Avnet (AVT) Q1 2025 earnings summary

Executive summary

• Q1 FY25 sales were $5.6B, down 11.6–12% year-over-year, with Asia growth offsetting declines in EMEA and Americas.

• Adjusted EPS was $0.92, exceeding guidance but down 42.9–43% year-over-year; diluted EPS was $0.66.

• Cash flow from operations improved to $106M, with $267.5M in cash at quarter end.

• Aerospace & defense and compute end markets showed year-over-year growth; Farnell segment remains a focus for improvement.

• Book-to-bill ratio remained below parity, and lead times were generally stable.

Financial highlights

• Gross margin was 10.8%, down 97 bps year-over-year, mainly due to higher Asia sales mix.

• Adjusted operating income was $168.9M (3.0% margin), down 35.4% year-over-year.

• SG&A expenses were $439M, down 10% year-over-year, but increased as a percentage of gross profit.

• Interest expense was $64M, down $6M year-over-year.

• Working capital increased sequentially; inventory days improved to 101.

Outlook and guidance

• Q2 FY25 sales guidance: $5.40B–$5.70B; adjusted diluted EPS: $0.80–$0.90.

• Guidance assumes flattish EC regional sales and consistent Farnell performance.

• Sequential sales expected to change between +2% and -4%; market recovery anticipated in the second half.

• Industry sources project mid to high single-digit growth rates over the next three years in key end markets.

• Assumes 89M average diluted shares and adjusted effective tax rate of 21–25%.