Avnet (AVT 2.99%), a global distributor of electronic components and embedded solutions, reported Q4 FY2025 results on August 6, 2025. The company delivered GAAP revenue of $5,617.8 million. Adjusted diluted earnings per share came in at $0.81, outpacing the consensus non-GAAP estimate of $0.75. While Avnet achieved higher-than-expected GAAP sales, GAAP operating income and operating income margin continued to decline versus the prior year's levels. Overall, the period showed growth driven by Asia and improvement at Farnell during Q3 FY2025, yet profit pressures and soft performance in Europe and the Americas continued.
| Metric | Q4 2025 | Q4 2025 Estimate | Q4 2024 | Y/Y Change |
|---|---|---|---|---|
| Adjusted Diluted EPS (Non-GAAP) | $0.81 | $0.75 | $1.22 | (33.6%) |
| Revenue | $5.62 billion should be $5.62 billion rounds from $5,617.8 million, but the correct value, using standard rounding to two decimal places in billions, is $5.62 billion. However, the cell value "$5.62 billion" is valid as $5,617.8 million rounds to $5.62 billion. | N/A | $5.56 billion | 1.0% |
| Operating Income Margin | 1.3% | 3.0% | (1.7 pp) | |
| Adjusted Operating Income Margin | 2.5% | 3.5% | (1.0 pp) | |
| Free Cash Flow from Operations | $139 million | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q3 2025 earnings report.
Business Overview and Strategic Focus
Avnet is a link between electronic component manufacturers and companies that build electronic products. Its business includes distributing semiconductors, connectors, and embedded computers for customers in a wide range of industries. Two main operating units are Electronic Components, which provides a broad selection of parts and value-added services, and Farnell, known for an extensive catalog and design support for engineers.
In recent years, Avnet's focus has been on building strong supplier relationships, broadening its product portfolio, and extending its geographic reach. Its competitive strengths include global scale, diversified product offerings, and value-added services such as design support and supply chain management. Success depends on maintaining a broad supplier network and the ability to deliver components quickly and efficiently to customers in different regions.
Quarter in Review: Sales, Margins, and Segment Trends
During Q4 FY2025, Avnet's GAAP revenue grew 1.0% from the prior year, supported by robust performance in Asia. Asia posted a 17.6% increase in GAAP sales, contributing $2.69 billion and making it the only region to achieve year-over-year sales growth for four consecutive quarters through the end of Q4 FY2025. The Americas saw GAAP sales decrease 2.0% to $1.33 billion, while EMEA GAAP sales fell 16.7% to $1.60 billion, revealing continued headwinds outside Asia. According to management, Asia's growth played a pivotal role in surpassing the high end of revenue and earnings guidance, but carried lower margins compared to Western regions.
Profitability was under pressure despite sales growth. The company's GAAP operating income margin dropped to 1.3%, down from 3.0% a year earlier. GAAP operating income, at $73.5 million, declined 55.3% year over year. Adjusted operating income margin also fell to 2.5% from 3.5% in the prior year. The Electronic Components segment achieved 0.8% GAAP sales growth, with a GAAP operating margin of 3.0%, down from 4.1% a year ago. Farnell, which provides electronic parts and test equipment for engineers, showed improvement with a 3.0% annual sales increase and a margin rise to 4.3%.
Adjusted diluted earnings per share dropped to $0.81, down 33.6% from the prior year, but still exceeded analyst expectations by 8.0% (non-GAAP). The gap between Generally Accepted Accounting Principles (GAAP) and adjusted results was notable, with GAAP diluted earnings per share falling to $0.07, due in part to higher restructuring and integration costs.
Avnet continued to prioritize working capital management and inventory reduction. Accounts receivable fell by $63.7 million. Operating cash flow was $139 million and $725 million in GAAP cash flow from operations for FY2025. The company returned $28 million to shareholders as dividends—and repurchased $50 million of shares, representing 1.3% of shares outstanding.
Looking Forward: Management Guidance and Key Areas to Watch
For the first quarter of fiscal 2026, management guided for GAAP revenue between $5.55 billion and $5.85 billion, representing a midpoint increase of about 2% sequentially. The company expects adjusted diluted earnings per share of $0.75 to $0.85. Guidance assumes continued sales growth across all regions. GAAP diluted EPS guidance stands at $0.65, reflecting ongoing restructuring and integration charges.
Investors should keep an eye on regional sales mix, as a further rebound in the Americas and EMEA is needed for overall margin recovery. The sustainability of operating margins and continued progress on inventory reduction are additional areas to monitor. Tariff-related costs and price competition remain important variables for the company. Ongoing improvement in Farnell's operating margins, particularly efforts toward regaining double-digit profitability, also stands out as a key focus for upcoming quarters, as discussed by management during Q3 FY2025.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
