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Sanmina Corporation (NASDAQ:SANM)
Q4 2021 Earnings Call
Nov 8, 2021, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day and thank you for standing by and welcome to Sanmina Corporation's Fourth Quarter and Fiscal Year End 2021 Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, speaker Paige Melching, Senior Vice President of Investor Communications. Thank you. Please go ahead, madam.

Paige Melching -- Senior Vice President, Investor Communications

Thank you, Nora. Good afternoon, ladies and gentlemen and welcome to Sanmina's fourth quarter and full year fiscal 2021 earnings call. A copy of our press release and slides for today's discussion are available on our website at sanmina.com, in the Investor Relations section.

Joining me on today's call is Jure Sola, Chairman and Chief Executive Officer.

Jure Sola -- Chairman and Chief Executive Officer

Good afternoon.

Paige Melching -- Senior Vice President, Investor Communications

And Kurt Adzema, Executive Vice President and Chief Financial Officer.

Kurt Adzema -- Chief Financial Officer

Good afternoon.

Paige Melching -- Senior Vice President, Investor Communications

Before we begin our prepared remarks, let me remind everyone that today's call is being webcasted and recorded and will be available on our website. You can follow along with our prepared remarks in the slides provided on our website.

Please turn to slide 3 of our presentation or the press release Safe Harbor statement. During this conference call, we may make projections or other forward-looking statements regarding the future events or the future financial performance of the company. We caution you that such statements are just projections. The company's actual results could differ materially from those projections in these statements as a result of a number of factors set forth in the company's annual and quarterly reports filed with the Securities and Exchange Commission. The company is under no obligation to and expressly disclaims any such obligation to update or alter any of the forward-looking statements made in this earnings release, the earnings presentation, the conference call or the Investor Relations section of our website, whether as a result of new information, future events or otherwise, unless otherwise required by law.

Included in our press release and slides issued today, we have provided you with statements of operations for the quarter and fiscal year ending October 2nd, 2021 on a GAAP basis, as well as certain non-GAAP financial information. A reconciliation between the GAAP and non-GAAP financial information is also provided in the press release and slides posted on our website. In general, our non-GAAP information excludes restructuring costs, acquisition and integration costs, non-cash stock-based compensation expense, amortization expense and other unusual or infrequent items. Any comments we make on this call, as it relates to the income statement measures, will be directed at our non-GAAP financial results. Accordingly, unless otherwise stated in this conference call, when we refer to gross profit, gross margin, operating income, operating margin, taxes, net income and earnings per share, we are referring to our non-GAAP information.

I would now like to turn the call over to Jure Sola.

Jure Sola -- Chairman and Chief Executive Officer

Thanks, Paige. Good afternoon, ladies and gentlemen, and welcome. Thank you all for being here with us today. For agenda, we have Kurt, our CFO, to review the details of our financial results for you. I will follow up with additional comments about Sanmina results and future goals. Then Kurt and I -- open for question and answers.

And now, I'd like to turn this call over to Kurt. Kurt?

Kurt Adzema -- Chief Financial Officer

Thanks Jure. Please turn to slide 5. In the fourth quarter, our team did an excellent job of managing through the impact of supply chain constraints and delivering solid margins and profitability, as well as cash generation.

Q4 revenue of $1.64 billion, was slightly below our outlook of $1.65 billion to $1.75 billion. Demand was strong, however, the impact of supply chain constraints continued. We expected an impact of about 150 million in Q4, consistent with Q3. However, we believe revenue was ultimately impacted by more than $200 million in Q4.

Non-GAAP gross margin was 8.2%. The decline in gross margin relative to Q3 was primarily due to slightly lower revenues and incremental costs due to supply chain constraints. Non-GAAP operating margin was 4.8%, in line with our outlook, but slightly lower than the prior quarter, primarily due to lower revenue and lower gross margins, partially offset by lower operating expenses. Non-GAAP fully diluted earnings per share of $0.95 was in the range of our outlook of $0.93 to $1.03. Finally, Q4 and GAAP EPS was $0.84.

Now, please turn to slide 6; this slide shows the quarterly trends of our financial results. You can see our team has done an excellent job of managing through this dynamic period. Non-GAAP gross margins have exceeded 8% for the last six consecutive quarters. Non-GAAP operating margins have been 5% or greater for four of the last five quarters. We expect to return to non-GAAP operating margin at 5% or higher in the future, as revenue grows and the supply chain constraints ease. We've learned a lot over the last 12 months and the hard work and the focus of the team is demonstrated in our results. Furthermore, we believe revenue will increase and our margins will continue to improve, as material supply chain constraints resolve.

Now please turn to slide 7; Q4 IMS revenue was $1.32 billion. The slight decline in revenue from Q3 was primarily due to the increased impact of supply chain constraints. Non-GAAP gross margin for IMS declined to 6.8% from 7.6%. This was primarily due to slightly lower revenues and incremental costs, due to supply chain constraints. As a reminder, Q3 gross margin reflected a onetime release of a $2.2 million customer specific inventory reserve, which favorably impacted Q3 gross margins and did not -- which did not occur again in Q4.

Components, Products and Services revenue increased to $357 million. Non-GAAP gross margin for CPS increased relative to Q3 to 12.8%. As a reminder, Q3 gross margin was unfavorably impacted by costs associated with the ramping of several new defense related programs, which had less of an impact in Q4. Again, overall non-GAAP gross margin was 8.2%. In summary, we believe revenue will increase and our margins will improve, in both our IMS and CPS segments, as supply chain constraints resolve.

Now, please turn to slide 8, so we can talk about fiscal 2021 financial performance. We had a strong fiscal 2021, despite the challenges associated with the supply chain constraints. Fiscal 2021 revenue of $6.8 billion, was relatively flat compared to fiscal 2020, after adjusting for the fact that fiscal 2020 had 53 weeks, compared to 52 weeks in fiscal 2021. Non GAAP gross margins improved 70 basis points to 8.4%, primarily due to operational efficiencies and a favorable product mix. Non-GAAP operating margin improved from 4.2% to 4.9%, primarily due to improved gross margins and lower operating expenses.

Non-GAAP earnings per share were up 30% year-over-year from $3.05 to $3.97, primarily due to better margins. I'm proud of the exceptional performance that the team delivered during this year, in what was a challenging environment and despite revenue being relatively flat due to COVID and supply chain constraints.

Now please turn to slide 9; let's talk about the balance sheet. Cash and cash equivalents increased to $650 million. Between cash and availability under our revolver and other debt facilities, we have $1.4 billion of liquidity. At the end of Q4, there were no borrowings outstanding under the revolver. We believe we have a strong cash position to manage through these current market dynamics.

Inventory increased due to an increase in the level of unconstrained parts, resulting from a bigger than expected impact of supply chain constraints during the quarter. The inventory increase was driven based on conversations with our customers. We expect this inventory to be consumed and the balance of this inventory to normalize, as supply chain constraints are resolved. Despite the increase in inventory, we were able to manage working capital, such that cash cycle days remain steady at approximately 58 days. Non-GAAP pre-tax ROIC was 23.8%.

Now, please turn to slide 10; our cash flow generation remains consistently strong. We generated $92 million of cash from operations and $65 million of free cash flow in Q4 and $338 million of cash from operations and $274 million of free cash flow during fiscal 2021. We continue to remain very focused on cash generation, and can expect to continue to generate cash going forward.

Now please turn to slide 11; we continue to take a very disciplined approach to cash utilization. Our primary use of cash relates to the internal investments to drive organic revenue growth and improve the efficiency of our operations. Net capital expenditures for Q4 were $29.5 million and depreciation was approximately $27 million. Fiscal 2021 net capital expenditures were $72 million, as we continue to leverage our existing manufacturing capacity. FY '21 depreciation was approximately $109 million.

Please turn to slide 12, now; during Q4, we repurchased 827,000 shares for a total cost of approximately $32 million. For the full fiscal 2021, we repurchased approximately 1.5 million shares, for a total of $54 million. At the end of the quarter, we had remaining repurchase authorization of approximately $81 million. We announced today, that the Board of Directors approved an increase of the current authorization by an additional $200 million. This additional authorization will allow management the flexibility to continue to opportunistically repurchase shares. As I previously mentioned, our primary use of cash relates to internal investment to drive organic revenue growth and improve the efficiency of our operations.

Please turn to slide 13; let's talk about the outlook for Q1. Overall, customer demand is very strong, but there continue to be supply chain challenges. We expect Q1 revenue be slightly off and be in the range of $1.6 billion to $1.7 billion. Non-GAAP gross margin to be in the range of 8% to 8.6%. Non-GAAP operating expenses in the range of $56 million to $58 million, and non-GAAP operating margin in the range of 4.6% to 5.2%.

Non-GAAP other expenses are expected to be approximately $4.4 million to $5 million. Non-GAAP tax rate is expected to be approximately 17% and non-GAAP, fully diluted share count is expected to be approximately $66.5 million. When you consider all this guidance, our outlook for non-GAAP diluted earnings per share, is in the range of $0.90 to $1. We expect capital expenditures to be around $30 million, driven by growth of new programs and the depreciation to be about $28 million.

In summary, demand remains strong across our customer base. We are confident that our lean manufacturing business model, positions us well, and we expect the company to deliver strong operating leverage and cash flow generation over time, as the supply chain constraints are resolved.

Now I'll turn the call back over to Jure.

Jure Sola -- Chairman and Chief Executive Officer

Thanks Kurt. Ladies and gentlemen, let me add few more comments about our financial highlights for fiscal year 2021 and the fourth quarter. I'll also review with you the market outlook for a first quarter and fiscal year 2022.

Please turn to slide 15; first, I would like to take this opportunity and say thank you to our employees for managing daily challenges around the material shortages and navigating around the COVID. Our management team has done an outstanding job in this very difficult supply chain environment. And with all these constraints, we delivered strong financial results for fiscal year 2021, by focusing on what we control. The key for us was driving margins, deliver the growth in earnings per share and deliver a strong cash flow. So as you look at our margins, especially operating margin, they went from 4.2% to 4.9%, up 70 basis points. Earnings per share increased 30% and delivered a EPS of $3.97. Strong cash flow of $274 million. So overall, a good year, unfortunately, material shortages affected our revenue growth. But I can tell you today, that Sanmina is well positioned for the future.

Please turn to slide 16; let's look at the revenue for the fourth quarter by end markets. With a strong demand for the fourth quarter, as I mentioned, material shortages impacted the fourth quarter revenue, by approximately $200 million plus. Communication networks and cloud infrastructure was 44% of our revenue, that was slightly up quarter-over-quarter, and industrial, medical, defense and automotive was slightly down quarter-over-quarter. Our top 10 customers for the fourth quarter were 48.4% of our revenue. Bookings for the fourth quarter continue to be strong. Book-to-bill for the fourth quarter was 1.14 to 1.

Please turn to slide 17; let me review for you the first quarter of fiscal year '22 and market outlook. We are continuing to see strong demand across all market segments. So for communication networks and cloud infrastructure, for the revenue for the first quarter, we are forecasting the revenue to be slightly up, driven by strong demand from optical networking and 5G products. For industrial, medical, defense and automotive; for industrial, we see a strong demand, driven by security and safety products, semiconductor products, and alternative and renewable energy products. For medical, overall, we see stable demand across all product lines. For defense business, we have strong demand cross all product lines. For automotive, we also see strong demand, driven by electrical vehicles business for us. So overall, revenue growth for the first quarter will be impacted by material shortages.

As you -- please turn to slide 18; as you heard from Kurt, the outlook for first quarter is $1.6 billion to $1.7 billion. We have upside potential here, but today, it's limited by component constraints. But if we look at the fiscal year 2022, we expect to see nice growth, but it's all about the supply chain. We are forecasting that approximately 60% of revenue will be from industrial, medical, defense and automotive markets, and 40% from communication networks and cloud infrastructure markets. At this time, we are seeing strong business demand across all of our customers sectors, and we have strong pipeline of new opportunities. I'm personally optimistic that all of these opportunities will translate into margin expansion and EPS growth. For cash, we will continue to generate healthy cash, cash flow from operations.

Please turn to slide 19; let me talk to you about management priorities for this fiscal year 2022 and beyond. Number one for us is to continue to provide industry-leading end-to-end technology solutions for our customers. Build on our strong customer partnerships and continue to expand with industry leaders in mission critical, high complexity, heavy regulated markets. We are working closely with our customers and suppliers, to resolve supply chain shortages, and logistic challenges. We expect supply chain constraints to continue through fiscal year 2022.

We will continue to work around these constraints to deliver consistent and profitable growth. Our end goal is to maximize shareholder value. We are focused on investing in talent and technology, as we continue to deliver competitive advantage to our customers.

Please turn to slide 20; in summary, fiscal year 2021 was a good year. We delivered nice financial results, non-GAAP margin expansion, non-GAAP EPS growth of 30% plus and strong cash flow from operations. Our future is exciting. Sanmina is well positioned to deliver profitable growth in fiscal year 2022. We have industry leading diverse portfolio of leading technology and solutions. We're operating with lot of agility and successfully navigating in these market dynamics. And we have strong balance sheet, that provides us financial flexibility to drive future profitable growth for fiscal year 2022 and beyond.

So, ladies and gentlemen, now I would like to say thank you to you, for your time and support. Operator, we're now ready to open the lines for question and answers. Thank you again.

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from the line of Ruplu Bhattacharya with Bank of America. Your line is open.

Ruplu Bhattacharya -- Bank of America -- Analyst

Hi. Thank you for taking my questions. Jure, I want to ask you about the fiscal '22 outlook. I think when you were talking about revenue growth, I thought you said like strong revenue growth. I mean, consensus right now is modelling 6% to 7% year-on-year growth, based on the fiscal 2021 reported revenue. I mean, given that most people think that component shortages will last well into 2022, do you think that that's a reasonable estimate, or how would you phrase, just if you can qualify, what you mean by revenue growth in '22?

Jure Sola -- Chairman and Chief Executive Officer

Yeah, excellent question, Ruplu. Let me first of all go back to what I just said in my prepared statements, I said that we expect to see nice growth based on our strong backlog today and opportunities that we have in front of us. I did qualify it, I'd say it's all around -- it's all dependent on what goes on in materials. As you know, we've been in this material shortages now -- for us anyway, third quarter in a row. We don't have a, how do they say? Crystal ball to tell you exactly when it's going to end. But based on all the forecast stocking to our suppliers and customers, we think this is going to last definitely, maybe even for the rest of the calendar year '22, I'd say throughout [Phonetic] fiscal year '22.

I think we're in a better shape today than we were three months ago -- I'm sorry, three quarters ago, understanding what we're working with, so we're learning to work with it. We are expecting to see some improvements during the year. If we get the improvements, we have plenty of backlog. Our customers today will take lot more than what we can ship. So kind of that's what we are operating with. I expect still to see some growth next year. It's very hard for me to say in the short term, and short term to me, next 12 months, how much. But internally, we are driving, how do we get to that $2 billion a quarter, and it's all about materials for us, Ruplu.

Ruplu Bhattacharya -- Bank of America -- Analyst

Okay, OK. That's helpful. If I can ask, inventory looks like, it went up 16% sequentially, and I guess, you are facing material shortages. But the guide for the first quarter is flat sequentially. So, I mean, I guess the question is, how quickly do you think that that inventory gets worked off? And related to that, how should we think about working capital and free cash flow over the next 12 months?

Kurt Adzema -- Chief Financial Officer

Sure Ruplu. This is Kurt. So first of all, as I mentioned in my prepared remarks, I mean, part of the reason the inventory went up last quarter, is because we brought in a lot of unconstrained parts, assuming we were going to get a certain level of delivery of constrained parts, and it ended up being more challenging than we expected.

I think that being said, I expect inventory levels to remain high over the next couple quarters, and over time as the supply chain constraints ease, that obviously, will become more efficient and get back to a more normalized level. But I think in the near-term, I think the amount of inventory and inventory turns are going to be higher than normal. And that's just part of the business.

That being said, in terms of your question about cash generation, I still feel very confident that we'll be able to generate cash during this coming quarter and the fiscal 2022. So we're doing a lot of things, to make sure we operate the working capital efficiency, efficiently, working with our customers. So we'll continue to generate cash, just like we have the last couple of years. I think that's one of the things that separates, is our consistent cash generation, whether it's COVID or supply chain constraints or other factors.

Ruplu Bhattacharya -- Bank of America -- Analyst

Okay, OK. That's helpful. Kurt, if I can also ask you about the margin dynamics in IMS and CPS, I mean, for CPS, it didn't look like in the third quarter, that revenue was up that much sequentially. But you had 170 bps of margin improvement in IMS. On the other hand, also didn't seem to have that much of revenue decline, but it declined 80 bps. So if you can just kind of go into a little bit more detail on each segment, and what impacted the margins there?

Kurt Adzema -- Chief Financial Officer

Sure. So let's start with IMS first. As I mentioned in my prepared comments, you have to first of all, remember that Q3 gross margin for IMS was favorably impacted by a $2.2 million reversal of a reserve. And so that's why, Q3 was higher than the prior quarters. So I think that's a big part of it. I think the second part of it is, as we've seen materials come in, materials are not coming in linearly throughout the quarter. And so, what you're seeing is a lot of variability in arrival, which means at various points in time, we're just not operating as efficiently as we would like to, we have to incur -- we get a bunch of parts, we have to incur over time, and then we've got people not fully occupied, when the parts aren't there. So there's a bit of inefficiency associated with that on the IMS side. So I'd say those are the two biggest factors on IMS.

As we look at CPS again, last quarter, Q3, we talked about the fact that the reason the CPS margin was lower, is that we incurred a bunch of costs in some of our new defense programs that we were ramping. And so that is why Q3 margin went down to 11 and change percent last quarter. And as I mentioned, in my prepared comments, in Q4, we had less of those costs, plus, CPS revenue went up a little bit and so the combination of those two factors got us back kind of in that 12% to 13% range, which is more in line with what we had been reforming in Q4 of last year, and Q1 of last year. So hopefully, that's helpful.

Ruplu Bhattacharya -- Bank of America -- Analyst

Yeah. Thanks for the details on that. If I can just -- sorry, go ahead.

Jure Sola -- Chairman and Chief Executive Officer

Ruplu, let me add one more thing to that. In this environment, as Kurt said, when you have a lot of material shortages, our operational efficiencies are not very good. If we can -- once we improve that, we definitely know we can deliver the better bottom line. So combination of growth and steady output on daily basis will drive our margins substantially. So we did lot of work this year and that's very important to understand on, what I call, internal processes to improve the costs long-term, and I think that's going to start showing up, as we get a better, how do I say, handle on material shortages, and we start growing a little bit.

Ruplu Bhattacharya -- Bank of America -- Analyst

Great. Thanks for all the details. Can I just -- if I can just squeeze one more in for Jure. You guys are strong in 5G and on the communications side, can you just let us -- give some more details on what you saw on the networking, optical and wireless side and how do you see that progressing into the next quarter?

Jure Sola -- Chairman and Chief Executive Officer

Yeah. That business, as I mentioned, Ruplu in my prepared statement. We have very strong demand there. Our customers today in that segment will take everything I can ship. So the optical networks are really -- demand is very strong. 5G has continued to do well and expanding for us, that's doing well. And then networking product, IP routing, etc, also very, very strong. Again, the demand is there. I think it is just getting this material shortages resolved.

Ruplu Bhattacharya -- Bank of America -- Analyst

Okay, thank you. Thanks for all the details. Appreciate it.

Operator

Your next question comes from the line of Jim Suva with Citigroup. Your line is open.

Jure Sola -- Chairman and Chief Executive Officer

Hello Jim.

Jim Suva -- Citigroup -- Analyst

Hey, good afternoon. And the supply constraints are pretty well known, and it's unfortunate, and everybody's dealing with it. My question is, does it make sense longer term to like, adjust with your clients where you're manufacturing and the relationship of how much inventory, whether it'd be components or work in process or finished goods to hold structurally? I'm just wondering if those are discussions already in place, or were happening [Phonetic]? Because it seems like whether it be trade wars, whether it be power outages, or water shortages, or now COVID, or shipping containers and such, it seems like it's one thing after the other. I'm just wondering, if there's some structural things that maybe you were talking with your customers about for risk mitigation going forward longer term?

Jure Sola -- Chairman and Chief Executive Officer

Jim, that's an excellent question, and not because you asked that question, that's something that we have really been working with our customers, is really talking about the whole global supply chain. As you know, you've been around long as I've been. 40 years ago, everything went east, east, east. Now, customers are definitely concerned about the safety to fly, about logistic costs, etc. So we are really putting a lot of programs for one of our key customers today, to improve that and minimize the impact. Unfortunately, this material shortages, I have never seen anything like this, Jim, this is a very unique time. I wish this was eschewed [Phonetic], it will be at least easier to find a solution for it. But we are dealing with the real world, and which is lot of shortages from raw material to finished product. But also as you know, we have a lot of geopolitical issues around the world. So all those things today, our customer base is very concerned, which longer-term is really -- is going to benefit our industry, to be able to play a bigger role, and have a better solution and closer relationship with our key customer.

So we are excited of what's in front us. It's just frustrating in the short-term, because we are taking a lot of costs out, and I think if we had a better supply chain on daily basis, I think we delivered a lot better financial results. So still a lot of work, and -- but that's exciting part of our job.

Kurt Adzema -- Chief Financial Officer

Yeah, I think I'd add to that, Jim, I think we -- if you look at our manufacturing footprint, we have a very diversified manufacturing footprint. We're not focused in any one particular area and I think that's something that's quite appealing to our customers and our partners, as you undergo these challenges. I think in terms of long-term, are people going to hold more inventory of key components? That certainly seems to be the case. But given the fact that we're not going to -- everybody predicts that it's going to take another year plus to kind of get through this. That's something that won't happen until 2023. But certainly think people are expecting to hold more, at least critical components in the future.

Jim Suva -- Citigroup -- Analyst

And then as my follow-up question, can you give us a little bit of details in your communications network and cloud infrastructure, a little bit about the trend you're seeing in say, networking versus routing versus optical? It seems like everyone's shifting to go from 40-gig to 100-gig and eventually 400-gig, is that going well, or is there a pause there for supplies and kind of what's going on how we should think about those sub-parts of that segment?

Jure Sola -- Chairman and Chief Executive Officer

Jim, from our point of view, we will position this industry, especially right now, as a lot of our customers going to more to that 400-gig and so on. With every one of our key suppliers, I mean -- sorry, key customers, who have [Phonetic] been involved in last year or so, bringing the new product to the market. So for us, I think, you're going to see better demand into higher end systems in next -- what we deliver to them today, but I think you're going to see more of that in the next 12 months.

Definitely, shortage for materials is there too. We are chasing it every day. We're dealing it -- I think with Sanmina, I mean, because we're dealing with a lot of custom products, and lot of unique products and a lot of our components are, in some cases, a single source is affecting us a little bit more. But we're working on it together with our customers and I expect to see light at the end of the tunnel, and hopefully, a little bit easier couple of quarters from now.

Jim Suva -- Citigroup -- Analyst

Thank you so much for the details and clarifications.

Jure Sola -- Chairman and Chief Executive Officer

Thanks, Jim. Christian, we got the best for the last. Are you ready?

Operator

Your next question comes from the line of Christian Schwab with Craig-Hallum. Your line is open.

Christian Schwab -- Craig-Hallum -- Analyst

Thank you. Thank you, Jure. So just -- all my questions have kind of been answered, just a quick clarity, what constrained components surprised you this quarter, or materials that surprised you this quarter, when you were kind of thinking, it was going to be a typical $150 million and ended up being greater than $200 million. What became less available, or what became tighter? Can you give us any clarity on that?

Jure Sola -- Chairman and Chief Executive Officer

Well definitely, semiconductors has continued to be a problem. I think the biggest issue is decommit [Phonetic], when you think you're going to get the products today, and then they come you know, two weeks later, three weeks later. So semiconductor continues to be a problem. And also -- and it depends on the customer. We have a lot of different customers, different requirements, even for defense, where we can put a lot of pressure on suppliers to make sure they put priority on these top military programs. And we have a tough time getting assortment components there also. So semiconductors to me, it's number one, but all the way down to raw materials, both in aluminum to fiber optics material, etc. It's just across all the sectors right now.

Kurt Adzema -- Chief Financial Officer

Yeah Jim, I -- Christian I'm sorry, Christian. I would also add. I think in prior quarters, there were some there was some inventory out in the Disney Channel, and that we were able to access that and help mitigate some of the problems. I think once that stuff got eaten through, then we kind of had to wait to the normalized channel and we saw a lot of stuff get delivered in the back part of the quarter. So I think, it was a combination of those two things. But to Jure's point semiconductor is clearly the leader, in terms of impacting us.

Christian Schwab -- Craig-Hallum -- Analyst

And then as guys look to Q1, you guys kind of gave guidance for the next fiscal year, but a lot of the chip constraints by one of the largest bottleneck producers of chips, started in February of last year, a little bit earlier in January, for bigger customers pushing things to 52 weeks. So a lot of those customers should see increased supply going into Q1, I guess, if they predicted their business right, a year ago. Are you not seeing any reflection of that?

Jure Sola -- Chairman and Chief Executive Officer

Well definitely, our customers are giving us lot more visibility, I will say in last nine months than ever before. So we've been planning that out, and in some cases longer than a year. I have one customer is looking stuff out for two years. So definitely, you know, the customers that have a better planning, especially on these custom products that takes a long time to manufacture, are getting some relief.

Christian Schwab -- Craig-Hallum -- Analyst

So then my last question is, we don't you know, currently then believe there's any lost demand. So I mean, we have over the last few quarters, hundreds-and-hundreds of millions of dollars of incremental lost revenue. So if we get any help in the supply chain, or loosening up at the end of '22 or going into '23, that would suggest that there should be a material increase in top line growth at some point, if some of these component shortages, in particular, semiconductors become more available, is that fair?

Jure Sola -- Chairman and Chief Executive Officer

Yeah, that's fair. Right now, Christian in short-term, we don't see any orders going away. Yeah, we definitely believe that, as we resolve these shortages, our revenue will go up.

Christian Schwab -- Craig-Hallum -- Analyst

Yeah. Great, spectacular. No other questions. Thanks, guys.

Jure Sola -- Chairman and Chief Executive Officer

Thanks, Christian. Ladies and gentlemen, that's all we have for you today. Hopefully, we answered most of your questions. If not, give us a call.

With all that, thank you very much. Bye-bye.

Operator

[Operator Closing Remarks]

Duration: 41 minutes

Call participants:

Paige Melching -- Senior Vice President, Investor Communications

Jure Sola -- Chairman and Chief Executive Officer

Kurt Adzema -- Chief Financial Officer

Ruplu Bhattacharya -- Bank of America -- Analyst

Jim Suva -- Citigroup -- Analyst

Christian Schwab -- Craig-Hallum -- Analyst

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