# Jabil (JBL) Financial Model Free Excel 3-statement financial model and company analysis for Jabil. - Canonical: https://finamodel.com/companies/jabil - Industry: Electronics - Downloadable model: Yes - Excel download: https://finamodel.com/company-models/JBL.xlsx ## Model Purpose This model provides a comprehensive equity valuation and scenario planning tool for Jabil Inc. (JBL), enabling analysts to forecast cash flow generation, margin expansion, and capital returns following the transformational divestiture of its Mobility business and its strategic pivot towards high-growth AI cloud infrastructure. ## Company Overview Jabil Inc. is a leading global electronic manufacturing services (EMS) and solutions provider, offering comprehensive electronics design, production, and product management services to companies in various industries. The company operates a massive global footprint, providing end-to-end supply chain solutions that help customers bring products to market efficiently. Business segments (based on FY2025 reporting): * **Intelligent Infrastructure:** ~41% of revenue (Cloud & Data Centre Infrastructure, Capital Equipment, Networking & Communications). * **Regulated Industries:** ~40% of revenue (Automotive & Transportation, Healthcare & Packaging, Renewable Energy Infrastructure). * **Connected Living & Digital Commerce:** ~19% of revenue (Connected Living, Digital Commerce). Key geographies include major manufacturing hubs in Asia (China, Malaysia, Vietnam), the Americas (Mexico, United States), and Europe. The business model is asset-heavy and high-volume, relying on massive scale and supply chain efficiency to generate returns on low gross margins. Jabil holds a top-tier competitive position in the EMS industry alongside peers like Flex and Foxconn. A major recent event was the December 2023 divestiture of its Mobility business to BYD Electronic for $2.2 billion, which fundamentally shifted the company's revenue base (removing over $4 billion in low-margin annual revenue) and allowed for aggressive share repurchases and a focus on higher-margin segments. Furthermore, the company realigned its reporting segments in FY2025 to reflect this new strategic direction. ## Revenue Deep Dive ### Intelligent Infrastructure * **Segment name:** Intelligent Infrastructure * **Revenue driver formula:** (Cloud & DCI Volume x ASP) + (Capital Equipment Orders) + (Networking Volume) * **Historical growth rate:** 10% to 35% (FY2025 saw 34% growth driven by AI). * **Key growth levers and headwinds:** Explosive demand for AI-related cloud and data centre hardware is the primary lever. Headwinds include cyclical downturns in legacy networking and telecommunications equipment. * **Pricing dynamics:** Highly competitive but sticky once designed into a customer's supply chain. Contracts often include pass-through pricing for raw materials. * **Revenue recognition notes:** Recognised over time as manufacturing services are performed or at a point in time when control transfers, depending on the specific customer contract. * **Seasonality:** Generally stronger in the fiscal first and fourth quarters aligning with enterprise capital expenditure cycles. ### Regulated Industries * **Segment name:** Regulated Industries * **Revenue driver formula:** (Automotive Build Rates x Content per Vehicle) + (Healthcare Device Volume) + (Renewable Deployments) * **Historical growth rate:** Flat to low single digits (FY2025 declined 3% due to EV and renewable softness). * **Key growth levers and headwinds:** Long product lifecycles and high regulatory barriers to entry provide stability. Headwinds include macroeconomic sensitivity in the EV market and policy-driven fluctuations in renewable energy rollouts. * **Pricing dynamics:** Contractual, long-term agreements with higher margins due to the stringent quality and regulatory requirements (e.g., FDA approvals for healthcare). * **Revenue recognition notes:** Similar to other segments, heavily reliant on the transfer of control of custom-built products. * **Seasonality:** Less seasonal than consumer-facing segments, driven more by specific customer product launch schedules. ### Connected Living & Digital Commerce * **Segment name:** Connected Living and Digital Commerce * **Revenue driver formula:** Consumer Electronics Volume x Unit Price * **Historical growth rate:** Heavily negative recently (-25% in FY2025) strictly due to the Mobility divestiture, but low single digits organically. * **Key growth levers and headwinds:** Driven by global consumer spending and retail point-of-sale hardware upgrades. Headwinds include product commoditisation and shorter product lifecycles. * **Pricing dynamics:** Highly competitive, volume-driven pricing. * **Revenue recognition notes:** Standard point-in-time recognition upon shipment or delivery. * **Seasonality:** Highly seasonal, peaking in the fiscal first quarter (September to November) ahead of the holiday shopping season. ## Cost Structure ### Variable Costs / COGS * **Line-by-line breakdown:** Raw materials and components (the largest component), direct manufacturing labour, manufacturing overhead, freight, and logistics. * **Gross margin range:** 8.3% to 9.3% over the last 3 years (FY2025 was 8.9%). * **Key input costs and commodity exposures:** Semiconductors, printed circuit boards, plastics, and metals. Jabil often uses pass-through pricing to mitigate commodity risk. * **How COGS scales with revenue:** Highly linear. The EMS model operates on thin margins, meaning COGS moves almost perfectly in tandem with revenue, though slight operating leverage exists in manufacturing overhead. ### Operating Expenses * **R&D:** Included in SG&A or COGS depending on the nature of the work; customer-specific engineering is in COGS, while general R&D is a separate, relatively small line item. * **SG&A:** Typically runs at 3.5% to 4.5% of revenue. It is heavily headcount-driven and includes corporate functions, IT, and sales. * **Depreciation & Amortisation:** Significant due to the asset-heavy nature of the business, typically running at 2.5% to 3.5% of revenue. * **Stock-Based Compensation:** Material but manageable, usually around 0.3% to 0.5% of revenue. Jabil excludes this from its "Core" operating metrics. * **Restructuring / one-time charges:** Frequent. Jabil regularly optimises its global footprint, incurring severance and facility closure costs (e.g., $76 million in Q1 FY2026). ### Margin Profile * **Gross margin:** 8.5% to 9.5%. * **EBITDA margin:** 6.0% to 7.0%. * **Operating margin (GAAP):** 3.5% to 6.5% (FY2025 was 4.0%). * **Core operating margin (Non-GAAP):** 5.0% to 5.6% (FY2025 was 5.4%). * **Margin trend:** Expanding. The divestiture of the low-margin Mobility business and the growth in high-margin AI infrastructure have structurally lifted the margin floor. ## Balance Sheet Structure * **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. ## Capital Expenditure & Investment * **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). ## Debt & Capital Structure * **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. ## Cash Flow Characteristics * **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. ## Sheet Structure 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). ## Key Financial Relationships 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` ## Cross-Sheet Dependencies 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. ## Sign Convention * **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. ## Things Most Likely to Go Wrong 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. ## Validation Checks 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." ## Key Assumptions (Default Values) | Assumption | Default Value | Unit | Rationale | |---|---|---|---| | Intelligent Infrastructure Growth | 15.0 | % | Strong secular tailwinds from AI cloud and data centre buildouts. | | Regulated Industries Growth | 3.0 | % | Steady but slow growth in healthcare and automotive, offset by renewable lumpiness. | | Connected Living & Digital Commerce Growth | 2.0 | % | Mature consumer electronics markets post-Mobility divestiture. | | Gross Margin | 8.9 | % | Aligns with FY2025 actuals; reflects improved mix without Mobility. | | SG&A as % of Revenue | 4.0 | % | Historical average required to support global operations. | | Core Operating Margin | 5.4 | % | Matches FY2025 actuals and management's long-term target framework. | | Days Sales Outstanding (DSO) | 40 | Days | Based on historical receivables collection efficiency. | | Days Inventory Outstanding (DIO) | 60 | Days | Reflects necessary buffer stock for complex supply chains. | | Days Payable Outstanding (DPO) | 80 | Days | Leverage over suppliers to fund working capital. | | Capex as % of Revenue | 3.0 | % | Historical average required to maintain and expand SMT lines. | | Effective Tax Rate | 19.0 | % | Blended global tax rate reflecting Asian tax holidays. | | Annual Share Repurchases | 1,000 | $ Millions | Aligns with FY2025 actuals and the new $2.5B authorisation. | | Dividend per Share | 0.32 | $ / Year | Current annualised dividend rate ($0.08 per quarter). | | Weighted Average Interest Rate | 5.5 | % | Blended rate on existing senior notes and credit facilities. | | WACC | 9.5 | % | Standard discount rate for an EMS provider with Jabil's beta and leverage. | | Terminal Growth Rate | 2.0 | % | Long-term GDP-aligned growth for the terminal value calculation. | ## Data Sources & Benchmarks * **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. ## Sources * 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). --- ## Frequently asked questions ### What does Jabil Inc. do? Jabil Inc. is a leading global electronic manufacturing services (EMS) and solutions provider. The company offers comprehensive electronics design, production, and product management services across various industries, operating with a massive global footprint. ### How does Jabil generate revenue across its business segments? Jabil generates revenue primarily through its Intelligent Infrastructure, Regulated Industries, and Connected Living & Digital Commerce segments. The company's strategic pivot towards high-growth AI cloud infrastructure is a key focus for future revenue generation. ### What are the key revenue growth assumptions in Jabil's financial model? The financial model for Jabil assumes a revenue growth rate of approximately 8.24% for the forecast horizon. This growth is expected to be driven by the company's strategic pivot towards high-growth AI cloud infrastructure following the divestiture of its Mobility business. ### What are the primary capital expenditure assumptions in Jabil's financial model? The financial model assumes capital expenditure as approximately 3.73% of revenue. Historically, Jabil's capex has been 2.5% to 3.5% of revenue, with about 60% allocated to growth capex for new customer programs, particularly in AI and healthcare. ### Can I download an Excel financial model for Jabil (JBL)? Yes, a comprehensive Excel financial model for Jabil Inc. (JBL) is available for download. This model provides an equity valuation and scenario planning tool, forecasting cash flow generation and margin expansion from FY2026 to FY2030. ### How has Jabil's strategic focus changed recently? Jabil recently underwent a transformational divestiture of its Mobility business. The company has strategically pivoted towards high-growth AI cloud infrastructure, aiming to enhance cash flow generation, margin expansion, and capital returns. [Interactive forecast calculator](https://finamodel.com/companies/jabil/forecast)