艾睿電子 (ARW) 2023 Q4 法說會逐字稿

Good day, and welcome to Arrow Electronics Fourth Quarter and Full Year 2023 Earnings Call. Today's call is being recorded.

美好的一天，歡迎參加艾睿電子 2023 年第四季和全年財報電話會議。今天的通話正在錄音。

And at this time, I would like to turn the conference over to Anthony Bencivenga, Vice President of Investor Relations. Please go ahead, sir.

現在，我想將會議交給投資者關係副總裁安東尼·本西文加 (Anthony Bencivenga)。請繼續，先生。

Thank you, operator. I'd like to welcome everyone to the Arrow Electronics Fourth Quarter and Full Year 2023 Earnings Conference Call. Joining me on the call today is our President and Chief Executive Officer, Sean Kerins; our Chief Financial Officer, Raj Agrawal; our President of Global Components, Rick Marano; and our President of Global Enterprise Computing Solutions, Kristin Russell.

謝謝你，接線生。歡迎大家參加艾睿電子 2023 年第四季和全年財報電話會議。今天和我一起參加電話會議的是我們的總裁兼執行長 Sean Kerins；我們的財務長 Raj Agrawal；我們的全球零件總裁 Rick Marano；以及我們的全球企業運算解決方案總裁 Kristin Russell。

During this call, we'll make forward-looking statements, including statements about our business outlook, strategies and future financial results, which are based on our predictions and expectations as of today. Our actual results could differ materially due to a number of risks and uncertainties, including the risk factors described in our most recent filings with the SEC. We undertake no obligation to update publicly or revise any of the forward-looking statements as a result of new information or future events.

在本次電話會議中，我們將做出前瞻性聲明，包括有關我們的業務前景、策略和未來財務表現的聲明，這些聲明基於我們截至目前的預測和預期。由於許多風險和不確定性，包括我們最近向 SEC 提交的文件中描述的風險因素，我們的實際結果可能會存在重大差異。 我們不承擔因新資訊或未來事件而公開更新或修改任何前瞻性陳述的義務。

As a reminder, some of the figures we will discuss on today's call are non-GAAP measures, which are not intended to be a substitute for our GAAP results. We have reconciled these non-GAAP measures to the most directly comparable GAAP financial measures in this quarter's associated earnings release or Form 10-K.

提醒一下，我們將在今天的電話會議上討論的一些數據是非 GAAP 指標，它們無意替代我們的 GAAP 結果。我們已將這些非 GAAP 指標與本季度相關收益發布或 10-K 表格中最直接可比較的 GAAP 財務指標進行了調整。

You can access our earnings release at investor.arrow.com, along with a replay of this call. We've also posted a slide presentation to accompany our prepared remarks and encourage you to reference these slides during the webcast. Following our prepared remarks today, we'll be able to take your questions.

您可以在 Investor.arrow.com 上存取我們的收益發布以及本次電話會議的重播。我們也發布了投影片簡報以配合我們準備好的評論，並鼓勵您在網路廣播期間參考這些投影片。在我們今天準備好的發言之後，我們將能夠回答你們的問題。

And I'll now hand the call over to our President and CEO, Sean Kerins.

現在我將把電話轉給我們的總裁兼執行長 Sean Kerins。

Thanks, Anthony, and thank you all for joining us. We appreciate your interest in Arrow Electronics.

謝謝安東尼，也謝謝大家加入我們。我們感謝您對艾睿電子的興趣。

For some context, I'd like to first review our 2023 full year financial results before commenting on our fourth quarter performance and the overall state of the market. I'll then turn things over to Raj for more detail on our financials as well as our outlook for the first quarter.

在某些情況下，我想先回顧我們 2023 年全年的財務業績，然後再評論我們第四季的業績和市場的整體狀況。然後我將把事情轉交給 Raj，以獲取有關我們財務狀況以及第一季前景的更多詳細資訊。

As I reflect on our performance over the past year, I want to start by thanking our global team for their persistence, resilience and dedication to our suppliers and customers. Through their efforts, we were able to deliver solid financial performance given the market backdrop.

當我回顧我們過去一年的表現時，我首先要感謝我們的全球團隊對供應商和客戶的堅持、堅韌和奉獻。透過他們的努力，我們能夠在市場背景下實現穩健的財務表現。

Despite excess inventory throughout the supply chain leading to softer demand in our components business and a mixed IT spending environment for our enterprise computing solutions business, we executed well in a challenging environment. Arrow posted $33.1 billion in full year 2023 revenue, and achieved an operating margin of 4.8% on a non-GAAP basis. In addition, we generated healthy cash flow from operations, which enabled us to repurchase approximately $750 million in shares throughout the year.

儘管整個供應鏈的庫存過剩導致我們的組件業務需求疲軟以及企業運算解決方案業務的混合 IT 支出環境，但我們在充滿挑戰的環境中表現良好。 Arrow 公佈 2023 年全年營收為 331 億美元，以非 GAAP 計算營業利潤率為 4.8%。此外，我們還透過營運產生了健康的現金流，這使我們能夠全年回購約 7.5 億美元的股票。

Now moving to our fourth quarter results. To close out the year, we delivered sales of $7.8 billion in the fourth quarter, just better than the midpoint of our guidance. Based on healthy operating margins in each of our segments, we generated non-GAAP earnings per share of $3.98, comfortably above the high end of our guided range.

現在轉向我們的第四季業績。截至今年年底，我們第四季的銷售額為 78 億美元，略高於我們指引的中位數。基於我們每個部門的健康營運利潤率，我們實現了非 GAAP 每股收益 3.98 美元，遠高於我們指導範圍的上限。

Taking a closer look at our components business. The industry-wide inventory correction appears to be taking longer than anticipated when compared to prior cycles. This is likely due to the breadth and magnitude of the shortages that precipitated the inventory buildup, along with continued softness for components in many industrial markets. However, we do believe markets will eventually improve and see gradual signs of normalizing trends.

仔細看看我們的零件業務。與之前的周期相比，全產業庫存調整的時間似乎比預期的要長。這可能是由於短缺的廣度和程度導致庫存增加，以及許多工業市場零件的持續疲軟。然而，我們確實相信市場最終會改善，並逐漸看到趨勢正常化的跡象。

Our book-to-bill ratios have stabilized overall with our IP&E portfolio trending closer to parity. Pricing is generally holding up as reflected in our fourth quarter gross margins, which were sequentially better than in the prior quarter. Our demand creation pipeline is growing as customers continue to develop new products. And while order rescheduling activity persisted, we focused on backlog conversion during the quarter and reduced inventory by over $600 million sequentially.

我們的訂單出貨比整體穩定，我們的 IP&E 投資組合趨於接近平價。正如我們第四季的毛利率所反映的那樣，定價總體上保持不變，毛利率連續好於上一季。隨著客戶不斷開發新產品，我們的需求創造管道也不斷成長。雖然訂單重新安排活動持續存在，但我們在本季度專注於積壓訂單轉換，並連續減少了超過 6 億美元的庫存。

From a regional perspective, in Europe and the Americas, customers continued to moderate their supply, as reflected by their reluctance to place new orders. While we expect sub-seasonal performance in the near term and continued softness in industrial markets, we were encouraged by robust design activity and relative strength in verticals such as aerospace and defense and medical devices.

從區域角度來看，在歐洲和美洲，客戶繼續減少供應，這反映在他們不願意下新訂單。雖然我們預期短期內會出現次季節表現，工業市場將持續疲軟，但強勁的設計活動以及航空航太、國防和醫療設備等垂直產業的相對實力令我們感到鼓舞。

And in Asia, we expect results to normalize somewhat with respect to typical seasonality when compared to the West. And while we can't predict the timing of a broader macroeconomic recovery, we were pleased by sequential growth in segments such as data center compute and, to a lesser extent, transportation.

在亞洲，與西方相比，我們預期結果將在典型季節性方面有所正常化。雖然我們無法預測更廣泛的宏觀經濟復甦的時間，但我們對資料中心計算以及交通運輸等領域的連續成長感到高興。

Shifting to our global ECS business. During the quarter, we continued to execute on all things IT-as-a-Service, which led to a higher mix of infrastructure software, cloud solutions and related services when compared to the prior year. Over time, this mix drives a growing portfolio of recurring revenue volumes as well as better contribution margins for the business overall. And given the annual nature of this business model, fourth quarter results were up sequentially as expected.

轉向我們的全球 ECS 業務。本季度，我們繼續執行 IT 即服務的所有內容，與前一年相比，這導致基礎設施軟體、雲端解決方案和相關服務的組合更高。隨著時間的推移，這種組合將推動經常性收入不斷成長，並為整體業務帶來更好的邊際貢獻。鑑於這種業務模式的年度性質，第四季度業績按預期連續增長。

From a regional perspective, in Europe, we delivered year-over-year billings and gross profit dollar growth amidst the mixed IT spending environment. While storage and compute were down, they were more than offset by strength in infrastructure software and networking products.

從區域角度來看，在歐洲，我們在混合的 IT 支出環境中實現了同比帳單和毛利成長。雖然儲存和運算能力下降，但基礎設施軟體和網路產品的實力足以抵消這些下降。

And in North America, our results for the fourth quarter reflect a muted IT spending environment with softness in storage, compute and cybersecurity, partially offset by strength in infrastructure software and networking.

在北美，我們第四季的業績反映出 IT 支出環境低迷，在儲存、運算和網路安全方面表現疲軟，但基礎設施軟體和網路方面的實力部分抵消了這一影響。

As we stated in the past, we're in the process of optimizing our customer mix and supplier line card in the region to better serve the mid-market. We've made progress in this area and are optimistic about improving our results in the region this year.

正如我們過去所說，我們正在優化該地區的客戶組合和供應商線路卡，以更好地服務中端市場。我們在這一領域取得了進展，並對今年改善我們在該地區的表現持樂觀態度。

Before I hand things over to Raj, I do want to reflect a little bit on the future. Despite the ongoing cyclical correction and a weaker macro demand environment, we remain optimistic regarding the overall industry backdrop and believe longer-term technology trends will benefit Arrow. We're at the center of large and growing markets, driven by the electrification of everything: renewable energy, autonomous vehicles and artificial intelligence, just to name a few. Given a longer horizon, we remain committed to the growth initiatives we've previously shared with you, where our differentiation provides value to both our suppliers and customers.

在我把事情交給 Raj 之前，我確實想反思未來。儘管持續的周期性調整和疲軟的宏觀需求環境，我們對整體行業背景保持樂觀，並相信長期技術趨勢將使 Arrow 受益。我們處於龐大且不斷成長的市場的中心，受到一切電氣化的推動：再生能源、自動駕駛汽車和人工智慧等等。從長遠來看，我們仍然致力於我們之前與您分享的成長計劃，我們的差異化為我們的供應商和客戶提供價值。

First, in demand creation, we added engineering resources throughout 2023, which helped demand creation revenue outpace the rest of the portfolio. Second, our engineering services have been gaining traction across attractive verticals such as renewable energy, automotive and medical devices. As a result, full year engineering services revenue grew meaningfully. Third, in supply chain services, we expanded our customer base in 2023 with further penetration in the data center and automotive verticals. And looking ahead, we see additional opportunities to extend this offering to other verticals and OEMs.

首先，在需求創造方面，我們在 2023 年全年增加了工程資源，這有助於需求創造收入超過其他產品組合。其次，我們的工程服務在再生能源、汽車和醫療設備等有吸引力的垂直領域越來越受歡迎。因此，全年工程服務收入大幅成長。第三，在供應鏈服務方面，我們在2023年擴大了客戶群，進一步滲透到資料中心和汽車垂直領域。展望未來，我們看到了將此產品擴展到其他垂直行業和 OEM 的更多機會。

Next, we've maintained our differentiated focus on interconnects, passives and electromechanical components, a margin-accretive growth area within our components business. And finally, in our ECS business, over the course of the year, we enhanced our digital distribution platform, ArrowSphere, while onboarding new channel partners and supplier lines, demonstrating our commitment to the market's transition to IT-as-a-Service. In the meantime, as we navigate a challenging near term, we will continue to prudently manage our cost structure and working capital portfolio with an eye towards emerging even stronger as market conditions improve.

接下來，我們保持對互連、被動元件和機電元件的差異化關注，這是我們元件業務中利潤成長的成長領域。最後，在我們的ECS 業務中，在這一年中，我們增強了我們的數位分銷平台ArrowSphere，同時引入了新的通路合作夥伴和供應商系列，這表明了我們對市場向IT 即服務過渡的承諾。 同時，在我們應對充滿挑戰的短期內，我們將繼續審慎管理我們的成本結構和營運資金組合，並著眼於隨著市場狀況的改善而變得更加強大。

And with that, I'll hand things over to Raj.

這樣，我就把事情交給 Raj。

Thanks, Sean. I'll be speaking to our financials on an as-reported and GAAP basis, unless otherwise specified.

謝謝，肖恩。除非另有說明，我將在報告和公認會計原則的基礎上談論我們的財務狀況。

Consolidated revenue for the full year 2023 was $33.1 billion, which was down 11% versus prior year. Global components sales were $25.4 billion, which was down 12% from the prior year, driven primarily by softness in the Asia market and reduced shortage market activity in the Americas, partially offset by growth in our European market.

2023 年全年合併收入為 331 億美元，較前一年下降 11%。全球零件銷售額為 254 億美元，比上年下降 12%，這主要是由於亞洲市場疲軟和美洲短缺市場活動減少所致，部分被歐洲市場的成長所抵消。

Enterprise computing solutions sales were $7.7 billion, which was down 8% versus prior year. Importantly, our full year global ECS earnings were flat from prior year, reflecting growth in Europe, offset by a decline in North America due to a softer IT spending market in that region.

企業運算解決方案銷售額為 77 億美元，比上年下降 8%。重要的是，我們全年的全球 ECS 收益與去年持平，反映出歐洲的成長，但被北美地區 IT 支出市場疲軟導致的下降所抵消。

Moving to other financial metrics for the full year. Consolidated gross margin of 12.5% for the full year was down 50 basis points from prior year. Non-GAAP operating expenses were down $157 million from prior year to $2.6 billion. The OpEx decline came from a favorable legal settlement in the third quarter, reduced variable expenses and our continued efforts to control spending. Non-GAAP operating income was $1.6 billion or 4.8% of sales, with global components operating margin coming in at 5.8% and enterprise computing solutions coming in at 4.8%. Non-GAAP diluted EPS for the full year was $17.12, based on an average outstanding share count of 57 million shares.

轉向全年的其他財務指標。全年綜合毛利率為 12.5%，較前一年下降 50 個基點。非 GAAP 營運支出較前一年減少 1.57 億美元，至 26 億美元。營運支出的下降源於第三季有利的法律​​和解、可變費用的減少以及我們持續努力控制支出。非 GAAP 營業收入為 16 億美元，佔銷售額的 4.8%，全球組件營業利潤率為 5.8%，企業運算解決方案營業利潤率為 4.8%。 根據 5,700 萬股平均流通股計算，全年非 GAAP 稀釋後每股收益為 17.12 美元。

Now turning to our fourth quarter results. Consolidated revenue for the fourth quarter was $7.8 billion, within our guidance range and down 16% versus prior year. Global component sales were $5.6 billion, meeting the midpoint of our guidance and down 10% versus prior quarter or 17% versus prior year due to the ongoing semiconductor inventory correction. Enterprise computing solutions sales were $2.2 billion, also in line with guidance and down 11% versus prior year. This was partly a function of product mix and probably a function of lower discretionary IT spending in North America.

現在轉向我們第四季的業績。第四季合併收入為 78 億美元，在我們的指導範圍內，比去年同期下降 16%。全球零件銷售額為 56 億美元，達到我們指引的中位數，但由於持續的半導體庫存調整，較上一季下降 10%，較前一年下降 17%。 企業運算解決方案銷售額為 22 億美元，也符合預期，較上年下降 11%。這在一定程度上是由於產品組合的原因，也可能是由於北美可自由支配的 IT 支出較低的原因。

Moving to other financial metrics for the quarter. Fourth quarter consolidated gross margin of 12.6% was down 30 basis points versus prior year, driven primarily by overall mix in global components. Sequentially, our gross margin was higher by 40 basis points due to the typical seasonality within the ECS business as well as favorable mix in components business in the West.

轉向本季的其他財務指標。第四季綜合毛利率為 12.6%，比去年同期下降 30 個基點，這主要是受全球零件整體組合的推動。隨後，由於 ECS 業務的典型季節性以及西方組件業務的有利組合，我們的毛利率提高了 40 個基點。

Our fourth quarter non-GAAP operating expenses declined sequentially when normalized for certain previously announced third quarter items. Our Q4 GAAP operating expenses included restructuring, integration and other charges of $40 million related to facility consolidation and other operating expense reductions. We generated non-GAAP operating income of $364 million in Q4, which was 4.6% of sales, with global components' operating margin coming in at 5.1% and enterprise computing solutions coming in at 6.6%.

當先前宣布的某些第三季項目進行標準化後，我們第四季的非公認會計準則營運費用連續下降。我們第四季的 GAAP 營運費用包括重組、整合和其他與設施整合和其他營運費用削減相關的 4,000 萬美元費用。 我們第四季的非 GAAP 營業收入為 3.64 億美元，佔銷售額的 4.6%，全球組件的營業利潤率為 5.1%，企業計算解決方案的營業利潤率為 6.6%。

Interest and other expense was $82 million in the fourth quarter, which was flat quarter-over-quarter and better than guided due to lower-than-expected average daily borrowings. Our non-GAAP effective tax rate was also favorable to our guide at 21.8%, resulting from certain domestic and foreign tax credits. And finally, non-GAAP diluted EPS for the fourth quarter was $3.98, which is above the high end of our guidance range and based on a 55 million share count.

第四季利息和其他費用為 8,200 萬美元，環比持平，並且由於平均每日借款低於預期而好於預期。由於某些國內和國外稅收抵免，我們的非 GAAP 有效稅率也有利於我們的指導，為 21.8%。最後，第四季非 GAAP 攤薄後每股收益為 3.98 美元，高於我們基於 5500 萬股計算的指導範圍的上限。

Turning our attention to working capital. Net working capital for Q4 was flat from Q3 at $7.4 billion. Accounts receivable and accounts payable both increased in the fourth quarter due to normal seasonality in the ECS business, along with activity in our supply chain services offering.

將我們的注意力轉向營運資金。第四季的淨營運資本與第三季持平，為 74 億美元。由於 ECS 業務的正常季節性以及我們供應鏈服務的活動，第四季度應收帳款和應付帳款均有所增加。

Inventory at the end of the fourth quarter was $5.2 billion, decreasing more than $600 million from Q3 with inventory days declining to 69. The combination of ECS seasonality, along with the decline in inventory, drove a reduction in our cash conversion cycle. Our cash flow from operations was $287 million in the fourth quarter and $705 million for the full year. Net debt at the end of the fourth quarter was lower compared to Q3 at $3.6 billion.

第四季末的庫存為 52 億美元，比第三季減少超過 6 億美元，庫存天數下降至 69 天。 第四季我們的營運現金流為 2.87 億美元，全年營運現金流為 7.05 億美元。第四季末的淨債務為 36 億美元，低於第三季。

Arrow's total liquidity at the end of the fourth quarter stands at $2.4 billion, including our cash balance of $218 million. We remain confident in the strength of our balance sheet, which gives us the financial flexibility to effectively manage our working capital needs. We repurchased shares in the amount of approximately $50 million in the fourth quarter and approximately $750 million for the full year. At the end of the fourth quarter, our remaining stock repurchase authorization stands at approximately $580 million.

截至第四季末，Arrow 的總流動資金為 24 億美元，其中現金餘額為 2.18 億美元。我們對資產負債表的實力仍然充滿信心，這使我們具有財務靈活性，可以有效管理我們的營運資金需求。我們在第四季回購了約 5,000 萬美元的股票，全年回購了約 7.5 億美元的股票。 截至第四季末，我們剩餘的股票回購授權約為 5.8 億美元。

Please keep in mind that the information I've shared during this call is a high-level summary of our financial results. For more details regarding the business segment results, please refer to the press release and earnings presentation published on our website this morning.

請記住，我在本次電話會議中分享的資訊是我們財務表現的高級摘要。有關業務部門業績的更多詳細信息，請參閱今天上午在我們網站上發布的新聞稿和收益報告。

Now turning to Q1 guidance. We expect sales for the first quarter to be between $6.7 billion and $7.3 billion. We expect global components sales to be between $5 billion and $5.4 billion, which at the midpoint is down 8% from prior quarter. We expect enterprise computing solutions sales to be between $1.7 billion and $1.9 billion, which at the midpoint represents a 4% decrease year-on-year. We're assuming a tax rate in the range of approximately 23% to 25% and interest expense of approximately $80 million. And our non-GAAP diluted earnings per share is expected to be between $2.20 and $2.40, which reflects unfavorable leverage in the business due to current market dynamics. And finally, we estimate changes in foreign currencies to have an immaterial effect on our Q1 guide. The details of the foreign currency impact can be found in our press release.

現在轉向第一季指引。我們預計第一季的銷售額將在 67 億美元至 73 億美元之間。我們預計全球零件銷售額將在 50 億美元至 54 億美元之間，中位數較上一季下降 8%。我們預期企業運算解決方案銷售額將在 17 億美元至 19 億美元之間，中間值年減 4%。我們假設稅率約為 23% 至 25%，利息支出約為 8,000 萬美元。我們的非 GAAP 攤薄每股收益預計在 2.20 美元至 2.40 美元之間，這反映了當前市場動態導致的業務槓桿不利。最後，我們估計外幣變化對我們第一季指南的影響並不重大。外匯影響的詳細資訊可以在我們的新聞稿中找到。

With that, Sean and I are now ready to take your questions. Operator, please open the line.

至此，肖恩和我現在準備好回答你們的問題了。接線員，請開通線路。

(Operator Instructions) Your first question comes from the line of Matt Sheerin from Stifel.

（操作員說明）您的第一個問題來自 Stifel 的 Matt Sheerin。

The first question is just regarding the inventory reduction in the quarter, which was nice to see. But on a days basis, particularly year-over-year, you're still up. So the question is, a, looking at your customers' inventory, how long do you think this is going to take to wash out? And b, in terms of your own inventory target over the next couple of quarters, what should we be thinking about?

第一個問題是關於本季的庫存減少，這是很高興看到的。但從天數來看，尤其是與去年同期相比，你仍然處於起床狀態。所以問題是，a，查看客戶的庫存，您認為需要多長時間才能清理掉？ b，就您未來幾季的庫存目標而言，我們應該考慮什麼？

Sure, Matt. Welcome. So you're right. We focused pretty intently on backlog conversion in the quarter, and that helped us drive the reduction that you saw. I think part of this comes from our focus on the mass market, which is really a sweet spot for us, where we're seeing a little better sell-through velocity than we are in the higher end of the market.

當然，馬特。歡迎。所以你是對的。我們非常專注於本季的積壓訂單轉換，這幫助我們推動了您所看到的減少。我認為這部分來自於我們對大眾市場的關注，這對我們來說確實是一個最佳點，我們看到的銷售速度比高端市場要好一些。

The other thing to point out about inventories is that our units were down in the quarter, both sequentially and year-over-year. So part of the excess you're still seeing is really a function of price versus a lot of inbound volumes. The rate of inbound has certainly slowed for us as lead times have normalized.

關於庫存的另一件事需要指出的是，我們的庫存數量在本季度有所下降，無論是環比還是同比。因此，您仍然看到的部分過剩實際上是價格與大量入境量的函數。隨著交貨時間的正常化，我們的入境速度肯定已經放緩。

The other thing I would tell you is that if you look at it region by region, we exited the quarter within a turn or less as compared to our historical norms. So we think the right things are happening by way of normalization. There is still a piece of the excess inventory that's really a function of some of the long-term supply agreements that were in play. Most of those have wound down or are winding down, and the impact of that is abating for us over time.

我要告訴你的另一件事是，如果你逐個地區地查看，我們會發現與歷史標準相比，我們在一個回合或更短的時間內退出了本季度。因此，我們認為透過正常化，正確的事情正在發生。仍有一部分過剩庫存實際上是一些正在發揮作用的長期供應協議的結果。其中大多數已經結束或正在結束，隨著時間的推移，其對我們的影響正在減弱。

So hard to say exactly when things fully normalize. Suppliers are now behaving much like they would have been in pre-pandemic days. With lead times much more normal, they are certainly flexible with regard to reschedule and cancellation activity for us. That's been a little more reschedule and cancellation for sure, but it does mean the time it takes to work your way through the backlog is extending.

很難確切地說事情何時完全正常化。供應商現在的行為與大流行前的情況非常相似。由於交貨時間更加正常，他們在為我們重新安排和取消活動方面當然很靈活。這肯定會增加一些重新安排和取消的時間，但這確實意味著解決積壓工作所需的時間正在延長。

But the right things are happening. And as we said in our prepared remarks, book-to-bill is stabilizing and improving slightly, inventories coming down. We feel good about where we are. Probably still need this quarter and next, just from an inventory perspective, to see things fully normalize yet again.

但正確的事情正在發生。正如我們在準備好的發言中所說，訂單出貨量正在穩定並略有改善，庫存正在下降。我們對自己所處的位置感覺良好。僅從庫存角度來看，可能仍需要本季和下季才能看到事情再次完全正常化。

Okay. And then just a question regarding margins in the March quarter. It looks like your operating margin is going to shake out in the mid 3% range-or-so, so down year-over-year on the volumes, obviously. But can you give us a sense what the gross margin might look like sequentially? Is that expected to be down? And then also on OpEx, I know you have some restructuring program. So are you expecting to get OpEx dollars down quarter-on-quarter or year-on-year?

好的。然後是關於三月季度利潤率的問題。看來你們的營業利潤率將在 3% 左右的範圍內波動，因此銷量顯然會比去年同期下降。但您能否讓我們了解毛利率可能會是什麼樣子？預計會下降嗎？ 然後在營運支出方面，我知道你們有一些重組計劃。那麼您預計營運支出會較上月或較去年同期下降嗎？

Sure, Matt. So let me start with global components because that represents the lion's share of our volume. What you're seeing from an operating margin perspective is really more a function of regional mix than anything to do with pricing pressure. We've got a little bit less EMEA on a relative basis in this outlook than what normal seasonality might imply.

當然，馬特。讓我從全球組件開始，因為它佔了我們數量的最大份額。從營業利潤率的角度來看，您所看到的實際上更多是區域組合的函數，而不是與定價壓力有關。相對而言，我們對歐洲、中東和非洲地區的展望比正常季節性可能暗示的要少一些。

But if you look at all of our forecasts across the business, we kind of see gross margins holding up pretty well sequentially. So really, what we've got here is just a loss of operating leverage at these sales levels. We know that as demand improves, the leverage piece of the equation is going to take care of itself. We're pretty comfortable that the structural contributors to our margin strength are holding up.

但如果你看看我們對整個業務的所有預測，我們會發現毛利率比上季保持得很好。事實上，我們現在所得到的只是在這些銷售水準上運作槓桿的損失。我們知道，隨著需求的改善，槓桿部分將會自行發揮作用。我們對利潤率優勢的結構性貢獻因素保持不變感到非常滿意。

From an OpEx perspective, you're right. We've always been pretty vigilant when it comes to our cost structure. That's not changing. Especially in this market environment, we are taking appropriate actions in the near term. I can pretty confidently tell you that you'll see our absolute operating expense dollars trend downward over the course of the year.

從營運支出的角度來看，您是對的。對於我們的成本結構，我們一直非常警惕。這並沒有改變。特別是在這種市場環境下，我們正在短期內採取適當的行動。我可以非常自信地告訴您，您會看到我們的絕對營運費用在這一年中呈下降趨勢。

At the same time, even though this correction is taking a little bit longer to play out, I would say, we ultimately see this as short term in nature. So we do intend to protect our growth priorities and the associated selling and engineering capacity for the long haul.

同時，儘管這種調整需要更長的時間才能發揮作用，但我想說，我們最終認為這本質上是短期的。因此，我們確實打算長期保護我們的成長重點以及相關的銷售和工程能力。

And Matt, maybe I could just add. We also see in first quarter typical seasonality for ECS, where they had their largest quarter in the fourth quarter, they also have their softest quarter in the first quarter and so you're going to get a natural step-down in margins just in the ECS business. So that's why you're sort of seeing the margin step-down that you're seeing.

馬特，也許我可以補充一下。我們也看到 ECS 第一季的典型季節性，他們在第四季度經歷了最大的季度，他們也在第一季度經歷了最疲軟的季度，因此你的利潤率將在第二季度自然下降。雲端伺服器業務。這就是為什麼你會看到利潤率下降。

Your next question comes from the line of Melissa Fairbanks from Raymond James.

您的下一個問題來自雷蒙德詹姆斯 (Raymond James) 的梅麗莎費爾班克斯 (Melissa Fairbanks)。

I just had a quick one. Maybe to go back on the inventory from a little different perspective. As we've heard from a number of your suppliers this quarter, some have managed their channel inventory better than others. Pretty much all are seeing the same demand dynamics as the supply has eased, as what you're seeing. Are you starting to see any suppliers trying to push more inventory through to you as they work to manage their own working capital or is it still pretty much a fair balance?

我剛剛喝了一杯。也許可以從不同的角度重新審視庫存。正如我們本季從許多供應商那裡聽到的那樣，有些供應商比其他供應商更好地管理了通路庫存。正如您所看到的，隨著供應量的減少，幾乎所有人都看到了相同的需求動態。 您是否開始看到任何供應商在努力管理自己的營運資金時試圖向您推送更多庫存，或者這仍然是一個公平的平衡？

I'm glad you asked the question because I wanted to clarify my last remark. The short answer is no. We're not seeing that really at all. In fact, as lead times have normalized for the most part completely, suppliers again have returned to a more flexible posture with regard to the backlog that we're still managing through.

我很高興你問這個問題，因為我想澄清我最後的話。簡短的回答是否定的。我們根本沒有看到這一點。事實上，隨著交貨時間在很大程度上完全正常化，供應商再次對我們仍在管理的積壓訂單恢復到更靈活的態度。

So that means that we're able to reschedule as necessary, cancel on occasion. That takes a little bit longer to convert the backlog, and our backlog still remains at significant levels beyond pre-pandemic days. But we're not seeing any pressure from our suppliers in this environment. I think we're getting to the other side of what we typically expect in that regard.

因此，這意味著我們可以根據需要重新安排時間，有時也可以取消。轉換積壓訂單需要更長的時間，而且我們的積壓訂單仍然保持在疫情大流行前的顯著水準。但在這種環境下，我們沒有看到供應商施加任何壓力。我認為我們正在達到我們在這方面通常期望的另一面。

Okay. Great. That's great to hear. Maybe as a follow-up, just kind of dig in on, Sean, what you mentioned on the transport in Asia. You were actually starting to see a little bit of growth there on a sequential basis. What we've heard from a lot of your suppliers and maybe some of your own customers is that the demand has been outside of a few pockets has actually been fairly resilient. It's just been a matter of up and down the supply chain, people now have enough buffer inventory. Are you starting to see good sell-through? Or is it demand improvement or maybe a balance of both?

好的。偉大的。很高興聽到這個消息。也許作為後續行動，肖恩，請深入探討您提到的亞洲交通問題。實際上，您已經開始看到環比出現了一些增長。我們從你們的許多供應商以及你們自己的一些客戶那裡聽到的是，少數人的需求實際上相當有彈性。這只是供應鏈上下游的問題，人們現在有足夠的緩衝庫存。您開始看到良好的銷售情況嗎？還是需要改進或兩者的平衡？

I'd say in general, Melissa, it's a balance of both. And again, my comments were more on a relative basis. I think we all know the Chinese market remains down, certainly soft, and the period for recovery is a little unclear. But transportation and specifically EV has been a little bit healthier for us as compared to most other verticals.

我想說，總的來說，梅麗莎，這是兩者的平衡。再說一遍，我的評論更多是相對而言的。我想我們都知道中國市場仍然低迷，而且肯定疲軟，而且復甦的時期有點不清楚。但與大多數其他垂直行業相比，交通運輸，特別是電動車對我們來說更健康。

But demand hasn't probably ticked up dramatically. At the same time, we've been able to sell through pretty consistently some of the inventory we do carry for that space. And I think that will be kind of the same posture for us in this quarter as well.

但需求可能並沒有大幅增加。同時，我們已經能夠相當穩定地銷售該空間的一些庫存。我認為本季我們也將採取同樣的態度。

Your next question comes from the line of Joe Quatrochi from Wells Fargo.

您的下一個問題來自富國銀行的 Joe Quatrochi。

I just wanted to kind of understand, you talked about your IP&E book-to-bill approaching parity. In that context, can you help us just understand, when we think about that relative to other cycles and the rest of your components business, has that been like a leading indicator of a recovery? Just kind of help us to maybe understand the importance of that comment.

我只是想了解一下，您談到您的 IP&E 訂單出貨量接近平價。在這種情況下，當我們考慮相對於其他週期和其餘零件業務時，您能否幫助我們理解，這是否是復甦的領先指標？只是幫助我們理解該評論的重要性。

You know, Joe, I would really -- I probably wouldn't link IP&E to the broader correction cycle in that way necessarily. Remember that IP&E, as compared to semiconductor, never really had the same shortage and capacity challenges as we saw in the semiconductor space. So lead times never went out as long, shortage has never got to be that severe. And so we're really not in the same kind of correction in that piece of the market as we are in the semiconductor piece of the market. And yes, it's been more resilient, more predictable for us, hence, the reason book-to-bill is closer to parity.

你知道，喬，我真的——我可能不會以這種方式將 IP&E 與更廣泛的修正週期聯繫起來。請記住，與半導體相比，IP&E 從未真正遇到過我們在半導體領域看到的相同的短缺和產能挑戰。因此，交貨時間從來沒有那麼長，短缺也從來沒有那麼嚴重。因此，我們在該市場中確實沒有遇到與在半導體市場中相同的調整。是的，它對我們來說更有彈性，更可預測，因此，訂單到帳單更接近平價。

And as you know, we like the space. It's margin accretive, and our new leader for our global components business is doing a nice job of really standing up a differentiated go-to-market model for that piece of the market. And we think, over time and long term, it's really going to be quite attractive for us.

如您所知，我們喜歡這個空間。它可以增加利潤，而且我們全球零件業務的新領導者在為該市場建立差異化的上市模式方面做得很好。我們認為，隨著時間的推移和長期來看，它確實對我們非常有吸引力。

Got it. And then just, I guess, as we're looking beyond the March quarter, I'm trying to think about the regional mix and impact to margins on the business. As we think about seasonality into the June quarter, is it fair to assume that, that's a bit of a negative headwind, just given that it sounds like Asia is maybe working through inventory a little bit faster than the Western regions?

知道了。然後，我想，當我們展望三月季度之後的情況時，我正在嘗試考慮區域組合以及對業務利潤率的影響。當我們考慮六月季度的季節性時，考慮到亞洲的庫存消耗速度可能比西方地區快一點，可以公平地假設，這是一個有點負面的逆風嗎？

Probably too early to call Q2 from a seasonality perspective, Joe. I can tell you when we look at Q1, we are guiding below normal seasonality overall. That's really a function of some more macro pressure in the West, with evidence of some softness in industrial and parts of automotive.

喬，從季節性角度來看第二季可能還為時過早。我可以告訴你，當我們查看第一季時，我們的指導總體低於正常季節性。這實際上是西方一些宏觀壓力的結果，有證據表明工業和汽車零件行業出現了一些疲軟。

I think in Asia, we're not necessarily assuming a typical uptick that you'd see post the Chinese New Year. But as we work through backlog and as inventories start to normalize, we're going to get better visibility to near-term demand, and that's going to be a good signal for the business and the market overall.

我認為在亞洲，我們不一定會假設農曆新年後會出現典型的上漲。但隨著我們解決積壓問題以及庫存開始正常化，我們將更了解近期需求，這對於整個業務和市場來說將是一個良好的訊號。

Your next question comes from the line of William Stein from Truist Securities.

您的下一個問題來自 Truist Securities 的 William Stein。

Congratulations on the good results this quarter. I'm hoping you can linger a little bit on the legal settlement. If you can maybe remind us what that's related to? How big was it and in which segment?

恭喜本季取得的良好業績。我希望你能在法律和解問題上稍微猶豫。您能否提醒我們這與什麼有關？它有多大以及在哪個細分市場？

Sure, Will, and thank you. I'll let Raj speak to the number. But just for context, the settlement was related to a commercial dispute with a subset of our supplier base that dates back well more than a decade ago. Many of us weren't even on the scene when this played out, but we are very pleased this resolved, and we anticipate no ongoing consequences.

當然，威爾，謝謝你。我會讓拉傑接電話號碼。但僅就背景而言，和解與我們與部分供應商的商業糾紛有關，該糾紛可以追溯到十多年前。當這件事發生時，我們中的許多人甚至不在現場，但我們很高興這個問題得到了解決，並且我們預計不會產生持續的後果。

Raj, maybe you can speak to the numbers.

Raj，也許你可以用數字來說話。

Yes. And Will, this was all in the third quarter. As you know, the settlement that we took into our OpEx, that was $62 million, the legal benefit settlement that we got, the benefit of that and that was in the components business, and that was worth about 100 basis points in to the components margins in that quarter.

是的。威爾，這一切都發生在第三季。如您所知，我們在營運支出中納入的和解金額為 6,200 萬美元，我們獲得了合法利益和解，其好處是在組件業務中，價值約為組件業務的 100 個基點該季度的利潤率。

Great. And then share count. I know you're -- I know you have -- well, maybe you can just update us on what your expectation is for the share count in the current quarter?

偉大的。然後分享計數。我知道你——我知道你——好吧，也許你可以向我們介紹一下你對本季股票數量的預期嗎？

Yes. We didn't give a guide to share count because we don't typically guide the amount of share repurchase because that's going to vary from quarter-to-quarter, as you can see, based on what we did in the fourth quarter. So we felt that giving an actual share count wouldn't be appropriate either.

是的。我們沒有提供股票數量指南，因為我們通常不會指導股票回購的數量，因為正如您所看到的，根據我們在第四季度的情況，每個季度的股票回購數量都會有所不同。因此我們認為給出實際的股份數量也不合適。

We gave you the most important piece, though, where we gave you the EPS number that we're targeting and some of the other components to -- in the P&L that you can sort of back into some of those key assumptions. So nothing unusual there. Just we don't really guide the number of shares repurchased so we didn't give a share count either.

不過，我們給了你最重要的部分，我們給了你我們目標的每股盈餘數字以及損益表中的一些其他組成部分，你可以在其中回歸到一些關鍵假設。 所以那裡沒有什麼不尋常的。只是我們並沒有真正指導回購的股票數量，所以我們也沒有給出股票數量。

Will, I would also add just to reconfirm, our capital allocation priorities have not changed. Number one is organic investment or investment for organic growth; number two being appropriate M&A; and then number three, of course, returning cash to shareholders.

我還想補充一點，再次確認，我們的資本配置優先事項沒有改變。第一是有機投資或有機成長投資；第二是適當的併購；第三，當然是向股東返還現金。

As you can imagine, in this environment, we're going to be pretty surgical when it comes to organic investments. So in lieu of an appropriate M&A target, we're still very prone to buybacks, as it makes sense relative to our debt capacity.

正如你可以想像的那樣，在這種環境下，我們在有機投資方面將非常謹慎。因此，我們仍然很容易回購股票，而不是適當的併購目標，因為這相對於我們的債務能力是有意義的。

(Operator Instructions) Your next question comes from the line of Ruplu Bhattacharya from Bank of America.

（操作員說明）您的下一個問題來自美國銀行的 Ruplu Bhattacharya。

I have one for Sean and one for Raj. Sean, you were talking about investing organically. So in this weaker environment, can you talk about what areas you're going to be investing in? And in the prepared remarks, you talked a lot about -- several times about IT-as-a-Service. So how relevant is this to revenues? How should we think about that progressing over the next couple of years? And in terms of your growing portfolio of recurring revenue, how should we think about that?

我有一張給肖恩，一張給拉吉。 肖恩，你剛才談論的是有機投資。那麼在這個疲軟的環境下，您能談談您將投資哪些領域嗎？在準備好的發言中，您多次談到了 IT 即服務。那麼這跟收入有多大關係呢？我們該如何看待未來幾年的進展？就您不斷增長的經常性收入組合而言，我們應該如何看待這一點？

So okay, Ruplu, you got a few different threads there. Let me try and take them one at a time. Again, my comments about investment in this environment, again, the keyword there is surgical. We're taking the right steps and making the right moves to protect our cost structure and our profitability while we navigate this correction. To the extent that we have the ability to invest, we just remain focused on the things that are core to our strategy: demand creation; value-added offerings and capabilities; certainly, our IP&E selling motion; and then, of course, the transition to IT-as-a-Service in our ECS business. And so we're going to make sure that we're careful with respect to what's happening in the broader market in the meantime, but our investment priorities are fairly focused.

好吧，魯普魯，你有一些不同的線索。讓我試著一次拿一個。再次，我對這種環境下的投資的評論，再次，關鍵字是外科手術。在應對這項調整的同時，我們正在採取正確的步驟並採取正確的行動來保護我們的成本結構和獲利能力。只要我們有能力投資，我們就會繼續專注於我們策略的核心：創造需求；加值產品與能力；當然，還有我們的 IP&E 銷售動議；當然，還有我們的 ECS 業務向 IT 即服務的過渡。因此，我們將確保同時對更廣泛市場發生的事情保持謹慎，但我們的投資重​​點是相當集中的。

With regard to your question about IT-as-a-Service, it's basically changing the shape of our sales number in that business. The more we drive infrastructure software, cloud-related solutions and services, the more you'll see our mix shift to a model that's more about GP dollars than it is reported sales. And really, the right way to look at that business over time is through the lens of GP dollar and OI dollar growth as a result.

關於您關於 IT 即服務的問題，它基本上改變了我們在該業務中的銷售數字的形狀。我們越多地推動基礎設施軟體、雲端相關解決方案和服務，您就越會看到我們的組合轉向更注重 GP 美元而非報告銷售額的模式。 事實上，隨著時間的推移，看待該業務的正確方法是透過 GP 美元和 OI 美元成長的視角來看待。

But a good consequence of that pivot, and as you know, we've been on that journey for a good couple plus years now, has been the growth in the recurring piece of our total ECS business. We think now, when you look at cloud, when you look at things like the transition for software from perpetual- to subscription-based licensing models, the recurring piece of our total mix is now approaching 1/3. And so we like that, it's predictable, it's sticky and, ultimately, brings about accretive contribution margins for that piece of our business. So we're staying the course there as well. And you'll have to forgive me, but I think you had a third question in there, I want to make sure we don't forget it.

但是，正如您所知，這一轉變的一個良好後果是我們整個 ECS 業務的經常性部分的增長，我們已經踏上這一旅程好幾年了。我們現在認為，當你考慮雲端時，當你考慮軟體從永久授權模式轉向基於訂閱的授權模式的轉變時，我們總組合中的經常性部分現在已接近 1/3。所以我們喜歡這樣，它是可預測的，具有黏性，並且最終為我們的該業務帶來了增值的邊際貢獻。 所以我們也將堅持到底。你必須原諒我，但我認為你還有第三個問題，我想確保我們不會忘記它。

I didn't, but I'm going to put one in. Just in terms of IT-as-a-Service, what are people buying? Are they buying hardware or is it just software at this point?

我沒有，但我打算添加一個。他們目前購買的是硬體還是只是軟體？

Ultimately, we think it's about both. But in the near term and recently, it's been more about software.

最終，我們認為這與兩者有關。但在近期和最近，更多的是關於軟體。

Okay. Great. Raj, I just want to have a quick follow-up with you on margins. With respect to component margins, they were 5.1% this quarter. Is there a revenue level you need to keep the segment margin above 5%?

好的。偉大的。 Raj，我只是想在邊緣與您進行快速跟進。就零件利潤率而言，本季為 5.1%。您是否需要達到一定的收入水準才能將分部利潤率維持在 5% 以上？

And then the same question on the ECS side. I think Sean talked about optimizing customers and line cards in Americas. Does that impact how we should think about margin trends in ECS this year? Or is it the 1Q is the lowest and then we should see sequential margin improvement until 4Q? So just your thoughts on these, on the margins for both of these segments.

然後ECS端也有同樣的問題。我認為肖恩談到了優化美洲的客戶和線路卡。這是否會影響我們如何看待今年 ECS 的利潤率趨勢？或者說第一季是最低的，然後我們應該看到連續利潤率改善到第四季？所以，請談談您對這些以及這兩個細分市場的邊緣的看法。

Yes. Let me -- there's a few questions in there, Ruplu, but let me take the first one to start. On the components side, I don't think we have a set revenue level in mind for the higher margin target. We still are comfortable with the 5.5% to 6% in the components business in a normal environment.

是的。讓我——這裡有幾個問題，魯普魯，但讓我從第一個開始。在組件方面，我認為我們沒有為更高的利潤目標設定固定的收入水準。在正常環境下，我們對零件業務的 5.5% 至 6% 仍然感到滿意。

Right now, we're going through the down cycle. And as you heard some of the commentary, the gross margins seem to be relatively steady and stable, and it's really a function of negative leverage with the reduced revenue levels. So given the structurally higher margins that we have today and based on all the things that we did, we know that when revenue returns to a more normal environment, and that's to be defined, we're going to get that leverage back and margins will take care of themselves. So we're confident about the long-term target that we have.

目前，我們正在經歷下行週期。正如您聽到的一些評論一樣，毛利率似乎相對穩定，這實際上是負槓桿與收入水準下降的函數。因此，考慮到我們今天擁有的結構性較高的利潤率，並基於我們所做的所有事情，我們知道，當收入恢復到更正常的環境時（這將被定義），我們將恢復槓桿作用，利潤率將恢復。因此，我們對我們的長期目標充滿信心。

And I'm going to turn to Sean a little bit on the second question. Can you just repeat your question, Ruplu?

我將向肖恩詢問第二個問題。你能重複一下你的問題嗎，魯普魯？

Yes. I just referred to what Sean has said about in the ECS segment. I think in the Americas region, you're trying to optimize customers and line cards. And so like where are you with that? And how does that impact how we should think about margins? Like I mean, does that impact your margins positively this year versus prior years? And how should we think about the trend in ECS margins?

是的。我剛才提到了Sean在ECS部分所說的內容。我認為在美洲地區，您正在嘗試優化客戶和線路卡。那你在哪裡？這對我們如何看待利潤有何影響？就像我的意思是，與往年相比，這會對您今年的利潤產生正面影響嗎？我們該如何看待ECS利潤率的趨勢？

So I'm happy to take that, Ruplu. So again, for context, we've got kind of 2 different models in our ECS business. We've got a regional business in Europe that really suits our strategy nicely. It's a mid-market region, and it's one that lends itself nicely to a channel-based selling motion.

所以我很高興接受這個，魯普魯。再次強調一下，我們的 ECS 業務有兩種不同的模式。我們在歐洲的區域業務非常適合我們的策略。這是一個中端市場區域，非常適合基於通路的銷售活動。

The mix, as we grew up in that business, was more about software and now cloud as compared to the mix in the way that we grew up in North America, which was historically about hardware and larger enterprise accounts.

隨著我們在該行業的成長，這種組合更多地與軟體和現在的雲端有關，而我們在北美成長的方式則更多地與硬體和更大的企業帳戶有關。

So we're on the same path in North America to create the same model that we enjoy in Europe and ultimately, that should be accretive on the margin line. But we're not calling it out for the full year yet at this point. We're just guiding 1 quarter at a time for all the reasons that you'd expect.

因此，我們在北美正在走同樣的道路，創造我們在歐洲享受的相同模式，最終，這應該會增加利潤。但目前我們還沒有宣佈全年的情況。出於您所期望的各種原因，我們一次只提供一個季度的指導。

But we think that, that destination is a good one. We recognize we still have some work to do relative to more mid-market scale in North America, and we expect to see better progress across the course of '24.

但我們認為，那個目的地是一個很好的目的地。我們認識到，相對於北美的中端市場規模，我們仍有一些工作要做，我們預計在 2024 年會取得更好的進展。

We have no further questions in our queue at this time. I will now turn the conference back over to Anthony Bencivenga for closing remarks.

目前我們的隊列中沒有其他問題。現在我將把會議轉回安東尼·本西文加致閉幕詞。

Yes. Thank you, operator, and thank you, everyone, for joining us on today's call. We look forward to meeting you in the near future at upcoming investor events. Have a great day.

是的。謝謝接線員，也謝謝大家參加今天的電話會議。我們期待在不久的將來在即將舉行的投資者活動中與您見面。祝你有美好的一天。

This concludes today's conference call. Thank you for your participation, and you may now disconnect.

今天的電話會議到此結束。感謝您的參與，您現在可以斷開連接。