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01/11 16:22
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A highlight strong growth in AI revenue, positive developments in healthcare, and strategic U.S. investments. Despite some concerns about EV market volatility, the overall sentiment is positive with raised revenue guidance, strong shareholder returns, and a focus on high-margin products. The Q&A provided confidence in management's growth strategies, especially in data centers, outweighing minor uncertainties. The combination of these factors suggests a positive stock price movement over the next two weeks.
Revenue for Q4 $8.3 billion, exceeded the midpoint of guidance by $800 million, driven by broad-based growth across all three segments.
Core Operating Income for Q4 $519 million, well above the high end of the expected range, driven by strong underlying revenue growth.
Core Operating Margin for Q4 6.3% of revenue, representing a 50 basis point improvement year-over-year, attributed to better business mix and operational efficiency.
Net Interest Expense for Q4 $65 million, no specific year-over-year change or reasons mentioned.
GAAP Operating Income for Q4 $337 million, no specific year-over-year change or reasons mentioned.
Diluted Earnings Per Share (GAAP) for Q4 $1.99, no specific year-over-year change or reasons mentioned.
Core Diluted Earnings Per Share for Q4 $3.29, no specific year-over-year change or reasons mentioned.
Regulated Industries Revenue for Q4 $3.1 billion, increased approximately 3% year-over-year, driven by stronger-than-anticipated growth in renewable and energy infrastructure and automotive and transportation.
Core Operating Margin for Regulated Industries for Q4 6.5%, expanded by 40 basis points year-over-year, driven by a better mix.
Intelligent Infrastructure Revenue for Q4 $3.7 billion, $400 million above expectations, driven by faster efficiency gains, favorable mix, and stronger-than-anticipated demand in storage.
Core Operating Margin for Intelligent Infrastructure for Q4 5.9%, no specific year-over-year change or reasons mentioned.
Connected Living & Digital Commerce Revenue for Q4 $1.4 billion, declined approximately 14% year-over-year, primarily due to softness in consumer-driven products, partially offset by growth in warehouse and retail automation.
Core Operating Margin for Connected Living & Digital Commerce for Q4 6.6%, increased by 210 basis points year-over-year, reflecting cost actions and a shift towards higher-margin programs.
Inventory Days for Q4 69 days, improved by 5 days from the previous quarter.
Net Inventory Days for Q4 55 days, down 4 days sequentially, supported by working capital discipline.
Cash from Operations for Q4 $588 million, no specific year-over-year change or reasons mentioned.
Net CapEx Expenditures for Q4 $83 million, no specific year-over-year change or reasons mentioned.
Full Year Adjusted Free Cash Flow More than $1.3 billion, no specific year-over-year change or reasons mentioned.
Debt to Core EBITDA 1.3x, no specific year-over-year change or reasons mentioned.
Cash Balances at Year-End Approximately $1.9 billion, no specific year-over-year change or reasons mentioned.
Share Repurchase Authorization Completion $1 billion completed in Q4, consistent with the framework to return 80% of annual adjusted free cash flow to shareholders.
AI-related systems: Jabil is positioned to capture growth in AI-related systems, including semiconductor capital equipment, racks, servers, and advanced cooling solutions. AI-related revenue grew from $5 billion in FY '24 to $9 billion in FY '25 and is expected to reach $11.2 billion in FY '26.
Digital Commerce & Robotics: Investments in retail automation, robotics, and AI-driven systems are driving growth. Jabil is focusing on warehouse automation, autonomous vending, and humanoid robotics.
Connected Living: Jabil is transitioning towards advanced technologies like wireless power, human-machine interfaces, and connectivity platforms, while moving manufacturing to regions like Mexico and Southeast Asia.
Geographic Revenue Shift: Jabil has shifted its revenue profile from being heavily weighted towards Asia in FY '18 to a more balanced mix, with the Americas now accounting for 46% of revenue in FY '25.
AI Infrastructure Expansion: Jabil is building a new facility in North Carolina to address capacity constraints in AI infrastructure, expected to come online in 2026.
Operational Efficiencies: Jabil is embedding AI and automation across its operations, including 25,000 robots in production and AI-driven tools for quality inspections and supply chain management.
Supply Chain Resilience: AI-powered platforms like V-command are enhancing supply chain visibility, agility, and efficiency, reducing sourcing cycles and improving logistics.
Portfolio Rationalization: Jabil is pruning lower-margin programs in legacy consumer electronics and focusing on higher-margin areas like AI, health care, and digital commerce.
Capital Allocation: Jabil plans to return 80% of free cash flow to shareholders while maintaining a strong balance sheet and investing in high-return areas.
Automotive and Transportation: The industry is facing a global market correction with slowed near-term growth in battery electric vehicles (BEVs). Regulatory shifts, changing incentives, trade pressures, and U.S. tariffs on Chinese EVs are reshaping OEM strategies. These dynamics are expected to weigh on FY '26 performance.
Renewables and Energy Infrastructure: Interest rates, tariffs, and policy changes are reshaping near-term demand in areas like solar and energy storage. Despite these headwinds, the company has been able to support customers without disruption, but the macroeconomic environment remains dynamic.
Connected Living & Digital Commerce (CLDC): The segment is experiencing a deliberate shift away from lower-margin legacy consumer programs, leading to a planned revenue decline of about 13% in FY '26. This transition could create short-term financial pressures.
Health Care: While the segment shows growth potential, the long incubation lead times for drug delivery systems and other innovations could delay revenue realization. Additionally, health care companies face growing pressure to simplify supply chains, which could pose challenges.
Intelligent Infrastructure: The company is nearing capacity constraints in the U.S. for AI-related manufacturing, which could limit growth in FY '26. The new facility in North Carolina will not come online until mid-2026, potentially delaying the ability to meet strong demand.
Supply Chain and Procurement: The global supply chain remains complex, with over 38,000 suppliers and 700,000 unique parts. Tariffs, policy shifts, and supply chain disruptions could impact operations and costs.
Geopolitical and Economic Risks: Geopolitical uncertainty, including tariffs and trade policy shifts, could impact the company's regionalized manufacturing model and supply chain operations.
Revenue Guidance for Q1 FY '26: Total company revenue for Q1 is expected to be in the range of $7.7 billion to $8.3 billion.
Segment Revenue Projections for Q1 FY '26: - Regulated Industries: $3.05 billion, up 3% year-on-year.
Core Operating Income for Q1 FY '26: Estimated to be in the range of $400 million to $460 million.
Core Diluted Earnings Per Share for Q1 FY '26: Estimated to be in the range of $2.47 to $2.87.
AI-Related Revenue Growth for FY '26: Expected to grow by roughly 25%, reaching about $11.2 billion.
Intelligent Infrastructure Segment Growth for FY '26: Revenue expected to grow 18% with double-digit contributions from cloud and data center and from capital equipment.
Connected Living & Digital Commerce Segment Outlook for FY '26: Revenue expected to decline by about 13% due to pruning of lower-margin programs and focus on higher-margin opportunities.
Regulated Industries Segment Outlook for FY '26: Revenue expected to remain flat with margin expansion driven by health care growth offsetting automotive and renewables.
Enterprise-Level FY '26 Guidance: - Revenue growth of approximately 5% to about $31.3 billion.
Total Shareholder Returns: $7.7 billion, including both dividends and buybacks since FY '13.
Share Repurchase Authorization: Completed prior $1 billion share repurchase authorization in FY '25.
New Share Repurchase Program: Board authorized a new $1 billion share repurchase program in July, to be fully executed in fiscal '26.
Shares Outstanding Reduction: Reduced from 203 million in FY '13 to 107 million in FY '25, a 47% decline.
Share Repurchase Strategy: Repurchased 136 million shares at an average price of approximately $52 since FY '13.
The earnings call highlights positive financial guidance, including strong AI-related revenue growth and optimistic guidance for the Intelligent Infrastructure segment. The Q&A section reveals confidence in margin expansion and strategic investments in healthcare and cloud businesses. Despite some uncertainties, such as unchanged free cash flow projections and conservative automotive outlook, the overall sentiment is positive. The company's strategy to focus on higher-margin opportunities and the potential for new partnerships with hyperscalers further support a positive stock price reaction over the next two weeks.
The earnings call summary and Q&A highlight strong growth in AI revenue, positive developments in healthcare, and strategic U.S. investments. Despite some concerns about EV market volatility, the overall sentiment is positive with raised revenue guidance, strong shareholder returns, and a focus on high-margin products. The Q&A provided confidence in management's growth strategies, especially in data centers, outweighing minor uncertainties. The combination of these factors suggests a positive stock price movement over the next two weeks.
The earnings call reflects strong financial performance with a 35% increase in core diluted EPS and robust growth in AI-related revenues. The company is executing a strategic expansion plan, including a $1 billion share repurchase. While some segments face challenges, overall guidance is optimistic, and management is addressing margin improvements. The Q&A session provided insights into growth opportunities and risk management, further supporting a positive outlook. Given these factors and the absence of market cap data, a positive stock price movement of 2% to 8% is anticipated.
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