10-KPeriod: FY2023

FLEX LTD. Annual Report, Year Ended Mar 31, 2023

Filed May 19, 2023For Securities:FLEX

Summary

Flex Ltd. (FLEX) reported strong revenue growth in fiscal year 2023, with net sales increasing 17% to $30.3 billion. This growth was driven by robust performance across all three segments: Flex Agility Solutions (FAS), Flex Reliability Solutions (FRS), and Nextracker. The company highlighted improved operational efficiencies and new program wins as key contributors, despite ongoing supply chain challenges and inflationary pressures. The successful initial public offering (IPO) of its subsidiary Nextracker in February 2023 provided a significant capital infusion and allows for separate evaluation of this high-growth renewable energy business. Flex remains focused on its strategy of providing comprehensive supply chain solutions and enhancing its capabilities in advanced technologies. The company's diversified industry exposure, balanced global footprint, and strong customer relationships are key competitive advantages. While facing macroeconomic uncertainties and supply chain complexities, Flex demonstrated resilience and delivered improved gross profit margins year-over-year. The company also continues to invest in its people, sustainability, and technology to drive long-term value.

Financial Highlights

53 data points
Beta

Revenue

$28.50B

6.9% Gross Margin

Net Income

$793.00M

2.8% Net Margin

EPS (Diluted)

$1.72

Total Assets

$21.41B

Cash & Equivalents

$3.16B

Free Cash Flow

$315.00M

Financial Statements
Beta
Revenue$28.50B
Cost of Revenue$26.50B
Gross Profit$1.98B
SG&A Expenses$874.00M
Operating Income$1.02B
Interest Expense$191.00M
Net Income$793.00M
EPS (Basic)$1.75
EPS (Diluted)$1.72
Shares Outstanding (Basic)454.00M
Shares Outstanding (Diluted)462.00M

Key Highlights

  • 1Net sales for fiscal year 2023 increased by 17% to $30.3 billion, driven by strong performance across all three operating segments.
  • 2The successful IPO of its subsidiary Nextracker in February 2023 generated approximately $694 million in net proceeds.
  • 3Gross profit increased by 17% to $2.3 billion, with gross margin improving slightly to 7.5% from 7.4% in the prior year.
  • 4The FAS segment saw a 12% increase in net sales, led by the Communications, Enterprise, and Cloud (CEC) business.
  • 5The FRS segment experienced a 20% increase in net sales, primarily driven by the Industrial and Automotive businesses.
  • 6Nextracker's segment sales grew by 31%, driven by increased gigawatts delivered and a higher average selling price.
  • 7Flex continues to repurchase shares, with approximately $893 million available under its current authorization as of March 31, 2023.

Frequently Asked Questions

Flex's revenue growth in fiscal year 2023 was driven by strong customer demand and new program ramps across its key end markets. Specifically, the Communications, Enterprise, and Cloud (CEC) business within Flex Agility Solutions (FAS), and the Industrial and Automotive businesses within Flex Reliability Solutions (FRS) showed significant increases. The Nextracker segment also contributed positively with higher gigawatts delivered and increased average selling prices.

The IPO of its subsidiary Nextracker in February 2023 was a significant event for Flex. It generated substantial net proceeds of approximately $694 million, strengthening the company's financial position. Furthermore, it allows investors to separately evaluate Nextracker's distinct business and growth prospects in the renewable energy sector, potentially unlocking greater value for both entities.

Flex reported that component shortages and logistical constraints improved over the year, although some constraints in large-node semiconductors persisted. The company stated that it continues to monitor potential supply chain disruptions. While facing margin pressures from these factors and inflationary cost recoveries, Flex managed to slightly improve its gross profit margin to 7.5% by leveraging improved fixed cost absorption from stronger overall customer demand.