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]

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, reflecting a year of focused management and strategic investments [3][6] - In Q4, sales reached approximately $5.6 billion, exceeding guidance, with a 6% sequential increase and slight year-over-year growth [16][20] - Adjusted operating margin for Q4 was 2.5%, with electronic components operating margin at 3% [20][21] - The gross margin for Q4 was 10.6%, down 99 basis points year-over-year, primarily due to a higher mix of sales from Asia [17][18] Business Line Data and Key Metrics Changes - Electronic components sales improved by 1% year-over-year and 6% sequentially, while Farnell sales increased by 3% year-over-year and 5% sequentially [16][17] - Farnell's operating income was $17 million with an operating margin of 4.3%, reflecting improvements in sales and cost structure [21] Market Data and Key Metrics Changes - Sales in Asia increased by 18% year-over-year, while EMEA sales declined by 17% and The Americas by 2% [16][17] - The book-to-bill ratio improved across all regions, with Europe and Asia both above parity [8][10] Company Strategy and Development Direction - The company is focused on optimizing working capital, generating healthy cash flows, and returning cash to shareholders through buybacks and dividends [6][14] - Investments in digital infrastructure and engineering capabilities are prioritized to enhance customer experience and data insights [14][15] - The company aims to stabilize and grow Farnell's margins while continuing to improve operational efficiency [21][59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in EMEA, noting a modest increase in bookings and backlog [35][36] - The company anticipates continued growth in Asia, which has historically led market recoveries [14][48] - There is cautious optimism regarding inventory levels, with expectations of modest declines while maintaining necessary inventory for customer service [40][61] Other Important Information - The company reduced debt by $237 million during the fiscal year and returned $415 million to shareholders through share repurchases and dividends [25][26] - The company expects capital expenditures to normalize at 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 [35][36] Question: Inventory trends and management - The company expects a modest decline in inventory next quarter while continuing to manage inventory levels effectively [39][40] Question: Future performance in Asia - Management is confident in continued strong performance in Asia, which has shown consistent year-over-year growth [48][49] 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 [59][75] Question: Interest expense and inventory investment outlook - Management indicated that interest expenses are expected to remain stable, with inventory levels anticipated to decrease modestly [80]

Financial Performance - Avnet's Q4 FY25 revenue reached $5.62 billion, a 1% year-over-year increase[13] - The adjusted diluted EPS for Q4 FY25 was $0.81, a 34% decrease year-over-year[20] - Adjusted operating income for Avnet in Q4 FY25 was $143 million, a 26% decrease year-over-year, with an adjusted operating margin of 2.5%, down 94 bps[18] - Gross margin was 10.6% in Q4, influenced by a sales mix shift towards Asia[14] - SG&A expenses were $451 million, remaining relatively flat year-over-year but increasing 4% quarter-over-quarter due to foreign exchange impacts[14] Regional Performance - Asia experienced year-over-year growth, offsetting declines in EMEA and the Americas[8] - Asia's revenue was $2.691 billion, an 18% increase as reported and a 17% increase in constant currency[13] - Americas revenue was $1.327 billion, a 2% decrease as reported and in constant currency[13] - EMEA revenue was $1.600 billion, a 17% decrease as reported and a 21% decrease in constant currency[13] Balance Sheet and Liquidity - Inventory was $5.2 billion, a $35 million decrease quarter-over-quarter as reported, and a $185 million decrease excluding foreign exchange impacts[22] - The company returned $28 million to shareholders through a dividend of $0.33 per share[22] Outlook for Q1 FY26 - Avnet projects sales between $5.55 billion and $5.85 billion, with a midpoint of $5.70 billion, implying a 2% sequential sales growth[23, 24] - The company anticipates adjusted diluted EPS between $0.75 and $0.85, with a midpoint of $0.80[23]