SANMINA CORP Q4 FY2024 earnings call

Jure Sola recognized the Sanmina team's efforts, noting the fourth quarter revenue of $2.02 billion and non-GAAP EPS of $1.43. Jon Faust discussed fiscal 2024 results, highlighting revenue exceeded outlook, non-GAAP gross margin and operating margin trends. FY 2024 was a transition year but made progress in expanding gross margin, making strategic investments, and generating cash flow. Sanmina is diversified across end markets including industrial, medical, defense, aerospace, automotive, communication networks, and cloud infrastructure.

IMS revenue was $1.63 billion, up 10.1% sequentially, with non-GAAP gross margin of 7.3%, down 30 basis points sequentially and 70 basis points year-over-year due to unfavorable mix. CPS revenue was $418 million, up 7.6% sequentially, with non-GAAP gross margin of 13.6%, up 210 basis points sequentially and 280 basis points year-over-year.

Fiscal 2025 Q1 outlook: Revenue between $1.925 billion to $2.025 billion, non-GAAP gross margin 8.4% to 8.8%, operating expenses $62 million to $66 million, non-GAAP operating margin 5.3% to 5.7%, other income/expense ~$8 million, tax rate 20%-22%, non-GAAP EPS $1.30 to $1.40. Fiscal 2025 expected to be a growth year with high-single-digit revenue growth, margin expansion, and focus on organic growth and customer-centric strategy.

Potential material differences between projected and actual results due to factors in the safe harbor statement. Inventory management challenges and their impact on margins. Dependence on key customers and market fluctuations affecting end markets.

Q: Clarification on cloud segment growth and areas of growth A: Jure Sola mentioned focusing on high-performance networks, investing in critical technologies for data centers, and optimism for growth in communication networks and cloud infrastructure.

Q: Trends in communications, networking, optical, and inventory correction A: Jure Sola stated inventory correction is ending, positioned well in networking with strong optical footprint, and optimistic about growth in these segments.

Q: Operating margin progression in FY 2025 and investment areas A: Jon Faust noted margin expansion in segments, strategic investments in R&D, SG&A for strategic opportunities, and workforce, with ROI-based approach.

Q: Cash priorities, M&A, buybacks, debt in FY 2025 A: Jon Faust outlined priorities as organic investments, strategic acquisitions, debt management, and share repurchases with disciplined ROI approach; Jure Sola emphasized organic growth and focus on delivering solutions.

Q: Cash flow improvement, AI integration, and Reliance JV update A: Jon Faust discussed cash flow improvement through inventory turns and cash conversion cycle; Jure Sola and Jon Faust talked about AI use in manufacturing and supply chain, and positive update on Reliance JV with growth in India market.