With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Fortune Global 500

Industries included in the sector are computers, internet services, IT services, semiconductors, and software companies.

Fortune Sector Leaders: Technology

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

America's Most Innovative Companies

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

World's Most Admired Companies

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

With 100 plants in 30 countries, the manufacturing services company is frequently recognized for its efforts in social and environmental responsibility. Its two largest customers, Amazon and Apple, contributed 31% of the company's $27.3 billion net revenue in the last fiscal year, according to an SEC filing.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-104-Jabil

This year's Fortune 500 marks the 66th running of the list.

F500-2020-121-Jabil

A contract manufacturer of circuit boards and computer systems for companies in many industries, Jabil operates at more than 100 sites worldwide.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Jabil provides electronics manufacturing and diversified manufacturing services to the telecommunications, health care, and automotive industries as well as others. The company was founded in 1966 and, up until 2017, was known as Jabil Circuit. In addition to providing design, production, and product management services for electronics, Jabil also offers product safety and compliance-related services and more.

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Jabil (JBL): Company Profile, Stock Price, News, Rankings

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Jabil

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Greetings and welcome to Jabil's Second Quarter Fiscal Year twenty twenty five Conference Call and Webcast. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Adam Berry, Investor Relations.

Good morning, and welcome to Jabil's second quarter fiscal year twenty twenty five earnings call. Joining me on today's call are Chief Financial Officer, Greg Hebert and Chief Executive Officer, Mike Dastor. Please note that today's presentation is being live streamed. And during our prepared remarks, we will be referencing slides. To view these slides, please visit the Investor Relations section of jabil.com.

After today's presentation concludes, a complete recording will be available on website for playback. In addition, we will be making forward looking statements during this presentation, including among other things, those regarding the anticipated outlook for our business, such as our currently expected fiscal year net revenue and earnings. These statements are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. An extensive list of these risks and uncertainties are identified in our annual report on Form 10 K for the fiscal year ended 08/31/2024, and other filings with the SEC. Table disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

With that, I'll now turn the call over to Craig.

Thanks, Adam. Good morning, everyone. Thanks for taking the time to join our call today. I'm extremely pleased with our strong Q2 results where the team delivered solid margins and cash flows on $6,700,000,000 in revenue. When excluding approximately $250,000,000 associated with the divested mobility business in the prior year quarter, revenue increased 3% year on year.

Core operating income for the quarter came in at $334,000,000 Core operating margins came in at 5% Net interest expense in Q2 came in at $61,000,000 On a GAAP basis, operating income was $245,000,000 and our GAAP diluted earnings per share was $1.06 Core diluted earnings per share was $1.94 Turning now to our performance by segment in the quarter. Our regulated industry segment reported revenue of roughly $2,700,000,000 as guided. On a year over year basis, this represents a decrease of 8% due to expected weakness in our renewable energy and EV markets. Despite this, core operating margin for the segment increased year over year by 20 basis points to 4.8% based on favorable mix in the segment. In the Intelligent Infrastructure segment, we saw revenue of $2,600,000,000 up 18% year on year above what we expected in December.

This growth was primarily driven by strong demand in our AI related cloud, data center infrastructure and capital equipment markets. The core operating margin for this segment was 5.3%, a 110 basis point improvement compared to our prior year quarter. In our Connected Living and Digital Commerce segment, revenue was 1,300,000,000 down 13% year on year due to our mobility divestiture. Excluding revenue associated with the divested mobility business from the prior year, revenue growth for the segment was approximately 4%. This reflects strong year on year growth across our digital commerce and warehouse automation markets, which was partly consistent with the historical seasonality typically observed in the Connected Living sector following the holiday period.

Core operating margins for the segment came in at 4.5% in Q2. Next, I will provide an update on our cash flow and balance sheet metrics for the end of Q2 starting with inventory. As anticipated, during the quarter, inventory days increased four days sequentially to eighty days, which reflects typical seasonality in our business. However, on a year on year basis, inventory days decreased by seven days. Net of inventory deposits from our customers, inventory days were 61, a quarter on quarter increase of five days, which is slightly above our targeted range of fifty five to sixty days.

This was mainly due to timing within our Intelligent Infrastructure segment as we support strong growth. As we progress through the fiscal year, we anticipate that inventory days will normalize into our targeted range. In Q2, cash flow from operations for the quarter were solid amounting to $334,000,000 Net capital expenditures for the second quarter were $73,000,000 For the full year, we continue to expect net CapEx to be between 1.5% to 2% of revenue. As a result of the solid second quarter performance and cash flow generation, adjusted free cash flow for the quarter came in at $261,000,000 bringing our year to date adjusted free cash flow to $487,000,000 With our strong first half results, we now anticipate free cash flow for the year to exceed $1,200,000,000 We exited the second quarter with a healthy balance sheet with debt to core EBITDA levels of approximately 1.4 times and cash balances of approximately $1,600,000,000 In Q2, we repurchased 2,500,000.0 shares. The quarter ended with $364,000,000 remaining on our current $1,000,000,000 share repurchase authorization, which we expect to complete by the end of FY twenty twenty five.

Before I move on to guidance for the next quarter, I'd like to wrap up my remarks on Q2 by recognizing the Jabil team's strong execution this quarter. The team's effort have yielded strong results through the first half of FY 'twenty five despite a highly dynamic environment. The company continues to show remarkable resilience and is poised for future revenue growth, improved margins and robust free cash flow generation. With that, let's turn to the next slide for Q3 FY twenty twenty five guidance. Beginning with revenue by segment, we anticipate revenue for our regulated industries will be $3,000,000,000 down approximately 1% year on year, reflecting appropriate caution in the EV market.

For Intelligent Infrastructure segment, we expect revenue for the quarter to be $2,800,000,000 up approximately 22% year over year on broad based growth across our capital equipment, advanced networking, cloud and data center infrastructure markets. This strength is expected to be slightly offset by lower demand in our five gs end market. In our Connected Living and Digital Commerce segment, revenues are expected to be $1,200,000,000 This is down 16% year over year mainly due to weaker year on year demand in our Connected Living markets, offset slightly by continued growth across the digital commerce space. Total company revenue for Q3 is expected to be in the range of $6,700,000,000 to $7,300,000,000 Core operating income for Q3 is estimated to be in the range of $348,000,000 to $4.00 $8,000,000 GAAP operating income is expected to be in the range of $282,000,000 to $352,000,000 Core diluted earnings per share is estimated to be in the range of $2.08 to $2.48 GAAP diluted earnings per share is expected to be in the range of $1.5 to $1.99 Net interest expense in the third quarter is estimated to be approximately $61,000,000 For FY 'twenty five, we now expect it will be in the range of $240,000,000 to $245,000,000 Our core tax rate for Q3 and for the year is expected to be 21%.

With that, I'd like to thank you for your time this morning and for your interest in Jabil. I'll now turn the call over to Mike.

Thanks, Greg, and good morning to all those joining our call today. To begin, I'd like to take a moment to thank our incredible team here at Jabil for their commitment, dedication and hard work in a particularly dynamic operating environment. As the world continues to evolve, so does this team, always striving to ensure Jabil Solutions and our customer supply chains remain nimble, agile and resilient. Thank you. Speaking of nimble, agile and resilient, next I'd like to touch on a topic that remains top of mind for customers, shareholders and employees alike, potential tariffs.

Consistent with my comments in December, we placed considerable value on maintaining a large scale global manufacturing footprint. And as the geopolitical situation continues to evolve, our ability to adapt, combined with our designation as a U. S. Domicile manufacturing service provider and our significant U. S.

Footprint is becoming increasingly important for our customers. And in my opinion, Jabil is among the best positioned companies in the world to help customers navigate these complexities. As a reminder, while tariffs may impact end customer demand, any changes in tariff costs are a pass through cost for Jabil. Since our last call in December, tariff expectations have broadened to now include China, Canada and Mexico along with the Supercoil tariffs. Addressing each of these for starters, most of our business in China is predominantly local for local or local for regional with a very small portion of our revenues generated from that region being U.

S. Bound. We have extremely limited exposure to Canada. And in Mexico, Eighty Percent to 90% of our business today is USMCA compliant. While implementation mechanics of reciprocal tariffs are unknown, I believe it does level the playing field for manufacturing as hardware still needs to be built somewhere.

Once again, I feel Jabil is well positioned to help customers navigate these complexities. And finally, with 30 sites in The U. S, our manufacturing footprint here has never been bigger than it is today. And while I do feel there could be some challenges to overcome such as labor, our investments and experience in tried and tested automation lines and robotics will certainly help expedite any lift and shift transfers. I personally feel there is no company better positioned than us to grow manufacturing in The U.

S. Moving on to our results. As highlighted by Greg, our second quarter results were quite strong, driven by better than expected growth in capital equipment, cloud and data center infrastructure and digital commerce. At the same time, healthcare, automotive, renewables and connected living were all in line with our expectations from ninety days ago. As a result, the team delivered approximately $6,700,000,000 in revenue, 5% core margins and $1.94 in core earnings per share, up $0.26 from Q2 of last year.

As I review these results in context with our updated outlook for the balance of the year, a few things stand out to me. First, our strong year to date results underscore the resilience and strength of our diversified portfolio where certain end markets like capital equipment and DSN infrastructure continue to outperform, while some areas of our business like EDs and renewables continue to warrant caution. We now believe our Intelligent Infrastructure business is well positioned to deliver 17% growth in FY 2025 on a reported basis and approximately 27% excluding the legacy networking business we exited at the end of FY twenty twenty four. With this updated outlook, AI associated business is now expected to represent approximately $7,500,000,000 in revenue this fiscal year as demand for servers, racks, photonics, advanced networking gear, storage and testing equipment all continued to climb higher during the quarter. This represents an approximate 40% year on year increase for AI related revenue.

Contrary to market fears, the deployment of GPU integrated racks and liquid cooled data centers continues to accelerate. Our strategy to lead with design architecture and engineering allows us to keep pace with the accelerated development cycles with higher yields at launch. We can now transition from older computer architecture to GPU led system level design and hardware production at scale, which has been critical in establishing Jabil as a trusted partner for data center infrastructure build outs. As we look to future growth in this space, I'm particularly excited about our expansion opportunity in India. During the quarter, we announced our plans to expand in Gujarat to support our photonics capabilities.

Over the longer term, we expect Jabil to play a significant role domestically in India as the combination of domestic demand and friendly environment continue to support the manufacturing of advanced technologies and products, including sovereign data center build outs that are in very initial stages. And secondly, digital commerce with our Connected Living and Digital Commerce segment is expected to increase by 14% in FY 2025 as the team continues to help several customers drive automation in retail and digital commerce, be it in the warehouse, in the aisle or at checkout. And in healthcare, I would like to welcome the team from our exciting acquisition of U. S. Based pharmaceuticals International Inc.

This acquisition completed in early February allows us to better serve our pharmaceutical and healthcare customers in aseptic filling and dry oral dosage, which opens up a $20,000,000,000 addressable market by enhancing Jabil's existing pharmaceutical solutions offering, which includes the development and commercial production of auto injectors, pen injectors, inhalers and on body pumps. With PII's advanced capabilities and state of the art manufacturing facilities, we're now in a stronger position to meet the growing demand for high quality drug development and manufacturing in The U. S. In other parts of our business, we continue to be prudent with our expectations for the year. In automotive, we continue to be cautious with the EV outlook for the year, while at the moment we're not seeing much recovery in the renewable energy space outside of energy storage.

Putting it all together for the year on the next slide, we now anticipate approximately $27,900,000,000 in revenue with core operating margins of 5.4%. Core earnings per share now are expected to be $8.95 And importantly, as Greg indicated earlier, we now expect free cash flow generation in FY 2025 of more than $1,200,000,000 In closing, I want to say thank you to the entire Jabil team for your dedication and to our investors for your continued trust and support. I will now turn the call back over to Adam.

Thanks, Mike. Before moving into Q and A, I'd like to take a quick moment and summarize our call today. We're closely monitoring all things associated with the potential tariff situation. As Mike highlighted, we are extremely well positioned as a U. S.

Domicile manufacturing service provider supported by our global footprint and with a significant U. S. Manufacturing footprint. And as Greg highlighted, the resilience of our diversified portfolio is evident. Certain end markets such as capital equipment, data center infrastructure and digital commerce continue to perform exceptionally well.

While other end markets, including electric vehicles, renewables and five gs warrant near term caution. All of this has been considered in our raised outlook for fiscal twenty twenty five. Thank you for your time today. Operator, we're now ready for Q and A.

Thank you. The floor is now open for questions. Today's first question is coming from Rooplu Bhattacharya of Bank of America. Please go ahead. Can you please make sure your phone is not on mute?

Hi. Thank you for taking my questions. Mike, can you talk about your existing footprint in The U. S? You mentioned that several times and your ability to support customers who want to move manufacturing.

Do you think such moves are possible and would that make sense from a landed cost standpoint?

Sure, Raulu. I think in my prepared remarks, I tried to address what we know today. We're obviously a U. S. Domicile manufacturing service provider.

We're U. S. Headquartered. We've been in The U. S.

For sixty years. So we have a lot of experience, a lot of knowledge about The U. S. Today, if you look at the number of sites we have, we have 30 sites in The U. S.

All over the place. And I think if you look at the expertise that we have, the knowledge, the experience and all the capabilities that are required to move to The U. S, we have all of that. Today, if you look at some of our markets like healthcare, almost the entire segment in intelligent infrastructure is mainly U. S.

Based today as well. So we already have a footprint which is generating a large part of our revenue stream. And I think the ability to move manufacturing is obviously based on end markets. Some of the end markets are more price elastic where prices can be passed on to customers. There are some which are not as price elastic.

And that there will have to be a landed cost sort of determination in terms of what moves and what doesn't move. I think the key takeaway here is we're here. We have 30 sites. If you go back and look at what we did last year, within six months, we started from zero. We didn't even have a site.

We started from zero and we set it up, hired all the people, put all the equipment in, did all the infrastructure around the factory and had it up and running in six months. And that's the speed at which we can operate. Now it depends obviously on the end market, but it's highly, highly doable. So, yes, we're actually looking forward to helping our customers if they want to ship to The U. S.

Okay. Thanks for the details there. Can I ask you about the cloud revenues? And you raised the guidance for that as well as for AI related revenues. Can you talk more about the opportunity with silicon photonics?

And how do you see that market growing and your revenues growing? You mentioned Gujarat. Just elaborate on what you plan to build there and how do you see that market trending?

the AI piece, I think you referenced that. Obviously, Intelligent Infrastructure business is going up from previous outlook and considerably from last year. Our AI revenue, if you look at last year, it was in the region of $5,000,000,000 I think we took it up to $6,000,000,000 at one stage, then we took it up to $6,500,000,000 Now we're taking it up to $7,500,000,000 which is quite a big deal. If you go if you look at the year on year growth, that shows a 40% growth rate. So really happy with how we're progressing from the AI revenue perspective.

A lot of that today, to be fair, is coming from the data cloud infrastructure piece. Silicon Photonics, you talked about that. I think you're aware we made this acquisition from Intel that was about eighteen, twenty four months ago. That gave us a capability. That gave us engineering.

That gave us clean rooms. That gave us a whole bunch of capability to go out and build these photonics and transceivers transceiver modules. So it started off today we had $300,000,000 to $400,000,000 with hyperscaler. We're aggressively working with the new hyperscaler on increasing that. And I had really good thoughts about silicon photonics.

In fact, at OFC, in a couple of weeks' time, we'll be showcasing our 1.6 capability today from the front end. The 100 to 400 seems to be more applicable. The 800 on the back end today moving to 1.6 towards the end of this calendar year. So we're really well positioned from a silicon photonics perspective. And like I said today, it's a smaller base, but the future outlook is really good on that one.

Okay. Thanks for all the details there. Maybe I'll sneak one more in. Just looking at the forecast, looks like you tweaked down networking and healthcare forecast for fiscal 'twenty five. Just what should we read into that, if anything?

Sure. So, I think that probably is just a slight it's not on the switch, it's not on the gear, it's not on AI related revenue, it's mainly on the five gs infrastructure side. There's a little bit of uncertainty today with the network providers as well. So that's what's causing some of the reduction from our outlook.

Thanks for all the details. Appreciate it.

Thank you. The next question is coming from Samek Chatterjee of JPMorgan. Please go ahead.

Hi. Thanks for taking my question. Mike, it does seem like when I look at Intelligent Infrastructure, something changed materially for the positive this quarter because all through last year, you were doing about a $2200000000.0.2300000000.0 dollars revenue run rate per quarter. You extended that sequentially into $2,600,000,000 this quarter and you're guiding to 2.8 Also you're raising the AI guidance by about $1,000,000,000 after raising it by $500,000,000 last quarter. So it just seems like there's a increase in the confidence and I'm just wondering if there was something noticeable that happened during the quarter in terms of either sort of more design wins or more visibility into ramps that is driving that confidence?

And I have a quick follow-up after that. Thank you.

Sure. So I think it's in two main areas. If you look at semi cap that not in the wafer fab, it works inside more on the automated testing piece. That part of the business is doing really well with the sort of advent of custom chips that need to be tested, newer technologies coming through. The testing requirements are just going through the roof there.

So semi cap, good sort of outlook there. And then on the cloud data center infrastructure piece, I think that's I hear stories of it slowing down. It's not slowing down at all. It's actually gaining momentum at least as far as Jabil is concerned. So those are the two main areas, obviously some network and communication, the switchgear offset by some of the five gs infrastructure piece that I mentioned on the earlier call.

So I think that whole intelligent infrastructure outlook, again, growth expectations in my books are very robust.

Okay, got it. And then for my follow-up on the margin, particularly on a segment basis, when I look at Connected Living and Digital Commerce, obviously, there's some headwind rate up to mobility on the revenue side. But when we look at margins, what's driving some of the weakness here? Obviously, there are probably some revenue leverage, but otherwise, how are you thinking about the roadmap in terms of improving the margin for that particular segment?

Yes. So I think you hit the nail on the head there when you talked about mobility. That's why the year on year comp looks a little weird. We did have one month of mobility in Q2 of last year, which sort of which skews the number a little bit. But overall, our margin structure is going reasonably well.

We have seasonality. If you remember in Q1, we outperformed on the Connected Living piece by quite a big number. And Q2 is normally a slower quarter for us having gone through the holiday season in our Q1 sort of quarter. So I think that's doing well. I think going forward, the CLDC piece, the digital commerce piece is one I'm more excited about.

That's literally humanoids automation, warehouse automation. We're looking at digital commerce, whether it's in the warehouse, whether it's in the aisle on checkout. There's plenty of options there. And then this whole humanoid thing very early sort of situation there, but has very high potential. And I'm not suggesting that comes in the next six, twelve months.

But eventually over the medium to long term, that's another growth engine for us.

Okay. Thank you. Thanks for taking my questions.

Thank you. The next question is coming from Mark Delaney of Goldman Sachs. Please go ahead.

Yes. Good morning. Thanks very much for taking my questions. Thanks for the comments you've provided so far on tariffs. I'm hoping you can expand a bit on that topic and help us better understand what you're seeing from customers currently in terms of how they may want to respond to tariffs and potential tariffs.

Are there a meaningful number of customers that have already started to work on plans to shift sourcing into The U. S. Or told you that's something they want to do? Or is it more that customers are working through scenario analysis and planning in the event that higher tariffs do go into effect?

So let me just hit on what we have already covered in our prepared remarks. If you look at the current situation as we know today, which is Canada, Mexico and China, I think I addressed all three. The exposure there is minimal. The reciprocal tariffs, no one knows what the mechanics of that will be. It's supposed to be April 2.

Don't know what the actual implementation dates would be and what it would involve. But I think the opportunity, I think you have to look at this holistically as well. Mark, you've got to we've been are in all these countries. Reciprocal tariff in my view actually levels the manufacturing playing field quite a bit, which means that we can manufacture anywhere. And if the capabilities and the expertise that we have, we're in 30 countries.

We can use our local knowledge quite a bit to help our customers there. So overall, the tariff situation, I see that as a net positive. Obviously, demand reduction by the end customer. We're not seeing any of that today, but that could happen. But that's more a macro level issue than a Jabil issue.

I do think the potential for moving to The U. S, obviously, I mentioned earlier, it's very end market focused. I think if you look at healthcare, very difficult to move things around. We're already mainly in The U. S.

Anyway. So healthcare is a lot more sort of price elastic impact, Paul. The pricing is a little bit more tolerant to these movements or the tariff situation itself as well. So we have got our Intelligent Infrastructure business here doing really, really well. Already in most of that is early in The U.

S. And I think if you look at Digital Commerce, Connected Living, those are a little bit more price elastic, especially on the consumer side, consumer related products. Those will be a little bit more difficult to move across from a pricing standpoint. So we'll have to wait and see how things progress. But it's very early days, Buck.

I the reciprocal tariffs, don't know anything about that. And we've already addressed the three countries that we know of today. So I hope that answered your question.

No, that's helpful. And I understand there's a lot of moving parts here. I did want to make sure our investors and we understand what is embedded into your fiscal twenty twenty five guidance with tariffs. Are you assuming tariffs on imports from Mexico and the reciprocal tariffs go into effect on April 2? And then similarly, have you tried to bake in any revenue headwinds from potentially higher prices or even just some conservatism because of the uncertainty and perhaps timing to move products around the world?

All right. So let me again just address China, Mexico and Canada. The China situation, we have very little exposure of products that eventually come to The U. S. So we're good on China.

We have almost zero exposure in Canada. And in Mexico, I think I referred to that in my prepared remarks, 80% to 90% of our business is USMCA compliant. A lot of it is done under the USMCA free trade agreement. We don't know the details of reciprocal tariffs versus Mexico. I know Mexico doesn't charge that big of a tariff on U.

S. Products. So I'm not that worried about Mexico. I think overall will volumes get impacted eventually? Yes.

I don't think that happens in the next six months, Mark. I think this is a much longer term sort of impact. There could be some level of pullback towards the holiday season, especially for the consumer's perspective. We're not seeing any of that today. Until things get cleared, I think where our assumptions right now are still very consistent.

I think you asked whether we're being prudent and I called that out a couple of times in my prepared remarks. We're being absolutely prudent for end markets that we're aware of such as EVs, such as renewables, even some of the consumer piece. Just long term, I'll keep repeating this. We're really well positioned whether it's shifting to The U. S, whether it's shifting around globally.

And I don't think there are that many companies that are actually better suited for this sort of uncertainty or to at least help our customers navigate these complexities.

That all makes sense. Mike, appreciate all your commentary on this topic and congratulations on the solid results and outlook. I'll pass it along.

Thank you. Our next question is coming from David Vogt of UBS. Please go ahead.

Great. Thanks guys. I want to follow-up on that, but not necessarily on the actual gross margin impact of tariffs, but on revenue. And maybe this is for Greg to start. So Greg, I just want to make sure I understand sort of the year over year compares.

I know you have the divestiture of mobility last year, but you also exited some legacy networking businesses last year. Is that in sort of the commentary in terms of how you're thinking about the growth rates going forward? Because I thought it was my understanding that in February of last year, you had a couple hundred million from that business and a little bit similar number in May. So I'm trying to understand kind of the pro form a growth rate for Febrevs. I think you said 3%, but it suggests to me that it should be stronger than that.

Yes, David, thanks for the question. If we take out that networking legacy business out, our quarter year over year growth would have been 8.5%. So we had about $300,000,000 of revenue in Q2 of $24,000,000 on that. So again, when you look at that, the growth for intelligent infrastructure, which we reported 18% year over year, would have been 37% year over year.

Got it. Okay. So then my follow-up to that is, so if I just take your guidance at face value for the year, I would imagine in Q4 of this fiscal year, you don't have a tough compare. And so what's implied by the guide and maybe goes back to Mike's point about being conservative is that you have a fairly meaningful deceleration as we move through the summer months into fall. Is that a reflection of anything you're seeing from a demand perspective to date or tariff potential impact or just prudence given sort of the uncertain macro?

Maybe just kind of help flush that out, that'd be great. Thanks.

Yes, absolutely. It's all about being prudent given where we are today. So we're just being cautious on the guidance.

Got it. And then I would imagine that is that prudence in cloud and data center, auto ZVs or across the board? I'm just trying to get a sense for where you feel the most caution is warranted given the strong demand that you're seeing in semi fab and cloud and data center?

Yes. It's a broad stroke across all end markets, David.

Thank you. The next question is coming from Stephen Fox of Fox Advisors. Please go ahead.

Hi, good morning. I had two questions if I could. First of all, I was wondering if you could expand on the comment, Mike, that you made about GPU racks and liquid cooling continuing to accelerate. And it seems like you were tying it into your ability to deliver higher yields at launch of new racks. But I was wondering what does that exactly mean that you're doing and why you're benchmarking, I guess, supposedly better against competition?

Hey, Steve. So my comments on improving yields at launch were more related to our design architecture, the engineering piece, the capability that we have today, where the handshake between the hyperscaler and us as far as it relates to data center build outs, That's what drives improved yields at launch. The reference to obviously servers and racks are doing really well. The GPU related piece is obviously a big catalyst for that. The liquid cooling, the acquisition that we made last year is actually going really well.

It's opening up so many doors for us in terms of vertical solutions, in terms of individual customized solutions that we can do. And by the way, none of that is even in our forecast. We're still in conversations. It's actually going really well. I'm extremely pleased with that liquid cooling acquisition that we've done.

And the potential for future growth, again, that was the reason we bought it. We didn't buy it with revenue. We didn't buy it with a whole bunch of incremental revenue that came with it. It was more a capability that we were selling as a vertical and customized solution. So I think I hope that Ian answers your question.

Yes. That's really interesting. I appreciate

that color. And then on the flip side, the auto and transport segment, it's still a bit of a melting ice cube for you guys in terms of your forecast. And I was wondering how confident are you that you have a good handle on what EV production could be like for second half of the year and whether you have any offsets within that segment around like new programs or new content, etcetera? Thanks.

Jabil (JBL) Q2 2025 Earnings Call Transcript

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