Earnings Recap — Q4 FY2026
CY Q3 2026 · Reported September 30, 2026 · Beat 7 of last 7 quarters
Jabil Inc. reported Q4 FY2026 revenue of $10.62B, a beat of 9.3% against consensus, and EPS of $4.40, a beat of 8.1%.
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Jabil's quarter and its fiscal 2027 outlook reinforce that AI infrastructure spending is broadening beyond accelerator-centric training clusters into the surrounding stack — racks, liquid cooling, power distribution and modular data centers, networking and capital equipment — where Jabil positions itself as an asset-light integrator. The guidance for AI-related revenue to reach roughly $22.1 billion, up about 54%, alongside 4 million square feet of added capacity and six $1-billion-plus customers in Intelligent Infrastructure, is a demand signal for the power, thermal, optical and test layers of the buildout. Management's framing that most of its AI business supports deployed inference rather than frontier training, plus constraints in memory supply, suggests the buildout's component and materials supply chain could remain the key gating factor through fiscal 2027.
Jabil reported fourth quarter revenue of approximately $10.6 billion, up 29% year-over-year and more than $1 billion above the midpoint of its June outlook, with GAAP operating income of $602 million (5.7% of revenue), core operating income of $675 million (6.4% core operating margin) and core diluted EPS of $4.40, up 34%. Intelligent Infrastructure revenue was approximately $5.8 billion, up 56%, driven by accelerating AI-related demand, the ramp of a second hyperscaler in Mexico, continued strength in networking programs in India and better-than-expected power revenue, supported by capacity that came online sooner than planned; segment core operating margin was 6.5%, up 60 bps year-over-year including the Hanley Energy acquisition. Regulated Industries revenue was $3.4 billion, up 9%, with auto and transportation the largest contributor to upside and renewable and energy infrastructure also ahead, partly offset by lower healthcare and packaging revenue on delays in automation equipment and the timing shift of a customer program; segment core operating margin was 5.8%. Connected Living & Digital Commerce revenue was approximately $1.4 billion, roughly flat year-over-year, at a 7.1% core operating margin, and the segment is being renamed Intelligent Devices & Robotics. For the full fiscal year, revenue grew 21%, core operating margin expanded 40 bps, core EPS grew 34%, gross margin reached 9.2%, net CapEx was 1.3% of revenue, adjusted free cash flow was about $1.5 billion and core ROIC was 59%; net inventory days fell about 4 days sequentially to 64 (gross inventory days approximately 82), still above the 55-60 day target range, and the company repurchased about $169 million of shares in Q4 and approximately $1.1 billion for the year.
For fiscal 2027, management guided to revenue of approximately $44.5 billion, up about 24%, with core operating margin of 6.1% (up 30 bps), core diluted EPS of $17.55 (up about 34%) and adjusted free cash flow of approximately $1.6 billion, and said the company is adding in excess of $8.5 billion of revenue on top of over $6 billion added in fiscal 2026. Intelligent Infrastructure is guided to roughly $25.6 billion, up about 43%, with all three end markets growing double digits: cloud and data center infrastructure up about 52% to $17.5 billion, capital equipment up about 40% to $4.2 billion as the wafer fab equipment cycle recovers and ATE demand stays strong, and networking and communications up about 15% to $3.9 billion despite a subdued 5G market. Regulated Industries is guided to approximately $13.6 billion, up about 7%, led by auto and transportation at about $5 billion (up 9%), healthcare and packaging at about $5.6 billion (up 6%) and renewable and energy infrastructure at about $3 billion (up 7%), while Intelligent Devices & Robotics is guided to roughly $5.3 billion, down about 2%, as a 15% decline in Connected Living more than offsets 11% growth in Digital Commerce & Robotics. Management said revenue should split roughly 45%/55% first half to second half but margins would be more back-end loaded because of ramp costs, yield and training expenses as about 4 million square feet of capacity comes online, and said it would try to outperform the 6.1% margin. Demand commentary remained strong: AI-related demand "continues to accelerate," the added capacity is being filled with committed business, and Jabil expects six customers in Intelligent Infrastructure to each generate more than $1 billion of revenue in fiscal 2027 (five with AI-related revenue above $1 billion). Management reiterated an asset-light model with net CapEx of 1.5% to 2% of revenue, a return to the 55-60 day net inventory target range during fiscal 2027, and FY2028 framing that includes exiting FY2027 with meaningfully higher capacity, the India data center build-out through the Adani Group alliance, co-packaged optics and physical AI.
“The AI spending that makes headlines is at the frontier, small number of labs training the most capable models on the largest clusters ever built. Most of our business is not there.”
on AI demand mix
“In fiscal 2027, we expect that to grow to approximately $22.1 billion, up 54%. What is really impressive about this is that's another $7.7 billion at a higher growth rate on top of a much larger base, even from our expectations in June.”
on FY2027 AI revenue outlook
“In constrained markets, allocation follows trust as much as order size does.”
on Supply constraints
Looking at roughly $8.5 billion of growth, how do you think about the challenges to execute to that number this year versus last year, and how does that get you to the 6.1% operating margin — how much is sheer operating leverage from volume versus things you control?
Mike Dastoor said he feels good about the 6.1% margin, which is 30 bps up year-over-year, and about executing on the roughly $8.4 billion of revenue growth, which involves growing capacity by about 4 million square feet. He said the company has line of sight to all the capacity it is adding, with booked orders and customers ready to go, and that revenue is relatively balanced through the year at 45% to 55% first half to second half. Margins are more back-end loaded because bringing on that much capacity involves yield, additional expenses and training in the initial ramp, and he said management would try to outperform the 6.1% and that there might be upside if execution comes in better than expected.
How should we think about margin progression through the year given underutilization costs and program ramps, and why is networking and communications growth expected at 15% in fiscal 2027, below the other Intelligent Infrastructure end markets, versus OEM commentary pointing to very strong demand?
Greg Hebard said the shape of the year will be similar to last year: lighter on the first half from a margin perspective, then ramping as capacity is filled and utilized in the back half, with continued SG&A leverage and better mix. Matt Crowley said networking is actually growing roughly 45% to 50%, and the 15% reporting line reflects downside in the communications space, where the business continues to manage through a bottom; he said the 45% to 50% networking growth is in line with, if not ahead of, the market.
What demand signals do you need to see to get more aggressive in adding Intelligent Infrastructure capacity, and how long is the lead time to line up capacity for fiscal 2028 and beyond?
Matt Crowley said the company spent much of fiscal 2026 adding capacity in preparation for fiscal 2027 and feels good about what it sees 12 to 24 months out, having prepared for more of an 18-month horizon. He said capacity with lower power requirements — 2 to 4 megawatts at 1 million square feet — can be added relatively quickly inside 3 to 4 months, while demand for highly complex AI racks requiring 20 to 30 megawatts of power toward test infrastructure is a different profile. He said the company would look at adding capacity if unanticipated demand from new customer wins not currently in the funnel appeared, but that it has brought on the capacity it expects to need.