Operating income increased 4.2% to $23.6 million. Excluding severance expenses and other charges, operating income rose 17.8% to $26.7 million. Diluted earnings per share were $0.82, up 5.1%, while adjusted diluted EPS was $0.91, up 16.7% year over year.On a consolidated basis, gross profit increased 4.5% year over year to $135.6 million, and gross margin expanded 100 basis points to 19.3%, which management said reflected disciplined pricing and a shift in product and customer mix. Total net sales were $702 ...

PC Connection (CNXN) came out with quarterly earnings of $0.91 per share, beating the Zacks Consensus Estimate of $0.86 per share. This compares to earnings of $0.78 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +5.81%. A quarter ago, it was expected that this information technology services provider would post earnings of $1.01 per share when it actually produced earnings of $0.97, delivering a surprise of -3.96%.Over the l ...

PC Connection (NasdaqGS:CNXN) Q4 2025 Earnings call February 04, 2026 04:30 PM ET Company ParticipantsAdam Tindle - Managing DirectorSamantha Tracy - Head of Investor RelationsThomas Baker - Senior VP, Treasurer, and CFOTimothy McGrath - President and CEOConference Call ParticipantsAnthony Lebiedzinski - Senior Equity AnalystOperatorGood afternoon, and welcome to the Q4 2025 Connection Earnings Conference Call. My name is Lisa, and I will be the coordinator for the call today. At this time, all participants ...

PC Connection (NasdaqGS:CNXN) Q4 2025 Earnings call February 04, 2026 04:30 PM ET Company ParticipantsAdam Tindle - Managing DirectorSamantha Tracy - Head of Investor RelationsThomas Baker - Senior VP, Treasurer, and CFOTimothy McGrath - President and CEOConference Call ParticipantsAnthony Lebiedzinski - Senior Equity AnalystOperatorGood afternoon, and welcome to the fourth quarter 2025 Connection Earnings Conference Call. My name is Lisa, and I will be the coordinator for the call today. At this time, all ...

PC Connection (NasdaqGS:CNXN) Q4 2025 Earnings call February 04, 2026 04:30 PM ET Speaker2Good afternoon, and welcome to the fourth quarter 2025 Connection Earnings Conference Call. My name is Lisa, and I will be the coordinator for the call today. At this time, all participants are in a listen-only mode. Following the prepared remarks, there will be a question-and-answer session. As a reminder, this conference call is the property of Connection and may not be recorded or rebroadcast without specific permis ...

Financial Performance - Net sales for Q4 2025 decreased by 0.8% year over year to $702.9 million, while gross billings increased by 2.9% to $1.1 billion[3] - Gross profit for Q4 2025 rose by 4.5% to $135.6 million, with gross margin increasing by 100 basis points to 19.3%[5] - Net income for Q4 2025 remained flat at $20.7 million, translating to diluted EPS of $0.82, up from $0.78 in Q4 2024[3] - For the full year 2025, net sales increased by 2.5% to $2.9 billion, with gross billings rising by 2.7% to $4.1 billion[10] - Adjusted diluted EPS for Q4 2025 was $0.91, compared to $0.78 for Q4 2024, reflecting a significant year-over-year increase[3] - Net income for the year ended December 31, 2025, was $83,722,000, down from $87,095,000 in 2024[29] - Net income for Q4 2025 was $20,712, a slight decrease of 0% compared to $20,721 in Q4 2024, and total net income for the year was $83,722, down 4% from $87,095 in 2024[33] - Adjusted Net Income for Q4 2025 rose by 11% to $23,063 from $20,721 in Q4 2024, with total Adjusted Net Income for the year at $88,149, a 2% increase from $86,142[36] Segment Performance - The Business Solutions segment saw a 4.2% increase in net sales to $273.5 million in Q4 2025, while the Public Sector Solutions segment experienced a 36.8% decline to $90.8 million[11] - Enterprise Solutions net sales rose to $338,662,000 with a gross margin of 14.2%, compared to $302,711,000 and 14.9% in the previous year[28] Cash and Liquidity - Cash and cash equivalents as of December 31, 2025, were $406.7 million, down from $442.6 million a year earlier[9] - Cash and cash equivalents increased to $193,221,000 from $178,318,000 year-over-year[30] - Cash flows provided by operating activities for Q4 2025 were $27,418, compared to $25,248 in Q4 2024, with total cash flows for the year at $65,438, significantly down from $173,868[31] - The company declared a quarterly dividend of $0.20 per share, with a total of $81.2 million available for future share repurchases[2] Shareholder Actions - The company repurchased 179,235 shares at an aggregate price of $10.7 million during Q4 2025[9] Expenses and Other Income - The company reported a significant increase in severance expenses, totaling $3,083 in Q4 2025, compared to none in Q4 2024, reflecting restructuring activities[36] - The company recorded $1.7 million in other income from a legal settlement, impacting the financial results positively[34] - Total depreciation and amortization expenses for Q4 2025 were $2,850, a 10% decrease from $3,166 in Q4 2024[33] Operational Metrics - Inventory turns decreased to 18 from 23, indicating a slower inventory turnover rate[26] - Days sales outstanding increased to 76 days from 72 days, reflecting a longer collection period for receivables[26] - Total assets increased to $1,350,925,000 from $1,299,354,000 year-over-year[30] Earnings Per Share - Diluted earnings per share increased by 5% to $0.82 from $0.78 year-over-year[26] - Diluted Earnings per Share for Q4 2025 increased by 5% to $0.82 compared to $0.78 in Q4 2024, while Adjusted Diluted Earnings per Share rose by 16% to $0.91 from $0.78[36] EBITDA - Adjusted EBITDA for the year ended December 31, 2025, increased by 6% to $126.4 million compared to $118.9 million in 2024[13] - Adjusted EBITDA for Q4 2025 increased by 13% to $31,771 compared to $28,083 in Q4 2024, while the last twelve months (LTM) Adjusted EBITDA was $126,417, up 6% from $118,936[33] Interest Income - The company experienced a 25% decrease in interest income, reporting $(3,591) in Q4 2025 compared to $(4,779) in Q4 2024[33]

Summary of PC Connection Conference Call - December 11, 2025 Company Overview - **Company Name**: PC Connection (NasdaqGS: CNXN) - **Founded**: 43 years ago, went public in 1998 - **Employees**: Approximately 2,500 - **Shares Outstanding**: About 25 million - **Mission**: To be a leading global solution provider connecting customers with technology that enhances growth, elevates productivity, and empowers innovation [4][5] Core Business Segments - **Enterprise Group**: Focused on clients with 3,000 seats and above - **Business Solutions Team**: Targets clients with 3,000 seats and below - **Public Sector Team**: Serves state, local, K-12, and higher education [6][7] Go-to-Market Strategy - **Specialization**: Each subsidiary specializes in its area to enhance customer service and expertise [5][6] - **MarkITplace**: An IT procurement tool that allows customers to manage their IT assets and inventory effectively [6] - **Vertical Markets**: Focus on healthcare, manufacturing, retail, and financial sectors [7] Financial Performance - **Revenue Growth**: Reported $3.6 billion in revenue for 2024, a record for the company, with a gross profit of $520 million (18.5% gross margin) [18][19] - **Net Promoter Score**: Achieved a score of 82, significantly higher than the industry average [10] - **Earnings Per Share**: Increased from $3.15 to $3.29 year-over-year [19] - **Cash Flow**: Consistent cash generation with inventory turnover of 18 times a year and DSO of 74 days [20] Shareholder Returns - **Dividends**: Increased from $0.08 to $0.15 per share over the past years, with a commitment to return cash to shareholders [21][22] - **Share Buybacks**: Approximately $65 million worth of stock repurchased in the first three quarters of the year [22] Growth Drivers - **AI and Modern Infrastructure**: Focus on secure and hybrid data centers, digital workspace solutions, and supply chain management [13][14] - **AI Center (Helix)**: A dedicated group for applied AI and robotics, with 120 specialists and partnerships with major tech companies [12][13] Market Trends and Future Outlook - **Demand for AI**: Anticipated growth in demand for edge computing, network bandwidth, and hybrid cloud solutions driven by AI [34] - **Gross Margin Improvement**: Achieved a record gross margin of 19.6% in Q3, driven by a better mix of business and improved operational efficiency [30][33] Corporate Responsibility - **Sustainability Initiatives**: Published inaugural sustainability report and focused on charitable contributions [24] Conclusion - **Investment Rationale**: Strong customer loyalty, recurring revenue streams, financial stability, and global capabilities position the company well for future growth [24][25]

Core Insights - PC Connection (CNXN) reported quarterly earnings of $0.97 per share, missing the Zacks Consensus Estimate of $1.01 per share, representing an earnings surprise of -3.96% [1] - The company posted revenues of $709.07 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 4.66% and down from $724.72 million a year ago [2] - The stock has underperformed the market, losing about 9.9% since the beginning of the year compared to the S&P 500's gain of 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.94 on revenues of $750.43 million, and for the current fiscal year, it is $3.51 on revenues of $2.95 billion [7] - The estimate revisions trend for PC Connection was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Retail - Computer Hardware industry, to which PC Connection belongs, is currently in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

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Financial Data and Key Metrics Changes - Gross profit increased 2.4% year over year to $138.6 million, the highest in the company's history, with gross margin expanding 90 basis points to 19.6% [4][5] - Total net sales were $709.1 million, down 2.2% from last year, primarily due to a decrease in net sales in the public sector solutions segment [5][6] - Net income for the third quarter was $24.7 million compared to $27.1 million last year, a decrease of 8.6%, with diluted earnings per share at $0.97, down $0.05 year over year [10][11] Business Line Data and Key Metrics Changes - In business solutions, net sales grew 1.7% to $256.8 million, while gross profit increased 7.8% to $68 million, with gross margin reaching a record 26.5% [6] - Public sector solutions saw net sales decline 24.3% to $132.5 million, but gross margin increased 230 basis points to a record 17.2% [6] - Enterprise solutions net sales grew 7.7% to $319.8 million, with gross profit up 3.4% to $47.8 million [6] Market Data and Key Metrics Changes - Retail segment net sales grew 25%, and gross profit was up 42% year over year, indicating strong demand for tailored vertical market solutions [14] - Financial services net sales increased 23%, with gross profit rising 19% year over year, driven by infrastructure modernization [14] - Manufacturing segment grew 8% in net sales and 28% in gross profit year over year, despite macro challenges [15] Company Strategy and Development Direction - The company is focused on expanding its solutions-led business, deepening customer relationships, and driving profitable growth in cloud, cybersecurity, AI, and services [8][16] - The strategy aligns with customer evolution in technology deployment and management, emphasizing expertise as a differentiator [17] Management's Comments on Operating Environment and Future Outlook - Management noted that while funding cycles and project timing can affect quarterly results, long-term trends are positive, with confidence in record gross profit and expanding margins [8][16] - The public sector business is seen as a wildcard, with expectations of recovery but uncertainty regarding timing [19][31] Other Important Information - Operating cash flow for the first nine months of 2025 was $38 million, with a strong liquidity position of $399.2 million in cash and equivalents [12] - The company returned capital to shareholders through dividends and share repurchases, with $44.3 million remaining under the share repurchase authorization [11] Q&A Session Summary Question: Thoughts on year-end and Q4 growth potential - Management indicated that there is momentum in the enterprise segment and business solutions group, with potential for growth in Q4, but the public sector remains uncertain [18][19] Question: Backlog explanation and shipping delays - Management clarified that the backlog is customer-driven, with delays primarily on the customer side rather than supply chain issues [20][21] Question: Impact of federal government shutdown on public sector - The federal government shutdown is affecting the public sector business, with orders unable to be shipped due to lack of personnel to receive them [31] Question: Future profitability and gross margins outlook - Management expects gross margins to be flat year-over-year, with potential increases in spending depending on revenue growth [32][33] Question: Potential for acquisitions - The company is actively looking at tuck-in acquisitions to enhance solutions capability but has no specific updates at this time [34]