Arrow Electronics, Inc.

What they do

Arrow sources, engineers and distributes electronic components and enterprise computing products from leading suppliers to OEMs, EMS providers, VARs, MSPs and other commercial customers. It operates two reportable segments: Global Components, which markets semiconductors and interconnect, passive and electromechanical (IP&E) technologies, and Global ECS, which provides enterprise computing solutions. The company maintains over 140 sales facilities and 39 distribution and value-added centers serving more than 85 countries. In 2025, approximately 70% of sales came from Global Components and approximately 30% from Global ECS.

Revenue drivers

• Global Components — Distributes semiconductors and IP&E components to OEMs and EMS providers, with value-added supply chain, engineering and integration services. It was approximately 70% of 2025 sales and generated $7.37 billion of second-quarter 2026 sales, up 39% year over year.
• Global ECS — Provides enterprise computing solutions, including infrastructure software and IT hardware, to VARs and MSPs. It was approximately 30% of 2025 sales.
• Supply chain and engineering services — Fee-based procurement, logistics, warehousing, financial management, design engineering and integration offerings that support the component and ECS businesses and are intended to deepen supplier and customer relationships.
• Geographic mix — Operations span the Americas, EMEA and Asia-Pacific. In the second quarter of 2026, Americas Components sales rose 44%, EMEA Components rose 36% and Asia-Pacific Components rose 38% year over year.

Recent performance

Second-quarter 2026 consolidated sales were $9.99 billion, up 32% year over year and 30% on a constant currency basis. Net income attributable to shareholders was $273 million, or $5.26 per diluted share, while non-GAAP net income per diluted share was $5.45. Global Components sales rose 39% to $7.37 billion, and Global Components operating income more than doubled to $396 million. For the first six months of 2026, sales were $19.47 billion, up 35%, and net income per diluted share was $9.81 versus $5.09 a year earlier. Foreign currency changes added $93.5 million to second-quarter sales and $0.09 to diluted EPS.

Strategy

Arrow describes its strategy as becoming the premier technology-centric go-to-market and supply chain services company. It aggregates electronic components, infrastructure software and IT hardware to engineer complete solutions, targeting industries such as industrial automation, edge and cloud computing, smart and connected devices, and transportation. The company emphasizes higher-margin value-added services including supply chain, engineering, design and integration services, supported by a scalable operating model and focused capital allocation. Management says book-to-bill ratios remain above parity and backlog is building in both size and duration across both segments.

Risks

• Global economic and demand weakness — Arrow's revenue, margins and cash flow depend on worldwide demand for technology products, and economic downturns may require further restructuring.
• International operations and trade policy — Non-U.S. sales were approximately 66% of 2025 sales, exposing Arrow to tariffs, trade disputes, political instability and currency shifts.
• Supply chain and supplier concentration — The business depends on product availability and relationships with key suppliers, and ECS distribution agreements include non-cancellable purchase obligations that require sufficient sales to cover them.
• Leadership transition — The company's forward-looking disclosures flag management transitions, including the search for a permanent CEO; Bill Austen is serving as interim president and chief executive officer.

Outlook

Management said second-quarter 2026 revenue, profit margin and earnings per share all exceeded expectations, with healthy demand across regions, end markets and customer segments. Book-to-bill ratios remain well above parity, and backlog continues to build in both size and duration in both Global Components and Global ECS. Arrow expects its higher-margin value-added offerings, scalable operating model and focused capital allocation to support profitable growth and long-term value.