Avnet operates in the electronic component distribution industry, serving customers in more than 140 countries ¹. The industry is highly competitive, with competition based on brand recognition, product quality, price, and innovation. The semiconductor industry, which represented approximately 79% ² of consolidated sales in fiscal 2026, experiences periodic fluctuations in product supply and demand, often associated with changes in economic conditions, technology, and manufacturing capacity. The Company's sales closely follow the strength or weakness of the semiconductor industry.

Avnet's major competitors include Arrow Electronics, Future Electronics, World Peace Group, and WT Microelectronics for the Electronic Components operating group, and Mouser Electronics, Digi-Key Electronics, and RS Components for the Farnell operating group. A key competitive advantage is the breadth of the Company's supplier product line card, which allows many customers to simplify their procurement process by making all or substantially all of their required electronic component purchases from Avnet. The Company enhances its competitive position by offering a variety of value-added services tailored to individual customer specifications, such as design support, point of use replenishment, labelling, testing, assembly, programming, supply chain management, and materials management.

Avnet generates revenue by marketing, selling, and distributing electronic components from leading manufacturers to a wide range of customers, from startups and mid-sized businesses to enterprise-level original equipment manufacturers, electronic manufacturing services providers, and original design manufacturers. The Company operates through two primary operating groups: Electronic Components and Farnell. The Electronic Components group primarily supports high and medium-volume customers, offering design support, supply chain solutions, and embedded and integrated solutions. The Farnell group primarily supports lower-volume customers needing electronic components quickly for development, prototyping, and testing, primarily through an e-commerce channel.

The Electronic Components operating group markets, sells, and distributes electronic components including semiconductors, IP&E components (interconnect, passive and electromechanical components), and other integrated and embedded components. Within the EC operating group for fiscal 2026, net sales of approximately 83% ³ consist of semiconductor products, approximately 15% ⁴ consist of interconnect, passive, and electromechanical components, and 2% ⁵ consist of computers and others. EC serves a variety of markets ranging from industrial to automotive to defense and aerospace, and offers services throughout the product lifecycle including turnkey and customized design, supply chain, programming, logistics, and post-sales services.

The Farnell operating group distributes a comprehensive portfolio of kits, tools, electronic components, industrial automation components, and test and measurement products to engineers and entrepreneurs, primarily through an e-commerce channel. Within the Farnell operating group for fiscal 2026, net sales of approximately 19% ⁶ consist of semiconductor products, approximately 36% ⁷ consist of IP&E components, approximately 13% ⁸ consist of single-board computers, and approximately 32% ⁹ consist of other products and services, including test and measurement and maintenance, repair, and operations products. Farnell also distributes new product introductions for its suppliers across various product categories.

During fiscal 2026, the Company's financial performance improved as demand for electronic components strengthened, resulting in year-over-year sales growth across all regions and improved days of inventory on hand. The Company expects sales in the first quarter of fiscal 2027 will grow approximately 10% ¹⁰ compared to fourth quarter of fiscal 2026 sales with expected sales growth across all Electronic Components regions and Farnell. The Company's Board of Directors has approved a share repurchase plan of up to an aggregate of $600 million ¹¹ of common stock. As of June 27, 2026, the Company had a global workforce of approximately 15,040 ¹² employees across 48 ¹³ countries.

For fiscal year 2026, total sales were $27,633 million ¹⁴, compared to $22,201 million ¹⁵ in fiscal 2025, representing an increase of 24.5% ¹⁶. Gross profit was $2,882 million ¹⁷ in fiscal 2026 versus $2,385 million ¹⁸ in fiscal 2025, an increase of 20.8% ¹⁹. Operating income was $725 million ²⁰ in fiscal 2026 compared to $514 million ²¹ in fiscal 2025, an increase of 40.9% ²². Net income was $334 million ²³ in fiscal 2026 versus $240 million ²⁴ in fiscal 2025, an increase of 39.2% ²⁵. Diluted earnings per share were $4.01 ²⁶ in fiscal 2026 compared to $2.75 ²⁷ in fiscal 2025, an increase of 45.8% ²⁸.

The Company expects sales in the first quarter of fiscal 2027 will grow approximately 10% ²⁹ compared to fourth quarter of fiscal 2026 sales with expected sales growth across all Electronic Components regions and Farnell.

The Company continues to monitor the global tariff landscape, which continues to shift rapidly, with changes impacting businesses and markets around the world. The Company is evaluating the impact on its results of operations, including any potential refunds of tariffs struck down by the U.S. Supreme Court in February 2026. No potential refunds have been recorded in the Consolidated Financial Statements as the Company cannot reasonably estimate the financial impact.

The Company expects sales in the first quarter of fiscal 2027 will grow approximately 10% ³⁰ compared to fourth quarter of fiscal 2026 sales with expected sales growth across all Electronic Components regions and Farnell. The Company's financial performance improved during fiscal 2026 as demand for electronic components strengthened, resulting in year-over-year sales growth across all regions and improved days of inventory on hand.

The Company continues to develop systems and other measures to mitigate the impact of tariffs and has contingency plans to respond to a range of economic scenarios. The Company continues to monitor and evaluate changing trade policies, as well as the overall economic environment in the electronic components industry. Increased operational expenses incurred in minimizing the number of products subject to tariffs could adversely affect the Company's operating profits.

The Company's Board of Directors has approved a share repurchase plan of up to an aggregate of $600 million ³¹ of common stock. During the fourth quarter of fiscal 2026, the Company did not repurchase any shares under the share repurchase program. The declaration and payment of future dividends will be at the discretion of the Board of Directors and will be dependent upon the Company's financial condition, results of operations, capital requirements, and other factors the Board of Directors considers relevant.

Geopolitical uncertainty, including from military conflicts, health-related crises, and international trade disputes, has led and may continue to lead to shortages, extended lead times, and unpredictability in the supply of certain semiconductors and other electronic components. The U.S. administration has made, and continues to make, changes in trade policies, including negotiating or terminating trade agreements, imposing higher tariffs on imports into the United States, and other measures affecting trade between the United States and other countries. These global trade disruptions and geopolitical tensions, together with any related downturns in the global economy, could dampen customer demand, increase market volatility, and impact currency exchange rates.

The semiconductor industry experiences periodic fluctuations in product supply and demand, and suppliers may not adequately predict or meet customer demand. In reaction to shortages, customers may over order to ensure sufficient inventory, which, when the shortage lessens, may result in order cancellations and decreases. The Company may be unable to increase prices to customers to offset higher internal costs, which could reduce margins.

Management's message emphasizes that during fiscal 2026, the Company's financial performance improved as demand for electronic components strengthened, resulting in year-over-year sales growth across all regions and improved days of inventory on hand. Management expects sales in the first quarter of fiscal 2027 will grow approximately 10% ³⁵ compared to fourth quarter of fiscal 2026 sales with expected sales growth across all Electronic Components regions and Farnell. The strategic priorities emphasized include continuing to monitor the global tariff landscape and evaluating the impact on results of operations, including any potential refunds of tariffs, and continuing to develop systems and other measures to mitigate the impact of tariffs.

For fiscal year 2026, total sales were $27,633 million ³⁶ compared to $22,201 million ³⁷ in fiscal 2025. Net income was $334 million ³⁸ in fiscal 2026 versus $240 million ³⁹ in fiscal 2025. Diluted earnings per share were $4.01 ⁴⁰ in fiscal 2026 compared to $2.75 ⁴¹ in fiscal 2025. Operating income was $725 million ⁴² in fiscal 2026 versus $514 million ⁴³ in fiscal 2025. Gross profit margin was 10.4% ⁴⁴ in fiscal 2026 compared to 10.7% ⁴⁵ in fiscal 2025. Adjusted operating income was $861 million ⁴⁶ in fiscal 2026 compared to $624 million ⁴⁷ in fiscal 2025. The effective tax rate was 28.5% ⁴⁸ in fiscal 2026 compared to 4.1% ⁴⁹ in fiscal 2025. Restructuring, integration, and other expenses were $135 million ⁵⁰ in fiscal 2026 compared to $108 million ⁵¹ in fiscal 2025. Interest and other financing expenses, net, were $251 million ⁵² in fiscal 2026 compared to $246 million ⁵³ in fiscal 2025.

The Company faces material risks from changes in customer needs and consumption models, as sales of semiconductors represented approximately 79% ³² of consolidated sales in fiscal 2026, and the Company's sales closely follow the strength or weakness of the semiconductor industry. Disruptions to key supplier relationships are a significant risk, as one supplier accounted for over 10% ³³ of consolidated billings in fiscal 2026, and supplier contracts are generally terminable at will upon notice. International operations expose the Company to risks, as approximately 78% ³⁴ of sales in fiscal 2026 came from operations outside the United States, subjecting the Company to foreign currency fluctuations, trade restrictions, and complex tax laws. The Company's inventory value is subject to decline due to technological change and changes in customer needs, and many suppliers' price protection policies may not fully compensate for losses. Accounts receivable defaults pose a risk, as receivables are a significant portion of working capital, and an economic downturn could adversely affect collection ability.