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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