Jabil's $17.55 core EPS guide is about 4x last quarter's; adjusted free cash flow guided to $1.6B, 4% up

A full year guided at the pace of one quarter

Jabil's guide for its next fiscal year comes down to one number: core earnings of $17.55 a share. Core is the company's own measure, which leaves out amortization, stock-based pay and restructuring costs. In the latest quarter it earned $4.40 a share on that basis. Four times that is $17.60, by our arithmetic. The guide is five cents under it.

So the company is asking its holders to accept that the best of this year's four quarters is now the ordinary one. Yet its own guide for the first quarter of the new year starts lower, below that latest quarter. To make up the difference, the other three quarters then have to average above the latest quarter's pace.

Results cleared the guide midpoint in each quarter of fiscal 2026

There is a reason for the company's confidence. In September 2025 it guided core earnings for this year at $11 a share. It raised that in December, again in March, and again in June, then finished at $13.09, well above where it began. The raises came with a pattern: against the range it had given a quarter earlier, core earnings landed above the midpoint in all four quarters, and above the top of the range in two.

The latest beat came from volume, not margin. Revenue ran well over the midpoint of the June guide, while the core margin was what had been guided. Asked whether the new guide is conservative, the chief executive said the company is "always appropriately conservative" and that flawless execution could bring some upside. A guide that keeps being cleared says something about how it is written. It does not settle whether this one will be.

Two tests of the guide: one customer, one quarter

The second hyperscale customer, the head of Intelligent Infrastructure said, began with a single capability and is now a storage program above $1 billion in annual revenue. Last December management had put it at about that size. The chief executive now expects it to be a "10% plus customer" in fiscal 2027, which we take to mean a tenth or more of revenue. On that reading the customer goes from that size to at least about $4.45 billion in a year, by our arithmetic. The company did not name it on the call.

The shape of the year is the second test. The chief executive said revenue splits about 45% to 55% between the first and second halves, with a dip in the second quarter on seasonality. By our arithmetic that puts the second quarter near $9.0 billion, far below where the first quarter is guided. The split is rounded; at last year's split, the second quarter would still be about 14% below the first-quarter midpoint. In each of the last two years the second quarter was flat to slightly down on the first. Either the seasonal dip is about to be much larger than in the last two years, or the split, or the first-quarter guide, has some conservatism in it.

Adjusted free cash flow guided up 4%, core EPS up 34%

The company guided adjusted free cash flow of about $1.6 billion for next year, a little above this year's, by our arithmetic. Adjusted means operating cash flow less capital spending net of asset-sale proceeds. Against core earnings, and holding last quarter's share count, that is about 86% by our arithmetic of core earnings turning into free cash flow. The chief executive says free cash flow conversion should be above 100% "over time". He gave no date on the call. The same remarks put last year's conversion at about 110% of core net earnings, so we take the base as core earnings. The guide sits below that, and the chief financial officer said working capital will absorb more cash as revenue grows.

The growth is being carried on the balance sheet. Total assets rose by nearly half in a year while equity barely moved. Accounts payable, what Jabil owes its suppliers, rose 82%. This year's operating cash flow held up because supplier credit and other liabilities grew about as much as receivables, inventory, prepaid and contract assets absorbed.

What we do not know yet

Inventory is a small test of the company's word. In June the chief financial officer said net inventory days should normalize back toward the target range in the fourth quarter. They fell, but are still above the range, and the company now puts the return to it somewhere in the next fiscal year. That is progress toward the range, as guided.

A second line went unmentioned on the call: prepaid expenses and other current assets more than doubled in the year. The company's 10-Q for the quarter to May 2026 put $2.8B of it, against $1.1B at August 2025, in components bought for customers on a net-revenue basis, and attributed the rise mainly to the timing of shipments of customer-controlled consignment components in its Intelligent Infrastructure segment.

This year's free cash flow guide began as a floor, and the year landed at $1,532 million, 18% above that first floor by our arithmetic, a beat about the size of the earnings guide's. The new guide is not a floor. A company that has cleared its guide midpoint for ten straight quarters, since a miss in the February 2024 quarter, has had ten chances to learn where to set it, and it has set the first quarter of the new year below the one just reported.