Avnet Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 28 January 2026: press release. Guidance figures: 9 new. The quarter’s numbers.

Read the filing

Key takeaways

• Sales reached $6.3 billion: Sales were $6,319.0 million, up 11.6% year over year and 7.1% sequentially. Constant-currency growth was 9.5% year over year and 7.5% sequentially. Source
• GAAP EPS fell, adjusted EPS rose: Diluted EPS was $0.75, down 24.2% from $0.99 a year earlier and up 23.0% from $0.61 in the first quarter. Adjusted diluted EPS was $1.05, up 20.7% from $0.87. Source
• Farnell sales rose 23.6%: Farnell sales were $427.1 million, up 23.6% reported and 20.3% in constant currency. Farnell operating margin was 4.7%, against 1.0% a year earlier. Source
• Operating margin fell year over year: GAAP operating margin was 2.3%, down 43 basis points from 2.7% a year earlier and down 10 basis points sequentially. Adjusted operating margin was 2.7%, down 10 basis points year over year. Source
• Adjusted profit grew about twice sales: Adjusted operating income was $171.7 million, up 14.0% sequentially against 7.1% sales growth. Management described the gap as the expected operating leverage in the business model. Source
• Inventory down $126 million: Inventories were reduced by $126 million in the quarter, and days of inventory were 86. Source
• Operating cash flow was $208 million: Operating cash flow was $208 million in the quarter, after a use of $144.6 million in the first quarter. Six-month operating cash flow was $63.7 million. Source
• Sales guided to $6.20 - 6.50 billion: Third-quarter sales guidance is $6.20 billion to $6.50 billion, midpoint $6.35 billion, implying about 1% sequential growth. It assumes Americas and EMEA growth and a smaller-than-typical Asia decline. Source

“We delivered year-over-year sales growth across all of our Electronic Components regions and Farnell, and both total Company revenue and earnings per share were above our expectations.”

Phil Gallagher, Avnet Chief Executive Officer

Guidance

What changed from last quarter

• New guidance: Third-quarter fiscal 2026 sales and adjusted diluted EPS guidance was issued. The prior release had covered the second quarter. Source
• Ended: Second-quarter guidance from the prior release ended with the quarter. Results were above the high end of its sales and adjusted EPS ranges. Source

Results and growth drivers

• Sales reached $6.3 billion: Sales were $6,319.0 million, up 11.6% year over year and 7.1% sequentially. Constant-currency growth was 9.5% year over year and 7.5% sequentially. Source
• Asia led growth: Asia sales were $3.17 billion, up 16.9% year over year and 10.7% sequentially, about half of quarterly sales. The company reported record Asia revenue for the quarter. Source
• GAAP EPS fell, adjusted EPS rose: Diluted EPS was $0.75, down 24.2% from $0.99 a year earlier and up 23.0% from $0.61 in the first quarter. Adjusted diluted EPS was $1.05, up 20.7% from $0.87. Source

Segments and regions

• Farnell sales rose 23.6%: Farnell sales were $427.1 million, up 23.6% reported and 20.3% in constant currency. Farnell operating margin was 4.7%, against 1.0% a year earlier. Source
• EC margin eased year over year: Electronic Components sales were $5.89 billion, up 10.8%. EC operating margin was 3.2%, down 25 basis points from 3.4% a year earlier and up 28 basis points from 2.9% in the first quarter. Source
• EMEA and Americas grew: EMEA sales were $1.71 billion, up 8.3% year over year after a first-quarter decline. Americas sales were $1.44 billion, up 4.9% year over year. Source

“Sequentially, our adjusted operating income grew two times faster than sales, demonstrating the expected leverage in our business model.”

Phil Gallagher, Avnet Chief Executive Officer

Margins and costs

• Operating margin fell year over year: GAAP operating margin was 2.3%, down 43 basis points from 2.7% a year earlier and down 10 basis points sequentially. Adjusted operating margin was 2.7%, down 10 basis points year over year. Source
• Adjusted profit grew about twice sales: Adjusted operating income was $171.7 million, up 14.0% sequentially against 7.1% sales growth. Management described the gap as the expected operating leverage in the business model. Source
• Adjusted measures exclude specific items: Adjusted operating income excludes restructuring, integration and other expenses, and amortization of acquired intangibles. The company says the excluded items are outside normal operations or non-cash. Source

Inventory, cash and shareholder returns

• Inventory down $126 million: Inventories were reduced by $126 million in the quarter, and days of inventory were 86. Source
• Operating cash flow was $208 million: Operating cash flow was $208 million in the quarter, after a use of $144.6 million in the first quarter. Six-month operating cash flow was $63.7 million. Source
• Dividends paid in quarter: The company returned $28 million to shareholders in dividends, with cash dividends of $0.35 per common share. Source
• Six-month buybacks matched first quarter: Share repurchases for the six months were $138.3 million, the same amount reported for the first quarter in the prior release.
• Convertible notes and term loan: Six-month financing included $633.8 million of convertible notes and a $264.9 million term loan borrowing. Short-term debt rose to $463.6 million at December 27. Source

“The trends we see are encouraging, and our third quarter outlook implies above-trend seasonal growth and improving margins.”

Phil Gallagher, Avnet Chief Executive Officer

Third-quarter guidance

• Sales guided to $6.20 - 6.50 billion: Third-quarter sales guidance is $6.20 billion to $6.50 billion, midpoint $6.35 billion, implying about 1% sequential growth. It assumes Americas and EMEA growth and a smaller-than-typical Asia decline. Source
• Adjusted EPS guided to $1.20 - 1.30: Adjusted diluted EPS guidance is $1.20 to $1.30, midpoint $1.25. GAAP diluted EPS guidance is $0.95 to $1.15 after restructuring and other expenses of $0.15 to $0.25 per share, net of tax. Source
• Share count and tax rate assumed: Guidance assumes 83 million average diluted shares, an adjusted effective tax rate of 21% to 25%, and interest expense similar to the second quarter. Source

Management commentary on trends

• Trends viewed as encouraging: Phil Gallagher said the trends the company sees are encouraging, and that the third-quarter guidance implies above-trend seasonal growth and improving margins. Source
• Growth credited to all EC regions: Management said sales grew year over year in every Electronic Components region and Farnell, and that revenue and EPS were above its expectations. Source
• Inventory discipline credited: Management attributed operating cash flow and lower days of inventory to continued work on optimizing inventory and operational excellence. Source

Coming up, as management said on 28 January 2026

• Third quarter ends March 28, 2026: Third-quarter fiscal 2026 closes March 28, 2026, the period covered by the sales and adjusted EPS guidance. Source
• Restructuring expected in third quarter: Guidance includes restructuring, integration and other expenses of $0.15 to $0.25 per share, net of tax, which lowers GAAP diluted EPS guidance to $0.95 to $1.15. Source

Figures management reported

Risks management discussed

• Operational: Restructuring, integration and other expenses were $25.2 million in the quarter, against $3.8 million a year earlier. These costs are excluded from adjusted results and guidance. Source
• External: Reported and constant-currency growth differ: EMEA sales rose 8.3% reported and 0.6% in constant currency, while Asia rose 16.9% reported. Source

Earlier plans management reported on

• Ahead: Management stated results exceeded the high end of the prior sales and adjusted EPS ranges. Source
• Not stated: Management described the sequential adjusted operating income gain as demonstrating the expected leverage. Source

Other quarters

• Q4 FY2026 earnings call
• Q3 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.