Avnet Reports 11.6% Revenue Growth in Q2 Fiscal 2026, Net Income Declines

Avnet, Inc. reported its financial results for the second quarter and first six months of fiscal 2026, revealing a total revenue of $6.32 billion for the quarter, an increase of 11.6% from $5.66 billion in the same period last year. For the first half of the fiscal year, revenue reached $12.22 billion, up 8.4% from $11.27 billion in the prior year. The company's gross profit for the second quarter was $663 million, reflecting a 6.2% increase year-over-year, while net income for the quarter was $61.7 million, or $0.75 per diluted share, down from $87.3 million, or $0.99 per diluted share, in the previous year.

The financial performance indicates a decline in profitability, with operating income for the second quarter decreasing by 5.9% to $146.2 million compared to $155.3 million in the same quarter of the previous year. The decrease in net income was attributed to higher selling, general, and administrative expenses, which rose by 12.5% to $492 million, and a significant increase in income tax expense, which surged to $28.2 million from $3 million in the prior year. The effective tax rate for the second quarter was 31.3%, a notable increase from 3.4% in the same quarter last year.

Operationally, Avnet's Electronic Components segment generated $5.89 billion in sales, a 10.8% increase year-over-year, driven by growth in the compute, aerospace, and defense markets. The Farnell segment also saw a significant increase, with sales rising 23.6% to $427.1 million, primarily due to improved demand for single board computers and electronic components. The company reported a total of 81,862,967 shares outstanding as of January 24, 2026, and maintained a cash and cash equivalents balance of $286.5 million, up from $192.4 million at the end of the previous fiscal year.

In terms of strategic developments, Avnet issued $650 million in convertible senior notes in September 2025, with net proceeds used to reduce its credit facility and repurchase shares. The company also incurred restructuring expenses of $25.2 million in the second quarter, primarily related to severance and integration costs associated with a new distribution center in EMEA. Looking ahead, Avnet anticipates a modest sales growth of approximately 1% in the third quarter of fiscal 2026, with expectations for continued improvement in the Americas and EMEA regions.

Overall, while Avnet experienced revenue growth, the decline in profitability and increased expenses highlight challenges in maintaining margins amid rising operational costs. The company continues to navigate a complex market environment, with ongoing efforts to optimize its operations and manage its financial position effectively.