Financial Data and Key Metrics Changes - For Q4 2025, the company reported net sales of $5.5 billion, an increase of 5% year-over-year, and gross profit of $1.25 billion, up 9% [5][6] - Non-GAAP operating income was $503 million, up 1%, and non-GAAP net income per share was $2.57, up 4% compared to 2024 [6][8] - Full-year 2025 results showed net sales of over $22 billion, up 7%, with gross profit nearly $5 billion, up 6%, and non-GAAP net income per share reaching $10.02, up 5% [8][27] Business Line Data and Key Metrics Changes - The company experienced strong double-digit growth in software, cloud, and professional managed services, which contributed to the highest gross margin of the year [6][12] - Corporate sales were relatively flat, down 1%, while small business sales grew by 18%, driven by cloud consumption and client device modernization [10][11] - The healthcare segment increased by 5%, and education saw a 13% increase, driven by strong relationships and lifecycle services capabilities [11][12] Market Data and Key Metrics Changes - The U.S. IT addressable market is expected to grow in the low single digits in 2026, with the company targeting 200-300 basis points of outperformance [18][35] - The company’s U.K. and Canadian operations delivered sales of $2.7 billion in 2025, with strong performance in small business and state and local markets [10][11] - The government segment saw a 4% increase, with strong growth in state and local offsetting declines in federal due to the government shutdown [11][21] Company Strategy and Development Direction - The company aims to deliver sustainable, profitable growth by deepening customer value, sharpening efficiency, and deploying capital with discipline [19][32] - The focus is on high relevance, high growth areas, particularly in AI, where the company believes it has the architectural depth and partner reach to lead [15][19] - The company is actively evaluating M&A opportunities to bolster its end-to-end lifecycle capabilities, as demonstrated by the acquisition of Lexicon Tech Solutions [32] Management's Comments on Operating Environment and Future Outlook - Management noted that 2025 was a year of transition and resilience amid economic uncertainties, including tariffs and government spending changes [7][27] - The company expects gross profit to grow in the low single digits for 2026, with a slight increase in gross margin compared to 2025 [35][36] - Management highlighted the importance of AI adoption and consumption, indicating that customers are increasingly looking for help in integrating AI into their operations [55][72] Other Important Information - The company generated $1.1 billion in adjusted free cash flow in 2025, returning nearly $1 billion to shareholders through dividends and share repurchases [9][30] - Non-GAAP SG&A expenses for Q4 totaled $752 million, up 14.6% year-over-year, primarily due to higher performance-based expenses [24][25] - The company plans to increase its dividend in line with non-GAAP net income growth, targeting a payout ratio of approximately 25% going forward [31][32] Q&A Session Summary Question: Impact of memory pricing on demand - Management indicated that they expect a similar amount of pull forward in Q1 as seen in Q4, with strong demand for PCs despite potential deceleration in growth [40][41] Question: SG&A as a percentage of gross profit - Management acknowledged that while operating leverage is a priority, the SG&A ratio will improve as growth picks up and expenses are optimized [42][44] Question: Drivers of IT budget allocation in 2026 - Management expects client device growth to remain strong, with cloud, SaaS, and security continuing to be important categories for spending [57][58] Question: Corporate versus small business performance divergence - Management noted that larger companies are taking time to integrate AI, while small businesses are more agile in adopting new technologies [71][72]

Core Viewpoint - CDW reported quarterly earnings of $2.57 per share, exceeding the Zacks Consensus Estimate of $2.44 per share, and showing an increase from $2.48 per share a year ago, indicating a positive earnings surprise of +5.54% [1] Financial Performance - CDW achieved revenues of $5.51 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 4.60% and up from $5.19 billion year-over-year [2] - The company has consistently exceeded consensus EPS estimates over the last four quarters [2] Stock Performance and Outlook - CDW shares have declined approximately 7.4% since the beginning of the year, contrasting with the S&P 500's gain of 1.1% [3] - The future performance of CDW's stock will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $2.14 on revenues of $5.18 billion, and for the current fiscal year, it is $10.39 on revenues of $22.51 billion [7] - The trend of estimate revisions for CDW was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Computers - IT Services industry, to which CDW belongs, is currently in the top 40% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Another company in the same industry, Unisys, is expected to report quarterly earnings of $0.60 per share, reflecting a year-over-year change of +81.8% [9]

CDW Corporation Webcast Conference Call February 4, 2026 Today's Agenda Fourth Quarter and Full Year 2025 Results Performance Drivers Outlook Q&A 2 Forward-Looking Statements Statements in this presentation that are not statements of historical fact are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding the future financial performance, 2026 outlook, capital allocation priori ...

Core Viewpoint - CDW exceeded fourth-quarter sales and profit expectations, driven by continued client investments in artificial intelligence and cloud adoption [1] Group 1: Financial Performance - CDW reported better-than-expected sales and profit figures for the fourth quarter [1]

EXHIBIT 99.1 CDW Reports Fourth Quarter and Full Year 2025 Earnings | Three Months Ended December 31, | | | | | | | | | | | | | | | | | Year Ended December 31, | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | (Dollars in millions, except per | | | | | | | | | | | | | | | | | | | Percent | | | Percent | | | | | | | | share amounts) | | | | | | | 2025 | | | 2 ...

VERNON HILLS, Ill.--(BUSINESS WIRE)--CDW Corporation (Nasdaq: CDW) announced today that its Board of Directors declared a quarterly cash dividend of $0.630 per common share will be paid on March 10, 2026 to all stockholders of record as of the close of business on February 25, 2026. "Dividends represent an important component of our capital allocation priorities, along with share repurchases, strategic M&A and managing our capital structure," said Albert J. Miralles, chief financial officer. ...

Core Insights - CDW Corporation is set to release its fourth-quarter 2025 results on February 4, 2026, with revenue expectations of $5.3 billion, reflecting a 1.6% growth year-over-year [1] - The earnings consensus estimate is $2.44 per share, indicating a slight 1.6% decline from the previous year, attributed to weak demand in government and education sectors, potential healthcare funding gaps, and economic uncertainty [2][7] Financial Performance - CDW has consistently beaten earnings estimates in the last four quarters, with an average surprise of 6% [3] - The company anticipates low- to mid-single-digit gross profit growth year-over-year, with a sequential decline due to seasonality [5][7] - Operating expenses are expected to decrease modestly quarter-over-quarter, but with some reinvestment leading to higher non-GAAP SG&A as a percentage of gross profit [5] Revenue Breakdown - Estimated revenues for the fourth quarter from various sectors include: Small Business at $350.8 million, Government at $653.5 million, Education at $613.8 million, Healthcare at $609.3 million, and Corporate at $2.4 billion, which is a 1% increase [8] Strategic Initiatives - CDW is focusing on high-growth areas such as cloud, cybersecurity, and AI, with strong demand for services contributing significantly to profit growth [9] - The company plans to increase its annual dividend to $2.52, maintain a solid balance sheet, and prioritize mergers and acquisitions along with share buybacks [6] Market Conditions - Despite mixed performance in recent quarters, CDW's diversified customer base across the U.S., U.K., and Canada supports its growth, driven by technology investments in small businesses and healthcare [7] - Ongoing macroeconomic challenges, including trade wars and geopolitical tensions, are impacting the technology supply chain and customer spending [10]

Market Performance - The broad U.S. market started the year positively, with the SPDR® S&P 500® ETF (SPY) posting a gain despite some elevated volatility in the final week of January [1]

The market expects CDW (CDW) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended December 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on Febr ...

Summary of Earnings Conference Call Insights Industry Overview - **Industry Focus**: US Enterprise Hardware and Networking - **Key Trends**: AI infrastructure investments are expected to drive earnings per share (EPS) beats for select companies, while traditional demand remains uneven. Strong performance is anticipated in AI-centric data centers, supported by robust financial results from vendors like Ciena and EMS providers such as Jabil and TD SYNNEX [2][4]. Company-Specific Insights Arista Networks (ANET) - **Performance Expectations**: Anticipated revenue for December quarter is $2.42 billion, approximately 3% above the estimate of $2.35 billion, reflecting a 25% year-over-year growth against a guide of 19% to 24% [10][11]. - **EPS Forecast**: Expected diluted EPS of ~$0.79, which is a 5% beat compared to the estimate of $0.75 [10][11]. - **Revenue Guidance**: Expected to raise the CY26 revenue guidance to 22% growth from the previous 20% due to strong AI investments and $2.5 billion in deferred revenue entering the December quarter [18][19]. - **Historical Performance**: Over the past five years, Arista has consistently exceeded revenue guidance by an average of 4% in the December quarter [7][13]. - **Operating Margins**: Expected operating margin of at least 48.3%, which is approximately 150 basis points above the estimate of 46.8% [11]. IBM - **Revenue Expectations**: Anticipated revenue of $19.2 billion for the December quarter, in line with consensus estimates [22][25]. - **Segment Performance**: Expected constant currency growth of ~9% in Software, ~2% in Consulting, and ~6% in Infrastructure [22][24]. - **EPS Forecast**: Expected adjusted EPS of $4.29, slightly below consensus of $4.30 [23][25]. - **Future Guidance**: Anticipated guidance for CY26 revenue growth of 5+%, including a contribution from the pending Confluent acquisition [39][42]. Celestica (CLS) - **Revenue Expectations**: Projected revenue of $3.61 billion for the December quarter, which is 3% to 4% above the guide, driven by strong demand for AI back-end 800G switches [49][54]. - **EPS Forecast**: Expected adjusted EPS of $1.86, approximately 7.5% above the midpoint of the company outlook [49][54]. - **Future Guidance**: Anticipated increase in CY26 revenue and EPS guidance to $16.5 billion and $8.70 respectively, reflecting strong demand in both HPS switching and TPU/Compute [62][63]. Extreme Networks (EXTM) - **Performance Expectations**: Continued strength in wired and wireless markets is expected to support upside in December quarter revenue and EPS estimates [68]. Lumentum - **Revenue Expectations**: Expected revenue to exceed estimates by at least 5%, driven by strong demand for laser chips and transceivers [4]. Key Takeaways - **AI Investment Impact**: Companies like Arista, Celestica, and Lumentum are well-positioned to benefit from AI infrastructure investments, with expectations of revenue and EPS beats [2][4]. - **Market Sentiment**: Investor expectations for Celestica and Lumentum are notably high, while Arista's expectations are more modest, indicating a preference for Arista based on its conservative outlook [2][4]. - **Guidance Trends**: Companies are expected to provide optimistic guidance for the upcoming quarters, reflecting confidence in sustained demand and operational efficiency [18][19][59]. Additional Insights - **Market Dynamics**: The anticipated price increases by customers may lead to a slight demand pull-in, impacting orders positively for companies like Extreme Networks [68]. - **Operational Efficiency**: Companies are maintaining tight control over operating expenses, which is expected to enhance margins despite potential revenue mix challenges [11][23].