Jabil's Q2 2025: Navigating Contradictions in Networking, AI Growth, and Inventory Levels
Thursday, Mar 20, 2025 11:29 am ET
3min read 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.
JBL Basic EPS, Total Revenue YoY...
| Name |
|---|
| Date |
| Basic EPS(USD) |
| Total Revenue YoY% |
| ROE(Average)% |
| JabilJBL |
| 2025 Q1 |
| 0.89 |
| -16.61 |
| 6.01 |
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.
