Avnet(AVT) - 2025 Q4 - Annual Results

Executive Summary Fourth Quarter and Fiscal Year 2025 Overview Avnet reported Q4 FY25 sales of $5.6 billion, diluted EPS of $0.07, and adjusted EPS of $0.81, with Farnell achieving year-over-year growth | Metric | Q4 FY25 | Q4 FY24 | | :----- | :------ | :------ | | Sales | $5.6 billion | $5.6 billion | | Diluted EPS | $0.07 | $0.91 | | Adjusted Diluted EPS | $0.81 | $1.22 | - Farnell returned to year-over-year sales and operating income margin growth[1] CEO Commentary CEO Phil Gallagher emphasized cost management and working capital optimization, boosting cash flow and expressing optimism for recovery - Managed costs effectively and made progress on working capital optimization to enhance operating cash flow[2] - Optimistic about recovery led by steady growth in Asia and Farnell's return to year-over-year growth[2] - Surpassed the high end of fourth-quarter sales and earnings guidance[2] Key Financial Highlights (Summary) Fiscal Fourth Quarter 2025 Highlights Avnet's Q4 FY25 sales were flat at $5.6 billion, diluted EPS fell to $0.07, and adjusted EPS to $0.81, with operating income margins declining despite $139 million in operating cash flow | Metric | Q4 FY25 | Q4 FY24 | Change Y/Y | | :-------------------------- | :------ | :------ | :--------- | | Sales | $5.6 billion | $5.6 billion | 0.0% | | Diluted EPS | $0.07 | $0.91 | (92.3%) | | Adjusted Diluted EPS | $0.81 | $1.22 | (33.6%) | | Operating Income Margin | 1.3% | 3.0% | (170 bps) | | Adjusted Operating Income Margin | 2.5% | 3.5% | (100 bps) | | Cash flow from operations | $139 million | N/A | N/A | | Share repurchases | $50 million | N/A | N/A | | Dividends | $28 million | N/A | N/A | - Asia achieved its fourth consecutive quarter of year-over-year sales growth[5] Fiscal Year 2025 Highlights For FY25, Avnet's sales decreased to $22.2 billion, diluted EPS to $2.75, and adjusted EPS to $3.44, with operating income margins declining despite $725 million in operating cash flow and inventory reduction | Metric | FY25 | FY24 | Change Y/Y | | :-------------------------- | :------ | :------ | :--------- | | Sales | $22.2 billion | $23.8 billion | (6.7%) | | Diluted EPS | $2.75 | $5.43 | (49.3%) | | Adjusted Diluted EPS | $3.44 | $5.34 | (35.6%) | | Operating Income Margin | 2.3% | 3.6% | (130 bps) | | Adjusted Operating Income Margin | 2.8% | N/A | N/A | | Cash flow from operations | $725 million | N/A | N/A | | Share repurchases | $301 million | N/A | N/A | | Dividends | $113 million | N/A | N/A | - Reduced inventories by $414 million in constant currency[8] Detailed Financial Performance Fourth Quarter 2025 Performance (GAAP & Non-GAAP) Avnet's Q4 FY25 GAAP sales increased 1.0% to $5,617.8 million, but operating income and diluted EPS significantly decreased, while adjusted metrics also declined, with Asia showing strong growth | Metric | Q4 FY25 (GAAP) | Q4 FY24 (GAAP) | Change Y/Y | Q4 FY25 (Non-GAAP) | Q4 FY24 (Non-GAAP) | Change Y/Y | | :-------------------------- | :------------- | :------------- | :--------- | :----------------- | :----------------- | :--------- | | Sales | $5,617.8M | $5,563.0M | 1.0% | N/A | N/A | N/A | | Operating Income | $73.5M | $164.2M | (55.3%) | $142.9M | $193.4M | (26.1%) | | Operating Income Margin | 1.3% | 3.0% | (164 bps) | 2.5% | 3.5% | (94 bps) | | Diluted EPS | $0.07 | $0.91 | (92.3%) | $0.81 | $1.22 | (33.6%) | | Segment/Region | Q4 FY25 Sales | Q4 FY24 Sales | Change Y/Y | Q4 FY25 Op. Inc. Margin | Q4 FY24 Op. Inc. Margin | Change Y/Y | | :--------------- | :------------ | :------------ | :--------- | :---------------------- | :---------------------- | :--------- | | Electronic Components | $5,231.3M | $5,187.8M | 0.8% | 3.0% | 4.1% | (105 bps) | | Farnell | $386.5M | $375.2M | 3.0% | 4.3% | 4.0% | 25 bps | | Americas Sales | $1,327.0M | $1,353.8M | (2.0%) | N/A | N/A | N/A | | EMEA Sales | $1,599.7M | $1,920.3M | (16.7%) | N/A | N/A | N/A | | Asia Sales | $2,691.1M | $2,288.9M | 17.6% | N/A | N/A | N/A | Fiscal Year 2025 Performance (GAAP & Non-GAAP) For FY25, Avnet's GAAP sales decreased to $22,200.8 million, operating income to $514.3 million, and net income to $240.2 million, with adjusted figures also showing declines | Metric | FY25 (GAAP) | FY24 (GAAP) | Change Y/Y | FY25 (Non-GAAP) | FY24 (Non-GAAP) | Change Y/Y | | :-------------------------- | :---------- | :---------- | :--------- | :-------------- | :-------------- | :--------- | | Sales | $22,200.8M | $23,757.1M | (6.6%) | N/A | N/A | N/A | | Operating Income | $514.3M | $844.4M | (39.1%) | $624.0M | $900.0M | (30.6%) | | Net Income | $240.2M | $498.7M | (51.8%) | $300.3M | $490.0M | (38.7%) | | Diluted EPS | $2.75 | $5.43 | (49.3%) | $3.44 | $5.34 | (35.6%) | Sales in Constant Currency Avnet's overall sales in constant currency decreased in Q4 FY25 and FY25, with Americas and EMEA declining, while Asia showed strong growth across both periods | Category | Q4 FY25 Sales Y/Y % Change | Q4 FY25 Sales Y/Y % Change in Constant Currency | FY25 Sales Y/Y % Change | FY25 Sales Y/Y % Change in Constant Currency | | :-------------------- | :------------------------- | :-------------------------------------------- | :---------------------- | :------------------------------------------- | | Avnet Total | 1.0% | (0.7%) | (6.6%) | (6.7%) | | Americas | (2.0%) | (2.0%) | (10.5%) | (10.5%) | | EMEA | (16.7%) | (20.6%) | (23.7%) | (24.1%) | | Asia | 17.6% | 16.8% | 11.1% | 11.1% | | Electronic Components | 0.8% | (0.8%) | (6.3%) | (6.4%) | | Farnell | 3.0% | 0.8% | (9.5%) | (9.9%) | Historical Segment and Geographical Financial Information Avnet provides detailed quarterly sales and operating income data by segment and geographic region for fiscal years 2025 and 2024, illustrating performance trends Fiscal Year 2025 Quarterly Sales and Operating Income (in millions) | Metric | Q4 FY25 | Q3 FY25 | Q2 FY25 | Q1 FY25 | | :-------------------- | :------ | :------ | :------ | :------ | | Sales: | | | | | | Electronic Components | $5,231.3 | $4,948.7 | $5,317.8 | $5,257.1 | | Farnell | $386.5 | $366.7 | $345.6 | $347.1 | | Operating Income: | | | | | | Electronic Components | $157.0 | $172.2 | $181.6 | $197.4 | | Farnell | $16.5 | $11.0 | $3.5 | $1.9 | Fiscal Year 2025 Quarterly Sales by Geographic Area (in millions) | Region | Q4 FY25 | Q3 FY25 | Q2 FY25 | Q1 FY25 | | :----- | :------ | :------ | :------ | :------ | | Americas | $1,327.0 | $1,274.2 | $1,368.8 | $1,329.9 | | EMEA | $1,599.7 | $1,559.0 | $1,582.8 | $1,668.2 | | Asia | $2,691.1 | $2,482.2 | $2,711.8 | $2,606.1 | Fiscal Year 2024 Quarterly Sales and Operating Income (in millions) | Metric | Q4 FY24 | Q3 FY24 | Q2 FY24 | Q1 FY24 | | :-------------------- | :------ | :------ | :------ | :------ | | Sales: | | | | | | Electronic Components | $5,187.8 | $5,245.8 | $5,812.1 | $5,914.4 | | Farnell | $375.2 | $407.8 | $392.8 | $421.2 | | Operating Income: | | | | | | Electronic Components | $210.1 | $216.9 | $247.9 | $272.8 | | Farnell | $15.1 | $16.3 | $15.7 | $17.7 | Fiscal Year 2024 Quarterly Sales by Geographic Area (in millions) | Region | Q4 FY24 | Q3 FY24 | Q2 FY24 | Q1 FY24 | | :----- | :------ | :------ | :------ | :------ | | Americas | $1,353.8 | $1,403.4 | $1,588.5 | $1,573.5 | | EMEA | $1,920.3 | $2,053.1 | $2,113.6 | $2,308.0 | | Asia | $2,288.9 | $2,197.1 | $2,502.8 | $2,454.1 | Consolidated Financial Statements (GAAP) Consolidated Statements of Operations The Consolidated Statements of Operations detail Avnet's GAAP financial performance for Q4 and full FY25 and FY24, including sales, gross profit, operating income, net income, and EPS | Metric (Thousands) | Q4 FY25 | Q4 FY24 | FY25 | FY24 | | :---------------------------------- | :-------- | :-------- | :--------- | :--------- | | Sales | $5,617,795 | $5,562,977 | $22,200,754 | $23,757,129 | | Gross profit | $593,684 | $642,880 | $2,384,956 | $2,766,442 | | Operating income | $73,452 | $164,189 | $514,254 | $844,367 | | Income before taxes | $7,404 | $101,324 | $250,569 | $632,263 | | Net income | $6,089 | $82,665 | $240,217 | $498,699 | | Diluted Earnings Per Share | $0.07 | $0.91 | $2.75 | $5.43 | | Cash dividends paid per common share | $0.33 | $0.31 | $1.32 | $1.24 | Condensed Consolidated Balance Sheets The Condensed Consolidated Balance Sheets present Avnet's financial position at June 28, 2025, and June 29, 2024, showing assets, liabilities, and shareholders' equity | Metric (Thousands) | June 28, 2025 | June 29, 2024 | | :---------------------------------- | :-------------- | :-------------- | | Cash and cash equivalents | $192,428 | $310,941 | | Inventories | $5,235,485 | $5,468,730 | | Total current assets | $10,018,737 | $10,370,552 | | Total assets | $12,118,553 | $12,209,147 | | Short-term debt | $87,284 | $492,711 | | Accounts payable | $3,487,419 | $3,345,510 | | Total current liabilities | $4,128,104 | $4,465,269 | | Long-term debt | $2,574,729 | $2,406,629 | | Total liabilities | $7,107,058 | $7,283,643 | | Shareholders' equity | $5,011,495 | $4,925,504 | Consolidated Statements of Cash Flows The Consolidated Statements of Cash Flows outline Avnet's cash generation and usage for FY25 and FY24, showing increased operating cash flow but higher financing cash usage | Metric (Thousands) | FY25 | FY24 | | :---------------------------------- | :--------- | :--------- | | Net income | $240,217 | $498,699 | | Net cash flows provided by operating activities | $724,504 | $689,984 | | Net cash flows used for financing activities | $(693,526) | $(433,799) | | Net cash flows used for investing activities | $(137,127) | $(225,484) | | Cash and cash equivalents at end of period | $192,428 | $310,941 | - Repurchases of common stock increased to $303.5 million in FY25 from $162.7 million in FY24[19] Non-GAAP Financial Information Explanation of Non-GAAP Measures Avnet uses non-GAAP measures like adjusted operating income, adjusted EPS, and constant currency sales to provide a clearer view of underlying business trends and performance - Non-GAAP measures are used to better assess and understand operating performance, especially when comparing periods or forecasting, by excluding items outside normal operating results or non-cash in nature[23] - Constant currency measures adjust for the impact of foreign currency exchange rate changes to evaluate current period performance against prior periods and understand underlying trends[22] - Adjustments to income tax expense and effective tax rate include effects of changes in tax laws, valuation allowances, unrecognized tax benefits, and audit settlements[24] Non-GAAP Reconciliations (Fiscal Year 2025 & Quarters) This section reconciles GAAP to non-GAAP financial measures for FY25 and its quarters, detailing adjustments that impact operating income, net income, and diluted EPS Fiscal Year 2025 Non-GAAP Reconciliations (in thousands, except per share amounts) | Metric | FY25 (GAAP) | Adjustments | FY25 (Adjusted) | | :-------------------------- | :---------- | :---------- | :-------------- | | Operating income | $514,254 | $109,779 | $624,033 | | Other expense, net | $(17,283) | $29,631 | $12,348 | | Income before income taxes | $250,569 | $139,410 | $389,979 | | Income tax expense | $10,352 | $79,343 | $89,695 | | Net income | $240,217 | $60,066 | $300,283 | | Diluted earnings per share | $2.75 | $0.69 | $3.44 | Q4 Fiscal Year 2025 Non-GAAP Reconciliations (in thousands, except per share amounts) | Metric | Q4 FY25 (GAAP) | Adjustments | Q4 FY25 (Adjusted) | | :-------------------------- | :----------- | :---------- | :-------------- | | Operating income | $73,452 | $69,425 | $142,877 | | Other expense, net | $(7,604) | $12,811 | $5,207 | | Income before income taxes | $7,404 | $82,236 | $89,640 | | Income tax expense | $1,315 | $19,302 | $20,617 | | Net income | $6,089 | $62,934 | $69,023 | | Diluted earnings per share | $0.07 | $0.74 | $0.81 | Non-GAAP Reconciliations (Fiscal Year 2024 & Quarters) This section reconciles GAAP to non-GAAP financial measures for FY24 and its quarters, detailing adjustments that significantly altered reported GAAP figures Fiscal Year 2024 Non-GAAP Reconciliations (in thousands, except per share amounts) | Metric | FY24 (GAAP) | Adjustments | FY24 (Adjusted) | | :-------------------------- | :---------- | :---------- | :-------------- | | Operating income | $844,367 | $55,680 | $900,047 | | Other (expense) income, net | $(15,736) | $27,730 | $11,994 | | Income before income taxes | $632,263 | $(3,089) | $629,174 | | Income tax expense | $133,564 | $5,631 | $139,195 | | Net income | $498,699 | $(8,720) | $489,979 | | Diluted earnings per share | $5.43 | $(0.09) | $5.34 | Q4 Fiscal Year 2024 Non-GAAP Reconciliations (in thousands, except per share amounts) | Metric | Q4 FY24 (GAAP) | Adjustments | Q4 FY24 (Adjusted) | | :-------------------------- | :----------- | :---------- | :-------------- | | Operating income | $164,189 | $29,245 | $193,434 | | Other (expense) income, net | $1,409 | $680 | $2,089 | | Income before income taxes | $101,324 | $29,925 | $131,249 | | Income tax expense | $18,659 | $1,035 | $19,694 | | Net income | $82,665 | $28,890 | $111,555 | | Diluted earnings per share | $0.91 | $0.31 | $1.22 | Business Outlook and Guidance First Quarter Fiscal 2026 Outlook Avnet projects Q1 FY26 sales between $5.55 billion and $5.85 billion, with adjusted diluted EPS between $0.75 and $0.85, implying sequential growth across all regions | Metric | Guidance Range | Midpoint | | :-------------------- | :------------- | :------- | | Sales | $5.55B – $5.85B | $5.70B | | Adjusted Diluted EPS | $0.75 – $0.85 | $0.80 | - Guidance implies sequential sales growth of approximately 2% at the midpoint, with growth across all regions[7] - Assumes similar interest expense to Q4 FY25, an adjusted effective tax rate of 22-26%, and 85 million average diluted shares outstanding[8] Average Currency Exchange Rates for Q1 Fiscal 2026 Guidance | Currency Pair | Q1 Fiscal 2026 Guidance | | :------------ | :---------------------- | | Euro to U.S. Dollar | $1.16 | | GBP to U.S. Dollar | $1.33 | Guidance Reconciliation The company provides a reconciliation of its non-GAAP adjusted diluted EPS guidance to GAAP diluted EPS guidance for Q1 FY26, primarily adjusting for restructuring expenses | Metric | Low End of Guidance Range | High End of Guidance Range | | :------------------------------------------ | :------------------------ | :------------------------- | | Adjusted diluted earnings per share guidance | $0.75 | $0.85 | | Restructuring, integration, and other expenses (net of tax) | $(0.10) | $(0.20) | | GAAP diluted earnings per share guidance | $0.65 | $0.65 | Additional Information Conference Call and Webcast Details Avnet hosted a conference call and webcast on August 6, 2025, to discuss financial results and provide a business update, with replay details available - Conference call and webcast held on August 6, 2025, at 9:00 a.m. PT / Noon ET[10] - Access via live conference call (877-407-8112 domestic / 201-689-8840 international) or Avnet's Investor Relations website (https://ir.avnet.com)[13](index=13&type=chunk) - An audio replay of the webcast will be available and archived on the website for one year[13] Forward-Looking Statements This section contains standard forward-looking statements, subject to numerous assumptions, risks, and uncertainties that could cause actual results to differ materially - Statements are subject to numerous assumptions, risks, and uncertainties, and actual results may differ materially[11] - Key risk factors include geopolitical events, military conflicts, pandemics, competitive pressures, semiconductor industry down-cycles, supplier relationships, international sales and operations risks (e.g., foreign currency, tariffs), acquisitions, supply chain disruptions, cybersecurity attacks, and general economic conditions[11] - The company assumes no obligation to update any forward-looking statement unless required by law[12] About Avnet Avnet is a leading global technology distributor and solutions provider with over a century of experience, supporting customers and suppliers throughout the product lifecycle - Avnet is a leading global technology distributor and solutions provider, serving customers for over a century[14] - Supports customers and suppliers at every stage of the product lifecycle, helping accelerate design and supply stages[14] - Solves complex design and supply chain issues to help customers realize revenue faster[14]