CDW (CDW) Q1 2026 earnings summary

Executive summary

• Net sales rose 9.2% year-over-year to $5.68 billion for Q1 2026, with growth across all segments, driven by strong demand for infrastructure hardware, AI investment, and increased customer spending in data storage, servers, networking, software, and mobile devices.

• Gross profit increased 6.0% to $1.2 billion, though gross margin declined 60 basis points to 21.0% due to a lower mix of netted down revenue.

• Non-GAAP net income per diluted share grew 6.3% to $2.28, and adjusted free cash flow reached $251 million.

• Operating income increased 4.0% to $376 million, while net income rose 4.7% to $235 million; diluted EPS was $1.82.

• Performance was fueled by a balanced portfolio, full stack offerings, and execution of a growth strategy centered on AI adoption.

Financial highlights

• Consolidated net sales increased 9.2% year-over-year to $5.68 billion; gross profit up 6.0% to $1.2 billion.

• Non-GAAP operating income was $452 million (8.0% margin), up 1.8% year-over-year; non-GAAP net income was $295 million, up 3.1%.

• Non-GAAP net income per diluted share was $2.28, up 6.3% year-over-year.

• Gross margin was 21.0%, down 60 basis points year-over-year, mainly due to lower mix of netted down revenues.

• Adjusted free cash flow was $251 million, representing 85% of non-GAAP net income.

Outlook and guidance

• Maintains full-year 2026 view of low single-digit growth for the U.S. IT addressable market, targeting 200–300 basis points of outperformance.

• Expects full-year gross profit growth in the low to mid-single digits, with gross margins approximately in line with 2025.

• Non-GAAP net income per diluted share expected to grow at the high end of mid-single digits year-over-year.

• Q2 guidance: gross profit to grow high single digits sequentially, mid-single digits year-over-year; non-GAAP net income per diluted share up high single digits year-over-year.

• Management expects continued uncertainty in economic and geopolitical conditions, which may impact customer IT spending, especially in government and education sectors.