Flex Ltd (FLEX) 2024 Q1 法說會逐字稿

Good afternoon and thank you for standing by. Welcome to Flex's First Quarter Fiscal 2024 Earnings Conference Call. (Operator Instructions) As a reminder, this call is being recorded. I will now turn the call over to Mr. David Rubin. You may begin.

下午好，感謝您的支持。歡迎參加偉創力 2024 財年第一季度收益電話會議。 （操作員說明）謹此提醒，此通話正在錄音。我現在將把電話轉給大衛·魯賓先生。你可以開始了。

Thank you, Jenny. Good afternoon, and welcome to Flex's First Quarter Fiscal 2024 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. Slides for today's call as well as a copy of the earnings press release and summary financials are available on the Investor Relations section at flex.com. This call is being recorded and will be available for replay on our corporate website.

謝謝你，珍妮。下午好，歡迎參加偉創力 2024 財年第一季度收益電話會議。今天與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。兩人都會發表簡短的講話，然後進行問答。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取。此次通話正在錄音中，並將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 our 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.

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。這些陳述涉及風險和不確定性，可能導致我們的實際結果出現重大差異。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、新聞稿或我們最近向 SEC 提交的文件中的風險因素部分中的警告聲明。

Note this information is subject to change, and we undertake no obligation to update these forward-looking statements. Lastly, please note, unless otherwise stated, all results provided will be non-GAAP measures, and all growth metrics will be on a year-over-year basis. The full non-GAAP to GAAP reconciliations can be found in the appendix slides of today's presentation as well as the summary financials posted again on our 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。最後，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衡量標準，所有增長指標都將按年計算。完整的非 GAAP 與 GAAP 調節表可以在今天演示文稿的附錄幻燈片以及我們的投資者關係網站上再次發布的財務摘要中找到。

Now I'd like to turn the call over to our CEO. Revathi?

現在我想把電話轉給我們的首席執行官。瑞瓦蒂？

Thank you, David. Good afternoon and thank you for joining us today. As we move into our new fiscal year, we continue to make progress on our long-term strategy and deliver consistent results. Starting with our fiscal Q1 results on slide 4; overall, it was another solid quarter. Revenue came in at $7.3 billion, which is flat with last year's exceptionally strong Q1. Adjusted operating margin came in at 5.1%, and we delivered $0.57 of adjusted EPS. On July 3, we completed a follow-on offering for NEXTracker. We still own about 51% of the company, but this marks yet another significant step forward.

謝謝你，大衛。下午好，感謝您今天加入我們。隨著我們進入新的財政年度，我們繼續在長期戰略上取得進展並取得一致的成果。從幻燈片 4 上我們第一季度財報的結果開始；總體而言，這是又一個穩健的季度。收入為 73 億美元，與去年異常強勁的第一季度持平。調整後營業利潤率為 5.1%，調整後每股收益為 0.57 美元。 7 月 3 日，我們完成了 NEXTracker 的後續產品。我們仍然擁有該公司約 51% 的股份，但這標誌著又向前邁出了重要一步。

Now turning to slide 5; now looking at core Flex fundamentals, we continue to navigate the dynamic macro environment with trends in the current quarter, relatively in line with our expectations. Consumer-facing markets remained soft from several factors, including higher interest rates and lingering post-COVID spending normalization in a few areas. As we indicated last quarter, we also experienced some slowing in enterprise IT. But so far, it is performing to our prior expectations, and we continue to monitor demand indicators. On the other hand, we also faced a difficult comp this year in CEC offer. It grew 30% last year.

現在轉到幻燈片 5；現在看看 Flex 的核心基本面，我們繼續以當前季度的趨勢來應對動態的宏觀環境，相對符合我們的預期。由於多種因素的影響，面向消費者的市場仍然疲軟，包括利率上升和一些領域在新冠疫情后支出正常化方面揮之不去的問題。正如我們上季度所指出的，我們的企業 IT 也出現了一些放緩。但到目前為止，它的表現符合我們之前的預期，我們將繼續監控需求指標。另一方面，我們今年在CEC報價方面也面臨著困難。去年增長了30%。

However, we continue to see strength in most of our secular-driven markets, and that's one of the benefits of having our well-diversified portfolio. There's a lot of hype around AI right now. Maybe I can help separate a little fact from fiction, at least for what it means to us. We all know that the computer and power requirements of Generative AI are highly intensive. This has led to change in technical requirements in the data center. From a manufacturing perspective, these changing needs are creating new opportunities. I should say, however, this has been the trend for a little while now, and it's already driving some of our business. In the CEC, we've talked about share gains driven by our bespoke cloud offering based on our unique design, vertically integrated manufacturing and value-added fulfillment solutions. That is what helped drive triple-digit growth in our cloud business last year.

然而，我們繼續看到大多數長期驅動市場的實力，這是擁有多元化投資組合的好處之一。現在圍繞人工智能有很多炒作。也許我可以幫助區分一些事實和虛構，至少對於我們來說意味著什麼。我們都知道生成式人工智能對計算機和電力的要求非常高。這導致了數據中心技術要求的變化。從製造業的角度來看，這些不斷變化的需求正在創造新的機遇。然而，我應該說，這種趨勢已經存在了一段時間，並且它已經推動了我們的一些業務。在 CEC 中，我們討論了基於我們獨特的設計、垂直集成製造和增值履行解決方案的定制雲產品所驅動的份額收益。這就是去年我們雲業務實現三位數增長的原因。

These same capabilities have led to additional wins, including one ramping in the back half of this year. With our expertise in power, we have developed a new Power Module Solution, which, for example, is suited to the needs of the more intensive GPU-based computing, and we are seeing strong customer adoption here. And of course, changes in the cloud core design means changes to critical power configurations, and that's what's driving additional conversions. It's safe to say cloud technical needs will change as applications evolve over time. We have a highly adaptable platform operating at scale, so we continue to be well-positioned to capture these opportunities.

這些相同的功能帶來了更多的勝利，其中包括今年下半年的勝利。憑藉我們在電源方面的專業知識，我們開發了一種新的電源模塊解決方案，例如，它適合更密集的基於 GPU 的計算的需求，並且我們在這裡看到了強勁的客戶採用。當然，雲核心設計的變化意味著關鍵電源配置的變化，這就是推動額外轉換的原因。可以肯定地說，隨著應用程序的不斷發展，雲技術需求也會發生變化。我們擁有一個大規模運營、適應性強的平台，因此我們將繼續處於有利地位以抓住這些機會。

Now switching gears a little bit; healthcare trends remain intact. Elective procedure demand is strong and hospital CapEx is steady. We're experiencing some slowing in medical equipment related to life sciences, but this appears largely a result of normalization after an extended period of exceptionally strong demand for testing products from the pandemic. Now looking at the automotive space, our EV and ADAS customer demand remains strong. Technology transitions are driven by important long-term trends, and we have built a business based on customer and geographic diversity. As our Automotive business makes its way towards $4 billion in revenue, we are adding value on multiple levels to drive deeper and higher valued engagements.

現在稍微切換一下；醫療保健趨勢保持不變。擇期手術需求強勁，醫院資本支出穩定。我們正在經歷與生命科學相關的醫療設備的增長放緩，但這似乎在很大程度上是由於大流行期間對測試產品的需求異常強勁之後的正常化的結果。現在看看汽車領域，我們的電動汽車和 ADAS 客戶需求仍然強勁。技術轉型是由重要的長期趨勢驅動的，我們建立了基於客戶和地域多樣性的業務。隨著我們的汽車業務收入邁向 40 億美元，我們正在多個層面上增加價值，以推動更深入、更高價值的合作。

Our next-gen mobility bookings continue to grow. That's building on our momentum from record bookings from the last fiscal year. All of this comes from our proven design and engineering capabilities, our multi-disciplined technology expertise and decades of experience with the unique demands of the automotive industry. Now another important secular trend from which we're all benefiting is the global renewable energy transition. We're currently ramping both microinverter and EV fast charger production in the U.S. and these are just two examples of how well we are positioned to help enable the global shift to renewable energy.

我們的下一代出行預訂持續增長。這是我們上一財年創紀錄的預訂量所帶來的勢頭的基礎。所有這一切都源於我們經過驗證的設計和工程能力、多學科技術專業知識以及數十年滿足汽車行業獨特需求的經驗。現在，我們都受益的另一個重要的長期趨勢是全球可再生能源轉型。我們目前正在美國提高微型逆變器和電動汽車快速充電器的產量，這只是我們在幫助全球轉向可再生能源方面的兩個例子。

Last year, our renewables-related hardware revenue was just over $1.2 billion within our $6.5 billion industrial business unit. We expect renewables to grow again this year with improving long-term prospects as the rules and benefits of the IRA are finalized and fully understood. Again, having a diversified portfolio from a product, customer and geographic perspective is an important attribute to managing through the cycles and delivering consistent results over time.

去年，我們價值 65 億美元的工業業務部門與可再生能源相關的硬件收入略高於 12 億美元。我們預計，隨著 IRA 的規則和好處最終確定並得到充分理解，可再生能源今年將再次增長，並改善長期前景。同樣，從產品、客戶和地理角度來看，擁有多元化的投資組合是管理整個週期並隨著時間的推移提供一致結果的重要屬性。

We continue to believe the fundamentals of outsourced manufacturing are strong, and we remain very optimistic about our future. Our focus on providing a wide range of manufacturing capabilities and services where our customers need them across the globe is our competitive advantage. By leveraging our core capabilities and capitalizing on the long-term secular growth drivers, we will continue to drive value creation in the years to come.

我們仍然相信外包製造的基本面是強勁的，我們對未來仍然非常樂觀。我們專注於為全球客戶提供廣泛的製造能力和服務，這是我們的競爭優勢。通過利用我們的核心能力並利用長期長期增長動力，我們將在未來幾年繼續推動價值創造。

With that, I'll turn it over to Paul to take you through our financials.

接下來，我將把它交給保羅，讓他帶你了解我們的財務狀況。

Okay. Thank you, Revathi. I'll begin with our first quarter performance on slide 7. First quarter revenue was $7.3 billion, flat year-over-year against a difficult comp and with some macro-related slowing. Revenue was down 2% sequentially, which is in line with typical seasonality. Gross profit totaled $614 million and gross margin came in at 8.4%. Operating profit was $377 million, with operating margins at 5.1%, improving 60 basis points year-over-year. Earnings per share came in at $0.57 for the quarter. That was up 6% and includes $0.06 of headwind from NEXTracker non-controlling interest. Turning to our first quarter segment results on the next slide; Reliability revenue increased 11% to $3.3 billion.

好的。謝謝你，瑞瓦蒂。我將從幻燈片 7 上我們第一季度的業績開始。第一季度的收入為 73 億美元，與去年同期持平，而對比困難的情況以及一些與宏觀相關的放緩。收入環比下降 2%，與典型的季節性相符。毛利潤總計 6.14 億美元，毛利率為 8.4%。營業利潤為 3.77 億美元，營業利潤率為 5.1%，同比提高 60 個基點。該季度每股收益為 0.57 美元。上漲了 6%，其中包括來自 NEXTracker 非控股權益的 0.06 美元阻力。轉向下一張幻燈片中我們第一季度的業績；可靠性收入增長 11%，達到 33 億美元。

The growth was driven by continued momentum with strong secular trends such as next-gen mobility, renewables and cloud critical power. Operating income was $165 million, up 12%, and operating margin for this segment improved sequentially to 5% as production volumes increased on ramping programs and as we navigated labor inflation and lingering semiconductor disruptions. In Agility, revenue was $3.6 billion, down 10% as expected due to a combination of tough comps, continued weakness in consumer end markets and some softness in parts of enterprise IT. Operating income was $146 million, down 14%, but focused execution and strong cost management helped maintain operating margins at 4.1%.

這一增長是由下一代移動、可再生能源和雲關鍵電力等強勁長期趨勢的持續勢頭推動的。營業收入為 1.65 億美元，增長 12%，隨著產能增加計劃的產量增加以及我們應對勞動力通脹和揮之不去的半導體中斷，該部門的營業利潤率環比提高至 5%。 Agility 業務的收入為 36 億美元，如預期下降 10%，原因是競爭激烈、消費者終端市場持續疲軟以及企業 IT 部分業務疲軟。營業收入為 1.46 億美元，下降 14%，但專注的執行和強有力的成本管理幫助將營業利潤率維持在 4.1%。

Finally, NEXTracker revenue came in at $480 million, up 21% year-over-year. Operating income at NEXTracker was $82 million more than double what it was last year, delivering a solid 17.2% operating margin. Moving to cash flow on slide 9; inventory improvements continued into Q1, with total net inventory decreasing slightly in the quarter. We're seeing signs of recovery. However, we continue to expect inventory will be slow to unwind. Q1 net CapEx totaled $156 million on target at 2% of revenue. We expect similar total investment levels for the full fiscal 2024 as we continue to invest in future growth as well as technologies such as Advanced Automation and Machine Learning Solutions.

最後，NEXTracker 收入達到 4.8 億美元，同比增長 21%。 NEXTracker 的營業收入為 8200 萬美元，是去年的兩倍多，營業利潤率為 17.2%。轉到幻燈片 9 上的現金流；第一季度庫存持續改善，本季度總淨庫存略有下降。我們看到了復甦的跡象。然而，我們仍然預計庫存將緩慢釋放。第一季度淨資本支出總計 1.56 億美元，目標為收入的 2%。我們預計 2024 財年的總投資水平將與此類似，因為我們將繼續投資於未來增長以及高級自動化和機器學習解決方案等技術。

These investments are important to drive continued optimization and agility with increasingly complex products and changing labor markets. Free cash flow was an outflow of $150 million driven by the timing of our business, along with reductions in working capital advances and increased investments in CapEx. As previously indicated, we expect cash to be back half weighted to progressively improve through FY '24, and we continue to expect free cash flow to be $600 million or more. In line with our capital allocation priorities, we bought back $197 million worth of stock in the quarter.

這些投資對於推動日益複雜的產品和不斷變化的勞動力市場的持續優化和敏捷性非常重要。由於我們的業務時機、營運資本預付款的減少和資本支出投資的增加，自由現金流流出了 1.5 億美元。如前所述，我們預計現金將在 2024 財年恢復半加權並逐步改善，並且我們繼續預計自由現金流將達到 6 億美元或更多。根據我們的資本配置優先順序，我們在本季度回購了價值 1.97 億美元的股票。

On that note, I'll quickly remind everyone that the NEXTracker follow-on offering closed on July 3 after our quarter end. So while we received net proceeds of $495 million, it was not included in our final cash balance for this quarter. Although we continue to maintain a strong cash position and as I mentioned last quarter, we have no intention of carrying this level of cash indefinitely. As we have consistently demonstrated over the last several years, and we have and will continue to allocate capital in the best interest of our shareholders.

關於這一點，我將快速提醒大家，NEXTracker 後續產品已於 7 月 3 日季度結束後結束。因此，雖然我們收到了 4.95 億美元的淨收益，但它並未包含在本季度的最終現金餘額中。儘管我們繼續保持強勁的現金狀況，正如我上季度提到的，但我們無意無限期地持有這一水平的現金。正如我們在過去幾年中一貫所證明的那樣，我們已經並將繼續以股東最佳利益的方式分配資本。

Please turn to slide 10 for our segment outlook for the fiscal second quarter. For Reliability Solutions, we expect flat to up mid-single-digit revenue growth for this segment and continued growth in our end markets, albeit at a more moderate pace. Revenue in Agility is expected to be down mid-single to low double digits, with weakness in the consumer end markets affecting both lifestyle and consumer devices. CEC will be impacted by comms, infrastructure and enterprise IT spending adjustments ahead of our planned cloud ramps in the back half of the year. So far, the deceleration is consistent with our projections.

請參閱幻燈片 10，了解我們對第二財季的部門展望。對於可靠性解決方案，我們預計該細分市場的收入增長將持平至中個位數，並且我們的終端市場將持續增長，儘管增長速度較為溫和。 Agility 的收入預計將下降中個位數至低兩位數，消費終端市場的疲軟會影響生活方式和消費設備。在我們計劃於今年下半年推出雲服務之前，CEC 將受到通信、基礎設施和企業 IT 支出調整的影響。到目前為止，減速與我們的預測一致。

On to slide 11 for our quarterly guidance; we expect revenue in the range of $7.3 billion to $7.7 billion with adjusted operating income between $370 million and $400 million. Interest and Other is estimated to be around $52 million. We expect the tax rate to be around 13% for the quarter, and all that translate to adjusted EPS between $0.55 and $0.60 based on approximately 453 million weighted average shares outstanding. This guidance includes the impact of approximately $0.06 to $0.07 of non-controlling interest expense resulting from the NEXTracker IPO. Looking at our full year guidance on the following slide; we currently expect full year revenue between $30.5 million and $31.5 billion, with adjusted operating margin now between 5% and 5.2% and adjusted EPS between $2.35 and $2.55 a share.

請參閱幻燈片 11，了解我們的季度指導；我們預計收入將在 73 億美元至 77 億美元之間，調整後的營業收入將在 3.7 億美元至 4 億美元之間。利息及其他估計約為 5200 萬美元。我們預計本季度的稅率約為 13%，根據約 4.53 億股加權平均流通股計算，調整後每股收益將在 0.55 美元至 0.60 美元之間。本指引包括 NEXTracker IPO 產生的約 0.06 至 0.07 美元非控股權益費用的影響。在下面的幻燈片中查看我們的全年指導；我們目前預計全年收入在 3050 萬美元至 315 億美元之間，調整後營業利潤率目前在 5% 至 5.2% 之間，調整後每股收益在 2.35 美元至 2.55 美元之間。

This includes the impact of approximately $0.23 to $0.26 in non-controlling interest expense, which is up $0.06 to $0.07 from our prior guidance resulting from the NEXTracker follow-on offering and our ownership going from 61% to 51%. Before we begin Q&A, I'd like to emphasize our conviction and our strategy and our portfolio. While the world faces continued macro and geopolitical uncertainty, our well-rounded and diversified portfolio and customer base significantly mitigates exposure. The inherent strength of our business gives us confidence, and we continue to see solid momentum in the underlying drivers of our business.

這包括約 0.23 美元至 0.26 美元的非控股權益費用的影響，這比我們之前因 NEXTracker 後續發行而產生的指導增加了 0.06 美元至 0.07 美元，而且我們的所有權從 61% 增至 51%。在我們開始問答之前，我想強調一下我們的信念、我們的戰略和我們的產品組合。儘管世界面臨持續的宏觀和地緣政治不確定性，但我們全面且多元化的投資組合和客戶群顯著減輕了風險。我們業務的內在實力給了我們信心，我們繼續看到我們業務的潛在驅動力的強勁勢頭。

With that, I'll turn it back to Jenny to begin Q&A.

這樣，我會將其轉回給珍妮以開始問答。

(Operator Instructions) The first question is from Mark Delaney from Goldman Sachs.

（操作員說明）第一個問題來自高盛的馬克·德萊尼（Mark Delaney）。

Margins reached the highest level in many years at 5.1%. NEXTracker, of course, is an important factor in that, given the strength that you reported there. But I think you also saw some sequential improvement in Reliability. Maybe you can help us understand a bit better how you think about margins by segment as the year progresses. I think pretty steady at these sorts of levels implied in guidance, but any puts and takes we should be considering by segment as it relates to margins?

利潤率達到多年來的最高水平5.1%。當然，考慮到您在那里報告的實力，NEXTracker 是其中的一個重要因素。但我認為您也看到了可靠性方面的一些連續改進。也許您可以幫助我們更好地了解您如何看待隨著時間的推移按部門劃分的利潤率。我認為指導中暗示的這些水平相當穩定，但是我們應該按部門考慮任何看跌期權和看跌期權，因為它與利潤率有關？

Yeah, Mark. So first, I'm glad you asked the question, margins were much, much better sequentially, and we were very happy to see that. Maybe just kind of take you through the different segments. So first of all, NEXTracker, as you know, you look back a year ago, Q1 margins for NEXTracker were their trough margins for that year as they were still coming out of that all that repricing of backlog and getting through the logistics and steel challenges that they had a couple of years back. So they're lapping an easy comp, but I'll also say really strong execution from the NEXTracker team in the quarter at north of 17% margin so that was really, really good to see. You look at the other two segments sequentially, Agility, really good.

是的，馬克。首先，我很高興您提出這個問題，利潤率連續好得多，我們很高興看到這一點。也許只是帶你經歷不同的部分。首先，NEXTracker，如您所知，回顧一年前，NEXTracker 第一季度的利潤率是當年利潤率的低谷，因為他們仍在擺脫所有積壓訂單的重新定價並克服物流和鋼鐵挑戰他們幾年前就有過這樣的經歷。所以他們的表現很簡單，但我還要說的是，NEXTracker 團隊在本季度的執行力非常強，利潤率超過 17%，所以這真的非常非常好。你依次看另外兩段，敏捷，確實不錯。

Look, volume was down a little bit, but if you look at where volume came down within Agility, part of that was double-digit declines in the Lifestyle business. As I think everyone knows that tends to be the richer margin business unit within Agility. And so if I look at their decrementals on lower volume, I think they did a fantastic job managing that so thrilled to see that. And then if you look at Reliability, the Reliability story over the last 6 to 9 months has been doing what we can to accelerate a number of very important next-gen programs. You saw 4% margins in Q3 and Q4 of last year and a huge improvement in Reliability as we moved here into Q1. On $51 million of incremental sales, profit dropped through at 45%, which is very strong incremental margins. I can't say enough about the execution of that team this quarter. Very happy to see it.

看，銷量略有下降，但如果你看看 Agility 銷量下降的部分，其中一部分是生活方式業務的兩位數下降。我想每個人都知道，這往往是敏捷內部利潤更豐厚的業務部門。因此，如果我看看他們在較低交易量上的遞減，我認為他們在管理方面做得非常出色，所以很高興看到這一點。然後，如果你看看可靠性，就會發現過去 6 到 9 個月的可靠性故事一直在盡我們所能來加速許多非常重要的下一代項目。去年第三季度和第四季度的利潤率為 4%，隨著我們進入第一季度，可靠性也有了巨大的提高。在 5100 萬美元的增量銷售額中，利潤下降了 45%，這是非常強勁的增量利潤。對於該團隊本季度的執行情況，我無法說得太多。很高興看到它。

That's helpful context. Thinking about the higher-level opportunities that you spoke to, you mentioned some of the secular changes underway in areas such as electrification and AI. When you look at what Flex may need in order to properly address those opportunities over the next several years, how are you thinking about the company's capabilities? And would you consider using some of the cash on hand for M&A? And maybe acquisitions akin to what you did with Anord Mardix and adding even some product type capabilities.

這是有用的背景。考慮到您談到的更高層次的機會，您提到了電氣化和人工智能等領域正在發生的一些長期變化。當您考慮偉創力可能需要什麼才能在未來幾年正確抓住這些機會時，您如何看待該公司的能力？您是否會考慮使用部分手頭現金進行併購？也許收購類似於您對 Anord Mardix 所做的收購，甚至添加一些產品類型功能。

Yeah. Mark, what I'd say is both electrification and AI as it relates to both cloud and CEC and our power business are both important to us. We have been investing in our electrification, in our EV business in automotive for a while, and you have seen the results of it in the bookings that came in last year and how we are continuing to perform with the overall growth of the business this year. So we feel really good in our investments there. We have made design investments that creates a platform opportunity for EV customers to use when they want to use our platform so we can do that as a full design house or we can do that as a joint manufacturing with them if they want to give us their own design for us to contract manufacture.

是的。 Mark，我想說的是電氣化和人工智能，因為它與雲和 CEC 相關，而且我們的電力業務對我們都很重要。一段時間以來，我們一直在投資我們的電氣化和汽車電動汽車業務，您已經在去年的預訂中看到了它的結果，以及我們今年如何繼續實現業務的整體增長。所以我們在那裡的投資感覺非常好。我們進行了設計投資，為電動汽車客戶創造了一個平台機會，讓他們在想要使用我們的平台時可以使用，這樣我們就可以作為一個完整的設計公司來做到這一點，或者如果他們想給我們他們的產品，我們可以與他們聯合製造。我們自己設計來合同製造。

So electrification as a whole, we feel really good about our position there. Will there be opportunities for tuck-in acquisitions? I would say there always is. At this time, our focus on the use of cash is really around buybacks, but we always look for nice technology add-ins if it's possible. And then we would love if it came in as the returns that (inaudible) did for us. But we don't have significant gaps for our electrification, automotive portfolio to do really well. So we feel good about that. I'd say on AI, from the CEC perspective, the most important thing that customers are expecting from us, and we have a big platform ramp that's happening in the second half of this year for a cloud customer that is around this particular issue is that you have to be able to scale fast.

因此，就整個電氣化而言，我們對自己的地位感到非常滿意。會不會有收購機會？我想說總是有。目前，我們對現金使用的重點實際上是圍繞回購，但如果可能的話，我們總是尋找好的技術插件。如果它能像（聽不清）為我們帶來的回報一樣出現，我們會很高興。但我們的電氣化、汽車產品組合在取得真正出色的表現方面並沒有顯著的差距。所以我們對此感覺良好。我想說，在人工智能方面，從 CEC 的角度來看，客戶對我們的期望最重要的是，我們在今年下半年為圍繞這一特定問題的雲客戶提供了一個大型平台升級，你必須能夠快速擴展。

You have to have very complex fully vertically integrated capability. And that's what customers are looking for from the CEC side. And that Flex is very good at doing. From the power side, we have developed on our embedded power products that's in the industrial business, product that is very specific for GPU power needs. And those products are already launched with one customer, and we're looking to launch that with other customers that we have very strong growth potential. I don't see a lot of acquisition needs there, but I'd say, yes, I mean, from a technology perspective, if there's any plug-in capability for both of these areas, we'll look at it. But at this point, we do think our best use of cash will be in buybacks.

你必須擁有非常複雜的完全垂直整合的能力。這正是客戶對 CEC 方面的期望。 Flex 非常擅長做到這一點。從電源方面來看，我們開發了工業業務中的嵌入式電源產品，該產品非常適合 GPU 電源需求。這些產品已經向一位客戶推出，我們希望向其他客戶推出該產品，因為我們有非常強大的增長潛力。我在那裡沒有看到太多的採購需求，但我想說，是的，我的意思是，從技術角度來看，如果這兩個領域都有任何插件功能，我們會考慮它。但目前，我們確實認為現金的最佳用途是回購。

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

您的下一個問題來自美國銀行的 Ruplu Bhattacharya。

First one on margins compared to your guidance for 1Q, I mean, margins came in much better, especially in Reliability. And it looks like you're taking up the full year by 10 bps to 5.1%. But the EPS guidance range remains the same. Is that all because of the higher non-controlling interest from NEXTracker? And on the Agility side, on maybe $100 million lower revenues, your margins declined sequentially, like 400 bps or 500 bps -- sorry, 40 bps, 50 bps. So can you -- do you think that will sustain at a lower level throughout the year because you're guiding lifestyle and consumer devices to be weaker?

第一個是關於利潤率的，與您對第一季度的指導相比，我的意思是，利潤率要好得多，尤其是在可靠性方面。看起來全年的增長率為 10 個基點，達到 5.1%。但每股收益指引範圍保持不變。這都是因為 NEXTracker 的非控股權益更高嗎？在敏捷性方面，收入可能減少 1 億美元，您的利潤率會連續下降，比如 400 個基點或 500 個基點——抱歉，40 個基點、50 個基點。那麼，您是否認為這一數字全年都會維持在較低水平，因為您正在引導生活方式和消費設備變得更弱？

Yeah. So good questions, Ruplu, appreciate it. And so first of all, just on your NCI comment and EPS, you're right. We took up the margin rate. Things look really good in Q1. Like you said, it wasn't across the board. We did better in Agility, Reliability and NEXTracker in terms of margin performance. So that was very nice to see, and you heard my comments to Mark, just on the sequentials. The NCI answer, absolutely, that you're thinking about the right way. As you know, our stake went from 61% down to 51%.

是的。很好的問題，魯普魯，謝謝。首先，就您的 NCI 評論和 EPS 而言，您是對的。我們採用了保證金率。第一季度的情況看起來非常好。正如你所說，這並不是一刀切的。就利潤表現而言，我們在敏捷性、可靠性和 NEXTracker 方面做得更好。所以很高興看到這一點，你聽到了我對馬克的評論，只是關於連續劇。 NCI 的答案是肯定的，您正在考慮正確的方法。如您所知，我們的持股比例從 61% 降至 51%。

And so there's a little bit more minority interest headwind or NCI headwind, and we called that out in the prepared remarks. So that's -- you're right, that's how to think about it. In terms of Agility decrementals, here's what I would say. Sequentially for Agility, they had soft revenue. It was for the things that we had sort of been telegraphing to everyone over the last couple of quarters, softer consumer end markets -- but on 10% lower revenue, their decremental margins were only about 17%, which is pretty good considering where we're seeing the volume declines.

因此，存在更多的少數股東利益逆風或 NCI 逆風，我們在準備好的發言中指出了這一點。所以，你是對的，這就是思考的方式。就敏捷性遞減而言，這就是我要說的。接下來，Agility 的收入疲軟。這是為了我們在過去幾個季度向所有人傳達的信息，消費者終端市場疲軟——但在收入下降 10% 的情況下，他們的利潤率下降幅度僅為 17% 左右，考慮到我們的情況，這已經相當不錯了。看到成交量下降。

It's in the Lifestyle segment and in Consumer Devices, Lifestyle of the three business units within Agility that tends to be the better margin business. And so when you have top line pressure, it does convert, that said, really strong execution by the team to sort of mitigate the softer volume. And it was things like cost reduction and pulling all the levers we need to pull to continue to have strong margins. And I was thrilled to see margins still north of 4% in the quarter despite the lower volumes.

Agility 旗下三個業務部門的生活方式部門和消費設備、生活方式往往是利潤率更高的業務。因此，當你面臨頂線壓力時，它確實會轉化為團隊的強大執行力，以緩解銷量疲軟的情況。這包括降低成本和採取我們需要的所有手段來繼續保持強勁的利潤率。儘管銷量較低，但我很高興看到本季度的利潤率仍高於 4%。

Yeah. And at a time like this when there's so much instability in terms of how end markets are moving it's really good to see margin performance like this. And we've always talked about how Agility performs in a down market. And so this is fantastic to see how well they're performing from a margin standpoint in a time like this. So we feel good about the year. We're still in the first quarter, our fiscal Q1. So it's a good time to hold the full year the way we think it is. I think it's a prudent thing to do, but feel good overall in terms of where margins have come in.

是的。在終端市場走勢如此不穩定的時期，看到這樣的利潤率表現真是太好了。我們一直在談論敏捷性在低迷市場中的表現。因此，在這樣的時期，從利潤的角度來看他們的表現真是太棒了。所以我們對這一年感覺良好。我們仍處於第一季度，即第一財季。因此，現在是按照我們的想法來慶祝全年的好時機。我認為這是一件謹慎的事情，但就利潤率而言，總體感覺良好。

Okay. Let me ask you a follow-on question on ROIC, return on invested capital. What do you target -- what's your target range for that metric? It looks like over the last couple of quarters, it's been trending in the 20%, like low 20%, including goodwill. And how do you see that trending over the next couple of quarters or years? I mean, what are some of the things that you can do to potentially improve that?

好的。讓我問你一個關於ROIC（投資資本回報率）的後續問題。您的目標是什麼——該指標的目標範圍是多少？看起來過去幾個季度，它的趨勢一直在 20%，比如低 20%，包括商譽。您如何看待未來幾個季度或幾年的趨勢？我的意思是，你可以做哪些事情來潛在地改善這一點？

Yeah. We target north of 20% and ROIC is one of those funny things, right? If you target 40%, you're leaving investments on the table that could be accretive to our overall investors. And so I would rather not hard peg a number, but rather just say our job is to maintain solid ROIC so that all of our investors benefit and that would be certainly north of 20%.

是的。我們的目標是 20% 以上，ROIC 是其中一件有趣的事情，對吧？如果您的目標是 40%，那麼您就將放棄可能為我們整體投資者帶來增值的投資。因此，我不想硬性規定一個數字，而只是說我們的工作是保持穩定的投入資本回報率，以便我們所有的投資者受益，而這肯定會超過 20%。

The next one is from Samik Chatterjee from J.P. Morgan.

下一篇來自摩根大通的 Samik Chatterjee。

I guess if I can start with one really on the revenue side here in certain end markets that you are seeing a bit more headwind like consumer. I know you said they're tracking largely in line with what you expect even on the enterprise side. But if I look at sort of relative to where consensus was, it looks like you're sort of expecting a more back-end loaded year than where consensus was.

我想，如果我能從某些終端市場的收入方面真正開始的話，你會看到像消費者這樣的更多逆風。我知道你說過，即使在企業方面，他們的跟踪也基本上符合你的預期。但如果我看看相對於共識的情況，看起來你預計今年的後端負載會比共識的情況更大。

And I'm just curious, like when you think about a bit more of a back-end loaded year, is that really driven by the visibility you have and maybe the engagement with the cloud customer that you talked about or are there any other sort of segments you would call out where there's a bit more activity in the back half that we are maybe consensus and depreciating in relation to how you get to that full year number? And I have a follow-up.

我只是很好奇，就像當你考慮更多後端負載的一年時，這真的是由你擁有的可見性驅動的，也許是你談到的與雲客戶的互動，或者還有其他類型的嗎？您會指出後半段有更多的活動，我們可能已經達成共識，並且相對於您如何獲得全年數字而貶值？我有一個後續行動。

Yeah. Samik, I'll start, and then Paul will probably have something to add. First is I think it's pretty usual for us to have second half revenue be higher than the first half. So that's pretty common for us. And then fiscal '23 was definitely an unusual year, right? It was very strong first half. So the comps improve in the back half of the year. I would say that if you look at fiscal '22, second half was up 7% over the first half. And so we've had similar trends before that you see. And so we expect more normalization, I would say, this year than what we saw last year. And then if you look at the second half, what I feel really good about is what's driving the volume increase for us is our expectation in some new bookings that we have in cloud and power that will drive the second half acceleration.

是的。 Samik，我先開始，然後 Paul 可能會補充一些內容。首先，我認為下半年收入高於上半年對我們來說是很常見的。所以這對我們來說很常見。那麼 23 財年絕對是不尋常的一年，對吧？上半場非常強勁。因此，下半年的業績有所改善。我想說，如果你看看 22 財年，下半年比上半年增長了 7%。所以你看，我們之前也有過類似的趨勢。因此，我想說，我們預計今年的正常化程度將高於去年。然後，如果你看看下半年，我真正感覺良好的是，推動我們銷量增長的因素是我們對雲和電力方面的一些新預訂的期望，這將推動下半年的加速。

Reliability already has a strong first half. We'll have a strong second half. And also, we don't anticipate much improvement in the consumer markets, and so we'll lap some difficult comps. So I'd say overall, it makes sense for us to think the year will pan out the way we have. And then plus we're trying to forecast in a very dynamic macro environment. We're usually very prudent in our end market forecast and have been fairly accurate in the last five years in terms -- even with such a dynamic environment. So -- and then lastly, I would say, very importantly is that volumes move around, but we're also very confident in our EPS target. So I don't know, Paul, if you'll add anything to that?

上半年可靠性已經很強。我們將有一個強勁的下半場。而且，我們預計消費市場不會有太大改善，因此我們將進行一些困難的比較。所以我想說，總的來說，我們認為今年會取得現在的成績是有道理的。另外，我們正在嘗試在一個非常動態的宏觀環境中進行預測。我們通常對終端市場預測非常謹慎，並且在過去五年中相當準確 - 即使在如此動態的環境下也是如此。因此，最後，我想說，非常重要的是銷量的變化，但我們對每股收益目標也非常有信心。所以我不知道，保羅，你是否願意補充一些內容？

No, that's clear. I would like to say welcome Samik. Nice to hear from you.

不，這很清楚。我想說歡迎薩米克。很高興聽到你的消息。

And maybe just for my follow-up. You talked about the opportunity with these cloud customers on AI-related engagements. I'm more curious if you see an opportunity to maybe take the margin profile a bit higher on these AI engagements related to the sort of traditional run rate business that you have with them? How does the competitive landscape look or what do you even sort of -- what are the sort of decision-making points that you're putting up with them? And is there an opportunity to sort of get a premium in some relation to drive a higher margin mix on that?

也許只是為了我的後續行動。您談到了與這些雲客戶進行人工智能相關合作的機會。我更好奇的是，您是否認為有機會在這些與您與他們開展的傳統運行率業務相關的人工智能業務中提高利潤率？競爭格局如何？或者您對他們的決策點有何看法？是否有機會在某種關係上獲得溢價，從而推動更高的利潤組合？

Yeah. I'd say, Samik, what Flex has done consistently over the last five years in almost all end markets that we participate in is really focused on working with customers where we can provide right solutions that move our margin profile up. And you've seen that play out in the last five years. With AI, what we -- like I said in my comments in the beginning, what's really important is how quickly can you scale? Are you capable of handling complex products? And we're talking scale we're talking about significant scale in a short amount of time. Are you capable of complexity of products like this?

是的。 Samik，我想說的是，Flex 在過去五年中在我們參與的幾乎所有終端市場中始終如一地所做的事情是真正專注於與客戶合作，在這些客戶中我們可以提供正確的解決方案來提高我們的利潤狀況。在過去的五年裡你已經看到了這種情況的發生。對於人工智能，我們——就像我在開頭的評論中所說的那樣，真正重要的是你能多快地擴展？您有能力處理複雜的產品嗎？我們談論的是規模，我們談論的是短時間內的顯著規模。你有能力處理這樣複雜的產品嗎？

Can you brainstorm with the customer in terms of making improvements to their product because a lot of it is new product going into the market? So from the CEC side, those are the main things that customers are looking for is a partner who will be very consistent, has high technology capability. And we do command a price premium for those kinds of things. So that definitely helps in terms of our overall mix and margin. And then on the embedded power side, on the industrial side, those are the designs that we own. We command a premium on those products.

您能否與客戶集思廣益，討論如何改進他們的產品，因為其中很多都是進入市場的新產品？因此，從CEC方面來看，客戶尋找的主要是一個非常一致、具有高技術能力的合作夥伴。我們確實對這類東西要求溢價。因此，這對我們的整體組合和利潤率肯定有幫助。然後在嵌入式電源方面，在工業方面，這些是我們擁有的設計。我們對這些產品收取溢價。

There's not many suppliers out there who are capable of developing that. And we're with some very premier customers already with our products that we've been qualifying for the last year, and those will come in at a very significant premium to our base product. So I would say, yes, I mean, we have shown consistently that we participate in end markets only if we like the margin profile. We don't go for the next shiny bicycle. So I would say AI would be the same thing. And we feel quite confident that it will meet the margin profiles we're looking for.

有能力開發這種技術的供應商並不多。我們已經擁有一些非常重要的客戶，他們已經使用了我們去年獲得資格的產品，這些產品的價格將比我們的基礎產品高得多。所以我想說，是的，我的意思是，我們一直表明，只有當我們喜歡利潤狀況時，我們才會參與終端市場。我們不會追求下一輛閃亮的自行車。所以我想說人工智能也是一樣的。我們非常有信心它將滿足我們正在尋找的利潤狀況。

No bicycles.

自行車禁行。

Thank you. Thanks for the responses.

謝謝。感謝您的回复。

Your next question is from Matt Sheerin from Stifel.

您的下一個問題來自 Stifel 的 Matt Sheerin。

Question, Paul, on your comments around inventory, which continues to be fairly bloated revenue -- I mean, on a dollar basis, certainly and a days basis. You talked about that unwind being relatively slow. Is that because there's still some hard-to-get parts and still elevated lead times? Are customers asking you to keep inventory on hand? How do we think about this playing out over the next few quarters?

保羅，請問你對庫存的評論，庫存仍然是相當龐大的收入——我的意思是，以美元為基礎，當然是以天為基礎。你談到放鬆相對緩慢。這是因為仍然存在一些難以獲得的零件並且交貨時間仍然較長嗎？客戶是否要求您保留現有庫存？我們如何看待未來幾個季度的情況？

Yeah. I mean, I don't love the word bloated. But inventory will be gradual to unwind. I think we've been carrying levels of inventory that we've needed to just support -- to support our end customers. And in many cases, you look back 18 months ago, our customers wanted to carry more buffer stock and with the plan that, that be sort of short term and I think short term sort of blended into medium term. But expectation continues that inventory will unwind. If you look at sort of the dynamics of free cash flow, as you know, we've had significant support over the last year or two from working capital advances.

是的。我的意思是，我不喜歡臃腫這個詞。但庫存將逐步減少。我認為我們的庫存水平一直是我們所需要的——支持我們的最終客戶。在很多情況下，回顧 18 個月前，我們的客戶希望持有更多的緩衝庫存，並且計劃是短期的，我認為短期與中期相結合。但人們仍然預計庫存將會減少。如果你看看自由現金流的動態，你就會發現，在過去的一兩年裡，我們從營運資本預付款中獲得了巨大的支持。

That's customers basically giving us cash to carry those higher inventory levels. And so what's going to happen here over the next several quarters as you'll see inventory levels gradually come down. You'll also see working capital advance levels gradually come down. So those two opposite sides of the balance sheet items will slowly start to pull back. And what I think will happen is because we're carrying more inventory than we are advances over time, you'll see cash flow improve. As I look to the full year, no change on our cash outlook. We still feel confident in the $600 million plus of free cash generation, no change there. I would say everything is at least at the moment we're kind of surprise free.

這基本上是客戶給我們現金來維持較高的庫存水平。因此，接下來的幾個季度將會發生什麼，你會看到庫存水平逐漸下降。您還會看到營運資金預付款水平逐漸下降。因此，資產負債表項目的這兩個相對面將慢慢開始回落。我認為將會發生的情況是，隨著時間的推移，我們的庫存量將超過預付款，您會看到現金流量有所改善。展望全年，我們的現金前景沒有變化。我們仍然對 6 億多美元的免費現金生成充滿信心，沒有任何變化。我想說，至少目前我們一切都沒有什麼意外。

Got it. Okay. And then just as my follow-up, just regarding NEXTracker and the remaining 51% stake that you have in that. What should we think about the exit strategy and how that plays out?

知道了。好的。然後，正如我的後續行動，關於 NEXTracker 以及您所擁有的剩餘 51% 的股份。我們應該如何看待退出策略以及其結果如何？

Matt, we've been very consistent in what we've said of our NEXTracker, and we have followed through. You can see that with the last event that took place with our follow-on. And I would say we've always said NEXTracker will do better as a standalone company, and we'll continue to execute in that direction so no change on that.

馬特，我們對 NEXTracker 的說法非常一致，並且我們一直堅持到底。您可以在我們的後續活動中看到這一點。我想說的是，我們一直說 NEXTracker 作為一家獨立公司會做得更好，我們將繼續朝這個方向執行，所以這一點不會改變。

(Operator Instructions) Your next question is from Steven Fox from Fox Advisors.

（操作員說明）您的下一個問題來自 Fox Advisors 的 Steven Fox。

Two questions, if I could. First of all, Paul, you mentioned the 45% incremental margins on the Reliability business. Can you break that down a little bit further? Give us what's normal versus maybe what was a little more episodic? And then I had a follow-up.

如果可以的話，有兩個問題。首先，Paul，您提到了可靠性業務 45% 的增量利潤。你能進一步分解一下嗎？請告訴我們什麼是正常的，什麼是偶發的？然後我進行了跟進。

Sure. So Reliability, I mean, here's the quick math. Sales were up 51%. Profit was up -- excuse me, 51%, I wish. Sales were up $51 million. Operating profit was up $23 million. So that's the 45% drop-through that I referred to. So Q3 and Q4 were tough. We made a lot of investments in that Reliability business as we were preparing to accelerate a number of these next-generation program ramps. And that meant we had some stranded resources.

當然。我的意思是，可靠性，這是一個簡單的數學計算。銷售額增長了 51%。利潤上升了——對不起，我希望是 51%。銷售額增加了 5100 萬美元。營業利潤增加 2300 萬美元。這就是我提到的 45% 的下降率。所以第三季度和第四季度很艱難。當我們準備加速一些下一代項目的升級時，我們在可靠性業務上進行了大量投資。這意味著我們有一些擱淺的資源。

We had some stranded labor. We were hiring sort of ahead of the curve. And so as volume comes and all those resources become fully utilized, it just has a huge effect on your incrementals. So I think that was a lot of it. And I would say it was essentially across the board. We're ramping in the Industrial business for a number of Reliability -- excuse me, renewable energy programs. We've got a bunch of stuff going on in automotive right now. They did much better sequentially as well. The Health Solutions business was up quarter-over-quarter. So I would say across the board, business-by-business, strong performance and much better than what we saw in the back half of last year.

我們有一些滯留勞動力。我們的招聘有點超前。因此，隨著數量的增加以及所有這些資源的充分利用，它會對您的增量產生巨大的影響。所以我認為這已經很多了。我想說這基本上是全面的。我們正在工業業務中大力發展一些可靠性項目——對不起，是可再生能源項目。我們現在在汽車領域正在進行很多工作。他們也連續表現得更好。健康解決方案業務環比增長。因此，我想說，從各個業務來看，整體表現強勁，比我們去年下半年看到的要好得多。

Great. That's helpful. And then just during the CapEx commentary, you mentioned investments. I assume this is internal investments in automation and AI or machine learning. Can you just talk about how you're making decisions on where to invest there? Are those customer-sponsored? Are those things that are just meant to generally expand your capabilities? How do we think about what kind of return you get on those investments?

偉大的。這很有幫助。然後就在資本支出評論中，您提到了投資。我認為這是對自動化和人工智能或機器學習的內部投資。您能談談您是如何決定在那裡投資的嗎？這些是客戶贊助的嗎？這些東西只是為了擴展你的能力嗎？我們如何看待您從這些投資中獲得的回報？

Yeah. I would say it's a mix of both. We're definitely making investments in factory automation, machine learning related to improving our factory automation or our planning processes or things like that so definitely making investments on that. I think whether you think about kind of improving your quality inspection capability as an example, right? And that helps the customer improve their overall quality performance but also helps flex from a productivity standpoint. So there are many examples like that where you will use to deploy a machine vision capability that can self-learn and correct itself with time.

是的。我想說這是兩者的混合。我們肯定會在工廠自動化、與改進工廠自動化相關的機器學習或我們的規劃流程或類似的事情上進行投資，所以肯定會在這方面進行投資。我想你是否會考慮提高你的質量檢驗能力作為一個例子，對吧？這不僅可以幫助客戶提高整體質量績效，還可以從生產力的角度提高靈活性。因此，有很多這樣的例子，您將使用它來部署可以自學習並隨著時間的推移進行自我修正的機器視覺功能。

So these kinds of things would either be funded by us or funded by the customer to drive productivity and better quality performance. So I'd say some of the investments are for us. Some of the investments are customer-driven. But also from a product design perspective, those mainly come in our power business that's in industrial that's more for the Generative AI space. But most of it is for kind of factory automation, I would say, deployments is what we're driving. And our belief is that it drives productivity for the business.

因此，這類事情要么由我們資助，要么由客戶資助，以提高生產力和更好的質量績效。所以我想說有些投資是給我們的。有些投資是客戶驅動的。但從產品設計的角度來看，這些主要來自我們的工業電力業務，更多的是生成人工智能領域。但我想說，其中大部分是為了工廠自動化，部署是我們正在推動的。我們相信它可以提高企業的生產力。

And your last question is from Shannon Cross from Credit Suisse.

你的最後一個問題來自瑞士信貸銀行的香農·克羅斯（Shannon Cross）。

Revathi, I was wondering if you could talk about within Industrial. I saw you recently announced the opening of the facility with Enphase in Columbia, South Carolina, and that was pointed to in terms of being at least somewhat funded or supported by the IRA. So I'm just wondering how you're thinking about some of this government stimulus money that's coming through? And how we'll see it sort of manifest itself within Flex's results over the next couple of years? And then I have a follow-up.

Revathi，我想知道您是否可以談談工業領域的問題。我看到您最近宣佈在南卡羅來納州哥倫比亞市與 Enphase 合作開設該設施，並指出這至少得到了愛爾蘭共和軍 (IRA) 的一定程度的資助或支持。所以我只是想知道您如何看待即將到來的政府刺激資金？我們將如何看待它在未來幾年 Flex 的業績中體現出來？然後我有一個後續行動。

Yeah, I would say from an IRA perspective that looks at driving growth in the U.S. for renewables energy. For us, the biggest impact, Shannon will be growth that is funded by our customers that is mainly focused on U.S. manufacturing. So Enphase is a classic example of that, that we're quickly seeing customers pivot to U.S. manufacturing capability to take advantage of things like IRA. I would say, from a margin standpoint, how that helps in the long run and how those incentives really play out, I think there's still work to be done there. But the view is that there is a growth opportunity for our customers and us that we all should be really taking advantage of Enphase and other customers in the inverter space that we are ramping up for all fit into that environment. So we do see overall growth in our U.S. manufacturing as it results to IRA or infrastructure, and you've seen several announcements related to that.

是的，我想說的是，從 IRA 的角度來看，它著眼於推動美國可再生能源的增長。對我們來說，香農最大的影響將是由我們的客戶資助的增長，這些客戶主要集中在美國製造業。 Enphase 就是一個典型的例子，我們很快就看到客戶轉向美國的製造能力，以利用 IRA 等技術。我想說，從利潤的角度來看，從長遠來看這有何幫助以及這些激勵措施如何真正發揮作用，我認為仍有工作要做。但我們認為，我們的客戶和我們都有一個增長機會，我們都應該真正利用 Enphase 和逆變器領域的其他客戶，我們正在為適應該環境而加大力度。因此，我們確實看到了美國製造業的整體增長，因為這是 IRA 或基礎設施的結果，而且您​​已經看到了一些與此相關的公告。

Great. And then, Paul, maybe if we could talk a little bit about cash, cash balance, share repurchase timing. You bought back $197 million of stock last quarter. How should we think about the pace of share repurchase? How are you thinking about that? And what do you think you're sort of cash balances that you need to run the business? I understand free cash flow is more back-end loaded this year, but I think you had some excess cash coming into the NEXTracker sale. And then obviously, you've got those proceeds and then you're going to generate cash. So just wondering how you're thinking about it in terms of return to shareholders.

偉大的。然後，保羅，也許我們可以談談現金、現金餘額、股票回購時機。您上個季度回購了 1.97 億美元的股票。我們應該如何看待股票回購的節奏？你覺得怎麼樣？您認為經營業務所需的現金餘額是多少？我知道今年自由現金流更多的是後端負載，但我認為您有一些多餘的現金進入了 NEXTracker 銷售。顯然，你已經獲得了這些收益，然後你將產生現金。所以只是想知道您如何看待股東回報。

Yeah. So we were pleased to be able to step up repo in the first quarter compared to what we did in Q4. Q4 was a sort of challenged because of the -- we're locked up because of the NEXTracker and really couldn't trade. And so getting $200 million or so done in the first quarter. By the way, at an average price in the [$22], something or other $22 plus. Really happy with that. That's great for shareholders. Just looking at our valuation and you kind of do the sum of the parts and giving full credit for NEXTracker -- it does seem that core Flex is undervalued relative to EMS. And so as long as we see disconnects like that, we think it makes sense to be in the market.

是的。因此，與第四季度相比，我們很高興能夠在第一季度加大回購力度。第四季度遇到了一些挑戰，因為——我們因為 NEXTracker 而被鎖定，實際上無法進行交易。因此第一季度就完成了 2 億美元左右的工作。順便說一下，平均價格在[22美元]，或者其他東西22美元以上。真的很高興。這對股東來說是件好事。只要看看我們的估值，你就可以將各個部分相加，並給予 NEXTracker 充分的信任——核心 Flex 相對於 EMS 似乎確實被低估了。因此，只要我們看到這樣的脫節，我們就認為進入市場是有意義的。

Not going to give like a hard peg number on what specifically we're going to do here in Q2. But I will say we're going to continue to be in the market. And you asked a good question, Shannon, on cash and what's sort of necessary. I would say if you looked several years ago, the peak-to-trough cash use would say maybe you need $1.5 billion. That's probably up a little bit over the last few years, given things like inventory and just other challenging supply chain situations. But if you think about where we ended Q1, which excludes $500 million from the follow-on, so take $2.6 billion, $2.7 billion plus another $500 million. We're well north of $3 billion. We have excess cash. And as Revathi pointed out, maybe 20 minutes ago, our number one priority is share repo right now. We think it's accretive to the investors and makes good sense as a capital allocation option.

我們不會給出具體的數字來說明我們在第二季度將要做什麼。但我會說我們將繼續留在市場上。香農，你問了一個很好的問題，關於現金和什麼是必要的。我想說，如果你看幾年前的情況，從高峰到低谷的現金使用情況會說你可能需要 15 億美元。考慮到庫存和其他具有挑戰性的供應鏈情況，過去幾年這個數字可能略有上升。但如果你考慮一下我們第一季度的結束情況，其中不包括後續的 5 億美元，那麼就需要 26 億美元、27 億美元再加上另外 5 億美元。我們已經遠遠超過了 30 億美元。我們有多餘的現金。正如 Revathi 指出的那樣，也許 20 分鐘前，我們現在的首要任務是股票回購。我們認為這對投資者來說是增值的，並且作為一種資本配置選擇很有意義。

Thank you. No more questions at this time. You can continue, sir.

謝謝。目前沒有更多問題。您可以繼續，先生。

Okay. Thank you and on behalf of the entire Flex leadership team, I want to give a sensor thank you to all our customers for their trust and partnership and of course, to our shareholders for your continued support. And then I want to thank our Flex team across the globe for their hard work and dedication. Thank you, everyone.

好的。謝謝您，我謹代表整個偉創力領導團隊向所有客戶的信任和合作夥伴致以傳感器的謝意，當然也感謝我們的股東對我們的持續支持。然後，我要感謝全球 Flex 團隊的辛勤工作和奉獻精神。謝謝大家。