of at from days of X our a which X days. came QX were days. of Inventory quarter-on-quarter XX, in was end customers, inventory

repurchase healthy of the approximately and core billion of of the remain QX flows million cash team's slide We adjusted management approximately for balance capital solid for with million, our 'XX. We million share of and expenditures fully quarter, while good to on our in the fourth authorization approximately working XX. team, resulting balances we flow came end current sheet $XXX exited as committed million, share a us in EBITDA during $XXX With As operations levels quite And million quarter to of QX, a X.Xx third from net investment-grade billion. credit FY at next $XXX the $X.X turn by our May totaled committed $XXX the cash we with result profile. strong let's to maintaining as authorization capital approximately are in million, fully cash a our shares completing with leaving free quarter. In $XXX repurchased $X.X remaining repurchase X.X guidance. to that, management the debt quarter in

a our the expected $X.XX. Net million. be share range is earnings of of total XX%. expect be rate to fourth share GAAP is QX the approximately Core quarter to $X.X $X.XX $X.XX, core is million. diluted $XXX in operating diluted to expected revenue range of to expense per company is in be in to billion to the per estimated to tax $XXX income to for to $XXX operating is $X.XX $X.X million. range million to expected be the a be GAAP estimated of Core to interest $XX of estimated is for to we range QX, QX range earnings And income $XXX be in billion. in For be

tax to and and guidance to expect rate moving $XXX tax update rate to core expense provide levels on FY expense elevated global interest remain next Before in like 'XX be our 'XX FY approximately now we 'XX, for a rate will tax legislation. the our FY brief We interest tax by Pillar interest and our anticipate core slide, minimum remain net at our anticipate rates to on 'XX. full million. And impacted I'd X FY core be net beyond in year

We adopt We're will FY only evaluating this impact 'XX. in required this will have. to the be

our rate we we today, 'XX in As core to FY the to anticipate tax XX% XX%. sit be of in range

Now full the year to on moving guidance next slide. on

or demand transportation has we continues softened thoughts with cars continue resulting have new For what $XX.X for in And the surplus in Compared that further. very next revenue begin impacted and our demand our March, In particular, of expected environment. been EV the growth there. of now our year, business to in be billion so to in expect to overcapacity dynamic launching affecting market automotive quarters. out a local several in China a XXX expectations has to global platforms shifted face the originally in due in days the we

largely the All reported in expectations. the On are today see other in are our networking declines term. we devices were health offset a by and side, AI These with connected previous line which industrial, medical care to in we end revenue strength which devices, end in markets. center softness across create expect end markets markets, cloud near headwind will data and

the move slide market end to FY outlook, guidance. our review next 'XX to let's updated this Given

improvement year XX come basis continue in to at the X.X%, We over to a for margins point year. the expect prior core

your the flow Mike. $X.XX and you deliver we over time importantly, We morning to in generating cash your this like adjusted Jabil. now EPS the also committed of $X over thank expect And year. With that, to to I'll for for interest turn I'd year. call billion remain free this to in

morning, Good and joining our today. call Greg. you Thanks, for thank

my I board. Mark truly and Before trust the Jabil humbled couple remarks, jump in the me placed am prepared a of I to comments. by by

true we the $XX professional $X customers. our testament in home years, my Jabil journey has XX For witnessing is company's the billion to the care and to past offer billion XXXX been from a

As and team. of carry tremendous amount an CEO, to I'm gratitude amazing excited steward a

$XX.X environment. in EVs mobility Greg which track, data in margins and renewables, on billion term all back the when and amid it a FY strategic with divested nature. Yet billion in take to towards well this, put working a of semi-cap resilient in revenue. $X.X you $X end expect space, AI remains and key expect equipment, repurchase flow and decision. has market step billion on short while a our and we dealing center we We're commitment in 'XX, X.X% company we As free to the highlighted, of key to Consider core growth capturing be excess our of on team cash softness all dynamic and including deliver together, executed the metrics, business, strong we're our shares,

the in infrastructure, center, the of many trends warehousing, remain our involving landscape we geopolitical Jabil is a solutions a everything complex and AI to to environment. around of powerful at well data solutions with of rapidly needs providing forefront health like do positioned from supply More in the ever enable importantly, end care, day, we innovation changing manufacturing complex nearly name few. At in the technology automated in everyday to an chains areas world's pharma the benefit world lives.

on solutions. And management today. we're right the us of delivering in end it's ensure customers, say a right incredible we're with fair that focused markets I the it's team, most to the incumbent middle innovative As upon thereby to think ecosystem

driving focused margins on portfolio growing continue generating free and we'll diversified cash ahead, businesses new and Moving to reshape value-added remain flow. existing our and

share let focused So X the our X customers, spending my over suppliers weeks. I've people. investors, to been and on been I've our where me our time last our

creating take This business value we standpoint, our follows: From prioritizing an This our at served shareholders committed has organizational that market attractive targets a ensures in over that on investments to returning and domain key Some an to at better approach takeaways and shareholders suppliers in our Jabil simultaneously to our All decade organic structure Jabil for levels. by investing pursuing approach growth. From people focused and approach, capabilities. remain can believe, effectively speed, buybacks by have last aggressively ability are valuation serve positions focus with respect. each and solutions. share our while, will of will standpoint, balanced us intense chosen distinct capital allocation areas while next-generation I while the expertise reward as well a care the of here I core we our treating with our we customers precision the

things. of side business the to Turning

our you'll choose resend tough singular May led key recall, factors. to that issue And was there on worth XX, it's X but 'XX guidance. decision, noting, rather to As no that FY we

end the recovery remains particularly EVs the markets in and of we and many soft, end starters, serve in For semi-cap equipment. these unclear, remain markets timing of

less and We our from attractive expect risk reshaping and geographies with markets away portfolio to also end financial outcomes. accelerate

be FY our by will result, in $XXX approximately negatively 'XX revenue a impacted million. As

And Greg come. we However, expectations set be and us push-out higher a the up tax interest to expense the of to interest this to expect company in stronger minimum in noted rate FY tax rate a much that lastly, 'XX, years global current to earlier. will the be and due now

Over will rapid automation couple in And our like help capabilities September, infrastructure team prioritizing How fully months, in the hyperscalers, per next only the with the management accelerate 'XX to outlook technology. deemphasizing and in but robotics. FY our for methodology full a through around to markets their also warehousing solutions care will businesses and but we'll and changed our our be capital how the vehicles, end you our XG. And expectations our that normal has provide for the how that the will we like business. is the own when team. am I the in connected lot energy you our robust intelligent brighter generate has flow, serve environment of in seasonality a the beyond. silicon rather these allocation spending result a retailers providers the of usual of of standpoint, helping given color our model manufacturing the plans propel actions on offer develop map generating sustainable people. Jabil's and we're subsequent year our for surrounding devices well of in providing our anticipate driving all this hear run Jabil electric aligned improved taking road automate in AI confident time not renewables, future. the put strategy, and demand, an reviewing I navigate the future. we technology-driven market margins suppliers we're the as health even recovery assure do end while individual of year. From we'll how and infrastructure, And growth end business in color towards map how higher I long mix success squarely timing anticipate focused and leverages road of growth we've care capabilities We'll an commentary intensity will our anticipated efforts, the retail course, not areas entire certain and our business can we all also cash collective our we describe as markets together, new capital around both and all best of key to of flows customers, of the you achievement free remain semi-cap, how cash

Looking ahead, company. the about of the excited I'm long-term trajectory

talented execute We a deliver will leadership clear the for dedicated and continue have shareholders customers. and to to a vision drive future. innovation, our a Together, team, strong track record, our and value for we

dedication a Jabil take other. Thank and and over Before say moment I call entire our time call customers, team each and over Adam. to like for you your thank to Jabil. I'll your to Adam, you for interest commitment the now in handing to to communities the for hand your to the to would

Thanks look Mike, working forward Greg, each to and roles. you of both you. congratulations on of alongside I well-deserved to new

broadly session, our minutes Q&A like take few you messages heard of to our we today. key to some I'd summarize move Before into a

on First in $X.XX billion billion anticipate we this repurchase X.X% our outlook our margins we balance track reiterated subsequently flow. And of the cash the includes through off, $X.X in share $X plus authorization. core EPS, March is and fully as fiscal and move core we May. completing in update provided Notably, QX, free in 'XX with

we modeling As reported to our our we Mike see AI please will networking are year-over-year center cloud, opportunity to to growth mind today actively our plans keep same industrial mobility remain the any purposes, committed and our in fiscal 'XX further in be markets if just data of to reflective fiscal At the 'XX early optimize, turn that markets, 'XX, end fully our divestiture. described. And which we're across end our attention end both as markets. portfolio there's time, in in the evaluating for and seasonality

and As progression on cash half we're Xth XX% look be expansion and on of capacity. for half such, many ready expense year to of fiscal quarterly the remains extremely scheduled tentatively fiscal in We forward flow and we more the proven generation well the 'XX, positioned although September to business, benefit have year. Interest uncertain, from more our earnings lead a typically revenue that even the first end second in headwinds now like in our in where growth, EMS will will margin the ultimate recovery is of solid increase earn that XX% updating finally, Pillar 'XX. matters our tax briefing, while as a to shaping and speaking, recovery of rate these remains be up is further XX. Operator, 'XX expected Q&A. dependent, from fiscal legislation. And is the tax already be in annual And fiscal And core an markets you to rate approximately just timing to on which minimum investor to million. more global the $XXX for 'XX installed Jabil to generally of X our result

[Operator Instructions] is Bhattacharya. Today's Ruplu from first coming question

a your Mike similar and biggest for Greg, you see risk? question you main year? the What do areas over biggest year? what assignments. see your And as on Mike, for do the as what new the CFO. And congrats Greg, Jabil as the next you next to are opportunity focus

Thanks, Ruplu.

purposes. so aware, utilization will areas and been We margins for free of my CFO flow X And we're free think to that focus continue cash the flow, this have always years. undervalued. I I've do cash buyback and and think you're for always during been time, be

key of a capital on continuous that well allocation continue the with flow. that's cash X% margins will area So focus free

are end right sort well. of the We on markets as

suggesting the we end in there some are a have standpoint, we're that. -- happens one markets the the But we'll the opportunity right X that looking shifting next structured over I'm think reasons an for of are the recovery. quarters, not from I be that to X there's way into softness in? right. not seen some we're markets. the term, end in So But recovery our now, end in That's yes, that And some ripe markets organization. of we of long new these shifting are or Yes,

perspective, think an this from overall, So almost do. opportunity I when key the in does is AI proliferation everything whole we

is And right all markets. board. we're So in paying almost a hardware the AI to the refreshes hardware across require end company. going we're

So I entire us. proliferation do that expect to be for tailwind AI a

center do perhaps the standpoint, proliferate risk data sell. From the quarters, recovery. a the So over the I end next But of the more X or it's that across in of that long timing Right focused. markets think happens to range it's now, entire not. X Ruplu, expect I we run,

anecdotes I recovering than we slower would think are some externally, there's internally, bit outside, anticipated. various suggest things a little

Some suggest might it okay. that be

take next reasons one plan. more our in at analyst we'll 'XX time and this our -- we our That X September. out to guidance, over figure the So provide on resended or X of was end months briefing the color the much FY of we'll

Hi, Ruplu. Greg. It's

to focus will Mike Just strong expanding things a free said. operating the margins. flows. just continuing cash It to of some key be generate Definitely reiterate

return QX As had. strong then And quite shareholders. saw, we capital a you to

believe We for cash continue be share a Jabil. great repurchase of to super is and on thoughtful this use our still

getting talked mean, about a Okay. at Got I be is when space. you I competitive to look it. AI. Mike, AI very things,

the given in you trend do the you higher how on side or than few margins think AI of competition? the next do And investments rest increased the years? business AI lower so see Jabil's the And trending over

mainly competition, you think where about right. the There server large play equipment. think it's a So amount Ruplu. you're if of in AI, we is around I Today, absolutely

well. infrastructure, data building looking look power. looking of at some center we're data at we center, cooling. services We're looking We're as these at value-add at As pieces around

So slow sort will down, a expanding but it time around again an there will over of will AI up strategy. picking margin data center-driven be as we -- start start

at So other the we're at of silicon looking lines along We're in periphery, the pieces photonics. packaging. looking OSAT

a fast. of jump a perspective. not So at to it that but now, whole down quite margin we right And back -- up does come an think things pretty from going go bit there's up I it's and look bunch go will AI

more Okay. Maybe X in. and sneak I'll try

And You talked think in also the that you've weaker if I some recovery what and do of care you the and think levers a have free you've semi-cap, you to about expected. some expect drive revenues said weakening are continue it's to I of health on be cash and space weak, auto margins flow? are to said margins than these? When the focus. continue

are margin you and the what given weak? on flow some free have So cash are revenues the of side if levers

question So first. Ruplu, try and let auto your me answer

I seeing auto, particularly China. in we to weakness, think it are some as relates

That situation an to impact local -- export local for I sorry, for think purposes there's oversupply there. manufacturing as and Asia local local does well. for us,

existing you'll seeing in now. into December situation lot a recovery because of space inventory. to the out There China. From to player in a right a full-scale bit But coming January, that's recovery January little or and think that 'XX of EV I a little weird the China. So initial situation we in a is there sell-through we're where a the sell-through from I see in dominant 'XX, of was whole is a push is out China some semi-cap pushing right, -- expectation December standpoint, bit think

middle coming all a expect of year or start a other. these Ruplu, impact 'XX. From expect some by do to the standpoint, calendar markets around point start of we So calendar margin the to in year, Jabil we

completely a down where not and down full-blown facilities we it's does -- come close not through. when a in we So recession, and the take out recovery because costs we're go lose

temporary So level you margin might of there. see some impact

an strong. our And trajectory be starts and the I'll overall, recovery give example. when you But will extremely position

be billion revenue. lower considerably today, of obviously, our in than -- about it think what if at 'XX, for billion, I probably look will you $XX that. we're And FY capacitized $XX

capacity. surplus take we'll have the So is want take to answer out? that don't I little Do a we bit of out. think capacity to

be really going to back. of And margin level we're temporary there positioned. long term, that think I to wait impact. well come might some for But recovery

Steven from next The of is Fox question Fox coming Advisors.

appointments. Mike guess your Greg Congrats, on had and I questions. I X

guidance X% following you QX the implies up these operating magical just all, on mean, comments, hit of I last Mike. First for margin that number.

I'm curious just number put could that if So you into context.

of lot seasonality mixed You just described markets. some a and

how had think more X% a like And I So follow-up. as at year? next to that's QX versus then something out like you number ongoing as sustainable

Yes.

I So see all. we of thanks, Steve, single in that of every do think amount first QX. is there an almost seasonality

bit that is recoveries. have still the a half the impact. So we of highlighted that, is margins mobility even when And cost more think X% because I up through, half going second cost not we're go think about 'XX, margin be going in seeing. no fixed the And -- of you'll of see sustainable to revenue don't think be of definitely flowing some second a recoveries, for to you when I think I what we It's QX. is do level but there half fixed year much first our sure. than FY Adam forward, divestiture. There of expect because

and uptick QX look see go margins. in down. you things consistent another seasonality, sort of at then If we QX, QX is QX. historical And with QX

But X%, would first QX see year. is perspective. has seasonality bit of similar of margin little of and you'll of in one-offs a next a QX, So half I the the for it year, say, sort from sustainable a not

area I helpful. terms X your prepared I there's guess, dig That's into remarks, little And you was hoping Great. in then bit. could a of

sort incrementally last is makes end little in saw geographically, weeks what want Can your of on that X with a weeks expand now you mentioned table X on strategy to point for market just your year. change reshaping sort second just to next bit? the you You some I of, you guess,

Sure.

margins Steve, and I've been always on free cash flow. focused So

the over last X seen that years. you've think I

see from of metrics where flow accounts of and those sort these X We and level of with continue geographies away as well. some it too we of our We're cash the a reshaping of or outcomes. margins risk don't up X from at markets financial if attractive sort end and looking less prioritize well some shape portfolio to

legacy So as where the it's see at bit. going of a look one spread areas you legacy networking out little this I would networking down.

the see replacing piece You'll AI that. some of

you'll positions increase you where a piece a in the bit legacy us see this decrease well. as So an will really well. Again, AI, little see networking of on

So the of with saying not the I'm margins cash this. beyond, FY and structure will improve jump flows. But up because 'XX margin in 'XX will in better term, over long along

I think in Greg flows in strong talked about cash coming free really QX.

where be We forward cash to flows lies the free is we flow. going think on that's free focused in continue because cash valuation the our

Wang from The of coming Barclays. question is next George

new Congrats on the roles.

X So I parts. have

connected you Firstly, devices the and driven mentioned XQ networking by the storage.

raised year also forecast full the You the subsequently X for segments.

growth for Just Just the networking? of of kind a this can share of result kind about of and what's and industry devices outlook driving connected you kind is better a or kind talk gains?

think those. probably a our of conservative I a of from perspective. forecasting There was little neither bit it's

the of forecasting last connected we've conservative of big think jump has If whole we'd the think seeing QX sort tried post-COVID in. that because sure came the are the a of But market. in see instance, we're a was I devices don't end numbers up impact mainly sort I you anticipated. the in accurate. In particular of little to this that And always been bit a forecasts our over maybe down. couple make years,

Got you.

a confirm, quick revenue I Just it's I billion for FY to still $X if follow-up, 'XX. can. just

remarks, You change it guys forecast. didn't really in talked the about prepared the

$X on hone I to So want like But I power confirm, just want and cooling. the also, still to in billion. just it's

power some about talked guys massive Obviously, higher shortage been cooling value has margins. with add. You the of

your the you capture Jabil's from with the power associated kind coming about can inherent the table data initiatives of of So shortage standpoint talk differentiation sort the some demand the cooling to and and in center. of and the on

cooling Let first. me power the hit question and

there center cooling can legacy from going retrofit. in centers perspective. space, at seeing the distribution services unit a the are to we're that offer data data retrofit, One things we are data a capabilities we centers of the And looking through where

more and we'll air, ones If infrastructure you think in around the transactions legacy is look as new building liquid space at small to our the capabilities as be expand whole and newer internal are we liquid integration have Well, around to deployments capability-driven we continuing are liquid key into that here at deployments, to well. cooling. look I that, to a differentiator. And center be that server would data service -- well. The big the

next from Matt of Stifel. The coming is question Sheerin

strength, more networking, to the drill wanted down on little bit your a base. on I commentary also the but customer

know like You indicated that I'm away are those I tell partners us customers you could for you've with OEM you walk got you may on -- some growing that about networking business. the on center legacy switches? the from And of traditional base, market. But the you're exactly also talking products network But the doing side. and to a server particularly you're what guessing working data those hyperscale customer on side?

Yes.

question. great a that's think I So

quite by sort of from -- legacy that I replaced a walking liquid from of away think you're right. that forward-looking sort absolutely side anyways cool being networking lot the is future we're piece of definitely if It's We're the AI, transceiver getting that. bit whole switches. a at in you space We're silicon looking involved the well. that to gets we're as -- business, at which looking look attached photonics a space,

go we're to business storage, the will be of playing overall, new a where and legacy network switching, era same new a from bit. networking networking heavily going a it down as and transitioning and of think a time, networking to the we're switching. and on legacy transition So At the

an the on have of Are Okay. going and side? peers And you some on doing are routes work actually we're design. traditional for more they're through customers EMS seeing your the customers' to mostly networking building side, or model, ODM both where others custom

that, it be customers, Historically, we'll with think Matt. away will We're EMS competing in we've going full do a continue OEM continue stayed space. not I stage. from -- at and the hybrid. We're to We're to directly going our this definitely

some that flattish. are And post just down your I above balance and year allocation. down interest but Could aggressive of still buyback interest you reduce take And a your -- significant, of that? you've to not great. the know for look talk sheet expense also, inventory, they've or Okay, capital days, well short-term to next come net why turning where you borrowings just were they your basically forecast but lot, the done some they're higher at if the inventory pandemic. through debt

to net done be So is work bring in the interest working that to expense of there terms inventory down? capital or

Yes. This is Greg.

few I So expense. definitely making and look say and for that. see Interest 'XX buyback. results to and to the do most of rates from think expense interest X combined We continuing calendar on EPS there's have stay parts elevated most the We at we the share yes, I'd question. a sure into effective first that 'XX.

a on some We and capital of inventory been year number. From do I cyclicality think see good we've we and our intra-quarter. range, that really conservative do XX-day being see that during to doing perspective, job. a the working So the net XX- in

that inventory thing we So just we at as a to do number gross do remind had we our pickup have hit. offset you obviously, that good that down. does coming quarter, some deposits DII of this look But well, when one

to on focused some very be getting and that. to there continuing we're closer cyclicality down is on inventory but So net it XX%,

a are our new do committed to We authorization go Board authorization share need On into as in QX. the completing share 'XX. billion $X.X we we repurchase,

] XXX for lasso looking by [ the to FY get our into ] But the to that. stay of XXX 'XX. end [ range So tuned

color Matt, if can on more I just provide interest. And some the

range in back previous years, million. was year of 'XX, to $XXX interest go you FY our sort of this the If or

I possible. our downwards. $XXX million. you line. it XXXs the bit not quite a of start we But be more was as suggesting a because go in I'm year And won't to It's all year impact that to we it's to look and to to of a EPS not going rates is end go highly $XXX but low interest as to calendar over think the going million. see norm. back million just $XXX interest going million, coming you'll that of well continue range. the if 'XX, time, It have go Today, back down, is down directly drops at that full towards start $XXX

it. Got

Okay. you year, the about coming and deselecting as $XXX headwind you And portfolio. down part question of break customers, can for for Could weakness. from said, demand just most you But that just I in next that sneak a that you -- also prune regarding us? coming that as million from last talked of there if a is

comes All not of deselecting, renegotiating down. customers. with from -- deselecting coming It's but that

geographies million. $XXX was our Like markets and provided to reshaping I number flow everything and end financial part is the it's do. center cash That -- outcomes. mentioned before, our we just of strategy. continue from think front of portfolio And risk attractive margins with we're I've free less of I and away be sort and

that. So it's all

I think the there. ones I big mentioned legacy networking of being one

So driven the reshaping all by literally it's numbers.

recovery, the has than end continuing I the It's I'd think soft, the of pushed bit. a be out. been timing you little if are more recovery look all say, to they out pushed at that markets, other

but no of that, recovery referenced So reshaping There around will be on the level timing million as going of down, right was I some to markets the as will reshaping gets that there's be shifted number. and revenue that a impact the probably other end $XXX well.

would and would in -- business? company is revenue clarify. other And imagine I profile the return margin million to that helpful that, that average, so $XXX accretive, words, your very below that be is That's to

we'll I'm capacitized again, being of FY -- not I billion accretion that. $XX a suggesting because 'XX, revenue. of billion, see for not us about $XX I'm Absolutely. talked big

going are short that. be considerably revenues Our of to

us need So I things recover. we start that be to will have think capacity go that capacity today. of when shortsighted very address overcapacity. But And bit little it that we will of to have incremental we a and

'XX? as accretion an When will mind overall a well. But So opportunity. margin just FY withdrew margin yes, We overcapacity our as is don't FY happen right why a asked we've these keep little guidance. more that be in an towards And the that's And a standpoint, end that's things now that coming think it and start company there from a right of have of in of little back, why time, bit 'XX? there for will that Does 'XX big businesses bit impact. in situation does we happen just now. that know

the will to end of color September of more the best abilities. at We provide our

coming Mark Sachs. is question next of The Goldman from Delaney

to the that? is on the of I follow-up looking said a more breakeven, First you associated revenue of that that profile would $XXX color us understand corporate $XXX know company what million million low be you average? help deselect. corporate But digits, the helpful. Can the below below is just single it's it margin on with Any above slightly average. the is margin

margin. flow That are enterprise as critical of margin. the look success. cash free not just the our We for -- those at both south metrics of It's It's profile well.

looking of a of I we're to as perspective. the out at the as seeing world, Risk replaced a being think different well have risk risk things tie obviously, that The as financial or metrics to is in out. the -- new are risk one the well. tie parts in end the by trend markets has downward

and all it's of So margin that work, south. be the will

mentioning expect question I because up of Matt, an a little the from was is on overcapacity to of jump bit from don't There As 'XX margins this. situation. previous

'XX towards does and the expect I do pickup impacted 'XX maybe end in because So over in this. the it's of get FY see FY time. or even to margin of a margin

return. So it's a mid- or to long-term payback a

Helpful hybrids. was around color. question My second

as OEMs support years? the with more, hybrids? And just hybrids, to bit Jabil participating grow over traditional some that you you growth faster not is to are wins the planning a hybrids grow double-click to in have design little where around next You what that Can ability mentioned to some and you talk in have few hybrid of the EVs. presentation would in extent with the us

succeed. about the EVs, almost I EVs. I at think to areas vehicles. think So it's that or that X applies I or combustion, across of agnostic it's software-defined and succeed look talked some I X I when think we're you whether that EVs hybrids make I think And point to hybrids trying was the if that That was we participate in,

to the If do at systems EVs hybrids. you equally and the to and applies battery look it battery, everything management with

with ADAS some look automated is right of cameras, X all look categories technologies, If it automotive. And to applies to again, for uptakes, out. of at the you you wins of agnostic connectivity technology think again, piece, which then bunch with a at old driving if with EVs comeback. still We

seen I price, some of range. due impact temporary think battery due it's to to sort

make agnostic going of for But hybrid point online. up, I those EV always a come go have trying or couple business EVs we're a down to of little is trajectory them back But When resolved EV our and an for the there'll timing to be technology was terms space quite again. being hybrid. the will go Just wins hybrids is EVs issues a out. in to programs difference long-term in in the which actually and

from question JPMorgan. next The coming is Chatterjee Samik of

This MP on Chatterjee. Samik for

you XG, So just wanted devices, included connected I ask, had cetera. cloud, to outlook around like networking, storage, et

a So markets. is in end these revenue AI recognized lot of

recovery of the just wondered I have I traditional AI So because how markets? And in is follow-up. in increase end the versus outlook a of much the

today impacting perspective. end So the are an us AI markets, talked Greg about I think X in other from the that

early start markets, I On there. AI little the pieces in to end a assuming it's for of us think sort other too

number our bake I now. We end going markets, all assumptions end see coming of that to hardware think definitely coming. markets, is cycles take impact our forward. wouldn't it refresh AI those will is definitely but of AI right in place. A

-- will this answer in. little. your AI there's other start answer There's almost no markets We end to the of But question of in the that is stage. some very at any direct putting

operating another will on one expenses. And Okay. be

something midpoint be which this of guidance. margins drove operating operating the believe So expenses, have quarter, to below but higher were revenues midpoint guidance net I quite a the than the the of which is

what this operating confidence higher to the was So driving expenses? margin And track what's next your for X% -- quarter? from exactly bringing on

we're recently. It's really Yes, Samik. a seeing mix that

again, we seasonality that mix. that, So some -- related is to all to but

of from next question UBS. Vogt coming The is David

This is to wanted I Andrew David. about wireless ask on a business. for your question

that As elections pick might business signs seen India, we've past the in have up? moved back you any that,

At this stage, really. not

been a there's think of in scale deployment India. I XG mass already

hope move they I there's -- a forward definitely there's monetize after and returns. that think think seen they've I some

think XX%, big So sort there's in of XX% India recovery stage. of don't they're I we out. at think almost assumptions this post-election have I some rolled --

Devices What it. seeing what expand could business. of driving up you segment, part health comments wondering in to Got that you about I think on was you it Medical on in the macro? care also the said just softness? I I'm was that follow softness if And there? it Is wanted saw are you just the

softness, in health note just do space. care things that the say just the it's X we of we X when So that entire or X

higher from a bunch to there's other well orthopedic we're sort the are pharma think do higher an from things devices. There's standpoint, we and look in I of that higher. of surgeries, you obviously, medical a medical as that But solutions play standpoint, if diagnostic they a devices. from from impact, off drugs, a keep impacts other the whole at and they is GLP-X standpoint, just positioned no going charts, counter space. There really and well -- that

wouldn't Greg a smaller impact. I -- out. called So it it's

short-term there our think for 'XX. was GLP-X that. it I because piece of the forget We're don't an seeing issue continue FY grow. headwinds to will specifically But some

little only I the capacity, that sort to putting of time think constraint in on place, the piece. heavy is involved which automation due of bit GLP-X a capacity the takes that's

floor to time, additional this turn At comments. for would closing management like over or to I the back any

it Thank That's call. for you this much. very

questions, have you any reach If further please out.

to happy be will We you. talk. Thank

event. this Ladies today's and concludes gentlemen,

log webcast the enjoy time, may disconnect or the day. this at lines your and rest your of off You