Jabil Inc at JPMorgan Global Technology, Media and Communications Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : <_ALACRA_META_ABSTRACT>I'll start you off with a question I've been asking every company to sort of opine on. And so I know it's not very company-specific, but let's sort of get your views given the amount of insights you get from customers. Clearly, a lot of macro concerns on investors' minds at this point. And given the conversations you're having with customers, how worried are you that we potentially go into a much slower macro backdrop in the second half or potentially a recession?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Great. The unpredictability around the tariff environment, I mean, how are you navigating that? How are you sort of overall managing

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Okay. I was going to actually follow up with that because interestingly, one of the conversations I was having with one of our covered companies, which is a hardware supplier, did mention booking business with Jabil in Mexico as their sort of overall manufacturing footprint plant. So not saying it's as material to you as it's to them in terms of size of the business. But is there more interest in Mexico relative to all other facilities globally? Or are you seeing any trends on that front?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Okay. Interesting. And I'm trying to compare the backdrop we have today to what we saw during COVID with the supply chain crisis then a pull-forward and then the digestion. And from your standpoint, when you're managing these businesses, like how does it look different or similar to what we went through just 2020 to 2023? We -- it feels like, at least from my standpoint, we went through a very similar dynamic. And why is this maybe even different from that?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Got it. Maybe going back to the capacity comment that you had. Can you just discuss what's your current capacity in US, Mexico and Canada and the flexibility you have in those three, -- in the three geographies in terms of what you can theoretically take your capacity to?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : And just given the cost of labor associated with each of these geographies, like is there a specific area where -- or a specific product category or overall segment that is more sort of easier to shift to the US compared to if you're looking at probably Mexico? Like are there easy ways to think about what is more likely to move to the US versus Mexico?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Okay. Got it. Moving to the -- maybe moving away from tariffs and to more the drivers of the business. Jabil, along with other EMS companies, has focused on improving margins over time. And largely, it's come from a focus on higher-margin businesses and sort of growing those, cultivating those over time. How do you think about balancing that going forward along with sort of the growth opportunities on the top line?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Okay. Before we move to Matt's segment and discussing AI, last couple of quarters, you've been revising up the full year guide in what is -- was still a very challenging macro overall. And from my understanding, most of that came from more resilient cloud spending relative to Intelligent Infrastructure. So can you just help us think about sort of the confidence level you have in that kind of spend continuing from your cloud customers, the sustainability of the growth rates that you've seen in that segment?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Okay. And Matt, a lot of the concern right now from investors has moved from 2025 to what does 2026 look like? Like are you getting any more visibility in terms of timeline from your customers on that front? Are there any early indications for 2026?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Got it. Okay. And so to break down the -- I think the guidance for now, $7.5 billion of revenue in fiscal '25, like just maybe break that down in terms of what are the different sort of broader categories you would break that $7.5 billion into. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2025 / 6:30PM, JBL.N - Jabil Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Got it. And the growth drivers, I think it's fair to assume, DCI is the strongest growth followed by semi cap.

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Got it. Okay. On the hyperscale customers that you're working with, and I know you mentioned the second hyperscale customer, but maybe help us think about the opportunity set here. And how that is really stemming from the broader capabilities that you have.

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Okay. Got it. On the optics front specifically, I know you mentioned you -- the acquisition was meant to position you for CDU. I mean most of the feedback I've seen from your peers as well as competitors is very favorable on the Intel IP on the optics side. How do you envision the long-term mix in optics for you being related to sort of IP versus being an EMS company supporting some of the IP manufacturing for some of the other IP holders in the space?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Got it. Okay. Let me move over to the automotive business. And there, it seems like given where we were sort of overall before some of the exemptions on the tariffs sort of possibly started to come through. I mean you still do have a bit of a headwind from the tariffs that you're dealing with for the industry as well as there's the exposure to EVs, which also has seen some pullback in terms of demand. So how are you thinking about the -- relative to the medium-term outlook in autos, both given price increases potentially because of tariffs as well as EVs seeing a pullback as well in terms of consumer adoption?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Okay. And relative to your largest customer there on the automotive side. I mean there are always concerns in terms of overall further downside risk from that individual customer given how big overall to your automotive segment that is in terms of relevance. Like how would you encourage investors to think about the downside risk to potentially the biggest customer continuing to lose share?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Okay. Let me just see if there's any, -- there are any questions in the audience. Unidentified Participant Matt, it sounds like your TAM is probably fairly enormous. So how are you starting to break down who to pursue and what segments of the marketplace? And then can you also just tell us a little bit about how these contracts play out? Do they sort of start with a small bite with you first and then start to build and expand? Or are they trying to sole-source their way through a build cycle?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Okay. So maybe if I can switch gears to the health care market. And the -- like just maybe talk about the growth opportunities you see in that market. And again, when it comes to the breadth of the capabilities you have in that market, how should we think about where you stand today and opportunities that you can expand further.

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Okay. I mean, any way to quantify if you had to sort of put numbers in relation to what that industry -- underlying industry grows at and what your health care business? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2025 / 6:30PM, JBL.N - Jabil Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : On the semi cap side, I mean, I know you had a good quarter on that front, but some companies that we talked to have already started to highlight that customers are evaluating capital expenditure decisions a bit more closely. Are you seeing any signs of that in your business? And is it very customer-specific that your growth outlook is driven by your specific customers doing very well rather than the industry?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Okay. Got it. Again, moving sort of to the other segment here, networking and comms. Maybe if you can sort of flesh out what the underlying trends there look like because you've been going through a bit more of a slower patch just given some of the low-margin businesses you're exiting. So what does the underlying growth outlook there look like at this time?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Got it. Okay. The last one on that front, digital commerce. And I think you've highlighted that you're seeing positive trends there. But maybe talk about the drivers on that front and how influenced will those be by the macro?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Got it. Okay. So maybe just last couple of questions. One, you did talk about initially in your remarks a 6% margin or a 6.5% is possible. So maybe talk to us about the drivers. Like what do you need in terms of revenue scale to get to 6%? What do you need in terms of revenue scale to get 6.5%? And is it really a function of revenue and operating leverage? Or do you see certain mix changes that get you there as well?

Question: Samik Chatterjee - J.P. Morgan Securities LLC - Analyst : Got it. I will -- yes, I'll wrap it up there just given that we are getting close to time here. But thank you for coming to the conference. And thank you to the audience as well.