Second quarter of 2026
Filed Aug 5, 2026CDW Reports Second Quarter 2026 Earnings
Net sales increased 10.0%, non-GAAP operating income increased 7.0%, and non-GAAP net income per diluted share increased 11.9%, although gross profit margin and GAAP operating income margin declined from the prior year.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, three months ended June 30GAAP | $6,572.2 million | – | 10.0% |
| Net sales growth, constant currency, second quarterother | 9.9 percent | – | – |
| Gross profit, three months ended June 30GAAP | $1,319.8 million | – | 6.3% |
| Gross profit margin, three months ended June 30GAAP | 20.1% | – | – |
| Selling and administrative expenses, second quarterGAAP | $891 million | – | 8.6 percent |
| Operating income, three months ended June 30GAAP | $428.6 million | – | 2.0% |
| Operating income margin, three months ended June 30GAAP | 6.5% | – | – |
| Non-GAAP operating income, three months ended June 30non-GAAP | $556.0 million | – | 7.0% |
| Non-GAAP operating income margin, three months ended June 30non-GAAP | 8.5% | – | – |
| Interest expense, net, second quarterGAAP | $60 million | – | 6.0 percent |
| Effective income tax rate, second quarterGAAP | 26.4 percent | – | – |
| Income tax expense, second quarterGAAP | $99 million | – | – |
| Net income, three months ended June 30GAAP | $274.4 million | – | 1.2% |
| Non-GAAP net income, three months ended June 30non-GAAP | $370.4 million | – | 7.8% |
| Net income per diluted share, three months ended June 30GAAP | $2.15 | – | 5.1% |
| Non-GAAP net income per diluted share, three months ended June 30non-GAAP | $2.91 | – | 11.9% |
| Weighted-average diluted shares outstanding, second quarterGAAP | 127 million | – | – |
| Average daily sales, three months ended June 30other | $102.7 million | – | 10.0% |
| Net sales, six months ended June 30GAAP | $12,252.0 million | – | 9.6% |
| Gross profit, six months ended June 30GAAP | $2,509.8 million | – | 6.2% |
| Gross profit margin, six months ended June 30GAAP | 20.5% | – | – |
| Operating income, six months ended June 30GAAP | $804.6 million | – | 2.9% |
| Operating income margin, six months ended June 30GAAP | 6.6% | – | – |
| Non-GAAP operating income, six months ended June 30non-GAAP | $1,007.9 million | – | 4.6% |
| Non-GAAP operating income margin, six months ended June 30non-GAAP | 8.2% | – | – |
| Net income, six months ended June 30GAAP | $509.8 million | – | 2.8% |
| Non-GAAP net income, six months ended June 30non-GAAP | $665.7 million | – | 5.6% |
| Net income per diluted share, six months ended June 30GAAP | $3.97 | – | 6.3% |
| Non-GAAP net income per diluted share, six months ended June 30non-GAAP | $5.18 | – | 9.3% |
| Average daily sales, six months ended June 30other | $96.5 million | – | 9.6% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| CommercialAn increase in Net sales to Corporate, Healthcare, and Financial Services customers of 10.7 percent, 9.1 percent, and 1.8 percent, respectively. | $3,965 million | – | 9.2 percent |
| GovernmentNo specific segment driver reported. | $848 million | – | 13.6 percent |
| EducationNo specific segment driver reported. | $933 million | – | 0.7 percent |
| OtherCDW’s UK and Canadian operations, combined as "Other" for financial reporting purposes. | $826 million | – | 22.9 percent |
Not specified outlook
- Noteremain confident in our ability to exceed US IT addressable market growth by 200 to 300 basis points on a constant currency basis
Capital returns
- Quarterly cash dividend of $0.630 per common share to be paid on September 10, 2026, to all stockholders of record as of the close of business on August 25, 2026.
What drove it
- Customer demand drove Net sales growth primarily in data storage and servers, notebooks/mobile devices, software, and netcomm products.
- Strong demand for infrastructure solutions, combined with disciplined execution and expense management, drove solid gross profit growth, operating income expansion and double-digit earnings per share growth in the quarter.
- Commercial segment growth was driven by higher Net sales to Corporate, Healthcare, and Financial Services customers.
- Gross profit margin was partially offset by a higher contribution of netted down revenue.
Concerns
- Gross profit margin was 20.1 percent compared to 20.8 percent in the second quarter of 2025.
- The decrease in Gross profit margin was primarily driven by mix into and lower margin in certain hardware categories.
- Selling and administrative expenses increased primarily due to higher compensation expense, including performance-based incentives, and workplace optimization costs.
- The effective income tax rate increased primarily due to current year tax shortfalls as compared to prior year excess tax benefits on equity-based compensation.
- Interest expense, net increased primarily due to higher average debt levels on the senior unsecured revolving loan facility.
What to watch
- Net sales growth in data storage and servers, notebooks/mobile devices, software, and netcomm products.
- The mix into and margin profile of certain hardware categories.
- Commercial Net sales trends across Corporate, Healthcare, and Financial Services customers.
- Progress toward exceeding US IT addressable market growth by 200 to 300 basis points on a constant currency basis.
- Average debt levels on the senior unsecured revolving loan facility.
Balance sheet and cash flow
- Interest expense, net was $60 million in the second quarter of 2026, compared to $57 million for the second quarter of 2025.
- The increase is primarily due to higher average debt levels on our senior unsecured revolving loan facility.
Analysis
CDW reported second-quarter net sales of $6,572.2 million, up 10.0% from the prior-year period, with constant-currency net sales growth of 9.9 percent. Average daily sales were $102.7 million versus $93.4 million. Management attributed growth primarily to customer demand for data storage and servers, notebooks/mobile devices, software, and netcomm products, and described customer investments in infrastructure modernization, cloud, and AI-enabled technologies.
Growth was broad across reported segments, led by Other, which includes UK and Canadian operations, at 22.9 percent growth. Government net sales increased 13.6 percent and Commercial net sales increased 9.2 percent, supported by growth to Corporate, Healthcare, and Financial Services customers. Education growth was comparatively modest at 0.7 percent. For the first six months, net sales increased 9.6% to $12,252.0 million.
Profit growth lagged sales growth on a GAAP basis. Second-quarter gross profit increased 6.3% to $1,319.8 million, while gross profit margin declined to 20.1% from 20.8%. The company attributed the margin decrease primarily to mix into and lower margin in certain hardware categories, partially offset by a higher contribution of netted down revenue. Selling and administrative expenses increased 8.6% to $891 million, reflecting higher compensation expense, including performance-based incentives, and workplace optimization costs. GAAP operating income increased 2.0% to $428.6 million and operating income margin declined to 6.5% from 7.0%.
Non-GAAP operating income increased 7.0% to $556.0 million, while non-GAAP operating income margin was 8.5% compared with 8.7%. GAAP net income increased 1.2% to $274.4 million, whereas non-GAAP net income increased 7.8% to $370.4 million. GAAP diluted EPS increased 5.1% to $2.15 and non-GAAP diluted EPS increased 11.9% to $2.91. Weighted-average diluted shares outstanding were 127 million, compared with 132 million in the prior-year period. Interest expense, net rose to $60 million from $57 million, primarily due to higher average debt levels on the senior unsecured revolving loan facility, while the effective income tax rate rose to 26.4 percent from 25.7 percent.
Capital allocation included a quarterly cash dividend of $0.630 per common share, payable September 10, 2026, to stockholders of record on August 25, 2026. CDW did not provide quantitative revenue, margin, expense, or tax-rate guidance in the supplied release. Its disclosed outlook is a confidence statement that it can exceed US IT addressable market growth by 200 to 300 basis points on a constant currency basis. The key operating issue is whether infrastructure and AI-related demand can sustain sales growth while the company manages hardware mix pressure, selling and administrative expense growth, and interest costs.
Management, verbatim
CDW delivered strong second quarter results as customers advanced investments in infrastructure modernization, cloud, and AI-enabled technologies.
Christine A. Leahy, chair and chief executive officer, CDW
Strong demand for infrastructure solutions, combined with disciplined execution and expense management, drove solid gross profit growth, operating income expansion and double-digit earnings per share growth in the quarter.
Albert J. Miralles, chief financial officer, CDW
Supported by these strengths, we remain confident in our ability to exceed US IT addressable market growth by 200 to 300 basis points on a constant currency basis.
Christine A. Leahy, chair and chief executive officer, CDW
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported financial metrics
- Segment prior-year revenue amounts and prior-quarter segment comparisons
- Operating cash flow
- Free cash flow
- Cash and cash equivalents balance
- Total debt balance
- Share repurchase activity
- Quantitative revenue guidance
- Quantitative gross margin guidance
- Quantitative operating expense guidance
- Quantitative tax-rate guidance
- Prior-release outlook for comparison with actual results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.