Segment and Geographic Information

12 Months Ended

Dec. 31, 2024

Segment and Geographic Information

Segment and Geographic Information

16. Segment and Geographic Information

The company is a global provider of products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. The company organizes its operations by geographic region and global business lines. The company’s operating segments reflect the way the chief executive officer, who is the CODM as defined in ASC 280, Segment Reporting, reviews financial information, makes operating decisions and assesses business performance. In identifying operating segments, the company also considers its annual budgeting and forecasting process, management reporting structure, the basis on which management compensation is determined, information presented to the Board of Directors and similarities such as the nature of products, the level of shared products, technology and other resources, and customer base. The company concluded that identifying operating segments by major geographic region within each of the company’s major businesses was consistent with the objectives of ASC 280 and it has aggregated geographic operating segments within the global components reportable segment and the global ECS reportable segment based on similar characteristics including long-term financial performance, the nature of services provided, internal process for delivering those services, and types of customers.

The company’s global components reportable segment is enabled by a comprehensive range of value-added capabilities and services, markets, and distributes electronic components to OEMs and EMS providers. The company’s global ECS reportable segment is a leading value-added provider of comprehensive computing solutions and services. The global ECS portfolio of computing solutions includes datacenter, cloud, security, and analytics solutions. Global ECS brings broad market access, extensive supplier relationships, scale, and resources to help its VARs and MSPs meet the needs of their end-users.

The CODM evaluates the performance of both reportable segments based on operating income. Sales, net gross profit, and operating expenses are also monitored closely. This information is used to monitor operating margins, measure segment profitability, allocate resources, and make budgeting and forecasting decisions about the reportable segments. The CODM also uses these measures to monitor trends in year over year performance comparisons, sequential quarter performance comparisons, and to compare actual results to forecasts. More disaggregated information about operating expense is generally only reviewed by the CODM on a consolidated basis.

As a result of the company’s philosophy of maximizing operating efficiencies through the centralization of certain functions, operating income for the reportable segments excludes unallocated corporate overhead costs, depreciation on corporate fixed assets, and restructuring, integration, and other costs, as they are not attributable to the individual reportable segments and are included in the corporate line item.

Sales, by reportable segment by geographic area, are as follows:

(thousands)	2024		2023		2022
Sales:
Components:
Americas	$	6,411,701	$	7,954,713	$	9,592,547
EMEA		5,648,107		8,074,894		7,627,974
Asia/Pacific		7,923,459		9,390,292		11,567,482
Global components	$	19,983,267	$	25,419,899	$	28,788,003
ECS:
Americas	$	4,067,160	$	4,160,298	$	4,847,027
EMEA		3,872,897		3,526,923		3,489,392
Global ECS	$	7,940,057	$	7,687,221	$	8,336,419
Consolidated	$	27,923,324	$	33,107,120	$	37,124,422

Sales by country are as follows:

(thousands)	2024		2023		2022
Sales:
China and Hong Kong	$	4,033,744	$	4,858,871	$	6,339,883
Germany		3,007,517		4,341,837		4,715,806
Other		11,114,613		12,737,852		12,901,063
Total foreign	$	18,155,874	$	21,938,560	$	23,956,752
United States		9,767,450		11,168,560		13,167,670
Total	$	27,923,324	$	33,107,120	$	37,124,422

The company operates in more than 85 countries worldwide. Sales to unaffiliated customers are based on the company location that maintains the customer relationship and transacts the external sale.

Results of operations by reportable segment are as follows for the years ended December 31:

	2024
(thousands)	Global Components			Global ECS			Corporate		Consolidated
Sales	$	19,983,267		$	7,940,057		$	-	$	27,923,324
Cost of sales		17,650,909			6,980,007			-		24,630,916
Gross profit		2,332,358			960,050			-		3,292,408
Gross profit margin		11.7	%		12.1	%		-		11.8	%
Operating expenses (a)		1,591,085			549,975			382,791		2,523,851
Operating income (loss) (b) (c) (d)	$	741,273		$	410,075		$	(382,791)	$	768,557
Operating income margin		3.7	%		5.2	%		-		2.8	%
	2023
(thousands)	Global Components			Global ECS			Corporate		Consolidated
Sales	$	25,419,899		$	7,687,221		$	-	$	33,107,120
Cost of sales		22,220,779			6,737,323			-		28,958,102
Gross profit		3,199,120			949,898			-		4,149,018
Gross profit margin		12.6	%		12.4	%		-		12.5	%
Operating expenses (a)		1,739,954			582,894			355,006		2,677,854
Operating income (loss) (b) (c) (d)	$	1,459,166		$	367,004		$	(355,006)	$	1,471,164
Operating income margin		5.7	%		4.8	%		-		4.4	%

	2022
(thousands)	Global Components			Global ECS			Corporate		Consolidated
Sales	$	28,788,003		$	8,336,419		$	-	$	37,124,422
Cost of sales		24,883,076			7,404,721			-		32,287,797
Gross profit		3,904,927			931,698			-		4,836,625
Gross profit margin		13.6	%		11.2	%		-		13.0	%
Operating expenses (a)		1,943,802			523,179			301,150		2,768,131
Operating income (loss) (d)	$	1,961,125		$	408,519		$	(301,150)	$	2,068,494
Operating income margin		6.8	%		4.9	%		-		5.6	%

(a) Segment operating expenses include employee related expenses, depreciation and amortization, allowance for credit losses, and other segment expenses.

(b) Global components operating income includes charges of $60.6 million in inventory write downs related to the wind down of businesses in 2024. Global components operating income includes $62.2 million in settlement benefits recorded as a reduction to operating expense for 2023. Refer to Note 15.

(c) In 2023, global ECS operating income includes charges of $25.4 million to increase the allowance for credit losses related to one customer. During 2024, global ECS operating income includes a reversal of charges of $20.0 million for aged receivables that were collected, related to the same customer.

(d) Corporate operating loss for the years 2024, 2023, and 2022 includes restructuring, integration, and other charges of $142.9 million, $83.9 million, and $13.7 million, respectively. Refer to Note 9.

Total assets, by reportable segment, at December 31 are as follows:

(thousands)	2024		2023
Total assets:
Global components	$	14,765,931	$	15,129,190
Global ECS		6,518,723		6,051,459
Corporate		473,053		545,519
Consolidated	$	21,757,707	$	21,726,168

Long-lived assets by country are as follows:

(thousands)	2024		2023
Long-lived assets:
Netherlands	$	78,120	$	89,199
France		86,268		87,861
Other		223,903		258,264
Total foreign	$	388,291	$	435,324
United States		332,098		364,940
Total	$	720,389	$	800,264