Jabil guides to $44.5 billion in sales, but its $1.5 billion of free cash rested on payables nearly doubling

Jabil reported fiscal fourth-quarter revenue of $10.6 billion, up about 29% from $8.25 billion a year earlier, and core earnings of $4.40 a share against $3.29, in results filed with the SEC on Wednesday. On a GAAP basis it earned $3.76 a share. For fiscal 2027 it guided to revenue of $44.5 billion, up 24%, core EPS of $17.55, up 34%, and adjusted free cash flow of about $1.6 billion. First-quarter guidance is revenue of $10.6 billion to $11.4 billion and core EPS of $3.80 to $4.20.

The stock was at $312.38 at 9:53 a.m. Eastern, down 2.0% from Tuesday's $318.84 close, according to Nasdaq. That is about 27% below its 52-week high of $428.93. Seeking Alpha summed up the reaction: a solid quarter and outlook that failed to impress.

The number behind the cash flow

Chief executive Mike Dastoor highlighted more than $1.5 billion of adjusted free cash flow for the year, and the filing shows $1.532 billion. The cash flow statement shows where it came from.

Jabil tied up about $7.8 billion more in receivables, inventory and prepayments as AI work ramped. Almost all of that was offset by money it owed but had not yet paid. Operating cash flow was $2.0 billion. Without the $7.98 billion rise in payables and accruals, it would have been about $6 billion negative.

On the balance sheet, accounts payable rose 82% to $14.44 billion from $7.94 billion, while full-year revenue grew 21%. Measured against the fourth quarter's cost of revenue at an annual rate, payables went from about 97 days to about 137 days. Part of that is timing: a company that is growing this fast buys a lot of parts late in the year. But suppliers are financing a much bigger share of Jabil's growth than a year ago. Stockholders' equity was $1.6 billion against $27.4 billion of assets, after $1.06 billion of share buybacks during the year.

Why it matters

For investors, the free cash flow guidance of about $1.6 billion for fiscal 2027 assumes this working-capital balance holds. If AI demand slows and payables shrink faster than inventory, cash flow can swing the other way quickly.

For the component makers, machine shops and logistics firms that sell to large contract manufacturers, this is the other side of the same number. A customer whose payables rise four times as fast as its sales is holding cash that its suppliers are waiting for. Jabil did not comment on its payment terms in the release. A supplier can check its own receivables aging against the 137-day figure above.

Management said growth outside AI is also picking up, citing automotive, healthcare, energy infrastructure, defense and aerospace, and warehouse automation. Our stocks coverage follows the rest of the AI supply chain's results.

Sources: Jabil results, Exhibit 99.1 to Form 8-K, via SEC EDGAR; Nasdaq; Seeking Alpha. Growth rates, payable days and the cash-flow breakdown are our calculations from the filing. This is market information, not investment advice.