FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 27, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File #1-4224 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Exact name of registrant as specified in its charter) (State or other jurisdiction (IRS Employer of incorporati ...

Key Takeaways Avnet posted Q2 EPS of $1.05, topping estimates by 10.53% and increasing 20.7% year over year.Q2 sales rose 11.6% to $6.32 billion, driven by Electronic Components and Farnell segment gains.Shares surged 13.8% as Avnet's Q3 revenue and EPS guidance surpassed analyst expectations.Avnet, Inc. (AVT) shares jumped 13.8% on Wednesday after the company reported better-than-expected second-quarter fiscal 2026 results. The company’s second-quarter adjusted earnings of $1.05 per share surpassed the Zac ...

Core Insights - Avnet reported second-quarter fiscal 2026 results that exceeded the high end of the company's sales and earnings guidance, driven by record revenue in Asia and improved demand across multiple end markets [5][7] Financial Performance - Adjusted operating income was $172 million with a total adjusted operating margin of 2.7% [1] - Sales reached $6.3 billion, representing a 12% year-over-year increase and a 7% sequential increase, surpassing guidance [3][7] - Adjusted diluted earnings per share (EPS) were $1.05, exceeding the high end of guidance for the quarter [7] - Gross margin was reported at 10.5%, described as "flattish" year-over-year and slightly up sequentially [2] Segment Performance - Electronic components generated an operating income of $187 million with a 3.2% operating margin, while Farnell produced an operating income of $20 million with a 4.7% operating margin, the latter being the highest since fiscal 2023 [1][4] - Farnell's gross margins improved by over 100 basis points year-over-year but decreased by 25 basis points sequentially [2] Regional Highlights - Asia sales exceeded $3 billion, marking the sixth consecutive quarter of year-over-year growth and now account for over 50% of total sales [3][12] - Sales in Europe increased year-over-year and sequentially, with clear signs of recovery noted [13] - The Americas also saw sales growth for the second consecutive quarter, led by aerospace and defense [14] Demand and Supply Chain Dynamics - Demand signals are resetting higher, particularly driven by data center and AI demand, with lead times trending upward across most product categories [9][10] - The pricing environment remained stable, although spot price increases were noted in some areas, indicating potential upward pricing pressure as supply tightens [11] Working Capital and Inventory Management - Working capital improved with inventory reduced by $126 million, resulting in 86 days of inventory at quarter-end [6][18] - The company aims to reduce total inventory days to below 80 [18] Guidance and Outlook - For Q3 fiscal 2026, sales are guided to be between $6.2 billion and $6.5 billion, with diluted EPS expected to be between $1.20 and $1.30, implying modest sequential growth [20][21] - The guidance reflects anticipated growth in the Americas and EMEA, with a slight seasonal decline in Asia due to the Lunar New Year [21]

Financial Data and Key Metrics Changes - The company achieved sales of $6.3 billion in the second quarter, representing a 12% year-over-year increase and a 7% sequential increase [13][4] - Adjusted diluted earnings per share were $1.05, exceeding the high end of guidance and growing nearly four times compared to the previous quarter [16][21] - Operating margin for electronic components was 3.2%, while Farnell's operating margin was 4.7%, marking the highest for Farnell since fiscal 2023 [16][11] Business Line Data and Key Metrics Changes - Electronic components sales increased by 11% year-over-year and 7% sequentially, with a constant currency increase of 9% year-over-year [13][14] - Farnell sales grew by 24% year-over-year and 7% sequentially, with a constant currency increase of 20% year-over-year [14][10] - Demand creation revenues increased sequentially by 7%, indicating positive trends in converting design wins into revenues [9] Market Data and Key Metrics Changes - Sales in Asia reached a record high of over $3 billion, marking the sixth consecutive quarter of year-on-year sales growth in the region [8][13] - Year-over-year sales increased by 17% in Asia, 8% in Europe, and 5% in the Americas [13] - The pricing environment remained stable, but upward pricing pressure is anticipated across many technologies due to supply dynamics [7][34] Company Strategy and Development Direction - The company is focused on expanding operating margins, optimizing inventory, and generating cash flow while making necessary investments for future growth [5][12] - There is an emphasis on improving return on working capital and overall return on invested capital [20][19] - The company aims to leverage its diverse supplier line card and customer base to drive profitable growth [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong demand signals and improving visibility into customer orders [6][29] - The company anticipates continued growth and margin expansion in 2026, supported by a recovering market and improved operational leverage [12][21] - Management noted that the demand for electronic components is broadening, driven by sectors such as data centers and artificial intelligence [5][6] Other Important Information - The company generated $208 million in cash flow from operations during the quarter and reduced inventory by $126 million [20][17] - The company paid a quarterly dividend of $0.35 per share, totaling $28 million [21] - Guidance for the third quarter of fiscal 2026 includes sales in the range of $6.2 billion to $6.5 billion and diluted earnings per share between $1.20 and $1.30 [21] Q&A Session Summary Question: Can you discuss the linearity of orders during the quarter and the duration of your backlog? - Management noted that bookings typically tail off in December, but billings continue, indicating a positive trend in order visibility and customer engagement [25][26][29] Question: What are the pricing pressures in specific end markets? - Management indicated that while pricing has remained stable, there are signs of upward pressure in memory, storage, and certain capacitors, driven by increased demand from data centers [34][49] Question: How do you expect the March quarter to perform relative to seasonality? - Management expects a typical seasonal bounce back in the West, with high single-digit growth anticipated, while Asia may see a less than seasonal decline due to Lunar New Year [38][45] Question: Can core business margins grow year-over-year for the remaining quarters? - Management expressed confidence in margin expansion as the West recovers, with expectations for continued momentum in operating margins [45][46] Question: How does pricing from suppliers impact revenues and margins? - Management explained that pricing affects average selling prices, with contracted customers absorbing price increases, while spot buys can lead to improved margins [48][49]

Financial Data and Key Metrics Changes - The company achieved sales of $6.3 billion in the second quarter, representing a 12% year-over-year increase and a 7% sequential increase [13][4] - Operating margin for the electronic components business was 3.2%, while Farnell's operating margin was 4.7% [4][16] - Adjusted diluted earnings per share reached $1.05, exceeding the high end of guidance and growing nearly four times compared to the previous quarter [16][21] - Gross margin was stable at 10.5%, with electronic component gross margins impacted by faster growth in Asia compared to the West [14][16] Business Line Data and Key Metrics Changes - Electronic components sales increased by 11% year-over-year and 7% sequentially, with Farnell sales growing 24% year-over-year and 7% sequentially [13][14] - Demand creation revenues increased sequentially by 7%, indicating a positive trend in converting design wins into revenues [9] - The IP&E business experienced double-digit growth year-over-year, contributing to higher gross margins [10] Market Data and Key Metrics Changes - Sales in Asia reached a record high of over $3 billion, marking the sixth consecutive quarter of year-over-year growth in the region [8] - Year-over-year sales growth was 17% in Asia, 8% in Europe, and 5% in the Americas [13] - The pricing environment remained stable, but upward pricing pressure is anticipated across many technologies due to supply dynamics [7] Company Strategy and Development Direction - The company is focused on expanding operating margins, optimizing inventory, and generating cash flow while investing in future growth [5][12] - There is an emphasis on improving return on working capital and maintaining a strong balance sheet by reducing leverage [20] - The company aims to leverage its diverse supplier line card and customer base to enhance its market position [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong demand signals and improving visibility from customers [29][45] - The company anticipates continued growth and margin expansion in 2026, supported by a recovery in the West and improved demand in Asia [12][22] - Management noted that the current operating environment presents opportunities to address supply chain complexities [7] Other Important Information - The company generated $208 million in cash flow from operations during the quarter and reduced inventory by $126 million [20][17] - The third quarter guidance projects sales between $6.2 billion and $6.5 billion, with expectations for growth in the Americas and EMEA [21] Q&A Session Summary Question: Can you discuss the linearity of orders during the quarter? - Management noted that bookings typically tail off in December, but billings continue, indicating a positive book-to-bill ratio [25][26] Question: What are the pricing pressures in specific end markets? - Management indicated that pricing pressures are emerging in memory, storage, and certain capacitors, driven by demand from data centers and industrial customers [33][34] Question: How does the company view operating margin growth for the remaining quarters? - Management expects continued momentum in operating margins, particularly as the West recovers, with a focus on improving profitability [45][46]

Financial Data and Key Metrics Changes - The company achieved sales of $6.3 billion in Q2 2026, representing a 12% year-over-year increase and a 7% sequential increase [12] - Adjusted diluted earnings per share reached $1.05, exceeding the high end of guidance and growing nearly four times compared to the previous quarter [15] - Gross margin for the quarter was 10.5%, remaining stable year-over-year and slightly up sequentially [13] Business Line Data and Key Metrics Changes - Electronic components sales increased by 11% year-over-year and 7% sequentially, with constant currency sales up 9% year-over-year [12] - Farnell sales grew 24% year-over-year and 7% sequentially, with constant currency sales up 20% year-over-year [12] - Operating margin for electronic components was 3.2%, while Farnell's operating margin was 4.7%, marking the highest for Farnell since fiscal 2023 [15] Market Data and Key Metrics Changes - Sales in Asia increased by 17% year-over-year, accounting for over 50% of total sales, compared to approximately 48% in the previous quarter [12] - EMEA sales grew 8% year-over-year, showing signs of recovery across most end markets [12] - The Americas saw a 5% year-over-year sales increase, with aerospace and defense leading the growth [12] Company Strategy and Development Direction - The company is focused on expanding operating margins, optimizing inventory, and generating cash flow while investing in future growth [4] - There is an emphasis on demand creation, supply chain services, and embedded solutions to drive growth and margin expansion [8] - The company aims to improve return on working capital and overall return on invested capital [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a diverse supplier line card and a stable leadership team [10] - Demand signals are improving globally, with lead times trending higher across most product categories, driven by data center and AI demand [5] - The company anticipates continued growth and margin expansion in 2026, supported by a favorable regional mix and improving market conditions [21] Other Important Information - The company generated $208 million in cash flow from operations during the quarter and reduced inventory by $126 million [18] - Working capital days decreased to 88 days, indicating improved efficiency [16] - The company paid a quarterly dividend of $0.35 per share, totaling $28 million [19] Q&A Session Summary Question: Can you discuss the linearity of orders during the quarter and the duration of the backlog? - Management noted that bookings typically tail off in December, but billings continued strongly, with positive book-to-bill ratios [24][25] - There is an increasing trend of customers placing orders within lead times, indicating improved visibility [26] Question: What are the pricing pressures in specific end markets? - Management indicated that pricing pressures are emerging in memory, storage, and certain capacitors, driven by increased demand from data centers [32][33] Question: How does the guidance for the March quarter compare to previous years? - Management expects typical seasonality with growth in the West, while Asia may see a less significant decline due to Lunar New Year [35][36] Question: Will core business margins grow year-over-year for the remaining quarters? - Management anticipates continued momentum in operating margins, especially as the West recovers [44][45] Question: How do supplier price increases impact revenues and margins? - Price increases affect average selling prices, with contracted customers absorbing costs, while spot buys can lead to higher margins [47][48] Question: Can Farnell margins accelerate with the recovery in Europe? - Management expects incremental improvements in Farnell margins, potentially exceeding 50-100 basis points as revenues increase [50][51]

For the quarter ended December 2025, Avnet (AVT) reported revenue of $6.32 billion, up 11.6% over the same period last year. EPS came in at $1.05, compared to $0.87 in the year-ago quarter.The reported revenue represents a surprise of +5.28% over the Zacks Consensus Estimate of $6 billion. With the consensus EPS estimate being $0.95, the EPS surprise was +10.53%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next m ...

Avnet Second Quarter Fiscal Year 2026 Financial Results January 28, 2026 Safe Harbor Statement Regional demand • Growth in Asia, the Americas and EMEA Y/Y End market demand This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the financial condition, results of operations, and business of the Company. You can find many of these statements by looking fo ...

Avnet (AVT) came out with quarterly earnings of $1.05 per share, beating the Zacks Consensus Estimate of $0.95 per share. This compares to earnings of $0.87 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +10.53%. A quarter ago, it was expected that this distributor of electronic components would post earnings of $0.81 per share when it actually produced earnings of $0.84, delivering a surprise of +3.7%.Over the last four quar ...

Financial Performance - Achieved sales of $6.3 billion, representing an 11.6% year-over-year growth and a 7.1% quarter-over-quarter growth[4] - Diluted EPS of $0.75, down 24.2% year-over-year, while adjusted diluted EPS increased by 20.7% to $1.05[4] - Operating income margin of 2.3%, with adjusted operating income margin at 2.7%[4] - Net income for the six months ended December 27, 2025, was $113,478 thousand, a decrease of 22.4% compared to $146,209 thousand for the same period in 2024[18] - GAAP diluted earnings per share for the six months ended December 27, 2025, was $1.36, up from $0.75 in the same period last year, representing an increase of 81.3%[26] - GAAP net income for the quarter was $240,217, up from $6,089 in the previous quarter[27] - Adjusted net income for the quarter was $300,283, compared to $69,023 in the previous quarter[27] Cash Flow and Assets - Generated $208 million in cash flow from operations and returned $28 million to shareholders in dividends[3] - Cash and cash equivalents rose to $286,547 thousand at the end of the period, compared to $192,428 thousand at the beginning, reflecting an increase of 48.9%[18] - Cash flows provided by operating activities totaled $63,658 thousand, a significant decrease of 85.7% from $444,152 thousand in the prior year[18] - Long-term debt decreased to $2,474,100 thousand from $2,574,729 thousand, reflecting a reduction of 3.9%[16] - The company issued convertible notes totaling $633,750 thousand during the period, contributing to financing activities[18] Inventory and Liabilities - Reduced inventories by $126 million, resulting in a decrease of days of inventory to 86 days, with EC business days of inventory below 80 days[3] - Total current liabilities increased to $5,333,960 thousand, up from $4,128,104 thousand, marking a rise of 29.2%[16] Sales Growth by Region - Asia recorded sales of $3.2 billion, marking a 16.9% year-over-year increase, and the sixth consecutive quarter of growth in this region[4] - Farnell sales increased by 23.6% year-over-year to $427.1 million, with an operating margin improvement to 4.7%[4] - Americas and EMEA regions also showed sales growth, with EMEA sales up 8.3% year-over-year[4] - Sales for the Electronic Components segment reached $5,891.8 million, up from $5,317.8 million year-over-year[30] - Sales in the Asia region increased by 16.9% year-over-year, with a constant currency change of 17.0%[29] - Farnell segment sales grew by 23.6% year-over-year, with a gross profit margin of 26.8%[30] Future Guidance - Guidance for Q3 2026 sales is projected between $6.20 billion and $6.50 billion, with an adjusted diluted EPS range of $1.20 to $1.30[5] - The company expects above-trend seasonal growth and improving margins in the third quarter[2] - Adjusted diluted earnings per share guidance for Q3 fiscal 2026 is set between $1.20 and $1.30, with GAAP diluted earnings per share guidance ranging from $0.95 to $1.15[32] Operating Income - Adjusted operating income for the fiscal year to date December 27, 2025, was $322,418 thousand, compared to $171,731 thousand for the same period in 2024, indicating an increase of 88%[26] - GAAP operating income for the quarter ended June 28, 2025, was $514,254, compared to $73,452 in the previous quarter[27] - Adjusted operating income for the same quarter was $624,033, reflecting a significant increase from $142,877 in the previous quarter[27] Profit Margins - The gross profit margin for the Electronic Components segment was 9.3%, slightly down from 9.6% in the previous year[30]