Arrow Electronics (ARW) risk factors, FY2025 10-K

Arrow Electronics's FY2025 10-K, filed Feb 11, 2026, lists 24 risk factors in 4 groups. Against the prior year's 24: 3 new, 3 dropped, 19 substantially reworded.

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Risk factors listed
244 groups
New this year
3vs 24 last year
Dropped
3since the prior 10-K
Substantially reworded
19of those kept
Section length
9k wordsItem 1A

What the changes say

  • Arrow Electronics highlights ongoing executive leadership transitions, including the search for a permanent CEO following the appointment of an interim chief.

What changed since the prior 10-K

New

  • NewBusiness Risks

    Overestimating customer demand for certain products or a decline in the value of the company’s inventory or pre-paid IT solutions could materially adversely affect the company’s business

    Overestimating customer demand or holding obsolete inventory can hurt business, as supplier return protections are limited by time and volume.

  • NewRegulatory and Legal Risks

    imposition of different or additional duties, refunds to the company that may be difficult or impossible to collect, or litigation with third parties concerning prior tariff-related payments, any of which could have a material negative impact on the company’s business

    Imposition of tariffs or duties, uncollectible refunds, and litigation over prior tariff-related payments could negatively impact the business.

  • NewRegulatory and Legal Risks

    The company is subject to a variety of additional laws, regulations, and executive orders in the U.S. and other jurisdictions, and could be subject to claims, investigations, and litigation that could adversely affect the company’s results of operations and harm the company’s reputation

    The company faces unpredictable legal claims, investigations, and lawsuits covering product liability, intellectual property, and employment matters.

Dropped

  • DroppedBusiness Risks

    Declines in value of the company’s inventory, or pre-paid IT Solutions, could materially adversely affect its business

  • DroppedOperational Risks

    distracting to employees and may negatively impact the company’s business operations, reputation, or ability to serve customers. Relatedly, the company also faces risks of mismanaging employee relations and terminations and becoming subject to legal claims as a result

  • DroppedRegulatory and Legal Risks

    The company is subject to a variety of claims, investigations and litigation that could adversely affect the company’s results of operations and harm the company’s reputation, including intellectual property rights claims

    Declines in inventory or pre-paid IT solutions value could adversely affect the business.

Reworded

  • 80% rewrittenBusiness Risks

    The company’s revenues originate primarily from the sales of semiconductor, IP&E, and IT hardware and software products, the sales of which are traditionally cyclical and may be impacted by shortages and other disruptions in the global supply chain

    Updated semiconductor sales contribution figures to 50% for 2025 compared to 53% in 2024 and 60% in 2023.

  • 74% rewrittenRegulatory and Legal Risks

    Products sold, designed, or integrated by the company may be found to be defective and, as a result, warranty and/or product liability claims may be asserted against the company, which may have a material adverse effect on the company

    Adjusted phrasing regarding supplier agreement limitations on avoiding defective product liabilities from differing factors to various factors.

    Was: Products sold or designed by the company may be found to be defective and, as a result, warranty and/or product liability claims may be asserted against the company, which may have a material adverse effect on the company

  • 70% rewritten

    Global and regional economic weakness and uncertainty could have a material adverse effect on the company’s financial performance

    Added persistent inflation, higher interest rates, and market uncertainty as macroeconomic headwinds impacting financial performance.

    Was: Global, regional, and local economic weakness and uncertainty, including because of epidemics and pandemics, could have a material adverse effect on the company’s financial performance

  • 70% rewrittenBusiness Risks

    Any failure to attract, retain, motivate, and develop key executive and employee talent may materially and adversely affect the company’s business

    Disclosed the active search for a permanent President and CEO following William F. Austen's appointment as Interim CEO on September 16, 2025.

  • 58% rewrittenRegulatory and Legal Risks

    Expectations and regulations related to corporate stewardship and corporate responsibility matters, and related disclosures, expose the company to potential liabilities, increased costs, reputational harm, and other adverse effects on the company’s business

    Broadened ESG references to encompass broader corporate stewardship expectations from investors, customers, and regulators.

    Was: Expectations and regulations relating to environmental, social, and governance (“ESG”) and corporate responsibility matters, and related disclosures, expose the company to potential liabilities, increased costs, reputational harm, and other adverse effects on the Company’s business

  • 56% rewrittenFinancial Risks

    The company may not have adequate or cost-effective liquidity or capital resources, which could have a material adverse impact on its ability to maintain cash necessary to operate its business or return capital to shareholders

    Updated committed and undrawn liquidity figures to over $2.5 billion and cash on hand to $306.5 million as of December 31, 2025.

  • 55% rewrittenFinancial Risks

    The company’s goodwill and identifiable intangible assets could become impaired, which could reduce the value of its assets and reduce its net income in the year in which the write-off occurs

    Refined language on potential goodwill and intangible asset impairment charges triggered by adverse economic valuations.

  • 55% rewritten

    The company’s non-U.S. sales represent a significant portion of its revenues, and consequently, the company is exposed to risks associated with operating internationally

    Added potential social unrest, military conflicts, and government shutdowns to the list of international and geopolitical operational risks.

  • 54% rewrittenCybersecurity, Privacy, and Technology Risks

    Failure to maintain satisfactory compliance with certain privacy and data protections laws and regulations may subject the company to substantial negative financial consequences and civil or criminal penalties

  • 52% rewrittenRegulatory and Legal Risks

    The company may not be able to adequately anticipate, prevent, or mitigate damage resulting from criminal and other illegal or fraudulent activities committed against it or as a result of misconduct or other improper activities by its employees or contractors

  • 44% rewrittenFinancial Risks

    As a result of these covenants and restrictions, the company may be limited in how it conducts its business and may be unable to raise additional debt, compete effectively, or make investments

  • 40% rewrittenRegulatory and Legal Risks

    The company is subject to environmental laws and regulations, and may be impacted by climate change, in ways that could materially adversely affect its business

  • 40% rewrittenBusiness Risks

    If the company is unable to implement its Operating Expense Efficiency Plan effectively, it could materially adversely impact financial results

  • 39% rewrittenFinancial Risks

    If the company fails to maintain an effective system of internal controls or discovers material weaknesses in its internal control over financial reporting, it may not be able to report its financial results accurately or timely, or detect fraud, which could have a material adverse effect on its business

  • 33% rewrittenBusiness Risks

    If the company fails to successfully invest in and implement digital, AI, and other technological developments, or its suppliers are not able to continue to offer competitive components and electronic computing solutions, it could materially adversely impact results

    Was: If the company fails to adequately invest successfully in and introduce digital, artificial intelligence (“AI”), and other technological developments, or its suppliers are not able to continue to offer competitive components and electronic computing solutions, it could materially adversely impact results

  • 31% rewrittenCybersecurity, Privacy, and Technology Risks

    Cybersecurity incidents may hurt the company’s business, damage its reputation, increase its costs, and cause losses

  • 30% rewrittenFinancial Risks

    The agreements governing some of the company’s financing arrangements contain various covenants and restrictions that limit some of management’s discretion in operating the business and could prevent the company from engaging in some activities that may be beneficial to its business

  • 26% rewrittenBusiness Risks

    The company’s lack of long-term sales contracts may have a material adverse effect on its business

  • 20% rewrittenBusiness Risks

    The competitive pressures the company faces, such as pricing and margin reductions, could have a material adverse effect on the company’s business

All 24 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01Global and regional economic weakness and uncertainty could have a material adverse effect on the company’s financial performance70% rewritten
  2. 02The company’s non-U.S. sales represent a significant portion of its revenues, and consequently, the company is exposed to risks associated with operating internationally55% rewritten

Business Risks

  1. 03The competitive pressures the company faces, such as pricing and margin reductions, could have a material adverse effect on the company’s business20% rewritten
  2. 04Any failure to attract, retain, motivate, and develop key executive and employee talent may materially and adversely affect the company’s business70% rewritten
  3. 05Overestimating customer demand for certain products or a decline in the value of the company’s inventory or pre-paid IT solutions could materially adversely affect the company’s businessNew
  4. 06If the company fails to successfully invest in and implement digital, AI, and other technological developments, or its suppliers are not able to continue to offer competitive components and electronic computing solutions, it could materially adversely impact results33% rewritten
  5. 07The company’s revenues originate primarily from the sales of semiconductor, IP&E, and IT hardware and software products, the sales of which are traditionally cyclical and may be impacted by shortages and other disruptions in the global supply chain80% rewritten
  6. 08The company’s lack of long-term sales contracts may have a material adverse effect on its business26% rewritten
  7. 09If the company is unable to implement its Operating Expense Efficiency Plan effectively, it could materially adversely impact financial results40% rewritten
  8. 10Changes in the company’s global mix of earnings, tax laws, and regulations could cause fluctuations in the company’s effective tax rate and adversely impact financial results

Cybersecurity, Privacy, and Technology Risks

  1. 11Cybersecurity incidents may hurt the company’s business, damage its reputation, increase its costs, and cause losses31% rewritten
  2. 12Failure to maintain satisfactory compliance with certain privacy and data protections laws and regulations may subject the company to substantial negative financial consequences and civil or criminal penalties54% rewritten
  3. 13The company relies heavily on its internal information systems, which, if not properly functioning, could materially adversely affect the company’s business

Regulatory and Legal Risks

  1. 14imposition of different or additional duties, refunds to the company that may be difficult or impossible to collect, or litigation with third parties concerning prior tariff-related payments, any of which could have a material negative impact on the company’s businessNew
  2. 15Products sold, designed, or integrated by the company may be found to be defective and, as a result, warranty and/or product liability claims may be asserted against the company, which may have a material adverse effect on the company74% rewritten
  3. 16The company is subject to environmental laws and regulations, and may be impacted by climate change, in ways that could materially adversely affect its business40% rewritten
  4. 17The company is subject to a variety of additional laws, regulations, and executive orders in the U.S. and other jurisdictions, and could be subject to claims, investigations, and litigation that could adversely affect the company’s results of operations and harm the company’s reputationNew
  5. 18The company may not be able to adequately anticipate, prevent, or mitigate damage resulting from criminal and other illegal or fraudulent activities committed against it or as a result of misconduct or other improper activities by its employees or contractors52% rewritten
  6. 19Expectations and regulations related to corporate stewardship and corporate responsibility matters, and related disclosures, expose the company to potential liabilities, increased costs, reputational harm, and other adverse effects on the company’s business58% rewritten

Financial Risks

  1. 20The company may not have adequate or cost-effective liquidity or capital resources, which could have a material adverse impact on its ability to maintain cash necessary to operate its business or return capital to shareholders56% rewritten
  2. 21The agreements governing some of the company’s financing arrangements contain various covenants and restrictions that limit some of management’s discretion in operating the business and could prevent the company from engaging in some activities that may be beneficial to its business30% rewritten
  3. 22As a result of these covenants and restrictions, the company may be limited in how it conducts its business and may be unable to raise additional debt, compete effectively, or make investments44% rewritten
  4. 23The company’s goodwill and identifiable intangible assets could become impaired, which could reduce the value of its assets and reduce its net income in the year in which the write-off occurs55% rewritten
  5. 24If the company fails to maintain an effective system of internal controls or discovers material weaknesses in its internal control over financial reporting, it may not be able to report its financial results accurately or timely, or detect fraud, which could have a material adverse effect on its business39% rewritten

Other Arrow Electronics 10-Ks

  • FY2024 10-K risk factors
    24 risks

    Arrow Electronics relies heavily on semiconductor sales, which generated 53% of consolidated sales in 2024.

    Filed Feb 11, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.