PLXS - Earnings call transcript Q2 2024

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Operator

Good morning, and welcome to the Plexus Corp Conference Call regarding its fiscal second quarter 2024 earnings announcement. My name is Brett Morgan, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. After a brief discussion by management, we will open the conference call for questions. The conference call is scheduled to last approximately 1 hour. conference being this that note call recorded. is Please turn over to would now call to like I Mr. the Harrison Shawn Plexus's Vice Relations. Investor President of Shawn?

Shawn Harrison

Thank everyone, us morning, you, you Britney. joining for and today. thank Good

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

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

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

our in Executive be in death and today Oliver not Chief Frisch, due Executive Financial Operating Chief family. me Mihn, Chief unfortunately Officer; Officer; Strategy call will participating Executive Todd Joining President Kelsey, Vice to are Steven the Chief Officer; and Jermain, Officer, Pat President and today's Vice a President,

to further before turning Todd family. Oliver today's over call, referring provide and will summary his Steve with call for comments details. and Pat are With thoughts Our the earnings

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

Todd Kelsey

positioning X. pleased increased levels Please with to profitability of Good Plexus flow sustained along free advance the Thank quarter, higher deliver our during to everyone. performance you, fiscal industry-leading ongoing cash growth I second generation. morning, revenue was Slide our team of with Shawn. and

wins consistent quarter, with share in new new both team market and $XXX delivered program gains reflecting first our go-to-market Our million fiscal opportunities. outsourcing

billion directly strategy, with X% combined of Our ongoing CAGR is delivering $XXX momentum, to when our a revenue XX% market available that goal. to wins supports our our expectations aligned

Our X.X% stock-based margin to exiting expense. than X% equates margin, greater a XXXX, a operating fiscal which target non-GAAP GAAP compensation operating remains excluding

flow to continue achieve We will continued We strong result, this free and our third and both operations on quarters. fiscal margin align will our cash expense. as excess million to Slide for well details of EPS fiscal approximately regarding delivered flow XXXX top results. non-GAAP including our compensation our of of forecast of cash free $X.XX our of our more sequential prepared fiscal expansion progress the at $XXX additional the second Later cash X return remarks, quarter create our results half. generated free value. million a our operating sustain second I plans shareholder working of quarter a momentum provide aided and to $XX Pat fiscal $X.XX, our expect fiscal revenue as anticipate particularly quarter, for flow second million guidance by during for to deploying with our we of second fourth cash stock-based fiscal increased capital initiatives. We in Please $XXX in advance end review

the operating expense, quarter. compensation approximately non-GAAP X. our advance of including met Our of stock-based Slide margin points basis to XX X.X%, Please entering expectation

our in outsourcing of in on support programs opportunities our differentiated second of sectors, being contributions winning our and our fully go-to-market market Plexus' manufacturing organization as from regulatory demanding offering as quarter, highly execution well XX is new revenue our created we when share X. growth.Please environments, complex each In Slide including supported production, advance superior service to focus sustaining fiscal million the won worth the by significant and new semi value market annually cap into the subsector. capitalizing leader and For ramped industry-leading solid upon $XXX products gaining by

initiative We Net responsible for impact. We foundation operations the partner were more recognized help a sustainable, transparent impact. chain second Ambition setting to potential targets. of to deliver the Accelerator, Hero emissions our energy developed our their based will create. Zero more we engineering, impact our capabilities strengthened reduction help science-based on the Climate social customers value A strategy. the the members design, sourcing accelerate service our on the sustainable reducing fiscal transition expanded our a we follows: strategy are our and manufacture education delivered a their our goal for We team slide who in XXX global environmental Compact practices supply Scotland progress work. highlights we assess and and as UN award Glasgow, top suppliers products this engagement a capabilities environmental chain, products fiscal program value-added development few to criteria. efforts based Center with and Pictures to joining we responsible our are maximize build to and resilient while our that XXXX for our Scotland Plexus warming towards into the offer on aiding to business across of advance finalist integrate assess delivered by continue We from on Global and collective These and as the the quarter by

on in our Purdue principles to mutual with of our We development understanding also custom sustainable partnered eco-design curriculum to deepen strengthen product solutions. order a University

our correction to our made better early revenue create we progress fiscal Finally, higher. vision responsible world. And products annual build stages that for sector of recovery gradual Please demonstrated XXXX excited for X. to to in revenue to is million and in business are our our sectors. than mitigating practices $XXX we sustainability share the are the inflecting more gains X sustainable $X the We which our and market billion. a guiding our realize years defense market ongoing from program are by report, demand demand new equipment quarter, Sciences we and fiscal that quarter, semiconductor the and the advance headwinds advance fiscal Robust industrial later inventory Slide release we the ramps Healthcare/Life third of aided growth in help from third and the captures that capital as market aerospace in our is past over believe continued will

approximately which stock-based points compensation associated best We needs to margin realigning charges support are also expense. excludes X.X% restructuring to non-GAAP customer basis of of points forecasting manufacturing of XX operating our capabilities with basis long-term X.X%, approximately and XX

year. do activity fiscal actions, Following these we restructuring not any expect further this

with guidance operating higher to basis, we third to our with comparability continue performance outlook quarter, easier previously quarter of basis our operating quarter and non-GAAP against guidance comparable for while second compensation first Therefore, margin basis XX our excluding sequential a operating is midpoint GAAP of metrics, points at XX third margin As update, are fiscal our measure expense of quarter end fiscal results our to or beginning peers. than EPS our provided points XX of the margin the we fiscal stock-based high directly expansion. from mentioned this fiscal on

excludes third $X.XX non-GAAP restructuring $X.XX, quarter EPS to Finally, we of fiscal charges. of are which $X.XX expense of and guiding stock-based compensation $X.XX

XXXX, anticipate a further We for fiscal Plexus XXXX. strong continue momentum finish fiscal to positioning into

third of modest for reflecting a fiscal the we trends fourth quarter, revenue fiscal the expansion, we expect the sequential continuation quarter. anticipate For

also operating XXXX of Oliver trough. will to would In X.X% excess point XXXX for call analysis with and and At non-GAAP despite fiscal actions. more improved term, are quarter, on for to fiscal We consistent leverage turn operating exiting be CAGR Oliver. continues non-GAAP points flow. X% execute GAAP over sectors, in restructuring benefiting expansion of margin operating our the delivering for macro focused environment. additional operating our I'm organic non-GAAP summary, our over our an our pleased We challenging anticipating shareholders compared the when now X% at margin XX% to midpoint, XX second generating operating margin basis in fiscal the how quarter volume our team additional performance by free to long XX a the our exiting to of basis goal the greater from and I fourth remain margin fiscal cash revenue from XX improvements market producing least

Oliver Mihm

review sectors. Todd. I begin fiscal you, morning. Good market each will a the second of quarter with Thank our performance of of

supply and low for sector manufacturing certain fiscal Starting each chain also region review funnel for in market for and opportunities. sector performance some second softer from with Incremental then of the end sequentially market an revenue X. a commentary single-digit and for contribution qualified helped fiscal subsectors. X% demand overview each expectations on third wins sector of our quarter. directional provide Revenue across sector I expectation XXXX. the compensate revenue of our decreased gains Our our quarter resulting the to will Slide fiscal resolve market the This for result decrease. constraints met industrial of annualized

in As demand quarter, muted increases will broadband industrial by the program had from our and semi in cap the for strong customers subsectors balanced Wins semi million. are substantial third stages offset the second market quarter multiple quarter. cap. of we creating industrial the fiscal and communications. inventory sector and incremental the wins The were fiscal $XXX included wins of in existing third X sector result in recovery for across corrections fiscal start in revenue part subsectors, This in early flat

Additional serviced leverages our wins sustainable in energy ability technology and our fiscal to expanded Xiamen, services, sustaining our new customer in be also quarter mechanical from provide due new with and new included more AI-enabled was assemble Idaho Plexus This across produced our to portfolio China a their program will capabilities campus. our design, engagement to a commercialize division program that our selected for second with a in complex a win operations. to the a leading their facility.We assembly including will all services. support customer be with of Boise, mining part that include product infrastructure built

second for in as In of programs sector quarter, uplift for delays market for our new stages our term, of quarter largely associated muted is modestly single-digit as Please ahead, the decline through in early fiscal we new some to customers improvement. anticipate and more by sector than revenue sequentially corrections offset Slide from launches low which the semi and exceeded stabilized. advance strengthening cap existing working a and a demand X. we was Looking increases has anticipated fiscal XXXX now the Demand inventory ramp generally subsided drove expectation our industrial inside X% with inventory. in Sciences a timing communications have an near single-digit revenue both in low program gradual product the the decrease. Revenue down Healthcare/Life our believe

wins sector were for be Healthcare/Life million. fiscal to expect totaled We fiscal second and third flat quarter. quarter the Sciences $XXX Sciences our the sector for Healthcare/Life strong

programs Our wins new with customers. X included

We production in been have for marks and This device the Bangkok. for vitro Illinois our Thailand sciences Bangkok, device awarded point-of-care our diagnostic fertilization an our facility. of win in first for life healthcare facility our facility Chicago, a

with our also this gain The the award and all monitoring operating performance Our executive to awarding of share engagement of a fiscal is for exceptional customer the due a consistent market second wins marks our and long-standing device services customer Guadalajara relationships. operational included patient quarter regions. competitive for a of Plexus X our expansion to campus production and

market program volume. prices, wins XX. as of reduction for revenue The Healthcare/Life year-over-year the of gives X approximately above F of corrections anticipate in strength historical market percentage we procured decline sector fiscal point at Looking and XX a at to optimism teens. inventory new they to for Sciences us Advancing XXXX Slide continue components growth from the to headwind ramp as result the the year-over-year

proceeding Our a performance Aerospace sequentially quarter, program the expectation increased contributed performance. and new low Defense ahead single-digit schedule, improved sector the our and supply better-than-expected to ramps fiscal of of second decrease, in X% meeting chain

single-digit we As our in quarter, program a third and the commercial subsectors the new to to demand expectation continued aerospace high defense for increase sector. the space look strength of contribute fiscal aerospace defense, and robust and security

defense our and acquired recently million. in was space facility. commercial X Our with fiscal a strong applications. assemblies We These both military at and aerospace $XX produced customers new programs sector supporting quarter wins second Scotland Kelso, for subsector will the won be

that an We the Malaysia our product next-generation built subsector also customer in be in Penang, security won from our campus. will existing

be fiscal of subsectors. For to our continues robust demand aerospace across and XXXX, all defense

million $XX Penang, an million and expansion sciences region's our Malaysia monitoring recent performance The health of with exceed the to customer a win in our growth of growth substantial second we As were the continues production campus. to Advancing to from the substantial for Slide second advance XXXX cap Guadalajara, continue in That wins award an revenue our customer from device. program at result, region's of wins included for fiscal expect manufacturing existing sector fiscal Livingston, qualified witnessed in its included for to and customer strong of life wins facility fiscal care Americas for quarter opportunities. existing XXXX. campus. manufacturing million next-generation second includes The quarter teens Mexico quarter. wins regional built we $XXX for highlights fiscal robust existing Scotland. our a a its device a APAC of EMEA high review $XX The an a for wins can significant is of a funnel XX, communications the the device semi in Slide XX review subsector Please

past few in billion. of as and well total harvesting Given the flow to the typical solid of quarters the programs out funnel as $X.X wins and the the decreased funnel, ebb

The The opportunities recall in While subsector we qualified wins. both divisions only funnel the in large declining unqualified are aerospace funnel the of wins opportunities funnel a dipped the new funnel $X.X industrial sectors market our and programs reduction in sector the Sciences security for semi to for a million. our customers. sector with strong with balanced of new pursue of growth wins noted manufacturing slightly The sector defense, The performance sequentially outsourcing. opportunities both early-stage across to billion. a funnel Strength contributed their The the size. continue remains the markets sector across cap almost backfilled existing at and resilience of early-stage and the subsectors. as space existing strategy, strength lower, we of had variety addressable $XXX opportunities substantial breached as to customers all customers, and million to and funnel, in increase Aligned Healthcare/Life and demonstrated optimism market our strong great Sciences $X.X our in XXXX.Further, the defense threshold fiscal that in provides multiple billion wins for sector. aerospace, the opportunities reflected for across $XXX funnel commercial breadth future the Healthcare/Life

our the funnel of the improvement solutions Customer slightly second quarter, opportunities wins a remains our rebounded Lastly, for incremental fiscal engineering as during robust. decision-making result. and saw

has to review growth now over and sector improved, Plexus future benefit to utilization Pat market improved from diversity our the addition, In our in-depth the an within the team.I of significantly funnel financial performance. positioning engineering of Pat? call will turn for the

Patrick Jermain

you, good Thank and Oliver, morning, everyone.

our slightly compensation margin guidance. savings million of the of cost Our on due seasonal the midpoint the in XX. start and guidance, a Productivity improvement sequential of leverage. efforts increases. at With led our above of $XX.X to and came improvements our quarter was from expense results X.X% are revenue fixed margin gross end fiscal cost Slide second slightly our summarized impact administrative from restructuring gross to Selling above despite better top

percentage of with midpoint points Non-GAAP X.X% XXX reflected of met static-based consistent fiscal non-GAAP compensation SG&A our expectations. points of XX comparability included over to of expense guidance. This would the basis of compensation revenue, guidance. margin exclusion excludes margin result quarter I operating for X.X%, as is Recall This a of which last mentioned in begin basis restructuring of peers. that was exclusive operating However, quarter expense. third and stock-based easier we EPS, sharing our charges,

which $XX.X restructuring favorable and compensation X included last stock-based operating million expenses We quarters. of to for in expense Nonoperating margin expectations press were our and have a release EPS, excluding table charges also presenting EPS the restructuring net of at $X.XX, was of lower-than-anticipated $X.XX excludes our end factors to Non-GAAP diluted top the charges, tax to the interest rate. favorable due with of guidance previously along due expense. mentioned,

and expectations. cash cash $XX in flow XX. Slide performance cash our million quarter. pleased income our on sheet $XX We to from Turning net We significantly resulting free result in exceeded free with This flow delivered operations and on million million. capital our balance cash flow expenditures, and $XX this of spent were

quarter, cash of usage million in With cash fiscal the flow the $XX have X of first generated now the through months of first XXXX. we free fiscal

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

$XXX had our borrow facility We with quarter available of million our to second a cash and We million exercise under $XX under $XX debt-to-EBITDA the of available and than to million. amount half We have of of the authorization million additional debt ended $XXX consistently total credit a XXXX, second current and ratio less the conservative X.Xx. fiscal gross balance approximately during creating expect million remaining fiscal shareholder value. $XXX

In addition cash borrowings any to we to funding facility. our excess reduce credit use authorization, under repurchase our share will

fiscal X.X%, to cost of second XX we second for capital. capital invested quarter, points Please cycle. which weighted on cycle at the sequentially days. turn on and of favorable our days, Cash For fiscal expectations to XX the was by XXX improved delivered return end X cash was above days details average XX our Slide of basis the quarter

Our X cash gross the days now improvement drive teams sits were inventory, lowest lower a see in both of and years. cycle a reduction chain improvement $XX million areas. quarter advanced which higher combination payments. inventory sequential at in We They came regional days delivered in encouraged in sequential our from balance and in supply to

review cost anticipated the leverage quarter to improvement. our are XX X.X% efforts which As the Fiscal expected has details, regions, points to would Todd margin than quarter. and of across second the and of revenue productivity savings the fiscal be contributing fixed are margin gross EPS Improved additional fiscal midpoint, restructuring from higher is to X.X%. recognized the At XX. better basis our all provided third summarized the already third guidance in I'll Slide be quarter, some for on gross range

of selling second and Non-operating of We of fairly the million $X.X expenses quarter. quarter. administrative $XX.X that be second in the SG&A million, is our guidance to compensation which the which fairly range with $XX.X is expect fiscal of fiscal inclusive expense. anticipated the range $XX.X consistent consistent is in also $XX stock-based million to million, million approximately to expenses are with Note

capital this both With expect This is working fiscal working days balance tax this in expected second XX% for quarter XX sequential couple capital inventory. sheet be fiscal fiscal of year Based on expectation cycle reductions we to focus to would to working At be in XX%. the improvement the lead of our level flow. to forecast, further will of third we our range which full Our to and in is effective revenue the year. of is should will compared efficiency, free in and investments cash the the rate a non-GAAP continued quarter. capital on that positive attention for in to another result X days, the of on midpoint, the related reductions gross comments of cash mainly quarter XX range days. improvement A recognize

in of revenue. for cash call flow XXXX. with to projecting are the of $XX in we fiscal less working to fiscal expect that, progress now flow open of initiatives, equate $XXX for on million year, quarter, now further million Last million, capital than for questions. the let's spending With free Britney, cash X% range approximately the million that to free capital will continue $XXX generate which we could We to $XXX I up mentioned

Operator

Company. with [Operator the Benchmark first the line question David Williams Instructions] Our of comes from

David Williams

some bit out think about a in the of some terms improvement weakening industrial little you the segment, and That -- on you that seems mentioned side. hearing even maybe communications some suppliers of If been of the commentary semi of better there, we've there.

some maybe or you where you So inventory to if parse think whether greater maybe you're just just demand related wondering that's it's could if where seeing and specific more Or you're through related? exposure. where weakening you have --

Todd Kelsey

seeing over things If David, in we at I'll pass look segment, maybe cap, last So the demand. all, Oliver about the and as through a start that the talk improvement where then the take some within about we happening -- we are. to it with challenges few good of some of Industrial I'll CAP the incremental of quarters, bottom believe semi semi talked and we're are first we've are

bulk is seeing share that market modest some well, the share we market as and we're had seeing revenue gains market of we've from But in what are improvement too, recently. Now gains it of which some We're we at anticipate into to as will improvement to accelerate some -- it but will expect signs we also accelerate you. likely seeing point. well within 'XX, communications

ready point, not at recovery momentum So a Oliver are positive over there. we pass again, but signs, some I'll to to seeing it now. great early declare this

Oliver Mihm

Yes.

a automation that, subsectors rippling inventory on in add would of a delay even consider industrial corrections to to we [indiscernible], semi we sealing if or quarters. subsectors of more both if just prior communications I fab pushouts we've attribute to for early due little note, -- outlook said, whole, seeing indications that, that positive muted electrification inside And cap through a Todd reiterate industrial and specific So say, to no improvement. equipment. market either other are broadband a on in we're other cap to what as it's some bit semi or say then modest and something the I and seen incremental those like see

David Williams

programs. that the some of Is some just delays that to on about the had now? industrial fabless maybe you related in And mentioned talked you

Oliver Mihm

it. second half didn't your catch the I of Sorry, sentence,

David Williams

that that or that of? just related delays were had there the some the You Is spoke mentioned program to you segment. on some the Industrial fab maybe delays earlier pushouts within of

Oliver Mihm

Yes. X be Exactly, correct. points those Same right. correlating would

David Williams

And that Todd, that, And to improvements margin in from -- then talk has this about taken about engineering of there the a of And side? think is improved actions outside you is in services the quarter, contribution? that operating last bit way the the guess, seeing that quarter? restructuring terms little a you're really I can you've boost that maybe, a

Todd Kelsey

engineering activities as improvement restructuring Yes. well, the are certainly, demand too. Well, but in helped, we a seeing

wins them a new potential phases. program As are, the the many programs call up. Oliver would that And brand-new thing, mentioned, encouraging I follow-on of for ticked have the number wins

around demand confident getting a more we're lot So Solutions. within Engineering our

diversification funnel and our life care that is The we other engineering. sciences. continue health penetrate thing our good a as within And real as I'd other to I sectors seeing add view within we're the within positive beyond wins

Oliver Mihm

we've to was will forward say from a I reflected margin probably David, QX that. our benefit some fully that's taken in and actions guidance, and just QX, after standpoint, going our more of in going so but

David Williams

And of been just on job for about That's maybe free the of should focus how about maybe cash area we in puts there and and Pat, the year, and maybe this what thus you off. one you the an the maybe more takes kind you the talk all for flow year, flow. fantastic are you we made that next at think cash certainly just beyond you've progress paying Can done far? free given get just as a

Patrick Jermain

forecasted I I'll and QX, of that probably inventory, down a X main getting all those advanced times, moderate coming also higher Adjusting effort benefited after bringing gross lot mean this an then areas effort had to generated as minimum to inventory, quantities, inventory, maybe but going we well. what's where million order with investment gross into free in lead big capital there's improvement a cash from, anticipated, and And future quarter the in start of happened. positive into we because think And We that's $XX quarters flow. working lead our saw facilities. actually I aged reverse came around obviously, payments. actually of

and on And to excess just getting obsolete commitments of of just excess growth back based some and that that's that inventory we'll of on but of and benefited that revenue see that some inventory, back capital to is so QX, then customer deferral in linked our that's some absolute spending pulled some us. spending. that pulling Some

cash going see generating and flow pre seen do we as think get David, kind expectation. QX free in to we've gross would amounts getting of be a of path cash that QX is our normalized down, we free So And then similar 'XX, to so more to I forward, back a bring our expectation. pandemic flow into continuing inventory

we perspective, just free cash pull reminder, So up. freeing a a of cycle cash $XX is day million from we're day flow each out

improvement nice expectation So beyond. really in and QX QX for and

Operator

of from comes the question next line Needham Company. & Our Ricchiuti Jim with

James Ricchiuti

subsectors You in may missed the I may call. But this on some to margin a wondering, reference on bit in industrial like it. sounds just you're was was I heard it the have spreading. what I hoping cap. about and addressed And I have another some was semi correction you're more seeing -- the and little I inventory of positive

So potentially some where are you signs of some softening industrial? in seeing

Todd Kelsey

I'll there, industrial. looking to as we'll provide overview some provide how oversight Jim, you're in we're jump and at how Yes, correct.

do Our on commentary whole, was modest muted we're within our We both deployment cap fab still early and out here fab incremental semi in the hear comms, script market delays. some say, see incremental industrial But and some about semi creating reductions, pointing inventory automation we electrification. in equipment, prepared remarks improvement. pushouts, specifically delays, seeing demand, inside cap as

James Ricchiuti

inventory to may may begin maybe where that even you're Any be in headwinds on. a tougher correction seeing that little the to in answer, a one broader but challenges sense when those as the abate? markets early seen the some this of and industrial to And you've just care correction health

Patrick Jermain

strong inventory as looks most to You -- the of if to 'XX, maybe at, severe so security I'll across we corrections. for think really take the our growth and talk continued defense, those XX that's health at subsectors we space, of and and care, would each encouraging moment. seen fiscal in in commercial over outlook well within I If subsectors E&D, at the we're all each guide here, go strong where we've aerospace look through I about include markets and where Jim,

we've we the Now believe there. hit bottom

stability we degradation over a forecast our in where past previously quarter, of had seeing So there's course been the the basis. quarter-over-quarter on been

the do bottom when recover. markets question And we've then signs becomes there. just hit So there's the

as So this right within projecting at point. market 'XX, a of program that's look we're now, growth not we to some strong ramps, recovery care, result but health

or time have outlook. strong think I looking to recover, growth we one a latest then markets could been as soften at growth a that's industrial, bit. that really at So projection the And

upward seeing I and bit over really that X point being subsectors. taking away balance So say, seeing of is the we're an a the the is sector, semi-cap would correction that And half of this inventory at communications now, that's business. the growth from our other on in kind trend right an

Operator

Fairbanks next comes question from the Associates. Melissa of Our James & Raymond line with

Melissa Dailey Fairbanks

you're time, follow-up, an there comments headwinds on expectations you give just in business. an your in any for of you a in patterns. some know Can health Maybe a where in level outperformed now some on little update of better? you maybe on what each there corrections of maybe first, We greater coming? or care overcorrection terms the getting quite But detail Or March. bit face product category the slightly are inventory constraints seeing buying the maybe from us what's Todd, your actually supply terms

Todd Kelsey

Yes.

I little think it to pass I'll color to Oliver on that, give a you over Melissa.

Oliver Mihm

our As specific. less more consider we customer based that's would QX and performance, subsector I say

beat. than are ahead, So customers of so that the moved the then we demand and the both had better for ramps, program their were that to that with couple customers increased those essentially things specifically contributed through we all few And little customers had bit faster existing expected, quarter. and a [indiscernible]. a a new The

Melissa Dailey Fairbanks

AI follow-up, call. talk and So seems fair, we about like not be but it have every my to for on this might

learning machine about manufacturing past, AI the and in in your talked own processes. So deploying you've

own any processes? outspoken this if the either of their of own you been recently pretty to the can your in exposure exposure you've data more center, your about peers outside power got of AI, management, some industrial us direct internal to remind market like applications Some have

Oliver Mihm

that direct for through associated out you and be semi to going going and something that AI then you that's with the so is think in. I ripple contemplate can cap we're I paint build if to equipment, to that that's that heavily going participate how most line to

We AI also drive innovation. to expect continued

innovation stand algorithms quickly that as So outcomes that's launching we for for expect gain to instance, and enable making kind device up developed, you come drive innovation patient the from. more at could of care, on health with up directly would they've to with think associated within things instance, something to to We them and product that. faster

Operator

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

Steven Fox

X questions. had I

you off, your expand you're at winning only but same new time. seeing the side semi that the mentioned cap on funnel not you're First programs,

only the this you was area that where that quarter. said think I

called my where et most out question you from that's could the like benefiting of us right success was size sort growth some chain? seems of new do. supply is, sort programs, share? that semi But times, you're do on You Tier compete changing there. momentum companies, some EMS you semi Is cetera. have cap, cap a if It to you're on you wondering the there's know I of Tier lot seeing why anything also but in stuff you the at X of with guys Because I taking X, players

So sort of gone years what's the guys? of for a changed And I maybe follow-up. this last over through you couple the has then had as downturn industry

Todd Kelsey

well, the as back as wins with entire this within goes So from new spectrum semi semi cap semi and the across end. the basically or and too. play manufacturing test as well We process in cap, a standpoint,

piece business a So incredibly significant within our quality performs taking is We well space. for that delivery and of execution. of finished standpoint we're us as that's from ship well. market a team reason systems. mean, I share The

I recognized of say would I So as and that's by And and across playing well as memory space, are logic. our spectrum outstanding our the we're technology customers. capabilities the think kind within

semi Another is us big play capabilities. within cap engineering for our

our bring technology lot to able customers. for a into offering we're of So our

Steven Fox

a And the are the you just you benefits are initiatives in future? Where helping secondly, improved little mentioned you Pat, around productivity And maybe of that? right now? put seeing what color kind just Can then productivity.

Patrick Jermain

our and jump start, in. then I'll all It's across of really We've could Oliver Europe, productivity improvements. regions. we've wins. secured some new Maybe seen In

benefiting So where within are is better said leveraging the that capacity gross for utilization capacity of Same be ramps we're going can increasing Europe. and program some AMER in. with our margin our new

productivity else that seeing. anything from you're add a Oliver you standpoint So let

Oliver Mihm

X add I'll Pat. things, Thanks.

terms second I'll site in that quarter. First, note of fiscal just our even in broke utilization, Bangkok

we improve. So something measure transformation approach continue full called specifically, -- continue internally, as ramps to have obviously profitability costs, And that we've program that's essentially laser those us good volume well. cost And continue important will by to we materials is transform goals, as additional got as that really will and that to we a And focus news. finished improvement improve benefit for then to raw think It's product. something so on business, site. that the to required production, drive

Patrick Jermain

down just be that focus example having. that improved mentioned. those quality and And the scrap of quality expense with that's and on we're Oliver of one seeing one transformation costs And would around coming areas scrap

Operator

comes Sidoti. from of Our next the Soderstrom Anja question line with

Anja Soderstrom

there questions going quarter. think the that Is X about think we [indiscernible] Is a should that? lumpiness also about there? How should Or forward? I we contraction how there have for here.

Oliver Mihm

fund first I'll As quarterly on we the is the point thing do out manage that whole, not the I the boundaries. consider

and other strong So the that our of larger a there. number out flow, to there's of large and early-stage track we And and then continue And typical that strength I'll we a the comments, would we a we specifically wins our call publish that opportunities in sectors also and contributed during don't what internally funnel of recently fact had see part I'll of also unqualified typical ebb pulling have of funnel number a the of then funnel. still our multiple is pointed on thing natural prepared they that's than have our something as lot that just really reflect we've process. point out to back. quarters

the is And so to backfill going us optimism funnel gives that then that nicely.

Anja Soderstrom

back CapEx being CapEx cash into I you're growth that then your the spend Or a pulling are flow spend just on matter and the softer out year? that. just on this out being later pushed pushed you Is of that around comments And you and softer want clarification getting on past see free ahead? some upon

Oliver Mihm

No.

Anja, we're quarterly than we lot typically trend just spend we a CapEx come several going have some into timing at quarters keeping million hits. and this do, thinking I'm quarter And quarters. to more of a spending seen typically $XXX I for between it, million think $XXX year. say it to I'd when a we the some is of and that's

I started I $XXX year, million. quarter. $XXX last million think, the with to consistent at that's So

a bit a still it's little consistent quarter just needs our with based on this but what ago. down pretty come So we expected year,

Patrick Jermain

optimistic we're our What I'd for 'XX. is fiscal add on growth in very too, potential

backing an not off we're investment from So standpoint at all.

Anja Soderstrom

Actually, I have follow-up, too. one

Just customer the in general, given sentiment, economic your uncertainties. with

However, are outsourcing you industry. the in

customers speak to do cautious? seeing you are them? what how among turning Or to see you more when them? general, you just they Are they Or So are in outsourcing? the more

Oliver Mihm

Yes.

is generally in continued more economy think I when think economy there's increase an general, and outsourcing. a as see I outsourcing. flows the movement towards -- in ebbs the And worse, you and more as the

proportional. interest it's it the Right good bit put inversely now, as improve. outsourcing I it continues So seeing in a and to way we're

Operator

I'm would call Thank showing questions. for turn Kelsey you further to closing remarks. so I much for no now like that. the back over to Todd

Todd Kelsey

am analysts, I'd We continues Britney. our exiting at state to joining and a term, you execute. day. like like operating In more to delivering our you, with everybody goal long shareholder pleased X.X% generating for our create us, activities Thank Plexus I team GAAP Thank fiscal greater value, and I to would revenue cash remain XX% flow. growth X% on to over consistent again XXXX margin thank members. and shareholders, and have wonderful free these focused least producing investors, to concluding, team include all, the how

Operator

conclude program. for today's participating in This you Thank Okay. does the conference.

disconnect. You may now

Plexus (PLXS) 25 Apr 242024 Q2 Earnings call transcript