Arrow Electronics — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated sales reached $10.7 billion for the quarter ended October 3, 2026, representing a 39% year-over-year increase; nine-month sales totaled $30.2 billion, up 37% year-over-year.
• Net income attributable to shareholders was $318 million for the quarter (192% YoY increase) and $826 million for the nine months (119% YoY increase).
• Diluted earnings per share (EPS) were $6.17 for the quarter (196% YoY increase) and $15.97 for the nine months (122% YoY increase).
• Non-GAAP diluted EPS were $6.22 for the quarter (158% YoY increase) and $16.89 for the nine months (154% YoY increase).
• Global Components sales were $7.9 billion (43% YoY increase), with operating income of $413 million (109% YoY increase).
• Global ECS sales were $2.8 billion (29% YoY increase), with operating income of $98 million (54% YoY increase).
• Cash flow from operations used $441 million in the quarter, primarily due to working capital investments to support customer demand.
• Accounts receivable increased to $33.3 billion from $19.7 billion at the end of the prior year; inventories increased to $7.3 billion from $5.1 billion.
• Total debt (short-term borrowings and long-term debt) stood at $2.75 billion as of October 3, 2026, compared to $3.1 billion at December 31, 2025.

Guidance and Future Outlook:

• Fourth-quarter 2026 consolidated sales are projected between $11.55 billion and $12.15 billion.
• Fourth-quarter 2026 Global Components sales are projected between $8.15 billion and $8.55 billion; Global ECS sales are projected between $3.40 billion and $3.60 billion.
• Fourth-quarter 2026 diluted net income per share is projected between $6.25 and $6.45; non-GAAP diluted net income per share is projected between $7.00 and $7.20.
• The average tax rate for the fourth quarter is expected to be between 23% and 25%.
• Interest expense for the fourth quarter is expected to be approximately $50 million.
• Foreign currency changes are expected to decrease fourth-quarter sales by approximately $88 million and diluted EPS by $0.14 compared to the fourth quarter of 2025.

Business Segments and Product Lines:

• Global Components benefited from broad-based demand across geographies, customer segments, and industry verticals, with a growing backlog and book-to-bill ratios well above parity.
• Americas Components sales increased 58% year-over-year; EMEA Components sales increased 41% year-over-year; Asia-Pacific Components sales increased 33% year-over-year.
• Global ECS experienced robust demand as customers modernized technology environments through investments in AI, cloud, cybersecurity, and hybrid infrastructure solutions.
• Global ECS gross billings increased 14% year-over-year to $5.9 billion for the quarter.
• EMEA ECS sales increased 30% year-over-year; Americas ECS sales increased 27% year-over-year.

Market and Competitive Landscape:

• The company attributes growth to a diversified business model and strong momentum across both Global Components and Global Enterprise Computing Solutions.
• Management highlighted the strength of its scalable operating model and disciplined execution in expanding higher-margin, value-added services.

Risks and Challenges:

• Foreign currency fluctuations had a negative impact of $10.3 million on sales and a positive impact of $0.02 on diluted EPS for the quarter compared to the prior year.
• Working capital investments to support customer demand resulted in significant cash outflows from operating activities.
• Global ECS operating income includes costs related to the underperformance of certain non-cancellable multi-year purchase obligations ($3.8 million in the quarter).
• Global Components operating income includes inventory recoveries related to the wind down of a business ($3.9 million in the quarter).
• Corporate operating expenses included $5.0 million in restructuring, integration, and other charges for the quarter.

Management Commentary and Tone:

• Bill Austen, interim chief executive officer, stated the company delivered record quarterly revenue and EPS with strong momentum across both business segments.
• Management expressed confidence in Arrow's position to deliver sustainable, profitable growth and create long-term value, supported by a solid financial foundation and disciplined capital allocation.
• The tone emphasized the power of the diversified business model and continued focus on expanding higher-margin, value-added services.

Other Key Points:

• The company repurchased $93 million of shares during the third quarter of 2026.
• The earnings presentation is available at investor.arrow.com.
• A conference call to discuss results was held on November 5, 2026, at 8:30 a.m. ET.
• Global Components non-GAAP operating income was $413 million for the quarter, representing 5.2% of sales.
• Global ECS non-GAAP operating income was $99 million for the quarter, representing 3.6% of sales.