Avnet, Inc. (AVT) Earnings & Analysis

Latest quarter

Avnet reported Q4 FY2026 revenue of $8.3 billion, up 47.7% from $5.6 billion a year earlier and above the $7.5 billion consensus. Adjusted diluted earnings per share of $2.28 also exceeded the $1.76 consensus.

CFO Ken Jacobson said electronic components sales rose 49% year over year, while Farnell sales increased 29%. He attributed approximately one-third of the company’s year-over-year sales growth to memory price increases. Avnet’s revenue also exceeded its own quarterly guidance range.

Avnet reported diluted EPS of $1.49, compared with $0.07 a year earlier. Gross margin was 10.4%, compared with 10.6%, while operating margin rose to 2.78% from 1.31%. Jacobson said a better mix of higher-margin on-the-board components contributed to Farnell’s gross margin improvement.

Free cash flow was −$307.5 million, compared with $79.9 million a year earlier. Jacobson said Avnet used $291 million of operating cash during the quarter to support sequential sales growth, with working capital rising primarily because of higher receivables.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Phil Gallagher said demand improved across Avnet’s regions and end markets, rather than being confined to AI and data centers. He said lead times had extended across a wider range of applications and that price increases had become more prevalent beyond memory. Gallagher also expected additional increases from semiconductor and interconnect, passive and electromechanical suppliers.

On pricing, Gallagher said Avnet often passes supplier increases through to customers without adding a further markup, which can lift gross profit dollars without necessarily raising the margin percentage. CFO Ken Jacobson said other price increases were more modest than those for memory, and that the next-quarter guide assumed modest increases.

Asked about customers building inventory, Jacobson said more customers, particularly large manufacturers, were seeking safety or buffer stocks. He added that Avnet’s indicators did not suggest a significant buildup, although memory shortages were constraining customers’ ability to obtain everything needed for production. Gallagher said Avnet checks forecasts with customers and suppliers and was not seeing abnormal cancellations.

Jacobson said regional mix still affects electronic components gross margin and advised tempering expectations for expansion. Gallagher said the Americas and Europe had improved and described Europe as Avnet’s most profitable region. Asked about Farnell through an industry cycle, Gallagher said the company was modeling its margin after an adjustment but did not have exact numbers for that floor.

On investment, Jacobson said inventory days improved to 71 from 77 in the preceding quarter. He said Avnet would continue investing in inventory to support growth, while prioritizing growth funding and the dividend in its near-term capital allocation. He also expected Avnet to use cash in the first quarter, primarily for receivables as sales grow.

Guidance

For Q1 FY2027, Avnet guided sales to $9.0 billion–$9.3 billion and adjusted diluted EPS to $2.80–$2.90. Jacobson said the outlook assumes current market conditions persist and modest price increases. For Q2 FY2027, he expected revenue growth to be better than seasonal but probably not double-digit.