Jabil Inc. (JBL) | The Buildout — AI Infrastructure
The Verdict
Jabil takes complex hardware from design into high-volume production, and increasingly builds and integrates whole systems rather than parts. Its AI exposure sits in the Intelligent Infrastructure segment, which supplies racks, servers, storage, power distribution and liquid cooling for data centers, plus semiconductor test subsystems and networking gear. Management rejects the contract-manufacturer label, describing Jabil as an engineering-led, supply-chain-enabled manufacturing solutions company that helps customers build the systems they designed rather than steering them onto a Jabil platform. The appeal of that position is timing: Jabil wants to be engaged before the product design is locked, where management says it is very hard to displace.
| Market Cap | — |
| Revenue (TTM) | $36.0B |
| Revenue Growth | +20.6% |
| EBITDA Margin (TTM) | 7.3% |
| Net Debt | $2.3B |
| Earnings Beats | 7 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- FY2026 AI-related revenue was ~$14.4B, up $5.4B (~60% YoY), about $800M above the June guide of ~$13.6B.
- FY2027 guidance pairs revenue of ~$44.5B (+24%) with AI-related revenue of ~$22.1B (+54%) — the incremental AI dollar grows from ~$5.4B to ~$7.7B.
- Customer breadth is widening: four customers above $1B of AI-related revenue in FY2026, up from one two years ago, and the second hyperscaler is expected to become a 10%+ customer in FY2027.
- The model is asset-light: net capex was $470M, or 1.3% of revenue, in FY2026 (from 2.9% in FY2020), with FY2026 free cash flow conversion of ~110% of core net earnings and core ROIC of 59%.
- Top-5 customer concentration is drifting down — 36% of nine-month revenue in the June 2026 10-Q, from 38% in the two prior filings — while 78 customers make up about 90% of revenue.
What We’re Watching
- Margins are back-end loaded by design: FY2027 revenue is guided 45% first half / 55% second half, and management says the first one or two quarters of any ramp carry higher costs. The 6.1% full-year margin guide sits below the 6.4% Q4 FY2026 exit rate.
- Memory and component supply: management calls the reallocation of memory toward AI and hyperscale a 'structural shift,' with high-bandwidth memory and high-density PCBs tight. The supply chief's stated top worry is access to supply, and the constraint is baked into guidance rather than quantified.
- Inventory days were 64 net (gross ~82) at year-end, above the 55–60 target, with normalization now expected through FY2027.
- The Adani India platform — 'multi-gigawatt' AI data-center manufacturing — has no definitive framework, no financials and an FY2028 realistic start; separately, Connected Living revenue is guided down ~15% to ~$2.3B in FY2027.
The thesis reads as strengthening on the near-term numbers: two consecutive guidance raises, a Q4 revenue beat, a third hyperscaler booked on the timeline management had given, and a formal FY2027 plan built on roughly $8.5B of added revenue. The evidence also shows how much of that plan rests on things not yet proven — supply access, a clean capacity ramp, and a second-half margin lift. The open question is whether the 6.1% margin and the Adani framework arrive when management says they will.
Earnings Beat
Jabil reported Q4 FY2026 revenue of ~$10.6B, up 29% year over year and more than $1B above the June midpoint, at a 9.4% gross margin. Core operating income was $675M, a 6.4% core margin, and core diluted EPS was $4.40, up 34% — both above the high end of guidance. The standout was Intelligent Infrastructure at ~$5.8B, up 56% and about $900M above the June outlook, with management citing demand ahead of plan and capacity arriving sooner than expected.
| Metric | Q4 FY2026 | Q3 FY2026 | Q4 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $10.6B | $8.8B | $8.3B | +28.6% |
| Gross margin | 9.4% | 9.5% | 9.5% | -10bps |
| EBITDA | $856M | $641M | $389M | +120.1% |
| EPS | $3.72 | $2.58 | $2.00 | +86.5% |
| Net inventory days | 64 | ~68 | n/a | — |
AI-related demand remained very strong and continued to accelerate, exceeding the significant growth we had already incorporated in our June outlook.— Matt Crowley, 2026-09-30
Management tone: Tone shifted constructively from the June call. The third hyperscaler moved from 'close discussions' to booked, FY2027 was formalized with numbers, and Regulated Industries commentary improved, with auto returning to growth faster than anticipated. Management also added blunt caveats — back-end-loaded margins, memory as a 'structural shift,' inventory above target — and declined to discuss Adani's structure or capital model.
Management Guidance
Management guides FY2027 revenue to ~$44.5B (+24%) at a 6.1% core operating margin (+30 bps), with core diluted EPS of $17.55, adjusted free cash flow of ~$1.6B and AI-related revenue of ~$22.1B (+54%). The stated assumptions: revenue split 45% first half / 55% second half with margins back-end loaded as capacity fills; capex of 1.5%–2% of revenue (closer to 1.5%); net interest expense of $390M–$400M; and a 20% core tax rate. For Q1 FY2027 the guide is revenue of $10.6B–$11.4B and core diluted EPS of $3.80–$4.20, with Regulated at ~$3.5B (+~12%), Intelligent Infrastructure at ~$6.3B (+~63%) and IDR at ~$1.2B (−~10%). Management describes the outlook as 'appropriately conservative' given geopolitics, inflation and supply-chain constraints.
Trajectory
Revenue was roughly flat through the first three quarters of FY2026 — $8.3B, $8.3B and $8.8B — then stepped up in Q4, taking the fiscal year to ~$36B, up 21%. Margins moved with the mix: gross margin went from 8.9% in Q1 FY2026 to 9.4% in Q4, and EBITDA margin from 6.6% to 8.1% over the same span (EBITDA basis: operating income plus D&A as reported). The driver is Intelligent Infrastructure, up 56% in Q4 and the source of most of the dollar growth, while Connected Living is being deliberately shrunk. Guidance extends the step: a 6.1% core operating margin on revenue weighted 45/55 to the second half.
The Model
The model projects FY+1 revenue of $45,500M with EBITDA of $3,594M (7.9%), and FY+2 revenue of $54,300M with EBITDA of $4,453M (8.2%). The near-term figure sits just above management's FY2027 revenue guide, anchored on the roughly 4 million square feet of capacity management says is booked and on AI-related revenue compounding at a guided 54%. FY+2 assumes the second hyperscaler's 10%+ ramp holds, the third hyperscaler scales, and the Adani platform begins contributing — management points to FY2028 as the realistic starting point. Across the five runs behind the FY+2 figure, revenue dispersion is 13%, with a low of $49,182M and a high of $56,500M.
| Metric | FY2026 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $36.0B | $45.5B | $54.3B |
| YoY Growth | — | +26.6% | +19.3% |
| EBITDA | $2.6B | $3.6B | $4.5B |
| EBITDA Margin | 7.3% | 7.9% | 8.2% |
Projections are the median of 5 independent model runs. The model’s revenue sits 14.1% above analyst consensus.
Management guides FY2027 revenue to ~$44.5B (+24%) at a 6.1% core operating margin (+30 bps), with core diluted EPS of $17.55, adjusted free cash flow of ~$1.6B and AI-related revenue of ~$22.1B (+54%). The stated assumptions: revenue split 45% first half / 55% second half with margins back-end loaded as capacity fills; capex of 1.5%–2% of revenue (closer to 1.5%); net interest expense of $390M–$400M; and a 20% core tax rate. For Q1 FY2027 the guide is revenue of $10.6B–$11.4B and core diluted EPS of $3.80–$4.20, with Regulated at ~$3.5B (+~12%), Intelligent Infrastructure at ~$6.3B (+~63%) and IDR at ~$1.2B (−~10%). Management describes the outlook as 'appropriately conservative' given geopolitics, inflation and supply-chain constraints.
What Could Go Right — and Wrong
- The ~4 million square feet of added capacity converts on schedule; management says orders are booked and customers are ready.
- AI-related revenue compounds at or above the guided 54%, and if memory supply eases, management says demand 'way outweighs' supply.
- The second-half margin lift materializes as utilization fills; Q4 FY2026 exited at a 6.4% core margin against a 6.1% full-year guide.
- Breadth keeps widening: the second hyperscaler holds 10%+ customer status, the third hyperscaler scales, and Regulated Industries returns to growth.
- Adani moves from 'no framework' to a defined structure and capital commitment, converting the largest named project into forecastable demand.
- Memory and component constraints bite the guided networking ramp or the Connected Living decline hard enough to pull FY2027 revenue or margin below the 6.1% margin / guided revenue frame.
- A first-half ramp slip propagates into the full year, because margins are back-end loaded and the plan assumes clean second-half execution.
- A hyperscaler pauses or reallocates capex; AI-related revenue is an estimated ~40% of FY2026 and heading toward roughly half in FY2027, concentrated in a few relationships.
- Adani stays undefined or is de-emphasized, removing the largest named future project from the plan.
- Inventory days fail to normalize from 64 toward the 55–60 target, while working capital and net interest expense ($390M–$400M guided for FY2027) rise with growth.
Looking Ahead
The next twelve months are a capacity-and-mix story. Management expects the added capacity to be fully on board by early calendar 2027, with revenue weighted 45/55 across the halves and margins lifting as utilization improves. The third hyperscaler scales from a modest FY2027 start, with 2028 as the next step; the second hyperscaler is expected to cross 10%+ customer status, and healthcare returns to growth with Croatia ramping through FY2027 to full production in FY2028. The Adani platform's framework, if it comes, points to FY2028. Against that, the buyback authorization had ~$1.4B remaining at year-end.
- Q1 FY2027Q1 FY2027 results — Tests the ramp: II guided ~$6.3B (+63%).
- ~JanuaryNorth Carolina full ramp — One customer booked; $1B–$3B run-rate over 1/2/3 years.
- FY2027Second hyperscaler 10%+ — Expected to cross 10%+ customer status as Mexico ramps.
- FY2027Inventory normalization — From 64 net days toward the 55–60 day target.
- FY2027–FY2028Croatia healthcare ramp — Ramp in FY2027, full production FY2028; >700M injectors in FY2027.
- FY2028Adani framework — Multi-gigawatt India platform; no definitive framework yet.
Financials
Annual Summary
| Metric | FY2025 | FY2026 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $29.8B | $36.0B | $36.0B | +20.6% |
| Gross Margin | 8.9% | 9.2% | 9.2% | +32bps |
| EBITDA | $1.9B | $2.6B | $2.6B | +40.9% |
| EBITDA Margin | 6.2% | 7.3% | 7.3% | +105bps |
| Net Income | $657M | $1.0B | $1.0B | +58.6% |
| Free Cash Flow | $1.2B | $1.7B | $1.7B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)9.2%
- EBITDA Margin (TTM)7.3%
- Net Margin (TTM)2.9%
- ROIC34.6%
- FCF Conversion65.9%
- SBC / Revenue0.6%
The Company
Jabil describes itself in its 10-K as 'one of the leading providers of engineering, manufacturing, and supply chain solutions,' taking complex products from design into industrialized, high-volume production and increasingly building whole systems rather than components. The AI buildout reaches it through Intelligent Infrastructure: racks, servers, storage, power distribution and liquid cooling for data centers, plus semiconductor test and wafer-fab subsystems and networking gear including AI switches and co-packaged optics. Management resists the contract-manufacturer label — 'We are not a contract manufacturer competing with low-cost EMS companies, nor are we a product company competing with our customers.'
The operating model rests on three things management laid out on the September call: engineering (more than 9,000 engineers, engaged before the product design is locked), supply chain (about $35B of global spend, 40,000 suppliers, 1 million parts, roughly 3,500 procurement and supply-chain professionals and about 120 strategic partners), and manufacturing (more than 120 sites in 30 countries, including more than 40 in the U.S.). Capital intensity is deliberately low: net capex was $470M, or 1.3% of revenue, in FY2026 against 2.9% in FY2020, with capex guided at 1.5%–2% and Intelligent Infrastructure closer to 1%. The company has also re-mixed away from lower-margin work — it divested the Mobility business and is running Connected Living down by about 15% in FY2027.
Business Segments
Competitive Landscape
Jabil's stated differentiation is that it builds the system the customer designed rather than selling the customer a platform of Jabil's own. Dastoor's framing: 'Others in the industry are building product companies around their own power and cooling platforms and asking customers to standardize on them. That's a legitimate model. Ours is different.' Competitor names in the material come from counterparty filings rather than any ranking by Jabil itself, and a cross-stack theme in the source groups Celestica, Jabil, Sanmina and Flex as EMS/ODM companies being re-rated into AI infrastructure platforms, with combined AI-related revenue approaching $50B. The source's own criticality read is that a halt at Jabil would cause only minor delays, given how replicable advanced manufacturing services are.
- CelesticaNamed in counterparty filings as a competitor; not discussed.
- FlexNamed in counterparty filings as a competitor; not discussed.
- SanminaNamed in counterparty filings as a competitor; not discussed.
- Foxconn / Hon HaiNamed by Arista Networks as one of its primary manufacturing partners and listed in the competitor sets drawn from counterparty filings.
- Named in counterparty filings as a competitor; not discussed.
Supply Chain
Jabil sits on both sides of the chain: it manufactures for other hardware companies, including Arista, Cohu and Trimble, and it supplies hyperscaler data centers. No neighbor transcript in the material names Jabil directly, so the read-through is inferred.
More on JBL: Earnings recap