UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 29, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-4482

ARROW ELECTRONICS, INC.

(Exact name of registrant as specified in its charter)


New York		11-1806155
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)


9151 East Panorama Circle		80112
Centennial CO		(Zip Code)
(Address of principal executive offices)

(303) 824-4000

(Registrant’s telephone number, including area code)

No Changes

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of the exchange on which registered
Common Stock, $1 par value	ARW	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

There were 52,944,169 shares of Common Stock outstanding as of July 25, 2024.

Table of Contents

ARROW ELECTRONICS, INC.

Table of Contents


Part I.	Financial Information

	Item 1.	Financial Statements
		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	9

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	37

	Item 4.	Controls and Procedures	38

Part II.	Other Information

	Item 1.	Legal Proceedings	39

	Item 1A.	Risk Factors	39

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

	Item 5.	Other Information	39

	Item 6.	Exhibits	40

Signature			41

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ARROW ELECTRONICS, INC.

Glossary of Selected Abbreviated Terms*


Abbreviated Term	Defined Term
AFC	Arrow Electronics Funding Corporation
ASU	Accounting Standard Update
CMs	Contract Manufacturers
CODM	Chief Operating Decision Maker
CTA	Foreign Currency Translation Adjustment
ECS	Enterprise Computing Solutions
EMEA	Europe, the Middle East, and Africa
FASB	Financial Accounting Standards Board
GAAP	Generally Accepted Accounting Principles
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
2.95% notes	2.95% notes, due 2032
3.25% notes	3.25% notes, due September 2024
3.875% notes	3.875% notes, due 2028
4.00% notes	4.00% notes, due 2025
5.875% notes	5.875% notes, due 2034
6.125% notes	6.125% notes, due 2026
7.50% notes	7.50% senior debentures, due 2027

* Terms used, but not defined, within the body of the Form 10-Q are defined in this Glossary.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share data)

(Unaudited)


	Quarter Ended				Six Months Ended
	June 29,		July 1,		June 29,		July 1,
	2024		2023		2024		2023
Sales	$	6,892,868	$	8,514,516	$	13,817,128	$	17,250,944
Cost of sales		6,046,424		7,448,467		12,112,858		15,071,073
Gross profit		846,444		1,066,049		1,704,270		2,179,871
Operating expenses:
Selling, general, and administrative		552,595		617,202		1,135,921		1,259,633
Depreciation and amortization		41,037		46,264		82,764		92,943
Restructuring, integration, and other		40,537		10,333		87,393		12,893
		634,169		673,799		1,306,078		1,365,469
Operating income		212,275		392,250		398,192		814,402
Equity in earnings of affiliated companies		1,254		3,061		910		2,981
(Loss) gain on investments, net		(4,615)		497		(4,517)		10,808
Loss on extinguishment of debt		(1,657)		—		(1,657)		—
Employee benefit plan expense, net		(980)		(803)		(1,913)		(1,656)
Interest and other financing expense, net		(66,891)		(84,834)		(146,495)		(164,492)
Income before income taxes		139,386		310,171		244,520		662,043
Provision for income taxes		29,762		72,380		51,798		148,927
Consolidated net income		109,624		237,791		192,722		513,116
Noncontrolling interests		926		1,232		423		2,807
Net income attributable to shareholders	$	108,698	$	236,559	$	192,299	$	510,309

Net income per share:
Basic	$	2.03	$	4.17	$	3.56	$	8.84
Diluted	$	2.01	$	4.12	$	3.53	$	8.74
Weighted-average shares outstanding:
Basic		53,640		56,720		53,944		57,726
Diluted		54,181		57,355		54,496		58,409

See accompanying notes.

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ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Quarter Ended				Six Months Ended
	June 29,		July 1,		June 29,		July 1,
	2024		2023		2024		2023
Consolidated net income	$	109,624	$	237,791	$	192,722	$	513,116
Other comprehensive income (loss):
Foreign currency translation adjustment and other, net of taxes		(24,416)		(1,343)		(123,691)		9,942
Gain (loss) on foreign exchange contracts designated as net investment hedges, net of taxes		1,378		(4,043)		4,976		(4,476)
(Loss) gain on interest rate swaps designated as cash flow hedges, net of taxes		(226)		5,447		303		1,738
Employee benefit plan items, net of taxes		(502)		(298)		(593)		(570)
Other comprehensive (loss) income		(23,766)		(237)		(119,005)		6,634
Comprehensive income		85,858		237,554		73,717		519,750
Less: Comprehensive income (loss) attributable to noncontrolling interests		696		(1,377)		(955)		3,275
Comprehensive income attributable to shareholders	$	85,162	$	238,931	$	74,672	$	516,475

See accompanying notes.

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ARROW ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands except par value)

(Unaudited)


	June 29,			December 31,
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	213,009	$	218,053
Accounts receivable, net		10,886,501		12,238,073
Inventories		4,654,793		5,187,225
Other current assets		1,010,942		684,126
Total current assets		16,765,245		18,327,477
Property, plant, and equipment, at cost:
Land		5,691		5,691
Buildings and improvements		190,109		195,579
Machinery and equipment		1,623,869		1,632,606
		1,819,669		1,833,876
Less: Accumulated depreciation and amortization		(1,319,945)		(1,303,136)
Property, plant, and equipment, net		499,724		530,740
Investments in affiliated companies		60,400		62,741
Intangible assets, net		112,470		127,440
Goodwill		2,052,701		2,050,426
Other assets		617,226		627,344
Total assets	$	20,107,766	$	21,726,168
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	8,770,862	$	10,070,015
Accrued expenses		1,687,273		1,463,915
Short-term borrowings, including current portion of long-term debt		860,538		1,653,954
Total current liabilities		11,318,673		13,187,884
Long-term debt		2,479,313		2,153,553
Other liabilities		495,730		507,424
Contingencies (Note L)
Equity:
Shareholders’ equity:
Common stock, par value $1:
Authorized - 160,000 shares in both 2024 and 2023
Issued - 58,046 and 57,691 shares in 2024 and 2023		58,046		57,691
Capital in excess of par value		574,530		553,340
Treasury stock (5,101 and 3,880 shares in 2024 and 2023, respectively), at cost		(456,123)		(297,745)
Retained earnings		5,982,516		5,790,217
Accumulated other comprehensive loss		(415,666)		(298,039)
Total shareholders’ equity		5,743,303		5,805,464
Noncontrolling interests		70,747		71,843
Total equity		5,814,050		5,877,307
Total liabilities and equity	$	20,107,766	$	21,726,168

See accompanying notes.

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ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Six Months Ended
	June 29,		July 1,
	2024		2023
Cash flows from operating activities:
Consolidated net income	$	192,722	$	513,116
Adjustments to reconcile consolidated net income to net cash provided by operations:
Depreciation and amortization		82,764		92,943
Amortization of stock-based compensation		21,700		28,349
Equity in earnings of affiliated companies		(910)		(2,981)
Deferred income taxes		(7,398)		(33,399)
Loss on extinguishment of debt		1,657		—
Loss (gain) on investments, net		4,763		(10,808)
Other		4,864		2,986
Change in assets and liabilities, net of effects of acquired businesses:
Accounts receivable, net		1,213,562		1,324,772
Inventories		493,474		(141,373)
Accounts payable		(1,237,812)		(1,513,259)
Accrued expenses		273,043		(215,583)
Other assets and liabilities		(319,038)		52,237
Net cash provided by operating activities		723,391		97,000
Cash flows from investing activities:
Acquisition of property, plant, and equipment		(51,636)		(37,105)
Other		6,452		10,962
Net cash used for investing activities		(45,184)		(26,143)
Cash flows from financing activities:
Change in short-term and other borrowings		(1,144,520)		198,339
Proceeds from (repayments of) long-term bank borrowings, net		673,607		(9,426)
Net proceeds from note offering		494,678		496,268
Redemption of notes		(500,000)		(300,000)
Proceeds from exercise of stock options		4,768		16,381
Repurchases of common stock		(163,301)		(516,217)
Settlement of forward-starting interest rate swap		—		56,711
Other		(141)		(142)
Net cash used for financing activities		(634,909)		(58,086)
Effect of exchange rate changes on cash		(48,342)		50,696
Net (decrease) increase in cash and cash equivalents		(5,044)		63,467
Cash and cash equivalents at beginning of period		218,053		176,915
Cash and cash equivalents at end of period	$	213,009	$	240,382

See accompanying notes.

Table of Contents

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

(Unaudited)


									Accumulated
	Common		Capital in						Other
	Stock at Par		Excess of Par		Treasury		Retained		Comprehensive		Noncontrolling
	Value		Value		Stock		Earnings		Loss		Interests		Total
Balance at December 31, 2023	$	57,691	$	553,340	$	(297,745)	$	5,790,217	$	(298,039)	$	71,843	$	5,877,307
Consolidated net income (loss)		—		—		—		83,601		—		(503)		83,098
Other comprehensive loss		—		—		—		—		(94,091)		(1,148)		(95,239)
Amortization of stock-based compensation		—		13,447		—		—		—		—		13,447
Shares issued for stock-based compensation awards		264		(1,621)		4,286		—		—		—		2,929
Repurchases of common stock		—		—		(112,204)		—		—		—		(112,204)
Balance at March 30, 2024	$	57,955	$	565,166	$	(405,663)	$	5,873,818	$	(392,130)	$	70,192	$	5,769,338
Consolidated net income		—		—		—		108,698		—		926		109,624
Other comprehensive loss		—		—		—		—		(23,536)		(230)		(23,766)
Amortization of stock-based compensation		—		8,253		—		—		—		—		8,253
Shares issued for stock-based compensation awards		91		1,111		637		—		—		—		1,839
Repurchases of common stock		—		—		(51,097)		—		—		—		(51,097)
Distributions		—		—		—		—		—		(141)		(141)
Balance at June 29, 2024	$	58,046	$	574,530	$	(456,123)	$	5,982,516	$	(415,666)	$	70,747	$	5,814,050


									Accumulated
	Common		Capital in						Other
	Stock at Par		Excess of Par		Treasury		Retained		Comprehensive		Noncontrolling
	Value		Value		Stock		Earnings		Loss		Interests		Total
Balance at December 31, 2022	$	125,424	$	1,208,708	$	(4,637,345)	$	9,214,832	$	(365,262)	$	64,996	$	5,611,353
Consolidated net income		—		—		—		273,750		—		1,575		275,325
Other comprehensive income		—		—		—		—		3,794		3,077		6,871
Amortization of stock-based compensation		—		19,497		—		—		—		—		19,497
Shares issued for stock-based compensation awards		—		(25,071)		31,005		—		—		—		5,934
Repurchases of common stock		—		—		(318,800)		—		—		—		(318,800)
Balance at April 1, 2023	$	125,424	$	1,203,134	$	(4,925,140)	$	9,488,582	$	(361,468)	$	69,648	$	5,600,180
Consolidated net income		—		—		—		236,559		—		1,232		237,791
Other comprehensive income (loss)		—		—		—		—		2,372		(2,609)		(237)
Amortization of stock-based compensation		—		8,852		—		—		—		—		8,852
Shares issued for stock-based compensation awards		—		(8,922)		19,369		—		—		—		10,447
Repurchases of common stock		—		—		(202,417)		—		—		—		(202,417)
Distributions		—		—		—		—		—		(142)		(142)
Balance at July 1, 2023	$	125,424	$	1,203,064	$	(5,108,188)	$	9,725,141	$	(359,096)	$	68,129	$	5,654,474

See accompanying notes.

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Index to Notes

ARROW ELECTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Index to Notes


		Page

Note A. Basis of Presentation		10
Note B. Impact of Recently Issued Accounting Standards		10
Note C. Goodwill and Intangible Assets		11
Note D. Investments in Affiliated Companies		12
Note E. Accounts Receivable		12
Note F. Supplier Finance Programs		14
Note G. Debt		15
Note H. Financial Instruments Measured at Fair Value		17
Note I. Restructuring, Integration, and Other		20
Note J. Net Income per Share		21
Note K. Shareholders’ Equity		22
Note L. Contingencies		23
Note M. Segment and Geographic Information		24

Table of Contents

Index to Notes

ARROW ELECTRONICS, INC.

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, 2023, 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, 2024.

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 December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Upon adoption of this ASU, the company will disclose specific new categories in its income tax rate reconciliation and provide additional information for reconciling items above a quantitative threshold. The company will also disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions in which income taxes paid were above a threshold. The company expects these amendments will first be applied in the company’s annual report on form 10-K for the fiscal year ending December 31, 2025, on a prospective basis.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. Upon adoption of this ASU, the company will disclose significant segment expenses, the title and position of the CODM, and an explanation of how the reported measure of segment profit or loss is used by the CODM to assess segment performance and make resource allocation decisions. These amendments will first be applied in the company’s annual report on form 10-K for the fiscal year ending December 31, 2024, and will be applied retrospectively for all prior periods presented in the financial statements.

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Index to Notes

ARROW ELECTRONICS, INC.

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, 2023 (a)	$	875,194	$	1,175,232	$	2,050,426
Acquisitions		18,454		—		18,454
Foreign currency translation adjustment		(5,464)		(10,715)		(16,179)
Balance as of June 29, 2024 (a)	$	888,184	$	1,164,517	$	2,052,701

(a)

The total carrying value of goodwill as of June 29, 2024 and December 31, 2023, 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 reportable segment and $301.9 million was recorded in the global ECS reportable segment.

Intangible assets, net, are comprised of the following as of June 29, 2024:


	Gross
	Carrying		Accumulated
(thousands)	Amount		Amortization		Net
Customer relationships	$	254,056	$	(161,939)	$	92,117
Amortizable trade name		74,003		(53,650)		20,353
	$	328,059	$	(215,589)	$	112,470

Intangible assets, net, are comprised of the following as of December 31, 2023:


	Gross
	Carrying		Accumulated
(thousands)	Amount		Amortization		Net
Customer relationships	$	258,337	$	(156,141)	$	102,196
Amortizable trade name		73,811		(48,567)		25,244
	$	332,148	$	(204,708)	$	127,440

During the second quarter of 2024 and 2023, the company recorded amortization expense related to identifiable intangible assets of $7.5 million and $7.9 million, respectively. During the first six months of 2024 and 2023, amortization expense related to identifiable intangible assets was $15.0 million and $15.9 million, respectively.

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Index to Notes

ARROW ELECTRONICS, INC.

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:


	June 29,		December 31,
(thousands)	2024		2023
Marubun/Arrow	$	47,350	$	50,779
Other		13,050		11,962
	$	60,400	$	62,741

The equity in earnings of affiliated companies consists of the following:


	Quarter Ended				Six Months Ended
	June 29,		July 1,			June 29,		July 1,
(thousands)	2024		2023			2024		2023
Marubun/Arrow	$	620	$	2,365	$	86	$	1,968
Other		634		696		824		1,013
	$	1,254	$	3,061	$	910	$	2,981

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 June 29, 2024 and December 31, 2023.

Note E – Accounts Receivable

Accounts receivable, net, consists of the following:


	June 29,		December 31,
(thousands)	2024		2023
Accounts receivable	$	11,004,433	$	12,384,553
Allowance for credit losses		(117,932)		(146,480)
Accounts receivable, net	$	10,886,501	$	12,238,073

The following table is a rollforward for the company’s allowance for credit losses: