Core Insights - The company is navigating a challenging capital markets environment while completing significant development and regulatory work [3] - The approval of VMS version 4 provides a stronger foundation for commercialization and a clear path for scaling commercial adoption [3] - The strategic focus is shifting from product development to commercial adoption and market expansion, particularly in congenital heart defect centers [5] Business Strategy - The business plan has been reviewed and updated, optimizing marketing processes and expanding the commercial footprint [4] - There is tangible progress in structuring the sales process and strengthening partnerships in preparation for growth [4] - The company aims to transition VMS from research settings to routine clinical use [5]

Financial Performance - Arrow Electronics reported quarterly earnings of $2.41 per share, exceeding the Zacks Consensus Estimate of $2.28 per share, and showing a slight increase from $2.38 per share a year ago, representing an earnings surprise of +5.70% [1] - The company achieved revenues of $7.71 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.59% and increasing from $6.82 billion year-over-year [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.63 on revenues of $8.12 billion, and for the current fiscal year, it is $10.20 on revenues of $30.18 billion [7] - The estimate revisions trend for Arrow Electronics was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Electronics - Parts Distribution industry, to which Arrow Electronics belongs, is currently ranked in the top 9% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - Sales for Q3 2025 increased by $890 million year-over-year to $7.7 billion, representing a 13% increase compared to the prior year, or an 11% increase on a constant currency basis [16] - Non-GAAP gross margin for Q3 was 10.8%, down approximately 70 basis points year-over-year, primarily due to regional and customer mix in Global Components and a $21 million charge in ECS [16] - Non-GAAP diluted EPS for Q3 was $2.41, exceeding the guided range, with the charge lowering EPS by $0.31 [16] Business Line Data and Key Metrics Changes - Global Components sales increased by $610 million year-over-year to $5.6 billion, up 5% sequentially [20] - Global ECS sales rose by $300 million year-over-year to $2.2 billion, reflecting a 15% increase compared to the prior year [21] - ECS billings were $5.2 billion, up 14% year-over-year, with a healthy backlog growth exceeding 70% year-over-year [21] Market Data and Key Metrics Changes - Sales in the Americas were flat sequentially at $1.7 billion, driven by strength in industrial and transportation markets [19] - EMEA sales reached $1.4 billion, with resilience in industrial and aerospace markets despite macroeconomic challenges [19] - Asia sales grew sequentially by 12% to $2.4 billion, supported by strength in industrial, compute, and consumer markets [19] Company Strategy and Development Direction - The company is focused on delivering high-quality, innovative technology solutions and is positioned to emerge with improved momentum as the market gradually recovers [5][6] - The strategy includes a deliberate shift towards higher-margin value-added offerings and expanding the addressable market through strategic outsourcing arrangements [12][13] - The company aims to leverage strong trends in cloud and AI to drive growth in both supply chain services and ECS segments [27] Management's Comments on Operating Environment and Future Outlook - Management believes the current cyclical recovery is gradual, with leading indicators remaining robust across all markets [26] - The company anticipates that the West will catch up to the East in terms of recovery, with mass market customers expected to improve over time [26] - Future guidance for Q4 expects sales between $7.8 billion and $8.4 billion, indicating an 11% year-over-year increase at the midpoint [25] Other Important Information - The company has returned approximately $3.5 billion to shareholders via share repurchase since 2020 [14] - A $21 million charge was taken in Q3 due to lower profit expectations on multi-year contracts, which are part of the strategic outsourcing model [23][35] Q&A Session Summary Question: Clarification on the interim CEO role - The interim CEO confirmed he is not a candidate for the permanent position and a search committee is in place to find a successor [30] Question: Details on the $21 million charge - The charge relates to underperformance in strategic outsourcing contracts, which are expected to be margin-accretive in the long term despite current challenges [31][35] Question: ECS margins and growth expectations - The company expects strong performance in the ECS business for Q4, with margins anticipated to improve despite the recent charge [38] Question: Slower growth in specific verticals - Management indicated that while recovery is underway, some mass market customers are not recovering as quickly as larger OEMs, impacting profit margins [40] Question: Impact of new contracts on working capital - The company noted that while new contracts may require more working capital, they are expected to be margin-accretive, justifying the investment [46]

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Safe harbor This presentation 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. Such forward-looking statements i ...

Financial Performance - Total revenue for Q3 2025 increased by 13% year over year to $7.713 billion, with a constant currency increase of 11%[2] - Net income attributable to shareholders rose by 9% to $109 million, with diluted earnings per share of $2.09, an 11% increase from the previous year[3] - The company reported a 29% increase in net income for the first nine months of 2025, totaling $377 million[3] - Consolidated net income for the nine months ended September 27, 2025, was $376,148, compared to $293,619 for the same period in 2024, representing a year-over-year increase of 28.1%[31] - The company reported a net income attributable to shareholders of $109,193 for the three months ended September 27, 2025, compared to $125,731 in the same period of 2024[41] Sales Performance - Global components sales increased by 12% year over year to $5.556 billion, with a 19% increase in Asia-Pacific sales[4] - Global enterprise computing solutions (ECS) sales grew by 15% year over year to $2.156 billion, despite a 16% decrease in operating income due to underperforming contracts[5] - EMEA ECS sales increased by 34% year over year in Q3 2025, indicating strong regional performance[5] - Gross billings for Global Enterprise Computing Solutions (ECS) reached $5,189,972 for the quarter ended September 27, 2025, a 14% increase from $4,559,784 in the same quarter of 2024[33] - Global components sales for the nine months ended September 27, 2025, were $15,619,012, reflecting a 3% increase from $15,169,507 in the previous year[39] Future Projections - The company expects Q4 2025 GAAP sales between $7.80 billion and $8.40 billion, with global components sales projected between $5.10 billion and $5.50 billion[11] - Non-GAAP net income per diluted share for Q4 2025 is projected to be between $3.44 and $3.64, reflecting anticipated growth despite challenges[11] - Changes in foreign currencies are expected to positively impact Q4 2025 sales by approximately $226 million and earnings per share by $0.22 compared to Q4 2024[11] Operational Metrics - Operating income for the quarter was $179,007, reflecting an increase of 2.0% from $175,262 in the prior year[21] - Operating income for Global ECS in the nine months ended September 27, 2025, was $238,027,000, a decrease from $249,654,000 in the same period last year[50] - Global ECS operating income for the third quarter of 2025 included losses of $21.4 million related to underperformance of non-cancellable multi-year purchase obligations[51] Asset and Liability Overview - Total current assets increased to $21,138,302 as of September 27, 2025, from $18,401,413 at the end of 2024, marking a growth of 9.4%[25] - Total liabilities increased to $18,050,503 as of September 27, 2025, compared to $15,425,979 at the end of 2024, indicating a rise of 10.5%[25] - Total assets as of September 27, 2025, were $24,526,488, up from $21,757,707 at the end of 2024, reflecting an increase of 12.7%[25] Profitability Metrics - Gross profit for the nine months ended September 27, 2025, was $2,457,963, a decrease of 1.3% from $2,489,098 for the same period in 2024[21] - Global components gross profit for Q3 2025 was $609.1 million, an increase from $564.5 million in Q3 2024, representing a growth of 7.5%[54] - Global ECS gross profit for Q3 2025 was reported at $226.2 million, up from $220.4 million in Q3 2024, marking a growth of 2.9%[54] Cash Flow Analysis - The company reported a net cash used for operating activities of $(281,684) for the quarter, compared to $80,558 provided in the same quarter last year[28] - Net cash used for operating activities was $(135,901) for the nine months ended September 27, 2025, a significant decrease from $803,949 in the same period of 2024[31] - Cash and cash equivalents at the end of the period were $213,612, a slight increase from $188,807 at the end of 2024[25]

Core Insights - Arrow Electronics and EMASS have announced a collaboration to accelerate the deployment of ultra-low-power edge AI solutions across various sectors, utilizing EMASS's ECS-DoT System on Chip (SoC) [1][2] - The ECS-DoT SoC enables real-time, always-on, milliwatt-scale intelligence at the edge, reducing reliance on cloud computing and enhancing performance for on-device AI applications [2][3] - The partnership aims to redefine edge AI capabilities, allowing for innovative applications that were previously unfeasible due to power constraints [3][5] Company Collaboration - Arrow and EMASS are jointly developing enhanced SDKs, developer tools, and reference designs to expedite the market introduction of ultra-low-power AI solutions [4] - The collaboration leverages engineering resources from the NTU-Arrow Invent Lab to foster innovation and facilitate faster prototyping of edge AI applications [4][5] - Both companies will showcase their joint evaluation boards and reference designs at the Singapore Week of Innovation and Technology (SWITCH) from October 29-31, 2025 [6] Market Positioning - The partnership positions EMASS to lead the edge AI ecosystem and accelerate the global adoption of real-time, on-device intelligence [3] - Arrow's global reach, technical expertise, and distribution network, combined with EMASS's relationships with OEMs and system integrators, create a unique opportunity to expand market reach in the AI SoC space [5][8] - Arrow Electronics reported global sales of $28 billion in 2024, indicating a strong market presence that can support the growth of edge AI technologies [8]

Investment Rating - The industry investment rating is "Outperform the Market" (maintained) [3][36] Core Viewpoints - The report highlights that artificial intelligence (AI) is driving a semiconductor supercycle, with significant investments and collaborations in the sector, such as Anthropic's partnership with Google, which includes a deal for up to one million custom TPU chips [3] - Major memory manufacturers like Samsung and SK Hynix are expected to raise prices of DRAM and NAND storage products by up to 30% in response to the surge in AI-driven demand [3] - Amphenol reported a 53.35% year-on-year increase in revenue for Q3 2025, driven by the growing demand for data center solutions [3] - The report anticipates a substantial increase in overall computing power by 2035, predicting a growth of up to 100,000 times, emphasizing the transformative potential of general artificial intelligence [3] Summary by Sections 1. Market Review - The electronic industry saw a weekly increase of 8.49% from October 20 to October 24, with the communication sector leading at 11.55% [6] - The Philadelphia Semiconductor Index rose from 6,885.03 points to 6,976.94 points during the same period, indicating a positive trend since April 2025 [11] 2. Industry High-Frequency Data Tracking 2.1 Panel Prices - TV panel prices are expected to stabilize due to healthy inventory levels, with no significant changes anticipated for various sizes [17] 2.2 Memory Prices - Prices for DDR5 and DDR4 memory chips have shown an upward trend, with DDR5 increasing from $10.457 to $12.615 and DDR4 from $24.333 to $24.721 between October 20 and October 24 [21]

Core Insights - Arrow Electronics will host a conference call to discuss its third-quarter 2025 financial results on October 30, 2025, at 4:30 p.m. ET [1] - The company reported global sales of $28 billion for 2024, indicating a strong market presence [2][8] - Arrow Electronics has a net income of $392 million for 2024, showcasing its profitability [3][8] Company Overview - Arrow Electronics is headquartered in Centennial, Colorado, and employs approximately 21,500 people [3][8] - The company sources and engineers technology solutions for leading manufacturers and service providers across various industries [2] - The CEO of Arrow Electronics is Sean Kerins, who has been actively communicating the company's financial performance [5][7] Financial Performance - Arrow Electronics has consistently exceeded its revenue and earnings per share guidance in recent quarters, indicating strong operational performance [5][7] - The company has reported positive momentum in the EMEA region, contributing significantly to its overall performance [7]

Core Viewpoint - Arrow Electronics has been removed from the U.S. Entity List by the Bureau of Industry and Security (BIS), which is expected to impact the semiconductor distribution market positively, particularly for Texas Instruments (TI) [5][10]. Group 1: Events Leading to Removal - On October 8, 2023, BIS placed Arrow Electronics' subsidiaries in mainland China and Hong Kong on the Entity List due to their involvement in procuring U.S. electronic components for organizations in Iran [9]. - The removal notification from BIS indicates that several Arrow Electronics subsidiaries, including Arrow China Electronics Trading Co., Ltd., have been cleared from the Entity List [6][8]. - A temporary authorization was granted by BIS, allowing Arrow Electronics and its partners to maintain trade of specific controlled items until February 14, 2026, or until the official removal notice is published [7]. Group 2: Market Impact - The removal of Arrow Electronics from the Entity List has led to increased demand for TI products, as Arrow was previously a significant distributor for TI [10]. - Following the removal announcement, there was a notable increase in the prices of TI components, although some market participants reported mixed feelings about price changes [11]. - The market has shown signs of becoming more cautious, with customers adopting a wait-and-see approach after the initial surge in demand [11].