Avnet Inc Q1 2026 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: William Stein - Truist Securities - Analyst : Great, thank you for taking my question. Congrats on the good, quartered outlook first, I wanted to ask, Phil, you mentioned revenue in the data center, I think, AI application category. I suspect your exposure there is still relatively small compared to the overall sales. Can you just bring us up to speed on that metric, please?

Question: William Stein - Truist Securities - Analyst : Yeah, so it sounds like 7% of your Asia sales. As a follow-up on a different topic, inventory days in the quarter were flattish. I think you called out down a couple of days sequentially, but my model is roughly flattish. It's not a huge difference anyway. But we expected this number to be down more meaningfully. Maybe I just got a little bit ahead of myself, but that drove cash flows negative in the quarter. And you talked about investing for future growth and other things. Maybe I'm just hoping you can help set expectations going forward a bit here. Should we expect this relatively higher number of inventory days to persist for longer term, maybe even perpetually? Or should we expect inventory days to come down over time? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2025 / 4:00PM, AVT.OQ - Q1 2026 Avnet Inc Earnings Call

Question: William Stein - Truist Securities - Analyst : Just one follow-up to that quantification. 80s like, in a year, in three years? Any sort of trajectory you can give us would be helpful.

Question: William Stein - Truist Securities - Analyst : Yeah, thank you.

Question: Joe Quatrochi - Wells Fargo Securities LLC - Analyst : Yeah, thanks for taking the question you called out EMEA being better than seasonal in the September quarter and then -- thinking that it could be flattish for December. I can appreciate the seasonality is a little bit difficult to kind of call right now, but like, how do we think about, I guess, the demand profile of that for the December quarter and kind of your visibility relative to seasonality in EMEA?

Question: Joe Quatrochi - Wells Fargo Securities LLC - Analyst : Got it. And then just trying to think about now that the total business has returned to year-over-year growth. How should we think about just incremental margins for the business? Appreciating obviously, the geographic mix matters, but the Americas turning to

Question: Joe Quatrochi - Wells Fargo Securities LLC - Analyst : Maybe just one last follow-up. In the prepared remarks, you talked about suppliers seeing potential for price increases. Just wondering if you could maybe provide any more color on that front and just any additional details?

Question: Ruplu Bhattacharya - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hi, thanks for taking my questions. I want to ask a couple of more questions on margins. So if I look at core segment margins, they were down 10 bps sequentially on $250 million higher sales sequentially. And look, from the guide, it looks like the trends are the same with Asia growing and America is growing as well, whereas Europe is flat. So Ken, when we think about core business margins, I mean, how should we think about that over the next couple of quarters? And what needs to happen for the margins there in the core business to get above 4%? And do you think that can happen in fiscal '26? And then I have a follow-up.

Question: Ruplu Bhattacharya - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Okay. Yes. No, that makes sense. Can I ask the same question on margins for Farnell? If Europe remains flat from a revenue standpoint, can you still see Farnell margins continue to grow 50 bps, I think you were targeting? Is that -- does it depend on overall revenue? Or does it -- is it more dependent on mix? I think you called out some mix impacts this quarter. So again, how should we think about Farnell margins going forward?

Question: Ruplu Bhattacharya - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Got it. Can I sneak one more in for you, Phil? You've mentioned demand creation revenues and IP&E. What are those each as a percent of revenue? And are -- I'm assuming these are higher margin businesses. I mean, what is the margin delta with the core business? And can they be meaningful drivers for margin upside over the next couple of quarters?

Question: Ruplu Bhattacharya - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Okay. Got it. Thanks for all the details. I appreciate it.

Question: Melissa Fairbanks - Raymond James - Analyst : Hey guys, thanks so much for taking my questions. I wanted to start off first with some questions around the transport business. Phil, I think you highlighted that as being one of the areas where you saw some favorable trends. Was that across all geographies? Or was it kind of more limited to the areas where you saw growth in Asia and the Americas? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2025 / 4:00PM, AVT.OQ - Q1 2026 Avnet Inc Earnings Call

Question: Melissa Fairbanks - Raymond James - Analyst : Sure. Yes. Do you have any kind of visibility into what your exposure to either pure EV or hybrid versus kind of that traditional supply chain for ICE vehicles?

Question: Melissa Fairbanks - Raymond James - Analyst : Okay. Yes, that was a bit of a trick question. I didn't expect you to.

Question: Melissa Fairbanks - Raymond James - Analyst : Maybe one quick follow-up on the data center business. Especially as you're getting deeper into some of these higher value components, whether it's the memory, the storage, the FPGA, the interconnect. Is there any change in linearity with either how the bookings come through for that business? Or is it still just kind of book and ship and you see turns in the quarter?

Question: Melissa Fairbanks - Raymond James - Analyst : Okay, got you, thanks very much that's all for me guys.