Technology
Electronic Components
$17.15B
138K
Jabil Inc. provides manufacturing services and solutions worldwide. It operates in two segments, Electronics Manufacturing Services and Diversified Manufacturing Services. The company offers electronics design, production, and product management services; electronic circuit design services, such as application-specific integrated circuit design, firmware development, and rapid prototyping services; and designs plastic and metal enclosures that include the electro-mechanics, such as the printed circuit board assemblies (PCBA). It also provides three-dimensional mechanical design comprising the analysis of electronic, electro-mechanical, and optical assemblies, as well as various industrial design, mechanism development, and tooling management services. In addition, the company provides computer-assisted design services consisting of PCBA design, as well as PCBA design validation and verification services; and other consulting services, such as the generation of a bill of materials, approved vendor list, and assembly equipment configuration for various PCBA designs. Further, it offers product and process validation services, such as product system, product safety, regulatory compliance, and reliability tests, as well as manufacturing test solution development services. Additionally, the company provides systems assembly, test, direct-order fulfillment, and configure-to-order services. It serves 5G, wireless and cloud, digital print and retail, industrial and semi-cap, networking and storage, automotive and transportation, connected devices, healthcare and packaging, and mobility industries. The company was formerly known as Jabil Circuit, Inc. and changed its name to Jabil Inc. in June 2017. Jabil Inc. was founded in 1966 and is headquartered in Saint Petersburg, Florida.
Key insights and themes extracted from this filing
Net revenue decreased to $6.994 billion from $8.387 billion in the same quarter last year, a 16.6% decrease. This decline is attributed to a 46% decrease in the Connected Living and Digital Commerce segment due to the divestiture of the Mobility Business.
Gross profit margin decreased from 9.2% to 8.7% year-over-year. The company attributes this contraction primarily to product mix within the Connected Living and Digital Commerce segment.
Net income attributable to Jabil Inc. decreased from $194 million to $100 million year-over-year. This reflects the overall decline in revenue and profitability.
The divestiture of the Mobility Business within the Connected Living and Digital Commerce segment significantly impacted revenue, contributing to a 46% decrease in that segment's net revenue. This strategic decision reflects a shift in the company's portfolio.
Jabil acquired Mikros Technologies LLC for $63 million, enhancing its capabilities in liquid cooling solutions for thermal management. This acquisition is expected to contribute to the Intelligent Infrastructure segment.
The company's Board approved the 2025 Restructuring Plan to align support infrastructure and optimize organizational effectiveness. This includes headcount reductions and capacity realignment, with expected pre-tax costs between $150 million and $200 million.
Management is actively implementing the 2025 Restructuring Plan, involving headcount reductions and capacity realignment. This demonstrates a proactive approach to managing costs and improving efficiency.
Days in inventory decreased year-over-year, indicating improved inventory management. However, days in accounts receivable increased, potentially signaling challenges in collecting payments.
The effective income tax rate increased from 17.6% to 28.0%, primarily due to changes in the jurisdictional mix of earnings and other specific tax items. This indicates potential challenges in tax planning and optimization.
The company's five largest customers accounted for approximately 33% of net revenue, highlighting a concentration risk. Loss of or reduced business from these customers could materially impact financial performance.
The 2025 Restructuring Plan involves headcount reductions and capacity realignment, which could lead to operational disruptions and unforeseen costs. The exact timing and costs are subject to various factors and may vary.
The company operates in approximately 30 countries, exposing it to various geopolitical and economic risks. These risks could include political instability, trade disputes, and currency fluctuations, impacting financial results.
The Regulated Industries segment experienced a revenue decrease, while the Intelligent Infrastructure segment saw an increase. This highlights the varying competitive dynamics and market conditions across different industries served by Jabil.
The acquisition of Mikros Technologies is intended to strengthen Jabil's position in thermal management solutions, a key area for the Intelligent Infrastructure segment. This demonstrates a strategic effort to build competitive advantages through acquisitions.
The divestiture of the Mobility Business suggests a strategic decision to focus on higher-growth or more profitable areas. This portfolio optimization could improve Jabil's overall competitive positioning in the long term.
Selling, general, and administrative expenses decreased by $9 million year-over-year, indicating some success in cost control. This is partially offset by restructuring costs.
The 2025 Restructuring Plan aims to further optimize organizational effectiveness, including headcount reductions and capacity realignment. This initiative suggests a continued focus on improving operational efficiency.
Days in accounts payable increased, potentially indicating improved management of payment terms with suppliers. However, this could also reflect liquidity pressures.
The acquisition of Mikros Technologies, a leader in liquid cooling solutions, directly enhances Jabil's technological capabilities in thermal management. This is particularly relevant for the Intelligent Infrastructure segment.
The Intelligent Infrastructure segment is focused on the modern digital ecosystem including artificial intelligence (AI) infrastructure. This indicates a strategic alignment with emerging technological trends.
Research and development expenses remained consistent at 0.1% of net revenue, suggesting a steady level of investment in innovation.
The company continues to repurchase shares under authorized programs, signaling confidence in long-term value. However, the pace of repurchases may be affected by the revenue decline.
Capital expenditures are primarily directed towards supporting ongoing business in the Regulated Industries, Intelligent Infrastructure, and Connected Living and Digital Commerce segments, indicating a focus on maintaining existing operations and capabilities.
The company issued a warrant to Amazon, vesting based on future purchases of products and services. This is a unique capital allocation strategy to incentivize future business and align interests.
The 10-Q filing does not explicitly mention any environmental, social, or governance initiatives. This suggests that ESG factors are not being prominently emphasized in this reporting period.
The divestiture of the Mobility Business suggests a strategic response to changing market dynamics within that sector.
The company's strategic focus on regulated industries and intelligent infrastructure aligns with long-term growth trends in areas such as automotive, healthcare, AI, and cloud computing.
The company acknowledges that future financial performance will be influenced by global economic conditions, highlighting the importance of monitoring macroeconomic factors.