Sanmina(US:SANM)2023-05-12 01:45Financial Data and Key Metrics Changes - Q2 revenue reached $2.32 billion, exceeding the guidance of $2.2 billion to $2.3 billion, with a year-over-year growth of 21% from $1.92 billion [16][24] - Non-GAAP gross margin was 8.4%, and non-GAAP operating margin improved to 5.8% from 4.7% in Q2 FY 2022 [24] - Non-GAAP fully diluted EPS was $1.59, up over 50% from $1.05 in Q2 FY 2022 [24][26] - First half FY 2023 revenue was $4.7 billion, on track for mid-teens growth for the full year compared to the prior year [26][41] Business Line Data and Key Metrics Changes - IMS revenue for the first half of FY 2023 was $3.9 billion, driven by supply chain improvements [27] - CPS revenue for the first half of FY 2023 was $889 million, with non-GAAP gross margin improving to 13.2% compared to FY 2022 [27] Market Data and Key Metrics Changes - Revenue from industrial, medical, defense, and automotive markets was $1.362 billion, with year-over-year growth of 18% [38] - Communication networks and cloud infrastructure revenue was $958 million, showing a year-over-year growth of 27% despite a slight quarter-over-quarter decline of 6% [38] Company Strategy and Development Direction - The company is focused on high complexity, heavily regulated markets, avoiding consumer markets [40] - Plans to expand capacity into more profitable projects, particularly in medical, defense, and automotive sectors [43] - Continued investment in talent and technology to support growth for FY 2024 and beyond [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties, highlighting strong operational execution and improved supply chain conditions [36][45] - The company anticipates mid-teens revenue growth for FY 2023, with expectations for margin expansion and EPS growth [41][42] Other Important Information - Cash and cash equivalents at the end of Q2 were $718 million, with no borrowings under the $800 million revolver [28] - The company has authorized $164 million for share repurchases, with an additional $200 million recently approved [29] Q&A Session Summary Question: Inventory levels and management - Management noted that inventory levels have increased over the past few years, aiming for inventory turns of six to seven times, ideally reaching eight [51] Question: Revenue guidance for Q3 - Management acknowledged slight revenue guidance decline but expressed confidence in delivering strong financial numbers despite challenges [61] Question: Communication networks performance - Management confirmed some delays in communication projects but noted strong performance in the previous quarters [83]