JBL · Q2 2026 Earnings

Bullish

Jabil

Reported March 18, 2026

30-second summary

Jabil printed Q2 revenue of $8.28B (+23.1% YoY), $282M above the high end of the prior $7.5–8.0B guide, and core EPS of $2.69, $0.02 above the high end. FY26 revenue guide was raised by $1.6B to $34.0B and core EPS by $0.70 to $12.25 — the second consecutive quarterly raise, with AI-related revenue now lifted to ~$13.1B (+46% YoY) from $12.1B at Q1. The intelligent infrastructure FY26 framing moved to $16.5B (+34% YoY) and management told the Street a third hyperscaler closure is expected "within weeks" — the FY27 setup is being pre-loaded one quarter at a time.

Headline numbers

EPS

Q2 FY2026

$2.69

Revenue

Q2 FY2026

$8.28B

+23.1% YoY

Gross margin

Q2 FY2026

9.0%

Operating margin

Q2 FY2026

4.5%

Key financials

Q2 FY2026

Metric	Q2 FY2026	YoY	Q1 FY2026	QoQ
Revenue	$8.28B	+23.1%	$8.30B	-0.3%
EPS	$2.69	—	$2.85	-5.6%
Gross margin	9.0%	—	8.9%	+10bps
Operating margin	4.5%	—	3.4%	+110bps

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	$7.5 billion to $8.0 billion	$8.282 billion	+$0.282 billion above guidance high end	Beat
Core EPS (Non-GAAP)	Q2 FY2026	$2.27 to $2.67 per share	$2.69 per share	+$0.02 above guidance high end	Beat
GAAP EPS	Q2 FY2026	$1.70 to $2.19 per share	$2.08 per share	in-line with guidance high end	Beat
Core Operating Income (Non-GAAP)	Q2 FY2026	$375 million to $435 million	$438.7 million	+$3.7 million above guidance high end	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q3 FY2026	$8.1 billion to $8.9 billion	+3.4% to +13.5% YoY
Core EPS (Non-GAAP)	Q3 FY2026	$2.83 to $3.23 per share	—
GAAP EPS	Q3 FY2026	$2.36 to $2.76 per share	—
Core Operating Income (Non-GAAP)	Q3 FY2026	$452 million to $512 million	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY2026	$32.4 billion	$34.0 billion	+$1.6 billion	Raised
Core EPS (Non-GAAP)	FY2026	$11.55 per share	$12.25 per share	+$0.70 per share	Raised

Reaffirmed unchanged this quarter: Core Operating Margin (Non-GAAP) (5.7%), Adjusted Free Cash Flow (Non-GAAP) ($1.3+ billion)

Profitability

Q2 FY2026

Segment	Q2 FY2026
Core Operating Margin	5.3%
Adjusted Free Cash Flow (FY2026 Guidance)	$1.3+ billion

Management tone

Q3 FY25 anchor: AI as operating thesis → Q4 FY25: capacity is the constraint → Q1 FY26: AI rebased upward one quarter in → Q2 FY26: AI rebased again, FY27 pre-loaded with third hyperscaler.

The shape of the AI commitment language hardened from quarterly raises into structural inflection. Three quarters ago, the framing was "demand for AI hardware is not slowing down". Two quarters ago: $11.2B FY26 target. One quarter ago: rebased to $12.1B. This quarter: "demand continues to outstrip supply for the integration of highly complex racks and servers" — and the FY26 number is at $13.1B. The cumulative two-quarter lift of $1.9B is larger than the entire FY25 AI revenue base was framed at three years ago. When management is raising the same forward number every print and citing supply imbalance as the bottleneck rather than demand uncertainty, the question for the bear case becomes which quarter the rebasing pattern breaks — and there is no evidence of that in this print.

The previously-trough end markets graduated from "monitoring" to "recovering." Last quarter Regulated Industries was reframed as "return to growth" without sizing. This quarter the prepared-remarks framing — "those markets have bottomed and are now slowly recovering" — is explicit, with the Regulated FY26 outlook lifted by $500M. The structural read: the FY26 raise is no longer single-axis. AI is doing $1.0B of incremental work; Regulated is doing $0.5B. The bear thesis that Jabil is a one-end-market story took its biggest hit yet this quarter.

The strategic frame moved from product supplier to systems integrator. The notable phrase — "we now have the capability to design and deliver integrated systems at the system level" — is the cleanest articulation yet of what the Hanley (power) + Micros (liquid cooling) + Memphis (servers) + North Carolina (next gen) acquisitions add up to. In Q1 the integration story was implicit in the capex line; this quarter it's the operating posture. The Q&A confirmation that neocloud business is being won "across diverse capabilities" validates the model is working outside the hyperscaler concentration.

The one place tone tightened, again, is free cash flow. $1.3B+ has now been reaffirmed three consecutive prints — first against $31.3B, then $32.4B, now $34.0B. Each refresh mechanically dilutes the conversion ratio (4.2% → 4.0% → 3.8%), and management has not addressed the absorption. The "we're going to stay measured" and "extremely disciplined" hedge language in the tone analysis is consistent with where this strain sits. It's the only place in the print the bull narrative leaves a footprint.

EV positioning sharpened from cautious to "powertrain agnostic." The Q&A line — "our strategy to focus on powertrain agnostic capabilities is working as we continue to win programs on ICE platforms… we're going to stay extremely disciplined in both our outlook and investments regarding EVs" — completes a multi-quarter pivot from EV as the auto thesis to EV as one of several auto exposures. China EV remains weak; other regions improving. The capital discipline message is louder than the EV opportunity message.

Recurring themes management leaned on this quarter:

AI data center infrastructure driving growth accelerationDiversified portfolio recovery across regulated industriesMargin expansion through favorable mix and disciplined executionCapacity and supply chain readiness for demand surgeRobotics and physical AI as emerging growth vectorStrong free cash flow generation amid higher revenue

Risks management surfaced:

Global uncertainty and geopolitical factors affecting demandWorking capital management tied to higher revenue growthEV market timing and investment discipline requiredExecution risk on customer ramps and integration programsSupply-demand balance sustainability for AI infrastructure

Q&A highlights

Rupalu Bhattacharya · Bank of America

Rank-order opportunity in intelligent infrastructure (compute, networking, semi-cap). Can AI revenue growth of ~50% YoY sustain beyond fiscal 26?

Growth was broad-based: cloud/DCI up $600M (east coast retrofit 2-3 months ahead of schedule, Memphis expansion), networking/comms up $400M ($300M networking, $100M 5G), capital equipment up $100M. AI revenue grew $1B YoY. Management expressed confidence in sustained momentum but provided no specific growth rate guidance beyond FY26.

$1.1B intelligent infrastructure revenue increaseCloud/DCI: +$600MNetworking/comms: +$400MCapital equipment: +$100M

Mark Delaney · Goldman Sachs

Update on winning new hyperscaler customers and third hyperscaler discussions. What products/applications show most share gain potential?

Second hyperscaler ramp progressing well. Close discussions with third hyperscaler expected to close within weeks, major contributor to FY27. Memphis expansion on track; North Carolina facility ready July/August with multiple interested customers. Strategy is holistic system integration (compute, networking, power, liquid cooling) not siloed products.

Third hyperscaler: closure expected within weeksMemphis expansion: 1.5M sq ft on trackNorth Carolina: ready July/August, expect closure soonHolistic system-level integration strategy

Stephen Fox · Fox Advisors

Intelligent infrastructure operating margin outlook and drivers. Status on manufacturing reconfigurations and capacity constraints. Physical AI opportunities and program highlights.

II margins improved 40 bps YoY despite peak capacity. Portfolio approach: DCI at enterprise margins; networking, silicon photonics, power, liquid cooling at higher margins. East coast retrofit complete (2-3 months ahead), no further major reconfigs pending. Physical AI in early commercialization; Jabil well-positioned given existing hardware capabilities in retail, warehouses, robots, autonomous vehicles, industrial automation.

II margins: +40 bps YoYEast coast retrofit: complete, 2-3 months earlyLiquid cooling: integral to future intelligent infrastructure growthPhysical AI: still in early commercialization, high cost/complexity

Sameek Chatterjee · J.P. Morgan

Opportunities with neocloud players. CapEx trajectory given peer announcements of significant increases; U.S. facility expansion needs and liquid cooling retrofits.

Winning neocloud business with system integration capabilities (service racks, power, liquid cooling, network switching, silicon photonics). Intelligent infrastructure now highly diversified (customers, products, capabilities). CapEx modeled at 1.5-2% of revenue going forward despite expansion. II business is asset-light, requiring less capital than traditional EMS.

Neocloud: winning business across diverse capabilitiesCapEx: 1.5-2% to revenue trajectory maintainedIntelligent infrastructure: asset-light modelII diversified: customers, products, manufacturing scale

Melissa Fairbanks · Raymond James

Automotive results better than expected; exposure to China EV slowdown. Renewables/energy infrastructure sustainability beyond tax credit expirations. Healthcare/packaging equipment margin profile.

Automotive: pivoted to powertrain-agnostic platforms (ICE, hybrid, EV); OEMs want compute modules across all categories. China EV slow but other regions showing recovery. Renewables: shift from residential to commercial installations more sustainable than tax-incentive driven. Healthcare: minimally invasive tech more capability-based with higher margins vs. disposables.

Automotive: powertrain-agnostic strategy (ICE, hybrid, EV)EV momentum: positive in Q2, outside ChinaRenewables: commercial installations growing, less tax-dependentHealthcare minimally invasive: higher capability-based margins

Answers to last quarter's watch list

Q2 FY26 actual vs $7.5–8.0B revenue / $2.27–2.67 EPS guide — revenue printed $8.282B, $282M above the high end; core EPS $2.69, $0.02 above the high end. The sequential step-down framing from Q1 turned out to be too conservative — Q2 actually grew $0M from Q1's $8.31B, not the implied 7% decline. East coast retrofit ran 2–3 months ahead of schedule and the second hyperscaler ramp continued at pace. The H1 print does not require an H2-loaded bridge; both raises are organic. Status: Resolved positively

FY26 AI revenue at Q2 print — target lifted to $13.1B (+46% YoY) from $12.1B (+35% YoY), a +$1B raise. This is the second consecutive quarterly upward revision, exactly the pattern flagged as the cleanest demand-durability tell. The "compound the FY27 setup" scenario is now the active case, particularly given the third hyperscaler closure expected within weeks. Status: Resolved positively

FCF conversion in H1 — H1 FCF was not separately disclosed in the press release excerpt, but FY26 adjusted FCF was reaffirmed at $1.3B+ against a now-higher $34.0B revenue base. The conversion ratio mechanically moved from ~4.0% to ~3.8% — second consecutive reaffirmation despite revenue and EPS raises. Working capital absorption from the AI ramp is now visible in the math even if not addressed verbally. Status: Resolved negatively (the conversion compression flagged last quarter has continued, not reversed)

Regulated Industries Q2 revenue trajectory — segment-level Q2 figure not specifically broken out in the press release excerpt, but FY26 Regulated Industries outlook was raised by $500M to $12.5B, confirming the "return to growth" framing has structural sizing behind it. The recovery is no longer back-half-dependent — the segment raise is driving $0.5B of the $1.6B total FY26 raise. Status: Resolved positively

Second hyperscaler ramp at $1B vs prior $750M, plus third/fourth pipeline disclosure — second hyperscaler continues to ramp on schedule. The major news: third hyperscaler closure expected within weeks, positioned as an FY27 contributor. North Carolina facility ready July/August with multiple interested customers. This is the highest-leverage upside vector for FY27 modeling and management has now telegraphed it more explicitly than at any prior point. Status: Resolved positively

What to watch into next quarter

Q3 FY26 actual vs $8.1–8.9B revenue / $2.83–3.23 EPS guide — the Q3 midpoint of $8.5B implies +8.6% YoY on the $7.83B base; a print at or above the high end ($8.9B / +13.5% YoY) would mark the third consecutive quarter of beats above the high end of the guide. A miss below the $8.5B midpoint would be the first crack in the rebasing pattern.

Third hyperscaler closure confirmation and sizing — management said closure expected "within weeks." Watch for explicit naming or sizing of the FY27 contribution. A disclosed dollar range or qualitative ramp framing would be the most actionable FY27 datapoint in years.

FY26 AI revenue at Q3 print — $13.1B is now the target after a cumulative +$1.9B lift across two prints. Watch whether a third upward revision arrives or whether the rebasing pattern pauses. A pause without other drivers softening would suggest the run rate has stabilized, not weakened.

H1 FCF and implied H2 conversion — $1.3B+ FY26 against $34.0B is now ~3.8% conversion. Watch for an explicit H1 FCF disclosure and whether management addresses working-capital absorption from the AI ramp. A reaffirmation at $1.3B+ on a further revenue raise would be the first place to question whether the AI revenue quality matches the headline.

Core operating margin Q3 print vs 5.7% FY guide — Q2 came in at 5.3%, below the FY mark. The H2 bridge requires ~6.0%+ to land at 5.7%. A Q3 print at or above 5.7% would confirm the bridge is mechanical; a sub-5.5% print would tighten the FY26 EPS to $12.25 bridge.

North Carolina facility customer commitments by Q3 call — management said customer commitments expected "soon" with the facility ready July/August. Concrete customer announcements would anchor FY27 modeling and validate the $500M capex commitment from Q3 FY25.

Sources

Jabil Q2 FY2026 press release, March 18, 2026. https://www.sec.gov/Archives/edgar/data/898293/000162828026019043/jbl-20260318ex991.htm
Jabil Q2 FY2026 earnings conference call commentary (Q&A excerpts as referenced).

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.