Arrow Electronics, Inc.

Good day and welcome to the Arrow Electronics first quarter 2026 earnings call. Today's conference call is being recorded. And at this time, I would like to turn the conference over to Michael Nelson, Arrow Vice President and Investor Relations. Please go ahead.

Thank you, Operator. I'd like to welcome everyone to the Arrow Electronics first quarter 2026 earnings conference call. Joining me on the call today is our Interim President and Chief Executive Officer, Bill Austin, our Chief Financial Officer, Raj Agrawal, our President of Global Components, Rick Marano, and our President of Global Enterprise Computing Solutions, Eric Nowak. During this call, we'll make forward-looking statements, including statements about our business outlook, strategies, plans, and projections regarding future financial results, which are based on our predictions and expectations as of today. Our actual results could differ materially due to a number of risks and uncertainties, including due to the risk factors and other factors described in this quarter's associated earnings release and our most recent annual report on Form 10-K and other filings with the SEC. We undertake no obligation to update publicly or revise any of the forward-looking statements as a result of new information or future events. As a reminder, some of the figures we will discuss on today's call are non-GAAP measures, which are not intended to be a substitute for our GAAP results. We've reconciled these non-GAAP measures to the most directly comparable GAAP financial measures in this quarter's associated earnings release. You can access our earnings release at investor.arrow.com along with a replay of this call. We've also posted a slide presentation on this website to accompany our prepared remarks and encourage you to reference these slides during this webcast. Following our prepared remarks today, Bill, Raj, Rick, and Eric will be available to take your questions. On that hand, the call over to our interim president and CEO, Bill Austin.

Thank you, Michael, and good morning, everyone. We appreciate you joining us for a discussion of our first quarter 2026 results. Before turning to our results, I want to extend my sincere thanks to our colleagues around the world whose dedication and hard work continue to support our suppliers and customers and drive Arrow's success. Starting on slide three, We started 2026 with very strong results in the first quarter. Total revenue of $9.5 billion increased 39% year-over-year, while operating margin expanded 160 basis points year-over-year to 4.2%. The strong revenue growth combined with a significant margin expansion resulted in non-GAAP EPS of $5.22, representing an increase of 190% year-over-year. Our strong results were attributable to several items, including, one, unit volume growth coupled with good execution, two, leverage in the P&L, three, the mix of value-added services, and good execution in the core that benefited from the market that accelerated in the second half of the first quarter. We saw strong performance in both global components and ECS. In global components, The recovery is broad-based across geographies, industry verticals, and customer mix, driven by customer demand. In ECS, we continue to benefit from strong secular demand trends in AI-driven workloads, and we have generated year-over-year growth in billings, net sales, gross profit, and operating income. Operating momentum across our business continues to build as our fundamentals strengthen. Raj will provide more detail on our financial performance, but first I would like to highlight several key themes from the quarter that reinforce this momentum. First, our leading indicators continue to improve. Book-to-bill ratios improved further and we currently are at healthy levels sitting well above parity in all three operating regions. Additionally, backlog continues to build into the third and fourth quarters, providing us with confidence that the momentum is sustainable. We have also seen lead times extend, but they remain significantly lower than a pervasive shortage environment. Second, the market recovery is unit volume driven, backed by customer demand. Third, the recovery is broad based, as we are seeing backlog from our mass market customers build quarter over quarter. Fourth, value added services and particularly supply chain services saw a meaningful contribution to overall operating income. Finally, we are achieving more profitable growth driven by better regional and customer mix, more accretion from value-added services, and importantly, our cost structure is more efficient, demonstrating the positive operating leverage we have built into our model. We have been disciplined with our cost structure which is now benefiting from operational momentum in the business and generating significant incremental margins. Turning to slide four, I would like to remind you of the four key pillars of our investment thesis, the reasons why Arrow is a unique and compelling investment opportunity. First, Arrow holds a leading position in large and growing markets, maintaining a central role across our six core markets of industrial, transportation, aerospace and defense, medical, consumer electronics, and data center, each supported by durable, long-term, secular tailwinds. Second, Arrow has differentiated capabilities driving profitable growth. We have made a shift toward an increased mix of higher margin value-added services, including supply chain services, engineering and design services, and integration services. Our distribution capabilities around SEMI, IP&E and demand creation remain a fundamental part of what we do, and our value-added services are a natural extension for Arrow. Third, Arrow has a diversified business model, which provides financial flexibility. This continues to be a key differentiator for us, providing balance, resilience, and consistent free cash flow generation through cycles. Our global components and ECS segments complement each other well. allowing us to participate across the full technology lifecycle while providing resilience on both the income statement and balance sheet, supporting long-term value creation. And fourth, our focused capital allocation strategy is designed to maximize shareholder value through reinvesting in organic growth, pursuing disciplined M&A, and returning excess capital to shareholders. We remain focused on deploying capital where we anticipate the highest long-term risk-adjusted returns while preserving an investment-grade credit profile and the flexibility to continue investing in the business. Turning to slide five, we are very pleased with the results we delivered in the first quarter, which positions us well for the remainder of the year. We remain focused on executing against our strategy with discipline, and are encouraged by the accelerated recovery we are experiencing across geographies and verticals. The momentum we are building illustrates the beginning of a recovery cycle, and the customer order patterns are currently reflecting a rational market backdrop. Our priority continues to be driving profitable growth through improved execution as we manage mix, costs, and working capital carefully and align investment levels with the pace of demand. At our core lies traditional distribution. It's the engine that has gotten us to where we are today. It's a big engine which allows us the opportunity to get beyond the traditional business and expand margins via supply chain services, engineering and design services, and integration services. Just to be clear, we will always excel at our traditional distribution, and we will continue to expand our higher margin value-added offerings deepening customer relationships, and improving the quality and durability of our earnings over time. We will also continue to be disciplined with our cost structure, which we expect will drive additional operating leverage in the business. I believe Arrow is well positioned for the long term, supported by a diversified business model, improving profitability, and a focused capital allocation strategy that enables us to invest through market cycles and drive sustainable shareholder value. With that, I'll turn it over to Raj to dive deeper into our financial performance.