Arrow Electronics Q1 2025 Earnings Call Transcript

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May 1, 2025
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Operator

Good day, and welcome to the Arrow Electronics First Quarter twenty twenty five Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brad Windbigler, Arrow's Treasurer and Vice President of Investor Relations. Please go ahead.

Brad Windbigler
Brad Windbigler
Vice President, Investor Relations and Treasurer at Arrow Electronics

Thank you, operator. I'd like to welcome everyone to the Arrow Electronics first quarter twenty twenty five earnings conference call. Joining me on the call today is our President and Chief Executive Officer, Sean Caron our Chief Financial Officer, Raj Agarwal our President of Global Components, Rick Murano and our President of Global Enterprise Computing Solutions, Eric Nowak. During this call, we'll make forward looking statements, including statements about our business outlook, strategies, plans, and future financial results, which are based on our predictions and expectations as of today. Our actual results could differ materially due to a number of risks and uncertainties, including due to the risk factors and other factors described in this quarter's associated earnings release and our most recent annual report on Form 10 ks and other filings with the SEC.

Brad Windbigler
Brad Windbigler
Vice President, Investor Relations and Treasurer at Arrow Electronics

We undertake no obligation to update publicly or revise any of the forward looking statements as a result of new information or future events. As a reminder, some of the figures we will discuss on today's call are non GAAP measures, which are not intended to be a substitute for our GAAP results. We've reconciled these non GAAP measures to the most directly comparable GAAP financial measures in this quarter's associated earnings release. You can access our earnings release at investor.arrow.com along with a replay of this call. We've also posted a slide presentation to this website to accompany our prepared remarks and encourage you to reference these slides during the webcast.

Brad Windbigler
Brad Windbigler
Vice President, Investor Relations and Treasurer at Arrow Electronics

Following our prepared remarks today, Sean and Raj will be available to take your questions. I'll now hand the call over to our President and CEO, Sean Carrance.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

Thank you, Brad, and thank you all for joining us. Today, I'd like to discuss our first quarter performance, provide some commentary on the broader market environment, and then close with some thoughts as we look to the balance of the year. I'll then turn things over to Raj for more detail on our financials as well as our outlook for the second quarter. For the first quarter, I'm pleased to report both consolidated and segment sales as well as earnings per share that exceeded the high end of our guidance ranges. The overachievement was a function of several factors, most notably in Global Components, we saw improving trends across the broader market, including healthy momentum in EMEA.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

Our Enterprise Computing Solutions business delivered year over year billings growth with solid operating leverage and we continue to benefit from both our value added offerings and our ongoing expense management initiatives. Now taking a closer look at our Global Components business. Our first quarter results were highlighted by stronger sales than anticipated with all three regions performing ahead of typical seasonality. In addition to the momentum we cited in EMEA, we saw sequential improvement in our industrial markets on a global basis alongside resilience in transportation, especially in the West. Both verticals represent a significant portion of our overall mix.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

We also enjoyed sequential growth in the market for IP and E underscoring our continued initiative to specialize our go to market efforts in this attractive segment. Lastly, our value added offerings, namely supply chain management and integration services were once again accretive to our operating results. Now for some color commentary on a regional basis. Our results in The Americas were highlighted by a return to sequential growth in both the Industrial and Transportation segments. In Asia, we saw improving momentum across a number of verticals including Compute and Consumer Markets.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

And given first quarter Lunar New Year celebrations, we were pleased to see sales results ahead of seasonal expectations. And then finally, our performance in EMEA was marked by strong sales activity in our industrial, transportation and aerospace and defense verticals. Taking a closer look at the market more broadly, our leading indicators continue to trend positively. Our book to bill ratios improved throughout the quarter and now sit at or above parity in all three regions. Even with steady and manageable lead times, our backlog is growing again and should contribute to improving visibility.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

And notably, industry wide intelligence continues to indicate customer inventory levels in the areas of the market are trending for replenishment. Considering these and other factors, our guidance reflects our belief that demand trends are at a cyclical turning point and the business is beginning to return to more normal seasonal patterns, creating a foundation for the future. As we move into the second quarter and consistent with the earlier stages of cyclical improvement, we do anticipate stronger trends in Asia and across the larger OEM customer base. Finally, rapidly evolving trade policies are clearly top of mind throughout the electronics industry. While we continue to both assess and mitigate the impacts of tariffs to our business, our top priority lies with our suppliers and customers.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

Leveraging our global supply chain network and related services offerings, whether aimed at improving their supply chain visibility or guiding them through effective component level selection, sourcing and staging options, we are well poised to help them navigate an uncertain trade landscape. Specific to the impact of tariffs on near term demand trends, we've not yet seen changes in customer behavior in the form of order acceleration to any material degree. While the tariff environment remains highly fluid and until the dust fully settles, longer term implications are more difficult to predict. Now turning to our global ECS business. In the first quarter, we again delivered year over year growth in billings, gross profit and operating income.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

Generally speaking, what we experienced in the fourth quarter of twenty twenty four continued into the early stages of 2025. Our top line momentum was characterized by continued strength in cloud and infrastructure software along with an uptick in hybrid cloud technologies. Regionally, our performance in EMEA was broad based with growth across all of our enterprise technology categories. And in North America, we saw improving activity levels in the enterprise data center along with continued acceleration of our cloud portfolio. Most importantly, our ECS backlog grew in the first quarter by more than 50% year over year.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

We believe this reflects our ongoing alignment to the higher growth demand trends across Enterprise IT, many of which are now being served on an as a service basis. This continues to contribute to the growth of our recurring revenue volumes now approaching one third of our total billings mix. Last quarter, we highlighted several factors that gave us a level of optimism regarding our full year outlook. These include recent supplier and customer base expansion wins along with the continued adoption of our Aerosphere digital platform. Given that context, our second quarter outlook reflects continued momentum in both regions poised again for year over year growth in billings, gross profit and operating income when normalized.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

In closing, we're encouraged by the positive momentum we see in both of our operating segments. We believe it's the result of modestly improving demand trends and our relentless pursuit of our growth priorities. While we recognize the current broader economic and geopolitical landscape contributes to uncertainty, we remain focused on the factors within our control, those that we believe will keep the business on an improving trajectory. Lastly, I'm grateful for and impressed by the resilience of all of our Arrow teams and employees across the globe. They continue to lead us through the most pronounced cyclical correction in recent memory and they do so with determination and dedication each and every day.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

With that, I'll hand things over to Raj.

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

Thanks, Sean. Consolidated sales for the first quarter were $6,800,000,000 exceeding our guidance range and down 2% versus prior year or flat year over year on a constant currency basis. Global Components sales were $4,800,000,000 above our guidance range and down 1% versus prior quarter or flat sequentially in constant currency terms. Enterprise computing solutions sales were $2,000,000,000 above our guidance range and 18% higher versus prior year or 19% higher year over year in constant currency. ECS billings grew 5% in the quarter compared to the same period last year.

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

Moving to other financial metrics for the quarter. First quarter consolidated non GAAP gross margin of 11.3% was down approximately 120 basis points versus prior year, driven primarily by overall mix in both Global Components and ECS. Sequentially, our consolidated gross margin was lower by 40 basis points due to seasonality within the ECS business. Global Components gross margin was 11.6% and Enterprise Computing Solutions was 10.8% both on a non GAAP basis. Our first quarter non GAAP operating expenses grew $13,000,000 sequentially to $593,000,000 as we balance managing costs with reinvestment priorities.

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

Non GAAP expense levels continued to decline year over year with the first quarter approximately $25,000,000 lower compared to the same period last year, demonstrating the results of recent initiatives and our continuing focus on expense efficiency. In the first quarter, we generated non GAAP operating income of $179,000,000 which was 2.6% of sales with Global Components operating margin at 3.6% and Enterprise Computing Solutions at 3.8% both on a non GAAP basis. Interest and other expense was $56,000,000 in the first quarter and our non GAAP effective tax rate was 22.9%. And finally, non GAAP diluted EPS for the first quarter was $1.8 which was above our guided range mainly due to favorable sales results. Turning to working capital.

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

Net working capital declined sequentially in the first quarter by approximately $340,000,000 ending the quarter at $6,400,000,000 Inventory at the end of the first quarter was $4,800,000,000 Our cash conversion cycle was unchanged in the first quarter at seventy seven days. Our cash flow from operations was $352,000,000 in the first quarter. This was the seventh consecutive quarter of positive cash flow generation. Gross balance sheet debt at the end of the first quarter was $2,800,000,000 We repurchased $50,000,000 of shares in the first quarter and our remaining repurchase authorization stands at approximately $275,000,000 In the short term, we are continuing to balance our capital priorities with managing our debt ratios. Now turning to Q2 guidance.

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

We expect sales for the second quarter to be between $6,700,000,000 and $7,300,000,000 We expect Global Components sales to be between 4,800,000,000 and $5,200,000,000 which at the midpoint is up 4.6% from prior quarter. In Enterprise Commuting Solutions, we expect sales to be between $1,900,000,000 and $2,100,000,000 which is approximately up 7.5% at the midpoint year on year. Recent tariffs represent uncertainty, but we have not factored in recently enacted policies into our revenue guidance. Based on what we know today and current policy, we estimate that incremental tariffs could increase Global Components sales by two to four percentage points sequentially and we expect minimal impact on ECS sales. While tariffs introduce significant complexity, we are working with suppliers and customers end to end and our focus remains on mitigating impacts through intelligent routing and where necessary passing through and collecting incremental costs and potential credits.

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

We are assuming a tax rate in the range of approximately 23% to 25% and interest expense of approximately $60,000,000 And our non GAAP diluted earnings per share is expected to be between $1.9 and $2.1 And finally, given recent weakness in the U. S. Dollar, particularly relative to the euro, we estimate changes in foreign currencies to be a tailwind in the second quarter, increasing reported sales by approximately 80 basis points or $60,000,000 compared to the second quarter of twenty twenty four. The details of foreign currency impact can be found in our earnings release. With that, Sean and I are now ready to take your questions.

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

Operator, please open the line.

Operator

Our first question will come from the line of Joe Cotrochi with Wells Fargo. Please go ahead.

Joe Quatrochi
Joe Quatrochi
Director & Equity Research Analyst at Wells Fargo

Yes, thanks for taking the questions. Maybe first just in terms of the guidance commentary, can you help us just maybe understand a little bit more of what you're trying to say in terms of the 2% to 4% increase in component sales not included in the guide? Is that to mean that essentially that price increases or surcharges or whatever you want to call it for tariffs that's not contemplated in your guide for tariffs that could potentially go into effect for semiconductors that are right now exempt? And then how do you think about, I guess, like the pass through of that? Or is that a potential kind of risk to EBIT as we think about the guidance?

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

Hey, Joe. Sure thing. Let me offer a little context as to how we've approached, you know, the tariffs, puzzle, and then I'll let Raj maybe speak to some of the details. He's been in the thick of this for several weeks now, as you might imagine. So as you probably know, tariffs aren't good for us, but we do recognize, how much more complex the recently implemented tariffs are.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

And so we've been taking that pretty seriously. Based on what's actually been implemented, we feel like we've got a pretty good handle on the top line estimate, and that's where the 2% to 4% comes from. And you're right, that would represent basically surcharges or price uplifts to reflect the charges that we have to pass on and that we can't mitigate otherwise. But we've also got a whole variety of mechanisms either in place or being put in place to mitigate margin risk. Those include things like intelligent sourcing and routing, foreign trade zone capabilities, and then a whole variety of process changes that we're implementing throughout our selling and support operations.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

I think even if existing or more significant tariffs don't take hold for the full year, we still have to largely assume they will and plan accordingly so that we're prepared accordingly. I think we feel like Q2 is going to be a very transitional quarter. There's still plenty of confusion at the customer level, a lot of uncertainty surrounding what's ultimately going to play out. So with that, let Raj maybe speak a little bit more to some of the numbers and how we're approaching the financials.

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

Yeah, Joe. We did want to call out the potential impact of the current tariff policies in a separate range because it is volatile. It keeps moving around as you know. It's certainly complex as Sean just described. And so it is meant to be a two to four percentage point incremental benefit to the top line of global components.

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

That's not in our baseline guide. Our baseline guide is really meant to show you what we believe the core business is doing. Before we talk about the incremental impact of current tariff policy, to the extent that something goes into place, after today, that's not envisioned. It really is based on what we know today that's gonna impact the top line. So we wanted to make sure that was called out separately, so it's very clear to you on on the impacts that we're talking about.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

And and part of the reason for that, Joe, is we really wanted to give you our best view of the underlying business and how the cycle is really playing out because we think we're at kind of a modest turning point, and we didn't want to conflate the two conversations.

Joe Quatrochi
Joe Quatrochi
Director & Equity Research Analyst at Wells Fargo

Yeah. Understood. And I guess just to clarify, and I've got a follow-up. But just to clarify, the 2% to 4% assumes that like the export exemptions for semiconductors into The U. S.

Joe Quatrochi
Joe Quatrochi
Director & Equity Research Analyst at Wells Fargo

That's currently enacted continues to the entire quarter. Is that the right way to think about it?

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

Yeah. Yeah. The 2% to 4% assumes that everything that's in place as of right now continues on for the balance of the quarter. Obviously, things could change, but we've not assumed any change at this stage.

Joe Quatrochi
Joe Quatrochi
Director & Equity Research Analyst at Wells Fargo

Okay. And then just as a follow-up, you talked about customer inventories trending towards replenishment kind of stages. I guess how do we think about that comment relative to Arrow's inventory and trends that we should expect to see there? Obviously, inventory stayed somewhat elevated here. I guess is it the right inventory in terms of where you're seeing the pull from customers?

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

Yes. Joe, in general, we think we're at a pretty good level. Just as a reminder, I think we talked about last quarter that since late 'twenty three, inventories had come down over $1,000,000,000 from their peak. I think we would consider the uptick in the first quarter this year as fairly marginal. But your instinct is right.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

We feel like our turns are roughly in line with current sales levels. They're kind of in line with historical ranges, so we feel pretty good about them. It doesn't mean that there aren't still pockets of excess inventory with certain component types, but we're pretty comfortable that the aging profile of our inventory continues to improve. And as the industry continues to eat through pockets of excess, you know, the good news here is that we see our inventory levels normalizing, you know, more closely in line with actual demand signals. And that's kind of where we want to be, and that will tell us that, you know, the market is normalizing in the right direction.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

I would say, though, to your point, since we're starting to see, you know, signs of incremental improvement, you know, we also wanna be on our front feet, not our heels. And so we've gotta be conscious of, you know, what customers are gonna need, and we wanna be able to support, growth as and when the market recovers.

Joe Quatrochi
Joe Quatrochi
Director & Equity Research Analyst at Wells Fargo

Okay. Thanks. Thanks for the details.

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

Sure.

Operator

Our next question comes from the line of William Stein with Truist Securities. Please go ahead.

William Stein
William Stein
Managing Director/Senior Research Analyst - Technology at Truist Securities

Great. Thank you. I'd like to revisit the inventory question. Maybe I didn't follow the question or the answer, but let me set it up this way. We just saw inventory increase and your inventory days are still, I don't know, fifteen or twenty days above where you were a few years ago.

William Stein
William Stein
Managing Director/Senior Research Analyst - Technology at Truist Securities

Perhaps what you're saying, and if so, that's fine. I just want to get it clear. Is this the approximately correct long term level of inventories that we're shooting for? Or are we still at an elevated level where over time we are trying to take it down?

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

Will, I would start by saying that there are still some pockets of excess in our inventory profile, as I just mentioned. We have seen the aging profile improve. There's still probably a little bit more work to do. So, turns could get incrementally better across the course of the year, especially if what we suspect is playing out does play out. But it won't be dramatic.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

We don't feel we're far from where we ought to be. And I would say the one incremental difference between, you know, where we sit now versus where we might have a few years ago is we have been somewhat intentional about our commitment to the market for IP and E. That does require a different working capital profile so we can serve that business in the way that, you know, it's become accustomed to being served. But beyond that, no, we think we're we're in the right neighborhood.

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

Yeah. I'll just add, Will, that, you know, over the last, year or since the peak of inventory levels that we had, we've actually bottomed down by about a billion dollars. And, you know, so I think that's a good result. We've also generated a lot of cash flow, which is what you would expect when the business is declining. But now as we go into growth mode, you know, as you look at the absolute dollars, you know, we're going to wanna deploy working capital wherever it's needed.

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

So, yeah, the the turns may look different or the number of days may look different, but those things will improve as the business grows.

William Stein
William Stein
Managing Director/Senior Research Analyst - Technology at Truist Securities

Thank you. That's very helpful. One other if I can. Think you posted upside relative to the high end in both end markets, but I wanted to focus on the systems business for a moment. Very strong revenue performance, especially relative to how you guided, and you've highlighted strength in Europe.

William Stein
William Stein
Managing Director/Senior Research Analyst - Technology at Truist Securities

A dynamic that many companies have highlighted this quarter is pull ins in response to elevated future risks from tariffs. And I wonder if you think that is not what we're seeing in your business. And if not, can you explain it for us?

Raj Agrawal
Raj Agrawal
CFO & Senior VP at Arrow Electronics

Thank you.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

Yeah. Sure thing, Will. I kind of expected that question for the components business, not the ECS business, but there you go. We're pretty confident that we've not All right. Well, let's start with where you started on the ECS business.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

First of all, would just say the short answer is we're pretty confident that our outlook does not reflect any order acceleration in that business. And what we, I think, mentioned in our prepared remarks, we feel really good about, which is the momentum we saw to close out the year continued into Q1, and we kind of see more of the same in Q2. We're kind of striking a good balance between the above average growth rates we're continuing to enjoy in cloud along with some improvement in the traditional data center for hybrid cloud infrastructure along with continued growth in our infrastructure software portfolio. So I would say steady as she goes. We're obviously trying to make sure that we continue to execute as well in North America as we have been in Europe, but we like the path we're on.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

And it's important not to confuse reported sales line with the gross billings line because what that will do from time to time is sort of create some volatility in the reported sales number from one quarter to the next, and that's largely a function of how we account for all the different SKUs that team sells. But if you look at the underlying operating margins on a billings basis, they were flat year over year in Q1, and we assume they'll be at least flat year over year in Q2. The reported sales number will vary, but the underlying health of the business is strong and improving.

William Stein
William Stein
Managing Director/Senior Research Analyst - Technology at Truist Securities

Thank you.

Operator

And our next question comes from the line of Joseph Lehman with Bank of America. Please go ahead.

Analyst

Hi. This is Joseph on for Ruplu. Were you seeing any pull forward in the quarter?

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

Hey, Joe. I assume your question is one more about our electronics business. And, here's how we would answer that question. Yeah. I'd start with, we didn't really see any any material impacts, in that way, in q one.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

And then we don't really see a whole lot of that playing out in our Q2 outlook either. We are seeing some of that in Asia, specifically China this quarter, but we don't think it's going to move the needle. And then when we look at our business in The U. S. Where you'd expect, you know, that question to be very valid, you know, we're obviously monitoring this very closely.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

But, you know, when we break it down, we haven't seen an uptick in our quick turns activity. That would be evidence of a lot of order expedites, and we haven't seen that. And when we look at the backlog for our U. S. Business, we feel kind of good because it's not just building in magnitude, it's building out in time, meaning into Q3 and Q4.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

And, obviously, if it was more about tariff avoidance, it would be, you know, more of the immediate term. And we haven't seen any abnormal, you know, uptick in order activity related to, basically country of origin China, for content. So all of those things tell us, you know, this outlook is, you know, probably not overly impacted by any of the tariff avoidance activity as best as we can see it today.

Analyst

Okay. Thank you. That makes a

Analyst

lot of sense. And then just one follow-up. So would you say you have improving visibility in C2H '20 '5?

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

Yeah. Visibility is improving. We always said the preconditions for an uptick as we go through this cycle would be, first of all, industry wide inventory levels have got to come down, right? The industry has got to eat through all the excess. And so we think what we're seeing, what we saw in Q1 certainly in Europe and what we see in Q2 is a level of replenishment playing out.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

That had to happen. And then beyond that, you sort of say, well, what's going to signal the potential for recovery? And we've always focused on three things: one, our book to bill ratios have to improve and they have two, backlog has to grow again. It grew again for the first time in quite some time in Q1, and we expect it to grow again in Q2. And as part of that, the backlog, as I said, is building out in time, not just in magnitude.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

So, our visibility into Q3 and Q4 is improving. And then the third condition, we always pay close attention to the whole portfolio of suppliers we represent because ultimately they're going to lead us out of this. And as we see their guides improve, we think ours should follow.

Analyst

Okay. Thank you.

Sean Kerins
Sean Kerins
CEO & President at Arrow Electronics

Thanks, Joe.

Operator

And that will conclude our question and answer session. I'll turn the call back over to Bradwin Bigler for any closing comments.

Brad Windbigler
Brad Windbigler
Vice President, Investor Relations and Treasurer at Arrow Electronics

Thank you all again for joining today's call. Have a great day.

Operator

Ladies and gentlemen, that will conclude today's call. Thank you all for joining. You may now disconnect.

Executives
    • Brad Windbigler
      Brad Windbigler
      Vice President, Investor Relations and Treasurer
    • Sean Kerins
      Sean Kerins
      CEO & President
    • Raj Agrawal
      Raj Agrawal
      CFO & Senior VP
Analysts
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Key Takeaways

  • In Q1, Arrow exceeded the high end of its guidance for consolidated sales, segment sales, and EPS, driven by stronger-than-expected Global Components trends and year-over-year growth in Enterprise Computing Solutions.
  • Global Components outperformed typical seasonality in all regions, with healthy momentum in EMEA, sequential improvement in industrial and transportation markets, and accretive value-added supply chain and integration services.
  • Enterprise Computing Solutions delivered 18% year-over-year billings growth, with backlog up over 50%, underpinned by strength in cloud, infrastructure software, hybrid cloud technologies, and recurring revenue now comprising about one-third of billings.
  • Key market indicators improved as book-to-bill ratios reached or exceeded parity in all regions, backlog growth resumed, and customer inventory levels began trending toward replenishment, suggesting a cyclical turning point.
  • For Q2, Arrow expects sales of $6.7–$7.3 billion (Global Components up ~4.6% sequentially; ECS up ~7.5% year-over-year), with a potential incremental 2–4 pp sales tailwind in Components from tariffs and an ~80 bp FX benefit.
A.I. generated. May contain errors.
Earnings Conference Call
Arrow Electronics Q1 2025
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