Jabil Q3 Earnings Surpass Estimates on Solid Demand, Guidance Raised

Core Insights - Jabil, Inc. (JBL) reported strong third-quarter fiscal 2025 results, with both net income and revenues exceeding the Zacks Consensus Estimate, driven by growth in data center infrastructure, capital equipment, cloud, and digital commerce markets [1][10]. Financial Performance - Net income on a GAAP basis was $222 million or $2.03 per share, up from $129 million or $1.06 in the prior-year quarter, primarily due to top line growth [2]. - Non-GAAP net income for the quarter was $279 million or $2.55 per share, compared to $230 million or $1.89 in the same quarter last year, surpassing the Zacks Consensus Estimate of $2.33 [2]. - Revenues increased to $7.82 billion from $6.76 billion year-over-year, beating the consensus estimate of $7.08 billion, supported by strong demand in Intelligent Infrastructure and Connected Living & Digital Commerce [3]. Segment Performance - The Regulated Industries segment generated $3.1 billion in revenues, flat year-over-year, contributing 39% to total revenues, with declines attributed to weaknesses in renewable energy and EV verticals [4]. - The Intelligent Infrastructure segment reported $3.4 billion in revenues, up 51% year-over-year, contributing 44% of total revenues, driven by demand in Capital Equipment, AI-related Cloud, and Data Center Infrastructure [5]. - The Connected Living & Digital Commerce segment accounted for 17% of total revenues, with net sales declining to $1.3 billion, down 7% year-over-year, due to soft demand for consumer-driven products, although growth in digital commerce and warehouse automation partially offset this decline [6]. Profitability and Cash Flow - Gross profit was $681 million compared to $608 million in the prior-year quarter, while non-GAAP operating income rose to $420 million from $350 million year-over-year [7]. - Non-GAAP operating margin was 5.4%, down from 6% in the previous year [7]. - Jabil generated $406 million of net cash from operating activities in the third quarter, with $1.52 billion in cash and cash equivalents as of May 31, 2025 [8]. Future Guidance - For the fourth quarter of fiscal 2025, revenues are expected to range from $7.1 billion to $7.8 billion, with non-GAAP operating income projected between $428 million and $488 million [9]. - Management raised the fiscal 2025 revenue outlook to $29 billion from a previous estimate of $27.9 billion, with non-GAAP earnings per share expected at $9.33, up from $8.95 [11].