Jabil Inc.
JBL · NYSE
Next quarter
Reports Sep 30, 2026, before the open.
Consensus is $3.86 EPS for Aug 2026 across 4 estimates, ranging $3.82 to $3.91.
JBL May 2026
- 1.01%
- -0.83%
- $2.96
- $2.93
- —
- $8.75B
Reported results
- $8.75B
- 9.46%
- $445.00M
- 5.09%
- $275.00M
- $2.59
Highlights
- Revenue: Q3 FY2026 revenue was $8.75 billion, up 11.8% year over year and 5.7% from $8.28 billion in Q2.
- Earnings: GAAP operating income rose 10.4% year over year to $445 million, while net income increased 23.9% to $275 million and diluted EPS reached $2.59 versus $2.03 a year ago.
- Core profitability: Core operating income increased 20.0% to $504 million, with core diluted EPS of $3.16 versus $2.55 a year ago; core operating margin was 5.8%.
- Expectations: The supplied consensus comparison shows reported EPS of $2.93 versus a $2.96 expectation, a 1.01% shortfall; the filing reports $2.59 of GAAP diluted EPS and $3.16 of core diluted EPS.
- Intelligent Infrastructure: Revenue grew 21% year over year to $4.17 billion and segment income rose 41% to $256 million, driven by networking, cloud and data-center infrastructure, and capital equipment.
- Outlook: Jabil now expects FY2026 revenue of $35 billion, core operating margin of 5.8%, core diluted EPS of $12.70 and adjusted free cash flow of at least $1.4 billion.
- Cash generation: Nine-month operating cash flow was $1.27 billion and adjusted free cash flow was $991 million, up from $813 million a year ago.
- Capital allocation: Jabil repurchased $891 million of stock in the first nine months, reducing outstanding shares to 104.8 million from 107.5 million at August 31, 2025.
Analysis
Jabil's May-quarter print was a strong operating result with an unusually small gap to the supplied EPS expectation. Revenue of $8.75 billion rose 11.8% from the year-ago quarter and 5.7% sequentially, while GAAP operating income increased to $445 million from $403 million a year ago and $374 million in Q2. Net income was $275 million, versus $222 million last year and $223 million in the prior quarter. GAAP diluted EPS was $2.59, compared with $2.03 a year ago and $2.08 in Q2; the supplied consensus dataset lists reported EPS of $2.93 against $2.96 expected, while Jabil reported core diluted EPS of $3.16.
The defining feature was continued AI and data-center infrastructure momentum. Intelligent Infrastructure revenue rose 21% year over year to $4.17 billion, lifting segment income to $256 million and margin to 6.1%. Mix also helped gross margin expand to 9.5% from 8.7%. Management raised its FY2026 targets to $35 billion of revenue, 5.8% core operating margin, $12.70 of core EPS and at least $1.4 billion of adjusted free cash flow. Cash generation remained strong despite acquisitions and working-capital investment, while $891 million of buybacks further reduced the share count.
Intelligent Infrastructure growth
- Segment scale: Intelligent Infrastructure revenue increased 21% year over year to $4.17 billion and represented 48% of company revenue, up from 44% a year ago.
- Demand drivers: Existing-customer revenue rose 10% in networking and communications, 8% in cloud and data-center infrastructure, and 3% in capital equipment.
- Profit contribution: Segment income increased to $256 million from $181 million, while segment margin expanded to 6.1% from 5.3%.
- AI exposure: Management said AI infrastructure demand remained extremely strong and raised its full-year AI-related revenue outlook, although the release did not disclose a separate dollar target.
Broadening portfolio recovery
- Regulated Industries: Revenue rose 4% year over year to $3.18 billion, led by a 4% increase in automotive and transportation; segment income increased to $180 million from $168 million.
- Connected Living: Revenue increased 5% to $1.40 billion, as digital commerce revenue rose 13% and offset an 8% decline in connected living.
- Margin mix: Company gross profit increased to $828 million from $681 million, and gross margin improved to 9.5% from 8.7%, primarily because of Intelligent Infrastructure mix.
- Operating leverage: Core operating income rose 20% to $504 million, despite SG&A increasing $66 million year over year to $340 million, partly because of higher salaries and recent acquisitions.
Raised fiscal outlook
Jabil raised its FY2026 outlook across revenue, margin, earnings and cash flow. The company now expects $35 billion of revenue, a 5.8% core operating margin, $12.70 of core diluted EPS and at least $1.4 billion of adjusted free cash flow. The fourth-quarter outlook calls for revenue of $9.2 billion to $10.0 billion, GAAP operating income of $526 million to $586 million, GAAP diluted EPS of $3.24 to $3.64, core operating income of $589 million to $649 million and core diluted EPS of $3.80 to $4.20. Management also said it felt good about the setup for FY2027, with AI demand the principal growth driver and Automotive and Connected Living performing better than previously expected.
Cash and capital allocation
- Free cash flow: Nine-month operating cash flow was $1.27 billion versus $1.05 billion a year ago, while adjusted free cash flow rose to $991 million from $813 million.
- Working capital: The sales cycle fell to 5 days from 21 days in Q2, but days in receivables increased to 56 from 48 and days in inventory to 84 from 75, largely reflecting payment timing and delayed Intelligent Infrastructure shipments.
- Share repurchases: Jabil spent $891 million on buybacks through May 31, repurchasing 3.7 million shares; $109 million remained under the $1 billion authorization.
- Balance sheet: Cash was $1.36 billion and total debt was $3.38 billion at May 31, compared with $1.93 billion of cash and $2.89 billion of debt at August 31, 2025. The company reported $4.4 billion of unused borrowing capacity.
Acquisition investment
Jabil continued to build its data-center and infrastructure capabilities through acquisitions. The January purchase of Hanley Energy Group for $752 million added energy-management and critical-power solutions for data centers, while the September acquisition of Rebound Technologies for $133 million added supply-chain services. Both businesses were allocated to Intelligent Infrastructure. Goodwill increased to $1.23 billion at May 31 from $841 million at the prior fiscal year-end, and net intangible assets rose to $627 million from $273 million. The acquisitions contributed to higher SG&A and $23 million of quarterly intangible amortization, but the quarter's segment growth and margin improvement indicate that the strategic focus remained aligned with the strongest demand area.
