CDW · CDW Corporation

CDW Corporation delivered strong Q1 2026 results with net sales reaching $5,680 million, a 9.2% increase from $5,199 million in the prior year, supported by 63 selling days in both periods. Growth was fueled by heightened customer demand for infrastructure hardware including data storage, servers, netcomm products, software, and notebooks/mobile devices, amid a shift toward AI production environments. All segments showed improvement: Commercial up 9.6% to $3,569 million, driven by 28.2%, 8.4%, and 4.9% gains in Financial Services, Corporate, and Healthcare; Government up 4.6% to $633 million; Education up 2.5% to $675 million; and Other (UK/Canada) up 17.9% to $803 million. Gross profit rose 6.0% to $1,190 million, but margin compressed to 21.0% from 21.6% due to a lower mix of netted down revenue. Selling and administrative expenses increased 7.0% to $814 million from higher compensation, coworker costs, and AI investments. GAAP operating income grew 4.0% to $376 million (margin 6.6%), while Non-GAAP operating income rose 1.8% to $452 million (margin 8.0%). Net income increased 4.7% to $235 million, with diluted EPS at $1.82 (up 7.9%), benefiting from lower weighted average shares (129 million vs. 133 million). Non-GAAP EPS was $2.28, up 6.3%. Interest expense, net declined 3.2% to $55 million on lower debt and rates, and the effective tax rate remained stable at 26.2%. Management highlighted disciplined execution, strong cash flow, and confidence in exceeding US IT market growth by 200-300 basis points on constant currency. Concurrently, the Board declared a $0.630 quarterly dividend, payable June 10 to May 25 record holders, reinforcing capital return amid $484 million remaining in share repurchases as of March 31, 2026.