CDW (CDW) investor relations material

Executive summary

• Net sales reached $6.6 billion in Q2 2026, up 10% year-over-year, driven by strong demand in infrastructure modernization, cloud, AI, and hardware/software solutions.

• Gross profit increased 6.3% to $1.3 billion, with gross margin at 20.1%, down 70 basis points due to product mix shift toward lower-margin hardware.

• Operating income rose 2% to $429 million; non-GAAP operating income was $556 million, up 7%.

• Net income was $274 million, up 1.2% year-over-year; non-GAAP net income was $370 million, with non-GAAP EPS up 11.9% to $2.91.

• All-time quarterly records were set for net sales, gross profit, and non-GAAP EPS, reflecting strong execution amid dynamic technology trends.

Financial highlights

• Commercial net sales grew 9.2% to $3.97 billion; Corporate up 10.7%, Healthcare up 9.1%, Financial Services up 1.8%.

• Government net sales increased 13.6% to $848 million; Education up 0.7% to $933 million; UK/Canada up 22.9% to $826 million.

• Gross margin was 20.1%, down 70 basis points year-over-year; operating margin was 6.5%, down from 7.0%.

• Non-GAAP operating income margin was 8.5%; non-GAAP net income margin was 4.2%.

• Adjusted free cash flow year-to-date was $278 million, or 42% of non-GAAP net income, below the 80%-90% target due to higher inventory investments.

Outlook and guidance

• Full-year outlook raised: U.S. IT addressable market expected to grow mid-single digits in 2026, with 200-300 basis points of outperformance.

• Gross profit for 2026 expected to grow mid-single digits; non-GAAP EPS growth at the high end of high single digits.

• Second half of 2026 expected to show more typical seasonality, with gross margins modestly below 2025 but above pre-pandemic levels.

• Currency expected to be a slight benefit to reported growth rates.

• Management remains focused on balancing growth investments with operational efficiency and disciplined capital allocation.