AVT - Earnings call transcript Q1 2025

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Operator

Our presentation will now begin. Welcome to the Avnet First Quarter Fiscal Year 2025 Earnings Call. I would now like to turn the floor over to Joe Burke, Vice President of Treasury and Investor Relations for Avnet.

Joseph Burke

Thanks, operator. I'd like to welcome everyone to the Avnet First Quarter Fiscal Year 2025 Earnings Conference Call. website, financial and the on access the Relations of released fiscal quarter the at Avnet slide section XXXX the year release Avnet's your morning, convenience. results you first for of Investor presentation, This which with may along is available

not SEC. company's As some in are in actual such forward-looking risks, that or involve those Form filings uncertainties information results could assumptions that detail of guarantee differ the XX-K to contained most release Avnet's Such materially the could such news the that from a on forward-looking contained and differences this and contribute are in statements to subsequent performance, reminder, XX-Q difficult factors statements. statements predict. and described recent are Several conference and cause with the the in call of contain and

only These information date and no presentation. company undertakes presentation, forward-looking the statements of statements supply this publicly forward-looking speak date after of the the the any circumstances or to as obligation this of undertake regarding new

the today provided well website. note, full the in be stated, issued otherwise press all will unless Relations slides appendix found presentation to today's and results be posted release GAAP non-GAAP non-GAAP measures. in reconciliation Please as of Investor can the The as on

With let turn the me Today's call to will Jacobson, Gallagher. be led by Phil? Phil that, Ken Avnet's call Gallagher, Avnet's CEO; CFO. and Phil over

Philip Gallagher

of above EPS for you, than both achieved and more XXXX Joe, you, sales on the $X.XX, we adjusted high guidance. everyone, call. of billion thank us quarter, earnings quarter and $X.X our the Thank year joining our first In end fiscal of

cash million $XXX flow the operations over quarter. from generated also in of We

continued by in our at were weakness strong Farnell. results by performance Our the West in and offset primarily Asia, driven

during working most a their efforts I cycle, this pricing thank dedication and the in know families. uptick well with technologies, for them compete costs in this continue managing their when Semiconductor and position challenging our and suppliers, and closely certain to with for by stable market lead product I and to continues team other want lead capital. market us recovers. slight customers well for and working times controlling Our to for memory pricing be times

On times be also lead the IP&E side, to stable. continue

Our book-to-bill little and ratio is ratio. below the improvement book-to-bill Asia showed with still region global our of sign strongest parity showing

business, portion of a its driven EMEA Our bookings seeing end transportation is billings demand. to and which large industrial the by markets business lower due has and softer

shorter to over lead continues destocking inventoried being mode. backlog in Our be times as result of and a and customers lower

normal at remained have Cancellations levels.

While inventory increased rates. sequentially, noted, it changes in foreign exchange almost increase all the to due currency should be of was

the need We expect the in to in balance reduce the but we with market. quarters, are to opportunities seeing levels the coming core inventory also near-term reductions

to to are continue We as for Avnet previously. be we good that those have shared opportunities open

You Ken, just inventory will hear more on in our minutes. a from that from few

bright essentially is basis with Asia, let to Asia started often also followed Now starting the have top underlying spot the sequential corner on our recovery with for The year-over-year a our the that region. have in year-on-year the cycle shifts Pac the returning by in turned Asia in by West. we market Historically, growth turn that, me on Electronic first EC At a declined quarter was Components business and results. basis. our business to flat line, and

come West. in at with point, the this the While that remain is things is to sign a too optimistic in to growth early any to positive of certainty we it call return Asia

communications XX% region, data Asia sales the In and and X% the and end powered year-on-year sequentially by increased server in strength markets. center

each sequential saw we growth year-on-year we major and market in that notable end serve. is it Additionally,

AI We the seeing region, data and activity including center compute in are are for we recovery cautiously optimistic projects. by the

defense the and be end aerospace backdrop. aerospace industrial In demand was EMEA, modest amid growth economic and market, continued and soft markets sequentially market to weak year-on-year. the and Americas, strongest year-on-year. automotive a increased we saw In The defense end flat in our and end was

the see end We saw We year-on-year. in sequentially market, the both markets. growth in and continue do softness end and compute also transportation industrial to

teams demand engage the design side, continue and On creation with customers registrations. on our wins and engineering our to suppliers

off down, converting our trend, overall While drive design demand which funnel, wins will consistent sales coming creation revenues into quarters. the continue to pay were our in engineers the revenues, with

Farnell. Now has a region. macro Farnell sales given been have turning EMEA from higher that impacted current than they percentage down of year-on-year. Sales and to environment, from the sequentially more were expected

Rebeca While quarters. underscore months, we over would improvement areas few in under we recently are transition are actions disappointed Obregon. I Rebecca President, its In of to appointed key a identified for taken with that couple has the Farnell's just and a be next period results,

things cost business our against the Although control, Farnell focus and margins. we the the to market executing is conditions, due reduction and to including under on challenging we top stabilizing line can continue gross pressure initiatives

at While to we the am strategy results we cut improve work right for have I in out coming quarters. the have leadership, Farnell, our us confident focus and

thank we To to dedication and under and our spirit such team I resiliency, the we market conditions. and conclude, our want as navigate continue current competitive for demonstrate correction, strength challenging to their

will why continue, difficult reasons market of correction long a about optimistic there it is I'm number the are to While the gauge how future.

to past grow we to leaders time In units of benefits of business was able business, our partners. several month, our see of the spend well with IP&E as to globally. top I the the opportunities road, as the executives our on some of And all continue and while supplier

supplier mass opportunities tapping demonstrate distribution, to our better grow value partners automation see serve by with the continuing our of including to also market. to share We capabilities digital the

the areas. we book-to-bill inventory slowly and certain improvement That speak in with and I supply the across global years, pockets calendar the regularly, These backlog. primary in industry and follow coupled with serve: and our lead with single-digit of on markets growth projecting servers defense, Based well the still data center. aerospace same highest mid- our the dynamic, X sources on high improving, are bodes to transportation next industry end the and chain suppliers buildup average, rates for we the oversupply current industrial, sources in to levels customers growth are rates of granted times and over

we areas Further, business our are indicators. that currently see X of positive

data for First region to is in growth healthy with Asia a year-on-year and projects. server AI-related return activity center our

the which indicator good usually of is turns demand. modest our in Second is increase business, a future

to and to for deliver has to stronger we in At our out of times being able the what's are on their reach product from helping thrive center changes and for than solutions a to at technology long like customers end-to-end the Avnet to our of tail the be to customers. adapt satisfy wherever customer supplier journey. proven supply next partners providing chain, ability Finally, XXX more weathering their years, they corrections market, the this, coming needs,

over With dive that, results. I'll quarter to it first into Ken? Ken our to deeper turn

Ken Jacobson

Thank for We quarter interest appreciate good morning, everyone. you, and Phil, and your joining call. first in earnings our Avnet

down sequential $X.X were basis, first guidance sales up sales X%. billion, and range Our our the year-over-year. a XX% above approximately On quarter were for

XX% but increased in sales X% the XX% sales group Component basis, year-over-year X% EMEA X% Electronic declined an and operating in sequentially. From declined XX% increased Americas. in and year-over-year sequentially. sales perspective, a on Farnell Asia declined year-on-year Regionally, but XX% declined

from margin gross gross the XX to points XX.X% sales and shift For to sequentially lower due lower year-over-year. components decline driven was was foreign the mix primarily mix quarter, impact due both Farnell first and was sequentially. to and margin year-over-year sales year-over-year year-over-year, due was down margin mix declines EC is of Asia. The a of XX currency. down sequentially were points of lower of Asia. the primarily on-the-board basis The basis higher sequential by gross a primarily to primarily down and

were expenses or Turning $XX or to quarter, down X% year-over-year in the down XX% operating million $XXX million million expenses. $XX and sequentially. SG&A

a dollars, at profit sequentially As were of percentage higher SG&A XX%. expenses gross

additional permanent integration Farnell reduction actions were in first the Farnell, being And million expenses, and $XX the realized expected. sequentially. expenses the million nature. expense at as actions Farnell are primarily operating restructuring, and incurred which quarter, In $X taken are continuation year-over-year previously for of we down other expense

were operating than lower quarter anticipated. expenses first Overall,

expect As modestly increase move sales business underlying through recovers. the XXXX, and expenses will improve when we fiscal we

and For X.X%. margin Asia. million, $XXX the first adjusted operating mix operating group, due million was income primarily seasonal decline was sales our EC margin was was to quarter, operating Electronic X%. in By operating we operating to $XXX of reported margin The sequential income shift adjusted operating and the Components EC

on to X%. was gross to Farnell Farnell's foreign unfavorable income in income currency operating sales operating due the due and rates. $X impacted operating decreased sequentially, changes Farnell and from to margin impacts exchange approximately margin in was declines margin negatively million primarily

operating below income. expenses to Turning

flat quarter million expense $X decreased sequentially. $XX was by interest First of year-over-year million and

tax in income diluted effective adjusted rate XX% Adjusted expectations as expected. quarter. earnings share for our $X.XX of Our the exceeded per the was quarter

Turning to and the sheet balance liquidity.

constant to the by million by days changes million X capital in $XX driven $XX XXX sequentially, foreign capital all rates. days days. working exchange capital During working decreased currency, quarter, increased sequentially. currency quarter-over-quarter In decreased Working

decreased capital on on return operating Our accordingly lower the working income.

$XXX foreign increase in was largely exchange million reported of rates. driven in changes The inventories currency by

a days Additionally, during increase inventory to of couple was a which related payable. quarter, of corresponding received in drove inventory accounts the increase last portion the the of

sequentially days XXX to X days. improved days Inventory

Our investments on We is to we days make focused the this to near-term remain XXs also inventory year. elevated, goal levels get the reducing in of by noting inventory that fiscal needed. want where end where

on benefit increases we with our continue Avnet. consider conversations supplier will only specific to partners a inventory there's if ongoing We opportunities have for to that

share. benefits terms, or incremental stock may rotation rights improved additional include additional margin, Such market

these supplier focused beneficial are that on and to approach partners. achieving on Our Avnet mutually our is win-win opportunities outcomes

million. in led in in operations cash million working $XXX We increase from increase an of the generated quarter. $XX Our capital debt of to

from in by negatively was quarter, a the income transition million TCJA. payments $XX operations from XXXX flow for payment over of million including tax tax $XX impacted the Cash

million we capacity. with With committed continue gross and leverage capital Xx, ended existing to prioritize our had $XXX regards needs. of a the business of we available allocation, We our to quarter approximately borrowing

X% used million million per $XX the quarter. expected increased $XX quarterly approximately $X.XX levels approximately million by dividend per cash quarter, $XX share. for During to CapEx of within quarterly was our to We our

$XXX commitment cash buyback our free part reduce authorization our continue our share of count. to expanded flow Board to positive to million to Our use as

$XXX and allocation of and track our dependable year, repurchased count at X% commitment returns X% we approximately least million quarter, to goal in which this fiscal worth more with represented our capital shares, on to line consistent share the priorities shareholders. provide of shares reduce by We're our outstanding. than to In for

share. Book value to a share improved $XX approximately a per sequential share increase $X or per of

guidance. to Turning

quarter sales XXXX, guiding second per of $X.X billion $X.XX. the $X.X billion fiscal the we diluted of the For to $X.XX in range are of and range earnings in share to

assumes and Our X% second approximately sales approximately persist sales guidance X%. sequential of current a implies growth decline conditions quarter to of market a

performance flattish XX% and quarter first assumes interest the with to and XX% it sales XX effective million basis. and of guidance compared assumes a shares guidance fiscal This each assumes quarter, is on outstanding tax expense also rate generally similar consistent EC an the This in between region first diluted Farnell's XXXX. of

well have do. In plenty work can team to execute to we control, against closing, our still we the but continues areas of

this Avnet changing continues through benefit customers market and We remain demonstrate our rapidly market today's Given to our our value long team downturn term. will the confident proposition in suppliers. to our approach conditions,

it will for Operator? I it that, to open to up over With the operator questions. turn

Operator

Instructions] first [Operator question the line from Wells of Quatrochi with Fargo. comes Our Joe

Joseph Quatrochi

ex return in wanted growth. those comment your I fairly nascent I probably well? kind ago. in understand to growth of center I year-over-year wonder, leading to you're year-over-year terms Asia Yes. center a to we opportunities I Are a seeing of think just that ex indicator year returning as the guess kind as seeing, Asia data are of data

Philip Gallagher

aerospace, seeing But this Phil. not us us, about number that's some in honest carrying the We're the -- upside increase down a an Europe script it what's Asia. with be It's and really that's in the in is some even is for for Asia we Joe, in is Yes, particularly today in not than Europe or it have much than consumer, the and some as Asia. AI huge Asia, bit there. but on to we believe not, It's Americas. a more Americas as industrials seen little over mentioned pronounced, not the communication, compute, you.

there We of broad in ton -- really some power there. a bit analog board. hyperscalers. it's say, do across So China center I'd a play Even for or flattened lines data it's out the little We is and don't than kind some more But large get benefits some the just it's lines. connector us.

Joseph Quatrochi

a Maybe I that kind and we on think mean, here, back helpful. path the can you double-digit think That's then the as along has side, lines, that you was do that assumption still I what mean, does planning? basis? those And I target? And take Okay. your go-forward gave guess I to step we I EBIT go-forward just that business on guess of Farnell about some of guys to that kind require? try out return relative target, the to impact this and played pricing how And think pricing when probably like around of maybe there a structurally,

Philip Gallagher

are with Farnell accelerated some in I we here. where today. don't Yes, some highlight of Joe. bit little just want a Thanks, down Couple high of were alone things service. we're let where We in reemphasize. might the than We are Yes. We're think we have more to from we to disappointed others. where me

First XX%, the off, It get X% revenues Farnell to our your of close income, of answer can ranges believe model. it those XX% -- believe operating is question that ago, and to we our yes, long was wasn't in we your and to back again. it absolutely

script, in We're there in new looking Rebecca We've leader the her announced some She's restructuring. July, over mentioned actually I now at as a with team. Obregon.

Ken year started a out, that we about As so or ago. pointed

restructuring anticipated. numbers the of keep down has world, in the tougher the time and in in costs. Europe than they're We we And market accelerated mind, we have rest having hit balance market. than heavier for more are they is even of the targeted the Unfortunately, than a the Europe

not that. immune they're So to

what's XX%, that's interesting to line activity, down, activity, X% The if let's is the business Farnell, -- the down call about it, item activity, yet you XX%.

line as down. activity a down item more down value or near -- is bit what little So as line not item revenue item are line the the says the per line much which items the the Xx almost is

a have working combination we things So of at Farnell.

are bunch that the We sales out going a fill regional to We're needed the All staff, as quarter are there. to by the restructuring round well, filled. positions another of through of changed way, doing a we restructuring. We've model. the

Now we've got focus to on execution.

Joseph Quatrochi

we're get bouncing here? do Or worse to here Okay. that. I And did maybe kind get quick a before of mean, bottom on just they follow-up as from better? things the you think

Philip Gallagher

because about think And this we're bouncing you along did We're We at bottom. Farnell. -- too hoping see asked to the modest improvement quarter. the you margin other and thing

the it's of at down more to the than a the that's whammy. tend onboard Some of components the measurement IP&E They balance test business. run and the and margin than double semi got onboard components, higher

margin. okay, whammy components double So Measurement onboard a we on at kind of runs and the of kind lower holding down. is up there, Test just but

So I to just in. wanted that throw

Ken Jacobson

Yes, Joe, this is Ken.

for bit now the But now unfortunately, and has margins foreign taking Just a from line on product, like-for-like cost have been Farnell, stable dropping a had just cost It's been quarters little we intended. pretty top is past that. benefiting. plus of probably gross I that traction for and movements currency for to faster are quarters impact overall than say that. would currency, a to row X stable the are It's the things think Farnell. of but like profile from margin a add line really actions the I top pricing couple as in actions

Philip Gallagher

-- and ago. just expanded Rebecca the with just Pac, team Japan, and e-commerce Asia to Ken guess there just were expanded actually, time last our Japan new last commitment -- site there further I expanded. X new Farnell, We're in weeks I is we in into

So...

Operator

Ruplu Our Bank comes the next from line question of Bhattacharya with of America.

Ruplu Bhattacharya

where one we If for couple bottom? at another terms you trends of WT Phil Ken. of also, give mean, future Are innings you could us And are any market of seen you and just on have impact have the for acquisition, there's one the negative this in. positive do correction, Phil, I terms we of think in either that. trends? your I think correction? are you in Or or from we any quarters view Micro the what do

Philip Gallagher

Yes, great question.

We we're the the ago, we crystal into it's Ruplu thought time of quarter think it would we're on outlook few said I getting the X. that think or we now, challenges hasn't in West. the and on particularly ball the a turning another by obviously quarters market, that start some happened across and with seeing board,

which are tough But early has I probably really into book-to-bills think eaten bit. XXXX. it's little going think it's not call. negative. been because I'm it's more to call Backlog to a I up -- quarter still The

grind what So I think through we December we're guided. going to to

we've And at this March June of the then kind best we'll I quarter. think uptick time, this see in at an I latter the just a choppier it's point part quarter come we maybe into to and It's little the but see can better to on I start lasted it -- longer of point, little other thought, bit through than thought, and we realized bit a out managing this the think all is than going side. we're

of was... part your second The question

Ruplu Bhattacharya

WT Micro...

Philip Gallagher

X, have earthshattering still just some in them publicly pretty great we'll don't got synergies or and compete we end. is we is you No, much Future that competition. competitor past. on still them a Yes. and competitor, privately a great on the as we're our and separately, go But WT one, really competing they're as with with definitely nothing between operating but the like although they comment, know,

Ruplu Bhattacharya

Okay.

what impact? impact the worse versus talked Ken, How when As mix a from being sequentially question about margin. ask was you mix reasonable what a this -- what a components then much another at this was lower. next of margins you much onboard we drivers How about can the back operating And think Farnell, of for I get operating the follow-up, on that double-digit FX you is couple margin target are business, operating business? look quarters? And to can Do it for margin? ever the over drive

Ken Jacobson

part to aspects I it's And are question but first, that. little we reality cost in the to that. we do, I a more Generally to that in, your OpEx. drive we to dialed Phil there of think believe do historical you think the business. the traction of double seeing I get growth thought. kind over back longer We we last we terms than going all answering there's of I think have digits, think the return way still see answered we some there, commentary, of take the think work to in want levels. is, we're million-plus The $XXX sales The

returns, sales it's going mix a when And be on-the-board higher that components. growth of to

well. gross So that helps as margin

and So to the just think of down. market, that components. in And the I just service recovery It's as board some in overall transactional the up aren't the high really of mentioned really the is a well. on space there overall is margin well the Phil matter competition mix immune this holding

back think with points, in you some We it So recovery. know market probably of this both of some with kind those to that impact we basis XXX anticipate things. comes but somewhere From those to never don't of return, necessarily was the XXX quarter. the FX,

So too there... impact continuing to hedging look to to our other at try we're minimize and things

Operator

Sheerin line of Our Matt comes the with from next Stifel. question

Matthew Sheerin

think commentary right like just weakest looking market the down you're regions. terms days. in sort December sounds guidance sequential that, EMEA, it seems on sequentially growth the and quarter, is right? typically, at on of And for your it of like about across question selling a the demand Europe now. flattish, I is Is Europe Phil, Because the

that? So could just clarify you

Philip Gallagher

hear from Yes. you. to No, Good thanks, Matt.

of it kind You right. about articulated

they bounce very in the seeing And down in modest did net with right, bounce typically, -- we're back March in the with back West. September a December. it's March, So not holidays quarter typically happen as in over Americas, in regional Europe, year, extended, recall you're typical, not Europe the not are but in every modest, last December which uptick it's the

I little September. in mean, a we're And it's down a of low also, think bit different pretty year. I Matt, So frankly,

coming in for now. Europe number well, going know I right on what's off we're in Competing So September in a we in low us Europe. think all

years. came well it's came proud team, the we're a of So and we competing in lowest but with the pretty -- been in the well, we in multiple

to optimistic flat be why kind that's So be modestly Americas Europe. Asia, in we and might of same to able Then we're thing. up

Matthew Sheerin

it. Got

bit was back the Okay. think And working on we a looks mix going gross and I Premier against like is And lowest that should about like in be I on But margins -- you, you That then number talked that few how about again mix December. margin, Farnell. flat it the years. that a then it little that looks should gross see know XX.X%.

how margin things So or the through other mix? Is it we in Or we dependent should gross fiscal on pricing just as there? year? get is think about there the mix

Ken Jacobson

mix quarter think nailed shift margin. is mass And I seeing than, better. a market regional demand within then let's X customers demand Matt, pricing larger upside bit bit the the saw puts doing a business a Asia takes. say more from probably biggest the and each little driver. came that Yes, drivers and biggest better We're in hold say, the the that business, We're the customers Farnell I'd seeing customers second The gross you overall in might weaker terms Asia have there's the up environment. just little of some obviously, bit on we bigger in the mix. of in little

a is of think, OpEx normal little takes other going puts I differences margin some there's timing there but that, up like a and gross we're things on up then general, range. that kind from it. how of flat within as So OpEx of thinking slightly bit to would kind and similar to be probably in the quarter, And about next in kind little there. But

Matthew Sheerin

it. Got

been inventory a where your fairly seen a And lot haven't the days. Okay. companies of progress lastly, of have any the then But significant just some back really you're the competitors, on big to know EMS in you reduction cutting XXs I inventory. targeting inventory,

Is because your So are I'm pushing I the back figure our guess you partly on the lagging? rescheduling customers have of timing is, been out of kind question just why inventory. that this trying still to orders?

Ken Jacobson

Yes.

the in customers' comment won't I dynamics levels. say the think of same but would of terms what I competition, on inventory seeing we're is still I some

Our comment is quarter in was then here this a currency, FX dollar was was some and the absent had really weakened euro but driving particular, the against the inventory we mostly there end bit the doing things quarter. down we're going past of happen towards keep the of one, And couple inventory I think to have prior in this nicely. we quarters done to came general, -- little

of we of or think some normalize where market to We're opportunistic. we've can the and increases hey, think the path. there least Matt, still absent take require quarter some of inventory flattish try But differences. X, we another going out advantage right? just temporary I I in one-offs of directionally that got when are plenty a and against for while you the work guess, things down timing right, FX but to going to There's some seeing do we execute still, at is continue them to for being here, some opportunities, to of be some these or may emphasize, we inventory

and on where of got we've It's I'll specific view certain we'll we inventory changed It's But in focused with of we our is of of needs It's not #X work say very the sight continue it. is the we're whenever think I guess line just term, the team reductions. those everywhere. get. some topic nothing's to #X on up products to to terms long And bring that team. what or

to continue hurting still and only is to is hurting also emphasize the go pockets And there so execute it it. of it's but good believe inventory drive gets and our a we not thing, kind to cash broader against, we We flow, need everyone that that returns. excess it's want but we of

So...

Philip Gallagher

had special we win-wins we we signaled and Avnet on last both And Matt, quarters we opportunities yes, couple the thought some that in -- good that, and were supplier. of the for Matt,

to we work by So Rest XXs. know get really, it take of surprise to but the a inventory it's work. the that totally about down. some And really down need didn't way, back into need the going us, dozen we it's suppliers to we And is a fine. half it

Operator

with next Instructions] from Our of Securities. question the Stein comes Truist line [Operator William

William Stein

I have a couple.

next over this talked X I'm years. to think if wind 'XX to sales fiscal end fiscal the you have Phil, if revenue seeing growth do we'll expect turn the towards grow a and full First, year-over-year you you wondering, about up at maybe the view you during strength point, the even of year? year current year in

Philip Gallagher

and our here, In -- June, current that, of didn't Vuja current we well, instead happen. fiscal Will. of year, we're Déjà and in it Vu July the to same fiscal is our year, year kind anticipated reemphasize last going We're to to De just the -- it's

of we last the boat were same kind in we're So year.

fiscal at a I'll December. increase. anticipating mean, and low, September second that. we're are it We guiding flat I pretty in leave was half

that. modeling So half some fiscal are second of anticipating and we gains year

William Stein

I That's helpful. At one least can. other, if

potential some of I your And cover is call reasons suppliers customers companies, come the highlighted with in discussed a I I've business, turns sort turns this with of misinterpret semi that. the and in to when signals what increase right? potential what guess we lot for You There business. are of

and optimistic demand that way to product well, and the I say, think an they're it's in quickly. wanting improving easy really interpret is

able deliver quite in bit very view grown and to The inventory excess they've quick to is other that a way having accustomed to of simply your turns. that

So in end is demand? business not seeing give really more think and that shorter you the they're that I turns dynamic? relying why visibility. demand? in we're you they is have in it optimistic the view lead Do are of times you to wonder a should of tons in more pickup fact, where you on inventory we think that, a the Or

Philip Gallagher

Yes. It's absolute your that, give is Will. more, tough on answer think an to but I point closer, is latter

in still ago, conclude putting you available. because pipeline -- there customers we okay, that see lower were readily are aren't than underlying right they is message not X the backlog say, years sure. I'll stable, and parity, As times could Lead are the book-to-bills things on for

and of pop their a need So and buy MRP waiting something into kind they're just will sudden then to it. of delaying all go boom and they

the see we turns. So

Will, get because seems already -- of some and so market couple think customers lot not this just anything they're on call, to I it's that, us the and in build suppliers customers are don't who they future. again, our ago. greater pipelining, we want were it years of outlook, trying know are will out. But to a back industrial we where find pointed what the defense, It of we're like more for suppliers right aero, -- a whatnot, the be than because outlook to give that

short -- And of we but script, we turns. modest, it the that's that, was in it's Will, up. they why So included get were

So put it we so the but it's not be. script, bit, to it where turns up a in needs it little

William Stein

that. if could can if us I appreciate on follow-up, end level exposure. please. market I one set the you more I'm wondering,

remind regional get that exposure. once aerospace, you start you defense is you blue get -- disclose all. throwing on you like if strong, Even quarterly us us can't from that it market in moon, because that know we out of can and you don't a from a when sort you I basis, we all just things that remind think AI on what a we end give basis

us with able wonder discuss if that for I a be minute. So to you'd

Philip Gallagher

this. We give give rough me you numbers. Let some you do

get a all, So data it we of in script regional centers. the and into little work will mentioned the bit in backwards. that let's AI, of hyperscalers, with some Asia Pac the start first

mean So business. now. one some some it's we've of of kind our it's Asia we're particularly lift nice have increase in right verticals that we suppliers seen I and there. key seeing some not in

But again, any our it vertical wouldn't largest be by stretch.

somewhere is range just years, relatively AI it business. by still of in range you that's But So and come participate XX% region. defense Europe, Defense, would give globally, XX% XX% is that strong, and Again, aerospace. last again, there low. a Transportation to probably that but right? do lot XX% around years XX% XX%, if I Asia XX-plus in XX% it to in ago, one today. in at be it X% Industrial, look where okay? Europe. probably the is the it's globally, Industrial, a channels several it the might something Americas many from up the let's globally, to in call Aero, depends and our differs to of between the very you the

kind in to them range, and XX% you gives of about compute XX%. Consumer communications, XX% if together some tie to the you probably XX% --

message there think Will, it diverse numbers I is really one really the diverse of we're regions. for on okay? a really that's base, the us but typically, high-level of that's what region, with and some you. customer though, key we're So depends I does thing, our diversification bit, by Well, think the -- help course,

in as jut to So that well. throw want I

Operator

questions closing And at there are no further for Gallagher back will now it this Philip I over remarks. turn time. to

Philip Gallagher

at to our to Thank speaking it, thank holiday. I I Thanks earnings a attending you look everyone fiscal again a XXXX call, year forward to want and first nice report. have Appreciate quarter Great. you. for lot. and earnings today's

Operator

today's does teleconference. Ladies gentlemen, and this conclude

your for disconnect time. you You participation. this your Thank at lines may

Avnet (AVT) 30 Oct 242025 Q1 Earnings call transcript