Good afternoon, and thank you for joining us. Welcome to Flex's Third Quarter Fiscal 2024 Earnings Conference Call. I will now hand it over to Mr. David Rubin; please proceed.

Thank you, Diego. Good afternoon, and welcome to Flex's Third Quarter Fiscal 2024 Earnings Conference Call. With me today is our Chief Executive Officer, Revathi Advaithi; and our Chief Financial Officer, Paul Lundstrom. Both will give brief remarks, followed by Q&A. Slides for today's call, as well as a copy of the earnings press release and summary financials, are available on the Investor Relations section at flex.com. This call is being recorded and will be available for replay on our corporate website. As a reminder, today's call contains forward-looking statements, which are based on our current expectations and assumptions. These statements involve risks and uncertainties that could cause actual results to differ materially. For a full discussion of these risks and uncertainties, please see the cautionary statements in our presentation, press release, or in the Risk Factors section in our most recent filings with the SEC. Note this information is subject to change, and we have undertaken no obligation to update these forward-looking statements. Please note, unless otherwise stated, all results provided will be non-GAAP measures, and all growth metrics will be on a year-over-year basis. The full non-GAAP to GAAP reconciliations can be found in the appendix slides of today's presentation, as well as in the summary financials posted on the Investor Relations website. As previously announced, on January 2, 2024, Flex completed the spin-off of all its remaining interest in Nextracker to Flex shareholders. As a result of the completion of the spin-off, Nextracker became a fully independent public company. Flex no longer directly or indirectly holds any shares of Nextracker common stock, and Flex will no longer consolidate Nextracker into its financial results. Please note, our guidance for the fourth quarter fiscal '24 excludes any economic interest in Nextracker, and for fiscal year 2024 full-year guidance includes Flex economic interest in Nextracker for Q1 through Q3. However, it also excludes it from Q4 fiscal '24. Lastly, the historical results of Nextracker and certain assets and liabilities included in the spin-off will be reported in Flex's consolidated financial statements as discontinued operations beginning in Flex's fourth quarter ending in March 31, 2024. With all that, now I'd like to turn the call over to our CEO, Revathi.

With the tax-free spin that occurred in early January, making Nextracker a fully independent company, we wish them great success in the future and look forward to watching their continued growth. Through this process, we unlock tremendous value, and the approach reflects in our continued focus on creating long-term shareholder value. Of course, Flex remains committed to enabling the transition to renewable energy in our core business. We serve a wide variety of customers and applications, generating over $1 billion in revenue for this market. I should also mention that we continue to expand the use of renewable energy in our own factories as part of our net-zero journey. Now moving to our results on slide 4. Overall, fiscal Q3 was another quarter of strong execution. For total Flex, revenue was $7.1 billion, adjusted operating margin came in at 6.7%, and we delivered $0.71 of adjusted EPS. Looking at results for Core Flex, which excludes Nextracker, we continue to execute very well in this dynamic environment. Revenue was $6.4 billion. Core Flex operating margin came in at a record 4.9%, up both sequentially and year-over-year, and we delivered $0.54 of EPS. Again, this was solid execution in the quarter. Now the takeaway should be clear. Our results continue to show the resiliency of the Flex model and fundamental changes to the industry. Despite significant macro-driven volume fluctuations, we've continued to deliver on our margin and EPS commitments. We remain very well positioned across the markets we serve, and this comes from our deep relationships with our customers and our ability to provide world-class quality and value in the products we manufacture. I want to share a couple of highlights from the quarter that demonstrate our strong market position. AI is driving changes in data movement both through the data center and across the network. Our strength in hyperscale data center and networking infrastructure are key enablers of our customers' success in delivering these products at scale. We've talked before about our strong positioning with multiple hyperscale customers. We're the only EMS provider with a comprehensive offering, including bespoke fully integrated rack systems and power solutions, ranging from embedded, discrete, and all the way up to data center critical power. In addition, we offer value-added services in design, metal, components, supply chain management integration, and aftermarket services, including the circular economy. As a result of our comprehensive offerings, we continue to see very strong growth in our Cloud business. On the networking side, a good example is our partnership with Cisco. Recently, we were honored to receive their 2023 Electronic Manufacturing Services Partner of the Year Award. We're also building on our 20-year partnership with Ciena under the world-class networking company to provide U.S.-based manufacturing capabilities and supply chain services, enabling Ciena to ramp high-volume production of its innovative pluggable optical technologies in support of the broadband equity access and deployment programs and the Build America, Buy America requirements. Now looking at automotive. Next-gen mobility, including EV onboard electronics, charging infrastructure, and advanced compute systems for the software-defined vehicle remains very important long-term growth drivers, and Flex plays a key role across these ecosystems to support the OEMs, including designing or co-designing content while bringing world-class manufacturing and supply chain leadership. We have built a well-diversified portfolio of solutions for ICE, hybrid, full EV, and across the spectrum of driver assistance and safety. For example, our advanced compute platform technology that powers software-defined vehicles is agnostic across ICE, hybrid, and EVs. We also have established relationships with many of the upstream semiconductor providers, as evidenced by our previously announced partnership with NVIDIA for ADAS and autonomous applications, and we recently showcased our next-gen EV power electronics full design capability with STMicroelectronics, utilizing the latest in silicon carbide MOSFET technology. So you can see Flex is well positioned for every stage of this long-term technology transition. It is also very important to remember that as a platform, we are experts in complex compute and power, which gives us a competitive advantage across the multiple markets. Our technology and vertical integration capabilities serve many applications, including hyperscale data centers, renewables, and next-generation mobility. Our customers look to us to help them navigate the complexity and implement these integrated capabilities to give them a competitive advantage. Now, the current environment remains highly dynamic, and we're already seeing the impact from elevated interest rates in some markets and excess inventory in others. We have made it through the supply chain crisis. However, we carefully watch the situation in the Red Sea and how that could impact supply lines. We continue to execute through this cycle, and we are very well positioned in markets with strong, long-term secular drivers. The greater stability in margins and EPS validates the changes we have made to our business and the evolution of the top-tier EMS industry. We are very optimistic about our future. With that, I'll pass the call over to Paul to take you through our financials.

Okay. Thank you, Revathi. I would also like to start by wishing Nextracker great success on their new path and reiterate something that Revathi said. This separation is a great example of our commitment to create strong shareholder value. As you may recall, we executed on multiple value-creating transactions over this whole process with the private equity investment, the IPO, the follow-on, and finally, the investor-friendly and tax-efficient spin of the remaining Nextracker shares. Jumping to our third-quarter performance on slide 7, it was another solid quarter. Third quarter revenue was $7.1 billion. Gross profit improved to $712 million and gross margin increased 10%, an increase of over 200 basis points. Operating income was $477 million with operating margin at 6.7%, up from 4.8% in the prior year period. And earnings per share came in at $0.71 for the quarter, increasing 15%, which includes $0.10 of Nextracker non-controlling interest. Looking at Core Flex results, which excludes Nextracker, results were stronger than initially expected with Core Flex revenue of $6.4 billion, down 11%, but against a tough year-over-year compare. Core Flex operating margin came in at a record 4.9%, up 60 basis points with another quarter of sequential margin expansion, up 20 basis points from Q2. This is reflective of our strong execution, including cost actions and continued mix improvements. The Flex core business delivered $0.54 of EPS, up 10%. Turning to our quarterly segment results on the next slide, reliability revenue was $3 billion, with solid demand in auto and medical devices, while we saw further macro-driven weakness in commercial industrial solutions and continued headwinds in residential solar. Operating income came in at $159 million, and operating margin for this segment improved sequentially and year-over-year to 5.4%. In Agility, revenue came in at $3.5 billion as we executed on very strong AI-driven cloud demand. Operating income came in at $174 million. The team delivered a record 5% operating margin, reflective of favorable mix, continuing value-added services adoption, and strong operational cost management. Finally, Nextracker delivered revenue of $710 million, up 38%. Operating income at Nextracker was $162 million, delivering a 23% operating margin. Moving to cash flow on slide 9, we made further progress on our inventory improvement goals, reducing net inventory again by 5% sequentially and 13% year-over-year. In general, the semiconductor shortages that punctuated the previous supply chain challenges are largely back to normal, and we expect continued reductions in inventory and working capital advances. However, the Red Sea situation could temporarily impact the pace of those reductions if supply chains are adversely affected by increasing transit times. Q3 net CapEx came in at $128 million on target at 2% of revenue. We expect to maintain a similar total investment level in Q4. Free cash flow in the quarter was $156 million. We expect free cash flow in Q4 to be between $3 million and $400 million for Core Flex. So given where we are today, that would put us in line with our original FY '24 free cash flow guidance of $600 million that had assumed a combined Flex and Nextracker for the full year despite the absence of Nextracker in Q4. In the quarter, we returned $275 million to shareholders through share repurchases ahead of the full Nextracker separation. Fiscal year-to-date, we have returned approximately $780 million. Please turn to the next slide for our segment outlook for the fiscal fourth quarter. For Reliability Solutions, we expect revenue will be down mid-single digit to low teens as we expect continued strength in Cloud Power Solutions, stable demand in automotive and medical devices, and continued mixed demand in medical equipment and life sciences. We also expect further macro-related weakness in core industrial and also residential solar. Revenue in Agility is expected to be down low teens to low 20% percent. We continue to see strong AI-driven Cloud spending with weakness in communications, enterprise IT, and consumer-related end markets. Q4 is also typically our seasonally weakest quarter across Agility. On to slide 11 for our quarterly guidance. With the Nextracker separation completed on January 2, Q4 guidance is now based only on Core Flex financials and is not comparable to previous consensus. For Q4, we expect revenue in the range of $5.8 billion to $6.4 billion, with operating income between $305 million and $355 million. Interest and others estimated to be around $53 million. We expect the tax rate to be around 15% in the quarter. All of that translates to adjusted EPS between $0.50 and $0.60 based on approximately 425 million weighted average shares outstanding. And looking at our GAAP guidance, recall for Q3, we expected approximately $100 million in restructuring charges. We implemented about $70 million of that in Q3. So we expect at least another $30 million of those charges will then shift into Q4. Looking at our full-year guidance on the following slide, note that FY '24 total Flex guidance still includes the impact from Nextracker in the prior 3 quarters. Please note, total Flex full-year guidance is not comparable to our previous guidance or consensus due to the January separation of Nextracker. So for total Flex, we expect full-year revenue between $27.7 million and $28.3 billion, adjusted operating margin now between 5.7% and 5.9%, and adjusted EPS between $2.47 and $2.57 a share. As with last quarter, for additional visibility, we are providing our expectations for Core Flex only for the full year, and this guidance is comparable to Core Flex guidance that we gave last quarter. So for Core Flex, our guidance is essentially unchanged from last quarter. We expect full-year revenue between $26 million and $26.6 billion. We expect adjusted operating margin to be between 4.8% and 4.9%, and we expect adjusted EPS of between $2.07 and $2.17 a share. As we enter into the final quarter of the year, our team continues to execute very well in a challenging environment. As Revathi pointed out, the results we are delivering validate that Flex is a more resilient and efficient company. Strong long-term trends remain intact, and we continue to have ample opportunity to build on our diversified portfolio and customer base through new wins and increasing wallet share, and we'll continue to drive margin expansion and ultimately create shareholder value. Lastly, this year, we will hold our virtual investor event in conjunction with our fiscal Q4 earnings call, where we will provide full fiscal '25 guidance and also update our longer-term outlook. So please stay tuned for that. I'll now turn the call back over to you, Diego, to start the Q&A.

This is Samik Chatterjee. I wanted to ask about the updated visibility concerning end markets. Can you please revisit the 2.65 Core Flex EPS target for FY '25 and explain the drivers behind it in relation to top line expansion, operating margins, and buyback support? I have one follow-up.

Okay, I'll start off and Paul can jump in wherever he wants. Our fiscal year ends in March, and as Paul mentioned, we’ll be having our Investor Day in April. That’s when we’ll really discuss guidance for fiscal '25 and our long-term outlook. First, I want to revisit the long-term targets we set in 2022, which included a 5% Core Flex operating margin and mid-teens EPS growth. We believe those targets still hold true. The market is quite dynamic, as you know, so we’ll have to wait until next quarter to provide the exact numbers for FY '25 guidance. I want to take a moment to reflect on the progress we’ve made over the last four years to complete the transformation we initiated. This includes significant portfolio alignments, operational transitions, and numerous shareholder-friendly corporate actions. This quarter, we achieved a record Core Flex operating margin of 4.9%, and we anticipate further improvements next quarter. We are committed to being a more agile and efficient company focused on higher-value business. Part of this transformation's goal was to make Flex a more attractive investment, which means we are also prioritizing the quality of our earnings. This involves strong growth in end markets aligned with long-term trends, increasing wallet share with our customers, and enhancing value-added services while executing operationally. As we mentioned before, we are aiming for good margin expansion in 2022 and mid-teens EPS growth despite macroeconomic challenges and corporate initiatives like Nextracker. We have also made good progress on capital return. In summary, we view ourselves as a strong, agile, and resilient company amidst several macro uncertainties, and we will be using the coming months to assess the situation further. Paul, do you have anything to add?

Yes. I think you said it well. I mean, we told you that we think we can achieve margins of 5% down the road. And like you said, we just hit 4.9% and expect to do more. We also have talked about mid-teens EPS growth. As I look ahead to next year, I think that's reasonable, low teens, mid-teens. And we're buying back stock. And so I think the hard part for us at the moment is what's revenue growth really going to be based on the macro. We're listening to all the same earnings calls that all of you guys are too. And I could kind of go down the list for FY or calendar '24; you look at telecommunications' CapEx looks down, enterprise spending continues to be a bit weak, and industrial capital equipment seems to continue to be slowing a bit. So I would rather just hold off a quarter. We'll talk about it in more detail at the Investor Day here in May. But I think you have a pretty good framework for how we're thinking about it.

And a follow-up I have is regarding the M&A landscape, what sort of activity are you currently seeing in this space? And which is the target area for you in terms of end markets for M&A?

Sure. So I would say our posture really hasn't changed on M&A. And I guess I'll just kind of broadly talk about capital allocation. But we continue to have a pretty robust process, and I would say, a pretty robust pipeline. We're always looking at the landscape of opportunities. There's nothing large-scale that I would say is in the hopper. We're talking about technology acquisitions and other tuck-ins that we can make to sort of improve the capability of the enterprise, but not large-scale M&A. And if I think about how I would sort of prioritize M&A, frankly, it's probably last unless we can get a really good deal. Continuing to focus on internal investment and make sure the business is well funded for all the organic growth opportunities we think we have over the next several years. That's a key priority for us. And the stock continues, in our view, to be a great opportunity to create more shareholder value. So we're going to continue to buy back stock.

Yes. The only thing I would add is that we are interested in technology or small acquisitions in the areas of power, embedded power, and critical power, which is a significant part of our business. The products in this area will target hyperscale and data center customers, so we will continue to expand that segment of our portfolio. Additionally, we are focused on the ongoing growth of our value-added services business and related initiatives. These are the areas we will prioritize for investment as we move forward, although, as Paul mentioned, buybacks will take precedence.

The cloud market you mentioned today is performing well. I believe Flex is anticipating about 20% growth in Cloud, supported by the various hyperscaler programs that have been increasing. Could you elaborate on how these are progressing operationally? Are you able to fulfill that demand? Additionally, how does the growth in Cloud compare to your previous estimate of nearly 20% growth?

Yes, the Cloud business is performing exceptionally well and will exceed the 20% growth we discussed earlier. Initially, we were cautious about making predictions while observing market developments. However, for fiscal year '24, we anticipate our Cloud business will grow significantly beyond 20%. Looking ahead to fiscal year '25, we also expect strong growth in Cloud, which includes not only our CEC business and its RAC integration but also our embedded power and facilities power sectors. Cloud is poised to become nearly as large as our enterprise IT business, demonstrating strong growth potential. We are very satisfied with the operational progress on our large-scale programs, and we've made substantial advancements, so I'm pleased with our trajectory.

That's helpful. And my other question was just trying to better understand some of the mechanics in the fiscal 4Q guide. And in particular, it looks like the company is expecting EBIT dollars in fiscal 4Q to increase sequentially to, I think, about $330 million at the midpoint, up from, I think, the $315 Core Flex did in the third quarter, even though revenue is dropping a little over $300 million quarter-on-quarter. So maybe help us better understand if you could please what's allowing EBIT dollars and margin to improve so much even as revenue is falling in the coming quarter for guidance?

Yes, that's a great question. To clarify, in the third quarter, we achieved $6.4 billion for Core Flex with a 4.9% operating margin. We expect revenue to be around $6.1 billion in Q4 at an operating margin of 5.4%. While revenue is down sequentially, about a third of that decrease is due to fewer recoveries. This is linked to the improving semiconductor market, which means we have fewer claims. The inflation pass-through effect we've discussed for the past year and a half also contributes to the reduction in revenue from claims. The remainder of the decline is due to volume, but there’s an improvement in mix, which is a positive aspect. Additionally, we have a restructuring tailwind as we transition from Q2 to Q3 to Q4, implementing programs that add around $70 million in benefit. Thus, we expect better margins from improved mix, cost reductions, and restructuring benefits, despite the volume contraction in some end markets, which has led us to take other cost actions as a prudent measure.

Just relative to your outlook, and you pointed out several end markets where there is weakness, but a quarter ago, you took a very big cut to your forward guidance based on customer order cuts. So the question is, have things gotten materially worse, or in terms of any cancellations or inventory issues at customers' demand issues, have things stabilized? Because it looks like your guidance is sort of in line with what we had previously expected.

Yes, Matt, I would say that it's in line with what we had previously expected. When we made that correction, we looked ahead and considered the feedback we received from customers. We utilized our insights and planning to understand the channel inventories and predict how these end markets would behave. Our forward-looking forecast has turned out to be in line with our expectations. Regarding the markets, we are not seeing any significant changes from what we had observed. Previously, we mentioned that the Cloud sector was fairly strong, and Automotive continues to perform well, though interest rates will be a factor to monitor, as others have noted. In health care, the situation remains mixed, and industrial has continued to be weak as we mentioned before. Overall, I would say the situation is very similar with no new developments to report. I’m pleased with our ability to forecast in this challenging environment, as our predictions about the end markets have aligned with what we anticipated.

So left on the authorization, off the top of my head, I don't know that, but I'm sure David can pull it quickly. But let me tell you kind of what we're thinking. So buyback this past quarter about $275 million or so. I would expect that we'll probably do close to twice that here in Q4. The cadence definitely steps up. If I were to just put a placeholder in there, I would say go with $500 million, give or take, which would put us at for the full fiscal year, somewhere in the order of $1.3 billion. It's what we've talked about before. I think as we move through the better part of the calendar year last year, a fair amount of stops and starts because we were in the process for a lot of the Nextracker transaction, which means that we kind of got blacked out in some months. But we continue to believe that this is a nice value creation opportunity in our own stock and hence, the expected stepped-up cadence in our FY Q4 here.

Competitor Jabil also took down their guidance. But the strange thing there is they've taken down their second half more than the first half. I mean, if I look at your fiscal year '25, the June quarter, September quarter, I mean, their guidance would imply some weakness in the end markets. My question to you, Paul, is the $265 million in earnings that you have for fiscal '25, even without either restating that or not, can you remind us of what are some of the margin improvement levers that you have so that even if revenues are weaker in the first half of fiscal '25, what are your thoughts as to like what you can do in terms of margin improvement to help get EPS to where you want to get to?

Ruplu, I'll start, and Paul can jump in. So what I'll tell you is that we have shown this year, right, our ability to really manage our decrementals really well, either through a variety of different ways, whether it is through improved cost management, driving strong productivity and efficiency in our factories, and then, of course, our end markets in terms of where we are participating and mix has also helped overall. When I look at first half versus second half, frankly, Ruplu, I mean, at this point, it's too early to talk about FY '25, but I don't even know if like second half has a huge recovery. I think in general, FY '25 will be an interesting year. But I'd say our view is that we have tremendous room in terms of driving factory automation and productivity, and we have seen that play out this year, and we'll continue to drive that into next year. So fundamental operating efficiency and productivity driven by factory improvement is going to be a core part of this. Our mix will continue to improve, so things like value-added services, growth coming from power and hyperscale, all those are critical areas where we will see margin improvement driven by that. So I think those are the ways that we continue to see margin improvement. I think this year and the last few years have proven that we can deliver it.

Right. Thanks for the details, Revathi. For my follow-up, I want to ask you another broad picture question. So now that Flex is Core Flex ex-Nextracker, where do you think your investments will be more in which end market or which segment? And as you look out beyond this near-term weakness in the end markets, what do you think will drive growth for Flex? I mean, which end market or which sector? And where would you want to invest your CapEx? And I know, for example, you've got a big Cloud customer you talked about. But any areas, is it Reliability that you want to invest in? Is it Agility or both? Any thoughts there?

Thank you for the question. We plan to discuss this in more detail during our Investor Day, but to give you a brief overview, we will continue to invest heavily in both commercial and capacity growth for power related to Cloud, which will be a significant aspect of our growth. Specifically, within our CEC segment focused on AI and hyperscale growth, we will maintain our investment in Cloud. This aligns with what we mentioned at the last Investor Day, and it has been a solid commitment of our resources, serving as a major growth driver for us. Another key focus will be value-added services, which include recycling, waste management, and additional component services or greater vertical integration across our customer engagement. This has shown good momentum in recent years, and we anticipate it will continue to be a priority for growth. Additionally, we are expanding our presence in the automotive market related to electrification, which we see as another area of growth. Overall, these macro trends align well with our growth strategies and are reflected in the industry. These will be our primary areas of focus.

Our next question comes from Steven Fox with Fox Advisors.

I have a couple of questions. First, regarding cash flows as we move into the next fiscal year with a Core Flex business, can you provide some guidelines on working capital, especially as we approach the end of the year? It seems like there's a plan to reduce inventory. I also have a follow-up question.

Yes. I think the good news is on this, Steven, is we do continue to see progress on inventory. And I don't want to guide on FY '25 yet, we're still kind of working through that process, but I certainly like the momentum and how things have sort of loosened up a little bit. My only hedge on that would be we supported the inventory growth with working capital advances from customers, and those will kind of unwind together, maybe not exactly at the same time, but those kind of come down generally simultaneously. But yes, I mean, I expect more good things to come when it comes to cash because I do see a working capital unwind here as we look forward over the next couple of years.

Paul, do you want to start?

I would say Revathi and I probably worry about a lot of things, but mine would be that I'm slightly concerned about the end markets. I believe the operations are well managed, and we've shown that we can grow earnings even when end markets contract. We have enough strategies to ensure we achieve strong operating performance even in a tough fiscal year. However, until revenue stabilizes, it won't start increasing. I'm a bit anxious about sectors like telecommunications infrastructure, enterprise IT spending, and the outlook for medical equipment, particularly in medical centers. Nonetheless, there are many positive trends right now. The cloud sector appears to be performing well, and the automotive industry has remained robust despite rising interest rates. Although parts of the industrial business are facing negative perceptions globally, we have significant opportunities, and I remain optimistic about the continuity of the supply chain, which is a strong advantage for the macro environment in our industry, especially for Flex. While there are specific challenges in certain end markets that concern me, I think the overall macroeconomic conditions are favorable for companies in our sector. We just need to execute effectively.

I have nothing to add; I think that's well said.

Congratulations on the quarter. I have two quick questions. First, the guidance for free cash flow in the fourth quarter appears very strong, particularly as it more than doubled sequentially from a Core Flex perspective. Could you elaborate on the factors driving this? Apart from the factors you mentioned regarding inventory and the reduction of working capital advances, I’m curious about any additional leverage you foresee as we look into fiscal year 2025.

Sure, George. One thing to note is that we tend to experience some seasonality in our cash flow. Our fiscal year ends in March, while many of our customers' fiscal years end in December, leading to some timing differences between our third quarter and their fourth quarter. As a result, our third quarter is often a bit weaker, while our fourth quarter tends to improve as some customers delay payments until their year-end. We typically see a seasonal uptick in performance during this time. We're also making good progress on inventory, as I mentioned to Stephen. Working capital and inventory will decrease simultaneously, and this should provide us with a positive impact as we continue to address the inventory from the chip shortage we've been handling over the past couple of years. I should also mention that I generally prefer not to provide quarterly guidance, and you shouldn't expect that moving forward. The clarity we provided regarding the fourth quarter is important for understanding our position after the Nextracker separation. We're anticipating free cash flow of $300 million to $400 million in Q4, which is something I typically wouldn't guide on. However, we feel confident about our current standing for the year.

I just wanted to follow up and focus on the power of AI and hyperscale exposure. Can you quantify the revenue contribution from this segment? They are experiencing over 20% growth. What is the rough mix compared to total Flex revenue? Also, could you incorporate some of the market share gains, as it seems there is significant growth in the AI industry and possibly some share gain compared to other ODMs, given the strong double-digit growth rate? Additional insights on this would be appreciated.

Yes, George, we'll discuss this further at our Investor Day, but we have not publicly shared the details of our embedded power business or our value-added services related to hyperscale, although we have seen significant growth in the Anord Mardix business since its acquisition. Overall, I can affirm that our growth in AI and hyperscale capabilities is strong. We've gained market share, particularly in the CEC segment, and in the embedded power segment, we have a unique product capability with limited competition. We are comfortable with our approach to capturing market share without competing with ODMs on their margin structure, allowing us to promote our overall value instead. The margin improvement aligns with our expectations, and we'll provide more updates in a few months, specifically focusing on AI and data center growth. I believe that concludes our questions, so thank you. We look forward to our next discussion during our investor event alongside our fiscal Q4 earnings call. I want to express gratitude on behalf of my leadership team to our customers, shareholders for their support, and the Flex team globally for their commitment and contributions. Thank you.

Thank you. This concludes today's conference call. Thank you for joining. You may now disconnect.