Ruplu Bhattacharya: Okay. Thanks for that. And just as a follow-up, I want to push you a little bit. I mean this is the second time in a row that you’re cutting full year guidance. I mean last time revenues you cut by $2.5 billion. And this time, it looks like ex the $400 million for the mobility business, the takedown is about $2.1 billion. So my question is really the same as I had last time, which is, what gives you confidence in your guidance and how can investors get confidence that you won’t come in even lower for fiscal ’24, for example, if renewables is weak, why can’t it get even weaker? And then Mike, just on the — for next year, you talked about all these drivers for margin improvement. My question would be what can derail that? I mean what are some of the risks to Jabil attaining that margin and what should we look out for? Thank you so much for taking my questions.
Kenny Wilson: Yeah. So let me take a step back, Ruplu, because we’ve reflected on that a lot. The relationships we’ve got with our customers is — and generally has been long term in some instances, has been multi-decades. So we have a partnership there. We’re kind of joined at the hip connected. We’ve got processes where we share forecasts. We look at inventory. So we’re pretty tight. We’ve got people in our sites, whether it’s business development people, planners, et cetera, et cetera, that are involved in this. So this isn’t the top down. It’s — we bubble this up from the bottom. So — and I can understand the question. In Q1, we’ve seen a broad-based reduction. And if I look forward from what we when we looked at Q2, across the majority of our end markets, what we predicted is going to happen for the balance of the year is happening.
So we’re comfortable with that. And sometimes you get out higher, like India, for example, I mean, no one expected with the rate — the deployment of radios in India that, that would just all of a sudden stop. So I think that, that in this instance, that becomes something that you got accept that sometimes things will happen. In the renewable space, we spend a lot of time with — we’ve got more customers now than we had six months ago. And we spend a lot of time with them. It’s clear that the slowdown and the rollout of the inventory we got in channel has been much lower than expected. We’ve taken our numbers way, way down. But in that also, we look — it’s mainly a residential play that’s been soft. We are pivoting so that we are much more in the commercial side, and that’s been supported by our customers.
We’re also — we’re winning market share, and there’s been a lot of consolidation to Jabil in that space lightly. And if you read the it seems like the commercial space in the U.S. is becoming more robust and we’ll be building that in North America also. So we’re getting share. We’re taking our numbers down significantly. The balance of our business, we think, is holding up. So we think we’re really at the bottom here. But what I would like to add though a little bit to your question is — and I mentioned in my prepared remarks, we’ve got to be really, really good at control in what we can control. Whether this has been a pullback, slowdown, recession, inventory correction, whatever you want to call it, if we look back in our company’s history, the last couple of times this has happened.
Our EPS has gone down by 40% or margins by 100 basis points or more. Here, we’re working really hard, as we mentioned in our prepared remarks, to make the company much more resilient and robust. So I think that we demonstrate that in spite of shops in a couple of our end markets that that our businesses has taken a couple of punches, but staying remarkably resilient. So my message to investors would be that sometimes like outliers happen. But I think it was improving our margins and I think 840 EPS, I think it demonstrates that our company is much more robust than it was historically.
Michael Dastoor: And Ruplu, I’m going to answer your question in a slightly different way than you were at it. Obviously, you asked about the risk and what can go wrong and why the margin story holds good for us. So let me just try and answer it by talking about the $10.65 a little bit. Because all of that is factored into our $10.65 guide. Why do I feel so strongly about that particular $10.65 number. Before that, let me just give you some building blocks. So if you look at what our interest costs this year will be in the high 200s. We expect next year to be in the mid-$200 million. So if you take an interest number of about $250 million for the building block there, if you take WASO (ph), we will have done substantially the $2.5 billion will be completed by FY ’24.
In FY ’25, we’ll continue a more normalized run rate of buyback. So I expect WASO to be about $110 million to $113 million in FY ’25. Now based on these two numbers, if you take the incremental income that’s needed to make $10.65, the numbers are around $130 million to $140 million of incremental income. I talked about some of the end markets, how we’re sort of benefiting from some other macro trends that are coming into play right now. I talked about AI, I talked about the different end markets within storage, in cloud, et cetera, where we’re seeing this whole AI proliferation. And that alone, as I mentioned, is about $1 billion to $1.5 billion incremental revenue, net revenue, I should add as well, sort of net of any consignment effect that FY ’25 presents.
