CDW 2025 Q1 Earnings Strong Performance as Net Income Rises 4.1%

CDW (CDW) reported its fiscal 2025 Q1 earnings on May 07th, 2025. The company's earnings surpassed analyst expectations with an EPS of $1.70, slightly above the projected $1.69. CDW continues to project confidence in its growth strategy, maintaining guidance to exceed US IT market growth by 200 to 300 basis points. This outlook is bolstered by the company's robust start to 2025 and its ongoing commitment to customer-centric solutions.

Revenue
CDW's revenue in the first quarter of 2025 rose by 6.7% to $5.20 billion, compared to $4.87 billion in the same period of 2024. The Corporate segment generated $2.24 billion, while the Small Business sector contributed $404.60 million. The Public sector added $1.88 billion, and the Other segment brought in $680.40 million. The Headquarters segment reported no revenue, culminating in a total revenue of $5.20 billion.

Earnings/Net Income
CDW's EPS increased by 5.6%, reaching $1.70 in 2025 Q1, up from $1.61 in 2024 Q1, reflecting continued earnings growth. The company's net income improved to $224.90 million in 2025 Q1, a 4.1% increase from $216.10 million in the previous year. These results indicate a positive earnings trajectory and stable profitability.

Post-Earnings Price Action Review
The strategy of purchasing CDW shares following a revenue increase and holding them for 30 days has delivered a 9.67% return over the past five years. However, this performance significantly underperforms the benchmark return of 84.08%. The strategy's Sharpe ratio is notably low at 0.25, indicating poor risk-adjusted returns. Moreover, a maximum drawdown of -12.30% highlights the strategy's susceptibility to market downturns, pointing to a need for reassessment to improve risk management and performance metrics over time.

CEO Commentary
Christine A. Leahy, Chair and Chief Executive Officer of CDW, highlighted the strong start to 2025, noting the team's success in helping customers navigate dynamic market conditions. She emphasized that the company's diverse portfolio and customer-centric strategy drove robust growth and stable gross margins. Leahy pointed out that customers are increasingly turning to CDW for essential technology needs, focusing on exceeding US IT market growth by 200 to 300 basis points. She reiterated the commitment to meeting the evolving demands of over 250,000 customers and maintaining partnerships with more than 1,000 technology brands.

Guidance
CDW expects to maintain a strong value proposition as it navigates a rapidly changing environment, aiming to exceed US IT market growth by 200 to 300 basis points on a constant currency basis. The company will continue to optimize cash flow generation through effective working capital management, supporting flexibility across its capital priorities. CDW's leadership anticipates ongoing customer demand for technology solutions, reinforcing its position as a trusted advisor across the full technology stack and lifecycle.

Additional News
In recent developments, CDW announced a strategic partnership aimed at enhancing its product offerings in the cloud services sector, reflecting its commitment to expanding its market presence. Additionally, the company has appointed a new Chief Technology Officer, further strengthening its leadership team to drive innovation and growth. Furthermore, CDW declared a quarterly dividend, reinforcing its dedication to returning value to shareholders. These strategic moves underscore CDW's focus on reinforcing its competitive edge and sustaining long-term growth.