CDW (NASDAQ:CDW) Announces Quarterly Earnings Results

CDW (NASDAQ:CDW) announced its quarterly earnings results on Wednesday. The information technology services provider reported $2.91 earnings per share for the quarter, beating analysts’ consensus estimates of $2.80 by $0.11, FiscalAI reports. CDW had a return on equity of 49.67% and a net margin of 4.70%.The business had revenue of $6.57 billion during the quarter, compared to analysts’ expectations of $6.21 billion. During the same quarter last year, the business posted $2.60 earnings per share. The business’s revenue for the quarter was up 10.0% on a year-over-year basis.

Here are the key takeaways from CDW’s conference call:

• CDW reported record second-quarter results: net sales rose 10% to $6.6 billion, gross profit increased 6%, and non-GAAP EPS climbed 12% to $2.91. Growth was led by infrastructure modernization, AI readiness, cloud, security, and strong international demand.
• Management raised its full-year outlook, now expecting mid-single-digit gross-profit growth and non-GAAP EPS growth at the high end of the high-single-digit range. The company cited robust written demand, shipping activity, backlog, and expected operating leverage from its Geared for Growth initiatives.
• AI is driving a broad, full-stack opportunity spanning hardware, cloud, security, data, implementation, and lifecycle services. Infrastructure demand is currently leading, while management expects services and recurring managed-services revenue to accelerate as customers move from procurement into deployment and ongoing management.
• Second-quarter gross margin declined 70 basis points to 20.1%, primarily because of mix toward larger enterprise infrastructure orders, which carry lower margins, and weaker services contribution due to deployment timing. Management expects second-half and full-year margins to remain below 2025 levels.
• Adjusted free-cash-flow conversion was only 42% of non-GAAP net income in the first half, below the 80%-90% target, as inventory increased by approximately $400 million to support customer demand and pricing volatility. Management expects working capital to normalize in the second half, but execution will be important.

CDW Trading Down 9.0%

CDW stock traded down $13.90 during midday trading on Wednesday, hitting $140.10. The stock had a trading volume of 5,810,704 shares, compared to its average volume of 1,913,677. The company’s 50-day moving average price is $134.75 and its 200 day moving average price is $127.52. The company has a debt-to-equity ratio of 1.81, a current ratio of 1.16 and a quick ratio of 1.06. The firm has a market cap of $17.90 billion, a PE ratio of 17.04, a price-to-earnings-growth ratio of 1.96 and a beta of 0.96. CDW has a 12-month low of $97.12 and a 12-month high of $171.55.

CDW Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Tuesday, August 25th will be paid a $0.63 dividend. This represents a $2.52 annualized dividend and a yield of 1.8%. The ex-dividend date of this dividend is Tuesday, August 25th. CDW’s payout ratio is presently 30.66%.

Insider Buying and Selling at CDW

In other CDW news, Director David W. Nelms acquired 18,000 shares of the firm’s stock in a transaction dated Wednesday, May 27th. The shares were acquired at an average price of $111.43 per share, for a total transaction of $2,005,740.00. Following the completion of the acquisition, the director directly owned 51,025 shares of the company’s stock, valued at $5,685,715.75. This trade represents a 54.50% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at the SEC website. 0.82% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On CDW

Several institutional investors have recently added to or reduced their stakes in CDW. Brown Brothers Harriman & Co. grew its holdings in CDW by 38.6% in the 4th quarter. Brown Brothers Harriman & Co. now owns 912 shares of the information technology services provider’s stock valued at $124,000 after buying an additional 254 shares during the period. Los Angeles Capital Management LLC acquired a new stake in shares of CDW in the fourth quarter worth approximately $144,000. Dark Forest Capital Management LP acquired a new stake in shares of CDW in the third quarter worth approximately $313,000. Campbell & CO Investment Adviser LLC purchased a new stake in CDW in the fourth quarter valued at approximately $351,000. Finally, Syon Capital LLC grew its holdings in CDW by 36.2% in the fourth quarter. Syon Capital LLC now owns 3,650 shares of the information technology services provider’s stock valued at $497,000 after purchasing an additional 970 shares during the period. 93.15% of the stock is currently owned by institutional investors and hedge funds.

Analyst Ratings Changes

Several brokerages recently issued reports on CDW. Barclays cut their price objective on CDW from $144.00 to $123.00 and set an “equal weight” rating for the company in a research report on Thursday, May 7th. Morgan Stanley upgraded CDW from an “equal weight” rating to an “overweight” rating and increased their target price for the company from $142.00 to $170.00 in a report on Tuesday, June 23rd. UBS Group cut their price target on CDW from $162.00 to $147.00 and set a “buy” rating for the company in a report on Thursday, May 7th. Raymond James Financial set a $150.00 price target on CDW in a report on Wednesday, May 6th. Finally, JPMorgan Chase & Co. upgraded CDW from a “neutral” rating to an “overweight” rating and set a $130.00 price objective on the stock in a research report on Wednesday, May 27th. One analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating and three have given a Hold rating to the company’s stock. According to MarketBeat, the stock presently has an average rating of “Moderate Buy” and a consensus target price of $146.88.

Key CDW News

Here are the key news stories impacting CDW this week:

• Positive Sentiment: CDW reported second-quarter revenue of $6.57 billion, up 10% year over year and ahead of the $6.21 billion consensus estimate. Adjusted earnings of $2.91 per share also exceeded expectations of $2.80, helped by broad technology demand, AI infrastructure spending and international growth. CDW Q2 Earnings and Sales Beat
• Positive Sentiment: Management raised its 2026 outlook, calling for mid-single-digit gross-profit growth and adjusted EPS growth at the high end of the high-single-digit range. Government sales increased 13.6%, while international sales rose 22.9%, providing additional growth support.
• Positive Sentiment: The board declared a quarterly dividend of $0.630 per share, payable September 10 to shareholders of record on August 25. CDW Declares Quarterly Cash Dividend
• Neutral Sentiment: Chief Financial Officer Albert J. Miralles announced a planned retirement and leadership transition. The change introduces an execution and continuity consideration, although no immediate operational disruption was reported. CDW Announces CFO Retirement
• Negative Sentiment: Gross-profit margin declined to 20.1% from 20.8% and was below Wall Street expectations. Gross profit rose only 6.3%, while operating income increased 2.0%, indicating that larger, lower-margin infrastructure projects are diluting incremental profitability. Management also said gross profit could be roughly flat sequentially in the third quarter. CDW Shares Fall on Margin Miss
• Negative Sentiment: First-half adjusted free cash flow fell to $278.4 million from $458.9 million a year earlier as inventory and working-capital investment increased. The margin pressure and weaker cash conversion outweighed the earnings beat, driving the negative investor reaction. CDW Slides as Margin Pressure Outweighs Earnings Beat

CDW Company Profile

CDW (NASDAQ: CDW) is a leading provider of information technology products and integrated solutions for business, government, education and healthcare customers. The company sources and resells hardware and software from major technology vendors and packages those products with professional services, managed services and lifecycle support. Its offerings span IT infrastructure, cloud and data center solutions, cybersecurity, networking, unified communications, endpoint devices, and software licensing and procurement services designed to simplify IT operations for customers.

CDW combines a broad product portfolio with consultative sales, implementation and technical support capabilities.