Jabil (JBL) Q3 2024 earnings summary

Executive summary

• Q3 FY24 net revenue was $6.8 billion, down 20% year-over-year, primarily due to the mobility business divestiture and lower demand in key end markets.

• Q3 GAAP operating income was $261 million; core (non-GAAP) operating income was $350 million (5.2% margin), up 40 bps year-over-year.

• Q3 GAAP diluted EPS was $1.06; core diluted EPS was $1.89, $0.04 above guidance midpoint.

• Net income for Q3 FY24 was $129 million, compared to $233 million in Q3 FY23.

• Management remains focused on margin expansion, free cash flow, and capital returns, with emphasis on AI data center, healthcare, pharma solutions, and automation as growth drivers.

Financial highlights

• Q3 cash flow from operations was $515 million; adjusted free cash flow for the nine months was $636 million, up from $368 million year-over-year.

• Cash and cash equivalents totaled $2.5 billion at quarter end.

• Net capital expenditures totaled $100 million; inventory days improved to 81 (58 net of deposits).

• Debt to Core EBITDA at 1.2x; net debt reduced as total liabilities decreased to $15.17 billion from $16.56 billion.

• Repurchased $1.82 billion in shares in nine months, with $700 million remaining on the $2.5 billion authorization.

Outlook and guidance

• Q4 FY24 net revenue expected between $6.3–$6.9 billion; core operating income $365–$425 million; core EPS guidance: $2.03–$2.43.

• FY24 guidance: net revenue $28.5 billion, core operating margin 5.6% (up 60 bps YoY), core EPS $8.40, adjusted free cash flow over $1 billion.

• FY25 net interest expense projected at $275 million; core tax rate to rise to 22–24% due to global minimum tax.

• FY25 revenue may be negatively impacted by ~$800 million due to portfolio reshaping.

• The company expects to recognize approximately $300 million in pre-tax restructuring and related costs in fiscal 2024.