CDW Q2 Profit Falls 4% to $271.2M, Revenue Rises 10% to $5.976B.

CDW Corporation reported Q2 earnings of $271.2 million, or $2.05 per share, down from $281.1 million, or $2.07 per share last year. Adjusted earnings were $343.7 million, or $2.60 per share. Revenue rose 10.2% to $5.976 billion from $5.423 billion last year.

CDW Corporation (CDW) reported its second-quarter earnings on Wednesday, showcasing a mix of revenue growth and margin compression. The company's earnings report, released on July 2, 2025, highlighted a 10.2% increase in revenue to $5.976 billion, up from $5.423 billion in the same period last year. Despite the revenue growth, adjusted earnings per share (EPS) decreased to $2.60, down from $2.67 last year. The company's net income was $271.2 million, a decrease of 3.5% from $281.1 million in the same period last year [1].

The earnings report was driven by robust demand in notebooks, software, and cloud infrastructure, with the Corporate and Small Business segments expanding by 17.6% and 12.6%, respectively. However, gross profit margin contracted to 20.8% from 21.8% in Q2 2024, primarily due to lower pricing in hardware categories like data storage and servers. This margin compression was offset by CDW's strategic emphasis on high-margin services and its ability to leverage economies of scale in procurement [2].

CDW's capital allocation strategy in 2025 exemplifies a disciplined approach to balancing growth and returns. The company has consistently prioritized reinvestment in high-growth areas, such as AI and cloud infrastructure, while maintaining a strong dividend payout. For instance, in FY 2024, CDW allocated $323.9 million to acquisitions, a sharp increase from $76.4 million in FY 2023, to bolster its AI capabilities through partnerships like Mission Cloud Services. These investments align with the company's broader vision to position itself as a leader in digital transformation, a sector projected to grow 8–10% in 2025. Simultaneously, CDW has maintained a robust dividend program. The TTM payout ratio of 30.52% indicates that the company is returning a significant portion of earnings to shareholders without overextending its cash flow [3].

CDW's stock has witnessed a change of -7.3% in the past month, in contrast to the Zacks S&P 500 composite's +0.6% move. Despite the recent decline, the company's Zacks Rank #2 (Buy) position suggests that it is expected to outperform the overall market performance in the near term. CDW's ability to navigate inflationary pressures and shifting demand patterns while maintaining a robust commitment to shareholder returns positions it as a compelling IT transformation play [1].

References:
[1] https://finance.yahoo.com/news/cdw-q2-earnings-snapshot-110821674.html
[2] https://www.nasdaq.com/articles/countdown-cdw-cdw-q2-earnings-look-estimates-beyond-revenue-and-eps
[3] https://www.ainvest.com/news/cdw-q2-2025-earnings-outperformance-dividend-commitment-signal-strong-capital-allocation-discipline-2508/