CDW's Q2 2025 Earnings Call: Unpacking Contradictions in Market Share, Funding Impacts, and Margin Trends

Market share growth expectations, impact of federal and education funding changes, gross margin trends, and gross margin stability and pricing pressures are the key contradictions discussed in CDW's latest 2025Q2 earnings call.



Revenue Growth and Market Performance:
- CDW Corp reported consolidated net sales of $6 billion for Q2, up 10% over last year.
- This growth was driven by strong execution and a strategic advantage from a diversified portfolio, despite federal and education market challenges.

Hardware and Solutions Demand:
- Hardware increased by 9%, with significant increases in infrastructure solutions, and software grew by 16%, driven by areas like telephony and application suites.
- The growth was attributed to strong customer demand for client devices and mission-critical infrastructure projects.

Services and Solutions Expansion:
- Services were up 8%, with CDW professional managed services increasing by 13%.
- This growth was due to strategic investments in services capabilities, which are integral to delivering full stack solutions and enhancing customer outcomes.

Financial Performance and Outlook:
- Non-GAAP operating income increased by 2%, and non-GAAP net income per share rose by 4%.
- The outlook for the remainder of the year is prudent, considering ongoing market uncertainties and expected changes in government and education funding.