Good afternoon and thank you for standing by. Welcome to Flex Fiscal Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I will now turn the call over to Mr. David Rubin. You may begin, sir.

Thank you, Karl. Good afternoon and welcome to Flex’s fourth quarter fiscal 2022 earnings conference call. With me today is our Chief Executive Officer, Revathi Advaithi; and our Chief Financial Officer, Paul Lundstrom. Both will give brief remarks followed by Q&A. This call is being webcast live and recorded. Slides for today’s presentation along with a copy of the earnings press release and summary financials are available on the Investor Relations page at flex.com. As a reminder, today’s call contains forward-looking statements, which are based on our current expectations, assumptions and predictions. These statements are subject to risks and uncertainties that could cause actual results to differ materially. For a full discussion of these risks and uncertainties, please see the cautionary statements in our presentation and press release of the Risk Factors section in our most recent filings with the SEC. Note, this information is subject to change and we undertake no obligation to update these forward-looking statements. Unless otherwise specified, we will refer to non-GAAP metrics on this call. The full non-GAAP to GAAP reconciliations can be found in the appendix slide of today’s presentation as well in the summary financials posted in Investor Relations website. As previously disclosed, the draft registration statement on Form S-1 relating to the proposed initial public offering of NEXTracker’s Class A common stock remains on file with the U.S. Securities and Exchange Commission. The initial public offering and its timing are subject to market and other conditions and the SEC’s review process. We made this announcement in accordance with Rule 135 under the Securities Act. Following SEC regulations, we will not make any further statements or answer any additional questions on the NEXTracker filing at this time. Now, I’d like to turn the call over to our CEO, Revathi.

Thank you, David. Thank you and good afternoon, everyone. Today, we will talk about our results for our fiscal Q4 and also our full year results, which was another outstanding year in the midst of lots of macro challenges. Paul will then take you through the detailed results. First, I will start by saying I am very proud of our team for delivering exceptional results for our customers and all our stakeholders. Their continued dedication helped us deliver strong performance this fiscal year. I also believe that in the midst of crisis is when true partnerships are built and we have significantly strengthened our partnerships with our customers and suppliers as we navigated through the dynamic supply chain environment. While delivering record performance this year, we have kept our eyes focused on the longer term direction of our company. We laid this out for you in our most recent Investor Day, which sets the stage for our next phase of profitable growth. Now, going to the next slide, let’s look at some of our accomplishments. Q4 was up over 9% year-over-year and over 3% sequentially. As you all know, seasonally, this is usually our weakest quarter with overall revenue typically down about 10% sequentially. Our ability to deliver revenue growth shows the continued strength and demand across the portfolio as well as the team’s incredible execution while operating in this environment. A good example is in our automotive business. Despite the major industry disruptions, our automotive business growth grew both sequentially and year-over-year, while S&P global auto production volumes declined. Both industrial and CEC also had very strong quarters, all of which led to strong revenue and record adjusted EPS levels in the quarter. For the full year, revenue was up about 8% year-over-year and we delivered record full year…

Okay, great. Thanks, Revathi and good afternoon, everyone. I will begin on Slide 6 with a review of our fourth quarter results. Please note all remarks will be based on non-GAAP results unless stated otherwise. The GAAP reconciliations can be found in the appendix of this presentation. Our fourth quarter revenue came in at $6.9 billion, up 9% year-over-year. Operating income was $295 million with earnings per share at $0.52 for the quarter, a year-over-year increase of 6%. Free cash flow was $252 million and up year-over-year. Just taking a step back and looking at our full year performance on Slide 7, with focused execution throughout a very dynamic environment, we delivered full year revenue of $26 billion, up 8% year-over-year. Operating income for the fiscal year 2022 totaled $1.169 billion that was up 13% year-over-year despite the challenges caused by component shortages and COVID flare-ups. For the full year, Flex achieved record EPS of $1.96 which was up 25% year-over-year. 2022 free cash flow was $593 million. Turning to our fourth quarter segment results on the next slide, reliability revenue was $2.8 billion, an increase of 12% year-over-year driven by improved execution against strong demand in auto and industrial and with some tailwind also from Anord Mardix. Operating income was $140 million. Operating margin was 4.9%, with pressure from material shortages that created some inefficiencies in industrial. In Agility, revenue was up $3.6 billion, up 4% year-over-year driven by strong demand across lifestyle and CEC partially offset by planned declines in consumer devices. Operating income was $152 million, up about 12% year-over-year, with nice margin expansion up almost 30 basis points to 4.2%. And finally, NEXTracker revenue was $440 million up 38% year-over-year due to continued strong demand. Adjusted operating income for NEXTracker was $22 million with pressure on…

Thank you, sir. [Operator Instructions] Our first question comes from the line of Mark Delaney with Goldman Sachs. Your line is open.

Yes, good afternoon and thank you very much for taking the questions. Looking at the fiscal ‘23 outlook relative to what was discussed about a month ago at the Analyst Day, it looks like the revenue and the midpoint of the EPS guidance are both slightly higher. And then despite some of the continued challenges around COVID, in particular in China and hoping you can better understand what’s driving the updated view on fiscal ‘23?

Yes. I will start that, Mark and if Revathi wants to chime in here, she will do that as well. But relative to the Analyst Day, we came in Q4 a little bit better than what we had expected. And so we dropped some of that revenue through. So you see the midpoint of our guidance did come up a little bit for the year. At this point, we held EPS flat to what we had indicated at the Investor Day. I think we had said 216 really didn’t give you a range. Right now, I would say 216 is still the midpoint pretty upbeat about that high single-digit top line growth that we had messaged and a pretty good EPS.

Okay, that’s helpful. And my follow-up question hoping to better understand some of the headwinds that are weighing on EBIT margins you talked about some of the cost and logistics headwinds, can you be me a little bit more specifics on how you expect those to trend over the course of fiscal ‘23. Because I think you need to go from the lower 4% range at the midpoint of the fiscal 1Q guidance and see that improve over the course of the year in order to get the full year to the 4.7 to 4.9. So maybe talk a little bit about what you are seeing and then how you expect that to have been over the course of the year? Thank you.

Yes, Mark, I will start by saying that in the last few years we have shown our ability to really continuously improve our margin dollars, our margin rates. So, we have really shown well in the middle of all this ups and downs and all the macro challenges that we have been really good at driving the right mix, the right kind of growth and managing through all our efficiencies that happen as a result of supply chain and pandemic and all that. So, I’d say so fiscal ‘22 again, very good margin improvement. Our fiscal ‘23 guide right now still shows very good margin improvement. And I’d say that will move around a little bit in the quarters, just because we continue to work through some of the supply chain inefficiencies, whether it’s trying to shutdown or things like that. And we have to ramp up and down as we see availability of critical products. And so that will tend to happen, but we feel very good about kind of first as the mix of our bookings that converge to revenue that is improving our overall margin profile and which really gives us confidence in our ability to guide where we are guiding right now for fiscal ‘23, I’d say yes, it will move around a little bit in the quarters based on how much inefficiency happens, what supply chain disruptions and things like that. But our history shows that we managed this extremely well and will continue to feel strong about how we can deliver the rest of the year.

Our next question comes from the line of Matt Sheerin with Stifel. Please ask your question.

Yes, thank you and good afternoon. I am just following up on the question regarding supply chain challenges and the component constraints. It seems like you overdelivered and a lot of your peers did too. And of course, you and your peers have built inventory over the last few quarters, is that starting to benefit you where you are putting materials in place for their orders, 2 months out and you are now helping fulfill that and is that your strategy going forward with us inventory build?

Yes, Matt, first is spot on, right. I mean, the idea always as this inventory builds up, we said before that it’s all about kind of that golden screw mindset where it’s waiting for one component. And as that component clears up, we want to be able to meet the demand for our customers, right. And that’s what you are seeing us execute to with the revenue upside that we are seeing these quarters that as products comes in and we are able to free up the bill of materials and build the product we are able to execute really well. I’d say that inventory buildup itself, I expect that it will start balancing out right towards the end of the year and you are going to see that happen. And that’s the right thing to do. Because my eventual focus will always be to get turns back to where we think we want it to be. And this is a very unique situation with what’s happening with the supply chain congestion. And so we are very committed to delivering the growth our customers want us to. That’s why you see the inventory buildup, but the strategy won’t be to continue to keep inventory at an inflated level to meet that demand. The hope is that the supply chain congestion at some point starts to ease up so you can get to the right level of currents to deliver the growth that we are looking for.

Got it. And just regarding the inventory, are your customers paying you in advance? Are you seeing an increase in customer deposits?

Yes, Matt, I will take that one, they are. I wish it was a dollar for dollar offset, but if you look year on year at our working capital advances coming in from customers, Q4 of ‘22 versus Q4 2021, we are up almost 3x. So that’s, I would say close to $1 billion worth of help in terms of that offsets to inventory growth. So they are helping, I wish it was dollar for dollar, but it certainly has helped to mitigate the impact.

Okay, thank you.

Our next question comes from the line of Steven Fox with Fox Advisors. Please ask your question.

Hi, good afternoon. Couple of questions. First off, the cash balance is up substantially into the end of the year, approaching $3 billion. Can you sort of talk about what’s behind that? And you guys, your investors don’t want you to hoard cash, what you are thinking about doing with it in the coming fiscal year, especially with regard to the guidance, whether any of usage of cash is factored in? And then I had a follow-up.

Yes, sure.

Paul, it’s all yours.

Okay. Sure. So okay, I’ll just maybe start with this, on free cash flow you didn’t hear us talk about the script, but I’ll just kind of voice it over just where everyone is clear. $550 million is the free cash flow expectation for 2023 here. That will likely be more back-end loaded as Revathi had alluded to. I mean, I think we will continue to see some pressure on inventory for the next couple of quarters, but I would expect that to start to abate. So, probably more a back half loaded free cash year for us. In terms of the cash on the balance sheet itself, look, we’ve been operating in a very unusual environment over the last few years. You got COVID, you got shortages, you got logistics constraints, now you have war. And I think we have all concluded with that backdrop, it’s smart to have flexibility and have some liquidity. And that liquidity has been beneficial for us. You look at the intra quarter working capital requirements, the cash requirements from peak to trough they are more significant than what they have been in the past couple of years. That peak the trough for us typically is, I don’t know, 30% plus of our inventory level. And so you kind of do the back of the envelope math on it. That’s a fairly high peak to trough use of cash throughout the quarter. Inventory as you know, it’s significantly higher than it was that sort of that pre-COVID level and there is – we need some balance sheet support, we need some balance sheet strength to support that. I will say this we like where we are, we are in a very strong financial position to manage through what is a, as you know, a very dynamic environment, because of the liquidity we have. We don’t want to be in a position to pinch ourselves here should things soften up a little bit. So, we like where we are. It’s a high balance as I see it today, but I think it’s appropriate given the dynamic environment and what we have been seeing with inventory.

And the guidance for the full year doesn’t assume use of cash for anything outside of working capital and organic initiatives?

So, you are correct, we are assuming that share count is flat. And so, the $2.16 EPS that we are guiding to here at the midpoint presumes that we take care of things like dilution from equity comp, but we have not baked in share count declines.

Great. And then just as a follow-up on the like you pointed out the auto, your auto sales are significantly outgrowing vehicle production right now. And I am just curious if we start to assume whatever normal production looks like, maybe later in the year hopefully, does that outgrowth sort of normalized also or should we think of the outgrowth you are having right now as sustainable in the subsequent quarters and if so, why or why not? Thanks.

We have said in the Investor Day, we spent a lot of time talking about our focus on kind of the EV space and connection mobility. And we feel very strongly and we did a deep dive on it for the reason that we really feel strongly that we are outperforming the industry, because our technology is very strong. We are really getting rewarded in terms of bookings for this next gen mobility. So, our reason for outperforming I feel is twofold. One is we are always able to perform well in terms of supply chain shortages and how we manage that. They have a strong relationship with our OEMs and suppliers. So that definitely helps. But I feel comfortable with our outperformance for the sector even moving forward just because of the thesis we laid out in the Investor Day that this is a high focus area for us, lot of new wind, you saw the kind of estimated EAR number that might laid out for this space. So, our view is that we will continue to outperform the IHS guidance for this space.

Great. Thank you so much.

Our next question comes from Ruplu Bhattacharya with Bank of America. Please ask your questions.

Hi, thanks for taking my questions. Revathi, you took up the fiscal ‘23 revenue guide by $400 million. Can you talk about which end markets are outperforming versus what you thought at the Analyst Day? And this might be nitpicking, but I mean, you kept the EPS guidance at $2.16 that $400 million probably translates to about $0.03 or $0.04 in EPS. Is there any further headwinds to margins than what you have thought at the Analyst Day or is it just you are being conservative on the EPS given the macro situation?

Ruplu, first thanks for the question. I’d say the first thing in terms of overall listing our revenue guide, we really outperformed our Q4 number as you saw, right and that – and looking at that and our ability to just manage this whole shortage clearance and everything for the year, we felt like we had to take up revenue for FY ‘23 right now, even though it’s early in the year, we feel really good about how we are clearing shortages and how we are managing demand. And so that was kind of the overall view. And the sector’s I would say is across the board. And the reason I’d say Ruplu that’s the case is because we have demand backlog in all of our six segments. It’s not one or the other. So because of that, I would say overall, all six segments are outperforming to what our original thesis for the year was and we feel quite comfortable that we will continue to see that over the next few quarters that we will be clearing shortages and improving our demand outlook pretty well to the guidance we have given. I’d say in terms of EPS, Paul will jump into this. I’d say just a little early in the first is we feel very comfortable about our margin guide. Let me be very clear about that. Our margin percent we have shown our ability to deliver this. Yes, will there be inefficiencies through quarters because of China shutdown or something else? Yes, absolutely. That’s going to happen. But we always come through in terms of how we manage the combination of kind of productivity and managing this efficiency. So feel very comfortable about our adjusted operating margin guide of 4.8%. I think just little to – we have shown, we have given you a very nice EPS guide year-over-year improvement, just a little too early to start changing our numbers for fiscal ‘23. And you know how we are in terms of how we guide, Ruplu. I think we feel like its first quarter is too early to do that. So, we will look through the year and see how it comes through. And then hopefully EPS will move up with the rest of the numbers. Paul, anything to add?

Yes. Just say a couple minor things you blew for modeling purposes, you probably want to model a little bit more interest costs, that’s probably a couple cents of headwind and probably the higher end of that 13% to 15% tax rate, given what we know today. That’s the sort of the offset to incremental margin that you would expect from that $400 million more in revenue. So, it all kind of rinses out.

No, that makes sense. Thanks for the details on that. And then just on some of the investments you are going to make in fiscal ‘23, I think you had said CapEx of 2%. Is that still the case? And what areas are you going to be investing in organically? And then any thoughts on M&A, I mean do you think that’s feasible in this environment, so any talks on the capital allocation? Thank you.

Yes. I would say, let me start with overall CapEx, yes. We are going to have to continue to invest in the CapEx, right. We committed to just because our organic growth is so strong, right. We are going to have to invest in growth, to deliver the bookings we are seeing and then the commitments that we have given to our customers. So, absolutely, I would say in terms of the areas itself, all our five segments, I would say outside of consumer devices will show strong year-over-year growth and we will need to have capital invested for those businesses. We always tend to see a little bit more in reliability, just because of the capital intensity of that business. We will also be looking to add square footage in areas that we are running out of space. And it tends to be all the places where you see the whole re-shoring regionalization trend, whether it’s North America or parts of Europe, or parts of Southeast Asia. So, we will continue to look at adding that. We are also making some strong productivity investments. I talked about how we feel very good about our manufacturing technology excellence. And so continuing to invest in that to really drive the productivity investments, so we can see that long-term 5% margin growth, margin percent that we talked about is important. So, I would say we will see a little bit of everywhere is kind of how we are thinking about investing for growth. Paul, you want to take the…?

Yes. And in terms of M&A, we want to leave the door open to that. You never know when opportunities arise at fair price. But I would say if on balance priority for us more is more stock buyback right now than M&A.

Okay. Thanks for all the details and congrats on the strong execution.

Thanks. Thank you. I appreciate it.

Our next question comes from Jim Suva with Citigroup. Please ask your question.

Thank you. And my question as well as the follow-up are kind of the same question. So, I will kind of pose the same questions are ready to be and Paul with just kind of a different angle. And that is now that we have had multiple years of trade wars, shipping costs, COVID outbreaks, component shortages, power outages, all these challenges. I am wondering first, for where to be, do you think the just in time delivery model needs to be adjusted to permanently build in some buffer? And then kind of the same question to Paul, is it worth your contracts of instead of just doing a straight cost plus model now, not knowing what the future shipping, inbound steel costs, outgoing steel costs are, is it worth building in contracts that are different than in the past with like some type of indexing or is that just too forward looking? Thank you.

Thanks Jim. I would say let me start with the just in time delivery model. I have spent my entire career and operations, supply chain and at many other end markets outside of kind of what Flex is in. And what I see with what is happening today, which is such a shift and globalization moving to the regionalization, re-shoring, manufacturing to the point of use is a huge trend, right. And then you combine that with the supply chain congestion that people are learning from which all the things you talked about whether it’s trade or pandemic issues, then there is a view of, hey, should I have more buffer inventory to manage for all of that and is it just in-time delivery model dead, right. I would say, Jim, my thesis on all of this, and we will say, time plays out in terms of how all this works is that we will land somewhere in the middle. I think customers, all of us, including we will be a little bit more reticent to have very lean inventory models, right. And that will be important, particularly when you have products that have long supply chains. But on products that are going to have shorter supply chains, because you are going to reassure them or bring them closer to the point of views, they are the just in-time models will have some justification to continue. So, it will really depend on the product and the end market that you are in. And I am very sure you are going to end up with a blended model based on the complexity of the supply chain. So, I wouldn’t say all dead, but definitely, in some cases of those long complex supply chain everybody is going to be talking about that more and saying, let’s build a different model than we had before. And we look at that very, very closely in terms of our planning processes and what would provide the best value for us and customers and how can you get the best level of delivery performance with kind of all this volatility built in. So, I would say, my view is, it’s going to end up somewhere in the middle, and it will depend on the products and the complexity of the supply chain. Paul, you want to jump in on the contract?

Yes, happy to. So, I am glad you asked the question, Jim, because it’s helpful to maybe demystify this a little bit for investors. If you look at the model, the contracting model in this industry, like you said, it is largely cost plus, when you have episodes of higher than usual inflation, or micro shocks to the system. A good example would be big shutdown in Malaysia in July of last year, June of last year, was basically shut the country down for a month, similar to what we are seeing here in Shanghai. There is various mechanisms in our contracts today, and contracts in the future, to protect us from those headwinds, hard pegged costs. So, very specific component inflation costs, specific expediting fees, those are fairly easy to contract to just pass right through. It’s we unfortunately don’t have the benefit of 15% Op margins to absorb all that, we just can’t. So that’s the nature of the industry, those costs, again, that you can hard peg get passed back to the customers, and that protects the overall margin dollars for companies, companies like Flex. The softer costs, things that you had mentioned, COVID, the stops and starts, inefficiency from under-absorption, that’s a little bit more difficult to hard peg, we work on ways to mitigate that. And it’s I think sit with the most part, we have got really good relationships with our customers and we find ways to work things out. But that’s kind of how it works. For the most part, those incremental costs do get passed through directly as often as we can, so largely protected. You bring up another interesting point when it comes to inventory. Look, is the just in-time model broken. Is there going to be more inventory in the system going forward, particularly as we continue to see trends with things like regionalization, I don’t know. But that’s a – it’s a very interesting question, because we are seeing it today, with the support that we are getting from our customers in the form of working capital advances. I think I had mentioned to Matt, that we have got significant year-on-year growth in working capital advances. It’s almost – it’s up almost 3x. That’s an operating model difference. I think our customers in the past haven’t been asked to help share the burden of that inventory growth, because I don’t think we have been in a situation like this in a very, very long time. That’s a potential shift in the operating model. And what I would say is, we are – this is to lean a margin business to bear all of that inventory cost ourselves. If something does happen structurally, we will need customer support, continued customer support on that. And I would say that’s no different than anyone else in the industry. But very good question.

Thank you, Revathi and Paul for the detail, that’s greatly appreciated and congratulations.

Thank you, Jim.

Our next question comes from Paul Chung with JPMorgan. Please ask your question.

Hi. Thanks for taking my question. And just want to echo very nice execution here. So, first, just wanted to talk about the redesign opportunities you mentioned during by some of the legacy component constraints. So, are you seeing opportunities where you can kind of capture higher margins here on key products doing, expanding some of that design work? And is this dynamic kind of expanding across all your products, or are you seeing this more so in health solutions?

Paul, I will answer that. I would say first is the redesign opportunity is across the board. I see that and lifestyle. I see that in health. I see that in, in automotive. I see that in industrial. And the reason is because as our customers are understanding the kind of the platform effects of how their chip design is, the significance of that, they are really relying on Flex to provide them a new solution that longer term will provide them better resilience than where they are today, right. So, I would say this redesign opportunity for us is across the board. And we are being asked to do that every day, are we providing that to customers all the time. I am seeing that in small and medium sized customers and lifestyle or very large kind of Health Solutions customers. Everybody is asking about, hey, how do I do this differently and how can you do this for me. So, I would say, this is really good work, because this is the kind of complexity that I talked about, that now customers are relying on us to solve for them. And it is, of course, our job to make sure that these redesigns also work in a way that it’s a win-win for our customers and for us, and longer term, its better margin for all of us. So, Paul, I would say this is definitely happening and happening across the board.

Great. And then my follow-up on consumer devices, where are customers going if they don’t make the cut on your kind of profitability hurdles. Are you seeing some customers actually come back after shopping around? And is this in turn kind of improving the overall pricing environment in your view for the overall industry? Thank you.

Yes. Thanks Paul. What I would say is, I think in general, I would say the overall AMS industry has become disciplined, right. So, let me start with that. I would say in my last 3 years, across the board, we have seen discipline emerge in this industry, in terms of how we look at projects or how we execute. So, I think that we have seen general discipline, and we have seen that in the margin rates of the industry itself, right. Everybody has started improving in the last few years in terms of margin rates. I would say for consumer devices itself, there is enough people and I am not going to name names of people who would – where these hurdle rates would be fine for them, right. And they will, they are the ones who will win and take that business and it works for their business model where they have a different cost of capital, or they are fine with working with those margin rates. In some cases, we do have customers who come back to us and we work with the parameters that we have laid out and what Flex offers as a solution. And that’s a win-win for both of us, right, because they saw something in Flex that works for them. But we are very good at what you have seen in the last few years, we have become really good at managing the consumer device business to within the parameters of what we want to see. So, that’s why overall margins improved for that business. It is contained in terms of the type of growth of the mix within that consumer device business is changing. We like the more midsized customers for that. So, I would say yes, there is always people to take the business that we may not want. And in some cases, customers come back and we welcome that because that’s a win-win for both of us.

Okay. Great. Thank you.

Thanks Paul.

Our last question comes from the line of Melissa Fairbanks with Raymond James. You may ask your question.

Hi, everyone. Thanks very much. Glad to make it in under the wire. I think you referenced some of the inefficiencies related to China shutdowns that have happened most recently. Just wondering if you could quantify the headwind this quarter or what’s baked into the 1Q outlook, if anything?

Yes. Melissa, I will start, Paul can jump in. One is, I would say, I am not sure I want to quantify like on a case-by-case basis. But we expect some of these inefficiencies to continue at least for the next quarter. You have seen that China is definitely not freed up and particularly where this kind of impacts us in areas like our industrial business, which has got a lot of kind of lower volume, higher mix, right. So, managing that mix with the shortages becomes really, really tough and they have a lot of supply chain dependency on China in particular. So, I would say we kind of expect these inefficiencies to continue through next quarter, because China is not easing up anytime soon. But that’s why we have a diverse portfolio. We have a diverse portfolio. And you have seen it’s played out well for us over the last few years, right one segment, one business unit is down, the other is up, we get if we are able to manage the mix through all of that. But at the end of the day, right, highest EPS year that we have ever had highest EPS quarter, our guide for Q1 is still very strong. Full year, we have a very strong EPS guide. So, I would say you will see some pluses and minuses and inefficiencies, some more in the near-term. But we expect that we are very good at managing them. So, we will see that margin rates continue to move up through the year.

I would say very excellent execution in the face of all of these challenges. And then if I could just one quick follow-up. The detail that you gave us for NEXTracker is extremely helpful. It’s obviously a question that we get asked about quite a bit. Just wondering if as that business starts to gain scale, does it become lumpier in nation or in nature, as you get to larger scale deployments, or for the near-term should we just kind of assume just kind of the steady state growth rate?

I don’t – yes, I think steady state is more likely, Melissa. NEXTracker is a project business. But as you see the scale of that business continue to grow and you get a bit of a portfolio effect. So, yes, there will be large projects that ramp up and ramp down. But one, the nature of the accounting, which is percentage of completion accounting sort of helps to smooth that a little bit. And also, again, back to portfolio theory, I think you get such a large base that it becomes a little bit more immune to project specific stops and starts.

Yes. And it’s such a – it’s got so much backlog and so much growth in it, Melissa, that at this point, we are just expecting that growth to be more steady state. So, we think that just as you clear that pipeline and backlog, which is there for the next few years, it will be steady state as we go through that.

Perfect. Thanks very much. That’s all for me tonight.

Thanks Melissa.

Okay. Great. Hey, thank you, everyone. I just want to close by saying on behalf of my leadership team want to thank all our customers and for our trust and partnership and our shareholders of course for your support, and most importantly, the Flex team for all their hard work and their achievements for this past fiscal year. So, thank you, everyone for joining us.

This concludes today’s conference call. Thank you for joining. You may now disconnect.