Earnings Recap — Q4 FY2026
CY Q3 2026 · Reported August 5, 2026 · Beat 6 of last 7 quarters
The Buildout is a website built on agentic AI tools, currently in beta, and could have factual errors.
Avnet's record quarter and strong guidance underscore the accelerating AI infrastructure buildout, with memory pricing and extended lead times signaling tight supply across the component ecosystem. The company's exposure to data center and AI-enabling technologies, plus broadening demand into industrial and edge applications, positions it as a key beneficiary of the infrastructure expansion. Management's confidence in continued growth well into fiscal 2027 suggests sustained investment in AI-related hardware.
Avnet delivered record Q4 FY2026 results with sales of $8.3 billion, up 48% year-over-year, and adjusted EPS of $2.28, both well above guidance. Growth was broad-based across all regions and end markets, with Electronic Components sales up 49% and Farnell up 29% year-over-year. Memory pricing contributed approximately one-third of the sales growth, and the company saw improving lead times and pricing across most product categories. Operating margins expanded across both segments, with EC at 4.1% and Farnell at 9%, while inventory days improved to 71. The company used $291 million of cash flow from operations to support the $1.2 billion sequential sales growth, and ended the quarter with gross leverage of 3.2x.
Management guided Q1 FY2027 sales to $9.0–$9.3 billion (up ~10% sequentially at midpoint) and adjusted EPS to $2.80–$2.90, implying continued strong growth. They expect operating income to grow at roughly twice the rate of sales and EPS at about 3x sales growth, with SG&A as a percentage of gross profit improving to below 60% before the end of fiscal 2027. Farnell is on track to reach double-digit operating margins before fiscal year-end, and the company expects to achieve its leverage target of ~3x by the end of calendar 2026. Management sees broad-based demand recovery, with book-to-bill above 1 in all regions, extending backlog visibility well into fiscal 2027, and anticipates additional price increases beyond memory. They expect to continue improving inventory days, particularly in EC, while investing in inventory to capture growth opportunities.
“We delivered a record quarter across all key metrics in both our Electronic Components and Farnell businesses, supported by improving demand across all of our core markets, strong execution by our teams and expanded margins from the operating leverage inherent in our business model.”
on Record quarter performance
“What initially appeared to be demand concentrated around AI and data center-related deployments has broadened considerably with extended lead times now evident across a wider range of applications and end markets.”
on Demand broadening beyond AI
“We expect to continue to drive operating income growth at approximately twice the rate of sales growth, supported by our disciplined expense management.”
on Operating leverage outlook
Can you talk about the pricing dynamics you're seeing, what's embedded in the guide from a memory pricing perspective, and the impact on EBIT from memory pricing?
Phil noted that price increases are broadening beyond memory, though most are modest. Ken added that the guide assumes modest price increases, and about one-third of GP dollar growth came from pricing, similar to the sales impact. Operating leverage benefited from both volume and pricing.
What inning would you say we're in for the cycle, and how should we think about margin expansion over the next few quarters?
Phil said it feels like the third or fourth inning, not the eighth. Ken expects continued steady margin progress, with Farnell gross margins improving on mix, while EC gross margins may be tempered by regional mix. Phil reiterated the target of continuous improvement toward 5% operating margin, with Europe and Americas recovery helping.
What drove the outsized growth in the Americas, and how much came from memory and data center? How much of the revenue guide is memory pricing versus units, and is there evidence of real consumption vs precautionary buying?
Phil said Americas growth was broad-based across verticals, with industrial and defense leading; direct data center is relatively small. Ken noted memory pricing helped all regions equally. For guidance, Ken said it's mostly units and higher ASP mix, with modest price increases. They see no evidence of excess builds; customers are trying to build safety stock but supply is constrained, indicating real consumption.