Avnet, Inc.

Please stand by, our presentation will now begin. Welcome to the ABnet Third Quarter Fiscal Year 2026 Earnings Call. I would now like to turn the floor over to Lisa Mueller, Director of Investor Relations for ABnet.

Thank you, Operator. I'd like to welcome everyone to ABnet's Third Quarter Fiscal Year 2026 Earnings Conference Call. This morning, Avnet released financial results for the third 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 ABNES most recent Form 10-Q and 10-K 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 slides of today's presentation and posted on the Investor Relations website. Today's call will be led by Phil Gallagher, Abnett's CEO, and Ken Jacobson, Abnett'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 third quarter fiscal year 2026 earnings call. This was an outstanding quarter for Avnet, one that reflects both strong execution by our teams around the world and improving market conditions. Over the past several quarters, and really over the past couple years, our team has been operating in a challenging market environment. Throughout that period, we remained focused on the things we can control, supporting our customers, coordinating closely with our supplier partners, managing inventory and working capital with discipline, investing on our people, digital capabilities, and distribution centers with a long-term view. This quarter's results and our June quarter guidance demonstrates that focus positioned us well coming into the beginning of the upcycle. We delivered financial results that came in well above our expectations, including record sales in our electronic components business. As data center and AI demand proliferates throughout the market, we also saw broad-based demand across most of our core end markets, which translated into meaningful operating margin and EPS improvement. Before we give more color on the business, I wanted to take a moment to mention we're closely monitoring the current geopolitical environment and remain mindful of the potential broader macroeconomic impact. The conflict in the Middle East had no material impact on our Q3 results outside of some increases in freight expenses due to rising fuel costs. Now, turning to our third quarter, we achieved sales of $7.1 billion, driving a 3.5% operating margin in our electronic components business and a 5.2% operating margin in our Parnell business. We also reduced inventory days to 77, below our near-term target of 80 days. Our double-digit year-on-year sales growth was led by another quarter of record revenues in Asia, along with better than typical seasonal growth in the Americas and Europe. From a demand perspective, market conditions continue to improve across the majority of the verticals we serve, which includes data center, industrial, aerospace and defense, transportation, consumer, and networking. The third quarter is led by strong demand in industrial, networking, and our data center and markets. Year over year, we also saw broad-based improvement across most verticals led by the data center. Over the past 90 days, the lead time environment has shifted. Component lead time trends are increasing across many product categories. We have seen lead time extensions in over 50% of the product categories we track traversing semiconductors and interconnect passive electromechanical with stability being reflected in the balance. While lead time extensions continue in components supporting data center and AI builds, they are now spreading the broader set of products supporting diverse and market applications. Customers are increasingly recognizing the challenges of a tightening supply environment and are turning to Adnet's proven expertise to help manage their component supply chains. Our backlog is growing, and our book-to-bill ratios are well above parity in all regions. In the December quarter, we saw early indicators of certain component price increases. During the March quarter, we have seen price increases across a few suppliers and technologies, most predominantly related to memory. We expect to see additional price increases over the next several months, a majority of which are being driven by increases in the underlying input cost of components. Ken will get more cover on the impact of pricing during the quarter in his comments. Now, with that, let me turn to highlights of our business. Our electronic components business delivered a record sales quarter, driven by growth across all regions and strong execution. Demand creation activity remained robust. Design wins continued to convert to sales, and our interconnect passive and electromechanical, or IP&E business, outperformed, reflecting the benefits of our technical capabilities and our focus on the total solution selling. In Asia, sales reached another record high of $3.5 billion in a quarter that is usually impacted by the Lunar New Year holiday. This marks our seventh consecutive quarter of year-on-year sales growth in the region, which now represents almost 50% of our total sales. Demand increased across all the geographies and verticals we serve, led by the data center, industrial, and networking markets. In March, I was able to spend some time in China with our Asia leadership team, including visiting with local customers and suppliers. This trip reinforced my belief in the opportunity for growth we see in the region that our Asia team is capitalizing on. In EMEA, we were pleased to see continued rebound in the region, with sales growth both sequentially and year-on-year for the second consecutive quarter. EMEA is experiencing growth across a number of verticals, including industrial, networking, and early signs of the long-term opportunities we see in aerospace and defense. Overall, I would say the market conditions in Europe are improving, although the demand environment is still mixed. We are seeing improvement in our strategic differentiators, including leading indicators in our embedded business, as customers and suppliers are looking for board and display-level solutions. I was able to spend some time in Germany in late March, meeting with several of our IP&E suppliers and customers at our AdNet Advocates Technical Conference. The outlook and momentum I felt coming out of Europe was more encouraging than just even a few quarters fell. In the Americas, sales grew both sequentially and year-over-year, marking our third consecutive quarter of year-on-year growth. Most end markets showed sequential growth led by networking, while aerospace and defense, networking, and industrial were the strongest end markets year-over-year. Our Americas region recently hosted an IP&E Summit, bringing together leaders from our top suppliers to reinforce our focus and commitment to accelerating growth in the IP&E space. Our IP&E business had a record quarter, growing 25% year-on-year. We carry a world-class portfolio of IP&E products and solutions and are benefiting from this multiplier effect as every active semiconductor chip requires surrounding IP&E components to function. Think connectors, capacitors, passes, resistors, and sensors, among other technologies. We continue to see success driving conversations with customers about the full solutions we can provide with both our semiconductor and IP&E product offerings. Thirdly, for our other value-added drivers of profitable growth, we continue to benefit from our field application engineers, complemented by our digital design capabilities and tools. Our demand creation revenues increase sequentially by 16%. From a design opportunity standpoint, the leading indicators remain positive, which blows the wall from future design wins and downstream revenue. Our supply chain services offerings continue to grow and expand with many OEMs that are household names. We are seeing opportunities and wins across many of the same verticals where we are experiencing strong growth in the core business. These include transportation, data center, and networking, among others. We believe we have the opportunity and capabilities to be the leading supply chain services and solutions provider in the electronic components industry. Now, turning to Farnell. We are seeing steady progress in Farnell's performance and recovery. Sales grew double digits year-on-year for the third consecutive quarter. Growth margins and operating margins expanded in line with expectations, and the business remains on track with its return to double-digit operating margins over the next several quarters. Our powerful focus is gaining traction as we leverage Admin's scale and relationships with Pernell's capabilities and offerings. This unique combination differentiates AdNet and strengthens our value proposition to suppliers and customers. Farnell's continued investment in its e-commerce platform, customer experience, and inventory proposition positions us well as demand accelerates. Throughout this cycle, we have remained committed to investing in the future of AdNet with a focus on the long-term opportunities we see for the demand of electronic phones. Our adaptability has never been more critical. The proliferation of electronic components continues at a rapid pace with emerging opportunities in drone technologies, robotics, and edge AI as just a few examples of the future trends. We've made substantial investments in our digital platforms and capabilities, supply chain and distribution center infrastructure, and engineering resources. These investments are not just about near-term efficiencies. They are about future-proofing our company and ensuring we can support increasingly complex supplier and customer needs as technology and supply chains evolve. At the same time, we have stayed disciplined in managing expenses, optimizing inventory, and allocating capital. We have consistently said we will balance reinvestment in the business with returning capital to shareholders all while prioritizing and maintaining a strong balance sheet. And we have delivered on those commitments. In closing, I'm extremely proud of what our team has accomplished, and I'm excited for the continued recovery in our business. These results reflect not only an improving market environment, but also the resilience, experience, and dedication of our team. With the breadth of our supply line card, our diversified customer base, and the strength of the end markets they serve, we are well-positioned to deliver sustainable growth and improved returns into the future. We are thrilled by the momentum in the business and are confident in Avnet's ability to execute at a high level. So with that, I'll turn it over to Ken to dive deeper into our third quarter results. Ken?