Avnet is expanding its use of digital commerce tools and artificial intelligence as it works to strengthen its position as a value-added distributor in a global electronics market that is beginning to rebound.
On its fiscal second-quarter earnings call, executives at the Phoenix-based distributor said investments in digital platforms, data analytics and AI-driven tools are changing how Avnet supports engineers, procurement teams and manufacturers navigating ongoing supply-chain challenges.
CEO Phil Gallagher told analysts that customers are increasingly using Avnet’s online tools to research components, check availability and manage design cycles earlier in the product development process.
“We are seeing customers engage with us in a much more digital way,” Gallagher said. “That engagement is allowing us to be more responsive and more precise in how we serve them.”
For the quarter ending Dec. 27, Avnet reported sales of $6.319 billion, up from $5.663 billion a year earlier, an increase of 11.6%. Net income fell to $61.7 million, or 75 cents per share, from $87.3 million, or 99 cents per share, a decline of 29.3%.
For the first six months of the fiscal year, sales rose to $12.218 billion from $11.268 billion, an 8.4% increase. Profits for the six-month period declined to $113.5 million from $146.2 million, down 22.4%.
While sales improved across regions, particularly in Asia, much of Avnet’s discussion with analysts focused on how its digital infrastructure is becoming central to how customers source components and plan projects.
Executives said engineers and procurement teams are relying more heavily on Avnet’s digital tools earlier in the design process. That earlier engagement allows Avnet to capture more business over the life of a project while giving customers faster access to technical documentation, real-time availability data, and alternative parts when shortages arise.
Gallagher said those digital touchpoints are increasingly supported by AI-based tools that help Avnet analyze customer behavior, anticipate demand, and recommend substitutions when supply constraints occur.
“We are using data and AI to anticipate customer needs rather than just respond to orders,” he said.
Internally, Avnet is also using AI and analytics to improve how it positions inventory across its global network. By analyzing historical buying patterns, regional demand signals and supplier lead times, the company is working to place inventory closer to expected demand, reducing fulfillment times while keeping inventory levels in check.
CFO Ken Jacobson said those capabilities are especially important as the market transitions out of a prolonged semiconductor downturn.
“Digital and analytics capabilities are allowing us to be more disciplined in how we manage inventory while still supporting customers as demand returns,” Jacobson said.
Executives noted that customers increasingly expect distributor websites to function as engineering and procurement platforms rather than simple ordering portals. Avnet’s investments are aimed at turning its digital channels into destinations for research, design support and purchasing.
That approach, Gallagher said, helps Avnet embed itself earlier and deeper into customer workflows rather than competing solely with price and availability.
“We want to be part of the customer’s design and planning process, not just the fulfillment process,” he said.
As electronics manufacturers resume ordering after a slow period, Avnet executives said digital engagement is rising alongside sales, suggesting customers are becoming more comfortable researching and transacting online rather than relying primarily on traditional sales channels.
For Avnet, executives said digital commerce and AI are now central to how the distributor plans to grow as market conditions stabilize.
“Digital and AI are not side projects for us,” Gallagher said. “They are becoming part of how we run the business every day.”
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