Accounts Receivable

6 Months Ended

Jul. 04, 2026

Accounts Receivable

Accounts Receivable

Note E – Accounts Receivable

Accounts receivable, net, consists of the following:

	July 4,		December 31,
(thousands)	2026		2025
Accounts receivable	$	28,148,707	$	19,882,783
Allowance for credit losses		(139,972)		(144,117)
Accounts receivable, net	$	28,008,735	$	19,738,666

Accounts receivable includes balances related to inventory purchased by the company on the request of and behalf of its customers as part of its Global Components supply chain services offerings. In these transactions, receivables are disproportionate to the fees the company recognizes as revenue for its services. The company generally carries corresponding accounts payable on its balance sheet with some differences due to timing of settlement.

The following table is a rollforward for the company’s allowance for credit losses:

	Six Months Ended
	July 4,		June 28,
(thousands)	2026		2025
Balance at beginning of period	$	144,117	$	116,445
Charged to income		13,626		8,737
Translation adjustments		(932)		4,362
Write-offs		(16,839)		(7,406)
Balance at end of period	$	139,972	$	122,138

The company monitors the current credit condition of its customers in estimating the expected credit losses and has not experienced significant changes in customers’ payment trends or significant deterioration in customers’ credit risk as of July 4, 2026.

EMEA Asset Securitization

The company has an EMEA asset securitization program under which it continuously sells its interest in designated pools of trade accounts receivable of certain of its subsidiaries in the EMEA region at a discount to a bankruptcy-remote special purpose entity, Arrow EMEA Funding Corp B.V., which in turn sells certain of the receivables to unaffiliated financial institutions and conduits administered by such unaffiliated financial institutions (collectively, “Unaffiliated Financial Institutions”) on a monthly basis. The company may sell up to €600.0 million under the EMEA asset securitization program, which matures in December 2027, subject to extension in accordance with its terms. The company is deemed the primary beneficiary of Arrow EMEA Funding Corp B.V. as the company has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive the benefits that could potentially be significant to the entity from the transfer of the trade accounts receivable into the special purpose entity. Accordingly, Arrow EMEA Funding Corp B.V. is included in the company’s consolidated financial statements.

Sales of accounts receivable to Unaffiliated Financial Institutions under the EMEA asset securitization program:

	Quarter Ended				Six Months Ended
	July 4,		June 28,		July 4,		June 28,
(thousands)	2026		2025		2026		2025
EMEA asset securitization, sales of accounts receivable	$	584,090	$	416,150	$	1,055,569	$	788,791

Receivables sold to Unaffiliated Financial Institutions under the program are excluded from “Accounts receivable, net” on the company’s consolidated balance sheets, and cash receipts are reflected in the “Cash flows from operating activities” section of the consolidated statements of cash flows. The purchase price is paid in cash when the receivables are sold. Certain unsold receivables held by Arrow EMEA Funding Corp B.V. are pledged as collateral to Unaffiliated Financial Institutions. These unsold receivables are included in “Accounts receivable, net” on the company’s consolidated balance sheets.

The company continues servicing the receivables that were sold and in exchange receives a servicing fee under the program. The company does not record a servicing asset or liability on the company’s consolidated balance sheets as the company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities.

Other amounts related to the EMEA asset securitization program are set forth below:

	July 4,		December 31,
(thousands)	2026		2025
Receivables sold to Unaffiliated Financial Institutions that were uncollected	$	465,091	$	379,017
Collateralized accounts receivable held by Arrow EMEA Funding Corp B.V.		803,515		591,304

Any accounts receivable held by Arrow EMEA Funding Corp B.V. would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings if there are outstanding balances under the EMEA asset securitization program. The assets of Arrow EMEA Funding Corp B.V. cannot be used by the company for general corporate purposes. Additionally, the financial obligations of Arrow EMEA Funding Corp B.V. to the Unaffiliated Financial Institutions under the program are limited to the assets it owns and there is no recourse to Arrow Electronics, Inc. for receivables that are uncollectible as a result of an account debtor’s insolvency or inability to pay.

The EMEA asset securitization program includes terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. As of July 4, 2026, the company was in compliance with all such financial covenants.

Factoring

In the normal course of business, certain of the company’s subsidiaries have factoring agreements to sell, with limited or no recourse, selected trade accounts receivable to financial institutions and accounts for these transactions as sales of the related receivables. The receivables are excluded from “Accounts receivable, net” on the company’s consolidated balance sheets and cash receipts are reflected in the “Cash flows from operating activities” section on the consolidated statements of cash flows. The company typically does not retain financial or legal interests in these receivables. Factoring fees for the sales of accounts receivables are included in “Interest and other financing expense, net” in the consolidated statements of operations. The company continues servicing the receivables that were sold.

Sales of trade accounts receivable under the company’s factoring programs:

	Quarter Ended				Six Months Ended
	July 4,		June 28,		July 4,		June 28,
(thousands)	2026		2025		2026		2025
Sales of accounts receivable under the factoring programs	$	259,713	$	389,614	$	490,343	$	552,365

Other amounts under the company’s factoring programs:

	July 4,			December 31,
(thousands)	2026		2025
Receivables sold under the factoring programs that were uncollected	$	232,915	$	279,775