Jabil 10-Q 2023-05-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2023

or

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-14063

JABIL INC.

(Exact name of registrant as specified in its charter)

Delaware						38-1886260
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

10800 Roosevelt Boulevard North, St. Petersburg, Florida 33716

(Address of principal executive offices) (Zip Code)

(727) 577-9749

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading symbol(s)			Name of each exchange on which registered
Common Stock, $0.001 par value per share			JBL			New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer			☒			Accelerated filer			☐
Non-accelerated filer			☐			Smaller reporting company			☐
						Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of June 22, 2023, there were 130,881,417 shares of the registrant’s Common Stock outstanding.

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JABIL INC. AND SUBSIDIARIES INDEX

Part I – Financial Information
Item 1.			Financial Statements
			Condensed Consolidated Balance Sheets as of May 31, 2023 and August 31, 2022			1
			Condensed Consolidated Statements of Operations for the three months and nine months ended May 31, 2023 and 2022			2
			Condensed Consolidated Statements of Comprehensive Income for the three months and nine months ended May 31, 2023 and 2022			3
			Condensed Consolidated Statements of Stockholders’ Equity for the three months and nine months ended May 31, 2023 and 2022			4
			Condensed Consolidated Statements of Cash Flows for the nine months ended May 31, 2023 and 2022			5
			Notes to Condensed Consolidated Financial Statements			6
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			18
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			27
Item 4.			Controls and Procedures			27
Part II – Other Information
Item 1.			Legal Proceedings			29
Item 1A.			Risk Factors			29
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			29
Item 3.			Defaults Upon Senior Securities			29
Item 4.			Mine Safety Disclosures			29
Item 5.			Other Information			29
Item 6.			Exhibits			30
			Signatures			32

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PART I—FINANCIAL INFORMATION

JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except for share data)

			May 31, 2023 (Unaudited)						August 31, 2022
ASSETS
Current assets:
Cash and cash equivalents			$	1,480					$	1,478
Accounts receivable, net of allowance for credit losses			3,599						3,995
Contract assets			1,173						1,196
Inventories, net			6,084						6,128
Prepaid expenses and other current assets			1,273						1,111
Total current assets			13,609						13,908
Property, plant and equipment, net of accumulated depreciation of $6,055 as of May 31, 2023 and $5,624 as of August 31, 2022			3,919						3,954
Operating lease right-of-use asset			484						500
Goodwill			737						704
Intangible assets, net of accumulated amortization of $497 as of May 31, 2023 and $471 as of August 31, 2022			150						158
Deferred income taxes			233						199
Other assets			304						294
Total assets			$	19,436					$	19,717
LIABILITIES AND EQUITY
Current liabilities:
Current installments of notes payable and long-term debt			$	300					$	300
Accounts payable			6,406						8,006
Accrued expenses			5,964						5,272
Current operating lease liabilities			126						119
Total current liabilities			12,796						13,697
Notes payable and long-term debt, less current installments			2,874						2,575
Other liabilities			311						272
Non-current operating lease liabilities			386						417
Income tax liabilities			205						182
Deferred income taxes			127						122
Total liabilities			16,699						17,265
Commitments and contingencies
Equity:
Jabil Inc. stockholders’ equity:
Preferred stock, $0.001 par value, authorized 10,000,000 shares; no shares issued and no shares outstanding			—						—
Common stock, $0.001 par value, authorized 500,000,000 shares; 273,536,549 and 270,891,715 shares issued and 131,351,864 and 135,493,980 shares outstanding as of May 31, 2023 and August 31, 2022, respectively			—						—
Additional paid-in capital			2,758						2,655
Retained earnings			4,268						3,638
Accumulated other comprehensive loss			(11)						(42)
Treasury stock at cost, 142,184,685 and 135,397,735 shares as of May 31, 2023 and August 31, 2022, respectively			(4,279)						(3,800)
Total Jabil Inc. stockholders’ equity			2,736						2,451
Noncontrolling interests			1						1
Total equity			2,737						2,452
Total liabilities and equity			$	19,436					$	19,717

See accompanying notes to Condensed Consolidated Financial Statements.

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JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except for per share data)

(Unaudited)

			Three months ended												Nine months ended
			May 31, 2023						May 31, 2022						May 31, 2023						May 31, 2022
Net revenue			$	8,475					$	8,328					$	26,244					$	24,448
Cost of revenue			7,778						7,709						24,143						22,545
Gross profit			697						619						2,101						1,903
Operating expenses:
Selling, general and administrative			307						282						911						870
Research and development			8						8						25						25
Amortization of intangibles			7						8						24						24
Restructuring, severance and related charges			—						—						45						—
Operating income			375						321						1,096						984
Loss on debt extinguishment			—						4						—						4
Other expense (income)			18						1						50						(2)
Interest income			(32)						(1)						(62)						(2)
Interest expense			83						39						216						105
Income before income tax			306						278						892						879
Income tax expense			73						60						229						198
Net income			233						218						663						681
Net income attributable to noncontrolling interests, net of tax			—						—						—						—
Net income attributable to Jabil Inc.			$	233					$	218					$	663					$	681
Earnings per share attributable to the stockholders of Jabil Inc.:
Basic			$	1.76					$	1.55					$	4.96					$	4.77
Diluted			$	1.72					$	1.52					$	4.86					$	4.67
Weighted average shares outstanding:
Basic			132.3						140.4						133.6						142.6
Diluted			135.1						143.3						136.4						145.8

See accompanying notes to Condensed Consolidated Financial Statements.

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JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

(Unaudited)

			Three months ended												Nine months ended
			May 31, 2023						May 31, 2022						May 31, 2023						May 31, 2022
Net income

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Overview

We are one of the leading providers of worldwide manufacturing services and solutions. We provide comprehensive electronics design, production and product management services to companies in various industries and end markets. Our services enable our customers to reduce manufacturing costs, improve supply-chain management, reduce inventory obsolescence, lower transportation costs and reduce product fulfillment time. Our manufacturing and supply chain management services and solutions include innovation, design, planning, fabrication and assembly, delivery and managing the flow of resources and products. We derive substantially all of our revenue from production and product management services (collectively referred to as “manufacturing services”), which encompass the act of producing tangible components that are built to customer specifications and are then provided to the customer.

We serve our customers primarily through dedicated business units that combine highly automated, continuous flow manufacturing with advanced electronic design and design for manufacturability. We currently depend, and expect to continue to depend for the foreseeable future, upon a relatively small number of customers for a significant percentage of our net revenue, which in turn depends upon their growth, viability and financial stability.

We conduct our operations in facilities that are located worldwide, including but not limited to, China, Ireland, Malaysia, Mexico, Singapore and the United States. We derived a substantial majority, 86.9% and 85.6%, of net revenue from our international operations for the three months and nine months ended May 31, 2023, respectively. Our global manufacturing production sites allow customers to manufacture products simultaneously in the optimal locations for their products. Our global presence is key to assessing and executing on our business opportunities.

We have two reporting segments: Electronics Manufacturing Services (“EMS”) and Diversified Manufacturing Services (“DMS”), which are organized based on the economic profiles of the services performed, including manufacturing capabilities, market strategy, margins, return on capital and risk profiles. Our EMS segment is focused around leveraging IT, supply chain design and engineering, technologies largely centered on core electronics, utilizing our large scale manufacturing infrastructure and our ability to serve a broad range of end markets. Our EMS segment is a high volume business that produces product at a quicker rate (i.e. cycle time) and in larger quantities and includes customers primarily in the 5G, wireless and cloud, digital print and retail, industrial and semi-cap, and networking and storage industries. Our DMS segment is focused on providing engineering solutions, with an emphasis on material sciences, technologies and healthcare. Our DMS segment includes customers primarily in the automotive and transportation, connected devices, healthcare and packaging, and mobility industries.

We monitor the current economic environment and its potential impact on both the customers we serve as well as our end-markets and closely manage our costs and capital resources so that we can respond appropriately as circumstances change.

Refer to Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" section contained in our Annual Report on Form 10-K for the fiscal year ended August 31, 2022 for further discussion of the items disclosed in Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" section as of May 31, 2023 contained herein.

COVID-19

The COVID-19 pandemic has had, and continues to have, significant impacts in countries where we operate. Travel and business operation restrictions arising from governmental virus containment efforts have continued to impact our operations in Asia during this fiscal year.

Certain of our suppliers continue to experience supply chain constraints, including difficulty sourcing materials necessary to fulfill customer production requirements and challenges in transporting completed products to our end customers.

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Summary of Results

The following table sets forth, for the periods indicated, certain key operating results and other financial information (in millions, except per share data):

			Three months ended												Nine months ended
			May 31, 2023						May 31, 2022						May 31, 2023						May 31, 2022
Net revenue			$	8,475					$	8,328					$	26,244					$	24,448
Gross profit			$	697					$	619					$	2,101					$	1,903
Operating income			$	375					$	321					$	1,096					$	984
Net income attributable to Jabil Inc.			$	233					$	218					$	663					$	681
Earnings per share—basic			$	1.76					$	1.55					$	4.96					$	4.77
Earnings per share—diluted			$	1.72					$	1.52					$	4.86					$	4.67

Key Performance Indicators

Management regularly reviews financial and non-financial performance indicators to assess the Company’s operating results. Changes in our operating assets and liabilities are largely affected by our working capital requirements, which are dependent on the effective management of our sales cycle as well as timing of payments. Our sales cycle measures how quickly we can convert our manufacturing services into cash through sales. We believe the metrics set forth below are useful to investors in measuring our liquidity as future liquidity needs will depend on fluctuations in levels of inventory, accounts receivable and accounts payable.

The following table sets forth, for the quarterly periods indicated, certain of management’s key financial performance indicators:

			Three months ended
			May 31, 2023						February 28, 2023						May 31, 2022
Sales cycle(1)			48 days						50 days						37 days
Inventory turns (annualized)(2)			4 turns						4 turns						4 turns
Days in accounts receivable(3)			38 days						41 days						35 days
Days in inventory(4)			84 days						93 days						85 days
Days in accounts payable(5)			74 days						84 days						83 days

(1)The sales cycle is calculated as the sum of days in accounts receivable and days in inventory, less the days in accounts payable; accordingly, the variance in the sales cycle quarter over quarter was a direct result of changes in these indicators.

(2)Inventory turns (annualized) are calculated as 360 days divided by days in inventory.

(3)Days in accounts receivable is calculated as accounts receivable, net, divided by net revenue multiplied by 90 days. During the three months ended May 31, 2023, the decrease in days in accounts receivable from the prior sequential quarter was primarily due to the timing of collections. During the three months ended May 31, 2023, the increase in days in accounts receivable from the three months ended May 31, 2022, was primarily due to higher sales and the timing of collections.

(4)Days in inventory is calculated as inventories, net and contract assets divided by cost of revenue multiplied by 90 days. During the three months ended May 31, 2023, the decrease in days in inventory from the prior sequential quarter was primarily driven by increased sales activity during the quarter resulting in a higher consumption of inventory and improved working capital management.

(5)Days in accounts payable is calculated as accounts payable divided by cost of revenue multiplied by 90 days. During the three months ended May 31, 2023, the decrease in days in accounts payable from the prior sequential quarter was primarily due to a decrease in material purchases and timing of cash payments during the quarter. During the three months ended May 31, 2023, the decrease in days in accounts payable from the three months ended May 31, 2022, was primarily due to cash payments and timing of purchases during the quarter.

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Critical Accounting Policies and Estimates

The preparation of our Condensed Consolidated Financial Statements and related disclosures in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and judgments that affect our reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, we evaluate our estimates and assumptions based upon historical experience and various other factors and circumstances. Management believes that our estimates and assumptions are reasonable under the circumstances; however, actual results may vary from these estimates and assumptions under different future circumstances. For further discussion of our significant accounting policies, refer to Note 1 — “Description of Business and Summary of Significant Accounting Policies” to the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2022.

Recent Accounting Pronouncements

See Note 18 – “New Accounting Guidance” to the Condensed Consolidated Financial Statements for a discussion of recent accounting guidance.

Results of Operations

Net Revenue

Generally, we assess revenue on a global customer basis regardless of whether the growth is associated with organic growth or as a result of an acquisition. Accordingly, we do not differentiate or separately report revenue increases generated by acquisitions as opposed to existing business. In addition, the added cost structures associated with our acquisitions have historically been relatively insignificant when compared to our overall cost structure.

The distribution of revenue across our segments has fluctuated, and will continue to fluctuate, as a result of numerous factors, including the following: fluctuations in customer demand; efforts to diversify certain portions of our business; business growth from new and existing customers; specific product performance; and any potential termination, or substantial winding down, of significant customer relationships.

			Three months ended																		Nine months ended
(dollars in millions)			May 31, 2023						May 31, 2022						Change						May 31, 2023						May 31, 2022						Change
Net revenue			$	8,475					$	8,328					1.8		%				$	26,244					$	24,448					7.3		%

Net revenue increased during the three months ended May 31, 2023, compared to the three months ended May 31, 2022. Specifically, the DMS segment net revenue increased 13% due to: (i) an 11% increase in revenues from existing customers within our automotive and transportation business, and (ii) a 5% increase in revenues from existing customers within our healthcare and packaging business. The increase is partially offset by a 3% decrease in revenues from existing customers within our connected devices business. The EMS segment net revenue decreased 8% primarily due to a decrease in revenues from existing customers within our 5G, wireless and cloud business, which began transitioning to a customer-controlled consignment model in fiscal year 2023.

Net revenue increased during the nine months ended May 31, 2023, compared to the nine months ended May 31, 2022. Specifically, the DMS segment net revenue increased 10% due to: (i) a 8% increase in revenues from existing customers within our automotive and transportation business, (ii) a 4% increase in revenues from existing customers within our healthcare and packaging business, and (iii) a 1% increase in revenues from existing customers within our mobility business. The increase is partially offset by a 3% decrease in revenues from existing customers within our connected devices business. The EMS segment net revenue increased 5% due to: (i) a 3% increase in revenues from existing customers within our industrial and capital equipment business, and (ii) a 2% increase in revenues from existing customers within our digital print and retail business.

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The following table sets forth, for the periods indicated, revenue by segment expressed as a percentage of net revenue:

			Three months ended												Nine months ended
			May 31, 2023						May 31, 2022						May 31, 2023						May 31, 2022
EMS			49		%				54		%				48		%				50		%
DMS			51		%				46		%				52		%				50		%
Total			100		%				100		%				100		%				100		%

The following table sets forth, for the periods indicated, foreign source revenue expressed as a percentage of net revenue:

			Three months ended												Nine months ended
			May 31, 2023						May 31, 2022						May 31, 2023						May 31, 2022
Foreign source revenue			86.9		%				82.6		%				85.6		%				83.7		%

Gross Profit

			Three months ended																		Nine months ended
(dollars in millions)			May 31, 2023						May 31, 2022												May 31, 2023						May 31, 2022
Gross profit			$	697					$	619											$	2,101					$	1,903
Percent of net revenue			8.2		%				7.4		%										8.0		%				7.8		%

Gross profit as a percentage of net revenue increased for the three months ended May 31, 2023, compared to the three months ended May 31, 2022, primarily due to product mix and improved profitability across various businesses.

Gross profit as a percentage of net revenue remained relatively consistent for the nine months ended May 31, 2023, compared to the nine months ended May 31, 2022.

Selling, General and Administrative

			Three months ended																		Nine months ended
(dollars in millions)			May 31, 2023						May 31, 2022						Change						May 31, 2023						May 31, 2022						Change
Selling, general and administrative			$	307					$	282					$	25					$	911					$	870					$	41

Selling, general and administrative expenses increased during the three months ended May 31, 2023, compared to the three months ended May 31, 2022. The increase is primarily due to: (i) $15 million due to higher salary and salary related expenses and (ii) $6 million of indirect taxes.

Selling, general and administrative expenses increased during the nine months ended May 31, 2023, compared to the nine months ended May 31, 2022. The increase is primarily due to: (i) $13 million due to higher salary and salary related expenses, (ii) $13 million in stock-based compensation expense due to higher anticipated achievement levels for certain performance-based stock awards and awards granted during the three months ended November 30, 2022, (iii) $8 million for higher travel-related costs, and (iv) $6 million of indirect taxes.

Research and Development

			Three months ended																		Nine months ended
(dollars in millions)			May 31, 2023						May 31, 2022												May 31, 2023						May 31, 2022
Research and development			$	8					$	8											$	25					$	25
Percent of net revenue			0.1		%				0.1		%										0.1		%				0.1		%

Research and development expenses remained consistent as a percentage of net revenue during the three months and nine months ended May 31, 2023, compared to the three months and nine months ended May 31, 2022.

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Amortization of Intangibles

			Three months ended																		Nine months ended
(dollars in millions)			May 31, 2023						May 31, 2022						Change						May 31, 2023						May 31, 2022						Change
Amortization of intangibles			$	7					$	8					$	(1)					$	24					$	24					$	—

Amortization of intangibles remained relatively consistent during the three months and nine months ended May 31, 2023, compared to the three months and nine months ended May 31, 2022.

Restructuring, Severance and Related Charges

			Three months ended																		Nine months ended
(dollars in millions)			May 31, 2023						May 31, 2022						Change						May 31, 2023						May 31, 2022						Change
Restructuring, severance and related charges			$	—					$	—					$	—					$	45					$	—					$	45

Restructuring, severance and related charges increased during the nine months ended May 31, 2023, compared to the nine months ended May 31, 2022 primarily related to a headcount reduction to further optimize our business activities during the three months ended November 30, 2022.

Loss on Debt Extinguishment

			Three months ended																		Nine months ended
(dollars in millions)			May 31, 2023						May 31, 2022						Change						May 31, 2023						May 31, 2022						Change
Loss on debt extinguishment			$	—					$	4					$	(4)					$	—					$	4					$	(4)

Loss on debt extinguishment is due to the “make-whole” premium incurred during the three months ended May 31, 2022, for the redemption of the 4.700% Senior Notes due 2022.

Other Expense (Income)

			Three months ended																		Nine months ended
(dollars in millions)			May 31, 2023						May 31, 2022						Change						May 31, 2023						May 31, 2022						Change
Other expense (income)			$	18					$	1					$	17					$	50					$	(2)					$	52

The change in other expense (income) during the three months ended May 31, 2023, compared to the three months ended May 31, 2022, is primarily due to an increase in fees associated with the securitization programs and higher interest rates for the trade accounts receivable sales programs.

The change in other expense (income) during the nine months ended May 31, 2023, compared to the nine months ended May 31, 2022, is primarily due to: (i) $48 million related to an increase in fees associated with the securitization programs and higher utilization of and higher interest rates for the trade accounts receivable programs and (ii) $10 million, primarily related to higher net periodic benefit costs. The change is partially offset by a $6 million decrease in other expense.

Interest Income

			Three months ended																		Nine months ended
(dollars in millions)			May 31, 2023						May 31, 2022						Change						May 31, 2023						May 31, 2022						Change
Interest income			$	32					$	1					$	31					$	62					$	2					$	60

Interest income increased during the three months and nine months ended May 31, 2023, compared to the three months and nine months ended May 31, 2022, primarily due to higher interest rates on and higher cash balances.

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Interest Expense

			Three months ended																		Nine months ended
(dollars in millions)			May 31, 2023						May 31, 2022						Change						May 31, 2023						May 31, 2022						Change
Interest expense			$	83					$	39					$	44					$	216					$	105					$	111

Interest expense increased during the three months ended May 31, 2023, compared to the three months ended May 31, 2022, primarily due to higher interest rates on our commercial paper program, credit facilities, and other borrowings.

Interest expense increased during the nine months ended May 31, 2023, compared to the nine months ended May 31, 2022, primarily due to higher borrowings and higher interest rates on our commercial paper program, credit facilities, and other borrowings.

Income Tax Expense

			Three months ended																		Nine months ended
			May 31, 2023						May 31, 2022						Change						May 31, 2023						May 31, 2022						Change
Effective income tax rate			24.0		%				21.8		%				2.2		%				25.7		%				22.5		%				3.2		%

The effective income tax rate increased for the three months and nine months ended May 31, 2023, compared to the three months and nine months ended May 31, 2022, primarily due to a change in the jurisdictional mix of earnings, partially offset by a $17 million income tax expense during the three months and nine months ended May 31, 2022 for an unrecognized tax benefit related to the taxation of certain prior year intercompany transactions.

Non-GAAP (Core) Financial Measures

The following discussion and analysis of our financial condition and results of operations include certain non-GAAP financial measures as identified in the reconciliations below. The non-GAAP financial measures disclosed herein do not have standard meaning and may vary from the non-GAAP financial measures used by other companies or how we may calculate those measures in other instances from time to time. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. Among other uses, management uses non-GAAP “core” financial measures to make operating decisions, assess business performance and as a factor in determining certain employee performance when evaluating incentive compensation. Also, our “core” financial measures should not be construed as an indication by us that our future results will be unaffected by those items that are excluded from our “core” financial measures.

For fiscal year 2023, the Company adopted an annual normalized tax rate (“normalized core tax rate”) for the computation of the non-GAAP (core) income tax provision to provide better consistency across reporting periods. In estimating the normalized core tax rate annually, the Company utilizes a full-year financial projection of core earnings that considers the mix of earnings across tax jurisdictions, existing tax positions, and other significant tax matters. The Company may adjust the normalized core tax rate during the year for material impacts from new tax legislation or material changes to the Company’s operations.

Prior to fiscal year 2023, the Company determined the tax effect of the items included and excluded from core earnings quarterly.

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Included in the tables below are reconciliations of the non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures as provided in our Condensed Consolidated Financial Statements:

Reconciliation of U.S. GAAP Financial Results to Non-GAAP Measures

			Three months ended												Nine months ended
(in millions, except for per share data)			May 31, 2023						May 31, 2022						May 31, 2023						May 31, 2022
Operating income (U.S. GAAP)			$	375					$	321					$	1,096					$	984
Amortization of intangibles			7						8						24						24
Stock-based compensation expense and related charges			18						16						80						67
Restructuring, severance and related charges(1)			—						—						45						—
Net periodic benefit cost(2)			4						7						11						21
Adjustments to operating income			29						31						160						112
Core operating income (Non-GAAP)			$	404					$	352					$	1,256					$	1,096
Net income attributable to Jabil Inc. (U.S. GAAP)			$	233					$	218					$	663					$	681
Adjustments to operating income			29						31						160						112
Loss on debt extinguishment			—						4						—						4
Net periodic benefit cost(2)			(4)						(7)						(11)						(21)
Adjustments for taxes			11						—						32						—
Core earnings (Non-GAAP)			$	269					$	246					$	844					$	776
Diluted earnings per share (U.S. GAAP)			$	1.72					$	1.52					$	4.86					$	4.67
Diluted core earnings per share (Non-GAAP)			$	1.99					$	1.72					$	6.18					$	5.32
Diluted weighted average shares outstanding (U.S. GAAP and Non-GAAP)			135.1						143.3						136.4						145.8

(1)Recorded during the nine months ended May 31, 2023, related to headcount reduction to further optimize our business activities.

(2)We are reclassifying the pension components in other expense to core operating income as we assess operating performance, inclusive of all components of net periodic benefit cost, with the related revenue. There is no impact to core earnings or diluted core earnings per share for this adjustment.

Adjusted Free Cash Flow

			Nine months ended
(in millions)			May 31, 2023						May 31, 2022
Net cash provided by operating activities (U.S. GAAP)			$	1,048					$	745
Acquisition of property, plant and equipment (“PP&E”)(1)			(860)						(1,068)
Proceeds and advances from sale of PP&E(1)			180						470
Adjusted free cash flow (Non-GAAP)			$	368					$	147

(1)Certain customers co-invest in property, plant and equipment (“PP&E”) with us. As we acquire PP&E, we recognize the cash payments in acquisition of PP&E. When our customers reimburse us and obtain control, we recognized the cash receipts in proceeds and advances from the sale of PP&E.

Liquidity and Capital Resources

We believe that our level of liquidity sources, which includes cash on hand, available borrowings under our revolving credit facilities and commercial paper program, additional proceeds available under our global asset-backed securitization program and under our uncommitted trade accounts receivable sale programs, cash flows provided by operating activities and access to the capital markets, will be adequate to fund our capital expenditures, the payment of any declared quarterly dividends, any share repurchases under the approved programs, any potential acquisitions, our working capital requirements and our contractual obligations for the next 12 months and beyond. We continue to assess our capital structure and evaluate the merits of redeploying available cash.

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Cash and Cash Equivalents

As of May 31, 2023, we had approximately $1.5 billion in cash and cash equivalents, of which a significant portion was held by our foreign subsidiaries. Most of our foreign cash and cash equivalents as of May 31, 2023 could be repatriated to the United States without potential tax expense.

Notes Payable and Credit Facilities

Following is a summary of principal debt payments and debt issuance for our notes payable and credit facilities:

(in millions)			4.900% Senior Notes						3.950% Senior Notes						3.600% Senior Notes						3.000% Senior Notes						1.700% Senior Notes						4.250% Senior Notes						5.450% Senior Notes**(1)**						Borrowings under revolving credit facilities**(2)(3)**												Borrowings under loans						Total notes payable and credit facilities
Balance as of August 31, 2022			$	300					$	497					$	496					$	592					$	497					$	493					$	—					$	—											$	—					$	2,875
Borrowings			—						—						—						—						—						—						298						3,258												—						3,556
Payments			—						—						—						—						—						—						—						(3,258)												—						(3,258)
Other			—						—						—						1						1						2						(3)						—												—						1
Balance as of May 31, 2023			$	300					$	497					$	496					$	593					$	498					$	495					$	295					$	—											$	—					$	3,174
Maturity Date			Jul 14, 2023						Jan 12, 2028						Jan 15, 2030						Jan 15, 2031						Apr 15, 2026						May 15, 2027						Feb 1, 2029						Jan 22, 2025 and Jan 22, 2027												Jul 31, 2026
Original Facility/ Maximum Capacity(3)			$300 million						$500 million						$500 million						$600 million						$500 million						$500 million						$300 million						$3.9 billion(3)												$1 million

.

(1)On April 13, 2023, we issued $300 million of publicly registered 5.450% Senior Notes due 2029 (the “5.450% Senior Notes”). We intend to use the net proceeds for general corporate purposes, including, together with available cash, repayment of the $300 million aggregate principal amount of our 4.900% Senior Notes due in July 2023.

(2)On February 10, 2023, we entered into an amendment (the “Amendment”) to our senior unsecured credit agreement dated as of January 22, 2020 (as amended, the “Credit Facility”). The Amendment, among other things, (i) instituted certain amendments to the sustainability-linked adjustments to the interest rates applicable to borrowings under the three-year revolving credit facility (the “Three-Year Revolving Credit Facility”) and the five-year revolving credit facility (the “Five-Year Revolving Credit Facility”), (ii) established customary SOFR, CDOR, EURIBOR and TIBOR provisions, which replaced the LIBOR provisions set forth in the existing agreement, and (iii) extended the termination date of the Three-Year Revolving Credit Facility to January 22, 2025, and of the Five-Year Revolving Credit Facility to January 22, 2027.

(3)As of May 31, 2023, we had $3.9 billion in available unused borrowing capacity under our revolving credit facilities. The Credit Facility acts as the back-up facility for commercial paper outstanding, if any. We have a borrowing capacity of up to $3.2 billion under our commercial paper program. Commercial paper borrowings with an original maturity of 90 days or less are recorded net within the Condensed Consolidated Statements of Cash Flows, and have been excluded from the table above.

We have a shelf registration statement with the SEC registering the potential sale of an indeterminate amount of debt and equity securities in the future to augment our liquidity and capital resources.

Our Senior Notes and our credit facilities contain various financial and nonfinancial covenants. A violation of these covenants could negatively impact our liquidity by restricting our ability to borrow under the notes payable and credit facilities and potentially causing acceleration of amounts due under these notes payable and credit facilities. As of May 31, 2023 and August 31, 2022, we were in compliance with our debt covenants. Refer to Note 5 – “Notes Payable and Long-Term Debt” to the Condensed Consolidated Financial Statements for further details.

Global Asset-Backed Securitization Program

Certain Jabil entities participating in the global asset-backed securitization program continuously sell designated pools of trade accounts receivable to a special purpose entity, which in turn sells certain of the receivables at a discount to conduits administered by an unaffiliated financial institution on a monthly basis. In addition, a foreign entity participating in the global asset-backed securitization program sells certain receivables at a discount to conduits administered by an unaffiliated financial institution on a daily basis.

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We continue servicing the receivables sold and in exchange receive a servicing fee under the global asset-backed securitization program. Servicing fees related to the global asset-backed securitization program recognized during the three months and nine months ended May 31, 2023 and 2022 were not material. We do not record a servicing asset or liability on the Condensed Consolidated Balance Sheets as we estimate that the fee we receive to service these receivables approximates the fair market compensation to provide the servicing activities.

The special purpose entity in the global asset-backed securitization program is a wholly-owned subsidiary of the Company and is included in our Condensed Consolidated Financial Statements. Certain unsold receivables covering up to the maximum amount of net cash proceeds available under the domestic, or U.S., portion of the global asset-backed securitization program are pledged as collateral to the unaffiliated financial institution as of May 31, 2023.

The global asset-backed securitization program expires on November 25, 2024 and the maximum amount of net cash proceeds available at any one time is $600 million. During the three months and nine months ended May 31, 2023, we sold $1.0 billion and $3.1 billion, respectively, of trade accounts receivable and we received cash proceeds of $1.0 billion and $3.0 billion, respectively. As of May 31, 2023, we had no available liquidity under our global asset-backed securitization program.

The global asset-backed securitization program requires compliance with several covenants including compliance with the interest ratio and debt to EBITDA ratio of the Credit Facility. As of May 31, 2023 and August 31, 2022, we were in compliance with all covenants under our global asset-backed securitization program. Refer to Note 6 – “Asset-Backed Securitization Program” to the Condensed Consolidated Financial Statements for further details on the program.

Trade Accounts Receivable Sale Programs

As of May 31, 2023, we may elect to sell receivables and the unaffiliated financial institutions may elect to purchase specific accounts receivable at any one time up to a: (i) maximum aggregate amount available of $2.0 billion under eight trade accounts receivable sale programs, (ii) maximum amount available of 400 million CNY under one trade accounts receivable sale program, (iii) maximum amount available of 100 million CHF under one trade accounts receivable sale program, and (iv) maximum amount available of 8.1 billion INR under one trade accounts receivable sale program. The trade accounts receivable sale programs expire on various dates through 2028.

During the three months and nine months ended May 31, 2023, we sold $2.6 billion and $9.0 billion, respectively, of trade accounts receivable under these programs and we received cash proceeds of $2.6 billion and $9.0 billion, respectively. As of May 31, 2023, we had up to $1.0 billion in available liquidity under our trade accounts receivable sale programs.

Cash Flows

The following table sets forth selected consolidated cash flow information (in millions):

						Nine months ended
						May 31, 2023						May 31, 2022
Net cash provided by operating activities						$	1,048					$	745
Net cash used in investing activities						(738)						(616)
Net cash used in financing activities						(304)						(639)
Effect of exchange rate changes on cash and cash equivalents						(4)						13
Net increase (decrease) in cash and cash equivalents						$	2					$	(497)

Operating Activities

Net cash provided by operating activities during the nine months ended May 31, 2023, was primarily due to non-cash expenses and net income and a decrease in accounts receivable, inventories, and contract assets. The net cash provided by operating activities was partially offset by a decrease in accounts payable, accrued expenses and other liabilities and an increase in prepaid expenses and other current assets. The decrease in accounts receivable is primarily driven by the timing of collections. The decrease in inventories is primarily due to higher consumption of inventories to support sales during the quarter. The decrease in contract assets is primarily due to timing of revenue recognition for over time customers. The decrease in accounts payable, accrued expenses and other liabilities is primarily due to the timing of purchases and cash payments. The increase in prepaid expenses and other current assets is primarily due to the timing of payments.

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Investing Activities

Net cash used in investing activities during the nine months ended May 31, 2023 consisted primarily of capital expenditures, principally to support ongoing business in the DMS and EMS segments, partially offset by proceeds and advances from the sale of property, plant and equipment.

Financing Activities

Net cash used in financing activities during the nine months ended May 31, 2023 was primarily due to (i) payments for debt agreements, (ii) the repurchase of our common stock under our share repurchase authorization, (iii) the purchase of treasury stock under employee stock plans, and (iv) dividend payments. Net cash used in financing activities was partially offset by borrowings under debt agreements.

Capital Expenditures

For Fiscal Year 2023, we anticipate our net capital expenditures will be approximately $875 million. In general, our capital expenditures support ongoing maintenance in our DMS and EMS segments and investments in capabilities and targeted end markets. The amount of actual capital expenditures may be affected by general economic, financial, competitive, legislative and regulatory factors, among other things.

Dividends and Share Repurchases

We currently expect to continue to declare and pay regular quarterly dividends of an amount similar to our past declarations. However, the declaration and payment of future dividends are discretionary and will be subject to determination by our Board of Directors each quarter following its review of our financial performance and global economic conditions.

In July 2021, the Board of Directors approved an authorization for the repurchase of up to $1.0 billion of our common stock (the “2022 Share Repurchase Program”). As of February 28, 2023, 16.5 million shares had been repurchased for $1.0 billion and no authorization remained under the 2022 Share Repurchase Program.

In September 2022, the Board of Directors approved an authorization for the repurchase of up to $1.0 billion of our common stock (the “2023 Share Repurchase Program”). As of May 31, 2023, 2.2 million shares had been repurchased for $179 million, excluding excise tax, and $821 million remains available under the 2023 Share Repurchase Program.

Contractual Obligations

As of the date of this report, other than the borrowings on the 5.450% Senior Notes, (see Note 5 – “Notes Payable and Long-Term Debt” to the Condensed Consolidated Financial Statements) and the new operating and finance leases, (see Note 4 – “Leases” to the Condensed Consolidated Financial Statements), there were no material changes outside the ordinary course of business, since August 31, 2022, to our contractual obligations and commitments and the related cash requirements.

There have been no material changes in our primary risk exposures or management of market risks from those disclosed in our Annual Report on Form 10-K for the fiscal year ended August 31, 2022.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation required by Rules 13a-15 and 15d-15 under the Exchange Act (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 and 15d-15 under the Exchange Act as of May 31, 2023. Based on the Evaluation, our CEO and CFO concluded that the design and operation of our disclosure controls were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) accumulated and communicated to our senior management, including our CEO and CFO, to allow timely decisions regarding required disclosure.

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Changes in Internal Control over Financial Reporting

For our fiscal quarter ended May 31, 2023, we did not identify any modifications to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

See the discussion in Note 17 - “Commitments and Contingencies” to the Condensed Consolidated Financial Statements.

For information regarding risk factors that could affect our business, results of operations, financial condition or future results, see Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended August 31, 2022. For further information on our forward-looking statements see Part I of this Quarterly Report on Form 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information relating to our repurchase of common stock, excluding excise tax, during the three months ended May 31, 2023:

Period			Total Number of Shares Purchased**(1)**						Average Price Paid per Share						Total Number of Shares Purchased as Part of Publicly Announced Program**(2)**						Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions)****(2)
March 1, 2023 - March 31, 2023			607,055						$	82.49					607,055						$	925
April 1, 2023 - April 30, 2023			598,779						$	81.87					598,079						$	876
May 1, 2023 - May 31, 2023			685,772						$	80.14					685,772						$	821
Total			1,891,606						$	81.44					1,890,906

(1)The purchases include amounts that are attributable to 700 shares surrendered to us by employees to satisfy, in connection with the vesting of restricted stock unit awards, their tax withholding obligations.

(2)In September 2022, our Board of Directors authorized the repurchase of up to $1.0 billion of our common stock, as publicly announced in a press release on September 27, 2022 (the “2023 Share Repurchase Program”).

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

None.

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Index to Exhibits

															Incorporated by Reference Herein
Exhibit No.						Description									Form									Exhibit									Filing Date/Period End Date
1.1						Underwriting Agreement, dated as of April 10, 2023, among the Company, BofA Securities, Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC and U.S. Bancorp Investments, Inc., as representatives of the several underwriters listed therein.									8-K									1.1						4/13/2023
3.1						Registrant’s Certificate of Incorporation, as amended.									10-Q									3.1						5/31/2017
3.2						Registrant’s Bylaws, as amended.									10-K									3.2						8/31/2022
4.1						Form of Certificate for Shares of the Registrant’s Common Stock. (P)									S-1															3/17/1993
4.2						Indenture, dated January 16, 2008, with respect to Senior Debt Securities of the Registrant, between the Registrant and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), as trustee.									8-K									4.2						1/17/2008
4.3						Form of 5.450% Senior Notes due 2029 (included as Exhibit A to the Officers’ Certificate filed herewith as Exhibit 4.5).									8-K									4.1						4/13/2023
4.4						Form of 4.250% Registered Senior Notes due 2027 (included as Exhibit A to the Officers’ Certificate filed herewith as Exhibit 4.6).									8-K									4.1						5/4/2022
4.5						Officers’ Certificate, dated as of April 13, 2023, establishing the 5.450% Senior Notes due 2029.									8-K									4.1						4/13/2023
4.6						Officers’ Certificate, dated as of May 4, 2022, establishing the 4.250% Senior Notes due 2027.									8-K									4.1						5/4/2022
4.7						Officers’ Certificate, dated as of April 14, 2021, establishing the 1.700% Senior Notes due 2026.									8-K									4.1						4/14/2021
4.8						Officers’ Certificate, dated as of July 13, 2020, establishing the 3.000% Senior Notes due 2031.									8-K									4.1						7/13/2020
4.9						Officers’ Certificate, dated as of January 15, 2020, establishing the 3.600% Senior Notes due 2030.									8-K									4.1						1/15/2020
4.10						Officers’ Certificate, dated as of January 17, 2018, establishing the 3.950% Senior Notes due 2028.									8-K									4.1						1/17/2018
31.1*						Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive Officer.
31.2*						Rule 13a-14(a)/15d-14(a) Certification by the Chief Financial Officer.
32.1*						Section 1350 Certification by the Chief Executive Officer.
32.2*						Section 1350 Certification by the Chief Financial Officer.
101						The following financial information from Jabil’s Quarterly Report on Form 10-Q for the quarterly period ended May 31, 2023, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets as of May 31, 2023 and August 31, 2022, (ii) Condensed Consolidated Statements of Operations for the three months and nine months ended May 31, 2023 and 2022, (iii) Condensed Consolidated Statements of Comprehensive Income for the three months and nine months ended May 31, 2023 and 2022, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three months and nine months ended May 31, 2023 and 2022, (v) Condensed Consolidated Statements of Cash Flows for the nine months ended May 31, 2023 and 2022, and (vi) the Notes to Condensed Consolidated Financial Statements.
104						Cover Page Interactive Data File (Embedded within the inline XBRL Document in Exhibit 101).
*						Filed or furnished herewith

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Certain instruments with respect to long-term debt of the Registrant and its consolidated subsidiaries are not filed herewith pursuant to Item 601(b)(4)(iii) of Regulation S-K since the total amount of securities authorized under each such instrument does not exceed 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis. The Registrant agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			JABIL INC. Registrant
Date: June 30, 2023			By:			/s/ KENNETH S. WILSON
						Kenneth S. Wilson Chief Executive Officer
Date: June 30, 2023			By:			/s/ MICHAEL DASTOOR
						Michael Dastoor Chief Financial Officer