Avnet's third quarter was marked by revenue growth ahead of Wall Street expectations, with management attributing the performance to strong results in Asia and the Farnell business. CEO Phil Gallagher noted that both Asia and Farnell achieved double-digit year-over-year growth, while the Americas returned to year-on-year growth for the first time in recent quarters. Demand was particularly resilient in the transportation, compute, and communication sectors, and Gallagher highlighted that “semiconductor lead times and pricing continue to be stable for most technologies,” though memory and interconnect products saw some tightness tied to data center and AI demand.
Is now the time to buy AVT? Find out in our full research report (it’s free for active Edge members).
Avnet (AVT) Q3 CY2025 Highlights:
- Revenue: $5.90 billion vs analyst estimates of $5.73 billion (5.3% year-on-year growth, 3% beat)
- Adjusted EPS: $0.84 vs analyst estimates of $0.81 (4% beat)
- Adjusted EBITDA: $181.5 million vs analyst estimates of $171.6 million (3.1% margin, 5.7% beat)
- Revenue Guidance for Q4 CY2025 is $6 billion at the midpoint, above analyst estimates of $5.85 billion
- Adjusted EPS guidance for Q4 CY2025 is $0.95 at the midpoint, below analyst estimates of $1.02
- Operating Margin: 2.6%, in line with the same quarter last year
- Market Capitalization: $3.85 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Avnet’s Q3 Earnings Call
-
William Stein (Truist Securities) asked about Avnet’s exposure to AI and data center applications. CEO Philip Gallagher clarified that while hyperscaler business remains a small share (about 7% of Asia sales), downstream opportunities in power, storage, and edge computing are growing.
-
Stein (Truist Securities) also pressed on inventory levels and expected trajectory. CFO Ken Jacobson said inventory days remain elevated due to targeted investments but should decline into the “80s” range over the coming quarters, with the quality of inventory described as strong.
-
Joseph Quatrochi (Wells Fargo) inquired about EMEA demand and seasonality. Gallagher replied that Europe is stabilizing, with positive bookings and backlog growth, and modest sequential improvement is expected despite historical weakness in the region.
-
Ruplu Bhattacharya (Bank of America) queried about margin outlooks for both core and Farnell businesses. Jacobson attributed limited margin expansion to regional sales mix and noted that Farnell’s margins are more dependent on product mix, with on-the-board components offering higher profitability.
-
Melissa Fairbanks (Raymond James) asked about transportation sector trends and exposure to electric vehicles. Gallagher indicated transport growth was strongest in Asia and the Americas, with Asia having a higher mix of electric vehicle-related sales.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) whether Asia and the Americas sustain their sales momentum, (2) signs that margin pressures from regional and product mix begin to ease, and (3) progress on inventory management, especially reductions in inventory days. Developments in AI and data center demand, as well as the trajectory of price increases in memory and interconnect products, will also be closely monitored.
Avnet currently trades at $47.31, down from $50.56 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
Our Favorite Stocks Right Now
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
