Core Viewpoint - CDW reported quarterly earnings of $2.6 per share, exceeding the Zacks Consensus Estimate of $2.49 per share, and showing an increase from $2.5 per share a year ago, indicating a positive earnings surprise of +4.42% [1] Financial Performance - CDW's revenues for the quarter ended June 2025 were $5.98 billion, surpassing the Zacks Consensus Estimate by 8.51%, and up from $5.42 billion year-over-year [2] - Over the last four quarters, the company has exceeded consensus EPS estimates three times and topped revenue estimates three times [2] Stock Performance and Outlook - CDW shares have declined approximately 5.1% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $2.62 for the coming quarter and $9.73 for the current fiscal year [7] Industry Context - The Computers - IT Services industry, to which CDW belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that monitoring these revisions can be beneficial for investors [5]

Financial Performance - Q2 2025 - Net sales reached $60 billion, a 102% increase compared to the same period last year[12] - Gross profit was $12 billion, up by 49%, but the gross profit margin decreased by 100 basis points to 208%[12] - Operating income decreased by 30% to $420 million, while non-GAAP operating income increased by 18% to $520 million[12] - Net income decreased by 35% to $271 million, but non-GAAP net income per diluted share increased by 39% to $260[12] Sales by Channel - Q2 2025 - Corporate sales increased by 176% to $25815 million[13] - Small Business sales increased by 126% to $4313 million[13] - Healthcare sales increased significantly by 241% to $7285 million[13] - Education sales experienced a decline of 109%, reaching $9067 million[13] Liquidity and Cash Flow - Total debt was $56327 million as of June 30, 2025[16] - Free cash flow for the quarter was $1334 million, and adjusted free cash flow was $2101 million[18] - The company returned $515 million year-to-date to shareholders through share repurchases and dividends[19] 2025 Outlook - The company anticipates U S IT growth plus a premium target of approximately 200 to 300 basis points[21] - The company expects low-to-mid single-digit growth in gross profit[21] - The company projects low-single-digit growth in non-GAAP net income per diluted share[21]

[CDW Q2 2025 Earnings Overview](index=1&type=section&id=CDW%20Reports%20Second%20Quarter%202025%20Earnings) CDW reported strong Q2 2025 net sales growth to $5.98 billion, but GAAP net income declined, while non-GAAP metrics showed modest growth [Financial Highlights](index=1&type=section&id=Financial%20Highlights) CDW reported strong Q2 2025 top-line growth with net sales up 10.2% to $5.98 billion, though GAAP net income decreased 3.5% Q2 2025 Key Financial Metrics (GAAP) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $5,976.6 M | $5,423.4 M | 10.2% | | Gross Profit | $1,241.2 M | $1,183.1 M | 4.9% | | Operating Income | $420.2 M | $433.1 M | (3.0)% | | Net Income | $271.2 M | $281.1 M | (3.5)% | | Diluted EPS | $2.05 | $2.07 | (1.2)% | Q2 2025 Key Financial Metrics (Non-GAAP) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Non-GAAP Operating Income | $519.7 M | $510.3 M | 1.8% | | Non-GAAP Net Income | $343.7 M | $338.8 M | 1.4% | | Non-GAAP Diluted EPS | $2.60 | $2.50 | 3.9% | - The Board of Directors approved a quarterly cash dividend of **$0.625 per common share**, payable on September 10, 2025[3](index=3&type=chunk) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management highlighted strong top-line growth and effective working capital management, reaffirming targets to exceed US IT market growth - CEO Christine A. Leahy attributed the strong performance to the company's balanced portfolio and ability to help customers with mission-critical outcomes across the full IT stack[4](index=4&type=chunk) - CFO Albert J. Miralles noted that strong topline growth was coupled with consistent cash flow, enabled by effective working capital management[4](index=4&type=chunk) - CDW continues to target exceeding US IT market growth by **200 to 300 basis points** on a constant currency basis by focusing on the needs of its customers and partners[4](index=4&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) This section details Q2 2025 financial performance, including revenue growth, gross profit margin decline, and operating income contraction [Revenue and Gross Profit Analysis](index=2&type=section&id=Revenue%20and%20Gross%20Profit%20Analysis) Q2 2025 net sales increased 10.2% to $5.98 billion, driven by demand across categories, but gross profit margin declined by 100 basis points - The increase in Net Sales was driven by higher customer demand for notebooks/mobile devices, software, netcomm products, and data storage and servers[5](index=5&type=chunk) Q2 2025 Net Sales by Segment (vs. Q2 2024) | Segment | Q2 2025 Net Sales | % Change YoY | | :--- | :--- | :--- | | Corporate | $2,582 M | 17.6% | | Small Business | $431 M | 12.6% | | Public | $2,292 M | 2.2% | | - Healthcare | - | 24.1% | | - Government | - | 2.7% | | - Education | - | (10.9)% | | Other (UK & Canada) | $672 M | 11.6% | - Gross profit margin decreased from **21.8% in Q2 2024 to 20.8% in Q2 2025**, attributed to decreased rates in hardware categories and a lower contribution from netted down revenue[6](index=6&type=chunk) [Operating Expenses and Profitability](index=2&type=section&id=Operating%20Expenses%20and%20Profitability) Q2 2025 operating income decreased 3.0% to $420 million, with margin contraction due to increased selling and administrative expenses - Selling and administrative expenses increased **9.5% to $821 million**, primarily due to higher performance-based compensation, transformation costs, workplace optimization costs, and amortization of acquisition-related intangibles[7](index=7&type=chunk) Q2 2025 Profitability Metrics | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Operating Income | $420 M | $433 M | (3.0)% | | Operating Income Margin | 7.0% | 8.0% | -100 bps | | Net Income | $271 M | $281 M | (3.5)% | - Net interest expense increased by **8.6% to $57 million**, mainly due to lower interest income on cash balances and a higher fixed interest rate on senior notes[9](index=9&type=chunk) - The effective income tax rate was **25.7%**, slightly down from 26.0% in the prior year, primarily due to higher excess tax benefits on equity-based compensation[10](index=10&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents CDW's consolidated statements of operations, balance sheets, and cash flow for Q2 2025 [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) The statement shows Q2 2025 net sales growth of 10.2% to $5.98 billion, but higher costs led to declines in operating and net income Consolidated Statements of Operations - Q2 2025 vs Q2 2024 (in millions) | Line Item | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $5,976.6 | $5,423.4 | 10.2% | | Gross profit | $1,241.2 | $1,183.1 | 4.9% | | Operating income | $420.2 | $433.1 | (3.0)% | | Income before income taxes | $364.9 | $379.7 | (3.9)% | | Net income | $271.2 | $281.1 | (3.5)% | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $15.27 billion, driven by receivables and goodwill, with total debt at $5.63 billion Key Balance Sheet Items (in millions) | Account | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $481.0 | $665.3 | | Accounts receivable, net | $5,626.9 | $4,718.8 | | Total assets | $15,265.7 | $13,638.7 | | Total debt (Current + Long-term) | $5,632.7 | $5,628.3 | | Total stockholders' equity | $2,467.2 | $2,174.9 | [Cash Flow, Debt, and Working Capital](index=10&type=section&id=Cash%20Flow%2C%20Debt%2C%20and%20Working%20Capital) Net cash from operating activities decreased to $443.1 million for H1 2025, while the cash conversion cycle improved to 16 days Cash Flow Summary - Six Months Ended June 30 (in millions) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $443.1 | $589.9 | | Capital expenditures | $(49.4) | $(60.4) | | Net cash (used in) financing activities | $(649.2) | $(449.6) | Working Capital and Debt Metrics | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash conversion cycle | 16 days | 17 days | | Total debt | $5,632.7 M | $5,628.3 M | | Net debt | $5,151.7 M | $4,963.0 M | [Non-GAAP Financial Measures and Reconciliations](index=11&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section explains and reconciles non-GAAP financial measures, providing insights into underlying operating performance [Explanation and Reconciliation of Non-GAAP Measures](index=11&type=section&id=Explanation%20and%20Reconciliation%20of%20Non-GAAP%20Measures) CDW uses non-GAAP measures to show underlying performance by excluding specific items, with Q2 2025 non-GAAP operating income at $519.7 million - The company believes non-GAAP measures provide useful information by removing the impact of items not reflective of underlying operating performance, such as amortization of acquisition-related intangibles, equity-based compensation, and transformation initiatives[20](index=20&type=chunk)[21](index=21&type=chunk) Reconciliation of GAAP to Non-GAAP Operating Income - Q2 2025 (in millions) | Description | Amount | | :--- | :--- | | **Operating income, as reported (GAAP)** | **$420.2** | | Amortization of intangibles | $42.4 | | Equity-based compensation | $23.5 | | Transformation initiatives | $17.4 | | Workplace optimization | $12.7 | | Other adjustments | $3.5 | | **Non-GAAP operating income** | **$519.7** | Reconciliation of GAAP to Non-GAAP Net Income - Q2 2025 (in millions) | Description | Amount | | :--- | :--- | | **Net income, as reported (GAAP)** | **$271.2** | | Non-GAAP adjustments (pre-tax) | $100.0 | | Tax effect of adjustments | $(27.0) | | **Non-GAAP net income** | **$343.7** | - Adjusted Free Cash Flow for the six months ended June 30, 2025 was **$458.9 million**, compared to $502.8 million for the same period in 2024[59](index=59&type=chunk) [Other Information](index=3&type=section&id=Other%20Information) This section includes cautionary forward-looking statements and general information about CDW Corporation [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to risks and uncertainties, including economic conditions and competition, which may cause actual results to differ - The report contains forward-looking statements that are subject to risks and uncertainties which may cause actual results to differ materially from expectations[14](index=14&type=chunk)[15](index=15&type=chunk) - Key risk factors include inflationary pressures, interest rates, vendor relationships, competition, cybersecurity threats, and global economic and political conditions[16](index=16&type=chunk) [About CDW and Investor Relations](index=5&type=section&id=About%20CDW%20and%20Investor%20Relations) CDW, a Fortune 500 IT solutions provider, announced a conference call to discuss Q2 results and provided investor contact information - CDW is a leading multi-brand provider of IT solutions and a member of the Fortune 500 and S&P 500 Index[24](index=24&type=chunk) - A conference call to discuss the financial results was scheduled for August 6, 2025, with a webcast available on the company's investor relations website[25](index=25&type=chunk)

Core Insights - CDW Corporation is set to report its second-quarter 2025 results on August 6, with revenue expectations of $5.5 billion, reflecting a 1.6% year-over-year growth [1] - The consensus estimate for earnings per share is $2.49, indicating a 0.4% decline from the previous year's quarter [2] - CDW has a history of resilient performance, with earnings missing estimates in two of the last four quarters but beating in the others, averaging a surprise of 2.1% [2] Revenue Breakdown - Expected revenues for the second quarter are projected as follows: Corporate at $2.2 billion (up 0.4%), Government at $654.9 million (up 2.5%), Healthcare at $599.6 million (up 2.2%), Education at $1.05 billion, and Small Business at $356.6 million [7] Profitability and Expenses - CDW anticipates gross profit of $1.26 billion for Q2, with non-GAAP EPS expected to be $2.47, remaining flat year-over-year [10][11] - Operating expenses are projected to rise in line with seasonal patterns, but non-GAAP SG&A as a percentage of gross profit is expected to be lower than the previous quarter [9] Strategic Initiatives - The acquisition of Mission Cloud Services is a key driver for enhancing CDW's AI and AWS capabilities, aligning with its customer-centric growth strategy [5] - CDW's focus on addressing customer challenges related to cloud workload growth, security threats, and AI adoption is expected to positively impact performance [3] Market Trends - Demand in the healthcare sector is likely boosted by the need for devices, cloud services, and security, while the education sector benefits from strong Chromebook demand [6] - Despite cautious spending, commercial market activity remains healthy, with CDW assisting clients in optimizing spending and planning for future projects [4] Recent Developments - In July 2025, CDW partnered with Asato Corporation to deliver AI-powered IT asset intelligence, enhancing its service offerings to a wide range of customers [12] Earnings Prediction - CDW's earnings model indicates a potential earnings beat, supported by a positive Earnings ESP of +2.41% and a Zacks Rank of 2 [13]

In its upcoming report, CDW (CDW) is predicted by Wall Street analysts to post quarterly earnings of $2.49 per share, reflecting a decline of 0.4% compared to the same period last year. Revenues are forecasted to be $5.51 billion, representing a year-over-year increase of 1.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe. Prior to a company's earni ...

Core Viewpoint - CDW has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, indicating a positive earnings outlook that may lead to increased stock price [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in a company's earnings picture, which is a significant factor influencing stock prices [2][4]. - Rising earnings estimates are strongly correlated with near-term stock price movements, particularly due to the actions of institutional investors who adjust their valuations based on these estimates [4][5]. CDW's Earnings Outlook - CDW is expected to earn $9.73 per share for the fiscal year ending December 2025, with no year-over-year change, but analysts have raised their estimates by 1.4% over the past three months [8]. - The upgrade to Zacks Rank 2 reflects an improvement in CDW's underlying business, which is likely to attract investor interest and push the stock higher [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - Only the top 20% of Zacks-covered stocks receive a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions and potential for market-beating returns [9][10].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for CDW despite an increase in revenues, with the actual results being crucial for stock price movement [1][2]. Earnings Expectations - CDW is expected to report quarterly earnings of $2.49 per share, reflecting a -0.4% change year-over-year, while revenues are projected to be $5.51 billion, up 1.6% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [4]. Earnings Surprise Prediction - The Zacks Earnings ESP for CDW is +2.41%, suggesting a positive outlook as the Most Accurate Estimate exceeds the Zacks Consensus Estimate [12]. Historical Performance - In the last reported quarter, CDW exceeded expectations with earnings of $2.15 per share against an estimate of $1.96, resulting in a surprise of +9.69% [13]. Overall Assessment - CDW is viewed as a strong candidate for an earnings beat, but investors should consider additional factors beyond earnings results when making investment decisions [15][17].

Core Viewpoint - CDW is positioned well to potentially beat earnings estimates in its upcoming quarterly report, supported by a strong history of exceeding expectations [1][2]. Earnings Performance - CDW has a solid track record of surpassing earnings estimates, with an average surprise of 8.07% over the last two quarters [2]. - In the last reported quarter, CDW achieved earnings of $2.15 per share, exceeding the Zacks Consensus Estimate of $1.96 per share by 9.69% [3]. - In the previous quarter, CDW's actual earnings were $2.48 per share, surpassing the expected $2.33 per share, resulting in a surprise of 6.44% [3]. Earnings Estimates and Predictions - Recent estimates for CDW have been trending upward, indicating positive sentiment among analysts [5]. - The Zacks Earnings ESP for CDW is currently +2.41%, suggesting increased bullishness regarding its near-term earnings potential [8]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) indicates a strong likelihood of another earnings beat [8]. Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [6]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [7].

Core Viewpoint - CDW Corporation is a leading provider of integrated information technology solutions, primarily generating revenue from the United States market [1]. Group 1: Company Overview - CDW Corporation operates through four reportable segments: Corporate, Public, Small Business, and Other (which includes CDW UK) [1]. Group 2: Educational Background of Analysts - The analyst has a master's degree in Analytics from Northwestern University and a bachelor's degree in Accounting, with over 10 years of experience in the investment arena [1]. Group 3: Investment Focus - The analyst expresses a personal interest in dividend investing and aims to share insights with the Seeking Alpha community [1].

Core Insights - CDW Corporation has partnered with Asato Corporation to provide AI-powered IT asset intelligence, addressing the complexities of modern IT infrastructures for a wide range of customers, from large enterprises to SMBs [1][9] - The collaboration aims to simplify IT operations, reduce costs, and enhance decision-making through Asato's AI-native business observability platform [2][3] Group 1: Partnership and Platform Benefits - The integration of Asato's platform into CDW's solutions enhances both companies' capabilities, allowing organizations to streamline IT operations and make smarter technology investments [3] - Asato's platform has shown measurable results in pilot deployments, including improved IT asset visibility, reduced technology waste, and enhanced financial planning [4][9] - The partnership provides a direct way for organizations to reduce IT bottlenecks and maximize asset utilization through AI-driven decision-making [5] Group 2: Customer Focus and Market Trends - CDW emphasizes tailored solutions for clients with diverse technology needs, ensuring effective and cost-conscious solutions amid macroeconomic uncertainties [6][8] - A notable project involved migrating a commercial truck manufacturer's HR systems to a cloud-hosted environment, generating over $1 million in professional services fees [7] - Despite cautious spending due to global uncertainties, customers remain focused on mission-critical projects, with CDW assisting in optimizing expenditures and planning [7][8]