Jabil Inc (JBL)

Jabil operates in the engineering, supply chain, and manufacturing solutions industry, which was historically composed of companies providing design and manufacturing services to companies utilizing electronics components and subsequently expanded to include customers requiring products and services beyond electronic components, including plastics and metal components, packaging, and injection molding. The long-term factors driving customers to use the industry's services include efficient manufacturing, accelerated product time-to-market and time-to-volume, access to advanced design and manufacturing technologies, improved inventory management and purchasing power, and global reach and regional manufacturing. The business is highly competitive, with competition against numerous domestic and foreign electronic manufacturing solutions providers, diversified manufacturing service providers, and design providers, as well as the manufacturing operations of current and potential customers who continually evaluate the merits of manufacturing products internally against the advantages of outsourcing. Principal competitive factors in the manufacturing services market are cost, accelerated production time-to-market, higher efficiencies, global locations, rapid scaling of production, advanced technologies, quality, and improved pricing of components.

Jabil competes with different companies depending on the type of service provided and the geographic area in which an activity takes place, and the peer group used for stock performance comparison includes Celestica Inc., Flex Ltd., Hon-Hai Precision Industry Co. Ltd, Plexus Corp., and Sanmina Corp. The company believes it is extremely competitive with regard to all principal competitive factors. A small number of customers and significant industry sectors have historically comprised a major portion of net revenue, and in fiscal year 2026 the five largest customers accounted for approximately 37% ¹ of net revenue, while 76 customers accounted for approximately 90% ² of net revenue. Customer A accounted for 20% ³ of net revenue in fiscal year 2026 and 16% ⁴ of net revenue in fiscal year 2025, with sales reported primarily in the Intelligent Infrastructure segment, while Customer B accounted for 11% ⁵ of net revenue in fiscal year 2024, with sales reported in the Connected Living and Digital Commerce segment.

Jabil generates revenue by delivering comprehensive design, production, and product management services to companies across a diverse range of industries and end markets, with capabilities spanning the entire product lifecycle from innovation, design, and planning to fabrication, assembly, delivery, and post-production. The company serves customers primarily through dedicated business units that combine highly automated, continuous flow manufacturing with advanced electronic design and design for manufacturability, with each business unit team serving as a single point of contact between a customer and Jabil. Net revenue from each product manufactured consists of an element based on the costs of materials in that product and an element based on the labor and manufacturing overhead costs allocated to that product, and gross margin for any product depends on the mix between the cost of materials and the cost of labor and manufacturing overhead allocated to the product. As a provider of turnkey manufacturing services, Jabil is responsible for procuring components and other materials, requiring significant working capital commitments, and at times collects deposits from customers related to the purchase of inventory to effectively manage working capital.

The Regulated Industries segment is focused on regulated markets and includes revenues from customers primarily in the automotive and transportation, healthcare and packaging, and renewable and energy infrastructure industries. The Intelligent Infrastructure segment is focused on the modern digital ecosystem including artificial intelligence infrastructure and includes revenues from customers primarily in the capital equipment, cloud and data center infrastructure, and networking and communications industries. The Connected Living and Digital Commerce segment is focused on digitalization and automation, including warehouse automation and robotics, and includes revenues from customers primarily in the connected living and digital commerce industries. Beginning September 1, 2026, the Connected Living and Digital Commerce segment was renamed to Intelligent Devices and Robotics to better reflect the evolution of the business, including increased emphasis on automation and robotic capabilities and a strategic shift towards more highly complex, engineered solutions, with the name change not impacting the composition of reportable segments or the financial information reported for those segments.

Jabil offers a wide spectrum of value-add design services including Electronic Design, Experience Design, Mechanical Design, Optical Design, Industrialization Engineering Services, Product Verification, and Manufacturing Test Solution Development, supporting products across all markets served including cloud data center server platforms, medical and consumer health devices, automotive assemblies, vision and safety systems, connected consumer products and appliances, digital commerce ecosystem products for retail environments, power and storage products supporting energy infrastructure, and smart controls and security for digital building and utilities. The company also offers systems assembly, test, direct-order fulfillment, and configure-to-order services, with systems assembly extending assembly activities to include assembly of higher-level sub-systems and systems incorporating multiple PCBAs. Research and development activities include automation for tooling, manufacturing, and end customer solutions, next generation electronic interconnections, advanced electrical assembly and test processes, advanced polymer and metal material science, ceramic, metal and plastic single/multi-shot injection molding, in-mold mechanical and electrical assembly solutions, advanced coating solutions, thermal-plastic composite formation, advanced thermal management solutions, advanced sensor integration, optical sensors across wavelengths, co-packaged optics, silicon photonics, sterilization, device filling, and fluid management, outsourced semiconductor assembly and test capabilities, sustainable materials and design, and artificial intelligence and machine learning.

During fiscal year 2026, Jabil completed several acquisitions including Hanley Energy Group on January 2, 2026, Rebound Technologies Group Holdings Limited on September 1, 2025, Pharmaceutics International, Inc. on February 3, 2025, and Mikros Technologies LLC on October 1, 2024, with the Hanley Energy Group acquisition including contractual agreements and customer relationships, intellectual property, and trade names, the Pharmaceutics International acquisition including contractual agreements and customer relationships and intellectual property, and the Mikros Technologies acquisition including contractual agreements and customer relationships. The company also divested operations in Italy through the sale of Jabil Circuit Italia S.r.l. in August 2025. In December 2024, Jabil issued a warrant to Amazon.com NV Investment Holdings LLC to acquire up to 1,158,539 ⁶ ordinary shares. In July 2025, the Board of Directors authorized the repurchase of up to $1.0 billion ⁷ of common stock under the 2026 Share Repurchase Program, and in July 2026, the Board authorized the repurchase of up to $1.5 billion ⁸ of common stock under the 2027 Share Repurchase Program. During the three months ended August 31, 2026, the company repurchased 538,429 ⁹ shares at an average price of $315.70 ¹⁰ per share, including 534,735 ¹¹ shares purchased as part of publicly announced programs.

For fiscal year 2026, Jabil reported net revenue of $35,954 million ¹², gross profit of $3,317 million ¹³, operating income of $1,704 million ¹⁴, and net income attributable to Jabil Inc. of $1,042 million ¹⁵, with basic earnings per share of $9.86 ¹⁶ and diluted earnings per share of $9.75 ¹⁷. This compares to fiscal year 2025 net revenue of $29,802 million ¹⁸, gross profit of $2,646 million ¹⁹, operating income of $1,182 million ²⁰, net income attributable to Jabil Inc. of $657 million ²¹, basic earnings per share of $6.00 ²², and diluted earnings per share of $5.92 ²³. For fiscal year 2024, net revenue was $28,883 million ²⁴, gross profit was $2,676 million ²⁵, operating income was $2,013 million ²⁶, net income attributable to Jabil Inc. was $1,388 million ²⁷, basic earnings per share was $11.34 ²⁸, and diluted earnings per share was $11.17 ²⁹. The company's sales cycle was 2 days ³⁰ for the three months ended August 31, 2026, compared to 5 days ³¹ for the three months ended May 31, 2026, and 18 days ³² for the three months ended August 31, 2025, with inventory turns of 4 turns ³³ annualized for the three months ended August 31, 2026, 4 turns ³⁴ for the three months ended May 31, 2026, and 5 turns ³⁵ for the three months ended August 31, 2025.

Jabil's growth strategy centers on establishing and maintaining long-term customer relationships with leading companies in expanding industries that benefit from global, highly automated, continuous-flow manufacturing, pursuing relationships with new customers that are financially stable, technology-driven, growth-oriented, and committed to long-term collaboration. The company maintains a diversified portfolio of customers, end markets, technologies and product programs across a broad range of industries including cloud and data center infrastructure, healthcare, energy and renewable infrastructure, automotive and transportation, warehouse automation, networking and communications, and semi-capital equipment, with the diverse customer and end-market base helping reduce exposure to any single industry, customer or product category. The company continues to support the resilience and long-term growth of its business by evaluating opportunities to expand and balance its portfolio as customer demand, end markets and technologies evolve.

The Intelligent Infrastructure segment is focused on the modern digital ecosystem including artificial intelligence infrastructure, with revenues from customers primarily in the capital equipment, cloud and data center infrastructure, and networking and communications industries. The Connected Living and Digital Commerce segment, renamed to Intelligent Devices and Robotics effective September 1, 2026, is focused on digitalization and automation, including warehouse automation and robotics, with the name change reflecting increased emphasis on automation and robotic capabilities and a strategic shift towards more highly complex, engineered solutions. The company's acquisition strategy complements current capabilities, diversifies into new industry sectors and customers, and expands the scope of services offered, with recent acquisitions including Hanley Energy Group, Rebound Technologies Group Holdings Limited, Pharmaceutics International, Inc., and Mikros Technologies LLC.

Jabil's margin and cost outlook is influenced by operating results being impacted by the level of capacity utilization of manufacturing facilities, indirect labor costs, and selling, general, and administrative expenses, with operating income margins generally improving during periods of high production volume and high capacity utilization and reduced during periods of low production volume. The company monitors the current economic environment and its potential impact on both the customers served and end-markets, and closely manages costs and capital resources to respond appropriately as circumstances change. Rising component and material prices may negatively affect margins, and while the company periodically negotiates cost of materials adjustments with customers, most significant long-term customer contracts permit quarterly or other periodic prospective adjustments to pricing based on decreases and increases in component prices and other factors.

Jabil's operational outlook includes maintaining a global production footprint with facilities located worldwide including China, Malaysia, Mexico, and the United States, with approximately 120 ³⁶ locations in 30 ³⁷ countries and total headcount of 140 thousand ³⁸ employees including permanent, temporary and contingent workers as of August 31, 2026, with 72 thousand ³⁹ employees in Asia, 52 thousand ⁴⁰ in the Americas, and 16 thousand ⁴¹ in Europe. The company's global production sites allow customers to manufacture products simultaneously in optimal locations, and increasingly customers prefer manufacturing to be located closer to their end markets, leading the company to invest in local-for-local and local-for-regional capabilities that improve resilience, reduce lead times, enhance sustainability, and enable support of customers directly where they operate. The company's facilities total approximately 40 million ⁴² square feet as of August 31, 2026, with 20 million ⁴³ square feet in Asia, 15 million ⁴⁴ square feet in the Americas, and 5 million ⁴⁵ square feet in Europe, consisting of 15 million ⁴⁶ square feet in owned facilities and 25 million ⁴⁷ square feet in leased facilities, with approximately 13% ⁴⁸ of total square footage not currently used in business operations.

Jabil's capital allocation strategy includes declaring and paying quarterly dividends, with the company expecting to continue to declare and pay quarterly dividends of an amount similar to past declarations, subject to determination by the Board of Directors each quarter following review of financial performance and global economic conditions. The company has share repurchase programs including the 2026 Share Repurchase Program authorizing up to $1.0 billion ⁴⁹ and the 2027 Share Repurchase Program authorizing up to $1.5 billion ⁵⁰, with approximately $1,440 million ⁵¹ remaining available under the programs as of August 31, 2026. The company also invests in research and development activities designed to create new and improved products and manufacturing solutions, with expenses reflected in the research and development line item within the Consolidated Statements of Operations.

Jabil faces headwinds from component shortages, with the supply chain recently impacted by component shortages most notably in the semiconductor industry and currently impacted by the global memory component shortage. Some products require one or more components only available from a single source, and some of these components are subject to supply shortages from time to time, which can substantially curtail production of all assemblies using a particular component. A supply shortage can increase cost of goods sold if the company has to pay higher prices for components in limited supply, or cause redesign or reconfiguration of products to accommodate a substitute component. The company has and may in the future purchase components early to avoid delays or interruptions, which has and may again cause additional inventory carrying costs and inventory obsolescence.

Jabil faces constraints from tariffs and international trade disputes, with the U.S. implementing tariffs on a variety of countries and commodities beginning in February 2025, including tariffs on aluminum and steel derivative products, imports of certain Canadian and Mexican goods, imports of Chinese goods, universal tariffs on imports from most countries, and reciprocal tariffs on select countries. On February 20, 2026, the U.S. Supreme Court issued a ruling striking down tariffs imposed under the International Emergency Economic Powers Act, including tariffs on imports of certain Canadian, Chinese, and Mexican goods, a universal baseline tariff on imports from most countries, and reciprocal tariffs on select countries. On April 20, 2026, the U.S. Customs and Border Protection launched a system to process IEEPA tariff refund claims, and during the fiscal year ended August 31, 2026, the company began receiving refunds for IEEPA tariffs previously paid, which did not have a material impact on results of operations. The global tariff landscape continues to shift rapidly, with changes impacting businesses and markets around the world.

Management's message to shareholders emphasizes Jabil's vision to be the world's most technologically advanced and trusted manufacturing solutions provider, with strategic priorities focused on establishing and maintaining long-term customer relationships, diversification across customers, end markets, technologies and product programs, utilizing customer-centric business units, leveraging global production, expanding value-added services, delivering design expertise, and pursuing strategic acquisitions. The company's approach to manufacturing includes a decentralized customer engagement model where most business units serve a single customer and are empowered to tailor strategies to that customer's needs, automated continuous flow manufacturing, computerized control and monitoring, and electronic supply chain management. Management highlights the company's global footprint with approximately 120 ⁵⁶ locations in 30 ⁵⁷ countries and total headcount of 140 thousand ⁵⁸ employees, and notes that in fiscal year 2026, Jabil employees completed over 529,000 ⁵⁹ volunteer hours. The company recognized over 4,400 ⁶⁰ employees in fiscal year 2026 through its enterprise recognition program, a 66% ⁶¹ increase over the previous fiscal year. Management's strategic priorities for the period ahead include continuing to support the resilience and long-term growth of the business by evaluating opportunities to expand and balance the portfolio as customer demand, end markets and technologies evolve, investing in local-for-local and local-for-regional capabilities to improve resilience, reduce lead times, enhance sustainability, and enable support of customers directly where they operate, and maintaining a diversified portfolio to reduce exposure to any single industry, customer or product category.

For fiscal year 2026, Jabil reported net revenue of $35,954 million ⁶², compared to $29,802 million ⁶³ in fiscal year 2025 and $28,883 million ⁶⁴ in fiscal year 2024. Gross profit was $3,317 million ⁶⁵ in fiscal year 2026, compared to $2,646 million ⁶⁶ in fiscal year 2025 and $2,676 million ⁶⁷ in fiscal year 2024. Operating income was $1,704 million ⁶⁸ in fiscal year 2026, compared to $1,182 million ⁶⁹ in fiscal year 2025 and $2,013 million ⁷⁰ in fiscal year 2024. Net income attributable to Jabil Inc. was $1,042 million ⁷¹ in fiscal year 2026, compared to $657 million ⁷² in fiscal year 2025 and $1,388 million ⁷³ in fiscal year 2024. Basic earnings per share was $9.86 ⁷⁴ in fiscal year 2026, compared to $6.00 ⁷⁵ in fiscal year 2025 and $11.34 ⁷⁶ in fiscal year 2024. Diluted earnings per share was $9.75 ⁷⁷ in fiscal year 2026, compared to $5.92 ⁷⁸ in fiscal year 2025 and $11.17 ⁷⁹ in fiscal year 2024. The company's sales cycle was 2 days ⁸⁰ for the three months ended August 31, 2026, compared to 5 days ⁸¹ for the three months ended May 31, 2026, and 18 days ⁸² for the three months ended August 31, 2025. Inventory turns were 4 turns ⁸³ annualized for the three months ended August 31, 2026, 4 turns ⁸⁴ for the three months ended May 31, 2026, and 5 turns ⁸⁵ for the three months ended August 31, 2025. Days in accounts receivable were 55 days ⁸⁶ for the three months ended August 31, 2026, 56 days ⁸⁷ for the three months ended May 31, 2026, and 44 days ⁸⁸ for the three months ended August 31, 2025. Days in inventory were 82 days ⁸⁹ for the three months ended August 31, 2026, 84 days ⁹⁰ for the three months ended May 31, 2026, and 69 days ⁹¹ for the three months ended August 31, 2025. Days in accounts payable were 135 days ⁹² for the three months ended August 31, 2026, 135 days ⁹³ for the three months ended May 31, 2026, and 96 days ⁹⁴ for the three months ended August 31, 2025. The company's market capitalization based on the closing sale price of common stock on February 28, 2026, was approximately $24.0 billion ⁹⁵, and the closing sales price on October 20, 2026, was $277.18 ⁹⁶. The number of outstanding shares of common stock as of October 20, 2026, was 102,974,470 ⁹⁷.

Jabil faces material risks from customer concentration, with the five largest customers accounting for approximately 37% ⁵² of net revenue in fiscal year 2026 and 76 customers accounting for approximately 90% ⁵³ of net revenue, and Customer A alone representing 20% ⁵⁴ of net revenue in fiscal year 2026 and 16% ⁵⁵ in fiscal year 2025. A reduction in business from one or more of these largest customers could have a material adverse effect on results of operations. The company also faces risks from component shortages, with the supply chain recently impacted by component shortages most notably in the semiconductor industry and currently impacted by the global memory component shortage, and some products require components only available from a single source, which can substantially curtail production of all assemblies using a particular component. Tariff and international trade risks are significant, with the U.S. implementing tariffs on a variety of countries and commodities beginning in February 2025, and while the U.S. Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act on February 20, 2026, the global tariff landscape continues to shift rapidly. The company received an FDA Warning Letter in August 2026 relating to a March 2026 inspection of the Pharmaceutics International, Inc. facility in Hunt Valley, Maryland, with findings related to manufacturing practices and quality systems, and management has paused manufacturing at the site pending remediation. The company also faces risks from its international operations, with a significant portion of manufacturing, design, support and storage operations conducted in facilities in China, and revenues associated with China operations important to success.