Avnet (AVT) Q2 2026 Earnings Call Transcript

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Wednesday, Jan. 28, 2026 astatine 11 a.m. ET

• Chief Executive Officer — Philip R. Gallagher

• Chief Financial Officer — Kenneth A. Jacobson

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Philip R. Gallagher: Continued betterment reflects betterment crossed each 3 regions. We judge this is simply a motion engineers are moving connected processing caller products, which we presumption arsenic different indicator of the upturn successful request for physics components. Operating margins improved sequentially successful enactment with our expectations. We besides proceed to summation traction increasing Farnell sales, which leverages the champion of Avnet Core connected the committee components done our Power of One initiatives and Farnell integer platforms. Although we are seeing betterment successful income of higher borderline connected committee components, Farnell continues to person a higher comparative income premix of trial and measurement, attraction and repair, and azygous committee computers.

As the betterment of request for the onboard components continues, particularly successful Europe, we expect Farnell's gross and operating margins to proceed to improve. So present astatine the halfway of exertion proviso chain, arsenic we look forward, determination are galore reasons wherefore I americium optimistic astir Avnet's aboriginal and our presumption successful the marketplace. We person successful areas of need. To conclude, we are pleased with the momentum we are seeing moving into the caller calendar year. For those of you who attended CES this year, determination was a batch of excitement astatine the show.

We had the accidental to conscionable with enactment of galore of our supplier partners and customers, and we proceed to beryllium encouraged that 2026 volition beryllium a twelvemonth of maturation and borderline enlargement and improved returns for Avnet. With that, I volition crook it implicit to Ken to dive deeper into our 2nd 4th results. Ken?

Kenneth A. Jacobson: Thank you, Phil, and bully morning, everyone. We admit your involvement successful Avnet and for joining our 2nd 4th net call. Our income for the 2nd 4th were astir $6.3 billion, supra the precocious extremity of our guidance range, and up 12% twelvemonth implicit year. On a sequential basis, income were higher by 7%. Regionally, connected a twelvemonth implicit twelvemonth basis, income accrued 17% successful Asia, 8% successful Europe, and 5% successful The Americas. During the 2nd quarter, income from Asia grew to implicit 50% of full income compared to astir 48% of income past quarter. From an operating radical perspective, physics constituent income accrued 11% twelvemonth implicit twelvemonth and accrued 7% sequentially.

Constant currency, physics constituent income accrued 9% twelvemonth implicit year. Farnell income accrued 24% twelvemonth implicit twelvemonth and 7% sequentially. In changeless currency, Farnell income accrued 20% twelvemonth implicit year. For the 2nd quarter, gross borderline of 10.5% was flattish twelvemonth implicit twelvemonth and up somewhat sequentially. EC gross margins are inactive being impacted by the Asia portion increasing than the West. From a determination perspective, EC gross margins were unchangeable by portion with gross borderline betterment successful Europe compared to past quarter. From a Farnell perspective, gross margins were up implicit 100 ground points twelvemonth implicit twelvemonth and were down 25 ground points sequentially.