Jabil Financial Model

• Total assets: Approximately $18.5 billion (as of FY2025).
• Key asset categories: Accounts receivable, inventory, and property, plant, and equipment (PP&E).
• Goodwill & intangibles: Approximately $840 million, representing less than 5% of total assets, reflecting a history of bolt-on rather than transformational acquisitions.
• Working capital profile:
• Days Sales Outstanding (DSO): 35 to 45 days.
• Days Inventory Outstanding (DIO): 55 to 65 days.
• Days Payable Outstanding (DPO): 75 to 85 days.
• Net working capital as % of revenue: Typically 5% to 10%.
• Working capital dynamic: Positive working capital. The cash conversion cycle is tightly managed (often 15 to 25 days). Growth requires working capital investment, making it a use of cash during ramp-up periods.
• PP&E: Consists of global manufacturing facilities, surface mount technology (SMT) lines, and testing equipment. Useful lives range from 3 to 10 years for machinery.
• Right-of-use assets: Material, representing leased manufacturing and warehouse space globally.

• Capex as % of revenue: 2.5% to 3.5% historically.
• Maintenance capex vs. growth capex: Approximately 40% maintenance and 60% growth, heavily skewed towards tooling for new customer programmes (especially in AI and healthcare).
• Major capex programmes: Expanding footprint in India, Vietnam, and Mexico to support supply chain diversification away from China.
• Capitalised software: Minimal relative to physical machinery.
• M&A pattern: Bolt-on acquirer focused on specific capabilities (e.g., the recent acquisitions of Rebound Technologies and Hanley Energy Group).

• Total debt: Approximately $2.9 billion (FY2025).
• Debt/EBITDA ratio: Approximately 1.4x, well within investment-grade parameters.
• Credit rating: Investment grade (BBB- / Baa3).
• Key debt instruments: Senior unsecured notes and a revolving credit facility.
• Maturity profile: Well-laddered with typical issuances in the 5-year to 10-year range.
• Interest rate profile: Predominantly fixed-rate bonds.
• Covenants: Standard leverage and interest coverage ratios; currently operating with massive headroom.
• Share repurchase programme: Highly active. Jabil repurchased $1.0 billion in FY2025 and has a massive $2.5 billion authorisation for FY2026, representing a significant portion of its market capitalisation.
• Dividend policy: Very low payout. The dividend is $0.08 per quarter ($0.32 annually), yielding well under 1%. Capital return is almost entirely via buybacks.

• Operating cash flow conversion: OCF is typically 1.5x to 2.0x GAAP Net Income, heavily influenced by depreciation and working capital swings.
• Free cash flow margin: 3.5% to 4.5% (Adjusted FCF was $1.32 billion in FY2025 on $29.8 billion revenue).
• Major non-cash items: Depreciation, amortisation, and stock-based compensation.
• Working capital cash flow impact: A major swing factor. Inventory build-ups for new product launches consume cash, which reverses in subsequent quarters.
• Capex intensity: Moderate, but strictly controlled to ensure target return on invested capital (ROIC) is met before breaking ground on new facilities.
• Cash tax rate: Typically aligns closely with the effective tax rate of 18% to 20%, benefiting from tax holidays in jurisdictions like Malaysia and Vietnam.

1. Assumptions: Hardcoded inputs for macroeconomic drivers, segment growth rates, margin targets, working capital days, and capital allocation.
2. Scenarios: Toggle for Base, Bull (AI supercycle), and Bear (macro recession) cases.
3. Revenue Build: Segment-level forecasting for Intelligent Infrastructure, Regulated Industries, and Connected Living & Digital Commerce.
4. Income Statement: Consolidated view from Revenue down to Net Income and EPS, including a reconciliation to Core Operating Income.
5. Working Capital: Schedules for Accounts Receivable, Inventory, and Accounts Payable driven by DSO, DIO, and DPO.
6. PP&E and Capex: Roll-forward of gross PP&E, accumulated depreciation, and capital expenditures.
7. Debt Schedule: Tranche-by-tranche debt build, interest expense calculation, and debt paydown logic.
8. Shareholders Equity: Retained earnings roll-forward, dividend payments, and detailed share repurchase tracking.
9. Balance Sheet: Standard asset, liability, and equity consolidation.
10. Cash Flow Statement: Indirect method starting from Net Income, adjusting for non-cash items and working capital changes.
11. DCF Valuation: Unlevered free cash flow calculation, WACC build, terminal value, and implied share price.
12. Outputs & Charts: Summary dashboard of key metrics (Core EPS, FCF, ROIC, Leverage).

1. `Intelligent Infrastructure Revenue = Prior Year Intelligent Infrastructure Revenue x (1 + Intelligent Infrastructure Growth Rate)`
2. `Regulated Industries Revenue = Prior Year Regulated Industries Revenue x (1 + Regulated Industries Growth Rate)`
3. `Connected Living & Digital Commerce Revenue = Prior Year Connected Living & Digital Commerce Revenue x (1 + Connected Living Growth Rate)`
4. `Total Net Revenue = Intelligent Infrastructure Revenue + Regulated Industries Revenue + Connected Living & Digital Commerce Revenue`
5. `Cost of Revenue = Total Net Revenue x (1 - Gross Margin %)`
6. `Core Operating Income = Total Net Revenue x Core Operating Margin %`
7. `GAAP Operating Income = Core Operating Income - Stock Based Compensation - Amortisation of Intangibles - Restructuring Charges`
8. `Accounts Receivable = (Total Net Revenue / 365) x DSO`
9. `Inventory = (Cost of Revenue / 365) x DIO`
10. `Accounts Payable = (Cost of Revenue / 365) x DPO`
11. `Adjusted Free Cash Flow = Cash from Operations - Net Capital Expenditures`
12. `Diluted Shares Outstanding = Prior Period Shares - (Share Repurchase Amount / Average Share Price)`
13. `Core EPS = (Core Operating Income - Net Interest Expense - Core Taxes) / Diluted Shares Outstanding`

The Assumptions sheet dictates the growth and margin profiles in the Revenue Build and Income Statement. The Income Statement feeds Net Income to the Cash Flow Statement and Retained Earnings to the Balance Sheet. The Revenue Build and Income Statement (specifically Cost of Revenue) drive the Working Capital sheet, which calculates the changes in operating assets and liabilities. These changes flow into the Cash Flow Statement to determine Operating Cash Flow. Operating Cash Flow minus Capex (from the PP&E and Capex sheet) dictates cash available for the Debt Schedule and Shareholders Equity (buybacks). Finally, interest expense from the Debt Schedule loops back to the Income Statement. The model must use an interest switch to break the circularity between cash balances, debt paydown, and interest expense.

• Revenue and Expenses: Entered as positive numbers in their respective build schedules.
• Income Statement: Revenue is positive. Expenses (COGS, SG&A, Interest, Taxes) are subtracted (modelled as positive numbers with a minus sign in the formula).
• Balance Sheet: Assets, Liabilities, and Equity are all positive balances.
• Cash Flow Statement: Cash inflows are positive. Cash outflows (Capex, dividends, share repurchases, debt paydown) are negative. Increases in assets are negative; increases in liabilities are positive.

1. Segment Comparability: Jabil changed its reporting segments in FY2025. Using FY2023 or earlier segment data will break the model. The builder must use the recast FY2024 and FY2025 segment structures.
2. Mobility Divestiture Distortion: FY2024 includes a partial year of the Mobility business. Growth rates calculated directly from FY2024 to FY2025 will look artificially terrible for Connected Living. The model must use organic growth assumptions excluding Mobility.
3. Core vs. GAAP Confusion: Jabil guides and trades on "Core Operating Income" and "Core EPS". The model must explicitly bridge GAAP Operating Income to Core Operating Income by adding back restructuring and stock-based compensation.
4. Share Count Dynamics: Jabil retires over 5% of its float annually. Failing to model the aggressive share repurchase programme will result in a massive understatement of EPS.
5. Working Capital Swings: EMS companies have massive working capital balances. A 2-day error in DIO assumptions can swing cash flow by hundreds of millions of dollars.
6. Margin Precision: Because gross margins are under 10%, a 50 basis point error in gross margin assumptions translates to a massive percentage error in operating income.
7. Restructuring Charges: Jabil takes restructuring charges almost every year. Treating them as a one-off anomaly rather than a recurring cash expense will overstate true free cash flow.
8. Interest Income vs Expense: Jabil holds significant cash globally. The model must capture interest income on cash balances, not just interest expense on debt, to accurately forecast net interest expense.

1. "Gross margin must remain between 8.5% and 9.5%; flag if outside this band."
2. "Core Operating Margin should be between 5.0% and 6.0%; flag if outside this band."
3. "Adjusted Free Cash Flow conversion (FCF / Core Net Income) should be approximately 80% to 100%."
4. "Debt to EBITDA must remain below 2.0x; flag if leverage exceeds this threshold."
5. "Total Assets must equal Total Liabilities plus Shareholders Equity in every forecast period."
6. "Capital Expenditures as a percentage of revenue should remain between 2.5% and 3.5%."
7. "Effective tax rate should be between 18% and 21% based on historical core tax rates."
8. "Share count must decrease year-over-year given the active $2.5 billion repurchase authorisation."

• SEC Filings: Jabil Investor Relations website and SEC EDGAR (Form 10-K for FY2025, Form 8-K for Q1 FY2026 earnings).
• Key Peers for Benchmarking: Flex Ltd. (FLEX), Celestica Inc. (CLS), Sanmina Corporation (SANM), Benchmark Electronics (BHE).
• Industry Data Sources: IDC and Gartner for global IT and data centre infrastructure spending forecasts; IHS Markit for automotive build rates.
• Consensus Estimates: Bloomberg or FactSet for forward-looking revenue and EPS consensus to validate model outputs.

• Jabil Inc. Form 10-K for the Fiscal Year Ended August 31, 2025.
• Jabil Inc. Q1 FY2026 Earnings Release and Call Transcript.
• Jabil Inc. Investor Briefing and Segment Realignment Presentation (September 2024).
• Press Release: Jabil Completes the Divestiture of Mobility Business to BYD Electronic (December 2023).