CDW (NASDAQ:CDW) Releases Quarterly Earnings Results, Beats Expectations By $0.11 EPS

CDW (NASDAQ:CDW) released its 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 net margin of 4.70% and a return on equity of 49.67%. The company had revenue of $6.57 billion for the quarter, compared to analysts’ expectations of $6.21 billion. During the same quarter in the previous year, the company earned $2.60 EPS. CDW’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 Stock Performance

CDW stock opened at $140.10 on Thursday. CDW has a twelve month low of $97.12 and a twelve month high of $171.55. The firm has a market cap of $17.90 billion, a price-to-earnings ratio of 17.04, a PEG ratio of 2.04 and a beta of 0.96. The business’s fifty day simple moving average is $135.27 and its two-hundred day simple moving average is $127.57. The company has a quick ratio of 1.06, a current ratio of 1.16 and a debt-to-equity ratio of 1.81.

CDW Announces Dividend

The firm 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. The ex-dividend date is Tuesday, August 25th. This represents a $2.52 dividend on an annualized basis and a yield of 1.8%. CDW’s dividend payout ratio (DPR) is presently 30.66%.

Insider Buying and Selling

In related news, Director David W. Nelms acquired 18,000 shares of the firm’s stock in a transaction that occurred on Wednesday, May 27th. The stock was bought at an average price of $111.43 per share, for a total transaction of $2,005,740.00. Following the acquisition, the director directly owned 51,025 shares of the company’s stock, valued at $5,685,715.75. This represents a 54.50% increase in their position. The acquisition was disclosed in a document filed with the SEC, which is available at this hyperlink. 0.82% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Several institutional investors have recently bought and sold shares of the company. Brown Brothers Harriman & Co. increased its stake in shares of CDW by 38.6% during the fourth 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 purchased a new stake in CDW in the fourth quarter worth about $144,000. Dark Forest Capital Management LP bought a new position in CDW during the 3rd quarter worth about $313,000. Campbell & CO Investment Adviser LLC bought a new position in CDW during the 4th quarter worth about $351,000. Finally, Syon Capital LLC increased its position in CDW by 36.2% during the 4th 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 hedge funds and other institutional investors.

Trending Headlines about CDW

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 above the $6.21 billion analyst consensus. Adjusted earnings of $2.91 per share also exceeded expectations of $2.80. CDW Q2 Earnings & Sales Beat
• Positive Sentiment: Management raised its 2026 outlook to the high end of its high-single-digit adjusted EPS growth range, citing demand for AI infrastructure and a strong backlog. Government, commercial and international sales all posted solid growth. CDW raises 2026 outlook
• Positive Sentiment: The board declared a quarterly dividend of $0.630 per share, payable September 10 to shareholders of record on August 25, supporting the income and capital-return case. CDW dividend announcement
• Neutral Sentiment: Chief Financial Officer Albert J. Miralles announced a planned retirement and leadership transition. The change adds an execution consideration for investors, although it is described as planned rather than unexpected. CDW CFO retirement announcement
• Negative Sentiment: Gross margin fell to 20.1% from 20.8%, while gross profit rose only 6.3% and operating income increased 2.0%. Investors appear concerned that AI and infrastructure projects carry lower margins, with management expecting profitability to remain below 2025 levels. Reuters report on CDW margin pressure
• Negative Sentiment: First-half adjusted free cash flow declined to $278.4 million from $458.9 million a year earlier, reflecting higher inventory and working-capital investment. The combination of margin pressure and weaker cash conversion outweighed the earnings and guidance beats.

Analysts Set New Price Targets

Several equities research analysts have recently issued reports on CDW shares. Barclays reduced their price objective on shares of CDW from $144.00 to $123.00 and set an “equal weight” rating on the stock in a research report on Thursday, May 7th. Royal Bank Of Canada raised shares of CDW to an “outperform” rating and set a $130.00 target price for the company in a research note on Wednesday, May 27th. Citigroup boosted their price target on shares of CDW from $123.00 to $145.00 and gave the stock a “neutral” rating in a research note on Monday, July 13th. Raymond James Financial set a $150.00 target price on CDW in a report on Wednesday, May 6th. Finally, UBS Group decreased their price objective on CDW from $162.00 to $147.00 and set a “buy” rating on the stock in a report on Thursday, May 7th. One analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating and three have assigned a Hold rating to the stock. Based on data from MarketBeat.com, CDW currently has a consensus rating of “Moderate Buy” and an average price target of $146.88.

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.