--- title: "Arrow Electronics posted record $10.7 billion revenue and used $441 million of cash" description: "Arrow printed $10.7 billion of record revenue and $6.22 of adjusted EPS, clearing a consensus that already sat above its own guidance, while operating cash flow ran negative $441 million and inventories kept building. The record is real; the cash behind it is the open question." publisher: "The Inference" section: "Chips" published: 2026-11-05T14:11:42.529Z modified: 2026-11-05T14:11:42.529Z canonical: https://theinference.org/article/arrow-electronics-posted-record-10-7-billion-revenue-and-used-441-million-of-cash language: en keywords: "Earnings, Semiconductors, Cash Flow, Guidance, Supply Chain" --- # Arrow Electronics posted record $10.7 billion revenue and used $441 million of cash > Arrow printed $10.7 billion of record revenue and $6.22 of adjusted EPS, clearing a consensus that already sat above its own guidance, while operating cash flow ran negative $441 million and inventories kept building. The record is real; the cash behind it is the open question. [Arrow Electronics](https://theinference.org/markets/companies/arrow-electronics) reported [record quarterly revenue of $10.7 billion and record earnings](https://www.businesswire.com/news/home/20261105629501/en) this morning, and both cleared not only the guidance the company set in August but the analyst consensus, which itself sat above that guidance [1][3]. The earnings are real. The cash is not in them: [operations used $441 million over the same three months](https://www.sec.gov/Archives/edgar/data/7536/000110465926123063/arw-20261003x10q.htm) [2]. That gap is the whole print, and it is where the next surprise, in either direction, will show first. ## The beat cleared the highest bar this cycle has set Consensus going in was already the toughest bar of the run: its EPS estimate sat above the top of Arrow's own range [3]. Arrow beat it anyway, and by enough to reset the bar. Global Components did the lifting, with sales of $7.9 billion [2]. Its segment operating income, at $413 million, more than doubled [2]. ECS turned as well, earning $98 million of operating income, up by more than half [2]. Interim chief executive Bill Austen said book-to-bill ratios remain well above parity and the backlog is still growing [1]. ## The cash line ran the other way Nine-month operating cash flow stands at $577 million [4]. That is less than the first half produced on its own, so the third quarter consumed cash [4]. [As we found on November 2](https://theinference.org/article/two-downgrades-in-two-days-nova-s-record-ai-ramp-beats-on-revenue-loses-on-cash), the first half's $1.02 billion was settlement timing, not earnings, and this quarter answers the question we posed there: it did not hold [2]. *Chart: **Arrow used cash in the quarter it set its revenue record** Column chart of Arrow Electronics' quarterly net cash from operating activities from Q1 2024 to Q3 2026, swinging from positive to negative, with Q3 2026 highlighted at negative $441 million in the quarter that set the revenue record.* *Net cash used for or provided by operating activities by fiscal quarter, USD billions. Q1 2024 through Q2 2026 from Arrow's SEC filings (company series); Q3 2026 from the earnings release filed November 5, 2026. [2][5]* Inventories ended the quarter at $7.3 billion, up from $5.1 billion at the start of the year [4]. The company attributes the outflow to working capital invested to support customer demand [2]. In a shortage, buying ahead of demand is the growth strategy. It is also a loan against the day supply returns. ## ECS stopped bleeding at the gross line, then booked the cleanup Losses on the non-cancellable supplier obligations ran to $3.8 million in the quarter, against $52.1 million for the first nine months [4]. ECS gross margin, at 10.1%, still sits below last year's 10.5% [4]. The cleanup now has a price: Arrow amended one underperforming contract and terminated another, and the termination carries a $41.2 million charge into the fourth quarter [4]. Segment operating income rose by more than half anyway [2]. The bleed slowed; it has not stopped. ## Q4 guidance prices the scarcity to continue Arrow [guided the December quarter to sales of $11.55 to $12.15 billion and non-GAAP EPS of $7.00 to $7.20](https://www.sec.gov/Archives/edgar/data/7536/000000753626000150/arw-ex99d1.htm) [2]. The filing names the engine: AI infrastructure spending is driving constrained inventory, price inflation and extended lead times [4]. *Chart: **Guidance asks the market for a fifth straight record quarter** Column chart comparing Arrow Electronics' guided fourth quarter of 2026, $11.55 to $12.15 billion of sales shown as a range against a midpoint of $11.85 billion, with each quarter's actual sales from Q4 2025 through Q3 2026 and the third quarter's record of $10.7 billion highlighted.* *Net sales by quarter, actuals in USD billions from Arrow's SEC filings (company series), with the December quarter shown at the $11.55 to $12.15 billion range guided on November 5, 2026 (drawn at the midpoint, the guided band shown above it). The $41.2 million ECS contract termination charge falls in the guided quarter. [2][5]* The same scarcity that fills the income statement drains the balance sheet, and Arrow has $14.3 billion of purchase obligations falling due before the year ends [4]. The market has sold three of Arrow's last four beats [3], so a beat alone settles nothing, and a fourth does not either. This record was financed on the balance sheet, which is how shortages finance records. When supply returns and price-led revenue fades, cash flow turns before earnings do. Watch there. ## Takeaway Arrow's record quarter was financed on the balance sheet: negative $441M of operating cash flow and $7.3B of inventory, with $14.3B of purchase obligations due before year end and Q4 guidance of $7.00 to $7.20. ## Sources 1. [Business Wire, Arrow Electronics Reports Record Quarterly Revenue and EPS, 5 November 2026](https://www.businesswire.com/news/home/20261105629501/en) 2. [Arrow Electronics, Exhibit 99.1 (Q3 2026 earnings release) to Form 8-K, filed 5 November 2026](https://www.sec.gov/Archives/edgar/data/7536/000000753626000150/arw-ex99d1.htm) 3. [Admirals, Arrow Electronics Earnings Preview: What to Expect From ARW's Q3 2026 Results, 4 November 2026](https://admiralmarkets.com/analytics/traders-blog/arrow-electronics-earnings-q3-2026-preview) 4. [Arrow Electronics, Form 10-Q for the quarter ended 3 October 2026, filed 5 November 2026](https://www.sec.gov/Archives/edgar/data/7536/000110465926123063/arw-20261003x10q.htm) 5. [Arrow Electronics quarterly figures from its SEC filings, company series, retrieved 5 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000007536) --- Arrow Electronics posted record $10.7 billion revenue and used $441 million of cash — The Inference. Canonical: https://theinference.org/article/arrow-electronics-posted-record-10-7-billion-revenue-and-used-441-million-of-cash