What factors drove the changes in CDW's revenue and profit?

What guidance did CDW's management provide for the next earnings period?

What does CDW do and what are its main business segments?

What were the key takeaways from CDW’s earnings call?

What is CDW's gross profit margin?

What is CDW's latest dividend and current dividend yield?

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Did CDW beat or miss consensus estimates last quarter?

- **Q3 Growth Drivers**: Small Business (+14%), Services (+9%), and AI-enabled solutions offset government/education headwinds.
- **Financial Resilience**: Non-GAAP EPS up 3%, free cash flow $209M, and 12% dividend increase amid cautious macro outlook.
- **Strategic Focus**: Accelerating AI adoption, maintaining 200-300bps IT market outperformance, and prudent capital allocation.
- **Risks**: Prolonged government shutdown, healthcare funding shifts, and uneven enterprise project spending.

**【CEO Summary Section】**
- **Q3 2025 Financial Highlights**: Net sales of $5.7 billion (+4% YoY), gross profit $1.3 billion (+5%), non-GAAP EPS $2.71 (+3%).
- **End Market Performance**: Small Business (+14%), Healthcare (+7%), Government (+8%), offsetting declines in Education (-9%).
- **AI and Services Growth**: Services revenue up 9%, driven by CDW Professional and Managed Services. AI workstations gaining traction in small businesses.
- **Strategic Focus**: Embedding AI in operations, guiding customers through AI adoption, and maintaining prudent outlook amid macro uncertainty.

**【CFO Financial Commentary】**
- **Gross Profit**: $1.3 billion (+4.6% YoY), margin 21.9% (flat YoY). Netted-down revenues (36% of gross profit) reflect strong cloud, software, and security demand.
- **Expenses**: Non-GAAP SG&A $725 million (+8.7% YoY) due to higher commissions and performance-based pay. Efficiency ratio 57.7% (target 55%-56%).
- **Liquidity**: Adjusted free cash flow $209 million (Q3), $668 million YTD. Net debt $5.2 billion, within 2x-3x leverage target.
- **Dividends and Buybacks**: Returned $747 million to shareholders (112% of adjusted free cash flow), including $150M share buybacks.

**【Q&A Key Highlights】**
- **Government Shutdown Impact**: Q4 federal sales conservative, but expect timing delays rather than lost sales. Small Business resilience and U.K./Canada growth offsetting government weakness.
- **PC Market Outlook**: Mid-single-digit client device growth expected, driven by Windows 10 end-of-life and AI workstations.
- **Services Momentum**: Services growth (+9%) led by data/AI, security, and cloud. Long-term target for services as 10%+ of revenue.
- **Expense Management**: SG&A growth aligning with gross profit, aiming for 55% efficiency ratio in 2026. SBC normalization reducing margin pressure.
- **Healthcare Funding Risks**: Watching Medicare payment impacts, but long-term tech adoption trends positive.


CDW Corporation (CDW) Q3 2025 Earnings Call Transcript

- **Revenue Growth**: $6B (+10% YoY), driven by commercial (+18% corporate, +13% SMB) and healthcare (+24%).
- **AI-Driven Innovation**: AI Center of Excellence delivers end-to-end solutions, e.g., $10M transport security engagement.
- **Financial Resilience**: Non-GAAP EPS $2.60 (+4% YoY), free cash flow $210M, despite 100bps gross margin decline.
- **Cautious Outlook**: 2025 U.S. IT market low single-digit growth, CDW targeting 200-300bps premium, with federal/education risks.

**【CEO Summary Section】**
- Q2 2025 net sales: $6 billion (+10% YoY), driven by commercial (corporate +18%, SMB +13%) and healthcare (+24%).
- Gross profit: $1.2 billion (+5% YoY), outperforming expectations amid federal/education headwinds.
- Non-GAAP EPS: $2.60 (+4% YoY), with adjusted free cash flow of $210 million.
- Strategic focus on client devices (Windows 10 EOL transition) and mission-critical infrastructure projects.
- U.K. and Canada operations up 12% YoY, offsetting U.S. federal/education declines.
- AI Center of Excellence highlights: end-to-end solutions from proof-of-concept to managed services, e.g., apparel company's AI-driven IT support and transport company's $10M managed security engagement.

**【CFO Financial Commentary】**
- Gross margin: 20.8% (-100bps YoY) due to higher corporate customer mix and lower netted-down revenue contribution (32.9% vs. 36.5% YoY).
- Non-GAAP SG&A: $722 million (+7.2% YoY), with efficiency ratio 58.1% (vs. 56.8% Q1 2025, +130bps YoY).
- Free cash flow: $210 million (73% of non-GAAP net income), with $150M share buybacks and $82M dividends in Q2.
- 2025 outlook: U.S. IT market low single-digit growth, CDW targeting 200-300bps premium. Gross profit expected low-mid single-digit growth, gross margins ~2024 levels.

**【Q&A Key Highlights】**
- **Market Outperformance**: CEO confident in 200-300bps IT market premium despite 3Q指引 modest growth, citing federal/education uncertainty.
- **Hardware Strength**: Client devices (+12%), NetComm servers (double-digit), storage (high single-digit) driven by enterprise refresh cycles.
- **Gross Margin Dynamics**: CFO notes 2025 gross margins ~2024 levels, with potential leverage from services growth.
- **AI Impact**: CEO highlights AI as inflection point, with early wins in client devices and infrastructure (e.g., generative AI PCs, AI-optimized servers).
- **Capital Allocation**: CFO reaffirms 50-75% free cash flow return target, with $150M+ buybacks YTD vs. $300M annual cap.

CDW Corporation (CDW) Q2 2025 Earnings Call Transcript

- **Q1 Revenue Beat**: $5.2B (+8% YoY), driven by 20%+ client device growth and cloud/services expansion.\n- **Profitability Resilience**: Gross margin stable at 21.6%, non-GAAP EPS $2.15 (+12%).\n- **Strategic Wins**: Mission Cloud Services acquisition bolsters AI and cloud capabilities, healthcare segment up 20%.\n- **Tariff Impact**: $100M Q1 pull forward in client devices, pricing discipline maintains margin stability.\n- **2025 Outlook**: Low-single-digit IT market growth, CDW targeting 200-300bps premium, cautious on federal/education volatility.

**【CEO Opening Remarks】**
- Q1 2025 net sales: $5.2B (+8% YoY on average daily basis), driven by client devices (+20%), cloud, and services.\n- Non-GAAP operating income: $444M (+10% YoY), EPS: $2.15 (+12% YoY).\n- Key trends: customer focus on cost optimization, client device refresh (Windows 10 expiration, tariff anticipation), and consumption-based solutions.\n- End-market growth: Commercial (+6%), Public (+11%), Education (+11%), Government (+slight).\n- Strategic investments: AI, cybersecurity, cloud adoption (e.g., Mission Cloud Services acquisition).\n- Outlook: Maintain 2025 IT market growth guidance of low-single-digits, CDW premium of 200-300bps.\n
**【CFO Financial Details】**
- Gross profit: $1.1B (+7% YoY), margin: 21.6% (stable vs. 2024).\n- SG&A: $678M (+2.8% YoY), efficiency ratio: 60.4% (improved 170bps).\n- Free cash flow: $249M (87% of non-GAAP net income).\n- Capital allocation: $200M share buybacks, $83M dividends.\n- Q2 guidance: Mid-high single-digit gross profit growth, EPS growth mid-teens sequentially.\n
**【Q&A Highlights】**
- **Client Device Pull Forward**: ~$100M net sales benefit in Q1, primarily from education.\n- **Tariffs & Pricing**: CDW maintains gross margin despite tariff-related price increases, acting as cost-plus provider.\n- **Healthcare Strength**: Driven by cloud migration, security, and device refresh.\n- **Operating Leverage**: Q1 efficiency ratio improvement (60.4%) reflects disciplined expense management.\n- **AI & Cloud Growth**: Services top-line +14%, cloud spend +double-digits.\n- **Government & Education Volatility**: Federal delays, education tariff-driven buying ahead of Q2 seasonality.

CDW (CDW)-7 May 25-2025 Q1 Earnings call transcript

- **Q4 2024 Results**: Solid finish with $5.2B net sales (+5% YoY), but EPS down 4% due to margin pressure. Full year free cash flow $1.1B, $832M returned to shareholders.
- **2025 Outlook**: U.S. IT market low single-digit growth, CDW targeting 200-300bps outperformance. Focus on cloud, SaaS, and services to offset hardware weakness.
- **Strategic Moves**: Mission Cloud acquisition bolsters AWS capabilities. Healthcare segment up 30% Q4, driving services and cloud growth.
- **Financial Discipline**: 84% free cash flow conversion, $750M buyback authorization. Non-GAAP EPS expected low single-digit growth in 2025.


**【CEO Summary Section】**
- **Q4 2024 Performance**: Net sales of $5.2B (+5% YoY on average daily basis), non-GAAP EPS of $2.48 (-4% YoY). Full year 2024 adjusted free cash flow exceeded $1B, with $832M returned to shareholders via dividends and buybacks.
- **Market Outlook**: U.S. IT market expected to grow low single digits in 2025, CDW targeting 200-300bps outperformance. Focus on cloud, SaaS, and services to offset hardware deprioritization.
- **Strategic Investments**: Acquisition of Mission Cloud Services to strengthen AWS expertise and managed services. Healthcare segment standout with 30% Q4 growth driven by cloud and services.

**【CFO Financial Commentary】**
- **Q4 2024 Financials**: Gross profit $1.16B (flat YoY), non-GAAP operating income $500M (-4% YoY). Full year 2024 non-GAAP EPS down 4% to $2.48, with 84% free cash flow conversion.
- **2025 Guidance**: Gross profit expected low single-digit growth, non-GAAP EPS growth low single digits. First half gross profit slightly lower than second half due to seasonality.
- **Capital Allocation**: $750M share buyback authorization approved, maintaining 50-75% free cash flow return target.

**【Q&A Key Themes】**
- **Public Sector Dynamics**: Federal spending cautious due to policy uncertainty, Education facing funding declines post-stimulus. Healthcare outperformed with cloud-driven growth.
- **Hardware & Margin Trends**: Client devices growth (+mid-single digits) offset by SaaS/license transition. Core margins stable at 15.5%, netted-down revenue (cloud, services) up 16% YoY.
- **Competitive Position**: Maintaining margin discipline amid price competition, leveraging services and cloud to differentiate.


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