FLEX - Earnings call 2 2024

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Operator

Good afternoon, and thank you for standing by. Welcome to Flex's Second 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. begin. may you Rubin, David

David Rubin

being Chief Thank you, Quarter today to Second followed and and our will Lundstrom. give brief Good XXXX Earnings afternoon, remarks summary be well our at on available the Advaithi; for Fiscal Revathi Relations me Q&A. section call Slides Executive copy our welcome the are for Officer, Conference as corporate today's will earnings Paul Chief financials of This Both Flex's by Officer, recorded call replay on is flex.com. a available as John. press and Financial Call. is release and website. With Investor

could forward-looking current materially. differ actual a today's These results risks assumptions. As are that based involve statements, expectations call cause and on our contains to statements reminder, uncertainties which and

and all basis. full be will announce remaining plan Relations Investor Flex's interest to we pleased be growth on today, were discussion information subject of unless The today's or press presentation, risks can update recent appendix to a Flex filings otherwise SEC. these in obligation Please no please to of results will with shareholders. section found our well GAAP our stated, these year-over-year and reconciliations be slides and release, statements cautionary to in forward-looking see the all the as provided note, in metrics is non-GAAP a statements. the in For to spin this full change, the we of our measures, undertake as the non-GAAP NEXTracker presentation all to website. Factors off Risk uncertainties, Note Earlier

most connection agreement a shareholders. form Flex NEXTracker of We respective for and into the NEXTracker, disclosed, that public is Flex previously Flex, separation retained As initial NEXTracker's by effect the our option spin-off to the entered with and believe offering. advantageous spin-off to pursuant merger the in

long-term federal for a shareholders Specifically, in interest our income our allows Flex NEXTracker it value Flex and manner to opportunity the and tax-free to tax to shareholders. on U.S. creation provides in purposes strategies for focus distribute Flex's core

NEXTracker today, expected of XX, additional Flex's Flex, Form statement be subject on spin-off. is ending fourth to currently that completed number remain preliminary of earlier includes As registration quarter information in XXXX, but includes filed regarding publicly proxy Spin-off and a to a the statement we which S-X will, in occur. does a other We no additional that share appropriate. have will spin-off that but point, on no been to are conditions understand any this you can available, be assurance updates provide process. this details the made given questions At as may there what's than March fact,

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

Revathi Advaithi

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

how to Israel. Before say saddened attacks we we start, deeply I horrific on the by are want

customers, area. colleagues, out to Our friends in our our that hearts go our and

announced the our quarterly operating provide $X.XX Slide and Flex's came Turning billion, Overall, great have results $X.X separation adjusted with came X.X%, to fiscal X%, Since was excludes which of execution. able now Revenue we NEXTracker, we X. in are EPS. down about QX on was at adjusted to quarter NEXTracker. delivered results, another in we margin which of strong at Core

strong came X% Core Flex market really Flex, XX%. came company operating I'm we cycles. how grew in adjusted great the at executed For which even against year, uncertainty. build to up ability $X.XX pleased billion, $X.X with delivered at year-over-year, last performance Revenue our EPS. we in Core results resilient quarter really these with of execute a down and the through adjusted and X.X%, well sequentially both margin and with a shows

and a take dynamic to market environment. at We'll how look continue fundamentals X. highly Slide we navigate to turning Now a

how and truly perspective into few to that out our However, the point important items puts model a really company. evolved have want strength we as a I of

As portfolio within but mobility, shifting towards that, you been we've cloud, end next-gen we focused our aware, on markets, X more are in and well participate digital health.

the As us. Day, our right and growth drive highlighted believe March we margin in these expansion for markets XXXX Investor

like we're doing some how in give specifics I'd these So on to areas.

we comprises of our autonomous, Day, Next-gen CAGR have for our a this mobility, defined space. expected we as ADAS, At businesses. it the charging EV percent EV time and Investor XX-plus

see these with to on We par continue category expectations. growth in strong this

comes Looking from Once with steady expansion. quarter, our wins outpaced coupled units. This again at business. this revenue overall continued vehicle past automotive our content growth industry program strength

integrated power ability our to with unique center towards expect for cloud under increasing critical manufacture the racks data business vertically data and just Even trend the We consignment, to systems year based on and grow beat based we're per XX% AI capability on expansions. this year is currently of with we to multiple year. hyperscalers growth on also with generative have driven these growth center. already much This expectations top-tier next by that won what track

over we business a CAGR. healthcare Lastly, XX% our just said would have digital

was only upgrade digestion from is as look business we other touched some doubled opportunity opportunity. after initiatives Sciences during grid clean and we delivery 'XX. Despite trend now, seeing our early our short-term area year. renewables announced the last We renewables is in period still extended potential in in weakness devices, it fiscal changes we next just expect the Right to and Life infrastructure. transition in help again drive the Clean I'd days at still of monitors glucose programs. government an are the in diabetes multiyear inventory IRA on of grow that One And and Energy energy and lingering growth continue. drug strong expect continuous we to fiscal residential our Last our Transition that quarter, say business, that we generation to our Investor smaller smarter exceptional including growth. but Day solar,

Day Flex markets, was end company. made more focus to has Our stated intention resilient these our on at which Investor a strategic

in is steady margin a a more right our Flex markets that Now agile with EPS company. are let's and company, just with and end efficient combining we operating and results how operationally expansion the you see growth. with as

Our expansion, year-over-year margin both has of factory through footprint, Core combined and continued Flex. driving our automation productivity and enabled sequentially optimization operating mix our with investments for

this trend to this we expect further to when discuss guidance. also continue, we'll and We get

been efforts in of We company see the our the impact improving results this in our we X shaping shareholder over creation. and direction the last years, have and value

checks help value of Now executing fund shareholder cash unlock the our our value right on speaking the of boxes delivers value, is is multiple growing which creating for journey, the allocation we growth from Through the great we're strategy. used and transactions, overall facilities synergistic have focused critical with creation. addition We is the It investment Flex a our acquisition, value path cloud in on We Anorak cloud clearly to believe this accretive double-digit capital position market. to to investment. cash fund and power. margin NEXTracker. TPG This all pre-IPO to created

to authorized also the recall transactions share buying own Year-to-date, we're $X a from repurchase putting our cash stock. So stock. And program back our worth bought you'll work we back back August. billion Board million of $XXX in

the in the steps we're transaction. value a in shareholder-friendly NEXTracker Now unlock fully final to

the in investors through update. XX% to Paul? distribute With we I'll you via take call financial outlined, pass over QX. tax-free to Flex ownership fiscal Paul remaining to expect our David a spin that, to a As

Paul Lundstrom

was Revathi. quarter. I'll our Thank another solid with performance X. second Okay. you, It begin Slide quarter on

our increased and billion, quarter expectations. Gross $X.X Operating revenue in margin points. gross $XXX X%, basis $XXX up with profit line Second income totaled million million, to was with was XXX X%, X.X%, increasing share at came includes which at $X.XX quarter, NEXTracker interest. improvement, margins points, of in operating and a substantial for XXX noncontrolling the up basis year-on-year earnings per $X.XX

adjusted last up NEXTracker, our of XX points year excludes revenue in with against Flex operating Flex quarter came Flex 'XX. at quarter strongest in up which was was X%. points results, at up Revathi of And the The great Looking in up QX. this XX Flex was as quarter, Core fiscal Core billion, which sequential EPS, X.X%, XX%, down business from $X.X quarter $X.XX margin core Core and mentioned, a year, another basis delivered margins X%. basis expansion,

cloud consumer. billion. and segment margin, remained flat and million, this improved quarterly execution. Operating our and as down Agility, operating residential billion and offset on was million, revenue to Auto at X.X% to income strong on in mix. revenue improved of was IT, operational industrial. from sequentially up expected $X.X year-on-year, some was Solutions management margin X.X% Health strong solid for with Reliability by strong operating and with as solar income growth came segment In $XXX slide. $XXX sequentially solid Turning the was next and Operating reflective to was enterprise in anticipated headwinds comms, pressure at a the $X.X and results both

delivering year, was Finally, was than a XX%. NEXTracker margin. Operating up operating double what XX% $XXX income delivered NEXTracker revenue more it last $XXX of at strong million, million,

inventory year-over-year. further Moving our Slide net X% goals, improvement XX. reducing X% to by progress We cash inventory on by flow sequentially made and against

an last said we situation quarter, of improving, and coming overall we expect see quarters. the progress further As over to is this the indicator

on We in of continue revenue. QX at future million invest to target opportunities. $XXX in CapEx at X% growth came

level the both full and fiscal We expect was of to for to All led that up similar which year-over-year. a flow free maintain total sequentially million, investment $XXX XXXX. cash

to have continue million the worth quarter prioritize purchased we $XXX fiscal repurchases. million. year-to-date, to, stock committed $XXX we've bought of we share back As and in opportunistic We

for new to program. $X Slide for in earlier, repurchase authorized segment discussed outlook quarter. As XX continue the fiscal third Board a our August, the billion Please share

For steady. be revenue demand low will Reliability been we down high teens. digits to Auto has Solutions, expect single

more quarter. unresolved, However, UAW with we're strike the the approach in taking conservative a

Industrial. We comms, parts strong down also offset On to IT, low in to near-term Slide expect in of growth weakness be in is continued XX. by some and consumer. to Agility cloud, in Revenue weakness XX% mid-teens enterprise expected with

guidance. quarterly For our

the be $XXX in expense $XX with income million. For is total estimated Interest range expect around million between million. billion we to $X.X billion, $XXX operating and Flex, $X.X of and revenue to other

based that tax to to approximately around of between our We Core average expectations some for guidance noncontrolling the EPS on translates includes outstanding. quarter. Again, to All $X.XX for we XX% to visibility, $X.XX interest adjusted XXX expect shares This the included additional weighted and excluding $X.XX Flex, million NEXTracker. from $X.XX provide rate approximately be NEXTracker.

would we now $XXX between midpoint, X.X%. which revenue adjusted share equates we've be sequentially this adjusted $X.XX income margins $X.X in both and million and million between Flex QX. between and we included Core looking at expect between core to million, expect our the adjusted GAAP $XXX year-over-year. $X.X approximately At core to and and QX, operating For billion in $X.XX. per operating earnings And X.X% to expected restructuring, up which implement is be be to $XXX billion, guidance,

the and to revenue X.X% comparable approximately our NEXTracker, remains at guidance noncontrolling prior $X.XX and for total $XX.X between following and now per $X.XX guidance share. We which between full-year $X.XX separation adjusted expect to EPS $X.XX X%, including will NEXTracker. This provide until between billion the from guidance. on adjusted full-year expense Looking slide, includes our now billion, $XX.X operating margin and in interest Flex,

full-year for to excludes and modeling our the entire core total NEXTracker is help to Looking Flex, comparable previous at is expectations with this be -- Flex something not new to guidance. for year. you Again, this clear,

for midpoint at the margins expect billion. up XXX. Flex billion operating between point $XX.X and X.X revenue between We full-year and Core And which EPS between about Adjusted would last, X.X% adjusted XXX be $XX.X year-on-year. and X.X%,

Flex On shifted the cycles. to operationally higher-value next to has want much improved how to just the have and we changed slide, through as manage business I highlight

from our some outlook 'XX changed, resulting As you see, can challenges. for revenue short-term market FY has

businesses, are at operating top the This we've improve drive on and a on pressure rates strong operating at and expectation cost EPS as improved dollars margin we we that a comes profit will from in some better hold will executing that despite and told Flex and is our efficiency have our another to operating strategy This point operating history. that on evolved than level optimizing to expand. would. any portfolio continuously and time proof both line, Core is higher-value structure our you how constant However, towards company's the continue now

Revathi Advaithi

management, we portfolio pleased kind This, Thank how Overall, are with combined margin I'm expansion. the on our focused a focus the strong our strategy executing executing Paul. value how really is right we you, allocation of strategy driving shareholders. growth capital to provide and on on with with buybacks

fiscal good even EPS 'XX We me near-term expect Investor Flex with Day performance strong Core margin for year an our with Flex a the continued also to is This growth of extraordinarily and EPS for reiterate to challenges. $X.XX. adjusted time for getting targets

With begin remain Q&A. long-term for to we in So the confident to John, call turn the opportunity the operator, that, Flex. back I'll

Operator

you. Thank

question-and-answer the today's begin now portion will call. We of

. one. [Operator would you If Instructions]

please you that ask we moment, limit reminder, yourself please, a to your one question. As and One follow-up. for one first question

from Stifel. Sheerin comes of line question from the Matt first Your

Matt Sheerin

weak. Just a reliability ago. markets down you're We little the headwinds It talked significantly. some in XX do in still both as for being days And agility these But deterioration get into about relative customers could like a you from guidance expect terms of in the versus are looks some auto we you to tell some hitting calendar pretty patterns? of you've us markets? Or question seen both their taking we what of 'XX? and order bottom continued a your expectations exactly bit datacom

Paul Lundstrom

Matt.

question. So first appreciate of the all, I

spot I it's think on.

give one me previously of out specifics. have might And you consumer-facing some And just you well. just weakness what give more our some we particular, in had you Let But example. as Revathi, markets. I'll comments in called was

Agility down from based what it within the we're thinking we're figured today, around customers year segment, down consumer the we more like be for mid-teens. business, Our But which be it will hearing device XX%. would is on

a mid-teens consumer-facing those significant So change to infrastructure We comps out XX%, softening had markets. before. in fairly a on called

been markets seeing right ongoing digestion inventory we're expecting that and year probably what be what some X QX. for us. you of all had strong, with Auto we're but for in been end year, the thought now down in seeing seeing now, strike, more but of flat and here like comps to some UAW guys should XX% we're those week the impact for this has be in sitting the we're are too, Our

you're more And taking bit business. That renewables. a a conservative just We we're expecting little for robust little I expecting overall guess, said, the then, growth still approach. right automotive lastly, double-digit were we're So residential on what growth some digits. for more still space, but will it single low up, of it up that given in the like be the But probably seeing be now year. will solar

that markets great. Cloud, are although things some sort of digital choppy saying, would in bigger nice see some things there. things are the book continues next-gen to some comment But contraction. looks of So some like those seen in end I guess mobility we've I areas, some great really by health,

of So some offset we're seeing there they just in unfortunately those what some end quite of just other can't markets.

Revathi Advaithi

see last agile have thing only but of is EPS years operational with few about I'll the and in you now efficient. And right right what is playing to portfolio, in one Matt, Paul also just the our have to add consistently talked have that strategy things the to more said we've right that the for out growth. our Flex operationally to can you be results margin and expansion the

So it's out seeing what cycle, today. really is well present managed you're through which the

market choppiness So there. be will

we're think as company with we I that. pleased is execute important, and how a

Matt Sheerin

just guiding 'XX, Okay. Very follow-up, like EPS looks fiscal that 'XX. helpful. for regarding my as off you And significant reiterating for what it obviously, you're core business growth XXX of target the

that deficit? going is for up the that versus making of margins come core much how to business expanding from the buyback growing So

Paul Lundstrom

combination months expansion. be probably think momentum it X here. of makes think growth will kind to Matt. and too ahead We don't get specifics It's to well. guide that. and of X, want far be some of One as to of does margin going I the next the ourselves and on I But the I sense top-line a buyback some get given here too many through combination need our of a

Operator

line Your question next Fox Advisors. from comes Steven Fox of from the

Steven Fox

could. Two questions, if I

markets have the below seeing of all, softening are thought. some than that I seems markets, though even some a even strike lower given of that First margin, like further to average would in chord are it margins, in end weakness you're progress the

still just in curious, exiting, these the average you how towards not Would like to getting be how going you're markets were reconsidering forward. I'm I repricing, of ways? going of these maybe either strategy margins? some consider So markets other you're many was pliable some curious

Paul Lundstrom

Sure.

saying a I always wouldn't Steven, statement, per markets is not caveat divesting planning end any say and sort constant management process, we're I that there's evaluating But major of would deemphasizing. but by So maybe and exiting. se, we're on portfolio

nice of I margin It's the end you of I aggregate. on some is pointed comment at sort happened mix markets to if of lower those think Flex to on. out kind be that spot your that look

And we're line, guide of about market definitely with I so -- helps choppiness the down the as think how I that mix and kind some moving commentary? on definitely helps. is top the know, mix a helpful don't

Revathi Advaithi

theme Yes, portfolio kind even in years. the key has one just is thing X been I'll and last the to our is managing say mix add of

If you in. each managed the pretty of of Agility's chain. overall significantly markets, a all really up why end the even terms the our with and value such it's devices, end in That's being business within moving look the have what performance strong in we've see markets margins Agility that consumer at of we mix done you

are these strong, it's that to X talk really And So reliability portfolio our part within whether there of I but that Nothing the on markets. belief in significant will that I is agility, course you're pockets extremely that of managing that helps or size. within see matter normal keep end then the markets action. shrinking think others are us. all about, even Doesn't end that are

Steven Fox

definitely No, you wondering auto -- could And little then dial in more was Okay. bit a just market. I on if that's the helpful.

continuing to in the like of a of even couple on and seem ramp EVs there's though headlines next from You how they're whether talk that, can just year? ramps contributing Because maturity mentioned program programs the of the UAW into been pretty away last months that. margins, strike. to But things you new sort you of sort and on negative bullish programs of about look lot

Revathi Advaithi

automotive. call years of the part drive before, to I'll that our platform our a I've our focus get EV successful can own I'd stated to and say see our we designs of EV terms in combination say, I'd X also with we growing end and in cycle. our about platforms. in up intention mobility ramp is the see our hyper-growth is you're in We production. of designs had. automotive and see which America is any in is talked take customers I today say a We kind to really we at kind start will which would X on on that a good our in growth, And But of what of that that on Yes. good kind that years different that of, of thing. next-gen North that volume our with talked been very few large we we and automotive, ago, to maximum expansion see geographies and bookings be pains work saying you automotive, winning about has in of is that's both a markets that core and going through strategy terms believe bookings to growth there to in going noise that volume such that that, terms

is also Flex. in companies opportunity supply disruption the which in a chain like there overall We provides automotive, great EMS for think

together, would and for a result you continue say, that all that, overall want put markets. And is our I we Flex my So be. strong in place that really good in a EVs is to growth of to view be EVN diversified as have to automotive automotive it we on and

Operator

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

Ruplu Bhattacharya

reliability has over operating for business, billion, if your is revenues as the an core bps can American improvement, how better. into the Europeans? on bit from the about I do just margins, EVs? on margins delve are more to to then how that automotive, XX And does versus And driving North both specifically And for Paul, issue. that or expectation like and edge things of bps OEMs the side down little revenue on of or gets can on just deeper tied that that revenues? mix changing XX your mix you come is margins, was agility? the you business lagging that but you've see you done? towards XX semiconductors like how then that bps, wondering the more And expectation renewables, the year? gone you being the the on And improvement a past, Looks you lower $X.X Is talked more components, that residential do see tied now into what And if delve is progressing much in about margin the like scale? the utility on

Paul Lundstrom

you but Ruplu, there there, Well, them questions is that news, just had that think sides sell the teasing. will more of good no asked be because I'm X I in

start So revenue. let me with

a about was We By the at I the with end declines. of conservative comms being seeing that more markets bit a talked about talked think about the little few bit Devices We way, down. -- midpoint, little talked called I out $X.X piece. a my billion auto. we're We Consumer infrastructure. math about a renewables.

all So continued a cloud, I be the areas health, in those general some to the are going drivers, in look now, growth auto, I've about couple been good. of ability by partially of talking years bigger digital think offset pretty and Ravi for that next

what that's on the revenue. drove derate So

about for You renewables. asked versus resi utility

just It's customers. I'll of some I $X confidentiality we've this business before, the -- for around a the There's piece say First, now business. well renewables think big is disclosed Flex. over billion and

in with made partnership would -- We disclosures our customers. some that have

remains a grow. terms whole space. choppiness. that's very view the tend to we've where on and be a to know bullish there's forecast of expect been So residential couple bit little of that you we there our I in it some of But think more changes names long-term space, and little do to pinched that a here renewables out And bit that in continue

America. North asked You well automotive. I say overly We're fairly concentrated about not would dispersed. geographically in we're

and doesn't UAW, in we QX. China doesn't impact some here affect are It affect it Europe, So much. although seeing the expecting so

little helps. this sales where margin is so out, in OP of well things I there's seeing We're our are mix areas cut a that Steven to to the One, margins, reductions and in couple with a In be of tend think billion what no margin rates pointed -- volume terms bit favor change that. lower. our $X.X on

I in in that. the in so remarks, the to QX And and definitely I a be there's restructuring And that's mention came some to Two, here little prepared bit say QX a be better. that one. going going is helps. third would then both did three, tailwind quarter, there and in for QX

And dropping so through. that's

I And those of pieces the to operating the so X about think was you hold kind then us thing recoveries. last And profit. that asked on help line

reasons. a One, if gotten meaningfully last shortage So it's have I very some the this is And for good helps there tightness couple -- Recoveries It's impact core of beneficial what down a news it's couple to inventory, Flex. versus going better. areas, cost-to-cost much, year-on-year of in revenue are still about with included. on a think that quarters, chip full-year say we pass-through the although that's thought over would much thing. for I

year. And from guess so I comes think the guide, our maybe when would full I high point, that think this about half down full at year, pass-through. single-digit changes at and midpoint I for in of of the

it's So not all that markets. you're revenue headwinds core seeing are the

So little some things would knew as more see just pass-through we you when that of that inflation got bit normal. is a

Ruplu Bhattacharya

appreciate really into of that. you going all I

on follow-up. quick a quick real Just

NEXTracker think should the the of your remaining return that we How transaction, Now that? about capital does philosophy you've and change that announced pace around buybacks?

Paul Lundstrom

problem. No

quite We're about talked And capital to bullish of number end in we're we've so markets. And I allocation a number one, starve would core our priorities business. say, never before. our the going

a internal CapEx The going other ourselves #X buyback. investments. never and things like we're this high to priority for high, starve or so priority, is share is And

Hopefully, We that third rationalize a at continue and distant bit. to believe M&A. of moment there I the be the people there's arbitrage little significant things a the say NEXTracker the sort with disconnect. would that would of separation, probably sort realize

right is we free expected the always, the but clearly stock minds, reserve use As to our of change cash. buyback

Revathi Advaithi

billion thing we add only shareholders. authorized right? $X recently authorization, I'll our And back to so to the our just to Board return that remind stock continue you is, expect And cash a I'd

Operator

from of Samik from Chatterjee comes question line next JPMorgan. Your the

Samik Chatterjee

to give cloud Just in I parsing I I -- is have there modest numbers just a wondering hope there, there or the XQ modest profit in that you've about? can in customer-related guide Or how I right And through that of much and that is follow-up. when a of And doing us terms a XQ any to and XQ a here, the all look talked but the I'm cloud going to, in in XQ timing of uptick revenue disclosed, at implied ramping embedded XQ? just projects? there's in you've on those uptick get projects And the math and more numbers? starting then XQ the you they event XQ? is from Are then sense quick recovery of something it else in versus

Paul Lundstrom

talking well growth. in that of cloud, solutions we ramp continue tech do a that platforms new of some talking from smaller been as there us health benefit to we about. the we've to is been out, It's those others areas we've And a continued QX yes, of you to it's So number tailwind. through device as well. as these couple things. pointed about and piece expect -- give a it. continue There's that There's move as we ramp should It's some should the that mobility, X next-gen as cloud

You of restructuring we just really move well I expect a quarter mentioned full bit margins, do as That's uptick a margin QX. QX to little tailwind. from a as of

Samik Chatterjee

you of second adjust expansion all point, out. seeing on when about a 'XX margin point you're And the sort basis was, you core, fiscal the on did in XX numbers the that NEXTracker mention question

account next improvement wondering much Just in sustainability you that through thoughts on your lap share pace should how that can you how of year the going is And year, if to the that price of 'XX? we increases reliability about think pace? into fiscal about sustainability of start of improvement of

Revathi Advaithi

part is steady our to expansion consistent our of through core expansion. story ability years, we've to been X the a say drive would has cycles very first margin we've Samik, Yes. margin in I And X last different been seen, right? the

continue and cloud, to One XX So definitely growing that basis about. more our are is that's in areas we And from of continued next-gen change those I expansion. it view track better margins. margin mobility, focus Our in is points things of the talked way all the right? the care, like expansion health sustainable, comes mix, on margin digital

a it, role So mix in for sure. plays

a of automation, We through our investments. factories done through lot and optimization driving CapEx around have productivity

that very sustainable. So is

we're FY to we that how that So expansion, I EPS able good a very if direction. 'XX have reiterating do I look story. at And that say margin points that been in also think that I would it's sustainable and getting consistently it's

Operator

comes question the line Barclays. from next Wang of George Your from

George Wang

I can. X I if questions have

buyback. Firstly, the to want I double-click just on

Just you billion that authorized of mentioned buyback. $X

Just curious of XQ around also, be the for the XXXX. to based especially share of theme kind obviously, offset I you buybacks versus from was of dilution. flat March to quarter kind is And seems at of it kind count about cadence, kind on XQ, do may some which of blackout looking timing, guidance

run assume the Just quarters? color sort buybacks? linearity Or of some of we technicality kind for And curious, of cadence similar timing. the around could of any terms spin-off the should provide rate sort $XXX be a and you the million can few of in next

Paul Lundstrom

are essentially the news spend. Well, is now public do and intend the out in that's periods to that over domain good quiet we because

quarter of give helps so sort bit. our the part last has as and guide. last that count little that last years. so We But of over share our I And -- stops starts of the a really as some mean, sort X -- created over

quarters. stock continue you've us we think through buy the to known as to I move

And conservative so a probably that's view. slightly

a you to little If read into want bit. that

to other intend priority to fourth our quarter buyback terms us. say is buy specific say we than stock allocation in going In cadence, capital a of or I'm here clearly for our not what to third exactly

George Wang

Just a follow-up. quick

cash could Just driver price kind flow free being in share XQ versus the a XQ use. much strong for it's FCF kind terms see of bigger of a to deliver potentially of the cash be nice appreciation,

potential FCF based you the terms margin full-year half? back just is guys $XXX in Just any million profile are or curious above the and if better of in reiterating upside on there

Paul Lundstrom

great question. a it's Yes,

continued complete. bounce P&L, a quarter. to sequentially. to the we to the here's around north predicting than in in the in But of going inflected that cash up cash down we I'm QX. and other We're sure see we're definitely cash can headed than little direction. also NEXTracker And so is you puts free And -- is with once like inventory because lots everyone after perfectly said, expected is little flow to the predict. both say want But I'll progress we're There's just what CapEx. couple $XXX the do particularly in of like bit. about QX, our generation it a clear, update what performance from was I'd free targets of came just quite we're in again takes million separation to pleased significantly We predicting in that. little as back, with on going a is make it flow kind That a did cash right expectation And generated it's we was And not trickier of the flow. logic there. hard sometime quarters We and generated specifically. is $XXX the free million how certain year-on-year pleased and I timing the

So underinvesting in not business. we're the clearly

still changed, nothing to and free flow. we So say I cash has grow fundamentally would expect

Operator

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

Mark Delaney

playing from the dimensionalize mix But XQ, may that be? those tailwind to as terms on even as drivers margins fiscal sequential or how there and is programs of incremental pricing be XQ other could total if large large to strength? And in key Flex You revenue additional may going you mentioned anything restructuring roll a also margin declines. so, core

Paul Lundstrom

Sure.

So Mark? clear QX, to just on QX question. you Are your I'm talking

Mark Delaney

of you X.X%. is midpoint I X.X, did, just think the guidance the From Yes.

based are one with You to the you quarter just actually of guidance. restructuring roll how a or the margins little you may through and we as asset in key mentioned to the revenue try markets mix upcoming that incremental as drivers is are anything on pricing, in there just to think to drops. did some the But is buckets expanding of bit plan maybe programs pieces

Paul Lundstrom

it. Got Yes. Got it.

Okay.

we I to from both definitely push is our on that a some did flag tailwind restructuring. say that going biggest singular in prepared would have mix In is QX remarks, the So But also QX. benefit our productivity We're factor. pointed probably you out and continued in programs.

to little right some You other look earn are now. than tend of at that of portfolio. a less They the markets parts the end contracting core

asked sort -- -- that And you of of a and that we've so on beneficiary mix a to comment of it's mix. programs say been nothing productivity significant about pricing, I there. would combination

Revathi Advaithi

that lot factory optimization, big is a like Paul driver. a said, And then and really we driving that's of are

Mark Delaney

Do still with that's level And no do just you today? making on but I NEXTracker, in very know No, place spin? Or all helpful. on order announcement have or rulings approvals where set currently. you stand the that government you're you in Okay. those need to now guidance the do tax then to

David Rubin

is process. shareholder the this have November but outlined it in outlines of we're David. XX, vote, S-X. will haven't to had XXX gotten. We know you pages, we've it's still but all in moving the what Mark, Yes, prove approvals that I on have the time all otherwise, that's

Mark Delaney

Okay. for Thank you my much so taking questions.

David Rubin

Early guys. QX what we're thinking is

Revathi Advaithi

you for team just course, joining. for to Flex our and support. Thank all for of our of want on your and to Okay. the shareholders customers behalf the thank I leadership team -- all

Thanks all. for joining. So thank you

Operator

you our This concludes call. conference for joining. Thank

You may now disconnect.

Flex (FLEX) 25 Oct 232024 Q2 Earnings call transcript