UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, ~~2024~~2025

☐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 ofincorporation or organization)		(I.R.S. EmployerIdentification 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)

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

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262 (b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of voting stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter was $6,~~372~~525,~~985~~264,~~825~~346.

There were 5251,~~172~~086,~~303~~165 shares of Common Stock outstanding as of February 43, ~~2025~~2026.

DOCUMENTS INCORPORATED BY REFERENCE

The definitive proxy statement related to the registrant’s 2025 Annual Meeting of Shareholders, is incorporated by reference in Part III to the extent described therein. The definitive proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of December 31, ~~2024~~2025.

Table of Contents

TABLE OF CONTENTS

	PART I
Item 1.	Business	4
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	22
Item 1C.	Cybersecurity	22
Item 2.	Properties	23
Item 3.	Legal Proceedings	2324
Item 4.	Mine Safety Disclosures	2324

	PART II
Item 5.	Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2324
Item 6.	[Reserved]	26
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 8.	Financial Statements and Supplementary Data	4544
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	8485
Item 9A.	Controls and Procedures	8485
Item 9B.	Other Information	8688
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	8688

	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	8688
Item 11.	Executive Compensation	8689
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	8789
Item 13.	Certain Relationships and Related Transactions, and Director Independence	8789
Item 14.	Principal Accounting Fees and Services	8789

	PART IV
Item 15.	Exhibits and Financial Statement Schedules	8890
Item 16.	10-K Summary	9698
Signatures		9799

Table of Contents

ARROW ELECTRONICS, INC.

Glossary of Selected Abbreviated Terms*


Abbreviated Term	Defined Term
AFC	Arrow Electronics Funding Corporation
AI	Artificial Intelligence
ASU	Accounting Standard Update
BIS	Bureau of Industry and Security of the U.S. Department of Commerce
CIO	Chief Information Officer
CODM	Chief Operating Decision Maker
Compensation Committee	Compensation Committee of the company's Board of Directors
CSO	Chief Security Officer
CTA	Foreign Currency Translation Adjustment
EAR	U.S. Export Administration Regulations
ECS	Enterprise Computing Solutions
EMEA	Europe, the Middle East, and Africa
EMS	Electronics Manufacturing Services
FASB	Financial Accounting Standards Board
FDII	Foreign-Derived Intangible Income
GAAP	Generally Accepted Accounting Principles
Global components	Global components reportable segment
Global ECS	Global ECS reportable segment
GILTI	Global Intangible Low-Taxed Income
IP&E	Interconnect, Passive and Electromechanical
IRS	Internal Revenue Service
ISOs	Incentive Stock Options
IT	Information Technology
MSPs	Managed Service Providers
NYSE	New York Stock Exchange
OECD	Organization for Economic Co-operation and Development
OEMs	Original Equipment Manufacturers
OFAC	Office of Foreign Assets Controls
Omnibus Plan	Arrow Electronics, Inc. 2004 Omnibus Incentive Plan
S&P 400 MidCap Stock Index	Standard & Poor’s MidCap 400 Index
SEC	Securities and Exchange Commission
SERP	Supplemental Executive Retirement Plan
SOFR	Secured Overnight Financing Rate
U.S. or United States	United States of America
VARs	Value-Added Resellers

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

Table of Contents

PART I

Item 1.Business.

Arrow Electronics, Inc. (the “company” or “Arrow”) sources and engineers technology for thousands of leading manufacturers, service providers, and users of enterprise computing solutions. The company has one of the world’s broadest portfolios of product offerings available from leading electronic components and enterprise computing solutions suppliers. ~~Coupled~~Equipped with a range of services, solutions, and software, the company helps industrial and commercial customers introduce innovative products, reduce their time to market, and enhance their overall competitiveness. Arrow was incorporated in New York in 1946.

Arrow’s diverse worldwide customer base consists of OEMs, VARs, MSPs, EMS providers, and other commercial customers. These customers include manufacturers of products serving industries including industrial, automotive and transportation, ~~telecommunications~~computing, networking and ~~consumer electronics~~communications, among others.

The company has two reportable segments, global components and global ECS. The company distributes electronic components to OEMs and EMS providers through its global components ~~reportable~~ segment and provides enterprise computing solutions to VARs and MSPs through its global ECS ~~reportable~~ segment. The company maintains over 140 sales facilities and 3639 distribution and value-added centers, serving over 85 countries. ~~For~~In ~~2024~~2025, approximately 7270% of the company’s sales were from ~~the~~ global components ~~reportable segment~~, and approximately 2830% of the company’s sales were from ~~the~~ global ECS. ~~reportable~~Refer ~~segment.~~to ~~The~~Note 16 - “Segment and Geographic Information” within Item 8 for financial information about the company’s reportable segments and geographic operations ~~is found in Note 16 to the consolidated financial statements~~.

The company has operations in each of the three largest electronics markets; the Americas; the EMEA; and the Asia/Pacific regions. Arrow’s business strategy is to be the premier, technology-centric, go-to-market and supply chain services company. The company’s portfolio is designed to enable technology across major industries and markets including industrial automation, edge and cloud computing, smart and connected devices, and transportation to deliver new technologies. Arrow aggregates disparate sources of ~~electronics~~electronic components, infrastructure software, and IT hardware to engineer complete solutions for customers on behalf of its suppliers. The company aims to help enable secure and consistent supply chains, and drive growth on behalf of its suppliers.

The company’s long term financial objectives are to grow sales faster than the market, increase the markets served, grow profits faster than sales, generate earnings per share growth in excess of competitors’ earnings per share growth and market expectations, allocate and deploy capital effectively so that return on invested capital exceeds the company’s cost of capital, and increase return on invested capital. To achieve its objectives, the company seeks to capture significant opportunities to grow across products, markets, and geographies. To supplement its organic growth strategy, the company continually evaluates strategic acquisitions to broaden its product and value-added service offerings, increase its market penetration, and expand its geographic reach. The company is also committed to improving operational efficiency.

Global Components

~~The~~Global ~~company’s global~~ components ~~reportable segment~~ markets and distributes electronic components enabled by a comprehensive range of value-added capabilities and services. The company utilizes its vast marketing, integration and global logistics footprint to provide customers with the ability to deliver the latest semiconductor and IP&E technologies to the market. Along with the help of value-added services and capabilities, such as ~~new~~supply ~~product~~chain ~~component integration~~services, ~~also~~engineering ~~known~~and ~~as, demand creation,~~ design ~~engineering~~ services, and ~~supply~~integration ~~chain management~~services, the company offers the convenience of accessing, from a single source, multiple technologies and products from its suppliers with rapid or scheduled deliveries. Most of the company’s customers require delivery of their orders on schedules or volumes that are generally not available directly from manufacturers.

~~Demand~~Supply ~~creation~~chain ~~efforts~~service ~~are~~offerings ~~intended~~include toprocurement, ~~promote~~logistics, ~~the~~warehousing, ~~future~~financial ~~sale~~management, ofand ~~suppliers’~~insights ~~products~~from ~~through~~data ~~registered~~analytics. ~~engineered~~The ~~designs~~company ~~and~~provides ~~schematics~~logistics ~~showing~~support, ~~the~~as ~~use~~well ofas ~~suppliers’~~expertise ~~components~~ in ~~the~~processes ~~company’s~~and ~~customers’~~systems ~~future~~to ~~products.~~improve ~~Providing~~customer’s ~~these~~supply ~~services~~chain execution, ~~primarily~~visibility, ~~through~~resilience, ~~the~~and ~~efforts~~optimization. ofThe ~~field~~company’s ~~application~~supply ~~engineers,~~chain ~~generally~~services ~~leads~~are intended to ~~longer~~serve ~~and~~customers’ ~~more~~direct ~~profitable~~supply ~~relationships~~chain ~~that~~and ~~benefit~~provide ~~the~~fee-based ~~company~~revenue asopportunities, ~~well~~targeting as the ~~company’s~~most ~~suppliers~~complex ~~and~~electronics ~~customers.~~supply Inchains ~~addition~~in tothe ~~demand creation,~~ world.

The company utilizes its engineering resources to engage with customers in a variety of design engineering services, including software development, product design and integrated circuit design. The company is differentiated by its ability to deliver breakthrough products with device to digital applications, backed by long-term customer relationships. In addition to engineering services, demand creation efforts are intended to promote the future sale of suppliers’ products through registered engineered designs and schematics showing the use of suppliers’ components in the company’s customers’ future products. Providing these services, primarily through the efforts of field application engineers, generally leads to longer and more profitable relationships that benefit the company as well as the company’s suppliers and

Table of Contents

customers. In addition to demand creation, the company utilizes its ~~sizable~~ engineering resources to engage with customers in a variety of design engineering services, including software development, product design and integrated circuit design.

~~Integration~~The company’s integration services are designed to provide a full suite of product lifecycle solutions for ~~our~~ customers. Services include design engineering from prototyping to volume production readiness, worldwide logistics and fulfillment capabilities, and scalable manufacturing and customer support.

~~Supply~~Within ~~chain~~the ~~service~~global ~~offerings~~components ~~include~~segment ~~procurement,~~for ~~logistics~~2025, ~~warehousing,~~sales ~~financial~~of ~~management,~~approximately ~~and~~72% ~~insights~~consist ~~from~~of ~~data~~semiconductor ~~analytics.~~products ~~Arrow~~and ~~provides~~related ~~logistics~~services; ~~support~~approximately ~~and~~16% ~~process~~consist ~~and~~of ~~systems~~IP&E ~~expertise~~products, tosuch ~~improve~~as ~~customer’s~~capacitors, ~~supply~~resistors, ~~chain~~potentiometers, ~~execution~~power supplies, ~~visibility~~relays, ~~resilience~~switches, and ~~optimization.~~connectors; ~~The~~approximately ~~company’s~~7% ~~supply~~consist ~~chain~~of ~~services~~computing ~~are~~and ~~intended~~memory; ~~to serve customers’ direct supply chain~~ and ~~provide~~approximately ~~fee-based~~5% ~~revenue~~consist ~~opportunities,~~of ~~targeting~~other ~~the~~products ~~most~~and ~~complex electronics supply chains in the world~~services.

Within the global components reportable segment for 2024, sales of approximately 76% consist of semiconductor products and related services; approximately 16% consist of IP&E products, such as capacitors, resistors, potentiometers, power supplies, relays, switches, and connectors; approximately 5% consist of computing and memory; and approximately 3% consist of other products and services.

Global ECS

~~The~~Global ~~company’s global~~ ECS ~~reportable segment~~ is a leading value-added provider of comprehensive computing solutions and services. The global ECS portfolio includes datacenter, cloud, security, and analytics solutions. Global ECS brings broad market access, extensive supplier relationships, scale, and ~~resources~~value-added solutions to help ~~its~~ VARs and MSPs ~~meet~~tailor ~~the~~complex ~~needs~~IT ofsolutions ~~their end-customers. Global ECS works with VARs and MSPs~~ to ~~tailor~~fit ~~complex~~the ITneeds ~~solutions~~of ~~for~~ their end-users. Arrow’s customers have access to various services including engineering and integration support, warehousing and logistics, marketing resources, and authorized hardware and software training. Global ECS suppliers benefit from demand creation, speed to market, and efficient supply chain management.

Global ECS further supports customers by enabling their software and cloud solutions businesses through ArrowSphere, a software and cloud marketplace and management platform. ArrowSphere can help VARs and MSPs to manage, differentiate, and scale their as-a-service businesses. It can simplify the operational complexity of delivering hybrid multi-cloud solutions while providing the business intelligence that IT solution providers need to drive growth. By making software and cloud-based solutions available through ArrowSphere, suppliers can benefit from greater subscription adoption, consumption, and utilization.

~~Within~~Additionally, ~~the~~ global ECS ~~reportable~~partners ~~segment~~with ~~for~~certain ~~2024,~~suppliers ~~sales~~to ofmanage ~~approximately~~part ~~26%~~or ~~consist~~all of ~~storage,~~their ~~20%~~go-to-market ~~consist~~activities ofthrough ~~software~~strategic ~~applications~~outsourcing agreements, ~~18%~~which consist of ~~security,~~certain ~~16%~~non-cancellable ~~consist~~multi-year ofpurchase ~~compute,~~obligations. 6%Through ~~consist~~a ofcontractual ~~data~~fee ~~intelligence~~model, 6%global ~~consist~~ECS ofenables ~~networking,~~suppliers to outsource specific selling and 8%marketing ~~consist~~activities, ofallowing ~~other~~suppliers to concentrate on designing and enhancing their products. This approach not only streamlines suppliers’ operations but also ensures suppliers can allocate resources more effectively to drive innovation and ~~services~~growth in their software solutions.

~~Customers~~Within the global ECS segment for 2025, sales of approximately 27% consist of software applications, 25% consist of storage, 15% consist of security, 14% consist of compute, 5% consist of data intelligence, 5% consist of networking, and ~~Suppliers~~9% consist of other products and services.

The company and its affiliates serve thousands of industrial and commercial customers. Industrial customers range from major OEMs and EMS providers to small engineering and manufacturing firms, while commercial customers primarily include VARs, MSPs, and OEMs. No single customer accounted for more than 2% of the company’s 2024 consolidated sales. The company’s sales teams focus on an extensive portfolio of products and services to support customers’ material management and production needs, including connecting customers to the company’s field application engineers that provide technical support and serve as a gateway to the company’s supplier partners. The company’s sales representatives provide end-to-end product offerings and solutions with an emphasis on helping customers introduce innovative products, reduce their time to market, and enhance their overall competitiveness. Substantially all of the company’s sales are made on an order-by-order basis, rather than through long-term sales contracts. As such, the nature of the company’s business does not provide visibility of material forward-looking information from its customers and suppliers beyond a few months.

No single supplier accounted for more than 8% of the company’s consolidated sales in 2024. The company believes that many of the products it sells are available from other sources at competitive prices. However, certain parts of the

Table of Contents

~~company’s~~Customers ~~business, such as the company’s global ECS reportable segment, rely on a limited number of suppliers with the strategy of providing focused support, extensive product knowledge,~~ and customized service to suppliers, MSPs, and VARs. Most of the company’s purchases from suppliers are pursuant to distributor agreements, which are typically non-exclusive and cancellable by either party at any time or on short notice.Suppliers

~~Distribution~~The ~~Agreements~~company and its affiliates serve thousands of industrial and commercial customers. Industrial customers range from major OEMs and EMS providers to small engineering and manufacturing firms, while commercial customers primarily include VARs, MSPs, and OEMs. No single customer accounted for more than 2% of the company’s 2025 consolidated sales. The company’s sales teams focus on an extensive portfolio of products and services to support customers’ material management and production needs, including connecting customers to the company’s field application engineers that provide technical support and serve as a gateway to the company’s supplier partners. The company’s sales representatives provide end-to-end product offerings and solutions with an emphasis on helping customers introduce innovative products, reduce their time to market, and enhance their overall competitiveness. Substantially all of the company’s sales are made on an order-by-order basis, rather than through long-term sales contracts. As a result, the nature of the company’s business does not provide visibility of material forward-looking information from its customers and suppliers beyond a few months.

~~Certain~~No ~~agreements~~single ~~with~~supplier ~~suppliers~~accounted ~~protect~~for ~~the~~more ~~company~~than ~~against~~8% ~~the potential write-down~~ of ~~inventories~~the ~~due~~company’s toconsolidated ~~technological~~sales ~~change~~in ~~or suppliers’ price reductions~~2025. ~~These~~The ~~contractual~~company ~~provisions~~believes ~~typically~~that ~~provide~~many ~~certain~~of ~~protections to~~ the ~~company~~products ~~for~~it ~~product~~sells ~~obsolescence~~are ~~and~~available ~~price~~from ~~erosion~~other insources ~~the~~at ~~form~~competitive ofprices. ~~return privileges~~However, ~~scrap~~certain ~~allowances,~~parts ~~and price protection. Under the terms~~ of the ~~related distributor agreements and assuming the~~ company’s ~~complies with certain conditions~~business, such ~~suppliers~~as ~~are~~global ~~required~~ECS, torely ~~credit~~on ~~the~~a ~~company~~limited ~~for~~number ~~reductions~~of in suppliers’ ~~list~~with ~~prices.~~the Asstrategy of ~~December~~providing ~~31,~~focused ~~2024~~support, ~~this~~extensive ~~type~~product ofknowledge, ~~arrangement~~and ~~covered~~customized ~~approximately~~service ~~56%~~to ofsuppliers, ~~the~~MSPs, ~~company’s~~and ~~consolidated inventories~~VARs. InMost ~~addition, under the terms~~ of ~~many such agreements,~~ the company’s ~~has~~purchases ~~the~~from ~~right~~suppliers toare ~~return~~pursuant to ~~the~~distributor ~~supplier~~agreements, ~~for~~which ~~credit,~~are atypically ~~defined~~non-exclusive ~~portion~~and ofcancellable ~~those~~by ~~inventory~~either ~~items~~party ~~purchased~~at ~~within~~any atime ~~designated~~or ~~period~~on ofshort ~~time~~notice.

ADistributor supplier electing to terminate a distribution agreement may be required to purchase from the company the total amount of its products carried in inventory. As of December 31, 2024, this type of repurchase arrangement covered approximately 60% of the company’s consolidated inventories.Agreements

Certain agreements with suppliers protect the company against the potential write-down of inventories due to technological change or suppliers’ price reductions. These contractual provisions typically provide certain protections to the company for product obsolescence and price erosion in the form of return privileges, scrap allowances, and price protection. Under the terms of these distributor agreements and assuming the company complies with certain conditions, such suppliers are required to credit the company for reductions in suppliers’ list prices. As of December 31, 2025, this type of arrangement covered approximately 56% of the company’s consolidated inventories. In addition, under the terms of many such agreements, the company has the right to return to the supplier, for credit, a defined portion of those inventory items purchased within a designated period of time.

A supplier electing to terminate a distributor agreement may be required to purchase from the company the total amount of its products carried in inventory. As of December 31, 2025, this type of repurchase arrangement covered approximately 59% of the company’s consolidated inventories.

While these inventory practices do not wholly protect the company from inventory losses, the company believes that they currently provide substantial protection from such losses.

Competition

The company operates in a highly competitive environment, both in the United States and internationally. The company competes with other large multinational and national electronic components and enterprise computing solutions distributors, as well as numerous other smaller, specialized competitors who generally focus on narrower markets, products, or particular sectors. The company also competes for customers with its suppliers. The size of the company’s competitors vary across vertical markets, as do the resources the company has allocated to the sectors in which it does business. Therefore, some of the company’s competitors may have a more extensive customer and/or supplier base than the company in one or more of its market sectors. There is significant competition within each market sector and ~~geography~~region ~~served~~ that creates pricing pressure and the need to continually improve services. Other competitive factors include rapid technological changes, product availability, credit availability, speed of delivery, ability to tailor solutions to customer needs, quality and depth of product lines and training, as well as service and support provided by the distributor to the customer.

The company also faces competition from companies entering or expanding into the logistics and product fulfillment, electronic catalog distribution, and e-commerce supply chain services markets. As the company seeks to expand its business into new areas in order to stay competitive in the market, the company may encounter increased competition from its current and/or new competitors. The company believes that it is well equipped to compete effectively with its competitors in all of these areas due to its comprehensive product and service offerings, highly-skilled work force, and global distribution network.

Government Regulation

The company is subject to, and endeavors to comply with, various government regulations in the United States and various foreign jurisdictions in which it operates. These regulations cover several diverse areas including trade compliance, antitrust, anti-bribery, anti-corruption, money laundering, securities, environmental, labor and employment, and data and privacy protection. Regulatory or government authorities where the company operates may have enforcement powers that can subject the company to legal penalties or other measures and can impose changes or conditions in the way it conducts business. For example, local authorities may disagree with how the company classifies its products for trade and taxation purposes, and the company may be required to change its classifications, which could increase the company’s operating costs or subject it to increased taxes or fines and penalties. Increased government scrutiny of the company’s actions or

Table of Contents

~~enforcement~~The ~~could~~company ~~materially~~also ~~and~~faces ~~adversely~~competition ~~affect~~from ~~its~~companies ~~business~~entering or ~~damage~~expanding ~~its~~into ~~reputation.~~the Inlogistics ~~addition~~and product fulfillment, electronic catalog distribution, and e-commerce supply chain services markets. As the company ~~may~~seeks ~~conduct,~~to orexpand itits ~~may~~business beinto ~~required~~new areas in order to ~~conduct~~stay competitive in the market, ~~internal~~the ~~investigations~~company ormay ~~face~~encounter ~~audits~~increased orcompetition ~~investigations~~from byits ~~one~~current and/or ~~more~~new ~~domestic~~competitors. orThe ~~foreign~~company ~~governments~~believes orthat ~~regulatory~~it ~~agencies,~~is ~~which~~well ~~could~~equipped beto ~~costly~~compete ~~and~~effectively ~~time-consuming,~~with ~~and~~its ~~could~~competitors ~~damage~~in ~~the~~all ~~company’s~~of ~~reputation~~these orareas ~~could~~due ~~divert~~to ~~management~~its comprehensive product and ~~key~~service ~~personnel~~offerings, ~~from~~highly ~~the~~skilled ~~company’s~~work ~~business~~force, ~~operations.~~and global distribution network.

~~Additional~~Government information relating to environmental liabilities is set forth under the heading “Environmental Matters” in Note 15, “Contingencies” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 10-K and is incorporated herein by reference. Regulation

The company is subject to, and endeavors to comply with, various laws and regulations in the United States and various foreign jurisdictions in which it operates. The requirements of these laws and regulations vary significantly across these jurisdictions and involve numerous subject areas, including the importation and exportation of goods, international trade restrictions, data and privacy protection, anti-trust, anti-corruption, anti-money laundering, environmental protection, and labor and employment practices. Additionally, as the company’s customers include U.S. government agencies, the company is subject to additional requirements applicable to government contractors. The company’s policies and procedures require that the company and individuals acting on its behalf comply with applicable legal and regulatory requirements. The company maintains a robust compliance program to monitor ongoing changes to, and promote compliance with, relevant laws and regulations.

For more information about the company’s risks related to legal and regulatory matters, refer to “Risk Factors” in Part I, Item 1A.

Additional information related to environmental liabilities is set forth under the heading “Environmental Matters” in Note 15 - “Contingencies” within Item 8 and is incorporated herein by reference.

For further discussion of the matters discussed above related to government regulations and environmental liabilities refer to “Risk Factors” in Part I, Item 1A.

Human Capital

Arrow’s business strategy is to be the premier, technology-centric, go-to-market and supply chain services company. The company’s talent strategy powers that business strategy through its people. The company’s talent ecosystem spans 52 countries, with the strategic vision of excelling in the business to drive more scale, extending the company’s value, and winning in the market with the strength of its people and culture.

The company believes its deep capabilities and broad services are made possible by a broad group of professionals who understand its customers’ problems from numerous perspectives and curate forward-looking, comprehensive solutions. The company believes its employees’ varied backgrounds, talents, experiences, and perspectives frame how its global network of engineers, suppliers, and manufacturers work together, and enhance value for customers.

The company’s business results depend in part on its ability to successfully manage human capital resources, including attracting, identifying, and retaining key talent. Factors that may affect the company’s ability to attract and retain qualified employees include employee morale, its reputation, competition from other employers, and availability of qualified individuals.

The company and its affiliates employed approximately 21,520 employees worldwide as of December 31, 2024. The following table shows the company’s approximate headcount by region:


	Americas	EMEA	Asia/Pacific
Headcount	5,850	7,850	7,820

The company believes its broad portfolio is made possible by a talented group of professionals who understand its suppliers’ and customers’ problems from numerous perspectives and curate forward-looking, comprehensive solutions. The company believes its employees’ varied talents, experiences, and perspectives frame how its global network of engineers, suppliers, and manufacturers work together, and enhance value for customers.

The company’s business results depend in part on its ability to successfully manage human capital resources, including attracting, identifying, and retaining key talent. Factors that may affect the company’s ability to attract and retain qualified employees include its reputation, employee engagement, competition from other employers, and availability of qualified individuals.

The company and its affiliates employed approximately 22,230 employees worldwide as of December 31, 2025. The following table shows the company’s approximate headcount by region:

Talent Acquisition, Development, and Retention


		Americas		EMEA		Asia/Pacific
Headcount		5,860		8,020		8,350

The company has long-standing goals for fostering belonging across the organization and strives to provide all employees with equal opportunities at all levels of the organization. Efforts towards fostering a robust talent pipeline and supporting employee career opportunities are reflected in the company’s talent strategy through (a) internal talent development programs and retention initiatives that advance career opportunity for all employees, (b) hiring from a wide range of sources in support of a talent pool with a broad set of experiences and skills, and (c) training programs designed to emphasize principles that align to the company’s business strategy.

The company believes in work that elevates career opportunities for employees and views its employees as career investors. Employees bring their unique talents, experiences, and perspectives to the organization through their daily work. The company is committed to helping employees receive a return on their investment, in the form of compounding knowledge, skills, abilities, and earnings opportunity as their careers grow within the company. Through early career talent programs focused on recent college graduates, Arrow grows employee capability from the ground up. The company supports development for the global workforce through targeted curricula and tools focused on building skills and capabilities at each career stage. Arrow also offers a suite of enterprise leadership training and development programs. These programs create value by growing employee capability, which in turn facilitates business growth and career growth opportunities. For example, over 70% of open manager-level and above positions were filled internally during 2024 and 2023.

Table of Contents

Talent Acquisition, Development, and Retention

The company has long-standing goals for fostering inclusion across the organization and strives to provide all employees with equal opportunities at all levels of the organization. Efforts toward fostering a robust talent pipeline and supporting employee career opportunities are reflected in the company’s talent strategy through (a) internal talent development programs and retention initiatives that advance career opportunity for all employees, (b) hiring from a wide range of sources in support of a talent pool with a broad set of experiences and skills, and (c) training programs designed to strengthen skills and leadership capabilities in alignment with the company’s business strategy.

The company believes in work that elevates career opportunities for employees and views its employees as investors in their own future. Employees bring their unique talents, experiences, and perspectives to the organization through their daily work. The company is committed to helping employees receive a return on their investment, in the form of compounding knowledge, skills, abilities, and earnings opportunity as their careers grow within the company. Through early career talent programs focused on recent college graduates, the company grows employee capability from the ground up. The company supports development for the global workforce through targeted curricula and tools focused on building skills and capabilities at each career stage. The company also offers a suite of enterprise leadership training and development programs designed to build a future-ready talent pipeline that supports enterprise succession. These programs create value by growing employee capability, which in turn facilitates business growth and career growth opportunities. For example, over 70% of open manager-level and above positions were filled internally during 2025 and 2024.

The company believes in rewards that improve performance outcomes and endorses a pay-for-performance philosophy via performance differentiation and rewarding employees through compensation and benefits. The company believes its compensation and benefits programs are aligned with the local external market to attract, grow, and retain talent. The company’s commitment to rewarding employees fairly based on professional performance, skills, experience, external market data, and pay relative to other similarly situated employees enables us to maximize employees’ return on their career investment. The company reviews its compensation and benefits programs and practices regularly to ensure they remain fair and competitive.

Expanded Human Capital Disclosure

Additional human capital information is included in the company’s reporting on its corporate stewardship and impact, which is available on the Arrow.com website. Information contained in the company’s ~~corporate~~Corporate ~~stewardship~~Stewardship and ~~impact~~Impact ~~report~~Report, and website, is not deemed part of, or incorporated by reference into, this Annual Report on Form 10‑K.

Available Information

~~The~~Arrow’s ~~company~~website ~~files~~is ~~its~~located at www.arrow.com. The company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements, and ~~other~~any ~~documents~~amendments to these filings are available free of charge through Arrow’s Investor Relations website (investor.arrow.com) as soon as reasonably practicable after they are filed with the SEC. ~~under~~The ~~the~~company ~~Securities~~also ~~Exchange~~uses ~~Act~~the ofInvestor ~~1934~~Relations (website as ~~amended,~~a tool to disclose important information about the ~~“Exchange~~company ~~Act”)~~and comply with its disclosure obligations under Regulation Fair Disclosure. The ~~SEC~~information ~~maintains~~contained aon, ~~website~~or that ~~contains~~may ~~reports~~be accessed through, ~~proxy~~Arrow’s ~~and~~websites ~~information~~is ~~statements,~~not ~~and~~incorporated by reference into this Annual Report on Form 10-K or in any other ~~information~~report ~~regarding~~or ~~issuers~~document ~~that~~the ~~file~~company ~~electronically~~files with the SEC., ~~The~~and all references to the company’s ~~SEC~~websites ~~filings~~ are ~~available~~intended to ~~the~~be ~~public~~inactive ontextual ~~the~~references only. The SEC’s website at (www.sec.gov) contains reports, proxy and information statements, and other information regarding Arrow and other public companies.

A copy of any of the company’s filings with the SEC, or any of the agreements or other documents that constitute exhibits to those filings, can be obtained by request directed to the company at the following address and telephone number:8

~~Arrow~~Table ~~Electronics, Inc.~~of Contents

9151 East Panorama Circle

Centennial, Colorado 80112

(303) 824-4000

Attention: Corporate Secretary

The company also makes these filings, and amendments to these filings, available, free of charge, through its Investor Relations website (investor.arrow.com/investors) as soon as reasonably practicable after the company files such materials with the SEC. The company also uses its website as a tool to disclose important information about the company and comply with our disclosure obligations under Regulation Fair Disclosure. The company does not intend this internet address to be an active link or to otherwise incorporate the contents of the website into this Annual Report on Form 10-K.

Information about the Executive Officers

The following table sets forth the names, ages, and the positions held by each of the executive officers of the company as of February 1110, ~~2025~~2026:


Name	Age	Position
Sean J. Kerins	62	President, Chief Executive Officer
William F. Austen	67	Interim President, Chief Executive Officer
Rajesh K. Agrawal	5960	Senior Vice President, Chief Financial Officer
Carine L. Jean-Claude	5758	Senior Vice President, Chief Legal and Compliance Officer, and Secretary
Richard J. Marano	6061	President, Global Components
Eric C. Nowak	6162	President, Global Enterprise Computing Solutions
Gretchen K. Zech	5556	Senior Vice President, Chief Governance, Sustainability, and Human Resources Officer

Set forth below is a brief account of the business experience during the past five years of each executive officer of the company.

8William F. Austen was appointed Interim President, Chief Executive Officer in September 2025. He has served on the company’s Board of Directors since May 2020, including as Chair of the Corporate Governance Committee from May 2022 until September 2025. Prior thereto, he served as President, Chief Executive Officer and a director at Bemis Company, Inc. from 2014 to 2019.

Table of Contents

Sean J. Kerins was appointed President, Chief Executive Officer in June 2022. Prior thereto, he served as Chief Operating Officer since December 2020. Prior thereto, he served as President, Global Enterprise Computing Solutions for more than five years.

Rajesh K. Agrawal was appointed Senior Vice President, Chief Financial Officer in September 2022. Prior thereto, he served as Executive Vice President, Chief Financial Officer for The Western Union Company for more than five years.

Carine L. Jean-Claude was appointed Senior Vice President, Chief Legal Officer and Secretary in June 2021. Prior thereto, she served as Vice President, Interim Chief Legal Officer and Secretary since December 2020. Prior thereto, she served as Vice President, Chief Compliance Officer for more than five years.

Richard J. Marano was appointed President, Global Components in August 2023. Prior thereto, he served as President, Americas Components since January 2020. ~~Prior thereto, he served as Vice President, Sales, Americas Components for more than five years.~~

Eric C. Nowak was appointed President, Global Enterprise Computing Solutions in April 2024. Prior thereto, he served as President, EMEA Enterprise Computing Solutions for more than five years.

Gretchen K. Zech was appointed Senior Vice President, Chief Governance, Sustainability, and Human Resources Officer in February 2022. Prior thereto, she served as Senior Vice President and Chief Human Resources Officer of the company for more than five years.

Table of Contents

Item 1A. Risk Factors.

Described below and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures about Market Risk” are certain risks that the company’s management believes are applicable to the company’s business and the industries in which it operates. If any one or more of the described events occur, the company’s business, reputation, results of operations, financial condition, stock price, liquidity, or access to the capital markets could be materially adversely affected. When stated below that a risk may have a material adverse effect on the company’s business, it means that such risk may have one or more of these effects. There may be additional risks that are not presently material or known.

~~Business~~Global ~~Risks~~Operational and Economic Risks

~~The~~Global ~~company’s revenues originate primarily from the sales of semiconductor, IP&E,~~ and ITregional ~~hardware~~economic ~~and~~weakness ~~software products, the sales of which are traditionally cyclical~~ and ~~may~~uncertainty becould ~~impacted~~have bya ~~shortages~~material ~~and~~adverse ~~other~~effect ~~disruptions~~on in the ~~global~~company’s ~~supply~~financial ~~chain~~performance.

The ~~semiconductor~~company’s ~~industry~~business ~~historically~~and ~~has~~financial ~~experienced~~performance ~~fluctuations~~depend inon ~~product~~worldwide ~~supply~~economic conditions and the demand, ~~often~~for ~~associated~~technology ~~with~~products ~~changes~~and services in ~~technology~~the ~~and~~markets ~~manufacturing~~in ~~capacity~~which the company operates. Global and ~~significant~~regional economic weakness, market ~~upturns~~uncertainty, persistent inflation, and ~~downturns.~~other ~~Sales~~adverse ofeconomic ~~semiconductor~~conditions ~~products~~have and ~~related~~in ~~services~~the ~~represented~~future ~~approximately~~could ~~53%,~~negatively ~~60%~~impact net revenue, ~~and~~gross ~~60%~~margins, ofearnings, ~~the~~growth ~~company’s~~rates, ~~consolidated~~and ~~sales~~cash flows; result in ~~2024,~~increased ~~2023,~~expenses and ~~2022,~~interest ~~respectively.~~rates; ~~The~~and ~~sale~~cause ofdifficulty ~~the~~in ~~company’s~~managing ~~IP&E~~inventory ~~products~~levels, ~~closely~~collecting ~~tracks~~customer ~~the~~receivables, ~~semiconductor~~and ~~market~~forecasting revenue, gross margin, cash flows and expenses.

Accordingly, the company’s revenues and profitability, particularly in its global components reportable segment, may be, and have been, adversely affected by weakness in the semiconductor market. During 2023, the company’s global components reportable segment entered a cyclical downturn characterized by declining sales due to elevated customer inventory levels, which were largely a result of the normalization of shortages in electronic components markets towards the end of 2022. This downturn continued throughout 2024, and its duration and severity, and the related adverse impacts on the company’s results of operations, remain uncertain and difficult to predict. Additionally, economic weakness could cause a decline in spending in information technology, which could reduce demand for semiconductor-related products and services, thereby negatively impacting the company’s ECS reportable segment.

The current cyclical downturn in semiconductor markets and the technology industry has adversely impacted the company’s business and financial results throughout 2024, and a further prolongation or worsening of such conditions in the future could have a material adverse effect on the company’s business, profitability, and, consequently, stock price.

If the company is unable to maintain its relationships with its suppliers, if the suppliers materially change the terms of their existing agreements with the company or the company fails to abide by the terms of such agreements, if suppliers cease selling their products through distribution generally, or if supply chain shortages and other disruptions occur, the company’s business could be materially adversely affected.

A substantial portion of the company’s inventory is purchased from suppliers with which the company has entered into non-exclusive distribution agreements. These agreements are typically cancellable at any time or on short notice (generally 30 to 90 days). Some of the company’s businesses rely on a limited number of suppliers to provide a high percentage of their revenues. For example, sales of products from one of the company’s suppliers accounted for approximately 8% of the company’s consolidated sales in 2024. To the extent that the company’s significant suppliers reduce the number of products they sell through distribution or cease selling their products through distribution entirely, experience disruptions in their supply chains, cease to continue doing business with the company, or are unable to continue to meet or significantly alter their obligations, the company’s business could be materially adversely affected. In addition, to the extent the company’s suppliers modify the terms of their contracts to the detriment of the company, limit supplies due to capacity constraints or other factors, or cancel such contracts or exercise remedies thereunder due to the company’s breach of contract terms, there could be a material adverse effect on the company’s business. Further, the supplier landscape has continued to experience a consolidation, which could negatively impact the company if the surviving, consolidated suppliers decide to exclude the company from their supply chains, and which could expose the company to increased pricing and dependence on a smaller number of suppliers, among other risks. Increasing consolidation in the industries

Table of Contents

where the company’s suppliers operate may occur as companies combine to achieve further economies of scale and other synergies, which could result in reduced supplies, as companies seek to eliminate duplicative product lines and services, and increased prices, which could have a material adverse effect on the company’s business.

The competitive pressures the company faces, such as pricing and margin reductions, could have a material adverse effect on the company’s business.

The company competes for both customers and suppliers in a highly competitive international environment against other large multinational and national electronic components and enterprise computing solutions distributors, as well as numerous other smaller, specialized competitors who generally focus on narrower market sectors, products, or industries. Such robust competition broadly, and within each market sector and geography, creates pricing and margin pressure and continuous demand for the company to improve service and product offerings. Additionally, some of the company’s competitors may have more extensive customer and/or supplier bases than the company in one or more of its market sectors. Other competitive factors include rapid technological changes, product availability, credit availability, speed of delivery, ability to tailor solutions to changing customer needs, quality and depth of product lines and training, and increasing demand for customer service and support. The company also faces competition from its own suppliers and from companies in the logistics and product fulfillment, catalog distribution, e-commerce, design services, and supply chain services markets. Reduced pricing power and reduced margins, as well as a failure to adequately address evolving customer demand and otherwise respond to these competitive factors, could adversely impact the company’s results of operations.

As the company continues to expand its business into new areas in order to stay competitive in the market, the company may encounter increased competition from its current and/or new competitors, making it difficult to retain or increase its market share. Further, supplier consolidation may result in suppliers with greater scale, market presence, and purchasing power. As a result, distributors such as the company may experience difficulty maintaining favorable pricing and margins and experience related adverse impacts on operating results.

Declines in value of the company’s inventory, or pre-paid IT Solutions, could materially adversely affect its business.

The market for the company’s products and services is subject to rapid technological changes, evolving industry standards, changes in end-market demand, evolving customer expectations and demands, oversupply of product, and regulatory requirements, which can contribute to the decline in value or the obsolescence of the company’s inventory. Although many of the company’s suppliers provide the company with certain protections from the loss in value of inventory (such as price protection and certain rights of return), the company cannot be sure that (i) such protections will fully compensate it for the loss in value, (ii) the suppliers will choose to, or be able to, honor such agreements, or (iii) the company will be able to continue to secure such protections in the future. For example, many of the company’s suppliers will not allow products to be returned after they have been held in inventory beyond a certain amount of time, and, in most instances, the return rights are limited to a certain percentage of the amount of products the company purchased in a particular time frame. Therefore, the company is not fully protected from a decline in the value of the company’s inventory, and such decline could have a material adverse effect on the company’s business.

~~The~~Political ~~company~~developments impacting international trade, ~~within~~trade ~~its~~disputes ~~ECS~~and ~~reportable~~increased ~~segment~~tariffs, ~~has~~particularly ~~multi-year~~between ~~distribution~~the ~~agreements~~United ~~under~~States ~~which~~and itChina; ~~has~~political ~~non-cancellable~~instability, ~~payment~~such ~~obligations~~as ~~through~~wars ~~2030,~~or ~~giving~~other ~~the~~armed ~~company~~conflicts; and the ~~right~~effects toof ~~sell~~epidemics, apandemics, ~~broad~~or ~~set~~other ofpublic IThealth ~~solutions.~~crises Ifmay negatively impact markets and cause weaker macroeconomic conditions, reducing demand for the company’s isproducts ~~unable~~and services, particularly due to ~~sell~~the ~~sufficient~~company’s ITextensive ~~solutions~~international ~~under~~operations ~~these~~and ~~agreements~~business. toEconomic ~~cover~~downturns ~~our~~may ~~purchase~~necessitate ~~obligations~~further restructuring actions, itwhich could have a material adverse effect on the company’s business.

The company’s lack of long-term sales contracts may have a material adverse effect on its business.

Most of the company’s sales are made on an order-by-order basis, rather than through long-term sales contracts. The company generally works with its customers to develop non-binding forecasts for future orders. Based on such non-binding forecasts, the company makes commitments regarding the level of business that it will seek and accept, the inventory that it purchases, and the levels of utilization of personnel and other resources. A variety of conditions over which the company has little or no control, both specific to each customer or generally affecting each customer’s industry or the broader market, may cause customers to cancel, reduce, or delay orders that were either previously made or anticipated, file for bankruptcy protection, or default on their payments owed to the company. Significant or numerous cancellations,

Table of Contents

reductions, or delays in orders by customers, loss of customers, changes in pricing and sourcing, and/or customer defaults on payments could materially adversely affect the company’s business.

If the company is unable to implement its Operating Expense Efficiency Plan effectively, it could materially adversely impact financial results.

In 2024, the company began a multi-year restructuring plan (the “Operating Expense Efficiency Plan” or the “Plan”) designed to improve operational efficiency through various measures. Refer to Note 9 of the Notes to the Consolidated Financial Statements for discussion of the “Operating Expense Efficiency Plan.”

The Operating Expense Efficiency Plan could adversely impact the company due to any of the following: a decrease in employee morale; difficulty hiring qualified employees in other regions; current cost-effective regions becoming more expensive; inefficiency due to geographic segmentation of employees and operations; disruptions in operations; unanticipated delays encountered in finalizing the scope of, and implementing, the restructuring; failure to achieve targeted cost savings; failure to meet operational targets and customer requirements; failure to manage supplier relationships; and failure to maintain adequate internal control over financial reporting. These risks are further complicated by the company’s extensive international operations, which subject the company to different legal and regulatory requirements that govern the extent and speed of the company’s ability to reduce or consolidate its operations and workforce. See also “The company’s success depends upon its ability to attract, retain, motivate, and develop key executive and employee talent and the strategies they develop and implement”.

The company’s non-U.S. sales represent a significant portion of its revenues, and consequently, the company is exposed to risks associated with operating internationally.

In 2024, 2023, and 2022, approximately 65%, 66%, and 65%, respectively, of the company’s sales came from its operations outside the United States. As a result of the significant extent of the company’s international business and operations, the company is subject to a variety of risks, including the following:

•In ~~import~~2025, 2024, and ~~export~~2023, ~~regulations~~approximately ~~that~~66%, ~~could~~65%, ~~erode~~and ~~profit~~66%, ~~margins~~respectively, orof ~~restrict~~the ~~exports;~~company’s sales came from its operations outside the United States. As a result of the significant extent of the company’s international business and operations, the company is subject to a variety of risks, including:

•

import and export regulations that could erode profit margins or restrict international sales and transportation of products;

•

potential social unrest, military conflicts, government shutdowns and disruptions, and other geopolitical risks and uncertainties;

•

the burden and cost of compliance with international laws, regulations, treaties, and technical standards, including, without limitation, with respect to tax;

• ~~potential~~currency ~~restrictions on transfers of funds~~fluctuations;

•

trade protection measures, import and export tariffs and other restrictions, duties, and value-added taxes;

•

potential restrictions on transfers of funds;

•

transportation delays and interruptions;

•

uncertainties arising from local business practices and cultural considerations;

•

foreign laws that potentially discriminate against or disfavor companies headquartered outside the relevant jurisdiction;

•

stringent antitrust regulations in local jurisdictions;

• volatility associated with sovereign debt of certain ~~international economies~~countries;

• various jurisdictions’ environmental protection laws and regulations, including those related to climate change and sustainability disclosures; and

• non-compliance with local laws;.

~~• potential social unrest, military conflicts, government shutdowns and disruptions, and other geopolitical risks and uncertainties; and~~10

•Table ~~currency~~of ~~fluctuations.~~Contents

See also “The company is subject to laws, regulations, and executive orders that could have a negative impact on the company’s business, including, without limitation, export and import controls, tariffs, sanctions, embargoes, international trade restrictions, anti-corruption laws, and anti-money laundering laws. In the event of non-compliance, the company could face serious consequences, that could harm its business.” Refer to “Foreign Currency Exchange Rate Risk” in Item 7.A Quantitative and Qualitative Disclosures About Market Risk for a further discussion of the company’s description of the impacts of foreign currency exchange rates on the company’s results and projections.

~~See~~Business also “The company is subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws, anti-bribery laws, and anti-money laundering laws and regulations, as well as tariffs and trade protectionism. In the event of non-compliance, the company can face serious consequences, which can harm its business.” Refer to “Foreign Currency Exchange Risk” in Item 7.A Quantitative and Qualitative Disclosures About Market Risk for a further discussion of the company’s description of the impacts of foreign currency exchange rates on the company’s results and projections. Risks

A substantial portion of the company’s inventory is purchased from suppliers with which the company has entered into non-exclusive distribution agreements. These agreements are typically cancellable at any time or on short notice (generally 30 to 90 days). Some of the company’s business offerings rely on a limited number of suppliers to provide a high percentage of revenues. For example, sales of products from one of the company’s suppliers accounted for approximately 8% of the company’s consolidated sales in 2025. To the extent that the company’s significant suppliers reduce the number of products they sell through distribution, cease selling their products through distribution entirely, experience disruptions in their supply chains, cease doing business with the company, or are unable to continue to meet their obligations, the company’s business could be materially adversely affected. In addition, to the extent the company’s suppliers modify the terms of their contracts to the detriment of the company, limit supplies due to capacity constraints or other factors, or cancel such contracts or exercise adverse remedies thereunder due to an actual or perceived breach of contract terms by the company, there could be a material adverse effect on the company’s business.

Further, the supplier landscape has continued to experience consolidation, which could negatively impact the company if the surviving, consolidated suppliers decide to exclude the company from their supply chains, and which could expose the company to increased pricing and dependence on a smaller number of suppliers, among other risks. Increasing consolidation in the industries where the company’s suppliers operate may occur as companies combine to achieve further business advantages, which could result in reduced supplies as companies seek to eliminate duplicative product lines and services, and increased prices, which could have a material adverse effect on the company’s business.

The competitive pressures the company faces, such as pricing and margin reductions, could have a material adverse effect on the company’s business.

The company competes for both customers and suppliers in a highly competitive international environment against other large multinational and national electronic components and enterprise computing solutions distributors, as well as numerous other smaller, specialized competitors who generally focus on narrower market sectors, products, or industries. Such robust competition broadly, and within each region and market sector, creates pricing and margin pressure and continuous demand for the company to improve service and product offerings. Additionally, some of the company’s competitors may have more extensive customer and/or supplier bases than the company in one or more of its regions and/or market sectors. Other competitive factors include rapid technological changes, product availability, credit availability, speed of delivery, ability to tailor solutions to changing customer needs, quality and depth of product lines and training, and increasing demand for customer service and support. The company also faces competition from its own suppliers and from companies in the logistics and product fulfillment, catalog distribution, e-commerce, design services, and supply chain services markets. Reduced pricing power and reduced margins, as well as a failure to adequately address evolving customer demand and otherwise respond to these competitive factors, could adversely impact the company’s results of operations.

As the company continues to expand its business into new areas to stay competitive in the market, the company may encounter increased competition from current and/or new competitors, making it difficult to retain or increase its market share. Further, supplier consolidation may result in suppliers with greater scale, market presence, and purchasing power.

Table of Contents

As a result, distributors such as the company may experience difficulty maintaining favorable pricing and margins and experience related adverse impacts on operating results.

The company’s success depends upon its ability to attract, retain, motivate, and develop key executive and employee talent.

Any failure to attract, retain, motivate, and develop key executive and employee talent may materially and adversely affect the company’s business.

The company’s success depends, to a significant extent, on the capability, expertise, and continued service of its key executives and employees. The company relies on the expertise and experience of certain key executives and employees in developing business strategies, managing business operations, and cultivating new and maintaining existing relationships with customers and suppliers. If the company were to lose any of its key executives or employees, it may not be able to find a suitable replacement with comparable knowledge and experience in a timely manner, or if at all, at a similar level of remuneration and other benefits.

The company is currently conducting a search for a permanent President and CEO, following the appointment of William F. Austen as Interim President and CEO on September 16, 2025. Changes to executive leadership may create uncertainty, divert resources and management attention, or impact public or market perception, any of which could negatively impact the company's ability to operate effectively or execute its strategies and result in an adverse impact on its business. Further, new executives may have different backgrounds, experiences, and perspectives than the previous executives and thus may have different views on the company’s strategy and other significant matters, potentially resulting in employee, customer, and supplier uncertainty.

The company relies on its employee workforce to execute the business strategy, service customers and suppliers, and perform daily operations. From time to time, and most recently in connection with the Operating Expense Efficiency Plan, the company has and may need to reduce the size of its workforce in response to adverse market conditions or for strategic business realignment. Such workforce reductions may adversely affect the morale and performance of remaining employees as well as the company’s ability to attract, motivate, retain, and develop skilled personnel, which could have a significant impact on the company’s operations and financial condition.

Restrictions on immigration or changes in immigration laws could have adverse impacts on macroeconomic conditions, limit the company’s access to qualified and skilled professionals, increase the cost of doing business, delay international business travel, or otherwise disrupt operations.

Overestimating customer demand for certain products or a decline in the value of the company’s inventory or pre-paid IT solutions could materially adversely affect the company’s business.

The market for the company’s products and services is subject to rapid technological changes, evolving industry standards, changes in end-market demand, evolving customer expectations and demands, oversupply of product, and regulatory requirements, which can contribute to the decline in value or the obsolescence of the company’s inventory. Although some of the company’s suppliers provide the company with certain protections from the loss in value of inventory (such as price protection and certain rights of return), the company cannot be sure that (i) such protections will fully compensate it for the loss in value, (ii) the suppliers will choose to, or be able to, honor such agreements, or (iii) the company will be able to continue to secure such protections in the future. For example, many of the company’s suppliers will not allow products to be returned after they have been held in inventory beyond a certain amount of time, and, in most instances, the return rights are limited to a certain percentage of the amount of products the company purchased in a particular time frame. Therefore, the company is not fully protected against adverse shifts in customer demand or declines in the value of its inventory, which could result in increased inventory-management costs, write-downs, or write-offs, which could have a material negative effect on the company’s assets and operations.

The company, within global ECS, has multi-year distribution agreements under which it has non-cancellable purchase obligations through 2032, giving the company the right to sell certain IT solutions in specific regions. In 2025, the company recorded net losses of $18.3 million due to lower demand and profit expectations on certain contracts, which negatively

Table of Contents

impacted the company’s gross profit margins. If the sales under these or other agreements do not meet the company’s purchase obligations in future periods, the company’s business and results of operations could be materially negatively affected. Refer to “Business environment and other trends” in Item 7 for a further discussion of these multi-year distribution agreements.

If the company fails to successfully invest in and implement digital, AI, and other technological developments, or its suppliers are not able to continue to offer competitive components and electronic computing solutions, it could materially adversely impact results.

The company’s industry is subject to rapid and significant technological changes, and the company’s ability to meet its customers’ needs and expectations is key to the company’s ability to grow sales and earnings. The company’s customers and suppliers increasingly expect the company’s platforms to include digital technologies to facilitate distribution of components and electronic computing solutions. For example, the ability of customers to access their accounts, place orders, and otherwise interface with the company using digital technology is an important aspect of the distribution industry, and distribution companies are rapidly introducing new digital and other technology-driven products and services that aim to improve customer experience and reduce costs. If the company is unable to sufficiently maintain and enhance its digital platforms, cloud platforms, and AI tools to keep pace with competitors and align with evolving customer and supplier expectations and demands, there could be an adverse impact on the company’s sales revenues and ability to retain existing, and attract new, customers. Additionally, the company has made, and may continue to make, acquisitions of, or investments in new services or technologies to expand its current service offerings and product lines, which may involve risks that may differ from those traditionally associated with the company’s core business. See also “Acquisitions, divestitures, or joint ventures may cause the company to experience operating difficulties and other consequences that may negatively impact the company’s business, financial condition, and operating results, and the company may not be able to successfully consummate favorable transactions or integrate acquired businesses.”

The company’s sales are also partially dependent on continued innovations in components and electronic computing solutions by its suppliers, the competitiveness of its suppliers’ offerings, and the company’s ability to partner with new and emerging technology providers. As a result, the company may have difficulty offering components, services, and solutions that anticipate and respond to rapid and continuing changes in technology and meet customers’ evolving demands. See also “The competitive pressures the company faces, such as pricing and margin reductions, could have a material adverse effect on the company’s business.”

Additionally, laws and regulations concerning the use of AI are rapidly evolving and create uncertainty. Compliance with these laws and regulations may impose significant operational costs or limit the manner in which the company can utilize systems that incorporate AI technologies.

The company’s revenues originate primarily from the sales of semiconductor, IP&E, and IT hardware and software products, the sales of which are traditionally cyclical and may be impacted by shortages and other disruptions in the global supply chain.

The semiconductor industry historically has experienced fluctuations in product supply and demand, often associated with changes in technology and manufacturing capacity and significant economic market upturns and downturns. Sales of semiconductor products and related services represented approximately 50%, 53%, and 60%, of the company’s consolidated sales in 2025, 2024, and 2023, respectively. The sale of the company’s IP&E products closely tracks the semiconductor market.

Accordingly, the company’s revenues and profitability, particularly in its global components reportable segment, have been, and may be, adversely affected by weakness in the semiconductor market. During 2023, the company’s global components reportable segment entered a cyclical downturn that endured throughout 2024 and part of 2025, characterized by declining sales due to elevated customer inventory levels, which were largely a result of the normalization of shortages in electronic components markets toward the end of 2022. A cyclical downturn in semiconductor markets and the technology industry has adversely impacted the company’s business and financial results in the past, and a recurrence of such conditions in the future could have a material adverse effect on the company’s business, profitability, and, consequently, stock price.

Table of Contents

The company’s lack of long-term sales contracts may have a material adverse effect on its business.

Most of the company’s sales are made on an order-by-order basis, rather than through long-term sales contracts. The company generally works with its customers to develop non-binding forecasts for future orders. Based on such non-binding forecasts, the company makes commitments regarding the level of business that it will seek and accept, the inventory that it purchases, and the levels of utilization of personnel and other resources. A variety of conditions over which the company has little or no control, both specific to each customer or generally affecting each customer’s industry or the broader market, may cause customers to cancel, reduce, or delay orders that were previously made or anticipated, file for bankruptcy protection; or default on their payments owed to the company, which could materially adversely affect the company’s business.

If the company is unable to implement its Operating Expense Efficiency Plan effectively, it could materially adversely impact financial results.

In 2024, the company began a multi-year restructuring plan (the “Operating Expense Efficiency Plan” or the “Plan”) designed to improve operational efficiency through various measures, including reduction and relocation of parts of the company’s employee workforce. For further discussion of the Plan, refer to Note 9 - “Restructuring, Integration, and Other” within Item 8.

The Operating Expense Efficiency Plan could adversely impact the company due to any of the following: a decrease in employee morale; difficulty hiring qualified employees; current cost-effective regions becoming more expensive; inefficiency due to geographic segmentation of employees and operations; disruptions in operations; delays in finalizing the scope of, and implementing, the restructuring; failure to achieve targeted cost savings; failure to meet operational targets and customer requirements; failure to manage supplier relationships; and failure to maintain adequate internal control over financial reporting. These risks are further complicated by the company’s extensive international operations, which subject the company to different legal and regulatory requirements that govern the extent and speed of the company’s ability to reduce or consolidate its operations and workforce. See also “The company’s success depends upon its ability to attract, retain, and motivate key executive and employee talent.”

Changes in the company’s global mix of earnings, tax laws, and regulations could cause fluctuations in the company’s effective tax rate and adversely impact financial results.

The company’s effective tax rate may be adversely affected by fluctuations in the geographic distribution of earnings, which may subject earnings to different or multiple statutory tax rates. Shifts in the business environment or changes in tax laws and regulations in each jurisdiction in which the company operates may also adversely affect the company’s effective tax rate. For further details on the company’s deferred tax assets and liabilities and uncertain tax positions, refer to Note 1 of the Notes to the Consolidated Financial Statements.

The company’s effective tax rate may be adversely affected by fluctuations in the geographic distribution of earnings, which may subject earnings to different or multiple statutory tax rates. Shifts in the business environment or changes in tax laws and regulations in each jurisdiction in which the company operates may also adversely affect the company’s effective tax rate. For further details on the company’s deferred tax assets and liabilities and uncertain tax positions, refer to Note 1 – “Summary of Significant Accounting Policies” within Item 8.

In recent years, numerous domestic and international tax proposals have been issued and enacted which have increased the tax burden on large multinational companies. For example, the OECD has advanced new tax proposals affecting international taxation, including the establishment of a global minimum tax of 15%, which many countries are either considering implementing or have already implemented. Any new tax legislation could impact the company’s tax obligations in the countries where it operates, leading to increased taxation of its international earnings.

Moreover, changes to U.S. or foreign tax laws could have broader implications, including indirect effects on the economy, currency markets, inflation, or competitive dynamics, which are difficult to predict and may negatively impact the company. Such tax developments could further increase uncertainty and have a material adverse impact on the company’s cash flows, effective tax rate, and financial results.

The company is regularly audited by U.S. and foreign tax authorities. Although the company provisions for income taxes and tax estimates, the final resolution of these audits may differ, in some cases materially, from the estimates reflected in the company'’s financial results. Additionally, economic and political pressures to increase tax revenue by various jurisdictions may make resolving tax disputes more challenging ~~than in the past~~.

Table of Contents

Acquisitions, divestitures, or joint ventures may cause the company to experience operating difficulties and other consequences that may negatively impact the company’s business, financial condition, and operating results, and the company may not be able to successfully consummate favorable transactions or integrate acquired businesses.

From time to time, the company has, and may continue to evaluate potential acquisitions, divestitures, joint ventures, or other strategic transactions that could further the company’s strategic objectives. As part of the company’s history and growth strategy, it has acquired other businesses and continues to evaluate strategic opportunities to acquire additional businesses from time to time. The company has also in the past, and may in the future, divest or reduce its investment in certain businesses and product lines. Acquisitions and divestitures involve numerous risks, including:

•From ~~effectively~~time ~~combining~~to time, the company has, and may continue to, evaluate potential acquisitions, divestitures, joint ventures, or other strategic transactions. As part of the company’s growth strategy, it has acquired ~~operations~~other businesses and continues to evaluate strategic opportunities to acquire additional businesses from time to time. The company has also in the past, ~~technologies~~and may in the future, divest or ~~products;~~reduce its investment in certain businesses and product lines. Acquisitions and divestitures involve numerous risks, including:

•

effectively combining and integrating the acquired operations, technologies, or products;

•

unanticipated costs or assumed or retained liabilities, including, but not limited to, those associated with combining and integrating operations, technologies, and facilities;

• costs associated with regulatory approvals, actions, or investigations;

•

difficulty identifying potential acquirers or other divestiture options on favorable terms;

•

the inability to retain and obtain required regulatory approvals, licenses, and permits;

•

delayed completion due to local consultation laws;

•

not realizing the anticipated financial benefit from the acquired companies;

• in the event the acquisition is funded with proceeds of indebtedness, adverse impacts on the company’s leverage ratios and an associated downgrade of its credit rating as well as increased interest costs;

•

diversion of management’s attention;

•

negative effects on existing customer and supplier relationships;

•

disruption due to the integration and rationalization of operations, products, technologies, and personnel;

• liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims,; data privacy and security issues,; violations of laws and regulations; liabilities associated with violations of anticorruption, sanctions, or trade control laws; commercial disputes,; tax liabilities,; environmental issues and remediation expenditures,; and other known and unknown liabilities;

•

change in the company’s effective tax rate;

•

difficulty separating assets or businesses (or portions thereof) from the company’s other businesses;

•

decrease in margins, loss of revenue, operating income, or disruption to customer relationships as a result of a divestiture;

Table of Contents

•

litigation or other claims in connection with an acquired company or a divestiture, including claims from terminated employees, customers, current or former equity holders, or other third parties;

•

significant costs associated with exit or disposal activities or related impairment charges; and

•

potential loss of key employees of the company or acquired companies.

If the company is not able to successfully manage any of these risks in relation to future acquisitions or divestitures, it could have a material adverse effect on the company’s business.

~~If the company fails to adequately invest successfully in and introduce digital~~Cybersecurity, ~~artificial intelligence (“AI”)~~Privacy, and ~~other~~Technology ~~technological developments, or its suppliers are not able to continue to offer competitive components and electronic computing solutions, it could materially adversely impact results.~~Risks

The company’s industry is subject to rapid and significant technological changes, and the company’s ability to meet its customers’ needs and expectations is key to the company’s ability to grow sales and earnings. The company’s customers and suppliers increasingly expect the company’s platforms to include digital technologies to facilitate distribution of components and electronic computing solutions over time. For example, the ability of customers to access their accounts, place orders, and otherwise interface with the company using digital technology is an important aspect of the distribution industry, and distribution companies are rapidly introducing new digital and other technology-driven products and services that aim to offer a better customer experience and reduce costs. If the company is unable to maintain and enhance its digital platforms, cloud platforms, and artificial intelligence related tools to keep pace with competitors and align with evolving customer and supplier expectations and demands, it could adversely impact the company’s sales revenues and ability to retain existing, and attract new, customers. Additionally, the company has made, and may continue to make, acquisitions of, or investments in new services or technologies to expand its current service offerings and product lines, which may involve risks that may differ from those traditionally associated with the company’s core distribution business. See also “Acquisitions, divestitures, or joint ventures may cause the company to experience operating difficulties and other consequences that may negatively impact the company’s business, financial condition, and operating results, and the company may not be able to successfully consummate favorable transactions or integrate acquired businesses”.

The company’s sales are also partially dependent on continued innovations in components and electronic computing solutions by its suppliers, the competitiveness of its suppliers’ offerings, and the company’s ability to partner with new and emerging technology providers. The company may have difficulty offering customers components, services, and solutions that anticipate and respond to rapid and continuing changes in technology and which meet their evolving demands. See also “The competitive pressures the company faces, such as pricing and margin reductions, could have a material adverse effect on the company’s business”.

Operational Risks

The company’s success depends upon its ability to attract, retain, motivate, and develop key executive and employee talent and the strategies they develop and implement.

Any failure to attract, retain, motivate, and develop key executive and employee talent may materially and adversely affect the company’s business.

The company relies on its employee workforce to execute the business strategy, service customers and suppliers, and perform daily operations. The company’s Operating Expense Efficiency Plan involves the reduction of the company’s employee workforce and may adversely affect the company’s internal programs and initiatives as well as the company’s ability to attract, recruit and retain skilled and motivated personnel. The Operating Expense Efficiency Plan may also be

Table of Contents

distracting to employees and may negatively impact the company’s business operations, reputation, or ability to serve customers. Relatedly, the company also faces risks of mismanaging employee relations and terminations and becoming subject to legal claims as a result.

Additionally, management transitions, such as the company’s transitions in 2024 to a new president of global ECS and new chief strategy officer, may create uncertainty, divert resources and management attention, or impact public or market perception, any of which could negatively impact the company's ability to operate effectively or execute its strategies and result in an adverse impact on its business. Further, new executives may have different backgrounds, experiences, and perspectives from those individuals who previously served in these roles and thus may have different views on the issues that will determine the company’s future, potentially resulting in employee, customer, and supplier uncertainty.

The company relies heavily on its internal information systems, which, if not properly functioning, could materially adversely affect the company’s business.

The company relies on its information systems to support daily operations and generate timely, accurate, and reliable financial and operational data. The company’s current global operations reside on multiple technology platforms, some of which are currently undergoing projects intended to streamline or optimize these platforms. The size and complexity of the company’s information systems make them vulnerable to breakdown, defective software updates from the company’s information-technology vendors, failure to keep software updated and current, and ransomware attacks. Failure to properly or adequately address such issues could impact the company’s ability to perform necessary business operations, which could materially adversely affect the company’s business.

Technologies used in or integrated into the company’s operations, such as cloud-based services, artificial intelligence, and automation, may cause an adverse shift in the way the company’s existing business operations are conducted. In addition, AI algorithms may be flawed. Datasets used to train the models which support the company’s AI offerings or internal use may be insufficient or contain biased information or lead to unexpected or unintended outcomes, which could erode trust in the company’s AI systems and subject the company to competitive harm, regulatory action, and legal liability.

Cybersecurity and Privacy Risk

Cybersecurity incidents may hurt the company’s business, damage its reputation, increase its costs, and cause losses.

The company’s information technology systems could be subject to significant cyber security and privacy incidents, including, but not limited to, invasion, malicious intrusion, inducement (fraudulent or otherwise) by third parties to obtain information from employees, customers, or suppliers; cyber-attacks; ransom demands; or cybersecurity breaches caused by third parties as well as employees and others with authorized access; social engineering; nation-state attacks; exploitation of unpatched or unmanaged vulnerabilities; destruction or other misuse of data that could harm the company, operations, or the company’s competitive position. The company and its service providers have been, and continue to be, the subject of cyber-attacks. While cybersecurity incidents have not caused any material interruption to the company’s business, strategy, results of operations, or financial condition, there can be no assurance that such incidents will not have a material adverse impact on the company in the future.

~~Any~~The ~~such~~company’s ~~incident,~~information ~~whether~~technology ~~successful~~and orother ~~unsuccessful,~~systems could ~~result~~be ~~in,~~subject ~~without~~to ~~limitation,~~significant ~~disruption~~cybersecurity toand ~~the~~privacy ~~company’s~~incidents, ~~operations;~~including, ~~loss~~but ornot ~~compromise~~limited ofto, orinvasion, ~~damage~~malicious tointrusion, ~~the~~inducement ~~company’s~~(fraudulent or ~~any~~otherwise) ofby ~~its~~third parties to obtain information from employees, customers’, or suppliers’; ~~data,~~cyber-attacks; ~~confidential~~ransom ~~information~~demands; ~~significant~~cybersecurity ~~legal,~~breaches ~~regulatory,~~caused ~~and~~by ~~financial~~third ~~exposure;~~parties ~~damage~~as towell ~~the~~as ~~company’s~~employees ~~reputation~~and others with authorized access; ~~significant~~social ~~costs~~engineering; ~~related~~nation-state toattacks; ~~rebuilding~~exploitation ~~internal~~of ~~systems,~~unpatched ~~managing~~or ~~company~~unmanaged ~~brand~~vulnerabilities; ~~and~~or ~~reputation,~~destruction ~~litigation,~~or ~~fines,~~other ~~damages,~~misuse ~~responding~~of todata ~~regulatory~~that ~~inquiries,~~could ~~and~~harm ~~taking~~the ~~other~~company, ~~remedial~~its ~~steps;~~operations, ~~loss~~or ofits competitive ~~advantage;~~position. The company and aits ~~loss~~service ofproviders ~~confidence~~have inbeen, ~~the~~and ~~security~~continue ofto be, the ~~company’s~~subjects ~~information~~of ~~technology~~cyber-attacks. ~~systems,~~While ~~any~~cybersecurity ofincidents ~~which~~have ~~could~~not ~~have~~had ana ~~adverse~~material impact on the company’s business, ~~including~~strategy, byresults ~~impairing~~of ~~the~~operations, ~~company’s~~or ~~ability~~financial tocondition, ~~sell~~there ~~its~~can ~~products~~be ~~and~~no ~~services.~~assurance ~~Because~~that ~~the~~such ~~techniques used to cause these~~ incidents ~~and~~will ~~gain~~not ~~unauthorized~~have ~~access~~a ~~to,~~material ~~disable,~~adverse orimpact ~~sabotage~~on the company’s ~~information~~in ~~technology~~the ~~systems and data~~ future.

Table of Contents

Any such incident, whether successful or unsuccessful, could result in, without limitation, disruption to the company’s operations; loss or compromise of, or damage to, the company’s or any of its customers’, suppliers’, or end-users’ data; theft and misuse of confidential or personal information; significant legal, regulatory, and financial exposure; damage to the company’s reputation; significant costs related to rebuilding internal systems, managing company brand and reputation, litigation, fines, damages, responding to regulatory inquiries, and taking other remedial steps; loss of competitive advantage; and a loss of confidence in the security of the company’s information technology systems, any of which could have an adverse impact on the company’s business and relationships with customers or suppliers, including by impairing the company’s ability to sell its products and services. Because the techniques used to cause these incidents and gain unauthorized access to, disable, or sabotage the company’s information technology systems and data stored on those systems change frequently and often are not recognized until ~~launched~~they are initiated, the company may be unable to anticipate them or to implement adequate preventive or protective measures to guard against them. Further, third parties, such as hosted solution providers, are a source of risk because they could be subject to the same or other similar types of incidents, for example in the event of a failure of their own systems and infrastructure or if they experience their own privacy or security event, which could create risks similar to those described above. These third parties could include organizations in the company’s supply chain, which if subject to an incident, could adversely impact the company’s ability to service its customers and suppliers. Additionally, a cyber-attack or information technology system failure affecting the company’s suppliers or customers could disrupt and negatively impact the company’s operations.

Failure to maintain satisfactory compliance with certain privacy and data protections laws and regulations may subject the company to substantial negative financial consequences and civil or criminal penalties.

Global privacy legislation, enforcement, and policy activity are ~~also~~ rapidly expanding and creating a complex compliance environment. The company’s actual or perceived failure to comply with ~~federal, state, or international~~ privacy ~~related~~ or data protection laws and regulations in any of the jurisdictions in which it operates could result in damage to the company’s reputation as well as legal proceedings against the company by governmental entities or others, which could have a material adverse effect on its business.

The company relies heavily on its internal information systems, which, if not properly functioning, could materially adversely affect the company’s business.

The company relies on its information systems to support daily operations and generate timely, accurate, and reliable financial and operational data. The company’s current global operations reside on multiple technology platforms, some of which are currently undergoing projects intended to streamline or optimize these platforms. The size and complexity of the company’s information systems make them vulnerable to breakdown, defective software updates from the company’s IT vendors, failure to keep software updated and current, and ransomware attacks. Failure to properly or adequately address such issues could impact the company’s ability to perform necessary business operations, which could materially adversely affect the company’s business.

Technologies used in or integrated into the company’s operations, such as cloud-based services, AI, and automation, may cause an adverse shift in the way the company’s existing business operations are conducted. In addition, AI algorithms may be flawed. Datasets used to train the models which support the company’s AI offerings or internal use may be insufficient or contain biased information or lead to unexpected or unintended outcomes, which could erode trust in the company’s AI systems and subject the company to competitive harm, regulatory action, and legal liability.

Regulatory and Legal Risks

~~Products~~The ~~sold~~company oris ~~designed~~subject byto ~~the~~laws, ~~company~~regulations, ~~may~~and beexecutive ~~found~~orders tothat becould ~~defective~~have ~~and~~a negative impact on the company’s business, asincluding, awithout ~~result~~limitation, ~~warranty~~export and~~/or~~ ~~product~~import ~~liability~~controls, ~~claims~~tariffs, ~~may~~sanctions, beembargoes, ~~asserted~~international ~~against~~trade ~~the~~restrictions, ~~company~~anti-corruption laws, ~~which~~and ~~may~~anti-money ~~have~~laundering alaws. ~~material~~In ~~adverse~~the ~~effect~~event onof non-compliance, the company could face serious consequences that could harm its business.

As a distributor, the company sells its components or services at prices that are significantly lower than the cost of the equipment or other goods in which they are incorporated. As a result, the company may face claims for damages (such as consequential damages) that are disproportionate to the revenues and profits it receives from the components involved in such claims. Further, the company’s ability to avoid such liabilities pursuant to defective product provisions in its supplier agreements may be limited as a result of differing factors, such as the inability to exclude such damages due to third party contractual provisions or the laws of some of the countries where the company does business. The company’s business could be materially adversely affected as a result of a significant quality or performance issue in the products sold by the company if it is required to pay for the associated damages. The company’s product liability insurance is limited in coverage and amount and may not be sufficient to cover all possible claims. Further, when relying on contractual liability exclusions, the company could lose customers if their claims are not addressed to their satisfaction.

InThe ~~the~~ company’s ~~rendering~~is ofsubject ~~integration~~to ~~services,~~complex ~~the~~and ~~company~~evolving ~~may~~laws beand ~~exposed~~regulations toworldwide ~~increased~~that ~~risks~~differ ~~associated~~among ~~with~~jurisdictions ~~product~~and ~~defects.~~affect ~~Defects~~its ~~arising~~operations, ~~from~~including ~~integration~~the ~~services~~EAR, ~~could~~U.S. ~~lead~~Customs toregulations, ~~product~~and ~~liability~~various ~~claims~~other trade laws, ~~recalls~~regulations, ~~fines~~executive orders, and ~~penalties.~~sanctions ~~These~~administered ~~risks~~by ~~are~~the ~~particularly~~U.S. ~~pronounced~~Departments inof ~~applications for aerospace~~State, ~~automotive~~Commerce, and ~~medical products~~Treasury, ~~where~~as ~~product~~well ~~failures~~as ~~could~~other ~~result~~U.S. inand ~~serious~~foreign ~~harm~~governmental toagencies. ~~end~~Products ~~users.~~the ~~Any~~company ~~such~~sells ~~adverse~~which ~~events~~are ~~could~~either ~~affect~~manufactured ~~our~~in ~~financial~~the ~~condition,~~United ~~operating~~States ~~results,~~or ~~and~~based ~~reputation~~on U.S.

The company is subject to laws and regulations that could have a negative impact on our business, including, without limitation, U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws, anti-bribery laws, and anti-money laundering laws and regulations, as well as tariffs and trade protectionism. In the event of non-compliance, the company can face serious consequences, which can harm its business.

The company is subject to complex and evolving laws and regulations worldwide that differ among jurisdictions and affect our operations, including the U.S. EAR, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s OFAC. Products the company sells which are either manufactured in the United States or based on U.S. technology (“U.S. Products”) are subject to the EAR when exported and re-exported to and from all international jurisdictions, in addition to the local jurisdiction’s export regulations applicable to individual shipments. Licenses or proper license exemptions may be required by local jurisdictions’ export regulations, including EAR, for the shipment of certain U.S. Products to certain countries, including China, India, and other countries in which the company operates. The company may not be able to effectively monitor the activities of all of its employees involved in regulated export or shipment activities, which may lead to the company’s failure to prevent violations of such regulations.

Table of Contents

technology (“U.S. Products”) are subject to the EAR when exported and re-exported to and from all international jurisdictions, in addition to the local jurisdiction’s export regulations applicable to individual shipments. If a regulator determines, even in error, that the company or its subsidiaries are not in compliance with applicable laws, regulations, or executive orders or designates the company or its subsidiaries as sanctioned entities or otherwise prohibits third-parties from transacting with them, such determination could result in negative impacts to the company’s sales, customer relationships, and reputation that could have a material negative impact on the company’s business and financial condition.

~~Non-compliance~~For ~~with~~example, ~~the~~on ~~EAR~~October 8, ~~OFAC regulations~~2025, orthree ~~other~~of ~~applicable~~the ~~export~~company’s ~~regulations~~subsidiaries ~~can~~in ~~result~~China inwere aadded ~~wide~~to ~~range~~the of“Entity ~~penalties~~List” ~~including~~of the ~~denial~~BIS, orwhich ~~restriction~~restricted their ability to receive exports of ~~export~~U.S. ~~privileges,~~technology ~~significant~~from ~~fines,~~suppliers. ~~criminal~~On ~~penalties~~October 17, ~~and~~2025, the ~~seizure~~BIS ofissued ~~inventories,~~a ~~any~~temporary ofauthorization ~~which~~that ~~could~~allowed ~~have~~these aentities ~~material~~to ~~adverse~~resume ~~effect~~their onnormal ~~the~~business ~~company’s~~activities, ~~business.~~and ~~The~~the ~~company’s~~entities ~~distribution~~were ~~process~~formally ~~also~~removed ~~includes~~from the ~~use~~Entity ofList ~~third~~on ~~parties~~November ~~that~~11, ~~operate~~2025; ~~outside~~however, ofduring the ~~company’s~~intervening ~~direct~~time ~~control.~~period, ~~Noncompliance~~the ~~with~~subsidiaries ~~applicable~~were ~~import,~~unable ~~export,~~to ~~and~~receive ~~other~~shipments ~~laws~~from ~~and~~many ~~regulations~~suppliers byand ~~these~~fulfill ~~third~~corresponding ~~parties~~customer ~~may~~orders, ~~result~~which inhad ~~substantial~~an ~~liability~~adverse toimpact on the ~~company~~Company’s ~~and~~operating ~~harm~~results for the ~~company’s~~fourth ~~reputation~~quarter of 2025.

Further, the company is also subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, and other national and sub-national anti-bribery and anti-money laundering laws in the countries in which it conducts business. Anti-corruption laws have been enforced aggressively in recent years and are interpreted broadly. The company can be held liable under these laws for the corrupt or other illegal activities of its employees, agents, contractors, counterparties, and third parties it engages to provide services, even if it does not explicitly authorize or have actual knowledge of such activities. Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences.

~~The~~In ~~company’s~~addition, ~~global~~licenses ~~business~~or ~~also~~proper ~~could~~license beexceptions ~~negatively~~may ~~affected~~be required by ~~trade~~export ~~barriers~~regulations, ~~such~~including asthe ~~tariffs~~EAR, ~~and other governmental protectionist measures, which may decrease demand~~ for the ~~company’s~~shipment ~~products. Such measures can be imposed suddenly and unpredictably and may increase the prices~~ of ~~many~~certain ofU.S. ~~the~~Products ~~products~~to ~~that~~certain ~~the~~countries, ~~company~~including ~~purchases~~China, ~~from~~India, ~~its suppliers. Tariffs~~ and other ~~protectionist~~countries ~~measures,~~in ~~and~~which the ~~additional~~company ~~operational~~operates. ~~costs~~The ~~incurred~~company inmay ~~minimizing~~not ~~the~~be ~~number~~able ~~of products subject~~ to ~~them,~~effectively ~~could~~monitor ~~adversely affect~~ the ~~operating~~activities ~~profits~~of ~~for~~all ~~certain~~ of ~~the~~its ~~company’s~~employees ~~businesses~~involved ~~and~~in ~~customer~~regulated ~~demand~~export ~~for~~or ~~certain~~shipment ~~products~~activities, which ~~could~~may ~~have~~lead anto ~~adverse~~the ~~effect~~company’s onfailure ~~its~~to ~~business~~prevent ~~and~~violations ~~results~~ of ~~operations~~such regulations.

In the event that the company pays tariffs for products it imports from China, which are then re-exported to other locations outside of the United States, the company may be eligible for refunds of certain tariffs. In order to qualify for these tariff drawbacks, the company must provide data and documentation to the U.S. government that it must obtain from third-party sources, such as its suppliers. There is no guarantee the company will be able to obtain this additional data and documentation from those other sources, which could result in the U.S. government rejecting the drawback requests. There have been, and there could be, additional administrative costs in furtherance of these efforts.

Failure to obtain and apply required authorizations, or other non-compliance with the EAR, OFAC regulations, or other applicable export regulations could result in a wide range of penalties including the denial or restriction of export privileges, significant fines, criminal penalties, and the seizure of inventories, any of which could have a material adverse effect on the company’s business. The company’s isdistribution ~~subject~~process toalso ~~environmental~~includes ~~laws~~the ~~and~~use ~~regulations~~of third parties that operate outside of the company’s direct control. Noncompliance with applicable import, export, and ~~may~~other belaws, ~~impacted~~regulations, or executive orders by ~~climate~~these ~~change,~~third parties may result in ~~ways~~substantial ~~that~~liability ~~could~~to ~~materially~~the ~~adversely~~company ~~affect~~and ~~its~~harm ~~business~~the company’s reputation.

A number of jurisdictions in which the company’s products are sold have enacted laws addressing environmental and other impacts from product disposal, use of hazardous materials in products, use of chemicals in manufacturing, recycling of products at the end of their useful life, and other related matters. These laws prohibit the use of certain substances in the manufacture of products sold by the company and impose a variety of requirements for modification of manufacturing processes, registration, chemical testing, labeling, and other matters. Failure to comply with these laws or any other applicable environmental regulations could result in fines or suspension of sales. Additionally, these directives and regulations may result in the company having non-compliant inventory that (i) may be less readily salable or (ii) the company may need to write off.

~~Certain environmental laws impose liability~~Further, ~~sometimes~~the ~~without~~company ~~fault,~~is ~~for~~also ~~investigating~~subject orto ~~cleaning~~the upU.S. ~~contamination~~Foreign onCorrupt orPractices ~~emanating~~Act ~~from~~of ~~the~~1977, ~~company’s~~as ~~currently or formerly owned~~amended, ~~leased,~~the orU.S. ~~operated~~domestic ~~property,~~bribery asstatute ~~well~~contained asin ~~for~~18 ~~damages~~U.S.C. to§ ~~property~~201, orand ~~natural~~other ~~resources~~anti-bribery and ~~for~~anti-money ~~personal~~laundering ~~injury~~laws ~~arising~~in ~~out~~the ofcountries ~~such~~in ~~contamination.~~which ~~Under~~it ~~these~~conducts ~~laws~~business. ~~and~~The ~~regulations, the~~ company ~~may~~can be ~~responsible~~held ~~for~~liable ~~investigating,~~under ~~removing~~these laws, orwhich ~~otherwise~~are ~~remediating~~often ~~hazardous~~interpreted ~~substances~~broadly, ~~released~~for atthe ~~properties~~corrupt or ~~facilities~~other itillegal ~~owns~~activities ~~or operates, regardless~~ of ~~when~~its ~~such~~employees, ~~substances~~agents, ~~were~~contractors, ~~released. For example~~counterparties, ~~the~~and ~~company~~third isparties ~~currently~~it ~~obligated~~engages to ~~perform~~provide ~~environmental~~services, ~~remediation~~even onif ~~two sites that~~ it ~~obtained~~does asnot ~~part~~explicitly ofauthorize anor ~~acquisition~~have ~~transaction~~actual ~~(refer~~knowledge ~~to Note 15~~ of ~~the~~such ~~Notes to the Consolidated Financial Statements)~~activities. ~~The~~Any ~~presence~~violations of ~~environmental~~these ~~contamination~~laws atand ~~any~~regulations ofmay ~~the~~result ~~company’s~~in ~~locations~~substantial ~~could~~civil ~~also~~and ~~interfere~~criminal ~~with~~fines, ~~ongoing~~penalties, ~~operations~~disgorgement, orimprisonment, ~~adversely affect~~ the ~~company’s~~loss ~~ability~~of toexport ~~sell~~ or ~~lease~~import ~~its~~privileges, ~~properties.~~debarment, ~~The~~tax ~~discovery of contamination for which the company is responsible~~reassessments, ~~the~~breach ~~enactment~~ of ~~new~~contract ~~laws~~ and ~~regulations~~fraud litigation, orreputational ~~changes in how existing regulations are enforced~~harm, ~~could~~and ~~require~~other ~~the company to incur costs for compliance or subject it to unexpected liabilities~~consequences.

The company’s global business also could be negatively affected by trade barriers, such as tariffs, export restrictions, embargoes, and other governmental protectionist measures, which may decrease demand for the company’s products. Such measures can be imposed suddenly and unpredictably and, in the case of tariffs, may increase the prices of many of the products that the company purchases from its suppliers. Tariffs and other protectionist measures, and the additional operational costs incurred in minimizing the number of products subject to them, could adversely affect the operating profits for certain of the company’s businesses and customer demand for certain products, which could have an adverse effect on the company’s business and results of operations.

In the event that the company pays tariffs for imported products that are re-exported outside of the United States, the company may be eligible for refunds of certain tariffs. In order to qualify for these tariff drawbacks, the company must provide data and documentation to the U.S. government that it must obtain from third-party sources, such as its suppliers. There is no guarantee the company will be able to obtain this additional data and documentation from those other sources, which could result in the U.S. government rejecting the drawback requests. There have been, and there could be, additional administrative costs in furtherance of these efforts.

Ongoing litigation regarding U.S. tariffs issued pursuant to the International Emergency Economic Powers Act, including two matters recently heard by the U.S. Supreme Court, has created additional uncertainty regarding the potential effects that tariffs may have on the company’s business. The U.S. Supreme Court’s ruling in those or other similar matters could result in significant changes to U.S. tariff policies, the effects of which are difficult to predict, but could include the

Table of Contents

~~Additionally,~~imposition ~~long-term climate change impacts, including the frequency and magnitude~~ of ~~severe~~different ~~weather~~or ~~events,~~additional ~~and natural disasters~~duties, ~~may~~refunds ~~significantly~~to ~~impact~~ the company’s ~~operations~~that ~~and~~may ~~business,~~be ~~either~~difficult ~~directly~~ or ~~indirectly,~~impossible byto ~~adversely affecting the price and availability of energy~~collect, ~~and~~or ~~the~~litigation ~~supply~~with ofthird ~~other~~parties ~~services~~concerning orprior ~~materials~~tariff-related ~~throughout the company’s supply chain~~payments, any of which could have a material ~~adverse~~negative ~~effect~~impact on the company’s business. Proposed and existing efforts to address concerns over climate change by reducing greenhouse gas emissions could also directly or indirectly affect the company’s costs of energy and other operating costs.

The company is subject to a variety of claims, investigations and litigation that could adversely affect the company’s results of operations and harm the company’s reputation, including intellectual property rights claims.

~~The~~Products ~~company has in the past and may in the future be subject to claims~~sold, ~~investigations~~designed, ~~regulatory~~or ~~proceedings,~~integrated ~~and~~by ~~lawsuits in and outside~~ the ~~ordinary~~company ~~course~~may ofbe ~~business,~~found ~~including related~~ to ~~product~~be ~~liability~~defective and ~~warranties~~, ~~investigations~~as bya ~~governmental agencies~~result, ~~litigation~~warranty ~~alleging the infringement of intellectual property rights, securities~~ and/or ~~shareholder~~product ~~litigation,~~liability ~~and litigation related to employee matters and commercial disputes. Such matters are unpredictable. Managing, defending, and responding to~~ claims, ~~investigations, and lawsuits~~ may ~~divert~~be ~~management’s~~asserted ~~attention,~~against ~~damage~~ the company~~’s reputation~~, ~~and~~which ~~cause the company to incur significant expenses, even if there is no evidence that the company is at fault. In addition, the company~~ may ~~be required to pay damage awards, penalties, fines, or settlements, or become subject to injunctions or other equitable remedies, which could~~ have a material adverse effect on the company~~’s business, financial condition, results of operations and cash flows~~. ~~Moreover, any insurance or indemnification rights that the company has may be insufficient or unavailable to protect the company against potential loss exposures.~~

Certain of the company’s products and services include intellectual property owned primarily by the company’s third-party suppliers and, to a lesser extent, the company itself, and risk of litigation regarding these intellectual property rights exists. Third parties (including companies which acquire patents for the purpose of seeking artificial licensing revenue and not actually developing technology) may assert patent, copyright and/or other intellectual property rights to technologies that are important to the company’s business, for which the company may not be able to obtain indemnification. In addition, the company is exposed to potential liability either for technology it develops or when it combines multiple technologies of its suppliers for which the company may have limited or no indemnification protection. The company may also be required to indemnify and defend a customer in the event it becomes a target of intellectual property litigation.

~~Any~~As ~~infringement~~a distributor, the company sells its components or ~~indemnification~~services ~~claim~~at ~~brought~~prices ~~against~~that ~~the~~are ~~company,~~significantly ~~regardless~~lower ofthan the ~~duration,~~cost ~~outcome,~~of the equipment or ~~size~~other ofgoods ~~damage~~in ~~award,~~which ~~could~~they ~~result~~are inincorporated. ~~substantial~~As ~~cost~~a toresult, the company, ~~including~~may ~~potential~~face claims for ~~damage~~damages ~~awards;~~(such beas ~~time~~consequential ~~consuming~~damages) ~~and~~that ~~costly~~are disproportionate to ~~defend;~~the orrevenues ~~cause~~and ~~product~~profits ~~shipment~~it ~~delays.~~receives ~~Moreover,~~from in the ~~event~~components ofinvolved anin ~~adverse~~such ~~determination~~claims. Further, the company’s ~~may~~ability ~~be required~~ to ~~seek~~avoid ~~royalty~~such orliabilities ~~license~~pursuant ~~arrangements,~~to ~~which~~defective ~~may~~product ~~not~~provisions bein ~~available~~its onsupplier ~~commercially~~agreements ~~reasonable~~may ~~terms~~be orlimited ~~may~~as bea ~~unavailable~~result ~~entirely.~~of Invarious factors, such ~~circumstance,~~as the ~~company~~inability ~~would~~to beexclude ~~required~~such damages due to ~~stop~~third ~~selling~~party ~~certain~~contractual ~~products~~provisions or ~~technologies,~~the ~~which~~laws ~~could~~of ~~negatively~~some ~~affect~~of the countries where the company does business. The company’s ~~ability~~business tocould ~~compete~~be ~~effectively.~~materially ~~The~~adversely ~~payment~~affected as a result of ~~any~~a ~~such~~significant ~~damages~~quality or ~~royalties~~performance ~~may~~issue ~~significantly~~in ~~increase~~the products sold by the company’s ~~operating~~if ~~expenses~~it ~~and~~is ~~materially~~required ~~harm~~to pay for the associated damages. The company’s ~~operating~~product ~~results~~liability insurance is limited in coverage and ~~financial~~amount ~~condition~~and may not be sufficient to cover all possible claims. Further, when relying on contractual liability exclusions, the company could lose customers if their claims are not addressed to their satisfaction.

The company may not be able to adequately anticipate, prevent, or mitigate damage resulting from criminal and other illegal or fraudulent activities committed against it or as a result of misconduct or other improper activities by its employees or contractors.

~~Global~~In ~~businesses~~the ~~are~~company’s ~~facing~~rendering ~~increasing~~of ~~operational~~integration ~~risks~~services, ~~including~~the ~~potential~~company ~~criminal,~~may ~~illegal,~~be ~~and~~exposed ~~other fraudulent acts. Due~~ to ~~the~~increased ~~evolving~~risks ~~nature~~associated ofwith ~~such~~product ~~threats,~~defects. ~~considering~~Defects ~~new~~arising ~~and~~from ~~sophisticated~~integration ~~methods~~services ~~used~~could bylead ~~criminals,~~to ~~including~~product ~~phishing,~~liability ~~misrepresentation~~claims, ~~social engineering~~recalls, ~~and forgery~~fines, ~~it is increasingly difficult for the company to anticipate~~ and ~~adequately~~penalties. ~~mitigate~~These ~~these~~ risks. Inare ~~addition,~~particularly ~~designing~~pronounced ~~and~~in ~~implementing~~applications ~~measures~~for ~~to defend against~~aerospace, ~~prevent~~automotive, and ~~detect~~medical ~~these~~products, ~~types~~where ofproduct ~~activities~~failures ~~are~~could ~~increasingly~~result ~~costly~~in ~~and~~serious ~~invasive~~harm to ~~the~~end ~~operations of the business~~users. ~~Misconduct~~Any ~~or failure of its employees or contractors to adhere to company policy may further heighten~~ such ~~risks.~~adverse Asevents acould ~~result,~~affect the company’s ~~could~~financial ~~experience~~condition, aoperating ~~material~~results, ~~loss if its controls~~ and ~~other measures implemented to address these threats fail to prevent or detect such acts~~reputation.

In addition, misconduct by its employees or contractors may include intentional or negligent failures to comply with applicable laws and regulations, safeguard personally identifiable information, report financial information or data

The company is subject to environmental laws and regulations, and may be impacted by climate change, in ways that could materially adversely affect its business.

A number of jurisdictions in which the company’s products are sold have enacted laws and regulations addressing environmental and other impacts from product disposal, use of hazardous materials in products, use of chemicals in manufacturing, recycling of products at the end of their useful life, and other related matters. These laws and regulations prohibit the use of certain substances in the manufacture of products sold by the company and impose a variety of requirements for manufacturing processes, registration, chemical testing, labeling, and other activities. Failure to comply with these laws and regulations could result in litigation, fines, or suspension of sales. Additionally, these laws and regulations may restrict or prohibit the sale of certain products, which may negatively affect the value of the company’s inventory.

Certain environmental laws impose liability, sometimes without fault, for investigating or cleaning up contamination on or emanating from the company’s currently or formerly owned, leased, or operated property, as well as for damages to property or natural resources and for personal injury arising out of such contamination. Under these laws and regulations, the company may be responsible for investigating, removing, or otherwise remediating hazardous substances released at properties or facilities it owns or operates, regardless of when such substances were released. For example, the company is currently obligated to perform environmental remediation on sites that it obtained as part of an acquisition transaction (refer to Note 15 - “Contingencies” within Item 8 for additional information related to environmental remediation. The presence of environmental contamination at any of the company’s locations could also interfere with ongoing operations or adversely affect the company’s ability to sell or lease its properties. The discovery of environmental contamination, the enactment of new laws and regulations, or changes in the enforcement of existing regulations, could require the company to incur costs for compliance or subject it to unexpected liabilities.

Additionally, long-term climate change impacts, including the frequency and magnitude of severe weather events and natural disasters may significantly impact the company’s operations and business, either directly or indirectly, by adversely affecting the price and availability of energy, and the supply of other services or materials throughout the company’s supply chain, any of which could have a material adverse effect on the company’s business. Proposed and existing efforts to address concerns over climate change could also directly or indirectly affect the company’s costs of energy and other operating costs.

Table of Contents

accurately, or disclose unauthorized activities to the company. Such misconduct could result in legal or regulatory sanctions and threatened or filed lawsuits on behalf of impacted third-parties, including customers and suppliers, against the company, and, as a result, cause serious harm to the company, including to its reputation.

It is not always possible to identify and deter employee misconduct, and any other precautions the company takes to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses, or in protecting the company from governmental investigations or other actions, including lawsuits on behalf of third-parties, including customers or suppliers, stemming from a failure to comply with these laws or regulations. If any such actions are instituted against the company, and it is not successful in defending itself or asserting its rights, those actions could result in the imposition of significant civil, criminal, and administrative penalties, which could have a significant impact on the company’s business. Whether or not the company is successful in defending against such actions, it could incur substantial costs, including legal fees, and divert the attention of management in defending itself against them.

Expectations and regulations relating to environmental, social, and governance (“ESG”) and corporate responsibility matters, and related disclosures, expose the company to potential liabilities, increased costs, reputational harm, and other adverse effects on the Company’s business.

~~Investors,~~The ~~customers, regulators, governments, and other stakeholders continue to place emphasis on ESG and other corporate stewardship considerations, and the~~ company ~~may~~is ~~fail~~subject to ~~meet~~a ~~third-party~~variety ~~expectations~~of inadditional ~~this regard. The company has made statements about various ESG-related standards~~laws, ~~policies~~regulations, and ~~targets,~~executive ~~and~~orders ain ~~number of~~ the ~~company’s customers and suppliers require adherence to environmental and human rights policies~~U. ~~Failing to meet such standards adopted by or imposed on the company may result in reputational damage, loss of business, or potential liability~~S. ~~Whether~~and ~~the~~other ~~company discloses~~jurisdictions, orand ~~chooses not to disclose, ESG or corporate stewardship-related initiatives, it~~ could ~~face~~be ~~scrutiny~~subject ~~regarding~~to ~~the adequacy of its actions~~claims, ~~including from investors and proxy advisory firms. In addition~~investigations, ~~distinct stakeholders may consider different criteria~~ and ~~apply~~litigation ~~different~~that ~~methodologies~~could inadversely ~~evaluating~~affect the company’s ~~ESG~~results ~~or corporate stewardship performance. This lack~~ of ~~standardization~~operations ~~creates~~and ~~potential~~harm ~~for wide disparity in assessments, including misrepresentations or unfavorable assessments of~~ the company’s ~~corporate stewardship program and initiatives~~reputation. Failure to adequately meet the expectations of investors, proxy advisors, customers, suppliers, and other stakeholders in this area may also result in diluted market valuation, an inability to attract or retain customers and suppliers, and an inability to attract and retain top talent.

~~Additionally,~~The ~~the~~ company is orsubject ~~may~~to bevarious ~~obligated~~laws, toregulations, ~~comply~~and ~~with~~executive ~~new~~orders ~~ESG~~involving ~~and~~numerous ~~corporate~~subject ~~stewardship-related~~areas ~~disclosure~~in ~~requirements~~the ~~under~~U.S. ~~United~~and ~~States~~other ~~federal~~countries ~~and~~in ~~state~~which ~~laws~~it operates, the ~~European~~requirement ~~Green~~of ~~Deal,~~which ~~and~~vary ~~other~~across ~~laws~~jurisdictions. The company has in ~~various~~the ~~jurisdictions~~past ~~concerning~~and ~~human~~may ~~rights,~~in ~~governance,~~the ~~and~~future ~~environmental~~be ~~practices.~~subject Asto ~~regulations~~claims, ininvestigations, ~~these~~regulatory ~~areas~~proceedings, ~~increase~~and lawsuits in ~~number~~ and ~~scope,~~outside the ~~company~~ordinary ~~may~~course beof ~~required~~business, toincluding ~~develop~~related ~~additional~~to ~~governance~~product liability and ~~compliance frameworks~~warranties, ~~implement~~investigations ~~new~~by ~~processes~~governmental agencies, ~~establish~~litigation ~~controls,~~alleging ~~monitor~~the ~~performance~~infringement ~~metrics~~of intellectual property rights, ~~undergo~~securities ~~independent~~and ~~assessments~~shareholder litigation, and ~~prepare~~litigation ~~detailed~~related ~~public~~to ~~reports~~employee onmatters anand ~~ongoing~~commercial ~~basis~~disputes. ~~regarding~~Such ~~the~~matters ~~financial~~are unpredictable. Managing, defending, and ~~non-financial~~responding ~~risks~~to claims, investigations, and ~~impacts~~lawsuits ~~associated~~may ~~with~~divert management’s attention, damage the company’s ~~operations~~reputation, and ~~value~~cause ~~chains~~the company to incur significant expenses, even if there is no evidence of wrongdoing by the company. ~~These~~In ~~laws~~addition, ~~and~~the ~~regulations~~company may ~~result~~be inrequired ~~significant~~to ~~legal~~pay damage awards, ~~compliance~~penalties, ~~accounting~~fines, ~~operational~~or settlements, ~~and~~or ~~administrative~~become ~~costs~~subject to ~~the~~injunctions ~~company~~or other equitable remedies, ~~and~~which ~~may~~could ~~strain~~have a material adverse effect on the company’s ~~personnel~~business, ~~systems~~financial condition, ~~and~~results ~~other~~of ~~resources.~~operations, Ifand ~~the~~cash ~~company~~flows. ~~fails~~Moreover, toany ~~satisfy~~insurance ~~these~~or ~~new~~indemnification ~~regulatory~~rights ~~and~~that ~~other requirements,~~ the company ~~could~~has may be ~~exposed~~insufficient toor ~~fines,~~unavailable ~~penalties,~~to ~~and~~protect ~~other~~the ~~sanctions,~~company ~~and~~against ~~sustain~~potential ~~harm~~loss ~~to its reputation~~exposures.

Additionally, certain of the company’s business units contract or subcontract with U.S. government agencies, and on January 21, 2025, the President of the United States of America issued certain executive orders imposing new requirements on federal contractors and subcontractors prohibiting so-called “diversity, equity, and inclusion” practices in their employment, procurement, and contracting activities and requiring them to contractually certify that they do not operate diversity, equity, and inclusion programs violating the federal anti-discrimination laws. If the company is deemed to have violated these executive orders and any related laws or regulations, it may jeopardize the ability of the company’s business units to continue to do business as federal contractors or subcontractors, resulting in decreases in the company’s overall revenue.

Certain of the company’s products and services include intellectual property owned primarily by the company’s third-party suppliers and, to a lesser extent, the company itself, and there is risk of litigation regarding these intellectual property rights. Third parties (including companies which acquire patents for the purpose of seeking artificial licensing revenue and not actually developing technology) may assert patent, copyright, or other intellectual property rights to technologies that are important to the company’s business, for which the company may not be able to obtain indemnification. In addition, the company is exposed to potential liability, for which it may not have indemnification protection, for technology it develops and when it combines multiple technologies of its suppliers. The company may also be required to indemnify and defend a customer in the event it becomes a target of intellectual property litigation.

Any infringement or indemnification claim brought against the company, regardless of the duration, outcome, or size of any potential monetary award, could result in substantial cost to the company, could be time consuming and costly to defend, or could cause product shipment delays. Moreover, in the event of an adverse determination, the company may be required to seek royalty or license arrangements, which may not be available on commercially reasonable terms or may be unavailable entirely. An adverse determination could require that the company stop selling certain products or technologies, which could negatively affect the company’s operations and ability to compete in the market. The payment of any such damages or royalties may significantly increase the company’s operating expenses and materially harm the company’s operating results and financial condition.

Global businesses are facing increasing operational risks, including fraudulent acts that potentially violate criminal and civil law. Due to the evolving nature of such threats, considering new and sophisticated methods used by criminals, including phishing, misrepresentation, social engineering, deepfake video and audio, and forgery, it is increasingly difficult for the company to anticipate and adequately mitigate these risks. In addition, designing and implementing measures to defend against, prevent, and detect these types of activities are increasingly costly and invasive to business operations. Misconduct or failure by employees or contractors to adhere to the company’s policies and procedures may further heighten such risks. As a result, the company could experience a material loss if its controls and other measures implemented to address these threats fail to prevent or detect these types of criminal, illegal, and fraudulent acts.

In addition, misconduct by the company’s employees or contractors may include intentional or negligent failures to comply with applicable laws and regulations, safeguard personally identifiable information, report financial information or data accurately, or disclose unauthorized activities to the company. Such misconduct could result in legal action by government agencies or impacted third parties, including customers and suppliers, against the company, and, as a result, could cause significant harm to the company, including to its reputation.

Table of Contents

It is not always possible to identify and deter employee misconduct, and precautions the company takes to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses, or in protecting the company from governmental investigations or other actions, including lawsuits on behalf of customers, suppliers, or other parties. If the company is not successful in defending itself or asserting its rights in any such actions, those actions could result in the imposition of significant civil, criminal, and administrative monetary judgments or penalties, which could have a significant impact on the company’s business. Regardless of whether the company is successful in defending against such actions, it could incur substantial costs, including legal fees, and divert the attention of management.

Expectations and regulations related to corporate stewardship and corporate responsibility matters, and related disclosures, expose the company to potential liabilities, increased costs, reputational harm, and other adverse effects on the company’s business.

Certain investors, customers, regulators, governments, and other stakeholders continue to emphasize and assert expectations in connection with environmental, social, and governance matters, as well as other corporate stewardship considerations, and the company may fail to meet these expectations. The company has made statements about various standards, policies, and targets in connection with these expectations, and a number of the company’s customers and suppliers require adherence to specific environmental and human rights standards. Failing to meet these expectations and standards may result in reputational damage, loss of business, or potential liability. Whether the company discloses, or chooses not to disclose, initiatives related to environmental, social, governance, or other corporate stewardship matters, it could face scrutiny regarding the adequacy of its actions, including from investors and proxy advisory firms. In addition, individual stakeholders may consider different criteria and apply different methodologies in evaluating the company’s performance in connection with these matters. This lack of standardization creates potential for wide disparity in assessments, including misrepresentations or unfavorable assessments of the company’s corporate stewardship program and initiatives. Failure to adequately meet the expectations of investors, proxy advisors, customers, suppliers, and other stakeholders in this area may also result in diluted market valuation, an inability to attract or retain customers and suppliers, and an inability to attract or retain top talent.

Additionally, the company is or may be obligated to comply with new requirements related to environmental, social, governance, or other corporate stewardship matters under U.S. federal and state laws, regulations, and executive orders; the European Green Deal; and the laws and regulations of various other jurisdictions. As regulations in these areas increase in number and scope, the company may be required to develop additional governance and compliance frameworks, implement new processes, establish controls, monitor performance metrics, undergo independent assessments, and prepare detailed public reports on an ongoing basis regarding the financial and non-financial risks and impacts associated with the company’s operations and value chains. These laws, regulations, and executive orders may result in significant legal, compliance, accounting, operational, and administrative costs to the company, and may strain the company’s personnel, systems, and other resources. Any actual or perceived violations of these requirements could result in reputational harm, litigation costs, monetary penalties, or other sanctions.

Certain of the company’s business units contract or subcontract with U.S. government agencies, and on January 21, 2025, the U.S. President issued certain executive orders imposing new requirements on federal contractors and subcontractors prohibiting certain “diversity, equity, and inclusion” practices in employment, procurement, and contracting activities, and requiring a certification that the contractor or subcontractor does not operate diversity, equity, and inclusion programs that violate federal anti-discrimination laws. If the company is deemed to have violated these executive orders and any related laws or regulations, it may jeopardize the ability of the company’s business units to continue to do business as federal contractors or subcontractors, and could negatively affect the company’s revenue.

Table of Contents

Financial Risks

The company may not have adequate or cost-effective liquidity or capital resources, which could have a material adverse impact on its ability to maintain cash necessary to operate its business or return capital to shareholders.

The company requires cash or committed liquidity facilities for general corporate purposes, such as funding its ongoing working capital, acquisitions, capital expenditure needs, refinancing ~~indebtedness~~, returning capital to shareholders, and ~~funding costs and expenses in~~ implementing the Operating Expense Efficiency Plan. The company’s committed and undrawn liquidity stands at over $2.85 billion in addition to $~~188~~306.85 million of cash on hand atas of December 31, ~~2024~~2025. The company’s ability to satisfy its cash needs depends on its ability to generate cash from operations and to access the financial markets, both of which are partially subject to general economic, financial, competitive, legislative, regulatory, and other factors that ~~may~~are be beyond ~~its~~the company’s control.

The company’s ability to obtain external financing is affected by various factors, including general financial market conditions, the company’s debt ratings, and the company’s financial performance. For example, economic uncertainty or adverse economic conditions resulting from the impacts of and responses to ~~pandemics and other public health issues, natural disasters,~~ changes in global, national, or regional economies,; natural disasters; inflation,; governmental policies,; political unrest,; military action and armed conflicts,; pandemics and other public health issues; terrorist activities,; political and social turmoil,; civil unrest,; and other crises could result in significant or sustained disruption of global financial markets, thereby reducing the company’s access to capital.

IfCredit ~~the company’s leverage ratios or other measures tracked by credit~~ rating agencies ~~exceed~~consider ~~thresholds~~numerous ~~generally~~financial ~~permitted~~and byindustry-related ~~such~~metrics ~~agencies~~in ~~for~~determining ana ~~investment~~company’s ~~grade~~ credit ~~rating~~ratings. ~~for~~If ~~an extended period of time it may cause a reduction in~~ the company’s ~~current~~fails ~~debt~~to ~~ratings~~satisfy tothese ametrics, ~~level~~these ~~below~~agencies ~~investment~~may ~~grade.~~choose ~~Any~~to downgrade in the company’s ~~current~~ debt ~~rating~~ratings, orwhich ~~tightening of credit availability~~ could impair the company’s ability to obtain additional financing on favorable terms, redeem existing indebtedness, or renew existing credit facilities; ~~on favorable terms,~~ negatively impact the ~~price of the~~ company’s ~~common~~ stock price; increase ~~its~~the company’s interest payments under existing debt agreements; and have other negative implications onfor ~~its~~the company’s business. Under the terms of any additional external financing, the company may incur higher financing expenses and become subject to additional ~~onerous~~ restrictions and covenants that may adversely impact the company’s operations and ability to pursue strategic initiatives. An increase in the company’s financing costs or loss of access to cost-effective capital resources could also have a material adverse effect on the company’s business.

The agreements governing some of the company’s financing arrangements contain various covenants and restrictions that limit some of management’s discretion in operating the business and could prevent the company from engaging in some activities that may be beneficial to its business.

~~The~~Some ~~agreements governing some~~ of the company’s ~~financings~~financing agreements contain ~~various~~ covenants and restrictions that, in certain circumstances, could limit its ability to:

~~• grant liens on assets;~~

•● ~~make~~grant ~~investments~~liens oron ~~certain acquisitions~~assets;

•● ~~merge,~~make ~~consolidate,~~investments or ~~transfer~~certain ~~all or substantially all of its assets~~acquisitions;

•● ~~incur~~merge, ~~additional~~consolidate, ~~debt;~~or transfer all or substantially all of its assets;

•● ~~engage~~incur inadditional ~~certain~~debt; ~~transactions with affiliates.~~or

●

engage in certain transactions with affiliates.

As a result of these covenants and restrictions, the company may be limited in how it conducts its business and may be unable to raise additional debt, compete effectively, or make investments.

Further, if an event of default under any of the company’s existing debt agreements occurred or became imminent, the lenders under any such facility may have the right to declare all outstanding indebtedness immediately due and payable, and lenders under the company’s other debt facilities may likewise be able to declare a cross-default. If the company does not have access to capital under its existing credit facilities due to such an event, alternative sources of capital may be more expensive than the costs incurred under the company’s existing credit facilities. Further, the company may be unable to borrow additional amounts under the relevant credit facility or under its other credit facilities (in the event of a cross-

20Further, if an event of default under any of the company’s existing debt agreements occurred or became imminent, the lenders under any such facility may have the right to declare all outstanding indebtedness immediately due and payable, and lenders under the company’s other debt facilities may likewise be able to declare a cross-default. If such an event causes the company to lose access to capital under its existing credit facilities, the company may be forced to identify alternative sources of capital that are more expensive or restrictive. Further, the company may be unable to borrow additional amounts under the relevant credit facility or under its other credit facilities (in the event of a cross-default), and

Table of Contents

default), and as a result may be unable to make acquisitions, fund share repurchases, or meet other financial obligations. This circumstance would have a material adverse effect on the company’s financial position and results of operations.

The company’s goodwill and identifiable intangible assets could become impaired, which could reduce the value of its assets and reduce its net income in the year in which the write-off occurs.

The company may incur impairment charges on goodwill or identifiable intangible assets if it determines that the fair values of the goodwill or identifiable intangible assets are less than their current carrying values. If events or circumstances occur that indicate all, or a portion, of the carrying amount of goodwill or identifiable intangible assets is or may no longer be recoverable, an impairment charge to earnings may become necessary.

A decline in general economic conditions, a substantial increase in market interest rates or persistence of a high market-interest rate environment, an increase in income tax rates, or the company’s inability to meet long-term working capital or operating income projections, in each case, could impact future valuations of the company’s reporting units, and the company could be required to record an impairment charge in the future, which could impact the company’s consolidated balance sheets, as well as the company’s consolidated statements of operations. If the company were required to recognize an impairment charge in the future, the charge would not impact the company’s consolidated cash flows, current liquidity, capital resources, and covenants under its existing revolving credit facility, North American asset securitization program, and other outstanding borrowings.

General Risks

Global, regional, and local economic weakness and uncertainty, including because of epidemics and pandemics, could have a material adverse effect on the company’s financial performance.

The company’s business and financial performance depend on worldwide economic conditions and the demand for technology products and services in the markets in which the company competes. Ongoing economic weakness, uncertainty in markets throughout the world, and other adverse economic conditions, such as the recent downturn in the semiconductor market, have and may continue to result in decreased net revenue, gross margin, earnings, growth rates or cash flows, and increased expenses and difficulty managing inventory levels, collecting customer receivables, and accurately forecasting revenue, gross margin, cash flows and expenses.

Political developments impacting international trade, trade disputes and increased tariffs, particularly between the United States and China; political instability, such as armed conflicts (including the conflicts in Russia, Belarus, and Ukraine, in Israel and the Gaza Strip, and in Syria); and the effects of epidemics, pandemics, and other public health crises each, or collectively may negatively impact markets and cause weaker macroeconomic conditions, weakening demand for the company’s products and services, particularly due to the company’s extensive international operations and business. Economic downturns also may lead to future restructuring actions and associated expenses, any of which could have a material adverse effect on the company’s business.

If the company fails to maintain an effective system of internal controls or discovers material weaknesses in its internal control over financial reporting, it may not be able to report its financial results accurately or timely or detect fraud, which could have a material adverse effect on its business.

An effective internal control environment is necessary for the company to produce reliable financial reports, safeguard assets, and is an important part of its effort to prevent financial fraud. There are inherent limitations on the effectiveness of internal controls, including collusion, management override, and failure in human judgment. In addition, control procedures are designed to reduce rather than eliminate financial statement risk. If the company fails to maintain an effective system of internal controls, or if management or the company’s independent registered public accounting firm discovers material weaknesses in the company’s internal controls, it may be unable to produce reliable financial reports or prevent fraud, which could have a material adverse effect on the company’s business. In addition, the company may be subject to sanctions or investigation by regulatory authorities, such as the SEC or the NYSE. Any such actions could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of the company’s consolidated

Table of Contents

~~financial~~as ~~statements~~a result may be unable to make acquisitions, ~~which~~fund ~~could~~share ~~cause~~repurchases, ~~the~~or ~~market~~meet ~~price~~other offinancial ~~its~~obligations. ~~common~~Any ~~stock~~such tocircumstance ~~decline~~would orhave ~~limit~~a material adverse effect on the company’s ~~access~~financial toposition ~~capital~~and operations.

The company’s goodwill and identifiable intangible assets could become impaired, which could reduce the value of its assets and reduce its net income in the year in which the write-off occurs.

The company may incur impairment charges on goodwill or identifiable intangible assets if it determines that the fair value of the goodwill or identifiable intangible assets are less than their current carrying value. If events or circumstances occur that indicate all, or a portion, of the carrying amount of goodwill or identifiable intangible assets is or may no longer be recoverable, an impairment charge to earnings may become necessary.

An impairment charge might also be required if valuations of the company’s reporting units are negatively impacted by a decline in general economic conditions, a substantial increase in market interest rates, persistence of a high market-interest rate environment, an increase in income tax rates, or the company’s inability to meet long-term working capital or operating income projections, which could impact the company’s consolidated balance sheets, as well as the company’s consolidated statements of operations.

If the company fails to maintain an effective system of internal controls or discovers material weaknesses in its internal control over financial reporting, it may not be able to report its financial results accurately or timely, or detect fraud, which could have a material adverse effect on its business.

An effective internal control environment is necessary for the company to produce reliable financial reports, safeguard assets, and is an important part of its effort to prevent financial fraud. There are inherent limitations to the effectiveness of internal controls, including collusion, employee override, and failure in human judgment. In addition, control procedures are designed to reduce rather than eliminate financial statement risk. If the company fails to maintain an effective system of internal controls, or if management or the company’s independent registered public accounting firm discovers a material weakness in the company’s internal controls, the company may be unable to produce reliable financial reports or prevent fraud, which could have a material adverse effect on the company’s business. In addition, the company may be subject to sanctions or investigations by government agencies or other entities, such as the SEC or the NYSE. Any such actions could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of the company’s consolidated financial statements, which could negatively affect the company’s stock price and limit the company’s access to capital.

Item 1B. Unresolved Staff Comments.

None.

Item 1C. Cybersecurity.

Risk Management and Strategy

The company ~~maintains~~leverages technology and human oversight to maintain a multi-layered approach to cybersecurity risk management ~~which~~that ~~leverages~~is ~~technology~~integrated ~~and~~into ~~human~~the ~~oversight~~company’s broader risk management framework. ~~The~~As part of this process, the company uses active and passive methods designed to continuously monitor information systems and ~~assess~~identify, ~~identify~~assess, and manage potential vulnerabilities and threats. ~~This digital-security management process is integrated into the company’s broader enterprise risk management framework.~~

The company utilizes active monitoring techniques (e.g., penetration testing), designed to leverage multiple sources of threat intelligence and vulnerability scanning complemented by endpoint protection and network ~~systems~~security. The company has a rapid-response protocol designed to investigate ~~system alerts of potential~~ cybersecurity ~~threats~~threat alerts, and the company’s incident response plan provides a structured approach to inter-departmental assessment, mitigation, and resolution of cybersecurity threats. The company also conducts regular tabletop exercises to test and fortify the controls of its cybersecurity incident response program.

Table of Contents

The company maintains strategic relationships with third-party cybersecurity experts and coordinates with various law-enforcement partners, each of whom may be engaged to provide additional investigative and remediation support. The company’s senior security leadership conducts periodic, in-depth reviews with the company’s enterprise risk management team and internal and external auditors to evaluate the effectiveness of the company’s cybersecurity systems, controls, and management processes.

~~The~~Before ~~company~~engaging ~~conducts~~with a ~~security~~new ~~assessment~~supplier ~~for~~or ~~potential~~service ~~suppliers~~provider, ~~and~~the ~~service~~company ~~providers,~~conducts ~~which~~a security assessment that includes detailed interviews, questionnaires, and cyber-risk scoring. ~~This~~Following ~~process~~the ~~extends beyond~~ initial engagement, ~~with~~the company continues to monitor on an ongoing ~~monitoring~~basis to identify emerging security risks or changes in suppliers’ risk profiles.

~~The~~To ~~company~~date, ~~describes~~the ~~whether~~company ~~and~~is ~~how~~not ~~risks~~aware ~~from~~of ~~identified~~any cybersecurity threats or incidents that have materially affected, or are reasonably likely to materially affect, the company, ~~under~~including ~~the~~its ~~heading~~financial condition, results of operations, or business strategies. For more information about risks related to cybersecurity threats, refer to “Cybersecurity incidents may hurt the company’s business, damage its reputation, increase its costs, and cause losses,” ~~included~~within ~~as part of~~ the company’s risk factor disclosures in Item 1A of this Annual Report on Form 10-K. To date, the company is not aware of any cybersecurity threats or incidents that have materially affected, or are reasonably likely to materially affect, the company, including its financial condition, results of operations, or business strategies.

Governance

The Board of Directors of the company (the “Board”), primarily through its Audit Committee, oversees the company’s cybersecurity program. The company’s CIO and CSO regularly report to the Audit Committee on the current state of the company’s cybersecurity program (including the current threat landscape, cybersecurity risks, and any significant incidents). The Audit Committee may provide updates to the Board on the substance of these reports and any recommendations for enhancements that the Audit Committee deems appropriate.

The CIO and CSO receive regular reports from the company’s cybersecurity ~~department,~~division ~~both historical and real-time,~~ about the company’s global cybersecurity status., ~~The~~enabling ~~company believes this approach enables~~ the CIO and CSO to ~~monitor~~identify, ~~the~~assess, ~~company's global security status~~ and tomanage ~~identify~~cybersecurity ~~and assess potential~~ threats. The company has established ~~written~~ policies and procedures torequiring ~~ensure~~ that potentially material cybersecurity incidents are immediately investigated, and addressed through the coordination of ~~various~~ internal departments,. The company’s cybersecurity division utilizes a risk-based approach to assess the severity and ~~publicly~~priority ~~reported~~of (potential cybersecurity incidents on a rolling basis and provides timely notification to the ~~extent~~company’s ~~required~~management byupon ~~applicable~~detecting ~~law)~~any potentially material cybersecurity incidents. ~~The~~Members of the company’s ~~security~~management ~~organization~~will ~~assesses~~notify the ~~severity~~Board Chair and ~~priority~~Audit ofCommittee ~~incidents~~Chair onif athey ~~rolling~~determine ~~basis,~~that ~~with~~a ~~escalations~~material ofcybersecurity incident has occurred.

Table of Contents

cybersecurity incidents provided to the management team. If management determines a cybersecurity incident is material, the company’s incident response plan and its disclosure controls and procedures set forth the process for any required disclosures and require management to promptly inform the Board.

Under the direction of the CIO, the CSO is responsible for global cybersecurity and business continuity, which includes security architecture, security operations, incident response, IT risk analysis and compliance, physical security, ~~fraud~~ and security awareness and training. The CSO has over 20twenty years of security experience and holds a degree in IT and cybersecurity, along with maintaining certifications in risk analysis, information security, data privacy, data-security legal investigations, and ~~audit~~information systems auditing, among other disciplines. The other members of the company’s ~~security~~cybersecurity ~~organization~~division also have extensive cybersecurity, business, and technology experience and all hold certifications in their ~~area~~areas of expertise.

Item 2.Properties.

The company has its principal executive offices located in Centennial, Colorado under a lease expiring in 2032. The company leases ~~nine~~ten major warehouses and logistics centers with approximately 3.02 million square feet of space which includes two located in Reno, Nevada,; three in the Phoenix, Arizona area,; one in each of Hong Kong, and Shenzhen, China,; one in Johor Bahru, Malaysia,; one in Zapopan, Mexico,; and one in Venlo, Netherlands to support global components. The company has 27twenty-nine smaller distribution centers with approximately ~~827~~782.95 thousand square feet of space located throughout the Americas, EMEA, and Asia/Pacific regions supporting global components and global ECS. The company believes its facilities are well maintained and suitable for company operations, and does not anticipate significant difficulty in renewing its leases as they expire or securing replacement facilities.

Table of Contents

Item 3.Legal Proceedings.

The information set forth under the heading “Environmental Matters” in Note 15, - “Contingencies” inwithin ~~the Notes to Consolidated Financial Statements in Part II,~~ Item 8 ~~of this 10-K~~ is incorporated herein by reference.

Item 4.Mine Safety Disclosures.

Not applicable.

PART II

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

The company’s common stock is listed on the NYSE (trading symbol: “ARW”).

Record Holders

On February 43, ~~2025~~2026, there were approximately 1,~~211~~145 shareholders of record of the company’s common stock.

Table of Contents

Equity Compensation Plan Information

The following table summarizes information, as of December 31, ~~2024~~2025, relating to the Omnibus Incentive Plan, which was approved by the company’s shareholders and under which cash-based awards, non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units, covered employee annual incentive awards, and other stock-based awards may be granted.


	Number of
	Securities to be	Weighted-
	Issued Upon	Average Exercise
	Exercise of	Price of		Number of
	Outstanding	Outstanding		Securities
	Options,	Options,		Remaining
	Warrants and	Warrants and		Available for
Plan Category	Rights	Rights		Future Issuance
Equity compensation plans approved by security holders	1,~~400~~318,~~128~~715	$	~~101~~98.3436	4,~~437~~061,~~722~~160
Total	1,~~400~~318,~~128~~715	$	~~101~~98.3436	4,~~437~~061,~~722~~160

Table of Contents

Performance Graph

The following graph compares the performance of the company’s common stock for the periods indicated with the performance of the S&P 400 MidCap Stock Index and the average performance of a group consisting of the company’s peer companies (“Peer Group”) on a line-of-business basis. During ~~2024~~2025, the companies included in the Peer Group are Avnet, Inc., CDW Corp., Celestica Inc., Flex Ltd., HP Enterprise Co., HP Inc., Jabil Inc., TD Synnex, and WESCO International, Inc. The graph assumes $100 invested on December 31, ~~2019~~2020 in the company, the S&P 400 MidCap Stock Index, and the Peer Group. Total return indices reflect reinvestment of dividends and are weighted on the basis of market capitalization at the time of each reported data point.

~~2019~~2020

~~2020~~2021

~~2021~~2022

~~2022~~2023

~~2023~~2024

~~2024~~2025

Arrow Electronics

100

~~115~~138

~~158~~107

~~123~~126

~~144~~116

~~133~~113

Peer Group

100

~~106~~147

~~157~~132

~~140~~170

~~181~~200

~~213~~249

S&P 400 MidCap Stock Index

100

~~114~~125

~~142~~108

~~123~~126

144

~~164~~155

Table of Contents

Issuer Purchases of Equity Securities

The following table shows the share- repurchase activity for the quarter ended December 31, ~~2024~~2025:


					Approximate
				Total Number of	Dollar Value of
				Shares	Shares that May
	Total			Purchased as	Yet be
	Number of	Average		Part of Publicly	Purchased
	Shares	Price Paid		Announced	Under the
(thousands except share and per share data)	Purchased	per Share (a)		Program	Programs (b)
September 29 through October 26, 2024	—	$	—	—	$	374,557
September 28 through October 25, 2025	—	$	—	—	$	223,360
October 27 through November 23, 2024	—		—	—		374,557
October 26 through November 22, 2025	448,883		111.39	448,883		172,870
November 24 through December 31, 2024	419,432		119.21	419,432		324,063
November 23 through December 31, 2025	—			—		172,870
Total	~~419~~448,~~432~~883			~~419~~448,~~432~~883

(a)	Average price paid per share excludes 1% excise tax on share repurchases.

(b) The company’s share- repurchase program does not have an expiration date. As of December 31, ~~2024~~2025, the total authorized dollar value of shares available for repurchase was $1.6 billion of which $1827.31 ~~billion~~million has been utilized, while the $~~324~~172.19 million in the table represents the remaining amount available for repurchase under the program.

Item 6.[Reserved].

Table of Contents

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This section of the Form 10-K generally discusses ~~2024~~2025 and ~~2023~~2024 items and year-to-year comparisons between ~~2024~~2025 and ~~2023~~2024. Discussions of ~~2022~~2023 items and year-to-year comparisons between ~~2023~~2024 and ~~2022~~2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2023~~2024.

Information Relating to Forward-Looking Statements

This report includes “forward-looking statements,” as the term is defined under the federal securities laws. Forward-looking statements are those statements which are not statements of historical or current fact. These forward-looking statements can be identified by forward-looking words such as “expects,” “anticipates,” “intends,” “plans,” “may,” “will,” “would,” “could,” “believes,” “seeks,” “projected,” “potential,” “estimates,” and similar expressions. These forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which could cause actual results or facts to differ materially from such statements for a variety of reasons, including, but not limited to: ~~the~~unfavorable ~~incurrence~~economic ofconditions ~~additional~~or ~~charges~~changes, ~~not~~including ~~currently~~those ~~contemplated and failure to realize contemplated cost savings due to unanticipated events~~ that may occur, ~~including~~ in connection with ~~the~~recession, ~~implementation~~inflation, oftax ~~the~~rates, ~~company’s~~foreign ~~restructuring~~currency ~~plan;~~exchange ~~unfavorable economic conditions; disruptions~~rates, ~~shortages,~~ or ~~inefficiencies in~~ the ~~supply~~availability ~~chain~~of capital; political instability and changes; impacts of military conflict and sanctions; ~~industry~~trade ~~conditions;~~protection ~~changes~~measures, ~~in product supply~~tariffs, ~~pricing~~increased ~~and~~trade ~~customer~~tensions, ~~demand;~~ trade ~~protection~~agreements ~~measures,~~and ~~tariffs~~policies, and other restrictions, duties, and value-added taxes;, ~~competition~~and the associated macroeconomic impacts; ~~other~~disruptions, ~~vagaries~~shortages, or inefficiencies in the ~~global~~supply ~~components~~chain; ~~and~~non-compliance ~~the~~with ~~global~~certain ~~ECS~~laws, ~~markets;~~regulations, ~~deteriorating~~or ~~economic~~executive ~~conditions~~orders, ~~including~~such ~~economic~~as ~~recession~~trade, ~~inflation~~export, ~~tax~~antitrust, ~~rates~~and anti-corruption laws, ~~foreign~~or ~~currency~~regulatory ~~exchange~~restrictions ~~rates,~~relating to the company or its subsidiaries or the ~~availability~~permissibility of ~~capital~~third-parties to transact therewith; the ~~effects~~inability ofto ~~natural~~realize orsufficient ~~man~~sales to cover non-~~made~~cancellable ~~catastrophic~~purchase ~~events~~obligations under certain ECS distribution agreements; ~~changes~~management intransitions, ~~relationships~~including ~~with~~the ~~key~~company’s ~~suppliers;~~search ~~increased~~for ~~profit~~a ~~margin~~permanent ~~pressure~~CEO; ~~changes~~the inincurrence ~~legal~~of ~~and~~unanticipated ~~regulatory~~charges ~~matters;~~or ~~non-compliance~~failure to realize contemplated cost savings in connection with ~~certain~~the ~~regulations,~~Operating ~~such~~Expense asEfficiency ~~export~~Plan; changes in product supply, ~~antitrust~~pricing, and ~~anti-corruption~~customer ~~laws~~demand; ~~foreign~~increased ~~tax~~profit-margin ~~and~~pressure ~~other~~resulting ~~loss~~from ~~contingencies;~~industry ~~breaches~~conditions, ofcompetition, ~~security~~ or ~~privacy~~other offactors; ~~business~~changes ~~information~~in ~~and~~relationships ~~information~~with ~~system~~key ~~failures,~~suppliers; ~~including~~other ~~related~~vagaries toin ~~current~~the orglobal ~~future~~components ~~implementations,~~and ~~integrations~~the ~~and~~global ~~upgrades~~ECS markets; ~~outbreaks~~changes to applicable laws, ~~epidemics~~regulations, ~~pandemics~~executive orders, or ~~public~~rules ~~health~~relating ~~crises;~~to ~~future~~government ~~regulatory~~contractors ~~trends~~ and the resulting legal and ~~reputation~~reputational exposure, including but not limited to those relating to environmental, social, governance, cybersecurity, data privacy, and artificial intelligence issues; commercial disputes, patent infringement claims, product liability lawsuits, or other legal proceedings; foreign tax and other loss contingencies; failure, disruption, or compromise of the company’s information systems or those of a third-party service provider, including unauthorized use or disclosure of company, supplier, or customer information; outbreaks, epidemics, pandemics, or public health crises; the effects of natural or man-made catastrophic events; and the company’s ability to generate positive cash flow. For a further discussion of these and other factors that could cause the company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in this Annual Report on Form 10-K, as well as in other filings the company makes with the ~~Securities and Exchange Commission~~SEC. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements.

Certain Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with GAAP, the company also discloses certain non-GAAP financial information in the sections below captioned “Sales”,” “Gross Profit”,” “Operating Expenses”,” “Operating Income,” “Income Tax,” and “Net Income Attributable to Shareholders”.” Refer to these sections below for reconciliations of non-GAAP financial measures to the most directly comparable reported GAAP financial measures. Non-GAAP financial information includes the following:

● Non-GAAP sales ~~(referred to as “sales on a constant currency basis”)~~ exclude the impact of changes in foreign currencies by retranslating prior period results at current period foreign exchange rates.

● Non-GAAP gross profit excludes inventory ~~write~~(recoveries) write-downs related to the wind down of businesses within ~~the~~ global components ~~reportable segment~~ (“impact of wind down to inventory”) and impact of changes in foreign currencies.

● Non-GAAP operating expenses exclude identifiable intangible asset amortization,; restructuring, integration, and other,; and ~~the~~ impact of changes in foreign currencies.

● Non-GAAP operating income excludes identifiable intangible asset amortization, restructuring, integration, and other and impact of wind down to inventory.

● Non-GAAP effective tax rate and non-GAAP net income attributable to shareholders exclude identifiable intangible asset amortization, restructuring, integration, and other, impact of wind down to inventory, loss on extinguishment of debt, (loss) gain on investments, net, and the impact of certain tax legislation changes.

Table of Contents

~~Management~~● believes that providing this additional information is useful to the reader to better assess and understand the company’s operating performance and future prospects in the same manner as management, especially when comparing results with previous periods. Management typically monitors the business as adjusted for these items, in addition to Non-GAAP ~~results, to understand and compare~~ operating ~~results~~income ~~across~~excludes ~~accounting~~identifiable ~~periods,~~intangible ~~for~~asset ~~internal~~amortization; ~~budgeting purposes~~restructuring, for short-term and long-term operating plans, and to evaluate the company’s financial performance. However, analysis of results on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP. For a discussion of what is included within “Restructuring, integration, and other”; and ~~“(Loss)~~impact ~~gain~~of onwind ~~investments,~~down ~~net” refer~~ to ~~the similarly captioned sections of this item below~~inventory.

●

Non-GAAP effective tax rate and non-GAAP net income attributable to shareholders exclude identifiable intangible asset amortization; restructuring, integration, and other; impact of wind down to inventory; loss on extinguishment of debt; gain (loss) on investments, net; and the impact from tax settlements related to the U.S. federal tax law changes enacted as part of the 2017 Tax Cuts and Jobs Act (“impact of TCJA Tax Act settlements”).

Management believes that providing this additional information is useful to the reader to better assess and understand the company’s operating performance and future prospects in the same manner as management, especially when comparing results with previous periods. Management typically monitors the business as adjusted for these items, in addition to GAAP results, to understand and compare operating results across accounting periods, for internal budgeting purposes, for short-term and long-term operating plans, and to evaluate the company’s financial performance. However, analysis of results on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP. For a discussion of what is included within “Restructuring, integration, and other” and “Gain (loss) on investments, net” refer to the similarly captioned sections of this item below.

Key Business Metrics

Management uses gross billings as an operational metric to monitor the operating performance of ~~its~~ global ECS ~~reportable segment~~, including ~~sales~~ performance by geographic region, as it provides meaningful supplemental information in evaluating the overall performance of the global ECS business. The company uses this key metric to develop financial forecasts, make strategic decisions, and prepare and approve annual budgets. Gross billings represent amounts invoiced to customers for goods and services during a specified period and dodoes not include the impact of recording sales on a net basis or sales adjustments, such as trade discounts and other allowances. Refer to Note 1 - “Summary of Significant Accounting Policies” towithin ~~the~~Item ~~consolidated~~8 ~~financial statements~~ for further discussion of the company’s revenue recognition policies. The use of gross billings has certain limitations as an analytical tool and should not be considered in isolation or as a substitute for revenue.

Overview

~~Arrow~~The company sources and engineers technology for thousands of leading manufacturers, services providers, and users of enterprise computing solutions. The company has one of the world’s broadest portfolios of product offerings available from leading electronic components and enterprise computing solutions suppliers. ~~Coupled~~The company’s revenues originate primarily from the sales of semiconductor products, IP&E components, and IT hardware and software. Equipped with a range of services, solutions, and tools, the company enables its suppliers to distribute their technologies and ~~help~~helps its industrial and commercial customers source, build, and leverage these technologies, reduce their time to market, grow their businesses, and enhance their overall competitiveness. The company is a trusted partner in a complex value chain and is uniquely positioned through its ~~electronics~~electronic components and IT content portfolios to ~~increase~~enhance value and market opportunities for stakeholders.

The company has two reportable segments, ~~the~~ global components ~~reportable segment~~ and ~~the~~ global ECS ~~reportable segment~~. ~~The~~Global ~~company’s global~~ components ~~reportable segment~~, enabled by aan ~~comprehensive~~extensive ~~range~~portfolio of value-added capabilities and services, markets, and distributes electronic components primarily to OEMs and EMS providers. ~~The~~Global ~~company’s global~~ ECS ~~reportable segment~~ is a leading value-added provider of comprehensive computing solutions and services. Its portfolio ~~of computing solutions~~ includes datacenter, cloud, security, and analytics solutions. Global ECS ~~brings~~offers broad market access, extensive supplier relationships, scale, and ~~resources~~value-added solutions to ~~help~~enable its VARs and MSPs to meet the needs of their end-users. ~~For~~In ~~2024~~2025, approximately 7270% and 2830% of the company’s sales were from ~~the~~ global components ~~reportable segment~~ and ~~the~~ global ECS ~~reportable segment~~, respectively.

The company’s strategic initiatives include the following:

● Offering a variety of value-added services in the global components reportable segment, including demand creation, design, engineering, global marketing and integration services to promote the future sale of suppliers’ products, which generally lead to longer and more profitable relationships with its suppliers and customers.

● Providing global supply chain service offerings such as procurement, logistics, warehousing, and insights from data analytics within the global components reportable segment.

● Enabling customer cloud solutions through the global ECS reportable segments’ cloud marketplace and management platform, ArrowSphere, which helps VARs and MSPs to manage, differentiate, and scale their cloud businesses while providing the business intelligence that IT solution providers need to drive growth.

The company’s long-term financial objectives are to grow sales faster than the market, increase the markets served, grow profits faster than sales, generate earnings per share growth in excess of competitors’ earnings per share growth and market

Table of Contents

~~expectations,~~The ~~allocate and deploy capital effectively so that return on invested capital exceeds the~~ company’s cost of capital, and increase return on invested capital. To achieve its objectives, the company seeks to capture significant opportunities to grow across products, markets, and geographies. To supplement its organic growth strategy, the company continually evaluates strategic ~~acquisitions~~initiatives ~~to broaden its product and value-added service offerings, increase its market penetration, and expand its geographic reach. The company is also committed to improving operational efficiency.~~include:

Global Components:

●

Shifting toward an increased mix of higher-margin value-added services, including engineering, integration and supply chain services by offering procurement, logistics, warehousing, and insights from data analytics which generally leads to longer and more profitable relationships with the company’s suppliers and customers.

●

Striving to further penetrate the market for IP&E, which tends to be a margin accretive segment of the broader available market.

Global ECS:

●

Enabling customer cloud-based solutions through ArrowSphere, the company’s cloud marketplace and management platform, which helps VARs and MSPs to manage, differentiate, and scale their cloud businesses while providing the business intelligence and tools that IT solution providers need to drive growth. ArrowSphere includes an AI-enabled digital go-to-market platform aimed at helping the company’s channel partners sell and support a variety of cloud offerings at higher rates.

●

Providing value-added distribution services including sales and marketing, demand generation, support and managed services, digital platforms and other services on behalf of certain suppliers.

Executive Summary


(millions except per share data)	~~2024~~2025			~~2023~~2024			~~Change~~	Change
Consolidated sales	$	2730,~~923~~853		$	3327,~~107~~923		~~(15.7)~~	%10.5	%
Global components sales	$	1921,~~983~~501		$	2519,~~420~~983		~~(21.4)~~	%7.6	%
Global ECS sales	$	79,~~940~~352		$	7,~~687~~940		~~3.3~~	%17.8	%
Gross profit margin		11.82	%		1211.58	%	~~(70)~~	~~bps~~(60)	bps
Non-GAAP gross profit margin		1211.02	%		12.50	%	~~(50)~~	~~bps~~(80)	bps
Operating income	$	~~769~~822		$	~~1,471~~769		~~(47.8)~~	%7.0	%
Operating income margin		2.87	%		42.48	%	~~(160)~~	~~bps~~(10)	bps
Non-GAAP operating income	$	~~1,002~~948		$	1,~~586~~002		~~(36.9)~~	%(5.3)	%
Non-GAAP operating income margin		3.61	%		43.86	%	~~(120)~~	~~bps~~(50)	bps
Net income attributable to shareholders	$	~~392~~571		$	~~904~~392		~~(56.6)~~	%45.7	%
Earnings per share attributable to shareholders - diluted	$	710.2993		$	157.8429		~~(54.0)~~	%49.9	%
Non-GAAP net income attributable to shareholders	$	~~568~~576		$	~~977~~568		~~(41.9)~~	%1.4	%
Non-GAAP earnings per share attributable to shareholders - diluted	$	1011.5602		$	1710.1256		~~(38.3)~~	%4.4	%

During 2025, changes in foreign currencies increased sales by approximately $398.8 million, operating income by $21.6 million and earnings per share on a diluted basis by $0.31 compared to the year-earlier period.

Business environment and other trends:

● ~~During~~Within ~~2024~~global ECS, the ~~global~~company ~~components~~has ~~reportable~~entered ~~segment~~into ~~continued~~certain tonon-cancellable ~~experience~~multi-year apurchase ~~cyclical~~obligations ~~downturn~~through ~~characterized~~2032, bydesignating ~~elevated~~it ~~customer~~as ~~inventory~~the ~~levels,~~exclusive partner for certain products and granting it the right to sell a ~~challenging~~broad ~~global~~set ~~macroeconomic~~of ~~environment~~IT solutions. In 2025, ~~contributing~~the company recorded losses due to lower ~~demand~~profit ~~for~~expectations on certain underperforming contracts which negatively impacted gross profit margins. Heading into 2026, the company’s ~~products.~~is ~~These~~continuing ~~trends~~to ~~are~~adapt ~~likely~~to best service these obligations and is committed to ~~continue~~focusing inon ~~2025~~optimizing, enhancing and scaling these offerings. Due to the ~~duration~~early stages and ~~severity~~expected variability in the margins related to these contracts, the long-term performance of the ~~current~~agreements ~~downturn~~cannot ~~remain~~be ~~uncertain~~reasonably estimated at this time, and the company is anticipating there could be additional losses in the coming quarters on certain agreements.

● ~~Within~~Between ~~the~~October ~~company’s~~8, ~~global~~2025, ~~ECS~~and ~~reportable~~October ~~segment~~17, ~~in certain periods~~2025, ~~changes~~three ~~in the mix~~ of ~~sales of IT solutions impact~~ the ~~proportion of the~~ company’s ~~revenue~~subsidiaries ~~that~~in isChina ~~recorded~~were onadded ~~a net basis compared~~ to ~~a gross basis. These changes increase or decrease sales during a period without a corresponding change in gross profit. This is driven by~~ the ~~company’s~~“Entity ~~responsibilities~~List” inof the ~~sale of various IT solutions~~BIS, which isrestricted ~~based~~their onability ~~terms~~to ~~and~~receive ~~conditions~~exports inof ~~place~~U.S. ~~with~~technology ~~its~~from ~~partners~~suppliers. ~~Refer~~During tothat ~~Note~~time 1period, ~~“Summary~~the ofsubsidiaries ~~Significant~~were ~~Accounting~~unable ~~Policies”~~to inreceive ~~this~~shipments ~~Annual~~from ~~Report~~many onsuppliers ~~Form~~and ~~10-K.~~fulfill corresponding

● On October 31, 2024, the company announced the Operating Expense Efficiency Plan to reduce costs and improve efficiencies. Refer to the “Restructuring, Integration, and Other” section below.

Table of Contents

customer orders, which resulted in marginal lost sales by global components in the Asia/Pacific region in the fourth quarter of 2025. The company does not anticipate that this event will have a negative impact on sales in the first quarter of 2026 or future periods.

●

During 2024, global components experienced a cyclical downturn characterized by elevated customer inventory levels, and a challenging global macroeconomic environment, contributing to lower demand for the company’s products. In 2025, the company began realizing stronger demand trends in all regions and consistent with historical trends from past cyclical downturns, the Asia/Pacific region returned to growth ahead of the Americas and EMEA regions. Despite the temporary business disruption within the Asia/Pacific region related to the BIS entity list incident described above, both the Asia/Pacific and Americas regions saw an increase in sales compared to the year-earlier period. The company anticipates that demand for components will continue to gradually increase aided by the market focus on AI technology. As the market recovery progresses, the company is focusing on efficient deployment and reallocation of working capital investments to maximize margins. While leading indicators are incrementally improving, the company cannot currently predict whether this trend will continue or how it may impact future quarters due to geopolitical and economic uncertainty.

●

The company’s global business continues to face uncertainty around ongoing developments related to U.S. and foreign tariff policies and is continuing to evaluate and further implement mitigating actions, including supply chain optimization and improved solutions around processing tariffs. Global components continues to see a marginal increase in revenue and cost of sales due to price increases. Given the uncertain and evolving nature of U.S. and foreign tariff policies, the company cannot currently predict whether this trend will continue or how it may impact future quarters. Refer to Item 1A - Risk Factors in this Annual Report on Form 10-K for further discussion related to tariffs and tariff drawbacks.

Results of Operations

Sales by reportable segment

Following is an analysis of the company’s sales by reportable segment for the years ended December 31:


(millions)	~~2024~~2025		~~2023~~2024		~~Change~~	Change
Consolidated sales, as reported	$	2730,~~923~~853	$	3327,~~107~~923	~~(15.7)~~	%10.5	%
Impact of changes in foreign currencies		—		~~(33)~~399
Consolidated sales, constant currency	$	27,923	$	33,074	(15.6)	%
Non-GAAP consolidated sales	$	30,853	$	28,322		8.9	%

Global components sales, as reported	$	1921,~~983~~501	$	2519,~~420~~983	~~(21.4)~~	%7.6	%
Impact of changes in foreign currencies		—		~~(35)~~205
Global components sales, constant currency	$	19,983	$	25,385	(21.3)	%
Non-GAAP global components sales	$	21,501	$	20,189		6.5	%

Global ECS sales, as reported	$	79,~~940~~352	$	7,~~687~~940	~~3.3~~	%17.8	%
Impact of changes in foreign currencies		—		2193
Global ECS sales, constant currency	$	7,940	$	7,689	3.3	%
Non-GAAP global ECS sales	$	9,352	$	8,133		15.0	%

The sum of the ~~components~~subtotals ~~for~~and percentages within sales, as reported, and sales on a constant currency basis may not agree to totals, as presented, due to rounding.

Reportable segment sales by geographic region

Following is an analysis of the company’s reportable segment sales by geographic region for the years ended December 31:


	2024				2023
(millions)	Sales		% of Sales		Sales		% of Sales		% Change
Americas components sales	$	6,412	23.0	%	$	7,955	24.0	%	(19.4)	%
EMEA components sales		5,648	20.2	%		8,075	24.4	%	(30.1)	%
Asia/Pacific components sales		7,923	28.4	%		9,390	28.4	%	(15.6)	%
Global components sales	$	19,983	71.6	%	$	25,420	76.8	%	(21.4)	%

Americas ECS sales	$	4,067	14.6	%	$	4,160	12.6	%	(2.2)	%
EMEA ECS sales		3,873	13.8	%		3,527	10.6	%	9.8	%
Global ECS sales	$	7,940	28.4	%	$	7,687	23.2	%	3.3	%
Consolidated sales	$	27,923	100.0	%	$	33,107	100.0	%	(15.7)	%

The sum of the components for sales by geographic region and consolidated sales may not agree to totals, as presented, due to rounding.

During 2024, the global components reportable segment continued to experience a cyclical downturn characterized by elevated customer inventory levels, and a challenging global macroeconomic environment, contributing to lower demand for the company’s products. The decrease in sales compared to the year-earlier period was primarily due to the following impacts:

● sales declined in the Americas region primarily due to decreases in the industrial, networking and communications verticals;

● sales declined in the EMEA region primarily due to decreased demand for industrial and transportation verticals;

● sales declined in the Asia/Pacific region primarily due to softer demand across most verticals.

Table of Contents

~~During~~Reportable ~~2024, the global ECS reportable~~ segment sales ~~increased~~by ~~compared~~geographic ~~to the year-earlier period primarily due to the following impacts:~~region

● growth in the EMEA region primarily due to healthy demand for infrastructure applications, hybrid-cloud solutions, and AI related solutions;

● partially offset by decreased sales in the Americas region primarily due to lower demand for storage and security as well as continued efforts by the company to reshape its Americas ECS business for greater mid-market scale and more infrastructure software and cloud adoption, as the company continues to adopt a go-to-market model in this region that better approximates the company’s selling motion in EMEA ECS.

Substantially all of the company’s sales are made on an order-by-order basis, rather than through long-term sales contracts. As such, the nature of the company’s business does not provide for the visibility of material forward-looking information from its customers and suppliers beyond a few months.

Gross Billings

The following table summarizes gross billings by geographic region for the global ECS reportable segment for the years ended December 31:


(millions)	2024		2023		2022
Americas ECS gross billings	$	10,323	$	10,542	$	11,198
EMEA ECS gross billings		9,205		8,474		7,779
Global ECS gross billings	$	19,528	$	19,016	$	18,976

The sum of the components for global ECS gross billings may not agree to totals, as presented, due to rounding.

Gross Profit

Following is an analysis of the company’s consolidated gross profit for the years ended December 31:

Following is an analysis of the company’s reportable segment sales by geographic region for the years ended December 31:


(millions)	2024			2023			Change
	2025						2024
Consolidated gross profit, as reported	$	3,292		$	4,149		(20.6)	%
(millions)	Sales			% of Sales			Sales		% of Sales		% Change
Impact of wind down to inventory		61			—
Americas components sales	$	6,944		22.5	%		$	6,412	23.0	%	8.3	%
Impact of changes in foreign currencies		—			(9)
EMEA components sales		5,671		18.4	%			5,648	20.2	%	0.4	%
Non-GAAP consolidated gross profit	$	3,353		$	4,140		(19.0)	%
Asia/Pacific components sales		8,886		28.8	%			7,923	28.4	%	12.1	%
Consolidated gross profit as a percentage of sales, as reported		11.8	%		12.5	%	(70)	bps
Global components sales	$	21,501		69.7	%		$	19,983	71.6	%	7.6	%
Non-GAAP consolidated gross profit as a percentage of sales		12.0	%		12.5	%	(50)	bps


Americas ECS sales	$	4,231		13.7	%		$	4,067	14.6	%	4.0	%
Global components gross profit, as reported	$	2,332		$	3,199		(27.1)	%
EMEA ECS sales		5,121		16.6	%			3,873	13.8	%	32.2	%
Impact of wind down to inventory		61			—
Global ECS sales	$	9,352		30.3	%		$	7,940	28.4	%	17.8	%
Impact of changes in foreign currencies		—			(8)
Consolidated sales	$	30,853		100.0	%		$	27,923	100.0	%	10.5	%
Non-GAAP global components gross profit	$	2,393		$	3,191		(25.0)	%
Global components gross profit as a percentage of sales, as reported		11.7	%		12.6	%	(90)	bps
Non-GAAP global components gross profit as a percentage of sales		12.0	%		12.6	%	(60)	bps

Global ECS gross profit, as reported	$	960		$	950		1.1	%
Impact of changes in foreign currencies		—			(1)
Non-GAAP global ECS gross profit	$	960		$	949		1.2	%
Global ECS gross profit as a percentage of sales, as reported		12.1	%		12.4	%	(30)	bps
Non-GAAP global ECS gross profit as a percentage of sales		12.1	%		12.3	%	(20)	bps

The sum ofsubtotals ~~the~~and ~~components~~percentages ~~for~~within ~~non-GAAP~~sales ~~gross~~by ~~profit~~geographic region and consolidated sales may not agree to totals, as presented, due to rounding.

~~Global~~During ~~components~~2025, ~~gross~~consolidated ~~profit~~sales ~~margins~~increased ~~decreased during 2024,~~ compared ~~with~~to the year-earlier period, due to ~~the~~changes ~~inventory~~in ~~write~~foreign ~~downs~~currencies ~~related~~as towell ~~the wind down of non-core businesses, product mix shifting toward lower margin~~ as;

Global components sales increased compared to the year-earlier period, primarily due to the following:

●

increase in sales in the Americas region primarily due to higher demand for the integrated services offerings, partially offset by a decrease in demand for defense, transportation, and automative verticals; and an

●

increase in sales in the Asia/Pacific region primarily due to higher demand for computing, industrial and transportation verticals;

Within global ECS, sales increased primarily in the EMEA region, relative to the year-earlier period, mainly due to growth across most major technologies, most notably, cloud-based solutions and infrastructure software, and a shift in sales mix towards more sales recognized on a gross basis. Refer to Note 1 - “Summary of Significant Accounting Policies” within Item 8.

Gross Billings

Following is an analysis of gross billings by geographic region for global ECS for the years ended December 31:


(millions)	2025			2024			Change
Americas ECS gross billings	$	10,607		$	10,323			2.7	%
EMEA ECS gross billings		11,443			9,205			24.3	%
Global ECS gross billings	$	22,050		$	19,528			12.9	%

The sum of the subtotals and percentages within global ECS gross billings may not agree to totals, as presented, due to rounding.

Table of Contents

~~products,~~Gross ~~and regional mix shifting more towards the Asia/Pacific region. Global components supply chain services offerings continued to have a positive impact on gross margins.~~ Profit

~~Global~~Following ~~ECS~~is ~~gross~~an ~~profit~~analysis ~~margins~~of ~~decreased during 2024, compared with~~ the ~~year-earlier period, due to softer margins in the Americas region as the~~ company’s ~~works~~gross toprofit ~~optimize~~by ~~the~~reportable ~~customer~~segment ~~mix~~for ~~and supplier line card to better serve~~ the years ~~mid-market,~~ended and a shift in sales mix towards more sales recognized on a gross basis in both the Americas and EMEA regions, relative to 2023. Refer to Note 1 “Summary of Significant Accounting Policies” in this Annual Report on Form 10-K.December 31:

Following is an analysis of the company’s consolidated gross profit for the years ended December 31:


(millions)	2023			2022			Change
Consolidated gross profit, as reported	$	4,149		$	4,837		(14.2)	%
Impact of changes in foreign currencies		—			8
Non-GAAP consolidated gross profit	$	4,149		$	4,844		(14.4)	%
Consolidated gross profit as a percentage of sales, as reported		12.5	%		13.0	%	(50)	bps
Non-GAAP consolidated gross profit as a percentage of sales		12.5	%		13.0	%	(50)	bps

Global components gross profit, as reported	$	3,199		$	3,905		(18.1)	%
Non-GAAP global components gross profit	$	3,199		$	3,905		(18.1)	%
Global components gross profit as a percentage of sales, as reported		12.6	%		13.6	%	(100)	bps
Non-GAAP global components gross profit as a percentage of sales		12.6	%		13.6	%	(100)	bps

Global ECS gross profit, as reported	$	950		$	932		2.0	%
Impact of changes in foreign currencies		—			8
Non-GAAP global ECS gross profit	$	950		$	939		1.1	%
Global ECS gross profit as a percentage of sales, as reported		12.4	%		11.2	%	120	bps
Non-GAAP global ECS gross profit as a percentage of sales		12.4	%		11.2	%	120	bps

The sum of the components for non-GAAP gross profit may not agree to totals, as presented, due to rounding.


(millions)	2025			2024			Change
Consolidated gross profit, as reported	$	3,467		$	3,292		5.3	%
Impact of wind down to inventory		(10)			61
Impact of changes in foreign currencies		—			54
Non-GAAP consolidated gross profit	$	3,457		$	3,407		1.4	%
Consolidated gross profit as a percentage of sales, as reported		11.2	%		11.8	%	(60)	bps
Non-GAAP consolidated gross profit as a percentage of sales		11.2	%		12.0	%	(80)	bps

Global components gross profit, as reported	$	2,403		$	2,332		3.0	%
Impact of wind down to inventory		(10)			61
Impact of changes in foreign currencies		—			24
Non-GAAP global components gross profit	$	2,393		$	2,417		(1.0)	%
Global components gross profit as a percentage of sales, as reported		11.2	%		11.7	%	(50)	bps
Non-GAAP global components gross profit as a percentage of sales		11.1	%		12.0	%	(90)	bps

Global ECS gross profit, as reported	$	1,064		$	960		10.8	%
Impact of changes in foreign currencies		—			30
Non-GAAP global ECS gross profit	$	1,064		$	990		7.4	%
Global ECS gross profit as a percentage of sales, as reported		11.4	%		12.1	%	(70)	bps
Non-GAAP global ECS gross profit as a percentage of sales		11.4	%		12.2	%	(80)	bps

~~Global~~The ~~components~~sum ~~gross~~of ~~profit margins decreased during 2023, compared with~~ the ~~year-earlier~~subtotals ~~period, due to declines in shortage market activity in the Americas region~~ and ~~product~~percentages ~~mix shifting toward lower margin products~~ within ~~the~~non-GAAP ~~Asia/Pacific~~gross ~~region.~~profit ~~Global~~may ~~components~~not ~~supply~~agree ~~chain services offerings continued~~ to ~~have~~totals, aas ~~positive~~presented, ~~impact~~due onto ~~gross margins~~rounding.

Global ECS gross profit margins increased during 2023, compared with the year-earlier period, due to product mix shifting towards a higher proportion of revenue recognized on a net basis. Refer to Note 1 “Summary of Significant Accounting Policies” in this Annual Report on Form 10-K.

Global components gross profit margins decreased during 2025, compared with the year-earlier period, due to regional mix shifting toward the Asia/Pacific region which generally has lower margins compared to Americas and EMEA regions as well as changes in customer mix within EMEA region and product mix in the Americas region. Global components supply chain services offerings continued to have a positive impact on gross profit margins.

Global ECS gross profit margins decreased during 2025, compared with the year-earlier period, due to $18.3 million in net losses related to underperformance of certain non-cancellable multi-year purchase obligations and a shift in sales mix towards more sales recognized on a gross basis in the EMEA region. Refer to Note 1 - “Summary of Significant Accounting Policies” within Item 8.

Table of Contents

Operating Expenses

Following is an analysis of the company’s ~~consolidated~~ operating expenses for the years ended December 31:


(millions)	~~2024~~2025			~~2023~~2024			Change
Consolidated operating expenses, as reported	$	2,~~524~~644		$	2,~~678~~524		(54.8)	%
Identifiable intangible asset amortization		(3020)			(3130)
Restructuring, integration, and other		(~~143~~116)			(84143)
Impact of changes in foreign currencies		—			~~(3)~~32
Non-GAAP consolidated operating expenses	$	2,~~351~~509		$	2,~~560~~383		(85.2)3	%
Consolidated operating expenses as a percentage of sales, as reported		98.06	%		89.10	%	90(40)	bps
Non-GAAP consolidated operating expenses as a percentage of sales		8.41	%		78.74	%	70(30)	bps

Global components operating expenses, as reported	$	1,~~591~~628		$	1,~~740~~591		(82.6)3	%
Identifiable intangible asset amortization		(2616)			(2725)
Impact of changes in foreign currencies		—			~~(4)~~17
Non-GAAP global components operating expenses	$	1,~~566~~612		$	1,~~710~~583		(81.4)8	%
Global components operating expenses as a percentage of sales		87.06	%		6.8.0	%	~~120~~(40)	bps
Non-GAAP global components operating expenses as a percentage of sales		7.85	%		6.7.8	%	~~110~~(30)	bps

Global ECS operating expenses, as reported	$	~~550~~638		$	~~583~~550		(516.7)0	%
Identifiable intangible asset amortization		(4)			(54)
Impact of changes in foreign currencies		—			115
Non-GAAP global ECS operating expenses	$	~~546~~634		$	~~580~~560		(513.8)2	%
Global ECS operating expenses as a percentage of sales		6.98	%		7.6.9	%	(7010)	bps
Non-GAAP global ECS operating expenses as a percentage of sales		6.98	%		76.59	%	(6010)	bps

Corporate operating expenses, as reported	$	~~383~~378		$	~~355~~383		7(1.81)	%
Restructuring, integration, and other		(~~143~~116)			(84143)
Non-GAAP corporate operating expenses	$	~~240~~262		$	~~271~~240		~~(11~~9.5)3	%

The sum of the ~~components~~subtotals ofand percentages within consolidated operating expenses may not agree to totals, as presented, due to rounding.

~~Global~~Operating ~~components operating~~ expenses ~~decreased~~increased during ~~2024~~2025 compared to the year-earlier period, primarily due to ~~the following~~:

● achanges ~~decrease of $123.2 million~~ in ~~employee-related~~foreign ~~costs primarily due to cost reduction initiatives and lower sales incentives~~currencies;

● aincrease ~~decrease~~in ofoperating ~~$25.4~~expenses ~~million~~ in ~~charges~~global ~~taken~~components ~~for~~primarily ~~allowance~~due ~~for~~to ~~credit~~higher ~~losses;~~sales ~~partially~~incentives, ~~offset~~in byline with the increase in sales discussed above; and

● anincrease in operating expenses for global ECS primarily due to increased employee headcount and higher sales incentives, in line with the increase ofin sales discussed above, costs to expand the business related to the multi-year non-cancellable purchase obligations discussed above, and a $6220.20 million ~~due~~benefit related to ~~legal~~the ~~settlement~~reversal ~~benefits~~of ~~recognized~~an inallowance ~~connection~~for ~~with~~credit losses due to the collection of certain ~~legal~~aged ~~matters~~receivables related to one customer in ~~2023~~2024 with no similar items recorded in ~~2024~~2025.

~~Global~~These ~~ECS~~factors ~~operating~~were ~~expenses~~offset ~~decreased~~by ~~during~~a ~~2024 compared to the year-earlier period primarily due to the following:~~

● a decrease ofin ~~$45.8~~corporate ~~million~~operating inexpenses ~~charges~~primarily ~~taken~~due ~~for~~to ~~allowance~~a ~~for~~decrease ~~credit~~in ~~losses.~~restructuring, ~~This~~integration ~~decrease~~and ~~relates~~other tocharges ~~2023~~(see ~~charges~~discussion below) and reversal of ~~$25.4~~stock-based ~~million~~compensation ~~related~~expense mainly due to ~~one~~equity-award ~~customer~~forfeitures, of which ~~$20.0~~were ~~million~~partially ~~was~~offset ~~subsequently~~by ~~reversed~~an ~~upon~~increase ~~recovery~~in ~~during~~professional ~~2024~~fees.

Corporate operating expenses increased during 2024 compared to the year-earlier period primarily due to the following:

● an increase of $59.0 million due to higher restructuring, integration and other charges (see discussion below).

Table of Contents

Following is an analysis of the company’s consolidated operating expenses for the years ended December 31:


(millions)	2023			2022			Change
Consolidated operating expenses, as reported	$	2,678		$	2,768		(3.3)	%
Identifiable intangible asset amortization		(31)			(35)
Restructuring, integration, and other		(84)			(14)
Impact of changes in foreign currencies		—			6
Non-GAAP consolidated operating expenses	$	2,563		$	2,726		(6.0)	%
Consolidated operating expenses as a percentage of sales, as reported		8.1	%		7.5	%	60	bps
Non-GAAP consolidated operating expenses as a percentage of sales		7.7	%		7.3	%	40	bps

Global components operating expenses, as reported	$	1,740		$	1,944		(10.5)	%
Identifiable intangible asset amortization		(27)			(27)
Impact of changes in foreign currencies		—			2
Non-GAAP global components operating expenses	$	1,713		$	1,919		(10.7)	%
Global components operating expenses as a percentage of sales		6.8	%		6.8	%	10	bps
Non-GAAP global components operating expenses as a percentage of sales		6.7	%		6.7	%	—	bps

Global ECS operating expenses, as reported	$	583		$	523		11.4	%
Identifiable intangible asset amortization		(5)			(8)
Impact of changes in foreign currencies		—			4
Non-GAAP global ECS operating expenses	$	578		$	520		11.3	%
Global ECS operating expenses as a percentage of sales		7.6	%		6.3	%	130	bps
Non-GAAP global ECS operating expenses as a percentage of sales		7.5	%		6.2	%	130	bps

Corporate operating expenses, as reported	$	355		$	301		17.9	%
Restructuring, integration, and other		(84)			(14)
Non-GAAP corporate operating expenses	$	271		$	287		(5.6)	%

The sum of the components of consolidated operating expenses may not agree to totals, as presented, due to rounding.

Global components operating expenses decreased during 2023 compared to the year-earlier period primarily due to the following:

● a decrease of $125.6 million in employee-related costs primarily due to cost reduction initiatives and lower sales incentives; and

● a decrease of $62.2 million due to legal settlement benefits recognized in connection with certain legal matters in 2023.

Global ECS operating expenses increased during 2023 compared to the year-earlier period primarily due to the following:

● an increase of $25.4 million in charges taken for allowance for credit losses related to one customer; and

● an increase of $32.0 million in employee-related costs.

Corporate operating expenses increased during 2023 compared to the year-earlier period primarily due to the following:

● an increase of $70.2 million due to higher restructuring, integration and other charges related to cost reduction initiatives.

Table of Contents

Restructuring, Integration, and Other

~~The~~Restructuring ~~following~~initiatives ~~table~~and ~~presents~~integration ~~the~~costs ~~components~~are ofrelated to the company’s continued efforts to lower costs, drive operational efficiency and consolidate certain operations, as necessary. The company recorded restructuring, integration, and other charges as follows for the years ended December 31:


(millions)	~~2024~~2025		~~2023~~2024
Restructuring, integration and related costs
Operating Expense Efficiency Plan costs (a)	$	10106	$	—10
Other plans		42		94
Other expenses
Operating expense reduction costs not related to restructuring initiatives (b)		85(1)		1985
Increases to environmental remediation liabilities (c)		1		23
Environmental remediation liabilities		4		1
Early lease termination costs		72		297
Consulting costs (d)		25		—
Consulting costs (c)		—		25
Other charges		113		311
Total	$	~~143~~116	$	84143

The sum of the ~~components~~subtotals ~~for~~within restructuring, integration, and other may not agree to totals, as presented, due to rounding.

(a)	See details related to the Operating Expense Efficiency Plan discussed below.

(b) These costs are primarily related to ~~the~~employee ~~termination~~severance ofand ~~personnel~~benefit costs. As of December 31, ~~2024~~2025, the accrued liabilities related to these costs totaled $615.67 million and substantially all accrued amounts are expected to be spent in cash within ~~one~~two ~~year~~years.

(c) ~~Refer~~Consulting tocosts ~~Note~~are ~~15,~~related ~~“Contingencies” of the Notes~~ to ~~the~~operating ~~Consolidated~~expense ~~Financial~~reduction ~~Statements~~costs ~~for~~not ~~further~~related ~~discussion~~to ofthe ~~environmental~~restructuring ~~liabilities~~initiative.

(d) Consulting costs are related to operating expense reduction costs not related to the restructuring initiative.

Operating Expense Efficiency Plan

On October 31, 2024, in response to evolving business needs and as part of an initiative to optimize operating expenses, the company announced a multi-year restructuring plan (the “Operating Expense Efficiency Plan” or “the Plan”). The Plan is designed to improve operational efficiency through the following measures: (i) reorganizing and consolidating certain areas of the company’s operations to centralize functions and streamline resources, with a focus on more cost-efficient regions; (ii) enhancing warehouse and logistics operations; (iii) investing in information technology to support automation and process improvements; (iv) consolidating the company’s global real estate footprint; (v) reducing third-party spending; and (vi) winding down certain non-core businesses that are not aligned with the company’s strategic objectives. The company expects to substantially complete the Plan by the end of fiscal year 2026, subject to, among other things, local legal and consultation requirements.

Under the Plan, the company ~~expects~~anticipates to incur pre-tax restructuring charges of approximately $200.0 million which is an increase of $15.0 million compared to the original estimate of $185.0 million previously disclosed in Item 2.05 Form 8K filed on October 31, ~~consisting~~2024. While the expected cash charges are in line with original expectations, the increase is primarily related to non-cash write-offs due to changes in foreign currencies. The composition of these costs will continue to evolve over time the company currently expects to incur approximately $~~110~~100.0 million of employee severance and other personnel cash expenditures; approximately $5065.0 million of non-cash asset impairments, ~~accelerated~~inventory ~~depreciation~~write-downs and ~~inventory~~foreign currency translation adjustment write-~~downs~~offs related to the wind- down of certain business operations; and approximately $2535.0 million of other related cash expenditures. As a result of the company’s philosophy of maximizing operating efficiencies through the centralization of certain functions, restructuring, integration, and related costs are included in the corporate line item for management and segment reporting as they are not attributable to the individual reportable segments.

As a result of the Plan, the company expects to reduce annual operating expenses by approximately $90.0 million to $100.0 million by the end of fiscal year 2026. The estimates of charges or savings related to the Plan could differ materially from actual charges or savings recognized.

Refer to Note 9, - “Restructuring, Integration, and Other” ofwithin ~~the~~Item ~~Notes to~~8 ~~the Consolidated Financial Statements~~ for further discussion of the company’s restructuring and integration activities.

3534

Table of Contents

Operating Income

Following is an analysis of the company’s ~~consolidated~~ operating income, ~~and~~by ~~operating income for the company’s two~~ reportable ~~segments~~segment for the years ended December 31:


(millions)	~~2024~~2025			~~2023~~2024			~~Change~~	Change
Consolidated operating income, as reported	$	~~769~~822		$	~~1,471~~769		~~(47.8)~~	%7.0	%
Identifiable intangible asset amortization		3020			3130
Restructuring, integration, and other		~~143~~116			84143
Impact of wind down to inventory		61(10)			—61
Non-GAAP consolidated operating income	$	~~1,002~~948		$	1,~~586~~002		~~(36.9)~~	%(5.3)	%
Consolidated operating income as a percentage of sales, as reported		2.87	%		42.48	%	~~(160)~~	~~bps~~(10)	bps
Non-GAAP consolidated operating income, as a percentage of sales		3.61	%		43.86	%	~~(120)~~	~~bps~~(50)	bps

Global components operating income, as reported	$	~~741~~775		$	~~1,459~~741		~~(49.2)~~	%4.5	%
Identifiable intangible asset amortization		2516			2725
Impact of wind down to inventory		61(10)			—61
Non-GAAP global components operating income	$	~~827~~781		$	~~1,486~~827		~~(44.3)~~	%(5.6)	%
Global components operating income as a percentage of sales		3.76	%		53.7	%	~~(200)~~	~~bps~~(10)	bps
Non-GAAP global components operating income as a percentage of sales		43.16	%		54.81	%	~~(170)~~	~~bps~~(50)	bps

Global ECS operating income, as reported	$	~~410~~426		$	~~367~~410		~~11.7~~	%3.9	%
Identifiable intangible asset amortization		4			54
Non-GAAP global ECS operating income	$	~~414~~430		$	~~372~~414		~~11.4~~	%3.7	%
Global ECS operating income as a percentage of sales		54.26	%		45.82	%	40	~~bps~~(60)	bps
Non-GAAP global ECS operating income as a percentage of sales		54.26	%		45.82	%	40	~~bps~~(60)	bps

The sum of the ~~components~~subtotals ofand percentages within consolidated operating income do not agree to totals, as presented, because unallocated corporate amounts are not included in the table above. Refer to Note 16 - “Segment and Geographic Information” ofwithin ~~the~~Item ~~Notes~~8 ~~to the Consolidated Financial Statements~~ for ~~further~~a ~~discussion~~reconciliation.

The decrease in consolidated operating income as a percentage of sales during ~~2024~~2025 relates primarily to the changes in sales, gross profit margins, and operating expenses discussed above.

Gain (~~Loss~~loss) ~~Gain~~ on Investments, Net


(millions)	~~2024~~2025		~~2023~~2024
(Loss) gain on investments, net	$	(5)	$	19
Gain (loss) on investments, net	$	110	$	(5)

~~(Loss)~~The gain on investments, ~~net~~during 2025 is primarily related to ~~the~~a ~~changes~~$99.0 inmillion ~~fair~~gain ~~value~~on ~~of assets related to~~ the ~~Arrow~~sale ~~SERP pension plan, which consist primarily~~ of ~~life~~an ~~insurance policies and mutual fund assets, as well as changes in the fair value of the company’s~~ investment in ~~Marubun~~certain ~~Corporation,~~equity ~~refer~~securities. Refer to Note 73 - “~~Financial~~Investments ~~Instruments~~in ~~Measured~~Affiliated ~~at Fair Value~~Companies” ofwithin ~~the~~Item ~~Notes to the Consolidated Financial Statements~~8.

Interest and Other Financing Expense, Net

The company recorded net interest and other financing expense as follows:


(millions)	~~2024~~2025		~~2023~~2024
Interest and other financing expense, net	$	(~~270~~215)	$	(~~329~~270)

The ~~decreases~~decrease in interest and other financing expenses, net for ~~2024~~2025 is primarily related to lower interest rates and lower average daily borrowings on floating rate credit facilities. Refer to the section below titled “Liquidity and Capital Resources” for more information on changes in borrowings.

3635

Table of Contents

Income Tax

The company records a provision for income taxes for the anticipated tax consequences of the reported financial results of operations using the asset and liability method. The following table presents the company's effective income tax rate and non-GAAP effective tax rate for the years ended December 31:


	~~2024~~2025		~~2023~~2024
Effective income tax rate	1920.6	%	2119.96	%
Identifiable intangible asset amortization	0.31		0.13
Restructuring, integration, and other	10.25		0.1.2
Impact of wind down to inventory	0.7		—
(Gain) loss on investments, net	(0.6)		—
Impact of tax legislation changes	—		(0.1)
Impact of wind down to inventory	(0.1)		0.7
Non-GAAP effective income tax rate	21.8	%	22.0	%
Impact of TCJA Tax Act settlements	1.2		—
Non-GAAP effective income tax rate	21.7	%	21.8	%

The sum of the ~~components~~subtotals ~~for~~and percentages within non-GAAP effective income tax rate may not agree to totals, as presented, due to rounding.

The ~~company’s~~year-over-year ~~effective~~change ~~tax~~in ~~rate deviates from~~ the ~~statutory~~effective ~~U.S. federal income~~ tax rate ~~predominantly~~for ~~due~~2025 towas ~~the~~primarily ~~variety~~driven ofby ~~foreign~~a ~~taxing~~shift ~~jurisdictions where it operates, and its foreign subsidiaries generate taxable income. The fluctuation~~ in ~~the~~jurisdictional ~~effective~~mix ~~tax~~of ~~rate for 2024~~earnings, ~~compared to~~ the ~~previous~~impact ~~year,~~of isforeign ~~mainly~~currency ~~attributed~~exchange torate ~~changes~~fluctuations in ~~uncertain~~certain ~~tax positions~~locations, ~~including~~the ~~favorable~~ tax ~~audit~~treatment ~~settlements. Additionally, the mix~~ of ~~tax~~stock-based ~~jurisdictions~~compensation, ~~where~~an ~~income~~increase ~~was~~in ~~generated~~gain ~~was~~on ~~influenced~~investments ~~by higher restructuring, integration,~~ and ~~other~~adjustments ~~charges,~~to asreserves ~~well~~for asuncertain ~~inventory~~tax ~~write-downs taken during 2024~~positions.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, significantly amending U.S. federal tax law, including changes to international tax provisions, expensing of research and experimental expenditures, depreciation, and interest deduction rules. The company does not expect the OBBBA to have a material impact on its effective tax rate.

Net Income Attributable to Shareholders

Following is an analysis of the company’s consolidated net income attributable to shareholders for the years ended December 31:


(millions)	~~2024~~2025		~~2023~~2024
Net income attributable to shareholders, as reported	$	~~392~~571	$	~~904~~392
Identifiable intangible asset amortization *		2920		3029
Restructuring, integration, and other		~~143~~116		84143
Loss (gain) on investment		5		(19)
(Gain) loss on investment		(110)		5
Impact of wind down to inventory		61(10)		—61
Loss on extinguishment of debt		2—		—2
Tax effect of adjustments above		(633)		(2363)
Impact of tax legislation changes		—		1
Impact of TCJA Tax Act settlements		(8)		—
Non-GAAP net income attributable to shareholders	$	~~568~~576	$	~~977~~568

The sum of the ~~components~~subtotals ~~for~~within non-GAAP net income attributable to shareholders may not agree to totals, as presented, due to rounding.

* Identifiable intangible asset amortization excludes amortization attributable to the noncontrolling interest.

The increase in net income attributable to shareholders in 2025 compared to the year-earlier period relates primarily to gain on investments, net, changes in sales and gross margins, as discussed above, and the impact of TCJA Tax Act settlements.

The decrease in net income attributable to shareholders in 2024 compared to the year-earlier period relates primarily to changes in sales, gross margins, operating expenses, interest and other financing expenses, net, and income tax as discussed above.

Liquidity and Capital Resources

Management believes that the company’s current cash availability, its current borrowing capacity under its revolving credit facility and asset securitization programs, and its expected ability to generate future operating cash flows are sufficient to meet its projected cash flow needs for the next 12 months and the foreseeable future. The company’s committed and undrawn liquidity stands at over $2.85 billion in addition to $~~188~~306.85 million of cash on hand at December 31, ~~2024~~2025. The company also may issue debt or equity securities in the future and management believes the company will have adequate access to the capital markets, if needed. The company continually evaluates its liquidity requirements and would seek to amend its existing borrowing capacity or access the financial markets asif ~~deemed~~ necessary.

The company’s principal sources of liquidity are existing cash and cash equivalents, cash generated from operations and cash provided by its revolving credit facilities and debt. The company’s principal uses of liquidity include cash used in 36

Table of Contents

The company’s principal sources of liquidity are existing cash and cash equivalents, cash generated from operations, and cash provided by its revolving credit facilities and debt. The company’s principal uses of liquidity include cash used in operations, investments to grow working capital, scheduled interest and principal payments on its borrowings, and the return of cash to shareholders through share repurchases.

The following table presents selected financial information related to liquidity at December 31:


(millions)	~~2024~~2025		~~2023~~2024		Change
Working capital	$	67,~~693~~437	$	76,~~355~~693	$	~~(662)~~744
Cash and cash equivalents		~~189~~306		~~218~~189		~~(29)~~117
Short-term debt		~~350~~—		~~1,654~~350		(~~1,304~~350)
Long-term debt		23,~~774~~085		2,~~154~~774		~~620~~311

Working Capital

The company maintains a significant investment in working capital which the company defines as accounts receivable, net, plus inventories less accounts payable.

Working capital, as a percentage of sales, which is defined as working capital divided by annualized quarterly sales, decreased to 2321.03% at December 31, ~~2024~~2025 compared to 23.40% at December 31, ~~2023~~2024. ~~The decrease was primarily due to lower inventory.~~ Sales for the fourth quarter of ~~2024~~2025 and ~~2023~~2024 were $78.37 billion and $7.83 billion, respectively. The decrease in working capital as a percentage of sales was primarily due to the increase in sales.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments, which are readily convertible into cash, with original maturities of three months or less. At December 31, ~~2024~~2025 and ~~2023~~2024, the company had cash and cash equivalents of $~~188~~306.85 million and $~~218~~188.18 million, respectively, of which $~~164~~241.06 million and $~~160~~164.0 million, respectively, were held outside the ~~United States~~U.S.

As of December 31, ~~2024~~2025, the company has $5.4 billion of undistributed earnings of its foreign subsidiaries which it deems indefinitely reinvested, and recognizes that it may be subject to additional foreign taxes and U.S. state income taxes, if it reverses its indefinite reinvestment assertion on these foreign earnings. The company has $2.03 billion of foreign earnings that are not deemed permanently reinvested and are available for distribution in future periods as of December 31, ~~2024~~2025.

Revolving Credit Facilities and Debt

The following table summarizes the company’s credit facilities by category at December 31:


	Borrowing		Outstanding borrowings
(millions)	capacity		~~2024~~2025		~~2023~~2024
North American asset securitization program	$	1,500	$	~~633~~970	$	~~198~~633
Revolving credit facility		2,000		30—		—30
Commercial paper program (a)		1,200		—		~~1,122~~—
Uncommitted lines of credit		500		—		—

(a)	Amounts outstanding under the commercial paper program are backstopped by available commitments under the company’s revolving credit facility.


	Average Daily Balance Outstanding
	Year Ended				Effective Interest Rate
	December 31,		December 31,		December 31,		December 31,
(millions)	2024		2023		2024		2023
North American asset securitization program	$	567	$	1,092	4.83	%	5.85	%
Revolving credit facility		3		131	5.48	%	6.42	%
Commercial paper program		435		774	5.21	%	5.90	%
Uncommitted lines of credit		280		178	5.18	%	5.83	%

Table of Contents

The company also has an EMEA asset securitization program under which it continuously sells its interest in designated pools of trade accounts receivable of certain of its subsidiaries in the EMEA region. Receivables sold under the program are excluded from “Accounts receivable, net” and no corresponding liability is recorded on the company’s consolidated balance sheets. During 2024 and 2023, the average daily balance outstanding under the EMEA asset securitization program was $394.8 million and $626.4 million, respectively. During November 2024, the company amended the program to extend the maturity and correct an administrative error and regain compliance with certain operational covenants. Refer to Note 4 “Accounts Receivable” of the Notes to the Consolidated Financial Statements for further discussion.


		Average Daily Balance Outstanding
		Year Ended						Effective Interest Rate
		December 31,			December 31,			December 31,		December 31,
(millions)		2025			2024			2025		2024
North American asset securitization program		$	625		$	567		4.19	%	4.83	%
Revolving credit facility			1			3		5.01	%	5.48	%
Commercial paper program			278			435		4.26	%	5.21	%
Uncommitted lines of credit			274			280		4.37	%	5.18	%

The company also has an EMEA asset securitization program under which it continuously sells its interest in designated pools of trade accounts receivable of certain of its subsidiaries in the EMEA region. Receivables sold under the program are excluded from “Accounts receivable, net” and no corresponding liability is recorded on the company’s consolidated balance sheets. During 2025 and 2024, the average daily balance outstanding under the EMEA asset securitization program was $337.3 million and $394.8 million, respectively. Refer to Note 4 - “Accounts Receivable” within Item 8 for further discussion.

The following table summarizes recent events impacting the company’s capital resources:


(millions)	Activity	Date	Notional amount
4.00% notes, due April 2025	Repaid	April 2025	$	350
3.25% notes, due September 2024	Repaid	September 2024	$	500
5.15% notes, due August 2029	Issued	August 2024	$	500
5.875% notes, due April 2034	Issued	April 2024	$	500
6.125% notes, due March 2026	Repaid	April 2024	$	500
Uncommitted lines of credit	Increase in Capacity	May 2023	$	300
4.50% notes, due March 2023	Repaid	March 2023	$	300
6.125% notes, due March 2026	Issued	March 2023	$	500

Refer to Note 6, - “Debt” ofwithin ~~the~~Item ~~Notes to~~8 ~~the Consolidated Financial Statements~~ for further discussion of the company’s short-term and long-term debt and available financing.

Cash Flows

The following table summarizes the company’s cash flows by category for the periods presented:


(millions)	~~2024~~2025		~~2023~~2024		Change
Net cash provided by operating activities	$	~~1,130~~64	$	~~705~~1,130	$	~~425~~(1,066)
Net cash used for investing activities		(94)		(72)		(22)
Net cash provided by (used for) investing activities		24		(94)		118
Net cash used for financing activities		(~~957~~206)		(~~666~~957)		~~(291)~~751

Cash Flows from Operating Activities

The net amount of cash provided by the company’s operating activities during ~~2024~~2025 and ~~2023~~2024 was $164.10 ~~billion~~million and $~~705~~1.41 ~~million~~billion, respectively. The change in cash provided by operating activities during ~~2024~~2025, compared to the year-earlier period, relates primarily to an increase in inventory to support future growth in response to the ~~company’s~~expected ~~historical~~market ~~counter-cyclical~~recovery ~~cash~~coupled ~~flow~~with an increase in sales. The fluctuations in both “Accounts receivable, net” and “Accounts payable” are primarily related to the global components supply chain services offerings and generally correlated as the company ~~generates~~acts ~~cash~~as ~~flow~~an intermediary in ~~periods~~the oftransaction ~~decreased~~and ~~demand~~remits ~~growth~~payments ~~due~~ to ~~lower~~the ~~investment~~supplier inupon ~~working~~receipt ~~capital~~from ~~primarily~~the ~~due~~customer. Refer to ~~lower~~Note ~~inventory~~4 - “Accounts Receivable” within Item 8.

Cash Flows from Investing Activities

The net amount of cash ~~used~~provided ~~for~~by investing activities during ~~2024~~2025 ~~and 2023~~ was $9423.46 million ~~and~~compared to $7294.34 million, ~~respectively~~of cash used for investing activities in 2024. The change in cash provided by (used for) investing activities related primarily to ~~amounts~~proceeds ~~paid~~from ~~for~~the ~~businesses~~sale ~~acquired~~of an investment in ~~2024~~certain equity securities (refer to Note 3 - “Investments in Affiliated Companies” within Item 8) and proceeds for the settlement of net investment hedges (refer to Note 7 - “Financial Instruments Measured at Fair Value” within Item 8).

Table of Contents

Cash Flows from Financing Activities

The net amount of cash used for financing activities was $~~956~~206.81 million during ~~2024~~2025 compared to $~~666~~956.28 ~~million used for financing activities~~ in ~~2023~~2024. The change in cash used for financing activities was primarily due to ~~higher~~a decrease in short term and other borrowings, lower redemption of notes ~~partially~~and ~~offset by~~ lower share repurchases in ~~2024~~2025.

Capital Expenditures

Capital expenditures were $92101.73 million and $8392.37 million in ~~2024~~2025 and ~~2023~~2024, respectively. The company expects capital expenditures to be approximately $100.0 million for fiscal year ~~2025~~2026.

39Share Repurchase Program

~~Table~~The company repurchased 1.3 million shares of ~~Contents~~common stock for $149.9 million and 2.0 million shares of common stock for $250.0 million in 2025 and 2024, respectively, under its share repurchase program, excluding excise taxes. As of December 31, 2025, approximately $172.9 million remained available for repurchase under the share repurchase program. The share repurchase authorization does not have an expiration date and the pace of the repurchase activity will depend on factors such as the company’s working capital needs, cash requirements for acquisitions, debt repayment obligations or repurchases of debt, share price, and economic and market conditions. The share repurchase program may be accelerated, suspended, delayed, or discontinued at any time subject to the approval of the company’s Board of Directors.

Share-Repurchase Program

The company repurchased 2.0 million shares of common stock for $250.0 million and 6.1 million shares of common stock for $745.9 million in 2024 and 2023, respectively, under its share-repurchase program, excluding excise taxes. As of December 31, 2024, approximately $324.1 million remained available for repurchase under the share-repurchase program. The share-repurchase authorization does not have an expiration date and the pace of the repurchase activity will depend on factors such as the company’s working capital needs, cash requirements for acquisitions, debt repayment obligations or repurchases of debt, share price, and economic and market conditions. The share-repurchase program may be accelerated, suspended, delayed, or discontinued at any time subject to the approval of the company’s Board of Directors.

Contractual Obligations

The company has contractual obligations for short-term and long-term debt, interest on short-term and long-term debt, purchase obligations, and operating leases.

● At December 31, ~~2024~~2025, the company had $3.1 billion of total debt outstanding, $~~350.~~0.3 million of which matures in the next twelve months. The remaining debt has maturity dates inbetween ~~2026~~2027 ~~through~~and 2034. During April ~~2024~~2025, the company repaid ~~$500.0~~in ~~million~~full ~~principal amount of its 6.125% notes due March 2026. During September 2024,~~ the ~~company repaid~~ $~~500~~350.0 million principal amount of its 34.2500% notes ~~which~~due ~~were~~April ~~redeemed at maturity~~2025. Refer to Note 6, - “Debt” ofwithin ~~the~~Item ~~Notes~~8 ~~to the Consolidated Financial Statements~~ for further discussion of the company’s short-term and long-term debt and available financing.

● Amounts related to total interest on long-term debt at December 31, ~~2024~~2025 totaled $~~598~~501.41 million, with $~~110~~107.50 million expected to be paid within the next 12 months. Refer to Note 6, - “Debt” ofwithin ~~the~~Item ~~Notes~~8 ~~to the Consolidated Financial Statements~~ for further discussion of the company’s interest on short-term and long-term debt and available financing.

● Purchase obligations of $821.3 billion represent an estimate of non-cancellable inventory purchase orders, future payments under IT distribution arrangements, and other contractual obligations related to information technology and facilities as of December 31, ~~2024~~2025 with $511.74 billion expected to be paid within the next 12 months, $13.2 billion in ~~2026~~2027, $~~642.~~2.0 ~~million~~billion in ~~2027~~2028, ~~and~~ $~~487~~1.28 ~~million~~billion in ~~2028.~~2029 Inand ~~January~~$1.2 ~~2025,~~billion ~~the~~in ~~company~~2030. ~~entered~~Some ~~into~~of ~~new~~these ~~multi-year distribution agreements which increased its non-cancellable~~ purchase obligations byrelate ~~$2.8~~to ~~billion~~sales ~~with~~where ~~payments~~the ofcompany ~~$288.7~~acts ~~million~~as an agent in ~~2025,~~the ~~$495~~transaction.7 ~~million~~Refer into ~~2026,~~discussions ~~$563.0~~of ~~million~~the incompany’s ~~2027,~~revenue ~~$598.6~~recognition ~~million~~policy in ~~2028,~~Note ~~$639.~~1 ~~million~~- in“Summary ~~2029,~~of ~~and~~Significant ~~$228.2~~Accounting ~~million~~Policies” inwithin ~~2030~~Item 8.

● Amounts related to future lease payments for operating lease obligations at December 31, ~~2024~~2025 totaled $~~301~~296.06 million, with $7787.62 million expected to be paid within the next 12 months. Refer to Note 14, - “Lease Commitments” ofwithin ~~the~~Item ~~Notes~~8 ~~to the Consolidated Financial Statements~~ for further discussion of the company’s operating leases.

Table of Contents

Additional Capital Requirements and Sources

Recent and expected other capital requirements and sources, in addition to the above matters, also include the items described below:

● Employee Benefit Plans: The company maintains an unfunded executive pension plan under which the company will pay supplemental pension benefits to certain employees upon retirement. As of December 31, ~~2024~~2025, the company had designated $~~115~~119.73 million in assets to cover the ongoing costs of SERP payouts for both current and former executives. The projected benefit obligation at December 31, ~~2024~~2025 and ~~2023~~2024, was $8387.06 million and $8883.10 million, respectively. Refer to Note 13, - “Employee Benefit Plans” ofwithin ~~the~~Item ~~Notes~~8 ~~to the Consolidated Financial Statements~~ for further discussion of the company’s executive pension plan.

● Environmental liabilities: The company is involved in certain ongoing environmental cleanup activities and legal proceedings, the outcomes of which are inherently uncertain ~~with respect to outcomes~~. Refer to Note 15, - “Contingencies” ofwithin ~~the~~Item ~~Notes~~8 ~~to the Consolidated Financial Statements~~ for further discussion of the company’s environmental liabilities.

● Hedging activities: The company has entered into certain foreign exchange forward contracts designated as net investment hedges. As of December 31, ~~2024~~2025, all such contracts were in an asset position in the amount of $5316.8 million. Refer to Note 7 - “Financial Instruments Measured at Fair Value” within Item 8 for further discussion of the company’s hedging activities.

40● Restructuring activities: In an effort to address evolving business needs and optimize operating expenses, the company initiated the Operating Expense Efficiency Plan which is expected to incur pre-tax restructuring charges of approximately $200.0 million in total costs of which $156.4 million has been incurred as of December 31, 2025. Refer to Note 9 - “Restructuring, Integration, and Other” within Item 8 for further discussion of the company’s restructuring activities.

~~Table~~● Sales of ~~Contents~~trade receivables: In the normal course of business, certain of the company’s subsidiaries have agreements to sell, without recourse, selected trade receivables to financial institutions. The company does not retain financial or legal interests in these receivables, and, accordingly, they are accounted for as sales of the related receivables and the receivables are removed from the company’s consolidated balance sheets. Refer to Note 4 - “Accounts Receivable” within Item 8 for further discussion of the company’s factoring arrangements.

million. Refer to Note 7, “Financial Instruments Measured at Fair Value” of the Notes to the Consolidated Financial Statements for further discussion of the company’s hedging activities.

● Restructuring activities: In an effort to address evolving business needs and optimize operating expenses, the company initiated the Operating Expense Efficiency Plan which is expected to incur pre-tax restructuring charges of approximately $185.0 million in total costs of which $60.6 million has been incurred as of December 31, 2024. Refer to Note 9, “Restructuring, Integration, and Other” of the Notes to the Consolidated Financial Statements for further discussion of the company’s restructuring activities.

● Sales of trade receivables: In the normal course of business, certain of the company’s subsidiaries have agreements to sell, without recourse, selected trade receivables to financial institutions. The company does not retain financial or legal interests in these receivables, and, accordingly, they are accounted for as sales of the related receivables and the receivables are removed from the company’s consolidated balance sheets. Refer to Note 4, “Accounts Receivable” of the Notes to the Consolidated Financial Statements for further discussion of the company’s factoring arrangements.

Critical Accounting Estimates

The company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the company to make significant estimates and judgments that have had or are reasonably likely to have a material impact on the reported amounts of assets, liabilities, revenues, and expenses and related disclosure of contingent assets and liabilities. The company has established detailed policies and control procedures intended to ensure the appropriateness of such estimates and assumptions and their consistent application from period to period. The company bases its estimates on historical experience and on various other assumptions that are believed reasonable under the circumstances; the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

For a description of the company’s significant accounting policies, see Note 1, “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements of this Form 10-K. The following components of the consolidated financial statements contain critical accounting estimates:40

Table of Contents

For a description of the company’s significant accounting policies, see Note 1 - “Summary of Significant Accounting Policies” within Item 8. The following components of the consolidated financial statements contain critical accounting estimates:

Trade Accounts Receivable

Management estimates the allowance for credit losses using relevant available information about expected credit losses and an age-based reserve model. Inputs to the model include information about historical credit losses, customer credit ratings, past events, current conditions, and reasonable and supportable forecasts. Adjustments to historical loss information are made for differences in current receivable-specific risk characteristics such as changes in the economic and industry environment, or other relevant factors. These adjustments as well as other inputs such as the identification of credit risk pools, and age-based allowances require significant judgment and are inherently uncertain. This uncertainty can produce volatility in the company’s allowance for credit losses. In addition, the allowance for credit losses could be insufficient to cover actual losses, which would negatively impact net income.

Inventories

Inventories are stated at the lower of cost or net realizable value. Write-downs of inventories to net realizable value for excess or obsolete inventories are based upon contractual provisions governing supplier price protections and stock rotation rights, the age of inventories, inventory turnover, as well as assumptions about future demand and market conditions. Due to the large number of products, markets, and transactions, and the complexity of managing the process around price protections and stock rotations, there is a high degree of judgment required for estimates made regarding demand for age-based inventory and future market conditions, after considering supplier protection provisions.

Income Taxes

The company is subject to income taxes in the U.S. and numerous foreign jurisdictions. The evaluation of the company's valuation allowance on deferred tax assets and uncertain tax positions involves significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws. The assessment of the need for a valuation allowance requires judgment on the part of management with respect to the benefits that could be realized from future taxable income, as well as other positive and negative factors. It is also the company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. To the extent the company prevails in matters for which a liability for an unrecognized tax benefit is established, or is required to pay amounts in excess of the liability, or when other facts and circumstances change, the company’s effective tax rate in a given financial statement period may be materially affected. Refer to Note 8 - “Income Taxes” within Item 8 for further discussion.

Contingencies and Litigation

From time to time, the company is subject to legal claims, regulatory proceedings, and lawsuits related to environmental, intellectual property, labor, product liability, tax, and other matters and assesses the likelihood of an adverse judgment or outcome for these matters, as well as the range of potential losses. A determination of the required reserves, if any, is made after careful analysis. Significant judgments are made when determining if these reserves may change in the future due to new developments impacting the probability of a loss, the estimate of such loss, and the probability of recovery of such loss from third parties. These matters are reviewed at least on a quarterly basis. Refer to Note 15 - “Contingencies” within Item 8 for further discussion.

Table of Contents

and application of GAAP and complex domestic and international tax laws. The assessment of the need for a valuation allowance requires judgment on the part of management with respect to the benefits that could be realized from future taxable income, as well as other positive and negative factors. It is also the company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. To the extent the company prevails in matters for which a liability for an unrecognized tax benefit is established, or is required to pay amounts in excess of the liability, or when other facts and circumstances change, the company’s effective tax rate in a given financial statement period may be materially affected. Refer to Note 8 “Income Taxes” of the Notes to Consolidated Financial Statements for further discussion.

Contingencies and Litigation

From time to time, the company is subject to proceedings, lawsuits, and other claims related to environmental, regulatory, labor, product, tax, and other matters and assesses the likelihood of an adverse judgment or outcome for these matters, as well as the range of potential losses. A determination of the reserves required, if any, is made after careful analysis. Significant judgments are made when determining if these reserves may change in the future due to new developments impacting the probability of a loss, the estimate of such loss, and the probability of recovery of such loss from third parties. These matters are reviewed at least on a quarterly basis. Refer to Note 15 “Contingencies” of the Notes to Consolidated Financial Statements for further discussion.

Goodwill

The company performs a quantitative goodwill impairment test annually and this test is used to both identify and measure impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. Goodwill is tested at a level referred to as a reporting unit. If the carrying amount of the reporting unit is less than its fair value, no impairment exists. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Refer to the table below for a list of the company’s reporting units and the respective allocation of goodwill at December 31:


(millions)	~~2024~~2025
Americas Components	$	~~563~~565
EMEA Components		~~116~~128
Asia/Pacific Components (a)		—
eInfochips		~~224~~226

Americas ECS		~~777~~781
EMEA ECS		~~376~~420
Consolidated	$	2,~~055~~120

The sum of the ~~components~~subtotals for goodwill by reporting unit may not agree to the total, as presented, due to rounding.

(a) Within ~~the~~ global components ~~reportable segment~~, the Asia/Pacific reporting unit’s goodwill was previously fully impaired.

The company estimates the fair value of a reporting unit using the income approach. For the purposes of the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. The assumptions included in the income approach include forecasted revenues, gross profit margins, operating income margins, working capital, perpetual growth rates, income tax rates, and long-term discount rates, among others, all of which require significant judgments by management. The company also reconciles its discounted cash flow analysis to its current market capitalization allowing for a reasonable control premium. As of the first day of the fourth quarters of ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, the company’s annual impairment testing did not indicate impairment atof any of the company’s reporting units.

As of the date of the company’s ~~2024~~2025 annual impairment test, the fair value of all reporting units exceeded their carrying values by more than 3820%. Discount rates are one of the more significant assumptions used in the income approach. If the company increased the discount rates used by 100 basis points, the fair value of all reporting units would still exceed their carrying values by more than 2411%.

Actual results may differ from those assumed in the company’s forecasts. A decline in general economic conditions or global equity valuations could impact the judgments and assumptions about the fair value of the company’s businesses, and the company could be required to record an impairment charge in the future, which could impact the company’s consolidated balance sheets, as well as the company’s consolidated statements of operations. If the company were required to recognize an impairment charge in the future, the charge would not impact the company’s consolidated cash flows, current liquidity, capital resources, or covenants under its existing revolving credit facility, North American asset securitization program, other outstanding borrowings, and EMEA asset securitization program.

Impact of Recently Issued Accounting Standards

For a summary of recent accounting pronouncements applicable to the company’s consolidated financial statements, see Note 1 - “Summary of Significant Accounting Policies” within Item 8, which is incorporated herein by reference.

Table of Contents

Actual results may differ from those assumed in the company’s forecasts. A decline in general economic conditions or global equity valuations could impact the judgments and assumptions about the fair value of the company’s businesses, and the company could be required to record an impairment charge in the future, which could impact the company’s consolidated balance sheets, as well as the company’s consolidated statements of operations. If the company was required to recognize an impairment charge in the future, the charge would not impact the company’s consolidated cash flows, current liquidity, capital resources, and covenants under its existing revolving credit facility, North American asset securitization program, other outstanding borrowings, and EMEA asset securitization program.

Impact of Recently Issued Accounting Standards

For a summary of recent accounting pronouncements applicable to the company’s consolidated financial statements, see Note 1 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements, which is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The company is exposed to market risk from changes in foreign currency exchange rates and interest rates.

Foreign Currency Exchange Rate Risk

The company, as a large global organization, faces exposure to adverse movements in foreign currency exchange rates. These exposures may change over time as business practices evolve and could materially impact the company’s financial results in the future. The company’s primary exposure relates to transactions in which the currency collected from customers is different from the currency utilized to purchase the product sold in Europe, the Asia/Pacific region, Canada, and Latin America. The company’s policy is to hedge substantially all such currency exposures for which natural hedges do not exist. Natural hedges exist when purchases and sales within a specific country are both denominated in the same currency and, therefore, no exposure exists to hedge with foreign exchange forward, option, or swap contracts (collectively, the “foreign exchange contracts”). In many regions in Asia, for example, sales and purchases are primarily denominated in U.S. dollars, resulting in a “natural hedge.” Natural hedges exist in most countries in which the company operates, although the percentage of natural offsets, as compared with offsets that need to be hedged by foreign exchange contracts, will vary from country to country. The company does not enter into foreign exchange contracts for trading purposes. The risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the company minimizes by limiting its counterparties to major financial institutions. The fair value of the foreign exchange contracts are estimated using foreign currency spot rates and forward rates quoted by third-party financial institutions. The notional amount of the foreign exchange contracts inclusive of foreign exchange contracts designated as a net investment hedge at December 31, ~~2024~~2025 and ~~2023~~2024, was $1.1 billion ~~and $1~~.~~0 billion, respectively.~~

The company’s consolidated results of operations and financial position are also impacted by changes in foreign currency exchange rates through the translation of the company’s international financial statements into U.S. dollar. The company’s non-U.S. dollar results of operations are negatively impacted during periods when the U.S. dollar strengthens and positively impacted during periods when the U.S. dollar weakens. During ~~2024~~2025, the U.S dollar ~~strengthened~~weakened against certain other currencies. This ~~decreased~~increased sales and operating income by $33398.48 million and $621.86 million respectively, for ~~2024~~2025, compared with the year-earlier period, based on ~~2023~~2024 sales and operating income re-translated at average foreign currency exchange rates for ~~2024~~2025. These exposures may change over time and changes in foreign currency exchange rates could materially impact the company’s financial results in the future. For example, sales and operating income would decrease by approximately $~~637~~780.60 million and $2526.39 million, respectively, if the U.S. dollar strengthened by ~~another~~ 10% against the Euro. These amounts were determined by considering the impact of a hypothetical foreign exchange rate on the sales and operating income of the company’s international operations.

Interest Rate Risk

The company’s interest expense, in part, is sensitive to the general level of interest rates in North America, Europe, and the Asia/Pacific region. The company historically has managed its exposure to interest rate risk through the proportion of fixed-rate and floating-rate debt in its total debt portfolio. Additionally, the company may, at times, utilize interest rate swaps in order to manage its targeted mix of fixed- and floating-rate debt.

43At December 31, 2025, 69% of the company’s debt was subject to fixed rates and 31% was subject to floating rates. During 2025, the average outstanding balance on the company’s floating rate debt was $1.2 billion. Based on a sensitivity analysis, a one percentage point increase in average interest rates would have caused net interest and other financing expense during 2025 to increase by $11.8 million. This was determined by considering the impact of a hypothetical interest rate on the company’s average outstanding balance of floating rate debt during 2025. In the event of a change in the economic environment, which may adversely impact interest rates, the company could likely take actions to mitigate potential negative exposure to interest rate changes. However, due to the uncertainty of the specific actions that might be taken and their possible effects, the sensitivity analysis does not assume changes in the company’s financial structure.

Table of Contents

fixed-rate and floating-rate debt in its total debt portfolio. Additionally, the company may, at times, utilize interest rate swaps in order to manage its targeted mix of fixed- and floating-rate debt.

At December 31, 2024, 78% of the company’s debt was subject to fixed rates and 22% was subject to floating rates. During 2024, the average outstanding balance on the company’s floating rate debt was $1.3 billion, and a one percentage point change in average interest rates would have caused net interest and other financing expense during 2024 to increase by $12.9 million. This was determined by considering the impact of a hypothetical interest rate on the company’s average outstanding balance of floating rate debt during 2024. In the event of a change in the economic environment, which may adversely impact interest rates, the company could likely take actions to mitigate potential negative exposure to changes in interest rates. However, due to the uncertainty of the specific actions that might be taken and their possible effects, the sensitivity analysis assumes no changes in the company’s financial structure.

4443

Table of Contents

Item 8.Financial Statements and Supplementary Data.

INDEX

		Page
Report of Independent Registered Public Accounting Firm		4645
Consolidated Statements of Operations		4948
Consolidated Statements of Comprehensive Income (Loss)		5049
Consolidated Balance Sheets		5150
Consolidated Statements of Cash Flows		5251
Consolidated Statements of Equity		5352
Note 1. Summary of Significant Accounting Policies		5453
Note 2. Goodwill and Intangible Assets		6059
Note 3. Investments in Affiliated Companies		6160
Note 4. Accounts Receivable		6160
Note 5. Supplier Finance Programs		6362
Note 6. Debt		6463
Note 7. Financial Instruments Measured at Fair Value		65
Note 8. Income Taxes		6967
Note 9. Restructuring, Integration, and Other Charges		72
Note 9. Restructuring, Integration, and Other		71
Note 10. Shareholders’ Equity		73
Note 11. Net Income Per Share		74
Note 12. Employee Stock Plans		7574
Note 13. Employee Benefit Plans		77
Note 14. Lease Commitments		79
Note 15. Contingencies		80
Note 16. Segment and Geographic Information		81

4544

Index

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Arrow Electronics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Arrow Electronics, Inc. (the Company) as of December 31, ~~2024~~2025 and ~~2023~~2024, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, ~~2024~~2025, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, ~~2024~~2025 and ~~2023~~2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2024~~2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, ~~2024~~2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 1110, ~~2025~~2026 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the ~~consolidated~~ financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.


Evaluation of net realizable value adjustments to inventories for excess or obsolescence
Description of the Matter	At December 31, 2024, the Company’s inventories were $4.7 billion. As discussed in Note 1 to the consolidated financial statements, inventories are stated at the lower of cost or net realizable value. Write-downs of inventories to net realizable value for excess or obsolete inventories are based upon forecasted sales, contractual supplier protection and stock rotation privileges, and the age of inventories. Auditing management’s lower of cost or net realizable value determination for excess or obsolete inventories was especially challenging and highly judgmental because of the estimation uncertainty in determining demand for aging inventory and future market conditions, after considering supplier protection provisions. Inventories not supported by forecasted sales orders

Index

Evaluation of net realizable value adjustments to inventories for excess or obsolescence within Global Components
Description of the Matter	At December 31, 2025, the Company’s inventories were $5.1 billion. As discussed in Note 1 to the consolidated financial statements, inventories are stated at the lower of cost or net realizable value. Write-downs of inventories to net realizable value for excess or obsolete inventories are based upon forecasted sales, contractual supplier protection and stock rotation privileges, and the age of inventories. Auditing management’s lower of cost or net realizable value determination for excess or obsolete inventories within Global Components was especially challenging and highly judgmental because of the estimation uncertainty in determining demand for aging inventory and future market conditions, after considering supplier protection provisions. Inventories not supported by forecasted sales orders or stock rotation privileges are written down to lower of cost or net realizable value based on the age of the inventories and inventory turnover.
How We Addressed the Matter in Our Audit	We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s determination of the lower of cost or net realizable value for excess and obsolete Global Components inventories. For example, we tested controls over management’s review of excess and obsolete inventories for Global Components which includes their review of the assumptions supporting current product demand, supplier protections, evaluation of aging of inventories and consideration of inventory turnover. Our audit procedures to test the net realizable value adjustments to inventories for excess or obsolescence within Global Components included, among others, testing the completeness and accuracy of the underlying data used in management’s assessment. We evaluated the reasonableness of management’s assumptions by performing a retrospective review of the prior year assumptions to actual activity, including write-down and write-off history. We evaluated the appropriateness and consistency of management’s methods and assumptions used in developing their estimates around forecasted sales and expected stock rotation privileges. We tested the aging of inventories. We held discussions with senior financial and operating management to determine whether any strategic or operational changes in the Global Components business would impact expected demand or related carrying value of inventory. We assessed the reasonableness of management’s excess and obsolescence assumptions by comparing those assumptions to historical data and trends, as well as reviewing such assumptions for management bias. We considered macroeconomic trends within the industry, including trends that could impact the movement of the products provided by the Company. We performed procedures to compare recent sales transactions or market data to cost of inventories to assess that the carrying value of inventories was the lower of cost or net realizable value.
Evaluation of Americas Components and Americas ECS reporting units for impairment of goodwill
Description of the Matter	At December 31, 2025, the Company’s consolidated goodwill was $2.1 billion, with $565 million allocated to the Americas Components reporting unit and $781 million allocated to the Americas ECS reporting unit. As discussed in Note 2 to the consolidated financial statements, goodwill is tested for impairment annually as of the first day of the fourth quarter, or more frequently if indicators of potential impairment exist. As of the first day of the fourth quarter, the Company performed its annual impairment test which did not result in any impairment of goodwill. Auditing management’s annual impairment test related to the Americas Components and Americas ECS reporting units was especially challenging due to the complexity of forecasting the future cash flows of this business and the significant estimation uncertainty of the assumptions included within such forecast. The significant estimation uncertainty was primarily due to the

Index

	or stock rotation privileges are written down to lower of cost or net realizable value based on the age of the inventories and inventory turnover.
How We Addressed the Matter in Our Audit	We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s determination of the lower of cost or net realizable value for excess and obsolete inventories. For example, we tested controls over management’s review of excess and obsolete inventories which includes their review of the assumptions supporting current product demand, supplier protections, evaluation of aging of inventories and consideration of inventory turnover.Our audit procedures to test the net realizable value adjustments to inventories for excess or obsolescence included, among others, testing the completeness and accuracy of the underlying data used in management’s assessment. We evaluated the reasonableness of management’s assumptions by performing a retrospective review of the prior year assumptions to actual activity, including write-down and write-off history. We evaluated the appropriateness and consistency of management’s methods and assumptions used in developing their estimates around forecasted sales and expected stock rotation privileges. We tested the aging of inventories. We held discussions with senior financial and operating management to determine whether any strategic or operational changes in the business would impact expected demand or related carrying value of inventory. We assessed the reasonableness of management’s excess and obsolescence assumptions by comparing those assumptions to historical data and trends, as well as reviewing such assumptions for management bias. We considered macroeconomic trends within the industry, including trends that could impact the movement of the products provided by the Company. We performed procedures to compare recent sales transactions or market data to cost of inventories to assess that the carrying value of inventories was the lower of cost or net realizable value.
Evaluation of Americas Components Goodwill for Impairment
Description of the Matter	At December 31, 2024, the Company’s consolidated goodwill was $2.1 billion. As discussed in Note 2 to the consolidated financial statements, goodwill is tested for impairment annually as of the first day of the fourth quarter, or more frequently if indicators of potential impairment exist. As of the first day of the fourth quarter, the Company performed its annual impairment test which did not result in any impairment of goodwill.Auditing management’s annual impairment test related to the Americas Components reporting unit was especially challenging due to the complexity of forecasting the future cash flows of this business and the significant estimation uncertainty of the assumptions included within such forecast. The significant estimation uncertainty was primarily due to the sensitivity of the reporting unit’s fair value to changes in the underlying assumptions used in the income approach which include, among others, forecasted revenue, gross profit margins, operating expenses, working capital levels, and discount rates. These significant assumptions are inherently uncertain and require a high degree of estimation and judgment based on an evaluation of historical performance, current industry and global economic and geo-political conditions, and the timing and success of the Company’s ability to implement strategic initiatives.
How We Addressed the Matter in Our Audit	We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above and controls over management’s review of its annual financial forecasts.To test the estimated fair value of the Americas Components reporting unit, we performed audit procedures that included, among others, involving a specialist to assist in assessing the Company’s fair value methodology and its development and calculation of the discount rate. We

sensitivity of the reporting units’ fair value to changes in the underlying assumptions used in the income approach which include, among others, forecasted revenue, gross profit margins, operating expenses, and working capital levels. These significant assumptions are inherently uncertain and require a high degree of estimation and judgment based on an evaluation of historical performance, current industry and global economic and geo-political conditions, and the timing and success of the Company’s ability to implement strategic initiatives.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above and controls over management’s review of its annual financial forecasts.

To test the estimated fair value of the Americas Components and Americas ECS reporting units, we performed audit procedures that included, among others, involving a specialist to assist in assessing the Company’s fair value methodology and model. We assessed the reasonableness of the Company’s assumptions around forecasted revenue, gross profit margins, operating expenses, and working capital levels, by comparing those assumptions to recent historical performance, current economic and industry trends, and annual financial forecasts presented to the Board of Directors and communicated to external analysts. We also assessed the reasonableness of estimates included in the Company’s annual financial forecast by evaluating how such assumptions compared to economic, industry, and peer expectations. We evaluated management’s historical accuracy in forecasting revenues, gross profit margin, and operating expenses, by comparing past forecasts to subsequent actual activity. We performed various sensitivity analyses around these significant assumptions to understand the impact on the fair value calculation and focused our testing accordingly. We evaluated the Company’s determination of its reporting units and tested the allocation of net assets to each of its reporting units. We also tested the Company’s reconciliation of the fair value of its reporting units to the Company’s market value as of the impairment test date.

Index

assessed the reasonableness of the Company’s assumptions around forecasted revenue, gross profit margins, operating expenses, working capital levels, and tax rates, as well as discount rates, by comparing those assumptions to recent historical performance, current economic and industry trends, and annual financial forecasts presented to the Board of Directors and communicated to external analysts. We also assessed the reasonableness of estimates included in the Company’s annual financial forecast by evaluating how such assumptions compared to economic, industry, and peer expectations. We evaluated management’s historical accuracy in forecasting revenues, gross profit margin, operating expenses, and capital expenditures by comparing past forecasts to subsequent actual activity. We performed various sensitivity analyses around these significant assumptions to understand the impact on the fair value calculation and focused our testing accordingly. We evaluated the Company’s determination of its reporting units and tested the allocation of net assets to each of its reporting units. We also tested the Company’s reconciliation of the fair value of its reporting units to the Company’s market value as of the impairment test date.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1975.

Denver, Colorado

February 11 10, ~~2025~~2026

Index

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per share data)


	Years Ended December 31,
	~~2024~~2025		~~2023~~2024		~~2022~~2023
Sales	$	2730,~~923~~852,~~324~~935	$	3327,~~107~~923,~~120~~324	$	3733,~~124~~107,~~422~~120
Cost of sales		2427,~~630~~386,~~916~~216		2824,~~958~~630,~~102~~916		3228,~~287~~958,~~797~~102
Gross profit		3,~~292~~466,~~408~~719		43,~~149~~292,~~018~~408		4,~~836~~149,~~625~~018
Operating expenses:
Selling, general, and administrative		2,~~217~~390,~~940~~627		2,~~412~~217,~~822~~940		2,~~567~~412,~~008~~822
Depreciation and amortization		~~162~~137,~~994~~750		~~181~~162,~~116~~994		~~187~~181,~~382~~116
Restructuring, integration, and other		~~142~~116,~~917~~119		83142,~~916~~917		1383,~~741~~916
		2,~~523~~644,~~851~~496		2,~~677~~523,~~854~~851		2,~~768~~677,~~131~~854
Operating income		~~768~~822,~~557~~223		1768,~~471,164~~557		21,~~068~~471,~~494~~164
Equity in earnings of affiliated companies		13,~~368~~198		61,~~407~~368		76,~~664~~407
(Loss) gain on investments, net		(4,830)		19,284		(2,857)
Gain (loss) on investments, net		109,888		(4,830)		19,284
Loss on extinguishment of debt		~~(1,657)~~—		—(1,657)		—
Employee benefit plan expense, net		(4,285)		(3,777)		(3,503)
Post-retirement expense, net		(2,277)		(4,285)		(3,777)
Interest and other financing expense, net		(~~269~~215,~~834~~104)		(~~328~~269,~~724~~834)		(~~185~~328,~~648~~724)
Income before income taxes		~~489~~717,~~319~~928		1489,~~164,354~~319		1,~~884~~164,~~150~~354
Provision for income taxes		95148,~~812~~234		~~254~~95,~~991~~812		~~448~~254,~~992~~991
Consolidated net income		~~393~~569,~~507~~694		~~909~~393,~~363~~507		1909,~~435,158~~363
Noncontrolling interests		(1,~~433~~572)		51,~~858~~433		85,~~274~~858
Net income attributable to shareholders	$	~~392~~571,~~074~~266	$	~~903~~392,~~505~~074	$	1903,~~426,884~~505
Net income per share:
Basic	$	711.3603	$	167.0336	$	2216.0103
Diluted	$	710.2993	$	157.8429	$	2115.8084
Weighted-average shares outstanding:
Basic		5351,~~282~~804		5653,~~359~~282		6456,~~838~~359
Diluted		5352,~~797~~255		5753,~~035~~797		6557,~~453~~035

See accompanying notes.

4948

Index

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)


	Years Ended December 31,
	~~2024~~2025		~~2023~~2024		~~2022~~2023
Consolidated net income	$	~~393~~569,~~507~~694	$	~~909~~393,~~363~~507	$	1909,~~435,158~~363
Other comprehensive income (loss):
Foreign currency translation adjustment and other, net of taxes		~~(225~~403,~~564)~~602		74(225,~~800~~564)		~~(231~~74,~~464)~~800
Gain (loss) on foreign exchange contracts designated as net investment hedges, net of taxes		7,859		(7,952)		8,779
(Loss) gain on foreign exchange contracts designated as net investment hedges, net of taxes		(11,728)		7,859		(7,952)
(Loss) gain on interest rate swaps designated as cash flow hedges, net of taxes		(1,~~137~~706)		2(1,~~783~~137)		282,~~664~~783
Employee benefit plan items, net of taxes		4,854		(1,277)		18,724
Post-retirement expense items, net of taxes		(2,209)		4,854		(1,277)
Other comprehensive income (loss)		~~(213~~387,~~988)~~959		68(213,~~354~~988)		~~(175~~68,~~297)~~354
Comprehensive income		~~179~~957,~~519~~653		~~977~~179,~~717~~519		1977,~~259,861~~717
Less: Comprehensive (loss) income attributable to noncontrolling interests		(1,325)		6,989		6,582
Less: Comprehensive income (loss) attributable to noncontrolling interests		3,758		(1,325)		6,989
Comprehensive income attributable to shareholders	$	~~180~~953,~~844~~895	$	~~970~~180,~~728~~844	$	1970,~~253,279~~728

See accompanying notes.

5049

Index

ARROW ELECTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands except par value)


	December 31,
	~~2024~~2025		~~2023~~2024
ASSETS
Current assets:
Cash and cash equivalents	$	~~188~~306,~~807~~467	$	~~218~~188,~~053~~807
Accounts receivable, net		1319,~~030~~738,~~991~~666		1213,~~238~~030,~~073~~991
Inventories		45,~~709~~081,~~706~~863		54,~~187~~709,~~225~~706
Other current assets		~~471~~533,~~909~~035		~~684~~471,~~126~~909
Total current assets		1825,~~401~~660,~~413~~031		18,~~327~~401,~~477~~413
Property, plant, and equipment, at cost:
Land		5,691		5,691
Buildings and improvements		~~194~~199,~~061~~433		~~195~~194,~~579~~061
Machinery and equipment		1,~~623~~715,~~228~~415		1,~~632~~623,~~606~~228
		1,~~822~~920,~~980~~539		1,~~833~~822,~~876~~980
Less: Accumulated depreciation and amortization		(1,~~353~~445,~~720~~889)		(1,~~303~~353,~~136~~720)
Property, plant, and equipment, net		~~469~~474,~~260~~650		~~530~~469,~~740~~260
Investments in affiliated companies		5759,~~299~~315		6257,~~741~~299
Intangible assets, net		9677,~~706~~022		~~127~~96,~~440~~706
Goodwill		2,~~055~~120,~~295~~071		2,~~050~~055,~~426~~295
Other assets		~~677~~687,~~734~~049		~~627~~677,~~344~~734
Total assets	$	2129,~~757~~078,~~707~~138	$	21,~~726~~757,~~168~~707
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1117,~~047~~383,~~470~~796	$	1011,~~070~~047,~~015~~470
Accrued expenses		1,~~238~~461,~~714~~261		1,~~463~~238,~~915~~714
Short-term borrowings, including current portion of long-term debt		~~349,978~~341		1349,~~653,954~~978
Total current liabilities		1218,~~636~~845,~~162~~398		1312,~~187~~636,~~884~~162
Long-term debt		23,~~773~~084,~~783~~715		2,~~153~~773,~~553~~783
Other liabilities		~~516~~489,~~234~~326		~~507~~516,~~424~~234
Contingencies (Note 15)
Equity:
Shareholders’ equity:
Common stock, par value $1:
Authorized - 160,000 shares in both 2024 and 2023
Authorized - 160,000 shares in both 2025 and 2024
Issued - 55,592 and 57,691 shares in 2024 and 2023, respectively		55,592		57,691
Issued - 55,838 and 55,592 shares in 2025 and 2024, respectively		55,838		55,592
Capital in excess of par value		~~562~~586,~~080~~993		~~553~~562,~~340~~080
Treasury stock (3,420 and 3,880 shares in 2024 and 2023, respectively), at cost		(328,078)		(297,745)
Treasury stock (4,768 and 3,420 shares in 2025 and 2024, respectively), at cost		(483,571)		(328,078)
Retained earnings		56,~~980~~552,~~826~~092		5,~~790~~980,~~217~~826
Accumulated other comprehensive loss		(~~509~~126,~~269~~640)		(~~298~~509,~~039~~269)
Total shareholders’ equity		56,~~761~~584,~~151~~712		5,~~805~~761,~~464~~151
Noncontrolling interests		7073,~~377~~987		7170,~~843~~377
Total equity		56,~~831~~658,~~528~~699		5,~~877~~831,~~307~~528
Total liabilities and equity	$	2129,~~757~~078,~~707~~138	$	21,~~726~~757,~~168~~707

See accompanying notes.

5150

Index

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Years Ended December 31,
	~~2024~~2025		~~2023~~2024		~~2022~~2023
Cash flows from operating activities:
Consolidated net income	$	~~393~~569,~~507~~694	$	~~909~~393,~~363~~507	$	1909,~~435,158~~363
Adjustments to reconcile consolidated net income to net cash provided by (used for) operations:
Adjustments to reconcile consolidated net income to net cash provided by operations:
Depreciation and amortization		~~162~~137,~~994~~750		~~181~~162,~~116~~994		~~187~~181,~~382~~116
Amortization of stock-based compensation		3427,~~631~~883		4134,~~569~~631		4241,~~930~~569
Equity in earnings of affiliated companies		(13,~~368~~198)		(61,~~407~~368)		(76,~~664~~407)
Deferred income taxes		(9936,~~866~~182)		(9399,~~980~~866)		(1393,~~050~~980)
Loss on extinguishment of debt		~~1,657~~—		—1,657		—
Loss (gain) on investments, net		5,260		(12,466)		2,857
(Gain) loss on investments, net		(110,269)		5,068		(10,822)
Other		~~5,328~~351		225,~~590~~520		320,~~612~~946
Change in assets and liabilities, net of effects of acquired businesses:
Accounts receivable, net		(16,~~013~~342,~~091~~006)		~~189~~(1,~~425~~013,091)		(1189,~~430,400)~~425
Inventories		~~421~~(286,~~063~~180)		~~139~~421,~~313~~063		(1139,~~165,785)~~313
Accounts payable		16,~~092~~107,~~488~~791		~~(457~~1,~~382)~~092,488		~~945~~(457,~~819~~382)
Accrued expenses		~~(140~~60,~~871)~~415		38(140,~~601~~871)		~~102~~38,~~193~~601
Other assets and liabilities		~~268~~(62,~~681~~000)		~~(246~~268,~~293)~~681		(~~136~~246,~~129~~293)
Net cash provided by (used for) operating activities		1,130,413		705,449		(33,077)
Net cash provided by operating activities		64,049		1,130,413		705,449
Cash flows from investing activities:
Acquisition of property, plant, and equipment		(92101,~~703~~254)		(8392,~~285~~703)		(7883,~~836~~285)
Proceeds from sale of property, plant, and equipment		~~5,157~~—		—5,157		—
Cash consideration paid for acquired businesses, net of cash acquired		~~(34,834)~~—		—(34,834)		—
Proceeds from collections of notes receivable		—		237		21,125
Proceeds from settlement of net investment hedges		24,858		10,635		10,725
Proceeds from settlement of net investment hedge		10,635		10,725		—
Proceeds from sale of investments in equity securities		100,000		—		—
Other		~~17,303~~—		—17,303		—237
Net cash used for investing activities		(94,442)		(72,323)		(57,711)
Net cash provided by (used for) investing activities		23,604		(94,442)		(72,323)
Cash flows from financing activities:
Change in short-term and other borrowings		(~~1,155,909~~592)		~~866~~(1,~~012~~155,909)		~~258~~866,~~816~~012
Proceeds from (repayments of) long-term bank borrowings, net		~~470~~302,~~347~~820		(1470,~~031,881)~~347		(1,~~233~~031,~~250~~881)
Redemption of notes		(1350,000~~,000~~)		(~~300~~1,000,000)		(~~350~~300,000)
Net proceeds from note offering		~~989,564~~—		~~496~~989,~~268~~564		—496,268
Proceeds from exercise of stock options		53,~~354~~452		175,~~010~~354		17,~~340~~010
Repurchases of common stock		(~~265~~161,~~142~~669)		(~~770~~265,~~200~~142)		(1770,~~049,487~~200)
Settlement of forward-starting interest rate swap		—		~~56,711~~—		—56,711
Other		(~~1,041~~148)		(~~142~~1,041)		(~~137~~142)
Net cash (used for) provided by financing activities		(956,827)		(666,222)		109,782
Net cash used for financing activities		(206,137)		(956,827)		(666,222)
Effect of exchange rate changes on cash		~~(108~~236,~~390)~~144		74(108,~~234~~390)		~~(64~~74,~~273)~~234
Net (decrease) increase in cash and cash equivalents		(29,246)		41,138		(45,279)
Net increase (decrease) in cash and cash equivalents		117,660		(29,246)		41,138
Cash and cash equivalents at beginning of year		~~218~~188,~~053~~807		~~176~~218,~~915~~053		~~222~~176,~~194~~915
Cash and cash equivalents at end of year	$	~~188~~306,~~807~~467	$	~~218~~188,~~053~~807	$	~~176~~218,~~915~~053

See accompanying notes.

5251

Index

ARROW ELECTRONICS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)




	Common		Capital in						Accumulated Other		Noncontrolling
	Stock at Par Value		Excess of Par Value		Treasury Stock		Retained Earnings		Comprehensive Loss		Interests		Total
Balance at December 31, 2021	$	125,424	$	1,189,845	$	(3,629,265)	$	7,787,948	$	(191,657)	$	58,551	$	5,340,846
Consolidated net income		—		—		—		1,426,884		—		8,274		1,435,158
Other comprehensive loss		—		—		—		—		(173,605)		(1,692)		(175,297)
Amortization of stock-based compensation		—		42,930		—		—		—		—		42,930
Shares issued for stock-based compensation awards		—		(24,067)		41,407		—		—		—		17,340
Repurchases of common stock		—		—		(1,049,487)		—		—		—		(1,049,487)
Distributions		—		—		—		—		—		(137)		(137)
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		—		—		—		903,505		—		5,858		909,363
Other comprehensive income		—		—		—		—		67,223		1,131		68,354
Amortization of stock-based compensation		—		41,569		—		—		—		—		41,569
Shares issued for stock-based compensation awards		—		(38,536)		55,546		—		—		—		17,010
Repurchases of common stock		—		—		(770,200)		—		—		—		(770,200)
Retirement of treasury stock		(67,733)		(658,401)		5,054,254		(4,328,120)		—		—		—
Distributions		—		—		—		—		—		(142)		(142)
Balance at December 31, 2023	$	57,691	$	553,340	$	(297,745)	$	5,790,217	$	(298,039)	$	71,843	$	5,877,307
Consolidated net income		—		—		—		392,074		—		1,433		393,507
Other comprehensive income		—		—		—		—		(211,230)		(2,758)		(213,988)
Other comprehensive loss		—		—		—		—		(211,230)		(2,758)		(213,988)
Amortization of stock-based compensation		—		34,631		—		—		—		—		34,631
Shares issued for stock-based compensation awards		375		(993)		5,972		—		—		—		5,354
Repurchases of common stock		—		—		(265,142)		—		—		—		(265,142)
Retirement of treasury stock		(2,474)		(24,898)		228,837		(201,465)		—		—		—
Distributions		—		—		—		—		—		(141)		(141)
Balance at December 31, 2024	$	55,592	$	562,080	$	(328,078)	$	5,980,826	$	(509,269)	$	70,377	$	5,831,528
Consolidated net income		—		—		—		571,266		—		(1,572)		569,694
Other comprehensive income		—		—		—		—		382,629		5,330		387,959
Amortization of stock-based compensation		—		27,883		—		—		—		—		27,883
Shares issued for stock-based compensation awards		246		(2,970)		6,176		—		—		—		3,452
Repurchases of common stock		—		—		(161,669)		—		—		—		(161,669)
Distributions		—		—		—		—		—		(148)		(148)
Balance at December 31, 2025	$	55,838	$	586,993	$	(483,571)	$	6,552,092	$	(126,640)	$	73,987	$	6,658,699

See accompanying notes.

5352

Index

ARROW ELECTRONICS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements of Arrow Electronics, Inc. (the “company” or “Arrow”) include the accounts of the company, its majority-owned subsidiaries, and Arrow EMEA Funding Corp B.V. (see Note 4). All significant intercompany transactions are eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP in the United States requires the company to make significant estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments, which are readily convertible into cash, with original maturities of three months or less.

Trade Accounts Receivable

Trade accounts receivable are reported at amortized cost, net of the allowance for credit losses in the consolidated balance sheets. The allowance for credit losses is a valuation account that is deducted from the receivables’ amortized cost basis to present the net amount expected to be collected. Receivables are written off against the allowance when management believes the receivable balance is confirmed to be uncollectible.

Expected credit losses are estimated on a collective (pool) basis, when similar risk characteristics exist, based on customer credit ratings, which include both externally acquired as well as internally determined credit ratings. Receivables that do not share risk characteristics are evaluated on an individual basis.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined on a moving average cost basis, which approximates the first-in, first-out method. Substantially all inventories represent finished goods held for sale.

Property, Plant, and Equipment

Property, plant, and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives for depreciation of buildings is generally 20 to 30 years, and the estimated useful lives of machinery and equipment is generally 3 to 10 years. Leasehold improvements are amortized over the shorter of the term of the related lease or the life of the improvement. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of a specific asset or asset group may not be recoverable. The company assesses the recoverability of long-lived assets with definite lives at the asset group

5453

Index

level. Asset groups are determined based upon the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If the carrying value of an asset group cannot be recovered from estimated future cash flows, undiscounted and without interest, the fair value of the asset is calculated using the present value of estimated net future cash flows. If the fair value is less than the carrying amount of the asset, a loss is recognized for the difference, subject to the limitation of individual asset fair values within the group.

Software Development Costs

The company capitalizes certain internal and external costs incurred to acquire or create internal-use software. Capitalized software costs are amortized on a straight-line basis over the estimated useful life of the software, which is generally 3 to 12 years. At December 31, ~~2024~~2025 and ~~2023~~2024, the company had unamortized software development costs of $~~195~~184.04 million and $~~242~~195.40 million, respectively, which are included in “Machinery and equipment” in the company’s consolidated balance sheets.

Identifiable Intangible and Long-lived Assets

Amortization of definite-lived intangible assets is computed using the straight-line method over the estimated useful lives of the assets. Identifiable intangible and long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The company assesses the recoverability of long-lived assets with definite lives at the asset group level. Asset groups are determined based upon the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If the carrying value of an asset group cannot be recovered from estimated future cash flows, undiscounted and without interest, the fair value of the asset is calculated using the present value of estimated net future cash flows. If the fair value is less than the carrying amount of the asset, a loss is recognized for the difference, subject to the limitation of individual asset fair values within the group.

Investments

Investments are accounted for using the equity method if the investment provides the company the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if the company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investee’s Board of Directors, are considered in determining whether the equity method is appropriate. The company records its investments in equity method investees meeting these characteristics as “Equity in earnings of affiliated companies” in the company’s consolidated statements of operations and “Investments in affiliated companies” in the company’s consolidated balance sheets.

Equity investments for which the company does not possess the ability to exercise significant influence are measured at fair value using quoted market prices, and are included in “Other assets” in the company’s consolidated balance sheets. Changes in fair value are recorded in “Gain (~~Loss~~loss) ~~gain~~ on investments, net” in the company’s consolidated statements of operations.

The company records equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes.

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. The company tests goodwill for impairment annually as of the first day of the fourth quarter and/or when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Examples of such events and circumstances that the company would consider include the following:

●

macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets;

●

industry and market considerations such as a deterioration in the environment in which the company operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for the company’s products or services, or a regulatory or political development;

●

cost factors such as increases in inventory, labor, or other costs that have a negative effect on earnings and cash flows;

Index

●

overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods;

●

other relevant entity-specific events such as changes in management, key personnel, strategy, or customers, contemplation of bankruptcy, or litigation;

Index

●

events affecting a reporting unit such as a change in the composition or carrying amount of its net assets, a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit, the testing for recoverability of a significant asset group within a reporting unit, or recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit; and

●

a sustained decrease in share price (considered in both absolute terms and relative to peers).

Goodwill is tested at a level of reporting referred to as the reporting unit. Below is a list of the company’s reporting units and the respective allocation of goodwill:



(thousands)	~~2024~~2025
Americas Components	$	~~563~~565,~~135~~472
EMEA Components		~~115~~127,~~651~~598
Asia/Pacific Components (a)		—-
eInfochips		~~223~~225,~~659~~992

Americas ECS		~~776~~781,~~765~~202
EMEA ECS		~~376~~419,~~085~~807
Consolidated	$	2,~~055~~120,~~295~~071

(a) Within ~~the~~ global components ~~reportable segment~~, the Asia/Pacific reporting unit’s goodwill was previously fully impaired.

The company performs a quantitative goodwill impairment test annually and this test is used to both identify and measure impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit is less than its fair value, no impairment exists. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

The company estimates the fair value of a reporting unit using the income approach. For the purposes of the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. The assumptions included in the income approach include forecasted revenues, gross profit margins, operating income margins, working capital, perpetual growth rates, income tax rates, and long-term discount rates, among others, all of which require significant judgments by management. Actual results may differ from those assumed in the company’s forecasts. The company also reconciles its discounted cash flow analysis to its current market capitalization allowing for a reasonable control premium. As of the first day of the fourth quarters of ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, the company’s annual impairment testing did not indicate impairment atof any of the company’s reporting units.

A decline in general economic conditions or global equity valuations could impact the judgments and assumptions about the fair value of the company’s businesses, and the company could be required to record an impairment charge in the future, which could impact the company’s consolidated balance sheets, as well as the company’s consolidated statements of operations. If the company ~~was~~were required to recognize an impairment charge in the future, the charge would not impact the company’s consolidated cash flows, current liquidity, capital resources, ~~and~~or covenants under its existing revolving credit facility, North American asset securitization program, other outstanding borrowings, and EMEA asset securitization program.

5655

Index

Leases

The company determines if a contract contains a lease at inception based on whether it conveys the right to control the use of an identified asset. Substantially all of the company’s leases are classified as operating leases. The company records operating lease right-of-use assets within “Other assets” and lease liabilities are recorded within “Other liabilities” and “Accrued expenses” in the consolidated balance sheets. Lease expenses are recorded within “Selling, general, and administrative” in the consolidated statements of operations. Operating lease payments are presented within “~~Operating~~Cash ~~cash~~ flows from operating activities” in the consolidated statements of cash flows.

Operating lease right-of-use assets and lease liabilities are recognized based on the net present value of future minimum lease payments over the lease term starting on the commencement date. The company generally is not able to determine the rate implicit in its leases and, as such, applies an incremental borrowing rate based on the company’s cost of borrowing for the relevant terms of each lease. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Lease terms may include an option to extend or terminate a lease if it is reasonably certain that the company will exercise such options. The company does not separate lease components from non-lease components, and also has elected not to record a right-of-use asset or lease liability for leases which, at inception, have a term of twelve months or less. Variable lease payments are recognized in the period in which the obligation for those payments is incurred.

Foreign Currency Translation and Remeasurement

The assets and liabilities of international operations are translated at the exchange rates in effect at the balance sheet date. Revenue and expense accounts are translated at the monthly average exchange rates. Adjustments arising from the translation of the foreign currency financial statements of the company’s international operations are reported as a component of “Accumulated other comprehensive loss” in the company’s consolidated balance sheets.

For foreign currency remeasurement from each local currency into the appropriate functional currency, monetary assets and liabilities are remeasured to functional currencies using current exchange rates in effect at the balance sheet date. Gains or losses from these remeasurements were not significant and have been included in the company’s consolidated statements of operations. Non-monetary assets and liabilities are recorded at historical exchange rates. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date.

Income Taxes

Income taxes are accounted for under the liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of differences between the tax bases of assets and liabilities and their financial reporting amounts using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The carrying value of the company’s deferred tax assets is dependent upon the company’s ability to generate sufficient future taxable income in certain tax jurisdictions. Should the company determine that it is more likely than not that some portion or all of its deferred tax assets will not be realized, a valuation allowance to reduce the deferred tax assets is established in the period such determination is made. The assessment of the need for a valuation allowance requires judgment on the part of management with respect to the benefits that could be realized from future taxable income, as well as other positive and negative factors.

It is also the company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. To the extent the company prevails in matters for which a liability for an unrecognized tax benefit is established, or is required to pay amounts in excess of the liability, or when other facts and circumstances change, the company’s effective tax rate in a given financial statement period may be materially affected.

5756

Index

Net Income Per Share

Basic net income per share is computed by dividing net income attributable to shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. The dilutive effect of equity awards is calculated using the treasury stock method.

Treasury Stock

The company’s stock repurchase program provides an opportunity for the company to repurchase shares at the discretion of the company’s senior executives, based on various factors. The company recognizes treasury stock based on the amount paid to repurchase its shares. Direct costs incurred to acquire treasury stock, including excise taxes, are added to the cost of the treasury stock. Upon the retirement of treasury shares, the cost of repurchased and retired treasury shares in excess of the par value is allocated between additional paid-in -capital and retained earnings. All retired shares are classified as authorized but unissued and do not reduce the total number of authorized shares. When treasury shares are reissued, if the issuance price is higher than the average price paid to acquire the shares (the “average cost”), the gain on reissuance is credited to additional paid-in-capital. If the issuance price is lower than the average cost, the loss on reissuance is first charged against any previous gains recorded to additional paid-in-capital from treasury stock, with the remaining balance charged to retained earnings.

Comprehensive Income

Comprehensive income consists of consolidated net income, foreign currency translation adjustment, gains or losses on post-retirement benefit plans, gains or losses on foreign exchange contracts designated as net investment hedges, and gains and losses on interest rate swaps designated as cash flow hedges. Gains or losses on interest rate swaps, and foreign exchange contracts are net of any reclassification adjustments for realized gains or losses included in consolidated net income. Amounts related to net investment hedges that are excluded from the assessment of hedge effectiveness are amortized to “Interest and other financing expense, net” on a straight-line basis over the life of the hedging instrument. Foreign currency translation adjustments included in comprehensive income which are deemed permanent investments in international affiliates were not tax effected. All other comprehensive income items are net of related income taxes.

Stock-Based Compensation

The company records share-based payment awards exchanged for employee services at fair value on the date of grant and expenses the awards in the consolidated statements of operations over the requisite employee service period. Stock-based compensation expense includes an estimate for forfeitures. Stock-based compensation expense related to awards with a market or performance condition which cliff vest, and stock-based compensation awards with service conditions only are recognized over the vesting period on a straight-line basis. Stock-based compensation expense related to awards with graded vesting and performance conditions is recognized using the graded vesting method.

Segment Reporting

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance. The company’s operations are classified into two reportable segments: global components and global ECS (see Note 16).

~~Revenue Recognition~~57

The company recognizes revenue as control of products is transferred to customers, which generally happens at the point of shipment, or when the service has occurred. The company allows its customers to return product for exchange or credit in limited circumstances. The company also provides volume rebates and other discounts to certain customers which are considered a variable consideration. A provision for customer rebates and other discounts is recorded as a reduction of revenue at the time of sale based on an evaluation of the contract terms and historical experience. Sales are recorded net of discounts, rebates, and returns, which historically have not been material. Tariffs are included in sales as the company

Index

~~has~~Revenue enforceable rights to additional consideration to cover the cost of tariffs. Other taxes imposed by governmental authorities on the company’s revenue producing activities with customers, such as sales taxes and value-added taxes, are excluded from net sales.Recognition

~~Products~~The ~~sold by the~~ company ~~are~~recognizes ~~generally~~revenue ~~delivered~~as ~~via~~control ~~shipment~~of ~~from~~products ~~the~~is ~~company's~~transferred ~~facilities~~to customers, ~~drop~~which ~~shipment~~generally ~~directly~~happens ~~from~~at the ~~vendor~~point of shipment, or bywhen ~~electronic~~the ~~delivery~~service ofhas ~~keys~~occurred. The company allows its customers to return product for ~~software~~exchange ~~products~~or credit in limited circumstances. The company isalso ~~the~~provides ~~principal~~volume inrebates ~~transactions~~and ~~when~~other itdiscounts isto ~~principally~~certain ~~responsible~~customers which are considered a variable consideration. A provision for ~~fulfilling~~customer ~~the~~rebates ~~order,~~and ~~which~~other ~~includes~~discounts ~~negotiating~~is ~~pricing,~~recorded ~~payment~~as toa reduction of revenue at the ~~supplier,~~time ~~establishing~~of ~~payment~~sale ~~terms~~based ~~with~~on ~~the~~an ~~customer,~~evaluation ~~product~~of ~~returns,~~the contract terms and ~~has~~historical ~~risk~~experience. Sales are recorded net of ~~loss~~discounts, ifrebates, ~~the~~and ~~customer~~returns, ~~does~~which historically have not ~~make~~been ~~payment~~material. ~~Sales,~~Tariffs ~~where~~are included in sales as the company ishas ~~the~~enforceable ~~principal~~rights into additional consideration to cover the ~~transaction,~~cost ~~are~~of ~~reported~~tariffs. onOther ~~the~~taxes ~~gross~~imposed ~~amount~~by ~~billed~~governmental toauthorities aon ~~customer~~the ~~less~~company’s ~~discounts,~~revenue ~~rebates,~~producing ~~and~~activities ~~returns~~with ~~(referred~~customers, tosuch as “sales ~~recognized~~taxes onand avalue-added ~~gross~~taxes, ~~basis”)~~are excluded from net sales.

Products sold by the company are generally delivered via shipment from the company's facilities, drop shipment directly from the vendor, or by electronic delivery of keys for software products.

The company ~~has~~is ~~contracts~~the ~~with~~principal ~~certain~~in ~~customers~~transactions ~~where~~when ~~the~~it ~~company’s performance obligation~~ is toprincipally ~~arrange~~responsible for fulfilling the ~~products~~order, orwhich ~~services~~includes tonegotiating bepricing, ~~provided~~payment byto ~~another~~the ~~party.~~supplier, ~~The~~establishing ~~company~~payment isterms with the ~~agent~~customer, inproduct ~~these arrangements~~returns, ~~which~~and ~~pertains~~has torisk ~~the sale~~ of ~~supplier-provided~~loss ~~service~~if ~~contracts~~the tocustomer ~~customers~~does ornot ~~delivery~~make ofpayment. ~~product~~Additionally, ~~for~~the ~~which~~company is the ~~company~~principal ~~does~~in ~~not~~transactions ~~assume~~where ~~the~~it ~~risks~~is ~~and~~primarily ~~rewards~~responsible offor ~~ownership~~providing asservices ~~part~~that ofinclude logistics, ~~services~~warehousing, ~~rendered~~financial tomanagement, ~~customers~~and analytic services. Sales, where the company is the ~~agent~~principal in the transaction, are reported ason the gross amount billed to ~~the~~a customer ~~net~~less ofdiscounts, ~~the~~rebates, ~~cost~~and ofreturns ~~the sale~~ (referred to as “sales recognized on a ~~net~~gross basis”).

~~Within~~The company has contracts with certain customers where the company’s ~~global~~performance ~~ECS~~obligation ~~reportable~~is ~~segment,~~to inarrange ~~certain~~for ~~periods,~~the ~~changes~~products inor ~~the~~services ~~mix~~to ofbe ~~sales~~provided ofby ITanother ~~solutions~~party. ~~impact~~The company is the ~~proportion~~agent ofin ~~the~~these ~~company’s~~arrangements, ~~revenue~~which ~~that~~pertain isto ~~recorded~~the onsale aof ~~net~~supplier-provided ~~basis~~service ~~compared~~contracts to acustomers ~~gross~~or ~~basis.~~delivery ~~These~~of ~~changes~~product ~~increase~~for orwhich ~~decrease~~the ~~sales~~company ~~during~~does anot ~~period~~have ~~without~~control aof ~~corresponding~~the ~~change~~product inas ~~gross~~part ~~profit~~of logistics services rendered to customers. ~~This~~Sales, where the company is ~~driven~~the byagent are reported as the ~~company’s~~amount ~~responsibilities~~billed into the ~~sale~~customer net of ~~various~~the ITcost ~~solutions,~~of ~~which~~the issale ~~based~~(referred onto ~~terms~~as ~~and~~“sales ~~conditions~~recognized inon ~~place~~a ~~with~~net ~~its partners~~basis”).

NoWithin ~~single customer accounted for more than 2% of~~ the company’s ~~2024~~global ~~consolidated~~ECS ~~sales.~~segment, Noin ~~single~~certain ~~supplier~~periods, ~~accounted~~changes ~~for~~in ~~more~~the ~~than~~mix 8% of ~~the company’s consolidated~~ sales inof ~~2024.~~IT ~~The~~solutions ~~company~~impact ~~believes that many of~~ the ~~products~~proportion ~~it sells are available from other sources at competitive prices. However, certain parts~~ of the company’s ~~business,~~revenue ~~such~~that asis ~~the~~recorded ~~company’s~~on ~~global~~a ~~ECS~~net ~~business,~~basis ~~rely~~compared onto a ~~limited~~gross ~~number~~basis. ofThese ~~suppliers~~changes ~~with~~increase ~~the~~or ~~strategy~~decrease ofsales ~~providing~~during ~~focused~~a ~~support,~~period ~~extensive~~without ~~product~~a ~~knowledge,~~corresponding ~~and~~change ~~customized~~in ~~service~~gross toprofit. ~~suppliers,~~This ~~MSPs,~~is ~~and~~driven ~~VARs.~~by ~~Most of~~ the company’s ~~purchases~~responsibilities ~~from~~in ~~suppliers~~the ~~are~~sale ~~pursuant~~of tovarious ~~distributor~~IT ~~agreements~~solutions, which ~~are~~is ~~typically~~based ~~non-exclusive~~on terms and ~~cancelable~~conditions byin ~~either~~place ~~party~~with atits ~~any time or on short notice~~partners.

Shipping and Handling Costs

The company reports shipping and handling costs, primarily related to outbound freight, in the consolidated statements of operations as a component of “Selling, general, and administrative” or “Cost of sales”, depending on the nature of the transaction.

Vendor Programs

The company participates in supplier programs that provide for price protection, product rebates, marketing/promotional allowances, and other incentives. The consideration received under these programs is recorded in the consolidated statements of operations as an adjustment to “Cost of sales” or “Selling, general, and administrative”, according to the nature of the activity and terms of the vendor program. Incentives are accrued as they are earned based on sales of qualifying products or as services are provided in accordance with the terms of the related program.

~~Impact of Recently Issued Accounting Standards~~58

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires entities to disaggregate expense items in the notes to the financial statements and requires disclosure of specified information related to purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments in this ASU are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Companies have the option to apply the guidance either on a retrospective or prospective basis, and early adoption is permitted. The company is currently evaluating the impact of the ASU on its

Index

~~condensed~~Impact consolidated financial statements and related disclosures. In January 2025, the FASB issued ASU No. 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This ASU amends the effective date of ~~ASU~~Recently ~~No.~~Issued ~~2024-03~~Accounting to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU No. 2024-03 is permitted. Standards

In ~~December~~November ~~2023~~2024, the FASB issued ASU No. ~~2023~~2024-0903, Income ~~Taxes~~Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (~~Topic~~Subtopic ~~740~~220-40): ~~Improvements~~Disaggregation toof Income ~~Tax~~Statement ~~Disclosures~~Expenses. ~~Upon~~This ~~adoption~~ASU ofrequires ~~this~~entities ~~ASU,~~to disaggregate expense items in the ~~company~~notes ~~will~~to ~~disclose~~the ~~specific~~financial ~~new~~statements ~~categories~~and inrequires ~~its~~disclosure ~~income~~of ~~tax~~specified ~~rate~~information ~~reconciliation~~related ~~and~~to ~~provide~~purchases ~~additional~~of ~~information~~inventory, ~~for~~employee ~~reconciling~~compensation, ~~items~~depreciation, ~~above~~and aintangible ~~quantitative~~asset ~~threshold~~amortization. The ~~company~~amendments ~~will~~in ~~also~~this ~~disclose~~ASU ~~the~~are ~~amount~~effective offor ~~income~~annual ~~taxes~~periods ~~paid~~beginning ~~disaggregated~~after byDecember ~~federal~~15, ~~state~~2026, and ~~foreign~~interim ~~taxes,~~periods ~~and~~beginning ~~also~~after ~~disaggregated~~December by15, ~~individual~~2027. ~~jurisdictions~~Companies inhave ~~which~~the ~~income~~option ~~taxes~~to ~~paid~~apply ~~were~~the ~~above~~guidance either on a ~~threshold~~retrospective or prospective basis, and early adoption is permitted. ~~The~~In ~~company~~January ~~expects~~2025, ~~these~~the ~~amendments~~FASB ~~will~~issued ~~first~~ASU beNo. ~~applied~~2025-01, inIncome Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the ~~company’s~~Effective ~~annual~~Date. ~~report~~This onASU ~~form~~amends 10the effective date of ASU No. 2024-K03 ~~for~~to clarify that all public business entities are required to adopt the ~~fiscal~~guidance ~~year~~in ~~ending~~annual reporting periods beginning after December 3115, ~~2025~~2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU No. 2024-03 is permitted. The company is currently evaluating the impact of these ASUs on aits ~~prospective~~condensed ~~basis~~consolidated financial statements and related disclosures.

In ~~November~~December 2023, the FASB issued ASU No. 2023-0709, ~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures. Upon adoption of this ASU, the company has disclosed ~~significant~~specific ~~segment~~new ~~expenses,~~categories ~~the~~in ~~title~~its income tax rate reconciliation and ~~position~~provide ofadditional ~~the~~information ~~CODM,~~for ~~and~~reconciling anitems ~~explanation~~above ofa ~~how~~quantitative ~~the~~threshold. ~~reported~~The ~~measure~~company has also disclosed the amount of ~~segment~~income ~~profit~~taxes orpaid ~~loss~~disaggregated isby ~~used~~federal, state, and foreign taxes, and also disaggregated by ~~the~~individual ~~CODM~~jurisdictions toin ~~assess~~which ~~segment~~income ~~performance~~taxes ~~and~~paid ~~make~~were ~~resource~~above ~~allocation~~a ~~decisions~~threshold. Effective December 31, ~~2024~~2025, the company adopted the provisions of this ASU on a ~~retrospective~~prospective basis. Refer to Note ~~16.~~8 – “Income Taxes”.

2. 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. As of the first day of the fourth quarters of ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, the company’s annual impairment testing did not result in any additional impairment of goodwill of companies acquired.

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, 2022 (a)	$	873,003	$	1,154,623	$	2,027,626
Foreign currency translation adjustment		2,191		20,609		22,800
Balance as of December 31, 2023 (a)	$	875,194	$	1,175,232	$	2,050,426
Acquisitions		35,870		—		35,870
Foreign currency translation adjustment		(8,619)		(22,382)		(31,001)
Balance as of December 31, 2024 (a)	$	902,445	$	1,152,850	$	2,055,295
Foreign currency translation adjustment		16,617		48,159		64,776
Balance as of December 31, 2025 (a)	$	919,062	$	1,201,009	$	2,120,071

(a) The total carrying value of goodwill as of December 31, ~~2024~~2025, ~~2023~~2024, and ~~2022~~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 December 31, ~~2024~~2025:


	Gross
	Carrying		Accumulated
(thousands)	Amount		Amortization		Net
Customer relationships	$	~~215~~192,~~366~~743	$	(~~133~~125,~~927~~910)	$	8166,~~439~~833
Amortizable trade name		74,001		(5863,~~734~~812)		1510,~~267~~189
	$	~~289~~266,~~367~~744	$	(~~192~~189,~~661~~722)	$	9677,~~706~~022

6059

Index

Intangible assets, net, are comprised of the following as of December 31, ~~2023~~2024:


	Gross
	Carrying		Accumulated
(thousands)	Amount		Amortization		Net
Customer relationships	$	~~258~~215,~~337~~366	$	(~~156~~133,~~141~~927)	$	~~102~~81,~~196~~439
Amortizable trade name		7374,~~811~~001		(4858,~~567~~734)		2515,~~244~~267
	$	~~332~~289,~~148~~367	$	(~~204~~192,~~708~~661)	$	~~127~~96,~~440~~706

Amortization expense related to identifiable intangible assets was $2919.58 million, $3129.25 million, and $3431.72 million for the years ended December 31, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively. Amortization expense for each of the years ~~2025~~2026 through ~~2029~~2030 is estimated to be approximately $2019.20 million, $1918.58 million, $1811.92 million, $117.23 million, and $7.3 million, respectively.

3. 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:


(thousands)	~~2024~~2025		~~2023~~2024
Marubun/Arrow	$	43,~~851~~870	$	5043,~~779~~851
Other		1315,~~448~~445		1113,~~962~~448
	$	5759,~~299~~315	$	6257,~~741~~299

The equity (losses) in earnings of affiliated companies consists of the following:


(thousands)	~~2024~~2025		~~2023~~2024		~~2022~~2023
Marubun/Arrow	$	~~(463)~~2,013	$	~~4,452~~(463)	$	64,~~289~~452
Other		1,~~831~~185		1,~~955~~831		1,~~375~~955
	$	13,~~368~~198	$	61,~~407~~368	$	76,~~664~~407

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 December 31, ~~2024~~2025 and ~~2023~~2024.

In 2025, the company sold an investment in certain equity securities for $100.0 million and recorded a gain on investments of $99.0 million. This investment was previously accounted for as equity securities without a readily determinable fair value.

4. Accounts Receivable

Accounts receivable, net, consists of the following at December 31:


(thousands)	~~2024~~2025		~~2023~~2024
Accounts receivable	$	1319,~~147~~882,~~436~~783	$	1213,~~384~~147,~~553~~436
Allowance for credit losses		(~~116~~144,~~445~~117)		(~~146~~116,~~480~~445)
Accounts receivable, net	$	1319,~~030~~738,~~991~~666	$	1213,~~238~~030,~~073~~991

~~The~~Accounts ~~following~~receivable ~~table~~includes isbalances arelated ~~rollforward~~to ~~for~~inventory purchased by the company’s ~~allowance~~on the request of and behalf of its customers as part of its global components supply chain services offerings. In these transactions, receivables are disproportionate to the fees the company recognizes as revenue for ~~credit~~its ~~losses~~services. atThe ~~December 31:~~company generally carries corresponding accounts payable on its balance sheet with some differences due to timing of settlement.


(thousands)	2024		2023		2022
Balance at beginning of period	$	146,480	$	93,397	$	75,901
Charged to income		751		71,984		34,590
Translation Adjustments		(2,411)		690		(1,476)
Write-offs		(28,375)		(19,591)		(15,618)
Balance at end of period	$	116,445	$	146,480	$	93,397

Index

The ~~company~~following ~~monitors~~table ~~the~~is ~~current~~a ~~credit~~roll ~~condition~~forward ~~of its customers and other available information about expected credit losses in estimating its allowance~~ for ~~credit~~the ~~losses.~~company’s ~~The changes in~~ allowance for credit losses ~~taken~~at in 2024 as compared to 2023, relates primarily to charges of $25.4 million recorded during 2023 relating to one customer within the global ECS reportable segment, of which $20.0 million was subsequently reversed upon recovery during 2024. As of December 31~~, 2024, the company has not experienced significant changes in customers’ payment trends or significant deterioration in customers’ credit risk.~~:


(thousands)		2025			2024		2023
Balance at beginning of period		$	116,445		$	146,480	$	93,397
Charged to income			37,069			751		71,984
Translation Adjustments			4,383			(2,411)		690
Write-offs			(13,780)			(28,375)		(19,591)
Balance at end of period		$	144,117		$	116,445	$	146,480

The company monitors the current credit condition of its customers in estimating the expected credit losses and has not experienced significant changes in customers’ payment trends or significant deterioration in customers’ credit risk as of December 31, 2025. The changes in allowance for credit losses taken in 2024 as compared to 2023, relates primarily to charges of $25.4 million recorded during 2023 relating to one customer within the global ECS segment, of which $20.0 million was subsequently reversed upon recovery during 2024 with no similar items recorded in 2025.

EMEA Asset Securitization

The company has an EMEA asset securitization program under which it continuously sells its interest in designated pools of trade accounts receivable of certain of its subsidiaries in the EMEA region at a discount, to a special purpose entity, which in turn sells certain of the receivables to unaffiliated financial institutions and conduits administered by such unaffiliated financial institutions (“unaffiliated financial institutions”) on a monthly basis. The company may sell up to €600.0 million under the EMEA asset securitization program, which matures in December 2027, subject to extension in accordance with its terms. During the fourth quarter of 2024, the company extended the program’s maturity to 2027 and amended the program to correct an administrative error and regain compliance with certain operational covenants. In February 2024 the company amended provisions in the EMEA asset securitization program to update certain financial ratios. The program is conducted through Arrow EMEA Funding Corp B.V., an entity structured to be bankruptcy remote. The company is deemed the primary beneficiary of Arrow EMEA Funding Corp B.V. as the company has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive the benefits that could potentially be significant to the entity from the transfer of the trade accounts receivable into the special purpose entity. Accordingly, Arrow EMEA Funding Corp B.V. is included in the company’s consolidated financial statements.

Sales of accounts receivable to unaffiliated financial institutions under the EMEA asset securitization program for the years ended December 31:


(thousands)	~~2024~~2025		~~2023~~2024		~~2022~~2023
EMEA asset securitization, sales of accounts receivables	$	1,~~892~~669,~~516~~648	$	31,~~160~~892,~~247~~516	$	23,~~524~~160,~~276~~247

Receivables sold to unaffiliated financial institutions under the program are excluded from “Accounts receivable, net” on the company’s consolidated balance sheets and cash receipts are reflected as cash provided by operating activities on the consolidated statements of cash flows. The purchase price is paid in cash when the receivables are sold. Certain unsold receivables held on Arrow EMEA Funding Corp B.V. are pledged as collateral to unaffiliated financial institutions. These unsold receivables are included in “Accounts receivable, net” in the company’s consolidated balance sheets.

The company continues servicing the receivables which were sold and in exchange receives a servicing fee under the program. The company does not record a servicing asset or liability on the company’s consolidated balance sheets as the company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities.

Other amounts related to the EMEA asset securitization program as of December 31:


(thousands)	~~2024~~2025		~~2023~~2024
Receivables sold to unaffiliated financial institutions that were uncollected	$	~~339~~379,~~669~~017	$	~~529~~339,~~266~~669
Collateralized accounts receivable held by Arrow EMEA funding Corp B.V.		528,975		805,788
Collateralized accounts receivable held by Arrow EMEA Funding Corp B.V.		591,304		528,975

Index

Any accounts receivable held by Arrow EMEA Funding Corp B.V. would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings if there are outstanding balances under the EMEA asset securitization program. The assets of the special purpose entity cannot be used by the company for general corporate purposes. Additionally, the financial obligations of Arrow EMEA Funding Corp B.V. to the unaffiliated financial institutions under the program are limited to the assets it owns and there is no recourse to Arrow Electronics, Inc. for receivables that are uncollectible as a result of an account debtor’s insolvency or inability to pay.

The EMEA asset securitization program includes terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. As of December 31, ~~2024~~2025, the company was in compliance with all such financial covenants.

Factoring

In the normal course of business, certain of the company’s subsidiaries have factoring agreements to sell, with limited or no recourse, selected trade accounts receivable to financial institutions, and accounts for these transactions as sales of the related receivables. The receivables are excluded from “Accounts receivable, net” on the company’s consolidated balance sheets and cash receipts are reflected asin the “Cash ~~provided~~flows byfrom operating activities” section on the consolidated statements of cash flows. The company typically does not retain financial or legal interests in these receivables. Factoring fees for the sales of accounts ~~receivable~~receivables are included in “Interest and other financing expense, net” in the consolidated statements of operations. The company continues servicing the receivables ~~which~~that were sold.

Sales of trade accounts receivable under the company’s factoring programs for the years ended December 31:


(thousands)	~~2024~~2025		~~2023~~2024		~~2022~~2023
Sales of accounts receivables under the factoring programs	$	~~928~~1,~~279~~130,975	$	1928,~~618,726~~279	$	1,~~612~~618,~~909~~726

Other amounts under the company’s factoring programs as of December 31:


(thousands)	~~2024~~2025		~~2023~~2024
Receivables sold under the factoring programs that were uncollected	$	~~182~~279,~~432~~775	$	~~375~~182,~~940~~432

5. Supplier Finance Programs

At the request of certain of the company’s suppliers, the company has entered into agreements (“supplier finance programs”) with third-party finance providers, which facilitate the participating suppliers’ ability to sell their receivables from the company to the third-party financial institutions, at the sole discretion of the suppliers. For agreeing to participate in these programs, the company seeks to secure improved standard payment terms with its suppliers. The company is not involved in negotiating terms of the arrangements between its suppliers and the financial institutions and has no economic interest in a supplier’s decision to enter into these agreements, or sell receivables from the company. The company’s rights and obligations to its suppliers, including amounts due, are not impacted by suppliers'’ decisions to sell amounts under the arrangements. However, the company agrees to make all payments to the third-party financial institutions, and the company’s right to offset balances due from suppliers against payment obligations is restricted by the agreements for those payment obligations that have been sold by suppliers. These obligations are included in “Accounts payable” on the company’s consolidated balance sheets and all activity related to the obligations is presented within operating activities on the consolidated statements of cash flows.

The following table is a roll forward of the company’s outstanding obligations under its supplier finance programs:


(thousands)	~~2024~~2025		~~2023~~2024		2023
Obligations outstanding at the beginning of the year	$	1,~~113~~269,~~479~~672	$	1,~~568~~113,~~787~~479	$	1,568,787
Invoices added during the year		4,~~576~~939,~~839~~368		4,~~388~~576,~~317~~839		4,388,317
Invoices paid during the year		(4,~~420~~945,~~646~~951)		(4,~~843~~420,~~625~~646)		(4,843,625)
Obligations outstanding at the end of the year	$	1,~~269~~263,~~672~~089	$	1,~~113~~269,~~479~~672	$	1,113,479

6362

Index

6. Debt

Short-term borrowings, including the current portion of long-term debt, consist of the following at December 31:


(thousands)	~~2024~~2025		~~2023~~2024
3.25% notes, due September 2024	$	—	$	499,224
4.00% notes, due April 2025	$	—	$	349,808
4.00% notes, due April 2025		349,808		—
Other short-term borrowings		341		170
Commercial paper		—		1,121,882
	$	341	$	349,978
Other short-term borrowings		170		32,848
	$	349,978	$	1,653,954

The company has $500.0 million in uncommitted lines of credit. There were no outstanding borrowings under the uncommitted lines of credit at December 31, 2025 and 2024. The maturity for borrowings is generally short term and is agreed upon with lenders at the time of each borrowing. The uncommitted lines of credit had a weighted-average effective interest rate of 4.37% and 5.18% at December 31, 2025 and 2024, respectively.

The company has ~~$500.0~~a ~~million~~commercial inpaper ~~uncommitted~~program ~~lines~~and ofthe ~~credit.~~maximum ~~There~~aggregate ~~were~~balance noof commercial paper outstanding ~~borrowings~~may ~~under~~not exceed the ~~uncommitted~~borrowing ~~lines~~capacity of ~~credit~~$1.2 atbillion. ~~December~~Amounts ~~31,~~outstanding ~~2024~~under ~~and~~the ~~2023.~~commercial ~~These~~paper ~~borrowings~~program ~~were~~are ~~provided~~backstopped onby aavailable ~~short-term~~commitments ~~basis~~under ~~and~~the ~~their~~company’s ~~maturity~~revolving iscredit ~~agreed~~facility. ~~upon~~The ~~between~~company ~~the~~had ~~company~~no outstanding borrowings under this program at December 31, 2025 and ~~the~~December ~~lender~~31, 2024. The ~~uncommitted~~commercial ~~lines~~paper ofprogram ~~credit~~ had a weighted-average effective interest rate of 54.1826% and 5.8321% at December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

The company has a commercial paper program and the maximum aggregate balance of commercial paper outstanding may not exceed the borrowing capacity of $1.2 billion. Amounts outstanding under the commercial paper program are backstopped by available commitments under the company’s revolving credit facility. The company had no outstanding borrowings under this program at December 31, 2024 and $1.1 billion in outstanding borrowings at December 31, 2023. The commercial paper program had a weighted-average effective interest rate of 5.21% and 5.90% at December 31, 2024 and 2023, respectively.

Long-term debt consists of the following at December 31:


(thousands)	~~2024~~2025		~~2023~~2024
Revolving credit facility	$	~~30,000~~—	$	—30,000
North American asset securitization program		~~633~~970,000		~~198~~633,000
4.00% notes, due 2025		—		349,061
7.50% senior debentures, due 2027		110,348		110,266
6.125% notes, due 2026		—		497,661
3.875% notes, due 2028		498,480		497,775
7.50% senior debentures, due 2027		110,266		110,184
5.15% notes, due 2029		496,142		495,209
3.875% notes, due 2028		497,775		497,098
2.95% notes, due 2032		496,131		495,576
5.15% notes, due 2029		495,209		—
5.875% notes, due 2034		495,430		494,986
2.95% notes, due 2032		495,576		495,039
Other obligations with various interest rates and due dates		18,184		16,971
5.875% notes, due 2034		494,986		—
	$	3,084,715	$	2,773,783
Other obligations with various interest rates and due dates		16,971		6,510
	$	2,773,783	$	2,153,553

The 7.50% senior debentures are not redeemable prior to their maturity. All other notes may be called at the option of the company subject to “make whole” clauses.

The estimated fair market value of long-term debt at December 31, using quoted market prices, is as follows:


(thousands)	~~2024~~2025		~~2023~~2024
4.00% notes, due 2025	$	—	$	343,500
7.50% senior debentures, due 2027	$	114,000	$	115,000
6.125% notes, due 2026		—		502,000
3.875% notes, due 2028		496,500		481,500
7.50% senior debentures, due 2027		115,000		117,000
5.15% notes, due 2029		511,500		498,000
3.875% notes, due 2028		481,500		475,000
2.95% notes, due 2032		447,500		426,000
5.15% notes, due 2029		498,000		—
5.875% notes, due 2034		522,500		502,500
2.95% notes, due 2032		426,000		425,000
5.875% notes, due 2034		502,500		—

The carrying amount of the company’s other short-term borrowings, ~~4.00% notes due in 2025, revolving credit facility,~~ North American asset securitization program, commercial paper, and other obligations approximate their fair value.

The company has a $2.0 billion revolving credit facility that may be used by the company for general corporate purposes including working capital in the ordinary course of business, letters of credit, repayment, prepayment or purchase of long-term indebtedness, acquisitions, and as support for the company’s commercial paper program, as applicable. In 2025, the company amended its revolving credit facility and, among other things, extended its term to mature in 2030. Interest on borrowings under the revolving credit facility is calculated using a base rate or SOFR, plus a spread (1.08% at December 31, 2025), which is based on the company’s credit ratings, for a weighted-average effective interest rate of 5.01% at December 31, 2025. The effective interest rate was 5.48% at December 31, 2024. The facility fee, which is based on the

Index

company’s credit ratings, was 0.175% of the total borrowing capacity at December 31, 2025. The company had no outstanding borrowings under the revolving credit facility at December 31, 2025 and $30.0 million in outstanding borrowings under the revolving credit facility at December 31, 2024.

The company has a North American asset securitization program collateralized by accounts receivable of certain of its subsidiaries. The company may borrow up to $1.5 billion under the program which matures in September 2027. The program is conducted through AFC, a wholly-owned, bankruptcy remote subsidiary. The North American asset securitization program does not qualify for sale treatment. Accordingly, the accounts receivable and related debt obligation remain on the company’s consolidated balance sheets. Interest on borrowings is calculated using a base rate plus a spread (0.40% at December 31, 2025), and a credit spread adjustment of 0.10% for an effective interest rate of 4.19% at December 31, 2025. The effective interest rate was 4.83% at December 31, 2024. The facility fee is 0.40% of the total borrowing capacity.

The company had $970.0 million and $633.0 million in outstanding borrowings under the North American asset securitization program at December 31, 2025 and 2024, respectively, which was included in “Long-term debt” in the company’s consolidated balance sheets. Total collateralized accounts receivable of approximately $3.0 billion were held by AFC and were included in “Accounts receivable, net” on the company’s consolidated balance sheets at December 31, 2025 and 2024, respectively. Any accounts receivable held by AFC would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings of the company before repayment of any outstanding borrowings under the North American asset securitization program.

Both the revolving credit facility and North American asset securitization program include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. As of December 31, 2025, the company was in compliance with all such financial covenants.

In the second quarter of 2025, the company repaid in full the $350.0 million principal amount of its 4.00% notes due April 2025.

In the third quarter of 2024, the company completed the sale of $500.0 million principal amount of 5.15% notes, due 2029. The net proceeds of the offering of $494.9 million were used for general corporate purposes and to repay the $500.0 million principal amount of its 3.25% notes, due September 2024, which were redeemed at maturity.

In the second quarter of 2024, the company completed the sale of $500.0 million principal amount of 5.875% notes, due 2034. The net proceeds of the offering of $494.7 million were used for general corporate purposes and to repay the $500.0 million principal amount of its 6.125% notes, due 2026, which were redeemed in April 2024.

Expected annual payments of borrowings at December 31 are as follows:


(thousands)
2026		$	341
2027			1,087,775
2028			506,133
2029			503,488
2030			1,221
Thereafter			1,000,000

Interest and other financing expense, net, includes interest and dividend income of $46.8 million, $54.5 million, and $66.4 million in 2025, 2024, and 2023, respectively. Interest paid, net of interest and dividend income, amounted to $163.2 million, $199.0 million, and $274.1 million in 2025, 2024, and 2023, respectively.

Index

The company has a $2.0 billion revolving credit facility maturing in September 2026. The facility may be used by the company for general corporate purposes including working capital in the ordinary course of business, letters of credit, repayment, prepayment or purchase of long-term indebtedness, acquisitions, and as support for the company’s commercial paper program, as applicable. Interest on borrowings under the revolving credit facility is calculated using a base rate or SOFR, plus a spread (1.08% at December 31, 2024), which is based on the company’s credit ratings, plus a credit spread adjustment of 0.10% or an effective interest rate of 5.48% at December 31, 2024. The facility fee, which is based on the company’s credit ratings, was 0.175% of the total borrowing capacity at December 31, 2024. The company had $30.0 million in outstanding borrowings under the revolving credit facility at December 31, 2024 and no outstanding borrowings under the revolving credit facility at December 31, 2023.

The company has a North American asset securitization program collateralized by accounts receivable of certain of its subsidiaries. The company may borrow up to $1.5 billion under the program which matures in September 2027. The program is conducted through AFC, a wholly-owned, bankruptcy remote subsidiary. The North American asset securitization program does not qualify for sale treatment. Accordingly, the accounts receivable and related debt obligation remain on the company’s consolidated balance sheets. Interest on borrowings is calculated using a base rate plus a spread (0.40% at December 31, 2024), plus a credit spread adjustment of 0.10% or an effective interest rate of 4.83% at December 31, 2024. The facility fee is 0.40% of the total borrowing capacity.

The company had $633.0 million and $198.0 million in outstanding borrowings under the North American asset securitization program at December 31, 2024 and 2023, respectively, which was included in “Long-term debt” in the company’s consolidated balance sheets. Total collateralized accounts receivable of approximately $3.0 billion and $2.7 billion were held by AFC and were included in “Accounts receivable, net” on the company’s consolidated balance sheets at December 31, 2024 and 2023, respectively. Any accounts receivable held by AFC would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings of the company before repayment of any outstanding borrowings under the North American asset securitization program.

Both the revolving credit facility and North American asset securitization program include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. As of December 31, 2024, the company was in compliance with all such financial covenants.

During the third quarter of 2024, the company completed the sale of $500.0 million principal amount of 5.15% notes, due 2029. The net proceeds of the offering of $494.9 million were used for general corporate purposes and to repay the $500.0 million principal amount of its 3.25% notes, due September 2024, which were redeemed at maturity.

During the second quarter of 2024, the company completed the sale of $500.0 million principal amount of 5.875% notes, due 2034. The net proceeds of the offering of $494.7 million were used for general corporate purposes and to repay the $500.0 million principal amount of its 6.125% notes, due 2026, which were redeemed in April 2024.

Annual payments of borrowings during each of the years 2025 through 2029 are $350.1 million, $39.8 million, $747.3 million, $503.4 million, and $500.0 million, respectively, and $1.0 billion for all years thereafter.

Interest and other financing expense, net, includes interest and dividend income of $54.5 million, $66.4 million, and $33.7 million in 2024, 2023, and 2022, respectively. Interest paid, net of interest and dividend income, amounted to $199.0 million, $274.1 million, and $175.6 million in 2024, 2023, and 2022, respectively.

7. Financial Instruments Measured at Fair Value

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The company utilizes a fair value hierarchy, which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The fair value hierarchy has three levels of inputs that may be used to measure fair value:

Index

minimizes the use of unobservable inputs when measuring fair value. The fair value hierarchy has three levels of inputs that may be used to measure fair value:

Level 1

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2

Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.

The following table presents assets (liabilities) measured at fair value on a recurring basis at December 31, ~~2024~~2025:

(thousands)

Balance Sheet Location

Level 1

Level 2

Level 3

Total

Cash equivalents (a)

Cash and cash equivalents

1011,~~751~~412

—

1011,~~751~~412

Equity investments (b)

Other assets

4241,~~907~~787

—

4241,~~907~~787

Foreign exchange contracts designated as net investment hedges

Other assets / other current assets

—

5316,~~679~~816

—

5316,~~679~~816

53,~~658~~199

5316,~~679~~816

—

~~107~~70,~~337~~015

The following table presents assets measured at fair value on a recurring basis at December 31, ~~2023~~2024:


(thousands)	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Cash equivalents (a)	Cash and cash equivalents	$	810,~~729~~751	$	—	$	—	$	810,~~729~~751
Equity investments (b)	Other assets		5742,~~625~~907		—		—		5742,~~625~~907
Interest rate swaps designated as fair value hedge	Other liabilities		—		(454)		—		(454)
Foreign exchange contracts designated as net investment hedges	Other assets / other current assets		—		53,679		—		53,679
Foreign exchange contracts designated as net investment hedges	Other assets / other current assets		—		47,245		—		47,245
		$	53,658	$	53,679	$	—	$	107,337
		$	66,354	$	46,791	$	—	$	113,145

(a)	Cash equivalents include highly liquid investments with an original maturity of less than three months.

(b) The company has an approximately 9.0% equity ownership interest in Marubun Corporation and a portfolio of mutual funds with quoted market prices. During ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, the company recorded unrealized gains (losses) of $~~(12~~3.0)4 million, $9(12.70) million, and $(59.8)7 million, respectively, on equity securities held at the end of each year.

Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to goodwill, and identifiable intangible assets (see Note 2 “Goodwill and Intangible Assets”). The company tests these assets for impairment if indicators of potential impairment exist or at least annually if indefinite-lived.

Derivative Instruments

The company uses various financial instruments, including derivative instruments, for purposes other than trading. Certain derivative instruments are designated at inception as hedges and assessed for effectiveness both at inception and on an ongoing basis. Derivative instruments not designated as hedges are carried at fair value on the consolidated balance sheets with changes in fair value recognized in earnings.

Interest Rate Swaps

The company manages the risk of variability in interest rates of future expected debt issuances by entering into various forward-starting interest rate swaps, designated as cash flow hedges. Changes in fair value of interest rate swaps designated as cash flow hedges are recorded in the shareholders’ equity section in the company’s consolidated balance sheets in “Accumulated other comprehensive loss” and will be reclassified into income over the life of the anticipated debt issuance or in the period the hedged forecasted cash flows are deemed no longer probable to occur. Reclassified gains and losses are recorded within the line item “Interest and other financing expense, net” in the consolidated statements of operations.

6665

Index

or in the period the hedged forecasted cash flows are deemed no longer probable to occur. Reclassified gains and losses are recorded within the line item “Interest and other financing expense, net” in the consolidated statements of operations. The fair value of interest rate swaps are estimated using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads.

InThe ~~June~~company ~~2023~~occasionally enters into interest rate swap transactions, ~~the~~designated ~~company~~as ~~terminated~~fair ~~its~~value ~~outstanding~~hedges, ~~forward~~that convert certain fixed-~~starting~~rate ~~interest~~debt to variable-rate ~~swaps~~debt ~~and~~in ~~received~~order ato ~~cash~~manage ~~payment~~its targeted mix of ~~$56~~fixed- and floating-rate debt.~~7 million~~ For qualifying interest rate fair value hedges, ~~which~~gains isor ~~reported~~losses inon ~~the~~derivatives are included in “~~Cash~~Interest ~~flows~~and ~~from~~other financing ~~activities~~expense, net” ~~section~~in of the consolidated statements of ~~cash flows~~operations. InThe ~~April~~change ~~2024,~~in ~~the~~fair ~~forecasted~~value ~~bond~~of ~~issuance~~the ~~occurred,~~hedged ~~and~~item attributable to the ~~$56.7~~risk ~~million~~being ~~gain~~hedged ~~will~~is bereported ~~amortized~~as an adjustment to its carrying value and is also included in “Interest and other financing expense, net.” inThere ~~the~~are ~~company’s~~no ~~consolidated~~outstanding ~~statement~~interest ofrate ~~operations~~swaps ~~over~~as ~~the 10-year life~~ of ~~the~~December ~~bond~~31, 2025.

The company occasionally enters into interest rate swap transactions, designated as fair value hedges, that convert certain fixed-rate debt to variable-rate debt in order to manage its targeted mix of fixed- and floating-rate debt. For qualifying interest rate fair value hedges, gains or losses on derivatives are included in “Interest and other financing expense, net” in the consolidated statements of operations. The change in fair value of the hedged item attributable to the risk being hedged is reported as an adjustment to its carrying value and is also included in “Interest and other financing expense, net.”

At December 31, 2023, the company had one outstanding interest rate swap designated as a fair value hedge of its 6.125% notes due in March 2026, the terms of which were as follows:


		Notional Amount		Weighted-Average	Interest Rate due to
Trade Date	Maturity Date	(thousands)		Interest Rate	Counterparty
February 2023	March 2026	$	500,000	6.125%	SOFR+0.508%

In March 2024, the counterparty cancelled the swap and the company de-designated the fair value hedging relationship.

Foreign Exchange Contracts

The company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product. The company’s primary exposures to such transactions are denominated primarily in the following currencies: Euro and Indian Rupee. The company enters into foreign exchange forward, option, or swap contracts (collectively, the “foreign exchange contracts”) to facilitate the hedging of foreign currency exposures resulting from inventory purchases and sales and mitigate the impact of changes in foreign currency exchange rates related to these transactions. The ~~Foreign~~company also uses foreign exchange contracts to hedge its net investments in foreign operations against future changes in exchange rates. Except for the net investment hedges, the foreign exchange contracts generally have terms of no more than six months. The company does not enter into foreign exchange contracts for trading purposes. The risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the company minimizes by limiting its counterparties to major financial institutions. The fair value of the foreign exchange contracts is estimated using foreign currency spot rates and forward rates quotes by third-party financial institutions. The notional amount of the foreign exchange contracts inclusive of foreign exchange contracts designated as a net investment hedge at December 31, ~~2024~~2025 and ~~2023~~2024 was $1.1 billion ~~and $1~~.~~0 billion, respectively.~~

Gains and losses related to non-designated foreign currency exchange contracts are recorded in “Cost of sales” on the company’s consolidated statements of operations. Gains and losses related to foreign currency exchange contracts designated as cash flow hedges are recorded in “Cost of sales,” “Selling, general, and administrative,” and “Interest and other financing expense, net” on the company’s consolidated statements of operations, based upon the nature of the underlying hedged transaction~~, on the company’s consolidated statements of operations~~. Gains or losses on these contracts are deferred and recognized when the underlying future purchase or sale is recognized or when the corresponding asset or liability is revalued, and were not material to the financial statements for the periods presented.

Index

The following foreign exchange contracts were designated as net investment hedges, hedging a portion of the company's net investments in subsidiaries with Euro-denominated net assets for the years ended December 31:


	Notional Amount (thousands)
Maturity Date	~~2024~~2025		~~2023~~2024
September 2024	EUR	-	EUR	50,000
April 2025	EUR	—	EUR	100,000
April 2025	EUR	100,000	EUR	100,000
January 2028	EUR	100,000	EUR	100,000
Total	EUR	200,000	EUR	250,000
	EUR	100,000	EUR	200,000

The change in the fair value of derivatives designated as net investment hedges are recorded in CTA within “Accumulated other comprehensive loss” on the company’s consolidated balance sheets. Upon discontinuation, all previously recognized amounts remain in CTA until the net investment is sold or liquidated. Amounts excluded from the assessment of hedge effectiveness are included in “Interest and other financing expense, net” on the company’s consolidated statements of operations.

During ~~the~~2025 ~~third~~and ~~quarter of~~ 2024, a foreign exchange ~~contract~~contracts designated as a net investment ~~hedge~~hedges matured and the company received $24.9 million and $10.6 million, respectively, which is reported in the “Cash ~~flows~~flow from investing activities” section of the consolidated statements of cash flows.

During the first quarter of 2023, a foreign exchange contract designated as a net investment hedge matured and the company received $10.7 million, which is reported in the “Cash flows from investing activities” section of the consolidated statements of cash flows.66

Index

The effects of derivative instruments on the company’s consolidated statements of operations and other comprehensive income are as follows for the years ended December 31:


(thousands)	Income Statement Line	~~2024~~2025		~~2023~~2024		~~2022~~2023
Gain (Loss) Recognized in Income (Loss)
Foreign exchange contracts, net investment hedge (a)	Interest Expense	$	63,~~747~~429	$	76,~~460~~747	$	87,~~805~~460
Interest rate swaps, cash flow hedge	Interest Expense		593		(2,889)		(3,586)
Interest rate swaps, cash flow hedge (b)	Interest Expense		2,246		593		(2,889)
Interest rate swap, fair value hedge (b)	Interest Expense		454		(454)		—
Interest rate swap, fair value hedge (c)	Interest Expense		—		454		(454)
Total		$	7,794	$	4,117	$	5,219
		$	5,675	$	7,794	$	4,117
Gain (Loss) Recognized in Other Comprehensive Income (Loss) before reclassifications, net of tax
Foreign exchange contracts, net investment hedge (c)		$	12,996	$	(2,276)	$	15,474
Foreign exchange contracts, net investment hedge (d)		$	(9,123)	$	12,996	$	(2,276)
Interest rate swaps, cash flow hedge			~~(685)~~—		~~585~~(685)		~~25,937~~585
Total		$	12,311	$	(1,691)	$	41,411
		$	(9,123)	$	12,311	$	(1,691)

(a)	Represents derivative amounts excluded from the assessment of effectiveness for the net investment hedges reclassified from CTA to “Interest and other financing expense, net.”

(b) ~~The~~Includes ~~cumulative~~amortization ~~amount~~ of ~~fair value hedging adjustments to the carrying value of hedged debt instruments totaled a loss of~~ $056.47 million ~~during~~gain ~~2024,~~recognized ~~and~~in ~~a loss of $5.8 thousand during~~ 2023, ~~respectively.~~resulting ~~During~~from the ~~first~~termination ~~quarter~~ of ~~2024,~~an ~~the~~interest ~~fair~~rate ~~value hedge was terminated.~~swap

(c) ~~Includes~~The ~~derivative~~cumulative ~~gains~~amount ~~(losses)~~of ~~excluded~~fair ~~from~~value ~~the~~hedging ~~assessment~~adjustments ofto ~~effectiveness for~~ the ~~net~~carrying ~~investment~~value ~~hedges~~of ~~and~~hedged ~~recognized~~debt ininstruments ~~other~~totaled ~~comprehensive~~a ~~income,~~loss ~~net~~ of ~~tax, of~~ $~~(4.~~0).4 million, ~~$(1.8)~~during ~~million~~2024, and a loss of $15.8 ~~million~~thousand ~~for~~during ~~2024,~~ 2023, ~~and 2022,~~ respectively,. ~~which~~During ~~were excluded from~~ the ~~assessment~~first quarter of ~~effectiveness~~2024, ~~for~~ the ~~net~~fair ~~investment~~value ~~hedges~~hedge ~~and~~was ~~recognized in other comprehensive income (loss), net of tax~~terminated.

(d)

Includes derivative losses excluded from the assessment of effectiveness for the net investment hedges and recognized in other comprehensive income, net of tax, of $9.2 million, $4.0 million, and $1.8 million for 2025, 2024, and 2023, respectively, which were excluded from the assessment of effectiveness for the net investment hedges and recognized in other comprehensive income (loss), net of tax.

Other

The carrying amount of “Cash and cash equivalents”, “Accounts receivable, net”, and “Accounts payable” approximate their fair value due to the short maturities of these financial instruments.

Index

8. Income Taxes

The provision for income taxes for the years ended December 31 consists of the following:


(thousands)	~~2024~~2025		~~2023~~2024		~~2022~~2023
Current:
Federal	$	(814,~~586)~~859	$	33(8,~~832~~586)	$	~~139~~33,~~730~~832
State		34,~~352~~837		163,~~108~~352		2916,~~117~~108
International		~~200~~164,~~912~~720		~~299~~200,~~031~~912		~~293~~299,~~195~~031
	$	~~195~~184,~~678~~416	$	~~348~~195,~~971~~678	$	~~462~~348,~~042~~971
Deferred:
Federal	$	(5022,~~305~~831)	$	(5950,~~342~~305)	$	(3959,~~658~~342)
State		~~(8,348)~~655		(118,~~960~~348)		(511,~~613~~960)
International		(4114,~~213~~006)		(2241,~~678~~213)		32(22,~~221~~678)
		(9936,~~866~~182)		(9399,~~980~~866)		(1393,~~050~~980)
	$	95148,~~812~~234	$	~~254~~95,~~991~~812	$	~~448~~254,~~992~~991

The principal causes of the difference between the U.S. federal statutory tax rate of 21% and effective income tax rates for the years ended December 31 are as follows:


(thousands)	~~2024~~2025		~~2023~~2024		~~2022~~2023
United States	$	(~~234~~68,~~972~~852)	$	(38234,~~848~~972)	$	~~517~~(38,~~642~~848)
International		~~724~~786,~~291~~780		1724,~~203,202~~291		1,~~366~~203,~~508~~202
Income before income taxes	$	~~489~~717,~~319~~928	$	1489,~~164,354~~319	$	1,~~884~~164,~~150~~354

Provision at statutory tax rate	$	102,757	$	244,514	$	395,672
State taxes, net of federal benefit		(3,279)		2,379		18,675
International effective tax rate differential		8,958		27,993		26,210
Change in valuation allowance		333		(7,755)		(6,378)
Other non-deductible expenses		(585)		2,993		7,441
Changes in tax accruals		(9,419)		1,153		5,993
Tax credits		(10,786)		(7,666)		980
U.S. tax (benefit) on foreign earnings		6,801		(10,075)		3,879
Other		1,032		1,455		(3,480)
Provision for income taxes	$	95,812	$	254,991	$	448,992

The company is subject to taxation of GILTI on foreign subsidiaries and a tax provision to deduct a portion of FDII of U.S. corporations. GILTI tax expense, accounted for as a current period cost, net of FDII benefit, resulted in a net tax expense (benefit) of $4.7 million, $23.0 million, and $(7.4) million during 2024, 2023, and 2022, respectively.

At December 31, 2024, a short-term tax payable of $6.9 million was recorded in the consolidated balance sheets for a one-time transition tax on the foreign subsidiaries’ accumulated unremitted earnings related to the 2017 U.S. Tax Cuts and Jobs Act.67

At December 31, 2024, the company had a liability for unrecognized tax positions of $64.0 million. The timing of the resolution of these uncertain tax positions is dependent on the tax authorities’ income tax examination processes. Material changes are not expected; however, it is possible that the amount of unrecognized tax benefits with respect to uncertain tax positions could increase or decrease during 2025. Currently, the company is unable to make a reasonable estimate of when cash settlement would occur and how it would impact the effective tax rate.

Index


		2025
(thousands)		Amount			Percent
U.S. Federal statutory tax rate		$	150,765			21.0	%
State and local income taxes, net of federal income tax effect*			4,306			0.6	%
Foreign tax effects
Germany
Foreign exchange difference			(11,536)			(1.6)	%
Other			3,809			0.5	%
Cayman Islands
Statutory tax rate difference between Cayman Islands and United States			(12,170)			(1.7)	%
Taiwan
Foreign exchange difference			(7,930)			(1.1)	%
Other			807			0.1	%
Other foreign jurisdictions			11,743			1.6	%
Effect of cross-border tax laws			13,281			1.8	%
Tax credits
Research and development tax credits			(9,635)			(1.3)	%
Changes in valuation allowances
Nontaxable or nondeductible items			1,358			0.2	%
Changes in unrecognized tax benefits			1,452			0.2	%
Other adjustments			1,984			0.3	%
Effective tax rate		$	148,234			20.6	%

* State taxes in Ohio, California, District of Columbia, New York, Minnesota, and Virginia made up the majority (greater than 50 percent) of the tax effect in this category.


		Year Ended December 31,
(thousands)		2024			2023
United States		$	(234,972)		$	(38,848)
International			724,291			1,203,202
Income before income taxes		$	489,319		$	1,164,354

Provision at statutory tax rate		$	102,757		$	244,514
State taxes, net of federal benefit			(3,279)			2,379
International effective tax rate differential			8,958			27,993
Change in valuation allowance			333			(7,755)
Other non-deductible expenses			(585)			2,993
Changes in tax accruals			(9,419)			1,153
Tax credits			(10,786)			(7,666)
U.S. tax (benefit) on foreign earnings			6,801			(10,075)
Other			1,032			1,455
Provision for income taxes		$	95,812		$	254,991

The company is subject to taxation of GILTI on foreign subsidiaries and a tax provision to deduct a portion of FDII of U.S. corporations. GILTI tax expense, accounted for as a current period cost, net of FDII benefit, resulted in a net tax expense of $5.2 million, $4.7 million, and $23.0 million during 2025, 2024, and 2023, respectively.

At December 31, 2025, a short-term tax payable of $7.6 million was recorded in the consolidated balance sheets for a one-time transition tax on the foreign subsidiaries’ accumulated unremitted earnings related to the 2017 U.S. Tax Cuts and Jobs Act.

At December 31, 2025, the company had a liability for unrecognized tax positions of $50.5 million. The timing of the resolution of these uncertain tax positions is dependent on the tax authorities’ income tax examination processes. Material changes are not expected; however, it is possible that the amount of unrecognized tax benefits with respect to uncertain tax positions could increase or decrease during 2026. Currently, the company is unable to make a reasonable estimate of when cash settlement would occur and how it would impact the effective tax rate.

Index

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31 is as follows:


(thousands)	~~2024~~2025		~~2023~~2024		~~2022~~2023
Balance at beginning of year	$	8263,~~808~~953	$	7582,~~666~~808	$	7175,~~422~~666
Additions based on tax positions taken during a prior period		47,~~537~~710		74,~~466~~537		67,~~760~~466
Reductions based on tax positions taken during a prior period		(2010,~~245~~242)		(420,~~448~~245)		(34,~~007~~448)
Additions based on tax positions taken during the current period		75,~~943~~930		57,~~505~~943		35,~~526~~505
Reductions related to settlement of tax matters		(11,090)		—		(2,271)
Reductions based on tax positions taken during the current period		(1,575)		—		—
Reductions related to a lapse of applicable statute of limitations		—		(1,381)		(764)
Reductions related to settlement of tax matters		(15,265)		(11,090)		—
Balance at end of year	$	63,953	$	82,808	$	75,666
Reductions related to a lapse of applicable statute of limitations		—		—		(1,381)
Balance at end of year	$	50,511	$	63,953	$	82,808

Interest costs related to unrecognized tax benefits are classified as a component of “Interest and other financing expense, net” in the company’s consolidated statements of operations. In ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, the company recognized $57.93 million, $45.09 million, and $4.40 million, respectively, of interest expense related to unrecognized tax benefits. At December 31, ~~2024~~2025 and ~~2023~~2024, the company had accrued a liability of $2324.52 million and $1723.5 million, respectively, for interest related to unrecognized tax benefits.

In many cases the company’s uncertain tax positions are related to tax years that remain subject to examination by tax authorities. The following describes the open tax years, by major tax jurisdiction, as of December 31, ~~2024~~2025:


United States - Federal			2016 - present
United States - States			2015 - present
China and Hong Kong			2018 - present
Germany (a)			2020 - present
China and Hong Kong			2017 - present
Italy (a)			2013 - present
Netherlands			~~2018~~2019 - present
Sweden			~~2019~~2020 - present
Taiwan			~~2018~~2020 - present
United Kingdom			~~2020~~2021 - present

(a) Includes ~~federal~~national as well as local jurisdictions.

Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated balance sheets. These temporary differences result in taxable or deductible amounts in future years.

7069

Index

Deferred tax assets and liabilities consist of the following at December 31:


(thousands)	~~2024~~2025		~~2023~~2024
Deferred tax assets:
Net operating loss carryforwards	$	1635,~~567~~971	$	1716,~~987~~567
Inventory adjustments		~~110~~119,~~370~~898		68110,~~542~~370
Allowance for credit losses		2024,~~475~~918		2720,~~637~~475
Accrued expenses		86100,~~964~~853		7381,~~251~~951
Interest carryforward		214,~~923~~612		421,~~170~~923
Stock-based compensation awards		5,490		5,692
Foreign tax credit carryforward		9,194		—
Lease liability		65,718		68,605
Intangibles		10,499		4,939
Research and experimentation costs (a)		73,971		59,277
Stock-based compensation awards		6,345		5,490
Other		992		3,332
Lease liability		65,130		65,718
		402,470		328,493
Research and experimentation costs (a)		83,305		73,971
Valuation allowance		(16,165)		(15,832)
Other		1,921		1,066
Total deferred tax assets	$	386,305	$	312,661
		462,646		402,470
Valuation allowance		(16,011)		(16,165)
Total deferred tax assets	$	446,635	$	386,305

Deferred tax liabilities:
Goodwill	$	(~~157~~165,~~786~~985)	$	(~~152~~157,~~551~~786)
Depreciation		(42,~~540~~175)		(5842,~~419~~540)
Lease right-of-use assets		(61,~~685~~493)		(6461,~~937~~685)
Other comprehensive income items		(1520,~~615~~328)		(1315,~~204~~615)
Total deferred tax liabilities	$	(~~277~~289,~~626~~981)	$	(~~289~~277,~~111~~626)
Total net deferred tax assets	$	~~108~~156,~~679~~654	$	23108,~~550~~679

(a) At December 31, ~~2024~~2025, and ~~2023~~2024, the company recorded deferred tax asset of $7483.03 million and $5974.30 million, respectively, related to capitalized U.S. based research and experimental (“R&E”) costs, pursuant to the U.S. Internal Revenue Code Section 174, as amended by the 2017 U.S. Tax Cuts and Jobs Act.

At December 31, ~~2024~~2025, the company had international tax loss carryforwards of approximately $30147.39 million, of which $73.08 million have expiration dates ranging from ~~2025~~2026 to ~~2044~~2045, and the remaining $23144.31 million have no expiration date. Deferred tax assets related to these international tax loss carryforwards were $725.8 million with a corresponding valuation allowance of $~~2.6 million. At December 31, 2024, the company had a valuation allowance of $~~0.18 million ~~related to other deferred tax assets~~.

At December 31, ~~2024~~2025, the company had deferred tax assets of approximately $810.72 million with a corresponding valuation allowance of $67.4 million, related to U.S. state net operating loss carryforwards. Valuation allowances are needed when deferred tax assets may not be realized due to the uncertainty of the timing and the ability of the company to generate sufficient future taxable income in certain tax jurisdictions.

At December 31, ~~2024~~2025, the company had approximately $5.4 billion in undistributed foreign earnings which it deems to be indefinitely reinvested~~, and approximately $2~~.0 ~~billion in undistributed foreign earnings which it deems to be not permanently reinvested.~~ The company recognizes that if it reverses its indefinite reinvestment assertion on ~~$5.4 billion of~~ foreign earnings, it may be subject to additional foreign taxes and U.S. state income taxes. It is not practicable to determine the income tax liability that would be payable if these earnings were distributed and not reinvested indefinitely.

Income taxes paid, net of income taxes refunded, amounted to $230.5 million, $538.4 million, and $384.4 million in 2024, 2023, and 2022, respectively.

Index

Income taxes paid, net of income taxes refunded, for the year ended December 31 were:


(thousands)		2025
U.S. federal		$	12,354
U.S. state and local			5,287
			17,641

Foreign
Spain			16,184
Italy			15,581
Canada			14,937
United Kingdom			11,116
France			11,045
China			10,087
Other			98,609
Total Foreign			177,559
Total		$	195,200

Income taxes paid, net of income taxes refunded, amounted to $195.2 million, $230.5 million, and $538.4 million in 2025, 2024, and 2023, respectively.

9. Restructuring, Integration, and Other

The following table presents the components of the restructuring, integration, and other charges for the years ended December 31:


(thousands)	~~2024~~2025		~~2023~~2024		~~2022~~2023
Restructuring, integration and related costs
Operating Expense Efficiency Plan costs (a)	$	10106,~~279~~082	$	—10,279	$	—
Other plans		32,~~848~~075		83,~~877~~848		68,~~994~~877
Other expenses
Operating expense reduction costs not related to restructuring initiatives (b)		84(1,~~510~~418)		1984,~~077~~510		~~(370)~~19,077
Increases to environmental remediation liabilities (c)		756		23,336		2,544
Environmental remediation liabilities		4,463		756		23,336
Early lease termination costs		61,~~814~~546		296,~~400~~814		329,~~162~~400
Consulting costs (d)		25,306		—		—
Consulting costs (c)		—		25,306		—
Other charges		113,~~404~~371		311,~~226~~404		13,~~411~~226
	$	~~142~~116,~~917~~119	$	83142,~~916~~917	$	1383,~~741~~916

(a)	See details related to the Operating Expense Efficiency Plan discussed below.

(b) ~~These~~Primarily ~~costs are primarily~~ related to ~~the~~employee ~~termination~~severance ofand ~~personnel~~benefit costs. As of December 31, ~~2024~~2025, the accrued liabilities related to these costs totaled $615.67 million and substantially all accrued amounts are expected to be spent in cash within ~~one~~two ~~year~~years.

(c) ~~Refer~~Consulting costs are related to ~~Note~~operating 15expense ~~for~~reduction ~~further~~costs ~~discussion~~not ofrelated ~~environmental~~to ~~liabilities~~the restructuring initiative.

(d) Consulting costs are related to operating expense reduction costs not related to the restructuring initiative.

Operating Expense Efficiency Plan

Under the Plan, the company expects to incur pre-tax restructuring charges of approximately $185.0 million, consisting of approximately $110.0 million of employee severance and other personnel cash expenditures; approximately $50.0 million of non-cash asset impairments, accelerated depreciation and inventory write-downs related to the wind-down of certain business operations; and approximately $25.0 million of other related cash expenditures. As a result of the company’s philosophy of maximizing operating efficiencies through the centralization of certain functions, restructuring, integration, and related costs are included in the corporate line item for management and segment reporting as they are not attributable to the individual reportable segments.71

Index

Under the Plan, the company anticipates to incur pre-tax restructuring charges of approximately $200.0 million which is an increase of $15.0 million compared to the original estimate of $185.0 million previously disclosed in Item 2.05 Form 8K filed on October 31, 2024. While the expected cash charges are in line with original expectations, the increase is primarily related to non-cash write-offs due to changes in foreign currencies. The composition of these costs will continue to evolve over time the company currently expects to incur approximately $100.0 million of employee severance and other personnel cash expenditures; approximately $65.0 million of non-cash asset impairments, inventory write-downs and foreign currency translation adjustment write-offs related to the wind down of certain business operations; and approximately $35.0 million of other related cash expenditures. As a result of the company’s philosophy of maximizing operating efficiencies through the centralization of certain functions, restructuring, integration, and related costs are included in the corporate line item for management and segment reporting as they are not attributable to the individual reportable segments.

The following table presents the costs related to the Operating Expense Efficiency Plan:


(thousands)	Income Statement line		Year Ended December 31, ~~2024~~2025		~~Total~~Year ~~Cost~~Ended ~~Incurred~~December to31, ~~Date~~2024		Total Cost Incurred to Date
Employee severance and benefit costs		Restructuring, integration, and other	$	183,~~348~~658	$	1,348	$	85,006
Inventory write-downs		Cost of sales		50,344		50,344
Inventory (recoveries) write-downs		Cost of sales		(10,266)		50,344		40,078
Asset impairments		Restructuring, integration, and other		~~1,416~~-		1,416		1,416
Other costs (a)		Restructuring, integration, and other		722,~~515~~424		7,515		29,939
			$	6095,~~623~~816	$	60,623	$	156,439

(a) Other costs consist primarily of consulting and other professional fees, ~~and~~early lease ~~terminations~~termination fees, and foreign currency translation adjustment write-offs.

Index

The following table presents the activity in the restructuring and integration accruals related to the Operating Expense Efficiency Plan:


(thousands)	Employee ~~severance~~Severance and ~~benefit~~Benefit ~~costs~~Costs		Inventory ~~write-downs and asset impairments~~Recoveries		Other ~~costs~~Costs		Total
Balance at December 31, 2023	$	-	$	-	$	-	$	-
Restructuring related charges		1,348		51,760		7,515		60,623
Asset write-offs and other non-cash activity		-		(51,760)		(177)		(51,937)
Cash payments		(964)		-		(7,136)		(8,100)
Balance at December 31, 2024	$	384	$	-	$	202	$	586
Restructuring related charges		83,658		(10,266)		22,424		95,816
Cash (payments) receipts		(34,288)		10,266		(17,508)		(41,530)
Foreign currency translations		1,493		-		109		1,602
Balance at December 31, 2025	$	51,247	$	-	$	5,227	$	56,474

Substantially all amounts accrued at December 31, ~~2024~~2025 related to the Operating Expense Efficiency Plan are expected to be paid in cash within one year.

Index

10. Shareholders’ Equity

Accumulated Other Comprehensive Loss

The following table presents the changes in Accumulated other comprehensive loss, excluding noncontrolling interests:


			Gain		Gain
			(Loss) on Foreign		(Loss) on
	Foreign		Exchange		Interest Rate
	Currency		Contracts		Swaps
	Translation		Designated as		Designated as		~~Employee~~Post-retirement
	Adjustment and		Net Investment		Cash Flow		~~Benefit Plan~~Expense
(thousands)	Other, Net (a)		Hedges, Net (b)		Hedges, Net (b)		Items, Net		Total
Balance as of December 31, 2022	$	(422,711)	$	20,111	$	27,855	$	9,483	$	(365,262)
Balance as of December 31, 2023	$	(349,042)	$	12,159	$	30,638	$	8,206	$	(298,039)
Other comprehensive income (loss) before reclassifications (a)		72,949		(2,276)		585		(1,011)		70,247
Other comprehensive income (loss) before reclassifications		(222,489)		12,996		(685)		5,027		(205,151)
Amounts reclassified into income		720		(5,676)		2,198		(266)		(3,024)
Net change in accumulated other comprehensive income (loss) for the year ended December 31, 2023		73,669		(7,952)		2,783		(1,277)		67,223
Balance as of December 31, 2023		(349,042)		12,159		30,638		8,206		(298,039)
Other comprehensive income (loss) before reclassifications (a)		(222,489)		12,996		(685)		5,027		(205,151)
Amounts reclassified into income		(317)		(5,137)		(452)		(173)		(6,079)
Net change in accumulated other comprehensive income (loss) for the year ended December 31, 2024		(222,806)		7,859		(1,137)		4,854		(211,230)
Balance as of December 31, 2024	$	(571,848)	$	20,018	$	29,501	$	13,060	$	(509,269)
Other comprehensive income (loss) before reclassifications		394,450		(9,123)		—		(2,723)		382,604
Amounts reclassified into income		3,822		(2,605)		(1,706)		514		25
Net change in accumulated other comprehensive income (loss) for the year ended December 31, 2025		398,272		(11,728)		(1,706)		(2,209)		382,629
Balance as of December 31, 2025	$	(173,576)	$	8,290	$	27,795	$	10,851	$	(126,640)

(a) Foreign currency translation adjustment includes intra-entity foreign currency transactions that are of a long-term investment nature of $~~(52~~4.9)4 million and $21(52.29) million for ~~2024~~2025 and ~~2023~~2024, respectively.

73(b) For additional information related to net investment hedges and interest rate swaps, refer to Note 7 - “Financial Instruments Measured at Fair Value”.

~~Index~~

Common Stock Outstanding Activity

The following table sets forth the activity in the number of shares outstanding:


			Common
	Common	Treasury	Stock
(thousands)	Stock Issued	Stock	Outstanding
Common stock outstanding at December 31, 2021	125,424	57,358	68,066
Shares issued for stock-based compensation awards	—	(525)	525
Repurchases of common stock	—	9,342	(9,342)
Common stock outstanding at December 31, 2022	125,424	66,175	59,249
Shares issued for stock-based compensation awards	—	(653)	653
Repurchases of common stock	—	6,091	(6,091)
Retirement of treasury stock	(67,733)	(67,733)	—
Common stock outstanding at December 31, 2023	57,691	3,880	53,811
Shares issued for stock-based compensation awards	375	(75)	450
Repurchases of common stock	—	2,089	(2,089)
Retirement of treasury stock	(2,474)	(2,474)	—
Common stock outstanding at December 31, 2024	55,592	3,420	52,172
Shares issued for stock-based compensation awards	246	(54)	300
Repurchases of common stock	—	1,402	(1,402)
Common stock outstanding at December 31, 2025	55,838	4,768	51,070

~~During~~The ~~the year ended December 31, 2024, the~~ company retired 2.5 million shares of treasury stock with a cost of $228.8 million. ~~During~~in ~~the~~2024 ~~year~~and ~~ended December 31, 2023, the company retired~~ 67.7 million shares of treasury stock with a cost of $5.1 billion in 2023. The company has 2.0 million authorized shares of serial preferred stock with a par value of one dollar. There were no shares of serial preferred stock outstanding at December 31, ~~2024~~2025 and ~~2023~~2024.

~~Share-Repurchase Programs~~73

~~The following table shows the company’s share-repurchase programs as of December 31, 2024:~~Index

Share Repurchase Programs

The following table shows the company’s share repurchase programs as of December 31, 2025:


					Approximate
					Dollar Value of
	Dollar Value		Dollar Value of		Shares that May
	Approved for		Shares		Yet be Purchased
Share-Repurchase Details by Month of Board Approval (thousands)	Repurchase		Repurchased		Under the Program
Share Repurchase Details by Month of Board Approval (thousands)	Repurchase		Repurchased		Under the Program
September 2022	$	600,000	$	600,000	$	—
January 2023	$	1,000,000	$	827,130	$	172,870
January 2023		1,000,000		675,937		324,063
Total	$	1,600,000	$	1,275,937	$	324,063

The company repurchased 21.03 million shares and 62.10 million shares of common stock for $~~250~~149.09 million and $~~745~~250.90 million, in ~~2024~~2025 and ~~2023~~2024, respectively, under the share- repurchase program excluding excise taxes. During ~~2024~~2025, the company accrued $2.1.3 million of excise tax, which is recorded within “Treasury stock” on the company’s consolidated balance sheets and reduces the share- repurchase authorization, as the excise tax is a part of the overall cost of acquiring treasury shares. ~~As of December 31, 2024, approximately $324.1 million remained available for repurchase under the share-repurchase program.~~ The company’s share- repurchase program does not have an expiration date.

11. Net Income Per Share

Index

The following table presents the computation of net income per share on a basic and diluted basis for the years ended December 31:

Filing Compare · ARROW ELECTRONICS, INC.