CENTENNIAL, Colo. & FORT LAUDERDALE, Fla. - Arrow Electronics (NYSE: NYSE:ARW), a global technology provider, has entered into a strategic distribution agreement with Citrix, a business unit of Cloud Software Group, Inc. The arrangement, set to take effect on October 1, 2024, will see Arrow assume responsibilities for sales, marketing, and technical support for all service provider channel partners with fewer than 2,000 Citrix licenses in North America and Europe.
This collaboration is built on a pre-existing relationship between Arrow and Citrix. The new model aims to enhance enablement, flexibility, and support for service provider channel partners as they manage their Citrix licenses. The agreement is part of Citrix's broader strategy to create a robust channel-centric approach and focus on product development, engineering, and solution support.
Eric Nowak, president of Arrow's global enterprise computing solutions business, remarked on the company's commitment to exploring new engagement models within the channel. He emphasized Arrow's strong position to support this key segment, leveraging their past success and experience with Citrix solutions.
Ethan Fitzsimons, vice president and head of global channels for Citrix, highlighted Citrix's dedication to growth and scaling their business globally. Citrix plans to work closely with Arrow in delivering solutions to channel partners and their customers.
Citrix has undergone several changes to its channel program this year, including transitioning to an annually committed model. This shift is intended to allow for more significant partner-specific investment and align with Citrix's channel-focused strategy.
Service provider channel partners not directly affected by this change can expect Citrix to invest more deeply and with a more targeted approach in their joint go-to-market strategies. This is aimed at ensuring ongoing support and technology of the highest caliber.
Arrow Electronics, with 2023 global sales reaching $33 billion, engineers technology solutions for a wide array of manufacturers and service providers. Citrix, now under Cloud Software Group, offers a secure app and desktop delivery platform to facilitate flexible work environments while maintaining security for IT departments.
This strategic agreement is expected to leverage the strengths of both companies to better serve their service provider channel partners. The information for this article is based on a press release statement.
In other recent news, Arrow Electronics reported strong Q2 2024 earnings with total revenue hitting $6.9 billion and non-GAAP earnings per share of $2.78, exceeding market expectations. The company also issued $500 million in 5.150% notes due 2029, facilitated through an underwriting agreement with BofA Securities, Goldman Sachs (NYSE:GS) & Co., Mizuho Securities USA, and Scotia Capital.
The company's Global Components and Enterprise Computing Solutions segments showed robust performance, with the former experiencing accelerated bookings and the latter driven by strong demand for cloud and AI-related solutions. As part of its strategic growth plan, Arrow Electronics is investing in inventory, particularly in the IP&E area, while effectively managing costs and debt ratios.
For Q3 2024, Arrow Electronics projects sales to be between $6.37 billion and $6.97 billion, with non-GAAP diluted EPS estimated at $2.10 to $2.30. The company generated strong operating cash flow, with $320 million in Q2 and $1.3 billion over the last 12 months. Additionally, the company repurchased nearly $400 million of stock over the past year.
These are recent developments in the company's business activities.
InvestingPro Insights
As Arrow Electronics (NYSE: ARW) prepares to enhance its partnership with Citrix, the company's financial health and market performance provide a backdrop for understanding its potential to support this new strategic agreement. Arrow's aggressive share buyback strategy indicates a management confident in the company's value, a sentiment that aligns with the "InvestingPro Tips" highlighting a high shareholder yield and a strong free cash flow yield. These factors suggest that Arrow is in a robust position to invest in business growth and support initiatives like the collaboration with Citrix.
From a market perspective, Arrow's current market capitalization stands at approximately $7.14 billion, with a Price/Earnings (P/E) ratio of 12.43, reflecting investor expectations of earnings relative to the stock price. Notably, the adjusted P/E ratio for the last twelve months as of Q2 2024 is even more attractive at 9.66, which could appeal to value-oriented investors. Despite a revenue decline of 17.21% over the last twelve months as of Q2 2024, Arrow's role as a prominent player in the Electronic Equipment, Instruments & Components industry, coupled with its low revenue valuation multiple, could offer a compelling case for its stock. Moreover, with the stock trading near its 52-week high and a price of $133.61 at the previous close, investors may see a potential for stability and upside.
For readers interested in deeper analysis or seeking additional "InvestingPro Tips," Arrow Electronics has a total of 14 tips available, which can be further explored for those considering an investment in the company. The full range of insights is accessible on InvestingPro's platform at https://www.investing.com/pro/ARW.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.