Avnet (AVT) Q1 2025 earnings summary

Executive summary

• Q1 FY25 sales were $5.6B, down 11.6–12% year-over-year but up 0.7% sequentially, with Asia growth offset by declines in EMEA and Americas.

• Adjusted EPS was $0.92, exceeding guidance, while diluted EPS was $0.66; net income dropped 71.8% year-over-year.

• Cash flow from operations totaled $106M, despite $90M in tax payments, and cash and equivalents at quarter-end were $267.5M.

• Book-to-bill ratio remained below parity, with Asia showing the strongest recovery.

• Restructuring and cost reduction initiatives, especially in Farnell, impacted results.

Financial highlights

• Gross margin was 10.8%, down 97 bps year-over-year and 72 bps sequentially, mainly due to higher Asia mix.

• Adjusted operating income was $169M (3.0% margin), down 35.4% year-over-year; GAAP operating income was $142.2M (2.5% margin).

• 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 and flat sequentially.

• Cash flow from operations improved to $106M, up from a $41.3M outflow in the prior year.

Outlook and guidance

• Q2 FY25 sales guidance: $5.40B–$5.70B (midpoint $5.55B); adjusted diluted EPS: $0.80–$0.90 (midpoint $0.85).

• Guidance assumes flattish sales in EC regions and consistent Farnell performance.

• Sequential sales expected to change between +2% and -4%; optimism for second-half recovery.

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