Arrow Electronics (ARW) investor relations material

Executive summary

• First quarter 2026 revenue reached $9.5 billion, up 39% year-over-year, surpassing the high end of guidance, with strong operational momentum across both Global Components and ECS segments and notable AI-related growth.

• Non-GAAP EPS rose 190% year-over-year to $5.22, with GAAP EPS at $4.55, both above guidance; net income attributable to shareholders increased 195% to $235 million.

• Both Global Components and ECS segments delivered strong performance, benefiting from AI, hybrid cloud, and data intelligence demand, with improved book-to-bill ratios and a growing backlog.

• Value-added services, especially supply chain services, contributed significantly to operating income, and four extra shipping days boosted ECS billings.

• Cash flow from operations was $700 million, and $25 million of shares were repurchased.

Financial highlights

• Gross profit was $1.09 billion, with gross margin at 11.5%, up 10 basis points year-over-year.

• Non-GAAP operating income grew to $401 million, with operating margin expanding to 4.2%; operating income more than doubled to $362 million on a GAAP basis.

• Non-GAAP operating expenses were $687 million, 7.3% of sales, down 140 basis points year-over-year.

• Net income attributable to shareholders was $235 million, up 195% year-over-year; non-GAAP net income was $270 million, up 185%.

• Cash and cash equivalents at quarter-end were $287 million.

Outlook and guidance

• Q2 2026 consolidated sales expected between $9.15 billion and $9.75 billion, with non-GAAP diluted EPS guidance of $4.32 to $4.52 and GAAP EPS of $3.91 to $4.11.

• Global Components Q2 sales guided to $6.8–$7.2 billion; ECS to $2.35–$2.55 billion.

• Average tax rate projected at 23% to 25%; interest expense around $60 million.

• Foreign currency expected to increase Q2 sales by $117 million and EPS by $0.11 year-over-year.

• Supply chain services profit expected to normalize in Q2; Asia to be seasonally strong but at lower margins.