Financial Data and Key Metrics - Net sales for the quarter were $5.6 billion, down 8% year-over-year [2] - Non-GAAP operating income reached a record $556 million, up 1% year-over-year [2] - Non-GAAP net income per share was $2.72, up 4% year-over-year [2] - Gross profit was $1.2 billion, with a record gross margin of 21.8%, up 200 basis points year-over-year [93][95] - Non-GAAP operating income margin reached a record 9.9%, up 110 basis points year-over-year [98] - Non-GAAP net income was $369 million, up 3.5% year-over-year [99] - Net debt was $5.3 billion, with a net leverage ratio of 2.4 times [101] Business Line Performance - Corporate net sales decreased 12%, driven by declines in client devices [9] - Small business net sales declined 22%, with a focus on cost management and shorter-term ROI [12][13] - Public sales increased 1% year-over-year, with healthcare and education each posting a 2% increase [14] - Healthcare net sales increased 2%, driven by cloud solutions and security spend [17][18] - Education net sales increased low single-digits, the first positive growth quarter in over eight quarters [20] - UK and Canada operations delivered $2.9 billion in 2022 sales, but declined mid-teens in Q3 2023 [24] Market Performance - Cloud spend increased nearly 20% across all end markets, with half coming from commercial customers and half from public [65] - Security spend increased by double digits, driven by software and cloud solutions [66] - Client device demand remained weak, particularly in the commercial space, with double-digit declines [64] - Network modernization led to double-digit growth in net comp performance [11] Strategy and Industry Competition - The company's strategy focuses on capturing market share, enhancing high-growth solutions, and expanding services capabilities [90] - Investments in cloud, security, and AI are driving customer spend, with cloud and SaaS-based solutions outpacing net sales growth [6][95] - The company is well-positioned to help customers with AI-enabled technology across the full stack, including client devices [52][53] - The company continues to outperform the IT market by 200 to 300 basis points on a customer spend basis [108] Management Commentary on Operating Environment and Future Outlook - The company expects the IT market to contract at the upper end of high single digits in 2023 [108] - Full-year non-GAAP operating income margin is expected to be in the low to mid-9% range, up from prior expectations [110] - Full-year non-GAAP earnings per share are expected to be flat to slightly up year-over-year in constant currency [111] - The company anticipates a mid-single-digit sequential decline in average daily sales from Q3 to Q4 [112] Other Important Information - The company returned $79 million to shareholders through dividends and $54 million in share repurchases in Q3 [104] - The company announced a 5% increase in its dividend, marking the 10th consecutive year of dividend growth [105] - Adjusted free cash flow for the year is expected to be approximately 6% of net sales, above prior expectations [113] Q&A Session Summary Question: Demand signals and backlog normalization [29] - The company noted that backlog is nearing normalization, with no significant impact expected [33] - Demand in international markets is worse than expected, with the UK and Canada a few quarters behind the US [32] Question: Federal spending and potential government shutdown [37] - The company is confident in managing through potential federal government shutdowns, with in-flight projects likely to continue [37] Question: Operating margin durability [38] - The company expects to continue driving efficiency while investing in its strategy, with potential dilution from transactional products and PC refreshes [41] Question: International market weakness [49] - The company saw a steep decline in international markets in Q3, with expectations for continued softness over the next few quarters [50] Question: AI-enabled PCs and upgrade cycles [51] - The company expects customers to get excited about AI-enabled client devices, but commercialization is still in early stages [51][54] Question: Share gains and M&A [56] - The company continues to take market share, with a delta of more than 5% in customer spend [57] - M&A remains a priority, with a focus on capabilities in cloud, security, and digital solutions [58][59] Question: Impact of netted down items on sales growth [74] - Netted down revenues are expected to outpace net sales growth, with a significant impact on gross profit margins [74][61] Question: Gross margin trends and cyclical vs structural factors [83] - The company expects a balance between transactional products and netted down revenues over time, with potential dilution in gross margins [84][86] Question: Protecting earnings in a muted environment [79] - The company will continue to drive efficiency while investing strategically, with operating leverage expected to vary by quarter [81][82]

Financial Performance - Net sales for Q3 2023 were $5,628.3 million, a decrease of 9.4% compared to $6,215.5 million in Q3 2022[17] - Gross profit for Q3 2023 was $1,227.7 million, slightly down from $1,233.2 million in Q3 2022, resulting in a gross margin of approximately 21.8%[17] - Operating income increased to $478.4 million in Q3 2023, up from $466.4 million in Q3 2022, reflecting a growth of 2.9%[17] - Net income for Q3 2023 was $315.5 million, compared to $297.8 million in Q3 2022, representing an increase of 5.8%[19] - For the nine months ended September 30, 2023, net sales totaled $16,357.5 million, a decrease of 10.6% from $18,310.4 million for the same period in 2022[79] - The company reported a total operating income of $1,245.9 million for the nine months ended September 30, 2023, down from $1,288.6 million in the same period of 2022[79] - Net income for the nine months ended September 30, 2023, was $808.2 million, compared to $297.8 million for the same period in 2022, representing a 171% increase[27] - Non-GAAP net income for the three months ended September 30, 2023, was $369.4 million, compared to $357.0 million for the same period in 2022[150] - Non-GAAP net income for the nine months ended September 30, 2023, was $997.1 million, compared to $998.0 million in 2022, reflecting a marginal decrease[170] Assets and Liabilities - Total current assets decreased to $6,458.4 million as of September 30, 2023, down from $6,564.0 million at the end of 2022[15] - Total liabilities decreased to $10,065.3 million as of September 30, 2023, compared to $10,528.2 million at the end of 2022[15] - The company’s total stockholders' equity increased to $1,810.0 million as of September 30, 2023, from $1,603.3 million at the end of 2022[15] - The company has total long-term debt of $5,661.5 million as of September 30, 2023, down from $5,866.4 million as of December 31, 2022[51] - Net debt as of September 30, 2023, was $5,260.8 million, down from $5,773.2 million in 2022, showing a reduction in leverage[170] Cash Flow and Investments - Cash and cash equivalents increased to $440.7 million at the end of Q3 2023, up from $384.6 million at the end of Q3 2022[21] - The company reported a net cash provided by operating activities of $1,062.2 million for the nine months ended September 30, 2023, compared to $1,094.0 million for the same period in 2022[21] - The company paid dividends of $1.77 per share, totaling $238.4 million for the nine months ended September 30, 2023[27] - The Company prepaid $100 million on the Term Loan Facility during the nine months ended September 30, 2023, with no additional mandatory payments required until maturity on December 1, 2026[69] - Adjusted free cash flow for the nine months ended September 30, 2023, was $1,112.9 million, an increase from $1,043.4 million in 2022[170] Segment Performance - The company has three reportable segments: Corporate, Small Business, and Public, with Corporate segment net sales of $2,226.5 million for the three months ended September 30, 2023[79] - Corporate segment net sales decreased by $1,190.9 million, or 15.1%, to $6,675.2 million, representing 40.8% of total net sales[199] - Small Business segment net sales decreased by $113 million, or 23.0%, for the three months ended September 30, 2023, compared to the same period in 2022[160] - Public segment operating income increased by $22 million, or 4.0%, to $575 million, primarily due to lower payroll costs[204] Revenue Composition - Hardware sales accounted for $12,149.9 million, which is 74.3% of total net sales, down from 77.6% in the previous year[102] - Software sales increased to $2,805.8 million, representing 17.2% of total net sales, up from 14.2% in 2022[102] - Services revenue reached $1,316.6 million, accounting for 8.0% of total net sales, compared to 7.6% in the prior year[102] - Revenue recognized at a point in time where CDW is principal was $14,244.6 million, making up the majority of total net sales[102] Operational Efficiency - Selling and administrative expenses decreased by $18 million, or 2.3%, to $749 million for the three months ended September 30, 2023, compared to $767 million for the same period in 2022[133] - Interest expense, net decreased by $5 million, or 8.3%, to $57 million for the three months ended September 30, 2023, compared to $63 million for the same period in 2022[135] - The effective tax rate for the three months ended September 30, 2023, was 24.8%, compared to 25.4% for the same period in 2022[85] Future Outlook - The company plans to continue investing in new product development and market expansion strategies to drive future growth[17] - Future outlook includes continued focus on expanding software and services offerings to enhance revenue diversification[102] - The company is exploring new market strategies and potential acquisitions to drive growth in the upcoming quarters[102] - Economic conditions and customer spending priorities are critical factors influencing the company's sales performance and IT investment decisions[116]

CDW Corporation (NASDAQ:CDW) Q2 2023 Earnings Conference Call August 2, 2023 8:30 AM ET Company Participants Steve O'Brien - Investor Relations Christine Leahy - President, CEO and Chair Albert Miralles - Senior Vice President and Chief Financial Officer Conference Call Participants Asiya Merchant - Citi Adam Tindle - Raymond James Matt Sheerin - Stifel Amit Daryanani - Evercore ISI Erik Woodring - Morgan Stanley Samik Chatterjee - JPMorgan Shannon Cross - Credit Suisse Keith Housum - Northcoast Research Op ...

TRACK RECORD OF PROFITABLE GROWTH • Offers 100,000+ products and services from 1,000+ brands to more than 250,000 customers in the US, UK and Canada $10.8 $12.1 $13.0 $13.7 $14.8 $16.2 $18.0$18.5 $20.8 $23.7 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 NET SALES ($B) (2) | --- | --- | |---------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------ ...

Financial Performance - Net sales for Q2 2023 were $5.626 billion, a decrease from $6.146 billion in Q2 2022[160][167] - Gross profit margin improved to 21.0% in Q2 2023, up from 19.0% in Q2 2022[160] - Operating income was $435.3 million, representing 7.3% of net sales in Q2 2023[160] - Net income was $279.3 million, representing 4.7% of net sales in Q2 2023[160] - Total net sales for the six months ended June 30, 2022, were $12,094.9 million, with hardware contributing $9,404.0 million (77.9%), software $1,719.4 million (14.2%), and services $907.1 million (7.5%)[174][175] Segment Performance - Corporate segment sales declined to $2.245 billion in Q2 2023 from $2.661 billion in Q2 2022[167][169] - Public segment sales increased to $2.295 billion in Q2 2023 from $2.243 billion in Q2 2022[167][169] - Small Business segment sales decreased to $396.2 million in Q2 2023 from $500.0 million in Q2 2022[167][169] - Corporate sales in the United States amounted to $5,272.2 million, while the Rest of World corporate sales were $16.1 million[174] - Government channel sales were $1,153.4 million, Education channel sales were $1,944.1 million, and Healthcare channel sales were $1,178.5 million in 2022[174] Product Sales - Hardware sales accounted for $4.280 billion of total net sales in Q2 2023[167] - Notebooks/Mobile Devices accounted for 28.7% of total net sales in 2022, generating $3,477.4 million, a decrease from 2023 where it accounted for 22.2% with $2,385.5 million[175] - Netcomm Products saw a significant increase in net sales from $1,191.6 million (9.9%) in 2022 to $1,660.9 million (15.5%) in 2023[175] - Data Storage and Servers contributed $1,247.3 million (10.3%) to total net sales in 2022, slightly decreasing to $1,078.0 million (10.0%) in 2023[175] - Software sales decreased from $1,719.4 million (14.2%) in 2022 to $1,808.8 million (16.9%) in 2023, showing a shift in product mix[175] - Services sales remained relatively stable, with $907.1 million (7.5%) in 2022 and $895.3 million (8.3%) in 2023[175] - Other sales, including delivery charges, were $64.4 million (0.4%) in 2022 and decreased to $56.6 million (0.5%) in 2023[175] Geographic Sales - US sales represented 87.2% of total net sales at $4.904 billion in Q2 2023[167] Revenue Recognition - Revenue recognition at a point in time where CDW is principal accounted for $10,765.7 million, while revenue transferred over time where CDW is principal was $660.0 million[174] Services Revenue - Services revenue grew to $453.2 million in Q2 2023, up from $469.7 million in Q2 2022[167][169]

CDW Corporation (NASDAQ:CDW) Q1 2023 Results Conference Call May 3, 2023 8:30 AM ET Company Participants Steve O'Brien - IR Chris Leahy - President, CEO & Chair Al Miralles - CFO Conference Call Participants Amit Daryanani - Evercore Samik Chatterjee - J.P. Morgan Shannon Cross - Credit Suisse Erik Woodring - Morgan Stanley Adam Tindle - Raymond James Matt Sheerin - Stifel Keith Housum - Northcoast Research Ruplu Bhattacharya - Bank of America Merrill Lynch Operator Hello, and welcome to the CDW First Quart ...

UNITED STATES CDW CORPORATION (Exact name of registrant as specified in its charter) Table of Contents CDW CORPORATION AND SUBSIDIARIES FORM 10-Q | --- | --- | --- | --- | --- | |-----------------------------------------------------------------------------------------------------------------------------------------|-------|------------------------------------|-------|-----------------------| | Assets | | March 31, 2023 \n(unaudited) | | December 31, 2022 | | Current assets: | | | | | | Cash and cash equival ...

UNITED STATES Commission File Number 001-35985 Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ý Yes ¨ No Indicate by check mark whether the registrant has filed a report on and attestat ...

CDW Corporation (NASDAQ:CDW) Q4 2022 Earnings Conference Call February 8, 2023 8:30 AM ET Company Participants Steve O'Brien - IR Chris Leahy - President, CEO & Chair Al Miralles - CFO Conference Call Participants Matt Sheerin - Stifel Ruplu Bhattacharya - Bank of America Merrill Lynch Samik Chatterjee - J.P. Morgan Amit Daryanani - Evercore Erik Woodring - Morgan Stanley Shannon Cross - Credit Suisse Jim Suva - Citigroup Keith Housum - Northcoast Research Adam Tindle - Raymond James Operator Hello, and wel ...

CDW Corporation (NASDAQ:CDW) Q3 2022 Earnings Conference Call November 2, 2022 8:30 AM ET Company Participants Steven O'Brien - VP, IR Christine Leahy - President, CEO & Director Albert Miralles - SVP & CFO Conference Call Participants Shannon Cross - Crédit Suisse Amit Daryanani - Evercore ISI Erik Woodring - Morgan Stanley Ruplu Bhattacharya - Bank of America Merrill Lynch Samik Chatterjee - JPMorgan Chase & Co. James Suva - Citi Keith Housum - Northcoast Research Mark Cash - Raymond James & Associates Op ...