Arrow Electronics Reports Second-Quarter 2025 Results

--Consolidated, Global Components, and ECS Segment Sales Above High End of Guidance--

--Second-Quarter Earnings Per Share of $3.59 and Non-GAAP Earnings Per Share of $2.43, Both Above High End of Guidance--

Arrow Electronics, Inc. (NYSE:ARW) today announced financial results for its second quarter of 2025.

"I am pleased to report we delivered both consolidated and segment revenues, as well as earnings per share, that exceeded our guidance ranges," said Sean Kerins, Arrow's president and chief executive officer.

In the second quarter of 2025, sales exceeded the high end of guidance range, increased 10 percent year over year, and increased 8 percent year over year on a constant currency basis. Changes in foreign currencies had a positive impact on growth of approximately $123.3 million on sales and $0.07 on earnings per share on a diluted basis compared to the second quarter of 2024.

Global Components

"In our global components business, while momentum in Asia was especially strong, we enjoyed sequential growth in all three operating regions," said Mr. Kerins. "In addition, our leading indicators continue to suggest that a modest cyclical recovery is in flight."

In the second quarter of 2025, global components sales exceeded the high end of guidance range, increased 5 percent year over year, and increased 3 percent year over year on a constant currency basis. Americas components second-quarter sales increased 9 percent year over year. EMEA components second-quarter sales decreased 1 percent year over year and decreased 6 percent year over year on a constant currency basis. Asia-Pacific components second-quarter sales increased 6 percent year over year.

Global Enterprise Computing Solutions

"In our global ECS business, we delivered year-over-year growth in billings and gross profit. Additionally we saw robust growth in our IT as-a-service backlog, alongside continued adoption of our digital platform, Arrowsphere. Our strategy to concentrate on the higher growth demand trends throughout enterprise IT is gaining momentum," said Mr. Kerins.

In the second quarter of 2025, global ECS sales exceeded the high end of guidance range and increased 23 percent year over year, and increased 20 percent year over year on a constant currency basis. Global ECS billings increased 15 percent year over year. EMEA ECS second-quarter sales increased 39 percent year over year and increased 31 percent year over year on a constant currency basis. Americas ECS second-quarter sales increased 9 percent year over year.

Other Financial Information

"In the second quarter, we increased our inventory turns, reduced our cash conversion cycle and improved our returns on capital," said Raj Agrawal, Arrow's senior vice president and chief financial officer. "We were also able to repurchase another $50 million of shares."

¹ A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in the reconciliation tables included herein.

Third-Quarter 2025 Outlook

• Consolidated sales of $7.30 billion to $7.90 billion, with global components sales of $5.30 billion to $5.70 billion, and global enterprise computing solutions sales of $2.00 billion to $2.20 billion
• Net income per share on a diluted basis of $1.49 to $1.69, and non-GAAP net income per share on a diluted basis of $2.16 to $2.36
• Average tax rate in the range of 23 percent to 25 percent
• Interest expense of approximately $65 million
• Changes in foreign currencies to increase sales by approximately $135 million, and earnings per share on a diluted basis by $0.11 compared to the third quarter of 2024
• Changes in foreign currencies to increase quarter-over-quarter growth in sales by $89 million, and earnings per share on a diluted basis by $0.05 compared to the second quarter of 2025
• Global components second-quarter sales included a 1% incremental billing impact from tariffs. The company has assumed a similar amount in its third-quarter outlook.

Earnings Presentation

Please refer to the earnings presentation, which can be found at investor.arrow.com, as a supplement to the company's earnings release. The company may use this website as a means of disclosing material, non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor the website noted above, in addition to following the company's press releases, SEC filings, and public conference calls and webcasts.

Webcast and Conference Call Information

Arrow Electronics will host a conference call to discuss second-quarter 2025 financial results on July 31, 2025, at 1:00 p.m. ET. A live webcast of the conference call will be available via the events section of investor.arrow.com or by accessing the webcast link directly at https://events.q4inc.com/attendee/323584746. Shortly after the conclusion of the conference call, a webcast replay will be available on the Arrow website for one year.

About Arrow Electronics

Arrow Electronics (NYSE:ARW) sources and engineers technology solutions for thousands of leading manufacturers and service providers. With global 2024 sales of $28 billion, Arrow's portfolio enables technology across major industries and markets. Learn more at arrow.com.

Key Business Metrics

Management uses gross billings as an operational metric to monitor operating performance of its global ECS reportable segment, including sales performance by geographic region, as it provides meaningful supplemental information to the reader 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 do not include the impact of recording sales on a net basis or sales adjustments, such as trade discounts and other allowances. 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.

Information Relating to Forward-Looking Statements

This press release 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 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. Such forward-looking statements in this press release include, but are not limited to, statements regarding: Arrow's future financial performance, including its outlook on financial results for the second quarter of fiscal 2025 such as sales, net income per diluted share, non-GAAP net income per diluted share, average tax rate, interest and other expense, impact to sales due to changes in foreign currencies, the timing of the completion of the company's restructuring initiatives (the "Operating Expense Efficiency Plan") and Arrow's estimated costs and expected operating expense reductions associated therewith, industry trends and expectations regarding market demand and conditions, and shareholder returns. These and other 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; disruptions, shortages, or inefficiencies in the supply chain; trade protection measures, tariffs, increased trade tensions, trade agreements and policies, and other restrictions, duties, and value-added taxes, and the associated macroeconomic impacts; the incurrence of additional charges not currently contemplated and failure to realize contemplated cost savings due to unanticipated events that may occur in connection with the implementation of the Operating Expense Efficiency Plan; political instability and changes; impacts of military conflict and sanctions; industry conditions; changes in product supply, pricing and customer demand; competition; other vagaries in the global components and the global ECS markets; deteriorating economic conditions, including economic recession, inflation, tax rates, foreign currency exchange rates, or the availability of capital; the effects of natural or man-made catastrophic events; changes in relationships with key suppliers; increased profit margin pressure; changes in legal and regulatory matters; non-compliance with certain regulations, such as trade, export, antitrust, and anti-corruption laws; foreign tax and other loss contingencies; breaches of security or privacy of business information and information system failures, including related to current or future implementations, integrations and upgrades; outbreaks, epidemics, pandemics, or public health crises; executive orders and regulatory trends and the resulting legal and reputational exposure, including but not limited to those relating to environmental, social, governance, cybersecurity, data privacy, and artificial intelligence issues; 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 the company's most recent 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 accounting principles generally accepted in the United States ("GAAP"), the company also provides certain non-GAAP financial information. The company provides the following non-GAAP metrics: sales, operating income (including by business segment), income before income taxes, provision for income taxes, consolidated net income, noncontrolling interest, net income attributable to shareholders, effective tax rate, and net income per share on a diluted basis. The foregoing non-GAAP measures are adjusted by certain of the following, as applicable: impact of changes in foreign currencies (referred to as "changes in foreign currencies" or "on a constant currency basis") by re-translating prior-period results at current period foreign exchange rates; identifiable intangible asset amortization, restructuring, integration, and other; net gains on investments; and inventory write downs (recoveries) related to the wind down of a businesses within the global components reportable segment ("impact of wind down"). Management believes that providing this additional information is useful to the reader 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- 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, in conjunction with, and not as a substitute for, data presented in accordance with GAAP.