Avnet Inc.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 29 April 2026: press release. Guidance figures: 2 raised, 4 new, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Sales rose 34% to $7.1 billion: Sales were $7.12 billion, up 34.0% year over year and 12.7% sequentially. Constant-currency growth was 30.2% year over year. Source
• Adjusted EPS up 76% year over year: GAAP diluted EPS was $1.14, up 12.9% year over year and 52.0% sequentially. Adjusted diluted EPS was $1.48, up 76.2% year over year and 41.0% sequentially. Source
• Electronic Components sales up 34.7%: EC sales were $6,665.1 million, up 34.7% year over year and 13.1% sequentially. In constant currency, EC sales grew 31.2% year over year, and EC operating margin was 3.5%. Source
• Operating income grew over twice sales: GAAP operating income rose 40.6% sequentially to $205.5 million, while sales grew 12.7%. Management described this as operating leverage. Source
• Operations used $54 million of cash: Management said the company used $54 million of cash for operations to support $800 million of sales growth. Nine-month operating cash flow was $9.8 million, against $585.0 million a year earlier. Source
• Fourth-quarter guidance ranges set: Guidance is sales of $7.30 billion to $7.60 billion and adjusted diluted EPS of $1.70 to $1.80. GAAP diluted EPS is guided to $1.20 to $1.45. Source

“Sales and earnings exceeded our expectations, with double-digit sales growth both sequentially and year over year.”

Avnet Chief Executive Officer Phil Gallagher

Guidance

What changed from last quarter

• New guidance: Fourth-quarter fiscal 2026 sales and adjusted EPS ranges were given. The prior release gave ranges for the third quarter only. Source
• Guidance kept: The adjusted effective tax rate range of 21% to 25% was repeated from the prior release. Source
• Guidance kept: The 83 million average diluted share assumption was repeated from the prior release. Source

Results and growth drivers

• Sales rose 34% to $7.1 billion: Sales were $7.12 billion, up 34.0% year over year and 12.7% sequentially. Constant-currency growth was 30.2% year over year. Source
• Adjusted EPS up 76% year over year: GAAP diluted EPS was $1.14, up 12.9% year over year and 52.0% sequentially. Adjusted diluted EPS was $1.48, up 76.2% year over year and 41.0% sequentially. Source
• Nine-month sales grew 16.6%: Nine-month sales were $19.34 billion, up 16.6% year over year and 14.2% in constant currency. Nine-month diluted EPS was $2.49, against $2.65 a year earlier. Source
• Operating margin up 58 basis points: GAAP operating margin was 2.9%, up 58 basis points sequentially and 19 basis points year over year. Adjusted operating margin was 3.1%, up 38 basis points sequentially. Source

Segments and regions

• Electronic Components sales up 34.7%: EC sales were $6,665.1 million, up 34.7% year over year and 13.1% sequentially. In constant currency, EC sales grew 31.2% year over year, and EC operating margin was 3.5%. Source
• Farnell margin reached 5.2%: Farnell sales were $454.7 million, up 24.0% year over year and 6.5% sequentially. Farnell operating margin was 5.2%, up 224 basis points year over year. Source
• Farnell double-digit growth for three quarters: Farnell grew double digits year over year for a third straight quarter. In constant currency, Farnell sales rose 17.9% year over year, against 24.0% as reported. Source
• All three regions grew year over year: Americas sales were $1,615.0 million, up 26.7%. EMEA was $2,046.3 million, up 31.3%. Asia was $3,458.5 million, up 39.3%, and 48.6% of total sales. Source
• EMEA growth lower in constant currency: EMEA sales rose 31.3% as reported but 18.9% in constant currency. Americas and Asia growth rates were the same on both bases. Source

“We see the momentum building in our business, indicative of broadening strength across all regions in our core markets.”

Avnet Chief Executive Officer Phil Gallagher

Costs and margins

• Operating income grew over twice sales: GAAP operating income rose 40.6% sequentially to $205.5 million, while sales grew 12.7%. Management described this as operating leverage. Source
• EC gross margin slightly lower: EC gross profit margin was 9.2%, against 9.3% in the December quarter and 9.9% a year earlier. Farnell gross margin was 27.2%, against 26.8% in December. Source
• Cost management credited for margin gains: SG&A expenses rose to $518.8 million from $491.7 million in the December quarter. Management attributed the improved margins and leverage to cost management and inventory optimization. Source
• Restructuring costs excluded from adjusted results: Restructuring, integration and other expenses were $14.7 million in the quarter and $48.2 million year to date. Adjusted operating income excludes these expenses. Source
• Income tax expense rose: Income tax expense was $46.2 million on $140.6 million of pretax income. The year-earlier quarter had a $9.8 million tax benefit. Source

Cash, inventory and working capital

• Operations used $54 million of cash: Management said the company used $54 million of cash for operations to support $800 million of sales growth. Nine-month operating cash flow was $9.8 million, against $585.0 million a year earlier. Source
• Inventory days down to 77: Days of inventory were 77 in the quarter, and EC days were below 70. Inventories were $5.46 billion at March 28, 2026, up from $5.29 billion in December. Source
• Receivables and payables both rose: Receivables were $5.50 billion, up from $5.24 billion in December. Accounts payable were $4.63 billion, up from $4.34 billion. Nine-month receivables used $1.21 billion of cash. Source
• Return on working capital rose: The company reported that return on working capital expanded more than 300 basis points sequentially. Source

Capital and shareholder returns

• Dividends of $29 million paid: The company returned $29 million to shareholders in dividends in the quarter. Dividends per share were $0.35, against $0.33 a year earlier. Source
• No buybacks in the third quarter: Nine-month repurchases were $138.3 million, the same as the six-month figure. This implies no repurchases in the third quarter, against $253.5 million in the prior nine months. Source
• Convertible notes and term loan added: Nine-month financing included $633.8 million of convertible notes, net of costs, and $268.1 million of term loan borrowings. Short-term debt was $470.1 million, against $87.3 million at June 2025. Source
• Capital spending lower year to date: Nine-month purchases of property, plant and equipment were $56.8 million, against $87.9 million a year earlier. Source

Fourth-quarter assumptions and strategy

• Fourth-quarter guidance ranges set: Guidance is sales of $7.30 billion to $7.60 billion and adjusted diluted EPS of $1.70 to $1.80. GAAP diluted EPS is guided to $1.20 to $1.45. Source
• Currency rates assumed higher: Guidance assumes the euro at $1.17 and sterling at $1.35. The third-quarter guidance assumed $1.16 and $1.34, and the adjusted tax rate range is 21% to 25%. Source
• Digital investments paying off: Management said the company's investments in capabilities and digital infrastructure are paying off. Source
• Progress toward prior peak margins: Management said it expects to continue progressing toward its prior peak margin levels. The release gives no date or margin target. Source

Coming up, as management said on 29 April 2026

• Fourth quarter ends June 27, 2026: Guidance covers the fourth quarter of fiscal 2026, which ends June 27, 2026. The release gives no later date for the next guidance update. Source

Figures management reported

Earlier plans management reported on

• Ahead: Management said third-quarter sales and earnings exceeded its expectations. The prior ranges were $6.20 billion to $6.50 billion for sales and $1.20 to $1.30 for adjusted EPS. Source
• Met: Management said days of inventory improved to 77, achieving the near-term target of below 80 days. Source
• Not stated: Management said it expects to continue progressing toward its prior peak margin levels. No timing was given. Source

Other quarters

• Q4 FY2026 earnings call
• Q2 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.