Avnet, Inc.

What they do

Avnet buys electronic components from manufacturers and resells them to customers ranging from startups and mid-sized businesses to enterprise OEMs, EMS providers and ODMs. Its Electronic Components group serves high- and medium-volume customers with semiconductors, interconnect, passive and electromechanical (IP&E) components, plus design, supply chain, embedded and integration services. Its Farnell group is a separate operating group serving customers through distribution. Both groups operate in the Americas, EMEA, and Asia/Pacific.

Revenue drivers

• Electronic Components (EC) — The dominant group: EC sold $7,795.3 million in the June 2026 quarter alone, with an operating margin of 4.1%. Within EC for fiscal 2026, roughly 83% of net sales were semiconductor products, about 15% IP&E components and 2% computers and other.
• Farnell — The second operating group, with record quarterly sales of $500 million and a 9.0% operating margin in the June 2026 quarter, according to the company's earnings release.
• Avnet Supply Chain Solutions and Avnet Embedded / Integrated Solutions — Attached to EC, these services offer procurement support, warehousing and logistics, and technical design, integration and assembly of embedded products, deepening engagement with OEMs, EMS providers and component manufacturers.
• Geographic mix — The company reports sales across all three major regions — Americas, EMEA and Asia/Pacific — and said its fiscal 2026 sales growth was year-over-year across all regions. It also cited sequential and year-over-year growth across all EC regions and Farnell in the June 2026 quarter.

Recent performance

Fiscal 2026 sales were $27,633 million, up 24.5% from $22,201 million in fiscal 2025, and diluted earnings per share were $4.01 versus $2.75. GAAP operating income was $724.8 million, up from $514.3 million, with adjusted operating income of $860.9 million versus $624.0 million. The June 2026 quarter set records: sales of $8,295.4 million, up 47.7% year over year, GAAP diluted EPS of $1.49 versus $0.07, and adjusted diluted EPS of $2.28, up 181.5%. Operating cash flow was negative $280.9 million for fiscal 2026, compared with positive $724.5 million in fiscal 2025.

Strategy

Management describes disciplined execution of a long-term strategy, emphasizing operating leverage as profitability grew faster than sales. The company reduced inventory days to 81 in fiscal 2026, down 18 days year over year, and by 6 days quarter over quarter to 71 in the June 2026 quarter. It returned capital to shareholders: $138 million of share repurchases representing 3.2% of shares outstanding and $114 million of dividends in fiscal 2026. The company also reported a July 6, 2026 material agreement and direct financial obligation in an 8-K, but the excerpt provided gives no terms or purpose. Management stated it expects fiscal 2027 first-quarter sales to grow approximately 10% versus the fourth quarter of fiscal 2026, across all Electronic Components regions and Farnell.

Risks

• Cyclical electronic components demand — The industry has a history of cyclical downturns, and Avnet's prior two fiscal years saw a downturn with decreasing sales before fiscal 2026 growth returned.
• Tariffs and trade policy — Avnet imports components across borders and faces shifting U.S. and foreign tariff measures; in February 2026 the U.S. Supreme Court struck down IEEPA-based tariffs, and the company says it cannot reasonably estimate any potential refunds and has recorded none.
• Gross margin from supplier and customer concentration — As a distributor, Avnet's margins depend on terms from component manufacturers and demand from its OEM, EMS and ODM customers; its EC operating margin was only 4.1% in the June 2026 quarter.
• Cash flow and working capital — Operating cash flow was negative $280.9 million in fiscal 2026 after positive $724.5 million in fiscal 2025, and the June 2026 balance sheet showed only $155.4 million of cash against $2.48 billion of long-term debt.

Outlook

Management said demand for electronic components strengthened during fiscal 2026, with sales growth across all regions and improved inventory days, and that momentum is building across all regions, end markets and customer segments. For the first quarter of fiscal 2027, Avnet expects sales to grow approximately 10% compared with the fourth quarter of fiscal 2026, with growth expected across all Electronic Components regions and Farnell. The company also warned that global trade disruptions and geopolitical tensions could dampen demand, increase market volatility and affect currency rates.