Avnet, Inc.

Welcome to the Avnet first quarter fiscal year 2026 earnings call. I would now like to turn the floor over to Lisa Mueller, Director of Investor Relations for Avnet. Please go ahead.

Thank you, Operator. I'd like to welcome everyone to Avnet's first quarter fiscal year 2026 earnings conference call. This morning, Avnet released financial results for the first quarter of fiscal year 2026, and the release is available on the investor relations section of Avnet's website. along with a slide presentation, which you may access at your convenience. As a reminder, some of the information contained in the news release and on this conference call contain forward-looking statements that involve risks, uncertainties, and assumptions that are difficult to predict. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in Avnet's most recent form 10Q and 10K and subsequent filings with the SEC. These forward-looking statements speak only as of the date of this presentation and the company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this presentation. Please note, unless otherwise stated, all results provided will be non-GAAP measures. The full non-GAAP to GAAP reconciliation can be found in the press release issued today, as well as in the appendix slide of today's presentation and posted on the investor relations website. Today's call will be led by Phil Gallagher, Avnet's CEO, and Ken Jacobson, Avnet's CFO. With that, let me turn the call over to Phil Gallagher. Phil?

Thank you, Lisa, and thank you everyone for joining us on our first quarter fiscal year 2026 earnings call. We're off to a solid start in the new fiscal year. In the first quarter, we achieved sales of $5.9 billion above guidance and adjusted EPS of 84 cents near the high end of guidance. Our performance was led by Strength in Asia and Farnell, which both had double-digit year-on-year growth. Sales in our America's region grew year-on-year for the first time since fiscal 2023. While sales in our immediate region were flat with year-ago quarter, they did grow better than seasonal on a sequential basis, as did all of our regions. From a demand perspective, in the quarter, we saw strength in certain key vertical segments, most notably transportation, compute, and communication. Overall, semiconductor lead times and pricing continue to be stable for most technologies. That said, we do see extended lead times and price increases in memory, storage, and certain interconnect products, particularly those supporting data center and AI build-outs. On the IP&E side, lead times also continue to be stable. Our book-to-bill ratio improved globally, led by Asia and the Americas, and all regions were above parity. Our backlog is growing, and we continue to see customers placing orders within lead times, which is a sign of strengthening markets. cancellations have remained at normal levels. In the quarter, we had a modest increase in inventory to support sales growth in Asia and certain supply chain opportunities, although we did see improvement in days of inventory on hand. We remain focused on balancing these growth opportunities with reductions in the near term and optimizing the inventory we have on hand. Now, turning to our electronic components results. At the top line, Our electronic component sales increased on a sequential and year-on-year basis due to a generally improving demand environment led by Asia and the Americas. In Asia, sales grew sequentially and year-on-year and now represent just over half of EC sales. This marks our fifth consecutive quarter of year-on-year sales growth in the region, driven by strength across the communication and transportation end markets. The Americas are showing signs of recovery, with sales growing both sequentially and year-on-year. Sales were strongest in the industrial and communications end markets, followed by transportation and consumer. In EMEA, sales were basically flat year-on-year and higher sequentially, which is better than seasonal for the region. Bookings improved as the region returned from its summer slowdown. The industrial and communications and markets showed year-on-year growth, while compute grew both sequentially and year-on-year. We are optimistic about continued modest improvement in Q2. We continue to see healthy design wind activity and momentum in demand creation. We've recorded solid increases in demand creation revenues and gross profit hours for the quarter. We are also pleased with progress in our IP&E product sales. As we mentioned in the past, IP&E is one of our higher margin businesses. Sales have been steady with improving margins and doing particularly well in Asia. Now turning to Farnell. Farnell delivered sequential and year-on-year growth and experienced similar sales trends to EC with strengthening in Asia and the Americas. Operating margin remained stable sequentially. due mostly to increased sales of the onboard components offset by higher sales of single board computers and tested measurements, which tend to be a bit lower in margin. The team continues to execute on their strategy, including enhancing digital capabilities and leveraging Adnet's core ecosystem for new and additional opportunities. While there is still plenty of work to do, we are pleased with Fresnel's progress, especially given its improved performance, while the macro environment in Europe, its largest region, has yet to fully recover. To conclude, we are encouraged by the increasing number of positive signs in our business. We feel good about the recovery in Asia-Pac and progress in the Americas. Conditions in EMEA are stabilizing and modestly improving, while geopolitical and market uncertainties remain, we believe our strong supply line card and diverse customer base and the strength of the end markets they serve position as well as the market recovers. During the quarter, I spent some time with the leadership teams from several of our supplier partners, both in the U.S. and Europe. Most recently, attended the Electronic Components Industry Association, ECIA, conference in Chicago. Consistent with our views, our supplier partners are also seeing several positive signs, including lead times extending in certain technology and discussions on actual or potential price increases. Maintaining and strengthening our supplier relationships through these challenging times has helped us navigate the market, which also translates into increased value for our end customers. It is time like these that I'm especially thankful for our dedicated and experienced team across our whole organization who have led us through this prolonged market cycle. I want to thank them for their efforts that continue to reinforce AdNet's position at the center of the technology supply chain, helping our customers and suppliers navigate complexity and unlock new opportunities. With that, I'll turn it over to Ken to dive deeper into our first quarter results. Ken?