Jabil Inc.

Greetings. Welcome to J. Bill's second quarter fiscal 2026 earning conference call. At this time, all participants will be in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note, this conference is being recorded. I'll now turn the conference over to Adam Perry, Senior Vice President, Investor Relations and Corporate Affairs. Thank you, Adam. You may now begin.

Hello. And welcome to Jabil's second quarter fiscal 2026 earnings conference call. Joining me on today's call are Chief Executive Officer Mike Destor and Chief Financial Officer Greg Hebert. Please note that today's presentation is being live streamed, and during our prepared remarks, we will be referencing slides. To view these slides, please visit the Investor Relations section of Jabil.com. After today's presentation concludes, a complete recording will be available on our website for playback. In addition, we will be making forward looking statements during this presentation, including, among other things, those regarding the anticipated outlook for our business, such as our currently expected third quarter and full fiscal year 2026 net revenue and earnings. These statements are based on current expectations, forecasts, and assumptions involving risks and unsearched keys that could cause actual outcomes and results to differ materially. An extensive list of these risks and unsearched keys is identified in our annual report on Form 10-K for the fiscal year ended August 31, 2025, and other filings with the SEC. Table disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. With that, I'd now like to hand the call over to Greg.

Thank you, Adam. Good morning, everyone, and thank you for joining our call today. Our second quarter exceeded expectations on both revenue and core operating margin, driving another step up in core EPS. And while intelligent infrastructure continues to be the primary driver of growth, we were encouraged to see solid performance across other areas of the portfolio as well. In regulated industries, revenue came in about $200 million above our Q2 guide, driven mainly by automotive, with renewables also performing better than expected. In intelligent infrastructure, we were up nearly $300 million above our Q2 guide. driven mainly by cloud and data center infrastructure and networking and communications. And in connected living and digital commerce, performance was largely in line with expectations. Overall, Q2 was a strong quarter, and it provides us with greater confidence in our outlook for the back half of our fiscal year. With that, let's walk through the numbers for the quarter. Net revenue for Q2 was $8.3 billion, exceeding our outlook for the period. Favorable revenue mix and ongoing cost discipline enabled us to achieve core operating income of $436 million and a core operating margin of 5.3%. On a GAAP basis, operating income was $374 million. and GAAP diluted earnings per share was $2.08. Core diluted earnings per share for Q2 was $2.69, reflecting results that were above our expectations for the quarter. Now turning to performance by segment in the quarter. Regulated industries generated $3 billion in revenue, up 10% year over year, and well above our outlook in December. the higher year-over-year revenue was driven by all three end markets. Core operating margin for the segment was 4.8%. Intelligent infrastructure revenue was $4 billion, a 52% year-over-year and also ahead of expectations. Growth was broad-based across capital equipment, cloud and DCI, and networking and communications. Poor operating margin for the segment was 5.7%, up 40 basis points year over year, supported by favorable mix and disciplined execution. Connected living and digital commerce revenue was $1.2 billion, down 8% as expected, reflecting planned program attrition and customer pruning. This was partially offset by continued growth in robotics, advanced warehouse, and retail automation. Our operating margin for this segment was 4.9%, up 40 basis points year over year. Turning now to cash flow and balance sheet metrics. Inventory days for the quarter were 75. Net of inventory deposits from customers, inventory days were 60, consistent with our targeted range of 55 to 60 days. Cash flow from operations in Q2 was $411 million. and net capital expenditures were $51 million, resulting in adjusted free cash flow of $360 million for the quarter. This keeps us well-positioned to deliver over $1.3 billion in adjusted free cash flow for the full fiscal year. Our balance sheet remains in excellent shape. We ended Q2 with $1.8 billion in cash and remain fully committed to maintaining our investment-grade credit profile. During Q2, we repurchased $300 million of shares under our existing share repurchase authorization. With that, I'll walk through our guidance for Q3 FY26. Beginning with revenue by segment, we anticipate regulated industries revenue of $3.1 billion, reflecting some growth in renewables, steady healthcare demand, and stabilizing trends in automotive and transport. For intelligent infrastructure, we expect revenue of $4.2 billion, up 22% year-over-year, supported by ongoing demand across cloud and data center infrastructure, advanced networking and communications, and capital equipment. And for connected living and digital commerce, we expect revenue of $1.2 billion, down 10% year-over-year, reflecting continued program transitions and portfolio optimization, partially offset by growth in automation, robotics, and advanced retail and warehouse programs. At the enterprise level, total company revenue for Q3 is expected to be in the range of $8.1 billion to $8.9 billion. to $512 million. GAAP operating income is expected to be in the range of $398 million to $458 million. Poor diluted earnings per share is expected to be in the range of $2.83 to $3.23. GAAP diluted earnings per share is expected to be in the range of $2.36 to $2.76. We expect third quarter net interest expense to be approximately $73 million and full year interest expense to be approximately $280 million. Our core tax rate for Q3 and the full year remains at 21%. Let me close by saying Q2 delivered strong results and we are entering Q3 with solid momentum. Our performance this quarter demonstrates the strength of our diversified portfolio and disciplined execution. As we move through the year, our priorities remain consistent. We remain focused on margin expansion, capital efficiency, and sustained cash generation. With that, I will turn the call over to Mike, who will share more on fiscal 2026 in our updated guidance.