Flex(US:FLEX)2025-12-04 16:12Summary of Flex's Earnings Call Company Overview - Company: Flex - Industry: Data Center and Power Solutions Key Points Financial Performance - Flex reported an expected revenue of $6.5 billion from the data center segment for the current fiscal year, representing 25% of total revenue, with a projected growth rate of 35% for fiscal 2026 [4][5][7] - The power business generated $1.3 billion in revenue for fiscal 2025 [9][10] Data Center and Power Business - Flex's data center business includes compute integration, power development for chips, cooling solutions, and auxiliary cooling systems [5][6] - The growth in the data center market is driven by increasing power demands from chips and advancements in cooling technologies [7][8] - The embedded power business is a significant growth area due to the rising power consumption of chips [7][16] Technology Trends - The industry is moving towards 800-volt technology to meet the increasing power demands of data centers, with Flex currently validating a 400-volt product [17][19][22] - Flex is focusing on providing integrated solutions that combine power supply units, bus bars, and rack systems, leading to increased revenue per megawatt [23][24] Modular Solutions - Flex has been developing PowerPods to streamline installation and reduce deployment times for data centers [25][27][28] - The company is expanding its modular solutions to include IT and cooling pods, enhancing the speed and efficiency of installations [27][29] Utility Market and Acquisitions - The acquisition of Crown Technical in 2024 has strengthened Flex's presence in the utility market, particularly in modular systems [33][35] - Flex is expanding its utility business, which is expected to grow alongside the data center segment [37][38] Capacity and Demand - Flex is currently unable to meet demand and is investing in capacity expansions across multiple facilities in the U.S. and Mexico [40] - The company is strategically focusing on high-growth markets such as data centers and utilities while being selective about other sectors [57][58] Competitive Landscape - Flex believes it has a strong competitive position due to its local capabilities and integrated solutions, despite competition from various players in the market [52][54][55] Partnerships and Collaborations - Flex has partnered with LG to enhance its cooling solutions, providing a complete cooling stack for data centers [44][45] - The company is focused on maintaining around 80% of its capabilities internally while leveraging partnerships for complementary technologies [48] Future Outlook - Flex anticipates continued growth driven by the demand for data centers and power solutions, with a focus on productivity improvements through AI and automation [63][64] - The company expects to maintain strong operating margins, supported by growth in high-margin areas and internal productivity initiatives [67][68]