Core Viewpoint - The company is focused on accelerating growth through new product development, aftermarket services, and systems-related growth, with a positive outlook for performance improvement in the upcoming years [1]. Group 1: Growth Strategy - The company has identified three of the four elements in its growth algorithm—products, aftermarket, and systems—which are expected to contribute around 4 to 5 points of growth [2]. - The aftermarket segment is performing well, and the company is successfully introducing new products and gaining market share, particularly in data centers [2]. - The systems segment represents a new opportunity, with initiatives like CDUs for QuantumLeap offerings in data centers and energy system-level offerings in HEMS in Europe [3].

Financial Data and Key Metrics Changes - Adjusted earnings per share increased by 18% year-over-year, reaching $3.33, aligning with the midpoint of guidance [5][16] - Quarterly revenue was reported at $7.1 billion, with segment margins hitting a record of 24.9%, up 20 basis points year-over-year [5][16] - Organic growth for the quarter was 9%, driven by strength in aerospace and Electrical Americas, partially offset by weaknesses in vehicle and e-mobility [16] Business Line Data and Key Metrics Changes - Electrical Americas segment achieved organic sales growth of 15%, primarily driven by data center demand, which was up about 40% [16][17] - Aerospace segment reported organic sales growth of 12%, with operating margin expanding by 120 basis points to 24.1% [19] - Vehicle segment experienced a decline of 13% on an organic basis, primarily due to weaknesses in the North America truck and light vehicle markets [20] Market Data and Key Metrics Changes - Orders in Electrical Americas increased by 16% on a trailing 12-month basis, with total quarterly orders up more than 50% [17][12] - Aerospace orders increased by 11% on a rolling 12-month basis, driven by defense OEM and aftermarket [19] - Data center orders accelerated approximately 200%, indicating strong demand in that market [4][16] Company Strategy and Development Direction - The company plans to spin off its mobility business into a separate publicly traded entity, aiming to sharpen strategic focus and optimize the portfolio [6][10] - Investments of $13 billion were announced for 2025, including acquisitions to enhance growth in key markets [5][6] - The company is focused on higher growth, higher margin businesses to improve earnings consistency and drive long-term value [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in double-digit growth in data center markets, supported by strong order trends and backlog [33][34] - The company anticipates a strong 2026, with guidance for organic growth between 7%-9% and segment margins of 24.6%-25% [24][23] - Management acknowledged the challenges of ramping up capacity but remains optimistic about long-term growth potential [54][56] Other Important Information - The backlog in Electrical Americas reached an all-time high of $15.3 billion, with a total backlog of $19.6 billion across segments [12][17] - The company is experiencing unprecedented demand, reflected in continued order acceleration and growing backlogs [25][26] Q&A Session Summary Question: Confidence in double-digit growth in data center markets - Management highlighted strong market indicators, including a 200% year-over-year increase in industry announcements and backlog, supporting optimism for future growth [33][34] Question: Quarterly cadence of the 2026 EPS guide - Management explained that the first half of 2026 is expected to show lower growth due to ramp-up costs, with a stronger performance anticipated in the second half [47][48] Question: Challenges related to capacity expansion - Management acknowledged the challenges of ramping up capacity but emphasized that investments are necessary to meet strong market demand [51][52]

Summary of Jabil (JBL) FY Conference Call - May 13, 2025 Company Overview - **Company**: Jabil (JBL) - **Industry**: Electronics Manufacturing Services (EMS) Key Points and Arguments Macro Economic Concerns - There is a sense of relief among customers regarding recession fears, with the administration's efforts seen as effective in preventing a significant downturn [3][5][6] - Jabil's diversified portfolio across various end markets, including healthcare and digital commerce, positions the company well to manage through economic fluctuations [4][5] Supply Chain and Tariff Management - Jabil has regionalized its supply chain, producing in-country for local consumption, which mitigates risks associated with tariff volatility [7][8] - The company is not currently seeing significant shifts in business due to tariffs, as customers are cautious about the costs and risks of relocating operations [8] Capacity and Geographic Flexibility - Approximately 35% to 40% of Jabil's capacity is located in the Americas, with current utilization around 75-80%, indicating room for growth [16][18] - The company has recently opened a facility in St. Petersburg, Florida, and has the capability to expand in the U.S. and Mexico as needed [16][18] Margin Improvement Strategies - Jabil aims to increase its margin from 5.4% to 6% or 6.5% in the near future, driven by portfolio diversification, vertical integration, and operational efficiencies [22][23][24] - The company is focusing on higher-margin businesses and has made tuck-in acquisitions to enhance its service offerings [24][25] Growth in Cloud and Data Center Infrastructure - Jabil has increased its revenue guidance for the second half of the fiscal year by $1 billion, driven by strong demand from hyperscale customers and capital equipment business [28] - The company is confident in continued spending from cloud customers, viewing it as an "arms race" among hyperscalers [28][29] Automotive Sector Challenges - The automotive segment faces headwinds from tariffs and reduced demand for electric vehicles (EVs), but Jabil is diversifying its customer base and product offerings to mitigate risks [44][45] - The company has added new OEM customers in China, which is expected to provide growth opportunities in the EV space [46][48] Healthcare Market Opportunities - Jabil is significantly larger than its nearest competitor in the healthcare market and is focused on expanding its share of wallet through organic growth and acquisitions [56][57] - The company recently acquired Pharmaceutical International Incorporated, enhancing its capabilities in pharmaceutical delivery systems [58] Semiconductor Capital Equipment - Jabil's semiconductor capital equipment business is performing well, with strong growth driven by key customers like NVIDIA [62] - The company anticipates a cyclical recovery in the semiconductor industry within the next twelve months [63] Networking and Communications - The networking segment is experiencing slower growth due to exiting low-margin businesses, but there are positive trends in Ethernet and liquid cooling technologies [65][66] Digital Commerce Growth - Jabil is seeing growth in digital commerce, particularly in automation and robotics for retail environments, with expectations for continued expansion in this area [67][68] Future Outlook - Jabil's path to achieving higher margins is not solely dependent on revenue growth but also on optimizing product mix and operational efficiencies [69][70] - The company is well-positioned for future growth across various sectors, including healthcare, cloud infrastructure, and automotive, despite current economic challenges [49][50][56]