PC Connection (NASDAQ:CNXN) Posts Quarterly Earnings Results, Beats Estimates By $0.31 EPS

PC Connection (NASDAQ:CNXN) released its earnings results on Wednesday. The company reported $1.31 EPS for the quarter, topping analysts’ consensus estimates of $1.00 by $0.31, FiscalAI reports. PC Connection had a net margin of 3.02% and a return on equity of 10.17%. The business had revenue of $854.00 million for the quarter, compared to the consensus estimate of $764.79 million.

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

• Connection reported record net sales of $854 million, up 12.4% year over year, with gross profit rising 14.3% to $157.5 million and operating income increasing 39.2% to a record $43 million. Diluted EPS grew 35.1% to $1.31.
• Growth was broad-based, including a 19.5% increase in notebooks, mobility and desktops, 15% software growth, and 11.5% networking growth. Business Solutions and Enterprise Solutions posted double-digit sales growth and both ended the quarter with elevated or record backlogs.
• Management said customer investment remains strong in data-center modernization, cybersecurity, cloud, AI-ready endpoints and enterprise AI infrastructure, and expects to outperform the U.S. IT market by approximately 200 basis points in 2026.
• Management expects third-quarter revenue to decline sequentially and grow at a high-single-digit rate year over year, partly due to Microsoft’s June year-end, typical seasonal patterns, and purchases pulled forward ahead of potential price increases. Some supply-chain-related backlog may not be fulfilled until the fourth quarter.
• First-half operating cash flow was negative $49.5 million as inventory increased by $61.5 million and accounts receivable rose by $80.6 million. Management expects inventory to decline somewhat by year-end, but receivables may remain elevated if current business levels persist.

PC Connection Stock Performance

Shares of CNXN stock traded up $1.08 on Thursday, reaching $84.05. 145,011 shares of the company’s stock traded hands, compared to its average volume of 103,438. The company has a market capitalization of $2.12 billion, a P/E ratio of 24.17, a price-to-earnings-growth ratio of 2.12 and a beta of 0.88. PC Connection has a 12-month low of $54.97 and a 12-month high of $88.31. The business’s 50 day moving average price is $73.51 and its two-hundred day moving average price is $65.64.

PC Connection Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, August 28th. Stockholders of record on Tuesday, August 11th will be issued a dividend of $0.20 per share. The ex-dividend date is Tuesday, August 11th. This represents a $0.80 dividend on an annualized basis and a dividend yield of 1.0%. PC Connection’s payout ratio is currently 23.26%.

Insider Activity

In related news, Chairman Patricia Gallup sold 7,142 shares of the firm’s stock in a transaction that occurred on Monday, July 6th. The shares were sold at an average price of $72.86, for a total transaction of $520,366.12. Following the completion of the sale, the chairman directly owned 7,006,321 shares in the company, valued at approximately $510,480,548.06. This trade represents a 0.10% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Insiders have sold 28,592 shares of company stock valued at $2,048,512 over the last ninety days. 56.60% of the stock is owned by corporate insiders.

Institutional Trading of PC Connection

Several hedge funds and other institutional investors have recently modified their holdings of the company. Geode Capital Management LLC increased its position in PC Connection by 0.8% in the 4th quarter. Geode Capital Management LLC now owns 377,001 shares of the company’s stock worth $21,777,000 after purchasing an additional 2,945 shares during the last quarter. Invesco Ltd. lifted its holdings in shares of PC Connection by 22.1% during the 4th quarter. Invesco Ltd. now owns 219,220 shares of the company’s stock valued at $12,662,000 after buying an additional 39,716 shares during the last quarter. Qube Research & Technologies Ltd grew its stake in shares of PC Connection by 71.3% in the 3rd quarter. Qube Research & Technologies Ltd now owns 165,573 shares of the company’s stock valued at $10,264,000 after buying an additional 68,906 shares in the last quarter. Goldman Sachs Group Inc. increased its holdings in PC Connection by 22.4% in the fourth quarter. Goldman Sachs Group Inc. now owns 150,235 shares of the company’s stock worth $8,678,000 after buying an additional 27,517 shares during the last quarter. Finally, AQR Capital Management LLC raised its position in PC Connection by 12.6% during the second quarter. AQR Capital Management LLC now owns 139,881 shares of the company’s stock valued at $9,201,000 after acquiring an additional 15,623 shares in the last quarter. 42.85% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth

CNXN has been the topic of several research reports. Wall Street Zen raised PC Connection from a “hold” rating to a “buy” rating in a report on Saturday, May 2nd. Weiss Ratings upgraded PC Connection from a “hold (c+)” rating to a “buy (b-)” rating in a report on Wednesday, June 3rd. One investment analyst has rated the stock with a Buy rating and one has issued a Hold rating to the company. According to MarketBeat, the stock presently has an average rating of “Moderate Buy”.

PC Connection Company Profile

PC Connection, Inc (NASDAQ: CNXN), now operating under the trade name Connection, is a value-added provider of information technology solutions founded in 1982 and headquartered in Merrimack, New Hampshire. The company offers a broad portfolio of hardware and software products sourced from leading technology vendors, alongside professional services designed to help organizations design, deploy and maintain IT environments.

Connection’s product offerings encompass desktop and notebook computers, servers and storage systems, networking and cybersecurity solutions, as well as cloud and virtualization technologies.