Jabil Q2 Earnings Beat on AI Data-Center Demand
Jabil Q2 earnings topped forecasts as AI data-center demand lifted revenue and raised FY2026 guidance, supporting buybacks and investor positioning.
KEY TAKEAWAYS
- Q2 revenue was $8.3 billion and non-GAAP core EPS was $2.69.
- Company raised FY2026 guidance to $34 billion and $12.25 core EPS on AI infrastructure strength.
- Intelligent Infrastructure accounted for 49% of revenue and grew 52% year-over-year.
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Jabil Inc. (NYSE: JBL) reported Q2 earnings on March 18, 2026, that exceeded expectations, driven by accelerating AI data center demand. The company raised its full-year outlook, highlighting its growing exposure to cloud and networking equipment markets.
Quarter Results and Cash Flow
Jabil said in a press release that Q2 net revenue reached $8.282 billion, up from $6.728 billion a year earlier. U.S. GAAP diluted earnings per share (EPS) rose to $2.08 from $1.06, while non-GAAP core diluted EPS increased to $2.69 from $1.94. U.S. GAAP operating income was $374 million, and non-GAAP core operating income was $436 million. Net income attributable to Jabil totaled $223 million. The company described the quarter as "very strong" and ahead of expectations.
Management emphasized cash generation during the earnings call. Operating cash flow for the quarter was $411 million, and the company repurchased $300 million of stock. Adjusted free cash flow for the first half of fiscal 2026 rose to $632 million from $487 million a year earlier. Stronger margins on higher revenue and robust cash flow supported the decision to accelerate capital returns while maintaining investment flexibility.
Raised Guidance and AI Infrastructure Growth
Jabil raised its fiscal 2026 guidance to a $34 billion net revenue target, a 5.7% core operating margin, and $12.25 core diluted EPS. Adjusted free cash flow is expected to exceed $1.3 billion for the year ending August 2026. The company set Q3 revenue guidance between $8.1 billion and $8.9 billion, with GAAP diluted EPS of $2.36 to $2.76. Management attributed the upgrade to stronger-than-expected Q2 results and sustained AI infrastructure demand.
The Intelligent Infrastructure segment accounted for 49% of total revenue and grew 52% year-over-year, fueled by demand in cloud and data-center infrastructure, networking, and capital equipment. The Regulated Industries segment rose 10%, while Connected Living & Digital Commerce declined 8%. Jabil expanded its capabilities with the $725 million acquisition of Hanley Energy Group in January 2026 and earlier added Mikros Technologies for liquid-cooling technology. Management expects Hanley to be modestly accretive in fiscal 2026.
The revenue mix weighted toward Intelligent Infrastructure, recent acquisitions, and improved cash flow led management to raise the outlook and frame the quarter as evidence of durable AI-related demand and increased confidence for the second half of the fiscal year.
