Jabil
Contract design and manufacturing at scale — builds electronic and mechanical products for OEM customers across healthcare, automotive, cloud/data-center, networking, capital equipment, and consumer end-markets. Thin gross margins (~9%) on very high volume; earns via scale, engineering/integration services, supply-chain management, and disciplined capital return (buybacks). Increasingly moving up the value chain into AI systems integration, liquid cooling, and photonics.
Earnings, margins, COGS & capex
Jabil earns thin EMS margins on ~$30-35B of revenue but has structurally improved mix and margin since its 2024 three-segment reorganization. FY2025 revenue grew only 3.2% as legacy consumer/mobility and EV/renewables demand softened, but Intelligent Infrastructure (cloud/data-center, networking, capital equipment) surged on AI. That segment is now the growth engine: FY2026 AI-related revenue is guided to ~$13.6B (~50% YoY growth from ~$9B in FY2025), roughly 39% of total. Management has aggressively bought back stock, shrinking the share count (diluted shares down to ~107M) and amplifying EPS growth well above revenue growth.
Income statement — where each revenue dollar goes
% of revenueOf every $1 of revenue, ~91¢ is cost of goods and ~4¢ operating expense, leaving ~5¢ of operating profit (~2¢ net).
Revenue trend
Margins
improving on richer systems/integration mix
expanding
improving
thin by design, edging up
up sharply, buyback-amplified
rising
COGS structure
Cost of goods sold is ~91% of revenue (90.5% in Q3 FY26) — dominated by direct materials (components, semiconductors, mechanicals) passed through at low markup, plus direct labor and factory overhead across a global footprint. Margin leverage comes from mix (higher-value systems integration, thermal/liquid cooling, photonics) and utilization, not from pricing power on commodity assembly.
Capex
Net capex ~$0.9-1.0B/yr (~3% of revenue), directed at data-center/AI capacity, liquid-cooling and photonics capability, and select automation. Asset-light relative to semiconductor or capital-equipment peers; free cash flow conversion is a core part of the equity story (guided $1.4B+ adjusted FCF FY2026; $991M through 9M).
Latest earnings
Beat (core EPS $3.16 vs ~$3.08 consensus); management raised full-year FY2026 guidance across revenue, margin, EPS, and FCF
FY2026: ~$35B revenue, 5.8% core op margin, $12.70 core diluted EPS, $1.4B+ adjusted FCF. Q4 FY2026: $9.2-10.0B revenue, $3.80-4.20 core diluted EPS. AI-related revenue raised to ~$13.6B (+$500M vs March outlook).
- Q3 revenue
- $8.751B (+12% YoY)
- Q3 core EPS
- $3.16 (+24% YoY vs $2.55)
- Q3 GAAP EPS
- $2.59 (vs $2.03)
- Q3 GAAP operating income
- $445M
- Q3 core operating income
- $504M
- Q3 net income
- $275M
- FY26 AI revenue (guided)
- ~$13.6B (~50% YoY)
- 9M adjusted FCF
- $991M
- Leverage
- ~1.3x debt/core EBITDA
Growth drivers
- AI data-center infrastructure — servers, networking, capital equipment, silicon photonics, and liquid/thermal cooling for hyperscalers (Intelligent Infrastructure segment; ~$13.6B AI revenue guided FY2026, ~50% YoY)
- Healthcare & regulated industries — medical devices, drug delivery, and automotive/transport (Regulated Industries, highest-margin segment)
- Move up the value chain — from board assembly to full system integration, design, and supply-chain services that command better margins
- Reshoring / regional manufacturing footprint (US, Mexico, India, Europe) as customers de-risk from concentrated Asia supply chains
- Capital return — sustained large buybacks compounding EPS above revenue growth
Reported financials — SEC EDGAR
Audited GAAP figures pulled from SEC filings · latest filing 2025-10-17. The audited primary-source spine — not financial advice.
Revenue — annual (GAAP)
Margins & balance sheet — FY’25
Bull & bear
Jabil has transformed from a low-multiple commodity EMS into a leveraged, cash-generative play on the AI data-center buildout, with a diversified, higher-margin base underneath and a management team compounding EPS through buybacks.
- AI-related revenue guided to ~$13.6B FY2026 growing ~50% YoY — Jabil is a real, scaled arms-dealer to the hyperscaler capex cycle across servers, networking, cooling, and photonics
- Margin and EPS are inflecting up faster than revenue: core op margin 5.4%->5.8%, core EPS $9.75->$12.70 (+30%) in one year
- Aggressive, consistent buybacks ($891M repurchased in 9M FY26; diluted share count down to ~107M) magnify per-share growth and signal confidence
- Diversified regulated/healthcare base provides a durable, higher-margin floor beneath the cyclical AI upside
- Strong FCF ($1.4B+ guided) and investment-grade balance sheet fund both growth capex and capital return
You are paying ~27x current-FY core EPS (near a historic peak for an EMS name) for a fundamentally thin-margin, capex-cycle-dependent contract manufacturer whose AI tailwind could digest and whose baseline business has little pricing power.
- Re-rating from a historical ~12x to ~27x current-FY core EPS prices in sustained AI growth; any hyperscaler capex pause or share loss re-compresses the multiple hard
- EMS is structurally a ~9% gross-margin, low-differentiation business — Flex, Celestica, Sanmina, Foxconn and BYD Electronic all chase the same AI/data-center contracts, pressuring price
- Customer concentration and in-sourcing risk: hyperscalers can and do bring integration in-house or dual-source to squeeze margin
- Legacy segments (Connected Living/consumer, some Regulated auto/EV) have shown steep declines, masking how much of the story now rests on one cyclical driver
- EPS growth is partly financial engineering (buybacks) rather than pure operating outperformance; net debt ~$2B on $3.378B total debt
What it is worth
Peer-relative (EMS comps) cross-checked with a reverse-DCF sanity read. At ~$342 and ~$36B market cap ($35.76B) on $12.70 guided FY2026 core EPS, JBL trades ~27x current-FY core EPS. On FY2027 consensus core EPS (~$15-16) the forward multiple is ~22x (market forward P/E ~21.7); trailing GAAP P/E is ~43x. This is a large premium to the historical EMS 10-15x band and above/around peers Flex and Sanmina, though below the hottest AI-EMS re-rating (Celestica). EV/EBITDA sits in the low-to-mid teens.
~$210-260
AI capex digests, revenue growth slows to low single digits, margins stall, and the multiple compresses back toward ~15-18x on ~$13 EPS — a de-rating toward the historical EMS range (near the ~$190 52-week low in a harder downturn).
~$340-380
~$35B FY2026 delivered, $12.70 core EPS, mid-teens EPS growth into FY2027, multiple holds ~25-27x. Roughly the current price — fairly valued on guidance.
~$430-475
AI revenue keeps compounding ~40-50%, core op margin pushes past 6%, FY27 core EPS approaches ~$15-16, and the market sustains a ~28-30x AI-infrastructure multiple. (Aligns with the recent ~$429 52-week high.)
The current multiple embeds continued double-digit revenue growth and steady margin expansion driven by AI infrastructure — i.e., the reverse-DCF implies the AI capex cycle stays strong for several more years and Jabil holds its content share. That is plausible but not conservative; the multiple, not the fundamentals, is the primary risk.
SWOT
Strengths
- Scale: among the largest EMS providers globally (~$30-35B revenue), giving procurement leverage and hyperscaler-grade capacity
- Diversified end-markets — healthcare, automotive, data-center, networking, capital equipment — smoothing any single cycle
- Rising AI-infrastructure exposure with genuine capability (system integration, liquid cooling, silicon photonics), not just box assembly
- Strong free cash flow and disciplined capital return; consistent, large buybacks shrinking share count
- Investment-grade balance sheet, modest leverage (~1.3x)
Weaknesses
- Structurally thin margins (~9% gross, ~5-6% core operating) — a low-margin business model with limited pricing power on commodity work
- Revenue quality tied to a handful of large OEM customers; concentration risk
- Cyclical and demand-driven — legacy consumer, mobility, EV/renewables end-markets have been volatile and declining
- Low differentiation vs Flex, Celestica, Sanmina on baseline manufacturing; competition is on execution and price
Opportunities
- Continued AI-capex supercycle expanding the Intelligent Infrastructure segment and mix-shift to higher-value integration/cooling/photonics
- Reshoring and supply-chain regionalization (India, Mexico, US, Europe) as customers diversify away from concentrated Asia footprints
- Healthcare/medtech and pharma manufacturing outsourcing — durable, higher-margin, regulated demand
- Further margin expansion as systems-integration and design services grow as a share of revenue
Threats
- AI-capex digestion or hyperscaler spending pause would hit the segment now driving the re-rating
- Customer in-sourcing or shifting to rival EMS (Foxconn/Hon Hai, Celestica, Flex, BYD Electronic) on price
- Tariffs, trade policy, and geopolitical disruption to a globally distributed supply chain
- Valuation risk — multiple has re-rated to ~27x current-FY core EPS (~22x on FY2027 consensus) — above the historical EMS 10-15x band — leaving little room for a growth disappointment
- Component/semiconductor supply shocks and FX volatility
Moats, dependencies & bottlenecks
Moats
Top-tier EMS scale and a distributed manufacturing footprint create real switching friction and procurement leverage, but two-to-three peers have comparable scale.
Deep design-in and qualified manufacturing (especially regulated medical/auto) are sticky, but baseline assembly is contestable on price.
Genuine up-the-stack capability, but Celestica and Flex are building the same; edge is execution, not a structural lock.
Dependencies
Hyperscaler / cloud AI capex (Intelligent Infrastructure customers) Demand / end-market The AI segment now drives the growth and the multiple; a spending digestion cycle is the single biggest swing factor.
Customer concentration Revenue leans on a limited set of large customers who can dual-source or in-source.
Chip/component availability and pricing directly gate build volumes and pass-through margins.
Regulatory / geopolitical A globally distributed footprint is exposed to tariffs and reshoring-driven realignment (also an opportunity).
Advantages
- Scale-driven procurement and manufacturing cost leverage
- Diversified end-market mix cushioning single-cycle shocks
- Strong free-cash-flow generation and disciplined capital return
- Investment-grade balance sheet with capacity to fund growth and buybacks
- Early, credible positioning in AI systems integration, liquid cooling, and silicon photonics
Weaknesses
- Low gross margin (~9%) and limited pricing power on commodity assembly
- Heavy dependence on the AI-capex cycle for its growth narrative and premium multiple
- Customer concentration and in-sourcing exposure
- Cyclical legacy segments that have declined sharply
- Elevated valuation leaves little margin for error
Bottlenecks
- Thin structural margins cap profit even in a demand boom — leverage must come from mix and utilization
- Component/semiconductor supply constrains build volume during demand spikes
- Capacity ramp (data-center/cooling/photonics) requires lead-time capex ahead of demand
- Skilled engineering/integration talent for higher-value systems work
Top signals & trends
Top signals
The core growth thesis; watch each print for reacceleration vs deceleration.
Confirms mix-shift up the value chain is real, not just volume.
Continued share-count reduction supports EPS; watch that it isn't the whole EPS story.
Jabil's AI demand is downstream of these budgets; any capex pause flows through.
Sets a high bar; multiple compression is the main downside risk.
Trends
High positive · Primary tailwind; drives Intelligent Infrastructure and the equity re-rating.
Higher-value content per rack that Jabil is positioned to supply.
Favors diversified-footprint EMS providers; India/Mexico/US expansion.
Durable, higher-margin, less cyclical demand in Regulated Industries.
Peers chasing the same AI contracts pressures pricing over time.
Ecosystem & competitor graph
Suppliers feed the company; customers pull from it. Line thickness shows the strength of each tie (supply-chain dependency, customer earnings contribution). Hover to isolate a tie.
GPUs/accelerators whose data-center demand drives Jabil's AI systems content.
Networking/custom silicon and optics components in Jabil's infrastructure builds.
Data-center silicon and optical/DSP components.
Connectors, interconnect, and sensor components.
High-speed interconnect and cabling for data-center systems.
Microsoft, Alphabet, Meta) Data-center, server, networking, and cooling demand — the AI growth engine (customer names representative of the segment).
Networking and communications infrastructure OEM customer type.
Johnson & Johnson MedTech, Stryker) Representative of Regulated Industries healthcare manufacturing demand.
Auto electronics and EV/transport programs within Regulated Industries.
Closest large-scale EMS peer (~$26B revenue); also pivoting hard into data-center/power and cloud infrastructure.
Fastest-re-rated EMS peer on AI/hyperscaler data-center wins; platform-led compute and networking.
Mid-scale EMS competing in AI servers, aerospace/defense, and enterprise computing; expanding via M&A.
Smaller, specialized in medical, aerospace/defense, and complex/regulated work.
Specialized EMS focused on healthcare, industrial, and aerospace/defense certifications.
World's largest contract manufacturer; expanding aggressively into AI servers — the scale threat. Context only, not a US-listed name and not a buy/own call.
Bought Jabil's Mobility business; expanding into servers/automotive electronics. Named for context only, not a buy/own call.