01—Abstract
Summary
Summary of the 10-Q filed August 5, 2026. Cited figures are marked; the original filing is the authoritative source.
CDW Corporation reported net sales of $6.57 billiona for the three months ended June 30, 2026, up 10.0% from $5.98 billion a year earlier, and $12.25 billion for the six months, up 9.6%.
Net sales growth was led by data storage and servers, notebooks/mobile devices, software, and netcomm products, with all operating segments growing. Gross profit rose 6.3% to $1.32 billionb for the quarter, but gross profit margin fell 70 basis points to 20.1%, driven by product mix and lower-margin hardware categories. Operating income increased 2.0% to $428.6 million, while net income rose 1.2% to $274.4 million and diluted EPS was $2.15, compared with $2.05 a year earlier.
Non-GAAP diluted EPS was $2.91c, versus $2.60. Cash flow weakened notably. Net cash provided by operating activities fell to $219.7 million for the six months from $443.1 million, mainly because of accounts receivable and merchandise inventory build, partly offset by higher accounts payable-trade.
The cash conversion cycle lengthened to 21 days from 16 days. Total debt was $5.8 billiond, with $175 million drawn on the revolver and $1.7 billion of revolver availability. During the six months, the company repurchased 4.5 million shares for $545 million, and the Board authorized a $1 billion increase to the repurchase program on May 13, 2026, leaving about $1.14 billion remaining at June 30, 2026.
The company also declared a quarterly dividend of $0.630 per share on August 5, 2026. The filing also introduces a segment realignment effective January 1, 2026, into Commercial, Government, and Education reportable segments, with CDW UK and CDW Canada reported as Other.
In the quarter, Commercial sales rose 9.2% and Government sales rose 13.6%, while Education was up 0.7%. The company notes a DOJ Civil Investigative Demand related to E-Rate bids but says it cannot assess the probability or financial impact of any outcome.
02—Key points
Key Highlights
- Q2 2026 net sales rose 10.0% to $6.57 billion; six-month net sales rose 9.6% to $12.25 billion, with growth across all operating segments.
- Gross profit margin declined 70 basis points to 20.1% in Q2 2026, mainly from product mix and lower-margin hardware categories, partly offset by netted-down revenue.
- Q2 2026 operating income rose 2.0% to $428.6 million, and diluted EPS was $2.15 versus $2.05; non-GAAP diluted EPS was $2.91 versus $2.60.
- Operating cash flow for the six months fell to $219.7 million from $443.1 million, driven by accounts receivable and merchandise inventory increases.
- Cash conversion cycle lengthened to 21 days from 16 days, with days of sales outstanding rising to 93 from 80.
- Repurchased $545 million of common stock in the six months; the Board added $1 billion to the repurchase program, leaving about $1,138 million remaining at June 30, 2026.
- Total debt was $5.8 billion at June 30, 2026, with $1.7 billion of revolver availability; a new product financing arrangement of $62 million was added in 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, CDW kept $0.04.
- Revenue$6.57B100.0%
- Cost of revenue−$5.25B79.9%
- Gross profit$1.32B20.1%
- Operating costs−$891.2M13.6%
- Operating income$428.6M6.5%
- Interest, other & tax−$154.2M2.3%
- Net income$274.4M4.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 5, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $6.57B$5.98B | +10.0% |
| Cost of Revenue | $5.25B$4.74B | +10.9% |
| Gross Profit | $1.32B$1.24B | +6.3% |
| SG&A Expenses | $891.20M$821.00M | +8.6% |
| Operating Income | $428.60M$420.20M | +2.0% |
| Net Income | $274.40M$271.20M | +1.2% |
| EPS (Basic) | $2.16$2.06 | +4.9% |
| EPS (Diluted) | $2.15$2.05 | +4.9% |
| Shares Outstanding (Basic) | 127.00M131.60M | −3.5% |
| Shares Outstanding (Diluted) | 127.40M132.40M | −3.8% |
05—Questions
Frequently Asked Questions
How did CDW's revenue and profitability trend in the second quarter of 2026?
Net sales grew 10.0% to $6.57 billion, and operating income rose 2.0% to $428.6 million. Gross profit margin fell to 20.1% from 20.8%, so profit grew more slowly than sales. Net income was $274.4 million compared with $271.2 million a year earlier.
Why did operating cash flow decline so sharply?
Net cash provided by operating activities was $219.7 million for the six months, down from $443.1 million. The filing attributes the decline mainly to higher accounts receivable and merchandise inventory, which the company links to timing of collections, increased sales activity, and higher customer stocking positions and hardware costs. Higher accounts payable-trade partly offset this.
How much capital has CDW returned to shareholders?
In the six months ended June 30, 2026, CDW repurchased 4.5 million shares for $545 million and paid $160.9 million in dividends. Dividends were $0.630 per share in each of the first two quarters, and a further $0.630 quarterly dividend was declared on August 5, 2026, payable September 10, 2026.
What is CDW's debt and liquidity position?
Total unsecured indebtedness was $5.8 billion at June 30, 2026, and the company said it was in compliance with its credit agreement and indenture covenants. It had $1.7 billion of availability under its revolving loan facility and $175 million drawn on it. Cash and cash equivalents were $361.8 million.
Did the segment structure change in 2026?
Yes. Effective January 1, 2026, CDW realigned its sales organization into three reportable segments: Commercial, Government, and Education. CDW UK and CDW Canada are reported in an all-other category. Historical segment information was recast to reflect the new structure. In Q2 2026, Commercial net sales were $3.97 billion, Government $848.0 million, Education $933.1 million, and Other $825.7 million.
06—Continue