What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-01-10 compared with 2024-07-09 · 196 added, 180 removed, 197 unchanged (66% of the section changed)

7 unchanged sentences

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, India, Malaysia, Mexico, Singapore and the United States.

We derived a substantial majority, 80.5% and 83.4%, of net revenue from our international operations for the three months and nine months ended May 31, 2024, respectively.

We conduct our operations in facilities that are located worldwide, including but not limited to, China, Mexico, Singapore, Malaysia, and the United States.

We derived a substantial majority, 80.8% of net revenue from our international operations for the three months ended November 30, 2024.

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-capital equipment, 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.

On December 29, 2023, we completed the sale of our product manufacturing business in Chengdu, including its supporting component manufacturing in Wuxi for pre-tax cash proceeds of approximately $2.2 billion, subject to certain post-closing adjustments.

The sale of the Business represented the divestiture of our mobility business.

See Note 15 – “Business Acquisitions and Divestitures” to the Consolidated Financial Statements for additional information.

As of September 1, 2024, we are reporting our business in the following three segments:

Regulated Industries, Intelligent Infrastructure, and Connected Living and Digital Commerce, which are also the Company’s reportable segments.

Our Regulated Industries segment is focused on regulated markets and includes revenues from customers primarily in the automotive and transportation, healthcare and packaging, and renewable energy infrastructure industries.

Our Intelligent Infrastructure segment is focused on the modern digital ecosystem including artificial intelligence (“AI”) infrastructure and includes revenues from customers primarily in the capital equipment, cloud and data center infrastructure, and networking and communications industries.

Our Connected Living and Digital Commerce segment is focused on digitalization and automation, including warehouse automation and robotics, and includes revenues from customers primarily in the connected living and digital commerce 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.

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"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, 2024, 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, 2024 contained herein.

"Management's Discussion and Analysis of Financial Condition and Results of Operations" section as of November 30, 2024, contained herein.

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, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Three months ended

November 30, 2024 November 30, 2023

Net revenue $ 6,994 $ 8,387

2 unchanged sentences

Net income attributable to Jabil Inc.

$ 129 $ 233 $ 1,250 $ 663

Earnings per share – basic $ 0.89 $ 1.49

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Three months ended

May 31, 2024 February 29, 2024

November 30, 2024 August 31, 2024

November 30, 2023

Sales cycle (1)

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(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, 2024, the increase in days in accounts receivable from the prior sequential quarter and the three months ended May 31, 2023, was primarily driven by timing of collections.

During the three months ended November 30, 2024, the increase in days in accounts receivable from the prior sequential quarter and the three months ended November 30, 2023, was primarily driven by timing of payments.

(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, 2024, the decrease in days in inventory from the prior sequential quarter and the three months ended May 31, 2023, was primarily driven by higher consumption of inventory to support sales during the quarter and improved working capital management.

During the three months ended November 30, 2024, the decrease in days in inventory from the three months ended November 30, 2023, was primarily driven by higher consumption of inventory to support sales during the quarter 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, 2024, the increase in days in accounts payable from the prior sequential quarter and the three months ended May 31, 2023, was primarily due to timing of purchases and cash payments during the quarter.

During the three months ended November 30, 2024, the increase in days in accounts payable from the prior sequential quarter and the three months ended November 30, 2023, was primarily due to higher purchases of customer-controlled consignment components and timing of cash payments.

Critical Accounting Policies and Estimates

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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.

On an ongoing 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;

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and any potential termination, or substantial winding down, of significant customer relationships.

Three months ended Nine months ended

(dollars in millions) May 31, 2024 May 31, 2023 Change May 31, 2024 May 31, 2023 Change

As discussed in the “Overview” section, as of September 1, 2024, we are reporting our business in the following three segments – Regulated Industries, Intelligent Infrastructure, and Connected Living and Digital Commerce.

In conjunction with this reorganization, there have been certain reclassifications made within the reported segments.

Three months ended

(dollars in millions) November 30, 2024 November 30, 2023 Change

Net revenue $ 6,994 $ 8,387 (16.6) %

Net revenue decreased during the three months ended May 31, 2024, compared to the three months ended May 31, 2023.

Specifically, the DMS segment net revenue decreased 23% due to:

(i) a 18% decrease primarily driven by the divestiture of our mobility business, (ii) a 3% decrease in revenues from existing customers within our connected devices business, (iii) a 1% decrease in revenues from existing customers within our healthcare and packaging businesses, and (iv) a 1% decrease in revenues from existing customers within our automotive and transportation business.

The EMS segment net revenue decreased 18% primarily due to:

(i) a 7% decrease in revenues from existing customers within our industrial and semi-capital equipment business, (ii) a 5% decrease in revenues from existing customers primarily within our 5G and wireless business, and the continued transitioning to a customer-controlled consignment model in our cloud business during fiscal year 2024, (iii) a 4% decrease in revenues from existing customers within our networking and storage business, and (iv) a 2% decrease in revenues from existing customers within our digital print and retail business.

Net revenue decreased during the nine months ended May 31, 2024, compared to the nine months ended May 31, 2023.

Specifically, the EMS segment net revenue decreased 19% primarily due to:

(i) a 10% decrease in revenues from existing customers within our 5G, wireless and cloud business, primarily driven by the continued transitioning to a customer-controlled consignment model in our cloud business during fiscal year 2024, (ii) a 5% decrease in revenues from existing customers within our digital print and retail business, and (iii) a 4% decrease in revenues from existing customers within our industrial and semi-capital equipment business.

The DMS segment net revenue decreased 14% due to:

(i) a 12% decrease primarily driven by the divestiture of our mobility business and (ii) a 4% decrease in revenues from existing customers within our connected devices business.

The decrease is partially offset by a 2% increase in revenues from existing customers within our automotive and transportation business.

On September 26, 2023, we announced the signing of a definitive agreement to divest our mobility business to an affiliate of BYD Electronic (International) Company Limited (“BYDE”) in a cash transaction valued at approximately $2.2 billion, subject to certain customary purchase price adjustments.

On December 29, 2023, the Closing Date, we completed the sale.

See Note 15 – “Business Acquisitions and Divestitures” to the Consolidated Financial Statements for additional information.

Net revenue decreased during the three months ended November 30, 2024, compared to the three months ended November 30, 2023.

Specifically, the Connected Living and Digital Commerce segment net revenue decreased 46% due to a 50% decrease in revenues primarily driven by the divestiture of our Mobility Business within our connected living business.

The decrease is partially offset by a 4% increase in revenues from existing customers within our digital commerce business.

The Regulated Industries segment net revenue decreased 7% primarily due to:

(i) a 6% decrease in revenues from existing customers within our renewable energy infrastructure business and (ii) a 1% decrease in revenues from existing customers within our automotive and transportation business.

The Intelligent Infrastructure segment net revenue increased 5% primarily due to:

(i) a 14% increase in revenues from existing customers within our cloud and data center infrastructure business and (ii) a 6% increase in revenues from existing customers within our capital equipment business.

The increase is partially offset by a 15% decrease in revenues from existing customers within our networking and communications business.

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, 2024 May 31, 2023 May 31, 2024 May 31, 2023

EMS 50 % 49 % 47 % 48 %

DMS 50 % 51 % 53 % 52 %

Three months ended

November 30, 2024 November 30, 2023

Regulated Industries 42 % 38 %

Intelligent Infrastructure 36 % 28 %

Connected Living and Digital Commerce 22 % 34 %

Total 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, 2024 (1)

May 31, 2023 May 31, 2024 (1)

Three months ended

November 30, 2024 (1)

November 30, 2023

Foreign source revenue 80.8 % 86.4 %

(1) Decrease from prior periods is driven by the divestiture of our mobility business during the three months ended February 29, 2024.

Three months ended Nine months ended

(dollars in millions) May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

(1) Decrease from the prior period is primarily driven by the divestiture of the Mobility Business during the three months ended February 29, 2024.

Three months ended

(dollars in millions) November 30, 2024 November 30, 2023

Gross profit $ 606 $ 775

Percent of net revenue 8.7 % 9.2 %

Gross profit as a percentage of net revenue increased for the three months and nine months ended May 31, 2024, compared to the three months and nine months ended May 31, 2023, primarily due to product mix and depreciation and amortization for long-lived assets related to the mobility divestiture no longer being recorded while these assets were classified as held for sale.

Gross profit as a percentage of net revenue decreased for the three months ended November 30, 2024, compared to the three months ended November 30, 2023, primarily due to product mix in our Connected Living and Digital Commerce segment.

Selling, General and Administrative

Three months ended Nine months ended

(in millions) May 31, 2024 May 31, 2023 Change May 31, 2024 May 31, 2023 Change

Three months ended

(in millions) November 30, 2024 November 30, 2023 Change

Selling, general and administrative $ 305 $ 314 $ (9)

Selling, general and administrative expenses decreased during the three months ended May 31, 2024, compared to the three months ended May 31, 2023, primarily due to a decrease in stock-based compensation expense associated with forfeitures of time-based, performance-based and market-based restricted stock awards during the three months ended May 31, 2024 and a decrease in salary and salary related expenses.

Selling, general and administrative expenses decreased during the nine months ended May 31, 2024, compared to the nine months ended May 31, 2023, primarily due to a decrease in stock-based compensation expense associated with forfeitures of time-based, performance-based and market-based restricted stock awards.

Selling, general and administrative expenses decreased during the three months ended November 30, 2024, compared to the three months ended November 30, 2023, primarily due to a decrease in office and support costs.

Research and Development

Three months ended Nine months ended

(dollars in millions) May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Three months ended

(dollars in millions) November 30, 2024 November 30, 2023

Research and development $ 8 $ 10

Percent of net revenue 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, 2024, compared to the three months and nine months ended May 31, 2023.

Research and development expenses remained consistent as a percentage of net revenue during the three months ended November 30, 2024, compared to the three months ended November 30, 2023.

Amortization of Intangibles

Three months ended Nine months ended

(in millions) May 31, 2024 May 31, 2023 Change May 31, 2024 May 31, 2023 Change

Three months ended

(in millions) November 30, 2024 November 30, 2023 Change

Amortization of intangibles $ 13 $ 6 $ 7

Amortization of intangibles increased during the three months and nine months ended May 31, 2024, compared to the three months and nine months ended May 31, 2023, primarily due to amortization related to the Green Point trade name, which was reclassified to a definite-lived intangible asset during fiscal year 2024.

Amortization of intangibles increased during the three months ended November 30, 2024, compared to the three months ended November 30, 2023, primarily due to amortization related to the Green Point trade name, which was reclassified to a definite-lived intangible asset during fiscal year 2024.

Restructuring, Severance and Related Charges

Three months ended Nine months ended

(in millions) May 31, 2024 May 31, 2023 Change May 31, 2024 May 31, 2023 Change

Three months ended

(in millions) November 30, 2024 November 30, 2023 Change

Restructuring, severance and related charges $ 83 $ 127 $ (44)

Restructuring, severance and related charges increased during the three months and nine months ended May 31, 2024, compared to the three months and nine months ended May 31, 2023, primarily due to charges related to the 2024 Restructuring Plan.

Restructuring, severance, and related charges decreased during the three months ended November 30, 2024, compared to the three months ended November 30, 2023, primarily due to higher restructuring, severance and related charges, related to the 2024 Restructuring Plan, during the three months ended November 30, 2023.

This current quarter decrease is partially offset by increased restructuring, severance and related charges, related to the 2025 Restructuring Plan, during the three months ended November 30, 2024.

2025 Restructuring Plan

On September 26, 2023, our Board of Directors approved a restructuring plan to (i) realign our cost base for stranded costs associated with the sale and realignment of our mobility business and (ii) optimize our global footprint.

This action includes headcount reductions across our Selling, General and Administrative (“SG&A”) cost base and capacity realignment (the “2024 Restructuring Plan”).

The 2024 Restructuring Plan reflects our intention only and restructuring decisions, and the timing of such decisions, at certain locations, are still subject to consultation with our employees and their representatives.

Based on the analysis done to date, we currently expect to recognize approximately $300 million in pre-tax restructuring and other related costs over the course of our 2024 fiscal year.

The restructuring and other related charges are expected to include $150 million to $180 million of employee severance and benefit costs;

$80 million to $120 million of asset write-off costs;

and $30 million to $40 million of contract termination costs and other related costs.

The charges relating to the 2024 Restructuring Plan are currently expected to result in net cash expenditures of approximately $200 million that will be payable over the course of our fiscal years 2024 and 2025.

On September 24, 2024, our Board of Directors approved a restructuring plan to align our support infrastructure to further optimize organizational effectiveness.

This action includes headcount reductions across our Selling, General and Administrative (“SG&A”) and manufacturing cost base and capacity realignment (the “2025 Restructuring Plan”).

The 2025 Restructuring Plan reflects our intention only and restructuring decisions, including the timing of such decisions, at certain locations remain subject to consultation with the Company’s employees and their representatives.

We currently expect to recognize approximately $150 million to $200 million in pre-tax restructuring and other related costs over the course of our 2025 fiscal year.

The charges relating to the 2025 Restructuring Plan are currently expected to result in net cash expenditures of approximately $100 million to $130 million that will be payable over the course of our fiscal years 2025 and 2026.

The exact timing of these charges and cash outflows, as well as the estimated cost ranges by category type, have not been finalized.

The amount and timing of the actual charges may vary due to a variety of factors, including the finalization of timetables for the transition of functions, consultation with employees and their representatives, as well as the impact of jurisdictional statutory severance requirements.

This information will be subject to the finalization of timetables for the transition of functions, consultation with employees and their representatives as well as the statutory severance requirements of the jurisdictions impacted, and the amount and timing of the actual charges may vary due to a variety of factors.

Our estimates for the charges discussed above exclude any potential income tax effects.

2024 Restructuring Plan

On September 26, 2023, our Board of Directors approved a restructuring plan to (i) realign our cost base for stranded costs associated with the sale and realignment of our Mobility Business and (ii) optimize our global footprint.

This action includes headcount reductions across our SG&A cost base and capacity realignment (the “2024 Restructuring Plan”).

The 2024 Restructuring Plan, totaling approximately $300 million in pre-tax restructuring and other related costs, was substantially complete as of August 31, 2024.

See Note 14 – “Restructuring, Severance and Related Charges” to the Condensed Consolidated Financial Statements for further discussion of restructuring, severance and related charges.

Gain from the Divestiture of Businesses

Three months ended Nine months ended

(in millions) May 31, 2024 May 31, 2023 Change May 31, 2024 May 31, 2023 Change

Gain from the divestiture of businesses $ — $ — $ — $ (944) $ — $ (944)

In the second quarter of fiscal year 2024, we completed the divestiture of our mobility business.

As a result of the transaction, we recorded a pre-tax gain of $944 million, subject to certain post-closing adjustments that are still being finalized.

See Note 15 – “Business Acquisitions and Divestitures” to the Condensed Consolidated Financial Statements for additional information.

Acquisition and Divestiture Related Charges

Three months ended Nine months ended

(in millions) May 31, 2024 May 31, 2023 Change May 31, 2024 May 31, 2023 Change

Three months ended

(in millions) November 30, 2024 November 30, 2023 Change

Acquisition and divestiture related charges $ — $ 15 $ (15)

Acquisition and divestiture related charges recorded during the three months and nine months ended May 31, 2024, related to transaction and disposal costs incurred in connection with the divestiture of our mobility business.

Acquisition and divestiture related charges recorded during the three months ended November 30, 2023, related to transaction and disposal costs incurred in connection with the divestiture of our Mobility Business.

See Note 17 – “Business Acquisitions and Divestitures” to the Condensed Consolidated Financial Statements for additional information.

Other Expense

Three months ended Nine months ended

(in millions) May 31, 2024 May 31, 2023 Change May 31, 2024 May 31, 2023 Change

Three months ended

(in millions) November 30, 2024 November 30, 2023 Change

Other expense $ 20 $ 21 $ (1)

Other expense increased during the three months ended May 31, 2024, compared to the three months ended May 31, 2023, is primarily due to an increase in fees due to higher utilization of our trade accounts receivable sales programs and global asset-backed securitization program, as well as higher interest rates on these programs.

Other expense increased during the nine months ended May 31, 2024, compared to the nine months ended May 31, 2023, primarily due to an increase in fees due to higher interest rates on our trade accounts receivable sales programs and global asset-backed securitization program, as well as higher utilization of our global asset-backed securitization program.

Other expense remained relatively consistent during the three months ended November 30, 2024, compared to the three months ended November 30, 2023.

Interest Expense, Net

Three months ended Nine months ended

(in millions) May 31, 2024 May 31, 2023 Change May 31, 2024 May 31, 2023 Change

Three months ended

(in millions) November 30, 2024 November 30, 2023 Change

Interest expense, net $ 38 $ 47 $ (9)

Interest expense, net decreased during the three months ended May 31, 2024, compared to the three months ended May 31, 2023, primarily due to lower borrowings on our credit facilities and commercial paper program.

Interest expense, net decreased during the nine months ended May 31, 2024, compared to the nine months ended May 31, 2023, due to lower borrowings primarily on our credit facilities and commercial paper program.

The decrease is partially offset by an increase due to higher interest rates primarily on our credit facilities and commercial paper program.

Interest expense, net decreased during the three months ended November 30, 2024, compared to the three months ended November 30, 2023, due to lower interest rates and lower borrowings primarily on our credit facilities and commercial paper program.

Income Tax Expense

Three months ended Nine months ended

May 31, 2024 May 31, 2023 Change May 31, 2024 May 31, 2023 Change

Three months ended

November 30, 2024 November 30, 2023 Change

Effective income tax rate 28.0 % 17.6 % 10.4 %

The effective income tax rate differed for the three months and nine months ended May 31, 2024, compared to the three months and nine months ended May 31, 2023, primarily due to:

(i) a change in the jurisdictional mix of earnings, driven in part by restructuring charges and (ii) the gain from the divestiture of the mobility business and the corresponding $58 million of income tax expense recorded during the three months ended February 29, 2024.

The European Union (EU) and other countries have committed to enacting substantial changes that would reshape international tax rules, including the introduction of a global minimum tax.

In December 2022, the EU approved a directive requiring member states to incorporate a 15% global minimum tax applied on a country-by-country basis into their respective laws effective for fiscal years beginning on or after December 31, 2023.

In addition, several non-EU countries have recently proposed and/or adopted legislation consistent with the global minimum tax framework.

As legislation becomes effective in more countries in which we do business, our taxes could increase and negatively impact our provision for income taxes.

We continue to monitor pending legislation and implementation by countries and evaluate the potential impact on our business in fiscal year 2025 and future periods.

The effective income tax rate differed for the three months ended November 30, 2024, compared to the three months ended November 30, 2023, primarily due to:

(i) a change in the jurisdictional mix of earnings, driven in part by decreased income before income taxes in low tax rate jurisdictions for the three months ended November 30, 2024, (ii) an $18 million income tax benefit for the reversal of an unrecognized tax benefit due to a lapse of statute for the three months ended November 30, 2024, (iii) a $19 million income tax benefit for the reversal of an unrecognized tax benefit due to audit closure for the three months ended November 30, 2023, and (iv) an $11 million income tax benefit for the reversal of a portion of the U.S.

valuation allowance related to an acquisition for the three months ended November 30, 2023.

The Organization for Economic Co-operation and Development (“OECD”) and participating countries continue to work toward the enactment of a 15% global minimum corporate tax rate.

Many countries, including countries in which we have tax incentives, have enacted or are in the process of enacting laws based on the OECD’s proposals.

We do not currently expect a material impact to our effective tax rate for the fiscal year ending August 31, 2025.

Non-GAAP (Core) Financial Measures

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GAAP Financial Results to Non-GAAP Measures

Three months ended Nine months ended

(in millions, except for per share data) May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Three months ended

(in millions, except for per share data) November 30, 2024 November 30, 2023

Operating income (U.S.

$ 261 $ 375 $ 1,695 $ 1,096

Amortization of intangibles 13 6

3 unchanged sentences

Business interruption and impairment charges, net (3)

Gain from the divestiture of businesses (4)

Acquisition and divestiture related charges — 15

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Net income attributable to Jabil Inc.

$ 129 $ 233 $ 1,250 $ 663

Adjustments to operating income 150 196

Net periodic benefit cost (2)

(2) (4) (7) (11)

Adjustments for taxes (4)

6 unchanged sentences

GAAP and Non-GAAP) 114.0 132.1

(1) Charges recorded during the three months and nine months ended May 31, 2024, related to the 2024 Restructuring Plan.

Charges recorded during the nine months ended May 31, 2023, related to headcount reduction to further optimize our business activities.

(1) Charges recorded during the three months ended November 30, 2024, and 2023, primarily related to the 2025 Restructuring Plan and 2024 Restructuring Plan, respectively.

(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.

(3) Charges recorded during the three months and nine months ended May 31, 2024, related to costs associated with product quality liabilities, which is classified as a component of cost of revenue and selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

(4) We completed the divestiture of our mobility business and recorded a pre-tax gain of $944 million, subject to certain post-closing adjustments that are still being finalized.

We incurred transaction and disposal costs in connection with the sale of approximately $64 million during the nine months ended May 31, 2024.

(5) Tax adjustments for the nine months ended May 31, 2024, were partially driven by an income tax expense associated with the divestiture of the mobility business.

(3) Charges recorded during the three months ended November 30, 2024, relate primarily to costs associated with damage from Hurricanes Helene and Milton, which impacted our operations in St.

Petersburg, Florida and Asheville and Hendersonville, North Carolina.

(4) Tax adjustments for the three months ended November 30, 2023, were partially driven by an income tax benefit for the reversal of an unrecognized tax benefit due to audit closure.

Adjusted Free Cash Flow

Nine months ended

(in millions) May 31, 2024 May 31, 2023

Three months ended

(in millions) November 30, 2024 November 30, 2023

Net cash provided by operating activities (U.S.

$ 1,181 $ 1,048

Acquisition of property, plant and equipment (“PP&E”) (1)

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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.

When our customers reimburse us and obtain control, we recognize the cash receipts in proceeds and advances from the sale of PP&E.

Acquisitions and Divestitures

Fiscal Year 2025

On October 1, 2024, we completed the acquisition of Mikros Technologies LLC for consideration transferred of $63 million.

Mikros Technologies LLC is a leader in the engineering and manufacturing of liquid cooling solutions for thermal management.

The final purchase price is subject to adjustment based on certain customary conditions as outlined in the purchase agreement.

The acquisition of Mikros Technologies was accounted for as a business combination using the acquisition method of accounting.

Assets acquired of $63 million, including $40 million in intangible assets and $15 million in goodwill, were recorded at their estimated fair values as of the acquisition date.

The preliminary estimates and measurements are subject to change during the measurement period for assets acquired, liabilities assumed and tax adjustments.

The excess of the purchase price over the fair value of the acquired assets and assumed liabilities was recorded to goodwill and was fully allocated to the Intelligent Infrastructure segment.

The majority of the goodwill is currently expected to be deductible for income tax purposes.

The results of operations were included in our condensed consolidated financial results beginning on October 1, 2024.

Pro forma information has not been provided as the acquisition of Mikros Technologies is not deemed to be significant.

Fiscal Year 2024

On November 1, 2023, we completed the acquisition of ProcureAbility Inc.

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Assets acquired of $87 million, including $40 million in intangible assets and $38 million in goodwill, and liabilities assumed of $26 million were recorded at their estimated fair values as of the acquisition date.

The preliminary estimates and measurements are subject to change during the measurement period for assets acquired, liabilities assumed and tax adjustments.

The excess of the purchase price over the fair value of the acquired assets and assumed liabilities was recorded to goodwill and was fully allocated to the DMS segment.

The excess of the purchase price over the fair value of the acquired assets and assumed liabilities was recorded to goodwill and was fully allocated to the Regulated Industries segment.

The majority of the goodwill is currently not expected to be deductible for income tax purposes.

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Pro forma information has not been provided as the acquisition of ProcureAbility is not deemed to be significant.

Fiscal Year 2024

We announced on September 26, 2023, that, through our indirect subsidiary, Jabil Circuit (Singapore) Pte.

Ltd., a Singapore private limited company (“Singapore Seller”), we agreed to sell to an affiliate of BYD Electronic (International) Co.

Ltd., a Hong Kong limited liability company (“Purchaser” or “BYDE”), our product manufacturing business in Chengdu, including our supporting component manufacturing in Wuxi (the “Business”) for cash consideration of approximately $2.2 billion, subject to certain customary purchase price adjustments.

As of August 31, 2023, we determined the Business met the criteria to be classified as held for sale.

Accordingly, we presented the assets and liabilities of the Business as held for sale in the Consolidated Balance Sheets as of November 30, 2023 and August 31, 2023.

Asset and liabilities classified as held for sale had a carrying value less than the estimated fair value less cost to sell and, thus, no adjustment to the carrying value of the disposal group was necessary.

Ltd., a Hong Kong limited liability company (“Purchaser” or “BYDE”), its product manufacturing business in Chengdu, including its supporting component manufacturing in Wuxi, the Mobility Business, for cash consideration of approximately $2.2 billion, subject to certain customary purchase price adjustments.

As of August 31, 2023, we determined the Mobility Business met the criteria to be classified as held for sale.

Assets and liabilities classified as held for sale had a carrying value less than the estimated fair value less cost to sell and, thus, no adjustment to the carrying value of the disposal group was necessary.

Depreciation and amortization expense for long-lived assets was not recorded for the period in which these assets were classified as held for sale.

The divestiture did not meet the criteria to be reported as discontinued operations and we continued to report the operating results for the Business in the Condensed Consolidated Statement of Operations in the DMS segment until the Closing Date.

On December 29, 2023, the Closing Date, we completed the sale.

The divestiture did not meet the criteria to be reported as discontinued operations, and we continued to report the operating results for the Mobility Business in our Condensed Consolidated Statements of Operations in the DMS segment until the Closing Date.

On December 29, 2023, the Closing Date, we completed the sale of the Mobility Business.

As a result of the transaction, we derecognized net assets of approximately $1.2 billion and recorded a pre-tax gain of $942 million, subject to certain post-closing adjustments that are still being finalized.

In addition, we agreed to indemnify the Purchaser from certain liabilities that may arise post-close that relate to periods prior to the Closing Date.

We incurred transaction and disposal costs in connection with the sale of approximately $64 million during the nine months ended May 31, 2024, which are included in continuing operations in the Condensed Consolidated Statement of Operations.

We perform a goodwill impairment analysis on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

In connection with the preparation of the Company’s financial statements for the quarter ended February 29, 2024, we completed an impairment analysis for goodwill recorded within the reporting unit impacted by the divestiture of the Business.

The quantitative assessment was used, and we determined that it is more likely than not that the fair value of the impacted reporting unit is in excess of the carrying value and that no impairment existed subsequent to the closing of the Business.

We allocated goodwill to the disposal group based on the relative fair value of the Business as compared to the impacted reporting unit.

In the second quarter of fiscal year 2024 and in connection with the divestiture of the Business, we made a strategic decision that the indefinite-lived (“Green Point”) trade name valued at $51 million acquired during the acquisition of Green Point should no longer be classified as an indefinite-lived intangible asset.

Accordingly, prior to reclassifying the trade name to a finite-lived intangible asset, we completed a quantitative assessment for impairment and determined the fair value of the asset exceeded the carrying value.

As such, the trade name was assigned a two-year estimated useful life and is being amortized on a straight-line basis as of the Closing Date.

In addition, we agreed to indemnify BYDE from certain liabilities that may arise post-close that relate to periods prior to the Closing Date.

We incurred transaction and disposal costs in connection with the sale of approximately $67 million during the fiscal year ended August 31, 2024, which are included in continuing operations in our Condensed Consolidated Statements of Operations.

Refer to Note 17 – “Business Acquisitions and Divestitures” to the Condensed Consolidated Financial Statements for discussion.

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Cash and Cash Equivalents

As of May 31, 2024, we had approximately $2.5 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, 2024 could be repatriated to the United States without potential tax expense.

As of November 30, 2024, we had approximately $2.1 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 November 30, 2024, 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) 3.950% Senior Notes 3.600% Senior Notes 3.000% Senior Notes 1.700% Senior Notes 4.250% Senior Notes 5.450% Senior Notes Borrowings

facilities (1)(2)

loans Total notes

(in millions) 3.950% Senior Notes 3.600% Senior Notes 3.000% Senior Notes 1.700% Senior Notes 4.250% Senior Notes 5.450% Senior Notes Borrowings under revolving

credit facilities (1)

Borrowings under loans Total notes payable

and credit facilities

Balance as of August 31, 2024 $ 498 $ 497 $ 594 $ 499 $ 496 $ 296 $ — $ — $ 2,880

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Other — — — — 1 1 — — 2

Balance as of May 31, 2024 $ 498 $ 497 $ 594 $ 498 $ 496 $ 296 $ — $ — $ 2,879

Balance as of November 30, 2024 $ 498 $ 497 $ 594 $ 499 $ 497 $ 297 $ — $ — $ 2,882

Maturity Date Jan 12, 2028 Jan 15, 2030 Jan 15, 2031 Apr 15, 2026 May 15, 2027 Feb 1, 2029 Jan 22, 2026 and Jan 22, 2028 Jul 31, 2026

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$4.0 billion (1)

(1) On February 23, 2024, 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”) and (ii) extended the termination date of the Three-Year Revolving Credit Facility (with respect to the available commitments of the extending lenders) to January 22, 2026, and of the

Five-Year Revolving Credit Facility (with respect to the available commitments of the extending lenders) to January 22, 2028, in each case subject to an additional one-year extension at the option of the Company.

(2) As of May 31, 2024, we had $4.0 billion in available unused borrowing capacity under our revolving credit facilities.

(1) As of November 30, 2024, we had $4.0 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.

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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, 2024 and August 31, 2023, we were in compliance with our debt covenants.

As of November 30, 2024, and August 31, 2024, we were in compliance with our debt covenants.

Refer to Note 6 – “Notes Payable and Long-Term Debt” to the Condensed Consolidated Financial Statements for further details.

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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, 2024.

The global asset-backed securitization program expires on November 25, 2024.

Effective February 20, 2024, the terms of the global asset-backed securitization program were amended to increase the maximum amount of net cash proceeds available at any one time from $600 million to $700 million.

During the three months and nine months ended May 31, 2024, we sold $1.0 billion and $3.0 billion, respectively, of trade accounts receivable and we received cash proceeds of $1.0 billion and $2.9 billion, respectively.

As of May 31, 2024, we had no available liquidity under our global asset-backed securitization program.

Effective November 21, 2024, the terms of the global asset-backed securitization program were amended to extend the termination date from November 2024 to January 2025.

The maximum amount of net cash proceeds available at any one time is $700 million.

During the three months ended November 30, 2024, we sold $1.1 billion of trade accounts receivable, and we received cash proceeds of $1.1 billion.

As of November 30, 2024, 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, 2024 and August 31, 2023, we were in compliance with all covenants under our global asset-backed securitization program.

As of November 30, 2024, and August 31, 2024, we were in compliance with all covenants under our global asset-backed securitization program.

Refer to Note 7 – “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, 2024, we may elect to sell receivables and the unaffiliated financial institutions may elect to purchase specific accounts receivable at any one time, at a discount, on an ongoing basis up to a:

(i) maximum aggregate amount available of $1.9 billion under nine trade accounts receivable sale programs, (ii) maximum amount available of 100 million CHF under one trade accounts receivable sale program, (iii) maximum amount available of 8.1 billion INR under one trade accounts receivable sale program, and (iv) maximum amount available of 1.9 billion CNY under one trade accounts receivable sale program.

The trade accounts receivable sale programs either expire on various dates through 2028 or do not have expiration dates and may be terminated upon election of the Company or the unaffiliated financial institutions.

During the three months and nine months ended May 31, 2024, we sold $2.1 billion and $6.0 billion, respectively, of trade accounts receivable under these programs and we received cash proceeds of $2.1 billion and $5.9 billion, respectively.

As of May 31, 2024, we had up to $693 million in available liquidity under our trade accounts receivable sale programs.

Following is a summary of the trade accounts receivable sale programs with unaffiliated financial institutions.

Under the programs we may elect to sell receivables, and the unaffiliated financial institutions may elect to purchase, at a discount, on an ongoing basis (in millions):

Maximum Amount (1)

Type of Facility Expiration Date

$ 350 Uncommitted

$ 120 Uncommitted

$ 230 Uncommitted

May 4, 2028 (2)

$ 170 Uncommitted

$ 50 Uncommitted

$ 100 Uncommitted

$ 1,200 Uncommitted

$ 250 Uncommitted

$ 100 Uncommitted

$ 75 Uncommitted

January 23, 2025 (2)

(1) Maximum amount of trade accounts receivable that may be sold under a facility at any one time.

(2) Any party may elect to terminate the agreement upon 30 days prior notice.

(3) Any party may elect to terminate the agreement upon 15 days prior notice.

During the three months ended November 30, 2024, we sold $1.7 billion of trade accounts receivable under these programs and we received cash proceeds of $1.7 billion.

As of November 30, 2024, we had up to $1.8 billion in available liquidity under our trade accounts receivable sale programs.

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

Nine months ended

May 31, 2024 May 31, 2023

Three months ended

November 30, 2024 November 30, 2023

Net cash provided by operating activities

$ 1,181 $ 1,048

Net cash provided by (used in) investing activities

Net cash used in investing activities

Net cash used in financing activities

(1,989) (304)

Effect of exchange rate changes on cash and cash equivalents (7) (7)

Net increase in cash and cash equivalents

Net decrease in cash and cash equivalents

$ (143) $ (254)

Operating Activities

Net cash provided by operating activities during the nine months ended May 31, 2024, was primarily due to a decrease in inventories and non-cash expenses and net income.

Net cash provided by operating activities was partially offset by an increase in prepaid expenses and other current assets, a decrease in accounts payable, accrued expense and other liabilities, an increase in contract assets and an increase in accounts receivable.

The decrease in inventories is primarily due to higher consumption of inventory to support sales and improved working capital management.

Net cash provided by operating activities during the three months ended November 30, 2024, was primarily due to an increase in accounts payable, accrued expense and other liabilities and non-cash expenses and net income.

Net cash provided by operating activities was partially offset by an increase in prepaid expenses and other current assets, an increase in accounts receivable, an increase in inventories and an increase in contract assets.

The increase 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.

The decrease in accounts payable, accrued expenses and other liabilities is primarily due to the timing of purchases and cash payments.

The increase in contract assets is primarily due to timing of revenue recognition for the over time customers.

The increase in accounts receivable is primarily driven by the timing of collections.

The increase in inventories is primarily to support expected sales levels in the second quarter of fiscal year 2025.

The increase in contract assets is primarily due to timing of revenue recognition for the over time customers.

Investing Activities

Net cash provided by investing activities during the nine months ended May 31, 2024, consisted primarily of proceeds from the divestiture of our mobility business and proceeds and advances from the sale of property, plant and equipment, partially offset by capital expenditures, principally to support ongoing business in the DMS and EMS segments and the acquisition of ProcureAbility and certain other third party assets.

Net cash used in investing activities during the three months ended November 30, 2024, consisted primarily of capital expenditures, principally to support ongoing business in the Regulated Industries, Intelligent Infrastructure, and Connected Living and Digital Commerce segments and the acquisition of Mikros Technologies LLC, 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, 2024, was primarily due to (i) payments for debt agreements, (ii) the repurchase of our common stock under our share repurchase authorization, (iii) treasury stock minimum tax withholding related to vesting of restricted stock, and (iv) dividend payments.

Net cash used in financing activities was partially offset by (i) borrowings under debt agreements and (ii) net proceeds from the exercise of stock options and issuance of common stock under the employee stock purchase plan.

Net cash used in financing activities during the three months ended November 30, 2024, was primarily due to (i) the repurchase of our common stock under our share repurchase authorization, (ii) payments for debt agreements, (iii) treasury stock minimum tax withholding related to vesting of restricted stock, and (iv) dividend payments.

Net cash used in financing activities was partially offset by borrowings under debt agreements.

Capital Expenditures

For Fiscal Year 2025, we anticipate our net capital expenditures to be in the range of 1.5 percent to 2.0 percent of net revenue.

Upon closing of the Company’s sale of its mobility business, we anticipate our longer-term net capital expenditures to be in the range of 2.0 to 2.3 percent of net revenue.

In general, our capital expenditures support ongoing maintenance in our DMS and EMS segments and investments in capabilities and targeted end markets.

In general, our capital expenditures support ongoing maintenance in our Regulated Industries, Intelligent Infrastructure, and Connected Living and Digital Commerce 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.

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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 August 31, 2023, 2.7 million shares had been repurchased for $224 million, excluding excise tax.

We repurchase shares of our common stock under share repurchase programs authorized by our Board of Directors.

The following Board approved share repurchase programs were executed through a combination of open market transactions and accelerated share repurchase (“ASR”) agreements (in millions):

Board Approval Date Amount Authorized Shares Repurchased Total Cash Utilized Remaining Authorization Authorization Completion Date

2022 Share Repurchase Program Q4 FY 2021 $ 1,000 16.5 $ 1,000 $ — Q2 FY 2023

2023 Share Repurchase Program Q1 FY 2023 $ 1,000 2.7 $ 224 (1)

Amended 2023 Share Repurchase Program (2)

Q1 FY 2024 $ 2,500 20.4 $ 2,500 $ — Q1 FY 2025

2025 Share Repurchase Program (3)

Q1 FY 2025 $ 1,000 4.3 $ 636 $ 364

(1) In September 2023, the Board of Directors amended and increased the 2023 Share Repurchase Program to allow for the repurchase of up to $2.5 billion of our common stock.

As part of the amended 2023 Share Repurchase Program, we entered into an accelerated share repurchase (“ASR”) agreement with a bank in September 2023 to repurchase $500 million of our common stock.

During the first quarter of 2024, the ASR transaction was completed, and 3.9 million shares were delivered under the ASR agreement at an average price of $128.61.

The final number of shares delivered upon settlement of the ASR agreement was determined based on a discount to the volume weighted average price of our common stock during the term of the agreement.

As of May 31, 2024, 14.2 million shares had been repurchased for $1.8 billion, excluding excise tax, and $676 million remains available under the amended 2023 Share Repurchase Program.

In June 2024, as part of the amended 2023 Share Repurchase Program, the Company repurchased $121 million, excluding excise tax, and entered into ASR agreements to repurchase an additional $555 million, excluding excise tax, of the Company’s common stock.

Under the ASR agreements, the Company made payments of $555 million to participating financial institutions and received an initial delivery of shares of common stock.

(2) In September 2024, an ASR transaction was completed, and 1.0 million additional shares were delivered under the Q4 FY 2024 ASR agreements.

As of November 30, 2024, no authorization remained under the amended 2023 Share Repurchase Program.

(3) As of January 2, 2025, 4.3 million shares had been repurchased for $636 million and $364 million remains available under the 2025 Share Repurchase Program.

Under ASR agreements, we make payments to the participating financial institutions and receive an initial delivery of shares of common stock.

The final number of shares delivered upon settlement of the ASR agreements is determined based on a discount to the volume weighted average price of our common stock during the term of the agreements.

At the time the shares are received by the Company, the initial delivery and the final receipt of shares upon settlement of the ASR agreements results in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share.

The terms of ASR agreements, structured as outlined above, were as follows (in millions, except average price):

Agreement Execution Date Agreement Settlement Date Agreement Amount Initial Shares Delivered Additional Shares Delivered Total Shares Delivered Average Price Paid Per Share

Q1 FY 2024 Q1 FY 2024 $ 500 3.3 0.6 3.9 $ 128.61

Q4 FY 2024 Q1 FY 2025 $ 555 4.2 1.0 5.2 $ 107.08

Q2 FY 2025 Q3 FY 2025 $ 310 1.8 (1) (1) $ 145.00

(1) In December 2024, as part of the 2025 Share Repurchase Program, we entered into ASR agreements to repurchase $310 million, excluding excise tax, of our common stock.

Under the ASR agreements, we made payments of $310 million to participating financial institutions and received an initial delivery of shares of common stock.

The delivery of any remaining shares will occur at the final settlement of the transactions under the ASR agreements.

In addition, we repurchased shares of its common stock through the open market as follows (in millions):

Three months ended

November 30, 2024 November 30, 2023

Shares Cost Shares Cost

Open market share repurchases (1)

1.8 $ 232 0.0 $ —

(1) As of November 30, 2024, $768 million remains available under the 2025 Share Repurchase Program.

On December 27, 2024, we issued a warrant (the “Warrant”) to Amazon.com NV Investment Holdings LLC (“Warrantholder”) to acquire up to 1,158,539 of our ordinary shares (“Warrant Shares”) at an initial exercise price of $137.7671 per share, which is the preceding 30 trading day VWAP.

The Warrant allows for cashless exercise and expires December 27, 2031.

The Warrant Shares are subject to vesting for payments for purchased products and services over the Warrant term, with a portion of the Warrant Shares having vested as of the Warrant issuance.

Upon the consummation of an acquisition transaction (as defined in the Warrant), subject to certain exceptions, the unvested portion of the Warrant will vest in full.

So long as the Warrant is unexercised, the Warrant does not entitle the Warrantholder to any voting rights or any other common stockholder rights.

The exercise price and the number of Warrant Shares are subject to customary anti-dilution adjustments.

Contractual Obligations

As of the date of this report, there were no material changes outside the ordinary course of business, since August 31, 2023, to our contractual obligations and commitments and the related cash requirements.

As of the date of this report, other than 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, 2024, to our contractual obligations and commitments and the related cash requirements.

Quantitative and Qualitative Disclosures About Market Risk

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What changed 10-Q

Item 2. Management’s Discussion and Analysis