Arrow Electronics President and CEO Sean Kerins believes the distributor has taken actions throughout 2024 that strengthen its position both in the global components and global enterprise solutions segments.
“In global components, we expanded our linecard and customer base, realigned the business for global consistency, and remained committed to our value-added service offerings that differentiate us,” said Kerins (pictured). “And in enterprise computing solutions, we’ve unified our go-to-market strategy in both regions, and we’re poised to benefit from the growing demand trends in hybrid cloud and AI-related solutions.”
“As a result, suppliers and channel partners are taking notice. We exited the year on a healthy trajectory and have growing confidence for the performance of this business in 2025,” he added.
Arrow’s full year sales fell from $25.42 billion to $19.98 billion year on year. Q4 revenues dipped 7% to $7.28 billion, a result that surpassed the high end of Arrow’s expectations.
Year on year global Q4 component sales declined 15% to $$4.81 billion in a market Kerins characterised as “challenging”
“On a global basis, despite continued softness across a number of verticals, we saw all three regions perform in line with or better than typical seasonal patterns,” commented Kerins.
“Our overall sales results were better in IP&E relative to our semiconductor business, reflecting the resilience of that segment throughout the cycle,” he added. “Most notably, we saw sequential improvement in our industrial markets, driven by gains in both Asia and the Americas and in addition, our value-added offerings and capabilities contributed to gross margin stability during the quarter.”
In the regions Q4 Americas sales shrank 10 per cent to $1.6 billion, and Q4 Asia sales dropped 10% to $1.95 billion. EMEA Q4 sales drooped 25% to $1.26 billion.
Explained Kerins: “In Asia, stability and transportation and growth in industrial were offset by softness in consumer, compute and communications segments. In the Americas, our gains in the industrial market were offset by softness throughout the automotive sector. Aerospace and defence along with the medical device markets continue to be more resilient. And finally, EMEA sequential revenue decline aligned with seasonal norms, potentially an encouraging trend given the region’s later passage through the cycle. And despite a challenging macro environment, we’re executing well in that region.”
“As for the market more broadly, we believe we’re in the later innings of the industry’s cyclical correction. The precise timing and pace of a broader market recovery are still difficult to predict, but we do continue to see incremental improvement in the key leading indicators for our business,” Kerins continued.
“Our book-to-bill ratio is now just shy of parity on a global basis with two of our three operating regions exiting Q4 at or near 1:1. Rescheduling and cancellation rates are fully normalised.”
Looking beyond the first quarter to the balance of the full year, Kerins was cautiously optimistic about an improving trajectory.
“We think the declining inventory levels will eventually support, improved visibility in a modest recovery. We expect to see incremental volume related to our supplier and customer-based expansion efforts, and we believe our actions to further penetrate the market for IP&E, along with growth and value-added services will also contribute to our momentum.”
Year on year global enterprise computing revenues advanced 12% in Q4 to $2.46 billion.
“We delivered year-over-year billings, gross profit, and operating income growth,” said Kerins. “This strong performance reflects our alignment to the higher growth demand trends across enterprise IT along with our improving execution in North America.”
Arrow’s Q1 2025 outlook forecasts consolidated sales of $5.98 billion to $6.58 billion, with global components sales of $4.35 billion to $4.75 billion, and global enterprise computing solutions sales of $1.63 billion to $1.83 billion.
