Avnet delivered a strong first quarter, with management crediting broad-based demand recovery across its end markets and particularly pronounced growth in Asia, industrial, networking, and data center segments. CEO Phil Gallagher noted that the company achieved “record sales in our electronic components business” and saw its backlog and book-to-bill ratios rise above parity worldwide. Management emphasized that improved supply chain execution and strategic inventory investments were key enablers for capturing volume growth.
Is now the time to buy AVT? Find out in our full research report (it’s free for active Edge members).
Avnet (AVT) Q1 CY2026 Highlights:
- Revenue: $7.12 billion vs analyst estimates of $6.45 billion (33.9% year-on-year growth, 10.3% beat)
- Adjusted EPS: $1.48 vs analyst estimates of $1.32 (12.3% beat)
- Adjusted EBITDA: $254 million vs analyst estimates of $229.5 million (3.6% margin, 10.7% beat)
- Revenue Guidance for Q2 CY2026 is $7.45 billion at the midpoint, above analyst estimates of $6.62 billion
- Adjusted EPS guidance for Q2 CY2026 is $1.75 at the midpoint, above analyst estimates of $1.35
- Operating Margin: 3.1%, in line with the same quarter last year
- Market Capitalization: $6.76 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Avnet’s Q1 Earnings Call
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Melissa Dailey Fairbanks (Raymond James) asked how much of revenue growth beyond memory came from higher average selling prices. CEO Phil Gallagher clarified that outside of memory, price increases had already been absorbed into prior run rates, so recent growth was primarily volume-driven.
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William Stein (True Securities) inquired about Avnet’s exposure to AI data centers. Gallagher estimated the company’s direct exposure has grown to 10–15% and explained that related sales also benefit adjacent verticals like industrial and power management.
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Stein also questioned why the core components segment outpaced Farnell’s growth. Gallagher explained that Farnell’s lower mix of on-board components and its focus on Europe, where recovery is less robust, accounted for the difference.
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Joseph Quatrochi (Wells Fargo) probed the relationship between price increases and operating profit. CFO Ken Jacobson responded that memory pricing contributed to operating leverage, but most profit gains came from higher sales in Asia.
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Ruplu Bhattacharya (Bank of America) asked about the sustainability of above-seasonal growth and the trajectory of Farnell margins. Gallagher said visibility remains positive for the rest of the year, while Jacobson noted progress toward Farnell’s incremental margin targets.
Catalysts in Upcoming Quarters
In the coming quarters, our team will be closely tracking (1) whether data center and AI-driven demand remains resilient, (2) the pace of margin recovery in the Americas and Europe, and (3) Farnell’s ability to accelerate growth as European market conditions stabilize. Additional attention will be paid to inventory discipline and the impact of any further component price increases on both revenue and profitability.
Avnet currently trades at $83.14, up from $78.28 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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