Skip to content
    JBL
    Earnings call· Feb 2026(Q2 FY26)

    JABIL Q2 FY26 earnings call JBL

    Mar 18, 2026 Source

    Executive summary

    Jabil Q2 FY26 — Strong Intelligent Infrastructure Growth and Broad-Based Outperformance

    Jabil delivered a strong second quarter, surpassing revenue and earnings expectations, primarily driven by robust performance in its Intelligent Infrastructure segment, particularly from AI data center build-out. The company also saw broad-based outperformance across other areas, including automotive and renewables, indicating market recovery. Management expressed confidence in achieving its full-year outlook and maintaining strong cash generation, with a focus on margin expansion and capital efficiency.

    Highlights

    5

    • Net revenue of $8.3 billion exceeded outlook by $500 million.

    • Core operating margin of 5.3% exceeded expectations.

    • Core diluted EPS of $2.69 exceeded expectations.

    • Intelligent Infrastructure revenue grew 52% year-over-year, driven by AI data center build-out.

    • FY26 AI-related revenue outlook increased by $1 billion to $13.1 billion, representing 46% YoY growth.

    Concerns

    4

    • Global Geopolitics and Uncertainties

    • Supply Chain Constraints

    • EV Market Volatility (China)

    • Renewables Market Volatility

    Guidance & targets

    23
    CategoryTargetConfidence
    Q3 FY26 Regulated Industries Revenue
    $3.1 billion
    medium materiality
    High
    Q3 FY26 Intelligent Infrastructure Revenue
    $4.2 billion
    high materiality
    High
    Q3 FY26 Connected Living & Digital Commerce Revenue
    $1.2 billion
    medium materiality
    High
    Q3 FY26 Total Company Revenue
    $8.1 billion to $8.9 billion
    high materiality
    High
    Q3 FY26 Core Operating Income
    $452 million to $512 million
    high materiality
    High
    Q3 FY26 GAAP Operating Income
    $398 million to $458 million
    medium materiality
    High
    Q3 FY26 Core Diluted EPS
    $2.83 to $3.23
    high materiality
    High
    Q3 FY26 GAAP Diluted EPS
    $2.36 to $2.76
    medium materiality
    High
    Q3 FY26 Net Interest Expense
    approximately $73 million
    low materiality
    High
    FY26 Full Year Interest Expense
    approximately $280 million
    low materiality
    High
    Q3 FY26 Core Tax Rate
    21%
    low materiality
    High
    FY26 Full Year Core Tax Rate
    21%
    low materiality
    High
    FY26 Intelligent Infrastructure Segment Revenue
    approximately $16.5 billion
    high materiality
    High
    FY26 Cloud and Data Center Infrastructure Revenue
    $10.4 billion
    high materiality
    High
    FY26 Networking and Communications Revenue
    approximately $3.1 billion
    medium materiality
    High
    FY26 Capital Equipment Revenue
    approximately $3 billion
    medium materiality
    High
    FY26 AI-related Revenue
    roughly $13.1 billion
    high materiality
    High
    FY26 Regulated Industries Revenue
    $12.5 billion
    medium materiality
    High
    FY26 Total Company Revenue
    approximately $34 billion
    high materiality
    High
    FY26 Diluted EPS
    $12.25
    high materiality
    High
    FY26 Core Operating Margins
    approximately 5.7%
    high materiality
    High
    FY26 Adjusted Free Cash Flow
    more than $1.3 billion
    high materiality
    High
    FY27 Core Operating Margin
    6%
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Regulated Industries
    Revenue came in about $200 million above Q2 guide, driven mainly by automotive with renewables also performing better than expected. Higher year-over-year revenue was driven by all 3 end markets. FY26 outlook increased by $500 million to $12.5 billion.
    		$3 billion10%—4.8%
    Intelligent Infrastructure
    Revenue was up nearly $300 million above Q2 guide, driven mainly by cloud and data center infrastructure and networking and communications. Growth was broad-based across capital equipment, cloud and DCI and networking and communications. Core operating margin up 40 basis points year-over-year, supported by favorable mix and disciplined execution. FY26 outlook increased by $1.1 billion to $16.5 billion.
    		$4 billion52%—5.7%
    Connected Living & Digital Commerce
    Performance was largely in line with expectations, reflecting planned program attrition and customer pruning. This was partially offset by continued growth in robotics, advanced warehouse and retail automation. Core operating margin up 40 basis points year-over-year. Full year outlook largely in line with December expectations.
    		$1.2 billion-8%—4.9%

    Operational metrics

    13
    Net Revenue
    $8.3 billionexceeded outlook
    Q2 FY26

    Exceeded outlook for the period.

    Core Operating Income
    $436 millionexceeded expectations
    Q2 FY26

    Enabled by favorable revenue mix and ongoing cost discipline.

    GAAP Operating Income
    $374 million
    Q2 FY26

    Reported on a GAAP basis.

    GAAP Diluted EPS
    $2.08
    Q2 FY26

    Reported on a GAAP basis.

    Core Diluted EPS
    $2.69above expectations
    Q2 FY26

    Reflecting results that were above expectations for the quarter.

    Inventory Days
    75
    Q2 FY26

    Total inventory days for the quarter.

    Inventory Days (net of customer deposits)
    60consistent with targeted range
    Q2 FY26

    Consistent with targeted range of 55 to 60 days.

    Net Capital Expenditures
    $51 million
    Q2 FY26

    Net CapEx for the quarter.

    Cash and Investments Balance
    $1.8 billion
    Q2 FY26

    Balance at the end of Q2 FY26.

    Share Repurchases
    $300 million
    Q2 FY26

    Repurchased under existing share repurchase authorization.

    CapEx to Revenue Run Rate
    1.5% to 2%
    Future

    Expected CapEx to revenue run rate for the back half of the fiscal year, considered a good run rate for future.

    Full Year CapEx to Revenue
    around 1%
    FY26

    Expected for the full fiscal year.

    Capacity Utilization
    80%up from 75% last year
    Current

    Improved capacity utilization contributing to higher margins.

    Industry KPIs

    10
    MetricValueDetails
    M a contribution—
    Segment revenue growthRegulated Industries: $3 billion; Intelligent Infrastructure: $4 billion; Connected Living & Digital Commerce: $1.2 billionUSD
    Ai data center content revenue$13.1 billionUSD
    Content per device per vehicle—
    Design wins product cycle ramps—
    Recurring software services mix—
    Supply demand imbalance lead times—
    Capacity expansion internal sourcing—
    End market revenue mix organic growthRegulated Industries: $3 billion; Intelligent Infrastructure: $4 billion; Connected Living & Digital Commerce: $1.2 billionUSD
    Operating margin incremental leverage5.3%%

    Product announcements

    1
    ProductTypeDetails
    Next-gen optics (800G to 1.6T), integrated advanced packaging solutions, cooling technologiesroadmap

    Deals & partnerships

    1
    HanleyAcquisition

    Hanley acquisition integration is going very well and according to plan.

    Capital programs

    3
    Memphis expansionunderway

    Benefit: adding 1.5 million square feet

    Our facilities, if you think of the expansion that we're undertaking in Memphis, where we're adding 1.5 million square feet, that expansion is on track.

    North Carolina facilitynearing completion

    North Carolina is on track. I think it will be ready by July, August. And FY '27, we have a whole bunch of customers that are interested in that site.

    U.S.-based East Coast facility retrofit for liquid-cooled rackscompleted
    Start: September (discussed)

    Benefit: flexibility to support both liquid and air-cooled configurations, incremental capacity available

    in September, we discussed our intention to retrofit our U.S.-based facility on the East Coast to support liquid-cooled racks... those modifications are largely behind us, which means we now have incremental capacity available a bit ahead of schedule.

    Risks & headwinds

    4
    Global Geopolitics and UncertaintiesOngoing

    Not quantified, but mentioned as a reason for prudence in margin guidance.

    Mitigation: Being conservative and prudent in outlook.

    Supply Chain ConstraintsCurrent

    Not explicitly quantified, but noted as "getting a little bit tighter" for DDR4 and lower memory, and some PCB constraints.

    Mitigation: Jabil's supply chain team is adept at managing these constraints; factored into guidance. Hyperscalers (on DDR5) receive allocation.

    EV Market Volatility (China)Current

    China EV market is "a little bit slow".

    Mitigation: Jabil's strategy focuses on powertrain-agnostic platforms; seeing EV momentum outside the U.S.; remaining conservative and prudent in outlook and investments.

    Renewables Market VolatilityHistorical, informs current caution

    Not quantified, but noted as historically shifting.

    Mitigation: Being cautious; noting a shift to commercial installations creating a more sustainable level.

    Q&A highlights

    8

    Asked for a rank order of opportunities within Intelligent Infrastructure (compute, networking, semi-cap) and if strong AI revenue growth can sustain beyond FY26.

    Mike Dastoor detailed broad-based growth across all three Intelligent Infrastructure end markets. Cloud and DCI saw a $600M increase due to early completion of liquid-cooled rack retrofits and strong ramp with a second hyperscaler in Mexico. Networking and communications increased by $400M, driven by high-speed interconnect demand and some 5G recovery. Capital equipment was up $100M due to automated test equipment and improving wafer fab equipment demand. He expressed strong confidence in continued AI momentum.

    “I'm really pumped up with what's going on in Intelligent Infrastructure right now. And this is nowhere near slowing down. In fact, it's actually gaining momentum.”

    asked by Ruplu Bhattacharya · answered by Michael Meheryar Dastoor

    2 min read6 chapters

    Detailed Narrative

    01

    Intelligent Infrastructure Growth Drivers

    The Intelligent Infrastructure segment saw broad-based growth, exceeding expectations by $300 million in Q2. This was driven by cloud and data center infrastructure, networking and communications, and capital equipment. The company's strategy of providing system-level integration across compute, networking, power, and advanced cooling, rather than a product-focused approach, is highlighted as a key differentiator, delivering real value and accelerating deployment times for customers.

    02

    AI Data Center Build-Out & Capacity Expansion

    Jabil's AI-related revenue outlook for FY26 increased by $1 billion to $13.1 billion, representing 46% year-over-year growth. This is supported by the early completion of liquid-cooled rack retrofits at a U.S. East Coast facility, providing incremental capacity ahead of schedule. Strong execution with a second hyperscale customer in Mexico and continued strength in data center power in Memphis also contributed, with expansion plans for Memphis underway.

    03

    Regulated Industries Recovery

    The Regulated Industries segment exceeded its Q2 guide by $200 million, primarily due to automotive and renewables. The company is seeing momentum in automotive with powertrain-agnostic programs and early signs of EV recovery outside the U.S., though remaining disciplined in its outlook. Renewables are also improving, with a shift towards a more sustainable mix of residential and commercial installations, which is believed to create a more stable demand level.

    04

    Connected Living & Digital Commerce Evolution

    This segment's full-year outlook is largely in line with prior expectations, but the internal mix is shifting positively. Growth is driven by automation, robotics, and advanced retail and warehouse programs. Management views robotics and physical AI as meaningful long-term growth opportunities that will increasingly contribute to the segment's performance, with expectations for double-digit growth going forward⏳.

    05

    Margin Expansion & Capital Efficiency

    Despite a higher revenue outlook, Jabil maintains its FY26 core operating margin guidance of 5.7% and adjusted free cash flow of over $1.3 billion, demonstrating disciplined execution and capital efficiency. The company expects margin accretion in Intelligent Infrastructure due to higher-margin capabilities like liquid cooling and silicon photonics. Management expressed high confidence in achieving 6% operating margins in FY27, citing improved capacity utilization and operating leverage.

    06

    Physical AI Commercialization

    Jabil is actively engaged in the early stages of physical AI commercialization, leveraging its existing hardware expertise in areas like retail warehouse robots, autonomous vehicles, and industrial automation. The company's capabilities in sensors, onboard compute, connectivity, power systems, and complex electromechanical assemblies are foundational for physical AI, positioning the company well for future growth as costs and complexity decrease over time⏳.

    AI-generated summary of the company’s earnings call. Not investment advice.