Arrow Electronics (ARW) Raymond James & Associates’ 46th Annual Institutional Investors Conference summary

Company overview and business segments

• Operates as a platform-based business connecting thousands of suppliers with hundreds of thousands of customers in electronic components and enterprise IT sectors.

• Electronic components business is about $20B, while enterprise IT is $8B, but gross billings for IT reach $19.5B.

• Enterprise IT business enables a large channel of resellers and managed service providers, acting as an off-payroll sales force.

• Both segments are similar in size when considering gross billings, with differences due to accounting methods.

Strategic evolution and growth priorities

• Focus on value-added services like engineering and supply chain management to serve large OEMs and drive higher margins.

• Expanding into interconnect, passive, and electromechanical technology to capture more of the electronic design market.

• Enterprise IT business shifting toward cloud, hybrid cloud, and managed services, with recurring revenue now over 30% of total volume.

• Ongoing reinvestment in higher-margin, accretive businesses and services.

Market cycles, recovery, and operational adjustments

• Electronic components business is in a prolonged cyclical correction, but inventory levels are normalizing and modest recovery is expected this year.

• New supplier relationships and customer wins are expected to drive incremental business in the coming year.

• Organic growth priorities include expanding engineering services, supply chain management, and IP&E penetration.

• Enterprise IT business is benefiting from a successful European go-to-market model now being replicated in North America.