NYSE:ARW
ARROW ELECTRONICS, INC.
Arrow Electronics is a premier global distributor of electronic components and industrial products serving diverse industries with over $30 billion in recent revenue.
Key Metrics
Investment Thesis
Bull Case
Investors may favor Arrow due to its dominant market position and ability to monetize through value-added services like BOM management and supply chain consulting as hardware costs rise. The company's strong balance sheet with $306.5M in cash allows for strategic acquisitions or share repurchases, evidenced by the $161.7M in buybacks this period. Rebound potential is high given the cyclical nature of the semiconductor industry and the company's recovery in profitability metrics from previous lows.
Bear Case
Concerns persist regarding the massive increase in inventory ($5.08B) and accounts receivable, which could signal slowing demand or collection issues if the economy softens further. The significant non-cash adjustments of -$13.36B obscure the quality of earnings and raise questions about the sustainability of reported net profit margins. High debt levels relative to equity ($22.42B liabilities vs $6.66B equity) coupled with long-term debt of $3.08B increases financial leverage risk during downturns.
About ARROW ELECTRONICS, INC.
Arrow Electronics is a leading distributor of electronic components, industrial products, and technology solutions serving global markets including aerospace, automotive, healthcare, and telecommunications. The company provides essential parts such as semiconductors, microprocessors, and passive components to original equipment manufacturers (OEMs) and system builders worldwide. With a robust distribution network and specialized expertise in complex supply chains, Arrow facilitates the movement of critical technology goods from suppliers to end-users efficiently.
Analysis
Management Discussion
Despite a recent revenue decline from $37.12B in 2022 to $27.92B in 2024, the company demonstrated resilience with net income recovering to $569.7M in 2025 from $393.5M the prior year. The substantial increase in accounts payable ($17.38B) and receivables ($19.74B) suggests aggressive working capital management, while operating cash flow of $64.0M indicates healthy liquidity generation despite heavy non-cash adjustments totaling -$13.36B.
Industry Overview
The electronic components distribution industry is characterized by high volatility driven by technological shifts, geopolitical tensions, and cyclical demand from consumer electronics and industrial manufacturing. Success in this sector requires immense scale, deep supplier partnerships, and sophisticated logistics capabilities to handle millions of part numbers efficiently. Consolidation trends are evident as larger players seek to acquire smaller distributors to capture market share and diversify product portfolios.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $37.12B | $33.11B | $27.92B | $30.85B |
| Cost of Revenue | $32.29B | $28.96B | $24.63B | $27.39B |
| Gross Profit | $4.84B | $4.15B | $3.29B | $3.47B |
| Operating Expenses | $2.77B | $2.68B | $2.52B | $2.64B |
| Operating Income | $2.07B | $1.47B | $768.6M | $822.2M |
| G&A | $2.57B | $2.41B | $2.22B | $2.39B |
| Stock-Based Comp | $42.9M | $41.6M | $34.6M | $27.9M |
| D&A | $187.4M | $181.1M | $163.0M | $137.8M |
| Amortization | $34.7M | $31.2M | $29.5M | $19.8M |
| Other OpEx | $201.1M | $265.0M | $305.9M | $253.9M |
| Non-Operating Income | $-1.55B | $-306.8M | $-279.2M | $-104.3M |
| Pre-Tax Income | $517.6M | $1.16B | $489.3M | $717.9M |
| Income Tax | $449.0M | $255.0M | $95.8M | $148.2M |
| Continuing Ops | $68.7M | $909.4M | $393.5M | $569.7M |
| Discontinued Ops | $1.37B | $0 | $0 | $0 |
| Net Income | $1.44B | $909.4M | $393.5M | $569.7M |
| Minority Interest | $8.3M | $5.9M | $1.4M | $-1.6M |
| Net to Common | $1.43B | $903.5M | $392.1M | $571.3M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $18.34B | $18.33B | $18.40B | $25.66B |
| Cash & Equivalents | $176.9M | $218.1M | $188.8M | $306.5M |
| Accounts Receivable | $12.32B | $12.24B | $13.03B | $19.74B |
| Inventory | $5.32B | $5.19B | $4.71B | $5.08B |
| Other Current Assets | $521.3M | $684.1M | $471.9M | $533.0M |
| Long-Term Assets | $3.42B | $3.40B | $3.36B | $3.42B |
| PP&E (Net) | $596.5M | $530.7M | $469.3M | $474.6M |
| Intangibles | $159.1M | $127.4M | $96.7M | $77.0M |
| Goodwill | $2.03B | $2.05B | $2.06B | $2.12B |
| Operating Leases | $277.6M | $269.5M | $251.1M | $248.8M |
| Other LT Assets | $297.0M | $357.8M | $426.6M | $438.2M |
| Total Assets | $21.76B | $21.73B | $21.76B | $29.08B |
| Current Liabilities | $12.39B | $13.19B | $12.64B | $18.85B |
| Accounts Payable | $10.46B | $10.07B | $11.05B | $17.38B |
| Current Leases | $69.5M | $74.2M | $68.9M | $76.5M |
| Taxes Payable | — | — | $6.9M | $7.6M |
| Other Current Liab | $520.4M | $1.58B | $274.1M | $-83.8M |
| Long-Term Liabilities | $3.76B | $2.66B | $3.29B | $3.57B |
| Long-Term Debt | $3.18B | $2.15B | $2.77B | $3.08B |
| LT Operating Leases | $227.0M | $210.1M | $198.5M | $186.7M |
| Other LT Liab | $328.0M | $290.4M | $317.8M | $302.6M |
| Total Liabilities | $16.15B | $15.85B | $15.93B | $22.42B |
| Shareholders' Equity | $5.61B | $5.88B | $5.83B | $6.66B |
| Retained Earnings | $9.21B | $5.79B | $5.98B | $6.55B |
| AOCI | $-365.3M | $-298.0M | $-509.3M | $-126.6M |
| Treasury Stock | $4.64B | $297.7M | $328.1M | $483.6M |
| Total L&E | $21.76B | $21.73B | $21.76B | $29.08B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $1.44B | $909.4M | $393.5M | $569.7M |
| Non-Cash Adjustments | $-5.25B | $297.3M | $-538.1M | $-13.36B |
| Working Capital Changes | $3.78B | $-501.2M | $1.27B | $12.86B |
| Cash from Operations | $-33.1M | $705.4M | $1.13B | $64.0M |
| Capital Expenditures | $78.8M | $83.3M | $92.7M | $101.3M |
| Cash from Investing | $-57.7M | $-72.3M | $-94.4M | $23.6M |
| Share Buybacks | $1.05B | $770.2M | $265.1M | $161.7M |
| Cash from Financing | $109.8M | $-666.2M | $-956.8M | $-206.1M |
| FX Effect | $-64.3M | $74.2M | $-108.4M | $236.1M |
| Net Change in Cash | $-45.3M | $41.1M | $-29.2M | $117.7M |
| Beginning Cash | $222.2M | $176.9M | $218.1M | $188.8M |
| Ending Cash | $176.9M | $218.1M | $188.8M | $306.5M |
Frequently Asked Questions
How does ARROW ELECTRONICS, INC. make money?
The company operates primarily through its Global Business Group (GBG) and North America Business Group, which together account for the vast majority of its $30.85B revenue. Key revenue streams include the distribution of semiconductors, passive components, microprocessors, and power management solutions to OEMs and system builders. Additional segments include specialized industrial product lines such as sensors, actuators, and test equipment that support manufacturing and infrastructure projects.
What are the main risks for ARW?
Significant exposure to semiconductor price volatility and global supply chain interruptions could compress gross margins or lead to stockouts of high-demand components. Regulatory changes related to trade restrictions, such as those affecting China exports, may disrupt key revenue streams and increase compliance costs. Intense competition from other distributors and vertical integration by major chip manufacturers could erode the company's market share and pricing power.
What is ARW's competitive advantage?
Arrow possesses an extensive global logistics network that ensures rapid delivery of over 10 million SKUs, providing a speed-to-market advantage for time-sensitive electronic designs. Its deep supplier relationships and proprietary data analytics capabilities allow the company to navigate complex supply chain disruptions better than smaller competitors. The firm's specialized engineering support services help customers optimize their bill-of-materials (BOM) costs and manage inventory levels effectively.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.