Slide 1: Q2 FY24 Earnings Presentation
Q2 FY24 Earnings Presentation Quarter End: September 29, 2023 Earnings Announcement: October 25, 2023
Slide 2: Risks, Forward-Looking Statements and non-GAAP Disclaimers
Risks, Forward-Looking Statements and non-GAAP Disclaimers This presentation contains forward -looking statements within the meaning of U.S. securities laws, including statements related to our future financial results and our guidance for future financial performance (including expected revenues, o
Slide 3: Other Cautionary Statements
Other Cautionary Statements No Offer or Solicitation This communication is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in
Slide 4: Business update
Business update Revathi Advaithi Chief Executive Officer
Slide 5: Executive summary
Executive summary Q2 financial performance – TOTAL FLEX REVENUE ADJ. OPERATING INCOME ADJ. NET INCOME ADJ. EARNINGS PER SHARE $7.5B $439M $303M $0.68 Q2 financial performance – CORE FLEX A REVENUE ADJ. OPERATING INCOME ADJ. NET INCOME ADJ. EARNINGS PER SHARE $6.9B $327M $249M $0.56 See Appendix for
Slide 6: Business update
Business update MARKET TRENDS FLEX EXECUTION Focus markets Margins expanding • Cloud /AI demand remains strong in • Q2 Core Flex adjusted Operating both CEC and Power/Industrial Margins expanded both sequentially and year-over-year • Next Gen Mobility growth continues • Expect continued expansion in
Slide 7: Financial results
Financial results Paul Lundstrom Chief Financial Officer
Slide 8: Key financials
Key financials Q2F23 Q2F24 Revenue $7,766M $7,471M TOTAL FLEX Adj. Gross Profit / Margin $599M / 7.7% $676M / 9.0% Adj. Operating Income / Margin $375M / 4.8% $439M / 5.9% Adj. Earnings Per Share $0.63 $0.68 Q2F23 Q2F24 Revenue $7,303M $6,932M CORE FLEX Adj. Gross Profit / Margin $533M / 7.3% $523M
Slide 9: Segment performance
Segment performance ADJ. OPERATING ADJ. OPERATING TOTAL FLEX REVENUE A INCOME MARGIN REVENUE ($B) Y/Y GROWTH ($M) Y/Y GROWTH % Y/Y CHANGE Flex Reliability Solutions $3.3 flat $171 (2%) 5.2% (10 bps) 44% Flex Agility Solutions 48% $7.5B $3.6 (10%) $168 (1%) 4.6% 30 bps 8% Nextracker $0.6 21% $112 160
Slide 10: Cash flow overview
Cash flow overview ($M) Q2F24 FYTD CAPITAL EXPENDITURES, NET A ($M) GAAP NET INCOME $406 $617 Depreciation, Amortization and other Impairment Charges 127 260 $187 $180 $157 $156 $144 Change in Working Capital and other, net (176) (514) OPERATING CASH FLOW 357 363 A Capital Expenditures, net (144) (3
Slide 11: Q3 FY24 segment outlook
Q3 FY24 segment outlook Flex Reliability Solutions Flex Agility Solutions Automotive CEC • Secular trends, including electrification driving demand • IT spending environment remains dynamic; AI-driven Cloud spending strong, Enterprise IT & Comms soft • UAW strikes remain a watch item • Longer-term t
Slide 12: Q3 FY24 guidance
Q3 FY24 guidance Q3 financial guidance – TOTAL FLEX (includes Nextracker contribution) REVENUE ADJ. OPERATING INCOME A ADJ. EARNINGS PER SHARE B, C $6.5B - $6.9B $375M - $425M $0.57 - $0.65 GAAP: $0.25 - $0.34 INTEREST EXPENSE ADJ. INCOME TAX RATE WEIGHTED AVG. SHARES OUTSTANDING $50M 11% 448M Q3 fi
Slide 13: FY24 guidance – UPDATED
FY24 guidance – UPDATED FY24 financial guidance – TOTAL FLEX (includes Nextracker contribution) A REVENUE ADJ. OPERATING MARGIN ADJ. EARNINGS PER SHARE B $28.1B - $28.8B 5.8% - 6.0% $2.49 - $2.66 GAAP $1.71 - $1.89 Nextracker FY24 financial guidance | Revenue $2.3 – $2.4B | EBITDA $390 – $440M FY24
Slide 14: FY24 guidance bridge: Margin expansion tells the story
FY24 guidance bridge: Margin expansion tells the story Prior Guidance New Total Flex Guidance Revenue $30.5B - $31.5B $28.1B - $28.8B TOTAL FLEX Adj. Operating Margin 5.0% - 5.2% 5.8% - 6.0% A Adj. Earnings Per Share $2.35 - $2.55 $2.49 - $2.66 B GAAP Earnings Per Share $1.87 - $2.07 $1.71 - $1.89 P
Slide 15: Key Takeaways: Delivering on our long-term performance
Key Takeaways Strong execution on margin expansion, portfolio Delivering on our strategy long-term performance Executing on capital allocation strategy; focused on continued buybacks commitments Nextracker Tax-Free Spin expected in FQ4 Reiterate F2025 target: $2.65 Core Flex Adjusted Earnings Per Sh
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Slide 17: Appendix
Appendix
Slide 18: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures TOTAL FLEX Quarter-ended Quarter-ended Quarter-ended Quarter-ended September 29, 2023 June 30, 2023 September 30, 2022 July 01, 2022 % of revenue % of revenue % of revenue % of revenue ($ in Millions)* GAAP gross profit $665 8.9% $587 8.0% $591 7
Slide 19: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures TOTAL FLEX Quarter- Quarter- Quarter- Quarter- ended ended ended ended September 29, 2023 June 30, 2023 September 30, 2022 July 01, 2022 ($ in Millions) GAAP operating income $376 $291 $325 $272 Intangible Amortization 17 20 21 22 Stock-based com
Slide 20: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures TOTAL FLEX Quarter- Quarter- Quarter- Quarter- ended ended ended ended ($ in Millions, except for EPS) September 29, 2023 June 30, 2023 September 30, 2022 July 01, 2022 GAAP net income attributable to Flex Ltd. $228 $186 $232 $189 Intangible amor
Slide 21: Appendix: Reconciliation of Total Flex to Core Flex
Appendix: Reconciliation of Total Flex to Core Flex Noncontrolling Stock-based Q2FY24 GAAP Intangible compensation Restructuring Legal & Other interest share of Adjustment for Non-GAAP ($ in Millions, except for EPS) Amortization Charges non-GAAP taxes expense adjustments Total Flex (A) Revenue $7,4
Slide 22: Appendix: Reconciliation of Total Flex to Core Flex
Appendix: Reconciliation of Total Flex to Core Flex Q2FY23 GAAP Intangible Stock-based compensation Restructuring Legal & Other Interest and Noncontrolling interest share of Adjustment for Non-GAAP ($ in Millions, except for EPS) Amortization Charges Other, net non-GAAP taxes expense adjustments Tot
Slide 23: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures Quarter- Quarter- ended Ended September 29, 2023 September 29, 2023 ($ in Millions) ($ in Millions) Segment income: Reconciliation of segment income Flex Agility Solutions $168 GAAP Operating Income $376 Flex Reliability Solutions 171 Intangible
Slide 24: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures Quarter- Quarter- Quarter- Quarter- Quarter- Quarter- ended Ended ended ended ended ended ($ in Millions) September 29, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 July 01, 2022 Net cash provided by operating activities
Slide 25: Thank you.
Thank you. For more information, please visit investors.flex.com