CDW Corporation (NASDAQ:CDW) Q2 2023 Earnings Conference Call August 2, 2023 8:30 AM ET Company Participants Steve O'Brien - Investor Relations Christine Leahy - President, CEO and Chair Albert Miralles - Senior Vice President and Chief Financial Officer Conference Call Participants Asiya Merchant - Citi Adam Tindle - Raymond James Matt Sheerin - Stifel Amit Daryanani - Evercore ISI Erik Woodring - Morgan Stanley Samik Chatterjee - JPMorgan Shannon Cross - Credit Suisse Keith Housum - Northcoast Research Op ...

TRACK RECORD OF PROFITABLE GROWTH • Offers 100,000+ products and services from 1,000+ brands to more than 250,000 customers in the US, UK and Canada $10.8 $12.1 $13.0 $13.7 $14.8 $16.2 $18.0$18.5 $20.8 $23.7 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 NET SALES ($B) (2) | --- | --- | |---------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------ ...

Financial Performance - Net sales for Q2 2023 were $5.626 billion, a decrease from $6.146 billion in Q2 2022[160][167] - Gross profit margin improved to 21.0% in Q2 2023, up from 19.0% in Q2 2022[160] - Operating income was $435.3 million, representing 7.3% of net sales in Q2 2023[160] - Net income was $279.3 million, representing 4.7% of net sales in Q2 2023[160] - Total net sales for the six months ended June 30, 2022, were $12,094.9 million, with hardware contributing $9,404.0 million (77.9%), software $1,719.4 million (14.2%), and services $907.1 million (7.5%)[174][175] Segment Performance - Corporate segment sales declined to $2.245 billion in Q2 2023 from $2.661 billion in Q2 2022[167][169] - Public segment sales increased to $2.295 billion in Q2 2023 from $2.243 billion in Q2 2022[167][169] - Small Business segment sales decreased to $396.2 million in Q2 2023 from $500.0 million in Q2 2022[167][169] - Corporate sales in the United States amounted to $5,272.2 million, while the Rest of World corporate sales were $16.1 million[174] - Government channel sales were $1,153.4 million, Education channel sales were $1,944.1 million, and Healthcare channel sales were $1,178.5 million in 2022[174] Product Sales - Hardware sales accounted for $4.280 billion of total net sales in Q2 2023[167] - Notebooks/Mobile Devices accounted for 28.7% of total net sales in 2022, generating $3,477.4 million, a decrease from 2023 where it accounted for 22.2% with $2,385.5 million[175] - Netcomm Products saw a significant increase in net sales from $1,191.6 million (9.9%) in 2022 to $1,660.9 million (15.5%) in 2023[175] - Data Storage and Servers contributed $1,247.3 million (10.3%) to total net sales in 2022, slightly decreasing to $1,078.0 million (10.0%) in 2023[175] - Software sales decreased from $1,719.4 million (14.2%) in 2022 to $1,808.8 million (16.9%) in 2023, showing a shift in product mix[175] - Services sales remained relatively stable, with $907.1 million (7.5%) in 2022 and $895.3 million (8.3%) in 2023[175] - Other sales, including delivery charges, were $64.4 million (0.4%) in 2022 and decreased to $56.6 million (0.5%) in 2023[175] Geographic Sales - US sales represented 87.2% of total net sales at $4.904 billion in Q2 2023[167] Revenue Recognition - Revenue recognition at a point in time where CDW is principal accounted for $10,765.7 million, while revenue transferred over time where CDW is principal was $660.0 million[174] Services Revenue - Services revenue grew to $453.2 million in Q2 2023, up from $469.7 million in Q2 2022[167][169]

CDW Corporation (NASDAQ:CDW) Q1 2023 Results Conference Call May 3, 2023 8:30 AM ET Company Participants Steve O'Brien - IR Chris Leahy - President, CEO & Chair Al Miralles - CFO Conference Call Participants Amit Daryanani - Evercore Samik Chatterjee - J.P. Morgan Shannon Cross - Credit Suisse Erik Woodring - Morgan Stanley Adam Tindle - Raymond James Matt Sheerin - Stifel Keith Housum - Northcoast Research Ruplu Bhattacharya - Bank of America Merrill Lynch Operator Hello, and welcome to the CDW First Quart ...

UNITED STATES CDW CORPORATION (Exact name of registrant as specified in its charter) Table of Contents CDW CORPORATION AND SUBSIDIARIES FORM 10-Q | --- | --- | --- | --- | --- | |-----------------------------------------------------------------------------------------------------------------------------------------|-------|------------------------------------|-------|-----------------------| | Assets | | March 31, 2023 \n(unaudited) | | December 31, 2022 | | Current assets: | | | | | | Cash and cash equival ...

[PART I](index=6&type=section&id=PART%20I) This section provides an overview of the company's business, operations, risk factors, properties, legal proceedings, and executive officers [Item 1. Business](index=6&type=section&id=Item%201.%20Business) CDW is a leading IT solutions provider serving over 250,000 customers in a $460 billion market - CDW is a Fortune 500 and S&P 500 company, providing IT solutions to over **250,000** business, government, education, and healthcare customers in the US, UK, and Canada[8](index=8&type=chunk)[523](index=523&type=chunk) - The company operates in a large and fragmented addressable market estimated at **$460 billion** annually, with CDW's Net sales of **$23.7 billion** in 2022 representing approximately **5%** of this market[9](index=9&type=chunk) - CDW's business is divided into three reportable segments: Corporate, Small Business, and Public, with international operations in the UK and Canada categorized under "Other"[12](index=12&type=chunk) - The company partners with over **1,000** brands, including major players like Apple, Cisco, Dell EMC, HP Inc., and Microsoft, generating over **$1.5 billion** in Net sales from each of its five largest vendor partners in 2022[13](index=13&type=chunk)[548](index=548&type=chunk) - The acquisition of Sirius Computer Solutions, Inc. in December 2021 significantly enhanced CDW's services and solutions capabilities in key growth areas[543](index=543&type=chunk) [Item 1A. Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from vendor dependence, technological changes, cybersecurity, macroeconomic conditions, and substantial debt - CDW's business is highly dependent on relationships with key vendor partners and wholesale distributors, where loss or alteration could negatively impact product supply and cost[52](index=52&type=chunk)[622](index=622&type=chunk) - The company faces significant competition and must keep pace with rapid technological innovation, such as cloud-based solutions, which could disrupt its business model[55](index=55&type=chunk)[56](index=56&type=chunk)[597](index=597&type=chunk) - Cybersecurity is a major risk, as the company handles sensitive data and faces threats from malicious attacks, potentially leading to legal liability, remediation costs, and reputational damage[59](index=59&type=chunk)[86](index=86&type=chunk)[60](index=60&type=chunk) - The company's success depends on attracting and retaining key personnel, including sales, services, and technical coworkers, with failure potentially harming vendor and customer relationships[61](index=61&type=chunk)[88](index=88&type=chunk)[113](index=113&type=chunk) - Macroeconomic conditions, including inflation, rising interest rates, and political instability, could cause customers to postpone or reduce technology spending[97](index=97&type=chunk)[123](index=123&type=chunk) - As of December 31, 2022, the company had **$5.9 billion** of total debt, requiring a substantial portion of cash flow for debt service and compliance with restrictive covenants[108](index=108&type=chunk)[155](index=155&type=chunk) [Item 1B. Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC as of the end of the fiscal year - There are no unresolved staff comments[190](index=190&type=chunk) [Item 2. Properties](index=24&type=section&id=Item%202.%20Properties) As of December 31, 2022, CDW owned or leased approximately 2.4 million square feet of space, primarily in the US, UK, and Canada - The company owns or leases a total of **2.4 million** square feet of space[149](index=149&type=chunk) - Owned properties include a **513,240 sq. ft.** distribution center in North Las Vegas, NV, and a **442,400 sq. ft.** combined office and distribution center in Vernon Hills, IL[149](index=149&type=chunk) [Item 3. Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, including a Civil Investigative Demand from the US Department of Justice related to a False Claims Act investigation - The company is party to various legal proceedings that arise in the ordinary course of business[192](index=192&type=chunk) - A subsidiary received a Civil Investigative Demand from the US Department of Justice (DOJ) on September 20, 2021, in connection with a False Claims Act investigation regarding teaming agreements with OEMs, with the company cooperating with the DOJ[104](index=104&type=chunk)[657](index=657&type=chunk) [Item 4. Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business operations - Not applicable[196](index=196&type=chunk) [Information about our Executive Officers](index=25&type=section&id=Information%20about%20our%20Executive%20Officers) The report lists the executive officers of the company as of February 24, 2023, including their ages and positions Executive Officers | Name | Age | Position | | :--- | :--- | :--- | | Christine A. Leahy | 58 | Chair, President and Chief Executive Officer | | Sona Chawla | 55 | Chief Growth and Innovation Officer | | Christina M. Corley | 55 | Chief Commercial and Operating Officer | | Albert J. Miralles | 53 | Senior Vice President and Chief Financial Officer | | Carolyn Wiesenhahn | 51 | Chief People Officer and Senior Vice President, Coworker Services | [PART II](index=26&type=section&id=PART%20II) This section covers the market for the registrant's common equity, financial performance, and market risk disclosures [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) CDW's common stock is listed on Nasdaq, with the company continuing quarterly cash dividends and an active share repurchase program - The company's common stock is listed on the Nasdaq Global Select Market under the symbol "CDW"[201](index=201&type=chunk) - On February 8, 2023, the Board of Directors declared a quarterly cash dividend of **$0.59 per share**[227](index=227&type=chunk) - As of December 31, 2022, **$87.6 million** was available under the share repurchase program, which was increased by **$750 million** on February 8, 2023[229](index=229&type=chunk) [Item 6. [RESERVED]](index=28&type=section&id=Item%206.%20%5BRESERVED%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) CDW's 2022 Net sales grew 14.1% to $23.7 billion, with gross profit up 31.3% and strong cash flow generation Key Financial Metrics | Financial Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $23,748.7 M | $20,820.8 M | 14.1% | | Gross profit | $4,686.6 M | $3,568.5 M | 31.3% | | Operating income | $1,735.2 M | $1,419.0 M | 22.3% | | Net income | $1,114.5 M | $988.6 M | 12.7% | | Non-GAAP operating income | $2,050.5 M | $1,645.4 M | 24.6% | | Net income per diluted share | $8.13 | $7.04 | 15.5% | | Non-GAAP net income per diluted share | $9.79 | $7.97 | 22.8% | Net Sales by Segment | Segment | 2022 Net Sales (M) | % Change vs 2021 | | :--- | :--- | :--- | | Corporate | $10,350.1 | 26.5% | | Small Business | $1,938.9 | 3.7% | | Public | $8,551.3 | 4.5% | | Other | $2,908.4 | 12.4% | - Gross profit margin increased by **260 basis points** to **19.7%** in 2022, driven by a more favorable product mix, a higher mix of netted down revenue, and increased sales and margins from services following recent acquisitions[268](index=268&type=chunk) - Free cash flow for 2022 was **$1.3 billion**, a significant increase from **$476.7 million** in 2021[262](index=262&type=chunk) - The cash conversion cycle improved to **21 days** at the end of 2022, down from **24 days** at the end of 2021, influenced by the Sirius acquisition and an increase in netted down revenue[219](index=219&type=chunk)[300](index=300&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks relate to interest rate fluctuations and foreign currency exchange rates - The company's main market risks are from changes in interest rates and foreign currency exchange rates[171](index=171&type=chunk) - As of December 31, 2022, the company had **$857 million** of variable rate debt outstanding, exposing it to risk from interest rate increases[141](index=141&type=chunk) - Foreign currency risk stems from operations in the UK and Canada, with exposure primarily to the British pound and Canadian dollar, though the direct effect on operations has not been material[173](index=173&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=45&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements with an unqualified opinion, detailing critical audit matters and financial notes - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements, confirming they are presented fairly in conformity with U.S. GAAP[15](index=15&type=chunk)[177](index=177&type=chunk) - Critical Audit Matters identified were (1) Revenue recognition, due to judgment in determining principal vs. agent status and allocating transaction prices, and (2) Accounting for the Sirius acquisition, due to significant estimation in valuing customer relationship intangible assets[17](index=17&type=chunk)[23](index=23&type=chunk)[22](index=22&type=chunk) Consolidated Balance Sheet (As of Dec 31) | Consolidated Balance Sheet (As of Dec 31) | 2022 | 2021 | | :--- | :--- | :--- | | Total Current Assets | $6,564.0 M | $6,478.1 M | | Total Assets | $13,131.5 M | $13,199.4 M | | Total Current Liabilities | $4,947.1 M | $5,096.0 M | | Total Long-term Debt | $5,866.4 M | $6,755.8 M | | Total Liabilities | $11,528.2 M | $12,493.7 M | | Total Stockholders' Equity | $1,603.3 M | $705.7 M | Consolidated Statement of Operations (Year Ended Dec 31) | Consolidated Statement of Operations (Year Ended Dec 31) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net sales | $23,748.7 M | $20,820.8 M | $18,467.5 M | | Gross profit | $4,686.6 M | $3,568.5 M | $3,210.1 M | | Operating income | $1,735.2 M | $1,419.0 M | $1,179.2 M | | Net income | $1,114.5 M | $988.6 M | $788.5 M | - The acquisition of Sirius in 2021 for net consideration of **$2.5 billion** resulted in the allocation of **$1.2 billion** to identified intangible assets, primarily **$1.1 billion** for customer relationships[21](index=21&type=chunk)[448](index=448&type=chunk) - As of December 31, 2022, the company had total debt of **$5.9 billion**, consisting of a term loan facility, revolving loan facility, and various senior notes with maturities ranging from 2024 to 2031[489](index=489&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=83&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on any matter of accounting principles or practices, or financial statement disclosure - None[720](index=720&type=chunk) [Item 9A. Controls and Procedures](index=83&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[696](index=696&type=chunk) - Management's assessment concluded that the company's internal control over financial reporting was effective as of December 31, 2022[698](index=698&type=chunk)[722](index=722&type=chunk) - There were no changes in internal control over financial reporting during the fourth quarter of 2022 that have materially affected, or are reasonably likely to materially affect, internal controls[723](index=723&type=chunk) [Item 9B. Other Information](index=85&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[706](index=706&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=85&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - None[746](index=746&type=chunk) [PART III](index=86&type=section&id=PART%20III) This section incorporates by reference information on corporate governance, executive compensation, and related party transactions [Item 10. Directors, Executive Officers and Corporate Governance](index=86&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding the company's directors, executive officers, and corporate governance practices is incorporated by reference - Information required for this item is incorporated by reference from the company's 2023 Proxy Statement[748](index=748&type=chunk) [Item 11. Executive Compensation](index=86&type=section&id=Item%2011.%20Executive%20Compensation) Details concerning executive compensation are incorporated by reference from the company's definitive proxy statement - Information required for this item is incorporated by reference from the company's 2023 Proxy Statement[708](index=708&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=86&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information about security ownership of certain beneficial owners, management, and related stockholder matters is incorporated by reference - Information required for this item is incorporated by reference from the company's 2023 Proxy Statement[730](index=730&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=86&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference - Information required for this item is incorporated by reference from the company's 2023 Proxy Statement[749](index=749&type=chunk) [Item 14. Principal Accountant Fees and Services](index=86&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information concerning principal accountant fees and services is incorporated by reference from the company's definitive proxy statement - Information required for this item is incorporated by reference from the company's 2023 Proxy Statement[709](index=709&type=chunk) [PART IV](index=87&type=section&id=PART%20IV) This section details the exhibits and financial statement schedules filed as part of the Form 10-K report [Item 15. Exhibits and Financial Statement Schedules](index=87&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and exhibits filed as part of the Form 10-K report - This item lists the consolidated financial statements and exhibits filed with the annual report[733](index=733&type=chunk)[734](index=734&type=chunk) - Exhibits filed include various credit and indenture agreements, forms of equity award agreements, and certifications by the CEO and CFO[755](index=755&type=chunk)[757](index=757&type=chunk) [Item 16. Form 10-K Summary](index=92&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company provides no summary for this item - None[760](index=760&type=chunk)

CDW Corporation (NASDAQ:CDW) Q3 2022 Earnings Conference Call November 2, 2022 8:30 AM ET Company Participants Steven O'Brien - VP, IR Christine Leahy - President, CEO & Director Albert Miralles - SVP & CFO Conference Call Participants Shannon Cross - Crédit Suisse Amit Daryanani - Evercore ISI Erik Woodring - Morgan Stanley Ruplu Bhattacharya - Bank of America Merrill Lynch Samik Chatterjee - JPMorgan Chase & Co. James Suva - Citi Keith Housum - Northcoast Research Mark Cash - Raymond James & Associates Op ...

CDW Corporation Webcast Conference Call November 2, 2022 CDW.com | 800.800.4239 Today's Agenda ▪ Third Quarter and YTD 2022 Results ▪ Performance Drivers ▪ Outlook ▪ Q&A 2 Disclaimers Forward-Looking Statements Statements in this presentation that are not statements of historical fact are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding the future financial performance, cap ...

Table of Contents Title of each class Trading symbol(s) Name of each exchange on which registered Common stock, par value $0.01 per share CDW Nasdaq Global Select Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transit ...

CDW Corporation (NASDAQ:CDW) Q2 2022 Earnings Conference Call August 3, 2022 8:30 AM ET Company Participants Steven O'Brien - Vice President of Investor Relations Christine Leahy - President and Chief Executive Officer Albert Miralles - Senior Vice President and Chief Financial Officer Conference Call Participants Samik Chatterjee - JPMorgan Chase & Co. James Suva - Citigroup Inc. Erik Woodring - Morgan Stanley Matthew Sheerin - Stifel, Nicolaus & Company, Inc. Ruplu Bhattacharya - Bank of America Merrill L ...