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 October 3, 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 50,557,510 shares of Common Stock outstanding as of October 29, 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
44
Item 4.
Controls and Procedures
Part II.
Other Information
Legal Proceedings
45
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Item 5.
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 or the company
Arrow Electronics, Inc. and its subsidiaries, unless otherwise indicated
ASU
Accounting Standard Update
CODM
Chief Operating Decision Maker
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
Nine Months Ended
October 3,
September 27,
2026
2025
Sales
$
10,717,739
7,712,541
30,183,524
22,106,505
Cost of sales
9,558,407
6,877,227
26,808,523
19,648,542
Gross profit
1,159,332
835,314
3,375,001
2,457,963
Operating expenses:
Selling, general, and administrative
688,168
587,866
2,032,447
1,751,172
Depreciation and amortization
35,873
32,793
107,525
103,765
Restructuring, integration, and other
5,034
35,648
65,837
74,880
729,075
656,307
2,205,809
1,929,817
Operating income
430,257
179,007
1,169,192
528,146
Equity in earnings of affiliated companies
1,693
463
4,654
1,124
Gain on investments, net
2,893
4,859
9,145
108,975
Post-retirement expense
(999)
(664)
(2,960)
(1,950)
Interest and other financing expense, net
(40,138)
(54,875)
(125,919)
(171,340)
Income before income taxes
393,706
128,790
1,054,112
464,955
Provision for income taxes
75,175
19,528
226,716
88,807
Consolidated net income
318,531
109,262
827,396
376,148
Noncontrolling interests
156
69
1,204
(514)
Net income attributable to shareholders
318,375
109,193
826,192
376,662
Net income per share:
Basic
6.25
2.11
16.14
7.25
Diluted
6.17
2.09
15.97
7.19
Weighted-average shares outstanding:
50,953
51,695
51,195
51,935
51,615
52,141
51,721
52,381
See accompanying notes.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Other comprehensive (loss) income:
Foreign currency translation adjustment and other, net of taxes
(50,312)
(32,224)
(95,287)
369,038
Gain (loss) on foreign exchange contracts designated as net investment hedges, net of taxes
1,155
440
2,628
(11,716)
Loss on interest rate swaps designated as cash flow hedges, net of taxes
(455)
(430)
(1,344)
(1,273)
Post-retirement expense items, net of taxes
(86)
(345)
(276)
(1,054)
Other comprehensive (loss) income
(49,698)
(32,559)
(94,279)
354,995
Comprehensive income
268,833
76,703
733,117
731,143
Less: Comprehensive (loss) income attributable to noncontrolling interests
(564)
(296)
(701)
4,659
Comprehensive income attributable to shareholders
269,397
76,999
733,818
726,484
CONSOLIDATED BALANCE SHEETS
(In thousands except par value)
December 31,
ASSETS
Current assets:
Cash and cash equivalents
215,607
306,467
Accounts receivable, net
33,259,191
19,738,666
Inventories
7,305,982
5,081,863
Other current assets
871,546
533,035
Total current assets
41,652,326
25,660,031
Property, plant, and equipment, at cost:
Land
5,691
Buildings and improvements
208,288
199,433
Machinery and equipment
1,721,665
1,715,415
1,935,644
1,920,539
Less: Accumulated depreciation and amortization
(1,482,743)
(1,445,889)
Property, plant, and equipment, net
452,901
474,650
Investments in affiliated companies
61,852
59,315
Intangible assets, net
62,769
77,022
Goodwill
2,101,839
2,120,071
Other assets
715,608
687,049
Total assets
45,047,295
29,078,138
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
32,862,316
17,383,796
Accrued expenses
1,710,636
1,461,261
Short-term borrowings, including current portion of long-term debt
110,497
341
Total current liabilities
34,683,449
18,845,398
Long-term debt
2,641,483
3,084,715
Other liabilities
460,659
489,326
Contingencies (Note L)
Equity:
Shareholders’ equity:
Common stock, par value $1:
Authorized - 160,000 shares in both 2026 and 2025
Issued - 56,135 and 55,838 shares in 2026 and 2025, respectively
56,135
55,838
Capital in excess of par value
624,987
586,993
Treasury stock (5,577 and 4,768 shares in 2026 and 2025, respectively), at cost
(651,824)
(483,571)
Retained earnings
7,378,284
6,552,092
Accumulated other comprehensive loss
(219,014)
(126,640)
Total shareholders’ equity
7,188,568
6,584,712
73,136
73,987
Total equity
7,261,704
6,658,699
Total liabilities and equity
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from operating activities:
Adjustments to reconcile consolidated net income to net cash provided by (used for) operations:
Amortization of stock-based compensation
33,978
20,448
(4,654)
(1,124)
Deferred income taxes
(14,517)
5,185
Loss on disposition of businesses, net
22,830
—
(8,827)
(109,435)
Other
(795)
(77)
Change in assets and liabilities:
(13,633,334)
(2,292,091)
(2,251,808)
65,225
15,543,508
1,871,455
341,010
(94,367)
Other assets and liabilities
(385,620)
(81,033)
Net cash provided by (used for) operating activities
576,692
(135,901)
Cash flows from investing activities:
Acquisition of property, plant, and equipment
(80,123)
(73,873)
Proceeds from settlement of net investment hedges
24,858
Proceeds from sale of investments in equity securities
100,000
Net cash (used for) provided by investing activities
50,985
Cash flows from financing activities:
Change in short-term and other borrowings
186
9,852
(Repayments of) proceeds from long-term bank borrowings, net
(336,540)
338,223
Redemption of notes
(350,000)
Proceeds from exercise of stock options
10,513
3,427
Repurchases of common stock
(174,453)
(110,779)
(153)
(148)
Net cash used for financing activities
(500,447)
(109,425)
Effect of exchange rate changes on cash
(86,982)
219,146
Net (decrease) increase in cash and cash equivalents
(90,860)
24,805
Cash and cash equivalents at beginning of period
188,807
Cash and cash equivalents at end of period
213,612
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
235,106
924
236,030
Other comprehensive loss
(59,492)
(861)
(60,353)
9,599
Shares issued for stock-based compensation awards
169
(888)
5,757
5,038
(33,292)
Balance at April 4, 2026
56,007
595,704
(511,106)
6,787,198
(186,132)
74,050
6,815,721
272,711
124
272,835
Other comprehensive income (loss)
16,096
(324)
15,772
12,816
87
5,040
266
5,393
(43,506)
Distributions
(150)
Balance at July 4, 2026
56,094
613,560
(554,346)
7,059,909
(170,036)
73,700
7,078,881
(48,978)
(720)
11,563
41
(136)
177
82
(97,655)
Balance at October 3, 2026
Balance at December 31, 2024
55,592
562,080
(328,078)
5,980,826
(509,269)
70,377
5,831,528
79,720
144
79,864
Other comprehensive income
124,084
1,891
125,975
18,559
195
(2,849)
3,558
904
(59,413)
Balance at March 29, 2025
55,787
577,790
(383,933)
6,060,546
(385,185)
72,412
5,997,417
Consolidated net income (loss)
187,749
(727)
187,022
257,932
3,647
261,579
11,641
28
49
2,222
2,299
(50,736)
Balance at June 28, 2025
55,815
589,480
(432,447)
6,248,295
(127,253)
75,184
6,409,074
(32,194)
(365)
(9,752)
12
(56)
268
224
(630)
Balance at September 27, 2025
55,827
579,672
(432,809)
6,357,488
(159,447)
74,888
6,475,619
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
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
20
Note J. Net Income per Share
21
Note K. Shareholders’ Equity
22
Note L. Contingencies
24
Note M. Segment and Geographic Information
25
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. There were 192 shipping days for the first nine months of 2026 and 188 shipping days for the first nine months 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 effective date was clarified in January 2025 when the FASB issued ASU No. 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. 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. 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 ASUs on its consolidated financial statements and related disclosures but does not anticipate early adoption.
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
(6,048)
(12,184)
(18,232)
Balance as of October 3, 2026 (a)
913,014
1,188,825
Intangible assets, net, are comprised of the following as of October 3, 2026:
Gross
Carrying
Amount
Amortization
Net
Customer relationships
191,072
(134,700)
56,372
Amortizable trade name
46,047
(39,650)
6,397
237,119
(174,350)
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 third quarter of 2026 and 2025, the company recorded amortization expense related to identifiable intangible assets of $4.7 million and $4.8 million, respectively. During the first nine months of 2026 and 2025, amortization expense related to identifiable intangible assets was $14.3 million and $15.0 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
45,935
43,870
15,917
15,445
The equity in earnings of affiliated companies consists of the following:
1,259
189
3,694
254
434
274
960
870
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 October 3, 2026 and December 31, 2025.
In the second quarter of 2025, the company sold an investment in certain equity securities for $100.0 million and recorded a gain on investments of $99.0 million. This investment was previously accounted for as equity securities without a readily determinable fair value.
Note E – Accounts Receivable
Accounts receivable, net, consists of the following:
Accounts receivable
33,407,711
19,882,783
Allowance for credit losses
(148,520)
(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
23,618
14,817
Translation adjustments
(1,472)
4,183
Write-offs
(17,743)
(9,344)
Balance at end of period
148,520
126,101
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 October 3, 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 bankruptcy-remote special purpose entity, Arrow EMEA Funding Corp B.V., which in turn sells certain of the receivables to unaffiliated financial institutions and conduits administered by such unaffiliated financial institutions (collectively, “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 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.
The following table presents sales of accounts receivable to Unaffiliated Financial Institutions under the EMEA asset securitization program:
EMEA asset securitization, sales of accounts receivable
651,834
411,163
1,707,403
1,199,954
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 that 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
519,328
379,017
Collateralized accounts receivable held by Arrow EMEA Funding Corp B.V.
869,269
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 Arrow EMEA Funding Corp B.V. 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 October 3, 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. For the periods presented, a significant portion of the trade accounts receivable sold as part of the company's factoring agreements were at the request of and on behalf of certain customers of the Global Components supply chain services offerings. 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.
The following table presents sales of trade accounts receivable under the company’s factoring programs:
Sales of accounts receivable under the factoring programs
312,116
206,328
802,459
758,693
Other amounts under the company’s factoring programs are set forth below:
Receivables sold under the factoring programs that were uncollected
216,221
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, at their sole discretion, to sell their receivables from the company to third-party financial institutions. In exchange, the company seeks to secure improved standard payment terms. The company has no economic interest or role in negotiating these arrangements, and its rights and obligations to the suppliers, including amounts due, remain unaffected. Payments are made directly 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 October 3, 2026, and December 31, 2025, the outstanding obligations under these programs were $1.1 billion and $1.3 billion, respectively, included in “Accounts payable” on the company’s consolidated balance sheets, with all related activity 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
110,409
Other short-term borrowings
88
The 7.50% senior debentures are not redeemable prior to their maturity.
The company maintains uncommitted lines of credit with financial institutions that provide for an aggregate borrowing capacity of approximately $160.0 million. Borrowings under these arrangements are subject to the discretion of the respective lenders, including the decision to extend, reduce, or terminate credit at any time. During 2026, the aggregate borrowing capacity under these agreements was reduced from $560.0 million to $160.0 million.
There were no outstanding borrowings under these uncommitted lines of credit as of October 3, 2026, and December 31, 2025. Borrowings under these arrangements are generally short-term in nature, with maturity dates and interest rates determined at the time of borrowing. The company’s weighted-average effective interest rate on borrowings outstanding under these arrangements was 4.66% and 4.37% at October 3, 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 October 3, 2026, and December 31, 2025. The commercial paper program had a weighted-average effective interest rate of 4.24% and 4.26% at October 3, 2026 and December 31, 2025, respectively.
Long-term debt consists of the following:
North American asset securitization program
638,000
970,000
110,348
3.875% notes, due 2028
499,028
498,480
5.15% notes, due 2029
496,875
496,142
2.95% notes, due 2032
496,561
496,131
5.875% notes, due 2034
495,776
495,430
Other obligations with various interest rates and due dates
15,243
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
491,000
496,500
492,500
511,500
428,000
447,500
488,500
522,500
The carrying amount of the company’s other short-term borrowings; 7.50% senior debentures, due January 2027; 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 October 3, 2026), which is based on the company’s credit ratings, or a weighted-average effective interest rate of 5.13% and 5.01% at October 3, 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 October 3, 2026. The company had no outstanding borrowings under the revolving credit facility at October 3, 2026, and December 31, 2025.
The company has a North American asset securitization program collateralized by accounts receivable of certain of its subsidiaries. In September 2026, the company amended its North American asset securitization program to increase its borrowing capacity from $1.5 billion to $1.75 billion and extend its maturity from September 2027 to August 2029. 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 (0.85% at October 3, 2026) or an effective interest rate of 4.76% at October 3, 2026. The effective interest rate was 4.19% at December 31, 2025. The facility fee is calculated on a daily basis on the unused portion of the loan at a rate ranging from 0.30% to 0.40%, depending on the unused amount.
16
The company had $638.0 million in outstanding borrowings under the North American asset securitization program at October 3, 2026, and $970.0 million in outstanding borrowings at December 31, 2025, which was included in “Long-term debt” on the company’s consolidated balance sheets. Total collateralized accounts receivable of approximately $4.1 billion and $3.0 billion were held by AFC and were included in “Accounts receivable, net” on the company’s consolidated balance sheets at October 3, 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 October 3, 2026, the company was in compliance with all such financial covenants.
In the second quarter of 2025, the company repaid $350.0 million principal amount of its 4.00% notes due April 2025.
Interest and dividend income of $21.4 million and $68.5 million for the third quarter and first nine months of 2026, respectively, and $9.9 million and $28.4 million for the third quarter and first nine months of 2025, respectively, were recorded in “Interest and other financing expense, net” within the company’s consolidated statements of operations. The increase for the third quarter and first nine months of 2026, compared to the year-earlier periods, was primarily due to an increase in interest income due to higher cash balances within cash pooling accounts. The increase for the first nine months compared to the year-earlier period was also driven by interest income on outstanding tariff receivables collected during the period related to the Global Components supply chain services offerings.
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 October 3, 2026:
Balance Sheet Location
Cash equivalents (a)
14,088
Equity investments (b)
44,917
Foreign exchange contracts designated as net investment hedges
Other assets / other current assets
22,286
59,005
81,291
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 is 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. There were no outstanding interest rate swaps as of October 3, 2026.
18
Foreign Exchange Contracts
The company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can differ from the currency used to purchase the product or where the currency used to pay employee compensation can differ from the functional currency of a wholly-owned subsidiary. 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 purchases of products, sales, and expenses. 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 three years. 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 rate 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 was $1.1 billion at October 3, 2026 and December 31, 2025.
Gains and losses related to non-designated foreign currency exchange contracts are generally 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, sale or expense 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
October 3, 2026
December 31, 2025
January 2028
EUR
The change in the fair value of derivatives designated as net investment hedges is 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.
During the second quarter of 2025, two foreign exchange contracts designated as net investment hedges matured and the company received $24.9 million, which is reported in the “Cash flows from investing activities” section of the consolidated statements of cash flows.
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)
671
2,013
2,759
Interest rate swaps, cash flow hedge (b)
597
565
1,768
1,672
1,268
1,236
3,781
4,431
Gain (loss) Recognized in Other Comprehensive Income before reclassifications, net of tax
Foreign exchange contracts, net investment hedge (c)
1,665
951
4,157
(9,616)
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.
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)
530
34,628
49,941
63,259
Other plans (b)
4,196
170
9,249
2,053
Other expenses
Operating expense reduction costs not related to restructuring initiatives (c)
(53)
(1,382)
438
546
Other charges
361
2,232
6,209
9,022
Subsequent to the balance sheet date, the company incurred a $41.2 million charge to terminate a certain contract related to underperforming multi-year non-cancellable purchase obligations, that will be recorded in “Restructuring, integration, and other” within the company’s consolidated statements of operations in the fourth quarter of 2026.
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”), which was substantially complete as of July 4, 2026. For more details on the Plan, refer to Part II, Item 8 - Note 9 “Restructuring, Integration, and Other” in the company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The following table presents the costs related to the Operating Expense Efficiency Plan:
Total Cost
Incurred to
Date
Employee severance and benefit costs (a)
28,334
16,835
47,747
101,840
Inventory (recoveries) write-downs (b)
(3,939)
(1,989)
(9,157)
(6,628)
30,921
Business wind down costs (a) (c)
-
27,475
Other costs (a) (d)
6,294
10,276
15,512
36,987
(3,409)
32,639
40,784
56,631
197,223
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
(22,830)
Cash (payments) receipts
(43,368)
9,157
(15,309)
(49,520)
Foreign currency translations
(2,038)
(42)
(2,080)
22,676
152
22,828
Substantially all amounts accrued at October 3, 2026 related to the Operating Expense Efficiency Plan are expected to be paid in cash within two years.
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
662
446
526
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
1
38
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)
(50,928)
(32,101)
(119,288)
360,249
Amounts reclassified into income
1,336
242
25,906
3,616
Gain (loss) on Foreign Exchange Contracts Designated as Net Investment Hedges, Net:
Other comprehensive income (loss) before reclassifications (b)
(510)
(511)
(1,529)
(2,100)
Loss on Interest Rate Swaps Designated as Cash Flow Hedges, Net:
Post-retirement Expense Items, Net:
Net change in Accumulated other comprehensive (loss) income
(92,374)
349,822
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
(3)
90
199
(199)
Common stock outstanding at July 4, 2026
5,119
50,975
(2)
43
460
(460)
Common stock outstanding at October 3, 2026
5,577
50,558
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
(23)
51
417
(417)
Common stock outstanding at June 28, 2025
4,314
51,501
(5)
Common stock outstanding at September 27, 2025
4,316
51,511
Share Repurchase Program
Effective May 12, 2026, the Board of Directors replaced the company’s previous share repurchase program that was authorized in January 2023 (“January 2023 program”) with a new share repurchase program (“May 2026 program”) pursuant to which Arrow may purchase an aggregate value of shares up to, but not to exceed, $1.0 billion, inclusive of any fees, commissions, taxes, or other expenses related to such repurchases, and with no expiration date.
The following table shows the company’s share repurchase program as of October 3, 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
May 2026
136,645
863,355
23
In the third quarter of 2026, under the May 2026 program, the company repurchased 0.4 million shares of its common stock for $92.7 million, excluding excise taxes. During the first nine months of 2026, under the January 2023 program, the company repurchased 0.2 million shares of its common stock for $25.0 million and under the May 2026 program, the company repurchased 0.6 million shares of its common stock for $135.5 million, excluding excise taxes.
The company accrued $1.1 million of excise tax, during the first nine months of 2026, which 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.
Note L – Contingencies
Environmental Matters
The company has accrued liabilities of $23.8 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 before they were acquired by Arrow. 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 $9.8 million and $91.0 million related to environmental costs at the Huntsville site and the Norco site, respectively. The subsequent environmental costs are estimated to be between $4.6 million and $16.3 million at the Huntsville site and between $19.2 million and $36.6 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. 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.
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.
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, 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.
Global Components, enabled by a comprehensive range of value-added capabilities and services, markets and distributes electronic components to OEMs and EMS providers. Global ECS is a leading provider of comprehensive computing solutions and value-added services which 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 comparisons of 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
2,703,157
1,708,840
7,469,825
4,984,932
2,036,976
1,443,607
5,740,939
4,210,552
Asia/Pacific
3,202,459
2,403,945
8,737,788
6,423,528
7,942,592
5,556,392
21,948,552
15,619,012
ECS:
1,300,944
1,021,950
3,621,507
2,984,638
1,474,203
1,134,199
4,613,465
3,502,855
2,775,147
2,156,149
8,234,972
6,487,493
Sales by country are as follows:
China and Hong Kong
1,383,761
1,210,685
3,909,209
3,227,276
Germany
1,027,040
821,256
3,056,493
2,331,610
4,412,710
3,075,995
12,570,703
9,015,217
Total foreign
6,823,511
5,107,936
19,536,405
14,574,103
United States
3,894,228
2,604,605
10,647,119
7,532,402
26
Results of operations by segment are as follows:
7,063,831
2,494,576
Gross profit (a) (b)
878,761
280,571
Gross profit margin
11.1
%
10.1
10.8
Segment operating expenses (c)
465,729
182,353
648,082
Segment operating income
413,032
98,218
511,250
Segment operating income margin
5.2
3.5
4.8
Reconciliation of segment operating income
Corporate operating expenses (d)
(80,993)
Consolidated operating income
Consolidated income before taxes
September 27, 2025
4,947,291
1,929,936
609,101
226,213
11.0
10.5
411,746
162,469
574,215
197,355
63,744
261,099
3.6
3.0
3.4
(82,092)
27
19,406,540
7,401,983
2,542,012
832,989
11.6
11.2
1,369,186
545,658
1,914,844
1,172,826
287,331
1,460,157
5.3
(290,965)
13,863,512
5,785,030
1,755,500
702,463
1,199,952
464,436
1,664,388
555,548
238,027
793,575
3.7
(265,429)
Total assets, by segment, are as follows:
Total assets:
38,087,594
21,222,941
6,468,553
7,355,089
Total segment assets
44,556,147
28,578,030
Other assets (a)
491,148
500,108
Consolidated assets
Long-lived assets by country are as follows:
Long-lived assets:
France
102,266
100,493
Netherlands
68,959
79,339
221,581
233,740
392,806
413,572
283,810
309,901
676,616
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; changes in product supply, pricing, and customer demand; increased profit-margin pressure resulting from industry conditions, competition, or other factors; other vagaries in the Global Components and the Global ECS markets; management transitions; 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 artificial intelligence, environmental, social, governance, cybersecurity, and data privacy issues; changes in relationships with key suppliers; 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 by Reportable Segment,” “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” and “Gain on investments, net” refer to the similarly captioned sections of these items 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 third quarter of 2026, approximately 74% and 26% 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
10,718
7,713
39.0
30,184
22,107
36.5
Global Components sales
7,943
5,556
42.9
21,949
15,619
40.5
Global ECS sales
2,775
2,156
28.7
8,235
6,487
26.9
flat
bps
Non-GAAP gross profit margin
430
179
140.4
1,169
121.4
Operating income margin
4.0
2.3
3.9
2.4
150
Non-GAAP operating income
436
217
100.6
1,240
612
102.8
Non-GAAP operating income margin
4.1
2.8
130
318
109
191.6
826
377
119.3
Earnings per share attributable to shareholders - diluted
195.2
122.1
Non-GAAP net income attributable to shareholders
321
126
155.3
874
348
151.1
Non-GAAP earnings per share attributable to shareholders - diluted
6.22
2.41
158.1
16.89
6.64
154.4
The sum of sales by reportable segments may not agree to consolidated sales, as presented, due to rounding.
During the third quarter and first nine months of 2026, compared to the year-earlier periods, changes in foreign currencies decreased sales by approximately $10.3 million and increased sales by approximately $356.7 million, respectively, and increased operating income by $0.6 million and $11.5 million, respectively. During the third quarter and first nine months of 2026, changes in foreign currencies increased earnings per share on a diluted basis by $0.02 and $0.18, respectively, compared to the year-earlier periods.
32
Business environment and other trends:
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
(10)
357
Non-GAAP consolidated sales
7,702
39.2
22,463
34.4
Global Components sales, as reported
218
Non-GAAP Global Components sales
5,561
42.8
15,837
38.6
Global ECS sales, as reported
(14)
139
Non-GAAP Global ECS sales
2,142
29.6
6,626
24.3
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.
33
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
2,703
25.2
1,709
22.2
58.2
7,470
24.7
4,985
22.5
49.8
EMEA Components sales
2,037
19.0
1,444
18.7
41.1
5,741
4,211
19.1
36.3
Asia/Pacific Components sales
3,202
29.9
2,404
31.2
33.2
8,738
28.9
6,424
29.1
36.0
74.1
72.0
72.7
70.7
Americas ECS sales
1,301
12.1
1,022
13.3
27.3
3,622
12.0
2,985
13.5
21.3
EMEA ECS sales
1,474
13.8
1,134
14.7
30.0
4,613
15.3
3,503
15.8
31.7
25.9
28.0
29.3
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 for the third quarter and first nine months of 2026, compared to the year-earlier periods, was primarily due to increased demand related to sustained market strength and AI-related growth. Global Components sales increased most notably in the following verticals:
The increase in Global ECS sales for the third quarter and first nine months of 2026, compared to the year-earlier periods, was primarily attributable to growth across most major technologies, most notably, cloud-based solutions, cyber security, data protection, data intelligence, storage, and infrastructure software. Additionally, as a result of the timing of the quarter end, the first nine months of 2026 included four extra shipping days compared to the first nine months of 2025, which increased Global ECS sales.
Gross Billings
Following is an analysis of gross billings by geographic region for Global ECS:
Americas ECS gross billings
2,907
2,713
7.1
8,560
7,565
13.2
EMEA ECS gross billings
3,028
2,477
22.3
9,665
7,404
30.5
Global ECS gross billings
5,936
5,190
14.4
18,225
14,969
21.8
The sum of the components for Global ECS gross billings may not agree to totals, as presented, due to rounding.
34
Gross Profit
Following is an analysis of the company’s gross profit by reportable segment:
Consolidated gross profit, as reported
1,159
835
38.8
3,375
2,458
37.3
Impact of wind down to inventory
(4)
(9)
(6)
(1)
Non-GAAP consolidated gross profit
833
3,366
2,495
34.9
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
879
609
44.3
2,542
1,755
44.8
(7)
Non-GAAP Global Components gross profit
875
608
43.9
2,533
1,775
42.7
Global Components gross profit as a percentage of sales, as reported
40
Non-GAAP Global Components gross profit as a percentage of sales
10.9
11.5
Global ECS gross profit, as reported
281
24.0
702
18.6
Non-GAAP Global ECS gross profit
25.0
719
Global ECS gross profit as a percentage of sales, as reported
(40)
(70)
Non-GAAP Global ECS gross profit as a percentage of sales
(80)
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 third quarter and first nine months of 2026, compared with the year-earlier periods, driven by favorable product and value-added services mix as a result of sustained market and AI-related growth as discussed above.
Global ECS gross profit margins decreased during the third quarter and first nine months of 2026, compared with the year-earlier periods, primarily due to a shift in sales mix towards more sales recognized on a gross basis in the EMEA region (refer to discussion of the company’s revenue recognition policy in Note 1 “Summary of Significant Accounting Policies” in the company’s Annual Report on Form 10-K for the year ended December 31, 2025). Additionally, during the first nine months of 2026, the decrease was due to cost related to the underperformance of certain non-cancellable multi-year purchase obligations, where the quarterly fee was in excess of the margin realized, in the amount of $3.8 million and $52.1 million for the third quarter and first nine months of 2026, respectively, and $12.6 million and $18.3 million, for the third quarter and first nine months of 2025, respectively.
35
Operating Expenses
Following is an analysis of the company’s operating expenses:
Consolidated operating expenses, as reported
729
656
2,206
1,930
14.3
Identifiable intangible asset amortization
(15)
(36)
(66)
(75)
Non-GAAP consolidated operating expenses
615
17.0
2,126
1,870
13.7
Consolidated operating expenses as a percentage of sales
6.8
8.5
(170)
7.3
8.7
(140)
Non-GAAP consolidated operating expenses as a percentage of non-GAAP sales
6.7
8.0
(130)
7.0
8.3
Global Components operating expenses, as reported
466
412
13.1
1,369
1,200
14.1
(11)
(12)
Non-GAAP Global Components operating expenses
462
408
1,358
1,207
12.5
Global Components operating expenses as a percentage of sales
5.9
7.4
6.2
7.7
Non-GAAP Global Components operating expenses as a percentage of non-GAAP sales
5.8
7.6
Global ECS operating expenses, as reported
182
162
12.2
464
17.5
Non-GAAP Global ECS operating expenses
181
160
543
473
14.8
Global ECS operating expenses as a percentage of sales
6.6
7.5
(90)
7.2
(60)
Non-GAAP Global ECS operating expenses as a percentage of non-GAAP sales
6.5
(100)
(50)
Corporate operating expenses, as reported
81
(1.3)
291
265
9.6
Non-GAAP corporate operating expenses
76
63.6
225
191
18.1
The sum of the components for non-GAAP operating expenses may not agree to totals, as presented, due to rounding.
36
During the third quarter and first nine months of 2026, compared to the year-earlier periods, consolidated operating expenses increased primarily due to higher sales incentives and variable costs, in line with the increase in sales discussed above as well as changes in foreign currencies relative to the U.S. dollar. Additionally, Global ECS operating expenses increased due to higher employee-related costs and professional fees to expand the business related to multi-year non-cancellable purchase obligations. Corporate operating expenses increased primarily due to an increase in stock-based compensation expense, which was primarily attributable to equity-award forfeitures in 2025 that did not repeat in 2026.
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:
50
63
66
75
The sum of the components for restructuring, integration, and other may not agree to totals, as presented, due to rounding.
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”), which was substantially complete as of July 4, 2026. Under the Plan, the company incurred pre-tax restructuring charges of approximately $200.0 million and is on target 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. For more details on the Plan, refer to Part II, Item 8 - Note 9 “Restructuring, Integration and Other” in the company’s Annual Report on Form 10-K for the year ended December 31, 2025.
37
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
413
197
109.3
1,173
556
111.1
Non-GAAP Global Components operating income
107.3
1,175
561
109.4
Global Components operating income as a percentage of sales
Non-GAAP Global Components operating income as a percentage of sales
5.4
180
Global ECS operating income, as reported
98
64
54.1
287
238
20.7
Non-GAAP Global ECS operating income
99
65
53.3
290
241
20.5
Global ECS operating income as a percentage of sales
(20)
Non-GAAP Global ECS operating income as a percentage of sales
60
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 third quarter and first nine months of 2026 compared to the year-earlier periods relates primarily to the changes in sales discussed above.
Gain on Investments, Net
The decrease in gain on investments for the first nine months of 2026 is primarily related to a $99.0 million gain on the sale of an investment in certain equity securities during the second quarter of 2025. Refer to Note D “Investments in Affiliated Companies” of the Notes to the Consolidated Financial Statements.
Interest and Other Financing Expense, Net
The company recorded net interest and other financing expense as follows:
(55)
(126)
(171)
The decrease in interest and other financing expense, net for the third quarter and first nine months of 2026 compared to the year-earlier periods, is primarily related to lower average daily borrowings and reduced interest cost as a result of additional cash within cash pooling accounts. The decrease for the first nine months of 2026 compared to the year-earlier period was also driven by interest income on outstanding tariff receivables collected during the period related to the Global Components supply chain services offerings. Refer to the section below titled “Liquidity and Capital Resources” for more information on changes in borrowings.
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
15.2
21.5
0.1
0.3
0.2
2.1
1.1
(0.1)
(0.4)
(0.3)
(0.2)
Impact of TCJA Tax Act settlements
5.6
2.0
Non-GAAP effective income tax rate
21.6
20.9
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 the third quarter and first nine months of 2026 was primarily driven by a shift in jurisdictional mix of earnings, the impact of foreign currency exchange rate fluctuations in certain locations, and adjustments to reserves for uncertain tax positions, including resolution of tax audits.
39
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 OBBBA did not have a material impact on the company’s effective tax rate for the current quarter; however, the company will continue to monitor developments and evaluate any potential future impacts.
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*
(109)
Tax effect of adjustments above
(8)
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 nine months of 2025, identifiable intangible asset amortization excludes amortization attributable to the noncontrolling interests.
The increase in net income attributable to shareholders in the third quarter and first nine months of 2026 compared to the year-earlier periods relates primarily to changes in operating income and interest and other financing expense, net, partially offset by the decrease in gain on investments, net discussed above.
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 $3.1 billion in addition to $215.6 million of cash on hand at October 3, 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
7,703
7,437
216
306
Short-term debt
110
2,641
3,085
(444)
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 increase in working capital during the first nine months of 2026 was primarily attributable to the higher inventory purchases to support future sales demand partially offset by 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.
Working capital as a percentage of sales, which is defined as working capital divided by annualized quarterly sales, decreased to 18.0% for the third quarter of 2026, compared to 23.5% 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 October 3, 2026, and December 31, 2025, the company had cash and cash equivalents of $215.6 million and $306.5 million, respectively, of which $183.7 million and $241.6 million, respectively, were held outside the United States.
The company has $6.3 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 October 3, 2026.
Revolving Credit Facilities and Debt
The following tables summarize the company’s credit facilities:
Outstanding Borrowings
Borrowing
Capacity
1,750
638
970
Revolving credit facility
2,000
Commercial paper program (a)
Uncommitted lines of credit
Average Daily Balance Outstanding
Effective Interest Rate
481
683
4.76
4.66
5.13
5.34
Commercial paper program
219
368
4.24
4.74
276
4.79
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 nine months of 2026 and 2025, the average daily balance outstanding under the EMEA asset securitization program was $428.6 million and $327.5 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
Increase in Capacity
September 2026
250
Decrease in Capacity
June 2026
300
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:
577
713
(131)
(500)
(391)
Cash Flows from Operating Activities
The net amount of cash provided by the company’s operating activities during the first nine months of 2026 was $576.7 million, and the cash used for operating activities during the first nine months of 2025 was $135.9 million. The change in cash provided by operating activities during 2026, compared to the year-earlier period, relates primarily to timing of settlements, most notably within the Global Components supply chain services offerings, and increase in income from operations, partially offset by higher inventory purchases to support future sales demand. 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 nine months of 2026 was $80.1 million, and the cash provided by investing activities for the first nine months of 2025 was $51.0 million. The change in cash flows from investing activities related primarily to proceeds from the sale of an investment in certain equity securities (refer to Note
42
D “Investments in Affiliated Companies” of the Notes to the Consolidated Financial Statements) and proceeds from the settlement of net investment hedges (refer to Note H “Financial Instruments Measured at Fair Value” of the Notes to the Consolidated Financial Statements) in the second quarter of 2025.
Cash Flows from Financing Activities
The net amount of cash used for financing activities during the first nine months of 2026 and 2025 was $500.4 million and $109.4 million, respectively. The change in cash used for financing activities relates primarily to an increase in repayments of long-term bank borrowings and an increase in repurchases of common stock, partially offset by the redemption of a note in 2025.
Capital Expenditures
Capital expenditures for the first nine months of 2026 and 2025 were $80.1 million and $73.9 million, respectively, and the company expects capital expenditures to be approximately $100.0 million for fiscal year 2026. The company's capital expenditures primarily relate to enhancements in internally developed software, mainly ArrowSphere, the company's AI-enabled marketplace and management platform, as well as improvements of the company's facilities and warehouses. Refer to discussion of the company’s policy on software development costs in Note 1 “Summary of Significant Accounting Policies” in the company’s Annual Report on Form 10-K for the year ended December 31, 2025.
During the first nine months of 2026, under the January 2023 program, the company repurchased 0.2 million shares of its common stock for $25.0 million, excluding excise taxes, and under the May 2026 program, the company repurchased 0.6 million shares of its common stock for $135.5 million, excluding excise taxes. During the first nine months of 2025, under the January 2023 program, the company repurchased 0.9 million shares of its common stock for $99.9 million, excluding excise taxes.
As of October 3, 2026, approximately $863.4 million remained available for repurchase under the May 2026 program.
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 October 3, 2026, the company had purchase obligations of $33.5 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 $14.3 billion expected to be paid in the remaining three months of 2026, $7.2 billion in 2027, $3.0 billion in 2028, $2.2 billion in 2029, $1.5 billion in 2030, and $5.3 billion in 2031 and thereafter. Some of these purchase obligations relate to sales where the company acts as an agent in the transaction. Refer to discussion of the company’s revenue recognition policy in Note 1 “Summary of Significant Accounting Policies” in the company’s Annual Report on Form 10-K for the year ended December 31, 2025.
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 October 3, 2026.
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 nine months ended October 3, 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 nine months ended October 3, 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 October 3, 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 October 3, 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 Part I, Item 1 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 October 3, 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)
July 5 through August 1, 2026
72,294
206.84
941,982
August 2 through August 29, 2026
306,461
209.21
877,866
August 30 through October 3, 2026
63,018
216.44
441,773
Item 5.Other Information
Trading Arrangements
During the quarter ended October 3, 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)+
Employment Agreement dated July 31, 2026, between the Company and Deidra C. Merriwether (incorporated by reference to Exhibit 10.1 to the company’s Current Report on Form 8-K filed on August 6, 2026).
10(b)+*
Restricted Stock Unit Award Agreement for William F. Austen.
10(c)
Amendment No. 36, dated as of September 2, 2026, to the Transfer and Administration Agreement dated March 21, 2001 (incorporated by reference to Exhibit 10.1 to the company’s Current Report on Form 8-K filed on September 4, 2026).
31(i)(A)*
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities 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 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:
November 5, 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