The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Joe Quatrochi - Wells Fargo Securities, LLC - Analyst
: Yes. Thanks for taking the questions. I wanted to kind of understand the puts and takes on the revenue guide for the June quarter.
It's a bit weaker than some of your suppliers that have already guided for the quarter, implying their revenue would be up low or
mid or even in some cases, high single digits sequentially.
So I wanted to kind of understand the difference there. And then maybe on -- as a follow-up to that, how do we think about your
inventory expectations given that you're guiding for flattish growth and some of your suppliers are guiding for growth?
Question: Joe Quatrochi - Wells Fargo Securities, LLC - Analyst
: Okay. And then as a follow-up on tariffs, I mean, you kind of touched upon it in the prepared remarks, opportunities for your supply
chain services for your customers? And can you talk about that? And what does that look like? And can you remind us of any just
kind of the details from the financial profile of that business?
Question: Joe Quatrochi - Wells Fargo Securities, LLC - Analyst
: Thanks for the details.
Question: William Stein - Truist Securities - Analyst
: Hi. Can you all hear me?
Question: William Stein - Truist Securities - Analyst
: Great. Thanks for taking my question. First, on Farnell. You did a bit better there than we expected in the quarter, both revenue, but
especially in margins. Can you elaborate a little bit on what went on in the quarter and what your longer-term expectations are for
that business, please?
Question: William Stein - Truist Securities - Analyst
: Thanks for that. The next thing I'd like to linger on for a minute is inventory. There's always this sort of push and pull at least in the
discussion. I think you tend to always cite that investors push you to keep that number low. I think that's fair. But you today and in
the past have talked about this as being sort of strategic and highly valuable to both customers and suppliers.
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APRIL 30, 2025 / 4:00PM, AVT.OQ - Q3 2025 Avnet Inc Earnings Call
So I wonder, first, would you consider establishing a higher sort of go-forward target level for inventories? Like maybe this is the
right level for a longer-term level. And if not, if you're trying to get them down, I am sort of surprised that even on the FX-adjusted
or a constant currency basis, you had revenue down 6% in the quarter. You talked about trying to get this number down, yet it was
only down about 1% on constant currency. So sort of which approach is right? Are you targeting higher levels longer term? And if
not, why didn't it come down faster? Thank you.
Question: William Stein - Truist Securities - Analyst
: Thank you.
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Question: Wamsi Mohan - Bank of America - Analyst
: Yes. Thank you. So it's Wamsi filling in for Ruplu today. A few questions are on tariffs for me. Have you seen any activity around order
patterns and linearity change at all based on the tariff news? And in particular, has there been anything that you can see relative to
pull in or maybe activity jumping up in Asia ahead of end products getting shifted to the US?
Question: Wamsi Mohan - Bank of America - Analyst
: Yes, that's helpful, Phil. Thanks again, too. Maybe just to think through this quantifying that you've done 7% to 10%. As we think
about that, I think you said that some of that also goes via Canada and Mexico. So what is the ability for you to kind of shift maybe
geographical exposure there in working with your customers? That's question one.
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APRIL 30, 2025 / 4:00PM, AVT.OQ - Q3 2025 Avnet Inc Earnings Call
And two, as you think through, are you expecting cash flow timing issues relative to when these tariffs go and impact on that
exposable piece. Can you just walk us through the dynamic there based on when maybe payments are being made versus what you
might be able to recoup?
Question: William Stein - Truist Securities - Analyst
: Okay. That's super helpful. If I could just one quick last one. This might be a little unusual. But in terms of your visibility into looking
into AI-driven components or components that end up in AI-based systems. How much visibility do you have into that? And would
you say that anything has changed either for the better or worse in that if -- to the extent that you have visibility there?
Question: Wamsi Mohan - Bank of America - Analyst
: Okay. Great. Thanks
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