Jabil Delivers Record-Breaking Quarter: Intelligent Infrastructure Drives Growth
The second quarter fiscal 2026 earnings conference call for Jabil has come to a close, and the company's performance is nothing short of impressive. With net revenue exceeding expectations at $8.3 billion, Jabil's intelligent infrastructure segment continues to be the primary driver of growth, with revenue coming in nearly $300 million above guidance.
Chief Financial Officer Greg Hebard highlighted the strong performance across various areas of the portfolio, including regulated industries and connected living and digital commerce. The company's core operating income came in at $436 million, with a core operating margin of 5.3%. On a GAAP basis, operating income was $374 million, and diluted earnings per share was $2.08.
Regulated Industries generated $3 billion in revenue, up 10% year-over-year and well above guidance. The higher year-over-year revenue was driven by all three end markets, with core operating margin coming in at 4.8%. Intelligent Infrastructure revenue was a staggering $4 billion, up 52% year-over-year and ahead of expectations.
Growth was broad-based across capital equipment, cloud and data center infrastructure, and networking and communications, with core operating margin increasing to 5.7%, up 40 basis points year-over-year. Connected Living and Digital Commerce revenue came in at $1.2 billion, down 8% as expected, but this was partially offset by continued growth in robotics, advanced warehouse, and retail automation.
The company's cash flow and balance sheet metrics also show promise. Inventory days for the quarter were 75, consistent with their targeted range of 55-60 days. Cash flow from operations in Q2 was $411 million, and net capital expenditures were $51 million, resulting in adjusted free cash flow of $360 million for the quarter.
This keeps Jabil well-positioned to deliver over $1.3 billion in adjusted free cash flow for the full fiscal year. The company's balance sheet remains in excellent shape, with $1.8 billion in cash and a commitment to maintaining their investment-grade credit profile.
In addition, Jabil repurchased $300 million of shares under their existing share repurchase authorization during Q2. This strategic move demonstrates the company's confidence in their future prospects and their commitment to returning value to shareholders.
