Core Viewpoint - The European Medicines Agency (EMA) has accepted a Marketing Authorization Application for AVT23, a proposed biosimilar to Xolair® (omalizumab), which is a significant step towards increasing access to affordable biologic medicines in Europe [1][2][3]. Company Overview - Advanz Pharma is a UK-based global pharmaceutical company focused on specialty, hospital, and rare disease medicines, with a commercial presence in over 90 countries and a direct presence in more than 20 countries [9]. - Alvotech is a global biotech company specializing in the development and manufacture of biosimilar medicines, aiming to be a leader in the biosimilar space with a pipeline that includes nine disclosed biosimilar candidates targeting various therapeutic areas [7]. Product Information - AVT23 is an investigational biosimilar to Xolair® (omalizumab), which is used for severe persistent allergic asthma, chronic spontaneous urticaria, and chronic rhinosinusitis with nasal polyps [5][4]. - The UK Medicines and Healthcare Products Regulatory Agency (MHRA) has also accepted a Marketing Authorization Application for AVT23 earlier this year, indicating progress in regulatory approvals [3]. Strategic Partnerships - Alvotech developed AVT23 in collaboration with Kashiv BioSciences LLC, and Advanz Pharma has licensed commercial rights for AVT23 in multiple regions including the European Economic Area, UK, Switzerland, Canada, Australia, and New Zealand [3][7]. - The partnership between Advanz Pharma and Alvotech is aimed at enhancing access to biologic medicines for patients, with both companies expressing commitment to this goal [2].

Core Insights - Avnet, Inc. (NASDAQ: AVT) reported stable, cash-generative results for FY2025, with revenue slightly dipping but Q4 sales showing a year-over-year increase, and earnings exceeding guidance [1] - Despite the positive earnings, the company's gross margin experienced a decline, indicating ongoing challenges with profitability [1] Financial Performance - FY2025 revenue decreased slightly, while Q4 sales were marginally higher compared to the previous year [1] - Earnings for the quarter surpassed the company's guidance, reflecting a positive outlook on financial performance [1] - The gross margin, however, slipped, highlighting potential concerns regarding cost management and pricing power [1]

Core Viewpoint - Alvotech has received a positive opinion from the European Medicines Agency's Committee for Medicinal Products for Human Use recommending approval for its biosimilar AVT03, which is a proposed alternative to Prolia® and Xgeva® [1][4] Company Overview - Alvotech is a global biotech company focused on developing and manufacturing biosimilar medicines, aiming to provide affordable biologic treatments to patients worldwide [7] - The company has already approved and marketed two biosimilars, with a pipeline that includes nine additional candidates targeting various diseases [7] Product Details - AVT03 is a human monoclonal antibody biosimilar candidate to Prolia® (denosumab 60 mg/mL) and Xgeva® (denosumab 70 mg/mL) [5] - Prolia® is indicated for treating osteoporosis and bone loss in specific patient populations, while Xgeva® is used to prevent bone complications in advanced cancer patients [3] Commercial Partnerships - Upon approval, AVT03 will be marketed by Alvotech's partners, STADA and Dr. Reddy's, each holding semi-exclusive commercial rights in Europe, including Switzerland and the UK [1][4] - STADA will market the biosimilar under the names Kefdensis® and Zvogra®, while Dr. Reddy's will use the names Acvybra® and Xbonzy® [4] Regulatory Status - AVT03 is currently under review by the EMA, with a final decision pending from the European Commission [4]

Core Viewpoint - Avnet Inc's shares have surpassed the average analyst 12-month target price of $48.50, currently trading at $48.61, prompting analysts to consider either downgrading their valuation or raising their target price based on the company's fundamental developments [1][3]. Analyst Target Summary - There are six different analyst targets contributing to the average for Avnet Inc, with the lowest target at $37.00 and the highest at $57.00, resulting in a standard deviation of $7.204 [2]. - The average target price reflects a collective assessment rather than a single expert's opinion, indicating a potential for further evaluation by investors regarding the stock's future trajectory [3]. Analyst Ratings Breakdown - The current analyst ratings for Avnet Inc are as follows: 1 Strong Buy, 0 Buy, 3 Hold, 0 Sell, and 2 Strong Sell, maintaining an average rating of 3.33, which indicates a Hold position [4].

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Avnet, Inc. is a global electronic component technology distributor and solutions provider operating for over a century, structured into two primary operating groups - Avnet, Inc. is a leading global electronic component technology distributor and solutions provider, serving customers in over 140 countries since 1921[17](index=17&type=chunk) - The company operates through two primary groups: Electronic Components (EC) for high/medium-volume customers and Farnell for lower-volume customers, both with global operations[19](index=19&type=chunk)[21](index=21&type=chunk)[29](index=29&type=chunk) Fiscal Year 2025 Net Sales by Operating Group | Operating Group | Net Sales (Approx.) | Primary Products | | :-------------- | :------------------ | :--------------- | | EC | **82%** Semiconductors, **16%** IP&E, **2%** Computers | Semiconductors, IP&E, integrated/embedded components | | Farnell | **14%** Semiconductors, **47%** IP&E, **11%** Single-board computers, **28%** Other | Kits, tools, electronic components, industrial automation, test & measurement | Major Product Categories Sales (Millions USD) | Product Category | 2025 | 2024 | 2023 | | :--------------- | :---------- | :---------- | :---------- | | Semiconductors | **$17,207.9** | $19,030.3 | $21,366.5 | | IP&E | **$3,976.9** | $3,745.9 | $4,150.6 | | Computers | **$528.9** | $382.8 | $520.8 | | Other | **$487.1** | $598.1 | $499.0 | | **Total Sales** | **$22,200.8** | **$23,757.1** | **$26,536.9** | - As of June 28, 2025, Avnet had approximately **14,869 employees** globally across 48 countries, with **4,052** in the Americas, **6,185** in EMEA, and **4,632** in Asia[42](index=42&type=chunk) - The Board of Directors as of June 28, 2025, was **40% women** and **50% racially and ethnically diverse**, reflecting the company's commitment to inclusion[49](index=49&type=chunk) [Item 1A. Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) Avnet faces operational, financial, legal, and general risks from changing demands, supply chain disruptions, competition, and international operations - Changes in customer product demands and consumption models, including those driven by new technologies like AI, could negatively impact billings and financial results[60](index=60&type=chunk) - The semiconductor industry's cyclical fluctuations, geopolitical uncertainties, and supply chain challenges significantly affect Avnet's sales, with semiconductors representing **78% of consolidated sales** in fiscal 2025[61](index=61&type=chunk) - International operations, which accounted for approximately **77% of sales** in fiscal 2025, are subject to risks such as tariffs, trade restrictions, foreign currency fluctuations, and non-compliance with various international laws[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk)[72](index=72&type=chunk) - Cybersecurity threats, including phishing and ransomware, are increasing in frequency and sophistication, posing risks of significant liability, reputational harm, and operational disruption, despite implemented security measures[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Financial risks include potential inventory value declines due to technological change and market oversupply, and accounts receivable defaults, which are a significant portion of working capital[79](index=79&type=chunk)[80](index=80&type=chunk) [Item 1B. Unresolved Staff Comments](index=31&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This item is not applicable to the company [Item 1C. Cybersecurity](index=31&type=section&id=Item%201C.%20Cybersecurity) Avnet maintains a comprehensive cybersecurity program, overseen by its GC&C team, aligning with NIST and ISO27001 frameworks - Avnet's Global Cybersecurity & Compliance (GC&C) team manages a comprehensive cybersecurity program based on NIST Cyber Security Framework (CSF) and aligning with NIST 800-171 and ISO27001[107](index=107&type=chunk) - The GC&C team provides quarterly updates and oversight to the Technology and Risk Committee on the cybersecurity program, incidents, and threat landscape[109](index=109&type=chunk) - The company conducts regular penetration tests, maturity assessments, self-assessments, and internal audits of its cybersecurity systems; employee training includes annual tabletop exercises, policy distribution, and monthly phishing simulations[113](index=113&type=chunk)[119](index=119&type=chunk) [Item 2. Properties](index=35&type=section&id=Item%202.%20Properties) Avnet's corporate headquarters are in Phoenix, Arizona, with global facilities totaling 5.8 million square feet for operations - Avnet owns approximately **2.1 million square feet** and leases **3.7 million square feet** of space globally, totaling **5.8 million square feet**, with **26%** located in the United States[115](index=115&type=chunk) Approximate Square Footage of Facilities by Region (Millions) | Region | Square Footage (Millions) | | :------- | :------------------------ | | Americas | **2.0** | | EMEA | **2.7** | | Asia | **1.1** | | **Total** | **5.8** | [Item 3. Legal Proceedings](index=35&type=section&id=Item%203.%20Legal%20Proceedings) Avnet is involved in various legal proceedings, with management believing current accruals are appropriate and outcomes will not materially affect financial position - Avnet regularly assesses legal proceedings, including environmental and compliance matters, and believes current accruals are appropriate[116](index=116&type=chunk) - Management believes the resolution of current legal matters will not materially adversely affect the company's financial position or liquidity, but could be material to results of operations in a single reporting period[117](index=117&type=chunk) [Item 4. Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Avnet's common stock is listed on Nasdaq, with the Board determining dividends and an active share repurchase program in place - Avnet's common stock is listed on the Nasdaq Global Select Market under the symbol **AVT**[121](index=121&type=chunk) - As of August 7, 2025, there were **1,245 registered holders** of record for Avnet's common stock[123](index=123&type=chunk) Common Stock Performance and Cumulative Total Returns (June 27, 2020 = $100) | Date | Avnet, Inc. | Nasdaq Composite | Peer Group | | :---------- | :---------- | :--------------- | :--------- | | 6/27/2020 | **$100** | **$100** | **$100** | | 7/3/2021 | **$157.60** | $151.15 | $199.41 | | 7/2/2022 | **$170.52** | $115.69 | $177.17 | | 7/1/2023 | **$209.03** | $144.64 | $218.32 | | 6/29/2024 | **$218.81** | $187.46 | $253.53 | | 6/28/2025 | **$229.61** | $215.81 | $256.14 | - The Board of Directors approved a share repurchase plan of up to **$600 million**, with **$364.1 million** remaining under authorization as of June 28, 2025[129](index=129&type=chunk)[130](index=130&type=chunk)[182](index=182&type=chunk) Issuer Purchases of Equity Securities (Q4 Fiscal 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Approximate Dollar Value Remaining | | :------------------ | :--------------------- | :--------------------------- | :------------------------------- | | March 30 – April 26 | **1,059,729** | **$45.98** | **$365,394,000** | | April 27 – May 24 | — | — | **$365,394,000** | | May 25 – June 28 | **25,686** | **$49.59** | **$364,120,000** | [Item 6. [Reserved]](index=39&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Avnet's fiscal year 2025 saw declining sales and profitability due to market downturns, offset by restructuring and liquidity management - The global electronic components market experienced a downturn in the second half of calendar year 2023, leading to decreased sales for Avnet due to elevated customer inventory levels and lower underlying demand[138](index=138&type=chunk) Key Financial Results (Fiscal 2025 vs. 2024) | Metric | FY2025 | FY2024 | Variance ($) | Variance (%) | | :-------------------------- | :------------ | :------------ | :----------- | :----------- | | Sales | **$22,201M** | $23,757M | **$(1,556)M** | **(6.6)%** | | Gross profit | **$2,385M** | $2,766M | **$(381)M** | **(13.8)%** | | Operating income | **$514M** | $844M | **$(330)M** | **(39.1)%** | | Adjusted operating income | **$624M** | $900M | **$(276)M** | **(30.7)%** | | Net income | **$240M** | $499M | **$(258)M** | **(51.8)%** | | Diluted earnings per share | **$2.75** | $5.43 | **$(2.68)** | **(49.4)%** | | Gross profit margin | **10.7%** | 11.6% | **(90) bps** | **(0.9)%** | | Operating income margin | **2.3%** | 3.6% | **(123) bps** | **(1.2)%** | | Adjusted operating income margin | **2.8%** | 3.8% | **(98) bps** | **(1.0)%** | | Effective tax rate | **4.1%** | 21.1% | **(1,699) bps** | **(17.0)%** | Sales Change Rates by Operating Group and Geographic Region (FY2025 vs. FY2024) | Category | FY2025 Sales ($M) | FY2024 Sales ($M) | Year-Year % Change | Year-Year % Change (Constant Currency) | | :------------------- | :---------------- | :---------------- | :----------------- | :------------------------------------- | | **Operating Group:** | | | | | | EC | **$20,755.0** | $22,160.0 | **(6.3)%** | (6.4)% | | Farnell | **$1,445.8** | $1,597.1 | **(9.5)%** | (9.9)% | | **Total Avnet** | **$22,200.8** | **$23,757.1** | **(6.6)%** | **(6.7)%** | | **Geographic Region:** | | | | | | Americas | **$5,300.0** | $5,919.2 | **(10.5)%** | (10.5)% | | EMEA | **$6,409.6** | $8,395.0 | **(23.7)%** | (24.1)% | | Asia | **$10,491.2** | $9,442.9 | **11.1%** | 11.1% | | **Total Avnet** | **$22,200.8** | **$23,757.1** | | | - Net cash provided by operating activities increased by **$34.5 million** to **$724.5 million** in fiscal 2025, primarily due to improvements in working capital management and inventory reduction, despite lower net income[164](index=164&type=chunk) - The company repaid **$274.9 million** in net debt during fiscal 2025, paid **$113.3 million** in dividends (**$1.32 per share**), and repurchased **$303.5 million** of common stock[165](index=165&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Avnet manages interest rate and foreign currency risks using financial arrangements and derivative instruments to mitigate volatility - Avnet uses financial arrangements and economic hedges, including derivative financial instruments, to reduce earnings and cash flow volatility from interest rate and foreign currency exchange rate changes[198](index=198&type=chunk)[201](index=201&type=chunk) Scheduled Maturities of Debt Outstanding (June 28, 2025, in Millions USD) | Fiscal Year | Fixed Rate Debt | Floating Rate Debt | | :---------- | :-------------- | :----------------- | | 2026 | **$552.9** | **$84.3** | | 2027 | $— | **$500.0** | | 2028 | **$500.0** | $— | | 2029 | $— | $— | | 2030 | $— | **$411.6** | | Thereafter | **$622.0** | $— | | **Total** | **$1,674.9** | **$995.9** | - A hypothetical **10% change** in foreign currency exchange rates would result in an approximate **$25.0 million** increase or decrease to the fair value of forward foreign currency exchange contracts, generally offset by the underlying hedged exposure[203](index=203&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=61&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Avnet's audited consolidated financial statements for fiscal years 2025, 2024, and 2023, with an unqualified auditor opinion - KPMG LLP provided an unqualified opinion on Avnet's consolidated financial statements and the effectiveness of its internal control over financial reporting as of June 28, 2025[207](index=207&type=chunk)[208](index=208&type=chunk) - A critical audit matter identified was the evaluation of accounting for income taxes, requiring complex auditor judgment due to the application of current tax regulations in various foreign jurisdictions[217](index=217&type=chunk)[218](index=218&type=chunk) Consolidated Balance Sheet Highlights (Thousands USD) | Item | June 28, 2025 | June 29, 2024 | | :------------------------ | :------------ | :------------ | | Total current assets | **$10,018,737** | $10,370,552 | | Total assets | **$12,118,553** | $12,209,147 | | Total current liabilities | **$4,128,104** | $4,465,269 | | Total liabilities | **$7,107,058** | $7,283,643 | | Total shareholders' equity | **$5,011,495** | $4,925,504 | Consolidated Statements of Cash Flows Highlights (Thousands USD) | Cash Flow Activity | FY2025 | FY2024 | FY2023 | | :------------------------ | :------------ | :------------ | :------------ | | Operating activities | **$724,504** | $689,984 | $(713,703) | | Financing activities | **$(693,526)** | $(433,799) | $1,054,756 | | Investing activities | **$(137,127)** | $(225,484) | $(211,551) | | Cash & cash equivalents at end of period | **$192,428** | $310,941 | $288,230 | - Avnet recorded a net loss contingency of **$43.4 million** in fiscal 2025 related to an ongoing consumption tax audit in Mexico, representing the company's best estimate of potential losses[331](index=331&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=106&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There were no changes in or disagreements with accountants on accounting and financial disclosure [Item 9A. Controls and Procedures](index=106&type=section&id=Item%209A.%20Controls%20and%20Procedures) Avnet's management concluded that disclosure controls and internal control over financial reporting were effective as of June 28, 2025 - Avnet's disclosure controls and procedures were deemed effective as of June 28, 2025[346](index=346&type=chunk) - Management concluded that the company maintained effective internal control over financial reporting as of June 28, 2025, based on the 2013 COSO framework, with KPMG LLP concurring[347](index=347&type=chunk)[348](index=348&type=chunk) - No material changes to internal control over financial reporting occurred during the fourth quarter of fiscal 2025[349](index=349&type=chunk) [Item 9B. Other Information](index=106&type=section&id=Item%209B.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the fourth quarter of fiscal 2025 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the fourth quarter of fiscal 2025[350](index=350&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=106&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) There are no disclosures regarding foreign jurisdictions that prevent inspections PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=108&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the definitive proxy statement - Information on directors, executive officers, and corporate governance is incorporated by reference from the definitive proxy statement for the Annual Meeting of Shareholders on November 21, 2025[353](index=353&type=chunk)[354](index=354&type=chunk) [Item 11. Executive Compensation](index=108&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the definitive proxy statement - Information on executive compensation is incorporated by reference from the definitive proxy statement for the Annual Meeting of Stockholders on November 21, 2025[355](index=355&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=108&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and related stockholder matters is incorporated by reference from the definitive proxy statement - Information on security ownership and related stockholder matters is incorporated by reference from the definitive proxy statement for the Annual Meeting of Stockholders on November 21, 2025[356](index=356&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=108&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the definitive proxy statement - Information on certain relationships, related transactions, and director independence is incorporated by reference from the definitive proxy statement for the Annual Meeting of Shareholders on November 21, 2025[357](index=357&type=chunk) [Item 14. Principal Accounting Fees and Services](index=108&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the definitive proxy statement - Information on principal accounting fees and services is incorporated by reference from the definitive proxy statement for the Annual Meeting of Stockholders on November 21, 2025[358](index=358&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=108&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits and financial statement schedules filed as part of the 10-K report - The section lists exhibits including the Restated Certificate of Incorporation, By-laws, descriptions of securities, indentures for notes, executive compensation plans, and bank agreements[363](index=363&type=chunk)[364](index=364&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk)[371](index=371&type=chunk)[372](index=372&type=chunk)[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk)[378](index=378&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk)[381](index=381&type=chunk) - Key bank agreements include the Securitization Program, which was amended and extended in December 2024, and the **$1.50 billion** revolving Credit Facility, amended and extended in January 2025[291](index=291&type=chunk)[293](index=293&type=chunk)[381](index=381&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included[381](index=381&type=chunk)[382](index=382&type=chunk) [Item 16. Form 10-K Summary](index=116&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company [Signature Page](index=118&type=section&id=Signature%20Page) The report is signed by the Chief Executive Officer and members of the Board of Directors, authorizing the filing of the Annual Report on Form 10-K - The report is signed by Philip R. Gallagher, Chief Executive Officer, and other directors, authorizing the filing of the Annual Report on Form 10-K[391](index=391&type=chunk)[393](index=393&type=chunk)

Summary of Avnet (AVT) Conference Call - August 12, 2025 Industry Overview - The semiconductor industry is showing signs of recovery, particularly starting in Asia, which typically leads cycles [1][2][3] - Avnet's Asia business grew approximately 12% in fiscal year 2025, marking four consecutive quarters of growth [2][3] - The company experienced a prolonged downturn prior to this growth, with six straight quarters of year-on-year declines in Asia [3] Company Performance - Asia now constitutes roughly 50% of Avnet's business, up from about 40% five quarters ago [6] - The company is seeing improvements in bookings, with a book-to-bill ratio above parity in Europe and Asia, and at parity in The Americas [3][4] - There is a notable increase in orders within lead times, indicating depleted inventories among customers [4][5] Demand Trends - Growth has been observed in the compute, communications, and transportation sectors, while industrial markets remain weak [15][16] - The company is optimistic about sequential growth in Europe and The Americas, despite modest expectations [5][6] Inventory Management - Avnet is currently managing approximately 94 days of inventory, with a goal to reduce this to the 80s [41][42] - The company aims to optimize inventory composition and reduce excess stock to align with customer demand [39][40] Pricing and Margins - Pricing has remained stable, with no significant downward pressure on average selling prices (ASPs) [43][44] - Gross margins are holding up well across regions, with some fluctuations [45] Tariff Impact - Tariffs have not significantly impacted financial results but have posed operational challenges [67][68] - The company has seen demand pull-ins in Asia due to uncertainty in the trade environment, amounting to $50 million to $100 million per quarter [68][69] Farnell Business Segment - Farnell, Avnet's high-service business, represents less than 10% of total revenues but contributes about 20% of operating profits [87] - The segment has potential for outsized growth due to its premium margins and operational improvements [84][88] - Farnell's gross margins were previously over 30%, and the company aims to restore these levels through operational efficiencies [84] Strategic Focus - Avnet is focused on dual sourcing and optimizing its regional footprint to mitigate tariff impacts [73][74] - The company is also enhancing its e-commerce capabilities to improve conversion rates and leverage synergies with its customer base [81][82] Conclusion - Overall, Avnet is positioned to capitalize on the recovery in the semiconductor industry, with a strong focus on inventory management, pricing stability, and operational efficiency in its high-service segment, Farnell. The company remains optimistic about future growth driven by demand across various sectors and regions.

Core Insights - The performance of Avnet's international operations is crucial for understanding its financial strength and growth potential [1][2] - The company's total revenue for the quarter ending June 2025 was $5.62 billion, reflecting a 1% year-over-year increase [4] International Revenue Breakdown - Asia contributed $2.69 billion, or 47.9% of total revenue, showing a significant increase of 17.62% compared to analyst expectations of $2.29 billion [5] - EMEA generated $1.6 billion, accounting for 28.5% of total revenue, which was a decrease of 5.74% from the projected $1.7 billion [6] Future Revenue Projections - Analysts expect Avnet's total revenue for the current fiscal quarter to be $5.7 billion, indicating a 1.7% increase from the prior year [7] - For the entire year, total revenue is forecasted at $22.87 billion, a 3% improvement from the previous year, with Asia expected to contribute 45.1% and EMEA 29.7% [8] Market Observations - The reliance on international markets presents both opportunities and challenges for Avnet, making it essential to track international revenue trends for future projections [9] - Analysts are closely monitoring these patterns due to the complexities of global interdependence and geopolitical issues [10]

Group 1 - Avnet, Inc. (AVT) has been added to the Zacks Rank 5 (Strong Sell) List due to a 7.5% downward revision in the consensus estimate for its current year earnings over the last 60 days [1] - Banco do Brasil S.A. (BDORY) is also on the Zacks Rank 5 (Strong Sell) List, with a 16.9% downward revision in the consensus estimate for its current year earnings over the last 60 days [1] - Dine Brands Global, Inc. (DIN) has seen a 5.3% downward revision in the consensus estimate for its current year earnings over the last 60 days, leading to its inclusion in the Zacks Rank 5 List [2]

Core Insights - Avnet, Inc. (AVT) reported fourth-quarter earnings of 81 cents per share, exceeding the Zacks Consensus Estimate by 12.5%, but reflecting a year-over-year decline of 33.6% [1][10] - Net sales reached $5.6 billion, surpassing the Zacks Consensus Estimate by 4.7%, but remained flat year-over-year due to regional performance variations [2][10] - Despite better-than-expected results, Avnet's shares fell 4.7% following guidance for the first quarter of fiscal 2026, which was below consensus estimates [3][10] Financial Performance - The Electronic Components segment generated revenues of $5.23 billion, up 1% year-over-year and 5.7% sequentially, exceeding estimates of $4.97 billion [4] - Farnell sales increased by 3% year-over-year to $387 million, also above the estimate of $368.2 million [4] - Regional sales showed an 18% increase in Asia to $2.69 billion, while EMEA and Americas saw declines of 17% to $1.6 billion and 2% to $1.33 billion, respectively [5] Operating Metrics - Adjusted operating income was $143 million, down 26% year-over-year, with the Electronic Components segment's income declining 25% to $157 million [5][6] - The adjusted operating margin decreased by 94 basis points to 2.5%, with the Electronic Components margin contracting 105 basis points to 3% [6] Balance Sheet & Cash Flow - As of June 28, 2025, Avnet had cash and cash equivalents of $192.4 million, up from $188.9 million at the end of the previous quarter [7] - Long-term debt decreased to $2.57 billion from $2.49 billion [7] - The company generated $139 million in cash from operating activities during the fourth quarter and $725 million for the full fiscal year [7] Shareholder Returns - In the fourth quarter, Avnet repurchased approximately $50 million in shares and paid $28 million in dividends [8] - For the full fiscal year, share repurchases totaled $301 million, with dividends amounting to $113 million [8] Q1 Guidance - For the first quarter of fiscal 2026, Avnet expects revenues between $5.55 billion and $5.85 billion, with a midpoint of $5.70 billion, indicating a year-over-year decline of 0.3% [9] - Non-GAAP earnings are anticipated in the range of 75-85 cents per share, below the consensus estimate of 98 cents, which suggests a year-over-year increase of 6.5% [9]

Financial Data and Key Metrics Changes - For fiscal year 2025, the company reported revenues of $22.2 billion and adjusted diluted earnings per share of $3.44 [5][15] - In the fourth quarter, sales reached $5.6 billion, exceeding guidance, with a 6% sequential increase and slight year-over-year growth [15][19] - Adjusted diluted earnings per share for the fourth quarter were $0.81, surpassing the high end of guidance [23] Business Line Data and Key Metrics Changes - Electronic components sales improved by 1% year-over-year and 6% sequentially [16] - Farnell sales increased by 3% year-over-year and 5% sequentially, with an operating margin of 4.3% [20][12] - The operating margin for electronic components was 3%, reflecting a year-over-year decline due to a sales mix shift to Asia and a sales decline in EMEA [19][20] Market Data and Key Metrics Changes - Asia saw an 18% year-over-year sales increase, while EMEA sales declined by 17% and The Americas by 2% [15][16] - The book-to-bill ratio improved across all regions, with Europe and Asia both above parity [7][14] - Demand increased in the compute, transportation, and communication end markets globally [6][10] Company Strategy and Development Direction - The company is focused on managing costs while investing in long-term strategies, optimizing working capital, and generating healthy cash flows [5][12] - There is an emphasis on digital infrastructure investments to enhance customer experience and data insights [13] - The company aims to achieve steady improvement in Farnell's operating margins and stabilize its cost structure [20][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about bookings in EMEA, indicating a modest recovery in the region [34] - The company is cautiously optimistic about continued growth in Asia, which has historically led market recoveries [47][48] - There are positive signs of inventory normalization and improved backlog, contributing to a favorable outlook [61][63] Other Important Information - The company returned $415 million to shareholders through share repurchases and dividends during the fiscal year [25][26] - The company reduced its debt by $237 million, ending the quarter with a gross leverage of 3.4 times [25][24] - The company expects capital expenditures to return to normal levels of approximately $25 million to $35 million per quarter in fiscal year 2026 [25] Q&A Session Summary Question: Changes in EMEA market conditions - Management noted increased optimism in EMEA, with modest improvements in bookings and backlog [34][36] Question: Inventory trends and management - The company expects a modest decline in inventory next quarter, driven by the electronic components business [37][39] Question: Future performance in Asia - Management is confident in continued strong performance in Asia, which has been growing and maintaining margins [46][48] Question: Improving margins at Farnell - The company is focused on continuous improvement in Farnell's margins, aiming for double-digit operating margins over the next few years [55][76] Question: Interest expense and inventory investment outlook - Management indicated that interest expense is expected to remain stable, with ongoing efforts to manage inventory levels effectively [84][86]