CDW (NASDAQ:CDW) Releases Quarterly Earnings Results, Beats Estimates By $0.28 EPS

CDW (NASDAQ:CDW) posted its quarterly earnings results on Wednesday. The information technology services provider reported $3.26 earnings per share for the quarter, topping analysts’ consensus estimates of $2.98 by $0.28, FiscalAI reports. The firm had revenue of $6.75 billion for the quarter, compared to analyst estimates of $6.19 billion. CDW had a net margin of 4.60% and a return on equity of 50.61%. CDW’s quarterly revenue was up 17.7% on a year-over-year basis. During the same period in the previous year, the business posted $2.71 earnings per share.

Here are the key takeaways from CDW’s conference call:

• CDW delivered record third-quarter net sales of $6.8 billion, up 18%, with double-digit growth in both hardware and software. Strength was broad across customer markets, led by infrastructure demand; server and storage sales more than doubled.
• Management raised its 2026 outlook, expecting the U.S. IT market to grow at a high-single-digit rate and CDW to outperform by 300–400 basis points. Full-year gross profit growth is now expected in the mid- to high-single digits, with non-GAAP EPS growth in the low double digits.
• Gross margin fell 140 basis points year over year to 20.5%, reflecting a mix weighted toward large infrastructure projects and netted-down cloud sales. CDW expects full-year gross margin to decline versus 2025, while services growth remains modest as customers prioritize infrastructure spending and deployments progress through the lifecycle.
• Cost efficiencies supported operating leverage: non-GAAP operating income rose 16.8% on 10.3% gross profit growth, and diluted EPS increased 20.4% to $3.26, aided by share repurchases. Management said its Geared for Growth savings are at or above expectations, though quarterly efficiency gains may not be linear.
• Adjusted free cash flow was $506 million in the quarter, but year-to-date conversion was 73% of non-GAAP net income, below the company’s 80%–90% long-term guide. CDW returned $892 million to shareholders year to date and announced an approximately 8% dividend increase, while net leverage ended the quarter at 2.5 times.

CDW Trading Up 13.5%

CDW traded up $20.29 on Wednesday, hitting $170.06. The company had a trading volume of 1,869,990 shares, compared to its average volume of 1,820,572. The company’s fifty day moving average price is $147.70 and its 200 day moving average price is $133.29. CDW has a 1 year low of $97.12 and a 1 year high of $172.25. The company has a current ratio of 1.17, a quick ratio of 1.05 and a debt-to-equity ratio of 1.97. The firm has a market cap of $21.26 billion, a P/E ratio of 20.39, a PEG ratio of 1.97 and a beta of 0.92.

Key Headlines Impacting CDW

Here are the key news stories impacting CDW this week:

• Positive Sentiment: CDW reported Q3 adjusted earnings of $3.26 per share, above analyst estimates, while revenue rose 17.7% year over year to $6.755 billion and also exceeded expectations. The company attributed growth to enterprise AI adoption and broad-based demand. Article: CDW Stock Jumps as AI Infrastructure Demand Drives Q3 Beat
• Positive Sentiment: The board raised CDW’s quarterly dividend to $0.68 per share, about 8% above last year’s payout, signaling continued cash returns to shareholders. Article: CDW Raises Quarterly Dividend
• Neutral Sentiment: A Hennessy Focus Fund investor letter revisited CDW as a “good but not great” business amid a market environment dominated by large technology stocks. The available article details do not specify a new CDW position or transaction. Article: Reevaluating CDW Corp.
• Negative Sentiment: Despite the earnings beat, margin compression and rising expenses remain watchpoints that could limit how much of the sales growth translates into future profit gains. Article: CDW Q3 Earnings Beat Despite Margin Compression

Insider Buying and Selling at CDW

In other news, insider Elizabeth Connelly sold 26,695 shares of the business’s stock in a transaction that occurred on Friday, August 7th. The shares were sold at an average price of $137.62, for a total value of $3,673,765.90. Following the sale, the insider directly owned 34,215 shares of the company’s stock, valued at approximately $4,708,668.30. The trade was a 43.83% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. 0.82% of the stock is currently owned by corporate insiders.

Analyst Ratings Changes

Several equities research analysts recently commented on CDW shares. Citigroup increased their price target on CDW from $123.00 to $145.00 and gave the company a “neutral” rating in a report on Monday, July 13th. Barclays dropped their target price on CDW from $150.00 to $148.00 and set an “equal weight” rating for the company in a report on Monday, September 21st. Morgan Stanley raised their target price on CDW from $170.00 to $171.00 and gave the stock an “overweight” rating in a research note on Thursday, August 6th. Finally, Weiss Ratings upgraded CDW from a “hold (c-)” rating to a “hold (c)” rating in a report on Tuesday, August 25th. One research analyst has rated the stock with a Strong Buy rating, five have given a Buy rating and three have assigned a Hold rating to the company. According to data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average target price of $150.12.

About CDW

CDW Corporation (NASDAQ: CDW) is a provider of technology products and services for business, government, education and healthcare organizations. The company helps customers plan, procure, implement and manage information technology solutions from leading hardware, software and cloud vendors.

Its offerings include computers, servers, networking equipment, data-storage systems, cybersecurity products, collaboration tools, software licensing and cloud solutions. CDW also provides professional and managed services, including technology consulting, infrastructure deployment, cloud management, security support and lifecycle services.

Founded in 1984 as Computer Discount Warehouse, CDW serves customers primarily in the United States, Canada and the United Kingdom through sales teams, digital channels and technology partnerships.