0001402057-25-000145
SEC filingCDW's Note 11 reveals segment economics with Corporate leading; debt structure stable; $420M inventory financing outstanding.
As of June 30, 2025, CDW held $481.0M in cash and cash equivalents, with no short-term investments (a certificate of deposit matured in April 2025). Total debt, including current maturities and excluding unamortized costs, stood at $5,661.6M, down from $5,875.6M at year-end 2024, primarily due to the $211.1M repayment of the 4.125% senior notes due 2025 at maturity. The revolving credit facility remained undrawn, with additional capacity of $1.2 billion, though $387M of that was reserved for the floorplan sub-facility. The company's shareholders' equity increased to $2,467.2M from $2,352.7M, driven by net income and foreign currency translation gains, partially offset by share repurchases and dividends.
The notes disclose remaining performance obligations (RPOs) of $259.0M for non-cancelable managed and professional services contracts where CDW acts as principal and the duration exceeds 12 months. Of this, $133.6M is expected within one year, $80.9M in years 1-2, $31.5M in years 2-3, and $12.9M thereafter. Additionally, $420.4M in accounts payable-inventory financing was outstanding under agreements with financial institutions for inventory purchases, with a large portion tied to the floorplan sub-facility within the revolving loan facility. The company sold approximately $294M of accounts receivable without recourse during the first half of 2025 to reduce credit exposure and accelerate cash.
During the six months ended June 30, 2025, CDW repurchased 2.0 million shares for $350.1M, with $150.0M in Q2 alone. Dividends totaled $165.1M ($0.625 per share quarterly, a slight increase from $0.620). The company repaid $211.1M of debt (the 2025 notes) and had no new debt issuance. Capital expenditures were $49.4M, representing 0.4% of sales. The net effect of financing activities was a cash outflow of $649.2M.
For Q2 2025, the Corporate segment led with $2,581.5M in net sales (43.1% of total), followed by Public ($2,291.7M), Small Business ($431.3M), and Other ($672.1M, primarily UK/Canada). Corporate operating income was $243.1M (9.4% margin), Small Business $47.8M (11.1%), Public $187.5M (8.2%), and Other $42.6M (6.3%). Revenue growth was strongest in Corporate (+17.6% YoY) and Small Business (+12.6%), while Public grew only 2.2% due to education weakness ($906.7M vs $1,017.4M). Geographically, US revenue was $5,278.6M (88.3% of total) and Rest of World $698.0M. Hardware drove 74.3% of sales, with notebooks/mobile devices alone at 26.4%.
Operating cash flow (CFO) for H1 2025 was $443.1M, a 24.9% decline from $589.9M in H1 2024. Net income remained stable at $496.1M (vs. $497.2M), but CFO fell short of net income, indicating weaker cash conversion. The primary driver was significant working capital outflows: accounts receivable increased by $450.1M (vs. $161.5M), inventory rose $147.3M, and other assets grew $217.1M. These were partially offset by increases in accounts payable ($384.7M) and other liabilities ($200.2M). Capital expenditures decreased to $49.4M from $60.4M, reflecting lower capex intensity (capex/CFO = 11% vs. 10% in prior period). Free cash flow (CFO minus capex) was $393.7M, down from $529.5M. Share repurchases of $350.1M and dividends of $165.1M totaled $515.2M, exceeding FCF, implying reliance on debt or cash reserves. Financing activities included net borrowings and repayments, with net cash used of $649.2M. Overall, cash generation weakened due to aggressive working capital build, while capital returns remained high.