Jabil Reports Q4 2026 Results: Full Earnings Call Transcript

On Wednesday, Jabil (NYSE: JBL ) discussed fourth-quarter financial results during its earnings call. The full transcript is provided below. This content is powered APIs. 6 billion, up 29% YoY, driven by intelligent infrastructure and regulated industries.

5 billion in revenue, a 24% increase, with significant growth anticipated in AI infrastructure, automotive, defense, and aerospace. 5-2% of revenue. The firm plans to return 80% or more of adjusted free cash flow to shareholders, with a strong focus on share repurchases and maintaining an investment-grade credit profile. CEO Mike Dastoor emphasized the company's evolution into an engineering-led, supply chain-enabled manufacturing solutions provider, with a focus on expanding margins and improving returns on invested capital.

Full Transcript Adam Berry, SVP Investor Relations and Corporate Affairs Good morning and welcome to Jabil's fourth quarter earnings call and ninth Annual Investor Briefing. My name is Adam Berry. I'm Senior Vice President of Investor Relations and Corporate Affairs. Thank you for joining us today.

Each September, this call is an opportunity for us to both report the quarter as well as give you a deeper look at our business and the opportunities that lie ahead. And as you'll hear throughout today's presentation, we have a lot to feel good about as the momentum we've seen in fiscal 2026 continues into fiscal 2027. Before we begin, it's worth noting that today's presentation is being live streamed. The slides are available in the Investor Relations section of Jabil and a recording will be available after this event.

In addition, we will be making forward looking statements during this presentation, including, among other things, those regarding the anticipated outlook process such as our currently expected first quarter and full fiscal year 2027 net revenue and earnings. These statements are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. An extensive list of these risks and uncertainties is identified in our annual report on Form 10-K for the fiscal year ended August 31, 2025 and in other filings with the SEC.

Jabil disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Now let me set the stage for what we'll cover today. We'll begin with Greg Hebert, our Chief Financial Officer, who will review our fourth quarter and fiscal year results, cash flow and balance sheet capital returns as well as our first quarter outlook. We will then move to Steve Borges who will cover our regulated industry segment including transportation, healthcare and renewable and energy infrastructure.

Next, Matt Crowley will follow with intelligent infrastructure and how we're expanding our role across AI infrastructure as customer demand continues to accelerate. Following Matt will be Rafael Rena who will discuss newly renamed segment Intelligent Devices and Robotics, or IDR, which will take the place of connectivity and digital commerce. We feel this name change better reflects where the segment is heading in terms of automation and robotics capabilities.

As the mix of business continues to shift towards more highly complex engineered solutions upon these three leaders, it will become further evident that the business remains strong and in good shape with growth coming in many key areas. 5 billion of revenue in fiscal 27 after having added over 6 billion in fiscal 26. That's an unprecedented amount of growth for Jabil.

Hence, we felt it was critically important for Frank Mckay, our Chief Supply Chain Officer, and Andrew Priestley, our Chief Operations Officer, to discuss how we're preparing to deliver this growth as well as our unique model for working with both customers and suppliers to secure the necessary components to ensure customer success. And finally, our CEO Mike Dastoor will bring it all together, starting with how Jabil has evolved as an engineering led supply chain enabled manufacturing solutions company, followed by our fiscal 2027 outlook by end market, our capital allocation priorities and how we're thinking about the business beyond fiscal 2027.

We'll then open the call for your questions. As you will hear from the team, there are three key messages today. First, we're positioned for growth in fiscal 27. Our strong customer relationships and capabilities are expanding what we can deliver while committed customer demand is filling the additional capacity we have added.

Second, our commitment to product, end market and customer diversification continues to create meaningful value. AI remains strong with a broadening customer base complemented by growth in automotive, defense and aerospace, healthcare, energy infrastructure and warehouse and retail automation. These businesses broaden our customer base and allow us to apply capabilities across markets. Finally, we're focused on converting this growth into earnings, cash flow and shareholder returns through disciplined execution, investment and capital allocation.

With that, let's get started. It's my pleasure to introduce Chief Financial Officer Greg Hebert. Greg Hebert, Chief Financial Officer Thank you Adam. Good morning everyone and thank you for joining us.

I am very excited with our strong finish to fiscal 26. Fourth quarter revenue and core earnings per share both exceeded the high end of our guidance, reflecting solid execution across the business. 6 billion, up 29% year over year and more than $1 billion above the midpoint of our June outlook. The upside was driven from intelligent infrastructure and regulated industries.

I'll provide additional detail on both segments later in my remarks. 7% of revenue. 4%. 40, up 34% year over year.

Net interest expense for the quarter was $87 million. 4 billion, up 9% year over year and above our outlook for the quarter. Auto and transportation was the largest contributor to that upside, with demand stronger than we expected. Renewable and energy infrastructure also finished ahead of our outlook.

Together, those businesses more than offset lower than expected revenue in healthcare and packaging, where results were impacted by delays in automation equipment and the timing shift of a customer program. 8%. 8 billion, up 56% year over year and roughly $900 million above our June outlook. The upside was driven by two factors.

First, AI related demand remained very strong and continued to accelerate, exceeding the significant growth we had already incorporated in our June outlook. Second, capacity came online sooner than planned and customer ramps progressed better than anticipated, allowing us to support that higher level of demand. That growth was supported by the ramp of our second hyperscaler in Mexico and continued strength in our networking programs in India. Our power business also performed better than expected, contributing to the upside for the quarter.

After being capacity constrained for much of the year, we're beginning to see our capacity investments drive growth. 5%, up 60 basis points year over year, reflecting an improvement including the contribution of our margin accretive Hanley Energy acquisition. 4 billion, roughly flat year over year. 1%.

As Adam mentioned, we will refer to this business as Intelligent Devices and Robotics in our outlook. Turning to cash flow in our balance sheet, let me begin with inventory. We made solid progress in the fourth quarter, reducing net inventory days by approximately four days sequentially to 64, including inventory deposits. Gross inventory days ended the year at approximately 82.

While net inventory days remain above our target range of 55 to 60 days, we expect continued improvement and return to that range as we move through fiscal 2027. Cash from operations was $733 million in the quarter and approximately $2 billion for the full year. 3% of revenue. 3 billion plus dollars.

5% to 2% of revenue. The asset light nature of intelligent infrastructure enables us to support strong growth while continuing to invest across our diversified portfolio. 7 billion. 4 billion of unused borrowing capacity.

4 billion. Our strong financial position provides the flexibility to support customer growth, continue returning capital to shareholders while maintaining commitment to an investment grade credit profile. 1 billion for the full year. That builds on our consistent track record of returning capital to shareholders.

Since fiscal 2013, we've reduced shares outstanding from approximately 203 million to approximately 104 million, a reduction of 49% over that period. 8 billion to shareholders through repurchases and dividends. 5 billion program authorized by our board in July. 4 billion remained available at year end.

Our long term framework remains unchanged. Return 80% or more of adjusted free cash flow to shareholders over time while continuing to invest for growth. 5 billion, up about 12% year over year. The growth is expected to be led by auto and transportation, driven by programs in defense and aerospace and automotive, along with continued momentum in renewable and energy infrastructure.

3 billion, up about 63% year over year. AI related demand remains very strong and continues to accelerate we expect customer ramps and additional capacity coming online to support that growth. 2 billion, down about 10% year over year. 4 billion.

GAAP operating income is expected to be in the range of $481 million to $541 million. Core operating income is estimated to be in the range of $592 million to $652 million. 18. 2.

Net interest expense is estimated to be approximately $95 million for Q1 and in the range of $390 to $400 million for the year. Tax rate for Q1 and for the fiscal year is expected to be 20%. Let me close with our full year results and the longer term progress shown on the next two slides. 8% and together with our share repurchase program has driven core earnings per share at a compound annual rate of approximately 29%.

3% while more than tripling annual free cash flow. That's a strong track record and one we are proud of. Our business has evolved considerably over that period, but our focus has remained consistent, strengthening the portfolio, expanding margins and converting earnings into cash. We saw the value of that approach again this year.

Intelligent infrastructure led our growth and automotive energy infrastructure and digital commerce also contributed. The strength of our diversified portfolio gives us multiple opportunities to grow and we'll continue to allocate capital toward the market. That and capabilities where we see the most attractive long term returns. We enter fiscal 2027 with strong momentum and broader participation across our end markets.

Our focus remains on delivering that growth with the same financial discipline that has driven our progress to date. Our business leaders will now discuss those opportunities in more detail before Mike takes you through our strategy and full year outlook. Steve, let me turn it over to you. To begin with, Regulated Industries Steve Borges, EVP, Regulated Industries Thanks Greg.

Good morning everyone. I lead Jabil's regulated industry segment which brings together automotive and transportation, defense and aerospace, healthcare and packaging and renewable energy infrastructure. These businesses share an important characteristic. They compete in markets where trust is earned over years, not quarters.

Qualification cycles are lengthy, certification requirements are rigorous and customers depend on consistent execution throughout programs that often remain in production for a decade or longer. That creates durable customer relationships and gives us the opportunity to expand our role over time. We often begin by supporting a specific product and as confidence and performance increase, we broaden our engagement into adjacent technologies, additional manufacturing processes, and increasingly complex system level solutions. Deepening these relationships remains one of the strongest drivers of value creation across the segment.

Looking ahead to fiscal 2027, we remain optimistic about the outlook across regulated industries. Automotive is benefiting from a more balanced technology mix. Defense and aerospace is gaining momentum as new programs move into production. Healthcare is expected to return to growth while renewable and energy infrastructure is benefiting from improving markets and overall demand.

Although we remain mindful of the broader demand environment, the long term trends supporting these businesses remain compelling. Let me start with automotive and transportation. This business returned to growth faster than we anticipated, driven by strong operational execution, improved win rates with strategic customers, and disciplined portfolio management.

Over the past several years, we have intentionally repositioned the automotive business towards higher value opportunities including software defined vehicles, advanced driver assistance systems, vehicle compute and powertrain agnostic technologies that support internal combustion, hybrid and battery electric platforms. That strategy is working. We have reduced the share of electrification and powertrain programs in our portfolio from approximately 80% in fiscal 2023 to about 40% in fiscal 2026. Software defined vehicle compute and advanced driver assistance programs represent much of the balance.

This more balanced mix positions us to perform across multiple technology pathways as the market evolves. While regional dynamics vary, we continue to see strong momentum across the board. In the US our growth is increasingly tied to to powertrain agnostic technology. In Europe and in China, we are seeing increased adoption of advanced technologies across battery electric platforms.

Our European pipeline continues to expand as existing customers extend these architectures across global vehicle platforms and respond to ongoing localization requirements. Approximately 90% of fiscal 2026 automotive revenue came directly from original equipment manufacturing manufacturers. As OEMs rethink their strategies, outsourcing is becoming more prevalent. Jabil is well positioned to benefit from these trends.

Our customer relationships, engineering expertise, advanced manufacturing know how and resilient global supply chain enable us to participate in the highest value, most complex areas of the autonomous, connected, electrified and software defined vehicle market. Beyond automotive, we see attractive potential across the broader portfolio. Defense and aerospace is expected to become an increasingly meaningful contributor in fiscal 2027 as new programs move into production across both established industry leaders and emerging technology companies.

Customers need partners that can move complex products from design to high volume production while meeting demanding quality, security and scale requirements. This is where Jabil's breadth of capabilities becomes a competitive advantage.