Arrow Electronics Soars: Q3 Sales Up 13%, Net Income Jumps 8.6%

TL;DR

**ARW is crushing it with strong sales and profit growth, signaling a bullish outlook for tech distribution.**

AI Summary

ARROW ELECTRONICS, INC. reported a strong financial performance for the quarter ended September 27, 2025, with sales increasing to $7.71 billion from $6.82 billion in the prior year's quarter, representing a 13.0% rise. Net income attributable to shareholders also grew by 8.6%, reaching $109.19 million compared to $100.57 million in the same period last year. Diluted earnings per share improved to $2.09 from $1.88. For the nine months ended September 27, 2025, sales were $22.11 billion, up from $20.64 billion, and net income attributable to shareholders surged to $376.66 million from $292.87 million, a 28.6% increase. A significant gain on investments of $108.98 million was recorded for the nine-month period, compared to a loss of $0.76 million in the prior year. The company's total assets increased to $24.53 billion from $21.76 billion at December 31, 2024, driven by a substantial rise in accounts receivable to $15.66 billion from $13.03 billion. Cash and cash equivalents saw a modest increase to $213.61 million from $188.81 million. Long-term debt also increased to $3.12 billion from $2.77 billion.

Why It Matters

Arrow Electronics' robust Q3 performance, marked by significant sales and net income growth, signals strong demand in the electronics components and enterprise computing solutions markets. This positive trend could attract investors seeking exposure to the technology distribution sector, potentially boosting ARW's stock price. For employees, continued growth may lead to job security and expansion opportunities. Customers benefit from a stable and growing distributor, ensuring reliable supply chains. In a competitive landscape, Arrow's ability to increase sales and profitability, especially with a substantial gain on investments, positions it favorably against rivals by demonstrating effective capital allocation and market penetration.

Risk Assessment

Risk Level: medium — While ARW shows strong growth, its accounts receivable increased significantly to $15.66 billion from $13.03 billion, and accounts payable also rose to $13.13 billion from $11.05 billion. This indicates a substantial reliance on working capital management and potential exposure to credit risk, despite the company's explanation of acting as an agent for customers. Additionally, the company reported a net cash outflow from operating activities of $135.90 million for the nine months ended September 27, 2025, a notable shift from the $803.95 million inflow in the prior year, suggesting potential liquidity pressures if not managed effectively.

Analyst Insight

Investors should consider ARW's strong top-line and bottom-line growth, but closely monitor its working capital trends, particularly the significant increase in accounts receivable and the shift to negative operating cash flow. A deeper dive into the company's supplier finance programs and credit risk management strategies would be prudent before making a significant investment decision.

Financial Highlights

debt To Equity

N/A

revenue

$22.11B

operating Margin

N/A

total Assets

$24.53B

total Debt

$3.12B

net Income

$376.66M

eps

$7.19

gross Margin

N/A

cash Position

$213.61M

revenue Growth

+7.1%

Revenue Breakdown

Key Numbers

• $7.71B — Sales for Q3 2025 (Increased from $6.82B in Q3 2024, a 13.0% rise)
• $109.19M — Net income attributable to shareholders for Q3 2025 (Increased from $100.57M in Q3 2024, an 8.6% rise)
• $2.09 — Diluted EPS for Q3 2025 (Increased from $1.88 in Q3 2024)
• $22.11B — Sales for nine months ended Sept 27, 2025 (Increased from $20.64B in the prior nine-month period)
• $376.66M — Net income attributable to shareholders for nine months ended Sept 27, 2025 (Increased from $292.87M in the prior nine-month period, a 28.6% rise)
• $108.98M — Gain on investments for nine months ended Sept 27, 2025 (Significant increase from a loss of $0.76M in the prior nine-month period)
• $15.66B — Accounts receivable, net, as of Sept 27, 2025 (Increased from $13.03B as of Dec 31, 2024)
• $135.90M — Net cash used for operating activities for nine months ended Sept 27, 2025 (Shift from $803.95M provided by operating activities in the prior nine-month period)

Key Players & Entities

• ARROW ELECTRONICS, INC. (company) — Registrant
• Marubun Corporation (company) — Joint venture partner
• New York Stock Exchange (regulator) — Exchange where ARW Common Stock is registered
• FASB (regulator) — Issued accounting standards updates
• SEC (regulator) — Recipient of 10-Q filing
• Global components segment (company) — Reportable segment of Arrow Electronics
• Global ECS segment (company) — Reportable segment of Arrow Electronics

FAQ

Risk Factors

• Increased Accounts Receivable [medium — financial]: Accounts receivable increased substantially to $15.66 billion as of September 27, 2025, from $13.03 billion at December 31, 2024. This significant rise could indicate longer collection periods or increased sales on credit, potentially impacting cash flow if not managed effectively.
• Increased Long-Term Debt [medium — financial]: Long-term debt rose to $3.12 billion from $2.77 billion. While this could fund growth, it also increases financial leverage and interest expense, making the company more sensitive to interest rate fluctuations and economic downturns.
• Restructuring and Integration Costs [low — operational]: The company incurred $74.88 million in restructuring, integration, and other costs for the nine months ended September 27, 2025. While lower than the prior year's $121.86 million, these costs can impact profitability and signal ongoing business adjustments.
• Foreign Currency Translation Volatility [medium — market]: The company experienced a significant foreign currency translation adjustment of $(32.22) million for the quarter ended September 27, 2025, and $369.04 million for the nine-month period. This volatility can impact reported earnings and comprehensive income.
• New Accounting Standards [low — regulatory]: The company is evaluating the impact of recently issued accounting standards, such as ASU No. 2024-03 regarding expense disaggregation. Changes in reporting requirements can necessitate system and process adjustments and may affect how financial performance is presented.

Industry Context

Arrow Electronics operates in the highly competitive global technology distribution and services market. The industry is characterized by rapid technological advancements, complex supply chains, and evolving customer demands for integrated solutions. Key trends include the increasing importance of cloud computing, cybersecurity, and the Internet of Things (IoT), driving demand for specialized components and services.

Regulatory Implications

Arrow Electronics must comply with various financial reporting regulations, including GAAP. The company is also subject to evolving accounting standards, such as those related to expense disaggregation, which require careful implementation and disclosure. Compliance with international trade and data privacy regulations is also critical given its global operations.

What Investors Should Do

1. Monitor accounts receivable trends closely.
2. Analyze the impact of increased long-term debt.
3. Evaluate the drivers of the gain on investments.
4. Assess the shift in operating cash flow.

Key Dates

• 2025-09-27: Quarterly Financial Reporting Date — Represents the end of the third fiscal quarter for which financial results are reported, showing increased sales and net income compared to the prior year.
• 2025-12-31: Fourth Quarter and Full Year Close — The company's fiscal year closes on this date, and the fourth quarter results will provide a complete picture of the annual performance.

Glossary

CODM

Chief Operating Decision Maker (Identifies the individual responsible for allocating resources and assessing performance of reportable segments.)

ECS

Enterprise Computing Solutions (One of the company's reportable segments, indicating a specific business area.)

GAAP

Generally Accepted Accounting Principles (The standard framework of guidelines for financial accounting used in the U.S.)

OEMs

Original Equipment Manufacturers (A key customer type for Arrow Electronics, indicating a significant part of their business model.)

SOFR

Secured Overnight Financing Rate (A benchmark interest rate that may affect the company's financing costs.)

VARs

Value-Added Resellers (A type of customer or partner in the distribution channel, relevant to the company's sales strategy.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Arrow Electronics has demonstrated robust top-line growth with sales increasing by 7.1% to $22.11 billion. Net income attributable to shareholders saw a substantial 28.6% rise to $376.66 million, significantly boosted by a $108.98 million gain on investments, a stark contrast to a $0.76 million loss in the prior year. While total assets grew to $24.53 billion, driven by a notable increase in accounts receivable, cash and cash equivalents saw a modest rise. Long-term debt also increased, indicating a higher leverage position.

Key Financial Figures

• $1 — ange on which registered Common Stock, $1 par value ARW New York Stock Exchan

Filing Documents

• arw-20250927x10q.htm (10-Q) — 3298KB
• arw-20250927xex31dia.htm (EX-31.IA) — 14KB
• arw-20250927xex31dib.htm (EX-31.IB) — 14KB
• arw-20250927xex32di.htm (EX-32.I) — 8KB
• arw-20250927xex32dii.htm (EX-32.II) — 8KB
• 0001104659-25-104364.txt ( ) — 11599KB
• arw-20250927.xsd (EX-101.SCH) — 49KB
• arw-20250927_cal.xml (EX-101.CAL) — 53KB
• arw-20250927_def.xml (EX-101.DEF) — 226KB
• arw-20250927_lab.xml (EX-101.LAB) — 461KB
• arw-20250927_pre.xml (EX-101.PRE) — 337KB
• arw-20250927x10q_htm.xml (XML) — 2614KB

Financial Statements (Unaudited)

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

Notes to Consolidated Financial Statements 10 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 31 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 47 Item 4.

Controls and Procedures

Controls and Procedures 47 Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 48 Item 1A.

Risk Factors

Risk Factors 48 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 49 Item 5. Other Information 49 Item 6. Exhibits 50 Signature 51 2 Table of Contents ARROW ELECTRONICS, INC. Glossary of Selected Abbreviated Terms* Abbreviated Term Defined Term AFC Arrow Electronics Funding Corporation ASU Accounting Standard Update CODM Chief Operating Decision Maker 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 segment Global components reportable segment Global ECS segment Global ECS reportable segment 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 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data) (Unaudited) Quarter Ended Nine Months Ended September 27, September 28, September 27, September 28, 2025 2024 2025 2024 Sales $ 7,712,541 $ 6,823,319 $ 22,106,505 $ 20,640,447 Cost of sales 6,877,227 6,038,491 19,648,542 18,151,349 Gross profit 835,314 784,828 2,457,963 2,489,098 Operating expenses: Selling, general, and administrative 587,866 534,508 1,751,172 1,670,429 Depreciation and amortization 32,793 40,592 103,765 123,356 Restructuring, integration, and other 35,648 34,466 74,880 121,859 656,307 609,566 1,929,817 1,915,644 Operating income 179,007 175,262 528,146 573,454 Equity in earnings of affiliated companies 463 1,002 1,124 1,912 Gain (loss) on investments, net 4,859 3,757 108,975 ( 760 ) Loss on extinguishment of debt — — — ( 1,657 ) Post-retirement expense ( 664 ) ( 979 ) ( 1,950 ) ( 2,892 ) Interest and other financing expense, net ( 54,875 ) ( 62,947 ) ( 171,340 ) ( 209,442 ) Income before income taxes 128,790 116,095 464,955 360,615 Provision for income taxes 19,528 15,198 88,807 66,996 Consolidated net income 109,262 100,897 376,148 293,619 Noncontrolling interests 69 330 ( 514 ) 753 Net income attributable to shareholders $ 109,193 $ 100,567 $ 376,662 $ 292,866 Net income per share: Basic $ 2.11 $ 1.90 $ 7.25 $ 5.48 Diluted $ 2.09 $ 1.88 $ 7.19 $ 5.42 Weighted-average shares outstanding: Basic 51,695 53,010 51,935 53,476 Diluted 52,141 53,475 52,381 53,999 See accompanying notes. 4 Table of Contents ARROW ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited) Quarter Ended Nine Months Ended September 27, September 28, September 27, Sep

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Index to Notes Page Note A. Basis of Presentation 11 Note B. Impact of Recently Issued Accounting Standards 11 Note C. Goodwill and Intangible Assets 12 Note D. Investments in Affiliated Companies 13 Note E. Accounts Receivable 13 Note F. Supplier Finance Programs 16 Note G. Debt 16 Note H. Financial Instruments Measured at Fair Value 18 Note I. Restructuring, Integration, and Other 22 Note J. Net Income per Share 24 Note K. Shareholders' Equity 25 Note L. Contingencies 26 Note M. Segment and Geographic Information 27 10 Table of Contents Index to Notes ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A – Basis of Presentation The accompanying consolidated financial statements of Arrow Electronics, Inc. (the "company") 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 the company's audited consolidated financial statements and accompanying notes for the year ended December 31, 2024, as filed in the company's Annual Report on Form 10-K. Quarter End The company operates on a quarterly calendar that closes on the Saturday closest to the end of the calendar quarter, except for the fourth quarter, which closes on December 31, 2025 . Reclassification Certain prior period amounts were reclassified to conform to the current period presentation. These reclassifications did not have a material impact on previously reported amounts. Note B – Impact of Recently Issued Accounting Standards In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires entities to disaggregate expense items in the notes to the financial statements and requires disclosure of specified information related to purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments in this ASU are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Comp

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 Global ECS Total Balance as of December 31, 2024 (a) $ 902,445 $ 1,152,850 $ 2,055,295 Foreign currency translation adjustment 16,501 45,221 61,722 Balance as of September 27, 2025 (a) $ 918,946 $ 1,198,071 $ 2,117,017 (a) The total carrying value of goodwill as of September 27, 2025 and December 31, 2024, in the table above is reflected net of $ 1.6 billion of accumulated impairment charges, of which $ 1.3 billion was recorded in the global components segment and $ 301.9 million was recorded in the global ECS segment. Intangible assets, net, are comprised of the following as of September 27, 2025: Gross Carrying Accumulated (thousands) Amount Amortization Net Customer relationships $ 192,700 $ ( 122,373 ) $ 70,327 Amortizable trade name 74,001 ( 62,542 ) 11,459 $ 266,701 $ ( 184,915 ) $ 81,786 Intangible assets, net, are comprised of the following as of December 31, 2024: Gross Carrying Accumulated (thousands) Amount Amortization Net Customer relationships $ 215,366 $ ( 133,927 ) $ 81,439 Amortizable trade name 74,001 ( 58,734 ) 15,267 $ 289,367 $ ( 192,661 ) $ 96,706 During the third quarter of 2025 and 2024, the company recorded amortization expense related to identifiable intangible assets of $ 4.8 million and $ 7.3 million, respectively. During the first nine months of 2025 and 2024, amortization expense related to id

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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: September 27, December 31, (thousands) 2025 2024 Marubun/Arrow $ 43,583 $ 43,851 Other 14,553 13,448 $ 58,136 $ 57,299 The equity in earnings of affiliated companies consists of the following: Quarter Ended Nine Months Ended September 27, September 28, September 27, September 28, (thousands) 2025 2024 2025 2024 Marubun/Arrow $ 189 $ 528 $ 254 $ 614 Other 274 474 870 1,298 $ 463 $ 1,002 $ 1,124 $ 1,912 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 September 27, 2025 and December 31, 2024. 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: September 27, December 31, (thousands) 2025 2024 Accounts receivable $ 15,782,917 $ 13,147,436 Allowance for credit losses ( 126,101 ) ( 116,445 ) Accounts receivable, net $ 15,656,816 $ 13,030,991 Accounts receivable includes balances related to inventory purchased by the company as part of its global components supply chain services offerings

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The following table is a rollforward for the company's allowance for credit losses: Nine Months Ended September 27, September 28, (thousands) 2025 2024 Balance at beginning of period $ 116,445 $ 146,480 Charged (credited) to income 14,817 ( 16,866 ) Translation adjustments 4,183 ( 102 ) Write-offs ( 9,344 ) ( 26,447 ) Balance at end of period $ 126,101 $ 103,065 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 September 27, 2025. For the first nine months ended September 28, 2024, the net benefit recorded to income of $ 16.9 million includes a $ 20.0 million reversal of an allowance previously recorded in the global ECS segment for aged receivables that were collected during the second quarter of 2024. EMEA Asset Securitization The company has an EMEA asset securitization program under which it continuously sells its interest in designated pools of trade accounts receivable of certain of its subsidiaries in the EMEA region at a discount to a special purpose entity, which in turn sells certain of the receivables to unaffiliated financial institutions and conduits administered by such unaffiliated financial institutions ("unaffiliated financial institutions") on a monthly basis. The company may sell up to 600.0 million under the EMEA asset securitization program, which matures in December 2027, subject to extension in accordance with its terms. The program is conducted through Arrow EMEA Funding Corp B.V., an entity structured to be bankruptcy remote. The company is deemed the primary beneficiary of Arrow EMEA Funding Corp B.V. as the company has both the power to direct the activities that most significantly impact the entity's economic performance and the obligation to absorb lo

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The company continues servicing the receivables which were sold and in exchange receives a servicing fee under the program. The company does not record a servicing asset or liability on the company's consolidated balance sheets as the company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities. Other amounts related to the EMEA asset securitization program are set forth below: September 27, December 31, (thousands) 2025 2024 Receivables sold to unaffiliated financial institutions that were uncollected $ 331,071 $ 339,669 Collateralized accounts receivable held by Arrow EMEA Funding Corp B.V. 655,844 528,975 Any accounts receivable held by Arrow EMEA Funding Corp B.V. would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings if there are outstanding balances under the EMEA asset securitization program. The assets of the special purpose entity cannot be used by the company for general corporate purposes. Additionally, the financial obligations of Arrow EMEA Funding Corp B.V. to the unaffiliated financial institutions under the program are limited to the assets it owns and there is no recourse to Arrow Electronics, Inc. for receivables that are uncollectible as a result of an account debtor's insolvency or inability to pay. The EMEA asset securitization program includes terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. As of September 27, 2025, 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 instituti

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