Flex Ltd (FLEX) 2023 Q3 法說會逐字稿

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

下午好，謝謝你的支持。歡迎參加偉創力 2023 財年第三季度收益電話會議。 （操作員說明）提醒一下，此通話正在錄音中。

I will now begin and turn the call over to Mr. David Rubin. You may begin.

我現在將開始並將電話轉給大衛魯賓先生。你可以開始了。

Thank you, JP. Good afternoon and welcome to Flex's Third Quarter Fiscal 2023 Earnings Conference 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，JP。下午好，歡迎來到偉創力 2023 財年第三季度收益電話會議。今天和我在一起的是我們的首席執行官 Revathi Advaithi；以及我們的首席財務官 Paul Lundstrom。兩人都將發表簡短評論，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.

可在 flex.com 的投資者關係部分獲取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。此通話正在錄音中，可以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 our most recent filings with the SEC.

提醒一下，今天的電話會議包含前瞻性陳述，這些陳述基於我們當前的預期和假設。這些陳述涉及可能導致實際結果大不相同的風險和不確定性。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美國證券交易委員會的文件中的警告聲明。

Note this information is subject to change, and we undertake no obligation to update these forward-looking statements. 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 in the Investor Relations website.

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。除非另有說明，否則我們將在電話會議上提及非 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以及投資者關係網站上發布的財務摘要中找到。

On January 13, we -- of this year, we publicly filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission relating to NEXTracker's proposed initial public offering. In connection with the proposed offering, NEXTracker intends to list under the ticker symbol NXT. The timing, number of shares to be offered and the price range for the proposed offering have not yet been determined. This offering is determined -- excuse me, this offering is subject to market and other conditions. For more information, please refer to the S-1 filing. Following SEC regulation remain in a quiet period, and we'll not make any further statements or answer additional questions on the NEXTracker filing at this time.

今年 1 月 13 日，我們 - 今年，我們就 NEXTracker 擬議的首次公開募股向美國證券交易委員會公開提交了表格 S-1 的註冊聲明。關於擬議的發行，NEXTracker 打算以股票代碼 NXT 上市。擬議發行的時間、發行股份數量和價格範圍尚未確定。本次發行是確定的——對不起，本次發行受市場和其他條件的影響。有關詳細信息，請參閱 S-1 文件。根據美國證券交易委員會的規定，我們仍處於靜默期，我們目前不會就 NEXTracker 文件發表任何進一步聲明或回答其他問題。

With that out of the way, 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。雷瓦蒂？

Thank you, David. Good afternoon and thank you for joining us today. So by now, you've all probably seen the S-1 public filing for the NEXTracker IPO. As I said from the very beginning of this process, the first step in creating value for our shareholders and to unlock the full long-term potential of NEXTracker is for it to operate as a stand-alone company. This process was, of course, delayed by the supply chain crisis brought on by the pandemic.

謝謝你，大衛。下午好，感謝您今天加入我們。所以到目前為止，你們可能都已經看到了 NEXTracker IPO 的 S-1 公開文件。正如我從一開始就說過的那樣，為我們的股東創造價值和釋放 NEXTracker 的全部長期潛力的第一步是讓它作為一家獨立的公司運營。當然，這一過程因大流行帶來的供應鏈危機而被推遲。

Despite all of the challenges during this time, we have maintained discipline and achieved multiple quarters of improving growth and margins. Along the way, we partnered with TPG Rise Climate, a team who's making a real difference in the renewable energy transition.

儘管這段時間面臨所有挑戰，但我們保持了紀律，並實現了多個季度的增長和利潤率改善。在此過程中，我們與 TPG Rise Climate 合作，該團隊在可再生能源轉型方面發揮了真正的作用。

So now we're moving forward. That said, renewable energy is one of the most important global technology transitions ever. It also represents a robust long-term growth opportunity for a number of technologies, including solar trackers, and Flex will continue to be involved to help drive this critical sector.

所以現在我們向前邁進。也就是說，可再生能源是有史以來最重要的全球技術轉型之一。它還代表了包括太陽能跟踪器在內的許多技術的強勁長期增長機會，Flex 將繼續參與以幫助推動這一關鍵領域。

Moving to our results. Please turn to Slide 4. Overall, fiscal Q3 was another fantastic quarter for Flex and another validation in the resiliency of our diverse portfolio. Revenue grew 17% year-over-year with adjusted operating margin at 4.8%. And the strong performance overall drove solid results of adjusted EPS at $0.62, up 24% year-over-year.

轉到我們的結果。請轉到幻燈片 4。總體而言，第三財季對 Flex 來說是又一個精彩的季度，也是對我們多元化產品組合彈性的又一次驗證。收入同比增長 17%，調整後營業利潤率為 4.8%。強勁的整體表現推動調整後每股收益穩健增長 0.62 美元，同比增長 24%。

Turning to Slide 5. Many of the positive dynamics in fiscal Q2 continued through the quarter, but with a few ongoing challenges that I'll touch on in a minute. We see strong growth driven by secular trends with technology transitions in EV and ADAS, in renewables and factory automation along with cloud expansion and strong automotive backlog. We're also seeing demand in communications, network security and many of the industrial applications we touch.

轉到幻燈片 5。第二財季的許多積極動態一直持續到本季度，但我將在一分鐘內談到一些持續的挑戰。我們看到電動汽車和 ADAS 技術轉型、可再生能源和工廠自動化以及雲擴張和強大的汽車積壓等長期趨勢推動了強勁增長。我們還看到了通信、網絡安全和我們接觸的許多工業應用方面的需求。

Consumer end markets remained weak, which shouldn't be a surprise, and we expect that weakness to continue in the current environment. Similar to last quarter, the overall supply chain and logistic situation continues to improve on a global level. However, shortages in the large node semiconductors remain a challenge, particularly within higher-liability applications, such as automotive, industrial and some health care products.

消費終端市場仍然疲軟，這不足為奇，我們預計這種疲軟在當前環境下將繼續存在。與上一季度相似，整體供應鍊和物流狀況在全球範圍內繼續改善。然而，大節點半導體的短缺仍然是一個挑戰，特別是在高可靠性應用中，例如汽車、工業和一些醫療保健產品。

We have talked before about how this causes inefficiencies and underabsorption of costs, and this golden screw effect is also the primary driver of higher working capital requirements. We remain very bullish on the long-term growth opportunities and reliability so have made additional near-term operational investments to support this growth, including increases in higher skilled labor.

我們之前已經討論過這如何導致效率低下和成本吸收不足，而這種金螺絲效應也是更高營運資金需求的主要驅動力。我們仍然非常看好長期增長機會和可靠性，因此進行了額外的短期運營投資以支持這種增長，包括增加高技能勞動力。

The net result this quarter was additional pressure on reliability operating margins. However, these investments will benefit our longer-term market positioning and is worth the focus as reliability has and will be the bigger driver of our long-term growth story.

本季度的最終結果是可靠性運營利潤率面臨額外壓力。然而，這些投資將有利於我們的長期市場定位，值得關注，因為可靠性已經並將成為我們長期增長故事的更大驅動力。

The Agility team had great execution, meeting strong demand in CEC and delivered another quarter of growth in lifestyle, but also demonstrated very effective cost management given the broader consumer turndown. We continue to recognize the benefits of both the operational improvements and portfolio changes we have made over the last several years.

Agility 團隊執行力出色，滿足了 CEC 的強勁需求，並實現了生活方式的又四分之一增長，而且鑑於更廣泛的消費者拒絕，還展示了非常有效的成本管理。我們繼續認識到我們在過去幾年中所做的運營改進和產品組合變化的好處。

It is important to highlight the power of a well-diversified and balanced portfolio. We remain in a challenging macro environment and yet delivered growth in 5 of 6 core business units and accelerated growth at NEXTracker.

重要的是要強調多元化和平衡的投資組合的力量。我們仍然處於充滿挑戰的宏觀環境中，但在 6 個核心業務部門中有 5 個實現了增長，並在 NEXTracker 加速增長。

Now looking to Slide 6. Paul will discuss our guidance in a minute, but assuming Q4 revenue comes in as expected, we remain on track to deliver 16% year-over-year growth in fiscal 2023. As you can see in the chart on the left, this also means we will have beat our previous revenue high watermark before we pruned a substantial amount of lower-quality business.

現在看幻燈片 6。保羅將在一分鐘內討論我們的指導意見，但假設第四季度收入如期出現，我們仍有望在 2023 財年實現 16% 的同比增長。正如您在圖表中看到的那樣左邊，這也意味著在我們削減大量低質量業務之前，我們將超過之前的收入高水位線。

Adding in our operational initiatives, you can see a steady and consistent path of margin expansion, and all of this reflects the improvements we have made as a company. With the evolving macroeconomic uncertainty, it's still a highly dynamic environment out there. However, I want to share an early view into what we're seeing as we look to our fiscal 2024.

加上我們的運營舉措，您可以看到一條穩定且一致的利潤增長路徑，所有這些都反映了我們作為一家公司所做的改進。隨著不斷變化的宏觀經濟不確定性，它仍然是一個高度動態的環境。但是，我想分享一下我們在展望 2024 財年時所看到的情況。

At this point, demand indicators are holding up for many of the multiyear trends we've been talking about, including renewables, next-gen mobility, cloud and health care. We believe these are strong enough to offset headwinds like consumer-related weaknesses and slowing enterprise IT spending. So at this point, we thought it was important to state we expect to grow next year in fiscal 2024. We will discuss our full fiscal 2024 guidance on next quarter's call.

在這一點上，我們一直在談論的許多多年趨勢的需求指標都保持不變，包括可再生能源、下一代移動、雲和醫療保健。我們相信這些足以抵消與消費者相關的弱點和企業 IT 支出放緩等不利因素。因此，在這一點上，我們認為重要的是要聲明我們預計明年將在 2024 財年實現增長。我們將在下一季度的電話會議上討論我們 2024 財年的完整指導。

Turning to Slide 7. Lastly, taking a step back, as I look at the fiscal 2025 financial framework we gave you in our Investor Day last year, we said high single-digit revenue CAGR, which will lead to 5-plus percent adjusting operating margin in core Flex, which is without NEXTracker, with mid-teens adjusted EPS growth getting us to $2.65 for core Flex and 80% adjusted free cash flow conversion.

轉到幻燈片 7。最後，退後一步，當我看一下我們在去年投資者日提供的 2025 財年財務框架時，我們說收入複合年增長率高個位數，這將導致 5% 以上的調整運營沒有 NEXTracker 的核心 Flex 的利潤率，調整後的 EPS 增長為 2.65 美元，核心 Flex 和 80% 的調整後自由現金流轉換。

It is a combination of strong multiyear drivers, coupled with our focus on the right growth areas and our execution, that will get us to these targets. With that, I'll turn it over to Paul to take you through our financials. Paul?

它是強大的多年驅動力的結合，再加上我們對正確增長領域的關注和我們的執行力，這將使我們實現這些目標。有了這個，我會把它交給保羅來帶你了解我們的財務狀況。保羅？

Okay. Great. Thanks, Revathi, and good afternoon, everyone. I'll begin on Slide 9 with a review of our third 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.

好的。偉大的。謝謝，Revathi，大家下午好。我將從幻燈片 9 開始回顧我們的第三季度業績。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，所有增長指標都將按年計算。 GAAP 調節表可在收益報告的附錄中找到。

Revenue growth was strong, up 17% at $7.8 billion. Gross profit totaled $595 million and gross margin improved to 7.7%. Operating profit was $372 million with operating margins at 4.8%, improving 30 basis points year-over-year. Lastly, earnings per share came in at $0.62 for the quarter, an increase of 24%.

收入增長強勁，增長 17% 至 78 億美元。毛利潤總計 5.95 億美元，毛利率提高至 7.7%。營業利潤為 3.72 億美元，營業利潤率為 4.8%，同比提高 30 個基點。最後，本季度每股收益為 0.62 美元，增長 24%。

GAAP EPS came in at $0.50, up 4% year-over-year. But if you recall, in Q3 of last year, we had a number of small nonoperating gains that we non-GAAP-ed out, creating the difficult comp. Overall, we're pleased with our performance this quarter. The strong growth is a result of the resiliency of our diverse portfolio and the compelling value proposition that Flex brings to the markets we serve.

GAAP 每股收益為 0.50 美元，同比增長 4%。但如果你還記得，在去年第三季度，我們有一些小的非經營性收益，我們沒有按照非公認會計原則計算出來，從而創造了困難的組合。總體而言，我們對本季度的表現感到滿意。強勁的增長得益於我們多元化產品組合的彈性以及偉創力為我們所服務的市場帶來的極具吸引力的價值主張。

Turning to our third quarter segment results on the next slide. Reliability revenue increased 19% to $3.2 billion. Operating income was $143 million, up 6%. And operating margin for the segment was 4.4%, impacted by persisting semi shortages and some increased operational investments made to support future growth.

在下一張幻燈片中轉向我們第三季度的業績。可靠性收入增長 19% 至 32 億美元。營業收入為 1.43 億美元，增長 6%。該部門的營業利潤率為 4.4%，受到持續的半成品短缺和為支持未來增長而增加的一些運營投資的影響。

In Agility, revenue was $4 billion, up 13%. Operating income was $181 million, up 11% with an operating margin of 4.5%. Finally, NEXTracker revenue came in at $516 million, up a very impressive 53% year-over-year. Operating income at NEXTracker was $60 million, up 225% with operating margins now at 11.7%. That's over 2.5 points of sequential improvement and 3 sequential quarters of significant margin expansion.

在 Agility，收入為 40 億美元，增長 13%。營業收入為 1.81 億美元，增長 11%，營業利潤率為 4.5%。最後，NEXTracker 的收入達到 5.16 億美元，同比增長 53%，令人印象深刻。 NEXTracker 的營業收入為 6000 萬美元，增長 225%，營業利潤率為 11.7%。這是超過 2.5 個百分點的連續改進和 3 個連續季度的顯著利潤率擴張。

In Reliability, despite macro concerns, auto inventory is still low and customer backlog is stable. However, semi shortages impacted efficiency and contributed to increased expedite costs, tempering profitability. Industrial demand was solid with notable strength in renewables, automation and other specialty programs. Demand in the health care space remains steady, and we continue to invest for future growth.

在可靠性方面，儘管存在宏觀擔憂，但汽車庫存仍然較低，客戶積壓情況穩定。然而，半成品短缺影響了效率並導致加速成本增加，從而削弱了盈利能力。工業需求強勁，在可再生能源、自動化和其他專業項目方面表現突出。醫療保健領域的需求保持穩定，我們將繼續投資以實現未來增長。

Looking at Agility. Our lifestyle business was up slightly in the quarter despite the ongoing consumer-related weakness. We've now seen multiple quarters of this outperformance driven by significant share gains. As expected, consumer devices was down similar to what we saw last quarter with continued soft end markets. And finally, CEC again showed excellent overall performance driven by strong execution and a continuation of trends in cloud and network infrastructure.

看敏捷。儘管與消費者相關的持續疲軟，但我們的生活方式業務在本季度略有增長。我們現在已經看到多個季度的這種出色表現是由顯著的份額增長推動的。正如預期的那樣，消費設備的下降與我們在上個季度看到的類似，軟終端市場持續。最後，在強大的執行力以及雲和網絡基礎設施趨勢的延續的推動下，CEC 再次展示了出色的整體性能。

Moving to cash flow on Slide 11. Q3 net CapEx totaled $157 million, on target at approximately 2% of revenue. Free cash flow was $202 million in the quarter. With the golden screw situation continuing to the degree it has and given our visibility today, we expect free cash flow in the fourth quarter to be on par with what we delivered in Q3, which would put us below our previous target of $550 million for the full year.

轉到幻燈片 11 的現金流。第三季度淨資本支出總計 1.57 億美元，目標是收入的 2% 左右。本季度自由現金流為 2.02 億美元。隨著金螺絲情況持續到現在的程度並考慮到我們今天的可見性，我們預計第四季度的自由現金流將與我們在第三季度交付的資金持平，這將使我們低於我們之前 5.5 億美元的目標整整一年。

We are, however, beginning to see trends inflect. Inventory net of working capital advances decreased 3% sequentially, and we flattened the curve on gross inventory, up only 1% sequentially. So it's nice to see that we are starting to see some progress on inventory. Lastly, we returned $40 million to shareholders this quarter through share repurchases.

然而，我們開始看到趨勢發生變化。扣除營運資金預付款的庫存環比下降 3%，我們拉平了總庫存曲線，環比僅增長 1%。所以很高興看到我們開始看到庫存方面的一些進展。最後，本季度我們通過股票回購向股東返還了 4000 萬美元。

Please turn to Slide 12 for our segment outlook. For the fourth -- fiscal fourth quarter and for our year-over-year growth expectations. For Reliability Solutions, we often talk about the longer-term secular tailwinds, but they're also playing out in the near term. Industrial continues to benefit from regionalization opportunities and trends in factory automation. And while the industry awaits further clarity on the IRA, the overall renewable energy transition is a positive driver.

請轉到幻燈片 12 了解我們的細分市場展望。對於第四財季和我們的同比增長預期。對於可靠性解決方案，我們經常談論長期的長期順風，但它們也在短期內發揮作用。工業繼續受益於工廠自動化的區域化機會和趨勢。雖然業界在等待 IRA 的進一步明確，但整體可再生能源轉型是一個積極的驅動力。

Health solutions remain strong with outsourcing trends providing more opportunities to grow, and we continue making progress on program ramps. And in auto, the EV and ADAS transition remains a dominant theme. Collectively, these trends should contribute to overall growth with Reliability revenue up high single digits to mid-teens.

健康解決方案依然強勁，外包趨勢提供了更多的增長機會，我們繼續在項目坡道上取得進展。在汽車領域，EV 和 ADAS 的過渡仍然是一個主導主題。總的來說，這些趨勢應該有助於可靠性收入的整體增長，達到高個位數至十幾歲。

For Agility Solutions, revenue will be relatively flat. CEC is expected to grow based on healthy underlying fundamentals, particularly within cloud and communications, but we expect both consumer devices and lifestyle to be down driven by the weakness in consumer product end markets.

對於 Agility Solutions，收入將相對持平。預計 CEC 將基於健康的基本面實現增長，尤其是在雲和通信領域，但我們預計消費設備和生活方式都將因消費產品終端市場的疲軟而下滑。

On to Slide 13 for our quarterly guidance. We expect revenue in the range of $7 billion to $7.4 billion with adjusted operating income between $315 million and $345 million. Interest and other is estimated to be around $60 million. We expect the tax rate to be around 14% this quarter, and we expect adjusted EPS between $0.48 and $0.54 based on approximately 460 million weighted shares outstanding.

轉到幻燈片 13 以獲取我們的季度指導。我們預計收入在 70 億美元至 74 億美元之間，調整後的營業收入在 3.15 億美元至 3.45 億美元之間。利息和其他估計約為 6000 萬美元。我們預計本季度的稅率約為 14%，我們預計基於約 4.6 億股已發行加權股票調整後的每股收益在 0.48 美元至 0.54 美元之間。

Now let's go over our full year guidance on the following slide. We increased our fiscal '23 revenue expectations to $29.9 billion to $30.3 billion, which would result in mid-teens growth year-over-year. We expect adjusted operating margins to be around 4.7%, consistent with what we told you before. And adjusted EPS is up from last quarter's guidance and is now between $2.27 and $2.33 a share.

現在讓我們在下一張幻燈片上回顧一下我們的全年指導。我們將 23 財年的收入預期提高到 299 億美元至 303 億美元，這將導致同比增長達到 15% 左右。我們預計調整後的營業利潤率約為 4.7%，與我們之前告訴您的一致。調整後的每股收益高於上一季度的指引，目前介於每股 2.27 美元和 2.33 美元之間。

Before we begin Q&A, I want to just echo Revathi's thoughts that I remain excited about the opportunities ahead of us. As our results demonstrate, we are able to slow -- to continue to deliver growth despite facing macro pressures and industry-wide challenges. The resiliency of our portfolio has been strengthened by our diversification, strategic investments in key growth areas and operational excellence.

在我們開始問答之前，我想重複 Revathi 的想法，即我對擺在我們面前的機會仍然感到興奮。正如我們的結果所表明的那樣，儘管面臨宏觀壓力和全行業挑戰，但我們能夠放慢速度——繼續實現增長。我們的多元化、對關鍵增長領域的戰略投資和卓越運營增強了我們投資組合的彈性。

There are a number of external factors still at play, but our team is executing against our strategy, and we remain focused on meeting our long-term targets and delivering value for all Flex stakeholders. With that, I'd like to turn the call over to the operator to begin Q&A.

許多外部因素仍在發揮作用，但我們的團隊正在執行我們的戰略，我們仍然專注於實現我們的長期目標並為所有 Flex 利益相關者創造價值。有了這個，我想把電話轉給接線員開始問答。

(Operator Instructions) Your first question comes from the line of Steven Fox from Fox Advisors.

（操作員說明）您的第一個問題來自 Fox Advisors 的 Steven Fox。

Can you hear me okay?

你能聽到我說話嗎？

Yes, we can hear you.

是的，我們能聽到你的聲音。

Okay. First of all, I was wondering if you can provide a little more color on the margin pressures on Reliability Solutions. Can you quantify the hit from sort of investing for the future and also the semiconductor area and talk about what kind of path you see going forward for the margins for that segment? And then I had a follow-up.

好的。首先，我想知道您是否可以提供更多關於可靠性解決方案利潤壓力的顏色。您能否量化對未來以及半導體領域的某種投資的影響，並談談您認為該細分市場的利潤率會走什麼樣的道路？然後我進行了跟進。

Yes. Steven, I'll start and then Paul can weigh in if he feels like. I'd say first is Reliability is seeing tremendous growth, as you're aware. We're very pleased with our growth, around 19%. And with growth comes all kinds of challenges.

是的。史蒂文，我會先開始，然後如果保羅願意，他可以權衡一下。我首先要說的是，正如您所知，可靠性正在實現巨大增長。我們對我們的增長非常滿意，大約 19%。隨著增長而來的是各種挑戰。

I'd say first is the supply chain issues and underabsorption continues in pretty much all 3 segments of the Reliability business. And because to support the growth we have this year and then what we continue to see moving forward driven by all the macro trends we have talked about regionalization, et cetera, we decided to continue to make some operational investments that supports multiyear program growth and also try to pull forward some program ramps we could and put in some front-end costs when we can afford to do it, right?

我首先要說的是可靠性業務的幾乎所有 3 個部分都存在供應鏈問題和吸收不足問題。因為為了支持我們今年的增長以及我們在談到區域化等所有宏觀趨勢的推動下繼續看到的發展，我們決定繼續進行一些支持多年計劃增長的運營投資，並且嘗試提前一些我們可以做的項目，並在我們有能力的時候投入一些前端成本，對嗎？

And like I said in my opening remarks, the diversity of our portfolio and how the company is performing gives us the room to make those decisions. Remember those -- nuances also, of course, for Reliability that you know well, Steven, is that the skilled labor market is tight. And so we have to continuously find ways to keep that labor available and hire the right kind of labor in different regions of the world that provide some pressure.

就像我在開場白中所說的那樣，我們投資組合的多樣性以及公司的表現為我們提供了做出這些決定的空間。請記住這些——當然，對於您熟知的可靠性，史蒂文，還有細微差別，那就是熟練勞動力市場緊張。因此，我們必須不斷尋找方法來保持勞動力可用，並在世界不同地區僱傭合適的勞動力，這會帶來一些壓力。

But we feel very good about kind of the trajectory of how Reliability margins comes out of this. I think these are decisions we choose to make because of how bullish we are about the long-term sector growth itself. We feel like, overall, the longer-term growth driver of margin expansion and all of that has -- and the longer-cycle program ramp hasn't changed. So the strategy is intact. But we have room to make some decisions and invest extra that we chose to do. But I feel very good about the commitments I've made for Reliability longer term.

但是我們對可靠性裕度如何由此產生的軌跡感到非常滿意。我認為這些是我們選擇做出的決定，因為我們對長期行業增長本身有多樂觀。總的來說，我們覺得利潤率擴張的長期增長驅動力和所有這些都已經發生了——而且更長周期的計劃斜坡沒有改變。所以策略是完整的。但我們有空間做出一些決定，並在我們選擇做的事情上進行額外投資。但我對我為長期可靠性做出的承諾感到非常滿意。

Great. That's helpful. And then just as a follow-up, I was wondering if there's anything you would highlight, say, over the last 90 days or so related to that regionalization theme. There's been a lot of headlines, good and bad, in China, India, related to electrification, et cetera. Is there anything you would call out that's either playing more or less on that theme than you would have thought versus a quarter ago?

偉大的。這很有幫助。然後作為後續行動，我想知道在過去 90 天左右的時間裡，您是否會強調與該區域化主題相關的任何內容。在中國、印度，有很多與電氣化等相關的頭條新聞，有好有壞。與一個季度前相比，您是否會說在該主題上播放的內容或多或少？

Yes. Steven, I would say, if anything, this only continues to accelerate. I would say it doesn't matter the ups and downs of the conversation on China, whether it is regionalization or whether the country is opening up now or what you're hearing going on in India. We are just supporting quite a significant amount of programs right now that is driven by that regionalization trend, which is driven by reducing resiliency in this -- increasing resiliency in the supply chain, particularly in Mexico, in U.S. are kind of our 2 biggest growth areas, and then some in Southeast Asia.

是的。史蒂文，我想說，如果有的話，這只會繼續加速。我想說的是，關於中國的對話起起落落並不重要，無論是區域化還是該國現在是否正在開放，或者你在印度聽到的情況。我們現在只是支持相當多的項目，這些項目是由區域化趨勢驅動的，這是由降低彈性所驅動的——增加供應鏈的彈性，特別是在墨西哥，在美國，這是我們的第二大增長點地區，然後是東南亞的一些地區。

So haven't seen the trajectory change. If anything, it's accelerated. We're trying to kind of absorb this base to really figure out how much more we can do moving forward. So the pressure is on from customers to do more and do it quickly is what we're seeing.

所以還沒有看到軌蹟的變化。如果有的話，它會加速。我們正試圖在某種程度上吸收這個基礎，以真正弄清楚我們還能做多少前進。因此，我們所看到的是來自客戶的壓力，要求他們做更多事情並儘快完成。

Your next question comes from the line of Shannon Cross from Credit Suisse.

你的下一個問題來自瑞士信貸的 Shannon Cross。

Can you talk a bit about cash flow? And what I'm wondering, I mean, you're holding to 80% of cash conversion over a longer period of time. But what are you doing internally to, I don't know, maybe improve your visibility, manage inventory better? Because I know some of what's gone on, obviously, has been the golden screw. I'm guessing some of it has been working capital-related, so just the growth that you've had.

你能談談現金流嗎？我想知道的是，我的意思是，您在較長時間內持有 80% 的現金轉換。但是你在內部做什麼，我不知道，也許提高你的知名度，更好地管理庫存？因為我知道發生的一些事情，顯然是金螺絲。我猜其中一些與營運資金相關，所以只是你所擁有的增長。

So I'm just wondering, as you look at how the business has changed over the last couple of years, how you're going about managing this so that you can get back to the 80% because I think that's one of the few knocks on your stock right now is your cash conversion.

所以我只是想知道，當你審視過去幾年業務發生了怎樣的變化時，你將如何管理這一點，以便你可以回到 80%，因為我認為這是為數不多的問題之一你的股票現在是你的現金轉換。

Yes. I would say, first, I'd start with, Shannon, that I really feel good about kind of the trajectory change that we're starting to see overall with working capital and how we are managing our customers. And I'm happy with the things we're seeing. I'd say, overall, inventory is flattening out. And while we still have this whole incomplete kit issue, I would say, because we have a part missing here or there, particularly in Reliability, I feel good about the general underlying trends that we track to see the right direction in inventory.

是的。我會說，首先，香農，我對我們開始看到的整體營運資金以及我們如何管理客戶的軌跡變化感到非常滿意。我對我們所看到的事情感到滿意。我想說，總體而言，庫存正在趨於平穩。雖然我們仍然存在整個不完整的套件問題，但我想說，因為我們在這里或那裡缺少一個部分，特別是在可靠性方面，我對我們跟踪的總體潛在趨勢感到滿意，以便在庫存中看到正確的方向。

So we do think that slips, and you're seeing that kind of the start of this quarter in terms of our overall cash flow, and we think that continues to improve. That is the reason why we feel comfortable with sticking with kind of our cash flow conversion target because, obviously, coming out of this, this business is going to generate cash.

因此，我們確實認為這種情況有所下滑，就我們的整體現金流而言，您會看到本季度的這種情況，我們認為這種情況會繼續改善。這就是為什麼我們對堅持我們的現金流量轉換目標感到滿意的原因，因為很明顯，從這一點來看，這項業務將產生現金。

I'd say in terms of longer term, Shannon, my view is we have -- the thing about Flex that we have done really well the last 4 years is we have taken every burning platform and become more disciplined with it. So underlying theme across the company is we have become more disciplined in planning. We're helping our customers get more disciplined with it. And that will have longer-term implications in terms of how supply chains are managed, not for us but all the customers that we touch, right?

從長遠來看，香農，我的觀點是我們有——過去 4 年我們做得非常好的關於 Flex 的事情是我們已經採用了每一個燃燒的平台並變得更加自律。因此，整個公司的基本主題是我們在規劃方面變得更加自律。我們正在幫助我們的客戶更加自律。這將對供應鏈的管理方式產生長期影響，不是對我們，而是對我們接觸的所有客戶，對吧？

This is near and dear to my heart, supply chain and planning. And we think that this will really make us a better company. And my aspiration will be to be better than 85% at some point in time. But I think we're seeing good inflection points here, and that makes us comfortable with sticking to these targets.

這對我來說很重要，供應鍊和計劃。我們認為這真的會讓我們成為一家更好的公司。我的願望是在某個時間點超過 85%。但我認為我們在這裡看到了良好的拐點，這讓我們對堅持這些目標感到滿意。

Okay. And then just sticking on cash, can you talk a bit about cash utilization? You have NEXTracker out there. I understand you're not going to talk about it necessarily. But just in terms of cash generation, assuming you move back, you'll have excess cash. So maybe can you talk a bit about what the landscape looks like in terms of potential acquisitions? Obviously, you've been buying back stock, but just in general, your approach to returning cash to shareholders?

好的。然後只堅持現金，你能談談現金利用率嗎？你那裡有 NEXTracker。我知道你不一定要談論它。但就現金產生而言，假設你搬回去，你就會有多餘的現金。那麼，也許你能談談潛在收購方面的情況嗎？顯然，你一直在回購股票，但總的來說，你向股東返還現金的方法是什麼？

No problem, Shannon. So first, I'll just say, I think if you look at our performance over the last few years, you've seen us to be disciplined and judicious when it comes to capital allocation. Specific to M&A, we have a robust process and a robust pipeline. But in terms of prioritization, when it comes to capital allocation, I would say #1 priority right now is supporting very strong organic growth, whether that's with some working capital or if it's internal investments or CapEx, very high priority because we have a very clear path ahead of us for solid top line growth over the next several years, and we want to make sure that we've funded the business for that. So that's one.

沒問題，香農。所以首先，我只想說，我想如果你看看我們過去幾年的表現，你就會發現我們在資本配置方面是有紀律和明智的。具體到併購，我們有一個強大的流程和強大的管道。但就優先次序而言，當談到資本分配時，我想說現在的第一要務是支持非常強勁的有機增長，無論是一些營運資金，還是內部投資或資本支出，都是非常高的優先級，因為我們有一個非常在接下來的幾年裡，我們為穩固的收入增長開闢了一條清晰的道路，我們希望確保我們已經為這項業務提供了資金。這就是一個。

Stock buyback has been a priority for us the last couple of years. I think we've been pretty vocal about our views on valuation, and we've leaned into that. And so I guess I would put M&A last, although again, we remain disciplined. We're going to be opportunistic. We have a pipeline, but at the moment, that's probably our lowest allocation priority.

過去幾年，股票回購一直是我們的首要任務。我認為我們對估值的看法一直很直言不諱，而且我們已經傾向於這一點。所以我想我會把併購放在最後，儘管我們仍然保持紀律。我們要投機取巧。我們有一個管道，但目前，這可能是我們最低的分配優先級。

Your next question comes from the line of Mark Delaney from Goldman Sachs.

你的下一個問題來自高盛的馬克德萊尼。

In the CEC segment, company, if I heard correctly, was guiding for growth there. I think a number of companies have been reporting pretty broad-based weakness in the comms infrastructure market. So maybe elaborate a little bit more on what Flex has seen in the comms infrastructure markets. And perhaps, is there a share gain or something else that a tailwind for Flex that other companies perhaps are not benefiting from?

在 CEC 部分，公司，如果我沒聽錯的話，正在指導那裡的增長。我認為許多公司一直在報告通信基礎設施市場的廣泛疲軟。因此，也許可以詳細說明 Flex 在通信基礎設施市場上看到的情況。也許，是否有其他公司可能沒有從中受益的股票收益或其他對 Flex 有利的因素？

Yes. No, I'd say, first, there's 2 things that are happening, right? If you think about the 3 segments in CEC, cloud communications and enterprise, we're still seeing growth in all 3 segments of it, while you are seeing a lot of noise about enterprise segment and how that is performing. But for us, a couple of things happening.

是的。不，我會說，首先，有兩件事正在發生，對吧？如果你考慮 CEC、云通信和企業的 3 個部分，我們仍然看到它的所有 3 個部分都在增長，而你會看到關於企業部分及其表現的很多噪音。但對我們來說，有幾件事正在發生。

In cloud, we've clearly -- while people have talked about the rate of growth changing, it is still pretty significant growth, and that's important. And along with that and market share gains, it has helped us show continued growth for cloud, and we see that playing forward.

在雲中，我們已經清楚地 - 雖然人們已經談論了增長率的變化，但它仍然是非常顯著的增長，這很重要。隨著這一點和市場份額的增加，它幫助我們展示了雲的持續增長，我們看到了這一點。

I would say, in the communications space, similarly, we have seen share gain that has happened with specific customers, and we're supporting that growth. But we're also seeing there's enough backlog being cleared in that business that is also supporting underlying growth.

我會說，在通信領域，類似地，我們已經看到特定客戶的份額增加，我們正在支持這種增長。但我們也看到，在支持潛在增長的業務中，有足夠的積壓被清除。

So overall, I'd say, CEC, the story of share gain is a big story there, particularly in communications and cloud. So -- and we feel like if the rate of change of growth switches a little bit, overall, it's still a very positive growth story for us. Paul, you'd add anything?

所以總的來說，我想說，CEC，份額增加的故事在那裡是一個大故事，特別是在通信和雲計算領域。所以——我們覺得如果增長的變化率稍微改變一點，總的來說，這對我們來說仍然是一個非常積極的增長故事。保羅，你要補充什麼嗎？

No. I think that was clear.

不，我認為這很清楚。

And my second question was on the China market. I was hoping you could elaborate a bit more on what Flex has been seeing operationally in China given the unfortunate COVID dynamics in recent months. And also, when you talk to your customers, are they expecting demand to pick up this coming year given the potential reopening that's occurring in China?

我的第二個問題是關於中國市場的。考慮到最近幾個月不幸的 COVID 動態，我希望您能詳細說明偉創力在中國的運營情況。而且，當您與客戶交談時，鑑於中國可能重新開放，他們是否預計來年需求會回升？

No problem, Mark. So the way we thought about this a couple of months ago was we -- as things started to open up, we expected there to be a sort of a big COVID spike in the November, December time frame. And then post Chinese New Year, our thought was we'd see another one, just kind of tell you how that played out.

沒問題，馬克。因此，幾個月前我們考慮這個問題的方式是——隨著事情開始開放，我們預計在 11 月、12 月的時間框架內會出現 COVID 的大幅飆升。然後在中國新年過後，我們的想法是我們會看到另一個，只是告訴你結果如何。

COVID cases were very high as we moved through December, particularly the back half of December. That probably had a little bit of effect on us, but I think we were able to manage it. But absenteeism was quite high in December. Too early to call on what's going to happen here post-Chinese New Year, but we track this stuff every day. And I'm pleased to say that people returning to work has been very, very high, higher than what we had originally anticipated coming back from Chinese New Year. And I think by the end of this week, we're going to be at 100%. So that's good news. Hopefully, that has some color that helps, Mark.

在我們進入 12 月時，尤其是 12 月下半月，COVID 病例非常多。這可能對我們有一點影響，但我認為我們能夠應對。但 12 月份的缺勤率相當高。現在預測農曆新年後這裡會發生什麼還為時過早，但我們每天都在跟踪這些事情。我很高興地說，重返工作崗位的人數非常非常多，高於我們最初預期的農曆新年回來的人數。我認為到本週末，我們將達到 100%。所以這是個好消息。希望這有一些幫助，馬克。

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。

I wanted to ask another question on the Reliability segment, where you've got good growth, and it sounds like you're confident in most of those subsegments in terms of growth and program ramps where you're hearing about some incremental weakness in some of those broader industrial markets, particularly semi-cap. I know you have some exposure, but not as much as some of your peers. So could you talk about those end-markets demand versus program ramps? And any pockets of concern there?

我想問另一個關於可靠性部分的問題，你在這個部分有良好的增長，聽起來你對大多數子部分的增長和計劃斜坡很有信心，你聽到一些漸進的弱點那些更廣泛的工業市場，尤其是半市值。我知道你有一些曝光率，但不如你的一些同齡人那麼多。那麼，您能否談談這些終端市場需求與項目增長情況？那裡有什麼值得關注的地方嗎？

Yes. So Matt, across Reliability, we have really good strong demand driven by the underlying fundamentals of the end markets we're in, but also kind of continued market share gains. We have very little in semi-cap, so that's a good thing. And so we don't see the fluctuations of the up and down in that, and that doesn't affect our overall portfolio.

是的。所以馬特，在可靠性方面，我們在終端市場的基本面驅動下有非常好的強勁需求，但也有持續的市場份額增長。我們的半市值很少，所以這是一件好事。因此，我們看不到其中的上下波動，這不會影響我們的整體投資組合。

In Industrial, we're seeing very strong growth in renewables, and we have a lot of opportunities to continue to grow in renewables. We're seeing really good growth in areas like automation. So industrial between renewables, the basic power business there and automation, the fundamentals are very strong, and we don't have much exposure to semi-cap equipment.

在工業領域，我們看到可再生能源的增長非常強勁，我們有很多機會繼續發展可再生能源。我們在自動化等領域看到了非常好的增長。因此，在可再生能源、那裡的基本電力業務和自動化之間的工業，基本面非常強勁，我們對半盤設備的接觸不多。

And then in auto, EV and ADAS is -- EV particularly is very, very strong because we have a lot of new program ramps going on there. And even while dealer lot inventory maybe getting filled up a little bit more, we see a very strong path forward in terms of year-over-year growth for automation. And health is going along as we predicted, right? So pretty steady growth rate and is going well. So we are really -- are on the other side of this equation. We have a lot of growth in Reliability. We just have to execute to that.

然後在汽車領域，EV 和 ADAS 是 - EV 特別是非常非常強大，因為我們有很多新的項目在進行。即使經銷商庫存可能會增加一點，但我們看到自動化的同比增長非常強勁。健康狀況正如我們所預料的那樣，對吧？所以相當穩定的增長率並且進展順利。所以我們真的 - 在這個等式的另一邊。我們在可靠性方面有很大的增長。我們只需要執行它。

Okay. And then on the margins within that business, which I know have been under pressure for the reasons that you explained. How do we get to that? You're talking about a 5%-plus margin for the whole company, which would imply nice margin expansion within Reliability because I assume that the Agility business is going to be sort of in that range. So what's the timing there? And in terms of these investments playing off or these other issues like logistics and supply issues, when do we start to see those margins move up?

好的。然後是該業務的利潤率，我知道由於您解釋的原因，該業務一直處於壓力之下。我們如何做到這一點？你說的是整個公司 5% 以上的利潤率，這意味著可靠性內的利潤率會有很好的擴張，因為我認為敏捷業務將在這個範圍內。那麼那裡的時間是什麼？就這些投資的進展或物流和供應問題等其他問題而言，我們什麼時候開始看到這些利潤率上升？

Yes. It's a good question, Matt. I look back to the February, March time frame when we were putting together the framework that we ultimately shared with you with our -- on Investor Day. And in a spreadsheet, we always plan for a nice gradual acceleration of margins, nice even smooth line, but I don't think any of us anticipated going into this year that inflation would be as sticky and persistent and as large and sticky as it has been nor did we anticipate the semiconductor shortage is persisting as long as it has.

是的。這是個好問題，馬特。我回顧了 2 月、3 月的時間框架，當時我們正在整理我們最終與您分享的框架——在投資者日。在電子表格中，我們總是計劃利潤率逐漸加速，甚至是平滑的線，但我認為我們中沒有人預計到今年通貨膨脹會像它一樣粘性、持續、大和粘性一直以來，我們也沒有預料到半導體短缺會持續這麼久。

And so both of those have put pressure on the business, including Reliability, of course. And I would say more so with Reliability because what we've talked about before. The stops and starts on that larger node technology, where you have resources idled waiting for components definitely puts pressure on margins.

因此，這兩者都給業務帶來了壓力，當然也包括可靠性。而且我會說可靠性更多，因為我們之前已經談過。在更大的節點技術上停止和啟動，在那裡你有資源閒置等待組件肯定會給利潤率帶來壓力。

And so I look at both the inflation effect and the component shortage effect and ultimately, how that impacts factories as sort of being onetime items. All else equal, I think you would have seen better margin performance out of the core Flex business. And I think as we look ahead, we'll slowly start to see those things abate and we'll see the margins accelerate.

因此，我同時研究了通貨膨脹效應和組件短缺效應，並最終將其作為一次性產品對工廠產生了怎樣的影響。在其他條件相同的情況下，我認為您會從核心 Flex 業務中看到更好的利潤率表現。而且我認為，當我們展望未來時，我們會慢慢開始看到這些事情減弱，我們會看到利潤率加速增長。

And Matt, I think all the more reason to feel bullish about our long-term target, right? Because if we are at core Flex target where we are today performing with Reliability margins under pressure, the upside is clear from that. So long-term targets remain intact. If anything, we feel really good about it.

而馬特，我認為更有理由對我們的長期目標感到樂觀，對吧？因為如果我們處於核心 Flex 目標，即我們今天在壓力下執行的可靠性利潤率，那麼上行空間是顯而易見的。因此，長期目標保持不變。如果有的話，我們對此感覺非常好。

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

你的下一個問題來自美國銀行的 Ruplu Bhattacharya。

Revathi, I wanted to ask you about how you're thinking about risk management. When you look out into the next 12 months, what is it that gives you the most concern? And you just reiterated the long term -- or the medium-term target of high single-digit revenue growth. Can you talk about what are some of the things that are giving you confidence in that, assuming if we have a recession this year, the consumer phasing end markets are weaker than what you think?

Revathi，我想問一下您對風險管理的看法。展望未來 12 個月，您最擔心的是什麼？你剛剛重申了長期 - 或高個位數收入增長的中期目標。你能否談談讓你對此充滿信心的一些事情，假設如果我們今年出現經濟衰退，消費者階段終端市場比你想像的要弱？

Can you maybe talk about like some of the levers you have that if one part of the business, the Agility part, is weaker? I mean, do you think that the other part can offset that? So tell us here like what is giving you the most concern and what is giving you confidence in the medium term on revenues. And then I have a follow-up on margins.

如果業務的一部分（敏捷性部分）較弱，您能否談談您擁有的一些槓桿？我的意思是，你認為另一部分可以抵消嗎？所以在這裡告訴我們什麼讓你最關心什麼，什麼讓你對中期收入有信心。然後我對利潤率進行了跟進。

Yes. Ruplu, I'd say first is our portfolio has changed significantly, if you look from history to where we are today, that we have in a very smart and planful way, we have looked at our portfolio and moved it forward in terms of being in the longer and more resilient cycles of the overall economy. And so that itself, and we have shared those numbers with you, right, in terms of how the overall Flex portfolio looks, says that we are in the end markets that have good long-term trajectory and the macro is in our favor, right? Whether it is regionalization or continued technology transitions, all of those are really in our favor.

是的。 Ruplu，我首先要說的是我們的投資組合發生了重大變化，如果你從歷史上看我們今天所處的位置，我們以一種非常聰明和有計劃的方式，我們已經審視了我們的投資組合併將其向前推進在整個經濟的更長和更具彈性的周期中。因此，就整個 Flex 產品組合的外觀而言，我們已經與您分享了這些數字，這表明我們處於具有良好長期軌蹟的終端市場，宏觀對我們有利，對吧？無論是區域化還是持續的技術轉型，所有這些都對我們有利。

And that's why when we look forward, we are really focused on that we need to have Reliability growth continue to be supported because that's going to be the long-term trajectory. Agility, the way the portfolio is we'll always have some ups and downs, but we have really minimized that pretty significantly, right? We've -- as you can see the last few months, we took the comps on consumer markets and still grew.

這就是為什麼當我們展望未來時，我們真正專注於我們需要繼續支持可靠性增長，因為這將是長期軌跡。敏捷性，投資組合的方式我們總是會有一些起伏，但我們真的已經非常顯著地減少了它，對吧？我們 - 正如你在過去幾個月所看到的那樣，我們在消費市場上取得了成功並且仍在增長。

So the diversity of our portfolio really makes it the real story of why we feel very strong about kind of committing to this longer-term growth. And we have delivered on that. If you look about the last 4 years, Ruplu, doesn't matter if it's trade crisis and exiting large portfolios or whether it is COVID or supply chain crisis is we've really executed on being able to get to this growth trajectory with how we have built up this business. So the diversity of the portfolio is what I really say is the big reason why we are very comfortable with making this commitment.

因此，我們投資組合的多樣性確實使它成為真實的故事，說明為什麼我們對致力於這種長期增長感到非常強烈。我們已經兌現了這一點。如果你回顧一下過去 4 年，Ruplu，無論是貿易危機和退出大型投資組合，還是 COVID 或供應鏈危機，我們都真正執行了能夠通過我們的方式實現這一增長軌跡建立了這項業務。因此，我真正要說的是，投資組合的多樣性是我們非常願意做出這一承諾的重要原因。

Okay. If I can ask a follow-up on margins. So I think you just talked about the Reliability segment being 4.4% and Agility 4.5%. So you're pretty much at the mid-4s, right? And if we take out inflation pass-through, I mean, those margins are likely like 10 to 20 basis points higher already.

好的。如果我可以詢問有關利潤率的後續行動。所以我想你剛剛談到可靠性部分是 4.4% 和敏捷性部分是 4.5%。所以你差不多在 4 歲左右，對吧？如果我們排除通貨膨脹傳遞效應，我的意思是，這些利潤率可能已經高出 10 到 20 個基點。

So when I look at the long-term target of 5% for fiscal year '25, I mean, that seems a little bit conservative. I mean, if you look over the past 2 years, you've done like 40 basis points of margin improvement. This would be more like 20 basis points. So maybe can you talk about some of the levers that you have for the margin improvement over the next 2 years? Is it getting harder to get the margin improvement? Or how -- where is that margin improvement going to come from? And what -- why wouldn't it be higher than 5% is what I'm trying to get at.

因此，當我審視 25 財年 5% 的長期目標時，我的意思是，這似乎有點保守。我的意思是，如果你回顧過去 2 年，你的利潤率提高了 40 個基點。這更像是 20 個基點。那麼也許你能談談你在未來兩年內提高利潤率的一些槓桿嗎？提高利潤率是不是越來越難了？或者如何 - 利潤率的提高將來自哪裡？什麼 - 為什麼它不高於 5% 是我想要達到的目的。

Yes. I think, Ruplu, a little bit of this I answered in the last question about -- and you hit the nail on the head, right, that even with kind of Reliability margins, we were able to make decisions on investment for the longer term of the business because we could afford to make those investments, right?

是的。我想，Ruplu，我在上一個問題中回答了一點——你一針見血，對吧，即使有一定的可靠性保證金，我們也能夠做出長期投資決策的業務，因為我們有能力進行這些投資，對嗎？

And so obviously, as we try to -- as we taper those off, we expect that the longer-term margin commitment is one that we can definitely commit to.

很明顯，當我們嘗試 - 當我們逐漸減少這些時，我們希望長期保證金承諾是我們絕對可以承諾的。

In terms of what is the next upside to that 5%, I think you have to wait and see in the next Investor Day. I think it's too early to commit. But I see lots of room for what we can continue to drive. I'd say manufacturing productivity is big for us. There's tons more to do. I see all kinds of opportunities there.

就 5% 的下一個上漲空間而言，我認為你必須在下一個投資者日拭目以待。我認為現在承諾還為時過早。但我認為我們可以繼續推動的空間很大。我想說製造業生產力對我們來說很重要。還有很多事情要做。我在那裡看到了各種各樣的機會。

I'd say driving efficiency around program growth and how we do that, there's lots of room for efficiency there. The mix-up story continues to be important for us. That hasn't changed, right? We're continuing to drive that in all the 6 business units. And of course, like you said, if you take inflation out, the 10 to 20 basis points of upside on that does help. So I have to agree with your thesis. I just don't want to make any commitment. I would say we are sticking with the long-term commitment we're giving you.

我想說圍繞項目增長提高效率以及我們如何做到這一點，那裡有很大的效率空間。混亂的故事對我們來說仍然很重要。那沒有改變，對吧？我們將繼續在所有 6 個業務部門中推動這一目標。當然，就像你說的，如果你把通貨膨脹排除在外，那麼 10 到 20 個基點的上漲確實有幫助。所以我必須同意你的論點。我只是不想做出任何承諾。我會說我們堅持我們給你的長期承諾。

Okay. If I can -- since you mentioned efficiencies, I can sneak one more in. If we talk about manufacturing efficiency, I'm just looking over the past 4 years, right, your revenues have grown $4 billion, but your total manufacturing square foot has not increased that much. So I mean, technically, the revenue per square foot is looking much better.

好的。如果可以的話——既然你提到了效率，我可以再偷偷談一談。如果我們談論製造效率，我只看過去 4 年，對吧，你的收入增長了 40 億美元，但你的總製造面積並沒有增加那麼多。所以我的意思是，從技術上講，每平方英尺的收入看起來要好得多。

So I mean you had -- ever since you've come in, you've driven a lot of efficiency in the factories. Can you talk about like, as you think about the fiscal '25 -- fiscal year '25 target, how much more -- how should we think about CapEx? How much more revenue can the existing infrastructure support? And can you talk about any manufacturing efficiencies? Are there more efficiencies to be had? And where do they come from?

所以我的意思是，自從你進來以來，你已經提高了工廠的效率。你能談談嗎，當你考慮'25 財年 - 25 財年目標時，還有多少 - 我們應該如何考慮資本支出？現有基礎設施可以支持多少收入？你能談談任何製造效率嗎？是否有更高的效率？他們來自哪裡？

Sure. Well, first of all, thank you, Ruplu. Do more with less, that's the goal. A couple of things. Will there be incremental PP&E expenditures? Absolutely. We're going to have to facilitize for growth. Revathi talked about the regionalization trends, significant growth in the U.S., significant growth in Mexico, significant growth in Malaysia this year.

當然。嗯，首先，謝謝你，Ruplu。事半功倍，這就是目標。幾件事。是否會增加 PP&E 支出？絕對地。我們將不得不促進增長。 Revathi 談到了區域化趨勢，美國的顯著增長，墨西哥的顯著增長，今年馬來西亞的顯著增長。

You'll see in the K in another few months. But those regions are going to be growing probably 2x the overall Flex growth rate. So there will be some pressure to invest. But that's a high-class problem. And again, we remain laser-focused on factory productivity and high, high asset utilization.

再過幾個月你就會在 K 中看到。但這些地區的增長率可能是 Flex 整體增長率的 2 倍。所以會有一定的投資壓力。但這是一個高級問題。再一次，我們仍然專注於工廠生產力和高、高資產利用率。

(Operator Instructions) Your next question comes from the line of Paul Chung from JPMorgan.

（操作員說明）您的下一個問題來自摩根大通的 Paul Chung。

So just on Anord Mardix, so you've had this acquisition for about a year. Can you talk about how that business has performed kind of on revenues and margins? And would have been some of the benefits of cross-sell and how material has the acquisition been to kind of winning other deals in the space? And as we think about future complementary kind of acquisitions, where are you looking to find incremental value? And which specific verticals should we be thinking about that can kind of see the same playbook from an Anord Mardix?

所以就在 Anord Mardix 上，所以你已經進行了大約一年的收購。您能談談該業務在收入和利潤方面的表現如何嗎？交叉銷售的一些好處以及收購對贏得該領域其他交易的重要性如何？當我們考慮未來的互補性收購時，您希望在哪裡找到增量價值？我們應該考慮哪些特定的垂直領域可以從 Anord Mardix 中看到相同的劇本？

Yes. I'd say, Paul, is the acquisition has gone very well. If you recall, the strategy was we wanted to get bigger in the power space. And we particularly wanted to focus on data centers, both colo and hyperscale, and expand our portfolio in that because we felt it's a long-term macro for us that was important.

是的。我想說，保羅，收購進行得非常順利。如果您還記得的話，我們的戰略是我們想在權力空間中變得更大。我們特別想專注於數據中心，包括託管數據中心和超大規模數據中心，並在其中擴展我們的產品組合，因為我們認為這對我們來說是一個重要的長期宏觀。

And Anord Mardix has -- in terms of revenue growth has done really well, and they have a strong backlog. We're more focused on expanding their footprint and really helping them grow their business faster. And in terms of how it has helped us win overall business, I would say, in hyperscale and in colo, where the focus is really on schedule and delivery of schedule, it really helps to have a more comprehensive portfolio to be able to offer to our customers. And we see that as a differentiator that nobody else has in our space.

而 Anord Mardix 在收入增長方面做得非常好，而且他們有大量積壓。我們更專注於擴大他們的足跡，真正幫助他們更快地發展業務。就它如何幫助我們贏得整體業務而言，我想說，在超大規模和託管中，重點真正放在進度和進度交付上，它確實有助於擁有更全面的產品組合，能夠提供給我們的顧客。我們認為這是我們領域中其他人所沒有的差異化因素。

And so the conversation has definitely changed with data center space in terms of how we're focused on power and on the IT sector, whether it is racks and enclosures and servers and storage. So we're seeing the effect of it. It's playing out exactly how we thought it would, and you see that in our cloud expansion and our overall growth there. So really good asset, I would say, for us, and the growth story has been fantastic.

因此，就我們如何關注電力和 IT 部門（無論是機架、機櫃、服務器和存儲）而言，對話肯定隨著數據中心空間而改變。所以我們看到了它的效果。它完全按照我們的預期進行，您可以在我們的雲擴展和那裡的整體增長中看到這一點。我想說，對我們來說，這是非常好的資產，而且增長故事非常棒。

Okay. Great. And then just a follow-up on cash flow. Which end markets are you having kind of the most issues with golden screws? And how do we think about some of the timing of conversion there on cash? And are you taking advantage of more customer deposits to kind of partially offset as well? And then I know it's early, but can we see more meaningful conversion in '24 and get close to that 80% mark in your view?

好的。偉大的。然後只是對現金流的跟進。您在哪個終端市場遇到的金螺絲問題最多？我們如何考慮現金轉換的一些時間？你是否也在利用更多的客戶存款來部分抵消？然後我知道現在還早，但我們能否在 24 年看到更有意義的轉化，並在您看來接近 80% 的大關？

Sure. So I think 3 questions in there. First, on the end markets. the older technology or the larger node technology have been the biggest headwind of late. Things have gotten a little bit easier and so more the commoditized, more consumer end markets. But automotive and industrial, to an extent health solutions, have continued to face pressure from those storages, and that has not been helpful. You see it manifesting itself in the P&L as we talked about earlier today.

當然。所以我認為有 3 個問題。首先，在終端市場。較舊的技術或更大的節點技術是最近最大的阻力。事情變得更容易了一些，因此更多的是商品化的、更多的消費者終端市場。但是汽車和工業，在某種程度上是健康解決方案，繼續面臨來自這些存儲的壓力，而這並沒有幫助。正如我們今天早些時候談到的那樣，您會在損益表中看到它的體現。

But you're absolutely right, Paul, that also has an effect on inventory and ultimately, cash flow.

但你是絕對正確的，保羅，這也會對庫存產生影響，並最終影響現金流。

The -- I think the second part of that was what are the things that we can do to offset that. Well, working capital advances and support from the partnerships we have with our customers has definitely been helpful. And You probably heard in our prepared remarks, I was very pleased to see that for the first time in a long time, we saw the trends of net inventory, and I say net as in gross inventory less advances, from customers actually came down sequentially. So that was a source of cash and great to see.

我認為第二部分是我們可以做些什麼來抵消這種影響。好吧，我們與客戶的合作夥伴關係帶來的營運資金預付款和支持肯定很有幫助。你可能在我們準備好的發言中聽到了，我很高興看到很長一段時間以來我們第一次看到淨庫存的趨勢，我說淨庫存減去預付款，來自客戶實際上是連續下降的.所以這是一個現金來源，很高興看到。

Is there a light at the end of the tunnel? I don't know, but I'd certainly like to see that trend. So we are getting some support from the customers. I think Shannon asked a question before about the -- over the last couple of years, what's changed? Well, that would be one change: I think better partnership with our customers in supporting a very voracious appetite for inventory.

隧道盡頭有光嗎？我不知道，但我當然希望看到這種趨勢。所以我們得到了客戶的一些支持。我想香農之前問過一個問題——在過去的幾年裡，發生了什麼變化？好吧，那將是一個變化：我認為與我們的客戶建立更好的合作夥伴關係，以支持對庫存的巨大需求。

And then the third, looking ahead to 2024, it's a little premature to guide on that. Long term, I think everybody understands that this is a timing issue. And ultimately, yes, I mean, inventory should come down as all these shortages start to abate.

然後是第三個，展望 2024 年，現在就此提供指導還為時過早。從長遠來看，我想每個人都明白這是一個時間問題。最終，是的，我的意思是，隨著所有這些短缺開始減少，庫存應該會下降。

But I would balance that with a comment on organic growth look. Flex is probably going to grow 16% this year. That definitely puts some pressure on working capital, but it's our job to manage that. So a little early to target on '24, but I think overall, this is -- it's really just timing.

但我會通過對有機增長外觀的評論來平衡這一點。 Flex 今年可能會增長 16%。這肯定會給營運資金帶來一些壓力，但管理它是我們的工作。以 24 年為目標有點早，但我認為總的來說，這真的只是時機。

Your last question comes from the line of Jim Suva from Citigroup.

你的最後一個問題來自花旗集團的 Jim Suva。

This is more of a strategic bigger-picture question. Revathi, as you load more onshoring facilities, whether it be Guadalajara or North America or South America or Europe ones facilities and you build on a cost-plus model, now that those factories are better utilized plus the labor rate is a little bit higher, which you passed to the end customer, doesn't this also help out your long-term operating margin goals to be accretive also? I just wanted to make sure or maybe it doesn't work that way.

這更像是一個戰略性的大局問題。 Revathi，當你裝載更多的外包設施時，無論是瓜達拉哈拉、北美、南美還是歐洲的設施，你都建立在成本加成模型上，現在這些工廠得到了更好的利用，而且勞動力率略高一些，您將其傳遞給最終客戶，這是否也有助於實現您的長期營業利潤率目標？我只是想確定或者它可能不會那樣工作。

I would say first, Jim, that I think the areas you've picked out are all the right ones that we have said Mexico, parts of the U.S. are definitely our biggest growth trajectory, some in Malaysia, Southeast Asia. So those are all the right areas that we're growing.

吉姆，我首先要說的是，我認為你選擇的地區都是我們所說的墨西哥的正確地區，美國的部分地區絕對是我們最大的增長軌跡，一些在馬來西亞和東南亞。所以這些都是我們正在發展的正確領域。

The way I think about it, I mean, you see this in Reliability now, right? When we start to execute these programs, there's always some challenges with it because they are big complex programs. And what you see, particularly in Mexico and U.S., is very few people can execute these type of complex programs, and we are choosing to take those on. So you see that execution pressure which challenges some of our Reliability margins as you see now.

我的想法是，我的意思是，您現在在可靠性中看到了這一點，對嗎？當我們開始執行這些程序時，總會遇到一些挑戰，因為它們是大型複雜程序。你所看到的，尤其是在墨西哥和美國，很少有人能夠執行這些類型的複雜程序，而我們正在選擇接受這些程序。所以你看到執行壓力挑戰了你現在看到的我們的一些可靠性利潤率。

But as you say, as those programs mature and we get to a more efficient model, I won't call it just a cost-plus model but a more efficient model that we work with at our customers, we do expect that to be a tailwind for margins. And that's why I keep answering the question of the 5% as it's something that we feel good about, right? There's a lot of different ways this industry is monetizing and expanding margins, and that is definitely one of them. So I agree with you.

但正如你所說，隨著這些項目的成熟和我們獲得更高效的模型，我不會稱之為成本加成模型，而是我們與客戶合作的更高效模型，我們確實希望它成為利潤率的順風。這就是為什麼我一直回答 5% 的問題，因為這是我們感覺良好的事情，對吧？這個行業有很多不同的方式來貨幣化和擴大利潤，這絕對是其中之一。所以我同意你的看法。

Great. Congratulations to you and all your teams.

偉大的。祝賀你和你所有的團隊。

Thanks, Jim.

謝謝，吉姆。

Okay. So thank you, everyone. I just want to close by saying that on behalf of the Flex leadership team, sincere thanks to our customers and to all our shareholders for their support and, of course, to the Flex team across the world. Your hard work makes this possible. We wouldn't be here today without you all. So thank you so much and see you soon. Bye.

好的。所以謝謝大家。最後，我只想代表偉創力領導團隊衷心感謝我們的客戶和所有股東的支持，當然還要感謝偉創力在全球的團隊。你的辛勤工作使這成為可能。沒有你們，我們今天就不會在這裡。非常感謝你，很快再見。再見。

This concludes today's conference call. Thank you for joining.

今天的電話會議到此結束。感謝您的加入。