Flex Ltd at JPMorgan Global Technology, Media and Communications Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Samik Chatterjee - JPMorgan - Analyst : We're seeing a lot of macro sort of volatility at this point. So, maybe just walk us through how did you look into sort of the, how are you thinking about the macro at this point? How are you incorporating that in your full your guide that you issued recently?

Question: Samik Chatterjee - JPMorgan - Analyst : And one of the concerns and maybe that's moderated since yesterday a bit but was of a recession and we're given the feedback you're getting from your customers, how likely or do you think there is a significant slowdown in the back half of the year or we go into a recession and is there a different way you're planning for your business in terms of how you operate just given those scenarios?

Question: Samik Chatterjee - JPMorgan - Analyst : And staying on the topic of tariffs, you mentioned customer activity and building robustness of supply chain is at a peak, but maybe flesh that are a bit more, what is a typical conversation with a customer look like today? Are you seeing more concrete changes in the supply or the capacity needs already from your customers and there's obviously the overall sort of supply, capacity planning on your front as well. What do you have in terms of flexible capacity to offer to new customers that might be looking for capacity in some of the lower tariff countries?

Question: Samik Chatterjee - JPMorgan - Analyst : Got it. I mean, I'm just going to sort of carry on that topic for a bit more matching high value customers to high value locations, and EMS companies including Flex in general have been on this path of margin improvement focusing on richer mix of businesses. Does this eventually become a margin opportunity as you match high value customers to high value footprint? Does this become a margin opportunity for the company? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 14, 2025 / 12:00PM, FLEX.OQ - Flex Ltd at JPMorgan Global Technology, Media and Communications Conference

Question: Samik Chatterjee - JPMorgan - Analyst : Okay. Just the last part of that overall long theme, pull forwards in demand. Anything that you're seeing on the consumer side or any other markets like automotive you're seeing sales is very high at this point, pre-tariff sales are pretty high. So, in terms of certain markets, are you seeing any markets sort of do a level of pull forward that might hurt the second half?

Question: Samik Chatterjee - JPMorgan - Analyst : Great, moving then sort of changing gears here, the EMS plus product plus services strategy that you have, just sort of give us a bit more of like, what does that strategy entail, what are the kind of services that you can typically attach to the products and manufacturing that you're doing for your customers? And what are the typical sort of margins on the services that actually look like?

Question: Samik Chatterjee - JPMorgan - Analyst : Okay, and so the rank order for margins would be products of the highest services in between EMS.

Question: Samik Chatterjee - JPMorgan - Analyst : And, I should know this, but David, have you quantified these services revenue?

Question: Samik Chatterjee - JPMorgan - Analyst : Okay, so the primary services sit in cloud and then some bit of it in Lifestyle. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 14, 2025 / 12:00PM, FLEX.OQ - Flex Ltd at JPMorgan Global Technology, Media and Communications Conference

Question: Samik Chatterjee - JPMorgan - Analyst : And so the services revenue is growing faster than the company average given the alignment to CEC?

Question: Samik Chatterjee - JPMorgan - Analyst : Got it. Moving to the data center business, maybe just start with giving us a rundown of the breadth of capabilities you have and there's, as you said, you don't get a vote in the CapEx, but any early indications in 2026, or given the pipeline that they shared with you, are you getting any indications about 2026 CapEx looks like?

Question: Samik Chatterjee - JPMorgan - Analyst : Okay, maybe just then taking power and the cloud business in two separate areas, this is your, you had cloud growing modestly faster than the power business if I remember the numbers right. The guidance for the next year is slightly to sort of flip that around and power growing faster. Is there a definite sort of ramp behind power business that's driving that outlook? Is it more just being mindful of the coms that you're running into?

Question: Samik Chatterjee - JPMorgan - Analyst : One of the questions that's come up on that front is moving to a more consignment model and customers choosing to do that, does it. Imply that you're doing more work on what would be a custom A for the customer related to traditional GPU based equipment. I don't know if you can share anything on that.

Question: Samik Chatterjee - JPMorgan - Analyst : Okay, just two more questions on that front before I open up to see if the audience has any questions. Synergies, revenue synergies from JetCool and Crown technical Systems like how should we think about them contributing to the fiscal '26 outlook.

Question: Samik Chatterjee - JPMorgan - Analyst : Great. The next question I had for you was optics. Some of the POs have shown interest in either doing EMS for optics or taking optics to the sort of product side. How do you think about optics as a capability for flex? I don't think you have the same level of investments as some of your peers have yet.

Question: Samik Chatterjee - JPMorgan - Analyst : Let me just open it up to the audience and see if anyone has a question. There's a microphone coming. Unidentified Participant I'm sorry if this is a basic question, but as you get more into products, are you competing more with like industrial manufacturing companies like Vertiv or Invent just how does that maybe if you could just explain that?

Question: Samik Chatterjee - JPMorgan - Analyst : Thank you. I'll wrap it up there. Thank you for coming to the conference. Thank you to the audience.