01—Abstract
Summary
Summary of the 10-K filed October 25, 2022. Cited figures are marked; the original filing is the authoritative source.
Jabil Inc. (JBL) reported fiscal year 2022 (ended August 31, 2022) net revenue of $33.5 billiona, up from $29.3 billion in fiscal 2021, and net income attributable to Jabil Inc. of $996 million, compared with $696 million the prior year.
Diluted earnings per share were $6.90b versus $4.58, and core diluted earnings per share were $7.65 versus $5.61. Gross profit rose to $2.63 billion, but gross margin as a percent of net revenue declared a decrease to 7.9% from 8.1%, which management attributed primarily to product mix. Operating income increased to $1.39 billion from $1.06 billion, and operating cash flow was $1.65 billion, with adjusted free cash flow of $810 million.
The company remains heavily concentrated in a few customers: the five largest accounted for approximately 44% of net revenue, and Apple, Inc. represented 19% of fiscal 2022 net revenue. Revenue is split almost evenly between the Electronics Manufacturing Services (EMS) segment at $16.74 billionc and the Diversified Manufacturing Services (DMS) segment at $16.74 billion. The filing highlights component shortages, especially in semiconductors, inflation, COVID-19 disruptions, and risks tied to China operations as ongoing concerns.
Balance sheet and capital allocation activity was active during the year. Total assets were $19.72 billion and inventories rose to $6.13 billiond from $4.41 billion. Jabil issued $500 million of 4.250% Senior Notes due 2027, redeemed its 4.700% notes due 2022, and repurchased $696 million of stock during the year.
As of August 31, 2022, $263 million remained under the 2022 Share Repurchase Program, and the board authorized a new $1.0 billion program in September 2022. Quarterly dividends of $0.08 per share were paid throughout the year.
02—Key points
Key Highlights
- Net revenue of $33.48 billion in fiscal 2022, up from $29.29 billion in fiscal 2021.
- Net income attributable to Jabil Inc. of $996 million, or $6.90 diluted EPS, versus $696 million and $4.58 a year earlier.
- Core (non-GAAP) diluted EPS of $7.65, compared with $5.61 in fiscal 2021.
- Gross profit of $2.63 billion; gross margin declined to 7.9% of net revenue from 8.1%, primarily due to product mix.
- Customer concentration remains high: five largest customers accounted for about 44% of net revenue, with Apple at 19%.
- Operating cash flow of $1.65 billion and adjusted free cash flow of $810 million; net capital expenditures are anticipated at about $875 million for fiscal 2023.
- Returned capital through $696 million in share repurchases and about $48 million in dividends paid during fiscal 2022, and a new $1.0 billion repurchase authorization was approved in September 2022.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Jabil kept $0.03.
- Revenue$33.48B100.0%
- Cost of revenue−$30.85B92.1%
- Gross profit$2.63B7.9%
- Operating costs−$1.24B3.7%
- Operating income$1.39B4.2%
- Interest, other & tax−$397.0M1.2%
- Net income$996.0M3.0%
Where FY2022 revenue went
$33.48B- Cost of revenue: $30.85B, 92% of revenue
- Net income: $996.0M, 3.0% of revenue
- R&D: $33.0M, 0.1% of revenue
- SG&A: $1.15B, 3.4% of revenue
- Interest, other & tax: $397.0M, 1.2% of revenue
Kept 3.0% as net incomeNet income $996.0M · 3.0%R&D $33.0M · 0.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed October 25, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $33.48B$29.29B | +14.3% |
| Cost of Revenue | $30.85B$26.93B | +14.6% |
| Gross Profit | $2.63B$2.36B | +11.6% |
| R&D Expenses | $33.00M$34.00M | −2.9% |
| SG&A Expenses | $1.15B$1.21B | −4.9% |
| Operating Income | $1.39B$1.05B | +32.0% |
| Interest Expense | $151.00M$130.00M | +16.2% |
| Net Income | $996.00M$696.00M | +43.1% |
| EPS (Basic) | $7.06$4.69 | +50.5% |
| EPS (Diluted) | $6.90$4.58 | +50.7% |
| Shares Outstanding (Basic) | 141.20M148.50M | −4.9% |
| Shares Outstanding (Diluted) | 144.40M152.10M | −5.1% |
05—Questions
Frequently Asked Questions
How did Jabil perform financially in fiscal 2022?
Net revenue rose to $33.48 billion from $29.29 billion, and net income attributable to Jabil Inc. increased to $996 million from $696 million. Operating income grew to $1.39 billion from $1.06 billion, while diluted EPS reached $6.90 compared with $4.58.
How concentrated is Jabil's customer base?
The filing states that the five largest customers accounted for approximately 44% of fiscal 2022 net revenue, and Apple, Inc. accounted for 19%. Amazon.com accounted for 11%. The company notes that a reduction in business from one or more of these customers could materially affect results.
What are the main risks the filing highlights?
Key risks include dependence on customers who do not commit to long-term production schedules, component shortages (most notably in semiconductors), inflation and rising component prices, COVID-19 disruptions, international operations including China, and tariffs and trade disputes. The filing also cites risks from acquisitions, restructurings, and debt levels.
How is Jabil returning capital to shareholders and managing its debt?
During fiscal 2022 Jabil repurchased $696 million of common stock and paid about $48 million in dividends. It issued $500 million of 4.250% Senior Notes due 2027 and used the proceeds to redeem its 4.700% Senior Notes due 2022. As of August 31, 2022, $263 million remained under the 2022 Share Repurchase Program, and in September 2022 the board authorized a new $1.0 billion program.
What drove the change in gross margin?
Gross profit as a percentage of net revenue decreased to 7.9% from 8.1%, which the filing primarily attributes to product mix. The company also expects that about $500 million of cloud-related components will shift to a customer-controlled consignment model in fiscal 2023, which it expects to produce higher gross margins and lower cash used in that business.
06—Continue