What Jabil (JBL) Said on Its Q4 Earnings Call

Key Points

• Jabil exceeded Q4 expectations: Revenue rose 29% year over year to approximately $10.6 billion, while core diluted EPS increased 34% to $4.40. Full-year adjusted free cash flow surpassed $1.5 billion.
• AI infrastructure is driving the outlook: Intelligent Infrastructure revenue grew 56% in Q4, and Jabil expects the segment to grow 43% in fiscal 2027, with AI-related revenue projected to rise 54% to approximately $22.1 billion.
• Fiscal 2027 guidance calls for strong growth and shareholder returns: Jabil forecasts roughly $44.5 billion in revenue, $17.55 in core EPS and $1.6 billion in adjusted free cash flow, while planning about 4 million square feet of additional capacity and continuing stock repurchases.

Jabil NYSE: JBL reported fourth-quarter revenue and core earnings above the high end of its guidance and outlined a fiscal 2027 outlook calling for revenue growth of about 24%, led by accelerating artificial intelligence infrastructure demand and contributions from automotive, healthcare, energy infrastructure and automation markets.

Chief Financial Officer Greg Hebard said fourth-quarter revenue rose 29% year over year to approximately $10.6 billion, more than $1 billion above the midpoint of the company’s June outlook. Core diluted earnings per share increased 34% to $4.40, while GAAP diluted earnings per share was $3.76. GAAP operating income totaled $602 million, or 5.7% of revenue, and core operating income was $675 million, representing a 6.4% core operating margin.

The quarter’s revenue upside was driven by Intelligent Infrastructure and Regulated Industries. For the full fiscal year, CEO Mike Dastoor said Jabil increased revenue 21%, expanded core operating margin by 40 basis points, increased core EPS 34%, and grew free cash flow by more than $200 million.

AI Infrastructure Drives Intelligent Infrastructure Growth

Intelligent Infrastructure revenue reached approximately $5.8 billion in the fourth quarter, rising 56% year over year and coming in roughly $900 million above Jabil’s prior outlook. Hebard attributed the result to accelerating AI-related demand, capacity coming online sooner than expected, and customer ramps that progressed faster than anticipated.

The segment benefited from the ramp of Jabil’s second hyperscale customer in Mexico, continued networking-program strength in India, and stronger-than-expected results in its power business. Core operating margin in Intelligent Infrastructure rose 60 basis points year over year to 6.5%, aided by improved business mix and the contribution from Hanley Energy, which Jabil described as margin-accretive.

Matt Crowley, executive vice president of Intelligent Infrastructure, said AI-related revenue grew 60% in fiscal 2026. The company ended the year with four customers producing more than $1 billion each in annual AI-related revenue, compared with one such customer two years earlier. Jabil also added a third hyperscale customer during the fiscal third quarter.

For fiscal 2027, Jabil expects Intelligent Infrastructure revenue of approximately $25.6 billion, up 43%. The company forecasts AI-related revenue of about $22.1 billion, up 54%, with five customers expected to generate more than $1 billion of AI-related revenue. Cloud and data center infrastructure revenue is projected to rise 52% to about $17.5 billion, while capital equipment revenue is expected to increase 40% to roughly $4.2 billion.

Crowley said the company’s AI exposure is primarily tied to deployed AI models and inference workloads rather than frontier-model training. He said those workloads require storage, networking, power and cooling infrastructure in addition to accelerators.

Regulated Industries Outlook Broadens

Regulated Industries generated $3.4 billion in fourth-quarter revenue, up 9% from a year earlier. Automotive and Transportation was the largest contributor to the segment’s upside, while Renewable and Energy Infrastructure also exceeded expectations. Healthcare and Packaging results were below expectations because of delays in automation equipment and a timing shift in a customer program.

Steve Borges, executive vice president of Regulated Industries, said the automotive business has shifted toward software-defined vehicles, advanced driver-assistance systems, vehicle compute and powertrain-agnostic technologies. Jabil reduced the share of electrification and powertrain programs in its automotive portfolio from approximately 80% in fiscal 2023 to about 40% in fiscal 2026, he said.

Jabil expects fiscal 2027 Regulated Industries revenue of approximately $13.6 billion, up about 7%. Its outlook includes:

• Automotive and Transportation revenue of about $5 billion, up approximately 9%.
• Healthcare and Packaging revenue of about $5.6 billion, up approximately 6%.
• Renewable and Energy Infrastructure revenue of about $3 billion, up approximately 7%.

The company expects defense and aerospace to become a more meaningful contributor as programs move into production. In healthcare, Borges said Jabil expects to manufacture more than 700 million injectors and delivery pens in fiscal 2027, spanning insulin delivery, biologics and weight-loss therapies. He said the company’s Croatia facility remains on track to ramp during fiscal 2027 and move into full production during fiscal 2028.

Devices and Robotics Segment Renamed

Jabil renamed its Connected Living and Digital Commerce segment Intelligent Devices & Robotics, or IDR, to reflect its increased focus on automation, robotics and physical AI applications.

Rafael Renno, senior vice president of Intelligent Devices & Robotics, said the company is prioritizing higher-margin and more complex programs while reducing emphasis on consumer-based products that do not meet return requirements. Its digital commerce and robotics portfolio includes warehouse systems, mobile robots, retail technologies and autonomous last-mile delivery solutions.

For fiscal 2027, Jabil expects Digital Commerce and Robotics revenue of approximately $3 billion, up 11%. Connected Living revenue is expected to decline about 15% to approximately $2.3 billion. Overall IDR segment revenue is projected at approximately $5.3 billion, down about 2%.

Dastoor said Jabil’s fiscal 2027 forecast for physical AI remains “modest and conservative,” though he expects the opportunity to grow substantially in the medium and longer term.

Cash Flow, Capacity and Fiscal 2027 Outlook

Jabil generated $733 million of cash from operations in the fourth quarter and approximately $2 billion for the full year. Adjusted free cash flow was $541 million in the quarter and more than $1.5 billion for the year, exceeding its initial fiscal 2026 outlook of more than $1.3 billion.

Net capital expenditures totaled $470 million for the full year, or 1.3% of revenue. The company expects net capital expenditures to remain in a range of 1.5% to 2% of revenue. It ended fiscal 2026 with approximately $1.7 billion in cash, $6.1 billion in total available liquidity and debt-to-core EBITDA of 1.3 times.

Jabil repurchased approximately $1.1 billion in stock during fiscal 2026, including $169 million during the fourth quarter. About $1.4 billion remained under its current $1.5 billion repurchase authorization at year-end. The company said its long-term framework is to return 80% or more of adjusted free cash flow to shareholders over time.

For the fiscal first quarter, Jabil expects revenue of $10.6 billion to $11.4 billion and core diluted EPS of $3.80 to $4.20. For the full fiscal year, the company forecast revenue of approximately $44.5 billion, core operating margin of 6.1%, core diluted EPS of $17.55 and adjusted free cash flow of approximately $1.6 billion.

Dastoor said Jabil plans to add about 4 million square feet of capacity to support expected growth. He said revenue is expected to be weighted approximately 45% in the first half and 55% in the second half, while margins are expected to be more heavily weighted toward the second half as new facilities and programs move through their initial production ramps.

About Jabil (NYSE:JBL)

Jabil Inc is a global manufacturing services and technology company that helps brands design, manufacture, and manage products and supply chains. Its capabilities include product design and engineering, prototyping, production, assembly, testing, packaging, logistics, and aftermarket services.

The company serves customers across a range of industries, including healthcare, automotive, cloud and data infrastructure, communications, connected devices, industrial equipment, energy, and consumer products.

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