Ruplu Bhattacharya: Hi, thanks for taking my questions. Revathi, I wanted to ask you about how you’re thinking about risk management. When you look out into the next 12 months, what is it that gives you the most concern? And you just reiterated the long-term — or the medium-term target of high single-digit revenue growth. Can you talk about what are some of the things that are giving you confidence in that, assuming if we have a recession this year, if the consumer-facing end markets are weaker than what you would think? Can you maybe talk about like some of the levers you have that if one part of the business, the Agility part, is weaker, I mean, do you think that the other part can offset that? So, tell us here like what is giving you the most concern and what is giving you confidence in the medium-term on revenues? And then, I have a follow-up on margins.
Revathi Advaithi: Yes. Ruplu, I’d say first is, our portfolio has changed significantly if you look from history to where we are today. We have in a very smart and planful way, we have looked at our portfolio and moved it forward in terms of being in the longer and more resilient cycles of the overall economy. And so that itself, and we have shared those numbers with you, right, in terms of how the overall Flex portfolio looks, says that we are in the end markets that have good long-term trajectory and the macro is in our favor, right? Whether it is regionalization or continued technology transitions, all of those are really in our favor. And that’s why when we look forward, we are really focused on that we need to have reliability growth continue to be supported, because that’s going to be the long-term trajectory.
Agility, the way the portfolio is, we’ll always have some ups and downs, but we have really minimized that pretty significantly, right? We’ve already — as you can see the last few months, we took the comms on consumer markets and still grew. So, the diversity of our portfolio really makes it the real story of why we feel very strong about kind of committing to this longer-term growth. And we have delivered on that. If you look about the last four years, Ruplu, doesn’t matter if it was trade crisis and exiting large portfolios or whether it is COVID or supply chain crises, we’ve really executed on being able to get to this growth trajectory with how we’ve built up this business. So, the diversity of the portfolio is what I really tell you is the big reason why we’re very comfortable with making this commitment.
Ruplu Bhattacharya: Okay, thanks for the details there, Revathi. If I can ask a follow-up on margins. So, I think you just talked about the Reliability segment being 4.4% and Agility 4.5%. So, you’re pretty much at the mid-4%-s, right? And if we take out inflation pass-through, I mean, those margins are likely like 10 basis points to 20 basis points higher already. So, when I look at the long-term target of 5% for fiscal year ’25, I mean, that seems a little bit conservative. I mean, if you look over the past two years, you’ve done like a 40 basis points of margin improvement. This would be more like 20 basis points. So, maybe can you talk about some of the levers that you have for the margin improvement over the next two years? Is it getting harder to get the margin improvement? Or how — where is that margin improvement going to come from? And what — why wouldn’t it be higher than 5% is what I’m trying to get at.
Revathi Advaithi: Yes, I think, Ruplu, a little bit of this I answered in the last question about — and you hit the nail on the head, right, that even with kind of Reliability margins, we were able to make decisions on investment for the longer-term of the business, because we could afford to make those investments, right? And so, obviously, as we try to — as we taper those off, we expect that the longer-term margin commitment is one that we can definitely commit to. In terms of what is the next upside to that 5%, I think you have to wait and see in the next Investor Day. I think it’s too early to commit. But I see lots of room for what we can continue to drive. I’d say manufacturing productivity is big for us. There’s tons more to do.
I see all kinds of opportunities there. I’d say driving efficiency around program growth and how we do that, there’s lots of room for efficiency there. The mix-up story continues to be important for us. That hasn’t changed, right? We’re continuing to drive that in all the six business units. And of course, like you said, if you take inflation out, the 10 basis points to 20 basis points of upside on that does help. So, I have to agree with your thesis. I just don’t want to make any commitment. I would say, we are sticking with the long-term commitment we’re giving you.
Ruplu Bhattacharya: Okay. Thank you for that. If I can — since you mentioned efficiency, I can sneak one more in. If we talk about manufacturing efficiency, I’m just looking over the past four years, right, your revenues have grown $4 billion, but your total manufacturing square foot has not increased that much. So, I mean, technically the revenue per square foot is looking much better. So, I mean, you’ve had — ever since you’ve come in, you’ve driven a lot of efficiency in the factories. Can you talk about, like, as you think about the fiscal ’25 — fiscal year ’25 target, how much more — how should we think about CapEx? How much more revenue can the existing infrastructure support? And can you talk about any manufacturing efficiencies? Are there more efficiencies to be add, and where do they come from?
Paul Lundstrom: Sure. Well, first of all, thank you, Ruplu. Do more with less, that’s the goal. A couple of things. Will there be incremental PP&E expenditures? Absolutely. We’re going to have to facilitize for growth. Revathi talked about the regionalization trends, significant growth in the U.S., significant growth in Mexico, significant growth in Malaysia this year. You’ll see it in the K in another few months. But those regions are going to be growing probably 2x the overall Flex growth rate. So, there will be some pressure to invest, but that’s a high-class problem. And again, we remained laser-focused on factory productivity and high, high asset utilization.
Ruplu Bhattacharya: Thanks for all the details. Appreciate it.
Paul Lundstrom: No, thanks, Ruplu.
Operator: Your next question comes from the line of Paul Chung from J.P. Morgan. You may ask your question.
