We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CDW Q1 Earnings Meet, Revenues Rise Y/Y on Infrastructure & AI Adoption
Read MoreHide Full Article
Key Takeaways
CDW reported Q1 EPS of $2.28 and sales of $5.68B, meeting and beating estimates, respectively.
CDW saw broad demand strength, led by servers, storage, software and mobile devices growth.
CDW invests in AI and expects to outperform the U.S. IT market by 200-300 basis points.
CDW Corporation (CDW - Free Report) reported first-quarter 2026 non-GAAP earnings per share (EPS) of $2.28, matching the Zacks Consensus Estimate. The bottom line increased approximately 6.3% year over year.
CDW reported quarterly net sales of $5.68 billion, representing a 9.2% year-over-year increase. On a constant currency (cc) basis, sales grew 8.4%, reflecting healthy organic demand across the business. The strongest drivers of growth included data storage systems, servers and networking hardware, software solutions and notebooks and mobile devices. Despite ongoing economic and geopolitical uncertainty, all segments saw stronger customer spending compared with the previous-year quarter. Quarterly revenues also surpassed the consensus mark of $5.4 billion.
According to management, organizations increasingly need partners capable of managing integration, governance and lifecycle execution at scale, areas where CDW believes it has a competitive advantage. CDW’s “full-stack” approach appears increasingly valuable in this environment. Rather than simply selling hardware, the company positions itself as a long-term technology advisor helping enterprises integrate, secure and manage complex systems. The company also continues investing internally in AI initiatives, which contributed to higher operating expenses during the quarter.
The company also reinforced shareholder returns by approving a quarterly cash dividend of 63 cents per share, payable June 10, 2026, to shareholders of record as of May 25, 2026.
Management is optimistic regarding the remainder of 2026 despite continued macroeconomic and geopolitical uncertainty. CDW expects to outperform the broader U.S. IT market by 200 to 300 basis points on cc, signaling confidence in both customer demand and competitive positioning. The company’s diversified customer base across commercial, government, education and international markets is likely to help reduce dependence on any single sector.
The Commercial segment served as the company’s largest revenue contributor, generating $3.57 billion in sales, up 9.6% year over year. Under commercial, several industries posted particularly strong spending trends. Financial services sales surged 28.2% to $428.4 million. Corporate customer sales rose 8.4% to $2.4 billion. Healthcare sales increased 4.9% to $766.7 million.
The Government segment also posted healthy growth, with sales rising 4.6% to $633 million.
Educationsales increased 2.5% to $675 million, reflecting continued technology spending by schools and universities.
Net sales in Other (Canadian and U.K. operations) rose 17.9% to $803 million, making it one of the fastest-growing areas of the company.
Margin Details
Gross profit increased 6% year over year to $1.19 billion. However, gross margin declined to 21% from 21.6%. The primary reason for the margin compression was a lower contribution from netted down revenue, which can affect reported profitability metrics.
Non-GAAP operating income increased 1.8% year over year to $452 million. The non-GAAP operating margin was down to 8% from 8.5%.
Selling and administrative expenses increased 7% to $814 million, primarily driven by higher compensation expenses, performance-based incentives, coworker-related costs and continued AI investments.
While margin pressure may concern some investors, management appears willing to prioritize strategic AI investments and long-term growth positioning over short-term margin expansion.
Balance Sheet and Cash Flow
As of March 31, 2026, CDW had $578.6 million of cash and cash equivalents compared with $618.7 million as of Dec. 31, 2025.
The company had a long-term debt of $5.64 billion compared with $5.63 billion as of Dec. 31, 2025.
For the three months ended on March 31, 2026, CDW generated $274.8 million of cash flow from operating activities compared with $287.2 million in the year-ago period.
Badger Meter, Inc. (BMI - Free Report) reported EPS of 93 cents for first-quarter 2026, which missed the Zacks Consensus Estimate by 22.5%. The bottom line compared unfavorably with the year-ago quarter’s EPS of $1.30. Quarterly net sales were $202.3 million, down 9% from $222.2 million in the year-ago quarter due to delayed project deployments and weaker-than-expected short-cycle order activity. The Zacks Consensus Estimate was pegged at $230.1 million.
Sensata Technologies Holding plc (ST - Free Report) reported first-quarter 2026 adjusted EPS of 86 cents, up from 78 cents a year ago. The bottom line beat the Zacks Consensus Estimate by 2.4%. Revenues for the quarter reached $934.8 million, up 2.6% from a year ago. The figure came near to the upper end of management’s expectations ($917-$937 million) and beat the consensus estimate by 0.7%. Strength Aerospace, Defense and Commercial Equipment segments drove the top-line performance.
Fortive Corporation (FTV - Free Report) reported first-quarter 2026 adjusted EPS of 70 cents from continuing operations, which surpassed the Zacks Consensus Estimate of 64 cents. The bottom line increased 25.4% year over year. Revenues increased 7.7% year over year to $1069.4 million. The top line beat the Zacks Consensus Estimate by 3.8%.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
CDW Q1 Earnings Meet, Revenues Rise Y/Y on Infrastructure & AI Adoption
Key Takeaways
CDW Corporation (CDW - Free Report) reported first-quarter 2026 non-GAAP earnings per share (EPS) of $2.28, matching the Zacks Consensus Estimate. The bottom line increased approximately 6.3% year over year.
CDW reported quarterly net sales of $5.68 billion, representing a 9.2% year-over-year increase. On a constant currency (cc) basis, sales grew 8.4%, reflecting healthy organic demand across the business. The strongest drivers of growth included data storage systems, servers and networking hardware, software solutions and notebooks and mobile devices. Despite ongoing economic and geopolitical uncertainty, all segments saw stronger customer spending compared with the previous-year quarter. Quarterly revenues also surpassed the consensus mark of $5.4 billion.
According to management, organizations increasingly need partners capable of managing integration, governance and lifecycle execution at scale, areas where CDW believes it has a competitive advantage. CDW’s “full-stack” approach appears increasingly valuable in this environment. Rather than simply selling hardware, the company positions itself as a long-term technology advisor helping enterprises integrate, secure and manage complex systems. The company also continues investing internally in AI initiatives, which contributed to higher operating expenses during the quarter.
The company also reinforced shareholder returns by approving a quarterly cash dividend of 63 cents per share, payable June 10, 2026, to shareholders of record as of May 25, 2026.
CDW Corporation Price, Consensus and EPS Surprise
CDW Corporation price-consensus-eps-surprise-chart | CDW Corporation Quote
Management is optimistic regarding the remainder of 2026 despite continued macroeconomic and geopolitical uncertainty. CDW expects to outperform the broader U.S. IT market by 200 to 300 basis points on cc, signaling confidence in both customer demand and competitive positioning. The company’s diversified customer base across commercial, government, education and international markets is likely to help reduce dependence on any single sector.
In the past month, CDW's shares have gained 10.6% against the Zacks Computers-IT Services industry’s fall of 0.6%.
Image Source: Zacks Investment Research
Segmental Details
The Commercial segment served as the company’s largest revenue contributor, generating $3.57 billion in sales, up 9.6% year over year. Under commercial, several industries posted particularly strong spending trends. Financial services sales surged 28.2% to $428.4 million. Corporate customer sales rose 8.4% to $2.4 billion. Healthcare sales increased 4.9% to $766.7 million.
The Government segment also posted healthy growth, with sales rising 4.6% to $633 million.
Educationsales increased 2.5% to $675 million, reflecting continued technology spending by schools and universities.
Net sales in Other (Canadian and U.K. operations) rose 17.9% to $803 million, making it one of the fastest-growing areas of the company.
Margin Details
Gross profit increased 6% year over year to $1.19 billion. However, gross margin declined to 21% from 21.6%. The primary reason for the margin compression was a lower contribution from netted down revenue, which can affect reported profitability metrics.
Non-GAAP operating income increased 1.8% year over year to $452 million. The non-GAAP operating margin was down to 8% from 8.5%.
Selling and administrative expenses increased 7% to $814 million, primarily driven by higher compensation expenses, performance-based incentives, coworker-related costs and continued AI investments.
While margin pressure may concern some investors, management appears willing to prioritize strategic AI investments and long-term growth positioning over short-term margin expansion.
Balance Sheet and Cash Flow
As of March 31, 2026, CDW had $578.6 million of cash and cash equivalents compared with $618.7 million as of Dec. 31, 2025.
The company had a long-term debt of $5.64 billion compared with $5.63 billion as of Dec. 31, 2025.
For the three months ended on March 31, 2026, CDW generated $274.8 million of cash flow from operating activities compared with $287.2 million in the year-ago period.
Free cash flow was $248.4 million.
CDW’s Zacks Rank
CDW currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Firms
Badger Meter, Inc. (BMI - Free Report) reported EPS of 93 cents for first-quarter 2026, which missed the Zacks Consensus Estimate by 22.5%. The bottom line compared unfavorably with the year-ago quarter’s EPS of $1.30. Quarterly net sales were $202.3 million, down 9% from $222.2 million in the year-ago quarter due to delayed project deployments and weaker-than-expected short-cycle order activity. The Zacks Consensus Estimate was pegged at $230.1 million.
Sensata Technologies Holding plc (ST - Free Report) reported first-quarter 2026 adjusted EPS of 86 cents, up from 78 cents a year ago. The bottom line beat the Zacks Consensus Estimate by 2.4%. Revenues for the quarter reached $934.8 million, up 2.6% from a year ago. The figure came near to the upper end of management’s expectations ($917-$937 million) and beat the consensus estimate by 0.7%. Strength Aerospace, Defense and Commercial Equipment segments drove the top-line performance.
Fortive Corporation (FTV - Free Report) reported first-quarter 2026 adjusted EPS of 70 cents from continuing operations, which surpassed the Zacks Consensus Estimate of 64 cents. The bottom line increased 25.4% year over year. Revenues increased 7.7% year over year to $1069.4 million. The top line beat the Zacks Consensus Estimate by 3.8%.