Avnet (AVT) investor relations material

Executive summary

• Q1 FY27 sales reached a record $10.718B, up 81.7% reported; adjusted operating income was $498.1M and adjusted diluted EPS was a record $3.63.

• Demand grew YoY across regions and end markets, led by data center/compute, aerospace and defense, and networking; lead times rose across most product categories.

Financial highlights

• Sales rose 29.2% sequentially; organic growth was 70.6% YoY and 21% sequentially excluding Q1’s extra week, which contributed an estimated $654M of sales.

• GAAP operating income was $474.7M and net income was $282.2M; adjusted operating income was $498.1M, while adjusted net income was $312.1M.

• Gross margin was 10.0%, down 40 bps YoY; memory pricing contributed roughly one-third of sales growth.

• SG&A was $576.3M, or 53.7% of gross profit, compared with 75.6% in Q1 FY26 and 63.3% in Q4 FY26.

• Net cash used in operations was $842.4M, including $1.20B used for working capital to support higher sales.

Outlook and guidance

• Q2 FY27 sales guidance is $11.10B–$11.40B, midpoint $11.25B; adjusted diluted EPS guidance is $3.90–$4.10, midpoint $4.00.

• Midpoint sales guidance implies ~5% sequential growth, or 12% excluding Q1’s extra week; assumptions include similar market and component-supply conditions as Q1.

• Q2 assumptions include similar interest expense to Q1, a 21%–25% adjusted tax rate and ~87M average diluted shares.

• EC operating margin is expected to reach 5% in H2 FY27; longer-term targets discussed were EC trending toward 6% and Farnell toward the low teens.

• Positive cash flow is expected by FY27 year-end as growth moderates; gross leverage target of 3x is anticipated in H2 FY27.