01—Abstract
Summary
Summary of the 10-K filed October 20, 2023. Cited figures are marked; the original filing is the authoritative source.
Jabil Inc. (JBL) reported fiscal year 2023 (ended August 31, 2023) net revenue of $34.7 billiona, up from $33.5 billion in fiscal 2022, with gross profit of $2,867 million and operating income of $1,537 million.
Net income attributable to Jabil Inc. was $818 millionb, down from $996 million in fiscal 2022, and diluted earnings per share were $6.02 versus $6.90 a year earlier. Diluted core earnings per share, a non-GAAP measure, rose to $8.63 from $7.65. The company reported net cash provided by operating activities of $1,734 million and adjusted free cash flow of $1,026 million (non-GAAP).
Cash and cash equivalents were $1,804 millionc at year-end. The most significant forward-looking event is the September 26, 2023 agreement to sell the mobility business (Chengdu product manufacturing and Wuxi component manufacturing) to BYD Electronic (International) Company Limited for approximately $2.2 billion in cash, expected to close within the first two quarters of fiscal 2024. The business is classified as held for sale, with assets of $1,929 million and liabilities of $1,397 million on the balance sheet.
The same day, the Board approved a 2024 Restructuring Plan, which the company expects to cost approximately $300 milliond in pre-tax charges, with about $200 million in net cash expenditures. The Board also raised the share repurchase authorization to $2.5 billion. Customer concentration remains high: the five largest customers accounted for approximately 42% of net revenue, and Apple, Inc. accounted for 17% in fiscal 2023, down from 19% in fiscal 2022.
The effective income tax rate rose to 35.2% from 19.1%, largely due to a $146 million tax expense tied to the planned divestiture. Total debt was $2,875 million at year-end, and the company reported $3.8 billion in available unused revolving credit capacity.
02—Key points
Key Highlights
- Net revenue rose to $34.7 billion in fiscal 2023 from $33.5 billion in fiscal 2022, while net income attributable to Jabil Inc. declined to $818 million from $996 million.
- Diluted core earnings per share (non-GAAP) increased to $8.63 from $7.65, while GAAP diluted EPS fell to $6.02 from $6.90.
- Agreed on September 26, 2023 to sell the mobility business to BYD Electronic for approximately $2.2 billion in cash, expected to close in the first two quarters of fiscal 2024; a $440 million deposit has been received.
- Approved a 2024 Restructuring Plan expected to produce about $300 million in pre-tax charges, with approximately $200 million in net cash expenditures over fiscal 2024 and 2025.
- The five largest customers represented about 42% of net revenue, and Apple, Inc. represented 17%, creating concentration risk.
- Effective income tax rate increased to 35.2% from 19.1%, including $146 million of tax expense tied to the planned divestiture's change in indefinite reinvestment assertion.
- Share repurchase authorization was increased to $2.5 billion in September 2023, from $776 million remaining under the prior program at August 31, 2023.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Jabil kept $0.02.
- Revenue$34.70B100.0%
- Cost of revenue−$31.84B91.7%
- Gross profit$2.87B8.3%
- Operating costs−$1.33B3.8%
- Operating income$1.54B4.4%
- Interest, other & tax−$719.0M2.1%
- Net income$818.0M2.4%
Where FY2023 revenue went
$34.70B- Cost of revenue: $31.84B, 92% of revenue
- Net income: $818.0M, 2.4% of revenue
- R&D: $34.0M, 0.1% of revenue
- SG&A: $1.21B, 3.5% of revenue
- Interest, other & tax: $719.0M, 2.1% of revenue
Kept 2.4% as net incomeNet income $818.0M · 2.4%R&D $34.0M · 0.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed October 20, 2023Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $34.70B$33.48B | +3.7% |
| Cost of Revenue | $31.84B$30.85B | +3.2% |
| Gross Profit | $2.87B$2.63B | +8.9% |
| R&D Expenses | $34.00M$33.00M | +3.0% |
| SG&A Expenses | $1.21B$1.15B | +4.5% |
| Operating Income | $1.54B$1.39B | +10.3% |
| Net Income | $818.00M$996.00M | −17.9% |
| EPS (Basic) | $6.15$7.06 | −12.9% |
| EPS (Diluted) | $6.02$6.90 | −12.8% |
| Shares Outstanding (Basic) | 133.00M141.20M | −5.8% |
| Shares Outstanding (Diluted) | 135.90M144.40M | −5.9% |
05—Questions
Frequently Asked Questions
How did Jabil perform financially in fiscal 2023?
Net revenue grew to $34,702 million from $33,478 million, and gross profit rose to $2,867 million from $2,632 million. Operating income increased to $1,537 million from $1,393 million. However, net income attributable to Jabil Inc. fell to $818 million from $996 million, and GAAP diluted EPS declined to $6.02 from $6.90, largely due to higher interest expense, other expense and a higher tax rate.
What is the significance of the planned sale of the mobility business?
Jabil agreed to sell its product manufacturing business in Chengdu and supporting component manufacturing in Wuxi to BYD Electronic (International) for approximately $2.2 billion in cash, subject to customary adjustments. The buyer paid a $440 million deposit, of which $308 million was paid to Jabil, and Jabil may need to repay $390 million if the reorganization is not completed by April 1, 2024 for reasons other than Chinese regulatory approvals. The closing is subject to regulatory approvals and other conditions and is not conditioned on financing.
What restructuring actions has Jabil announced?
On September 26, 2023, the Board approved a 2024 Restructuring Plan to realign the cost base for stranded costs from the mobility sale and to optimize the global footprint. The company expects approximately $300 million in pre-tax restructuring and other related costs during fiscal 2024, with about $200 million in net cash expenditures payable over fiscal 2024 and 2025. Fiscal 2023 restructuring, severance and related charges were $57 million, primarily tied to headcount reductions.
How concentrated is Jabil's customer base?
Concentration is significant. In fiscal 2023, the five largest customers accounted for approximately 42% of net revenue, and 84 customers accounted for approximately 90%. Apple, Inc. accounted for 17% of net revenue in fiscal 2023, down from 19% in fiscal 2022 and 22% in fiscal 2021, with its sales reported in the DMS segment.
What is Jabil's liquidity and capital return position?
At August 31, 2023, Jabil had cash and cash equivalents of $1,804 million, total notes payable and long-term debt of $2,875 million, and $3.8 billion of unused revolving credit capacity. Operating cash flow was $1,734 million. The company returned $532 million to shareholders in fiscal 2023 through $487 million of share repurchases and $45 million of dividends paid, and $776 million remained under the 2023 Share Repurchase Program before the September 2023 increase to $2.5 billion.
06—Continue