Avnet : Press Release (avnet reports third quarter 2025 financial results)

Published: 2025-05-01 09:23:51 ET AVT

Published on 05/01/2025 at 09:23

April 30, 2025

Third quarter sales of $5.3 billion and diluted EPS of $1.01 Adjusted diluted EPS of $0.84

Cash flow from operations of $859 million over the past four quarters

PHOENIX--(BUSINESS WIRE)--Apr. 30, 2025-- Avnet, Inc. (Nasdaq: AVT) today announced results for its third quarter ended March 29, 2025. "We are pleased with our third quarter results, with revenue and earnings exceeding our expectations," said Avnet Chief Executive Officer Phil

Gallagher. "Our team continues to execute well in a highly dynamic geopolitical and market environment, and I want to thank them for their persistence during this prolonged and challenging cycle. Avnet's proven history of helping our customers and suppliers adapt to market changes will serve us well as we continue to create value for our stakeholders."

($ in millions, except per share data)

Third Quarter Results (GAAP)

Mar - 25

Mar - 24

Change Y/Y

Dec - 24

Change Q/Q

Sales

$ 5,315.4

$ 5,653.6

(6.0)%

$ 5,663.4

(6.1)%

Operating Income

$ 143.3

$ 190.2

(24.7)%

$ 155.3

(7.8)%

Operating Income Margin

2.7%

3.4%

)

(66bps

2.7%

)

(4bps

Diluted Earnings Per Share (EPS)

$ 1.01

$ 0.97

4.1%

$ 0.99

2.0%

Third Quarter Results (Non-GAAP)(1)

Mar - 25

Mar - 24

Change Y/Y

Dec - 24

Change Q/Q

Adjusted Operating Income

$ 152.7

$ 202.7

(24.7)%

$ 159.5

(4.2)%

Adjusted Operating Income Margin

2.9%

3.6%

)

(72bps

2.8%

5 bps

Adjusted Diluted Earnings Per Share (EPS)

$ 0.84

$ 1.10

(23.6)%

$ 0.87

(3.4)%

Segment and Geographical Mix

Mar - 25

Mar - 24

Change Y/Y

Dec - 24

Change Q/Q

Electronic Components (EC) Sales

$ 4,948.7

$ 5,245.8

(5.7)%

$ 5,317.8

(6.9)%

EC Operating Income Margin

3.5%

4.1%

)

(65bps

3.4%

6 bps

Farnell Sales

$ 366.7

$ 407.8

(10.1)%

$ 345.6

6.1%

Farnell Operating Income Margin

3.0%

4.0%

)

(101bps

1.0%

198 bps

Americas Sales

$ 1,274.2

$ 1,403.4

(9.2)%

$ 1,368.8

(6.9)%

EMEA Sales

$ 1,559.0

$ 2,053.1

(24.1)%

$ 1,582.8

(1.5)%

Asia Sales

$ 2,482.2

$ 2,197.1

13.0%

$ 2,711.8

(8.5)%

(1) A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in the "Non-GAAP Financial Information" section of this press release.

Guidance Range

Midpoint

Sales

$5.15B - $5.45B

$5.30B

Adjusted Diluted EPS (1)

$0.65 - $0.75

$0.70

(1) A reconciliation of non-GAAP guidance to GAAP guidance is presented in the "Non-GAAP Financial Information" section of this press release.

The above guidance implies flat sequential sales at the midpoint and has the benefit of favorable foreign currency exchange rates primarily in EMEA. In constant currency this sales guidance assumes lower sales in EMEA and relatively flat sales in the Americas and Asia.

The above guidance also excludes restructuring, integration and other expenses, foreign currency gains and losses, and certain income tax adjustments. The above guidance assumes similar interest expense to the third quarter of fiscal 2025 and an adjusted effective tax rate of between 21% and 25%. The above guidance assumes 86 million average diluted shares outstanding and average currency exchange rates as shown in the table below:

Q4 Fiscal

2025

Q3 Fiscal

Q4 Fiscal

Guidance

2025

2024

Euro to U.S. Dollar

$1.14

$1.05

$1.08

GBP to U.S. Dollar

$1.34

$1.26

Avnet will host a conference call and webcast today at 9:00 a.m. PT / Noon ET to discuss its financial results, provide a business update and answer questions.

Live webcast along with slides can be accessed via Avnet's Investor Relations website at https://ir.avnet.com

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the financial condition, results of operations, and business of the Company. You can find many of these statements by looking for words like "believes," "projected," "plans," "expects," "anticipates," "should," "will," "may," "estimates," or

similar expressions. These forward-looking statements are subject to numerous assumptions, risks, and uncertainties. The following important factors, in addition to those discussed elsewhere in the Company's Annual Report on Form 10-K for the fiscal year ended June 29, 2024 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, could affect the Company's future results of operations, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements: geopolitical events and military conflicts; pandemics and other health-related crises; competitive pressures among distributors of electronic components; an industry down-cycle in semiconductors; relationships with key suppliers and allocations of products by suppliers; accounts receivable defaults; risks relating to the Company's international sales and operations, including risks relating to repatriating cash, foreign currency fluctuations, inflation, duties and taxes, tariffs, sanctions and trade restrictions, and compliance with international and U.S. laws; risks relating to acquisitions, divestitures, and investments; adverse effects on the Company's supply chain, operations of its distribution centers, shipping costs, third-party service providers, customers, and suppliers, including as a result of issues caused by military conflicts, terrorist attacks, natural and weather-related disasters, pandemics and health related crises, warehouse modernization, and relocation efforts; risks related to cyber security attacks, other privacy and security incidents, and information systems failures, including related to current or future implementations, integrations, and upgrades; general economic and business conditions (domestic, foreign, and global) affecting the Company's operations and financial performance and, indirectly, the Company's credit ratings, debt covenant compliance, liquidity, and access to financing; constraints on employee retention and hiring; and legislative or regulatory changes.

Any forward-looking statement speaks only as of the date on which that statement is made. Except as required by law, the Company assumes no obligation to update any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made.

As a leading global technology distributor and solutions provider, Avnet has served customers' evolving needs for more than a century. Through regional and specialized businesses around the world, we support customers and suppliers at every stage of the product lifecycle. We help companies adapt to change and accelerate the design and supply stages of product development. With a unique viewpoint from the center of the technology value chain, Avnet is a trusted partner that solves complex design and supply chain issues so customers can realize revenue faster. Learn more about Avnet at https://www.avnet.com. (AVT_IR)

March 29,

March 30,

March 29,

March 30,

2025

2024

2025

2024

$ 5,315,423

$ 5,653,591

$ 16,582,959

$ 18,194,153

4,727,570

4,984,318

14,791,688

16,070,591

587,853

669,273

1,791,271

2,123,562

435,492

467,275

1,311,214

1,419,253

9,110

11,847

39,255

24,132

143,251

190,151

440,802

680,177

(3,992)

(14,707)

(9,680)

(17,144)

(61,115)

(73,496)

(187,957)

(218,593)

86,499

78,144

101,948

243,165

530,939

(9,775)

13,114

9,037

114,906

$ 87,919

$ 88,834

$ 234,128

$ 416,033

Sales

Cost of sales Gross profit

Selling, general and administrative expenses

Restructuring, integration, and other expenses Operating income

Other expense, net

Interest and other financing expenses, net

Gain on legal settlements and other Income before taxes

Income tax (benefit) expense Net income

Earnings per share:

Basic

$ 1.02

$ 0.98

$ 2.69

$ 4.59

Diluted

$ 1.01

$ 0.97

$ 2.65

$ 4.52

Shares used to compute earnings per share:

Basic

86,014

90,430

86,984

90,726

Diluted

86,876

91,256

88,198

92,075

Cash dividends paid per common share

$ 0.33

$ 0.31

$ 0.99

$ 0.93

Current assets:

Cash and cash equivalents

$ 188,912

$ 310,941

Receivables

4,095,480

4,391,187

Inventories

Prepaid and other current assets

5,270,451

240,512

5,468,730

199,694

Total current assets

9,795,355

10,370,552

Property, plant and equipment, net

578,744

568,169

Goodwill

795,066

780,984

Operating lease assets

179,254

208,971

Other assets

363,911

280,471

Total assets

11,712,330

12,209,147

Current liabilities:

Short-term debt

$ 144,542

$ 492,711

Accounts payable

3,319,033

3,345,510

Accrued expenses and other

Short-term operating lease liabilities

495,270

55,537

573,055

53,993

Total current liabilities

4,014,382

4,465,269

Long-term debt

2,494,387

2,406,629

Long-term operating lease liabilities

137,806

173,886

Other liabilities

180,788

237,859

Total liabilities

6,827,363

7,283,643

Shareholders' equity

4,884,967

4,925,504

Total liabilities and shareholders' equity

11,712,330

12,209,147

Cash flows from operating activities:

Net income

234,128

416,033

Non-cash and other reconciling items:

Depreciation and amortization

53,307

64,151

Amortization of operating lease assets

39,963

40,181

Deferred income taxes

(81,950)

12,895

Stock-based compensation

30,449

27,150

Other, net

26,710

7,932

Changes in (net of effects from businesses acquired and divested):

Receivables

310,440

424,437

Inventories

217,568

(311,104)

Accounts payable

(8,785)

(23,247)

Accrued expenses and other, net (236,802) (242,698)

Borrowings (repayments) under accounts receivable securitization, net

84,900

(80,100)

Repayments under senior unsecured credit facility, net

(418,591)

(49,057)

Borrowings under bank credit facilities and other debt, net

63,432

22,884

Repurchases of common stock

(253,490)

(86,027)

Dividends paid on common stock

(85,645)

(84,154)

Net cash flows provided by operating activities 585,028 415,730 Cash flows from financing activities:

Other, net (4,297) (8,033)

Net cash flows used for financing activities (613,691) (284,487)

Cash flows from investing activities:

Purchases of property, plant and equipment (87,874) (200,210)

Other, net 10,353 629

Net cash flows used for investing activities (77,521) (199,581)

Effect of currency exchange rate changes on cash and cash equivalents

(15,845)

(1,419)

Cash and cash equivalents:

- decrease

(122,029)

(69,757)

- at beginning of period

310,941

288,230

- at end of period

188,912

218,473

Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States ("GAAP"), the Company also discloses certain non-GAAP financial information including (i) adjusted operating income, (ii) adjusted other income (expense), (iii) adjusted income before income taxes, (iv) adjusted income tax expense (benefit), and (v) adjusted diluted earnings per share.

There are also references to the impact of foreign currency in the discussion of the Company's results of operations. When the U.S. Dollar strengthens and the stronger exchange rates of the current year are used to translate the results of operations of Avnet's subsidiaries denominated in foreign currencies, the resulting impact is a decrease in U.S. Dollars of reported results. Conversely, when the U.S. Dollar weakens and the weaker exchange rates of the current year are used to translate the results of operations of Avnet's subsidiaries denominated in foreign currencies, the resulting impact

is an increase in U.S. Dollars of reported results. In the discussion of the Company's results of operations, results excluding this impact are referred to as "constant currency." Management believes sales in constant currency is a useful measure for evaluating current period performance as compared with prior periods and for understanding underlying trends. In order to determine the translation impact of changes in foreign currency exchange rates on sales, income or expense items for subsidiaries reporting in currencies other than the U.S. Dollar, the Company adjusts the average exchange rates used in current periods to be consistent with the average exchange rates in effect during the comparative period.

Management believes that operating income adjusted for restructuring, integration and other expenses, and amortization of acquired intangible assets, is a useful measure to help investors better assess and understand the Company's operating performance. This is especially the case when comparing results with previous periods or forecasting performance for future periods, primarily because management views the excluded items to be

outside of Avnet's normal operating results or non-cash in nature. Management analyzes operating income without the impact of these items as an indicator of ongoing margin performance and underlying trends in the business. Management also uses these non-GAAP measures to establish operational goals and, in most cases, for measuring performance for compensation purposes. Management measures operating income for its reportable segments excluding restructuring, integration and other expenses, and amortization of acquired intangible assets and other.

Management also believes income tax expense (benefit), net income and diluted earnings per share adjusted for the impact of the items described above, gain on legal settlements and other, foreign currency gains and losses and certain items impacting income tax expense (benefit) are useful to investors because they provide a measure of the Company's net profitability on a more comparable basis to historical periods and provide a more meaningful basis for forecasting future performance. Adjustments to income tax expense (benefit) and the effective income tax rate include the effect of changes in tax laws, certain changes in valuation allowances and unrecognized tax benefits, income tax audit settlements and adjustments to the effective tax rate based upon the expected long-term adjusted effective tax rate. Additionally, because of management's focus on generating shareholder value, of which net profitability is a primary driver, management believes net income and diluted earnings per share excluding the impact of these items provides an important measure of the Company's net profitability for the investing public.

Additional non-GAAP metrics management uses are adjusted operating income margin, which is defined as adjusted operating income divided by sales and the adjusted effective income tax rate, which is defined as adjusted income tax expense divided by adjusted income before income taxes.

Any analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, results presented in accordance with GAAP.

Fiscal

Quarters Ended

Year to Date

March 29,

December 28,

September 28,

2025*

2025

2024

($ in thousands, except per share amounts)

GAAP operating income

$ 440,802

$ 143,251

$ 155,327

$ 142,225

Restructuring, integration, and other expenses

39,255

9,110

3,794

26,351

Adjusted operating income

481,156

152,725

159,487

168,944

GAAP other expense, net

$ (9,680)

$ (3,992)

$ (2,645)

$ (3,043)

Amortization of intangible assets 1,099 364 366 368

Foreign currency loss 16,820 6,933 5,104 4,783

Adjusted other income, net

7,140

2,941

2,459

1,740

GAAP income before income taxes

$ 243,165

$ 78,144

$ 90,283

$ 74,738

Restructuring, integration, and other expenses

39,255

9,110

3,794

26,351

Amortization of intangible assets

1,099

364

366

368

Foreign currency loss 16,820 6,933 5,104 4,783

Adjusted income before income taxes

300,339

94,551

99,547

106,240

GAAP income tax expense (benefit)

$ 9,037

$ (9,775)

$ 3,030

$ 15,782

Restructuring, integration, and other expenses

10,274

2,475

1,142

6,657

Amortization of intangible assets

259

Foreign currency loss

5,004

1,762

1,630

1,612

Income tax expense items, net 44,504 27,199 17,007 298

Adjusted income tax expense

69,078

21,747

22,895

24,436

GAAP net income

$ 234,128

$ 87,919

$ 87,253

$ 58,956

Restructuring, integration, and other expenses (net of tax)

28,981

6,635

2,652

19,694

Amortization of intangible assets (net of tax)

839

278

280

281

Foreign currency loss (net of tax)

11,816

5,171

3,474

3,171

Income tax expense items, net

(44,504)

(27,199)

(17,007)

(298)

Adjusted net income

231,260

72,804

76,652

81,804

GAAP diluted earnings per share

$ 2.65

$ 1.01

$ 0.99

$ 0.66

Restructuring, integration, and other expenses (net of tax)

0.33

0.08

0.03

0.22

Amortization of intangible assets (net of tax)

0.01

0.00

Foreign currency loss (net of tax)

0.13

0.06

0.04

Income tax expense items, net

(0.50)

(0.31)

(0.19)

(0.00)

Adjusted diluted EPS

2.62

0.84

0.87

0.92

* May not foot/cross foot due to rounding.

($ in thousands, except per share amounts)

GAAP operating income

$ 844,367

$ 164,189

$ 190,151

$ 236,257

$ 253,769

Restructuring, integration, and other expenses

52,550

28,417

11,847

5,235

7,051

Amortization of intangible assets

3,130

828

712

878

Adjusted operating income

900,047

193,434

202,710

242,204

261,698

GAAP other (expense) income, net

$ (15,736)

$ 1,409

$ (14,707)

$ (8,397)

$ 5,960

Foreign currency loss (gain) and other, net 27,730 680 17,850 9,200 -

Adjusted other (expense) income, net

11,994

2,089

3,143

803

5,960

GAAP income before income taxes

$ 632,263

$ 101,324

$ 101,948

$ 153,558

$ 275,432

Restructuring, integration, and other expenses

52,550

28,417

11,847

5,235

7,051

Amortization of intangible assets

3,130

828

712

878

Foreign currency loss (gain) and other, net

27,730

680

17,850

9,200

Gain on legal settlements and other (86,499) - - - (86,499)

Adjusted income before income taxes

629,174

131,249

132,357

168,705

196,862

GAAP income tax expense

$ 133,564

$ 18,659

$ 13,114

$ 35,627

$ 66,164

Restructuring, integration, and other expenses

13,000

7,251

2,772

1,274

1,703

Amortization of intangible assets

700

185

156

203

Foreign currency loss (gain) and other, net

7,373

5,251

2,034

Gain on legal settlements and other

(20,434)

Income tax expense items, net

4,992

(6,489)

10,472

1,399

(390)

Adjusted income tax expense

139,195

19,694

31,765

40,490

47,246

GAAP net income

$ 498,699

$ 82,665

$ 88,834

$ 117,931

$ 209,268

Restructuring, integration, and other expenses (net of tax)

39,550

21,166

9,075

3,961

5,348

Amortization of intangible assets (net of tax)

2,430

643

556

675

Foreign currency loss (gain) and other, net (net of tax)

20,357

592

12,599

7,166

Gain on legal settlements and other (net of tax)

(66,065)

Income tax expense items, net

(4,992)

6,489

(10,472)

(1,399)

390

Adjusted net income

489,979

111,555

100,592

128,215

149,616

GAAP diluted earnings per share

$ 5.43

$ 0.91

$ 0.97

$ 1.28

$ 2.25

Restructuring, integration, and other expenses (net of tax)

0.43

0.23

0.10

0.04

0.06

Amortization of intangible assets (net of tax)

0.03

0.01

Foreign currency loss (gain) and other, net (net of tax)

0.22

0.01

0.14

0.08

Gain on legal settlements and other (net of tax)

(0.72)

(0.71)

Income tax expense items, net

(0.05)

0.07

(0.11)

(0.01)

0.00

Adjusted diluted EPS

5.34

1.22

1.10

1.40

1.61

* May not foot/cross foot due to rounding.

The following table presents the percentage change in sales and the percentage change in sales in constant currency for the third quarter and first nine months of fiscal 2025 compared to the third quarter and first nine months of fiscal 2024.

Sales

Year-Year %

Sequential %

Year-Year %

Sales

Change in

Sales

Change in

Sales

Change in

Year-Year

Constant

Sequential

Constant

Year-Year

Constant

% Change

Currency

% Change

Currency

% Change

Currency

Avnet (6.0)%

(4.9)%

(6.1)%

(5.6)%

(8.9)%

(8.5)%

Avnet by region

Americas

(9.2)%

(6.9)%

(13.0)%

EMEA

(24.1)

(21.8)

(1.5)

0.1

(25.7)

(25.2)

Asia

13.0

13.4

(8.5)

(8.3)

9.0

9.3

net by segment EC

(5.7)%

(4.6)%

(6.9)%

(6.4)%

(8.5)%

(8.2)%

Farnell

(10.1)

(8.5)

6.1

7.4

(13.3)

(13.1)

Sales:

Electronic Components Farnell

Avnet sales

2025* 2025 2024 2024

$ 15,523.6

$ 4,948.7

$ 5,317.8

$ 5,257.1

1,059.4

366.7

345.6

347.1

$ 16,583.0

$ 5,315.4

$ 5,663.4

$ 5,604.2

($ in millions)

Operating income:

Electronic Components

$ 551.2

$ 172.2

$ 181.6

$ 197.4

Farnell

16.3

11.0

3.5

1.9

567.5

183.2

185.1

199.3

Corporate expenses

(86.3)

(30.4)

(25.6)

(30.3)

Restructuring, integration, and other expenses

(39.3)

(9.1)

(3.8)

(26.4)

Amortization of acquired intangible assets

(1.1)

(0.4)

Avnet operating income

$ 440.8

$ 143.3

$ 155.3

$ 142.2

Sales by geographic area: Americas

$ 3,972.9

$ 1,274.2

$ 1,368.8

$ 1,329.9

EMEA

4,810.0

1,559.0

1,582.8

1,668.2

Asia

7,800.1

2,482.2 2,711.8

2,606.1

Avnet sales

16,583.0 $

5,315.4 $ 5,663.4

$ 5,604.2

* May not foot/cross foot due to rounding.

Quarters Ended

Fiscal Year

2024*

Fourth Quarter June 29,

2024

Third Quarter Second Quarter March 30, December 30,

2024 2023

First Quarter September 30,

2023

Sales:

($ in millions)

Electronic Components

$ 22,160.0

$ 5,187.8

$ 5,245.8 $ 5,812.1

$ 5,914.4

Farnell

1,597.1

375.2

407.8

392.8

421.2

Avnet sales

23,757.1

5,563.0

5,653.6

6,204.9

6,335.6

Operating income: Electronic Components

$ 947.6

$ 210.1

$ 216.9

$ 247.9

$ 272.8

Farnell

64.8

15.1

16.3

15.7

17.7

1,012.4

225.2

233.2

263.6

290.5

Corporate expenses

(112.3)

(31.8)

(30.5)

(21.4)

(28.7)

Restructuring, integration, and other expenses

(52.6)

(28.4)

(11.8)

(5.2)

(7.1)

Amortization of acquired intangible assets

(3.1)

(0.8)

(0.7)

(0.9)

Avnet operating income

$ 844.4

$ 164.2

$ 190.2

$ 236.3

$ 253.8

Sales by geographic area: Americas

$ 5,919.2

$ 1,353.8

$ 1,403.4

$ 1,588.5

$ 1,573.5

EMEA

8,395.0

1,920.3

2,053.1

2,113.6

2,308.0

Asia 9,442.9 2,288.9 2,197.1 2,502.8 2,454.1

Avnet sales $ 23,757.1 $ 5,563.0 $ 5,653.6 $ 6,204.9 $ 6,335.6

* May not foot/cross foot due to rounding.

The following table presents the reconciliation of non-GAAP adjusted diluted earnings per share guidance to the expected GAAP diluted earnings per share guidance for the fourth quarter of fiscal 2025.

Adjusted diluted earnings per share guidance $ 0.65 $ 0.75

Restructuring, integration, and other expenses (net of tax) (0.18) (0.09) GAAP diluted earnings per share guidance $ 0.47 $ 0.66

View source version on businesswire.com: https://www.businesswire.com/news/home/20250430761167/en/

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Source: Avnet

Disclaimer

Avnet Inc. published this content on April 30, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 01, 2025 at 13:22 UTC.