Jabil's Q2 2025: Navigating Contradictions in Networking, AI Growth, and Inventory Levels

These are the key contradictions discussed in Jabil's latest 2025Q2 earnings call, specifically including: Networking and Healthcare Forecasts, AI Revenue Growth, Inventory Levels, Growth in Intelligent Infrastructure Segment, and AI Impact on End Markets:



Revenue and Segment Performance:
- Jabil Inc. reported $6.7 billion in revenue for Q2 FY 2025, with a year-on-year increase of 3% when excluding the $250 million associated with the divested mobility business.
- The Intelligent Infrastructure segment saw 18% year-on-year revenue growth, driven by strong demand in AI-related markets like data center infrastructure and capital equipment.

Cash Flow and Financial Health:
- Cash flow from operations was $334 million for Q2, contributing to an adjusted free cash flow of $261 million.
- Jabil's strong financial performance allowed it to maintain a healthy balance sheet with debt to core EBITDA at approximately 1.4 times.

Tariff Impact and Manufacturing Strategy:
- Jabil emphasized its position as a U.S. domiciled manufacturing service provider, potentially benefiting from any shift in manufacturing due to tariffs.
- The company remains cautious regarding potential tariffs from China, Canada, and Mexico, with minimal exposure to these geographies.

AI and Photonics Growth:
- AI-related revenue is expected to reach approximately $7.5 billion for FY 2025, representing a 40% year-on-year increase.
- The acquisition of Intel's silicon photonics business has positioned Jabil well for growth in this area, with upcoming capabilities including 1.60 capacity for photonics transceivers.