AI Takeaway
J delivered a strong Q1 FY2026 with net income surging to $125.5M (vs. a loss of $18.1M a year ago), driven by 11.6% operating income growth and a 254% jump in operating cash flow, though long-term debt rose 44.8% and stockholders' equity declined 18.1%.
Cost of Revenue
$2.53B
++14.30% YoY
EPS (Basic)
$1.12
++1118.18% YoY
Operating Income
$232.56M
++11.58% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Net income swung from a loss of $18.1M in Q1 FY2025 to a profit of $125.5M in Q1 FY2026, a 792.3% improvement, signaling a significant operational or non-recurring turnaround. EPS (basic and diluted) moved from -$0.11 to +$1.12, reflecting the same recovery.
Source: Source: 10-Q Income Statement
Cost of Revenue grew 14.3% YoY to $2.53B, outpacing Gross Profit growth of 6.1% to $765.3M, suggesting margin compression at the gross level. SG&A expenses rose a more modest 3.9% to $532.7M, helping to contain the overall operating cost base.
Source: Source: 10-Q Income Statement
Operating cash flow surged 254.3% YoY to $380.8M from $107.5M, indicating substantially improved cash conversion from operations. This strong cash generation supported $252.1M in share buybacks, up 25.0% YoY.
Source: Source: 10-Q Cash Flow Statement
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Upgrade to unlockLong-term debt increased 44.8% YoY to $2.49B, while stockholders' equity fell 18.1% to $3.44B, meaningfully increasing financial leverage. Higher debt levels raise interest expense and refinancing risk, particularly in a higher-for-longer interest rate environment. This trend, if continued, could constrain future capital allocation flexibility.
Source: Source: 10-Q Balance Sheet
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $1.53 versus the $1.55 analyst consensus — a -1.0% miss for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Cost of Revenue | $2.53B | $2.21B | +14.30% |
Gross Profit | $765.25M | $721.27M | +6.10% |
Operating Income | $232.56M | $208.42M | +11.58% |
Net Income | $125.51M | $-18.13M | +792.27% |
EPS (Basic) | $1.12 | $-0.11 | +1118.18% |
EPS (Diluted) | $1.12 | $-0.11 | +1118.18% |
SG&A Expense | $532.69M | $512.85M | +3.87% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $11.61B | $11.61B | +0.03% |
Current Assets | $4.76B | $4.95B | -3.85% |
Current Liabilities | $3.58B | $3.94B | -9.27% |
Stockholders' Equity | $3.44B | $4.21B | -18.11% |
Cash & Equivalents | $1.55B | $1.3B | +19.49% |
Long-Term Debt | $2.49B | $1.72B | +44.77% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $380.76M | $107.46M | +254.34% |
Investing Cash Flow | $-15.49M | $-7.92M | -95.54% |
Financing Cash Flow | $-59.85M | $112.15M | -153.36% |
Share Buybacks | $252.08M | $201.63M | +25.02% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
ROE | 3.6% | — | — |
ROA | 1.1% | — | — |
Current Ratio | $1.33 | — | — |
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J reported net income of $125.5M and EPS of $1.12 in Q1 FY2026, compared to a net loss of $18.1M and EPS of -$0.11 in Q1 FY2025. Without consensus analyst estimates available in this filing, it is not possible to confirm whether J beat or missed Wall Street expectations, but the results represent a dramatic year-over-year improvement.
J's Q1 FY2026 highlights include a net income recovery to $125.5M (from a $18.1M loss), a 254% surge in operating cash flow to $380.8M, and 11.6% growth in operating income to $232.6M. However, cost of revenue grew faster than gross profit, and long-term debt rose 44.8% YoY to $2.49B, which are areas investors should watch closely.
Based on the financial data, key risks include rising long-term debt (up 44.8% to $2.49B), gross margin compression as cost of revenue grew 14.3% versus 6.1% gross profit growth, and declining stockholders' equity (down 18.1% to $3.44B). The sustainability of the net income recovery is also a watchpoint given the lack of detailed MD&A disclosure in this summary.
J's implied total revenue for Q1 FY2026 was approximately $3.29B, up roughly 12.5% YoY, based on cost of revenue of $2.53B and gross profit of $765.3M. Cost of revenue grew faster at 14.3%, while gross profit grew at a slower 6.1%, indicating some margin pressure despite solid top-line growth.
J's near-term liquidity appears adequate with a current ratio of 1.33x and cash of $1.55B (up 19.5% YoY), and operating cash flow is strong at $380.8M. However, long-term debt has risen sharply to $2.49B (+44.8% YoY) and stockholders' equity has declined to $3.44B (-18.1% YoY), indicating increased leverage that warrants monitoring.