Pc Connection Stock Earnings Reports

Connection reported a solid start to 2026 with broad-based execution despite supply constraints. Consolidated gross billings rose 4.3% to $1.0 billion and net sales increased 3.0% to $721.9 million. Gross profit grew 4.3% to $132.7 million and gross margin expanded 20 basis points to 18.4%. Segment results were mixed: Business Solutions sales rose 6.6% (gross margin 24.5%), Public Sector declined 31% mainly due to a large nonrecurring federal contract in the prior-year quarter (margin expanded to 15%), and Enterprise Solutions grew 16.3% with a record backlog (margin 14.5%). Management highlighted memory-driven supply constraints and related price inflation that increased pricing but reduced unit volumes in places; some customers pulled in orders while others delayed. Demand for AI-enabled endpoints accelerated (AI-chip enabled devices increased to ~70% of endpoint purchases versus ~40% a year ago), and management expects strong pipeline activity in AI, cloud, security and data center modernization. Expense discipline drove improvement in operating leverage: SG&A fell modestly, operating income rose ~39% to $20.2 million (adjusted operating income $23.3M), and adjusted EPS was $0.77. The company executed capital returns (quarterly dividend $0.20; repurchased ~42k shares for $2.4M) and ended the quarter with strong liquidity (~$411.4M in cash and short-term investments). Management says backlog is the highest since mid-2022 and positions the business for momentum, but cautioned that pricing dynamics and supply uncertainty could cause timing variability later in the year.