Cdw Stock Earnings Reports

CDW reported a strong start to FY2026 with consolidated net sales up 9% YoY, gross profit up 6%, non-GAAP operating income up 2%, non-GAAP EPS up 6% to $2.28, and adjusted free cash flow of $251 million. Key demand drivers were AI-related infrastructure and ongoing infrastructure modernization that lifted networking, storage, servers and power/cooling (hardware +10% overall; infrastructure subcategories +20%+), while higher-margin services, warranties and software assurance were deprioritized in the quarter. CDW emphasized breadth and diversification across Commercial, Government and Education, with international (U.K. & Canada) up ~18% (USD). The company articulated an “AI-first, outcome-obsessed” strategy and is embedding AI across selling and operating processes (CDW Assist Super Agent, Geared for Growth), positioning AI as a net opportunity that increases services attach and deal size. Management expects Geared for Growth to begin delivering benefits in H2 2026 and outlined a gross run-rate savings target of $100–$200 million by 2027–2028, with some of those savings to be reinvested. Q1 gross margin was 21% (down 60 bps YoY, mix-driven), and management now expects full-year gross profit to grow low- to mid-single digits and gross margins roughly in line with 2025. Net debt was $5.1 billion (2.5x net leverage), liquidity $2.5 billion, and capital returned in Q1 was $282 million (share repurchases + dividends), above the stated 2026 target. CDW reiterates guidance of low-single-digit IT market growth with 200–300 bps of outperformance and expects Q2 non-GAAP EPS growth in the high-single-digits YoY, with continued prudence around H2 demand and macro/geopolitical wildcards.