Flex (FLEX) Barclays 23rd Annual Global Technology Conference summary

Business performance and growth drivers

• Data center business grew 50% last year and is expected to grow 35%+ this year, with power outpacing cloud growth.

• Cloud and power segments are high-margin, with cloud above company average and products in the mid-teens.

• Customer base is highly diversified across hyperscalers, co-location providers, and silicon vendors, with no single customer over 10%.

• Growth is driven by increasing compute densities, requiring advanced power and cooling solutions.

• Modularity and speed in deployment are key, with innovations like power pods and 800-volt rack architectures.

Technology and innovation

• Embedded power business is advancing to support one-megawatt racks and 800-volt architectures, with partnerships such as NVIDIA.

• Cooling innovation includes proprietary cold plate technology targeting chip hotspots.

• Full rack integration is a growing trend, with vertical integration enabling faster scaling and higher margins.

• Participation in custom ASICs and accelerator hardware is increasing, leveraging manufacturing and power/cooling expertise.

• AI infrastructure platform launched to address modular, scalable data center needs, with positive customer engagement.

Financial outlook and margin evolution

• Operating margins have doubled from 3% post-COVID to around 6%, reaching targets a year early.

• Data center growth is a major margin driver, with product and service mix shifting toward higher-margin offerings.

• Automation and productivity improvements continue across all business units.

• 6% margin is not seen as a ceiling, with further expansion expected as high-margin segments grow.