Financial Performance Overview

Jabil Inc. is one of the leading providers of worldwide manufacturing services and solutions. The company reported mixed financial results for the three and six months ended February 28, 2025.

Net revenue decreased 0.6% to $6.73 billion in the three-month period and 9.4% to $13.72 billion in the six-month period, compared to the same periods in the prior year. The decline was primarily driven by a 13% and 34% decrease in the Connected Living and Digital Commerce segment, respectively, due to the divestiture of the Mobility Business. This was partially offset by an 18% and 12% increase in the Intelligent Infrastructure segment, respectively, driven by growth in the cloud, data center, and capital equipment businesses.

Gross profit as a percentage of net revenue decreased to 8.6% in both the three and six-month periods, down from 9.3% in the same periods last year. This was primarily due to product mix changes in the Connected Living and Digital Commerce segment.

Selling, general and administrative (SG&A) expenses decreased by $52 million and $61 million in the three and six-month periods, respectively, mainly due to lower salary and related expenses. Research and development expenses remained flat as a percentage of net revenue.

The company recorded $45 million and $128 million in restructuring, severance and related charges in the three and six-month periods, respectively, related to its 2025 Restructuring Plan to optimize its organizational effectiveness. This was lower than the $70 million and $197 million recorded in the same periods last year for the 2024 Restructuring Plan.

Jabil recorded no gain from divestitures in the current periods, compared to a $944 million gain in the prior year periods related to the sale of the Mobility Business. Acquisition and divestiture related charges also decreased by $38 million and $53 million in the three and six-month periods, respectively, due to lower transaction costs.

Interest expense, net decreased by $10 million and $19 million in the three and six-month periods, respectively, due to lower interest rates and borrowings. The effective tax rate increased to 36.2% and 32.7% in the three and six-month periods, respectively, compared to 12.7% and 13.6% in the prior year, primarily due to changes in the jurisdictional mix of earnings.

Overall, net income attributable to Jabil Inc. decreased to $117 million and $217 million in the three and six-month periods, respectively, compared to $927 million and $1.12 billion in the same periods last year. Diluted earnings per share decreased to $1.06 and $1.93, respectively, from $7.31 and $8.66 in the prior year periods.

Segment Performance

The Regulated Industries segment, which includes automotive, healthcare, packaging, and renewable energy infrastructure, saw net revenue decrease 8% in both the three and six-month periods. This was driven by declines in the automotive, transportation, healthcare, and packaging businesses, partially offset by growth in renewable energy infrastructure.

The Intelligent Infrastructure segment, which includes capital equipment, cloud and data center, and networking and communications, saw net revenue increase 18% and 12% in the three and six-month periods, respectively. This was primarily due to strong growth in cloud, data center, and capital equipment, partially offset by a decline in networking and communications.

The Connected Living and Digital Commerce segment, which includes connected living and digital commerce, saw net revenue decrease 13% and 34% in the three and six-month periods, respectively. This was driven by the divestiture of the Mobility Business, partially offset by growth in the digital commerce business.

Liquidity and Capital Resources

As of February 28, 2025, Jabil had approximately $1.6 billion in cash and cash equivalents, the majority of which was held by foreign subsidiaries. The company has access to additional liquidity through its revolving credit facilities, commercial paper program, asset-backed securitization program, and trade receivables sale programs.

During the six-month period, Jabil used $503 million in net cash for investing activities, primarily for capital expenditures and acquisitions. Net cash used in financing activities was $746 million, mainly for share repurchases, debt payments, and dividend payments.

For fiscal year 2025, Jabil anticipates net capital expenditures to be in the range of 1.5% to 2.0% of net revenue to support ongoing maintenance and investments in capabilities and targeted end markets.

The company currently expects to continue declaring and paying regular quarterly dividends, subject to the discretion of the Board of Directors. Jabil also has an active share repurchase program, having repurchased shares during the six-month period.

Acquisitions and Divestitures

In fiscal year 2025, Jabil completed the acquisitions of Pharmaceutics International, Inc. and Mikros Technologies LLC to enhance its Regulated Industries and Intelligent Infrastructure service offerings, respectively. The company also finalized the divestiture of its Mobility Business in the prior fiscal year, recording a $944 million pre-tax gain.

Outlook and Risks

Jabil faces several risks and uncertainties that could impact its future performance, including:

• Scheduling production, managing growth and capital expenditures, and maximizing manufacturing efficiency
• Managing rapid changes in customer demand
• Dependence on a limited number of customers and suppliers
• Technological changes and competition in the industry
• Ability to introduce new business models and implement new competencies
• Risks associated with international operations and trade disputes
• Financial risks such as customer/supplier financial troubles, debt exposure, and currency fluctuations
• Regulatory, legal, and intellectual property risks
• Risks of natural disasters, climate change, and other global events

Overall, Jabil’s financial results for the three and six-month periods were mixed, with revenue declines offset by cost savings and lower restructuring charges. The company’s liquidity position remains strong, providing flexibility to invest in growth initiatives and return capital to shareholders. However, Jabil faces a number of operational and financial risks that will require careful management going forward.