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CDW Gears Up to Post Q1 Earnings: Is a Beat in the Cards?
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Key Takeaways
CDW expects Q1 non-GAAP EPS to rise mid-single digits ahead of May 6 earnings release.
CDW sees strong software, cloud and services demand offsetting macro pressures and shifts.
CDW forecasts sequential gross profit dip but YoY growth, with margins a key focus area.
CDW Corporation (CDW - Free Report) is scheduled to release first-quarter 2026 results before the market opens on May 6.
The Zacks Consensus Estimate for revenues is pegged at $5.4 billion, indicating 3.9% growth from the prior-year quarter. As a leading IT solutions provider serving enterprises, government, education and healthcare sectors, Vernon Hills-based CDW sits at the intersection of enterprise IT spending, cloud adoption and digital transformation, making its earnings a key signal for broader tech demand trends.
The consensus estimate for earnings is pegged at $2.28 per share, up 0.9% in the past 60 days, indicating a 6% surge from the year-ago quarter’s reported figure. Management expects first-quarter non-GAAP net income per share to be up mid-single digits year over year.
CDW’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with an average surprise being 5.7%.
Image Source: Zacks Investment Research
Factors Investors Should Note for CDW’s Q1 Results
CDW’s first-quarter performance is likely to have been driven by steady demand across its end markets, with strong double-digit growth in key areas, such as software, cloud and services, helping offset macroeconomic pressures and shifting customer priorities. Ahead of its first quarter 2026 earnings call, CDW is set to update its customer channel reporting to better reflect its go-to-market structure. The company will provide expanded details for government and education, including gross profit and operating income. It will continue reporting net sales for healthcare and corporate, while adding financial services under a broader “commercial” segment. Small business will also be integrated into this segment, while maintaining its dedicated support model and aligning teams with industry expertise.
Despite ongoing customer caution, spending is likely to have improved across most segments, led by software, notebooks, mobile devices and services. Margins have become a key focus for CDW. It expects gross profit to decline at a mid-single-digit rate sequentially, while still delivering mid-single-digit growth year over year. This outlook reflects some demand being pulled into the first quarter as customers move ahead of anticipated price increases in memory-intensive products. It also assumes a slower start in the federal channel, as the pipeline rebuilds following last quarter’s government shutdown.
It further expects first-quarter operating expenses to decline sequentially on a dollar basis, a departure from the typical flat-to-higher sequential trend. Even so, as is usually the case, first-quarter operating margin is likely to have been the lowest of the year. Strong margins could signal that CDW is successfully executing its solutions-led strategy.
AI-driven infrastructure demand is an emerging trend. CDW benefits indirectly from enterprise adoption of AI workloads, increased need for servers, storage, networking and growth in hybrid cloud environments. CDW’s growth reflects the strength of its diversified portfolio across the U.S., U.K. and Canadian markets, with each sales channel generating more than $1 billion annually and international operations contributing $2.7 billion in 2025. Growth is fueled by cloud adoption, client device refresh cycles and rising AI-focused investments, especially among small businesses leveraging edge-based AI systems. Commercial momentum remains strong, driven by demand for hybrid infrastructure, client solutions and cloud, while healthcare continues to be a key growth driver.
For the first quarter, we expect revenues from Small Business, Government, Education and Healthcare to be $418.5 million, $576.8 million, $675.5 million and $658.4 million, respectively. Revenues from the Corporate sector are estimated to be $2.1 billion, down 5.8%.
CDW is known for strong cash generation and shareholder returns. It plans to increase its dividend modestly to $2.52 annually, in line with non-GAAP net income and a 25% payout target, while maintaining a solid balance sheet with net leverage at 2.4x. The company continues to prioritize M&A and share repurchases, supported by strong cash flow, and is on track to exceed its goal of returning 50–75% of adjusted free cash flow to shareholders by 2026. In 2025, CDW returned about $982 million through dividends and buybacks, backed by strong gross profit growth, disciplined working capital management and robust cash generation, while still preserving flexibility for acquisitions.
However, CDW continues to face uneven conditions in the public sector, with lingering effects from last year’s government shutdown and broader economic and geopolitical uncertainty keeping customer spending cautious. Against this backdrop, it expects the U.S. IT market to grow only in the low single digits in 2026, with CDW modestly outperforming by 200–300 basis points. Shifts in public spending, tariffs, geopolitical tensions and volatility in memory pricing and supply are likely to have weighed on first-quarter performance.
What Our Model Reveals for CDW
Our proven model predicts an earnings beat for CDW this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is exactly the case here.
CDW currently has an Earnings ESP of +1.90% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other stocks you may want to consider, as our model shows that these too have the right elements to post an earnings beat in this reporting cycle.
The Zacks Consensus Estimate for LUMN’s to-be-reported quarter’s loss and revenues is pegged at 6 cents per share and $2.84 billion, respectively. Shares of LUMN have skyrocketed 109% in the past year.
Onto Innovation Inc. (ONTO - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #1 at present. ONTO is scheduled to report quarterly figures on May 5. The Zacks Consensus Estimate for ONTO’s to-be-reported quarter’s earnings and revenues is pegged at $1.38 per share and $289.1 million, respectively. Shares of ONTO are up 137.2% in the past year.
Advanced Micro Devices, Inc. (AMD - Free Report) has an Earnings ESP of +5.02% and a Zacks Rank #2 at present. AMD is scheduled to report quarterly figures on May 5. The Zacks Consensus Estimate for AMD’s to-be-reported quarter’s earnings and revenues is pegged at $1.30 per share and $9.84 billion, respectively. Shares of AMD are up 252.4% in the past year.
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CDW Gears Up to Post Q1 Earnings: Is a Beat in the Cards?
Key Takeaways
CDW Corporation (CDW - Free Report) is scheduled to release first-quarter 2026 results before the market opens on May 6.
The Zacks Consensus Estimate for revenues is pegged at $5.4 billion, indicating 3.9% growth from the prior-year quarter. As a leading IT solutions provider serving enterprises, government, education and healthcare sectors, Vernon Hills-based CDW sits at the intersection of enterprise IT spending, cloud adoption and digital transformation, making its earnings a key signal for broader tech demand trends.
The consensus estimate for earnings is pegged at $2.28 per share, up 0.9% in the past 60 days, indicating a 6% surge from the year-ago quarter’s reported figure. Management expects first-quarter non-GAAP net income per share to be up mid-single digits year over year.
CDW’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with an average surprise being 5.7%.
Image Source: Zacks Investment Research
Factors Investors Should Note for CDW’s Q1 Results
CDW’s first-quarter performance is likely to have been driven by steady demand across its end markets, with strong double-digit growth in key areas, such as software, cloud and services, helping offset macroeconomic pressures and shifting customer priorities. Ahead of its first quarter 2026 earnings call, CDW is set to update its customer channel reporting to better reflect its go-to-market structure. The company will provide expanded details for government and education, including gross profit and operating income. It will continue reporting net sales for healthcare and corporate, while adding financial services under a broader “commercial” segment. Small business will also be integrated into this segment, while maintaining its dedicated support model and aligning teams with industry expertise.
Despite ongoing customer caution, spending is likely to have improved across most segments, led by software, notebooks, mobile devices and services. Margins have become a key focus for CDW. It expects gross profit to decline at a mid-single-digit rate sequentially, while still delivering mid-single-digit growth year over year. This outlook reflects some demand being pulled into the first quarter as customers move ahead of anticipated price increases in memory-intensive products. It also assumes a slower start in the federal channel, as the pipeline rebuilds following last quarter’s government shutdown.
It further expects first-quarter operating expenses to decline sequentially on a dollar basis, a departure from the typical flat-to-higher sequential trend. Even so, as is usually the case, first-quarter operating margin is likely to have been the lowest of the year. Strong margins could signal that CDW is successfully executing its solutions-led strategy.
AI-driven infrastructure demand is an emerging trend. CDW benefits indirectly from enterprise adoption of AI workloads, increased need for servers, storage, networking and growth in hybrid cloud environments. CDW’s growth reflects the strength of its diversified portfolio across the U.S., U.K. and Canadian markets, with each sales channel generating more than $1 billion annually and international operations contributing $2.7 billion in 2025. Growth is fueled by cloud adoption, client device refresh cycles and rising AI-focused investments, especially among small businesses leveraging edge-based AI systems. Commercial momentum remains strong, driven by demand for hybrid infrastructure, client solutions and cloud, while healthcare continues to be a key growth driver.
CDW Corporation Price and EPS Surprise
CDW Corporation price-eps-surprise | CDW Corporation Quote
For the first quarter, we expect revenues from Small Business, Government, Education and Healthcare to be $418.5 million, $576.8 million, $675.5 million and $658.4 million, respectively. Revenues from the Corporate sector are estimated to be $2.1 billion, down 5.8%.
CDW is known for strong cash generation and shareholder returns. It plans to increase its dividend modestly to $2.52 annually, in line with non-GAAP net income and a 25% payout target, while maintaining a solid balance sheet with net leverage at 2.4x. The company continues to prioritize M&A and share repurchases, supported by strong cash flow, and is on track to exceed its goal of returning 50–75% of adjusted free cash flow to shareholders by 2026. In 2025, CDW returned about $982 million through dividends and buybacks, backed by strong gross profit growth, disciplined working capital management and robust cash generation, while still preserving flexibility for acquisitions.
However, CDW continues to face uneven conditions in the public sector, with lingering effects from last year’s government shutdown and broader economic and geopolitical uncertainty keeping customer spending cautious. Against this backdrop, it expects the U.S. IT market to grow only in the low single digits in 2026, with CDW modestly outperforming by 200–300 basis points. Shifts in public spending, tariffs, geopolitical tensions and volatility in memory pricing and supply are likely to have weighed on first-quarter performance.
What Our Model Reveals for CDW
Our proven model predicts an earnings beat for CDW this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is exactly the case here.
CDW currently has an Earnings ESP of +1.90% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other stocks you may want to consider, as our model shows that these too have the right elements to post an earnings beat in this reporting cycle.
Lumen Technologies, Inc. (LUMN - Free Report) currently has an Earnings ESP of +27.27% and a Zacks Rank #1. Lumen is scheduled to report quarterly earnings on May 5. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LUMN’s to-be-reported quarter’s loss and revenues is pegged at 6 cents per share and $2.84 billion, respectively. Shares of LUMN have skyrocketed 109% in the past year.
Onto Innovation Inc. (ONTO - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #1 at present. ONTO is scheduled to report quarterly figures on May 5. The Zacks Consensus Estimate for ONTO’s to-be-reported quarter’s earnings and revenues is pegged at $1.38 per share and $289.1 million, respectively. Shares of ONTO are up 137.2% in the past year.
Advanced Micro Devices, Inc. (AMD - Free Report) has an Earnings ESP of +5.02% and a Zacks Rank #2 at present. AMD is scheduled to report quarterly figures on May 5. The Zacks Consensus Estimate for AMD’s to-be-reported quarter’s earnings and revenues is pegged at $1.30 per share and $9.84 billion, respectively. Shares of AMD are up 252.4% in the past year.