01—Abstract
Summary
Summary of the 8-K filed November 4, 2025. Cited figures are marked; the original filing is the authoritative source.
CDW Corporation reported third quarter 2025 results on November 4, 2025.
Net sales rose 4.0% to $5,737.4 milliona from $5,516.6 million, and rose 3.8% on a constant currency basis. Growth was driven by higher customer demand for netcomm products, notebooks/mobile devices, desktops, software and services, partially offset by lower data storage and servers. Gross profit increased 4.6% to $1,255.5 million, and gross profit margin improved to 21.9% from 21.8%.
However, selling and administrative expenses rose 12.9% to $812.2 millionb, driven by higher performance-based compensation, transformation costs and acquisition-related intangible amortization, so GAAP operating income fell 8.0% to $443.3 million. Net income declined 8.0% to $291.0 million and diluted EPS fell 5.8% to $2.21. On a non-GAAP basis, net income rose 0.6% to $357.2 million and non-GAAP diluted EPS rose 3.0% to $2.71.
For the nine months ended September 30, 2025, net sales grew 7.0% to $16,913.1 millionc, while GAAP net income fell 3.3% to $787.1 million. Net cash provided by operating activities was $771.4 million, compared with $932.0 million a year earlier, and free cash flow was $692.2 million. Total debt was $5,628.8 million at September 30, 2025, and net debt was $5,175.9 million.
The cash conversion cycle was 11 days, compared with 18 days at December 31, 2024. The Board also declared a quarterly cash dividend of $0.630d per share, payable December 10, 2025 to holders of record on November 25, 2025.
The company described this as an approximately 1 percent increase over the prior year's dividend, aligned with a target of 25 percent of trailing-twelve-month non-GAAP net income. Management reiterated a target of exceeding US IT market growth by 200 to 300 basis points on a constant currency basis.
02—Key points
Key Highlights
- Q3 2025 net sales of $5,737.4 million, up 4.0% (3.8% constant currency), with Corporate up 4.4%, Small Business up 14.2%, Public up 0.6% and Other (UK and Canada) up 9.1%.
- GAAP operating income fell 8.0% to $443.3 million, while non-GAAP operating income was $530.6 million, down 0.6%, with operating income margin at 7.7% versus 8.7% a year earlier.
- Selling and administrative expenses rose 12.9% to $812.2 million, primarily due to higher performance-based compensation, transformation costs and amortization of acquisition-related intangibles.
- Q3 2025 diluted EPS of $2.21 (down 5.8%); non-GAAP diluted EPS of $2.71 (up 3.0%), on 131.8 million diluted weighted-average shares versus 134.9 million.
- Nine-month net sales rose 7.0% to $16,913.1 million, but operating cash flow fell to $771.4 million from $932.0 million, and free cash flow was $692.2 million.
- Board declared a quarterly dividend of $0.630 per share, approximately 1% above the prior year, payable December 10, 2025 to holders of record on November 25, 2025.
- Cash conversion cycle improved to 11 days from 18 days at December 31, 2024, while accounts receivable rose to $5,785.1 million.
03—Questions
Frequently Asked Questions
How did CDW's third quarter 2025 revenue and profitability compare with the prior year?
Net sales grew 4.0% to $5,737.4 million. Gross profit rose 4.6% to $1,255.5 million, with gross margin up slightly to 21.9%. However, GAAP operating income fell 8.0% to $443.3 million because selling and administrative expenses rose 12.9%. Non-GAAP operating income was roughly flat at $530.6 million, down 0.6%.
What drove the difference between GAAP and non-GAAP earnings per share?
GAAP diluted EPS was $2.21, down 5.8%, while non-GAAP diluted EPS was $2.71, up 3.0%. The non-GAAP figures exclude amortization of acquisition-related intangibles, equity-based compensation, transformation initiatives, acquisition and integration expenses, and workplace optimization costs, along with related tax effects.
What is the dividend announcement and what does it mean for shareholders?
The Board declared a quarterly cash dividend of $0.630 per common share, payable December 10, 2025 to stockholders of record at the close of business on November 25, 2025. The company described this as an approximately 1 percent increase over last year's dividend, aligned with a target of 25 percent of trailing-twelve-month non-GAAP net income. Future dividends remain subject to Board approval.
How did cash flow and working capital trend?
For the nine months ended September 30, 2025, net cash provided by operating activities was $771.4 million, compared with $932.0 million in the prior-year period. Free cash flow was $692.2 million versus $838.0 million. Days of sales outstanding increased to 92 from 84 at year-end 2024, while the cash conversion cycle improved to 11 days from 18.
What is management's outlook and what were the key demand drivers?
Management said it continues to target exceeding US IT market growth by 200 to 300 basis points on a constant currency basis. Growth was driven by netcomm products, notebooks/mobile devices, desktops, software and services, partially offset by lower data storage and servers. The filing notes that economic uncertainty persists, although certain end markets showed improved customer spending in the quarter.
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