艾睿電子 (ARW) 2024 Q2 法說會逐字稿

Good day, and welcome to the Arrow Electronics second quarter 2024 earnings call. Today's conference is being recorded. (Operator Instructions) At this time, I would like to turn the conference over to Brad Windbigler, Arrow's Treasurer and Vice President of Investor Relations. Please go ahead.

美好的一天，歡迎參加艾睿電子 2024 年第二季財報電話會議。今天的會議正在錄製中。（操作員指示） 現在，我想將會議交給 Arrow 財務主管兼投資者關係副總裁 Brad Windbigler。請繼續。

Thank you, operator. I'd like to welcome everyone to the Arrow Electronics second quarter 2024 earnings conference call.

謝謝你，接線生。歡迎大家參加艾睿電子 2024 年第二季財報電話會議。

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; Eric Nowak.

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；埃里克·諾瓦克。

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've reconciled these non-GAAP measures to the most directly comparable GAAP financial measures in this quarter's associated earnings release or Form 10-Q. You can access our earnings release at investor.arrow.com, along with a replay of this call.

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-Q 表格中最直接可比較的 GAAP 財務指標進行了核對。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。

We've also posted a slide presentation to accompany our prepared remarks. I encourage you to reference these slides during the webcast. Following our prepared remarks today, Sean and Raj will be available to take your questions.

我們也發布了幻燈片簡報來配合我們準備好的評論。我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，肖恩和拉吉將回答您的問題。

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, Brad, and thank you all for joining us. Today, I'd like to discuss our second quarter results, provide some commentary on the markets in which we compete and then close with some thoughts as to how we're lining up for the future. I'll then turn things over to Raj for more detail on our financials as well as our outlook for the third quarter.

謝謝布拉德，也謝謝大家加入我們。今天，我想討論我們第二季的業績，對我們競爭的市場提供一些評論，然後以關於我們如何為未來做好準備的一些想法作為結束語。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三季度前景的更多詳細資訊。

In the second quarter, we once again executed well in an evolving market environment as we continue to navigate the later innings of a prolonged inventory correction throughout the electronic supply chain in a very mixed spending environment in enterprise IT. I'm pleased to announce that we delivered total revenue of $6.9 billion and generated non-GAAP earnings per share of $2.78. Both numbers exceeded the high end of our guidance.

第二季度，我們在不斷變化的市場環境中再次表現出色，在企業 IT 支出環境非常複雜的情況下，我們繼續應對整個電子供應鏈長期庫存調整的後期階段。我很高興地宣布，我們的總收入為 69 億美元，非 GAAP 每股收益為 2.78 美元。這兩個數字都超過了我們指導的上限。

Taking a closer look at our Global Components segment, we delivered solid financial results nicely ahead of our original expectations. Broadly speaking, we're seeing signs of incremental improvement across several of the market segments in which we compete, leading to relative stability as we look to the future.

仔細研究我們的全球零件部門，我們取得了穩健的財務業績，遠遠超出了我們最初的預期。從廣義上講，我們在我們競爭的幾個細分市場中看到了逐步改善的跡象，從而在我們展望未來時實現相對穩定。

Although conditions have not fully normalized, and the broader industrial markets remain soft, our bookings improved sequentially and the overall tone from suppliers and customers throughout the market has generally improved since our time together last quarter.

儘管情況尚未完全正常化，並且更廣泛的工業市場仍然疲軟，但我們的預訂量連續改善，並且自上個季度以來，整個市場供應商和客戶的整體基調普遍有所改善。

Our focus on value-added offerings, including supply chain management, design, engineering and integration services, along with demand creation, continue to foster deeper engagement with suppliers and customers. These capabilities continue to contribute to our structural margin health. In fact, although impacted by regional mix, our second quarter operating margin of 4.3% was well above levels experienced at the low point of previous cyclical corrections.

我們專注於增值服務，包括供應鏈管理、設計、工程和整合服務以及需求創造，持續促進與供應商和客戶的更深入互動。這些能力繼續為我們的結構性利潤健康做出貢獻。事實上，儘管受到區域結構的影響，我們第二季的營業利潤率為 4.3%，遠高於先前週期性調整的低點水準。

From a regional perspective, we experienced modestly improving conditions with mixed geographic trends. In Asia, revenue grew sequentially in both our semiconductor and IP&E product lines, led by a mild improvement in both the industrial and compute verticals. We were specifically encouraged by sequential growth in China, and fairly stable transactional pricing across the region.

從區域角度來看，我們的情況略有改善，但地理趨勢參差不齊。在亞洲，在工業和計算垂直領域的溫和改善的帶動下，我們的半導體和 IP&E 產品線的收入連續增長。中國的連續成長以及整個地區相當穩定的交易定價尤其令我們感到鼓舞。

In the Americas, while the region declined slightly, aerospace and defense remained healthy. And in addition, we saw sequential sales growth in IP&E, along with growth in design wins overall. And in EMEA, the broader industrial and transportation markets remained in decline. Although it's worth noting, as is typical across most cycles, that Europe was the last region to enter correction territory.

在美洲，雖然該地區略有下降，但航空航天和國防仍然健康。此外，我們也看到 IP&E 的銷售額持續成長，以及整體設計勝利的成長。在歐洲、中東和非洲地區，更廣泛的工業和運輸市場仍在下滑。儘管值得注意的是，正如大多數週期中的典型情況一樣，歐洲是最後一個進入調整區域的地區。

As we navigate the late stages of this cycle, several of the leading indicators we highlighted last quarter continued to reflect progress. Our book-to-bill ratios advanced across all 3 regions, progressing closer to parity. Backlog in our core regional businesses has stabilized and cancellation activity has fully normalized.

在我們度過本週期的後期階段時，我們上個季度強調的幾個領先指標繼續反映了進展。我們的訂單出貨比在所有 3 個地區均有所提高，接近平價。我們核心區域業務的積壓已趨於穩定，取消活動已完全正常化。

As mentioned, bookings accelerated across all regions, which we believe indicates a further step down in ecosystem inventory levels as well as improved visibility to forward-looking production requirements. And as for our own working capital, we again reduced inventory, reflecting market conditions but at a reduced rate versus prior quarters as we look to position the business for future growth.

如前所述，所有地區的預訂量都在加速，我們認為這表明生態系統庫存水準進一步下降，以及對前瞻性生產需求的可見度提高。至於我們自己的營運資金，我們再次減少了庫存，反映了市場狀況，但與前幾季相比，庫存減少了，因為我們希望為業務的未來成長做好準備。

We believe these signals point to an eventual return to growth and as the cycle fully corrects, we remain focused on diligently managing our cost structure and working capital while remaining invested in our strategic priorities.

我們相信這些訊號表明最終將恢復成長，並且隨著週期的完全糾正，我們將繼續專注於努力管理我們的成本結構和營運資本，同時繼續投資於我們的策略重點。

Our Q3 outlook reflects our view that conditions are generally beginning to level out, albeit with regional differences at play. As we progress through the third quarter, we're expecting more typical seasonality in the Americas and Asia, while still declining in Europe but less so than in the second quarter. And we do expect operating margins to be relatively stable in Q3.

我們對第三季的展望反映了我們的觀點，即儘管存在地區差異，但情況總體上開始趨於平穩。隨著第三季的進展，我們預期美洲和亞洲的季節性因素將更加典型，而歐洲的季節性因素仍會下降，但程度將低於第二季。我們確實預計第三季的營業利潤率將相對穩定。

Now turning to our global ECS business. In the second quarter, we exceeded our original expectations for both sales and operating income while delivering year-over-year billings growth. Globally speaking, cloud and AI-related solutions, along with better server demand contributed to our results while also adding to our future backlog.

現在轉向我們的全球 ECS 業務。第二季度，我們的銷售和營業收入都超出了我們最初的預期，同時實現了同比帳單成長。從全球範圍來看，雲端和人工智慧相關的解決方案以及更好的伺服器需求為我們的業績做出了貢獻，同時也增加了我們未來的積壓工作。

On a regional basis, in EMEA, we achieved year-over-year billings and gross profit dollar growth based on continued strength in hybrid cloud adoption. During the quarter, we also expanded our line card to enhance our offerings for our channel partners.

從區域來看，在歐洲、中東和非洲地區，由於混合雲採用的持續強勁，我們實現了年比帳單和毛利成長。在本季度，我們也擴大了我們的產品線，以增強我們為通路合作夥伴提供的產品。

And in North America, relative strength in the public sector and for cloud-related solutions was partially offset by softness in data storage. We continue to reshape our go-to-market model in this region to 1 that better approximates our selling motion in EMEA.

在北美，公共部門和雲端相關解決方案的相對優勢被資料儲存的疲軟部分抵消。我們繼續將該地區的進入市場模型重塑為 1，以更好地接近我們在 EMEA 的銷售活動。

In general, as we continue to capitalize on the market's transition to IT-as-a-service. We are growing our mix of multiyear subscriptions and recurring revenue streams. This is leading to a growing backlog, stickier relationships and accretive attribution margins.

總的來說，我們將繼續利用市場向 IT 即服務的轉變。我們正在擴大多年訂閱和經常性收入流的組合。這導致積壓不斷增加，關係更加緊密，歸因利潤不斷增加。

Our Q3 outlook indicates typical seasonal patterns in our ECS business as we anticipate a modest sequential decline, and we do believe market conditions will continue to improve throughout the balance of the year.

我們對第三季的展望表明了我們的 ECS 業務的典型季節性模式，因為我們預計會出現適度的環比下降，並且我們確實相信市場狀況將在今年餘下的時間裡繼續改善。

In closing, given the market backdrop, I'm pleased with our solid second quarter performance, and I'm confident in our future. As I mentioned, we're seeing mild improvement across several market segments, and so we do expect stronger performance in the second half of the year, reflecting both improving stability in components and a benefit from ECS seasonality later in the year.

最後，考慮到市場背景，我對我們第二季的穩健表現感到滿意，並對我們的未來充滿信心。正如我所提到的，我們看到多個細分市場出現了溫和的改善，因此我們預計下半年會有更強勁的表現，這不僅反映了組件穩定性的改善，也反映了今年晚些時候ECS 季節性的好處。

And as I look beyond the next couple of quarters, I think we're well positioned for the next growth cycle and well equipped to shepherd the next generation of technology, specifically artificial intelligence to the broader market.

當我展望未來幾個季度時，我認為我們已經為下一個成長週期做好了準備，並且有能力引導下一代技術，特別是人工智慧進入更廣泛的市場。

Although still in the earlier phases of broad industry adoption, we're building upon our capabilities for the future with some notable areas of focus, including our supply chain services offering, where we enable cloud and platform players to deploy and scale their next-generation AI infrastructure. Given our substantial field application engineering and embedded integration offerings, were well suited to help design and deploy AI-related solutions at the Intelligent Edge.

儘管仍處於廣泛行業採用的早期階段，但我們正在透過一些值得注意的重點領域來建立未來的能力，包括我們的供應鏈服務產品，我們使雲端和平台參與者能夠部署和擴展他們的下一代人工智慧基礎設施。鑑於我們大量的現場應用工程和嵌入式整合產品，非常適合幫助在智慧邊緣設計和部署人工智慧相關的解決方案。

And through investments like our robotics center of excellence, we're actively engaged in solution design from the GPU to the image sensor for a variety of industries, applications and use cases. We're obviously excited by these and other longer-term prospects. And in the meantime, we're cautiously optimistic that we're approaching a turning point in our core markets.

透過像我們的機器人卓越中心這樣的投資，我們積極參與從 GPU 到影像感測器的解決方案設計，適用於各種行業、應用和用例。我們顯然對這些和其他長期前景感到興奮。同時，我們對我們的核心市場正在接近一個轉折點持謹慎樂觀的態度。

Before I turn things over to Raj, I'd like to acknowledge the resilience of the Arrow team across the globe and thank them for their ongoing dedication to our suppliers and customers.

在將事情交給 Raj 之前，我要感謝 Arrow 團隊在全球範圍內的韌性，並感謝他們對我們的供應商和客戶的持續奉獻。

And with that, over to Raj.

接下來，輪到拉傑了。

Thanks, Sean. Consolidated sales for the second quarter were $6.9 billion, above the high end of our guidance range and down 19% versus prior year. Global components sales were $5 billion, down 3% versus prior quarter, better than we had expected. Enterprise computing solutions sales were $1.9 billion or 2% higher versus prior year due to favorable product mix.

謝謝，肖恩。第二季綜合銷售額為 69 億美元，高於我們指引範圍的上限，但與去年同期相比下降 19%。全球零件銷售額為 50 億美元，比上一季下降 3%，優於我們的預期。由於有利的產品組合，企業運算解決方案銷售額比上年增長 19 億美元，即 2%。

Moving to other financial metrics for the quarter. Second quarter consolidated gross margin of 12.3% was down approximately 20 basis points, both sequentially and versus prior year driven primarily by the overall mix of business within our two segments.

轉向本季的其他財務指標。第二季綜合毛利率為 12.3%，比上一季和上年同期均下降約 20 個基點，這主要是由於我們兩個部門的整體業務組合所致。

Non-GAAP operating expenses declined $31 million sequentially to $586 million and included a $20 million benefit in our ECS business for a positive recovery of a previously recognized bad debt charge related to one customer.

非 GAAP 營運費用較上季下降 3,100 萬美元，至 5.86 億美元，其中包括我們的 ECS 業務因積極收回先前確認的與一名客戶相關的壞帳費用而獲得的 2,000 萬美元收益。

Beyond the effect of the collections recovery, our core operating expenses declined quarter-over-quarter, resulting from our continuing efforts to optimize our cost structure. We expect to see further benefits in reduced expenses the rest of this year.

除了收款恢復的影響之外，由於我們不斷努力優化成本結構，我們的核心營運費用較上季下降。我們預計今年剩餘時間將看到費用減少的進一步好處。

In the second quarter, we generated non-GAAP operating income of $262 million, which was 3.8% of sales, with global components operating margin at 4.3%, and enterprise computing solutions at 5.6%, both on a non-GAAP basis.

第二季度，我們的非 GAAP 營業收入為 2.62 億美元，佔銷售額的 3.8%，全球組件營業利潤率為 4.3%，企業運算解決方案為 5.6%（均以非 GAAP 基準計算）。

The impact of the ECS collections recovery was 110 basis points within the ECS segment and 30 basis points on consolidated Arrow operating margin. Interest and other expense was $67 million in the second quarter as we benefited from lower working capital levels. Our non-GAAP effective tax rate was 22.4%, which benefited from favorable geographic income mix.

ECS 收款恢復對 ECS 部門的影響為 110 個基點，對 Arrow 綜合營運利潤率的影響為 30 個基點。第二季的利息和其他費用為 6,700 萬美元，因為我們受益於較低的營運資本水準。我們的非 GAAP 有效稅率為 22.4%，這得益於有利的地理收入組合。

And finally, non-GAAP diluted EPS for the second quarter was $2.78, which was substantially higher than our guided range, benefiting from better-than-expected revenue performance and a $0.29 contribution from the previously mentioned ECS recovery and expense reductions.

最後，第二季非GAAP 攤薄後每股收益為2.78 美元，大大高於我們的指導範圍，這得益於好於預期的收入表現以及之前提到的ECS 復甦和費用削減帶來的0.29 美元貢獻。

Moving over to working capital. We reduced net working capital in the second quarter by approximately $150 million compared to Q1, ending the quarter at $6.8 billion. This is the fourth consecutive quarter of lower net working capital. Accounts receivable and accounts payable both decreased in the second quarter and were nearly offsetting.

轉向營運資金。與第一季相比，我們第二季的淨營運資本減少了約 1.5 億美元，季末淨營運資本為 68 億美元。這是淨營運資本連續第四個季度下降。第二季應收帳款和應付帳款均減少，且幾乎抵銷。

Inventory at the end of the second quarter was $4.7 billion, decreasing approximately $140 million from Q1. Over the last nine months, we have reduced our inventory levels by $1.2 billion, yet we remain focused on investing for future growth and expansion.

第二季末庫存為 47 億美元，比第一季減少約 1.4 億美元。在過去 9 個月中，我們的庫存水準減少了 12 億美元，但我們仍然專注於為未來的成長和擴張進行投資。

Our cash conversion cycle finished the quarter at 79 days. Our cash flow from operations was $320 million in the second quarter. And over the last 12 months, we have generated over $1.3 billion of operating cash flow.

本季結束時，我們的現金轉換週期為 79 天。第二季我們的營運現金流為 3.2 億美元。在過去 12 個月中，我們產生了超過 13 億美元的營運現金流。

Net debt at the end of the second quarter was lower compared to Q1 at $3.1 billion. We repurchased $50 million of shares in the second quarter and our remaining repurchase authorization stands at approximately $425 million. In the last 12 months, we have repurchased nearly $400 million of stock. In the near term, we will continue to balance capital return priorities with managing our debt ratios.

第二季末的淨債務為 31 億美元，低於第一季。我們在第二季回購了 5,000 萬美元的股票，剩餘的回購授權約為 4.25 億美元。在過去 12 個月裡，我們回購了近 4 億美元的股票。短期內，我們將繼續平衡資本回報優先事項與管理負債比率。

Now turning to Q3 guidance. We expect sales for the third quarter to be between $6.37 billion and $6.97 billion. We expect global component sales to be between $4.7 billion and $5.1 billion, which at the midpoint is down approximately 3% from prior quarter. We expect enterprise computing solutions sales to be between $1.67 billion and $1.87 billion, which is unchanged at the midpoint year-on-year.

現在轉向第三季指引。我們預計第三季銷售額將在 63.7 億美元至 69.7 億美元之間。我們預計全球零件銷售額將在 47 億美元至 51 億美元之間，中位數較上一季下降約 3%。我們預期企業運算解決方案銷售額將在 16.7 億美元至 18.7 億美元之間，與去年同期中位數持平。

We're assuming a tax rate in the range of approximately 23% to 25%, and interest expense of approximately $70 million, and our non-GAAP diluted earnings per share is expected to be between $2.10 and $2.30. And finally, we estimate changes in foreign currencies to have an immaterial effect on our Q3 guidance. The details of foreign currency impact can be found in our press release.

我們假設稅率約為 23% 至 25%，利息費用約為 7,000 萬美元，我們的非 GAAP 攤薄每股收益預計在 2.10 美元至 2.30 美元之間。最後，我們估計外幣變化對我們第三季的指導影響不大。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) Melissa Fairbanks, Raymond James.

（操作員說明）Melissa Fairbanks、Raymond James。

Great quarter, obviously. Good to see that things are starting to stabilize. That's what we always want to hear from you guys. I had a quick question about the comments that you're anticipating a stronger second half. I'm wondering if that means that you're expecting revenue growth in back half over front half? I know you don't typically guide beyond one quarter, but just looking for some clarification there.

顯然，這是一個很棒的季度。很高興看到事情開始穩定下來。這就是我們一直想從你們那裡聽到的。我有一個關於你期待下半場更強勁的評論的簡短問題。我想知道這是否意味著您預計後半段的收入成長將超過前半段？我知道您通常不會提供超過四分之一的指導，而只是尋求一些澄清。

Thanks, Melissa. Sure thing. In general, we are expecting a better second half than first half. I think that's a function of 2 things. We do see things continuing to improve in our components business across the second half. But even more importantly, we're going to see a benefit from typical ECS seasonality later in the year, but all of that should add up to more revenue in 2H than 1H for sure.

謝謝，梅麗莎。當然可以。總的來說，我們預計下半年會比上半年更好。我認為這是兩件事的函數。我們確實看到下半年我們的零件業務持續改善。但更重要的是，我們將在今年稍後看到典型的 ECS 季節性帶來的好處，但所有這些加起來肯定會比 1H 帶來更多的 2H 收入。

Excellent. Love to hear that. Maybe just one quick follow-up then. The commentary regarding the inventory of investing ahead of future growth. I was just wondering if there were any specific areas that you're targeting with these investments. I assume IP&E might be one of those areas. But if you can give any additional color?

出色的。喜歡聽這個。也許只是一個快速的後續行動。關於未來成長前投資存量的評論。我只是想知道這些投資是否針對任何特定領域。我認為 IP&E 可能是這些領域之一。但如果你能提供任何額外的顏色嗎？

Yeah, I think you nailed it, Melissa. IP&E, as you know, is one of our strategic growth priorities inside components. And so we are looking at that inventory model a little bit differently than semi for the future. But otherwise, we're managing working capital carefully. I could also tell you that units came down in the quarter, but less so than from Q4 to Q1. So we're partly preparing for a better future, but also still being careful as we do so.

是的，我想你做到了，梅麗莎。如您所知，IP&E 是我們組件內部的策略成長重點之一。因此，我們對未來庫存模型的看法與半成品模型略有不同。但除此之外，我們正在謹慎管理營運資金。我也可以告訴您，本季的單位數量有所下降，但比第四季到第一季的下降幅度要小。因此，我們在某種程度上為更美好的未來做準備，但同時我們仍然要小心謹慎。

Matt Sheerin, Stifel.

馬特謝林，史蒂菲爾。

Just a follow-up on -- regarding the revenue in the back half. Specifically on components, you're guiding Q3 down sequentially. And my thought is that Q4 should also be flat to down, given seasonality in Europe and North America, unless there's a very big uptick in Asia. So how should we think about that? It looks like the second half should be down relative to the first half with the bookings improving?

只是關於後半段收入的後續行動。特別是在組件方面，您正在按順序引導第三季下降。我的想法是，考慮到歐洲和北美的季節性，第四季也應該持平或下降，除非亞洲大幅成長。那我們該如何思考呢？看起來下半年預訂量應該會比上半年下降吧？

So Matt, part of that is why we only guide one quarter at a time. So a little too early for us to guide Q4. But I would say all the key indicators that we track are showing progress. And so we're feeling better about the near term. It doesn't guarantee that we see sequential growth in Q4, but I would say we're more optimistic that we will now than we would have been 90 days ago based on what we see happening in the market.

所以馬特，這就是為什麼我們一次只指導一個季度的部分原因。所以我們指導第四季還為時過早。但我想說，我們追蹤的所有關鍵指標都顯示出進展。因此，我們對近期感覺更好。它並不能保證我們會在第四季度看到環比成長，但我想說，根據我們看到的市場情況，我們現在比 90 天前更樂觀。

Remember, just to reinforce, we are seeing modest recovery in Asia and North America. So implied in our outlook is a return to more normal seasonality for both. We know that the correction is still playing out to some degree in Europe, but that's normal.

請記住，為了強調這一點，我們看到亞洲和北美出現溫和復甦。因此，我們的前景暗示兩者都將回歸更正常的季節性。我們知道，歐洲的調整仍在一定程度上進行，但這是正常的。

You have seen a number of suppliers in our universe guide for sequential improvement. And we think that's ultimately a good sign as we typically follow our suppliers out of a correction. So we'll guide Q4 the next time we talk, but we're feeling like we should see steady improvement across the second half in that business.

您已經在我們的世界中看到了許多供應商的持續改進指南。我們認為這最終是一個好兆頭，因為我們通常會跟隨供應商進行調整。因此，我們將在下次討論時指導第四季度，但我們感覺下半年該業務應該會穩步改善。

I would also say, Matt, that if you think about what happened in the first half of the year, we had components declining at 8% in the first quarter and then down 3% in the second quarter. So that's also part of the commentary that we'll see likely better trends in the second half versus the first half.

馬特，我還要說，如果你想想今年上半年發生的事情，我們的零件在第一季下降了 8%，然後在第二季下降了 3%。因此，這也是評論的一部分，我們將看到下半年比上半年可能會出現更好的趨勢。

Got it. And could you just remind me the seasonality in North America in Q3? Is it typically what flat to down slightly or flat to up slightly. Is that about right?

知道了。您能否提醒我第三季北美的季節性？通常是平坦到稍微向下還是平坦到稍微向上。是這樣嗎？

Yeah, it's typically flat to up slightly, and we're right there with our outlook, given our own internal forecast.

是的，它通常會持平到略有上升，而且根據我們自己的內部預測，我們的前景是正確的。

Okay. That's helpful. And then regarding the margins or implied margin based on the EPS guide, it looks like your gross margin will be down sequentially, I don't know, call it, 12% or so. Correct me if I'm wrong there. It looks like that's just a function of mix with Asia components up and Europe down again. Or is there anything else going on there?

好的。這很有幫助。然後，關於基於 EPS 指南的利潤率或隱含利潤率，看起來你們的毛利率將連續下降，我不知道，稱之為 12% 左右。如果我錯了請糾正我。看起來這只是亞洲成分上漲和歐洲成分再次下跌的混合函數。或者有其他事情發生嗎？

No. In fact, as you know, Matt, we typically don't guide for gross margins. But if you look at the EPS decline quarter-on-quarter, it's really just a function of volume decline overall. One part in Components, as you just mentioned. And then one part, simply a function of typical seasonality in our ECS business, and we're actually offsetting both of those by a little bit with the benefit of our OpEx actions showing up in the P&L.

不。事實上，正如你所知，馬特，我們通常不提供毛利率指導。但如果你看一下每股盈餘的季度環比下降，你會發現這其實只是整體銷售下降的函數。正如您剛才提到的，元件中的一部分。還有一部分，只是我們 ECS 業務中典型季節性的函數，實際上，我們透過損益表中顯示的營運支出行動的好處，稍微抵消了這兩方面的影響。

So mix is a factor in the components business. And I would say it's regional mix more than anything else. But as we talked about in our prepared remarks, we do expect operating margins to be fairly stable in that business in the third quarter.

因此，混合是零件業務的因素。我想說的是，這是區域性的混合。但正如我們在準備好的發言中談到的那樣，我們確實預計第三季該業務的營業利潤率將相當穩定。

And you expect OpEx to be down sequentially on a dollar basis?

您預計營運支出以美元計算會連續下降嗎？

Yeah, we do. Yeah, we do.

是的，我們願意。是的，我們願意。

William Stein, Truist Securities.

威廉斯坦，Truist 證券公司。

Before I start, I want to offer congratulations. You guys did a great job in the quarter. I'd like to ask about the geo-mix first. Most of the semi companies I cover have talked about a pretty sharp inflection in China. I forget how much of your Asia revenue is there, but I suspect it's a significant amount in the Components business specifically.

在開始之前，我想表示祝賀。你們本季做得很好。我想先問一下關於地理混合的問題。我報道的大多數半導體公司都談到了中國的急劇變化。我忘記了你們在亞洲的收入有多少，但我懷疑其中很大一部分是在零件業務中。

I think in your prepared remarks, you talked about this showing some signs of recovery. But hopefully, you can talk a little bit about that, what's causing it, whether you're seeing it to the same sharp degree as your suppliers or if it's more moderated or delayed?

我認為在你準備好的發言中，你談到了這顯示出一些復甦的跡象。但希望您能談談這個問題，是什麼原因造成的，您是否與供應商一樣敏銳地看待它，或者它是否更加溫和或延遲？

Yeah. I would say it's certainly not V-shaped, Will. But you're correct. We did see sequential growth in Asia and specifically in China, which is a big piece of our Asia business in the second quarter. That's obviously a good sign compared to prior trends. Most of that came from an uptick in industrial and to some degree, compute, for us, which is great. But we still saw a softness in a number of other verticals. But this outlook, as I said before, does call for more typical seasonality.

是的。我想說這肯定不是 V 形，威爾。但你是對的。我們確實看到亞洲，特別是中國的連續成長，這是我們第二季亞洲業務的重要組成部分。與之前的趨勢相比，這顯然是一個好兆頭。其中大部分來自工業的成長，在某種程度上，計算的成長，對我們來說，這是偉大的。但我們仍然看到許多其他垂直領域的疲軟。但正如我之前所說，這種前景確實需要更典型的季節性。

So we're going to take this one quarter at a time. I think it's too early to call for a broader recovery. Remember, we play in some of the more mature pieces of the industry, given our focus on the broader industrial markets.

所以我們將一次進行一個季度。我認為現在呼籲更廣泛的復甦還為時過早。請記住，鑑於我們專注於更廣泛的工業市場，我們涉足該行業的一些更成熟的領域。

So consistent with what's playing out in other parts of the world, I think that's closer to an L than a V. But we're clearly encouraged by what we're seeing. We were certainly encouraged by the increase in bookings overall in that region as well and I think steady as she goes at this point.

與世界其他地區的情況一致，我認為這更接近 L，而不是 V。但我們所看到的顯然令我們受到鼓舞。我們當然對該地區整體預訂量的增加感到鼓舞，我認為她目前的情況很穩定。

The other question is as strong as the Q2 results were, you're guiding fairly significantly below consensus for the out quarter and it's just a little bit surprising to me that when you're talking about problems becoming less bad and you're beating the quarter.

The other question is as strong as the Q2 results were, you're guiding fairly significantly below consensus for the out quarter and it's just a little bit surprising to me that when you're talking about problems becoming less bad and you're beating the四分之一.

I wonder the degree to which the outlook just has maybe a higher dose of conservatism or are you seeing something pause in terms of what was maybe an initial stages of recovery in Q2? Are you seeing anything pause on that trail as we progress into Q3? Or how should we think about that?

我想知道前景的保守程度可能會更高，或者您是否看到第二季復甦的初始階段出現了一些停頓？當我們進入第三季時，您是否看到這條路線上有任何暫停？或者說我們該如何思考這個問題？

I don't think we're taking a different posture relative to this guide than we've taken in any other prior quarter guide. As you know, there's always a certain element of this industry that's going to be a little bit unpredictable. We think we're calling this one fairly accurately just as we did last quarter. We were pleased by the uptick.

我認為我們對本指南採取的立場與我們在任何其他前一季指南中採取的立場並沒有不同。如您所知，這個行業總有某些因素是難以預測的。我們認為我們對這個的稱呼相當準確，就像我們上季度所做的那樣。我們對這種上升感到高興。

I'd like to say that we could count on the uptick more sharply going forward. But I think the reason you're not seeing a sharper recovery is really a function of the softness that we still see in the broader industrial and transportation markets. Remember, together, they're a pretty significant piece of our mix.

我想說的是，我們可以指望未來的成長會更加迅速。但我認為，你沒有看到更急劇復甦的原因實際上是我們在更廣泛的工業和運輸市場中仍然看到的疲軟的結果。請記住，它們在一起是我們組合中非常重要的一部分。

And I think there's two things going on there, Will. I think one of them is macro in nature, which we can't control. And the other is related to elevated inventory levels. That one, obviously, we have better line of sight to and we think for the most part, that situation continues to improve. And we do see that resolving itself very likely by the end of the year, but probably not a whole lot sooner.

我認為有兩件事正在發生，威爾。我認為其中之一是宏觀的，我們無法控制。另一個與庫存水準升高有關。顯然，我們有更好的視野，而且我們認為在很大程度上，這種情況正在持續改善。我們確實看到這個問題很可能在今年年底前解決，但可能不會更快。

Joe Quatrochi, Wells Fargo.

喬·夸特羅奇，富國銀行。

Curious as you think about your inventory levels for the components side as we go forward, it seems like they're kind of maybe at a better more normalized absolute level. But how do you think about the mix as we think about having to need to invest in some parts of the inventory as demand starts to improve when we look into next year?

當您考慮我們前進時組件方面的庫存水準時，您會感到好奇，似乎它們可能處於更好、更標準化的絕對水準。但是，當我們考慮明年需求開始改善時，我們認為必須投資於庫存的某些部分，您如何看待這種組合？

So maybe if I understand your question correctly, it's more about are we confident in the mix of the inventory that we're carrying or planning to carry -- just want to make sure we understand what you're after here.

所以也許如果我正確理解你的問題，更多的是我們對我們正在攜帶或計劃攜帶的庫存組合是否有信心——只是想確保我們理解你在這裡追求的是什麼。

Exactly. And are there areas where there's still some inventory reductions to go that maybe demand is not going to step back as fast or areas where you need to invest more looking into next year as we see industrial and transportation kind of maybe improve.

確切地。是否還有一些領域需要減少庫存，需求可能不會那麼快回落，或者哪些領域需要在明年進行更多投資，因為我們看到工業和運輸業可能會有所改善。

Sure. Well, as I said before, we are managing inventory carefully. We are taking a 90-day view, one quarter at a time, if you will. We do anticipate that things are getting better here in the near term. I'd say we're now bouncing along the bottom.

當然。嗯，正如我之前所說，我們正在仔細管理庫存。如果您願意的話，我們正在查看 90 天的情況，一次一個季度。我們確實預計近期情況會有所改善。我想說我們現在正在底部反彈。

As I said, it's hard to predict when things tick up more significantly given some of the macro. But we feel, in general, comfortable with our inventory mix. We talked about the lean on IP&E because of our interest in that market and our continued exposure to it.

正如我所說，鑑於某些宏觀因素，很難預測何時情況會出現更顯著的變化。但總的來說，我們對我們的庫存組合感到滿意。我們談到了對 IP&E 的依賴，因為我們對該市場感興趣並且持續接觸該市場。

Remember that the majority of our highly engineered, which supports our design-in and demand creation efforts across the globe. We certainly haven't changed that. But to give you kind of an absolute feel for where we think we are, you saw turns improve slightly quarter-to-quarter. We'd say we're within half a turn or less where we want to be with inventory overall as we manage this thing going forward.

請記住，我們的大部分設計都經過精心設計，以支持我們在全球範圍內的設計和需求創造工作。我們當然沒有改變這一點。但為了讓您對我們的處境有一個絕對的感受，您會看到每季的轉彎率略有改善。我們會說，在我們繼續管理這件事的過程中，我們在半週或更短的時間內就達到了我們希望的整體庫存水準。

And as and when we see sequential improvement in the business, we'll maintain those turn levels and I think we'll be in great shape going forward. Again, we still have the residual some excess inventory, mainly a function of some of the long-term supply agreements that we were engaged in.

當我們看到業務連續改善時，我們將保持這些轉變水平，我認為我們未來將處於良好狀態。同樣，我們仍然有一些剩餘的過剩庫存，這主要是我們參與的一些長期供應協議的結果。

But that's abating, and we think the lion's share of that will resolve itself by the end of the year, and we would see inventory and inventory turns as fairly stable from there. But we're not bashful. We're going to lean in as we see the market firming because we want to make sure that we can help our suppliers grow.

但這種情況正在減弱，我們認為其中大部分問題將在今年年底前自行解決，我們將看到庫存和庫存週轉率從那時起相當穩定。但我們並不害羞。當我們看到市場堅挺時，我們將採取行動，因為我們希望確保能夠幫助我們的供應商成長。

As a follow-up, you talked about the demand you're seeing from cloud and AI solutions. Wondering if you could just kind of double click on that. What are these solutions that you guys are providing? Are you racking and stacking like full GPU server solutions? And then how do we think about like the margin on that business relative to, I think, a bit of a focus on driving higher margin dollars on the ECS business.

作為後續行動，您談到了您從雲端和人工智慧解決方案中看到的需求。想知道你是否可以雙擊它。你們提供的這些解決方案是什麼？您是否像完整的 GPU 伺服器解決方案一樣進行機架和堆疊？然後，我們如何看待該業務的利潤率，我認為，相對於專注於提高 ECS 業務的利潤率。

Yeah. So we don't break out margins at that granular level. But what I can say is we're participating in the early days of the ramp of AI in both of our segments. In our components business, our supply chain management offering is directly engaged in helping the right companies source, stage and build their AI infrastructure.

是的。因此，我們不會在這個粒度級別上細分利潤率。但我可以說的是，我們正在參與這兩個領域人工智慧發展的早期階段。在我們的組件業務中，我們的供應鏈管理產品直接幫助合適的公司採購、部署和建置其人工智慧基礎設施。

And in our ECS segment, we're very involved, it's a function of our focus on cloud and as is service offerings and things that we can enable though our digital platform, we're very engaged in helping the channel ramp up on things like CoPilot, for example. And that activity level has really taken off nicely for us, and we expect that to continue.

在我們的 ECS 領域，我們非常投入，這是我們對雲端的關注的一個功能，就像服務產品和我們可以透過我們的數位平台實現的東西一樣，我們非常致力於幫助管道提升諸如例如，副駕駛。這種活動水平對我們來說確實取得了良好的進展，我們希望這種情況能夠持續下去。

So there's other pockets of the company in which we're now engaged in, AI adoption as well, but those are two are better examples, and I think there's more to come as this thing plays out.

因此，我們現在正在參與公司的其他領域，人工智慧的採用，但這兩個是更好的例子，我認為隨著這件事的發展，還會有更多的事情發生。

Ruplu Bhattacharya, Bank of America.

魯普盧‧巴塔查亞 (Ruplu Bhattacharya)，美國銀行。

Maybe Sean, I'll follow up on the AI question. Just asking you for a little bit more detail. What do you think is the revenue contribution in 2024 from AI or what was the revenue contribution in this quarter? And if you can tell us like what type of customers are buying AI equipment, are you seeing demand from hyperscalers? Or do you think enterprise AI demand is also picking up?

也許肖恩，我會跟進人工智慧問題。只是要求您提供更多細節。您認為人工智慧在 2024 年的營收貢獻是多少，或是本季的營收貢獻是多少？如果您能告訴我們什麼類型的客戶正在購買人工智慧設備，您是否看到了超大規模企業的需求？還是您認為企業人工智慧需求也在回升？

So I'll start with your first question. You heard us talk about some of the focal points for us in our prepared remarks. What I would say about each of those is they're all real and tangible. Our intention today was simply to indicate our relevance in this part of the technology market as this piece of the industry starts to ramp up and evolve more completely. It's a little too early for us to quantify these in great detail. But they are real, and we do believe they'll become more important to our future trajectory.

我將從你的第一個問題開始。您聽到我們在準備好的演講中談論了我們的一些焦點。我想說的是，它們都是真實且有形的。我們今天的目的只是要表明我們在這部分技術市場中的相關性，因為該行業開始加速發展並更加全面地發展。對我們來說，詳細量化這些還為時過早。但它們是真實的，我們相信它們對我們未來的發展軌跡將變得更加重要。

The way we're thinking about AI is really on two fronts. Internally, we're getting after it because we think it can help us a great deal with our transactional workload, which can only help to create more sales capacity for our growth priorities.

我們思考人工智慧的方式其實有兩個面向。在內部，我們正在追求它，因為我們認為它可以幫助我們處理大量的交易工作量，這只會有助於為我們的成長重點創造更多的銷售能力。

But at the same time, commercially, I think you're going to see full ecosystems emerge around AI technologies and their applications. You could think of it as a rising tide that's going to lift many boats. And we're going to want to be front and center and enabling those ecosystems to develop and get their offerings to market.

但同時，在商業上，我認為你將看到圍繞人工智慧技術及其應用出現完整的生態系統。你可以把它想像成不斷上漲的潮水，會抬高許多船隻。我們希望成為前沿和中心，使這些生態系統能夠發展並將其產品推向市場。

But I would say, we're still in the early phases of broader AI adoption. We, again, want to signal our belief that we are relevant in it and we'll be more relevant in it in the future. But this will be a long journey and nevertheless, a pretty compelling one.

但我想說，我們仍處於更廣泛採用人工智慧的早期階段。我們再次希望表明我們的信念：我們在其中具有相關性，並且將來我們將在其中更加相關。但這將是一個漫長的旅程，但也是一個非常引人注目的旅程。

Raj, I have a couple of questions for you. Just on ECS margins, you had good sequential growth of 140 basis points. Can you help us like what were the drivers for that sequential growth? Like, how much was impacted because of netted down items versus product mix or regional mix? And as we think about sequential decline of margins going from 2Q to 3Q, if you can help us understand that what are some of the drivers for margins in the third quarter on the ECS side?

拉傑，我有幾個問題想問你。僅就 ECS 利潤率而言，就實現了 140 個基點的良好環比增長。您能否幫助我們了解連續成長的驅動因素是什麼？例如，由於淨減項目與產品組合或區域組合的影響有多大？當我們考慮從第二季到第三季的利潤率連續下降時，您能否幫助我們了解 ECS 方面第三季利潤率的一些驅動因素是什麼？

Yeah. Ruplu, it's really just a function of the business mix. Billings is the best indicator of health of that overall business. And then depending on the overall mix of products that we're selling, it will net down to certain levels of revenue.

是的。Ruplu，這其實只是業務組合的一個函數。比林斯是整體業務健康狀況的最佳指標。然後，根據我們銷售的產品的整體組合，淨收入將下降到一定水平。

But yeah, it did uptick in the second quarter. In the third quarter, we're seeing more of the normal seasonality of that business. And that's why you're seeing it step down. So nothing unusual there just from a margin standpoint, and it really is just a function of what types of sales we have in the particular quarter that impact margins on a sales basis.

但是，是的，第二季度確實有所上升。在第三季度，我們看到該業務更多的正常季節性。這就是為什麼你會看到它下台。因此，從利潤的角度來看，這並沒有什麼不尋常的，它實際上只是我們在特定季度的銷售類型影響銷售利潤的函數。

Okay. Understood. Maybe for the last one from me. When I think about free cash flow, I mean, it looks like you had pretty strong free cash flow versus the year ago quarter. I know you don't guide to free cash flow, but maybe I can ask the question in terms of investments in inventory. I think in response to your question, you said that you're going to invest in IP&E.

好的。明白了。也許是我的最後一篇。當我想到自由現金流時，我的意思是，與去年同期相比，您的自由現金流看起來相當強勁。我知道你不指導自由現金流，但也許我可以問庫存投資的問題。我想在回答你的問題時，你說你將投資IP&E。

So how should we think about inventory, what is a normal level of inventory or a normal level of cash conversion cycle? And how should we think about the second half free cash flow or the second half inventory trend as we go forward?

那麼我們應該如何看待庫存，什麼是庫存的正常水準或現金週轉週期的正常水準？展望未來，我們該如何看待下半年的自由現金流或下半年的庫存趨勢？

Yeah. Ruplu, it really comes down to our cash gen, and which we're very pleased with. You saw in the second quarter we generated about $320 million of operating cash flow. That puts us at about $720 million year-to-date. And as I mentioned, $1.3 billion over the last 12 months.

是的。Ruplu，這實際上取決於我們的現金來源，我們對此感到非常滿意。您可以看到，第二季我們產生了約 3.2 億美元的營運現金流。年初至今，我們的營收約為 7.2 億美元。正如我所提到的，過去 12 個月達到 13 億美元。

Our business just naturally generates cash. Obviously, working capital investments will impact that. And as we mentioned, also, inventory has come down by about $1.2 billion in the last nine months or so. So we think we're at a good level of inventory. We'll keep investing wherever it's needed. IP&E is certainly one of the areas. And -- but we feel very good about the cash gen ability of this business.

我們的業務自然會產生現金。顯然，營運資本投資會影響這一點。正如我們所提到的，在過去 9 個月左右的時間裡，庫存減少了約 12 億美元。因此，我們認為我們的庫存水準良好。我們將繼續在需要的地方進行投資。IP&E無疑是其中之一。而且——但我們對這項業務的現金產生能力感到非常滿意。

Melissa Fairbanks, Raymond James.

梅麗莎·費爾班克斯，雷蒙德·詹姆斯。

I just had kind of a quick follow-up to Ruplu's question for Raj. Maybe building on the question about free cash flow and how much cash you're generating -- can you remind us what your priorities for cash use are beyond, obviously, investing in the business and investing in some of that inventory. Share count has come down very significantly over the past couple of years, and the debt was -- came down pretty nicely in 2Q. Just wondering what you're thinking of going forward from there.

我剛剛快速跟進了 Ruplu 向 Raj 提出的問題。也許基於有關自由現金流和您產生多少現金的問題 - 您能否提醒我們，您的現金使用優先事項顯然超出了投資業務和投資部分庫存的範圍。過去幾年，股票數量大幅下降，債務在第二季也大幅下降。只是想知道您對未來的發展有何想法。

Thanks, Melissa. You kind of summarized it for me, but let me summarize it again. We're very pleased with the cash flow and -- in order of priority, which really have not changed, we will continue to invest in our business organically, for organic growth. So working capital, CapEx, other needs like that.

謝謝，梅麗莎。你幫我總結了一下，但讓我再總結一下。我們對現金流非常滿意，而且按照優先順序（實際上沒有改變），我們將繼續對我們的業務進行有機投資，以實現有機成長。因此，營運資金、資本支出以及其他類似需求。

We'll look at M&A as well. It's got to be at the right price, at the right returns, and we did a small acquisition in the first quarter in the engineering services side. And then as you said, we've bought back a lot of stock over the last 2 or 3 years. Last year, it was about $750 million. In the first half of this year, we're a little bit lighter at $150 million just to manage our debt ratios and we have paid down some debt. So that's exactly what we're doing, and I wouldn't see those priorities changing as we go forward.

我們也會關注併購。它必須以合適的價格，以合適的回報，我們在第一季在工程服務方面進行了小規模收購。然後正如你所說，我們在過去的兩三年裡回購了大量股票。去年，這一數字約為 7.5 億美元。今年上半年，我們的資產稍微減少了 1.5 億美元，只是為了管理我們的債務比率，我們已經償還了一些債務。這正是我們正在做的事情，而且我認為這些優先事項不會隨著我們的進展而改變。

Yeah. Melissa, I would just reinforce, our capital allocation priorities have not changed at all, as Raj just outlined. And I would say, all else being equal, we're simply managing the balance of the trade-off between share repurchase and debt capacity. But again, all else being equal, we're certainly still intent on doing so.

是的。梅麗莎，我想強調一下，正如拉傑剛才概述的那樣，我們的資本配置優先事項根本沒有改變。我想說，在其他條件相同的情況下，我們只是在股票回購和債務能力之間進行權衡。但同樣，在其他條件相同的情況下，我們當然仍然打算這麼做。

There are no further questions at this time. I'll hand things over to Brad Windbigler to close.

目前沒有其他問題。我會將事情交給 Brad Windbigler 來完成。

Thank you all again for joining today's call. We look forward to meeting with you at upcoming investor events. Have a good day.

再次感謝大家參加今天的電話會議。我們期待在即將舉行的投資者活動中與您會面。祝你有美好的一天。