The following is a summary of the Flex Ltd. (FLEX) Q4 2024 Earnings Call Transcript:
Financial Performance:
Flex Ltd reported Q4 total revenue of $6.2 billion, a decrease of 12% compared to the same period last year.
The company's Q4 gross profit improved to $532 million with a gross margin increase of 160 basis points from the prior year.
Record operating margin of 5.4% was reported in Q4, boosting by 120 basis points from the prior year due to a favourable mix cost action initiatives.
Adjusted earnings per share came in at $0.57 for the quarter, increasing 30%.
FY 2024 revenue decreased by 7% from the previous year to $26.4 billion, however, the gross margin improved by 70 basis points to 7.8%.
Operating income for FY 2024 totalled $1.3 billion, up by 3% with a record annual 4.8% Flex operating margin.
Despite the revenue headwinds, EPS for the full year was $2.15, up by 11%.
Business Progress:
In Q4, Flex Ltd saw strong demand in cloud power solutions and solid demand in auto and medical devices, driving the Reliability revenue to $2.9 billion.
Agility delivered a strong 5.6% operating margin due to the company's delivery on high AI-driven cloud demand.
The company forecasts an $8 billion revenue growth over the next five years from their Automotive and Cloud businesses, predicting that at least 40% of total revenue will come from these areas by fiscal year 2029.
The company aims to solve the growing power density requirements of data center customers through the development of power shelf products, capacitive energy storage solutions, and power modules.
Flex returned $1.3 billion to shareholders through share repurchases in fiscal year 2024, which is a record in annual cash returns to investors.
The company is focusing on sectors like cloud, automotive, health care, industrial, and energy applications, planning to grow the business at a 20% growth rate over the next few years.
Major improvements in the inventory section show better supply chain and operational management.
The company plans to participate in upcoming conferences such as JPMorgan, BofA, and Barclays in London.
More details: Flex Ltd IR
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