Jabil Reports Strong Third Quarter Performance, Exceeding Expectations Across Revenue, Core Operating Income, and Earnings
Jabil, a leading technology solutions provider, has reported a robust third quarter performance, exceeding expectations across key metrics. The company's net revenue for the quarter came in at $7.8 billion, representing an impressive 16% year-over-year growth and surpassing the midpoint of its guidance range by $800 million.
The significant upside in Jabil's Intelligent Infrastructure business led the charge, driven primarily by AI-related revenue. This segment's revenue grew by approximately 51% year-on-year, with sustained strong demand in cloud and data center infrastructure business, including power, cooling, and server rack solutions. Additionally, capital equipment saw robust demand, offset slightly by lower demand in networking and communications due to softer 5G demand.
Gregory Hebard, Jabil's Chief Financial Officer, highlighted the strength of the company's operating model, stating, "The environment remains dynamic, but our performance this quarter demonstrates the strength of our operating model and our ability to deliver consistent results even as conditions shift."
The company's Regulated Industries segment reported revenue of $3.1 billion, roughly in line with expectations and flat year-over-year. However, core operating margin for this segment was 5.5%, up 70 basis points sequentially but down 50 basis points year-over-year due to ongoing softness in the EV and renewable end markets.
Jabil's Connected Living & Digital Commerce segment saw revenue of $1.3 billion, slightly higher than expected, with a year-over-year decline of approximately 7%. This was mainly driven by softness in consumer-driven products, offset by growth areas such as warehouse and retail automation. Core operating margins for this segment came in at 5.3%, up 210 basis points year-over-year, reflecting cost reduction actions taken earlier in the year.
The company's cash flow and balance sheet metrics also showed improvement, with inventory days decreasing sequentially by 6 days to 74 days, and net of inventory deposits from customers, inventory days were 59, an improvement of 2 days sequentially and within the targeted range.
"We're very pleased with our third quarter performance," said Mike Dastoor, Jabil's Chief Executive Officer. "Our results demonstrate the strength and resilience of our business, even in a dynamic environment."
