Greetings and welcome to Jabil’s First Quarter and Fiscal Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Adam Berry, Vice President of Investor Relations. Thank you. You may begin

Good morning and welcome to Jabil’s first quarter of fiscal 2022 earnings call. Joining me on today’s call is Chief Executive Officer, Mark Mondello and Chief Financial Officer, Mike Dastoor. Please note that today’s call is being webcast live, and during our prepared remarks we will be referencing slides. To follow on with the slides, please visit jabil.com within our investor relations section. At the conclusion of today’s call, the entire call will be posted for audio playback on our website. I now like to ask that you follow our earnings presentation with the slides on the website beginning with the forward-looking statement. During this conference call we will be making forward-looking statements including among other things those regarding the anticipated outlook for our business such as our currently expected second quarter and fiscal year net revenue and earnings. These statements are based on current expectations, forecast and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. An extensive list of these risks and uncertainties are identified on our annual report on Form 10-K for the fiscal year ended August 31, 2021 and other filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. With that, I’d now like to shift our focus to our strong quarter and outstanding results. First off, the team delivered $400 million of core operating income and roughly $8.6 billion in revenue, resulting in a core operating margin of 4.7%. These results were primarily driven by broad base strength in several key end markets, including healthcare, industrial and semi cap and of course, mobility has customary for our first fiscal quarter. And finally, it's worth noting that our team was able to accomplish all…

Thank you, Adam. And thank you for joining us today. As Adam just highlighted Q1 was an exceptional quarter. The team delivered strong results on three fronts; revenue, core operating income and core diluted earnings per share. Our results were better than expected due to a combination of continued end market strength and excellent operation execution by the entire Jabil team along with lower tax and interest expense. Net revenue for the first quarter was $8.6 billion, up 9.4% over the prior quarter. GAAP operating income was $350 million, and our GAAP diluted earnings per share was $1.63. Core operating income during the quarter was $400 million, an increase of 9.6% year-over-year, representing a core operating margin of 4.7%. Core diluted earnings per share was $1.92, a 20% improvement over the prior quarter. Now turning to our first quarter segment results on the next slide. Revenue for our DMS segment was $4.7 billion and increase of 11.1% on a year-over-year basis. The strong year-over-year performance in our DMS segment was broad based, the strength across our healthcare, automotive and mobility businesses. Core margin for the segment came in at 5.4%. Revenue for our EMS segment came in at $3.9 billion, an increase of 7.4% on a year-over-year basis. For stronger year-over-year performance in our EMS segment was also broad based with strength across our digital print retail, industrial and semi cap and 5G wireless and cloud businesses. Core margin for the segment was 3.8%, 40 basis points higher than the prior reflecting solid execution by the team. Turning now to our cash flows and balance sheet. In Q1, inventory days came in at 66 days decline a five day sequentially. The management team continues to be fully focused on this metric, particularly in the current environment and I expect over…

Thanks Mike. Good morning. I'll begin today by thanking our folks here at Jabil for making safety, their personal priority. I'd also like to recognize their hard work and tireless commitment, which drove solid results for our first fiscal quarter. Again, thank you. Before I get into my prepared remarks, I'd like to wish all of you a safe and peaceful holiday season. With that, let's move to our next slide. Where I'd like to expand on what Mike and Adam addressed in their prepared remarks. Not only did our team deliver a favorable first quarter, but the diversification of our business was fundamental to the results. With each sector having a material contribution in the solutions we offer our customers and with each sector having a material contribution to our financial results. Specifically, the four sectors in our DMS segment focus on margins while offering reliable cash flows. While the four sectors in our EMS segment focus on cash flows, while offering reliable margins, a perfect complement as the well diversified construct of Jabil continues to drive our execution. If we dig a little deeper, we find secular trends embedded within certain sectors. Secular markets, where we now play and have a substantial presence. We believe these markets will drive our growth, with the overwhelming majority of such growth occurring organically, as we placed our attention on secular opportunities, opportunities such as 5G, electric vehicles, personalized health care, cloud computing, and clean energy. Furthermore, our commercial portfolio is intentional, and we think quite special. Each slice of this pie harbors domain expertise, affording us an essential collection of valuable capabilities. Although what's most impactful is the way in which we merge these capabilities with precision and speed as we serve our customers. Our approach is further enhanced by seamless…

Thanks Mark. Before we begin our Q&A session, I'd like to remind everyone on our call that we cannot address customer or product specific questions. Otherwise, we're now ready for your Q&A. Operator?

Thank you. [Operator Instructions] Our first question is coming from the line of Ruplu Bhattacharya with Bank of America. Please proceed with your questions.

Good Morning. Thanks for taking my questions. You talked about component shortages. Is there a way for us to -- for you to quantify for us what was the revenue impact in the November quarter from component shortages? And what have you factored in for the February quarter? And how you see these component shortages lasting into 2022?

Hey Ruplu thanks for the question. I don't -- I don't know that we really look at it that way. How I would answer it maybe would be maybe getting away from Q1. And I'm not doing that for any reason other than I kind of think about the year a bit deeper. I'd say that we've taken the year now from 31, five to 31, eight. I think that's up from like 29 three last year. And I think we've done a really good job, spending a lot of time with our commercial folks, our operations folks, and our supply chain procurement folks. So I believe that we've handicapped supply chain properly, to deliver the 31 eight. I guess in an unconstrained environment. I don't know maybe the maybe the 31 eight would be somewhere 32 something in terms of top line. But again, I think we spend more time really kind of looking at our factories, looking at the looking at the pipeline of materials, and then a lot of communication and connectivity between our supply chain procurement folks, our operations folks and our commercial folks. So I think maybe the main takeaway is Simmons supply chain continues to be kind of bumpy and a bit unpredictable for the next couple of quarters. We believe we've handicap that properly to deliver the year, or said differently the 31.8 billion. In terms of when we see things getting better for -- I like the question because it allows me to give a shout out to our supply chain procurement team for what they did in, in in for 4Q of last year in Q1 of this year, in delivering the numbers, we overshot revenue by a 300 million for the quarter and a lot of that had to do with the whole team, but just tremendous work from the supply chain procurement group. I think that will continue to be in this environment and in one way, shape perform probably through the spring into early summer. But I think we start seeing things getting better six to nine months from now.

Okay, thanks for the details on that Mark. That's, that's helpful. Mike, wanted to ask you on free cash flow looks like inventory was up 6% sequentially, after two quarters of I think it was double digit growth. And that's understandable given the component environment. But can you help us you've maintained the 700 million plus a guide for the full year. Can you help us think about the pace of free cash flow over the next two, three quarters? How should we think about which quarters are stronger which quarters are weaker?

Ruplu, I've sort of moved in the same direction as in previous years and previous quarters. In past years, the trend will be pretty similar, the seasonality attached to our free cash flow. So that doesn't change much through these times. We do expect the supply chain constraints to open up a little bit. And in Q4, I think the cash flow will be a lot higher. So I think overall, similar trends to last year with a slightly stronger performance in Q4 is the best way to model that group.

Okay, and maybe for my last question, Mike, if I can just ask you. How should we think about your capital allocation priorities? Specifically, if you can talk about how you're thinking about buybacks versus, maybe M&A. And also the tax rate was a little bit lower this quarter than expected. How should we think about that for the full year? Thanks so much.

Sure Ruplu. So we have on buybacks, we have a billion dollar authorization. I think we still have about, I think it's about 830 million of that authorization left. We’ll continue to be well balanced in our capital allocation. I personally feel the stock is still highly undervalued. So buyback will be an integral part of our capital allocation framework. M&A, as we've done in the past Ruplu, we've done tuck-in, M&A’s capability driven M&As. And I think in September we highlighted a little bit of a capital allocation framework there as well. At this stage, no changes to that M&A, tuck-ins will continue as we as we progress through the year.

And on the tax rate, any guidance for the full year?

Tax, so for Q2, I think we've said 24% in that range Ruplu the reason it was it was good as purely because of the mix, issue. income coming through in different jurisdictions where in 30 countries, so there's a lot of moving parts, but in that 24% range, should be to be a good guide for now.

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

Thanks, Ruplu.

Thank you. Our next question is come from the line of Jim Suva with Citigroup. Please proceed with your questions.

Thank you very much. Question for Mark. When all of this hit with COVID, and before that even trade wars, we're talking 2,3,4 years ago, there was discussions about your customers, maybe changing the sourcing of where they're going to actually have you do the work for it and not be as concentrated to mitigate risk. Just curious as we roll it forward now, several years has a lot of that materialized? Are they still in discussions? Is it off the tables? Or has it already come to pass? Or some of it has and some of the still being talked about. I was kind of curious about, how that all ended up because we've been in a world of trade wars, uncertainties, COVID, and supply constraints now for a couple of years and just kind of wonder what the materiality of, of actions from your customers. Thank you.

Thanks, Jim. Trying to figure out timeframe. Let's keep with the three to four years you talked about. I'd say that -- I'd say for the last, I don't know, dozen years, we have a bunch of tools that have kind of migrated from manual tools to more digital tools to more data analytics as the company's matured and advanced forward, but tools nonetheless, where we've always gone from kind of manual spread sheets to the new digital tools in terms of optimizing supply chains for customers. Kind of the thesis of your question, though, around trade wars and tariffs and geopolitical issues and risk and COVID this and other issues. I would say that in the last 24 to 30 months, there has been a heightened sensitivity in terms of working with customers on a proactive basis to be sure that their overall supply chain manufacturing solutions are optimized derisks and as well as supportive with backup plans. So as an example, one of the things we talk about a lot is I think there's a huge advantage of building stuff when you have scale. And then you have diversification either top line or, or factories around the world. Today we're sitting in a in a really good place, because a lot of our customers put a lot of trust in Jabil. And we do the vast majority of their work. And even though they're inside a Jabil, we can provide fabulous redundancy plans if, if things go a bit sideways. So I'd say Jim, some of the things that you alluded to have been very real catalysts to, to maybe increase the priority in terms of supply chain and where we build stuff. And then the other neat thing about our tools today is with the advancement of the data analytics, and how we're positioned in the supply chain, both front end and back end, we also spend a significant amount of time with customers today, mapping their entire supply chain. So from the from the most basic precious metals through components, consideration to design, where the product is going to be manufactured, and then how it's going to be distributed. So I'd say all-in-all today, it's perpetual, I don't think it's ever done. But I think to your point, we've done an awful lot of work. And there's been a lot of prime catalysts for that type of work to be done. And I think overall, we do a pretty good job in that area for our customers.

Thank you for the details and happy holidays to your team and congratulations.

Thanks, Jim, you as well.

Thank you. Our next question comes from the line of Mark Delaney with Goldman Sachs. Please proceed with your questions.

Yes, good morning. Thanks very much for taking the questions. I have two, maybe starting on margin, if I could. So if you could comment a little bit on how you're thinking about the sustainability of margins. Obviously, you got to fiscal 2022. But over the longer term, and on the one hand, the company has been having to deal with supply chain costs COVID. And some of those challenge but also I’m getting questions from investors about whether or not factory utilization is perhaps some unusually high when we think about how strong global demand for goods has been in some of the government stimulus programs that have been in place. And so any thoughts you can share on the puts and takes and sustainability of margins over the longer term please?

Thanks Mark. I think that let me start with factor utilization. I think factor utilization in 4Q and Q1 was mixed and choppy. We had and the biggest issue there is again, the supply chain dynamics. So I wouldn't conclude, I wouldn't conclude that any portion or a material portion of our results was due to hype or factory utilization. In fact, I think it was maybe a little bit of the opposite. So let's just call that let's just call that maybe a very slight net negative through Q1. And yet the results I think we’re very, very good. If I then move, if I then move through, maybe the back half, somehow we've posted Q1, we've given you a fairly explicit numbers for Q2. If I think about the back half of the year, as I think about margins, I think the back half of fiscal 2021 margins for the whole company were around 4%. If I think about the back half of 2022, the overall margins for the company are going to be 30, 40 basis points greater than that. And I think that's a good indication of the composition of the business mix today, and where we're focused. And one of the things that we did in the slide deck today and the prepared remarks between Adam, Mike and myself is we're reinforcing the 4.5% for the year, by the way, when again, a decent portion of the year is going to be fraught with supply chain challenges. So that's up 30 basis points from last year, which last year was I think, a pretty good year for us. And I think where you're going is beyond this year, I don't want to get into too much speculation about where the business might be going in 2023 and 2024. Although, I made a comment sometime, I don't remember when sometime in the last 12 months or something like that during the JPMorgan conference, the question came up, and we were going back and forth, talking about kind of the midterm outlook for the company. And I suggested that, we were a company where we focus the vast, vast majority of our growth organically. We're not big on big M&A deals. And if that continues, and we continue to be successful in the marketplace, I do think we're on a trajectory where margins can be above the four and a half, I think maybe next step would be 46, 47. And, our internal efforts are going to be around running the company at 5% on the income line.

That's really helpful. I appreciate all the thoughts on that Mark. My follow up was about an award, the company just received the optical business unit. So I was awarded some recognition for one of its sensors. And so when you could speak a little bit more on what that business unit is doing, because I know it's, behind a lot of the different products areas, and perhaps where you're seeing the best growth are some of your optical and essential technology.

Well, I think we've -- if I choose to go all the way back to I go all the way back to, to an acquisition we made that has been proven quite good for us, both in knowledge in terms of R&D, which is active alignment on sensors, as well as optics. And we think that's, we think that's a really nice tool to have in our toolset because it cuts across so many different end markets. It's everything from consumer on kind of the consumer robotics side. It's in retail in terms of our robots in terms of the retail space. And it's certainly helping us in terms of autonomous driving in and the EV market. And they are also using it in some areas of industrial. So I think that when I think about I think in my prepared remarks, I'd talked about kind of how we weave together kind of a library full of capabilities, the act of alignment sensors, and optic sight is, is important part of that. And again, we like it because it's not pigeon holed into one particular business or one particular sector. It cuts across probably 50% of our eight sectors. So it's something that can be leveraged quite well.

Thank you. Congratulations on the good results and happy holidays.

Thanks Mark.

Thank you. Our next questions come from the line of Matt Sheerin with Stifel. Please proceed with your question.

Yes, thank you. And good morning. My first question Mark is just regarding your guidance for DMS in the quarter up 4% year-over-year yet you're guiding more than 10% for the fiscal year. Is that just a reflection of a pronounced seasonality in the mobility business? Or do some of the supply chain constraints and expectations of that improving through the year also play into that?

Hey, Matt, can you help me a little bit? So the 4% being what if I heard you correctly? You talking about -- You're not talking about op margin? You're talking about growth? Venture my growth rate for on the Q2?

That's right.

Okay. When you started, I was getting a little bit confused on whether you were talking about the…

I was talking about the growth about a year-over-year growth.

Yes. I think that's, I think that's based on two things. I think it's largely based on I think that there's distortion in the comps year-on-year because last year with various product roadmaps and whatnot in DMS. They were a little bit different. And so I think the year-on-year comps are a little bit distortive. I would say if I back up and open the aperture a little bit who I really like. I really like the DMS construct and aside from the Q2 year-on-year comp, we still think and I think it was shown this way on the blue green slide that our DMS business is still going to grow 10% And that's at significant scale. So I appreciate the question because it is a it is a it is a one off I think every single quarter this year we'll be bumping up against double digits except for Q2. And again, largely due to the fact that I think Q2 of 21 was a little bit of an odd comp.

Okay, that makes sense. And then I wanted to just ask about the auto business. You're one of the few companies actually taking auto numbers up, despite the on-going supply constraints. And I know there's a lot of momentum in EV. So could you discuss Jabil’s position there, your areas of expertise and how you may be differentiated from competitors?

Yes, well, first off, I'd give, I'd give all the credit to the, the real cool part about Jabil is, is at an enterprise level, what we do is, in terms of our path is pretty, pretty, pretty simple. We build stuff. And, and we got the company broken up into eight segments. As you see, every time we get on one of these calls, or an investor day. And the strategies, the strategies are bottoms up, which I think is different than a lot of companies. And I love I love the I love the strategy that's been put in place with our automotive and transportation group. And it started a number of years ago, and they became hyper focused on a belief in electric vehicles. And we're starting to see that moving forward. I think that even with even with component constraints, through the back half of 2021, and certainly through a portion of 2022. When I when I when we meet with that group, we handicap it. We've got the -- supply chain dynamics going on, we're still looking at an auto, automotive and transportation, growth rate year-over-year north of 40%. And I think that I think that has to do with our solution set. I think that has to do with some very deep relationships we built in the EV space. And I think we're continuing to add to that and continuing to diversify that business. But all-in-all, as we sit today, our automotive business, if you go back to, let's say fiscal 18, 19, it was about $1.5 billion business. And we think going forward, that will be a $3.5 billion, $4 billion business for us. And again, I think it's a reflection of the service offerings and largely in the EV space.

Okay, great. Thanks so much.

You're welcome.

Thank you. Our next questions come from the line of Steven Fox with Fox Advisors. Please proceed with your questions.

Hi, good morning. Two questions from me. First of all, I'm just curious, like, with new variants of COVID, how you budget that into different factory attendance, utilization going forward. It looks like maybe you could have more people with COVID, hopefully with less serious symptoms, but they'd still be out of work for a little while. And then secondly, Mark, the healthcare business is turning into this boring, but very nice growth business. I'm just curious where you think you are on the on the margin trajectory, whether it is for the margin upside, and anything you would highlight in the quarter? Thanks.

Yes. First off, we hope to see you down here in Tampa, I think you're I think your team's playing in the Outback Bowl. So let us know if you're, if you're going to pop down in terms of in terms of gear, in terms of your question. The COVID situation, our team's done a first rate job. We, as we as we were going through the back half of 2021, we had, we had cases, largely driven on the Delta variant all over the world. And we were able to serve our customers do so really, really well. Not without some pain points. But again, I don't like to, I don't want to I don't want to start with our financial results. I want to start with the fact that we did a great job serving customers and an outcome for that was through it all, fiscal 2021. And for that sake, fiscal 2020. I think we navigated everything quite well, especially considering our geographic region and the scale of the company. As we sit today, more with Omicron I, let's keep our fingers crossed that maybe it appears to be a bit more contagious. Maybe not as severe time will tell. But we continue to do a really, really nice job in terms of managing that as well. As we think about some of the disruptions we had in Southeast Asia disruptions are still there but not to the magnitude that we've seen in the past. So fingers crossed. As we think about China, Mexico, U.S., and Eastern Europe, as we sit today, disruptions on a relative basis. So let's just say, let's just say for the last 18 months of hard, hard COVID, we see some periodic issues, but disruptions, I think, today are less than they've…

Great, that's really helpful. Happy holidays.

Thank you.

Thank you. Our next question comes from the line of Shannon Cross with Cross Research. Please proceed with your question.

Thank you very much, two for me as well. I guess the first is, in conversations with several companies that cover the managements are talking about looking to longer term contracts with the supply chain, sort of changing the, the discussions they are having to lock in business on a longer term basis. So I'm curious if you've heard that I know some of this is component based, but I think it also just goes to broader supply chain challenges. And I don't know if you can talk about it, but I'm curious, what percent of revenue is sort of locked in for a given quarter, at the start of the quarter, or maybe when we think about guidance for the full year. What percent of the year is locked in on the first day of the fiscal year? Thank you.

Thanks, Shannon. I would say on the speculation or rumors or fact that you're hearing in terms of people locking in allocations, both component and then maybe capacity for Jabil. I -- we sit kind of in the middle of all of that. And as I mentioned on one of the prior questions, I think a lot of our customers do a really nice job. They do things independent. We do things independent for them, and we bring our thoughts together. And then we have a lot of relationships where we work all of this collaboratively. And by the way, that's becoming more and more because of our tools. And I would say that with this most recent supply chain disruption has driven is there is a significant amount of activity going on today, where we’re already modeling, what if scenarios, and demand planning, which would result in allocation for late calendar 2022, and into the first half of 2023. So I think that people are trying to get out in front of it. Again, we're doing a lot of what if scenarios, and I think people are trying to do a better job with forward looking communication in terms of [Indiscernible] their overall demand and their needs, maybe 18 to 24 months out where maybe previously, for some companies, it might have been more like six to nine months out. And again, I think some of the data analytic tools are helping with that. In terms of, what percentage of our revenue is booked or secured going into a quarter. I would say, I don't know, 98% of our revenue going into a quarter. So as we're sitting here today. So here we sit on November, whatever today is 16, into our 2Q. And let's just say 95%, 98%…

Great. Thank you, that was really helpful. I'm wondering, from a bigger picture standpoint, from long term planning, I guess. Are there areas, once we get past, if we get past whatever we're going through in supply chain and COVID aware, there you're looking at big CapEx projects or new segments on technology. I'm just I'm wondering sort of, how you think about the next several years, or are you just extremely focused, as everybody is right now on kind of getting through this period of time. So I don't know maybe how you're doing long term planning in the days of COVID right now.

I'd start with the supply chain issues are going to, we're going to get to the other side of the supply chain issues. It's a matter of when, but that's 100% for sure. Because there's going to be normalization between demand and supply that's going to get remedied 100% fact just matter when. In terms of all the COVID thing, I don't know how that all ends, maybe we end up fortunate where ends up being flu like, and we just learned to live with it. So I don't want to speculate on that. In terms of how we run the business, I think, I think we run in a couple of different dimensions. We try to be again, we lead with obsessing around solutions and services for our customers and we believe that with the commitments we make to customers, those commitments are then rolled into a financial forecast and then we and then we handicap or haircut that a little bit with good management judgment. So if we if we continue to do what we say and deliver for customers, the financial results tend to be an output of that. And, and boy, we obsess about that on a weekly, daily, monthly basis in terms of maybe a little bit bigger picture on CapEx and whatnot, we're focused on we're focused on, there's an endless amount of things. When you think about how big the market is, in terms of building stuff, the market is just substantial. And so there's more stuff out there than we can possibly do, which I think is a good thing. And so, based on how the platform and the company looks today, and how well diversified we are today, and by the way, that wasn't the case, 10 years ago, we're really…

Great. Thank you very much.

Yes, thank you.

Thank you. Our next question comes from the line of Paul Chung with JPMorgan. Please proceed with your questions.

Hi, thanks for taking my questions. And, great quarter looks like a record in, in revenue and operating profit, despite challenging environments, so great job there. Just to follow up on, customer premises on facilities, location. So what occurs when a customer decides to move a line from China or some other location in Asia, or even moved to North America, you can talk about kind of the incremental costs of that move, and how that gets allocated, you kind of pass on most of that cost to the customer, is this kind of a margin cash neutral move for, for the company? And are those discussions kind of accelerating? Or a lot of customers kind of in wait and see mode.

Thanks for the question, Paul. I think, I'd start with there's nobody better in the world. And I don't make bold statements like this. There's nobody, there's nobody better in terms of giving optionality to customers in terms of what geography their product gets built. And I say that largely because if we're not the largest, when it we’re one of the largest manufacturing services company in the world today with a broad based footprint, and the art around your question is really around the hard assets, our global footprint, the broad based nature of that footprint, and then the fact that we wrap really sophisticated IT systems around that footprint, in a very, very consistent way, which also is very unique, especially when combined with our ability and our scale. So and it's an on-going iterative process. So we talked earlier in Q&A around the fact that there's been catalysts over the last couple of years. Going back to when Trump was in the office in the U.S. and the geopolitical issues and the macro issues and the supply chain issues. So there's been some it's always been in our business. I think it's been maybe more prevalent the last 24 months, 36 months, something like that. But how it gets done is, is we're continually rerunning and re running and re running the data analytics for customers working side by side with them on an absolute scale in a perfect world, as we look at their product roadmaps and their overall endpoint consumptions, here's what an optimal supply chain looks like and there tends to be a lot of variables that are all different for each product that go into those models. And then we end up having great practical conversations with the customers. In terms of who bears the cost on that it depends. If assets are fungible, reusable, a lot of times that we’ll bear the cost and that. If assets tend to be unique, difficult to move, have to be recreated, redundancies needed, things like that, we end up having appropriate commercial discussions with our customers. But again, if one were to if one were to take a proxy or a wide range conversation with our customers in terms of this part of our business, I think it's something we do really, really well, I think it's very good value. And, and it also, overall, when companies do get concerned around backup plans or redundancy plans, knowing that this is an area that we do especially well, I think gives a lot of our customers good comfort.

Thanks. And then last question, can you kind of provide an update on the pricing environment? You mentioned very strong demand ahead of supply. So are you kind of raising prices in certain areas? And then how's the competitive pricing environment kind of evolving, particularly with new customers? Are you seeing any acceleration of new customers as they want to kind of outsource the complexities of supply chain logistics, etcetera? Thank you.

I’d start first with I think during our investor day in September, I made a comment. I think I made the comment. Our organic pipeline today is substantial. So in, in answering your question in terms of are we adding new customers, we're always adding new customers. Again, I think that's a reflection of I think that's a reflection of the size of the market. But I think, again, if our pipeline, if our pipeline is call it $5 billion, $6 billion, $7 billion, organically we plan to try to confirm and book a decent portion of that for the next for FY 23, 24. In terms of, are we raising prices? I don't know that I look at it that way. The way I look at it is I think our margin expansion is not coming from anything to do with raising prices it has to do with the total holistic makeup of the company. What we are doing is, we're not in a high margin business, as all of you know. And we can't bear the cost when the macro, inflationary, transitory, permanent, whatever it may be. When hard costs start to move against us, I think we do a very good job of sharing that with our customers. And so I look at it more on based on the data, based on the macro, based on the facts we do a good job of sharing, increasing costs. I don't look at it so much as being out there raising prices.

Thank you.

You're welcome.

Thank you. There are no further questions at this time. With that we do thank you and appreciate your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Enjoy the rest of your day.