- Revenue: $7 billion for Q4, $364 million above the midpoint of the guidance range.
- Core Operating Income: $401 million, or 5.8% of revenue.
- Net Interest Expense: $65 million.
- GAAP Operating Income: $318 million.
- GAAP Diluted Earnings Per Share: $1.18.
- Core Diluted Earnings Per Share: $2.30, $0.07 above the midpoint of guidance.
- DMS Segment Revenue: $3.5 billion, exceeded expectations by $79 million.
- DMS Core Operating Margin: 5.4%.
- EMS Segment Revenue: $3.5 billion, $285 million higher than anticipated.
- EMS Core Margins: 6.1%, up 90 basis points year-over-year.
- Inventory Days: 76 days, down five days sequentially.
- Cash Flows from Operations: $535 million for Q4.
- Net Capital Expenditures: $116 million for Q4, $661 million for the full fiscal year.
- Adjusted Free Cash Flow: Over $1 billion for the fiscal year.
- Debt-to-Core-EBITDA: Approximately 1.3 times.
- Cash Balances: Approximately $2.2 billion.
- Share Repurchases: 19.4 million shares, or $2.5 billion, completing FY '24 authorization.
- New Share Repurchase Authorization: $1 billion for FY '25.
- Q1 Revenue Guidance: $6.3 billion to $6.9 billion.
- Q1 Core Operating Income Guidance: $304 million to $364 million.
- Q1 GAAP Operating Income Guidance: $143 million to $223 million.
- Q1 Core Diluted Earnings Per Share Guidance: $1.65 to $2.05.
- Q1 GAAP Diluted Earnings Per Share Guidance: $0.26 to $0.83.
- FY '25 Revenue Guidance: Approximately $27 billion.
- FY '25 Core Margins: 5.4%.
- FY '25 Core Earnings Per Share Guidance: $8.65.
- FY '25 Free Cash Flow Guidance: Around $1.2 billion.
- FY '25 CapEx Guidance: 1.5% to 2% of revenue.
Release Date: September 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Jabil Inc (JBL, Financial) divested its Mobility business for $2.2 billion and returned the majority of those proceeds to shareholders through a robust buyback program.
- The company reported strong margins and free cash flows despite a $6 billion year-over-year revenue decline, indicating resilience.
- Jabil Inc (JBL) reorganized its internal structure to focus on speed, precision, and solutions, transitioning from two segments to three for better growth positioning.
- The company achieved approximately $7 billion in revenue for Q4, exceeding the midpoint of the guidance range by $364 million.
- Jabil Inc (JBL) announced a new $1 billion share repurchase authorization for FY '25, demonstrating a commitment to returning capital to shareholders.
Negative Points
- Revenue in the DMS segment was down approximately 22% year-over-year, primarily due to the Mobility divestiture.
- The EMS segment saw a year-over-year revenue decline of roughly 13%, mainly due to ongoing softness in end markets like 5G, renewable energy, and digital print.
- The company anticipates revenue declines in its Regulated Industries and Intelligent Infrastructure segments for Q1 FY '25, reflecting softness in renewable energy and EV markets.
- Jabil Inc (JBL) expects higher tax rates beyond FY '25 due to global minimum tax legislation impacts, with rates anticipated to be in the range of 23% to 24%.
- The company is carrying higher than normal levels of excess capacity, which will weigh on core operating margins in FY '25 by 20 to 30 basis points.
Q & A Highlights
Q: Are you seeing any slowdown in the cloud and data center infrastructure segment? What is the impact from consignment in fiscal '25?
A: Mike Dastoor (CEO): Year-on-year, we're seeing about a 12% growth rate in Intelligent Infrastructure, excluding the legacy network customer we disengaged with. The impact from consignment is very small. The data center infrastructure business is expected to grow in double digits. Matt Crowley (Head, Intelligent Infrastructure) added that they are focused on expanding the segment beyond existing customers, with recent wins in silicon photonics and power and cooling for data centers.
Q: The healthcare growth rate for next year seems low. Can you talk about what you're seeing in the various end markets within healthcare?
A: Steve Borges (Head, Regulated Industries): The overall healthcare market is growing about 3% to 4%. We've been challenged by the impact of GLP-1 drugs on our medical device segment. However, we have strong new wins in injectors and diabetes care, which will launch in fiscal years '26 and '27. The pipeline for potential divestitures remains strong, indicating that healthcare OEMs still view outsourcing as a strategic move.
Q: What is the current utilization of your global footprint, and is there a need for any restructuring?
A: Mike Dastoor (CEO): Our capacity is set up for a $30 billion-plus revenue run rate, with new facilities coming online. Currently, our utilization is around 70%, creating surplus capacity. We are not restructuring capacity as we believe the end markets we serve will recover. We are addressing some SG&A costs to align with the revenue gap.
Q: Can you elaborate on the strong double-digit growth in the semi-cap business for this year?
A: Matt Crowley (Head, Intelligent Infrastructure): The growth is driven by increased demand in the automated test equipment (ATE) space, linked to the GPU silicon required for AI. We are also seeing a recovery in the wafer fab equipment (WFE) side.
Q: How are you managing pricing pressure in the cloud and data center infrastructure supply chain?
A: Matt Crowley (Head, Intelligent Infrastructure): We are constantly under price pressure, but it is part of the business. We are looking for efficiencies and opportunities to consolidate, which creates value for our customers.
Q: How are your customers approaching the upcoming election, and has it affected their planning?
A: Mike Dastoor (CEO): There is a wait-and-see approach, particularly in EVs and renewables. However, we believe that long-term growth drivers in these sectors will remain strong regardless of the election outcome.
Q: Can you provide more details on the new hyperscaler wins in the data center market?
A: Matt Crowley (Head, Intelligent Infrastructure): The wins are specific to our optical business, but they demonstrate our strategy of creating capabilities outside our core. This positions us to have broader conversations with hyperscalers about other areas of our business.
Q: How did you factor in potential market volatility in your fiscal '25 guidance?
A: Mike Dastoor (CEO): We have learned from last year and have based our second-half guidance on booked business and conservative assumptions. There is no expectation of a major recovery in end markets.
Q: What is driving the margin expansion in the second half of fiscal '25?
A: Mike Dastoor (CEO): The margin expansion is driven by normal EMS seasonality, mix improvements, and operational efficiencies. The second half is based on confirmed bookings and conservative forecasts.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
