Jabil (NYSE:JBL) Reports Upbeat Q2, Full-Year Sales Guidance is Optimistic

Electronics manufacturing services provider Jabil (NYSE: JBL) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 15.7% year on year to $7.83 billion. On top of that, next quarter’s revenue guidance ($7.45 billion at the midpoint) was surprisingly good and 4.2% above what analysts were expecting. Its non-GAAP profit of $2.55 per share was 9.8% above analysts’ consensus estimates.

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Company Overview

With manufacturing facilities spanning the globe from China to Mexico to the United States, Jabil (NYSE: JBL) provides electronics design, manufacturing, and supply chain solutions to companies across various industries, from healthcare to automotive to cloud computing.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years.

With $28.51 billion in revenue over the past 12 months, Jabil is a behemoth in the business services sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because finding new avenues for growth becomes difficult when you already have a substantial market presence. To expand meaningfully, Jabil likely needs to tweak its prices, innovate with new offerings, or enter new markets.

As you can see below, Jabil grew its sales at a sluggish 1.4% compounded annual growth rate over the last five years. This shows it failed to generate demand in any major way and is a rough starting point for our analysis.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Jabil’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 10.1% annually.

This quarter, Jabil reported year-on-year revenue growth of 15.7%, and its $7.83 billion of revenue exceeded Wall Street’s estimates by 11.2%. Company management is currently guiding for a 7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months. Although this projection indicates its newer products and services will catalyze better top-line performance, it is still below average for the sector.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.

Jabil’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 4.5% over the last five years. This profitability was lousy for a business services business and caused by its suboptimal cost structure.

Analyzing the trend in its profitability, Jabil’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Jabil generated an operating margin profit margin of 5.1%, up 1.3 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Jabil’s EPS grew at an astounding 25.7% compounded annual growth rate over the last five years, higher than its 1.4% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.

In Q2, Jabil reported EPS at $2.55, up from $1.89 in the same quarter last year. This print beat analysts’ estimates by 9.8%. Over the next 12 months, Wall Street expects Jabil’s full-year EPS of $8.79 to grow 14.8%.

Key Takeaways from Jabil’s Q2 Results

We were impressed by how significantly Jabil blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. We were also glad its revenue guidance for next quarter trumped Wall Street’s estimates and that it lifted its full-year EPS outlook. Zooming out, we think this quarter featured some important positives. The stock traded up 4.8% to $189.61 immediately following the results.

Sure, Jabil had a solid quarter, but if we look at the bigger picture, is this stock a buy? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.