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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 4, 2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-4482

ARROW ELECTRONICS, INC.

(Exact name of registrant as specified in its charter)


New York		11-1806155
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)


9151 East Panorama Circle		80112
Centennial CO		(Zip Code)
(Address of principal executive offices)

(303) 824-4000

(Registrant’s telephone number, including area code)

No Changes

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of the exchange on which registered
Common Stock, $1 par value	ARW	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

There were 51,133,946 shares of Common Stock outstanding as of April 30, 2026.

Table of Contents

ARROW ELECTRONICS, INC.

Table of Contents


Part I.	Financial Information

	Item 1.	Financial Statements (Unaudited)
		Consolidated Statements of Operations	4
		Consolidated Statements of Comprehensive Income	5
		Consolidated Balance Sheets	6
		Consolidated Statements of Cash Flows	7
		Consolidated Statements of Equity	8
		Notes to Consolidated Financial Statements	9

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	43

	Item 4.	Controls and Procedures	43

Part II.	Other Information

	Item 1.	Legal Proceedings	44

	Item 1A.	Risk Factors	44

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

	Item 5.	Other Information	45

	Item 6.	Exhibits	46

Signature			47

Table of Contents

ARROW ELECTRONICS, INC.

Glossary of Selected Abbreviated Terms*


Abbreviated Term	Defined Term
AFC	Arrow Electronics Funding Corporation
AI	Artificial Intelligence
Arrow	Arrow Electronics, Inc. and its subsidiaries, unless otherwise indicated
ASU	Accounting Standard Update
CODM	Chief Operating Decision Maker
The company	Arrow Electronics, Inc. and its subsidiaries, unless otherwise indicated
CTA	Foreign Currency Translation Adjustment
ECS	Enterprise Computing Solutions
EMEA	Europe, the Middle East, and Africa
EMS	Electronics Manufacturing Services
FASB	Financial Accounting Standards Board
GAAP	Generally Accepted Accounting Principles
Global Components	Global Components reportable segment
Global ECS	Global ECS reportable segment
IP&E	Interconnect, Passive and Electromechanical
IT	Information Technology
MSPs	Managed Service Providers
OEMs	Original Equipment Manufacturers
SOFR	Secured Overnight Financing Rate
U.S. or United States	United States of America
VARs	Value-Added Resellers

* Terms used, but not defined, within the body of this Form 10-Q, including in the Consolidated Financial Statements and accompanying notes, are defined in this Glossary.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share data)

(Unaudited)


	Quarter Ended
	April 4,		March 29,
	2026		2025
Sales	$	9,473,548	$	6,814,017
Cost of sales		8,383,088		6,040,025
Gross profit		1,090,460		773,992
Operating expenses:
Selling, general, and administrative		656,141		562,316
Depreciation and amortization		36,053		35,810
Restructuring, integration, and other		36,664		17,313
		728,858		615,439
Operating income		361,602		158,553
Equity in earnings of affiliated companies		896		1,320
(Loss) gain on investments, net		(5,792)		140
Post-retirement expense		(962)		(622)
Interest and other financing expense, net		(48,484)		(56,182)
Income before income taxes		307,260		103,209
Provision for income taxes		71,230		23,345
Consolidated net income		236,030		79,864
Noncontrolling interests		924		144
Net income attributable to shareholders	$	235,106	$	79,720

Net income per share:
Basic	$	4.58	$	1.53
Diluted	$	4.55	$	1.51
Weighted-average shares outstanding:
Basic		51,321		52,266
Diluted		51,707		52,674

See accompanying notes.

Table of Contents

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Quarter Ended
	April 4,		March 29,
	2026		2025
Consolidated net income	$	236,030	$	79,864
Other comprehensive (loss) income:
Foreign currency translation adjustment and other, net of taxes		(61,382)		132,708
Gain (loss) on foreign exchange contracts designated as net investment hedges, net of taxes		1,573		(5,952)
Loss on interest rate swaps designated as cash flow hedges, net of taxes		(442)		(419)
Post-retirement expense items, net of taxes		(102)		(362)
Other comprehensive (loss) income		(60,353)		125,975
Comprehensive income		175,677		205,839
Less: Comprehensive income attributable to noncontrolling interests		63		2,035
Comprehensive income attributable to shareholders	$	175,614	$	203,804

See accompanying notes.

Table of Contents

ARROW ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands except par value)

(Unaudited)


	April 4,			December 31,
	2026		2025
ASSETS
Current assets:
Cash and cash equivalents	$	286,512	$	306,467
Accounts receivable, net		25,961,193		19,738,666
Inventories		5,722,706		5,081,863
Other current assets		584,831		533,035
Total current assets		32,555,242		25,660,031
Property, plant, and equipment, at cost:
Land		5,691		5,691
Buildings and improvements		208,821		199,433
Machinery and equipment		1,722,427		1,715,415
		1,936,939		1,920,539
Less: Accumulated depreciation and amortization		(1,465,448)		(1,445,889)
Property, plant, and equipment, net		471,491		474,650
Investments in affiliated companies		59,226		59,315
Intangible assets, net		72,251		77,022
Goodwill		2,109,008		2,120,071
Other assets		686,752		687,049
Total assets	$	35,953,970	$	29,078,138
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	24,739,718	$	17,383,796
Accrued expenses		1,434,256		1,461,261
Short-term borrowings, including current portion of long-term debt		113,371		341
Total current liabilities		26,287,345		18,845,398
Long-term debt		2,352,395		3,084,715
Other liabilities		498,509		489,326
Contingencies (Note L)
Equity:
Shareholders’ equity:
Common stock, par value $1:
Authorized - 160,000 shares in both 2026 and 2025
Issued - 56,007 and 55,838 shares in 2026 and 2025, respectively		56,007		55,838
Capital in excess of par value		595,704		586,993
Treasury stock (4,923 and 4,768 shares in 2026 and 2025, respectively), at cost		(511,106)		(483,571)
Retained earnings		6,787,198		6,552,092
Accumulated other comprehensive loss		(186,132)		(126,640)
Total shareholders’ equity		6,741,671		6,584,712
Noncontrolling interests		74,050		73,987
Total equity		6,815,721		6,658,699
Total liabilities and equity	$	35,953,970	$	29,078,138

See accompanying notes.

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ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Quarter Ended
	April 4,		March 29,
	2026		2025
Cash flows from operating activities:
Consolidated net income:	$	236,030	$	79,864
Adjustments to reconcile consolidated net income to net cash provided by operations:
Depreciation and amortization		36,053		35,810
Amortization of stock-based compensation		9,599		18,559
Equity in earnings of affiliated companies		(896)		(1,320)
Deferred income taxes		9,754		(5,841)
Loss (gain) on investments, net		5,871		(32)
Other		8,104		(678)
Change in assets and liabilities:
Accounts receivable, net		(6,280,326)		731,226
Inventories		(656,543)		(62,384)
Accounts payable		7,390,689		(251,057)
Accrued expenses		6,910		(79,683)
Other assets and liabilities		(65,493)		(112,785)
Net cash provided by operating activities		699,752		351,679
Cash flows from investing activities:
Acquisition of property, plant, and equipment		(32,108)		(24,979)
Net cash used for investing activities		(32,108)		(24,979)
Cash flows from financing activities:
Change in short-term and other borrowings		2,681		180,616
Repayments of long-term bank borrowings, net		(623,096)		(464,223)
Proceeds from exercise of stock options		5,038		904
Repurchases of common stock		(33,292)		(59,413)
Net cash used for financing activities		(648,669)		(342,116)
Effect of exchange rate changes on cash		(38,930)		58,491
Net (decrease) increase in cash and cash equivalents		(19,955)		43,075
Cash and cash equivalents at beginning of period		306,467		188,807
Cash and cash equivalents at end of period	$	286,512	$	231,882

See accompanying notes.

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ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

(Unaudited)


														Accumulated
		Common			Capital in									Other
		Stock at Par			Excess of Par			Treasury			Retained			Comprehensive			Noncontrolling
		Value			Value			Stock			Earnings			Loss			Interests			Total
Balance at December 31, 2025		$	55,838		$	586,993		$	(483,571)		$	6,552,092		$	(126,640)		$	73,987		$	6,658,699
Consolidated net income			—			—			—			235,106			—			924			236,030
Other comprehensive loss			—			—			—			—			(59,492)			(861)			(60,353)
Amortization of stock-based compensation			—			9,599			—			—			—			—			9,599
Shares issued for stock-based compensation awards			169			(888)			5,757			—			—			—			5,038
Repurchases of common stock			—			—			(33,292)			—			—			—			(33,292)
Balance at April 4, 2026		$	56,007		$	595,704		$	(511,106)		$	6,787,198		$	(186,132)		$	74,050		$	6,815,721


														Accumulated
		Common			Capital in									Other
		Stock at Par			Excess of Par			Treasury			Retained			Comprehensive			Noncontrolling
		Value			Value			Stock			Earnings			Loss			Interests			Total
Balance at December 31, 2024		$	55,592		$	562,080		$	(328,078)		$	5,980,826		$	(509,269)		$	70,377		$	5,831,528
Consolidated net income			—			—			—			79,720			—			144			79,864
Other comprehensive income			—			—			—			—			124,084			1,891			125,975
Amortization of stock-based compensation			—			18,559			—			—			—			—			18,559
Shares issued for stock-based compensation awards			195			(2,849)			3,558			—			—			—			904
Repurchases of common stock			—			—			(59,413)			—			—			—			(59,413)
Balance at March 29, 2025		$	55,787		$	577,790		$	(383,933)		$	6,060,546		$	(385,185)		$	72,412		$	5,997,417

See accompanying notes.

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Index to Notes

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Index to Notes


		Page

Note A. Basis of Presentation		10
Note B. Impact of Recently Issued Accounting Standards		10
Note C. Goodwill and Intangible Assets		11
Note D. Investments in Affiliated Companies		12
Note E. Accounts Receivable		12
Note F. Supplier Finance Programs		15
Note G. Debt		15
Note H. Financial Instruments Measured at Fair Value		17
Note I. Restructuring, Integration, and Other		21
Note J. Net Income per Share		23
Note K. Shareholders’ Equity		23
Note L. Contingencies		25
Note M. Segment and Geographic Information		26

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Index to Notes

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note A – Basis of Presentation

The accompanying consolidated financial statements of Arrow were prepared in accordance with GAAP and reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position and results of operations at, and for the periods presented. The consolidated results of operations for the interim periods are not necessarily indicative of results for the full year.

These consolidated financial statements do not include all of the information or notes necessary for a complete presentation and, accordingly, should be read in conjunction with Arrow’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2025, as filed in the company’s Annual Report on Form 10-K.

Quarter End

For 2026, the company is operating on a quarterly reporting calendar that closes on the Saturday following the end of the calendar month, except for the fourth quarter, which closes on December 31, 2026. The first quarter of 2026 includes the period from January 1, 2026, through April 4, 2026. There were 65 shipping days for the first quarter of 2026 and 61 shipping days for the first quarter of 2025.

Reclassification

Certain prior period amounts were reclassified to conform to the current period presentation. These reclassifications did not have a material impact on previously reported amounts.

Note B – Impact of Recently Issued Accounting Standards

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires entities to disaggregate expense items in the notes to the financial statements and requires disclosure of specified information related to purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments in this ASU are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Companies have the option to apply the guidance either on a retrospective or prospective basis, and early adoption is permitted. The company is currently evaluating the impact of the ASU on its condensed consolidated financial statements and related disclosures. In January 2025, the FASB issued ASU No. 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This ASU amends the effective date of ASU No. 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU No. 2024-03 is permitted. The company does not currently anticipate adopting these amendments early.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note C – Goodwill and Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. The company tests goodwill and other indefinite-lived intangible assets for impairment annually as of the first day of the fourth quarter, or more frequently if indicators of potential impairment exist.

Goodwill of companies acquired, allocated to the company’s reportable segments, is as follows:


		Global
(thousands)		Components			Global ECS			Total
Balance as of December 31, 2025 (a)		$	919,062		$	1,201,009		$	2,120,071
Foreign currency translation adjustment			(3,083)			(7,980)			(11,063)
Balance as of April 4, 2026 (a)		$	915,979		$	1,193,029		$	2,109,008

(a)	The total carrying value of goodwill as of April 4, 2026 and December 31, 2025, in the table above is reflected net of $1.6 billion of accumulated impairment charges, of which $1.3 billion was recorded in the Global Components segment and $301.9 million was recorded in the Global ECS segment.

Intangible assets, net, are comprised of the following as of April 4, 2026:


		Gross
		Carrying			Accumulated
(thousands)		Amount			Amortization			Net
Customer relationships		$	192,521		$	(129,190)		$	63,331
Amortizable trade name			46,000			(37,080)			8,920
		$	238,521		$	(166,270)		$	72,251

Intangible assets, net, are comprised of the following as of December 31, 2025:


		Gross
		Carrying			Accumulated
(thousands)		Amount			Amortization			Net
Customer relationships		$	192,743		$	(125,910)		$	66,833
Amortizable trade name			74,001			(63,812)			10,189
		$	266,744		$	(189,722)		$	77,022

During the first quarter of 2026 and 2025, the company recorded amortization expense related to identifiable intangible assets of $4.8 million and $5.4 million, respectively.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note D – Investments in Affiliated Companies

The company owns a 50% interest in two joint ventures with Marubun Corporation (collectively “Marubun/Arrow”) and a 50% interest in one other joint venture. These investments are accounted for using the equity method.

The following table presents the company’s investment in affiliated companies:


	April 4,			December 31,
(thousands)	2026			2025
Marubun/Arrow	$	44,352		$	43,870
Other		14,874			15,445
	$	59,226		$	59,315

The equity in earnings of affiliated companies consists of the following:


		Quarter Ended
		April 4,			March 29,
(thousands)		2026			2025
Marubun/Arrow		$	783		$	908
Other			113			412
		$	896		$	1,320

Under the terms of various joint venture agreements, the company is required to pay its pro-rata share of the third-party debt of the joint ventures in the event that the joint ventures are unable to meet their obligations. There were no outstanding borrowings under the third-party debt agreements of the joint ventures as of April 4, 2026 and December 31, 2025.

Note E – Accounts Receivable

Accounts receivable, net, consists of the following:


		April 4,			December 31,
(thousands)		2026			2025
Accounts receivable		$	26,107,072		$	19,882,783
Allowance for credit losses			(145,879)			(144,117)
Accounts receivable, net		$	25,961,193		$	19,738,666

Accounts receivable includes balances related to inventory purchased by the company on the request of and behalf of its customers as part of its Global Components supply chain services offerings. In these transactions, receivables are disproportionate to the fees the company recognizes as revenue for its services. The company generally carries corresponding accounts payable on its balance sheet with some differences due to timing of settlement.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table is a rollforward for the company’s allowance for credit losses:


		Quarter Ended
		April 4,			March 29,
(thousands)		2026			2025
Balance at beginning of period		$	144,117		$	116,445
Charged to income			4,510			6,278
Translation adjustments			(731)			1,368
Write-offs			(2,017)			(3,052)
Balance at end of period		$	145,879		$	121,039

The company monitors the current credit condition of its customers in estimating the expected credit losses and has not experienced significant changes in customers’ payment trends or significant deterioration in customers’ credit risk as of April 4, 2026.

EMEA Asset Securitization

The company has an EMEA asset securitization program under which it continuously sells its interest in designated pools of trade accounts receivable of certain of its subsidiaries in the EMEA region at a discount to a special purpose entity, which in turn sells certain of the receivables to unaffiliated financial institutions and conduits administered by such unaffiliated financial institutions (“Unaffiliated Financial Institutions”) on a monthly basis. The company may sell up to €600.0 million under the EMEA asset securitization program, which matures in December 2027, subject to extension in accordance with its terms. The program is conducted through Arrow EMEA Funding Corp B.V., an entity structured to be bankruptcy remote. The company is deemed the primary beneficiary of Arrow EMEA Funding Corp B.V. as the company has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive the benefits that could potentially be significant to the entity from the transfer of the trade accounts receivable into the special purpose entity. Accordingly, Arrow EMEA Funding Corp B.V. is included in the company’s consolidated financial statements.

Sales of accounts receivable to Unaffiliated Financial Institutions under the EMEA asset securitization program:


		Quarter Ended
		April 4,			March 29,
(thousands)		2026			2025
EMEA asset securitization, sales of accounts receivable		$	471,479		$	372,641

Receivables sold to Unaffiliated Financial Institutions under the program are excluded from “Accounts receivable, net” on the company’s consolidated balance sheets, and cash receipts are reflected in the “Cash flows from operating activities” section of the consolidated statements of cash flows. The purchase price is paid in cash when the receivables are sold. Certain unsold receivables held by Arrow EMEA Funding Corp B.V. are pledged as collateral to Unaffiliated Financial Institutions. These unsold receivables are included in “Accounts receivable, net” on the company’s consolidated balance sheets.

The company continues servicing the receivables which were sold and in exchange receives a servicing fee under the program. The company does not record a servicing asset or liability on the company’s consolidated balance sheets as the company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Other amounts related to the EMEA asset securitization program are set forth below:


		April 4,			December 31,
(thousands)		2026			2025
Receivables sold to Unaffiliated Financial Institutions that were uncollected		$	376,435		$	379,017
Collateralized accounts receivable held by Arrow EMEA Funding Corp B.V.			689,988			591,304

Any accounts receivable held by Arrow EMEA Funding Corp B.V. would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings if there are outstanding balances under the EMEA asset securitization program. The assets of the special purpose entity cannot be used by the company for general corporate purposes. Additionally, the financial obligations of Arrow EMEA Funding Corp B.V. to the Unaffiliated Financial Institutions under the program are limited to the assets it owns and there is no recourse to Arrow Electronics, Inc. for receivables that are uncollectible as a result of an account debtor’s insolvency or inability to pay.

The EMEA asset securitization program includes terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. As of April 4, 2026, the company was in compliance with all such financial covenants.

Factoring

In the normal course of business, certain of the company’s subsidiaries have factoring agreements to sell, with limited or no recourse, selected trade accounts receivable to financial institutions and accounts for these transactions as sales of the related receivables. The receivables are excluded from “Accounts receivable, net” on the company’s consolidated balance sheets and cash receipts are reflected in the “Cash flows from operating activities” section on the consolidated statements of cash flows. The company typically does not retain financial or legal interests in these receivables. Factoring fees for the sales of accounts receivables are included in “Interest and other financing expense, net” in the consolidated statements of operations. The company continues servicing the receivables that were sold.

Sales of trade accounts receivable under the company’s factoring programs:


		Quarter Ended
		April 4,			March 29,
(thousands)		2026			2025
Sales of accounts receivable under the factoring programs		$	248,194		$	162,751

Other amounts under the company’s factoring programs:


		April 4,		December 31,
(thousands)		2026		2025
Receivables sold under the factoring programs that were uncollected	$	173,530	$	279,775

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note F – Supplier Finance Programs

At the request of certain of the company’s suppliers, the company has entered into agreements (“supplier finance programs”) with third-party finance providers, which facilitate the participating suppliers’ ability to sell their receivables from the company to the third-party financial institutions, at the sole discretion of the suppliers. For agreeing to participate in these programs, the company seeks to secure improved standard payment terms with its suppliers. The company is not involved in negotiating terms of the arrangements between its suppliers and the financial institutions and has no economic interest in a supplier’s decision to enter into these agreements or sell receivables from the company. The company’s rights and obligations to its suppliers, including amounts due, are not impacted by suppliers’ decisions to sell amounts under the arrangements. However, the company agrees to make all payments to the third-party financial institutions, and the company’s right to offset balances due from suppliers against payment obligations is restricted by the agreements for those payment obligations that have been sold by suppliers. As of April 4, 2026, and December 31, 2025, the company had $1.2 billion and $1.3 billion, respectively, in obligations outstanding under these programs included in “Accounts payable” on the company’s consolidated balance sheets and all activity related to the obligations is presented within operating activities on the consolidated statements of cash flows.

Note G – Debt

Short-term borrowings, including current portion of long-term debt, consist of the following:


		April 4,			December 31,
(thousands)		2026			2025
7.50% senior debentures, due January 2027		$	110,368		$	—
Other short-term borrowings			3,003			341
		$	113,371		$	341

The 7.50% senior debentures are not redeemable prior to their maturity.

The company has $400.0 million in uncommitted lines of credit. In February 2026, the company decreased the borrowing capacity on its uncommitted lines from $500.0 million to $400.0 million. There were no outstanding borrowings under the uncommitted lines of credit at April 4, 2026 and December 31, 2025. The maturity for borrowings is generally short term and is agreed upon with lenders at the time of each borrowing. The uncommitted lines of credit had a weighted-average effective interest rate of 4.08% and 4.37% at April 4, 2026 and December 31, 2025, respectively.

The company has a commercial paper program, and the maximum aggregate balance of commercial paper outstanding may not exceed the borrowing capacity of $1.2 billion. Amounts outstanding under the commercial paper program are backstopped by available commitments under the company’s revolving credit facility. The company had no outstanding borrowings under this program at April 4, 2026 and December 31, 2025. The commercial paper program had a weighted-average effective interest rate of 4.04% and 4.26% at April 4, 2026 and December 31, 2025, respectively.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Long-term debt consists of the following:


		April 4,			December 31,
(thousands)		2026			2025
Revolving credit facility		$	48,000		$	—
North American asset securitization program			300,000			970,000
7.50% senior debentures, due January 2027			—			110,348
3.875% notes, due 2028			498,661			498,480
5.15% notes, due 2029			496,383			496,142
2.95% notes, due 2032			496,273			496,131
5.875% notes, due 2034			495,544			495,430
Other obligations with various interest rates and due dates			17,534			18,184
		$	2,352,395		$	3,084,715

The 7.50% senior debentures are not redeemable prior to their maturity. All other notes may be called at the option of the company subject to “make whole” clauses.

The estimated fair market value of long-term debt, using quoted market prices, is as follows:


		April 4,			December 31,
(thousands)		2026			2025
7.50% senior debentures, due January 2027		$	—		$	114,000
3.875% notes, due 2028			493,000			496,500
5.15% notes, due 2029			504,500			511,500
2.95% notes, due 2032			441,500			447,500
5.875% notes, due 2034			513,000			522,500

The carrying amount of the company’s other short-term borrowings, 7.50% senior debentures, due January 2027, revolving credit facility, North American asset securitization program and other obligations approximate their fair value.

The company has a $2.0 billion revolving credit facility maturing in June 2030. The facility may be used by the company for general corporate purposes including working capital in the ordinary course of business, letters of credit, repayment, prepayment or purchase of long-term indebtedness, acquisitions, and as support for the company’s commercial paper program, as applicable. Interest on borrowings under the revolving credit facility is calculated using a base rate or SOFR, plus a spread (1.08% at April 4, 2026), which is based on the company’s credit ratings, or an effective interest rate of 4.77% and 5.01% at April 4, 2026 and December 31, 2025, respectively. The facility fee, which is based on the company’s credit ratings, was 0.175% of the total borrowing capacity at April 4, 2026. The company had $48.0 million outstanding borrowings under the revolving credit facility at April 4, 2026 and no outstanding borrowings at December 31, 2025, respectively.

The company has a North American asset securitization program collateralized by accounts receivable of certain of its subsidiaries. The company may borrow up to $1.5 billion under the program which matures in September 2027. The program is conducted through AFC, a wholly-owned, bankruptcy-remote subsidiary. The North American asset securitization program does not qualify for sale treatment. Accordingly, the accounts receivable and related debt obligation remain on the company’s consolidated balance sheets. Interest on borrowings is calculated using a base rate plus a spread (0.40% at April 4, 2026) and a credit spread adjustment of 0.10% or an effective interest rate of 4.16% at April 4, 2026. The effective interest rate was 4.19% at December 31, 2025. The facility fee is 0.40% of the total borrowing capacity.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The company had $300.0 million and $970.0 million in outstanding borrowings under the North American asset securitization program at April 4, 2026 and December 31, 2025, respectively, which was included in “Long-term debt” on the company’s consolidated balance sheets. Total collateralized accounts receivable of approximately $3.1 billion and $3.0 billion were held by AFC and were included in “Accounts receivable, net” on the company’s consolidated balance sheets at April 4, 2026 and December 31, 2025, respectively. Any accounts receivable held by AFC would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings of the company before repayment of any outstanding borrowings under the North American asset securitization program.

Both the revolving credit facility and North American asset securitization program include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. As of April 4, 2026, the company was in compliance with all such financial covenants.

Interest and dividend income of $21.0 million and $10.1 million for the first quarter of 2026 and 2025, respectively, were recorded in “Interest and other financing expense, net” within the company’s consolidated statements of operations.

Note H – Financial Instruments Measured at Fair Value

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The company utilizes a fair value hierarchy, which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The fair value hierarchy has three levels of inputs that may be used to measure fair value:

Level 1

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2

Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.

The following table presents assets measured at fair value on a recurring basis at April 4, 2026:


(thousands)		Balance Sheet Location		Level 1			Level 2			Level 3			Total
Cash equivalents (a)		Cash and cash equivalents		$	15,563		$	—		$	—		$	15,563
Equity investments (b)		Other assets			36,337			—			—			36,337
Foreign exchange contracts designated as net investment hedges		Other assets / other current assets			—			19,557			—			19,557
				$	51,900		$	19,557		$	—		$	71,457

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents assets measured at fair value on a recurring basis at December 31, 2025:


(thousands)		Balance Sheet Location		Level 1			Level 2			Level 3			Total
Cash equivalents (a)		Cash and cash equivalents		$	11,412		$	—		$	—		$	11,412
Equity investments (b)		Other assets			41,787			—			—			41,787
Foreign exchange contracts designated as net investment hedges		Other assets / other current assets			—			16,816			—			16,816
				$	53,199		$	16,816		$	—		$	70,015

(a)	Cash equivalents include highly liquid investments with an original maturity of less than three months.

(b)

The company has an approximately 9.0% equity ownership interest in Marubun Corporation and a portfolio of mutual funds with quoted market prices. The company recorded unrealized losses of $3.1 million and $0.2 million for the first quarter of 2026 and 2025, respectively, on equity securities held at the end of the quarter.

Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to goodwill, and identifiable intangible assets (refer to Note C “Goodwill and Intangible Assets”). The company tests these assets for impairment if indicators of potential impairment exist or at least annually if indefinite-lived.

Derivative Instruments

The company uses various financial instruments, including derivative instruments, for purposes other than trading. Certain derivative instruments are designated at inception as hedges and assessed for effectiveness both at inception and on an ongoing basis. Derivative instruments not designated as hedges are carried at fair value on the consolidated balance sheets with changes in fair value recognized in earnings.

Interest Rate Swaps

The company manages the risk of variability in interest rates of future expected debt issuances by entering into various forward-starting interest rate swaps, designated as cash flow hedges. Changes in fair value of interest rate swaps designated as cash flow hedges are recorded in the shareholders’ equity section in the company’s consolidated balance sheets in “Accumulated other comprehensive loss” and will be reclassified into income over the life of the anticipated debt issuance or in the period the hedged forecasted cash flows are deemed no longer probable to occur. Reclassified gains and losses are recorded within the line item “Interest and other financing expense, net” in the consolidated statements of operations. The fair value of interest rate swaps are estimated using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads.

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Index to Notes

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Foreign Exchange Contracts

The company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product. The company’s primary exposures to such transactions are denominated primarily in the following currencies: Euro and Indian Rupee. The company enters into foreign exchange forward, option, or swap contracts (collectively, the “foreign exchange contracts”) to facilitate the hedging of foreign currency exposures resulting from inventory purchases and sales and mitigate the impact of changes in foreign currency exchange rates related to these transactions. The company also uses foreign exchange contracts to hedge its net investments in foreign operations against future changes in exchange rates. Except for the net investment hedges, the foreign exchange contracts generally have terms of no more than six months. The company does not enter into foreign exchange contracts for trading purposes. The risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the company minimizes by limiting its counterparties to major financial institutions. The fair value of the foreign exchange contracts is estimated using foreign currency spot rates and forward rates quotes by third-party financial institutions. The notional amount of the foreign exchange contracts inclusive of foreign exchange contracts designated as a net investment hedge at April 4, 2026 and December 31, 2025 was $1.1 billion.

Gains and losses related to non-designated foreign currency exchange contracts are recorded in “Cost of sales” on the company’s consolidated statements of operations. Gains and losses related to foreign currency exchange contracts designated as cash flow hedges are recorded in “Cost of sales,” “Selling, general, and administrative,” and “Interest and other financing expense, net” based upon the nature of the underlying hedged transaction, on the company’s consolidated statements of operations. Gains or losses on these contracts are deferred and recognized when the underlying future purchase or sale is recognized or when the corresponding asset or liability is revalued, and were not material to the financial statements for the periods presented.

The following foreign exchange contracts were designated as net investment hedges, hedging a portion of the company’s net investments in subsidiaries with Euro-denominated net assets:


	Notional Amount (thousands)
Maturity Date	April 4, 2026		December 31, 2025
January 2028	EUR	100,000	EUR	100,000
	EUR	100,000	EUR	100,000

The change in the fair value of derivatives designated as net investment hedges are recorded in CTA within “Accumulated other comprehensive loss” on the company’s consolidated balance sheets. Upon discontinuation, all previously recognized amounts remain in CTA until the net investment is sold or liquidated. Amounts excluded from the assessment of hedge effectiveness are included in “Interest and other financing expense, net” on the company’s consolidated statements of operations.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The effects of derivative instruments on the company’s consolidated statements of operations and other comprehensive income are as follows:


				Quarter Ended
				April 4,			March 29,
(thousands)		Income Statement Line		2026			2025
Gain recognized in Income
Foreign exchange contracts, net investment hedge (a)		Interest Expense		$	671		$	1,417
Interest rate swaps, cash flow hedge (b)		Interest Expense			581			550
				$	1,252		$	1,967
Gain Recognized in Other Comprehensive Income before reclassifications, net of tax
Foreign exchange contracts, net investment hedge (c)				$	2,083		$	(4,873)
				$	2,083		$	(4,873)

(a)	Represents derivative amounts excluded from the assessment of effectiveness for the net investment hedges reclassified from CTA to “Interest and other financing expense, net.”

(b)	Represents amortization of derivative gains and losses on the termination of interest rate swaps.

(c)	Includes derivative gains excluded from the assessment of effectiveness for the net investment hedges and recognized in other comprehensive income, net of tax, of $0.4 million and $2.3 million for the first quarter of 2026 and 2025, respectively.

Other

The carrying amount of “Cash and cash equivalents”, “Accounts receivable, net”, and “Accounts payable” approximate their fair value due to the short maturities of these financial instruments.

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Index to Notes

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note I – Restructuring, Integration, and Other

The following table presents the components of the restructuring, integration, and other charges:


		Quarter Ended
		April 4,			March 29,
(thousands)		2026			2025
Restructuring, integration and related costs
Operating Expense Efficiency Plan costs (a)		$	31,085		$	8,685
Other plans			2,091			1,301
Other expenses
Operating expense reduction costs not related to restructuring initiatives (b)			540			3,749
Other charges			2,948			3,578
		$	36,664		$	17,313

(a)	See details related to the Operating Expense Efficiency Plan discussed below.

(b)	Primarily related to employee severance and benefit costs. As of April 4, 2026, the accrued liabilities related to these costs totaled $13.8 million and substantially all accrued amounts are expected to be spent in cash within two years.

Operating Expense Efficiency Plan

On October 31, 2024, in response to evolving business needs and as part of an initiative to optimize operating expenses, the company announced a multi-year restructuring plan (the “Operating Expense Efficiency Plan” or “the Plan”). The Plan is designed to improve operational efficiency through the following measures: (i) reorganizing and consolidating certain areas of the company’s operations to centralize functions and streamline resources, with a focus on more cost-efficient regions; (ii) enhancing warehouse and logistics operations; (iii) investing in IT to support automation and process improvements; (iv) consolidating the company’s global real estate footprint; (v) reducing third-party spending; and (vi) winding down certain non-core businesses that are not aligned with the company’s strategic objectives. The company expects to substantially complete the Plan by the end of fiscal year 2026, subject to, among other things, local legal and consultation requirements.

Under the Plan, the company anticipates to incur pre-tax restructuring charges of approximately $200.0 million. While the composition of these costs will continue to evolve over time, the company currently expects to incur approximately $100.0 million of employee severance and other personnel cash expenditures; approximately $65.0 million of non-cash asset impairments, inventory (recoveries) write-downs and CTA write-offs related to the wind down of certain business operations; and approximately $35.0 million of other related cash expenditures. As a result of the company’s philosophy of maximizing operating efficiencies through the centralization of certain functions, restructuring, integration, and related costs are included in the corporate line item for management and segment reporting, as they are not attributable to the individual reportable segments.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents the costs related to the Operating Expense Efficiency Plan:


					Quarter Ended					Total Cost
					April 4,		March 29,			Incurred to
(thousands)		Income Statement Line			2026		2025			Date
Employee severance and benefit costs			Restructuring, integration, and other		$	12,242	$	6,754		$	97,248
Inventory (recoveries) write-downs			Cost of sales			(2,248)		(2,467)			37,830
Business wind down costs (a)			Restructuring, integration, and other			8,567		-			13,211
Other costs (b)			Restructuring, integration, and other			10,276		1,931			36,987
					$	28,837	$	6,218		$	185,276

(a)	Business wind down costs consist primarily of asset impairments and CTA write-offs.

(b)	Other costs consist primarily of consulting and other professional fees and early lease termination fees.

The following table presents the activity in the restructuring, integration, and other accruals related to the Operating Expense Efficiency Plan:


(thousands)		Employee Severance and Benefit Costs			Inventory Recoveries			Business Wind Down Costs			Other Costs			Total
Balance at December 31, 2025		$	51,247		$	-		$	-		$	5,227		$	56,474
Restructuring related charges			12,242			(2,248)			8,567			10,276			28,837
Asset write-offs and other non-cash activity			-			-			(8,567)			-			(8,567)
Cash (payments) receipts			(23,637)			2,248			-			(9,138)			(30,527)
Foreign currency translations			(956)			-			-			(40)			(996)
Balance at April 4, 2026		$	38,896		$	-		$	-		$	6,325		$	45,221

Substantially all amounts accrued at April 4, 2026 related to the Operating Expense Efficiency Plan are expected to be paid in cash within two years.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note J – Net Income per Share

Basic net income per share is computed by dividing net income attributable to shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. The dilutive effect of equity awards is calculated using the treasury stock method.

The following table presents the computation of net income per share on a basic and diluted basis:


		Quarter Ended
		April 4,			March 29,
(thousands except per share data)		2026			2025
Net income attributable to shareholders		$	235,106		$	79,720
Weighted-average shares outstanding - basic			51,321			52,266
Net effect of dilutive stock-based compensation awards			386			408
Weighted-average shares outstanding - diluted			51,707			52,674
Net income per share:
Basic		$	4.58		$	1.53
Diluted (a)		$	4.55		$	1.51

(a) Equity awards excluded from diluted net income per share as their effect would have been anti-dilutive			121			86

Note K – Shareholders’ Equity

Accumulated Other Comprehensive (Loss) Income

The following table presents the changes in Accumulated other comprehensive (loss) income, excluding noncontrolling interests:


		Quarter Ended
		April 4,			March 29,
(thousands)		2026			2025
Foreign Currency Translation Adjustment and Other:
Other comprehensive (loss) income before reclassifications (a)		$	(69,530)		$	130,616
Amounts reclassified into income			9,009			201
Gain (loss) on Foreign Exchange Contracts Designated as Net Investment Hedges, Net:
Other comprehensive income (loss) before reclassifications (b)			2,083			(4,873)
Amounts reclassified into income			(510)			(1,079)
Loss on Interest Rate Swaps Designated as Cash Flow Hedges, Net:
Amounts reclassified into income			(442)			(419)
Post-retirement Expense Items, Net:
Amounts reclassified into income			(102)			(362)
Net change in Accumulated other comprehensive (loss) income		$	(59,492)		$	124,084

(a)	Foreign currency translation adjustment includes intra-entity foreign currency transactions that are of a long-term investment nature of $0.1 million and $12.7 million for the first quarter of 2026 and 2025, respectively.

(b)	For additional information related to net investment hedges and interest rate swaps refer to Note H “Financial Instruments Measured at Fair Value” of the Notes to the Consolidated Financial Statements.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Common Stock Outstanding Activity

The following tables set forth the activity in the number of shares outstanding:


		Common				Common
		Stock		Treasury		Stock
(thousands)		Issued		Stock		Outstanding
Common stock outstanding at December 31, 2025		55,838		4,768		51,070
Shares issued for stock-based compensation awards		169		(57)		226
Repurchases of common stock		—		212		(212)
Common stock outstanding at April 4, 2026		56,007		4,923		51,084


		Common				Common
		Stock		Treasury		Stock
(thousands)		Issued		Stock		Outstanding
Common stock outstanding at December 31, 2024		55,592		3,420		52,172
Shares issued for stock-based compensation awards		195		(28)		223
Repurchases of common stock		—		528		(528)
Common stock outstanding at March 29, 2025		55,787		3,920		51,867

Share Repurchase Program

The following table shows the company’s share repurchase program as of April 4, 2026:


								Approximate
								Dollar Value of
		Dollar Value			Dollar Value of			Shares that May
		Approved for			Shares			Yet be Purchased
Share Repurchase Details by Month of Board Approval (thousands)		Repurchase			Repurchased			Under the Program
January 2023		$	1,000,000		$	852,113		$	147,887

The company repurchased 0.2 million shares and 0.5 million shares of its common stock for $25.0 million and $49.9 million in the first quarter of 2026 and 2025, respectively, under the company’s share repurchase program, excluding excise taxes. The accrual for excise tax is recorded within “Treasury stock” on the company’s consolidated balance sheets and reduces the share repurchase authorization, as the excise tax is a part of the overall cost of acquiring treasury shares. The company’s share repurchase program does not have an expiration date.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note L – Contingencies

Environmental Matters

The company has accrued liabilities of $25.3 million for ongoing environmental remediation efforts at sites in Huntsville, Alabama (the “Huntsville site”) and Norco, California (the “Norco site”) at which contaminated soil and groundwater was identified. The contamination, which ended prior to 2000, related to activities of certain subsidiaries. Remediation efforts began in 2015 and 2003 at the Huntsville site and Norco site, respectively, and are progressing under action plans monitored by local environmental agencies.

Costs are recorded for environmental matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Environmental liabilities are included in “Accrued expenses” and “Other liabilities” on the company’s consolidated balance sheets. The company has determined that there is no amount within the environmental liability ranges discussed below that is a better estimate than any other amount, and therefore has recorded the accruals at the minimum amount of the ranges. The liabilities were estimated based on current costs and are not discounted. Environmental costs related to these matters include remediation, project management, regulatory oversight, and investigative and feasibility study activities.

To date, the company has spent approximately $9.6 million and $89.7 million related to environmental costs at the Huntsville site and the Norco site, respectively. The subsequent environmental costs are estimated to be between $4.8 million and $16.5 million at the Huntsville site and between $20.5 million and $37.8 million at the Norco site.

The company expects the liabilities associated with such ongoing remediation to be resolved over an extended period of time, with current estimates extending beyond 2040. The accruals for environmental liabilities are adjusted periodically as facts and circumstances change, assessment and remediation efforts progress, or as additional technical or legal information becomes available. Environmental liabilities are difficult to assess and estimate due to various unknown factors such as the timing, extent, and the efficacy of remediation, improvements in remediation technologies, orders by administrative agencies, and the extent to which environmental laws and regulations may change in the future.

To date, the company has recovered approximately $157.4 million from certain insurance carriers and other responsible parties related to environmental clean-up matters at these sites and continues to pursue additional recoveries from one insurer related solely to the Huntsville site. The company has not recorded a receivable for any potential future insurance recoveries.

It is reasonably possible that the company will need to adjust the liabilities noted above to reflect the effects of new or additional information, to the extent that such information impacts the costs, timing, or duration of the required actions. Future changes in estimates of the costs, timing, or duration of the required actions could have a material adverse effect on the company’s consolidated financial position, results of operations, or cash flows.

Other

From time to time, in the normal course of business, the company may become liable with respect to other pending and threatened litigation, environmental, regulatory, labor, product, intellectual property, and tax matters. While such matters are subject to inherent uncertainties, it is not currently anticipated that any such matters will materially impact the company’s consolidated financial position, liquidity, or results of operations.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note M – Segment and Geographic Information

The company is a global provider of products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. The company organizes its operations by geographic region and global business lines. The company’s operating segments reflect the way the chief executive officer (CODM as defined in ASC 280, Segment Reporting) reviews financial information, makes operating decisions and assesses business performance. In identifying operating segments, the company also considers its annual budgeting and forecasting process, management reporting structure, the basis on which management compensation is determined, information presented to the Board of Directors, and similarities such as the nature of products, technology and other shared resources, and customer base. The company concluded that identifying operating segments by major geographic region within each of the company’s major businesses was consistent with the objectives of ASC 280 and it has aggregated geographic operating segments within Global Components and Global ECS based on similar characteristics including long-term financial performance, the nature of services provided, internal process for delivering those services, and types of customers.

The Global Components segment is enabled by a comprehensive range of value-added capabilities and services, markets, and distributes electronic components to OEMs and EMS providers. The Global ECS segment is a leading provider of comprehensive computing solutions and value-added services. The Global ECS segment brings broad market access, extensive supplier relationships, scale, and value-added solutions to help its VARs and MSPs meet the needs of their end-users through a portfolio that includes datacenter, cloud, security, and analytics solutions.

The CODM evaluates the performance of both segments based on operating income, as well as monitors the components of operating income including sales, gross profit, and operating expenses. This information is used to monitor segment profitability, allocate resources and make budgeting and forecasting decisions about the segments. The CODM also uses these measures to monitor trends in year over year performance comparisons, sequential quarter performance comparisons, and to compare actual results to forecasts. More disaggregated information about operating expense is generally only reviewed by the CODM on a consolidated basis.

As a result of the company’s philosophy of maximizing operating efficiencies through the centralization of certain functions, operating income for the segments excludes unallocated corporate overhead costs, depreciation on corporate fixed assets, and restructuring, integration, and other costs, as they are not attributable to the individual segments and are included in the corporate line item.

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Index to Notes

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Sales, by segment by geographic area, are as follows:


		Quarter Ended
		April 4,			March 29,
(thousands)		2026			2025
Sales:
Components:
Americas		$	2,312,147		$	1,568,570
EMEA			1,765,179			1,340,001
Asia/Pacific			2,563,009			1,869,151
Global Components		$	6,640,335		$	4,777,722

ECS:
Americas		$	1,185,050		$	909,903
EMEA			1,648,163			1,126,392
Global ECS		$	2,833,213		$	2,036,295
Total		$	9,473,548		$	6,814,017

Sales by country are as follows:


		Quarter Ended
		April 4,			March 29,
(thousands)		2026			2025
Sales:
China and Hong Kong		$	1,171,786		$	925,892
Germany			1,019,962			717,332
Other			3,982,504			2,859,350
Total foreign		$	6,174,252		$	4,502,574
United States			3,299,296			2,311,443
Total		$	9,473,548		$	6,814,017

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Results of operations by segment are as follows:


	Quarter Ended
	April 4, 2026
(thousands)		Global Components			Global ECS			Total
Sales	$	6,640,335		$	2,833,213		$	9,473,548
Cost of sales		5,833,587			2,549,501			8,383,088
Gross profit		806,748			283,712			1,090,460
Gross profit margin		12.1	%		10.0	%		11.5	%
Segment operating expenses (a)		443,228			179,974			623,202
Segment operating income (b) (c)	$	363,520		$	103,738		$	467,258
Segment operating income margin		5.5	%		3.7	%		4.9	%
Reconciliation of segment operating income
Corporate operating expenses (d)								(105,656)
Consolidated operating income							$	361,602
Equity in earnings of affiliated companies								896
Loss on investments, net								(5,792)
Post-retirement expense								(962)
Interest and other financing expense, net								(48,484)
Consolidated income before taxes							$	307,260

	Quarter Ended
	March 29, 2025
(thousands)	Global Components			Global ECS			Total
Sales	$	4,777,722		$	2,036,295		$	6,814,017
Cost of sales		4,222,777			1,817,248			6,040,025
Gross profit		554,945			219,047			773,992
Gross profit margin		11.6	%		10.8	%		11.4	%
Segment operating expenses (a)		383,560			141,733			525,293
Segment operating income (b) (c)	$	171,385		$	77,314		$	248,699
Segment operating income margin		3.6	%		3.8	%		3.6	%
Reconciliation of segment operating income
Corporate operating expenses (d)								(90,146)
Consolidated operating income							$	158,553
Equity in earnings of affiliated companies								1,320
Gain on investments, net								140
Post-retirement expense								(622)
Interest and other financing expense, net								(56,182)
Consolidated income before taxes							$	103,209

(a)	Segment operating expenses primarily include employee-related expenses and depreciation and amortization.

(b)	Global ECS gross profit margin decreased during the first quarter of 2026 compared with the year-earlier period primarily due to a $21.7 million loss related to underperformance of a certain non-cancellable multi-year purchase obligation.

(c)	Global Components operating income includes recoveries of $2.2 million and $2.5 million in inventory write-downs related to the wind down of a business for the first quarter of 2026 and 2025, respectively.

(d)	Corporate unallocated operating expenses includes restructuring, integration, and other charges of $36.7 million and $17.3 million for the first quarter of 2026 and 2025, respectively. Refer to Note I – “Restructuring, Integration, and Other”.

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ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Total assets, by segment, are as follows:


		April 4,			December 31,
(thousands)		2026			2025
Total assets:
Global Components		$	28,970,802		$	21,222,941
Global ECS			6,628,098			7,355,089
Total segment assets		$	35,598,900		$	28,578,030
Other assets (a)			355,070			500,108
Consolidated assets		$	35,953,970		$	29,078,138

(a)	Other assets include Corporate unallocated assets.

Long-lived assets by country are as follows:


		April 4,			December 31,
(thousands)		2026			2025
Long-lived assets:
France		$	99,146		$	100,493
Netherlands			75,336			79,339
Other			226,834			233,740
Total foreign		$	401,316		$	413,572
United States			302,461			309,901
Total		$	703,777		$	723,473

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Information Relating to Forward-Looking Statements

This report includes “forward-looking statements,” as the term is defined under the federal securities laws. Forward-looking statements are those statements which are not statements of historical or current fact. These forward-looking statements can be identified by forward-looking words such as “expects,” “anticipates,” “intends,” “plans,” “may,” “will,” “would,” “could,” “believes,” “seeks,” “projected,” “potential,” “estimates,” and similar expressions. These forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: unfavorable economic conditions or changes, including those that may occur in connection with recession, inflation, tax rates, foreign currency exchange rates, or the availability of capital; impacts of military conflict and sanctions; political instability and changes; trade protection measures, tariffs, increased trade tensions, trade agreements and policies, and other restrictions, duties, and value-added taxes, and the associated macroeconomic impacts; disruptions, shortages, or inefficiencies in the supply chain; non-compliance with certain laws, regulations, or executive orders, such as trade, export, antitrust, and anti-corruption laws, or regulatory restrictions relating to the company or its subsidiaries or the permissibility of third-parties to transact therewith; the inability to realize sufficient sales to cover non-cancellable purchase obligations under certain ECS distribution agreements; management transitions, including the company’s search for a permanent CEO; the incurrence of unanticipated charges or failure to realize contemplated cost savings in connection with the Operating Expense Efficiency Plan; changes in product supply, pricing, and customer demand; increased profit-margin pressure resulting from industry conditions, competition, or other factors; changes in relationships with key suppliers; other vagaries in the Global Components and the Global ECS markets; changes to applicable laws, regulations, executive orders, or rules relating to government contractors and the resulting legal and reputational exposure, including but not limited to those relating to environmental, social, governance, cybersecurity, data privacy, and artificial intelligence issues; commercial disputes, patent infringement claims, product liability lawsuits, or other legal proceedings; foreign tax and other loss contingencies; failure, disruption, or compromise of the company’s information systems or those of a third-party service provider, including unauthorized use or disclosure of company, supplier, or customer information; outbreaks, epidemics, pandemics, or public health crises; the effects of natural or man-made catastrophic events; and the company’s ability to generate positive cash flow. For a further discussion of these and other factors that could cause the company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in this Quarterly Report on Form 10-Q and the company’s most recent Annual Report on Form 10-K, as well as in other filings the company makes with the Securities and Exchange Commission. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements.

Certain Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with GAAP, the company also discloses certain non-GAAP financial information in the sections below captioned “Sales,” “Gross Profit,” “Operating Expenses,” “Operating Income,” “Income Tax,” and “Net Income Attributable to Shareholders.” Refer to these sections below for reconciliations of non-GAAP financial measures to the most directly comparable reported GAAP financial measures. Non-GAAP financial information includes the following:

●

Non-GAAP sales exclude the impact of changes in foreign currencies by retranslating prior period results at current period foreign exchange rates.

●

Non-GAAP gross profit excludes inventory recoveries related to the wind down of businesses within Global Components (“impact of wind down to inventory”) and impact of changes in foreign currencies.

●

Non-GAAP operating expenses exclude identifiable intangible asset amortization; restructuring, integration, and other; and impact of changes in foreign currencies.

●

Non-GAAP operating income excludes identifiable intangible asset amortization; restructuring, integration, and other; and impact of wind down to inventory.

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●

Non-GAAP effective tax rate and non-GAAP net income attributable to shareholders exclude identifiable intangible asset amortization; restructuring, integration, and other; impact of wind down to inventory; (loss) gain on investments, net, and tax adjustments related to wind down of a business.

Management believes that providing this additional information is useful to better assess and understand the company’s operating performance and future prospects in the same manner as management, especially when comparing results with previous periods. Management typically monitors the business as adjusted for these items, in addition to GAAP results, to understand and compare operating results across accounting periods, for internal budgeting purposes, for short-term and long-term operating plans, and to evaluate the company’s financial performance. However, analysis of results on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP. For a discussion of what is included within “Restructuring, integration, and other” refer to the similarly captioned sections of this item below.

Key Business Metrics

Management uses gross billings as an operational metric to monitor the operating performance of Global ECS, including performance by geographic region, as it provides meaningful supplemental information in evaluating the overall performance of the Global ECS business. The company uses this key metric to develop financial forecasts, make strategic decisions, and prepare and approve annual budgets. Gross billings represent amounts invoiced to customers for goods and services during a specified period and does not include the impact of recording sales on a net basis or sales adjustments, such as trade discounts and other allowances. Refer to Note 1 - “Summary of Significant Accounting Policies” in the company’s Annual Report on Form 10-K for the year ended December 31, 2025, for further discussion of the company’s revenue recognition policies. The use of gross billings has certain limitations as an analytical tool and should not be considered in isolation or as a substitute for revenue.

Overview

The company sources and engineers technology for thousands of leading manufacturers, services providers, and users of enterprise computing solutions. The company has one of the world’s broadest portfolios of product offerings available from leading electronic components and enterprise computing solutions suppliers. The company’s revenues originate primarily from the sales of semiconductor products, IP&E components, and IT hardware and software. Equipped with a range of services, solutions, and tools, the company enables its suppliers to distribute their technologies and helps its industrial and commercial customers source, build, and leverage these technologies, reduce their time to market, grow their businesses, and enhance their overall competitiveness. The company is a trusted partner in a complex value chain and is uniquely positioned through its electronic components and IT content portfolios to enhance value and market opportunities for stakeholders.

The company has two reportable segments, Global Components and Global ECS. Global Components, enabled by an extensive portfolio of value-added capabilities and services, markets and distributes electronic components primarily to OEMs and EMS providers. Global ECS is a leading value-added provider of comprehensive computing solutions and services. Its portfolio includes datacenter, cloud, security, and analytics solutions. Global ECS offers broad market access, extensive supplier relationships, scale, and value-added solutions to enable its VARs and MSPs to meet the needs of their end-users. For the first quarter of 2026, approximately 70% and 30% of the company’s sales were from Global Components and Global ECS, respectively.

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The company’s strategic initiatives include:

Global Components:

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Shifting toward an increased mix of higher-margin value-added services, including engineering, integration and supply chain services by offering procurement, logistics, warehousing, and insights from data analytics, which generally leads to longer and more profitable relationships with the company’s suppliers and customers.

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Striving to further penetrate the market for IP&E, which tends to be a margin-accretive segment of the broader available market.

Global ECS:

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Enabling customer cloud-based solutions through ArrowSphere, the company’s cloud marketplace and management platform, which helps VARs and MSPs to manage, differentiate, and scale their cloud businesses while providing the business intelligence and tools that IT solution providers need to drive growth. ArrowSphere includes an AI-enabled digital go-to-market platform aimed at helping the company’s channel partners sell and support a variety of cloud offerings at higher rates.

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Providing value-added distribution services including sales and marketing, demand generation, support and managed services, digital platforms, and other services on behalf of certain suppliers.

Executive Summary


	Quarter Ended
	April 4,			March 29,
(millions except per share data)	2026			2025			Change
Consolidated sales	$	9,474		$	6,814		39.0	%
Global Components sales	$	6,640		$	4,778		39.0	%
Global ECS sales	$	2,833		$	2,036		39.1	%
Gross profit margin		11.5	%		11.4	%	10	bps
Non-GAAP gross profit margin		11.5	%		11.3	%	20	bps
Operating income	$	362		$	159		128.1	%
Operating income margin		3.8	%		2.3	%	150	bps
Non-GAAP operating income	$	401		$	179		124.2	%
Non-GAAP operating income margin		4.2	%		2.6	%	160	bps
Net income attributable to shareholders	$	235		$	80		194.9	%
Earnings per share attributable to shareholders - diluted	$	4.55		$	1.51		201.3	%
Non-GAAP net income attributable to shareholders	$	270		$	95		185.0	%
Non-GAAP earnings per share attributable to shareholders - diluted	$	5.22		$	1.80		190.0	%

The sum of sales by reportable segments may not agree to consolidated sales, as presented, due to rounding.

During the first quarter of 2026, changes in foreign currencies increased sales by approximately $273.5 million, operating income by $6.9 million, and earnings per share on a diluted basis by $0.07 compared to the year-earlier period.

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Business environment and other trends:

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In the first quarter of 2026, the company continued to experience stronger demand trends as a result of sustained market strength in all regions within Global Components. As the market strength continues, the company is prioritizing profitable growth through careful management of mix, costs, and working capital and aligning investments with the pace of demand. Given the geopolitical and economic uncertainty, the company cannot currently predict whether this trend will continue or how it may impact future quarters.

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In the first quarter of 2026, Global Components and Global ECS benefitted from increased demand related to AI, due to widespread rapid expansion of AI infrastructure. This increased demand is contributing to pockets of constrained inventory and extended lead times. The company expects the AI demand trend to continue in the coming quarters, but results will depend on future developments that are highly uncertain and cannot be predicted with confidence.

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Within Global ECS, the company entered into certain non-cancellable multi-year purchase obligations through 2032, designating it as the exclusive partner for certain products and granting it the right to sell a broad set of IT solutions. In the first quarter of 2026, the company recorded a loss due to lower profit expectations on a certain underperforming contract which negatively impacted gross profit margins. The company is committed to focusing on optimizing, enhancing and scaling these offerings. Due to the length and expected variability in the margins related to these contracts, the long-term performance of the agreements cannot be reasonably estimated at this time, and the company is anticipating there could be additional losses in the coming quarters on certain agreements.

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The company’s global business continues to face uncertainty around ongoing developments related to U.S. and foreign tariff policies and is continuing to evaluate and further implement mitigating actions, including supply chain optimization and improved solutions around processing tariffs. Global Components continues to see a marginal increase in revenue and cost of sales due to price increases. Given the uncertain and evolving nature of U.S. and foreign tariff policies, the company cannot currently predict whether this trend will continue or how it may impact future quarters. Refer to Part I, Item 1A - Risk Factors in the company’s Annual Report on Form 10-K for the year ended December 31, 2025, for further discussion related to tariffs and tariff drawbacks.

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Results of Operations

Sales by reportable segment

Following is an analysis of the company’s sales by reportable segment:


		Quarter Ended
		April 4,			March 29,
(millions)		2026			2025			Change
Consolidated sales, as reported		$	9,474		$	6,814		39.0	%
Impact of changes in foreign currencies			—			274
Non-GAAP consolidated sales		$	9,474		$	7,088		33.7	%

Global Components sales, as reported		$	6,640		$	4,778		39.0	%
Impact of changes in foreign currencies			—			155
Non-GAAP Global Components sales		$	6,640		$	4,932		34.6	%

Global ECS sales, as reported		$	2,833		$	2,036		39.1	%
Impact of changes in foreign currencies			—			119
Non-GAAP Global ECS sales		$	2,833		$	2,155		31.5	%

The sum of the components for sales, as reported, and sales on a non-GAAP basis may not agree to totals, as presented, due to rounding.

Reportable segment sales by geographic region

Following is an analysis of the company’s reportable segment sales by geographic region:


	Quarter Ended
	April 4,				March 29,
	2026				2025
(millions)	Sales		% of Sales		Sales		% of Sales		Change
Americas Components sales	$	2,312	24.4	%	$	1,569	23.0	%	47.4	%
EMEA Components sales		1,765	18.6	%		1,340	19.8	%	31.7	%
Asia/Pacific Components sales		2,563	27.1	%		1,869	27.3	%	37.1	%
Global Components sales	$	6,640	70.1	%	$	4,778	70.1	%	39.0	%

Americas ECS sales	$	1,185	12.5	%	$	910	13.4	%	30.2	%
EMEA ECS sales		1,648	17.4	%		1,126	16.5	%	46.3	%
Global ECS sales	$	2,833	29.9	%	$	2,036	29.9	%	39.1	%
Consolidated sales	$	9,474	100.0	%	$	6,814	100.0	%	39.0	%

The sum of the components for sales by geographic region and consolidated sales may not agree to totals, as presented, due to rounding.

The increase in Global Components sales compared to the year-earlier period, was primarily due to increased demand related to sustained market strength and AI related growth, most notably in the following verticals:

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aerospace and defense, industrial, and transportation in the Americas region;

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industrial, transportation, and aerospace and defense in the EMEA region; and

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computing, industrial, consumer, and networking and communications in the Asia/Pacific region.

The increase in Global ECS sales compared to the year-earlier period, was primarily attributable to growth across most major technologies, most notably, cloud-based solutions and infrastructure software. Additionally, as a result of the timing of the quarter end, the first quarter of 2026 included four extra shipping days compared to the first quarter of 2025, which increased Global ECS sales.

The increase in consolidated sales compared to the year-earlier period was also impacted by changes in foreign currencies relative to the U.S. dollar.

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Gross Billings

Following is an analysis of gross billings by geographic region for Global ECS:

ARROW ELECTRONICS, INC. 10-Q