Plexus Corp.

After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one in your telephone keypad. Thank you. I would now like to turn the call over to Mr. Sean Harrison, Vice President of Investor Relations. You may begin.

Good morning, and thank you for joining us today. Some of the statements made and information provided during our call today will be forward-looking statements including without limitation those regarding revenue, gross margin, selling and administrative expense, operating margin, other income and expense, taxes, cash cycle, capital allocation, and future business outlook. Forward-looking statements are not guaranteed since there are inherent difficulties in predicting future results, and actual results could differ materially from those expressed or implied in the forward-looking statements. For a list of factors that could cause actual results to differ materially from those discussed, please refer to the company's periodic SEC filings particularly the risk factors in our Form 10-K filing for the fiscal year ended September 28, 2024, is supplemented by our Form 10-Q filings in the Safe Harbor and Fair Disclosure Statement and our press release. We encourage participants on the call this morning to access the live webcast and supporting materials at Plexus's website at www.plexus.com, clicking on Investors at the top of that page. Joining me today are Todd Kelsey, President and Chief Executive Officer, Oliver Min, Executive Vice President and Chief Operating Officer, and Pat Germain, Executive Vice President and Chief Financial Officer. With today's earnings call, Todd will provide summary comments before turning the call over to Oliver and Pat for further details. With that, let me now turn the call over to Todd Kelsey. Todd?

Thank you, Sean. Good morning, everyone. Please advance to slide three. Our commitment to our customer success during dynamic market environments is enabling a growing breadth of new program wins across Plexus' solutions. During our fiscal second quarter, we achieved our largest ever win for our sustaining services and our best quarterly engineering solutions wins performance in more than five years. In addition, our continued progress with initiatives to increase our operational and working capital efficiency resulted in robust fiscal second quarter financial performance. We see this momentum sustaining as we drive actions to navigate the current environment. In order to proactively help customers navigate current market complexities, we are strategically investing in talent, such as our trade compliance and logistics organization. We also continue to invest in technology, including our growing internal use of AI, facilities, including our new site in Malaysia that will open this summer, and advanced capabilities, including numerous tools focused on process automation, efficiency, and achieving zero defects. As we look ahead, we continue to anticipate up to $100 million of free cash flow for fiscal 2025. Our substantial liquidity and robust free cash flow generation provides the opportunity to create additional shareholder value. Finally, while conservatively assessing the remainder of the fiscal year, and acknowledging the uncertainty associated with tariffs, we continue to anticipate achieving meaningful EPS growth in fiscal 2025, capitalizing upon revenue growth in each of our market sectors, sequential revenue growth for the remainder of the fiscal year, robust operating margin performance, and ongoing free cash flow deployment. Please advance to slide four. Revenue of $980 million met our guidance. As the fiscal second quarter progressed, we saw signs of incremental strengthening and outlooks from healthcare customers, which offset modest reductions in other markets. Non-GAAP operating margin of 5.7% met the high end of our guidance range. Our operational efficiency efforts and stronger performance from our engineering solutions and sustaining services helped to offset a portion of the typical seasonal cost headwinds. Non-GAAP EPS of $1.66 exceeded our guidance, benefiting from strong operating margin performance, as well as slightly favorable tax rate and lower than anticipated non-operating expenses. Finally, we delivered $16.5 million of free cash flow, significantly better than our expectations. Please advance to slide five. For the fiscal second quarter, we won 42 manufacturing programs worth $205 million in revenue annually when fully ramped into production. During the quarter, we closed our largest ever sustaining services win in support of creating success for an industry-leading healthcare customer. Also included in the quarterly wins are exciting manufacturing share gains and opportunities to support growth technologies in all of our market sectors. Furthermore, we generated the highest quarterly wins performance for our engineering solutions since the fiscal fourth quarter of 2019. The engineering wins performance reflected strong engagement across all of our market sectors, highlighting the extensiveness of our capabilities and effectiveness of the team's diversification efforts. The breadth of this quarter's wins performance across our solutions, market sectors, and technologies is a strong leading indicator of future Plexus revenue growth. Please advance to slide six. Our commitment to sustainability is integrated with our core value of innovating responsibly as we boldly drive positive change and promote a sustainable future. Our people are the heart of who we are and what we do. I'm therefore incredibly proud to share that Wisconsin manufacturers and commerce selected Plexus as manufacturer of the year mega category in recognition of our innovation, philanthropy, technological advancements, commitment to customer satisfaction, financial performance, and creation of quality jobs. Thank you to our incredible team members, partners, and local communities whose contributions support fulfilling our vision of helping to create the products that build a better world. We also continue to deliver innovative solutions to create customer success. During our fiscal second quarter, Our Plexus Xiamen team celebrated a new partnership with GE Healthcare China to advance the green supply chain ecosphere initiative by focusing on maximizing the recycling and reuse of valuable medical equipment and promoting sustainability. We also recently partnered with our customer Bevy to celebrate Earth Day. Bevy's mission is to unbottle the future through their smart bottleless water dispensers. Throughout our partnership, Bevy's smart water dispenser which is manufactured at our Appleton, Wisconsin facility, has saved the equivalent of over 218 million plastic water bottles from landfills. Our commitment to delivering excellence includes reducing our environmental impact. Our team members in Oradea, Romania joined the Planting Hope initiative, working with over 100 volunteers to plant 1,000 trees. And finally, we are excited to announce the release of our annual sustainability report later in the fiscal third quarter. The 2024 report highlights our continued commitment to innovating responsibly as we've always been driven to do more for our customers, our team members, and the world. Please advance to slide seven. We're getting fiscal third quarter revenue of $1.00 to $1.04 billion, non-GAAP operating margin of 5.7 to 6.1%, and non-GAAP EPS of $1.65 to $1.80. While conservatively assessing the remainder of the fiscal year and acknowledging the uncertainty associated with tariffs, we continue to anticipate sequential revenue growth for our fiscal fourth quarter combined with another quarter of strong operating margin performance. This outlook supports a continued view that Plexus will achieve meaningful EPS growth in fiscal 2025 with revenue growth in each of our market sectors robust operating margin performance, and ongoing free cash flow deployment. We continue to expect year-over-year growth for our aerospace and defense market sector, supported by robust demand for our solutions supporting defense and commercial space products. Growth forecasts improve slightly in our healthcare life sciences market sector. We continue to benefit from new program ramps and share gains, while healthcare customer demand is improving after a prolonged period of inventory correction. We continue to expect growth in our industrial market sector. This expectation reflects robust growth in semi-cap associated with contributions from new program wins and share gains amidst an outlook of modest semi-cap market growth. In addition, we see some early signs that inventory corrections may have peaked in the broader industrial market. Finally, Plexus uniquely supports customer success, leveraging our comprehensive product lifecycle solutions and passion for operational excellence delivered through our globally united team. Our ongoing strategic investments in talent, technology, facilities, and advanced capabilities position Plexus to proactively navigate evolving landscapes and dynamic market environments to enable our customers' success. I will now turn the call over to Oliver for additional analysis of the performance of our market sectors.