Group 1 - The core viewpoint is a reiteration of a buy rating on CDW Corporation, highlighting the significance of a hardware refresh cycle that is expanding, leading to increased infrastructure spending [1] - The hardware refresh cycle is expected to contribute to higher-value infrastructure spending, which is beneficial for CDW Corporation [1] Group 2 - The investment approach focuses on identifying undervalued companies with long-term growth potential, emphasizing a blend of value investing principles [1] - The strategy involves purchasing quality companies at a discount to their intrinsic value and holding them for long-term earnings and shareholder returns [1]

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The section presents unaudited consolidated financial statements for the periods ended June 30, 2025 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $15.27 billion, driven by higher accounts receivable and inventory Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $7,836.5 | $7,373.1 | | **Total Assets** | **$15,265.7** | **$14,678.4** | | **Total Current Liabilities** | $5,805.7 | $5,474.4 | | **Total Long-term Debt** | $5,623.2 | $5,607.0 | | **Total Liabilities** | $12,798.5 | $12,325.7 | | **Total Stockholders' Equity** | $2,467.2 | $2,352.7 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Net sales grew 10.2% in Q2 2025, though operating income and diluted EPS saw slight declines Key Performance Indicators - Three Months Ended June 30 (in millions, except EPS) | Metric | 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% | | Net income | $271.2 | $281.1 | -3.5% | | Diluted EPS | $2.05 | $2.07 | -1.0% | Key Performance Indicators - Six Months Ended June 30 (in millions, except EPS) | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $11,175.7 | $10,296.1 | 8.5% | | Gross profit | $2,363.5 | $2,246.4 | 5.2% | | Operating income | $781.6 | $761.1 | 2.7% | | Net income | $496.1 | $497.2 | -0.2% | | Diluted EPS | $3.73 | $3.66 | 1.9% | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased to $443.1 million due to working capital changes Cash Flow Summary - Six Months Ended June 30 (in millions) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $443.1 | $589.9 | | Net cash provided by (used in) investing activities | $154.6 | $(60.6) | | Net cash (used in) financing activities | $(649.2) | $(449.6) | | **Net (decrease) increase in cash** | **$(26.5)** | **$76.6** | - Key financing activities in the first six months of 2025 included **$350.1 million in common stock repurchases** and **$165.1 million in dividend payments**[16](index=16&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment performance, debt, and legal matters - The company is a leading multi-brand provider of IT solutions to business, government, education, and healthcare customers in the US, UK, and Canada[24](index=24&type=chunk) - Total long-term debt stood at **$5.62 billion** as of June 30, 2025, and the company repaid **$211 million** of its 4.125% Senior Notes in May 2025[44](index=44&type=chunk)[47](index=47&type=chunk) - The company received a Civil Investigative Demand from the Department of Justice related to a **False Claims Act investigation** concerning the E-Rate Program, with the outcome currently indeterminable[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial results, highlighting sales growth offset by margin pressure - Key factors affecting performance include general economic conditions, a measured approach to IT spending by customers, and technology trends driving adoption of cloud, AI, and hybrid solutions[94](index=94&type=chunk)[96](index=96&type=chunk) Key Business Metrics Summary | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales ($M) | $5,976.6 | $5,423.4 | $11,175.7 | $10,296.1 | | Gross profit margin | 20.8% | 21.8% | 21.1% | 21.8% | | Operating income margin | 7.0% | 8.0% | 7.0% | 7.4% | | Non-GAAP operating income margin | 8.7% | 9.4% | 8.6% | 8.9% | | Non-GAAP net income per diluted share | $2.60 | $2.50 | $4.74 | $4.41 | [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Q2 2025 net sales grew 10.2%, but a decline in gross margin led to lower operating income - **Q2 2025 vs Q2 2024:** Net sales increased by **$553 million (10.2%)**, but Gross Profit only grew by **$58 million (4.9%)** due to a 100 basis point decline in gross profit margin, leading to a **$13 million (3.0%) decrease in Operating Income**[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - **H1 2025 vs H1 2024:** Net sales increased by **$880 million (8.5%)**, and Gross Profit grew by **$117 million (5.2%)**, resulting in an Operating Income increase of **$21 million (2.7%)**[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [Segment Results of Operations](index=28&type=section&id=Segment%20Results%20of%20Operations) The Corporate segment led sales growth, while the Public segment's operating income declined Net Sales Growth by Segment - Q2 2025 vs Q2 2024 | Segment | Q2 2025 Net Sales ($M) | % Change YoY | | :--- | :--- | :--- | | Corporate | $2,581.5 | 17.6% | | Small Business | $431.3 | 12.6% | | Public | $2,291.7 | 2.2% | | Other | $672.1 | 11.6% | Operating Income by Segment - Q2 2025 vs Q2 2024 | Segment | Q2 2025 Op. Income ($M) | % Change YoY | | :--- | :--- | :--- | | Corporate | $243.1 | 23.4% | | Small Business | $47.8 | 4.8% | | Public | $187.5 | -10.4% | | Other | $42.6 | 76.0% | | Headquarters (cost) | $(100.8) | -135.0% | - The Public segment's performance was mixed: **Healthcare sales grew 24.1%**, Government sales grew 2.7%, but **Education sales declined 10.9%** year-over-year in Q2 2025[113](index=113&type=chunk)[124](index=124&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by operations and a revolving facility despite lower operating cash flow - As of June 30, 2025, the company had **$1.2 billion of availability** under its Revolving Loan Facility and total unsecured debt of **$5.6 billion**[150](index=150&type=chunk)[151](index=151&type=chunk) - During H1 2025, the company repurchased **2.0 million shares for $350 million**[154](index=154&type=chunk) - The cash conversion cycle decreased by one day to **16 days**, driven by an increase in Days of Purchases Outstanding (DPO)[159](index=159&type=chunk)[161](index=161&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk disclosures remain materially unchanged from the previous annual report - There have been **no material changes** in market risk information since the last annual report[176](index=176&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective with no material changes to internal controls - Management concluded that disclosure controls and procedures were **effective** as of the end of the period covered by the report[177](index=177&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[178](index=178&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings and a DOJ investigation - The company is subject to various legal proceedings and is cooperating with a **Department of Justice investigation** related to the Schools and Libraries Program (E-Rate Program)[63](index=63&type=chunk)[66](index=66&type=chunk)[180](index=180&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) Risk factors remain materially unchanged from the 2024 Annual Report on Form 10-K - There are **no material changes** to the risk factors previously disclosed in the company's 2024 Form 10-K[181](index=181&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 0.9 million shares for $150 million in Q2 2025 Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased (millions) | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 0.2 | $152.83 | | May 2025 | 0.3 | $182.93 | | June 2025 | 0.4 | $175.94 | | **Total** | **0.9** | **-** | - As of June 30, 2025, **$987.5 million remained available** for future repurchases under the authorized program[183](index=183&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including certifications and XBRL data - Exhibits filed include CEO and CFO certifications pursuant to Rule 15d-14(a) and 18 U.S.C. 1350, as well as Inline XBRL documents[188](index=188&type=chunk)

Core Insights - CDW Corporation reported second-quarter 2025 non-GAAP EPS of $2.60, exceeding the Zacks Consensus Estimate of $2.49, with a year-over-year increase of 3.9% [1][9] - Net sales for the quarter reached $5.98 billion, reflecting a solid 10.2% year-over-year growth, with a 9.8% increase on a constant currency basis [2][9] Financial Performance - The Corporate segment's net sales were $2.6 billion, up 17.6% year-over-year, while the Small Business segment reported $431 million in net sales, a 12.6% increase [7] - The Public segment generated $2.3 billion in revenues, representing a 2.2% growth, driven by a 24.1% increase in Healthcare and a 2.7% increase in Government, offset by a 10.9% decline in Education [7] - Gross profit grew 4.9% year-over-year to $1.24 billion, but gross margin declined from 21.8% to 20.8% due to pricing pressures [11] - Non-GAAP operating income increased 1.8% year-over-year to $519.7 million, with non-GAAP operating margin falling to 8.7% from 9.4% [11] Market Dynamics - Growth was supported by strong demand in IT lifecycle services, device refresh cycles, and international markets [9] - CDW's customer-focused approach and extensive product portfolio are crucial for addressing complex technology needs across the IT stack [4] Future Outlook - CDW aims to outpace U.S. IT market growth by 200–300 basis points on a constant currency basis, focusing on trends like cloud modernization and cybersecurity [5] - The company announced a quarterly dividend of 62.5 cents, payable on September 10, 2025 [5] Share Performance - Following strong demand across core commercial and international markets, CDW's shares rose 4.3% in pre-market trading on August 6 [6] - Over the past year, CDW's shares have declined by 21%, compared to a 3.1% decline in the Zacks Computers-IT Services industry [6] Balance Sheet and Cash Flow - As of June 30, 2025, CDW had $481 million in cash and cash equivalents, with long-term debt remaining at $5.623 billion [13] - For the first half of 2025, CDW generated $443.1 million in cash flow from operating activities, down from $589.9 million a year ago [13]

Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2025 were $6 billion, up 10% year-over-year [8] - Gross profit was $1.2 billion, an increase of 5% [8] - Non-GAAP operating income rose to $520 million, up 2% [8] - Non-GAAP net income per share was $2.60, reflecting a 4% increase [9] - Adjusted free cash flow for the quarter was $210 million [9] Business Line Data and Key Metrics Changes - Corporate net sales increased by 18%, while small business sales rose by 13% [12] - Health care sales surged by 24%, while education saw an 11% decline [13] - Hardware sales grew by 9%, driven by infrastructure solutions and client devices [17] - Software sales increased by 16%, with strong growth across all markets except K-12 [18] - Services revenue was up 8%, with professional managed services growing by 13% [18] Market Data and Key Metrics Changes - The commercial market showed strong performance, offsetting declines in federal and education sectors [12][14] - UK and Canadian operations reported a combined top line increase of 12% [16] - Federal market performance was mixed, with a 3% increase in government sales but declines in federal purchases [15] Company Strategy and Development Direction - The company maintains a focus on full stack, full life cycle solutions to address customer needs [6][19] - Strategic investments in services capabilities are seen as key differentiators in the market [19] - The company aims to navigate market dislocations in government and education while leveraging its scale and expertise [24][25] Management's Comments on Operating Environment and Future Outlook - Management expects continued challenges in the government and education sectors for the remainder of the year [23][24] - The outlook for 2025 remains cautious, with low single-digit growth anticipated for the IT market [23][38] - Management emphasizes a commitment to delivering customer value and executing with precision [25] Other Important Information - Non-GAAP SG&A expenses totaled $722 million, up 7.2% year-over-year [30] - The company returned approximately $150 million in share repurchases and $82 million in dividends during the quarter [33] - The liquidity position remains strong, with cash and revolver availability of approximately $1.7 billion [32] Q&A Session Summary Question: Performance vs. Market Expectations - Analyst inquired about the company's outperformance relative to market expectations and share gain [43] - Management confirmed confidence in outperforming the market by 200 to 300 basis points, attributing recent performance to strong execution and customer demand [44][45] Question: Product Segment Performance - Analyst asked about the performance of hardware segments and market cycles [46] - Management noted mid-cycle strength in client devices and an uptick in infrastructure hardware demand [47][48] Question: Corporate Market Strength - Analyst sought clarification on the motivating factors behind strong corporate market performance [54] - Management highlighted pent-up demand and strategic investments as key drivers [57][59] Question: Free Cash Flow Conversion - Analyst questioned the subdued free cash flow conversion rate [67] - Management attributed this to timing effects and expects improvement in the second half of the year [68] Question: AI Impact on Revenues - Analyst asked about the influence of AI on client device upgrades and data center demand [97] - Management indicated a growing urgency around AI, with increased conversations and demand across all product lines [99][100]

Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2025 were $6 billion, up 10% year-over-year [6] - Gross profit was $1.2 billion, an increase of 5% [6] - Non-GAAP operating income rose to $520 million, up 2% [6] - Non-GAAP net income per share was $2.60, reflecting a 4% increase [7] - Adjusted free cash flow for the quarter was $210 million [7] Business Line Data and Key Metrics Changes - Corporate net sales increased by 18%, while small business sales rose by 13% [10] - Health care sales surged by 24%, while education saw an 11% decline [11][12] - Hardware sales grew by 9%, driven by infrastructure solutions and client devices [15] - Software sales increased by 16%, with strong growth across all markets except K-12 [16] Market Data and Key Metrics Changes - U.S. IT market growth is expected to be in the low single digits, with CDW targeting a growth premium of 200 to 300 basis points [22] - Federal and education markets are facing ongoing challenges, impacting overall performance [22] - UK and Canadian operations reported a combined top line increase of 12% [14] Company Strategy and Development Direction - The company emphasizes a diversified portfolio of products and services to navigate market complexities [6] - Focus on full stack, full life cycle solutions to enhance customer relationships and drive growth [18] - Continued investment in AI capabilities to support customer needs across various sectors [19] Management's Comments on Operating Environment and Future Outlook - Management expects continued challenges in government and education sectors, impacting growth [22] - The company remains committed to executing its strategy and maximizing its business model strengths [23] - Anticipated gross profit growth for the full year 2025 is expected to be low to mid single digits [37] Other Important Information - Non-GAAP SG&A expenses totaled $722 million, up 7.2% year-over-year [29] - The company returned approximately $150 million in share repurchases and $82 million in dividends [32] - The cash conversion cycle was 16 days, reflecting effective working capital management [31] Q&A Session Summary Question: Regarding outperformance versus market expectations - Management confirmed that the outperformance is driven by market conditions and customer demand, expecting to maintain a growth premium [44] Question: Insights on hardware market cycles - Management indicated that the client device refresh cycle is mid-cycle, with positive trends in infrastructure hardware [47][50] Question: Factors behind corporate market strength - The corporate market's strength is attributed to pent-up demand and strategic investments in mission-critical technology [57] Question: Guidance for Q4 earnings - Management expressed conservatism in Q4 guidance due to expected softness in federal and education segments [82] Question: Impact of AI on revenues - AI is becoming a significant part of customer conversations, with increasing demand for AI-driven solutions across client devices and infrastructure [96] Question: M&A opportunities - The company is focused on growing capabilities in high-relevance areas, particularly in services-led capabilities [102]

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 ...