FLEX LTD. Q2 FY2025 earnings call

• Q2 revenue was $6.5 billion, adjusted operating margin was a record 5.5%, and adjusted EPS was $0.64. - EMS plus product plus services strategy is focused on expanding advanced manufacturing capabilities, innovative power and compute products, and life cycle services. - Data center portfolio (cloud and data center Power business) grew 40% year-over-year in Q2. - Announced partnership with Musashi Energy solutions, made critical announcements at open compute summit, partnered with JetCool for liquid cooling. - Announced acquisition of Crown Technical Systems, which enhances data center power portfolio.

Reliability revenue was $2.9 billion in the expected range with continued strength in power and medical devices. Operating income was $159 million, and operating margin for the segment improved to 5.4%. Agility revenue was flat at $3.6 billion with strong cloud offsetting softer non-cloud-related networking and enterprise IT. Operating income came in at $218 million, with a record 6.1% operating margin.

• Q3 expected revenue range: $6 billion to $6.4 billion; operating income: $335 million to $365 million; adjusted EPS: $0.60 to $0.66. - Full year expected revenue: $24.9 billion to $25.5 billion; adjusted operating margin: 5.4% to 5.5%; adjusted EPS: $2.39 to $2.51.

Q: Ruplu Bhattacharya from Bank of America asked about the sustainability of Power business growth, M&A plans, and if it's integral to Flex.

A: Revathi Advaithi said data center growth is sustainable due to macro trends and unique capabilities, growth will be a mix of organic and M&A, and it's integral to Flex's portfolio.

Q: Ruplu asked about margin confidence despite near-term revenue challenges.

A: Jaime Martinez said ramps continue to progress well, supporting margins despite revenue erosion in some projects.

Q: Samik Chatterjee from JP Morgan asked about order trends and margin leverage.

A: Revathi Advaithi said they're comfortable with revenue growth and EPS guidance due to mix and cost management.

Q: George Wang from Barclays asked about cloud ramp cadence and liquid cooling margin.

A: Revathi Advaithi said growth is from expanding wallet share and partnerships like with JetCool, which are margin accretive.

Q: Christian Zyla from KeyBanc Capital Markets asked about M&A in other subsegments and margin targets.

A: Revathi Advaithi said acquisitions are for technology and services fit, and they're confident in achieving long-term margin targets through mix and services expansion.