Jabil Q2 Sales Hit $8.3B on 50% AI Growth, Eyes 6% Margin in FY27
Jabil’s Q2 2026 revenue rose to $8.3 billion, driven by a 50% year-on-year jump in AI infrastructure and data center sales. The company maintained a 5.7% operating margin, generated $360 million in free cash flow and raised full-year outlook with CapEx at 1.5-2% of revenue.
1. Q2 Financial Highlights
Jabil delivered Q2 revenue of $8.3 billion, underpinned by a broad-based $1.1 billion increase in Intelligent Infrastructure across cloud and DCI (+$600 million), networking and communications (+$400 million) and capital equipment (+$100 million). AI revenues grew nearly 50% year-on-year, exceeding internal targets and prompting an upward revision to full-year guidance.
2. Margin and Profitability Outlook
Operating margin held at 5.7% for fiscal 2026 after a 10-basis-point gain in December. Management expects to achieve a 6% margin in fiscal 2027, driven by optimized business mix, improved capacity utilization and accretive acquisitions such as Hanley.
3. Cash Flow and Capital Allocation
Q2 free cash flow reached $360 million, with projections exceeding $1.3 billion for the full year. Capital expenditures are slated at 1.5–2% of revenue in H2, while 80% of free cash flow will fund share repurchases and the company remains ready to leverage for strategic M&A.
4. Hyperscaler Partnerships and Supply Chain
Jabil is in advanced discussions with a third hyperscaler customer, expected to close soon and bolster fiscal 2027 revenue. Expansion projects in Memphis and North Carolina remain on schedule, and supply chain teams are effectively managing semiconductor and memory constraints without revising guidance.