Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $6.4 billion, growing nearly 4% year over year [5][22] - Adjusted operating margin reached a record 6.2%, marking the second consecutive quarter above 6% [5][22] - Adjusted EPS for Q4 was $0.73, up 28% from the previous year [6][22] - For the full fiscal year, adjusted operating margins were 5.7%, with adjusted EPS reaching a record $2.65, up 23% [6][25] Business Line Data and Key Metrics Changes - In the Reliability segment, revenue was $2.9 billion, down 1.3%, with operating income at $180 million and a margin of 6.2% [23] - The Agility segment saw revenue of $3.5 billion, growing 8.2%, with operating income of $230 million and a margin of 6.6% [23] - Data center revenue grew approximately 50% year over year, reaching about $4.8 billion, driven by cloud and power solutions [12][14] Market Data and Key Metrics Changes - The company reported strong growth in key markets such as data centers, with cloud programs generating about $3.5 billion [12][14] - The power products segment generated approximately $1.3 billion in revenue [12] - The company expects data center revenue to grow around the mid-thirty percent level in the next fiscal year [14] Company Strategy and Development Direction - The company is executing its FlexForward strategy, focusing on higher value businesses and operational efficiency [8][9] - The EMS plus products plus services strategy aims to enhance vertical integration and customization [10][11] - The company is positioned to benefit from regionalization trends and has expanded its operational footprint in North America [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 6% adjusted operating margin a year ahead of schedule, despite macroeconomic uncertainties [21][35] - The company is navigating tariff impacts and is well-positioned to support customers through regionalization [15][20] - Management highlighted the importance of operational excellence and efficiency in driving record-level operating margins [30] Other Important Information - The company generated over $1 billion in free cash flow, maintaining an 80% plus free cash flow conversion target [6][25] - Inventory levels were reduced significantly, with net inventory down 18% year on year [26] - The company repurchased approximately $1.3 billion of stock, representing about 9% of outstanding shares [28] Q&A Session Summary Question: What are the drivers for the strong margin guidance for fiscal 2026? - Management indicated that continued growth in cloud and data center products, along with service business growth, will drive favorable mix impacts [40][42] Question: What is the demand for capacity in the U.S. and Mexico? - Management noted strong customer interest in capacity, with ongoing conversations about increasing utilization and productivity [43][45] Question: Can you elaborate on the scale advantages in data centers? - Management highlighted the unique capability of integrating compute and power, which differentiates the company from competitors [49][51] Question: How does customer-sourced inventory impact revenues and margins? - Management confirmed that while customer-sourced inventory primarily affects cloud business, it positively impacts margins [64][66] Question: What are the expectations for inventory and working capital in fiscal 2026? - Management expects some improvement in inventory rates but emphasizes continued focus on managing days of inventory effectively [101][104]