Arrow Electronics Overview
Arrow is one of the world's two largest Western broadline technology distributors. It reported 2025 sales of USD 30.9 billion and trailing-twelve-month sales of about USD 35.9 billion through Q2 2026. The business has two halves. Global Components (about 70% of 2025 sales) distributes semiconductors and IP&E (interconnect, passive and electromechanical) parts from hundreds of suppliers to OEMs and EMS providers. It adds design-in engineering, integration and supply chain services. Global Enterprise Computing Solutions (ECS, about 30%) aggregates datacenter, cloud, security and software offerings for value-added resellers and managed service providers, increasingly through its ArrowSphere cloud marketplace. Arrow's edge is scale and breadth: more than 140 sales facilities, 39 distribution and value-added centers, customers in over 85 countries, and no customer above 2% of sales. Its weaknesses are structural to distribution: thin margins (2.7% GAAP operating margin in 2025), heavy working-capital needs and exposure to the semiconductor cycle. A sharp 2026 upcycle driven by AI infrastructure and memory constraints is now lifting results. At the same time, the company is completing a CEO search.
The company's own description. In its FY2025 Form 10-K, Arrow describes itself as a company that sources and engineers technology for thousands of manufacturers, service providers and users of enterprise computing solutions. It claims one of the broadest product portfolios available from leading component and enterprise computing suppliers. Its stated business strategy is to be "the premier, technology-centric, go-to-market and supply chain services company." The portfolio is built to enable technology across industrial automation, edge and cloud computing, smart and connected devices, and transportation. Arrow says it aggregates disparate sources of electronic components, infrastructure software and IT hardware to engineer complete solutions for customers on behalf of its suppliers.
Business model. Arrow earns a spread between supplier acquisition cost and customer selling price. The spread is supplemented by fees for services. Most purchases are made under non-exclusive distributor agreements that suppliers or Arrow can cancel at short notice, typically 30 to 90 days. Sales are overwhelmingly order-by-order rather than long-term contracts, so forward visibility is generally only a few months. Supplier agreements give Arrow meaningful protection against inventory loss. At 31 December 2025, price-protection provisions covered about 56% of consolidated inventory, and supplier repurchase obligations on termination covered about 59%.
Revenue model mix. Arrow does not split revenue into product, service, subscription and licensing lines. It discloses product mix within each segment instead (FY2025 Form 10-K):
Semiconductor products and related services: Share of segment sales (%): 72
- IP&E (capacitors, resistors, potentiometers, power supplies, relays, switches, connectors) — Share of segment sales (%): 16
Computing and memory: Share of segment sales (%): 7
Other products and services: Share of segment sales (%): 5
Software applications: Share of segment sales (%): 27
Storage: Share of segment sales (%): 25
Security: Share of segment sales (%): 15
Compute: Share of segment sales (%): 14
Data intelligence: Share of segment sales (%): 5
Networking: Share of segment sales (%): 5
Other products and services: Share of segment sales (%): 9
Several revenue streams are fee-based or recognized net: supply chain services (procurement, logistics, warehousing, financial management, data analytics), engineering and design services (including integrated-circuit design and software development through eInfochips), integration services, ArrowSphere-enabled cloud and software subscriptions, and contractual go-to-market outsourcing fees in ECS. Software, cloud and some services are recognized on a net basis. As a result, ECS gross billings (USD 22.05 billion in 2025) were more than twice ECS reported sales (USD 9.35 billion).
Semiconductor share of consolidated sales (FY2025 Form 10-K)
Semiconductor products share of consolidated sales (%): FY2023: 60; FY2024: 53; FY2025: 50
Value chain position. Arrow sits downstream of semiconductor and IP&E manufacturers and IT vendors, and upstream of OEMs, EMS providers, VARs and MSPs. It handles demand creation for suppliers through field application engineers and design registrations. It also provides fulfillment for customers whose order sizes or delivery schedules suppliers do not serve directly. The largest single supplier was about 8% of 2025 consolidated sales.
Customers and end markets. The customer base includes OEMs, VARs, MSPs, EMS providers and other commercial customers in industrial, automotive and transportation, computing, networking and communications, aerospace and defense, and medical markets. Arrow also sells to U.S. government agencies, which subjects it to federal contractor rules. About 66% of 2025 sales came from operations outside the United States (65% in 2024, 66% in 2023).
Independent characterization. Arrow is best understood as a working-capital-intensive logistics and engineering platform with a high-margin services overlay. It makes money on scale, credit, inventory management and design-in influence rather than on owned intellectual property. Two shifts over 2024–2026 are changing the shape of the business. The first is growth in supply chain services recorded on a gross basis in the Americas, which inflated receivables and payables. The second is ECS's move toward software, cloud and exclusive multi-year supplier outsourcing contracts. These raise recurring revenue but have also produced loss charges where volumes undershot commitments.
Strategy
Stated strategy themes (FY2025 Form 10-K). Arrow aims to be "the premier, technology-centric, go-to-market and supply chain services company." The 10-K sets out these strategic initiatives:
Global Components: Initiative: Shift toward a higher mix of higher-margin value-added services: engineering, integration and supply chain services (procurement, logistics, warehousing, data-analytics insight)
Global Components: Initiative: Further penetrate the margin-accretive IP&E market
Global ECS: Initiative: Enable customers' cloud businesses through ArrowSphere, including an AI-enabled digital go-to-market platform for channel partners
Global ECS: Initiative: Provide value-added distribution services on behalf of suppliers: sales and marketing, demand generation, support and managed services, digital platforms
Enterprise: Initiative: Execute the Operating Expense Efficiency Plan and keep a scalable cost structure
Enterprise: Initiative: Run a disciplined capital allocation framework: working-capital deployment, debt reduction and share repurchases
Initiatives announced in the last 24 months
Operating Expense Efficiency Plan: Timing: Started 2024; multi-year; Detail: Workforce reduction and relocation to lower-cost regions; USD 116.1 million of restructuring, integration and other charges in 2025; Q4 2025 operating expenses fell to 67% of gross profit
Automotive engineering build-out: Timing: 2024; Detail: eInfochips acquired Avelabs and iQmine; new Munich and Istanbul automotive development centres
Next-generation vehicle E/E architecture hub: Timing: 2026; Detail: Engineering expertise and supply-chain stability offered to OEMs and tier-1 suppliers moving to software-defined vehicles
IP&E aerospace and defense expansion: Timing: Sep 2025; Detail: AirBorn (a Molex company) high-reliability interconnect added in North America and EMEA
ECS strategic outsourcing agreements: Timing: Ongoing to 2032; Detail: Exclusive multi-year supplier agreements with non-cancellable purchase obligations; management is optimizing, enhancing and scaling these offerings after loss charges
Supply chain services scale-up: Timing: 2025–2026; Detail: Gross-basis supply chain programs for complex customers, including hyperscale data-center deployments
Capital structure: Timing: Jun 2025; Detail: USD 2 billion revolver extended to June 2030
Capital return: Timing: Aug 2026; Detail: New USD 1 billion share repurchase authorization
Leadership: Timing: Aug 2026; Detail: New President and COO role to lead both segments and logistics and to strengthen succession
Sustainability: Timing: 2024–2025; Detail: Near-term science-based targets submitted to and validated by the Science Based Targets initiative (SBTi); supplier environmental engagement program launched
Medium-term targets and guidance. Arrow has not published formal multi-year financial targets. Management gives quarterly guidance. For Q3 2026 it guided to sales of USD 9.60–10.20 billion (Global Components USD 7.50–7.90 billion; ECS USD 2.10–2.30 billion). Non-GAAP diluted EPS guidance was USD 4.83–5.03, with interest expense of about USD 50 million. Management expects Global Components to track at or above seasonal trends for the rest of 2026. It expects supply chain services profit to return to more normal levels after an unusually strong Q2. ECS should show its typically strong fourth-quarter margin, though smaller additional contract charges are expected.
Products & Services
Arrow is a distributor, so its "products" are mostly third-party lines plus its own services and platforms. It publishes no price lists; pricing is quote-based for components and contractual or subscription-based for ECS and services.
Global Components
| Offering | Description and capabilities | Target customers | Pricing model |
|---|---|---|---|
| Semiconductor distribution | Broadline franchised distribution of microcontrollers, processors, FPGAs, analog, power, discretes, sensors, connectivity and memory from major semiconductor suppliers; about 72% of segment sales in 2025 | OEMs, EMS providers, design engineers | Quote-based spread; volume and scheduled pricing |
| IP&E distribution | Capacitors, resistors, potentiometers, power supplies, relays, switches and connectors, including a growing aerospace and defense interconnect line (AirBorn high-reliability connectors and cable assemblies added in North America and EMEA, Sep 2025); a strategic priority because it is margin-accretive | Industrial, aerospace and defense, transportation and medical OEMs | Quote-based |
| Computing and memory | Board-level computing and memory products within the components channel; about 7% of segment sales | OEMs, EMS providers | Quote-based |
| Supply chain services | Procurement, logistics, warehousing, financial management and data-analytics insight for complex direct supply chains; some engagements recorded on a gross basis; growth drove Americas integrated-services demand in 2025 and large operating cash inflows in Q1 2026 | Large OEMs and hyperscale and data-center customers with complex electronics supply chains | Fee-based and gross-margin models |
| Engineering and design services (incl. eInfochips) | Software development, product design, integrated-circuit design, digital engineering and an automotive Centre of Excellence (expanded with Munich and Istanbul development centres in 2024, plus the Avelabs and iQmine acquisitions) | OEMs, tier-1 automotive suppliers, product companies | Engineering service fees |
| Demand creation / field application engineering | Field application engineers win design registrations that lead to future production sales of suppliers' parts | Design engineers at OEMs; suppliers | Embedded in distribution margin |
| Integration services | Prototyping to volume-production readiness, worldwide logistics and fulfillment, scalable manufacturing and customer support across the product lifecycle | OEMs needing integrated subsystems | Service and integration fees |
| Next-generation vehicle E/E architecture initiative | Research hub and engineering resources for the shift to software-defined vehicles (launched 2026) | Automotive OEMs and tier-1 suppliers | Engineering and distribution |
| Digital channels (arrow.com) | E-commerce, account management and online ordering for components | Engineers, small and mass-market customers | List and quote pricing |
Global ECS
| Offering | Description and capabilities | Target customers | Pricing model |
|---|---|---|---|
| ArrowSphere | Cloud and software marketplace and management platform that helps VARs and MSPs manage, differentiate and scale as-a-service businesses across hybrid multicloud estates; includes business intelligence and an AI-enabled digital go-to-market platform | VARs, MSPs, cloud solution providers | Subscription and consumption pass-through with margin |
| Infrastructure software and business applications | Software applications were about 27% of 2025 ECS sales; business applications grew about 26% year over year in Q2 2026 | VARs and MSPs serving enterprise and mid-market | Mostly net-basis margin |
| Storage | About 25% of 2025 ECS sales; demand rose in 2026 as memory supply constraints pulled orders forward | Datacenter-focused VARs and integrators | Hardware margin |
| Security | About 15% of 2025 ECS sales; up about 21% year over year in Q2 2026 | Security VARs, MSPs, MSSPs | Hardware, software and subscription |
| Compute | About 14% of 2025 ECS sales; up about 51% year over year in Q2 2026 on hyperscaler and AI-related deployments | Datacenter integrators, VARs | Hardware margin |
| Data intelligence and analytics | About 5% of ECS sales | VARs and solution providers | Software and services |
| Networking | About 5% of ECS sales | VARs, MSPs | Hardware and software |
| Strategic outsourcing agreements | Multi-year, non-cancellable purchase-obligation agreements running through 2032 that make Arrow the exclusive partner for certain suppliers' products in specified regions, with a contractual fee model for outsourced selling and marketing | Software and IT suppliers | Contractual fees and margin; USD 18.3 million of net losses recognized in 2025 |
| Value-added services | Engineering and integration support, warehousing and logistics, marketing resources, authorized hardware and software training, support and managed services | VARs, MSPs, suppliers | Service fees |
Launch years for individual product lines are not publicly disclosed, except as noted above.
Financial Narrative
All figures are USD millions unless stated otherwise. They are GAAP figures from Arrow's Forms 10-K for FY2021–FY2025. Prior-year comparatives follow the latest filing presenting them. EBITDA is GAAP operating income plus depreciation and amortization.
Income statement
The 2023 non-GAAP diluted EPS is shown as 0 because that figure was not available on a comparable basis.
Margins
Revenue fell at a compound annual rate of -2.7% between FY2021 and FY2025, from USD 34.5 billion to USD 30.9 billion. Using the FY2020 base of USD 28.7 billion, the five-year CAGR to FY2025 is +1.5%.
Commentary. The five-year record traces a full semiconductor cycle. In 2021–2022, shortage-era pricing and allocation lifted gross margin to 13.0% and operating margin to 5.6%. Net income peaked at USD 1.43 billion in 2022. As customers worked down excess inventory, components sales fell 11.7% in 2023 and a further 21.4% in 2024. With a largely fixed cost base, operating margin roughly halved to 2.7–2.8% in 2024–2025. Higher interest rates compounded the earnings decline: interest expense rose from USD 128 million in 2021 to USD 341 million in 2023.
Several factors pushed gross margin down 60 basis points in 2025. These were regional and product mix (faster growth in lower-margin Asia/Pacific and in gross-recognized supply chain services), ECS contract losses and a heavier share of ECS sales recognized on a gross basis. The rise in 2025 net income (+45.7%) owed much to a net gain on investments of about USD 110 million. Non-GAAP net income grew only 1.4%, to USD 576 million.
The inflection is visible in 2026. Q1 and Q2 2026 sales rose 39% and 32% respectively, and Q2 operating margin reached 4.0%. Trailing-twelve-month net income through Q2 2026 reached USD 812 million on USD 35.9 billion of sales.
Balance sheet
Commentary. Total assets jumped 34% in 2025, to USD 29.1 billion, while sales rose only 10.5%. The cause was a surge in receivables (+USD 6.7 billion) matched by payables (+USD 6.3 billion), consistent with growth in supply chain services where Arrow intermediates large flows on a gross basis. By Q2 2026, total assets had reached USD 38.4 billion, with receivables of USD 28.0 billion and payables of USD 27.1 billion. These pass-through balances inflate the balance sheet and depress asset-based ratios without changing underlying leverage much.
Gross debt fell to about USD 2.2 billion by Q2 2026, and management cited adjusted leverage of 1.75 times. Goodwill has been stable at about USD 2.1 billion since the 2019 impairment cycle. The decline in intangibles reflects amortization with few acquisitions.
Cash flow
Commentary. Arrow's cash flow runs countercyclically. Working-capital builds absorb cash in upswings (2021–2022, 2025), and inventory and receivables release cash in downturns (2023–2024). The 2025 operating cash flow of only USD 64 million reflected about USD 522 million of working-capital investment as sales re-accelerated. The pattern reversed sharply in 2026. Operating cash flow was USD 700 million in Q1 and USD 318 million in Q2, helped by the timing of supply chain services flows. Trailing-twelve-month operating cash flow through Q2 2026 was about USD 936 million.
Share repurchases totaled about USD 3.2 billion over the five years. They cut the diluted share count from 73 million to 52 million, a reduction of roughly 29%, which supported EPS through the downturn.
Ratios
Commentary. Returns compressed hard from the 2022 peak. ROIC fell from 16.9% to 6.8%, below a typical BBB-rated cost of capital in 2024–2025. The rebound in 2026 earnings implies a material recovery: trailing net income of USD 812 million on Q2 2026 equity of about USD 7.0 billion gives an ROE near 12%.
Receivable and payable day counts have been distorted by gross-basis supply chain services and by ECS revenue recognized net. Days sales outstanding (234) and days payables outstanding (232) both more than doubled since 2021, while the net cash conversion cycle stayed in a 53–76-day band. Leverage peaked at 3.2 times net debt to EBITDA in 2024 and was falling quickly through 2026.
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Revenue by Segment
| Segment | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
Global Components sales (USD Mn) | 25,420 | 19,983 | 21,501 |
Global ECS sales (USD Mn) | 7,687 | 7,940 | 9,352 |
Consolidated sales (USD Mn) | 33,107 | 27,923 | 30,853 |
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View Subscription PlansResults by Segment
| Segment | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
Global Components operating income (USD Mn) | 1,459 | 741 | 775 |
Global ECS operating income (USD Mn) | 367 | 410 | 426 |
Corporate and unallocated (USD Mn) | -355 | -383 | -379 |
Consolidated operating income (USD Mn) | 1,471 | 769 | 822 |
Segment Margins & Growth (%) and Revenue by Segment (%)
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
Global Components operating margin (%) | 5.74 | 3.71 | 3.60 |
Global ECS operating margin (%) | 4.77 | 5.16 | 4.56 |
Global Components sales growth YoY (%) | -11.7 | -21.4 | 7.6 |
Global ECS sales growth YoY (%) | -7.8 | 3.3 | 17.8 |
Global Components share of total sales (%) | 76.8 | 71.6 | 69.7 |
Global ECS share of total sales (%) | 23.2 | 28.4 | 30.3 |
Results by Segment (FY2024–FY2025)
| Segment | FY2024 | FY2025 |
|---|---|---|
Global Components non-GAAP operating income (USD Mn) | 827 | 781 |
Global ECS non-GAAP operating income (USD Mn) | 414 | 430 |
Revenue by Segment (Quarterly)
| Metric | Q1 2025 | Q2 2025 | Q1 2026 | Q2 2026 |
|---|---|---|---|---|
Global Components sales (USD Mn) | 4,778 | 5,285 | 6,640 | 7,366 |
Global ECS sales (USD Mn) | 2,036 | 2,295 | 2,833 | 2,627 |
Consolidated sales (USD Mn) | 6,814 | 7,580 | 9,474 | 9,992 |
Income Statement and Margin Analysis (%)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Revenue (USD Mn) | 34,477 | 37,124 | 33,107 | 27,923 | 30,853 |
Revenue growth YoY (%) | 20.2 | 7.7 | -10.8 | -15.7 | 10.5 |
Gross profit (USD Mn) | 4,202 | 4,837 | 4,149 | 3,292 | 3,467 |
Operating income (USD Mn) | 1,557 | 2,068 | 1,471 | 769 | 822 |
Depreciation and amortization (USD Mn) | 195 | 187 | 181 | 163 | 138 |
EBITDA (USD Mn) | 1,752 | 2,256 | 1,652 | 932 | 960 |
Interest expense (USD Mn) | 128 | 209 | 341 | 254 | 210 |
Pre-tax income (USD Mn) | 1,436 | 1,884 | 1,164 | 489 | 718 |
Income tax expense (USD Mn) | 326 | 449 | 255 | 96 | 148 |
Effective tax rate (%) | 22.7 | 23.8 | 21.9 | 19.6 | 20.6 |
Net income attributable to shareholders (USD Mn) | 1,108 | 1,427 | 904 | 392 | 571 |
EPS basic (USD) | 15.29 | 22.01 | 16.03 | 7.36 | 11.03 |
EPS diluted (USD) | 15.10 | 21.80 | 15.84 | 7.29 | 10.93 |
Non-GAAP EPS diluted (USD) | 15.50 | 22.38 | 0 | 10.56 | 11.02 |
Dividends per share (USD) | 0 | 0 | 0 | 0 | 0 |
Diluted shares (M) | 73 | 65 | 57 | 54 | 52 |
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View Subscription PlansMargin Analysis (%)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Gross margin (%) | 12.19 | 13.03 | 12.53 | 11.79 | 11.24 |
Operating margin (%) | 4.52 | 5.57 | 4.44 | 2.75 | 2.66 |
EBITDA margin (%) | 5.08 | 6.08 | 4.99 | 3.34 | 3.11 |
Net margin (%) | 3.21 | 3.84 | 2.73 | 1.40 | 1.85 |
Balance Sheet and Per-Share Data
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Total assets (USD Mn) | 19,536 | 21,763 | 21,726 | 21,758 | 29,078 |
Cash and equivalents (USD Mn) | 222 | 177 | 218 | 189 | 306 |
Accounts receivable, net (USD Mn) | 11,124 | 12,323 | 12,238 | 13,031 | 19,739 |
Inventories (USD Mn) | 4,202 | 5,319 | 5,187 | 4,710 | 5,082 |
Accounts payable (USD Mn) | 9,617 | 10,460 | 10,070 | 11,047 | 17,384 |
Short-term debt incl. current portion (USD Mn) | 383 | 590 | 1,654 | 350 | 0.3 |
Long-term debt (USD Mn) | 2,244 | 3,183 | 2,154 | 2,774 | 3,085 |
Total debt, excl. leases (USD Mn) | 2,627 | 3,773 | 3,808 | 3,124 | 3,085 |
Net debt (USD Mn) | 2,405 | 3,596 | 3,590 | 2,935 | 2,779 |
Shareholders' equity attributable to Arrow (USD Mn) | 5,282 | 5,546 | 5,805 | 5,761 | 6,585 |
Goodwill (USD Mn) | 2,080 | 2,028 | 2,050 | 2,055 | 2,120 |
Identifiable intangibles (USD Mn) | 195 | 159 | 127 | 97 | 77 |
Working capital (USD Mn) | 4,567 | 5,951 | 5,140 | 5,765 | 6,815 |
Book value per share (USD) | 77.61 | 93.61 | 107.89 | 110.43 | 128.94 |
Cash Flow
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Operating cash flow (USD Mn) | 419 | -33 | 705 | 1,130 | 64 |
Capital expenditure (USD Mn) | 83 | 79 | 83 | 93 | 101 |
Free cash flow (USD Mn) | 336 | -112 | 622 | 1,038 | -37 |
Dividends paid (USD Mn) | 0 | 0 | 0 | 0 | 0 |
Share repurchases (USD Mn) | 912 | 1,049 | 770 | 265 | 162 |
Net debt issued or repaid (USD Mn) | 377 | 1,142 | 30 | -696 | -48 |
Returns & Leverage Ratios (%) and Financial Ratios (x)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
ROE on year-end equity (%) | 21.0 | 25.7 | 15.6 | 6.8 | 8.7 |
ROA (%) | 5.7 | 6.6 | 4.2 | 1.8 | 2.0 |
ROIC, NOPAT over equity plus debt (%) | 15.2 | 16.9 | 12.0 | 7.0 | 6.8 |
Current ratio (x) | 1.40 | 1.48 | 1.39 | 1.46 | 1.36 |
Debt to equity (x) | 0.50 | 0.68 | 0.66 | 0.54 | 0.47 |
Net debt to EBITDA (x) | 1.37 | 1.59 | 2.17 | 3.15 | 2.89 |
Interest coverage, operating income over interest (x) | 12.2 | 9.9 | 4.3 | 3.0 | 3.9 |
Asset turnover (x) | 1.76 | 1.71 | 1.52 | 1.28 | 1.06 |
Days sales outstanding | 118 | 121 | 135 | 170 | 234 |
Days inventory outstanding | 51 | 60 | 65 | 70 | 68 |
Days payables outstanding | 116 | 118 | 127 | 164 | 232 |
Cash conversion cycle (days) | 53 | 63 | 73 | 76 | 70 |
Revenue by Region
| Segment × region (USD Mn) | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
Americas Components | 7,955 | 6,412 | 6,944 |
EMEA Components | 8,075 | 5,648 | 5,671 |
Asia/Pacific Components | 9,390 | 7,923 | 8,886 |
Americas ECS | 4,160 | 4,067 | 4,231 |
EMEA ECS | 3,527 | 3,873 | 5,121 |
Revenue by Region by Region
| Region (USD Mn) | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
Americas | 12,115 | 10,479 | 11,175 |
EMEA | 11,602 | 9,521 | 10,792 |
Asia/Pacific | 9,390 | 7,923 | 8,886 |
Regional growth YoY (%)
| Regional growth YoY (%) | FY2024 | FY2025 |
|---|---|---|
Americas | -13.5 | 6.6 |
EMEA | -17.9 | 13.4 |
Asia/Pacific | -15.6 | 12.2 |
Revenue by Region (FY2024–FY2025)
| Region (USD Mn) | FY2024 | FY2025 |
|---|---|---|
Americas ECS gross billings | 10,323 | 10,607 |
EMEA ECS gross billings | 9,205 | 11,443 |
Global ECS gross billings | 19,528 | 22,050 |
Capital Markets
| Metric | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|---|
Arrow cumulative TSR index (end-2020 = 100) | 100 | 138 | 107 | 126 | 116 | 113 |
Peer group TSR index | 100 | 147 | 132 | 170 | 200 | 249 |
S&P MidCap 400 TSR index | 100 | 125 | 108 | 126 | 144 | 155 |
Share Price & Returns
| Period | Arrow share performance |
|---|---|
Five years to end-2025 (TSR) | +13% |
Three years to end-2025 (TSR) | +5.6% (index 107 to 113) |
2026 year to date | From USD 110.32 at the start of 2026 to roughly USD 208–221 in late October 2026, close to +90% |
One year to late October 2026 | Roughly +90%, from about USD 108–111 in November 2025 |
52-week range | USD 101.79 – 237.33 |
Valuation Multiples
| Multiple | Arrow |
|---|---|
P/E, trailing (GAAP EPS USD 15.65) | About 13–14x |
P/E, forward | About 10x |
EV/EBITDA, trailing | About 8.5x |
EV/Sales, trailing | About 0.35x |
P/B (Q2 2026 equity of about USD 7.0 billion) | About 1.5x |
Dividends & Capital Returns
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Share repurchases (USD Mn) | 912 | 1,049 | 770 | 265 | 162 |
Dividends per share (USD) | 0 | 0 | 0 | 0 | 0 |
Credit Ratings
| Agency | Senior unsecured rating | Outlook |
|---|---|---|
Moody's | Baa3 | Stable |
S&P Global Ratings | BBB- | Stable |
Fitch Ratings | BBB- | Stable |
Capital Instruments
| Instrument | Principal (USD Mn) | Maturity |
|---|---|---|
7.50% senior debentures (not redeemable before maturity) | 110 | 2027 |
3.875% notes | 500 | 2028 |
5.150% notes | 500 | 2029 |
2.95% notes | 500 | 2032 |
5.875% notes | 500 | 2034 |
North American asset securitization program (USD 1.5 billion capacity) | Variable | Revolving |
Revolving credit facility (USD 2 billion) | Variable | June 2030 |
Analyst Conclusions
Management guidance (Q3 2026, given 6 Aug 2026)
Consolidated sales: Guidance: USD 9.60–10.20 billion (about +28% year over year at the midpoint)
Global Components sales: Guidance: USD 7.50–7.90 billion (about +5% sequentially at the midpoint)
Global ECS sales: Guidance: USD 2.10–2.30 billion
Non-GAAP diluted EPS: Guidance: USD 4.83–5.03
Interest expense: Guidance: About USD 50 million
FX effect on sales: Guidance: About USD 27 million negative year over year
Consensus expectations. Consensus Q3 2026 EPS is about USD 5.06. Implied FY2026 EPS is about USD 21.24, nearly double FY2025 non-GAAP EPS of USD 11.02, with mid-to-high single-digit growth expected in FY2027.
Bull case
Operating leverage in a multi-year upcycle: Supporting data: Q2 2026 non-GAAP EPS up 124% on sales up 32%; WSTS projects a further 27% market growth in 2027
Balance sheet and cash turning sharply positive: Supporting data: USD 1.02 billion of operating cash flow in H1 2026; gross debt down to about USD 2.2 billion; leverage 1.75 times; new USD 1 billion buyback
Mix shift toward services and recurring ECS revenue: Supporting data: Record ECS backlog (+75% at end-2025); security, compute and business applications all growing above 20%; IP&E and services prioritized
Bear case
Cycle peak and pull-forward risk: Supporting data: Memory-constrained ordering pulled demand forward in early 2026; the prior downturn cut components sales 31% from peak and operating margin by half
Structural ECS contract drag: Supporting data: Non-cancellable obligations through 2032; USD 18.3 million of 2025 losses and further charges in 2026; management says long-term performance cannot be reasonably estimated
Governance and execution risk: Supporting data: Interim CEO for more than a year; geopolitical exposure demonstrated by the 2025 Entity List episode; five-year TSR well below peers
Key catalysts (next 12 months)
Q3 2026 results and Q4 guidance: Expected timing: 5 Nov 2026; Watch for: Normalization of supply chain services profit; ECS contract charges; Q4 seasonality
Permanent CEO appointment: Expected timing: Not dated; Watch for: Internal versus external pick, and any strategy reset
Q4 and FY2026 results: Expected timing: Early Feb 2027; Watch for: Full-year EPS against the about USD 21 consensus; 2027 commentary
Pace of buybacks under the USD 1 billion program: Expected timing: Quarterly; Watch for: Share count reduction
U.S. tariff and export-control decisions: Expected timing: Ongoing; Watch for: IEEPA ruling effects; China trade controls
Book-to-bill and backlog trends in Global Components: Expected timing: Quarterly; Watch for: Signs of peaking or order cancellations
Working-capital and cash conversion: Expected timing: Quarterly; Watch for: Unwind risk in gross-basis supply chain services balances
2027 annual meeting and governance: Expected timing: May 2027; Watch for: Board refresh, pay design for the new CEO
Analyst verdict. Arrow enters late 2026 at the strongest operating point since its 2022 peak. Quarterly revenue is near USD 10 billion, operating margin has recovered to about 4%, and trailing net income has roughly doubled from its 2024 trough. The recovery is real and broad. All three components regions grew more than 35% year over year in Q2 2026. ECS is benefiting from AI-driven compute and storage demand and from continued software and security growth. The balance sheet is moving the right way: gross debt has fallen by roughly USD 900 million since year-end, leverage is below 2 times, and a fresh USD 1 billion buyback gives management a lever it used heavily in past cycles.
The quality of earnings deserves scrutiny. Part of 2026's strength reflects order pull-forwards and unusually profitable supply chain services, which management itself expects to normalize. The ECS outsourcing contracts are a genuine uncertainty because their losses cannot yet be bounded. The interim leadership structure also leaves the strategic agenda partly on hold.
At about 13–14 times trailing and about 10 times forward earnings, and roughly 1.5 times book, the market is pricing Arrow as a cyclical near a peak rather than a re-rated services platform. That view is defensible given the company's history. Arrow's five-year shareholder return trails its peer group by a wide margin despite heavy buybacks. Distribution margins have never sustained much above 5%.
On balance, Arrow looks fairly valued with a modest positive skew. Upside depends on three things: the cycle extending into 2027, as WSTS forecasts suggest; ECS charges fading; and a permanent CEO credibly committing to services-led margin expansion. Downside protection comes from countercyclical cash flow, investment-grade credit and a low valuation multiple. The appointment of the permanent CEO and the 2027 guidance are the two signals that matter most.
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View Subscription PlansExecutive Leadership
Executive Leadership Team
| Name | Title | Age | In role since | Prior roles | Salary 2025 | Stock awards 2025 | Non-equity incentive 2025 | Total 2025 |
|---|---|---|---|---|---|---|---|---|
William F. Austen | Interim President and CEO; director | 67 | Sep 2025 (director since May 2020) | President, CEO and director of Bemis Company 2014–2019; Bemis EVP Operations and COO 2013–2014; director of Tennant Co. (2007–2022) and Arconic (2020–2023) | 350,770 | 3,795,113 | 0 | 4,347,295 |
Deidra C. (Dee) Merriwether | President and Chief Operating Officer | 57 | Sep 2026 | SVP and CFO of W.W. Grainger from 2021; earlier SVP and President, North American Sales and Services at Grainger; director of Weyerhaeuser | 0 | 0 | 0 | 0 |
Rajesh K. Agrawal | SVP, Chief Financial Officer | 60 | Sep 2022 | EVP and CFO of The Western Union Company | 700,000 | 2,300,056 | 653,100 | 3,996,353 |
Carine L. Jean-Claude | SVP, Chief Legal and Compliance Officer, Secretary | 58 | Jun 2021 | Interim Chief Legal Officer from Dec 2020; previously Chief Compliance Officer | 0 | 0 | 0 | 0 |
Richard J. Marano | President, Global Components | 61 | Aug 2023 | President, Americas Components from Jan 2020 | 750,000 | 3,500,043 | 699,750 | 4,972,325 |
Eric C. Nowak | President, Global ECS | 62 | Apr 2024 | President, EMEA ECS for more than five years | 822,269 | 3,400,095 | 767,177 | 5,150,461 |
Gretchen K. Zech | SVP, Chief Governance, Sustainability and HR Officer | 56 | Feb 2022 | SVP and Chief Human Resources Officer | 0 | 0 | 0 | 0 |
Board of Directors
| Director | Role | Background |
|---|---|---|
Steven H. Gunby (68, director since 2017) | Independent Board Chair | President, CEO and director of FTI Consulting since 2014; former Senior Partner at Boston Consulting Group |
William F. Austen (67, director since 2020) | Interim President and CEO | Former Bemis Company CEO |
Lawrence (Liren) Chen | Independent director | President, CEO and director of InterDigital since 2021; formerly at Qualcomm |
Michael D. Hayford | Independent director | Former CEO of NCR |
Andrew C. Kerin | Independent director | Senior operating executive background |
Carol P. Lowe | Independent director | Senior finance executive background |
Mary T. McDowell | Independent director | Former technology-company CEO |
Gerry P. Smith | Independent director | Retail and technology CEO background |
Board & Management Changes
| Date | Change |
|---|---|
Apr 2024 | Eric Nowak named President, Global ECS |
16 Sep 2025 | Sean Kerins separated from the company as director, President and CEO; the company said the separation was unrelated to its financial statements; Bill Austen appointed interim |
2025–2026 | Board, assisted by an executive search firm, conducting a search for a permanent CEO |
6 Aug 2026 | Deidra Merriwether appointed to the new post of President and COO, effective 8 Sep 2026, reporting to the interim CEO and responsible for both global business segments and logistics |
Major Shareholders
| Holder | Shares | % of outstanding |
|---|---|---|
The Vanguard Group | 6,211,177 | 12.16 |
BlackRock, Inc. | 4,732,911 | 9.26 |
ACR Alpine Capital Research, LLC | 3,451,606 | 6.70 |
Dimensional Fund Advisors LP | 2,839,149 | 5.56 |
Competitive Landscape
Key Competitors
| Competitor | Segment overlap | Positioning relative to Arrow |
|---|---|---|
Avnet, Inc. (Nasdaq: AVT) | Components | Closest U.S. broadline peer; fiscal 2026 (ended June 2026) sales of USD 27.63 billion (+24.5%); owns the Farnell high-service catalog business; about half its revenue now comes from Asia |
WPG Holdings (Taiwan) | Components | Asia's largest semiconductor distributor; strong in Greater China computing and mobile supply chains |
WT Microelectronics (Taiwan) | Components | Large Asian distributor that added Future Electronics' global footprint |
TTI, Inc. (Berkshire Hathaway) | Components (IP&E) | Specialist IP&E distributor competing in Arrow's priority IP&E segment |
Mouser Electronics (TTI / Berkshire) | Components (high-service, catalog) | Online catalog for design engineers |
Digi-Key Electronics | Components (high-service, catalog) | Privately owned online catalog leader |
Rutronik | Components (EMEA) | Strong German and European regional broadliner |
TD SYNNEX (NYSE: SNX) | ECS | Largest IT distributor; Q4 FY2025 (ended Nov 2025) revenue of USD 17.4 billion; Hyve hyperscale ODM business |
Ingram Micro | ECS | Global IT distributor with its own cloud marketplace |
Exclusive Networks | ECS (security) | Cybersecurity specialist distributor in EMEA |
ALSO Holding | ECS (EMEA) | European IT distributor and cloud marketplace |
Suppliers selling direct; logistics and e-commerce firms | Both | Arrow's 10-K names suppliers themselves, plus logistics, catalog and e-commerce providers, as competitors |
Peer Comparison FY2025
| Metric | Arrow (FY Dec-2025) | Avnet (FY Jun-2026) | TD SYNNEX (Q4 FY2025, quarter to Nov-2025) |
|---|---|---|---|
Revenue (USD Bn) | 30.85 | 27.63 | 17.38 |
Revenue growth YoY (%) | 10.5 | 24.5 | 9.7 |
Gross margin (%) | 11.2 | 10.4 | 6.9 |
GAAP operating margin (%) | 2.7 | 2.6 | 2.3 |
