Flex Ltd (FLEX) 2023 Q2 法說會逐字稿

Good afternoon, and thank you for standing by. Welcome to Flex's Fiscal Second Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this call is being recorded.

下午好，感謝您的支持。歡迎參加 Flex 的 2023 財年第二季度收益電話會議。 （操作員說明）作為提醒，此通話正在錄音中。

And I would now like to turn the call over to Mr. David Rubin, Sir, you may begin.

我現在想把電話轉給大衛魯賓先生，先生，你可以開始了。

Thank you, Michelle. Good afternoon, and welcome to today's call. With me today is our Chief Executive Officer, Revathi Advaithi; and our Chief Financial Officer, Paul Lundstrom. Both will give brief remarks followed by Q&A.

謝謝你，米歇爾。下午好，歡迎參加今天的電話會議。今天和我在一起的是我們的首席執行官 Revathi Advaithi；和我們的首席財務官 Paul Lundstrom。兩人都將發表簡短的評論，然後進行問答。

Slides for today's call as well as a copy of the earnings press release and summary financials are available in the Investor Relations section at flex.com. This call is being recorded and will be available for replay on our corporate website.

今天電話會議的幻燈片以及收益新聞稿和財務摘要的副本可在 flex.com 的投資者關係部分獲得。此通話正在錄音中，可在我們的公司網站上重播。

As a reminder, today's call contains forward-looking statements, which are based on our current expectations and assumptions. These statements involve risks and uncertainties that could cause actual results to differ materially. For a full discussion of these risks and uncertainties, please see the cautionary statements in our presentation, press release or in the Risk Factors section in our most recent filings with the SEC. Note this information is subject to change, and we undertake no obligation to update these forward-looking statements.

提醒一下，今天的電話會議包含基於我們當前預期和假設的前瞻性陳述。這些陳述涉及可能導致實際結果出現重大差異的風險和不確定性。有關這些風險和不確定性的完整討論，請參閱我們的演示文稿、新聞稿或我們最近提交給 SEC 的風險因素部分中的警示性聲明。請注意，此信息可能會發生變化，我們不承擔更新這些前瞻性陳述的義務。

Unless otherwise specified, we will refer to non-GAAP metrics on the call. The full non-GAAP to GAAP reconciliations can be found in the appendix Slides of today's presentation, as well as in the summary financials posted on the Investor Relations website.

除非另有說明，否則我們將在電話會議上參考非 GAAP 指標。完整的非 GAAP 與 GAAP 對賬可以在今天的演示文稿的附錄幻燈片中找到，也可以在投資者關係網站上發布的財務摘要中找到。

As previously disclosed, the draft registration statement on the Form S-1 relating to the proposed initial public offering of Nextracker's Class A common stock remains on file with the U.S. Securities and Exchange Commission. The initial public offering and its timing are subject to the SEC market and other conditions. Following SEC regulations, we will not make any further statements or answer any additional questions on the Nextracker filing at this time.

正如之前所披露的，關於 Nextracker 的 A 類普通股的擬議首次公開募股的 S-1 表格登記聲明草案仍在美國證券交易委員會存檔。首次公開募股及其時間取決於美國證券交易委員會市場和其他條件。根據 SEC 的規定，我們目前不會就 Nextracker 提交的文件發表任何進一步的聲明或回答任何其他問題。

With that, I'd like to turn the call over to our CEO, Revathi?

有了這個，我想把電話轉給我們的首席執行官 Revathi？

Thanks, David. Good afternoon, and thank you for joining us today.

謝謝，大衛。下午好，感謝您今天加入我們。

So jumping right in, fiscal Q2 was another strong quarter for Flex. Looking at Slide 4, revenue grew 25% year-over-year with growth in 5 out of 6 of our core businesses. As expected, consumer device was the only business down year-over-year. Overall, we continue to see a combination of strong demand in many of our served markets and sustained strength in customer backlog. Adjusted operating margin came in at 4.8%, which is a nice improvement versus last quarter. This strong performance overall drove another quarter of record adjusted EPS at $0.63, up 31% year-over-year.

因此，第二財季對 Flex 來說又是一個強勁的季度。從幻燈片 4 來看，收入同比增長 25%，其中 6 個核心業務中有 5 個實現增長。正如預期的那樣，消費設備是唯一同比下降的業務。總體而言，我們繼續看到我們服務的許多市場的強勁需求和客戶積壓的持續強勁。調整後的營業利潤率為 4.8%，與上一季度相比有了不錯的改善。這種強勁的整體表現推動了另一個季度創紀錄的調整後每股收益為 0.63 美元，同比增長 31%。

Turning to Slide 5. As we have focused the portfolio, we are confident in our market position and the macro and secular tailwinds remain in our favor. We're seeing continued strength in many of the end markets we participate in, where demand continues to outpace supply. Now this is a very dynamic environment, so we continue to closely monitor demand signals, and we are engaged with our customers and suppliers to navigate what is still a very unusual time. Recently, we have all seen headlines talking about the improving supply chain, and overall, it has improved.

轉到幻燈片 5。由於我們專注於投資組合，我們對我們的市場地位充滿信心，宏觀和長期的順風仍然對我們有利。我們看到我們參與的許多終端市場持續強勁，需求繼續超過供應。現在這是一個非常動態的環境，因此我們將繼續密切監控需求信號，並與我們的客戶和供應商合作，以應對仍然非常不尋常的時期。最近，我們都看到了關於改善供應鏈的頭條新聞，總體而言，它有所改善。

Total shortages have been cut roughly in half compared to this time last year. Now that being said, we continue to face shortages in certain areas, primarily the larger geometry node semiconductors, which mainly impact our reliability end markets such as automotive, healthcare and industrial. We expect constraints to continue to be a challenge as demand and supply remain out of balance.

與去年同期相比，總短缺量減少了大約一半。話雖如此，我們仍然在某些領域面臨短缺，主要是較大的幾何節點半導體，這主要影響我們的可靠性終端市場，如汽車、醫療保健和工業。由於供需仍然失衡，我們預計限制因素將繼續成為挑戰。

Now looking past the cyclical concerns, the longer-term trend is still towards increasing semiconductor content in almost every device regardless of the industry. This is primarily driven by OEMs, who want to create products with digital features that customers highly value. They also want more agility and resiliency in manufacturing and products that are made more sustainably. This trend of technology transitions driving increased product complexities consistent with the industry growth themes we laid out at our Investor Day earlier this year.

現在回顧週期性問題，長期趨勢仍然是增加幾乎所有設備中的半導體含量，無論行業如何。這主要是由 OEM 推動的，他們希望創造具有客戶高度重視的數字功能的產品。他們還希望在製造和產品製造過程中具有更高的敏捷性和彈性，並以更可持續的方式製造。這種技術轉型趨勢推動了產品複雜性的增加，這與我們在今年早些時候的投資者日上提出的行業增長主題一致。

We also talked about regionalization, as it relates to customers moving their production closer to demand and improving business resiliency. Now our ability to deliver along these themes has already directly led to share gains and expanding business for us.

我們還談到了區域化，因為它與客戶將生產移近需求並提高業務彈性有關。現在，我們實現這些主題的能力已經直接為我們帶來了分享收益和擴大業務。

Now let me just give you one example. Last quarter, we mentioned that we baked in weakness in our consumer device and lifestyle outlook, assuming they would be the most sensitive to the macro environment. Now this is still the right conservative assumption. However, our lifestyle business grew again this quarter year-over-year despite weaker end markets. Now this is a result of our advanced capabilities, our ability to navigate complexity and our ability to expand production in multiple regions across our geographic footprint.

現在讓我給你舉一個例子。上個季度，我們提到我們的消費設備和生活方式前景疲軟，假設它們對宏觀環境最敏感。現在這仍然是正確的保守假設。然而，儘管終端市場疲軟，我們的生活方式業務在本季度仍同比增長。現在，這是我們先進的能力、駕馭複雜性的能力以及我們在地理足蹟的多個地區擴大生產的能力的結果。

Our renewables business inside our Industrial Group is another great example, where our unique capabilities and global footprint align really well with both secular technology transitions and regionalization needs. I would say that the inflation Reduction Act will also contribute to the strong growth opportunity in renewables, as companies now look to move to domestic production to capture the tax credits, as well as increase their resiliency. Again, we have the expertise and the footprint to help our customers take advantage of these opportunities.

我們工業集團內的可再生能源業務是另一個很好的例子，我們獨特的能力和全球足跡與長期技術轉型和區域化需求非常吻合。我想說的是，《降低通脹法案》也將有助於可再生能源的強勁增長機會，因為公司現在希望轉向國內生產以獲取稅收抵免，並提高他們的彈性。同樣，我們擁有專業知識和足跡來幫助我們的客戶利用這些機會。

Now speaking of solar, looking at Nextracker segment, revenue growth reaccelerated this quarter due to strong demand. Margins also improved again, as we slowly work through those contracts that were impacted by the surge in shipping costs during the onset of the supply crisis. Now obviously, renewable energy overall is a very exciting area to me, and we're seeing very strong growth.

現在談到太陽能，看看 Nextracker 部分，由於需求強勁，本季度收入增長重新加速。利潤率也再次提高，因為我們正在慢慢處理那些在供應危機爆發期間受到運輸成本飆升影響的合同。現在顯然，可再生能源總體上對我來說是一個非常令人興奮的領域，我們看到了非常強勁的增長。

Now not to be cliche, but it's also important to remember that energy transition is a marathon and not a sprint. The industry is still dealing with near-term solar panel and component shortages, which could also limit the speed for some program ramps. Regardless, we see this as a strong multiyear growth opportunities, and we are very excited about it.

現在不要陳詞濫調，但同樣重要的是要記住能源轉型是一場馬拉鬆而不是短跑。該行業仍在處理近期的太陽能電池板和組件短缺問題，這也可能會限制某些項目的速度。無論如何，我們認為這是一個強大的多年增長機會，我們對此感到非常興奮。

Now moving to Slide 6, we had several notable industry accomplishments this quarter, one, in particular, our team in Sorocaba, Brazil was selected by the World Economic Forum, as a new member of the Global Lighthouse Network. This is our second facility to be selected. As you may recall, our team in Althofen, Austria was recognized last year. This recognition is important for us because it demonstrates our industry leadership, our technology innovation and the many talented people in our company. We are proving that you can deploy leading-edge automation to improve safety, data technologies to improve operational efficiency, and at the same time, you can upskill employees to increase their opportunities.

現在轉到幻燈片 6，我們在本季度取得了幾項顯著的行業成就，特別是我們在巴西索羅卡巴的團隊被世界經濟論壇選為全球燈塔網絡的新成員。這是我們第二個被選中的設施。您可能還記得，我們在奧地利阿爾特霍芬的團隊去年獲得了認可。這種認可對我們來說很重要，因為它展示了我們的行業領導地位、我們的技術創新以及我們公司的眾多人才。我們正在證明，您可以部署領先的自動化來提高安全性，部署數據技術來提高運營效率，同時，您可以提升員工的技能以增加他們的機會。

Building on our automation and data technology skills, deploying solutions inside of Flex has become a virtuous cycle. As partners and customers see our expertise, this leads to new product wins such as advanced robotics, which is also a fast-growing area for us.

基於我們的自動化和數據技術技能，在 Flex 內部部署解決方案已成為一個良性循環。隨著合作夥伴和客戶看到我們的專業知識，這會帶來新產品的勝利，例如先進的機器人技術，這也是我們快速增長的領域。

We are very focused on achieving 0 waste by prioritizing sustainability as part of our operations, which helps our customers see our circular economy solutions in action, and this is just a part of this story. I'm very excited about these advancements, and we will continue to push the boundaries of what our manufacturing and services can accomplish.

我們非常專注於通過優先考慮可持續性作為我們運營的一部分來實現零浪費，這有助於我們的客戶看到我們的循環經濟解決方案在行動中，這只是這個故事的一部分。我對這些進步感到非常興奮，我們將繼續推動我們的製造和服務可以完成的界限。

Now will that -- with that, I'll turn it over to Paul to take you through our financials. Paul?

現在，我將把它交給保羅，讓你了解我們的財務狀況。保羅?

Great. Thanks, Revathi, and good afternoon, everyone. I'll begin on Slide 8 with a review of our second quarter results. Please note, all results provided will be non-GAAP, and all growth metrics will be on a year-over-year basis unless stated otherwise. The GAAP reconciliations can be found in the appendix of the earnings presentation.

偉大的。謝謝，Revathi，大家下午好。我將從幻燈片 8 開始，回顧我們第二季度的業績。請注意，除非另有說明，否則提供的所有結果都將是非公認會計原則，並且所有增長指標都將按年計算。 GAAP 對賬可在收益報告的附錄中找到。

Revenue came in at $7.8 billion, that was up 25%. Gross profit totaled $599 million and gross margin was 7.7%. We had another quarter of impressive operating profit dollar growth, up 31% at $375 million, with operating margin at 4.8%, improving 25 basis points year-over-year. Lastly, earnings per share came in at $0.63 for the quarter, an increase of 31%. Collectively, solid execution and growth across the portfolio contributed to the strong results, and overall, we're pleased with our performance this quarter.

收入為 78 億美元，增長 25%。毛利潤總額為 5.99 億美元，毛利率為 7.7%。我們又一個季度實現了令人印象深刻的營業利潤增長，增長 31% 至 3.75 億美元，營業利潤率為 4.8%，同比提高 25 個基點。最後，本季度每股收益為 0.63 美元，增長 31%。總體而言，整個投資組合的穩健執行和增長促成了強勁的業績，總體而言，我們對本季度的表現感到滿意。

Turning to our second quarter segment results on the next slide. Reliability revenue was $3.3 billion, an increase of 34% year-over-year. Operating income was $175 million, up 38%, and operating margin for the segment was 5.3%. In Agility, revenue was $4 billion, up 16%. Operating income was $170 million, up 11% with an operating margin of 4.3%. Finally, Nextracker revenue came in at $473 million, that was up 40% year-over-year. Operating income at Nextracker was $43 million, up 76% with nice sequential operating margin expansion up to 9.1%.

在下一張幻燈片上轉到我們的第二季度部分結果。可靠性收入為 33 億美元，同比增長 34%。營業收入為 1.75 億美元，增長 38%，該部門的營業利潤率為 5.3%。 Agility 的收入為 40 億美元，增長 16%。營業收入為 1.7 億美元，增長 11%，營業利潤率為 4.3%。最後，Nextracker 的收入為 4.73 億美元，同比增長 40%。 Nextracker 的營業收入為 4300 萬美元，增長 76%，營業利潤率連續增長高達 9.1%。

Overall, demand was resilient across most end markets, but semiconductor shortages persisted in the quarter, especially at the larger nodes. These constraints primarily affect businesses in our Reliability segment and tempered growth and margins. Still, in automotive, customer backlog remained robust, and we gained ground in EV, power electronics and ADAS, consistent with the themes we outlined at our Investor Day. Industrial had a great quarter with healthy demand across our focused markets and demand in the healthcare space remains strong.

總體而言，大多數終端市場的需求具有彈性，但本季度半導體短缺持續存在，尤其是在較大的節點。這些限制主要影響我們可靠性部門的業務，並抑制增長和利潤率。儘管如此，在汽車領域，客戶積壓仍然強勁，我們在電動汽車、電力電子和 ADAS 方面取得了進展，這與我們在投資者日概述的主題一致。工業有一個很好的季度，我們的重點市場需求健康，醫療保健領域的需求仍然強勁。

As I mentioned, Agility revenue was up 16% despite some consumer-related weakness as expected. Consumer devices was down against softer markets. And in lifestyle, the consumer-related slowdowns were more than offset by new program wins and ramps. Finally, CEC delivered another strong quarter led by triple-digit growth in cloud and solid double-digit growth in [comms] and in enterprise.

正如我所提到的，Agility 的收入增長了 16%，儘管正如預期的那樣，與消費者相關的一些疲軟。消費設備因市場疲軟而下跌。在生活方式方面，與消費者相關的放緩被新項目的勝利和坡道所抵消。最後，CEC 在雲業務實現三位數增長以及 [comms] 和企業業務實現兩位數穩健增長的帶動下，實現了又一個強勁的季度。

Moving to cash flow on Slide 10. Q2 net CapEx totaled $187 million or 2.4% of revenue. Free cash flow was an outflow of $84 million for the quarter, and we continue to anticipate free cash flow for the year to be back-end loaded. We returned $72 million to shareholders this quarter through share repurchases.

轉向幻燈片 10 上的現金流。第二季度淨資本支出總額為 1.87 億美元，佔收入的 2.4%。本季度的自由現金流流出了 8400 萬美元，我們繼續預計今年的自由現金流將被後端加載。本季度我們通過股票回購向股東返還了 7200 萬美元。

Please turn to Slide 11 for our segment outlook for the fiscal third quarter and our year-over-year growth expectations. For Reliability Solutions, we expect secular trends to support growth and share gains with revenue up mid to high teens. A great example of this is within industrial, where investments based on longer-term cloud expansions, renewables and automation should continue. The health solutions pipeline is strong. And in auto, we expect to see solid growth as customers increasingly favor our next-gen mobility products that support new technologies, and we continue to expect to see growth in content per vehicle.

請轉到幻燈片 11，了解我們對第三財季的細分市場展望以及我們的同比增長預期。對於可靠性解決方案，我們預計長期趨勢將支持增長並分享收益，收入可達中高水平。這方面的一個很好的例子是在工業領域，基於長期雲擴展、可再生能源和自動化的投資應該繼續下去。健康解決方案管道很強大。在汽車領域，我們預計隨著客戶越來越喜歡我們支持新技術的下一代移動產品，我們將看到穩健的增長，我們繼續預計每輛車的內容將增長。

For Agility Solutions, revenue is expected to be up mid-single digit to low teens, driven by sustained strength in CEC, particularly within cloud and communications. We expect consumer devices to be down in Q3, driven by continued weakness in consumer end markets, and we'll see some of this in the lifestyle business as well, but we expect share gains to partially offset the softer consumer spend.

對於 Agility Solutions 而言，由於 CEC 的持續實力，尤其是在雲和通信領域，預計收入將增長到中個位數到十幾歲以下。我們預計第三季度消費設備將在消費終端市場持續疲軟的推動下出現下滑，我們也將在生活方式業務中看到其中的一部分，但我們預計份額增長將部分抵消消費者支出疲軟的影響。

On to Slide 12 for our quarterly guidance. We expect revenue in the range of $7.3 billion to $7.7 billion with adjusted operating income between 345 and $375 million. Interest and other expenses is estimated to be around $55 million. We expect the tax rate to be closer to 10% this quarter, driven by the timing of a few discrete items. And we expect adjusted EPS between $0.57 and $0.63 based on approximately 460 million weighted average shares outstanding. In general, our outlook for the fiscal third quarter anticipates similar demand trends to what we saw in the September quarter with the supply situation remaining the gating factor.

在幻燈片 12 上查看我們的季度指導。我們預計收入在 73 億美元至 77 億美元之間，調整後的營業收入在 345 美元至 3.75 億美元之間。利息和其他費用估計約為 5500 萬美元。我們預計本季度的稅率將接近 10%，受一些離散項目的時間驅動。根據大約 4.6 億股加權平均流通股，我們預計調整後的每股收益在 0.57 美元至 0.63 美元之間。總的來說，我們對第三財季的展望預計需求趨勢與我們在 9 月季度看到的相似，供應狀況仍然是決定性因素。

Now let's go over our full year guidance on the following slide. In short, our expectations for the second half of the year are the same as what we talked about last quarter, around 8% year-over-year growth. With that in mind, given our strong performance for the first half of the year and our current outlook on the third quarter, we increased our fiscal '23 revenue expectations to $29.1 billion to $30.1 billion. We expect adjusted operating margins to be around 4.6% to 4.8% and adjusted EPS between $2.20 a share and $2.35 a share.

現在讓我們在下面的幻燈片中回顧我們的全年指導。簡而言之，我們對下半年的預期與我們上個季度所說的相同，同比增長約 8%。考慮到這一點，鑑於我們上半年的強勁表現和我們目前對第三季度的展望，我們將 23 財年的收入預期提高到 291 億美元至 301 億美元。我們預計調整後的營業利潤率約為 4.6% 至 4.8%，調整後的每股收益在 2.20 美元至 2.35 美元之間。

In closing, although we're navigating a complex macro environment, our first half performance shows that our strategic focus on high-growth and profitable end markets is the right one. As you know, over the last several years, we changed our portfolio mix, purposely deemphasizing the most volatile and shortest cycle businesses. We strategically focused on aligning our portfolio mix with our core capabilities and large, diverse end markets with strong long-term growth drivers. And importantly, the trends supporting these growth opportunities are unchanged. We're confident that consistent execution that we've demonstrated these last few years will continue, as we remain focused on capturing these opportunities and delivering on our long-term commitments.

最後，儘管我們正在應對複雜的宏觀環境，但我們上半年的業績表明，我們對高增長和盈利終端市場的戰略重點是正確的。如您所知，在過去幾年中，我們改變了我們的投資組合，故意淡化波動最大、週期最短的業務。我們在戰略上專注於使我們的投資組合與我們的核心能力和具有強大長期增長動力的大型多樣化終端市場保持一致。重要的是，支持這些增長機會的趨勢沒有改變。我們相信，我們在過去幾年中展示的一貫執行將繼續下去，因為我們將繼續專注於抓住這些機會並兌現我們的長期承諾。

With that, I'd like to turn the call back over to the operator to begin Q&A. Michelle?

有了這個，我想把電話轉回給接線員開始問答。米歇爾？

(Operator Instructions) Your first question will come from Mark Delaney of Goldman Sachs.

（操作員說明）您的第一個問題將來自 Goldman Sachs 的 Mark Delaney。

Congratulations on the strong results. First question, just hoping to better understand the company's comments on the end market trends in the macroeconomic environment and what's implied in your guidance. If I understood the comments by end market, consumer is one of the only markets, where there's been some softness observed so far. But if I look at the guidance on a sequential basis going forward, I think next quarter and implied in the fiscal fourth quarter as well, there's some sequential revenue moderation quarter-over-quarter in both quarters. So it seems even though demand trends that the company has seen are still pretty strong, you're trying to bake in the potential for orders to slow more broadly given the macroeconomic backdrop, but if you could elaborate a little bit more on how you're trying to handicap some of these weaker macroeconomic data points and what the company could see going forward? And then how you put that into your guidance, that would be helpful.

祝賀你取得了不錯的成績。第一個問題，只是希望更好地了解公司對宏觀經濟環境下終端市場趨勢的評論以及您的指導中暗示的內容。如果我理解終端市場的評論，消費者是迄今為止觀察到一些疲軟的唯一市場之一。但是，如果我按順序查看未來的指導，我認為下個季度以及第四財季也暗示，兩個季度的收入環比都出現了一些環比下降。因此，儘管該公司看到的需求趨勢仍然相當強勁，但鑑於宏觀經濟背景，您正在嘗試更廣泛地了解訂單放緩的可能性，但如果您能詳細說明一下您是如何做到的是否重新試圖阻礙其中一些較弱的宏觀經濟數據點以及公司可以看到的未來？然後你如何將它納入你的指導，這將是有幫助的。

Yes. You're spot on, Mark, and good question. And I would say what I like about the Flex portfolio right now is it's so broad and diverse. We -- to your point, we're definitely seeing some softness in the more consumer type end markets, both consumer devices and lifestyle end markets a little bit soft. You heard in the prepared remarks, though, we managed to offset that weakness within the lifestyle business with share gain. So that's a nice net plus. But without that, we would have probably seen a decline in that business as well.

是的。馬克，你說得對，問得好。我想說的是，我現在喜歡 Flex 產品組合的地方是它如此廣泛和多樣化。我們 - 就您而言，我們肯定看到更多消費類型的終端市場出現疲軟，消費設備和生活方式終端市場都有點疲軟。但是，您在準備好的評論中聽到，我們設法通過增加份額來抵消生活方式業務中的弱點。所以這是一個很好的淨加。但如果沒有這一點，我們可能也會看到該業務的下滑。

The other 4, right now, they're firing on all cylinders. And so you sort of contrast soft consumer end markets with things like continued growth in the cloud, continued growth in renewable energy, continued growth in automotive, not just with IHS being up 26%, but with content per vehicle going up as well. So we feel pretty well balanced. No one is immune to softening markets, but we like where we are, and we think that the breadth of the portfolio has helped to insulate the business a little bit from softening elsewhere.

其他 4 個，現在，他們正在全力以赴。因此，您可以將軟消費終端市場與雲的持續增長、可再生能源的持續增長、汽車的持續增長等進行對比，不僅 IHS 增長了 26%，而且每輛車的內容也在增長。所以我們感覺很平衡。沒有人能對疲軟的市場免疫，但我們喜歡我們所處的位置，我們認為投資組合的廣度有助於使業務在其他地方免受疲軟的影響。

Mark, the only thing I'd add is, first is we're coming off of like strong quarters after quarter, right? 24% year-over-year growth this quarter, which is fantastic. We're still guiding to a very strong Q3. And I think you all will know that we like to be somewhat prudent in our assumptions and particularly with all the macroeconomic noise going on.

馬克，我唯一要補充的是，首先我們每個季度都表現強勁，對吧？本季度同比增長 24%，這太棒了。我們仍在指導一個非常強勁的第三季度。而且我想你們都會知道，我們喜歡在假設時保持謹慎，尤其是在所有宏觀經濟噪音不斷發生的情況下。

But what's really great about it is what Paul just said, 5 out of our 6 core businesses and Nextracker, all growing year-over-year, which is great in the midst of what you're hearing across other businesses. And what we think the reason for that is, of course, all the macro stuff we talked about, but also the share gain we are seeing even in areas like lifestyle. So I would say, you have to think about our future guide that there is some amount of prudence in our guide, and we need to do that with all the noise you're hearing. But we feel very good about the growth we just posted and the guide we're giving you for Q3, we feel really good about that. [But overall, that would] be a strong growth year [in the] second half for us.

但真正很棒的是保羅剛才所說的，我們 6 個核心業務中的 5 個和 Nextracker，所有業務都在逐年增長，這在您聽到的其他業務中非常棒。我們認為其原因當然是我們談到的所有宏觀問題，以及我們甚至在生活方式等領域看到的份額增長。所以我想說，你必須考慮我們未來的指南，我們的指南中有一些謹慎，我們需要在你聽到的所有噪音中做到這一點。但是我們對剛剛發布的增長以及我們為第三季度為您提供的指南感覺非常好，我們對此感覺非常好。 [但總體而言，這將是我們下半年強勁增長的一年。

My second question was just on the IRA, and maybe you could elaborate a little bit more on what you've seen from end markets, where there's potential tailwinds from the IRA, as that goes into effect and perhaps how that's evolved. But if you could also perhaps comment on to the extent Flex is manufacturing products in the U.S. that should be eligible for certain tax credits, do those credits flow to flex? Do they flow to the customer? Or do those get shared?

我的第二個問題只是關於愛爾蘭共和軍，也許你可以詳細說明你從終端市場看到的情況，愛爾蘭共和軍有潛在的順風，隨著它的生效，也許它是如何演變的。但是，如果您也可以評論一下 Flex 在美國製造的產品應該有資格獲得某些稅收抵免，這些抵免會流向 Flex 嗎？它們會流向客戶嗎？還是那些被共享？

Yes. I'd first start with saying that we think there is very good tailwind from IRA for us, not only in our Nextracker business, but in terms of our overall renewables business, which is part of our Industrial Group, we've talked about that in the past. So let me start with Nextracker to begin with. Obviously, Nextracker's growth continues to be really strong, and they will continue to have tailwinds from the IRA. There will be some short-term things like solar panel shortages and things like that, but we expect backlog to continue to grow and a good tailwind and growth for Nextracker, as the IRA kicks in.

是的。我首先要說的是，我們認為 IRA 對我們來說有很好的順風，不僅在我們的 Nextracker 業務中，而且在我們的整體可再生能源業務方面，這是我們工業集團的一部分，我們已經談到了這一點在過去。所以讓我從 Nextracker 開始。顯然，Nextracker 的增長繼續非常強勁，他們將繼續從 IRA 獲得順風。會有一些短期的事情，比如太陽能電池板短缺之類的事情，但我們預計隨著 IRA 的啟動，積壓訂單將繼續增長，並為 Nextracker 帶來良好的順風和增長。

I would say, in terms of credits and who gets tax credits, I think those are still being worked out. We have a lot of conversations going on in terms of what we manufacture, where we manufacture and how do we move things into the U.S. But I'd say there's a lot of noise in the system in terms of how the tax credits work out and who gets the best benefit. We expect that's revenue upside for -- and some profit upside for Flex through it.

我想說，就抵免額和誰獲得稅收抵免而言，我認為這些仍在製定中。關於我們製造的產品、製造地點以及如何將產品運往美國，我們進行了很多對話。但我要說的是，在稅收抵免如何發揮作用和誰得到最大的利益。我們預計這是收入的上升空間——以及通過它為 Flex 帶來的一些利潤上升空間。

In terms of overall renewables, the same way, our renewables business, whether it is in inverters or in storage, which is part of our industrial business is growing very strong, and we expect that to continue to be the case with the IRA. We are in deep conversations with our customers in that, and we're also already launching manufacturing strategies here in the U.S. to help support them. And I'd say the same thing on tax credits, Mark, is that, that is still being worked out, as to who gets credit for it and how it plays through the system. But overall, plus plus, it's a tailwind, whether it's for revenue or for profit, it's a good thing.

就整體可再生能源而言，同樣，我們的可再生能源業務，無論是逆變器還是儲能，這是我們工業業務的一部分，增長非常強勁，我們預計 IRA 的情況將繼續如此。我們正在與我們的客戶進行深入的對話，我們也已經在美國推出製造戰略來幫助支持他們。馬克，關於稅收抵免，我想說的是同樣的事情，關於誰獲得稅收抵免以及它如何通過系統發揮作用，這仍在製定中。但總的來說，再加上，這是一個順風，無論是為了收入還是為了利潤，這都是一件好事。

Your next question comes from Ruplu Bhattacharya of Bank of America.

您的下一個問題來自美國銀行的 Ruplu Bhattacharya。

Congrats on the quarter. My first question is on margins. You reported 4.8% operating margin. What was the impact from inflation pass-through. And the full year, you're raising revenues $700 million, EPS $0.11 and keeping the 4.7% operating margin. So what is factored in, into the full year guide from an inflation pass-through impact? If you can give us any quantification on that.

祝賀本季度。我的第一個問題是關於利潤的。你們報告了 4.8% 的營業利潤率。通貨膨脹傳遞的影響是什麼。全年，您將增加收入 7 億美元，每股收益 0.11 美元，並保持 4.7% 的營業利潤率。那麼，通貨膨脹傳遞影響的全年指南中考慮了哪些因素？如果您可以對此進行任何量化。

Sure. No problem, Ruplu. So maybe first on the second quarter. So the 4.8% probably a -- maybe a little bit of pressure from that low-calorie pass-through from inflation, just to kind of give you an appreciation for the magnitude of that in Q2. Of the [25 point] of sales growth we saw in the quarter, 25% sales growth, [5 points] or so of that was inflation-related pass-through. So there's going to be a little effect. Margins could have been a little bit better if it weren't for that low calorie pass-through, but still quite pleased with 25 basis points of margin expansion year-on-year in the quarter. So happy to see that.

當然。沒問題，魯普魯。所以也許是第二季度的第一個。因此，4.8% 可能是來自通脹的低熱量傳遞帶來的一點壓力，只是為了讓你對第二季度的幅度有所了解。在本季度我們看到的 [25 個百分點] 的銷售增長中，有 25% 的銷售增長，其中 [5 個百分點] 左右是與通脹相關的傳導效應。所以會有一點影響。如果不是因為低卡路里的傳遞，利潤率可能會好一些，但仍然對本季度利潤率同比增長 25 個基點感到非常滿意。很高興看到這一點。

If you look at the second half guide right now and maybe Q3 specifically, here's how I'm thinking about Q3. Q3 will largely be the same as Q2. Composition of the business, mix of the business, margin profile of the business, they'll be very similar quarters and at 4.8% in Q3, that's another 30 basis points of margin expansion. So that's kind of how I think that one will play out. We have some inflation pass-through in the -- in our second half guide, but it's minimal.

如果您現在查看下半年指南，也許特別是第三季度，這就是我對第三季度的看法。第三季度與第二季度基本相同。業務的構成、業務的組合、業務的利潤率狀況，它們將非常相似的季度和第三季度的 4.8%，這是利潤率增長的另一個 30 個基點。所以這就是我認為一個會發揮作用的方式。在我們的下半年指南中，我們有一些通貨膨脹傳遞，但它是最小的。

Paul, and if I can for my follow-up, ask you a question on inventory and free cash flow. It looks like inventory was up 6% sequentially in the quarter and free cash flow was negative slightly. Are you still maintaining the full year at $550 million of free cash flow? And how should we think about that? And specifically, I think you called out for the Reliability segment, you're still having issues with getting semiconductors is part of the inventory build because of that segment. So can you just talk a little bit about how you think inventory unwinds over the next couple of quarters if it does? And how should we think about free cash flow for the third quarter and fourth quarter?

保羅，如果我可以跟進，問你一個關於庫存和自由現金流的問題。看起來本季度庫存環比增長 6%，自由現金流略微為負。您是否仍將全年自由現金流保持在 5.5 億美元？我們應該如何考慮呢？具體來說，我認為您呼籲可靠性部門，由於該部門，您仍然無法將半導體作為庫存構建的一部分。那麼，您能否談談您認為未來幾個季度庫存會如何減少？我們應該如何考慮第三季度和第四季度的自由現金流？

Yes. So cash flow in Q3 and Q4 will be positive. We're still expecting $550 million for the year. A little color on Q2 shouldn't be a surprise that free cash flow was a bit negative in the second quarter, we had messaged that.

是的。所以第三季度和第四季度的現金流量將是正的。我們仍然預計今年將達到 5.5 億美元。第二季度的一點顏色不應該讓人感到意外，因為第二季度的自由現金流有點負，我們已經傳達了這一點。

Reason for the negative cash flow was incremental CapEx spend. We -- our CapEx rate as we move from Q1 to Q2 is about double the rate. We're investing in a number of next-gen ramps that support the top line growth that we're seeing right now. And so that 25% top line does come with a little bit of incremental investment both in working capital and some CapEx. So that was kind of the pressure there.

負現金流的原因是資本支出增加。我們從第一季度到第二季度的資本支出率大約是該比率的兩倍。我們正在投資一些支持我們現在看到的收入增長的下一代斜坡。因此，25% 的收入確實伴隨著對營運資金和一些資本支出的一點增量投資。這就是那裡的壓力。

To your point on Reliability and chips, some of the larger node or larger, like I said, lagging edge technology does more affect the industrial, automotive and health solutions businesses. And so that -- we really haven't seen the constraints abate as much there as what we have in some of the more -- the Agility type businesses. We saw (inaudible) improve a bit in the quarter in CEC, for example, that was nice to see, but we still have some pretty significant constraints, particularly in automotive and in health solutions.

就可靠性和芯片而言，一些更大的節點或更大的節點，就像我說的那樣，落後的邊緣技術確實對工業、汽車和健康解決方案業務產生了更大的影響。所以——我們真的沒有看到那裡的限制比我們在一些更多的——敏捷型業務中減少得那麼多。例如，我們看到（聽不清）CEC 在本季度有所改善，這很高興，但我們仍然有一些非常重要的限制，特別是在汽車和健康解決方案方面。

I think Ruplu, the only thing I would add is, first is you have to think about just the fantastic growth we're having this year, right? First quarter 16%; this quarter 24%, 25%; Q3 guide is 13%, obviously, can be a lot more of supply chain constraints clear. So our focus really is on meeting demand for our customers. And right now, demand is strong across most of our end markets. And so that has to be the most important factor for us, as we are bringing in inventory and trying to clear demand.

我認為 Ruplu，我唯一要補充的是，首先你必須考慮我們今年的驚人增長，對嗎？第一季度 16%；本季度 24%、25%； Q3 的指導是 13%，顯然，可以將供應鏈的限制清楚得多。因此，我們真正的重點是滿足客戶的需求。目前，我們大多數終端市場的需求都很強勁。所以這對我們來說必須是最重要的因素，因為我們正在引入庫存並試圖清除需求。

And we talked about Reliability, which is the most impacted, even though they had a fantastic growth quarter in Q1 and Q2, they're still the most impacted. You've been hearing from automotive, you've been hearing from other health companies in terms of how supply chain is impacting them. So demand is strong. Backlog is super strong. You can see Reliability margins continue to improve quarter-over-quarter, year-over-year. So it's all focused on let's make sure that we are able to meet the demand for our customers because that's what they're looking for us to do, and we're comfortable our inventory will flush through, as we work through that.

我們談到了受影響最大的可靠性，儘管他們在第一季度和第二季度有一個驚人的增長季度，但他們仍然是受影響最大的。您已經從汽車行業聽到過關於供應鏈如何影響它們的其他健康公司的聲音。所以需求旺盛。積壓非常強大。您可以看到可靠性利潤率環比、同比繼續提高。所以這一切都集中在讓我們確保我們能夠滿足客戶的需求，因為這是他們希望我們做的事情，而且我們很高興我們的庫存將在我們解決這個問題時被沖走。

Congrats again on the strong results.

再次祝賀強勁的結果。

Your next question comes from Steven Fox of Fox Advisors.

您的下一個問題來自 Fox Advisors 的 Steven Fox。

I was curious about 2 end markets in particular. During your prepared remarks, you talked about triple-digit growth in cloud. I was wondering if you could dig into what -- what's going on there?

我特別對 2 個終端市場感到好奇。在你準備好的演講中，你談到了雲計算的三位數增長。我想知道您是否可以深入研究-那裡發生了什麼？

And then secondly, how long do you think that you could sort of stay ahead of the weakening lifestyle demand trend with new programs? Is this -- is this sort of something that continues only for another quarter or so as you ramp these new programs? Or is there more behind that?

其次，您認為通過新計劃可以領先於生活方式需求減弱的趨勢多長時間？這是 - 當你增加這些新程序時，這種事情只會持續另一個季度左右嗎？還是背後有更多？

Yes. So (inaudible) Steven, let me start with the cloud to begin with. We talked in our Investor Day also about our focus on cloud, not just in CEC, but across our portfolio because we also support hyperscale customers and data centers from our industrial portfolio, both from Anord Mardix and our base power business. So we have a very comprehensive portfolio that supports data centers and cloud, not just from our CEC business. So we've been really focused on building share and taking advantage of the full market opportunity for cloud.

是的。所以（聽不清）史蒂文，讓我從雲開始。我們在投資者日還談到了我們對雲的關注，不僅在 CEC，而且在我們的產品組合中，因為我們還支持來自 Anord Mardix 和我們基礎電力業務的工業產品組合中的超大規模客戶和數據中心。因此，我們擁有非常全面的產品組合，不僅來自我們的 CEC 業務，還支持數據中心和雲。因此，我們一直非常專注於建立份額並利用雲計算的全部市場機會。

And we expect that to stay on track because I think despite what you hear in kind of the end markets in terms of maybe cloud growth slowing down, you have to remember, it's still a very big market that's not growing at [40%], it's still growing at [35%] plus. We have a lot of share gain to do. Our backlog is strong. So we feel really good about our cloud capabilities, not only the fact that it's so differentiated from where traditional EMS is because we have such a power portfolio also on top of the traditional storage networking portfolio. So we feel really good about our focus on cloud and how that is growing, and we feel the end market really supports kind of continued growth for cloud.

我們預計這將保持在正軌，因為我認為儘管您在終端市場聽到雲增長可能放緩，但您必須記住，它仍然是一個非常大的市場，沒有以 [40%] 的速度增長，它仍在以 [35%] 以上的速度增長。我們有很多份額收益要做。我們的積壓工作很強大。因此，我們對我們的雲功能感覺非常好，不僅因為它與傳統 EMS 的差異如此之大，因為我們在傳統存儲網絡產品組合之上也擁有如此強大的產品組合。因此，我們對我們對雲的關注以及它如何增長感到非常滿意，我們認為終端市場確實支持雲的持續增長。

I'd say in terms of kind of consumer lifestyle business, we -- what we did a few years ago, Steven, if you remember, is we're really focused on kind of the big brands in lifestyle really wanted to build a portfolio around kind of higher-end product, more complex products, and that's paying off because we have really gained share across some major customers and also taken advantage of the whole regionalization strategy and the whole kind of circular economy work around these customers.

我想說的是，就消費者生活方式業務而言，我們 - 幾年前我們所做的，史蒂文，如果你還記得的話，我們真的專注於生活方式領域真正想要建立投資組合的大品牌圍繞一種更高端的產品，更複雜的產品，這是有回報的，因為我們確實在一些主要客戶中獲得了份額，並且還利用了整個區域化戰略和圍繞這些客戶開展的整個循環經濟。

So the share gain is really what's driving that business in terms of continuing to grow in the midst of all this noise in that business. And we feel pretty good that we will be well above the market in that and continue to manage through that over the next few years because we are very confident in our program [ramps] and how our backlog is looking for that business.

因此，在該業務的所有這些噪音中，份額收益確實是推動該業務繼續增長的原因。而且我們感覺很好，我們將在這方面遠遠高於市場，並在未來幾年繼續管理，因為我們對我們的計劃 [坡道] 以及我們的積壓工作如何尋找該業務非常有信心。

Your next question comes from Jim Suva of Citigroup.

您的下一個問題來自花旗集團的 Jim Suva。

Maybe my observation is wrong, but it seems like all the contract manufacturers, I guess, specifically to you, Flex is seeing operating margin improvements and actually look quite sustainable and not just a supply chain driven shortage boost. Can you help us confirm that or not? And is onshoring turning in from more now just discussions to actual a reality and that could help you out with some of your utilization at some of your other factories.

也許我的觀察是錯誤的，但似乎所有的合同製造商，我想，特別是對你來說，Flex 正在看到營業利潤率的提高，實際上看起來相當可持續，而不僅僅是供應鏈驅動的短缺推動。你能幫我們確認一下嗎？並且正在從現在更多的討論變為現實，這可以幫助您解決在其他一些工廠的一些使用情況。

Yes. Jim, I'll start, and I'm sure Paul has a lot to say on this. I'd say first is, we are very pleased to see the industry as a whole continue to improve in terms of operating margin improvement. I think Flex, we started talking about this 3 years, 3.5 years ago, and it's really great to see the whole industry go in the right direction in terms of focused on growth, the right kind of growth, and that drives operating margin improvement for us and for the industry as a whole.

是的。吉姆，我會開始，我相信保羅對此有很多話要說。我首先要說的是，我們很高興看到整個行業在營業利潤率提高方面繼續改善。我認為 Flex，我們在 3 年、3.5 年前開始談論這個問題，很高興看到整個行業在專注於增長、正確的增長方面朝著正確的方向前進，這推動了運營利潤率的提高我們和整個行業。

We feel that we're very comfortable that it's sustainable margin improvement because one is for us, our mix is definitely changing. The types of end customers that we're going after, who want to pay for our services is definitely changing. So that is one reason we feel really good about the continued margin improvement. And our story is not just based on, hey, good growth and good absorption, but mix shift is a significant part of why you see our margin continuing to improve.

我們覺得我們對可持續的利潤率提高感到非常滿意，因為這是為我們準備的，我們的組合肯定會發生變化。我們所追求的最終客戶的類型，他們想要為我們的服務付費，肯定會發生變化。因此，這就是我們對利潤率的持續改善感到非常滿意的原因之一。我們的故事不僅基於，嘿，良好的增長和良好的吸收，而且混合轉變是您看到我們的利潤率繼續提高的重要部分。

And then I'd say on the onshoring discussions, I think it has become a reality in the last couple of years. A lot of our programs are related to either new products being ramped up in a different area or existing products being moved around and distributed to create resiliency. So a lot of programs are driven by this whole onshoring opportunity that's going on and bringing it close to consumers. So Paul, would you make any other comments on the margin improvement?

然後我會說關於外包討論，我認為這在過去幾年中已成為現實。我們的許多計劃都與新產品在不同領域的推廣或現有產品的移動和分發有關，以創造彈性。因此，許多計劃都是由正在發生的整個在岸外包機會推動的，並將其拉近消費者。那麼保羅，你會對利潤率的提高發表任何其他評論嗎？

No, just maybe a proof point on your comment on regionalization, which is what we saw in the lifestyle business this quarter. We talked about softer consumer end markets, but lifestyle actually grew, and a large part of that was the regionalization phenomenon that we've been talking about over the last year or so.

不，這可能只是您對區域化評論的一個證明點，這就是我們本季度在生活方式業務中看到的。我們談到了疲軟的消費者終端市場，但生活方式實際上在增長，其中很大一部分是我們在過去一年左右一直在談論的區域化現象。

Yes. So Jim, I think you're spot on. I think both of those things bode well for the industry and for Flex, a good macro, I'd say, tailwind in terms of growth due to onshoring, but margin improvement, we feel very good about. I think we've been on that track record now for almost 4 years, and we continue to show great room for improvement.

是的。所以吉姆，我認為你是正確的。我認為這兩件事對行業和 Flex 來說都是好兆頭，我想說，這是一個良好的宏觀，由於外包帶來的增長方面的順風，但利潤率的提高，我們感覺很好。我認為我們已經在這個記錄上保持了將近 4 年，並且我們繼續顯示出很大的改進空間。

Congratulations to you and all your teams.

祝賀你和你所有的團隊。

(Operator Instructions) Your next question will come from Shannon Cross of Credit Suisse.

（操作員說明）您的下一個問題將來自瑞士信貸的 Shannon Cross。

To go back to your growth this quarter and just ongoing for the year. Can you talk a bit about, maybe on a segment basis, how much of the growth is from new customers? How much of the growth is coming out of current programs and maybe how much of the growth is coming out of customers that have a program with you and are expanding it. Is there a difference between your segments? Or is it sort of just strong growth across the board? And then I have a follow-up.

回到本季度的增長，並在今年繼續。你能談談，也許是在細分的基礎上，有多少增長來自新客戶？有多少增長來自當前的計劃，也許有多少增長來自與你有一個計劃並正在擴展它的客戶。您的細分市場之間有區別嗎？還是只是全面的強勁增長？然後我有一個跟進。

Sure. So first of all, Shannon, nice to hear your voice on the live mic again. As for growth, let me give you a slightly different cut on the 25% and because I think if you look market by market, it is -- it's a really wide range. We talked about consumer on one end of the spectrum, you got automotive on the other and probably up in the [20s], I think, the overall market.

當然。首先，Shannon，很高興再次在現場麥克風上聽到你的聲音。至於增長，讓我在 25% 上給你一個稍微不同的削減，因為我認為如果你逐個市場看，它是 - 這是一個非常廣泛的範圍。我們一方面談到了消費者，另一方面談到了汽車，我認為可能在 [20 年代] 整個市場。

If I look at the 25% we saw this quarter, we had a couple of points that came from inorganic and that was the Anord Mardix acquisition. We had a couple of points just from Nextracker. Nextracker, as you saw, that was up 40% year-over-year. So that was a nice contribution to the overall Flex. We had about 5 points from inflation, which is that's the low-calorie cost per cost pass-through. So that's [9%]. The remaining [16] came from a combination of share growth and market.

如果我看一下本季度我們看到的 25%，我們有幾個點來自無機，那就是收購 Anord Mardix。我們從 Nextracker 那裡得到了幾點。如您所見，Nextracker 同比增長 40%。所以這是對整個 Flex 的一個很好的貢獻。我們從通貨膨脹中得到了大約 5 個點，這是每筆成本傳遞的低卡路里成本。所以這是[9%]。其餘的 [16] 來自份額增長和市場的結合。

We think the market overall across the whole portfolio was up mid-single digit, which means the rest came from share And so there's a lot of new -- there's not a -- lot of new labels, there's a lot of new products that are all contributing to that sales growth, hence, comments about ramps and some other things.

我們認為整個產品組合的整體市場都在中個位數增長，這意味著其餘部分來自份額所以有很多新的 - 沒有 - 很多新標籤，有很多新產品所有這些都有助於銷售增長，因此，對坡道和其他一些事情的評論。

Again, if you look at the end markets, mid-single digit broad, boy, there's a wide range. You have down in some consumer markets, and you have very strong market growth in others. A good example of that would be IHS data from light vehicle production in the automotive space, which I think was up 26%.

同樣，如果你看看終端市場，中等個位數，男孩，範圍很廣。你在一些消費市場出現下滑，而在另一些市場你有非常強勁的市場增長。一個很好的例子是來自汽車領域輕型汽車生產的 IHS 數據，我認為該數據增長了 26%。

I was wondering also if you could talk to some of the investments you've made and maybe advanced manufacturing technologies, whether it's AI and ML or 3D printing, robotics, I'm just wondering, as the larger EMS companies get bigger and have more capabilities, is there going to just continue to be more of a differentiator when you go out to sign new contracts versus maybe some of the smaller players or frankly, even some of the in-sourcing opportunities, where they don't have the same capabilities.

我還想知道你是否可以談談你所做的一些投資，也許還有先進的製造技術，無論是人工智能和機器學習還是 3D 打印、機器人技術，我只是想知道，隨著更大的 EMS 公司變得更大，擁有更多能力，當你出去簽訂新合同時，與一些較小的參與者相比，或者坦率地說，甚至是一些內包機會，他們是否有更大的差異化能力，他們沒有相同的能力.

Yes. Shannon, thank you for that question. First is, I love the opportunity that exists in manufacturing as you go into not just factory automation, but like you talked about AI ML, which is just to use good data to run our factories better. I still believe that where manufacturing is today is really has tremendous runway to grow. So one way is just factory automation, what do you do in a smarter way, whether it's through robotics or cobots and all of that.

是的。香農，謝謝你的問題。首先，我喜歡製造業中存在的機會，因為您不僅涉足工廠自動化，而且就像您談到的 AI ML 一樣，這只是為了使用良好的數據來更好地運行我們的工廠。我仍然相信，今天的製造業確實有巨大的發展空間。因此，一種方法就是工廠自動化，你以更智能的方式做什麼，無論是通過機器人技術還是協作機器人等等。

But the AI ML layer, which is how do you overlay smart software to run your machines better, to have more proactive decision-making, all of that will be a huge part of the kinds of investments that we're making today that continue to pay off in the future. And they are a big differentiator because our customers will say that they rather like to come to Flex because the way we can deal with redesigning their product or way we can deal with running their product more efficiently to solve some complex issue they have, it's just much better than everybody else. So whether that comes because of our capabilities or because of the AI ML layers that we are building into our manufacturing systems and thinking is a big part of that.

但是 AI ML 層，即您如何疊加智能軟件以更好地運行您的機器，進行更主動的決策，所有這些都將成為我們今天正在進行的投資的重要組成部分，這些投資將繼續將來還清。他們是一個很大的差異化因素，因為我們的客戶會說他們更喜歡來 Flex，因為我們可以重新設計他們的產品，或者我們可以更有效地運行他們的產品以解決他們遇到的一些複雜問題，這只是比其他人好多了。因此，無論是因為我們的能力還是因為我們正在構建到製造系統中的 AI ML 層，思考都是其中的重要組成部分。

So I feel like everything we've talked about in terms of Lighthouse Network and Industry 4.0 and all that is just the starting of the conversation in terms of what big manufacturing companies will do around automation and really taking advantage of full manufacturing capabilities. So a lot to come on that. It will be a big storyline for what drives our productivity and our margin improvement, and it definitely helps if you're a big company and you can invest more, right? So I think those are all part of a very strong storyline.

所以我覺得我們在燈塔網絡和工業 4.0 方面討論的所有內容都只是關於大型製造公司將圍繞自動化做什麼以及真正利用完整製造能力的對話的開始。所以很多事情要做。這將是推動我們的生產力和利潤率提高的重要故事情節，如果您是一家大公司並且可以投資更多，這肯定會有所幫助，對吧？所以我認為這些都是非常強大的故事情節的一部分。

Your next question comes from Paul Chung of JPMorgan. Mr. Chung, your line is open. Please proceed with your question.

您的下一個問題來自摩根大通的 Paul Chung。鍾先生，你的線是開放的。請繼續您的問題。

I was on mute. So just on the operating margin improvements here, you've seen kind of a big step-up here in Agility over the years, but also some step down in Reliability. So can you talk about the dynamics there? And is there a path for Reliability to kind of rebound back north of 6%? Just talk about the dynamics there, would be helpful.

我是靜音的。因此，僅就此處的營業利潤率改善而言，您已經看到多年來敏捷性有了很大的進步，但可靠性也有所下降。那麼你能談談那裡的動態嗎？可靠性有沒有辦法反彈回 6% 以上？談談那裡的動態，會有所幫助。

Sure. So first of all, Reliability was up year-on-year in the quarter. So I was very happy to see that. But to your point, that business overall wants to be a whole lot more than [low 5] something margin. We've struggled a bit with that business over the last couple of quarters as we've discussed because of the stops and starts from the supply chain. We continue to have some pressure there. And what that means is you'll have a factor that's all ready to go, but missing components, and so you have absorption headwind. Then -- and we've seen that over the last couple of quarters, as we have indicated before.

當然。首先，可靠性在本季度同比上升。所以我很高興看到這一點。但就您的觀點而言，該業務總體上希望比 [低 5] 的利潤率要高得多。正如我們所討論的，由於供應鏈的停頓和啟動，在過去幾個季度中，我們在該業務上遇到了一些困難。我們在那裡繼續面臨一些壓力。這意味著您將擁有一個準備就緒的因素，但缺少組件，因此您有吸收逆風。然後 - 正如我們之前指出的那樣，我們在過去幾個季度中已經看到了這一點。

But that's a great business, and that's a business that if you look at the -- kind of going back to the narrative from the Investor Day, Flex margins will continue to grow, Flex core margins will continue to grow over the next few years because of that Reliability business mixing up. So I can't tell you with rifle shot precision when we're going to see a 6 handle on reliability margins here, which quarter it will be, but the Reliability margins want to be better. And I think as we clear inventory, as this component shortage continues to improve we should see better margins in Reliability.

但這是一項偉大的業務，如果你回顧一下投資者日的敘述，Flex 利潤率將繼續增長，Flex 核心利潤率將在未來幾年繼續增長，因為可靠性業務混在一起。所以我不能用步槍射擊精度告訴你什麼時候我們會在這裡看到可靠性裕度為 6 的手柄，它將是哪個季度，但可靠性裕度想要更好。而且我認為，隨著我們清理庫存，隨著這種組件短缺的持續改善，我們應該會看到更高的可靠性利潤率。

And Paul, the thing I'd say is, one is our storyline on overall kind of how operating margin improves for this company has been very consistent. We started the story 4 years ago. We talked about how we will build our operating model for how we run these businesses on improving mix on how the kinds of customers will go after an Agility that is a lot easier to do than it's in Reliability because Reliability's long programs take a long time. And we've made a very conscious decision that we will go after complex automation, complicated products in these end markets because those are the ones, we feel are good for our businesses long term.

保羅，我想說的是，我們關於這家公司的營業利潤率如何提高的整體故事情節非常一致。我們在 4 年前開始了這個故事。我們討論了我們將如何建立我們的運營模式，以改善我們如何運營這些業務的組合，以改善客戶類型將如何追求比可靠性更容易實現的敏捷性，因為可靠性的長期計劃需要很長時間。我們做出了一個非常有意識的決定，我們將在這些終端市場中追求復雜的自動化和復雜的產品，因為這些是我們認為長期對我們的業務有利的產品。

So whether it's in automotive, we have our own design EV products or in health, where we have very complex things that we make for our customers. So it's a combination of what Paul said, which is lots of stops and starts happening there now, which is hard to do with higher capital intensity, but also the continued investments. But we just stand by our goal that our goal is for longer-term margins for Agility and for Reliability to keep going up. We said [5] plus for Flex. We said high single digits for Reliability, and that's kind of what we're pushing towards, and we're very comfortable that it's heading in the right direction for that.

因此，無論是在汽車領域，我們都有自己設計的電動汽車產品，還是在健康領域，我們為客戶製造了非常複雜的東西。所以這是保羅所說的結合，現在有很多停止和開始發生，這很難做到更高的資本密集度，還有持續的投資。但我們只是堅持我們的目標，即我們的目標是讓敏捷性和可靠性持續上升的長期利潤。我們對 Flex 說 [5] plus。我們說可靠性的高個位數，這就是我們正在努力的方向，我們很高興它正朝著正確的方向前進。

And then just a follow-up on inventory levels. They're at their highest levels ever. It kind of makes sense given the growth you're seeing in some component constraints, but how should we think about kind of the pace of harvest here? Or are we at competitive new elevated level of inventory? And then any update on some of the golden screw issues you were mentioning, are you finding a little bit easier to source some of those components now?

然後只是對庫存水平的跟進。他們處於有史以來的最高水平。考慮到您在某些組件限制中看到的增長，這是有道理的，但是我們應該如何考慮這裡的收穫速度呢？或者我們是否處於具有競爭力的新庫存水平？然後你提到的一些黃金螺絲問題的任何更新，你現在發現其中一些組件更容易採購嗎？

Yes. So Paul, I'll start with kind of supply issues and what we're seeing. We're definitely seeing supply constraints start to clear in parts of the Agility business. So consumer, lifestyle, our CEC business have more clearing of semiconductor availability that's happening, and that's consistent with what we are hearing. And we're excited that, that's what's driving a lot of our growth for Agility.

是的。所以保羅，我將從供應問題和我們所看到的開始。我們肯定看到敏捷業務的部分供應限制開始消除。因此，消費者、生活方式和我們的 CEC 業務對正在發生的半導體可用性有了更多的了解，這與我們所聽到的一致。我們很興奮，這就是推動我們為 Agility 實現大量增長的原因。

On the Reliability side, where we have kind of the more lagging edge semiconductors, those are still struggling. You're hearing that from automotive customers. You're hearing that from health customers that those investments have not come up as they were planned and they're still delayed. So we expect that those will continue to be challenged all through kind of next year, calendar year. And so I would say the way we're thinking about it is that we have great relationships with these end suppliers, and we work to get our share of them for our customers. And that's why our growth is still very strong in Reliability. But is there going to be continued backlog in those businesses, I would say, absolutely.

在可靠性方面，我們擁有更落後的半導體，但它們仍在苦苦掙扎。您是從汽車客戶那裡聽到的。您從健康客戶那裡聽說，這些投資並未按計劃進行，而且仍被推遲。因此，我們預計這些將在明年，日曆年繼續受到挑戰。所以我想說，我們正在考慮的方式是，我們與這些最終供應商有著良好的關係，我們努力為我們的客戶爭取到我們的份額。這就是為什麼我們在可靠性方面的增長仍然非常強勁。但是，我會說，這些業務是否會繼續積壓。

So in terms of inventory and clearing inventory, our focus is really on this growth opportunity that we have to take advantage for our customers is the single most important thing. We are very comfortable that the inventory we buy is on behalf of our customers, and we will clear that as the backlog starts to clear more in Reliability than we have seen before. So really comfortable with the pace of the change we're seeing. And we'd say, as kind of the growth continues, we'll manage the inventory down in the coming quarters.

因此，在庫存和清理庫存方面，我們的重點確實是我們必須為客戶利用的增長機會，這是最重要的事情。我們很高興我們購買的庫存是代表我們的客戶購買的，我們將清除這一點，因為積壓的可靠性開始比我們以前看到的更多。對我們所看到的變化速度感到非常滿意。我們會說，隨著增長的繼續，我們將在未來幾個季度減少庫存。

There are no further questions from the phone lines. At this time, I will turn the conference back to the CEO for any closing remarks.

電話線沒有進一步的問題。在這個時候，我會將會議轉回給 CEO 來做閉幕詞。

Well, thank you so much. Thanks, everyone, for joining. I would just take a minute to thank my leadership team, of course, all our customers, right, and our partners and our shareholders for your support, most importantly, to the Flex team for working so hard through these complex times. So thank you for your contributions and their commitment to Flex. Thanks, everyone. Thanks for joining.

嗯，非常感謝。謝謝大家的加入。我想感謝我的領導團隊，當然，感謝我們所有的客戶，對，以及我們的合作夥伴和股東的支持，最重要的是，感謝 Flex 團隊在這些複雜時期如此努力地工作。因此，感謝您的貢獻和他們對 Flex 的承諾。感謝大家。感謝您的加入。

Ladies and gentlemen, this does conclude your conference call for this afternoon. We would like to thank, everyone for participating, and you may now disconnect your lines.

女士們先生們，今天下午的電話會議到此結束。我們要感謝大家的參與，您現在可以斷開您的線路。