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CDW's Q2 Earnings Top, Revenues Up Y/Y on Strong Core & Global Demand
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Key Takeaways
{\"0\":\"CDW reported Q2 EPS of $2.60, surpassing estimates and up 3.9% year over year.\",\"1\":\"Revenue rose 10.2% to $5.98B, fueled by strong sales in Corporate and Small Business segments.\",\"2\":\"Growth was supported by demand in IT lifecycle services, international markets and device refresh cycles.\"}
CDW Corporation ((CDW - Free Report) ) reported second-quarter 2025 non-GAAP earnings per share (EPS) of $2.60, beating the Zacks Consensus Estimate of $2.49. Also, the bottom line increased 3.9% year over year.
Net sales for the quarter climbed to $5.98 billion, marking a solid 10.2% year-over-year increase. On a constant currency (cc) basis, sales improved 9.8%, highlighting broad-based demand across product categories such as notebooks/mobile devices, software, networking (netcomm) products, servers and data storage equipment.
The Corporate and Small Business segments drove growth, supported by a rebound in device refresh cycles and demand for comprehensive IT lifecycle services. The Public Sector experienced modest overall growth, with strong momentum in Healthcare and Government, partly offset by a decline in Education spending. International operations also achieved double-digit gains, demonstrating effective execution in the U.K. and Canada.
CDW’s customer-focused approach and extensive product portfolio are key in helping clients navigate increasingly complex technology needs across the IT stack and lifecycle — from infrastructure and software to devices and managed services. The company’s balanced portfolio and operational agility support high growth while maintaining financial flexibility.
Looking ahead, CDW reaffirmed its goal to outpace the U.S. IT market growth by 200–300 basis points at cc. It plans to stay focused on emerging trends such as cloud modernization, cybersecurity, AI-driven analytics, hybrid infrastructure and digital workspace, while strengthening partnerships with more than 1,000 technology OEMs and innovators.
Separately, the company announced a quarterly dividend of 62.5 cents, which will be paid on Sept. 10, 2025, to shareholders on record as of Aug. 25.
Buoyed by strong demand across core commercial and international markets, CDW’s shares went up 4.3% in pre-market trading on Aug 6. In the past year, shares have declined 21% compared with the Zacks Computers-IT Services industry’s fall of 3.1%.
Image Source: Zacks Investment Research
Segmental Details
Net sales of CDW’s Corporate segment amounted to $2.6 billion, growing 17.6% on a year-over-year basis.
The Small Business segment’s net sales of $431 million rose 12.6% year over year.
The Public segment’s revenues totaled $2.3 billion, representing 2.2% growth from the year-ago quarter. The uptick was driven by a 24.1% and 2.7% surge in net sales of Healthcare customers and Government customers, respectively, offset by a 10.9% decline in the Education sector.
Net sales in Other (Canadian and U.K. operations) rose 11.6% to $672 million.
Margin Details
Gross profit grew 4.9% year over year to $1.24 billion. However, gross margin declined from 21.8% to 20.8%, largely due to pricing pressure in hardware-centric categories like servers and netcomm products, and a mix shift away from higher-margin netted-down revenue.
Non-GAAP operating income increased 1.8% year over year to $519.7 million. The non-GAAP operating margin fell to 8.7% from 9.4%.
Selling and administrative expenses rose 9.5% year over year to $821 million, mainly due to higher performance-based pay, transformation-related costs, workplace optimization and amortization of acquisition-related intangibles.
Balance Sheet and Cash Flow
As of June 30, 2025, CDW had $481 million of cash and cash equivalents compared with $471.4 million as of March 31.
The company had a long-term debt of $5.623 billion, at the same level as of March 31, 2025.
For the six months that ended June 30, 2025, CDW generated $443.1 million of cash flow from operating activities compared with $589.9 million a year ago. Free cash flow was $393.7 million.
International Business Machines Corporation ((IBM - Free Report) ) reported strong second-quarter 2025 results, with adjusted earnings and revenues beating the respective Zacks Consensus Estimate. Quarterly total revenues increased to $16.98 billion from $15.77 billion, driven by strong demand for hybrid cloud and AI, which fueled growth in the Software segment. On a constant currency basis, revenues were up 5% year over year. IBM exceeded the consensus estimate of $16.58 billion for revenues.
Cadence Design Systems ((CDNS - Free Report) ) reported second-quarter 2025 non-GAAP earnings per share (EPS) of $1.65, which beat the Zacks Consensus Estimate by 5.1%. The bottom line increased 28.9% year over year, exceeding management’s guided range of $1.55-$1.61. Revenues of $1.275 billion beat the Zacks Consensus Estimate by 1.3% and increased 20.3% year over year. The figure beat CDNS’ guided range of $1.25-$1.27 billion. The top line was driven by broad-based demand for its solutions, especially the AI-driven portfolio, amid robust design activity.
SAP SE ((SAP - Free Report) ) reported second-quarter 2025 non-IFRS earnings of €1.50 ($1.70) per share, climbing 37% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.63 per share. Driven by robust cloud growth, disciplined cost control and expanding AI capabilities, SAP reported total revenues of €9.03 billion ($10.24 billion) on a non-IFRS basis, representing a 9% year-over-year increase (up 12% at constant currency). The Zacks Consensus estimate was pegged at $10.37 billion.
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CDW's Q2 Earnings Top, Revenues Up Y/Y on Strong Core & Global Demand
Key Takeaways
CDW Corporation ((CDW - Free Report) ) reported second-quarter 2025 non-GAAP earnings per share (EPS) of $2.60, beating the Zacks Consensus Estimate of $2.49. Also, the bottom line increased 3.9% year over year.
Net sales for the quarter climbed to $5.98 billion, marking a solid 10.2% year-over-year increase. On a constant currency (cc) basis, sales improved 9.8%, highlighting broad-based demand across product categories such as notebooks/mobile devices, software, networking (netcomm) products, servers and data storage equipment.
The Corporate and Small Business segments drove growth, supported by a rebound in device refresh cycles and demand for comprehensive IT lifecycle services. The Public Sector experienced modest overall growth, with strong momentum in Healthcare and Government, partly offset by a decline in Education spending. International operations also achieved double-digit gains, demonstrating effective execution in the U.K. and Canada.
CDW’s customer-focused approach and extensive product portfolio are key in helping clients navigate increasingly complex technology needs across the IT stack and lifecycle — from infrastructure and software to devices and managed services. The company’s balanced portfolio and operational agility support high growth while maintaining financial flexibility.
CDW Corporation Price, Consensus and EPS Surprise
CDW Corporation price-consensus-eps-surprise-chart | CDW Corporation Quote
Looking ahead, CDW reaffirmed its goal to outpace the U.S. IT market growth by 200–300 basis points at cc. It plans to stay focused on emerging trends such as cloud modernization, cybersecurity, AI-driven analytics, hybrid infrastructure and digital workspace, while strengthening partnerships with more than 1,000 technology OEMs and innovators.
Separately, the company announced a quarterly dividend of 62.5 cents, which will be paid on Sept. 10, 2025, to shareholders on record as of Aug. 25.
Buoyed by strong demand across core commercial and international markets, CDW’s shares went up 4.3% in pre-market trading on Aug 6. In the past year, shares have declined 21% compared with the Zacks Computers-IT Services industry’s fall of 3.1%.
Image Source: Zacks Investment Research
Segmental Details
Net sales of CDW’s Corporate segment amounted to $2.6 billion, growing 17.6% on a year-over-year basis.
The Small Business segment’s net sales of $431 million rose 12.6% year over year.
The Public segment’s revenues totaled $2.3 billion, representing 2.2% growth from the year-ago quarter. The uptick was driven by a 24.1% and 2.7% surge in net sales of Healthcare customers and Government customers, respectively, offset by a 10.9% decline in the Education sector.
Net sales in Other (Canadian and U.K. operations) rose 11.6% to $672 million.
Margin Details
Gross profit grew 4.9% year over year to $1.24 billion. However, gross margin declined from 21.8% to 20.8%, largely due to pricing pressure in hardware-centric categories like servers and netcomm products, and a mix shift away from higher-margin netted-down revenue.
Non-GAAP operating income increased 1.8% year over year to $519.7 million. The non-GAAP operating margin fell to 8.7% from 9.4%.
Selling and administrative expenses rose 9.5% year over year to $821 million, mainly due to higher performance-based pay, transformation-related costs, workplace optimization and amortization of acquisition-related intangibles.
Balance Sheet and Cash Flow
As of June 30, 2025, CDW had $481 million of cash and cash equivalents compared with $471.4 million as of March 31.
The company had a long-term debt of $5.623 billion, at the same level as of March 31, 2025.
For the six months that ended June 30, 2025, CDW generated $443.1 million of cash flow from operating activities compared with $589.9 million a year ago. Free cash flow was $393.7 million.
CDW’s Zacks Rank
CDW currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Recent Performance of Other Companies
International Business Machines Corporation ((IBM - Free Report) ) reported strong second-quarter 2025 results, with adjusted earnings and revenues beating the respective Zacks Consensus Estimate. Quarterly total revenues increased to $16.98 billion from $15.77 billion, driven by strong demand for hybrid cloud and AI, which fueled growth in the Software segment. On a constant currency basis, revenues were up 5% year over year. IBM exceeded the consensus estimate of $16.58 billion for revenues.
Cadence Design Systems ((CDNS - Free Report) ) reported second-quarter 2025 non-GAAP earnings per share (EPS) of $1.65, which beat the Zacks Consensus Estimate by 5.1%. The bottom line increased 28.9% year over year, exceeding management’s guided range of $1.55-$1.61. Revenues of $1.275 billion beat the Zacks Consensus Estimate by 1.3% and increased 20.3% year over year. The figure beat CDNS’ guided range of $1.25-$1.27 billion. The top line was driven by broad-based demand for its solutions, especially the AI-driven portfolio, amid robust design activity.
SAP SE ((SAP - Free Report) ) reported second-quarter 2025 non-IFRS earnings of €1.50 ($1.70) per share, climbing 37% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.63 per share. Driven by robust cloud growth, disciplined cost control and expanding AI capabilities, SAP reported total revenues of €9.03 billion ($10.24 billion) on a non-IFRS basis, representing a 9% year-over-year increase (up 12% at constant currency). The Zacks Consensus estimate was pegged at $10.37 billion.