Arrow Electronics (ARW) Q1 2025 earnings summary

Executive summary

• Q1 2025 consolidated sales were $6.81B, with non-GAAP EPS of $1.80, both exceeding the high end of guidance, driven by strong ECS performance and EMEA momentum.

• Net income attributable to shareholders was $80M, with GAAP EPS at $1.51 and non-GAAP EPS at $1.80.

• Operating income was $159M (non-GAAP $179M); operating cash flow reached $352M, and $50M was returned to shareholders via share repurchases.

• Both Global Components and ECS segments showed positive momentum, with ECS achieving year-over-year billings growth and strong operating leverage.

• The company is executing a multi-year Operating Expense Efficiency Plan targeting $90–100M in annual savings by 2026.

Financial highlights

• Q1 2025 consolidated sales were $6.81B, down 1.6% year-over-year; gross margin was 11.4%, down 100 bps year-over-year.

• Non-GAAP operating income was $179M (2.6% of sales); non-GAAP net income was $95M; non-GAAP diluted EPS was $1.80.

• Operating expenses (non-GAAP) were $593M, 8.7% of sales; interest and other expense was $56M; non-GAAP effective tax rate was 22.9%.

• Cash flow from operations was $352M; cash and equivalents at quarter end were $232M.

• Gross balance sheet debt was $2.8B; net working capital was $6.4B, down $340M sequentially.

Outlook and guidance

• Q2 2025 consolidated sales expected between $6.70B and $7.30B; global components $4.80B–$5.20B; ECS $1.90B–$2.10B.

• Q2 GAAP EPS guidance is $2.80–$3.00 (includes $1.41 gain on investment); non-GAAP EPS $1.90–$2.10.

• Foreign currency expected to increase Q2 sales by up to $109M and EPS by $0.03.

• Guidance excludes a potential 2–4% sales increase from new tariffs on global components.

• The Operating Expense Efficiency Plan is expected to be substantially completed by end of 2026, with up to $185M in pre-tax charges.