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Arrow Electronics’ $9.5B Quarter: Can AI Demand Offset Margin Risks?

Arrow Electronics reported strong financial results for the first quarter of fiscal 2026, highlighted by a 39% year-over-year increase in total revenue to $9.5 billion and a 160 basis point expansion in operating margin to 4.2%. Non-GAAP diluted earnings per share rose significantly by 190% to $5.22, driven by volume growth, operational leverage, and favorable business mix, including increased contributions from higher-margin value-added services such as supply chain management. This performance exceeded guidance expectations and demonstrated improvements across both global components and enterprise computing solutions (ECS) segments. Global components sales increased 13% sequentially to $6.6 billion, with operating margins improving by 180 basis points to 5.5%, reflecting broad-based recovery in diverse industry verticals including industrial, transportation, aerospace, and defense. Book-to-bill ratios were healthy across all regions, and backlog improved into the third and fourth quarters, supporting the sustainability of demand.