At the EDS Leadership Summit in Las Vegas, DigiKey’s President, Dave Doherty, and Vice President of Global Business Development, Mike Slater, provided a detailed briefing on the company’s performance, strategy, and outlook.
Addressing expectations for 2025, DigiKey offered a measured outlook. While some industry forecasts pointed towards double-digit expansion, the company aligned more closely with moderate projections. Referencing data from WSTS and DARC, DigiKey noted that segments such as data centres and AI were expected to grow by approximately 4%, a figure seen as reflective of broader market conditions.
From DigiKey’s standpoint, inventory levels across its customer base has begun to stabilise, signalling a return to more balanced procurement behaviour. Sector-specific growth was evident in areas such as medical technology, IoT, Cloud infrastructure, data applications, and energy systems. The excess inventory that had characterised recent market downturns appeared to be clearing, with customers increasingly placing new orders – including for components not sourced in over a year.
Internal metrics pointed to a steady resurgence in design and development activity. Development board sales rose by 12%, software purchases by 8%, and engineering-driven sales remained strong. These engineering sales typically consist of smaller orders linked to early-stage design work. This trend highlights the continued vibrancy of innovation-led procurement.
Customer and revenue growth in 2024 were particularly notable in interconnect solutions, industrial automation, wireless systems, and emerging segments such as the maker ecosystem, startup ventures, and education programmes.
Revenue recently reached $3.5 billion and customer growth has remained strong, with DigiKey approaching the milestone of one million total customers. Over 300,000 of these were new additions in the past year.
DigiKey’s digital-first strategy and community-driven growth
DigiKey’s strategic outlook remains rooted in its commitment to collaboration. Its ongoing success has been shaped not only by internal capability but also by the strength of its relationships with suppliers, manufacturers, and customers. This collective effort continues to underpin DigiKey’s mission to advance the electronics industry through shared progress.
The company’s support for engineers and innovators centres on the development of scalable digital tools that enhance performance throughout the supply chain. These investments are intended to empower users with accessible and efficient services that remove friction in design, procurement, and production. The focus is not solely on DigiKey’s operational gains, but on enabling the broader community to innovate with greater agility.
Digital infrastructure has played a defining role in DigiKey’s evolution. Its digital-first approach is now embedded at every level of operations, forming the foundation for scalability and responsiveness. The company’s transition away from printed catalogues in 2011 marked a pivotal shift towards web-based services. While initially met with scepticism, this decision anticipated the future demands of e-commerce, laying the groundwork for its digital logistics capability.
Investment in automation has further strengthened DigiKey’s operational efficiency. One notable development is an internally designed, high-performance tape-cutting system, responsible for handling 30% of the company’s outbound component picks. Built from the ground up, this system delivers increased density, precision, and throughput – characteristics that third-party solutions had not been able to meet.
AI, data, and digital transformation
DigiKey has been working with data and intelligent systems for over 15 years, long before artificial intelligence (AI) became a mainstream topic. The company’s journey began with big data and machine learning, evolving into a more sophisticated digital transformation strategy that now underpins many of its internal systems and customer-facing tools.
Internally, DigiKey has deployed over 70 AI-enabled applications across its operations. These are incremental improvements that streamline business processes and enhance decision-making. A good example is the recent implementation of an Oracle finance system, part of a broader overhaul of legacy infrastructure, including order and procurement management systems.
One specific area of improvement has been the automation of cash application processes. Historically reliant on manual intervention, the new system now automatically assigns over 90% of customer remittances and correctly applies about 70% of those payments to individual invoices. This has freed up human resources to focus on higher-value tasks such as labour planning and system optimisation.
On the customer-facing side, DigiKey has long been recognised for its parametric search capabilities. However, the company acknowledged the growing complexity of technical attributes – such as variations in output voltage ratings – and the need for more intuitive search functionality. In response, DigiKey has introduced a ‘smart filter’ that enables engineers to use natural language inputs (e.g. ‘output voltage greater than 12V’) to search for components, with AI processing the query across varied parametric data. While still an early step, it lays the foundation for more sophisticated natural language-based tools that could eventually allow engineers to specify tolerance, resistance, or capacitance through conversational queries.
DigiKey also sees an opportunity for AI to address long-standing challenges in the supply chain. Traditional forecasting models, which rely heavily on historical sales data, have proven insufficient in the face of today’s volatility. The company is now integrating multiple data sources – including manufacturer input, customer signals, and marketplace trends – to build a more forward-looking forecasting model. This data-driven approach aims to improve inventory accuracy and reduce the boom-bust cycles that often plague component availability.
A case in point is the increase in DigiKey’s product portfolio. In the past year alone, the marketplace added 135,000 new SKUs, generating $60 million in revenue and drawing over 100,000 new customers. Keeping pace with this growth requires more than physical infrastructure – it demands intelligent digital tools for product discovery, forecasting, quoting, and order management.
An optimistic future
Despite external headwinds – including tariffs, geopolitical tensions, and macroeconomic uncertainty – DigiKey reported steady growth in customer activity. The company has seen 21 consecutive months of year-over-year customer count growth. Order details, defined as individual line items in a customer order, have also shown sustained growth – rising from 67,000 to 89,000 per day. This trend underscores the increasing complexity of DigiKey’s fulfilment operations and justifies its ongoing investment in warehouse capacity and digital capabilities.
DigiKey continues to focus on small-quantity, high-mix orders, which it sees as critical for early customer engagement and long-term loyalty. Line items for fewer than 100 pieces, especially those under 25 pieces, remain a key metric for identifying demand creation opportunities. While many businesses deprioritise such orders due to their perceived low profitability, DigiKey views them as the foundation for future design wins and conversions.
Looking ahead, the company remains focused on growing its New Product Introduction (NPI) pipeline and enhancing the visibility of non-stocked parts that may have latent demand or historical usage. AI will play a critical role in accelerating this discovery process, enabling faster market responsiveness and stronger customer alignment.
