PC Connection 2025 Q3 Earnings Net Income Falls 8.6% Amid Revenue Decline

PC Connection (CNXN) reported fiscal 2025 Q3 earnings on October 30, 2025, with results falling short of expectations. The company’s non-GAAP EPS of $0.97 missed the $1.01 consensus estimate by $0.03, while revenue of $709.1 million lagged the $743.69 million forecast by $34.58 million. Management did not provide explicit forward guidance, maintaining a focus on strategic initiatives despite the decline in profitability.

Revenue

The company’s total revenue declined 2.2% year-over-year to $709.07 million, driven by reduced sales in notebooks/mobility, displays, and net/com products. Enterprise Solutions led growth with $319.74 million in revenue, a 7.7% increase, while Business Solutions rose 1.7% to $256.84 million. Public Sector Solutions, however, saw a sharp 24.3% drop to $132.48 million, primarily due to reduced federal and educational sales.

Earnings/Net Income

PC Connection’s net income fell 8.6% to $24.74 million, or $0.98 per share, compared to $27.06 million, or $1.03 per share, in 2024 Q3. The EPS decline of 4.9% and net income contraction highlight margin pressures despite record gross profit.

Post-Earnings Price Action Review



The stock has underperformed in the short term, with a 2.40% decline on the latest trading day, a 2.79% drop over the week, and a 1.18% decline month-to-date. Year-to-date, shares have lost 9.9% of value, lagging the S&P 500’s 17.2% gain. Analysts attribute the muted reaction to the company’s failure to meet earnings and revenue estimates, though long-term optimism persists around strategic initiatives. The Zacks Rank #3 (Hold) reflects mixed earnings estimate revisions and expectations of market-aligned performance.

CEO Commentary

Timothy McGrath, CEO, emphasized progress in data center modernization, digital workplace transformation, and supply chain innovation, which drove record gross profit of $138.6 million and a 19.6% margin. While acknowledging challenges in the Public Sector Solutions segment, he expressed confidence in Business and Enterprise Solutions’ growth trajectories.

Guidance

The company did not issue specific financial targets for 2026 but reiterated strategic priorities. Forward-looking risks include macroeconomic volatility and supply chain disruptions, though management remains focused on AI, cloud, and cybersecurity expansion.

Additional News

PC Connection announced a quarterly dividend of $0.15 per share, payable on November 28, 2025, to shareholders of record on November 11. The board also approved a share repurchase program of up to $5.1 million in Q3, reflecting confidence in long-term value. Meanwhile, CEO Timothy McGrath reiterated commitments to cloud, cybersecurity, and AI-driven solutions during the earnings call, signaling alignment with market trends.

Image: PC Connection’s Q3 2025 Segment Performance

Enterprise Solutions (7.7% growth), Business Solutions (1.7% growth), Public Sector Solutions (-24.3% decline).

<img src="https://cdn.ainvest.com/aigc/hxcmp/images/compress-aime_generated_1761843771769.jpg.png" style="max-width:100%;">

The company’s gross profit margin expansion to 19.6% underscores operational efficiency gains, despite revenue headwinds. Analysts remain cautious, with a median 12-month price target of $76 (17.8% above the October 28 closing price of $62.45) and a “Hold” consensus rating.