PC Connection (NASDAQ:CNXN) Releases Quarterly Earnings Results, Beats Expectations By $0.20 EPS

PC Connection (NASDAQ:CNXN) posted its quarterly earnings results on Wednesday. The company reported $1.24 earnings per share for the quarter, beating the consensus estimate of $1.04 by $0.20, FiscalAI reports. The firm had revenue of $874.31 million for the quarter, compared to analyst estimates of $773.74 million. PC Connection had a return on equity of 10.90% and a net margin of 3.21%.

Here are the key takeaways from PC Connection’s conference call:

• Record third-quarter results included net sales of $874.3 million, up 23.3% year over year, record gross profit of $161.9 million, and diluted EPS of $1.24, up 27.8%.
• Enterprise Solutions and Business Solutions posted strong growth of 27.4% and 27.8%, respectively, while Enterprise Solutions ended with a record backlog and broad demand for AI-ready infrastructure, endpoints, software, and services.
• Operating leverage improved as SG&A declined to 13.8% of sales, driving a 35.4% increase in operating income to $41 million; Connection also maintained significant liquidity with $343.3 million in cash and short-term investments.
• Gross margin fell 110 basis points to 18.5%, primarily due to customer and product mix, large endpoint rollouts, pricing pressures, and a lower contribution from software recognized on a net basis.
• Management expects fourth-quarter sales to decline seasonally by roughly 3% to 4% from the third quarter and said there is no clear evidence of a year-end budget flush. For 2027, endpoint demand may be modestly lower after the upgrade cycle, although on-premises infrastructure, networking, security, software, and AI-related demand are expected to remain solid.

PC Connection Trading Up 1.1%

CNXN traded up $0.98 during midday trading on Thursday, reaching $87.48. The company’s stock had a trading volume of 88,293 shares, compared to its average volume of 118,388. The stock has a market cap of $2.21 billion, a P/E ratio of 23.17, a PEG ratio of 2.12 and a beta of 0.81. The company has a fifty day simple moving average of $86.44 and a 200 day simple moving average of $72.05. PC Connection has a twelve month low of $54.97 and a twelve month high of $96.90.

PC Connection Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Friday, November 27th. Investors of record on Tuesday, November 10th will be paid a dividend of $0.20 per share. The ex-dividend date is Tuesday, November 10th. This represents a $0.80 annualized dividend and a yield of 0.9%. PC Connection’s dividend payout ratio is presently 21.16%.

Key Headlines Impacting PC Connection

Here are the key news stories impacting PC Connection this week:

• Positive Sentiment: Q3 earnings and revenue beat expectations. PC Connection reported adjusted earnings of $1.24 per share, up from $0.97 a year earlier and above the $1.04 consensus estimate. Revenue reached $874.31 million, significantly exceeding analyst expectations of $773.74 million. PC Connection Q3 Earnings and Revenues Top Estimates
• Positive Sentiment: AI server demand supported record sales. Coverage characterized the quarter as a record-revenue period driven by a surge in AI server demand, reinforcing the company’s exposure to higher-growth technology infrastructure spending. PC Connection Q3 2026: Record Revenue on an AI Server Surge
• Positive Sentiment: Quarterly dividend declared. PC Connection announced a $0.20-per-share quarterly dividend payable November 27 to shareholders of record November 10. The $0.80 annualized payout provides a dividend yield of approximately 0.9% and signals continued shareholder returns. PC Connection Declares Quarterly Dividend
• Neutral Sentiment: Valuation remains a consideration. Despite the earnings momentum, commentary questioned whether CNXN’s recent strength has already priced in substantial earnings optimism. The stock trades near its 52-week high at roughly 23 times earnings, which could limit upside if growth or AI-related demand moderates. Is PC Connection Stock Already Pricing In Too Much Earnings Hope?

Analyst Upgrades and Downgrades

A number of equities analysts recently commented on the company. Weiss Ratings upgraded PC Connection from a “buy (b-)” rating to a “buy (b)” rating in a report on Thursday, October 8th. Zacks Research lowered PC Connection from a “strong-buy” rating to a “hold” rating in a report on Monday, September 28th. One investment analyst has rated the stock with a Buy rating and one has issued a Hold rating to the company’s stock. According to MarketBeat, the company presently has an average rating of “Moderate Buy”.

Insider Buying and Selling

In other news, Chairman Patricia Gallup sold 8,004 shares of the company’s stock in a transaction that occurred on Tuesday, October 20th. The stock was sold at an average price of $86.57, for a total transaction of $692,906.28. Following the completion of the transaction, the chairman directly owned 6,906,383 shares in the company, valued at $597,885,576.31. The trade was a 0.12% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director David Beffa-Negrini sold 5,000 shares of the stock in a transaction that occurred on Friday, August 14th. The shares were sold at an average price of $81.05, for a total value of $405,250.00. Following the completion of the sale, the director directly owned 60,875 shares of the company’s stock, valued at $4,933,918.75. This represents a 7.59% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 62,136 shares of company stock valued at $5,312,310. Corporate insiders own 56.60% of the company’s stock.

About PC Connection

PC Connection, Inc is an information technology solutions provider that supplies technology products, services and expertise to businesses, government agencies, educational institutions and other organizations. The company helps customers plan, acquire, deploy and manage IT environments across workplace, data center, networking, security and cloud infrastructure.

Its offerings include computers, servers, storage systems, networking equipment, software, peripherals and related technology accessories.