Flex Ltd.

Thank you for standing by. Welcome to FLEX's fourth quarter and fiscal year 2025 earnings conference call. Presently, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question, please press star 1 on your telephone. If you'd like to withdraw your question, please press star 2. As a reminder, this call is being recorded. I will now turn the call over to Mr. David Rubin. You may begin.

Thank you, Melissa. Good morning and welcome to Flex's fourth quarter and fiscal 2025 earnings conference call. With me today is our Chief Executive Officer, Revathy Advaiti, and Chief Financial Officer, Kevin Crum. We 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 in the investor relations sections at flex.com. This call has been 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 factor section on our most recent filings with the SEC. Note this information is subject to change, and we undertake 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-gap-to-gap reconciliations can be found on the appendix slides of today's presentation, as well as in the summary financials posted in the Investor Relations website. Now I'd like to turn the call over to our CEO, Revati.

Thank you, David. Good morning, and thank you for joining us today. Starting with our fiscal Q4 results on slide four, we had a very strong finish to the year. Revenue came in at $6.4 billion, growing almost 4% year-over-year. Adjusted operating margin came in at 6.2%, which is another quarterly record, and the second quarter in a row with adjusted operating margin about 6%. We delivered adjusted EPS of $0.73, up 28% over last year. Now looking at the full-year results. We achieved another year of record annual adjusted operating margins, coming in at 5.7%. despite continued macroeconomic headwinds. And this is our fifth consecutive year of double-digit adjusted EPS growth, reaching a record level of $2.65 per share. Also, we generated over $1 billion in free cash flow, another record high. And for the second consecutive year, we exceeded our 80-plus percent adjusted free cash flow conversion targets. This year, we drove strong growth in key markets, such as the data center, as we continue to shift the portfolio towards more profitable business. We executed on multiple program ramps, completed several key acquisitions, and we won two PACE awards in the automotive space with our NVIDIA Drive, AGX-powered Jupyter compute platform, and our backup DC-DC converter. Throughout all of this, we maintained a relentless focus on operational efficiency. Another year of strong results once again demonstrates our ability to effectively navigate a challengingly macroeconomic environment and deliver value to our shareholders. These achievements also speak to the extraordinary dedication of our team who delivered these results under challenging market conditions. This has been the theme for the last several years, and it's important to understand how we got here. Now turning to the next slide. From the beginning, I have emphasized our focus on winning the right kind of growth that would ultimately transform this company. Since 2020, we have executed our flex-forward strategy. We've made aggressive portfolio management decisions that positioned us to shift towards higher value businesses. And by integrating thoughtful organizational changes and operational innovations, we have built a more efficient and resilient company. From this transformational strategy, we've delivered multiple years of consecutive record level adjusted operating margins and earnings per share. This performance validates our strategic direction and shows our ability to create sustainable value through the cycles. As you will recall, on our investor day last May, we formally unveiled the next phase in our evolution, our EMS plus products plus services strategy. This approach builds on our world-class advanced manufacturing and supply chain capabilities, adding proprietary products and expanded value-added services that provide greater vertical integration and customization at scale. Our power products further differentiates Flex as the only provider with a comprehensive portfolio spanning the data center from grid to chip. We believe that this evolved strategy will generate greater value for our customers more integrated engagements, and of course, margin of creative growth opportunities. Now turning to the next slide, our data center business exemplifies this strategy in action. Total data center revenue grew about 50% year over year in both Q4 and for the full year, and reached approximately 4.8 billion in fiscal 25 at a creative margin. We also strengthened our competitive position through several acquisitions aimed at solving critical challenges around power, heat, and scale. Our data center revenue is comprised of two parts, cloud and power. In FY25, our cloud programs generated about $3.5 billion as we provide end-to-end customized hyperscale rack solutions. Cloud operations are increasingly seeking more complete solutions to improve efficiency and cost at the scale they require. This year, we further enhanced our solution with direct-to-chip liquid cooling capabilities through our jet cool acquisition. Our power products, which is a combination of our embedded and critical power solutions, generated about $1.3 billion in revenue in fiscal 25. As you can see in the graphic, embedded power solution starts at the board level with our power modules managing power to the GPU or custom ASIC all the way through the racks. Critical power solutions is the other part of our power portfolio, which covers everything above the rack and through data center facilities, including our power pods that provide a fully customized modular data center power in a box, which is critical in supporting faster time to market and future flexibility as data centers evolve. Through our crown technical acquisition, We enhanced our critical power capabilities in the data center and expanded our addressable market into grid modernization. As you can see, we have truly differentiated ourselves as the only company providing both end-to-end IT cloud integration and an innovative power portfolio that spans from grid to chip. This synergistic combination reinforces our position in the evolving AI data center ecosystem, given the convergence between compute and power. Our value proposition is evident in the strength of our data center revenue growth at a creative margin. As we look to next year, we expect data center revenue to grow around the mid-30% level, with power likely a little above that rate, as we ramp domestic capacity and cloud to be slightly below difficult comps. Now turning to slide seven, regarding tariffs, here are a few things to keep in mind as we navigate the evolving situation. As we previously stated, tariffs are a pass-through cost. Mexico is our largest revenue center, and over 90% of what we produce there is USMCA compliant. Very little of the product manufactured in China comes to the U.S. However, we do procure raw materials from China and other countries that may still be impacted by higher tariffs, so this does add costs that we will ultimately pass through. As a trusted global manufacturing partner with deep supply chain expertise, we have become the first call for customers to help navigate today's complex trade and tariff environment. Through our proprietary pulse simulation platform and our team of supply chain experts, we have visibility and potential tariff impact by customer and by country, and are currently working with many customers to develop durable tariff mitigation strategies. This approach builds on our success guiding customers through Tariff 1.0 and other recent major geopolitical events. What's particularly noteworthy is how quickly the situation has progressed from conversations about potential location scenarios to customers moving forward with transition plans for North American manufacturing capacity. We believe these moves are reflective of a longer-term trend towards regionalization, as well as the value of our footprint and the trust customers place in our execution. We were early in establishing the right footprint, capabilities, and labor pools in key markets. Our actions and strategic investments have enabled us to have the right ecosystem in place today. Flex's global operational footprint now covers over 48 million square feet. Last year, we expanded four new strategic locations, predominantly in the U.S., which now encompasses 7 million square feet across 17 facilities and further expandability. When combined with our 9 million square feet in Mexico, we now command one of the largest advanced manufacturing footprints in North America. This expansion has been tied to current customer demand, especially with cloud and power programs. We will continue to be selective on new programs in North America as we prioritize capacity for initiatives that deliver maximum value and align with our longer-term strategy. Additionally, our EMEA footprint now exceeds 11 million square feet, also maintaining our position as one of the region's largest diversified manufacturing providers. You can see how our extensive footprint and operational agility have now become tremendous strategic assets. Of course, there are still risks in the current tariff environment, particularly to demand and a potential slowdown in the broader economy. Still, we believe that we are well-positioned to support customers and expect flexed to remain both a facilitator and beneficiary of regionalization in the coming years. Kevin will provide our full guidance in just a moment, but I want to make a few comments as we look ahead to fiscal 2026. Once again, this year is off to a dynamic start. As I've said before, resiliency and adaptability are embedded in our core, enabling us to navigate years of disruptions while still executing our longer-term growth and margin expansion strategy. The strength of this foundation becomes evident when you consider that despite current market uncertainty, our fiscal 2026 guidance indicates we expect to achieve 6% adjusted operating margin, reaching our fiscal 2027 target a full year ahead of schedule. Stepping back, I remain deeply confident in our strategy and distinctive value proposition. I believe our current capabilities and competitive advantage present the strongest opportunity in our company's history. And I'm very excited about our future and the exceptional value we'll continue to deliver to our stakeholders. Lastly, I want to thank the Flex team again for your continued dedication and hard work. I also want to thank our customers for their trust and partnership. And with that, I'll turn it over to Kevin. Kevin?