CDW (US:CDW) ZACKS·2025-02-05 18:11Core Insights - CDW Corporation reported fourth-quarter 2024 non-GAAP EPS of $2.48, exceeding the Zacks Consensus Estimate of $2.33, but reflecting a 3.5% year-over-year decline [1] - The company's revenues increased by 3.3% year over year to $5.186 billion, surpassing the consensus estimate of $4.97 billion, driven by strong performance in Corporate, Small Business, Public, and International segments [2] Financial Performance - For 2024, net sales decreased by 1.8% year over year to $21 million due to cautious technology spending, although the healthcare vertical grew by 7.1% [3] - CDW announced a quarterly dividend of 62.5 cents, payable on March 11, 2025, and authorized a $750 million increase to its share repurchase program [3] Stock Market Reaction - Following the results, CDW's shares rose by 11.5% in pre-market trading on February 5, despite a 13.6% decline over the past year compared to the Zacks Computers-IT Services industry's growth of 9.6% [4] Segment Performance - Corporate segment net sales were $2.345 billion, up 2.6% year over year; Small Business segment net sales were $380 million, up 2.7%; Public segment revenues totaled $1.854 billion, reflecting 4.4% growth, driven by a 27.5% increase in healthcare customer sales [5] - Other operations in Canada and the U.K. saw net sales rise by 3.4% to $607 million [6] Margin Analysis - Gross profit was $1.155 billion, a slight increase of 0.1% year over year, with gross profit margin decreasing from 23% to 22.3% due to a higher mix of notebook and desktop sales [7] - Non-GAAP operating income fell by 3.8% year over year to $499 million, with the non-GAAP operating margin decreasing from 10.3% to 9.6% [7] Expense Overview - Selling and administrative expenses rose by 3.9% year over year to $747 million, primarily due to lower performance-based compensation, higher workplace optimization costs, and credit loss provisions [9] Balance Sheet and Cash Flow - As of December 31, 2024, CDW had $503.5 million in cash and cash equivalents, down from $946.7 million as of September 30, 2024; long-term debt remained stable at $5.607 billion [10] - The company generated $1.277 billion in cash flow from operating activities for the year, compared to $1.6 million in the previous year [10]