CDW (US:CDW)2025-11-04 21:15Financial Performance - Net sales for the three months ended September 30, 2025, increased by $221 million, or 4.0%, to $5,737.4 million compared to $5,516.6 million in the same period of 2024[110] - Gross profit for the three months ended September 30, 2025, increased by $55 million, or 4.6%, to $1,255.5 million, with a gross profit margin of 21.9%[111] - Operating income for the three months ended September 30, 2025, decreased by $38 million, or 8.0%, to $443.3 million, resulting in an operating income margin of 7.7%[112] - Net income for the three months ended September 30, 2025, decreased by $25.4 million, or 8.0%, to $291.0 million, with a net income per diluted share of $2.21[109] - For the nine months ended September 30, 2025, net sales increased by $1,100 million, or 7.0%, to $16,913.1 million compared to $15,812.7 million in the same period of 2024[114] - Gross profit for the nine months ended September 30, 2025, increased by $172 million, or 5.0%, to $3,619.0 million, with a gross profit margin of 21.4%[115] Expenses and Cash Flow - Selling and administrative expenses for the nine months ended September 30, 2025, increased by $190 million, or 8.6%, to $2,394.1 million[116] - 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[106] - Adjusted free cash flow for the nine months ended September 30, 2025, was $668.0 million, compared to $764.1 million in the same period of 2024[106] - Free cash flow for the nine months ended September 30, 2025, was $692.2 million, down from $838.0 million in 2024[156] - Net cash provided by operating activities decreased by $160.6 million to $771.4 million for the nine months ended September 30, 2025, compared to $932.0 million in 2024[164][166] Debt and Financing - Net debt as of September 30, 2025, was $5,175.9 million, an increase from $4,872.3 million as of September 30, 2024[106] - Total unsecured indebtedness as of September 30, 2025, was $5.6 billion, with compliance to covenants under credit agreements[159] - The company repaid $211 million of the 4.125% Senior Notes due 2025 during the second quarter of 2025[159] - The company has entered into inventory financing agreements to enhance working capital without incurring interest expenses[161] - The company repurchased 2.9 million shares of common stock for $500 million during the nine months ended September 30, 2025[162] Segment Performance - Corporate segment net sales increased by $94.2 million, or 4.4%, primarily due to higher sales of netcomm products, software, and desktops[126] - Small Business segment net sales rose by $54.1 million, or 14.2%, driven by increased sales of notebooks/mobile devices, software, and desktops[128] - Public segment net sales increased by $14 million, or 0.6%, mainly due to growth in government and healthcare services, offset by a decline in education hardware sales[131] - Corporate segment gross profit increased by $11.2 million, or 2.2%, despite a decrease in gross profit margin to 23.1%[127] - Small Business segment gross profit rose by $10.9 million, or 12.4%, with a gross profit margin decrease to 22.8%[129] - Public segment gross profit increased by $13.3 million, or 2.8%, with a gross profit margin of 20.9%[132] Other Financial Metrics - Non-GAAP operating income for the three months ended September 30, 2025, was $530.6 million, representing a margin of 9.2%, compared to $534.0 million and 9.7% in 2024[149] - Non-GAAP net income for the nine months ended September 30, 2025, was $987.4 million, with a net income per diluted share of $7.45, compared to $954.5 million and $7.04 in 2024[151] - The cash conversion cycle improved to 11 days as of September 30, 2025, from 17 days in 2024[169] Future Outlook - The company anticipates potential impacts from inflationary pressures, interest rates, and competition on future performance[182] Dividend and Shareholder Returns - The quarterly cash dividend declared on November 4, 2025, is $0.630 per share, payable on December 10, 2025[162]