Celestica Inc (CLS) 2023 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Celestica Q3 2023 Earnings Conference Call. (Operator Instructions)

早安，女士們、先生們，歡迎參加天弘 2023 年第三季財報電話會議。 （操作員說明）

This call is being recorded today, October 26, 2023.

本次通話錄音於今天，即 2023 年 10 月 26 日進行。

I would now like to turn the conference over to Craig Oberg, Vice President of Investor Relations and Corporate Development. Please go ahead.

我現在想將會議交給投資者關係和企業發展副總裁克雷格·奧伯格 (Craig Oberg)。請繼續。

Good morning, and thank you for joining us on Celestica's Third Quarter 2023 Earnings Conference Call. On the call today are Rob Mionis, President and Chief Executive Officer; and Mandeep Chawla, Chief Financial Officer.

早安，感謝您參加天弘的 2023 年第三季財報電話會議。今天參加電話會議的是總裁兼執行長 Rob Mionis；和曼迪普‧喬拉 (Mandeep Chawla)，財務長。

As a reminder, during this call we will make forward-looking statements within the meanings of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Such forward-looking statements are based on management's current expectations, forecasts and assumptions, which are subject to risks, uncertainties and other factors that could cause actual outcomes and results to differ materially from conclusions, forecasts or projections expressed in such statements. For identification and discussion of such factors and assumptions as well as further information concerning forward-looking statements, please refer to yesterday's press release, including the cautionary note regarding forward-looking statements therein, our most recent annual report on Form 20-F and our other public filings, which can be accessed at sec.gov and sedar.com. We assume no obligation to update any forward-looking statement except as required by law.

謹此提醒，在本次電話會議中，我們將根據 1995 年美國私人證券訴訟改革法案和適用的加拿大證券法做出前瞻性聲明。此類前瞻性陳述是基於管理階層目前的預期、預測和假設，這些預期、預測和假設受到風險、不確定性和其他因素的影響，這些因素可能導致實際結果和結果與此類陳述中表達的結論、預測或預期有重大差異。有關此類因素和假設的識別和討論以及有關前瞻性陳述的更多信息，請參閱昨天的新聞稿，包括其中有關前瞻性陳述的警示性說明、我們最新的20-F 表格年度報告以及我們的報告。其他公開文件，可在 sec.gov 和 sedar.com 上存取。除法律要求外，我們不承擔更新任何前瞻性聲明的義務。

In addition, during this call we will refer to various non-IFRS financial measures, including ratios based on non-IFRS financial measures, consisting of non-IFRS operating margin, adjusted gross margin, adjusted return on invested capital, or adjusted ROIC, adjusted free cash flow, gross debt to non-IFRS trailing 12-month adjusted EBITDA leverage ratio, adjusted earnings per share, or adjusted EPS, adjusted SG&A expense and adjusted effective tax rate. Listeners should be cautioned that references to any of the foregoing measures during this call denote non-IFRS financial measures, whether or not specifically designated as such. These non-IFRS financial measures do not have any standardized meanings prescribed by IFRS and may not be comparable to similar measures presented by other public companies that report under IFRS or who report under U.S. GAAP and use non-GAAP financial measures to describe similar operating metrics.

此外，在本次電話會議中，我們將參考各種非國際財務報告準則財務指標，包括基於非國際財務報告準則財務指標的比率，包括非國際財務報告準則營業利潤率、調整後毛利率、調整後投資資本報酬率或調整後投資報酬率、調整後自由現金流、過去 12 個月調整後 EBITDA 槓桿率、調整後每股盈餘或調整後每股盈餘、調整後 SG&A 費用和調整後有效稅率。應提醒聽眾，本次電話會議中提及的任何上述措施均表示非 IFRS 財務措施，無論是否明確指定為此類措施。這些非 IFRS 財務指標沒有 IFRS 規定的任何標準化含義，並且可能無法與根據 IFRS 報告或根據美國 GAAP 報告並使用非 GAAP 財務指標描述類似運營指標的其他上市公司提出的類似指標進行比較。 。

We refer you to yesterday's press release and our Q3 2023 earnings presentation, which are available at celestica.com under the Investor Relations tab, for more information about these and certain other non-IFRS financial measures, including a reconciliation of historical non-IFRS financial measures to their most directly comparable IFRS financial measures from our financial statements, and a description of modifications to specified non-IFRS financial measures during 2022 and 2023.

我們建議您參閱昨天的新聞稿和我們的2023 年第三季度收益演示（可在celestica.com 的“投資者關係”選項卡下獲取），以了解有關這些和某些其他非IFRS 財務指標的更多信息，包括歷史非IFRS 財務指標的調節表我們的財務報表中最直接可比較的 IFRS 財務指標的衡量標準，以及 2022 年和 2023 年期間對特定非 IFRS 財務指標的修改說明。

Unless otherwise specified, all references to dollars on this call are to U.S. dollars and per share information is based on diluted shares outstanding.

除非另有說明，本次電話會議中所有提及的美元均指美元，每股資訊基於稀釋後的已發行股票。

Let me now turn the call over to Rob.

現在讓我把電話轉給羅布。

Thank you, Craig. Good morning, everyone, and thank you for joining us on today's call.

謝謝你，克雷格。大家早安，感謝您參加今天的電話會議。

Celestica's third quarter revenue of $2.04 billion was towards the high end of our guidance range, while our non-IFRS adjusted EPS came in at $0.65, exceeding the high end of our guidance range. Our non-IFRS operating margin of 5.7% was our 15th consecutive quarter of year-to-year non-IFRS operating margin expansion.

天弘第三季營收為 20.4 億美元，接近我們指引範圍的高端，而我們的非 IFRS 調整後每股收益為 0.65 美元，超出了我們指導範圍的高端。我們的非國際財務報告準則營業利益率為 5.7%，這是我們連續第 15 季實現非國際財務報告準則營業利益率年增。

Our CCS segment continues to benefit from improved business mix due to the strength of our hyperscaler portfolio, reflected by segment margin of 6.2% for the third quarter, the highest ever. We also saw meaningful sequential revenue growth in our HPS business.

由於我們超大規模產品組合的實力，我們的 CCS 部門繼續受益於業務組合的改善，第三季的部門利潤率為 6.2%，創歷史新高。我們的 HPS 業務收入也出現了顯著的環比成長。

Our ATS segment delivered solid double-digit year-to-year revenue growth, as we continue to see tailwinds from new program ramps as well as demand strength in our aerospace business.

我們的 ATS 部門實現了穩定的兩位數年收入成長，因為我們繼續看到新專案的成長以及我們的航空航太業務的需求強勁帶來的推動力。

Celestica's strong results in the third quarter are reflective of the bullish secular trends underpinning our portfolio and our team's solid execution.

天弘第三季的強勁業績反映了支撐我們投資組合和團隊穩健執行的看漲長期趨勢。

Before I provide an update on each of our end markets and some color on 2024, I would like to turn the call over to Mandeep, who will provide a detailed review of our third quarter financial performance and our guidance for the fourth quarter of 2023. Mandeep, over to you.

在我提供每個終端市場的最新情況和 2024 年的一些資訊之前，我想將電話轉給 Mandeep，他將對我們第三季的財務業績和 2023 年第四季的指導進行詳細審查。曼迪普，交給你了。

Thank you, Rob, and good morning, everyone. Third quarter revenue came in at $2.04 billion, towards the high end of our guidance range. Revenue was 6% higher year-over-year, supported by higher revenues in both segments, including double-digit growth in our ATS segment.

謝謝你，羅布，大家早安。第三季營收為 20.4 億美元，接近我們指引範圍的上限。由於兩個細分市場收入的成長（包括 ATS 細分市場的兩位數成長），營收年增 6%。

Our third quarter non-IFRS operating margin of 5.7% was 60 basis points higher year-over-year. This margin expansion was driven primarily by strong profitability in our CCS segment, supported by solid operational execution.

我們第三季的非 IFRS 營業利潤率為 5.7%，較去年同期高出 60 個基點。利潤率的成長主要是由於我們 CCS 部門的強勁獲利能力以及堅實的營運執行力的支持。

Non-IFRS adjusted earnings per share for the third quarter were $0.65, exceeding the high end of our guidance range, and were $0.13 higher year-over-year, driven primarily by higher operating profit.

第三季非國際財務報告準則調整後每股收益為 0.65 美元，超出了我們指導範圍的上限，年增 0.13 美元，這主要是由於營業利潤增加所致。

Moving on to our segment performance. Third quarter ATS revenue was $859 million, up 12% year-over-year and in line with our expectations of a low-double-digit percentage increase. The year-over-year increase in ATS segment revenue was driven by the ramping of new programs in our industrial business, improving demand in A&D and solid growth in our healthtech programs. This growth was partly offset with ongoing market- related softness in our capital equipment business. ATS segment revenue accounted for 42% of total revenue in the third quarter, compared to 40% in the same period last year.

延續我們的細分市場表現。第三季 ATS 營收為 8.59 億美元，年增 12%，符合我們對低兩位數百分比成長的預期。 ATS 部門收入的同比增長是由我們的工業業務新項目的增加、A&D 需求的改善以及我們的健康科技項目的穩健增長推動的。這一增長被我們資本設備業務持續的市場疲軟所部分抵消。第三季ATS部門收入佔總收入的42%，而去年同期為40%。

Our CCS segment revenue of $1.18 billion were up 2% compared to the prior year period and accounted for 58% of total company revenues in the third quarter, compared to 60% in the prior year period. Year-to-year dynamics were largely unchanged from last quarter, as very strong growth in our enterprise end market, supported by strong demand for proprietary compute, was largely offset by anticipated demand softness in our communications end market.

我們的 CCS 部門營收為 11.8 億美元，比去年同期成長 2%，佔第三季公司總營收的 58%，去年同期為 60%。與上季相比，同比動態基本上沒有變化，因為在對專有運算的強勁需求的支持下，我們的企業終端市場出現了非常強勁的成長，但在很大程度上被我們的通訊終端市場預期的需求疲軟所抵消。

Enterprise end market revenue in the quarter was up 31% year-over-year, higher than our expectation of a low-double-digit percentage increase. Revenue growth was driven by program ramps and continued strength in demand for proprietary compute from our hyperscaler customers in support of artificial intelligence applications.

本季企業終端市場營收年增 31%，高於我們預期的低兩位數百分比成長。收入成長的推動因素是專案的增加以及我們的超大規模客戶對支援人工智慧應用程式的專有運算的需求持續強勁。

Revenue in our communications end market in the third quarter was lower by 10% year-over-year versus our expectation of a high-single-digit percentage decrease. The decline was driven primarily by tough comps from a strong prior year period.

第三季我們通訊終端市場的營收年減了 10%，而我們的預期是高個位數百分比下降。下降的主因是去年同期的強勁業績。

HPS revenue was $493 million in the quarter, 5% lower year-over-year but up 39% sequentially, in line with our outlook provided last quarter. HPS revenues were 24% of total company revenues in the third quarter, compared to 27% in the prior year period. We expect HPS revenue to return to year-to-year growth in 2024, as we anticipate networking customers demand to increase.

本季 HPS 營收為 4.93 億美元，年減 5%，但季增 39%，與我們上季提供的預期一致。第三季 HPS 營收占公司總營收的 24%，去年同期為 27%。我們預計 HPS 收入將在 2024 年恢復同比增長，因為我們預計網路客戶的需求將會增加。

Turning to segment margins. ATS segment margin in the third quarter was 4.9%, 10 basis points lower year-over-year, as the benefits of volume leverage and ramping programs in our industrial business were more than offset by softness in the capital equipment business.

轉向細分市場利潤。第三季 ATS 部門利潤率為 4.9%，年減 10 個基點，因為我們工業業務的銷售槓桿和產能提升計畫帶來的好處被資本設備業務的疲軟所抵消。

CCS segment margin during the quarter was 6.2%, up 100 basis points year-over-year, marking the first time one of our segment margins has exceeded 6%. The increase was driven by higher volumes with our hyperscaler customers as well as production efficiencies.

本季 CCS 分部利潤率為 6.2%，年成長 100 個基點，這是我們的分部利潤率首次超過 6%。這一成長是由我們的超大規模客戶的銷售增加以及生產效率所推動的。

Moving on to some additional financial metrics. IFRS net earnings for the third quarter were $80 million, or $0.67 per share, compared to net earnings of $46 million, or $0.37 per share, in the prior year period.

接下來討論一些額外的財務指標。根據國際財務報告準則，第三季淨利為 8,000 萬美元，即每股 0.67 美元，而去年同期淨利為 4,600 萬美元，即每股 0.37 美元。

Adjusted gross margin for the third quarter was 9.8%, up 90 basis points year-over-year due to higher volumes in both segments and improved mix.

第三季調整後毛利率為 9.8%，年成長 90 個基點，這得益於兩個細分市場銷售的增加和產品組合的改善。

Third quarter non-IFRS adjusted effective tax rate was 20%, compared to 21% in the prior year period.

第三季非 IFRS 調整後有效稅率為 20%，而去年同期為 21%。

Non-IFRS adjusted ROIC for the third quarter was 21.5%, an improvement of 2.3% compared to the prior year quarter.

根據非 IFRS 調整後的第三季投資資本報酬率 (ROIC) 為 21.5%，較去年同期提高 2.3%。

Moving on to working capital. At the end of the third quarter, our inventory balance was $2.26 billion, down $85 million sequentially and down $65 million year-over-year.

轉向營運資金。截至第三季末，我們的庫存餘額為 22.6 億美元，季減 8,500 萬美元，年減 6,500 萬美元。

Cash deposits were $875 million at the end of the third quarter, up $65 million sequentially and higher by $251 million compared to the prior year period.

第三季末現金存款為 8.75 億美元，比上一季增加 6,500 萬美元，比去年同期增加 2.51 億美元。

When accounting for cash deposits, inventory continues to improve meaningfully: lower by $316 million on a year-to-year basis at the end of the third quarter and lower by $150 million sequentially.

在考慮現金存款時，庫存繼續顯著改善：第三季末年減 3.16 億美元，季減 1.5 億美元。

Inventory days, net of cash deposit days, were 72 in the third quarter, compared to 85 in the prior year period. We anticipate a further improvement in inventory days over the coming quarters as material lead times continue to normalize.

第三季的庫存天數（扣除現金存款天數）為 72 天，去年同期為 85 天。隨著材料交貨時間繼續正常化，我們預計未來幾季的庫存天數將進一步改善。

Cash cycle days were 72 during the third quarter, 1 day lower sequentially and 9 days higher than the prior year period.

第三季現金週期天數為 72 天，較上一季減少 1 天，比去年同期增加 9 天。

Capital expenditures for the quarter were $27 million, or approximately 1.3% of revenue, compared with 2.0% in the third quarter of 2022.

該季度的資本支出為 2,700 萬美元，約佔營收的 1.3%，而 2022 年第三季為 2.0%。

Non-IFRS adjusted free cash flow in the third quarter was $34 million, compared to $7 million in the prior year period. This represents our 19th consecutive quarter with positive non-IFRS adjusted free cash flow and brings our year-to-date figure to $110 million, more than double our performance of $51 million from the same period last year.

第三季非 IFRS 調整後自由現金流為 3,400 萬美元，去年同期為 700 萬美元。這代表我們連續第 19 個季度實現非 IFRS 調整後自由現金流為正值，使我們今年迄今的數字達到 1.1 億美元，是去年同期業績 5,100 萬美元的兩倍多。

Given our strong year-to-date performance and positive outlook for the fourth quarter, we are raising our non-IFRS adjusted free cash flow expectation from $125 million to $150 million for 2023.

鑑於我們今年迄今的強勁業績和第四季度的積極前景，我們將 2023 年非 IFRS 調整後自由現金流預期從 1.25 億美元提高到 1.5 億美元。

Moving on to some additional key metrics. Our cash balance at the end of the third quarter was $353 million, which in combination with our approximately $600 million of borrowing capacity under our revolver provides us with liquidity of approximately $1 billion. We believe this is sufficient to meet our anticipated business needs.

繼續討論一些其他關鍵指標。第三季末我們的現金餘額為 3.53 億美元，加上我們循環貸款下約 6 億美元的借款能力，為我們提供了約 10 億美元的流動性。我們相信這足以滿足我們預期的業務需求。

Our gross debt at the end of the third quarter was $613 million, leaving us with a net debt position of $250 million. Our third quarter gross debt to non-IFRS trailing 12-month adjusted EBITDA leverage ratio was 1.1 turn, down 0.1 turns sequentially and down 0.4 turns compared to the same quarter of last year.

第三季末我們的總負債為 6.13 億美元，淨負債部位為 2.5 億美元。我們第三季的總債務與非國際財務報告準則的過去 12 個月調整後 EBITDA 槓桿率為 1.1 倍，比上一季下降 0.1 倍，與去年同期相比下降 0.4 倍。

At September 30, 2023, we were compliant with all financial covenants under our credit agreements.

截至 2023 年 9 月 30 日，我們遵守了信貸協議下的所有財務契約。

We did not purchase any shares for cancellation under our NCIB during the third quarter. We do, however, intend to continue to be opportunistic on share repurchases under our current NCIB for the remainder of the year and intend on renewing our NCIB program in December, subject to necessary approvals.

第三季度，我們沒有根據 NCIB 購買任何要註銷的股票。然而，我們確實打算在今年剩餘時間內繼續根據目前的 NCIB 進行股票回購，並打算在 12 月更新我們的 NCIB 計劃，但須獲得必要的批准。

Now turning to our guidance for the fourth quarter of 2023. Fourth quarter revenues are expected to be in the range of $2.0 billion to $2.15 billion, which if the midpoint of this range is achieved will be slightly higher compared to the same quarter last year.

現在轉向我們對 2023 年第四季的指引。第四季的營收預計在 20 億美元至 21.5 億美元之間，如果達到該範圍的中點，則營收將略高於去年同期。

Fourth quarter non-IFRS adjusted earnings per share are expected to be in the range of $0.65 to $0.71 per share, which would represent an improvement of $0.13 per share, or approximately 23%, compared to the fourth quarter of 2022 if the midpoint of the guidance range is achieved.

第四季非國際財務報告準則調整後每股盈餘預計將在每股 0.65 美元至 0.71 美元之間，這意味著與 2022 年第四季相比，每股收益增加 0.13 美元，約 23%。達到指導範圍。

If the midpoint of our revenue and non-IFRS adjusted EPS guidance ranges are achieved, non-IFRS operating margin would be 5.7%, which would represent an increase of 40 basis points over the prior year period.

如果我們的收入和非國際財務報告準則調整後每股收益指引範圍的中點達到，非國際財務報告準則營業利潤率將為 5.7%，這將比去年​​同期增加 40 個基點。

Non-IFRS adjusted SG&A expense for the fourth quarter is expected to be in the range of $67 million to $69 million.

預計第四季非 IFRS 調整後的 SG&A 費用將在 6,700 萬美元至 6,900 萬美元之間。

We anticipate our non-IFRS adjusted effective tax rate to be approximately 20% for the fourth quarter, excluding any impact from taxable foreign exchange or unanticipated tax settlement.

我們預計第四季度非國際財務報告準則調整後的有效稅率約為 20%，不包括應稅外匯或意外稅務結算的任何影響。

Now turning to our end market outlook for the fourth quarter of 2023. In our ATS segment, we anticipate revenue to be up in the low-single-digit percentage range year-over-year, driven by expected double-digit growth in our industrial and A&D businesses, partly offset by ongoing market softness in capital equipment.

現在轉向我們對 2023 年第四季度的終端市場展望。在我們的 ATS 領域，我們預計收入將同比增長在低個位數百分比範圍內，這得益於我們的工業領域預計將實現兩位數增長。和A&D 業務，部分被資本設備市場持續疲軟所抵銷。

We anticipate revenues in our communications end market to be down in the mid-teens percentage range year-over-year, driven by tough comps from the prior year period.

我們預計，由於去年同期的強勁業績，我們的通訊終端市場的營收將年減百分之十左右。

Finally, in our enterprise end market, we expect revenues to be up in the high-20% range year-over-year, driven by anticipated continuing demand strength in proprietary compute programs from our hyperscaler customers.

最後，在我們的企業終端市場，由於我們的超大規模客戶對專有運算程式的預期持續需求強勁，我們預期營收將年增 20%。

I'll now turn the call back over to Rob to provide details on the outlook for our end markets and business overall.

現在，我將把電話轉回給 Rob，提供有關我們終端市場和整體業務前景的詳細資訊。

Thank you, Mandeep. Based on our solid performance this quarter and our strong guidance to close out the year, we are pleased to raise our preliminary 2024 outlook. In the coming fiscal year, we are maintaining our expectation of non-IFRS adjusted EPS growth of 10%, or more, compared to our 2023 outlook, which has increased from $2.25 to $2.36, based on the midpoint of our fourth quarter guidance. We expect this growth to be driven by a combination of higher revenue across each of our end markets and solid non-IFRS operating margin.

謝謝你，曼迪普。基於我們本季的穩健表現和對今年結束的強力指導，我們很高興上調 2024 年的初步展望。在下一財年，我們維持對非 IFRS 調整後每股收益成長 10% 或以上的預期，而我們的 2023 年展望則根據我們第四季度指引的中位數從 2.25 美元上調至 2.36 美元。我們預計這一成長將由我們每個終端市場收入的增加和穩固的非國際財務報告準則營運利潤率共同推動。

I would now like to provide some detail on the outlook for each of our businesses. Beginning with our ATS segment, our industrial business has continued to experience very strong growth in 2023, driven by ramping new programs. We expect this momentum to continue into the next year as these green programs continue to ramp.

我現在想詳細介紹我們每項業務的前景。從我們的 ATS 部門開始，在新項目不斷增加的推動下，我們的工業業務在 2023 年繼續經歷非常強勁的成長。隨著這些綠色計畫的不斷推進，我們預計這種勢頭將持續到明年。

Our PCI business also achieved solid revenue growth in 2023, and we are pleased that they are on track to achieve the synergy objectives established at the time of acquisition. We anticipate continuing growth in 2024, supported by our investment to expand capacity in Indonesia, which is expected to be online by year-end.

我們的 PCI 業務在 2023 年也實現了穩健的營收成長，我們很高興他們正在實現收購時確立的協同目標。我們預計 2024 年將持續成長，這得益於我們投資擴大印尼產能，預計將於年底上線。

The recovery in commercial aerospace demand continues to fuel solid growth in our A&D business, supporting our greater-than-30% increase in revenues year-to-date compared to the prior year period. Our defense business is also experiencing solid double-digit growth in 2023, supported by a number of new program ramps, and we anticipate this momentum to continue into next year.

商業航空航太需求的復甦繼續推動我們的 A&D 業務的穩健成長，支持我們今年迄今的收入較上年同期增長超過 30%。在許多新計劃的支持下，我們的國防業務在 2023 年也將實現兩位數的穩健增長，我們預計這種勢頭將持續到明年。

With commercial air traffic now approaching more normalized levels, we anticipate our overall A&D revenue growth rate moderating in 2024, though remaining relatively strong, as we continue to have a healthy backlog.

隨著商業航空交通量現已接近正常化水平，我們預計 2024 年整體 A&D 收入成長率將放緩，但仍相對強勁，因為我們繼續擁有健康的積壓訂單。

Moving on to capital equipment. Demand continues to be soft across the broader wafer fab equipment market, which has been compounded by the recent U.S.-China trade restrictions affecting the semi industry. We continue to be encouraged by our ability to execute in a challenging end market and remain profitable despite a material year-over-year reduction in volume. Overall, our capital equipment portfolio is benefiting from a combination of favorable mix and the ramping of new program wins.

轉向資本設備。整個晶圓廠設備市場的需求持續疲軟，最近影響半導體產業的中美貿易限制更是雪上加霜。儘管銷量同比大幅下降，但我們在充滿挑戰的終端市場中的執行能力和保持盈利的能力仍然令我們感到鼓舞。總體而言，我們的資本設備組合受益於有利的組合和新項目的不斷增加。

Looking ahead, we believe that our capital equipment business is operating at trough levels. And while we expect the underlying market demand to be relatively flat year-over-year in 2024, we do expect our business to grow based on new program wins.

展望未來，我們認為我們的資本設備業務正處於低谷水準運作。雖然我們預計 2024 年基礎市場需求將比去年同期相對持平，但我們確實預計我們的業務將基於新專案的成功而成長。

In our healthtech business, the ramping of new programs in surgical instruments and imaging devices are supporting solid growth during 2023. Overall, the demand outlook for our healthtech business remains healthy, with growth into 2024.

在我們的健康科技業務中，手術器械和影像設備新專案的增加正在支持 2023 年的穩健成長。總體而言，我們的健康科技業務的需求前景仍然健康，並將持續成長到 2024 年。

Now turning to our CCS segment. The broader environment continues to be positive for our CCS segment, as hyperscalers are making significant investments in data center capacity. Market observers have suggested that we may be in the early days of this long-term secular trend, accompanied by a major hardware upgrade cycle, to support artificial intelligence applications and the resulting increase in data center traffic. We believe that the different stages of this investment cycle will be synergistic and support demand for our entire suite of data center offerings at various times throughout the entire cycle.

現在轉向我們的 CCS 部分。由於超大規模企業正在資料中心容量方面進行大量投資，更廣泛的環境繼續對我們的 CCS 領域有利。市場觀察家表示，我們可能正處於這種長期長期趨勢的早期，伴隨著重大的硬體升級週期，以支援人工智慧應用以及由此帶來的資料中心流量的增加。我們相信，這個投資週期的不同階段將產生協同效應，並在整個週期的不同時間支持我們整套資料中心產品的需求。

Demand in our enterprise end market is showing significant strength, benefiting from the tailwinds of hyperscalers' investments in data center compute capacity to support the growth in artificial intelligence applications. Our medium-term outlook for this business also remains very positive, with expectations for continued strong demand and proprietary compute as well as ramping programs in storage. We anticipate that these factors will support double-digit revenue growth rate in our enterprise business through 2024.

由於超大規模企業對資料中心運算能力的投資以支援人工智慧應用程式的成長，我們的企業終端市場的需求顯示出巨大的強勁勢頭。我們對該業務的中期前景仍然非常樂觀，預計需求將持續強勁，專有運算以及儲存方面的計劃也會不斷增加。我們預計這些因素將支持我們的企業業務在 2024 年實現兩位數的收入成長率。

The near-term outlook for our communications end market remains soft into the end of the year, primarily due to tough comps. However, we do expect that this business will resume year-to-year revenue growth in 2024 as customer investments in compute begin to pull through demand for networking. We are encouraged by our medium-term outlook for our communications end market, supported by our leading position in 400G and recent wins in 800G.

到今年年底，我們的通訊終端市場的近期前景仍然疲軟，這主要是由於競爭激烈。然而，我們確實預計，隨著客戶對計算的投資開始拉動網路需求，該業務將在 2024 年恢復年收入成長。我們對通訊終端市場的中期前景感到鼓舞，這得益於我們在 400G 領域的領先地位以及最近在 800G 領域的勝利。

We are also encouraged by the sequential growth in our HPS business in the third quarter and believe that it is poised to return to annual growth in the coming year, as customer inventory levels are expected to normalize and new networking and compute programs ramp in 2024.

我們也對第三季 HPS 業務的連續成長感到鼓舞，並相信隨著客戶庫存水準預計將正常化，以及新的網路和運算項目將在 2024 年增加，該業務預計將在來年恢復年度成長。

Finally, I'm pleased to announce that we will be holding a virtual investor briefing on November 29. We are looking forward to welcoming the investment community through an overview of our CCS and ATS portfolios, including a more thorough look at the opportunities we see in our hyperscaler business. We also intend to provide further details on our 2024 outlook as well as our long-term financial targets and capital allocation framework. We will be releasing the details of the event shortly, and we hope that all of you can join us on that day.

最後，我很高興地宣布，我們將於 11 月 29 日舉行虛擬投資者簡報會。我們期待透過概述我們的 CCS 和 ATS 投資組合（包括更全面地了解我們看到的機會）來歡迎投資界在在我們的超大規模業務中。我們還打算提供有關 2024 年展望以及長期財務目標和資本配置框架的更多詳細資訊。我們很快就會發布活動詳情，希望大家能夠在當天參加我們的活動。

We have much to look forward to as we aim to close with a strong finish to the year. We are on track to achieve the highest-ever non-IFRS adjusted operating margin and non-IFRS adjusted earnings per share in the company's history, eclipsing both of the previous highs set last year. I have the utmost confidence and trust in our team to execute on our long-term strategy, continue to deliver on our targets and set us up for another great year in 2024.

我們有很多值得期待的事情，因為我們的目標是為這一年畫下圓滿的句點。我們預計將實現公司歷史上最高的非國際財務報告準則調整後營業利潤率和非國際財務報告準則調整後每股收益，超過去年創下的歷史新高。我對我們的團隊充滿信心和信任，他們會執行我們的長期策略，繼續實現我們的目標，並為我們在 2024 年再創輝煌的一年做好準備。

With that, I would now like to turn the call over to the operator for questions.

現在，我想將電話轉給接線員詢問問題。

(Operator Instructions) Your first question comes from the line of Robert Young, from Canaccord.

（操作員說明）您的第一個問題來自 Canaccord 的 Robert Young。

The first place I wanted to ask about is one of the last topics on your prepared remarks, around what you've talked about the pause and switch sales to hyperscalers. I think previously you had suggested it was buffer inventory that needed to be digested. And I think at the very end of your comments, you suggested that it was now tied to the proprietary compute opportunity. And so I was wondering -- I was hoping you could get into a little more detail around what's the driver between the switch sales, how closely tied to the AI opportunity is it and then maybe a little more detail around how that recovers.

我想問的第一個問題是您準備好的演講中的最後一個主題，圍繞您所談論的暫停並將銷售轉向超大規模企業。我想您之前曾建議需要消化的是緩衝庫存。我認為在您評論的最後，您建議它現在與專有計算機會聯繫在一起。所以我想知道 - 我希望你能更詳細地了解交換機銷售之間的驅動因素是什麼，它與人工智慧機會的聯繫有多緊密，然後可能更詳細地了解它如何恢復。

Rob, sure. First, I'll start off with saying that hyperscalers will grow close to 30% this year, and we have very strong demand with that group of customers into next year. In fact, the demand is so strong, our growth as we exit the year is being paced by material availability, of which we think will clear up in the very early parts of next year.

羅布，當然。首先，我首先要說的是，超大規模企業今年將成長近 30%，而且我們對這群客戶的需求到明年都非常強勁。事實上，需求如此強勁，我們在今年結束時的成長是根據材料供應來調整的，我們認為材料供應將在明年年初消除。

In terms of networking demand, we are getting towards the end of some inventory burn-down. For the top customers that we track that have the most buffers, one of them has returned to growth both sequentially and year-to-year, and the other one will do so very early next year. We are expecting the pull-through of networking to happen with the increased demand of proprietary compute. We're also starting to ramp some new 800G programs in the second half of 2024.

就網路需求而言，我們即將結束一些庫存消耗。對於我們追蹤的擁有最多緩衝的頂級客戶來說，其中一個已經恢復了環比和同比增長，而另一個客戶將在明年初實現增長。我們預計，隨著專有運算需求的增加，網路的發展將會發生。我們也將在 2024 年下半年開始推出一些新的 800G 項目。

Okay. And a question on capacity. If the AI-optimized server business continues at this pace and the switching business recovers, do you have the capacity to grow both of those businesses?

好的。還有關於容量的問題。如果AI優化伺服器業務繼續以這種速度發展，而交換業務也恢復了，您是否有能力同時發展這兩項業務？

We do, Rob. We started some expansion earlier in the year in Southeast Asia, and that capacity, 80,000 square feet, will be coming online in the first quarter of '24. We're also starting to invest side by side with our customers to expand capacity in Thailand, another 50,000-plus square feet, and that's going to support AI growth well into the future, and that capacity will come online in the first part of 2025.

我們願意，羅布。今年早些時候，我們開始在東南亞進行一些擴張，80,000 平方英尺的產能將於 2024 年第一季投入使用。我們也開始與客戶並肩投資，擴大泰國的產能，另外佔地 50,000 多平方英尺，這將支持人工智慧未來的成長，該產能將於 2025 年上半年上線。

Again, we have a very bullish view of AI growth going into the medium to long term. We think we're at the very beginning of a long-term upgrade cycle. As such, we're investing alongside our customers to increase our capacity to support their very robust demand.

同樣，我們對人工智慧中長期成長持非常樂觀的看法。我們認為我們正處於長期升級週期的開始階段。因此，我們正在與客戶一起投資，以提高我們的能力來支持他們非常強勁的需求。

Okay. Just one clarification there on the side-by-side investment with a customer. Does that create any kind of exclusive relationship? Or does it tie a customer to you a little more closely? Maybe a little more clarity around that, and then I'll pass the line.

好的。這裡只是對與客戶的平行投資進行一項澄清。這會產生某種排他關係嗎？或者它會讓客戶與你的聯繫更緊密嗎？也許更清楚一點，然後我就過線了。

I'll say it's a very sticky relationship with our customers that we're doing this with, and it just shows the commitment that they have with us relative to investing side by side with us and expanding the capacity. And also in Thailand, we're building basically a dedicated building just to support AI growth with our customer, and that's a pretty profound statement.

我想說，我們與客戶的關係非常緊密，這表明了他們對我們與我們並肩投資和擴大產能的承諾。同樣在泰國，我們基本上正在建造一座專用建築，只是為了與我們的客戶一起支持人工智慧的發展，這是一個非常深刻的說法。

Your next question comes from the line of Maxim Matushansky, from RBC Capital Markets.

您的下一個問題來自加拿大皇家銀行資本市場部門的 Maxim Matushansky。

I just wanted to ask if there's anything you can share in terms of how the conversations with the hyperscaler customers are going for 2024 visibility, or otherwise. I guess, at what point do you expect to have a better idea of that demand for the back half of 2024 across the different programs?

我只是想問一下您是否可以分享有關如何與超大規模客戶進行對話以實現 2024 年可見性或其他方面的資訊。我想，您預計什麼時候可以更了解 2024 年下半年不同專案的需求？

Thanks for the question. Hyperscalers typically lock down their full year budget towards the end of October, early November. So right now, I think we have pretty good visibility into the third quarter of '24. In the next 2 weeks, we'll probably have full visibility into all of 2024. And in our investor update briefing on November 29, we'll be providing additional color on '24 and also color for our 3-year outlook as well. But right now, demand is very robust across our hyperscalers, especially in the areas of proprietary compute.

謝謝你的提問。超大規模企業通常會在 10 月底、11 月初鎖定全年預算。所以現在，我認為我們對 24 年第三季有很好的了解。在接下來的兩週內，我們可能會全面了解 2024 年的情況。在 11 月 29 日的投資者更新簡報中，我們將提供有關 24 年的更多資訊以及我們的 3 年展望的資訊。但目前，我們的超大規模企業的需求非常強勁，尤其是在專有運算領域。

Just in terms of your competitiveness with those customers, have you seen any changes in competitive positioning, whether that's competitors being more aggressive on price or new entrants or maybe supply chain conditions are better for competitors? Like, anything that might impact your relationships with the hyperscaler customers in the foreseeable future?

就您與這些客戶的競爭力而言，您是否看到競爭定位發生任何變化，無論是競爭對手在價格上更加激進，還是新進入者，或者供應鏈條件對競爭對手來說更好？例如，在可預見的未來，有什麼可能會影響您與超大規模客戶的關係嗎？

This class of customer right now is very focused in on partners that could reliably and technically scale volume, and that plays to our strengths. These compute modules, proprietary compute modules, are very complex. They require water cooling, which we're very good at. And we're also very good at ramping new programs. So the most important award criteria is suppliers that could reliably scale new production, and that's why we've been winning more than our fair share of work with these guys.

目前，這類客戶非常關注能夠可靠地、在技術上擴大產量的合作夥伴，這也發揮了我們的優勢。這些計算模組（專有計算模組）非常複雜。它們需要水冷卻，而我們非常擅長這一點。我們也非常擅長推出新項目。因此，最重要的獎勵標準是能夠可靠地擴大新生產規模的供應商，這就是為什麼我們在與這些人的合作中贏得的份額超過了我們應得的份額。

And maybe just one final one. On the Q4 guidance, it implies in the enterprise segment revenues to reaccelerate quarter-over-quarter. And ATS, I guess, it implies fairly flat quarter-over-quarter. Are these more timing related? Or is there anything to call out in terms of the changes kind of maybe in the nearer term to those end markets?

也許只是最後一件事。在第四季的指導中，這意味著企業部門的收入將逐季重新加速。我想，ATS 意味著季度環比相當平穩。這些與時間有更多關係嗎？或者在近期這些終端市場可能發生的變化方面有什麼值得指出的嗎？

Maxim, it's Mandeep here. First off, I would talk about the second half of '23 in totality, which is we're coming in at [7,900] for the year. The outlook we had 3 months ago for the second half is largely intact. We did see some accelerated demand that took place in the third quarter. So a little bit of revenue did shift from Q4 to Q3. But largely, otherwise, Q4 is in line with what we were seeing just a few months ago.

馬克西姆，我是曼迪普。首先，我要談談 23 年下半年的情況，也就是我們今年的收入為 [7,900]。我們三個月前對下半年的展望基本上保持不變。我們確實看到第三季出現了一些加速的需求。因此，有一點收入確實從第四季度轉移到了第三季。但除此之外，第四季在很大程度上與我們幾個月前看到的情況一致。

To your point in terms of the underlying dynamics, the enterprise area is probably the area of the most growth that we're seeing right now. That's been happening as we've gone through the year, and it's continuing into Q4. And frankly, it's going to be continuing into next year. And it's tied, in many cases, specifically to the proprietary compute demand that we're in the process of fulfilling.

就您的觀點而言，就潛在動態而言，企業領域可能是我們目前看到的成長最快的領域。這一年以來這種情況一直在發生，並且一直持續到第四季。坦白說，這種情況將持續到明年。在許多情況下，它與我們正在滿足的專有運算需求密切相關。

ATS, too, if you just look at ATS in total, I mean, the growth this year has been terrific. Right now, it's on track for about 13% year-over-year growth on a full year basis. And so there's a little bit of timing delay sometimes between various quarters. But after growing strong double digits last year, it's going to be low double digits this year, and our outlook going into next year for ATS continues to be targeting that 10% number.

ATS 也是如此，如果你只看 ATS 的總量，我的意思是，今年的成長非常驚人。目前，全年預計將年增約 13%。因此，有時各個季度之間會出現一點時間延遲。但在去年強勁的兩位數成長之後，今年將是低兩位數，我們對 ATS 明年的展望仍然是 10% 的目標。

And if you -- the last thing I would also say is that if you look at the end markets within ATS, we saw very robust growth in 3 of the 4 markets. So we're going to be growing 13% this year despite capital equipment being down over 30%.

如果你——我還要說的最後一件事是，如果你看看 ATS 的終端市場，我們會發現 4 個市場中的 3 個市場成長非常強勁。因此，儘管資本設備下降了 30% 以上，但今年我們的成長率仍將達到 13%。

Your next question comes from the line of Daniel Chan, from TD Cowen.

您的下一個問題來自 TD Cowen 的 Daniel Chan。

Mandeep, you were talking about the ATS strength this year. Next quarter you're kind of guiding it for -- sorry, next quarter you're guiding it down to be up about low single digits. So a decel in that growth. Anything to call out there for that decel? Is it anything in the semi cap weakness or any delays like that?

Mandeep，您談到了今年 ATS 的實力。下個季度你會指導它——抱歉，下個季度你會指導它下降到低個位數。因此成長放緩。對於減速有什麼需要注意的嗎？是因為半上限的弱點還是有類似的延遲嗎？

No. Relatively flat on a sequential basis, Dan. But I'd point maybe to a couple of things. One is, again, outside of capital equipment we're seeing good growth across all of our end markets. But we are also facing tough comps. If you just look at the fourth quarter of last year, ATS grew by 29% organically. So it was a very strong fourth quarter of last year. But we're glad to see that this peak revenue that we're seeing currently in ATS, which I believe is at a record level, is holding going into the fourth quarter.

不。丹，環比相對持平。但我也許想指出幾件事。一是，除了資本設備之外，我們在所有終端市場都看到了良好的成長。但我們也面臨艱難的競爭。如果你只看去年第四季，ATS 有機成長了 29%。所以去年第四季的表現非常強勁。但我們很高興看到 ATS 目前的收入高峰（我認為處於創紀錄水平）將持續到第四季度。

Okay. That's good to hear. And then if we just switch gears to the HPS business, one of the strongest sequential growths we've ever seen out of the business. Are AI programs being migrated to HPS engagements? Or is there something else driving that strength?

好的。聽起來還不錯。然後，如果我們轉向 HPS 業務，這是我們在該業務中見過的最強勁的連續成長之一。 AI 程式是否正在遷移到 HPS 專案？或者還有其他什麼因素在推動這種力量？

We are seeing some HPS proprietary programs being migrated to HPS. That is still in the early stages. The drivers of the HPS growth is really a starting of some increased network demand, as one of the earlier callers mentioned. We are seeing a couple of our hyperscalers starting to buy more and more networking gear, which is HPS gear as well.

我們看到一些 HPS 專有程式正在遷移到 HPS。這仍處於早期階段。正如前面一位來電者提到的那樣，HPS 成長的驅動因素實際上是網路需求增加的開始。我們看到一些超大規模企業開始購買越來越多的網路設備，其中也包括 HPS 設備。

So going into next year, Dan, we are expecting growth in HPS, and there's 2 nice drivers that are happening. One is the 800G switches now starting to come online, and some of those are HPS products. That will be towards the back end of the year. And then there is some compute products as well in our HPS portfolio which are tied both -- you could tie both of those to overall AI.

因此，進入明年，Dan，我們預計 HPS 將會成長，並且有兩個很好的驅動因素正在發生。一是現在開始上線的800G交換機，其中有些是HPS產品。那將是在今年年底。然後，我們的 HPS 產品組合中還有一些運算產品，它們與兩者相關——您可以將它們與整體人工智慧相關聯。

Your next question comes from the line of Thanos Moschopoulos, from BMO.

您的下一個問題來自 BMO 的 Thanos Moschopoulos。

Generally speaking, it seems like macro conditions have deteriorated the last couple of months. Are you seeing any signs of that in any of your end markets? Or no, because of the specific ramps in markets you're involved in.

總體而言，過去幾個月宏觀狀況似乎有所惡化。您在您的終端市場中是否看到了任何這種跡象？或者不，因為您所參與的市場有特定的成長。

Thanos, I would say, overall, our markets are holding pretty tight. We're not very exposed to consumer markets or things that are very interest rate sensitive.

我想說的是，整體而言，薩諾斯的市場情況相當緊張。我們對消費者市場或對利率非常敏感的事物的接觸並不多。

Just going around the markets within A&D, A&D business continues to be strong. We have a very healthy backlog. (inaudible) availability is really pacing our ability to support demand there. Going into next year, we see some incremental growth coming out of defense programs, supporting what's happening in the world.

就 A&D 內部市場而言，A&D 業務仍然強勁。我們有非常健康的積壓。 （聽不清楚）可用性確實影響了我們支持那裡的需求的能力。進入明年，我們看到國防計畫出現一些增量成長，支持世界上正在發生的事情。

Within industrial, I would say across the board we are seeing a little bit of a slowdown in the EV charger portion of our portfolio. Again, that's a very small portion of our portfolio, 2%. But the other portions of our industrial portfolio are growing very nicely. Industrial is having very robust growth this year and very strong double-digit growth going into next year as well.

在工業領域，我想說的是，我們的產品組合中的電動車充電器部分總體有所放緩。同樣，這只是我們投資組合的一小部分，即 2%。但我們工業投資組合的其他部分成長得非常好。今年工業成長非常強勁，明年也將實現非常強勁的兩位數成長。

And then we also talked about, more broadly speaking, proprietary compute and all of our products that support AI growth. Very strong growth going into '24 versus '23, and '23 is also having some stupendous growth as well.

然後，更廣泛地說，我們還討論了專有計算以及支援人工智慧成長的所有產品。與 23 年相比，24 年的成長非常強勁，23 年也有一些驚人的成長。

Great. Cash cycle days were up due to higher receivables. Can you provide some color on the dynamic there?

偉大的。由於應收帳款增加，現金週期天數增加。您能提供一些有關動態的資訊嗎？

Thanos, I'd say quarter-to-quarter dynamics sometimes are just account specific. Overall, though, if we look at free cash flow, we're happy with the conversion that we've been seeing. $110 million year-to-date, that's kind of double what we did at this same time last year. And then as you saw in our prepared remarks, we are increasing our free cash flow target for this year to $150 million; at the beginning of the year, it was $100 million.

薩諾斯，我想說季度與季度的動態有時只是特定於帳戶的。但總的來說，如果我們看看自由現金流，我們對所看到的轉換感到滿意。今年迄今已完成 1.1 億美元，是去年同期的兩倍。然後，正如您在我們準備好的演講中看到的那樣，我們將今年的自由現金流目標提高到 1.5 億美元；今年年初，這一數字為 1 億美元。

So we're starting to see some good working capital movements. We do expect to see a strong conversion going into the fourth quarter and into next year as well. So while the cash cycle days may have spiked a little bit on some of the specific accounts, it will normalize as we go into the next few quarters.

因此，我們開始看到一些良好的營運資金變動。我們確實預計第四季和明年將會出現強勁的轉變。因此，雖然某些特定帳戶的現金週期天數可能略有增加，但隨著我們進入接下來的幾個季度，它將正常化。

Great. Last one for me. It sounds like you've had a lot of new program ramps across your business this year. Normally, my understanding is, new program ramps are at a lower margin until they get up and running and are optimized. Does that inherently provide a good margin opportunity for next year? Or is that going to be offset by other new programs that will be ramping next year?

偉大的。最後一張給我。聽起來您今年的業務有很多新計劃。通常情況下，我的理解是，新程式的提升幅度較低，直到它們啟動、運行並優化為止。這本質上是否為明年提供了良好的利潤機會？還是說這會被明年推出的其他新計畫所抵銷？

Well, we're always ramping programs, which is a good thing. And so we're always going to have a little bit of that mix change, if you will, on our margin profile.

嗯，我們總是在加強計劃，這是一件好事。因此，如果你願意的話，我們的利潤率狀況總是會有一些混合變化。

I would say that right now some of the -- many of the programs that we are ramping are not margin-dilutive. In some cases, we've already reached scale. So if you use industrial as an example, we're very pleased with the margin profile that's happening in industrial despite the fact that we're still ramping so many programs, because we've achieved a certain level of scale.

我想說的是，目前我們正在實施的許多計劃都不會稀釋利潤。在某些情況下，我們已經達到了規模。因此，如果您以工業為例，我們對工業中發生的利潤狀況非常滿意，儘管我們仍在增加如此多的項目，因為我們已經達到了一定的規模水平。

And then on the hyperscaler side, it's really about a portfolio and a suite, a portfolio of products. And we're pleased with the margin performance across all of our hyperscaler customers right now.

然後在超大規模方面，它實際上是一個產品組合和一個套件，一個產品組合。我們對所有超大規模客戶目前的利潤率表現感到滿意。

Now as we go into next year, as you would see, we're targeting 10% EPS growth over 2023. 2023 will be at record levels. Last year was at record levels. We're implying 2024 will be at record levels. And there's different ways that we may get there. Some of it will be on top line growth, but there is an opportunity on margin expansion as well.

現在，當我們進入明年時，正如您所看到的，我們的目標是 2023 年每股收益增長 10%。2023 年將達到創紀錄的水平。去年達到了創紀錄的水平。我們暗示 2024 年將達到創紀錄的水平。我們可以透過不同的方式來實現這一目標。其中一些將用於收入成長，但也存在利潤率擴張的機會。

Your next question comes from the line of Matt Sheerin, from Stifel.

您的下一個問題來自 Stifel 的 Matt Sheerin。

Just had another question regarding your cloud business, particularly on revenue recognition on the enterprise side. Is any of your business on a consignment basis? And are you planning to shift any of that? And does that have any impact on margins?

剛剛還有一個關於您的雲端業務的問題，特別是關於企業方面的收入確認。您的業務是否屬於寄售業務？你打算改變這一切嗎？這對利潤率有影響嗎？

So there is some consigned materials in the revenue that we do recognize, Matt. And so what that means ultimately is that we're not putting it through into our revenue, and we're also not marking it up. It makes sense in the EMS world to have consigned inventory. Otherwise, customers would be paying a margin stack on some very expensive components.

因此，我們確實確認了收入中的一些寄售材料，馬特。因此，這最終意味著我們不會將其計入收入，也不會對其進行標記。在 EMS 領域，擁有寄售庫存是有意義的。否則，客戶將為一些非常昂貴的組件支付保證金。

That being said, there is not a major shift in the concentration of consignment that we have. If you compare next year to what we're seeing this year, it's going to be relatively consistent. We're not looking to consign a lot more new material.

話雖如此，我們的寄售集中度並沒有重大變化。如果你將明年與今年的情況進行比較，你會發現相對一致。我們不打算委託更多的新資料。

Okay. And relative to your CCS business, I know that hyperscale is the fastest growing and is the largest portion of that business, but you do still have a strong OEM business. Could you talk about the dynamics going on there, end market demand? And as you continue to grow the hyperscale business at a faster rate, do you expect margins in that overall segment to expand?

好的。相對於你們的 CCS 業務，我知道超大規模是成長最快的，也是該業務的最大部分，但你們仍然擁有強大的 OEM 業務。能談談終端市場需求的動態嗎？隨著您繼續以更快的速度發展超大規模業務，您預計整個細分市場的利潤率會擴大嗎？

Yes, we do have OEM business as well, and those OEMs also sell into the hyperscalers business. So we don't count that in our hyperscaler class, but those businesses are growing quite nicely as well. Right now, they're working through some excess inventory challenges. But as we get into next year, we do see those guys returning to growth.

是的，我們也有 OEM 業務，這些 OEM 也銷售超大規模業務。因此，我們不將其計入超大規模企業類別，但這些業務的成長也相當不錯。目前，他們正在應對一些庫存過剩的挑戰。但當我們進入明年時，我們確實看到這些人恢復成長。

There has been some pockets of softness amongst the enterprise customers when it relates to small and medium businesses. But as Rob mentioned, we also have a large set of customers that are selling directly into the hyperscalers. So we have seen in most cases that that's balancing itself out.

當涉及到中小型企業時，企業客戶中存在一些軟弱的地方。但正如 Rob 所提到的，我們也有一大批直接向超大規模企業銷售產品的客戶。所以我們在大多數情況下都看到這正在自我平衡。

Okay. And just lastly, on the model, could you give us your estimate for the interest expense and other line? I know that was down, and I imagine with working capital coming down that line will also continue to come down?

好的。最後，關於模型，您能給我們您對利息費用和其他項目的估計嗎？我知道這個數字下降了，我想隨著營運資金的下降，這條線也會繼續下降嗎？

Right now, for both taxes and for interest, I would suggest on the tax side, to start there, to use 19% to 21% next year. This year, we're on track for around 20%. And at this point, we don't see a major deviation from that.

現在，對於稅收和利息，我建議從稅收方面開始，明年使用 19% 到 21%。今年，我們的目標是 20% 左右。目前，我們沒有看到與此有重大偏差。

And then to your point on the interest expense, we are starting to see a little bit of a reduction, despite rates having gone up so much, because of the cash conversion that we're having. We are having reduced AR sales, and we're not having to hit the revolver as much. I think right now if you've modeled somewhere close to $70 million for next year, it'd be representative of what we're expecting, and that is a bit of an improvement over 2023.

然後就您關於利息支出的觀點而言，儘管利率上漲了很多，但由於我們正在進行現金轉換，我們開始看到利息支出減少。我們減少了 AR 的銷量，而且我們不必那麼頻繁地購買左輪手槍。我認為，如果你現在已經為明年建立了接近 7000 萬美元的模型，那麼它將代表我們的預期，這比 2023 年有所改善。

Your next question comes from the line of Todd Coupland, from CIBC.

您的下一個問題來自 CIBC 的 Todd Coupland。

I wanted to ask about the volatility in the enterprise business. Obviously, strong in Q2 and then dipping down this quarter and moving back up next quarter. Can you just talk about why you're seeing that type of volatility and how we should think about the rhythm into 2024?

我想問一下企業業務的波動性。顯然，第二季度表現強勁，然後本季下降，下季回升。您能談談為什麼會看到這種波動以及我們應該如何考慮 2024 年的節奏嗎？

Within enterprise, the volatility is really being driven by storage. We've had a new program ramp that was put on pause by a customer as they qualify another piece of the rack that they're looking to deploy in their data center. And as that comes online, that program will continue to ramp. So really, within enterprise, it's some demand fluctuations that are happening within the storage area.

在企業內部，波動實際上是由儲存驅動的。我們有一個新的計劃，但由於客戶對他們希望在其資料中心部署的另一塊機架進行資格鑑定，因此該計劃被暫停。隨著該計劃上線，該計劃將繼續擴大。實際上，在企業內部，儲存區域內正在發生一些需求波動。

Again, within enterprise, we also have our proprietary compute business, and that continues to be very robust, both in the third quarter and in the fourth quarter and going into next year.

同樣，在企業內部，我們也擁有專有的計算業務，並且在第三季度和第四季度以及進入明年，該業務仍然非常強勁。

Okay. And you called out switching growth starting to return. I guess that's going to show up in the enterprise line as well. And I know 800G is second half of the year. So when are you thinking some of that switch demand might show up? Is it just with the initial orders of 800G? Or will that come with some of the established products?

好的。您也指出轉換成長開始回歸。我想這也會出現在企業產品線中。我知道800G是下半年。那麼您認為什麼時候可能會出現一些轉換需求呢？是不是只有最初的800G訂單？或是一些成熟的產品會附帶這種功能嗎？

Well, switching would be part of our communications end market, and that should come out of the gates in '24, hot out of the gate. The 800G will start ramping towards the end of 2024; the second half of 2024, I should say.

好吧，交換將成為我們通訊終端市場的一部分，這應該會在 24 年出現，一出現就很熱門。 800G 將於 2024 年底開始量產；我應該說是 2024 年下半年。

The think we're very pleased about, Todd, is that we've won a number of programs in the 800G market. And so it's really about the ability for our customers to absorb the hardware that they're ordering. As we talked about last quarter, we're seeing proprietary compute really be the leading indicator. Obviously, we're fulfilling a lot of that right now. We're pleased that we've already received the wins that we were looking for in the 800G market. And so it's really a matter of just the time on when specific customers are shifting towards that spend. But we're already in very active dialogue on the design front with those customers and are preparing for qualification builds as we go into '24.

Todd，我們非常高興的是我們在 800G 市場贏得了許多項目。因此，這實際上關係到我們的客戶吸收他們訂購的硬體的能力。正如我們上季度談到的，我們看到專有計算確實是領先指標。顯然，我們現在正在實現很多目標。我們很高興我們已經在 800G 市場上獲得了我們所期待的勝利。因此，這實際上只是特定客戶轉向該支出的時間問題。但我們已經在設計方面與這些客戶進行了非常積極的對話，並正在為進入 24 年時進行資格認證做準備。

Just to add on, Todd, as the 400 to 800 transition happens, we've actually won all the follow-on competitions from 400 to 800G with our hyperscalers, which just shows you the level of expertise that we're bringing to the party with respect to our design capability and manufacturing capability.

Todd，補充一點，隨著 400 到 800 的過渡，我們實際上已經透過我們的超大規模伺服器贏得了從 400 到 800G 的所有後續競爭，這只是向您展示了我們為聚會帶來的專業知識水平關於我們的設計能力和製造能力。

Okay. One last question on this point. So when you say starting '24 hot or out of the gate, you mean in Q1 comms business will pick up from 400G. So should the investor expectation be reduced seasonality in Q1 because the comms business is expected to pick up? How should we think about that?

好的。關於這一點的最後一個問題。因此，當您說「24 小時熱銷」或即將推出時，您的意思是第一季通訊業務將從 400G 開始回升。那麼，由於通訊業務預計將回升，投資者對第一季季節性的預期是否應該降低？我們該如何思考這個問題？

Todd, I wouldn't provide too much detail yet on the quarter themselves, just as we're focusing really right now in the fourth quarter and then we'll look at full year. We'll give more color as we go along.

托德，我不會提供有關季度本身的太多細節，正如我們現在真正關注的是第四季度，然後我們將關注全年情況。隨著我們的進展，我們將給予更多的色彩。

But what I would say is that more of it is going to be towards the back half. Although we're getting orders on the 800G side, there aren't going to be material shipments happening in the first half of next year. It's really tail end related.

但我想說的是，更多的事情將發生在後半場。雖然我們收到了800G方面的訂單，但明年上半年不會有材料出貨。這確實與尾部相關。

But that being said, we are seeing strong hyperscaler demand in each of the quarters next year. And so even if we're not shipping the 800G products, there still is a large part of our portfolio that's 400G. And some hyperscalers are still buying 400G. Some have not yet shifted to the 800G in a meaningful way.

但話雖這麼說，我們在明年每季都看到了強勁的超大規模需求。因此，即使我們不交付 800G 產品，我們的產品組合中仍然有很大一部分是 400G。一些超大規模廠商仍在購買 400G。有些尚未以有意義的方式轉向 800G。

And then, of course, the compute side. We're seeing demand continue through all the next year.

當然，還有計算方面。我們看到需求將持續到明年。

One last question for me. So this is more of a strategic question. Obviously, you have collapsed the multi-vote structure and your large shareholder has divested its holdings. You have a strong position in a key trend in the tech market right now. How are you thinking about sort of, like, strategic positioning of the company from an M&A perspective? Is this something investors should have on their minds? Could there be consolidation in the EMS sector as a result of this strong demand trend? Just give us your thoughts on that.

最後一個問題要問我。所以這更多的是一個戰略問題。顯然，你已經瓦解了多票結構，你的大股東已經剝離了所持股份。您目前在科技市場的關鍵趨勢中處於強勢地位。您如何從併購的角度考慮公司的策略定位？這是投資人應該考慮的事情嗎？這種強勁的需求趨勢是否會導致 EMS 產業出現整合？請告訴我們您對此的想法。

Thanks, Todd. We're very happy with the progress that we've made in executing our strategic plan. And right now, on the M&A side, as Mandeep mentioned in other calls, we continue to have a very tight filter and be very selective on looking for M&A deals. We're continuing to look for capability-based M&A, and we're also very keenly focused on expanding our services business, especially as it relates to servicing our CCS and hyperscaler customers. But we don't see any big moves on the horizon.

謝謝，托德。我們對執行戰略計劃所取得的進展感到非常滿意。目前，在併購方面，正如曼迪普在其他電話會議中提到的那樣，我們仍然有一個非常嚴格的過濾器，並且在尋找併購交易時非常有選擇性。我們將繼續尋求基於能力的併購，我們也非常專注於擴展我們的服務業務，特別是與為我們的 CCS 和超大規模客戶提供服務相關的業務。但我們沒有看到任何重大舉措。

There are no further questions at this time. I'd now like to turn the call back over to Mr. Rob Mionis for any closing remarks.

目前沒有其他問題。現在，我想將電話轉回給 Rob Mionis 先生，讓其結束語。

Thank you. I'm pleased that we posted another solid quarter, marked by our highest quarterly adjusted EPS ever. We continue to see positive momentum as we enter the final quarter and into 2024. We also look forward to hosting you at our investor update towards the end of November. Thank you again for joining today's call, and we look forward to updating you next month.

謝謝。我很高興我們又發布了一個穩定的季度，其特點是我們有史以來最高的季度調整後每股收益。隨著進入最後一個季度和 2024 年，我們繼續看到積極的勢頭。我們也期待在 11 月底接待您參加我們的投資者更新。再次感謝您參加今天的電話會議，我們期待下個月向您通報最新情況。

Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.

謝謝你，先生。女士們、先生們，今天的電話會議到此結束。我們感謝您的參與，並請您斷開線路。祝你愉快。