Jabil (NYSE:JBL) reported first-quarter fiscal 2026 results that exceeded management’s expectations, citing strength in Intelligent Infrastructure and continued execution across its diversified portfolio. In prepared remarks, Chief Financial Officer Greg Hebard said revenue, core operating income, core margins and core earnings per share all came in “strong,” while Chief Executive Officer Mike Dastoor said momentum in the business is now expected to continue through fiscal 2026 and into fiscal 2027.
Quarterly results top guidance range
For the first quarter, Jabil posted net revenue of $8.3 billion, which Hebard said was at the high end of the company’s guidance range. Core operating income was $454 million, resulting in a 5.5% core operating margin. On a GAAP basis, operating income was $283 million and diluted earnings per share were $1.35. Core diluted EPS came in at $2.85, at the upper end of the company’s guidance range.
- Regulated Industries: Revenue of $3.1 billion, up 4% year-over-year, with core operating margin of 5.8% (up 110 basis points).
- Intelligent Infrastructure: Revenue of $3.9 billion, ahead of expectations, with core operating margin of 5.2% (up 40 basis points).
- Connected Living and Digital Commerce: Revenue of $1.4 billion, ahead of expectations, with core operating margin of 5.5%.
Hebard attributed the Intelligent Infrastructure upside primarily to Cloud and Data Center Infrastructure (DCI) strength, including execution ramping a second hyperscale customer in Mexico and results from data center power operations in Memphis. He also cited stronger networking demand for “next-generation liquid-cooled platforms,” currently supported in India. In Connected Living and Digital Commerce, he pointed to broad-based strength in automation, robotics, and retail warehouse programs.
Cash flow, leverage, and buybacks
Jabil reported inventory days of 70, or 57 days net of customer inventory deposits, which Hebard said was consistent with its targeted range of 55 to 60 days. Cash flow from operations was $323 million, net capital expenditures were $51 million, and adjusted free cash flow was $272 million.
The company reiterated it remains on track to deliver $1.3 billion in adjusted free cash flow for the full year. Jabil ended the quarter with net debt to core EBITDA of 1.2x and cash balances of $1.6 billion. During the quarter, the company repurchased $300 million of shares under its existing authorization.
Second-quarter outlook includes Hanley Energy contribution
For the second quarter of fiscal 2026, Jabil guided to total revenue of $7.5 billion to $8.0 billion. Core operating income is expected to be $375 million to $435 million, while GAAP operating income is expected to be $312 million to $382 million. The company projected core diluted EPS of $2.27 to $2.67 and GAAP diluted EPS of $1.70 to $2.19.
Segment revenue expectations for Q2 include:
- Regulated Industries: $2.78 billion, up 2% year-over-year, with continued healthcare growth and a “disciplined outlook” for Automotive and Renewables.
- Intelligent Infrastructure: $3.76 billion, up 42% year-over-year, supported by demand across cloud, DCI, data center power, networking, liquid cooling, and Capital Equipment.
- Connected Living and Digital Commerce: $1.21 billion, down 10%, reflecting planned program attrition and customer pruning, partially offset by warehouse and retail automation growth.
Hebard said Q2 guidance assumes a “modest contribution” from the previously announced Hanley Energy acquisition, which the company expects to close in January. Jabil expects second-quarter net interest expense of approximately $69 million and full-year interest expense of approximately $270 million, reflecting anticipated acquisition-related borrowings and refinancing of senior notes maturing in April. The company’s core tax rate assumption for Q2 and the full year is 21%.
Full-year guidance raised on broad-based momentum, led by AI
Dastoor said Jabil’s improved outlook is “broad-based,” with all three segments contributing and Intelligent Infrastructure leading. The company raised its fiscal 2026 expectations for revenue, core margins, and core EPS. Jabil now expects fiscal 2026 revenue of approximately $32.4 billion, up $1.1 billion from its prior outlook, and core operating margins of roughly 5.7%, up 10 basis points from its earlier view. Core delivered EPS is now expected to be $11.55, an increase of $0.55, while adjusted free cash flow is still expected to be more than $1.3 billion.
Within Intelligent Infrastructure, Dastoor said the company is raising its outlook by approximately $900 million, driven by Cloud and DCI and networking. He said Cloud and DCI is now expected to reach $9.8 billion for fiscal 2026, including approximately $200 million associated with the Hanley Energy acquisition, which management expects to close in January. Dastoor described Hanley as strengthening Jabil’s capabilities in modular power distribution and energy systems for next-generation data centers, expanding beyond compute into power, energy management, and infrastructure services.
Jabil also raised its AI-related revenue expectation for fiscal 2026 to approximately $12.1 billion, representing about 35% year-over-year growth, up from 25% originally expected in September. Dastoor said the company’s approach of delivering integrated systems combining compute, networking, power distribution, and advanced cooling helps shorten deployment timelines and reduce customer costs. He added that retrofitting of East Coast rack and server factories to accommodate liquid cooling is “slightly ahead of schedule.”
Q&A: hyperscalers, margins, healthcare, and capacity
In the question-and-answer session, management provided additional context on the raised outlook. Dastoor said the second hyperscaler upside is tied to AI storage racks built in Mexico and that second-hyperscaler revenue is now roughly in the “billion-dollar range,” compared to an earlier reference of $750 million. He said Jabil is also in discussions with additional hyperscalers, though those opportunities are not included in current numbers.
On margins, Dastoor attributed the fiscal 2026 core operating margin increase to “better mix,” improved capacity utilization (moving closer to the 80% range from the mid-70% range), and SG&A leverage. He declined to provide fiscal 2027 margin guidance, but said he feels better about the path to 6% operating margins than he has in the past, citing pipeline strength and leverage opportunities, including a full-year impact from Hanley.
On healthcare, Dastoor described the business as “solid” with a healthy pipeline and visibility into program ramps across drug delivery and chronic disease management. He said Croatia is “going really well,” and noted the GLP-1 space carries higher margins, though he said good returns from Croatia are expected around 2027, potentially in the second half. He also said Jabil continues to evaluate healthcare deals focused on adding capabilities, including discussions spanning business development and M&A.
Management also addressed capacity planning for cloud and AI programs, pointing to surplus capacity in Mexico, a mix of existing and new capacity in India, upcoming capacity in North Carolina, and potential expansion in Memphis. Dastoor said these plans do not change the company’s capital spending framework, reiterating a CapEx outlook of 1.5% to 2% of revenue for fiscal 2026.
About Jabil (NYSE:JBL)
Jabil Inc (NYSE: JBL) is a global manufacturing solutions provider specializing in electronic manufacturing services (EMS) and diversified products across a wide range of industries. The company partners with original equipment manufacturers to deliver design engineering, supply chain management, precision manufacturing, and aftermarket services. Jabil’s expertise spans sectors such as healthcare, automotive, clean technology, telecommunications, consumer electronics, and packaging, enabling it to support both high-volume production and complex, mission-critical applications.
Founded in 1966 by William E.
