CDW (US:CDW)2025-11-04 12:03Financial Performance - Net sales for Q3 2025 were $5,737 million, a 4.0% increase from $5,517 million in Q3 2024[4] - Gross profit for Q3 2025 was $1,256 million, up 4.6% from $1,201 million in Q3 2024, with a gross profit margin of 21.9%[5] - Operating income decreased by 8.0% to $443 million in Q3 2025, with a non-GAAP operating income of $531 million, down 0.6%[7] - Net income for Q3 2025 was $291 million, an 8.0% decrease from $316 million in Q3 2024, while non-GAAP net income increased by 0.6% to $357 million[10] - For the nine months ended September 30, 2025, net sales increased by 7.0% to $16,913.1 million, compared to $15,812.7 million in the same period of 2024[29] - The company reported a net cash provided by operating activities of $771.4 million for the nine months ended September 30, 2025[60] Tax and Expenses - The effective income tax rate decreased to 25.3% in Q3 2025 from 26.0% in Q3 2024, resulting in a tax expense of $98 million[9] - Selling and administrative expenses rose by 12.9% to $812 million in Q3 2025, primarily due to higher performance-based compensation and acquisition-related costs[6] - The net income before income tax for the nine months ended September 30, 2025, was $1,058.3 million, with an effective tax rate of 25.6%[53] Segment Performance - Corporate segment net sales were $2,255 million, up 4.4% compared to 2024, while the Small Business segment saw a 14.2% increase to $434 million[13] - Healthcare sales increased by 6.9% to $693.9 million in Q3 2025, while Education sales decreased by 8.5% to $911.2 million[31] - The Corporate segment saw a 4.4% increase in sales to $2,255.4 million for Q3 2025, while the Small Business segment grew by 14.2% to $433.8 million[31] Cash Flow and Working Capital - Net cash provided by operating activities for the nine months ended September 30, 2025, was $771.4 million, down from $932.0 million in the same period of 2024, reflecting a decline of 17.3%[41] - Free cash flow for the nine months ended September 30, 2025, was $692.2 million, down from $838.0 million in 2024[60] - Cash conversion cycle improved to 11 days in September 2025, down from 18 days in December 2024, suggesting better efficiency in managing working capital[38] Assets and Liabilities - Total assets increased to $15,197.6 million as of September 30, 2025, up from $14,678.4 million at December 31, 2024, representing a growth of 3.5%[36] - Total debt decreased to $5,628.8 million from $5,842.8 million, a reduction of 3.7% compared to the previous period[38] - Total current liabilities rose to $5,593.8 million from $5,474.4 million, an increase of 2.2%[36] Shareholder Returns - A quarterly cash dividend of $0.630 per common share was approved, to be paid on December 10, 2025[2] Other Financial Metrics - Days of sales outstanding increased to 92 days in September 2025 from 84 days in December 2024, indicating a longer collection period[38] - Non-GAAP operating income for the three months ended September 30, 2025, was $530.6 million, accounting for 9.2% of net sales, compared to $534.0 million or 9.7% in 2024[45] - Non-GAAP net income for the three months ended September 30, 2025, was $476.7 million, with a net income per diluted share of $2.21, compared to $479.1 million and $2.34 in 2024[49] - The amortization of intangibles for the nine months ended September 30, 2025, was $127.6 million[53] - The company incurred $44.1 million in costs related to transformation initiatives during the nine months ended September 30, 2025[53]