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    JBL
    Earnings call· May 2026(Q3 FY26)

    JABIL Q3 FY26 earnings call JBL

    Jun 17, 2026 Source

    Executive summary

    Jabil Q3 FY26 — Strong AI Demand Drives Revenue and Margin Upside

    Jabil delivered a strong Q3 FY26, exceeding expectations across key financial metrics, primarily driven by robust demand in AI infrastructure and better-than-anticipated performance in automotive and Connected Living. The company is confident in its strategic position, with AI-related revenue growth expected to continue at a similar percentage rate in FY27 on a larger base, and anticipates core operating margin to exceed 6% in FY27. A strategic alliance with Adani Enterprises in India was announced, targeting a multi-gigawatt AI data center infrastructure platform for meaningful contributions from FY28.

    Highlights

    5

    • Revenue was approximately $8.8 billion, up 12% year-over-year and $250 million above the midpoint of outlook.

    • Core diluted earnings per share was $3.16, up 24% year-over-year.

    • Intelligent Infrastructure revenue grew 21% year-over-year, with AI-related revenue for FY26 now expected at $13.6 billion, a $500 million increase from prior outlook.

    • Adjusted free cash flow outlook for FY26 was raised to more than $1.4 billion from more than $1.3 billion.

    • Secured a third hyperscale customer, expected to contribute to future AI infrastructure growth.

    Concerns

    2

    • Inventory days were 84, above the normal targeted range of 55 to 60 days, largely tied to timing of customer shipments in Intelligent Infrastructure.

    • Automotive market remains cautious due to continued demand volatility, despite stronger-than-expected performance in the quarter.

    Guidance & targets

    15
    CategoryTargetConfidence
    Q4 FY26 Revenue
    $9.2 billion to $10 billion
    high materiality
    High
    Q4 FY26 Core Operating Income
    $589 million to $649 million
    high materiality
    High
    Q4 FY26 Core Diluted EPS
    $3.80 to $4.20
    high materiality
    High
    Q4 FY26 Net Interest Expense
    approximately $80 million
    medium materiality
    High
    Q4 FY26 Core Tax Rate
    approximately 21%
    medium materiality
    High
    FY26 Revenue
    approximately $35 billion
    high materiality
    High
    FY26 Core Operating Margin
    approximately 5.8%
    high materiality
    High
    FY26 Core Diluted EPS
    approximately $12.70
    high materiality
    High
    FY26 Adjusted Free Cash Flow
    more than $1.4 billion
    high materiality
    High
    FY27 AI-related Revenue Growth
    similar percentage to FY26
    high materiality
    High
    FY27 Core Operating Margin
    above 6%
    high materiality
    High
    Adani Enterprises Alliance Contributions
    meaningful contributions
    medium materiality
    Medium
    Regulated Industries Q4 FY26 Revenue
    approximately $3.3 billion
    medium materiality
    High
    Intelligent Infrastructure Q4 FY26 Revenue
    approximately $4.9 billion
    high materiality
    High
    Connected Living & Digital Commerce Q4 FY26 Revenue
    approximately $1.4 billion
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Regulated Industries
    Revenue was above outlook, primarily driven by stronger-than-expected demand in automotive and transportation. Core operating margin was up 10 basis points over the prior year.
    		$3.2 billion4%—5.6%
    Intelligent Infrastructure
    Reflected continued strong demand and performance in line with outlook. Growth was broad-based, with capital equipment and cloud and data center both double-digits, and networking communications up more than 50% due to a strong networking ramp in India. Core operating margin was up 80 basis points over prior year Q3.
    		$4.2 billion21%—6.1%
    Connected Living & Digital Commerce
    Revenue was above outlook, largely due to better-than-cautious assumptions for consumer-related demand in Connected Living. Operating margin for the segment was 4.9%.
    		$1.4 billion5%—4.9%

    Operational metrics

    13
    GAAP Operating Income
    $445 million
    Q3 FY26

    Reported for the third quarter.

    Core Operating Income
    $504 million
    Q3 FY26

    Reported for the third quarter.

    GAAP Diluted EPS
    $2.59
    Q3 FY26

    Reported for the third quarter.

    Core Diluted EPS
    $3.1624% YoY
    Q3 FY26

    Reported for the third quarter.

    Net Capital Expenditures
    $176 million
    Q3 FY26

    Reported for the third quarter.

    Inventory Days
    84
    Q3 FY26

    Higher than target, largely tied to timing of customer shipments in Intelligent Infrastructure, expected to normalize in Q4.

    Cash and Investments Balance
    $1.4 billion
    End of Q3 FY26

    Balance sheet remains in excellent shape.

    Debt-to-Core EBITDA
    1.3x
    End of Q3 FY26

    Company remains committed to maintaining investment-grade credit profile.

    Share Repurchases
    $291 million
    Q3 FY26

    Intends to fully complete the authorization in Q4.

    AI-related Revenue Growth
    $4.6 billionapproximately 50% YoY
    FY26

    Reflects strong customer demand and quality execution.

    CapEx Expectations
    1.5% to 2%
    Ongoing

    Asset-light model for AI infrastructure, even with footprint expansion.

    Daily Shipments
    $125 million-$130 million
    Daily

    Referenced in context of healthcare revenue changes.

    Core Operating Margin
    6.3%
    Q4 FY25

    Prior year Q4 core operating margin, used as a comparison for Q4 FY26 outlook.

    Industry KPIs

    9
    MetricValueDetails
    M a contribution—
    Segment revenue growth—
    Ai data center content revenue$13.6 billionUSD
    Design wins product cycle rampsThird hyperscale customer
    Recurring software services mix—
    Supply demand imbalance lead times—
    Capacity expansion internal sourcing10% incremental%
    End market revenue mix organic growth—
    Operating margin incremental leverage—

    Deals & partnerships

    1
    Adani EnterprisesStrategic alliance

    Alliance to build an AI data center infrastructure platform in India. Focus on multi-gigawatt manufacturing capacity for high-density AI racks and associated computing infrastructure, including next-gen liquid cooled AI racks, servers, storage systems, networking equipment, and supporting infrastructure (power distribution units, transformers, switchgear, thermal management systems). Still early days, definitive framework not yet established.

    Capital programs

    1
    North Carolina Facilityon track

    Benefit: Expected run rates of $1B-$3B over 1-3 years

    Facility is on track for end of fiscal year. One customer booked, talking to others. Exploring readily available facilities for additional capacity instead of building on adjacent land.

    Risks & headwinds

    3
    Automotive market demand volatilityOngoing

    Despite stronger-than-expected Q3 performance, company remains cautious.

    Mitigation: Focus on export demand from China, industry consolidation, and growth in powertrain agnostic platforms.

    Higher inventory daysQ3 FY26

    84 days (net of deposits ~68 days), above targeted 55-60 days.

    Mitigation: Expected to normalize in Q4, largely tied to timing of customer shipments in Intelligent Infrastructure.

    Component availabilityOngoing

    High demand for high bandwidth memory, high-end, high-density interconnect PCBs, R&I; lead times extending.

    Mitigation: Strategic conversations with suppliers, long-term commitments, hyperscalers receiving priority allocation.

    Q&A highlights

    8

    What gives Jabil the right to win in the strong AI space, and how significant are the third hyperscaler win and Adani partnership as revenue drivers?

    Jabil's holistic strategy of enabling faster AI scaling through integrated systems (compute, storage, networking, power, cooling) and expanding relationships from initial capabilities drives wins. The third hyperscaler ramp is expected to mirror the second. The Adani partnership in India represents a multi-gigawatt AI infrastructure manufacturing opportunity, aligning with 'Make in India' and offering a one-stop shop, but is a longer-term FY28 event with no definitive framework yet.

    “I think the holistic strategy that the team is focused on where we sort of enable customers to scale AI much faster by delivering fully integrated systems across compute, storage, networking, power, advanced cooling.”

    asked by Ruplu Bhattacharya · answered by Michael Meheryar Dastoor

    2 min read5 chapters

    Detailed Narrative

    01

    Diversified Business Model Strength

    Jabil emphasized its diversified business model, which leverages many large end markets to provide important synergies such as supply chain purchasing power and engineering. This approach is believed to foster more sustainable financial performance over longer periods, offering a natural hedge against different economic cycles. The company's ability to perform well across various segments, even those previously under pressure, validates this strategy.

    02

    AI Infrastructure Expansion and Strategy

    The company secured a third hyperscale customer for AI infrastructure, with the revenue ramp expected to follow a similar pattern to the second hyperscaler, starting with a specific capability and expanding across the data center. Jabil highlighted its asset-light model for AI infrastructure, maintaining CapEx expectations at 1.5% to 2% of revenue, and expanding capacity in a disciplined way tied to visible customer demand, avoiding product ownership and IP risk.

    03

    Portfolio Performance and Outlook

    Areas of the portfolio that had previously faced pressure, including automotive and transportation, and Connected Living & Digital Commerce, showed better-than-expected performance in Q3. Renewables also continued to improve, supported by safe harbor projects and demand for power related to AI and data center infrastructure. The company raised its FY26 outlook for revenue, core operating margin, core EPS, and adjusted free cash flow, reflecting broad-based strength.

    04

    Adani Enterprises Strategic Alliance

    Jabil announced a strategic alliance with Adani Enterprises to establish an AI data center infrastructure platform in India. This initiative targets multi-gigawatt manufacturing capacity for high-density AI racks and associated computing infrastructure, including next-gen liquid cooled racks, servers, storage, networking equipment, and supporting infrastructure. While still in early stages, this partnership is viewed as a significant longer-term opportunity, with meaningful contributions anticipated from fiscal year 2028.

    05

    Capacity and Margin Trajectory

    Jabil expressed confidence in its capacity to support strong AI growth, with new facilities in North Carolina, Memphis, India, and other locations coming online. The company expects core operating margin to exceed 6% in FY27, driven by an improving mix, higher-value capabilities within Intelligent Infrastructure (e.g., power, liquid cooling, silicon photonics), and enhanced operating leverage from better utilization as new capacity ramps up.

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