ARROW ELECTRONICS, INC. (ARW) Business

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. 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, computing, networking and 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 segment and provides enterprise computing solutions to VARs and MSPs through its global ECS segment. The company maintains over 140 sales facilities and 39 distribution and value-added centers, serving over 85 countries. In 2025, approximately 70% of the company’s sales were from global components, and approximately 30% of the company’s sales were from global ECS. Refer to Note 16 - “Segment and Geographic Information” within Item 8 for financial information about the company’s reportable segments and geographic operations.

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 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.

Global Components

Global components 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 supply chain services, engineering and design services, and integration 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.

Supply chain service offerings include procurement, logistics, warehousing, financial management, and insights from data analytics. The company provides logistics support, as well as expertise in processes and systems to improve customer’s supply chain execution, visibility, resilience, and optimization. The company’s supply chain services are intended to serve customers’ direct supply chain and provide fee-based revenue opportunities, targeting the most complex electronics supply chains in the 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

4

Table of Contents

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

Within the global components segment for 2025, sales of approximately 72% 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 7% consist of computing and memory; and approximately 5% consist of other products and services.

Global ECS

Global ECS 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 value-added solutions to help VARs and MSPs tailor complex IT solutions to fit the needs of 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.

Additionally, global ECS partners with certain suppliers to manage part or all of their go-to-market activities through strategic outsourcing agreements, which consist of certain non-cancellable multi-year purchase obligations. Through a contractual fee model, global ECS enables suppliers to outsource specific selling and marketing activities, allowing 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 growth in their software solutions.

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 9% consist of other products and services.

5

Table of Contents

Customers and Suppliers

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 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.

No single supplier accounted for more than 8% of the company’s consolidated sales in 2025. The company believes that many of the products it sells are available from other sources at competitive prices. However, certain parts of the company’s business, such as global ECS, 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.

Distributor 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 region 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.

6

Table of Contents

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 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.

​

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 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:

​

​

7

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 Stewardship and Impact Report, and website, is not deemed part of, or incorporated by reference into, this Annual Report on Form 10‑K.

Available Information

Arrow’s website is 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 any 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. The company also uses the Investor Relations website as a tool to disclose important information about the company and comply with its disclosure obligations under Regulation Fair Disclosure. The information contained on, or that may be accessed through, Arrow’s websites is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document the company files with the SEC, and all references to the company’s websites are intended to be inactive textual references only. The SEC’s website (www.sec.gov) contains reports, proxy and information statements, and other information regarding Arrow and other public companies.

8

Table of Contents

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 10, 2026:

​

​

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

William 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.

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.

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.

​