Table of Contents
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
OR
☐
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).
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.
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
Part II.
Other Information
Legal Proceedings
44
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Item 5.
45
Item 6.
Exhibits
46
Signature
47
2
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
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.
3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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:
51,321
52,266
51,707
52,674
See accompanying notes.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
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
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
December 31,
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
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
74,050
73,987
Total equity
6,815,721
6,658,699
Total liabilities and equity
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from operating activities:
Consolidated net income:
Adjustments to reconcile consolidated net income to net cash provided by operations:
Amortization of stock-based compensation
9,599
18,559
(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:
(6,280,326)
731,226
(656,543)
(62,384)
7,390,689
(251,057)
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
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
188,807
Cash and cash equivalents at end of period
231,882
CONSOLIDATED STATEMENTS OF EQUITY
Accumulated
Common
Capital in
Stock at Par
Excess of Par
Treasury
Retained
Comprehensive
Noncontrolling
Value
Stock
Earnings
Loss
Interests
Total
Balance at December 31, 2025
—
Other comprehensive loss
(59,492)
(861)
Shares issued for stock-based compensation awards
169
(888)
5,757
Balance at April 4, 2026
Balance at December 31, 2024
55,592
562,080
(328,078)
5,980,826
(509,269)
70,377
5,831,528
Other comprehensive income
124,084
1,891
195
(2,849)
3,558
Balance at March 29, 2025
55,787
577,790
(383,933)
6,060,546
(385,185)
72,412
5,997,417
Index to Notes
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Note A. Basis of Presentation
10
Note B. Impact of Recently Issued Accounting Standards
Note C. Goodwill and Intangible Assets
11
Note D. Investments in Affiliated Companies
12
Note E. Accounts Receivable
Note F. Supplier Finance Programs
15
Note G. Debt
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
Note L. Contingencies
25
Note M. Segment and Geographic Information
26
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.
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
Balance as of December 31, 2025 (a)
919,062
1,201,009
Foreign currency translation adjustment
(3,083)
(7,980)
(11,063)
Balance as of April 4, 2026 (a)
915,979
1,193,029
Intangible assets, net, are comprised of the following as of April 4, 2026:
Gross
Carrying
Amount
Amortization
Net
Customer relationships
192,521
(129,190)
63,331
Amortizable trade name
46,000
(37,080)
8,920
238,521
(166,270)
Intangible assets, net, are comprised of the following as of December 31, 2025:
192,743
(125,910)
66,833
74,001
(63,812)
10,189
266,744
(189,722)
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.
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:
Marubun/Arrow
44,352
43,870
14,874
15,445
The equity in earnings of affiliated companies consists of the following:
783
908
113
412
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:
Accounts receivable
26,107,072
19,882,783
Allowance for credit losses
(145,879)
(144,117)
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.
The following table is a rollforward for the company’s allowance for credit losses:
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:
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.
13
Other amounts related to the EMEA asset securitization program are set forth below:
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:
Sales of accounts receivable under the factoring programs
248,194
162,751
Other amounts under the company’s factoring programs:
Receivables sold under the factoring programs that were uncollected
173,530
279,775
14
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:
7.50% senior debentures, due January 2027
110,368
Other short-term borrowings
3,003
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.
Long-term debt consists of the following:
Revolving credit facility
48,000
North American asset securitization program
300,000
970,000
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
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:
114,000
493,000
496,500
504,500
511,500
441,500
447,500
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.
16
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:
Balance Sheet Location
Cash equivalents (a)
15,563
Equity investments (b)
36,337
Foreign exchange contracts designated as net investment hedges
Other assets / other current assets
19,557
51,900
71,457
The following table presents assets measured at fair value on a recurring basis at December 31, 2025:
11,412
41,787
16,816
53,199
70,015
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.
18
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
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.
19
The effects of derivative instruments on the company’s consolidated statements of operations and other comprehensive income are as follows:
Income Statement Line
Gain recognized in Income
Foreign exchange contracts, net investment hedge (a)
Interest Expense
671
1,417
Interest rate swaps, cash flow hedge (b)
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)
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.
20
Note I – Restructuring, Integration, and Other
The following table presents the components of the restructuring, integration, and other charges:
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
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.
The following table presents the costs related to the Operating Expense Efficiency Plan:
Total Cost
Incurred to
Date
Employee severance and benefit costs
12,242
6,754
97,248
Inventory (recoveries) write-downs
(2,248)
(2,467)
37,830
Business wind down costs (a)
8,567
-
13,211
Other costs (b)
10,276
1,931
36,987
28,837
6,218
185,276
The following table presents the activity in the restructuring, integration, and other accruals related to the Operating Expense Efficiency Plan:
Employee Severance and Benefit Costs
Inventory Recoveries
Business Wind Down Costs
Other Costs
51,247
5,227
56,474
Restructuring related charges
Asset write-offs and other non-cash activity
(8,567)
Cash (payments) receipts
(23,637)
2,248
(9,138)
(30,527)
Foreign currency translations
(956)
(40)
(996)
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.
22
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:
(thousands except per share data)
Weighted-average shares outstanding - basic
Net effect of dilutive stock-based compensation awards
386
408
Weighted-average shares outstanding - diluted
Diluted (a)
(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:
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)
(510)
(1,079)
Loss on Interest Rate Swaps Designated as Cash Flow Hedges, Net:
Post-retirement Expense Items, Net:
Net change in Accumulated other comprehensive (loss) income
Common Stock Outstanding Activity
The following tables set forth the activity in the number of shares outstanding:
Issued
Outstanding
Common stock outstanding at December 31, 2025
4,768
51,070
(57)
226
212
(212)
Common stock outstanding at April 4, 2026
4,923
51,084
Common stock outstanding at December 31, 2024
3,420
52,172
(28)
223
528
(528)
Common stock outstanding at March 29, 2025
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
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.
24
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.
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.
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.
Sales, by segment by geographic area, are as follows:
Sales:
Components:
Americas
2,312,147
1,568,570
1,765,179
1,340,001
Asia/Pacific
2,563,009
1,869,151
6,640,335
4,777,722
ECS:
1,185,050
909,903
1,648,163
1,126,392
2,833,213
2,036,295
Sales by country are as follows:
China and Hong Kong
1,171,786
925,892
Germany
1,019,962
717,332
3,982,504
2,859,350
Total foreign
6,174,252
4,502,574
United States
3,299,296
2,311,443
27
Results of operations by segment are as follows:
5,833,587
2,549,501
806,748
283,712
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
Loss on investments, net
Consolidated income before taxes
March 29, 2025
4,222,777
1,817,248
554,945
219,047
11.6
10.8
11.4
383,560
141,733
525,293
171,385
77,314
248,699
3.6
3.8
(90,146)
Gain on investments, net
28
Total assets, by segment, are as follows:
Total assets:
28,970,802
21,222,941
6,628,098
7,355,089
Total segment assets
35,598,900
28,578,030
Other assets (a)
355,070
500,108
Consolidated assets
Long-lived assets by country are as follows:
Long-lived assets:
France
99,146
100,493
Netherlands
75,336
79,339
226,834
233,740
401,316
413,572
302,461
309,901
703,777
723,473
29
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:
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.
31
The company’s strategic initiatives include:
Global Components:
Global ECS:
Executive Summary
(millions except per share data)
Change
Consolidated sales
9,474
6,814
39.0
Global Components sales
6,640
4,778
Global ECS sales
2,833
2,036
39.1
bps
Non-GAAP gross profit margin
11.3
362
159
128.1
Operating income margin
2.3
150
Non-GAAP operating income
401
179
124.2
Non-GAAP operating income margin
4.2
2.6
160
235
80
194.9
Earnings per share attributable to shareholders - diluted
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.
32
Business environment and other trends:
33
Results of Operations
Sales by reportable segment
Following is an analysis of the company’s sales by reportable segment:
(millions)
Consolidated sales, as reported
Impact of changes in foreign currencies
274
Non-GAAP consolidated sales
7,088
33.7
Global Components sales, as reported
155
Non-GAAP Global Components sales
4,932
34.6
Global ECS sales, as reported
119
Non-GAAP Global ECS sales
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:
% of Sales
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
70.1
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
29.9
100.0
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:
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.
34
Gross Billings
Following is an analysis of gross billings by geographic region for Global ECS:
Americas ECS gross billings
2,960
2,308
28.2
EMEA ECS gross billings
3,474
2,331
49.0
Global ECS gross billings
6,433
4,639
38.7
The sum of the components for Global ECS gross billings may not agree to totals, as presented, due to rounding.
Gross Profit
Following is an analysis of the company’s gross profit by reportable segment:
Consolidated gross profit, as reported
1,090
774
40.9
Impact of wind down to inventory
(2)
Non-GAAP consolidated gross profit
1,088
804
35.3
Consolidated gross profit as a percentage of sales, as reported
Non-GAAP consolidated gross profit as a percentage of sales
Global Components gross profit, as reported
807
555
45.4
Non-GAAP Global Components gross profit
805
570
41.1
Global Components gross profit as a percentage of sales, as reported
50
Non-GAAP Global Components gross profit as a percentage of sales
Global ECS gross profit, as reported
284
219
29.5
Non-GAAP Global ECS gross profit
234
21.3
Global ECS gross profit as a percentage of sales, as reported
(80)
Non-GAAP Global ECS gross profit as a percentage of sales
The sum of the components for non-GAAP gross profit may not agree to totals, as presented, due to rounding.
Global Components gross profit margins increased during the first quarter of 2026, compared with the year-earlier period, driven by changes in sales discussed above. Global Components supply chain services offerings continued to have a positive impact on gross profit margins.
Global ECS gross profit margins decreased during 2026, compared with the year-earlier period, due to supplier mix and a $21.7 million loss related to underperformance of a certain non-cancellable multi-year purchase obligation.
35
Operating Expenses
Following is an analysis of the company’s operating expenses as of:
Consolidated operating expenses, as reported
729
615
18.4
Identifiable intangible asset amortization
(5)
(37)
(17)
Non-GAAP consolidated operating expenses
687
617
Consolidated operating expenses as a percentage of sales
7.7
9.0
(130)
Non-GAAP consolidated operating expenses as a percentage of non-GAAP sales
7.3
8.7
(140)
Global Components operating expenses, as reported
443
384
15.6
(4)
Non-GAAP Global Components operating expenses
439
394
Global Components operating expenses as a percentage of sales
6.7
8.0
Non-GAAP Global Components operating expenses as a percentage of non-GAAP sales
6.6
Global ECS operating expenses, as reported
180
142
27.0
(1)
Non-GAAP Global ECS operating expenses
19.0
Global ECS operating expenses as a percentage of sales
6.4
7.0
(60)
Non-GAAP Global ECS operating expenses as a percentage of non-GAAP sales
6.3
(70)
Corporate operating expenses, as reported
106
90
17.2
Non-GAAP corporate operating expenses
69
73
(5.3)
The sum of the components for non-GAAP operating expenses may not agree to totals, as presented, due to rounding.
Operating expenses increased during the first quarter of 2026 compared to the year-earlier period, primarily due to an increase in:
36
Restructuring, Integration, and Other
Restructuring initiatives and integration costs are due to the company’s continued efforts to lower costs, drive operational efficiency, and consolidate certain operations, as necessary. The company recorded restructuring, integration, and other charges as follows:
1
37
The sum of the components for restructuring, integration, and other may not agree to totals, as presented, due to rounding.
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.
As a result of the Plan, the company expects to reduce annual operating expenses by approximately $90.0 million to $100.0 million by the end of fiscal year 2026. The company is reinvesting a portion of these savings into various strategic initiatives as well as variable costs to support sales growth. The estimates of charges or savings related to the Plan could differ materially from actual charges or savings recognized.
Refer to Note I, “Restructuring, Integration, and Other” of the Notes to the Consolidated Financial Statements for further discussion of the company’s restructuring and integration activities.
Operating Income
Following is an analysis of the company’s operating income by reportable segment:
Consolidated operating income, as reported
Non-GAAP consolidated operating income
Consolidated operating income as a percentage of sales
Non-GAAP consolidated operating income as a percentage of sales
Global Components operating income, as reported
364
171
112.1
Non-GAAP Global Components operating income
365
173
110.6
Global Components operating income as a percentage of sales
190
Non-GAAP Global Components operating income as a percentage of sales
Global ECS operating income, as reported
104
77
34.2
Non-GAAP Global ECS operating income
105
78
33.8
Global ECS operating income as a percentage of sales
(10)
Non-GAAP Global ECS operating income as a percentage of sales
The sum of the components for non-GAAP operating income may not agree to totals, as presented, due to rounding.
The sum of the components of consolidated operating income do not agree to totals, as presented, because unallocated corporate amounts are not included in the table above. Refer to Note M “Segment and Geographic Information” of the Notes to the Consolidated Financial Statements for further discussion.
The increase in consolidated operating income as a percentage of sales for the first quarter of 2026 compared to the year-earlier period relates primarily to the changes in sales and gross profit margins discussed above.
Interest and Other Financing Expense, Net
The company recorded net interest and other financing expense as follows:
(48)
(56)
The decrease in interest and other financing expenses, net for the first quarter of 2026 compared to the year-earlier period is primarily related to reduced interest cost as a result of additional cash within cash pooling accounts. Refer to the section below titled “Liquidity and Capital Resources” for more information on changes in borrowings.
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Income Tax
Income taxes for the interim periods presented have been included in the accompanying consolidated financial statements on the basis of an estimated annual effective tax rate. The determination of the consolidated provision for income taxes requires management to make certain judgments and estimates. Changes in the estimated level of annual pre-tax earnings, tax laws, and changes resulting from tax audits can affect the overall effective income tax rate, which impacts the level of income tax expense and net income. Judgments and estimates related to the company’s projections and assumptions are inherently uncertain, therefore, actual results could differ from projections.
Following is an analysis of the company’s consolidated effective income tax rate:
Effective income tax rate
23.2
22.6
0.1
(0.1)
0.2
Non-GAAP effective income tax rate
22.9
The sum of the components for non-GAAP effective income tax rate may not agree to totals, as presented, due to rounding.
The year-over-year change in the effective tax rate for 2026 was primarily driven by a shift in jurisdictional mix of earnings, the impact of foreign currency exchange rate fluctuations in certain locations, the tax treatment of stock-based compensation, and adjustments to reserves for uncertain tax positions.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, significantly amending U.S. federal tax law, including changes to international tax provisions, expensing of research and experimental expenditures, depreciation, and interest deduction rules. The company does not expect the OBBBA to have a material impact on its effective tax rate.
Net Income Attributable to Shareholders
Following is an analysis of the company’s consolidated net income attributable to shareholders:
Net income attributable to shareholders, as reported
Identifiable intangible asset amortization*
Tax effect of adjustments above
The sum of the components for non-GAAP net income attributable to shareholders may not agree to totals, as presented, due to rounding.
* For the first quarter of 2025, identifiable intangible asset amortization excludes amortization attributable to the noncontrolling interests.
The increase in net income attributable to shareholders in the first quarter of 2026 compared to the year-earlier period relates primarily to changes in sales and gross margins as discussed above.
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Liquidity and Capital Resources
Management believes that the company’s current cash availability, its current borrowing capacity under its revolving credit facility and asset securitization programs, and its expected ability to generate future operating cash flows are sufficient to meet its projected cash flow needs for the next 12 months and the foreseeable future. The company’s current committed and undrawn liquidity stands at approximately $3.2 billion in addition to $286.5 million of cash on hand at April 4, 2026. The company also may issue debt or equity securities in the future, and management believes the company will have adequate access to the capital markets, if needed. The company continually evaluates its liquidity requirements and may seek to amend its existing borrowing capacity or access the financial markets as deemed necessary.
The company’s principal sources of liquidity are existing cash and cash equivalents, cash generated from operations and cash provided by its revolving credit facilities and debt. The company’s principal uses of liquidity include cash used in operations, investments to grow working capital, scheduled interest and principal payments on its borrowings, and the return of cash to shareholders through share repurchases.
The following table presents selected financial information related to liquidity:
Working capital
6,944
7,437
(493)
287
306
(19)
Short-term debt
2,352
3,085
(733)
Working Capital
The company maintains a significant investment in working capital, which the company defines as accounts receivable, net, plus inventories less accounts payable. The decrease in working capital during the first quarter of 2026, compared to the year-earlier period, was primarily attributable to the timing of settlements, most notably within the Global Components supply chain services offerings. Refer to Note E “Accounts Receivable” of the Notes to the Consolidated Financial Statements. The decrease in working capital is partially offset by higher inventory purchases to support future growth.
Working capital as a percentage of sales, which is defined as working capital divided by annualized quarterly sales, decreased to 18.3% for the first quarter of 2026, compared to 23.3% in the year-earlier period. The decrease in working capital as a percentage of sales was primarily due to increased sales.
Cash and Cash Equivalents
Cash equivalents consist of highly liquid investments, which are readily convertible into cash, with original maturities of three months or less. At April 4, 2026 and December 31, 2025, the company had cash and cash equivalents of $286.5 million and $306.5 million, respectively, of which $264.2 million and $241.6 million, respectively, were held outside the United States.
The company has $5.7 billion of undistributed earnings of its foreign subsidiaries which it deems indefinitely reinvested, and recognizes that it may be subject to additional foreign taxes and U.S. state income taxes if it reverses its indefinite reinvestment assertion on these foreign earnings. The company also has $2.2 billion of foreign earnings that are not deemed permanently reinvested and are available for distribution in future periods as of April 4, 2026.
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Revolving Credit Facilities and Debt
The following tables summarize the company’s credit facilities:
Outstanding Borrowings
Borrowing
Capacity
1,500
300
970
2,000
48
Commercial paper program (a)
1,200
Uncommitted lines of credit
400
Average Daily Balance Outstanding
Effective Interest Rate
772
552
4.16
4.82
4.77
5.47
Commercial paper program
351
348
4.04
4.79
166
263
4.08
The company also 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. Receivables sold under the program are excluded from “Accounts receivable, net” and no corresponding liability is recorded on the company’s consolidated balance sheets. During the first quarter of 2026 and 2025, the average daily balance outstanding under the EMEA asset securitization program was $347.5 million and $307.9 million, respectively. Refer to Note E “Accounts Receivable” of the Notes to the Consolidated Financial Statements for further discussion.
The following table summarizes recent events impacting the company’s capital resources:
Activity
Notional Amount
Decrease in Capacity
February 2026
100
4.00% notes, due April 2025
Repaid
April 2025
350
Refer to Note G “Debt” of the Notes to the Consolidated Financial Statements for further discussion of the company’s short-term and long-term debt and available financing.
Cash Flows
The following table summarizes the company’s cash flows by category for the periods presented:
700
352
(25)
(7)
(649)
(342)
(307)
Cash Flows from Operating Activities
The net amount of cash provided by the company’s operating activities during the first quarter of 2026 and 2025 was $699.8 million and $351.7 million, respectively. The change in cash provided by operating activities during 2026, compared to the year-earlier period, relates primarily to changes in income from operations and timing of settlement of
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accrued expenses and other assets and liabilities. The fluctuations in both “Accounts receivable, net” and “Accounts payable” are primarily related to the Global Components supply chain services offerings and are typically correlated as the company acts as an intermediary in the transaction and remits payments to the supplier upon receipt from the customer. Refer to Note E “Accounts Receivable” of the Notes to the Consolidated Financial Statements.
Cash Flows from Investing Activities
The net amount of cash used for investing activities for the first quarter of 2026 and 2025 was $32.1 million and $25.0 million, respectively. The change in cash used for investing activities compared to the year-earlier period remained flat.
Cash Flows from Financing Activities
The net amount of cash used for financing activities during the first quarter of 2026 and 2025 was $648.7 million and $342.1 million, respectively. The change in cash used for financing activities relates primarily due to an increase in repayments of long-term borrowings, net in 2026.
Capital Expenditures
Capital expenditures for the first quarter of 2026 and 2025 were $32.1 million and $25.0 million, respectively. The company expects capital expenditures to be approximately $100.0 million for fiscal year 2026.
The company repurchased 0.2 million shares of its common stock for $25.0 million and 0.5 million shares of its common stock for $49.9 million in the first quarter of 2026 and 2025, respectively, under its share repurchase program, excluding excise taxes. As of April 4, 2026, approximately $147.9 million remained available for repurchase under the share repurchase program. The share repurchase authorization does not have an expiration date and the pace of the repurchase activity will depend on factors such as the company’s working capital needs, cash requirements for acquisitions, debt repayment obligations or repurchases of debt, share price, and economic and market conditions. The share repurchase program may be accelerated, suspended, delayed, or discontinued at any time subject to the approval of the company’s Board of Directors.
Contractual Obligations
The company has contractual obligations for short-term and long-term debt, interest on short-term and long-term debt, purchase obligations, operating leases, and other sources and uses of capital that are summarized in the sections titled “Contractual Obligations” and “Additional Capital Requirements and Sources” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Refer to the section above titled “Revolving Credit Facilities and Debt” for updates to the company’s short-term and long-term debt obligations. Refer to the section above titled “Restructuring, Integration, and Other” for updates related to discussion of planned restructuring costs. Refer to Note H “Financial Instruments Measured at Fair Value” of the Notes to Consolidated Financial Statements for further discussion on hedging activities.
As of April 4, 2026, the company had purchase obligations of $26.0 billion, which represent an estimate of non-cancellable inventory purchase orders, future payments under IT distribution arrangements, and other contractual obligations related to information technology and facilities with $13.8 billion expected to be paid in the nine months of 2026, $4.0 billion in 2027, $2.5 billion in 2028, $2.0 billion in 2029, $1.6 billion in 2030, and $1.2 billion in 2031.
With the exception of the item noted above, there were no other material changes to “Contractual Obligations” and “Additional Capital Requirements and Sources” of the company as of April 4, 2026.
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Critical Accounting Estimates
The company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the company to make significant estimates and judgments that have had or are reasonably likely to have a material impact on the reported amounts of assets, liabilities, revenues, and expenses and related disclosure of contingent assets and liabilities. The company has established detailed policies and control procedures intended to ensure the appropriateness of such estimates and assumptions and their consistent application from period to period. The company bases its estimates on historical experience and on various other assumptions that are believed reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There have been no significant changes to the company’s critical accounting estimates for the quarter ended April 4, 2026. For more information, refer to the section titled “Critical Accounting Estimates” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in the company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Impact of Recently Issued Accounting Standards
See Note B “Impact of Recently Issued Accounting Standards” of the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements, including the anticipated dates of adoption and the effects on the company’s consolidated financial position and results of operations.
Item 3.Quantitative and Qualitative Disclosures About Market Risk
During the three months ended April 4, 2026, there were no material changes in market risk for changes in foreign currency exchange rates and interest rates from the information provided in Part II, Item 7A – Quantitative and Qualitative Disclosures About Market Risk in the company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Item 4.Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The company’s management, under the supervision and with the participation of the company’s Interim Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the company’s disclosure controls and procedures as of April 4, 2026 (the “Evaluation”). Based upon the Evaluation, the company’s Interim Chief Executive Officer and Chief Financial Officer concluded that the company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended) were effective as of April 4, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in the company’s internal control over financial reporting during the company’s most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1.Legal Proceedings
The information set forth under the heading “Environmental Matters” in Note L “Contingencies” in the Notes to Consolidated Financial Statements in Item 1 Part I of this Report, is incorporated herein by reference.
Item 1A. Risk FactorsThere have been no material changes to the company’s risk factors from those discussed in Part I, Item 1A - Risk Factors in the company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
The following table shows the share repurchase activity for the quarter ended April 4, 2026:
Total Number of
Purchased as
Yet be
Number of
Average
Part of Publicly
Purchased
Price Paid
Announced
Under the
(thousands except share and per share data)
per Share
Program
Programs (a) (b)
January 1 through January 31, 2026
172,870
February 1 through February 28, 2026
159,822
156.42
March 1 through April 4, 2026
Item 5.Other Information
Amendment to the Company’s Executive Severance Policy
On May 5, 2026, the Compensation Committee of the company’s Board of Directors (the “Compensation Committee”) approved an amendment and restatement of the company’s Executive Severance Policy (“severance policy”), which provides for severance benefits to certain employees of the company in connection with a qualifying termination of employment, including each of the company’s currently employed named executive officers other than William F. Austen and Eric C. Nowak. The severance policy was updated to provide that outstanding equity awards held by participants whose employment is terminated by the company without “cause” (as defined in the severance policy) will be treated as if the participant experienced a “Retirement” for purposes of the applicable award agreements and, accordingly, will continue to vest in accordance with their original vesting schedules following such participant’s termination of employment until such awards are fully vested, based on actual performance with respect to performance-based awards and, beginning with awards granted in 2026, prorated in the case of any awards granted in the year in which the participant’s separation occurs. The severance policy was also revised to extend the post-termination exercise period for stock options described above from ninety days to seven years or, if earlier, the original expiration date.
In addition, on May 5, 2026, the Compensation Committee approved updates to its administrative guidelines applicable to outstanding equity awards held by separating employees to provide that (i) outstanding equity awards held by participants in the severance policy who are eligible for early retirement under the company’s policies but have not yet reached normal retirement age will continue to vest in accordance with their original vesting schedules following such participant’s termination of employment without cause until such awards are fully vested, based on actual performance with respect to performance-based awards, and (ii) beginning with awards granted in 2026, any equity awards granted to an employee in the year of such employee’s “Retirement” (as defined in the applicable award agreement) will continue to vest on a prorated basis, rather than in full. The Compensation Committee also approved updates to the company’s Form of Retirement Agreement applicable to members of the executive committee who are eligible to participate in the severance policy, providing that members of the company’s executive committee who voluntarily retire after meeting the requirements for either early retirement or normal retirement under the company’s policies, including each of the company’s currently employed named executive officers other than William F. Austen and Eric C. Nowak, will be eligible to receive a prorated bonus for the year in which their retirement occurs, based on actual performance, as well as any earned but unpaid bonus for the prior year.
Trading Arrangements
During the quarter ended April 4, 2026, none of the company’s directors or officers adopted, amended, or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408.
Item 6.Exhibits
Exhibit
Number
10(a)+*
Form of Restricted Stock Unit Award Agreement to Members of the Executive Committee.
10(b)+*
Form of Performance Stock Unit Award Agreement to Members of the Executive Committee.
10(c)+*
Form of Performance Stock Unit Award Agreement for Certain Grants to Members of the Executive Committee.
10(d)+*
Arrow Electronics, Inc. Executive Severance Policy adopted and effective May 5, 2026.
10(e)+*
Form of Separation and Release Agreement: Not Retirement Eligible.
10(f)+*
Form of Separation and Release Agreement: Retirement Eligible.
10(g)+*
Form of Retirement Agreement.
10(h)+*
Form of First Amendment to the Executive Change in Control Retention Agreement.
10(i)+*
Form of Executive Change in Control Retention Agreement.
10(j)+*
First Amendment to the Arrow Electronics, Inc. Supplemental Executive Retirement Plan, as amended and restated effective January 1, 2009.
31(i)(A)*
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31(i)(B)*
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32(i)**
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32(ii)**
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*
Inline XBRL Document Set for the consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*
: Filed herewith.
**
: Furnished herewith.
+ : Indicates a management contract or compensatory plan or arrangement.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date:
May 7, 2026
By:
/s/ Rajesh K. Agrawal
Rajesh K. Agrawal
Senior Vice President, Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
/s/ Brandon Brewbaker
Brandon Brewbaker
Vice President, Corporate FP&A and Chief Accounting Officer