Thank you, operator. I'd like to welcome everyone to the Arrow Electronics first quarter 2026 earnings conference call.

Joining me on the call today is our Interim President and Chief Executive Officer, Bill Austen; our Chief Financial Officer, Raj Agrawal; our President of Global Components, Rick Marano; and our President of Global Enterprise Computing Solutions, Eric Nowak. During this call, we'll make forward-looking statements, including statements about our business outlook, strategies, plans, and projections regarding future financial results, which are based on our predictions and expectations as of today.

Our actual results could differ materially due to a number of risks and uncertainties, including due to the risk factors and other factors described in this quarter's associated earnings release and our most recent annual report on Form 10-K and other filings with the SEC. We undertake no obligation to update publicly or revise any of the forward-looking statements as a result of new information or future events.

As a reminder, some of the figures we will discuss on today's call are non-GAAP measures, which are not intended to be a substitute for our GAAP results. We've reconciled these non-GAAP measures to the most directly comparable GAAP financial measures in this quarter's associated earnings release.

You can access our earnings release at investor.arrow.com, along with a replay of this call. We've also posted a slide presentation on this website to accompany our prepared remarks and encourage you to reference these slides during this webcast.

Following our prepared remarks today, Bill, Raj, Rick, and Eric will be available to take your questions. I'll now hand the call over to our Interim President and CEO, Bill Austen.

Thank you, Michael, and good morning, everyone. We appreciate you joining us for a discussion of our first quarter 2026 results.

Before turning to our results, I want to extend my sincere thanks to our colleagues around the world whose dedication and hard work continue to support our suppliers and customers and drive Arrow's success. Starting on slide three, we started 2026 with very strong results in the first quarter.

Total revenue of $9.5 billion increased 39% year-over-year, while operating margin expanded 160 basis points year-over-year to 4.2%. The strong revenue growth combined with a significant margin expansion resulted in non-GAAP EPS of $5.22, representing an increase of 190% year-over-year.

Our strong results were attributable to several items, including: one, unit volume growth coupled with good execution; two, leverage in the P&L; three, the mix of value-added services and good execution in the core that benefited from the market that accelerated in the second half of the first quarter. We saw strong performance in both Global Components and ECS.

In Global Components, the recovery is broad-based across geographies, industry verticals, and customer mix, driven by customer demand. In ECS, we continue to benefit from strong secular demand trends in AI-driven workloads, and we have generated year-over-year growth in billings, net sales, gross profit, and operating income.

Operating momentum across our business continues to build as our fundamentals strengthen. Raj will provide more detail on our financial performance, but first, I would like to highlight several key themes from the quarter that reinforce this momentum.

First, our leading indicators continue to improve. Book-to-bill ratios improved further, and we currently are at healthy levels sitting well above parity in all three operating regions.

Additionally, backlog continues to build into the third and fourth quarters, providing us with confidence that the momentum is sustainable. We have also seen lead times extend, but they remain significantly lower than a pervasive shortage environment.

Second, the market recovery is unit volume-driven, backed by customer demand. Third, the recovery is broad-based as we are seeing backlog from our mass-market customers build quarter-over-quarter.

Fourth, value-added services, and particularly supply chain services, saw meaningful contribution to overall operating income. Finally, we are achieving more profitable growth driven by better regional and customer mix, more accretion from value-added services, and, importantly, our cost structure is more efficient, demonstrating the positive operating leverage we have built into our model.

We have been disciplined with our cost structure, which is now benefiting from operational momentum in the business and generating significant incremental margins. Turning to slide four, I would like to remind you of the four key pillars of our investment thesis, the reasons why Arrow is a unique and compelling investment opportunity.

First, Arrow holds a leading position in large and growing markets, maintaining a central role across our six core markets of industrial, transportation, aerospace and defense, medical, consumer electronics, and data center, each supported by durable, long-term secular tailwinds. Second, Arrow has differentiated capabilities driving profitable growth.

We have made a shift toward an increased mix of higher-margin value-added services, including supply chain services, engineering and design services, and integration services. Our distribution capabilities around semi, IP&E, and demand creation remain a fundamental part of what we do, and our value-added services are a natural extension for Arrow.

Third, Arrow has a diversified business model, which provides financial flexibility. This continues to be a key differentiator for us, providing balance, resilience, and consistent free cash flow generation through cycles.

Our Global Components and ECS segments complement each other well, allowing us to participate across the full technology lifecycle while providing resilience on both the income statement and balance sheet, supporting long-term value creation. Fourth, our focused capital allocation strategy is designed to maximize shareholder value through reinvesting in organic growth, pursuing disciplined M&A, and returning excess capital to shareholders.

We remain focused on deploying capital where we anticipate the highest long-term risk-adjusted returns while preserving an investment-grade credit profile and the flexibility to continue investing in the business. Turning to slide five, we are very pleased with the results we delivered in the first quarter, which positions us well for the remainder of the year.

We remain focused on executing against our strategy with discipline and are encouraged by the accelerated recovery we are experiencing across geographies and verticals. The momentum we are building illustrates the beginning of a recovery cycle, and the customer order patterns are currently reflecting a rational market backdrop.

Our priority continues to be driving profitable growth through improved execution as we manage mix, costs, and working capital carefully and align investment levels with the pace of demand. At our core lies traditional distribution.

It's the engine that has gotten us to where we are today. It's a big engine which allows us the opportunity to get beyond the traditional business and expand margins via supply chain services, engineering and design services, and integration services.

Just to be clear, we will always excel at our traditional distribution, and we will continue to expand our higher-margin value-added offerings, deepening customer relationships and improving the quality and durability of our earnings over time. We will also continue to be disciplined with our cost structure, which we expect will drive additional operating leverage in the business.

I believe Arrow is well-positioned for the long term, supported by a diversified business model, improving profitability, and a focused capital allocation strategy that enables us to invest through market cycles and drive sustainable shareholder value. With that, I'll turn it over to Raj to dive deeper into our financial performance.

Thanks, Bill. On slide six, sales for the first quarter increased $2.7 billion year-over-year to $9.5 billion, exceeding our guidance range and up 39% versus the prior year, or up 34% versus the prior year on a constant currency basis.

First quarter consolidated non-GAAP gross margin as a percent of sales of 11.5% was up 20 basis points versus the prior year, driven by favorable business mix in Global Components, as well as higher profit contribution from our value-added services. Our first quarter non-GAAP operating expenses increased $95 million year-over-year to $687 million, primarily driven by variable costs and FX.

Importantly, non-GAAP OpEx as a percent of gross profit declined 13.6 percentage points year-over-year to 63.2%. Put another way, operating expenses increased at roughly one-third the rate of revenue growth.

The restructuring efforts we have executed the past couple of years are bearing fruit as we gain operating momentum and drive substantial operating leverage in the business model. We remain focused on disciplined, profitable growth and efficient operations.

In the first quarter, we increased non-GAAP operating income year-over-year by $222 million to $401 million. Non-GAAP operating margin rate increased 160 basis points year-over-year to 4.2% of sales.

Interest and other expense was $48 million in the first quarter as we benefited from lower average debt levels throughout the quarter, and our non-GAAP effective tax rate was 23%. Finally, non-GAAP diluted EPS for the first quarter increased 190% year-over-year to $5.22, which was significantly above our guidance range, driven by a number of factors, including favorable sales volume in both segments, healthy contribution from our value-added services, operational leverage from our productivity initiatives, and lower interest expense.

Turning to slide seven and our global ECS business. In the first quarter, global ECS sales increased approximately $800 million year-over-year to $2.8 billion, above our guidance range and up 39% versus the prior year, or up 31% versus the prior year on a constant currency basis.

Total ECS billings were $6.4 billion, up 39% year-over-year. First quarter non-GAAP operating margins declined modestly by 10 basis points year-over-year due to a few different factors.

First, as pockets of supply became constrained for technologies around AI investments, hardware sales saw strong momentum in the first quarter. Additionally, we took a charge primarily related to one underperforming multi-year contract.

We are in the process of adjusting the economics with this large, long-term partner. As we shared on our last earnings call, in the first quarter, we had four extra shipping days compared to the same quarter last year.

This impact is predominantly relevant for the ECS segment, given sales cycles tend to be end-of-month weighted. The result from the extra shipping days was several hundred million dollars of incremental billings in the quarter.

When normalizing for the four extra days, our global ECS business still achieved year-over-year growth in billings, net sales, gross profit, and operating income dollars, reflecting our alignment to the high-growth demand trends behind AI and data center build-out. We believe our global ECS business is well-positioned as we continue to differentiate on the more complex end of the IT spectrum.

Our diversified line card of solutions for cloud, infrastructure software, cybersecurity, data protection, and data intelligence are experiencing strong secular demand trends for AI-driven workloads. Today, as pockets of on-premise memory supply become thin, channel partners will need to find alternatives and lean more on the software and public cloud solutions that we offer.

Our proprietary digital platform, ArrowSphere, allows our partners to source, provision, manage, and scale these technologies, all within a user-friendly interface that drives deeper engagement and accelerates recurring revenue. Turning to slide eight, let's take a closer look at our Global Components business.

Global Components sales increased $758 million sequentially to $6.6 billion in the first quarter, above our guidance range and up 13% versus the prior quarter. Global Components non-GAAP operating income increased $146 million sequentially to $365 million, up 67% from the prior quarter.

Non-GAAP operating margins increased 180 basis points sequentially to 5.5%. In the back half of the first quarter, the cyclical market recovery accelerated at a pace that exceeded our expectations at the beginning of the year.

The growth that we experienced was broad-based across geography, industry vertical, and customer type. Booking momentum picked up, and our book-to-bill ratios are at healthy levels and remain well above one in all three regions.

Lead times continue to gradually extend. However, remain at manageable levels lower than a broad shortage environment.

This is lending itself to improving visibility as our backlog construct continues to grow in magnitude and duration, with coverage building into the third and fourth quarters, supporting our confidence in the sustainability of a strong market. Importantly, the complexion of the recovery is fundamentally unit volume-driven, backed by breadth of demand.

We believe our customers are holding normal inventory levels, and their order patterns illustrate a rational market environment. As we look ahead, our focus is on disciplined, profitable growth, and we're seeing healthy proof points that our positive operational momentum should continue.

First, the mix of our business continues to improve, both from a regional and customer standpoint. In the first quarter, our two largest verticals, industrial and transportation, saw double-digit sequential growth in both the Americas and EMEA regions.

Additionally, we're seeing backlog across our mass-market customers trend positively as this segment of the market continues to normalize. Second, we are executing well in the accretive areas of the business.

Our value-added services, primarily supply chain services, made a meaningful contribution to our overall first quarter operating income. Supply chain services exceeded our expectations in Q1, partially due to the heavier growth from our customers, which accelerated data center builds.

Additionally, interconnect, passive, and electromechanical components, or IP&E, an accretive segment of the market, had a record revenue in the quarter and surpassed $1 billion for the first time. Lastly, our cost structure is becoming more efficient, which we expect to drive meaningful operating leverage as the market progresses.

Taking a closer look at each of the regions, in the Americas, sales growth was broad-based, highlighted by strength in aerospace and defense, industrial, and transportation. In EMEA, the market meaningfully improved, underpinned by strength in industrial, transportation, and aerospace and defense.

Finally, in Asia, the sequential growth was driven by industrial mass market and demand for data center computing power. Turning to the balance sheet on slide nine.

Net working capital declined sequentially for the first quarter by approximately $490 million, ending the quarter at $6.9 billion. Inventory grew sequentially by approximately $640 million, ending the first quarter at $5.7 billion.

Nearly half of the inventory build was related to data center activity within our Arrow Intelligent Solutions. In this offering, we're helping to design, build, and test the compute and storage infrastructure needed to run AI workloads, and this value-added service is margin-accretive for Arrow.

Importantly, the financial metrics that we monitor continue to improve. Return on working capital increased 11.8 percentage points year-over-year, finishing the first quarter at 23.1%.

Likewise, return on invested capital increased 7 percentage points year-over-year, finishing at 13.4%. Working capital as a percent of sales declined in the first quarter to approximately 18%, and our cash conversion decreased year-over-year by 16 days.

Cash flow from operating activities was $700 million. A contributing factor was the timing of cash flows in supply chain services, which may partially reverse throughout the balance of the year.

This offering is generally a working capital light model, as most of the inventory is consigned and does not sit on our balance sheet because we do not own or bear the risk of holding it. However, because we are providing services within an existing customer-supplier relationship, we are also managing the associated AR and AP cash flows.

Each program is bespoke, given the unique needs of each customer. In general, the cash flow dynamics of the offering will impact our accounts receivable and accounts payable balances and can create material swings at the end of the quarter.

Taking a broader view, the counter-cyclical cash flow dynamics of our business model have not changed. Typically, in times when the business is growing, we will consume more cash and invest in working capital to ensure we can meet the needs and demand levels of our customers.

Because that is at the core of what we do as a leading global distributor. Gross balance sheet debt at the end of the first quarter declined sequentially by $619 million, finishing at $2.5 billion.

Finally, we repurchased $25 million in shares in the first quarter. Now turning to Q2 guidance on slide 10.

We expect sales for the second quarter to be between $9.15 and $9.75 billion, representing an increase of 25% year-over-year at the midpoint of the range. We expect Global Components sales to be between $6.8 and $7.2 billion, representing sequential growth of 5% at the midpoint.

In Enterprise Computing Solutions, we expect to be between $2.35 and $2.55 billion, which is up 7% at the midpoint year-over-year. We're estimating a tax rate in the range of 23% to 25% and interest expense of approximately $60 million.

Our non-GAAP diluted earnings per share is expected to be between $4.32 and $4.52. Details about the impacts of changes in foreign currencies can be found in our earnings release.

As we look at the balance of the year, we are confident in the operational momentum of the business. As always, there are factors that will impact the linearity of our results.

We expect Global Components to perform at or above seasonal trends in all of our regions for the remainder of the year. However, consistent with historical patterns, in Q2, Asia is expected to be seasonally strong.

As a reminder, Asia operates at a lower margin than the other regions. Additionally, unlike the first quarter, where we experienced heavier growth from our customers, supply chain services is expected to return to a more normal profit level in the second quarter.

In ECS, consistent with the first quarter, we expect the business mix will experience healthy hardware sales driven by ongoing AI data center build-out. Lastly, the timing of organizational annual compensation increases will impact operating expenses beginning in the second quarter.

More broadly, as we expect demand levels to continue to improve, we believe the operating leverage that we have created will drive significant earnings power. With that, I'll now turn things back over to Bill for some closing thoughts.

Turning to slide 11. Looking forward, our key priorities are clear.

We are focused on continuing to execute with discipline and drive the operational momentum that we have in the business. We are confident our strategy is delivering, and we are well-positioned to sustain this momentum.

Leading indicators continue to strengthen, reinforcing our confidence that the market is improving and that the actions we have taken over the last couple of years position us well to realize the positive operating leverage embedded in our model. The path forward is clear.

We plan to expand our high-margin value-added offerings across both Global Components and ECS, deepening customer relationships and enhancing the quality, resilience, and durability of our earnings over time. I remain confident in Arrow's strategy, differentiated capabilities, and diversified business model to drive profitable growth.

We will continue to allocate capital to the highest return on investment opportunities with the goal of creating sustainable shareholder value. In 2026, to better align the leadership team with shareholders, they will be compensated on our relative total shareholder return.

Speaking of leadership, the board search for a permanent CEO is ongoing. The board continues to evaluate a range of highly qualified candidates, and we will update the market when an appointment is ready to be announced.

With that, Raj, Rick, Eric, and I will now take your questions. Operator, please open the call for questions.

Thanks. Good morning, guys.

It's Aiden on for Will.

Hey, Will. Hello.

I was hoping you could touch on what drove the ECS strength in Q1, how much of that may have been one-time, and then also what's driving the Q2 guide. Then, secondly, if you could quantify the contribution from value-added services, maybe to hyperscalers specifically?

Thanks.

Eric, why don't you take the ECS question?

Yes, of course. The trends are the same since several quarters.

We are experiencing the high growth in our cloud and AI and software and infrastructure business. This is basically not new.

What's new in Q1 is that with the shortage in memory, we have a higher growth in storage and compute. We believe that the customers place their orders in advance to avoid price increase and be sure to be delivered during the year.

That's why drove the extra growth in Q1. Also, of course, the four days that we had at the end of the quarter.

Eric,

how about your look forward?

The Q2 Q3 should be more or less normal quarters, basically the four days we'll compensate in Q4 only, and we will have the same kind of growth, I believe. We do not expect that the hardware growth will stop during this year, and the cloud and AI and software will continue.

Basically, we should experience the same kind of growth during the quarter.

Very good. Rick, you want to take the hyperscaler question?

Sure. Thanks, Bill.

I think on the hyperscaler side, Will, when we look at our business overall, we're experiencing the same growth expectations that the market's experiencing as it relates to them. I don't think there's anything different.

The way we service that customer base is through supply chain services, as well as through our normal channels of business going forward. That growth in that market, we continue to see, we continue to participate in as time goes on.

Yep. I'll just add to that.

In Q1, as Raj was in Raj's script, one of the hyperscalers accelerated the build of a data center, and they pulled it up into Q1. We had some higher revenues related to hyperscaler growth in our supply chain service business in Q1, which was not expected.

The other thing I would just add is that value-added services, in total, was about 30% of our operating income generated by the business areas last year. That probably ticked down just a little bit in the first quarter because of the overall growth of the entire business.

It's still a significant contributor to the overall bottom line. It's going to continue to be a strong contributor, and it's one of the key drivers of the margin growth that we're seeing in the business.

Okay. I think next question?

Questions. I have a couple of them.

Raj, I'm going to ask you for a little bit more detail on the margin performance between fiscal 4Q, fiscal 1Q and in components. Obviously, 5.5% is much higher than what we had thought.

What was the contribution of the extra four days on revenues as well as on EBIT? On the value-added services part, as Bill mentioned, you had a pull-in of demand.

When you think about going from 1Q to 2Q, do you expect that level of demand to continue? Are you expecting some lower demand?

Help us just bridge the 3.7 to 5.5 operating margin performance in the core business. Then looks like you're guiding something lower for the fiscal second quarter, maybe like 4.5%.

Can you help us bridge from 1Q to 2Q? Then I have a follow-up.

Yeah.

Hey, Ruplu, it's Bill. Before Raj gets into the CFO part of that answer, I'll give you the CEO part of that answer.

It's what we said in our script. Our business in Q1, and as we look forward, because we get these leading indicators that are very strong.

We've been saying for quite some time, once regional mix starts to change, i.e., the mass market comes back in the West, Europe, and North America, and that's as Raj had in his script, industrial and transportation has come back strong in both of those Western regions. That's a part of why we went from 3.75 to 5.5.

Value-added services, we're pushing harder and harder in our strategy to push more value-added services both in ECS, which is not part of the 5.5, but in global components. Okay?

Demand creation, supply chain services, we have made a purposeful shift, and Rick has done that in his organization, to focus more and more on value-added services. The third is the growth in the mass market is coming back.

As I've already said, it's in industrial, and it's in transportation, and it's also in aerospace and defense. We've been talking now for close to seven, eight, nine, 10 months about the leverage that the business has been building in the P&L.

We've been maintaining costs flat to down on the fixed cost side so that as we drive more and more volume growth, which is what's driven our result in Q1, volume, not price, we get fall-through. It falls through at a pretty heavy clip.

What we're doing in global components is exactly what we said we were going to do seven, eight, nine months ago. We're executing on that.

We're executing very well. Raj will give you the details now.

Bill got into some of the details, but let me just add a little bit of color. The themes you're going to keep seeing or hearing, Ruplu, is that just to summarize again, we're getting the right kind of growth, and we always said that we're going to get leverage on the bottom line with the right kind of growth.

Growth in the West, the mass market customer coming back, the value-added services, and I'll address your question specifically on that here in just a second. That's a strong contributor to the bottom line, and then significant leverage.

All of those factors have an impact to getting us to the 5.5% margin in the first quarter. I think your math might be a little bit wrong.

We're not guiding to margins in the second quarter, but component margins do step down a little bit related to Asia mix, and then the supply chain services step-down, as well as some of the OpEx that increases. Overall, I think we're still going to have very strong operating margins for components in the second quarter, and it's just indicative of the leverage that we have in the model.

Those conditions will continue for the rest of the year, we believe, in terms of the mix that's driving the margin expansion. On value-added services, I wouldn't think about it as pull-in of demand into the first quarter.

It's really just extra growth that we got from our customer base in that part of the business. We're assuming in our outlook a lower number for supply chain services, but it's still going to be a significant contributor to the overall profit line.

We'll certainly try to do as much as we can there. Not a pull-in in demand, it's more about just continued momentum in that business at a more normalized level.

Then I think you asked about four extra days. That's in the ECS business.

It was worth several hundred million dollars of billings in the first quarter, which is what we indicated when we gave the outlook last time. If you just apply a net revenue to that, maybe 50% or so as a good benchmark, and then you apply margin to, you'll get to an operating profit number that benefited us in the first quarter.

That obviously isn't going to benefit us in the second quarter, and that's in our outlook as well. Hopefully I addressed all of your questions.

If not, just let me know.

Thanks for the details there, Bill and Raj. Can I ask a follow-up?

You mentioned, Raj, a couple of times that this is not related to pull-in. Can I ask how you're judging that?

What's the risk that component costs, including memory costs, are going up? What's the chance that customers are pre-ordering or trying to pre-empt the price increases and ordering ahead of time, and what's the risk either in the ECS segment or in the components segment that, as prices for components go up and market demand for end products can be lower in the second half, and the backlog that you're building could have some double ordering in it or could have some pre-buys, and that demand is weaker in the second half?

Just wanted to get your thoughts on it, how do you calculate whether there's any pull ahead or not, and how do you see that trending, and how do you see demand or true-end demand shaping up in the second half? Thank you for the details.

I appreciate the color.

Yep. Thanks, Ruplu.

Good question. We monitor order flows.

Okay? We monitor order flows from customers.

If there's a customer that, let's say orders at a rate of 10, and all of a sudden now they place an order for 27, that's kind of a red flag that goes up, and the team gets into that data and gets into the customer to say, 'What is it you're really doing here? Do you really have that demand?

What's going on?' We try to monitor that the best we can, and we don't see at this time that customers are double ordering, placing orders this week, next week, the next week, all for the same device or component, and if they are, we track that, and we call them out.

Now I'll let Rick add a little bit more color from what he sees in the branches.

Thanks, Bill. Thanks, Ruplu, for the question.

I think the way to look at it is the following, is we've talked about this gradual recovery. We've talked about inventory levels in the past.

If you think about it, if you look at the vertical markets of the segments we represent, inventory levels were really really taken down to very low levels through the last cycle. If you think about where lead times are doing, and we said this earlier, is lead times are gradually increasing, but from an overall perspective, are in line with the market overall.

I would say more of customers are looking at how they look at their buffer inventories, how they build their buffer inventories, and how they plan their demand moving forward based off of lead times that we believe are in line with the market at this point in time.

I just want to add a couple of things, just for the benefit of, since you asked a question. The the, and we said it in our commentary, but the the growth in revenue that we saw in the quarter quarter-over-quarter in the components business was driven by unit volume growth, and it was not driven by pricing.

Because as we look at the average selling price of our units and the unit volume growth, the unit volume growth lines up pretty well with the level of revenue growth that we got. We actually did not see much pricing impact in our business.

Yes, it's happening around us, and we flow it through, but when you look at it in total, it's not a significant impact, on from a quarter-over-quarter standpoint. Then the the memory exposure that we have is, probably in the mid-single-digit range, and yes, we've seen the price increases there as well.

It's still in the mid-single-digit range in terms of exposure to our revenue. Not a big impact.

We obviously participate in the supply chain services offering, from a profit standpoint, but that's much more a fee-based model. Just to clarify the pricing impacts within our results.

Yeah. It's minimal at best.

Okay.

I appreciate all the details. If I can just sneak one more clarification in: do you also resell GPUs?

What percent of your product line is that? From an AI standpoint, when we look at ECS, do you think that's a meaningful contributor this year?

Again, thanks so much for all the details.

Go ahead, Rick.

Go ahead. No, I was going to say we don't resell CPUs or GPUs.

No,

it's not what we do. It's not in our business.

No. Then ECS, I think you asked a question about ECS.

It's heavily exposed to everything AI and data center build with everything that we do, we have a heavy, heavy exposure to all the fast-growing areas of the business. Eric, you want to add?

Yes, our hardware business in ECS is only 25% of the revenue. Of course, the memory impacts mostly the compute, and compute is just a fraction of this 25%, basically, the impact is pretty weak on the ECS side.

The opportunity that we have is that if this continues, this will be good for our cloud business, because the customers will have to do more public cloud rather than buying hardware and software. Basically, it could be good for us on the longer term.

I think, Ruplu, just to close it all up there, what we're seeing is a broad-based recovery across many, many, many verticals in all regions. It's not just related to AI and the AI build.

We're seeing it across our mass market, and that's one of the things that gives us comfort, and that's how our backlog is building that the Americas, our customers there are serving demand. They're not building to inventory, they're building to order, which is a comforting sight for us.

Many thanks. I appreciate the details.

Thanks, Ruplu.

Yes. Thank you, operator.

In closing, I'm really pleased with how we are operating with rigor, focus, and a cadence that has us setting our sights on serving and supporting suppliers and customers. There is, however, still room for improvement across the entire business.

Thanks for joining us today, and we look forward to speaking with you all in the near future. Thanks, everybody.

Have a great day.

Thank you, everyone.