Earnings call transcript Q3 2023

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Operator

Good morning, and welcome to the Plexus Corp. Conference Call regarding its fiscal third quarter 2023 earnings announcement. My name is Benny, and I will be your operator for today's call. [Operator Instructions].

I would now like to turn the call over to Mr. President and Vice Relations. Plexus Harrison, of Investor Communications Shawn Shawn?

Shawn Harrison

us you Good thank joining today. morning, and for

Some of without outlook. made expense, cash will revenue, the cycle, statements margin, operating be call during gross and and forward-looking today margin, our capital other statements, expense, and allocation including selling limitation, income regarding and those administrative information taxes, provided business future

expressed differ future guarantees implied those Forward-looking are predicting actual there forward-looking not the or in since results, statements materially results statements. could are difficulties inherent and from in

the a could X, in XX-K For and Form discussed, cause Investors Form results on is XXXX, to participants the page. the at that company's clicking at list call to fair harbor periodic particularly safe release. www.plexus.com, our press October XX-Q our refer We live and filings in materials access filing yesterday's of to those supplemented by from encourage for actual risk the of disclosure factors factors top and filings, SEC website the webcast that this differ morning fiscal please the the ended Plexus' supporting materially at statement year on

prior call Officer; turning Officer; calls, President Oliver before for further Joining Todd are Steve Kelsey, Chief Chief earnings Todd Vice President Executive comments and Executive Mihm, details. will to summary the Officer. Jermain, Frisch, me with President Operating and and Executive Strategy Consistent Chief Financial today and provide Pat Vice Steve over Officer; Pat Chief and

the turn to me Kelsey. call Todd over now Todd? Let

Todd Kelsey

Good Shawn. everyone. morning, you, Thank

to future and a while team in strong deliver performance the pleased growth including Plexus opportunities to supply navigating the their global Slide and quarter, advance Please I'm environment. demand our with X. fiscal chain volatile support third ability results of

amidst of variety improvement times due a near-term others seemingly more subsectors with seeing certain revenue some quarter. of number further modest third within billion to we demand semiconductor Markets period. to we show quite mixed weakness seeing beginning once $X.XX $XXX demand bottom than a lead cross-currents under-shipped this and by while certain the again were remain met and availability, are component guidance edge in strengthen, Fiscal elevated, quarter of seeing factors. million Simultaneously, lagging demand

For margin GAAP X.X% per share the met of per to of high-end share of basis points share, operating our the arbitration delivered restructuring $X.XX quarter, GAAP and of of an we included range. which EPS of $X.XX compensation expense, with non-recurring XX X.X%, margin Adjusted decision including operating expense guidance compensation $X.XX charges. and stock-based per stock-based related

compensation supply team's to improvements our better-than-anticipated strong team the our consecutive ability $X.XX inclusive chain stock-based on fifth taxes. from from Non-GAAP contributed $X.XX quarter in and focus exceeding per the manufacturing The share, of EPS mitigate to exceeded fiscal with third benefiting excellence of operational team's guidance, engineering operating quarter of with represented margin The challenges, X%. expense result. performance lower-than-forecasted along efficiency and

into quarter, takeaways. competitive production. manufacturing the once team wins XX a record ramped million when programs, fiscal job go-to-market $XXX worth outstanding Several winning third represented the again Our an new share fully in did of program

robust of value have quarterly customer in last the the proposition. of strength a our twice confidence We exceeded momentum. our manufacturing funnel of quarters, demonstrating to time, of funnel to X position wins strategy $XXX new in This same includes again large typical each market program greater believe qualified in strong opportunities million manufacturing at wins number us maintained maintain we sectors, continues the during and which we opportunities our a At well than $X billion.

prior positive the future engineering expanded manufacturing and versus wins leading program indicators funnel Finally, wins. qualified the opportunities new of of quarter, both engineering

responsible call the help today's to web needs our are our $X that report our everyone team's found an in cyber-incident released in vision Slide site; culture completing a been review X. to which to page. practices across to on fiscal our and a the core reduction of build assessment response energy the Charitable have understand sustainability sustainable through that our donating few inaugural and business XXXX our materiality highlighted globally fiscal the Group, in Plexus A third-party encourage third Employee world. we Foundation; the advance third XX.X% quarter, preparedness. joining achieving I and excess accomplishments enhancing create report manufacturing Sustainability products a our to launching Late ingrained Plexus highlighted stakeholder intensity include; Please long Report, in of Resource million better

fiscal We and off groups during time resource X than have XX employee more delivering many underway and adding enhancing more programs. volunteer including matching additional charitable projects, our XXXX, efforts environmentally-focused

reduction a develop XXXX, we A which suite throughout assessment we process component end roadmap fiscal also of deployed our use, opportunities driving value and design, solutions, of customer to sustainability-oriented engagement. our team's emissions core During of consultative our our these with lifecycle through in deep partnership cases, a Through expanded formally customers' differentiated is and, and products. cost opportunities customers, solutions servicing lifecycle is lifecycle product including capabilities. We a strategic our of chains life. of reduction the manufacture, markets, the supply product, understanding some substantial of the add

supply ultimately customers development, our improved helping in lifecycle sustainability. in assessment, creating services chain Further, with upon product through the commercialization, act unique identified team's to opportunities sustaining and the are with solutions product products partner Plexus expertise our

deliver sustainable we build As a the our to responsible, the world, we market. to significant exists that better strive products opportunity customers help realize to more

in to have lifecycle or with pursuing additional solutions. are actively and XX opportunities across customers assessments engaged X product our date We completed

to X. Slide advance Please

of billion EPS revenue fiscal to compensation of inclusive expense points margin and are basis $X.XX of billion; We to XX $X.XX GAAP fourth $X guiding operating approximately of quarter GAAP to of X.X%, $X.XX. X.X% stock-based

the we and adjusted expect GAAP to finish fiscal second guidance, of for this approximately I'm exceeding $X.XX Our X%, growth EPS revenue year includes margin with from increase given compensation proud fiscal consecutive expense. guidance a operating meaningful XXXX exceeding XX% XXXX. stock-based that

commercial to increasingly positives industrial incremental supply robust demand of a demand equipment, negatively is in are sites. some capital in Within markets expect and to be a those new which quarter, fourth weakness semiconductor some by softening dynamic flatter from finding These ongoing challenges, cost our aerospace at the our seems absorption ongoing The bottom, continue fiscal offset being including chain market ramps. benefit and we of our modest of program to customers. affecting

supply to we fiscal XXXX. look dynamics holding early We demand the Finally, a enter as I'd like current provide XXXX. and chain steady into see fiscal

supply and this stabilizing of of to growth technology certain demand and semiconductor ramp lagging improvements unfulfilled supply customer our as a new availability, chain continued revenue management momentum team program The ongoing edge enhancements creating the profitability opportunity lessening demand. in the markets, follow challenges. We latter is expect backlog to result further includes chain gradual in to bringing with increasing reduce accelerating and

As operating well revenue a result, by we long industry-leading also billion goal XXXX. margin our remain positioned the $X revenue, confident growth profitability that I X.X% our in GAAP of to have fiscal in with is Plexus term. over deliver and confidence achieving continued

of operational opportunities. our Our funnel by momentum, the share wins and solutions and address excellence gains competitive best-in-class focus unique our evidenced on of lifecycle as resonating customers' program loudly ongoing capabilities, products are to robust

operations. the of performance over the turn our Steve call and of additional for analysis now Steve? sectors to market I'll

Steven Frisch

morning. Todd. you, Thank Good

will of fourth well of X third I our the fiscal of the Slide the quarter market with quarter as start expectations our on fiscal a for review XXXX. sectors, performance for as sectors

mid-single-digit in X% declined revenue sector, chain, contributed fiscal results. the than industrial Improvements to test decline. better measurement especially was result the our of with a quarter. expectation for stronger the and Starting supply The in third subsector our

test measurement a we lateness forecast decline and communication with quarter, sector short-term for a for some the this the start for and to customers, experiencing we fourth As fiscal industrial mid-single-digit forecast are leading quarter.

double-digit ongoing quarter, seeing this we the ramps are decline business program fiscal semicap decline for the slight flat the with industrial keep will our to sector in XXXX. mitigate Even

revenue fiscal quarter. X% in life sciences for our down As was healthcare, we sector the third anticipated,

the decline. market main Continued supply and were the softness end chain reasons modest challenges for

fluctuations relatively fiscal be for term, balanced. that our near that sector quarter. the forecast flat we is the In to And anticipate fourth are healthcare, sciences life result the

full track range of for healthcare, the increase year the fiscal For in XXXX, XX%. is an the on sector life sciences of

and the quarter. aerospace in third decrease. The mid-single-digit defense a of sector fiscal decreased X% expectations result Our beat our

team's deliveries to chain with drove results. improve supply ability stronger the components constrained Our

are we creating teams As positive look that fourth flow remains commercial to aerospace demand to quarter, the actions robust impacts. fiscal material have improve taken the and our

would put for fourth defense in our strong sector we expect meaningful growth aerospace fiscal X XX% shipments aerospace growth the a should XXXX The approximately an defense and sector and customers. the The the result, for expansion top finish to aerospace year and quarter. with fiscal our high-teens. yield As combined increase for the the of defense

X Please wins revenue advance into won XX when in fiscal of record million expect our annualized third to during new generate quarter $XXX for the programs Slide sector performance ramped exceptional overview we the that an market to teams. of a production. manufacturing We

decisions in benefited choice their or they by by consolidate pleased supply partner to as several decisions We internal sourcing wins of customers Our made increase from manufacturing outsource to strategic customers. were as to their an selected our either their base. be

is by trailing a trajectory the wins as wins, X momentum, of which the of of X this revenue, is the our level. strong trending back result historically towards a of strong wins, divided defined quarters trailing As quarter

Please the third advance for a Slide to regional sector the highlights and X. manufacturing of quarter. review wins can few fiscal We

program The sciences valued team $XXX the million, sectors a worth Our million defense industrial XX the with good program while led team million. new $XX ramped with aerospace new life production. new quarter won healthcare, team X very had wins fully at when $XX X into and of wins programs

at The were exceptional almost wins million. $XXX Americas

Mexico. of $XX of wins be of APAC benefited in from from strategic wins several sector. from the Guadalajara team America strong the regional facility as were Our $XXX wins as by our million this the sourcing region these fulfilled recipients we of industrial most team The million came in anticipate of decisions to

million. region result Finally, the of EMEA had impressive wins $XX another

wins With the region's high XXXX. meaningful now we million, fiscal for $XXX have surpassing trailing growth X in expectations quarter

industrial of and examples Please X from of customers fiscal programs. for highlights are third are advance operational delivering X X will teams excellence customer who quarter current on wins the service All our existing to sector. Slide I rewarding excellence start our for with wins.

The first products of They a Guadalajara, our from manufacturing customer. meaningful a is internal facilities. have into win Mexico their communications consolidate decided from to portion their long-term

will programs We ramping start quarter. this of some these

The second high-level example by subassembly who our our relationship is production. from a Malaysia team's Penang, expanding recognize performance in semicap to customer include

charging Oradea, Romania, in electrical for us board the is similar. that example production assembly we produced A focused finished has very Third of on vehicle customer product. printed awarded circuit rapid the

from programs Guadalajara, to of The healthcare, won portfolio life Mexico new in produces location team sciences logo new customer who production. The their our a selected meaningful a defibrillators. which consolidate

start some We this quarter. these will of ramping programs

and share defense sector market aerospace Finally, existing our an with customer. our aerospace grew

with current decided Plexus performance portion of programs, a competitors. Given they our one our to to have of our meaningful the business from transfer

expect new these our in to for assemblies early XXXX. manufacturing the qualification Wisconsin site process in fiscal We start Neenah,

were The the is as efforts. on Further our quarter. third new As $X well programs our of outsourcing in robust the include XX, that finished shown considering fiscal are Slide at qualified as billion a of opportunities more third consolidation the added decisions manufacturing supported by manufacturing customers quarter. funnel to evidence strategic fiscal internal opportunities sourcing that funnel supply-based new larger, the in the potential

are We customers partner have for be of wins that maintaining excellence our our funnel A choice. us customer customers' key strong excellence and focus positioned robust satisfied confident well are ingredients to performance. on service and operational

performance Slide operating Next, I'd to like on turn XX. to

of and quarter, fiscal forecast. solutions our finished commitment demonstrated drove third operations converted materials the supply once finding also by supply adjusting changes materials team teams They in into those our During to goods again within to chain and their quarter. customer constrained

by in of team In represents at extra expectations. X%, entire a operating operating the the performance addition, was our result quarter our high-end a engineering that above X%. non-GAAP row and of organization margins of The margin outperformed effort expectations the in fifth resulted

the an for of Pat now to performance. financial call review turn our Pat? will I in-depth

Patrick Jermain

Steve, good you, everyone. Thank morning, and

Our third quarter summarized XX. fiscal results are Slide on

our expense along and improved APAC value-added our million at X.X% of Selling lower in our the towards in of guidance, services, to healthier-than-expected primarily $XX.X from margin came margin our drove the guidance. due stock-based was gross regions performance revenue was gross to compensation administrative top-end Better margin. and with expense. EMEA higher While contribution favorable midpoint, of

As basis a SG&A and revenue, by X.X%, to was XX lower points. percentage of was sequentially expectations which favorable

of unfavorable SG&A points included our of Non-operating Non-GAAP also result at stock-based greater-than-anticipated of excludes XXX due foreign operating to lower basis improved slightly high-end points were as which margin losses. of and expectations XX exchange the and to expense. This restructuring X%, basis the gross other margin expense. of result charges was expenses a compensation guidance

excludes diluted restructuring items the to of contributing Non-GAAP due guidance lower-than-expected quarter. the and tax improvement mentioned. of due recorded EPS other $X.XX Also our expense to the $X.XX, which during EPS discrete factors exceeded charges, was to previously tax

from $XX.X to and outflow million. million cash and $XX.X payments to nonrecurring result sheet spent This to fiscal Slide we quarter. $XX.X expenditures, third with flow balance Turning on related Relative initial our performance in We XX. free pleased expectations, flow one-time on our million cash were of in capital in delivered $XX.X cash resulting cash charges. operations included our million this quarter

purchased million. we quarter, the of shares for XXX,XXX our stock $XX.X approximately During

$X the We fourth have amount during purchase quarter. fiscal remaining this authorization to million current our approximately expect under and

we'll plans once month, of is Board Directors a with new reviewing for completed. current the Next our authorization be our program

Plexus a believe is We At quarter total million. sheet. totaled well $XXX end, while $XXX million, positioned was strong debt balance cash with

million over X.Xx. of conservative under to facility debt-to-EBITDA $XXX our We and borrow available ratio also a credit gross had

the which expectations of slightly cost third at of we was quarter quarter, end invested Cash return average XX.X%, days, by days. above capital. the fiscal delivered X third XXX cycle our higher XXX sequentially above on points basis For the and capital of weighted was

increase have of covered of regional our a We on reduction end days. by With inventory teams the inventory sequential gross X%, chain $XXX improvement, Please dollars. customer Despite our cycle. gross to X-day the see in the More XX% in revenue. lower in now than Slide over increase to offsetting turn we days inventory over inventory drive days XX in deposit customer a encouraged and million to was the at dollar supply due for our quarter. sequentially details cash increased were primarily deposits,

Days in customer receivables receivables our primarily sequentially due in changes factoring under increased by reduced terms. activity X program and to days, payment

provided Fiscal to already of the expected lower on fiscal gross which be revenue gross is guidance has margin the some fiscal Slide EPS quarter, will Todd be quarter. are fourth fourth details, range the in to review X.X% As quarter midpoint, third than summarized and for margin I'll additional X.X%. the At XX. slightly the

and improvement we Bangkok positive steady business still are impacting in margins, move new as our improvement we While expect is a facility as seeing in returns site continued we ramp the earnings XXXX. to in fiscal

and in insurance sequentially $XX $XX foreign with selling losses. the benefits expect flat essentially are expected administrative the the $X quarter. to expenses to the of million in certain $X.X third of in improved be to million, range exchange million expenses to million, anticipated reduction fiscal We range and Non-operating due

range the for expected to is rate fourth in of be tax effective XX%. Our fiscal quarter the to XX%

revenue that of a days is the the on the working modestly cycle at third our level in to capital XXX Our we XXX will cash fiscal forecast, working will the improvement sheet Based capital to quarter. balance this compared X in midpoint. range of days result days sequential days, improve of expectation for investments expect

fiscal We year flow XXXX. million lower to anticipate improved expect in of capital to will the for cash of positive free fiscal the delivering $XX slightly fourth for in the million, to than flow previous cycle spending quarter, fiscal $XX Last, free range guidance. generate million the cash cash for $XXX million we the be $XXX range

call With open questions. that, now Benny, for let's the

Operator

[Operator Instructions].

Company. question of first comes David The from Williams of the Benchmark Our line

David Williams

this last through be in up anything is that Understanding I seen we've like funnel. a just should maybe there, it pulled of but come that of this the it there's down, first, time quarters else on function last funnel? or the some that first of Is but pretty takes was Yes. X big over kind quarter. of thinking really of looks lots the guess, terms being we about and the puts that

Todd Kelsey

Yes.

I the funnel on had largest and second say the I'd company. think, there -- was of it had it's ever that David, an the program we've you look can billion, the the at history $X wins in at impact funnel, but say certainly still

and feeling very a really robust we're it good view as much So, funnel.

Steven Frisch

fiscal look start billion the of Yes. we beginning at came the And like funnel in $X.X if year. in a 'XX, you at

billion of in year So $X feel to Todd's finishing us the prospect the the where range something we're comment at makes at. good about pretty

Todd Kelsey

funnel. One we of our is the qualified I'd to you add things what to is report

level well. quite and have that's a percolating is, but now. actually at We record We're also going the as that's not an bit there's funnel to early-stage what background a in say right that

David Williams

the about on talked Great. then semicap the just maybe Okay. equipment. weakness you incremental And that in

previously inventory equipment, you're that that some upside any of your strategy? you held that some change just a color seeing? Or the the in in. demand maybe comes around Are more think mentioned seeing requesting customers I maybe were semicap you weakness for

Steven Frisch

Yes.

As we've bouncing of we we talked bottom. the mean, about definitely some the throughout seen see it come being I comment, around Todd's it here, signs down. year

and the are of when So talking levels perspective, make customers. from it comes about our right managing mix and They inventory we are basically have they the back, they available sure tightly all ready. want products with -- inventories our to

So, They're upside. is early managing to the to will the exactly when happen. people ready A think But focus working being I them versus talking about more that. we optimize when the are now predict about strengthening talking it little with downside. the returns for

Todd Kelsey

semicap. at semicap from well, CAGR semicap if 'XX, bit look really color to we of is as And XX% had David, we're that little you history, a add within 'XX when additional I'd recovers. on past A our about excited

really that subsector. the we're think going the outperformed And market to does when market through substantial growth have excited we've we're period, semicap we some that within downturn this During recover, gains. share

David Williams

might if just here. one And more, Great. I

about that's care It nicely. -- any think, very upbeat of a than or I updates the had bit Anything anticipated. here noteworthy this was been ago? pause just the and opportunity, quarters health been couple discussed that You've a quarter lower, ramp on and trending we maybe

Todd Kelsey

read I into too it. much wouldn't

that few and single-use having driven that difficulty we think customers' supply or disposables I they what bit program Part the need customer for ramps, talk little were product a other a they program we slower chains. than end In were couple was market did one anticipated. there's of about that a getting. that the of devices words, by ramps

So, bit into wouldn't bit much as it. Little us. terms growth. are for sciences our of muted need too healthcare, of little volatility their of into are that's But predicting adjust very fiscal say, a, they optimistic yet in and we're XXXX. But what we go I people where read definitely people a in I'd again, inventories life as

David Williams

Appreciate the the color, and progress. congrats on

Operator

[Operator question line James Fairbanks of & next Instructions]. of from comes The the Melissa Raymond Associates.

Melissa Fairbanks

on it semicap? the an us helpful you to maybe Just customers? rest digging in bit little digging these safe It in could assume or if just detail revenue kind give seeing weakness kind by are if is the updated industrial. of of that of and give you of the more would delays pushouts a little us industrial? your then And between you're And just could -- a more semicap outside be where split

Todd Kelsey

Yes.

space that within we're well as softness the as Melissa, communications. and measurement industrial X is subsectors test seeing So on the

the switch the technology seeing what I we're certainly, is there. think over latter, in

recovering view is a that measurement as that view and So, right pause. later. softer as but we more now, we slightly do Test

we look maybe about sector. industrial it's our semicap, XX% at a X/X, little of As over

teens overall So higher mid- teens it in kind or from Plexus us the revenue. to of range upper puts

Melissa Fairbanks

customer Okay. topics. my on days covered give I could still the we of in if decline? you deposits one what us some inventory, was interesting component hotspots, the those then if to same can see see inventory wondering overall that's components of it's expect you're usual increased an And to of update again. to just if of suspects, favorite by pricing continue seeing inventories and Great. It's

Oliver Mihm

really hit perspective, is I'll I'd Yes, stories. down From it Melissa. break Oliver. lines, X This X supply an overall that. to chain

some lead inventory. Pricing First are we follow suppliers seeing commodity times. is build of tends broadly to trying that. to across normalization We our see base,

the incremental in continues just so And general, make to trend there progress.

our of electrical constraints see still terms mechanical In spots, both challenge we commodities. components in and custom-engineered

a lagging We're open times, Todd on as you still specialized get a within essentially components earlier de-commits, recovery. unexpected from just the And the mentioned, edge seeing semiconductors, volume then suppliers. to pull inventory of lead market handful really X lower quite key enable and into a inflated

that's of we So the that one areas are on. working

the with suppliers dynamic. to We are that improve working

to, challenges that on help a going we is I'd and the have I chain then with and in partner. also And actually think them as of specific sometimes customers earlier, our instances, one right to example And third supply when certain alluded little this to was solve a bit now. piece that's will engage can them talk

Patrick Jermain

the an And was dollars where X-day which XXX, QX, inventory. A then, lot of can that's think cash related we reduction Melissa, get of to, we guiding from for I midpoint QX. inventory a of perspective, from cycle be would to

dollars quarter. further Now the to is And Oliver the both in of fourth we see comments fourth on days. fiscal expect think that I to inventory in going quarter. lot the dollars and reductions we're But of in anticipating reduce a into based some there's deposits return made some opportunity fiscal of that 'XX, do then there

Todd Kelsey

AMER build relative sites how building and make materials our in of investments just that, manufacturing operations And analytics maybe processes deployed we've is And across to into algorithms. Yes. our all one continue on both machine of we and to that predictive performs. learning our innovation do piece now planning to tools

creates so us supply positioning, our Really, of capture customer availability. switch for which this feed to for true optimize accurate and predictive more to essentially to going plan analytics back a a your it if so creates production capital step is you that us customers. take feasible to demand. material working back, our enables And more And I relative think a or question,

that in now are AMER place So across as I all deploying with, and globally. that our open now manufacturing have places we of

Operator

of LLC. line Advisors Steven Fox the of from comes Fox question next The

Steven Fox

could. two I questions, if had I

part understanding off levels. like you early would next to what of of kind for beyond quarter going September year, I this if said quarter I'm you right? fiscal the start seen the color I maybe about with First of And assume of year. usually, you it's it that And all, this sounds Am the those growth quarter? into if the a little put what bit a could more reading you're around seeing end little sort would generally have flattish more of comments just after

Todd Kelsey

Yes.

I QX, to now. we think your Steve. is interpretation we I'd at -- accurate, right is what look And it there as view say when similar it looks QX pretty

acceleration I think a that we as cost begin typically some get we now. progress could a as we again, from see then remember, strong is in standpoint the half a to year have get stabilization fiscal challenge increases. on into second program QX, growth new And bit see see We But ramps. more quarter that, seasonal markets. we some as of we continued into make margin the big as we

right alluded large queue Steve then ones a in the incremental very are continues see now, And the couple of to a them couple that to. have We chain of improvement. that supply

second of year. we'd that So, to over the continue the expect half

Steven Fox

is basically And of I the business? QX, churn Or QX within reason your is flat kind there guess? markets, it's any end with

Todd Kelsey

It's call. demand in we referenced that the basically dynamics the

to markets the then continued and in the semiconductor the near-term continuing softness So the in through industrial supply chain. equipment, softness work capital

markets. the nearer-term are offsetting So, those dynamics are within the some have that we positives the of that

we effect as starting we're chain rapid we are recovery or upside more would than a saw here. rapidly some maybe gets we see more supply to the suggest projecting expect what from Now improve it if semicap could,

Steven Fox

just as Got follow-up. a it. And then

assuming sort to types why more products, some mentioned thread was You I takeaways in wondering is the I'm different there common but any competitors you're from maybe business across win competitive of -- new it's taking of category. recently?

Steven Frisch

soften focused Yes. came what are to was surprised you Steve. getting doing This customers less to product. people supply are by a I'm worried COVID you get through my our basically, little deliveries, are starting on as have that get trying can I challenges, now those and guess And just is bit I and about not everybody product.

to on starting the best of provider focus it. they're is Now who

building able going the to what proud chain we long-term our tail of customers we're of COVID. started supply more having were we're how funnel as of kind through their saw to end deliver think so And it. team's with strategic opportunities here. getting plan supply ability, the of our And COVID. this is about be to post COVID conversations And operations both really And rewarded I and a through standpoint, they for from increase,

to of the So, the expect part do opportunities I kind these and quarters of next the funnel come to be couple continue of into see wins.

Todd Kelsey

I'd Steve's add of across The each one to sectors. in thing is too, there We comment our it's sectors. broad-based takeaways saw market our market

Operator

of from comes Sheerin question from next The Stifel. Matt the line

Matthew Sheerin

'XX, order to year. flat you're you're to least single down be QX, 'XX to into at is because up said follow based like have on Yes. year-on-year. and QX like looks double-digit going regarding to And fiscal Steve's billion high to for wanted to for and going I it for mid- on to outlook a in looks question what growth how target plays unless it that your quarter you $X your -- the December grow beyond and digits

number, figure billion fiscal trying flat to of to out So to to given 'XX? that you're bridge that the how be $X down first we going in half

Todd Kelsey

Yes.

goal say, when overall at is to fiscal we XX 'XX, that the we have I'd what be will So X look Matt, difficult.

levels make the growth, see in to to as $X bit revenue challenge. growth achievable But we're a but you it into accelerate 'XX. might reasonable that expect to get the billion be and should range that We

we'd So, way at that's the look it.

Matthew Sheerin

Okay.

Okay. And then just back to ahead. the... Go

Todd Kelsey

programs and already won. are based that of Yes. ramping off Again, Matt, the it's

Matthew Sheerin

health And spaces? and the skewed is Okay. care that more defense towards

Todd Kelsey

sectors. X all across No,

Matthew Sheerin

Okay.

on about work you couple you next then is the that And will for were we're where supply backlog easing? sort as ship. the down Okay. that the quarters? at of number looking about Or talked that constraints unable that Oliver $XXX of issues, the of supply that to you number talked And million some

Todd Kelsey

continue down, come X Yes. we see to would was it down see and as fiscal X expect -- or ago it's from what particular. in 'XX It's we through and move reduce quarters to it coming

Operator

of of question next from Anja the The Sidoti. Soderstrom comes line

Anja Soderstrom

I'm of again So, strength big seems for up How aerospace, challenged. for new that picking it you curious just much growth? versus is after commercial being backlog like through to work a that's due

Steven Frisch

here. from sectors. commercial here. strong I'll has as coming This of as wasn't demand materials Yes. is start pipelining COVID. been for customers other is sophisticated time the quite challenge was some The a The period the through Steven. of aerospace of -- The

talked about come so our few hard the The that. up getting for materials better that to pipeline plan been able working to we And have with quarters a with forecasting ago, fact do customers of slowing. really and a teams a were we

what kind so of is to here continue meet demand. ability And a basically seeing backlog of our you're to

our looks and team Show. strengthening you returned just through like of press, additional read if the going backlog said, Air orders have, the in addition like some there looks the being to in And up, demand up from that With also it Paris be demand. that we being it forward, could

us about is be for in to optimistic going pretty feeling XXXX. commercial So aerospace where

Anja Soderstrom

reaching billion also biggest you pretty target. the What's in $X that? And seem confident Okay. your risk to

Todd Kelsey

from if a risk the where go things biggest I'd they from south today. say macro would and environment are the standpoint macro be

Operator

question. Last last the it's Company. of Chris comes Needham Grenga question & from Actually, Okay.

Christopher Grenga

been to been demonstrating on what has in just region strength? contributing seeing EMEA there, expand if The wondering particular wins. was that could in you you're what's strength I

Steven Frisch

well mass the over really with kind critical of continued a say invest it's few the market we years. the proposition. investing just in as facilities our in years think to got a success team, manufacturing they're I having and would we've in as value a ago, I to good that

with services the our months XX is engineering added design from through both our So, ago. everything well standpoint all way centers there manufacturing we and about value the based, there, proposition

benefiting that great Asia And customers, back that standpoint, that things seeing bit so Europe, do from should we from or proposition. localization. regionalization value it's believe to to and looking market are and little more We that. suppliers a a We're are from say, bring I in

number. our really of really So, as going you wins those of things revenue again, well kind I couple of it's number is think see the combination exceeding the is, annual

that for large to quite growth for look we are expectation region as XXXX. our So,

Christopher Grenga

wins, begin Great. guess trying ramp-up extent those being how wins? as how with is is new I engineering engineering the new into get those through And many program or the number program what And I'm the wins, with to flowed you to did how engineering XX is of the that to as what -- wins? wins wins,

Todd Kelsey

Yes. on that the typically, order know wins a engineering-centric be quarter. tend heavily I mean, this don't X/X breakdown of our manufacturing we have of previously. about I to for

Steven Frisch

Yes.

data the again. through going Just here

a numbers of front the of The sourcing bit where As have a Todd supply strategic of by were this in competitive wins base quarter said, more decisions, I here consolidation it's takeaways. dominated don't the us. or

don't So, that there's were quarter probably a in data few front engineering. that driven I less But have me again, by this of either.

So...

Operator

our would the to Kelsey, you. point, I like closing turn for conference now remarks. this CEO, Thank back At Todd to Mr.

Todd Kelsey

shareholders, All analysts Plexus right. Thank our you, the the Benny. thank I'd today everybody, members joined to us like call. and on investors, team who

you wish in interest Plexus. your a great all appreciate day. I we very And always, As

Operator

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

You disconnect. may now

Plexus (PLXS) 27 Jul 232023 Q3 Earnings call transcript