Jabil Q4 2026 Earnings: AI Infrastructure Drives a 24% Fiscal 2027 Growth Outlook

Jabil closed fiscal 2026 with stronger-than-expected fourth-quarter revenue and core earnings, led by accelerating AI infrastructure demand and earlier-than-planned capacity ramps. The company’s fiscal 2027 outlook calls for revenue of approximately $44.5B, up 24%, with AI-related revenue expected to rise 54% to $22.1B.

The central investment story is no longer simply Jabil’s exposure to AI hardware. It is whether the company can convert a large capacity buildout and committed customer ramps into sustained margin expansion and free cash flow while managing supply constraints, especially in memory, and preserving its asset-light model.

Earnings Snapshot

As Reported on the Call

Management said both fourth-quarter revenue and core diluted EPS exceeded the high end of its prior outlook. Revenue came in more than $1B above the midpoint of June guidance, primarily because Intelligent Infrastructure and Regulated Industries outperformed expectations.

The Bigger Story

Jabil is entering fiscal 2027 with an unusually large growth plan: management expects to add more than $8.5B of revenue after adding more than $6B in fiscal 2026. Most of that incremental growth is expected to come from Intelligent Infrastructure, where the company supplies equipment and systems spanning semiconductor capital equipment, cloud infrastructure, data-center power and cooling, and networking.

The company expects Intelligent Infrastructure revenue to reach approximately $25.6B in fiscal 2027, up 43%. AI-related revenue alone is projected to rise to approximately $22.1B, up 54% from roughly $14.4B in fiscal 2026.

That outlook depends on Jabil’s ability to bring new capacity online and move customer programs from ramp stages into steadier production. Management said it is adding about 4 million square feet of capacity across the company, with much of the expansion tied to AI infrastructure programs. The company characterized that capacity as supported by booked customer business, but investors should distinguish that statement from recognized revenue: execution, yield improvement, component availability and customer deployment schedules will determine how quickly the planned capacity translates into sales and margins.

Revenue and Operating Performance

Fourth-quarter revenue increased 29% year over year to approximately $10.6B. Intelligent Infrastructure was the primary growth engine, with revenue rising 56% to approximately $5.8B and finishing roughly $900M above Jabil’s June outlook.

Management attributed the Intelligent Infrastructure upside to AI-related demand that continued to accelerate, capacity coming online sooner than expected, and better-than-anticipated customer ramps. The ramp of Jabil’s second hyperscale customer in Mexico, continued networking strength in India, and stronger power-business performance also contributed.

The company’s Intelligent Infrastructure strategy is increasingly centered on broader system-level work rather than individual assemblies. Management highlighted opportunities in servers, racks, power distribution, liquid cooling, networking equipment, optics, test systems and modular data-center infrastructure. Its Hanley Energy acquisition contributed to both growth and margin improvement through power engineering, deployment and service capabilities.

Regulated Industries revenue rose 9% to $3.4B in the fourth quarter. Automotive and transportation was the largest source of upside, while renewable and energy infrastructure also exceeded expectations. Those gains more than offset weaker healthcare and packaging revenue, where Jabil cited delays in automation equipment and a timing shift in a customer program.

For fiscal 2027, management expects Regulated Industries revenue of approximately $13.6B, up 7%. Automotive and transportation is expected to generate about $5B of revenue, up 9%; healthcare and packaging is projected at roughly $5.6B, up 6%; and renewable and energy infrastructure is expected to reach about $3B, up 7%.

The company’s automotive mix has shifted away from electrification and powertrain programs. Jabil said electrification and powertrain represented about 40% of automotive revenue in fiscal 2026, down from approximately 80% in fiscal 2023. The balance is increasingly tied to software-defined vehicles, advanced driver-assistance systems and vehicle compute. That mix shift may reduce exposure to a single propulsion technology, though automotive demand remains inherently dependent on customer program timing and vehicle production.

Intelligent Devices & Robotics, formerly Connected Living & Digital Commerce, generated about $1.4B of fourth-quarter revenue, roughly flat from a year earlier. The name change reflects Jabil’s effort to shift the portfolio toward warehouse automation, robotics, intelligent devices and other higher-complexity products.

Still, the fiscal 2027 outlook for the segment is mixed. Jabil expects Digital Commerce & Robotics revenue to grow about 11% to approximately $3B, but Connected Living revenue is forecast to decline about 15% to roughly $2.3B. As a result, total Intelligent Devices & Robotics revenue is expected to fall about 2% to approximately $5.3B.

Profitability and Margins

Jabil reported fourth-quarter GAAP operating income of $602M, or 5.7% of revenue, and core operating income of $675M, or a 6.4% core operating margin. Core diluted EPS was $4.40, up 34% year over year, compared with GAAP diluted EPS of $3.76.

Intelligent Infrastructure’s 6.5% core operating margin increased 60 basis points from the prior year. Management cited a better business mix, including the margin-accretive contribution from Hanley Energy.

For fiscal 2027, Jabil expects core operating margin of 6.1%, up 30 basis points from fiscal 2026, and core diluted EPS of $17.55, up about 34%. The company expects earnings growth to outpace revenue growth through a combination of higher volume, improved utilization of recently added capacity, better mix and continued share repurchases.

However, management also indicated that the margin progression will be weighted toward the second half of fiscal 2027. New facilities and program ramps initially carry higher costs related to staffing, training, yield development and other launch activities. Revenue is expected to be relatively balanced between the first and second halves of the year, at roughly 45% to 55%, but margins should improve later as capacity utilization rises.

Demand, Customers and Supply Chain

AI infrastructure demand remains the major source of momentum. Jabil said it ended fiscal 2026 with four customers generating more than $1B in annual AI-related revenue, up from one such customer two years earlier. Management expects five customers to exceed $1B of AI-related revenue in fiscal 2027, while six Intelligent Infrastructure customers are expected to generate more than $1B each across the broader segment.

The second hyperscale customer is expected to become a more than 10% customer in fiscal 2027, reflecting the scale of the Mexico ramp. Jabil’s third hyperscale customer, added during fiscal 2026, is expected to make a modest contribution in fiscal 2027, with a larger opportunity beyond that.

Management argued that much of its AI exposure is tied to deployed AI workloads and inference infrastructure rather than frontier-model training. That distinction may be relevant if spending on the largest training clusters becomes more volatile, although Jabil remains exposed to broader cloud and data-center capital-spending cycles.

Supply availability is an important constraint. Management said memory is being reallocated toward AI and hyperscale demand, tightening availability across other markets Jabil serves. The company believes its supplier relationships and customer coordination position it to manage the environment, but it did not suggest it is insulated from shortages.

Net inventory days improved by approximately four days sequentially to 64, but remain above Jabil’s target range of 55 to 60 days. Management cited higher commodity pricing, an increased mix of cloud and data-center inventory, and inventory deposits supporting customer programs. It expects inventory efficiency to improve during fiscal 2027.

What is Jabil’s guidance and outlook?

For the fiscal first quarter, Jabil expects:

For fiscal 2027, management expects approximately $44.5B of revenue, core operating margin of 6.1%, core diluted EPS of $17.55, and adjusted free cash flow of about $1.6B.

The company expects capital equipment revenue to rise approximately 40% to $4.2B, cloud and data-center infrastructure revenue to increase about 52% to $17.5B, and networking and communications revenue to grow roughly 15% to $3.9B. Management clarified that networking itself is expected to grow about 45% to 50%, with the lower reported growth rate reflecting continued weakness in communications and 5G-related markets.

Balance Sheet, Cash Flow and Capital

Jabil ended fiscal 2026 with approximately $1.7B of cash, $3.4B of balance-sheet debt, and $6.1B of total available liquidity, including $4.4B of unused borrowing capacity. Debt to core EBITDA was 1.3x.

Adjusted free cash flow exceeded $1.5B in fiscal 2026, supported by approximately $2B of operating cash flow. Net capital expenditures were $470M, or 1.3% of revenue, below Jabil’s longer-term expected range of 1.5% to 2%.

Management expects to remain asset-light despite the fiscal 2027 growth plan. It reiterated expected net capital expenditures of 1.5% to 2% of revenue and said Intelligent Infrastructure capital intensity is closer to 1% of segment revenue. The company does expect a dollar increase in working-capital requirements as revenue expands, but does not anticipate needing additional external financing to support its current growth plan.

Jabil repurchased approximately $1.1B of stock in fiscal 2026, including $169M in the fourth quarter. About $1.4B remained under the company’s current repurchase authorization at year-end. Management reiterated its framework of returning 80% or more of adjusted free cash flow to shareholders over time while maintaining an investment-grade credit profile.

What Investors Should Watch

1. AI Capacity Ramps and Second-Half Margin Improvement

Jabil’s fiscal 2027 plan depends on new capacity reaching targeted production levels. Investors should watch whether the anticipated second-half improvement in utilization, yields and margins materializes as facilities and customer programs mature.

2. Hyperscaler Expansion and Customer Concentration

The second hyperscale customer is expected to become a more than 10% customer in fiscal 2027. That provides meaningful growth visibility, but also raises the importance of execution on a concentrated set of large cloud programs.

3. Memory Supply and Inventory Days

Management expects inventory days to return to its 55-to-60-day target range during fiscal 2027. Progress will depend on component availability, customer deposits, commodity costs and the company’s ability to align material purchases with ramp schedules.

4. Regulated Industries Recovery

Automotive, defense and aerospace, healthcare, and energy infrastructure are expected to provide more diversified growth. Healthcare’s return to growth and the ramp of programs such as Croatia will be important tests after fourth-quarter program delays and timing shifts.

5. Portfolio Transition in Intelligent Devices & Robotics

Growth in warehouse and retail automation is being offset by a planned decline in Connected Living. Investors should watch whether Jabil can improve the segment’s revenue quality and returns while reducing exposure to lower-value consumer-oriented programs.

AlgovestIQ Takeaway

Jabil’s fourth-quarter results and fiscal 2027 outlook show that AI infrastructure demand is becoming large enough to reshape the company’s earnings base. Intelligent Infrastructure is expected to account for more than half of fiscal 2027 revenue, and management expects AI-related revenue to exceed $22B.

The financial model is also improving. Jabil has expanded margins, held net capital expenditure relatively low, generated more than $1.5B of fiscal 2026 adjusted free cash flow and maintained modest leverage. The fiscal 2027 target of 6.1% core operating margin suggests management expects the large growth plan to produce operating leverage rather than dilute profitability.

The unresolved question is execution. Jabil is adding substantial capacity, ramping multiple hyperscale programs and operating in a supply environment where memory availability is tightening. Management expects margins to be more back-end weighted because new facilities and programs initially carry higher costs. That makes utilization, yield performance and supply-chain coordination more important than the headline revenue guide alone.

A stronger investment case would be supported by continued AI infrastructure growth, evidence that the second hyperscaler ramp is proceeding as expected, improving inventory efficiency, and second-half margin conversion. The thesis would weaken if component shortages delay launches, new capacity remains underutilized for longer than planned, or growth becomes too dependent on a narrow group of cloud customers.