Arrow Electronics Q1 Earnings Beat Estimates, Revenues Fall Y/Y

Core Viewpoint - Arrow Electronics reported adjusted earnings of $1.80 per share for Q1 2025, exceeding estimates but showing a year-over-year decline of 25.3% [1] - Revenues for the same period were $6.81 billion, a 1.6% decline year-over-year, yet surpassing estimates by 7.93% [1] Revenue Performance - Global Component sales decreased by 8% year-over-year to $4.78 billion, with a 7% decline at constant currency [2] - Region-wise, EMEA revenues fell by 16.8%, Americas by 1.7%, and Asia-Pacific by 3.1% at constant currency [2] - Global Enterprise Computing Solutions (ECS) revenues increased by 17.5% year-over-year to $2.04 billion, with a 19.4% increase at constant currency [3] - ECS revenues from America and EMEA grew by 1% and 40.1% respectively at constant currency [3] Operating Performance - Consolidated non-GAAP gross margin was 11.3%, down 120 basis points year-over-year [4] - Global Components segment gross margin was 11.6%, down 110 basis points, while Global ECS margin contracted by 150 basis points to 10.8% [4] - Non-GAAP operating income for Global Components was $173.4 million (down 28.5% year-over-year) and for Global ECS was $78.2 million (up 7.9% year-over-year) [5] - Overall non-GAAP operating income decreased by 28.7% year-over-year to $178.8 million, with a non-GAAP operating margin of 2.6% [5] Balance Sheet & Cash Flow - As of March 29, 2025, cash and cash equivalents were $231.9 million, up from $188.8 million at the end of 2024 [6] - Long-term debt decreased to $2.31 billion from $2.77 billion [6] - Cash flow from operations was $351.7 million, compared to $326.5 million in the previous quarter [6] - The company repurchased $50 million of shares during the quarter [6] Guidance - For Q2 2025, sales are projected between $6.70 billion and $7.30 billion [7] - Global Components sales are expected to be between $4.80 billion and $5.20 billion, while Global ECS sales are anticipated between $1.90 billion and $2.10 billion [7] - Interest expenses are expected to be $60 million, with non-GAAP earnings projected at $1.90-$2.10 per share [8]