01—Abstract
Summary
Summary of the 10-Q filed May 7, 2025. Cited figures are marked; the original filing is the authoritative source.
CDW Corporation reported first-quarter 2025 net sales of $5.20 billiona, up from $4.87 billion in the prior-year quarter, with net sales increasing $326 million, or 6.7%, driven by higher sales across all operating segments.
Gross profit rose to $1.12 billionb from $1.06 billion, though gross profit margin declined to 21.6% from 21.8% due to a mix shift toward lower-margin notebooks and mobile devices. Operating income increased $33 million, or 10.2%, to $361 million, and net income rose to $224.9 million from $216.1 million. Diluted earnings per share were $1.69 compared with $1.59 a year earlier.
Non-GAAP net income per diluted share was $2.15c, versus $1.92 in the prior-year period. Cash flow was weaker than the prior year. Net cash provided by operating activities fell to $287.2 million from $440.0 million, primarily due to higher accounts receivable and merchandise inventory, partially offset by accounts payable growth.
Adjusted free cash flow was $248.8 milliond compared with $364.4 million. The company repurchased 1.1 million shares for $200 million during the quarter, and total debt stood at $5.9 billion. Cash and cash equivalents were $471.4 million at March 31, 2025, and the company had $1.3 billion of availability under its Revolving Loan Facility.
The filing also discloses that the Department of Justice issued a Civil Investigative Demand on June 11, 2024, in connection with a False Claims Act investigation concerning bids for E-Rate Program contracts. The company is cooperating and states it cannot currently assess the probability of any outcome or range of possible loss. On May 7, 2025, the Board declared a quarterly dividend of $0.625 per share, payable June 10, 2025.
02—Key points
Key Highlights
- Net sales rose 6.7% to $5.20 billion, with increases in all operating segments; Healthcare sales grew 17.7% and Education 9.3% within the Public segment.
- Operating income increased 10.2% to $361.4 million, and operating income margin improved to 7.0% from 6.7%.
- Gross profit margin declined 20 basis points to 21.6%, attributed to a mix shift toward lower-margin notebooks and mobile devices.
- Diluted EPS was $1.69 versus $1.59; non-GAAP diluted EPS was $2.15 versus $1.92.
- Operating cash flow fell to $287.2 million from $440.0 million, mainly due to higher accounts receivable and inventory; adjusted free cash flow was $248.8 million versus $364.4 million.
- The company repurchased $200 million of common stock and paid $82.8 million in dividends during the quarter.
- A DOJ Civil Investigative Demand related to E-Rate Program bids remains open, and the company cannot currently assess the potential outcome or loss range.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, CDW kept $0.04.
- Revenue$5.20B100.0%
- Cost of revenue−$4.08B78.4%
- Gross profit$1.12B21.6%
- Operating costs−$760.9M14.6%
- Operating income$361.4M7.0%
- Interest, other & tax−$136.5M2.6%
- Net income$224.9M4.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed May 7, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $5.20B$4.87B | +6.7% |
| Cost of Revenue | $4.08B$3.81B | +7.0% |
| Gross Profit | $1.12B$1.06B | +5.5% |
| SG&A Expenses | $760.90M$735.30M | +3.5% |
| Operating Income | $361.40M$328.00M | +10.2% |
| Net Income | $224.90M$216.10M | +4.1% |
| EPS (Basic) | $1.70$1.61 | +5.6% |
| EPS (Diluted) | $1.69$1.59 | +6.3% |
| Shares Outstanding (Basic) | 132.50M134.40M | −1.4% |
| Shares Outstanding (Diluted) | 133.50M136.00M | −1.8% |
05—Questions
Frequently Asked Questions
How did CDW perform in the first quarter of 2025?
Net sales grew 6.7% to $5.20 billion, gross profit rose 5.5% to $1.12 billion, and operating income increased 10.2% to $361.4 million. Net income was $224.9 million, up from $216.1 million.
Why did operating cash flow decline?
Net cash provided by operating activities decreased $153 million to $287.2 million. The filing attributes this mainly to higher accounts receivable and merchandise inventory, which were partially offset by an increase in accounts payable-trade, reflecting higher sales activity and the timing of collections and payments, including multi-year transactions.
What is the status of the DOJ investigation?
The Department of Justice issued a Civil Investigative Demand on June 11, 2024, in a False Claims Act investigation concerning bids submitted for E-Rate Program-funded contracts. The company is cooperating and, at this stage, cannot assess the probability of any outcome or the range of possible loss.
How much capital did the company return to shareholders?
During the quarter, CDW repurchased 1.1 million shares for $200.1 million and paid $82.8 million in dividends at $0.625 per share. The Board also declared a $0.625 quarterly dividend on May 7, 2025, payable June 10, 2025.
What is CDW's debt and liquidity position?
Total unsecured indebtedness was $5.9 billion as of March 31, 2025, and the company was in compliance with its debt covenants. It had $1.3 billion of availability under its Revolving Loan Facility and cash and cash equivalents of $471.4 million.
06—Continue