CDW's Q3 Earnings & Revenues Top Estimates, Up Y/Y on Cloud Tailwinds

CDW Corporation (CDW) reported third-quarter 2025 non-GAAP earnings per share (EPS) of $2.71, surpassing the Zacks Consensus Estimate of $2.53. Also, the bottom line increased 3% year over year.

The company’s revenues increased 4% year over year to $5.74 billion. On a constant currency (cc) basis, sales grew 3.8%, showing broad-based demand across product categories, such as notebooks/mobile devices, software, networking (netcomm) products, desktops and services, despite a slowdown in data storage and servers. Despite ongoing macroeconomic uncertainty, some end markets showed signs of improved customer spending during the quarter. Quarterly revenues also exceeded the consensus estimate of $5.7 billion.

Looking ahead, CDW reaffirmed its goal to outpace the U.S. IT market growth by 200–300 basis points at cc.

Separately, the company announced a quarterly dividend of 63 cents, to be paid on Dec. 10, 2025, to shareholders on record as of Nov. 25, reflecting a 1% increase year over year.

CDW Corporation Price, Consensus and EPS Surprise

CDW Corporation price-consensus-eps-surprise-chart | CDW Corporation Quote

In the past year, shares have declined 19% compared with the Zacks Computers-IT Services industry’s fall of 11.5%.

Segmental Details

Net sales of CDW’s Corporate segment amounted to $2.25 billion, growing 4.4% on a year-over-year basis.

The Small Business segment’s net sales of $434 million rose 14.2% year over year.

The Public segment’s revenues totaled $2.35 billion, up 0.6% from the year-ago quarter. The uptick was driven by a 7.8% and 6.9% surge in net sales of Government customers and Healthcare customers, respectively, offset by an 8.5% decline in the Education sector.

Net sales in Other (Canadian and U.K. operations) rose 9.1% to $698 million.

Margin Details

Gross profit grew 4.6% year over year to $1.26 billion. Gross profit margin rose slightly to 21.9% from 21.8%, driven by higher service rates and more netted-down revenue.

The non-GAAP operating income fell 0.6% year over year to $530.6 million. The non-GAAP operating margin was down to 9.2% from 9.7%.

Selling and administrative expenses surged 12.9% year over year to $812 million due to higher performance-based pay, transformation costs and amortization of acquired intangibles.

Balance Sheet and Cash Flow

As of Sept. 30, 2025, CDW had $452.9 million of cash and cash equivalents compared with $946.7 million a year ago.

The company has a long-term debt of $5.62 billion, higher than $5.6 billion in the previous year.

For the nine months that ended on Sept. 30, 2025, CDW generated $771.4 million of cash flow from operating activities compared with $932 million in the year-ago period. Free cash flow was $692.2 million.

CDW’s Zacks Rank

CDW currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Recent Performance of Other Companies

Flex Ltd. (FLEX) reported second-quarter fiscal 2026 adjusted EPS of 79 cents, which surpassed the Zacks Consensus Estimate by 5.3%. The bottom line compared favorably with 64 cents posted in the prior-year quarter. Revenues increased 4% year over year to $6.8 billion. Also, it beat the consensus mark by 2%. The uptick was driven by strong data center growth in both the cloud and power end markets, despite a complex macroeconomic environment.

Fortive Corporation (FTV) reported third-quarter 2025 adjusted EPS of 68 cents from continuing operations, which surpassed the Zacks Consensus Estimate of 58 cents. The bottom line increased 15.3% year over year. Revenues increased 2.3% year over year to $1.03 billion. The top line beat the Zacks Consensus Estimate by 2.1%. Core revenues jumped 1.9%.

Sensata Technologies Holding plc (ST) reported third-quarter 2025 adjusted EPS of 89 cents, flat year over year. However, the bottom line topped the Zacks Consensus Estimate by 4.7%. Revenues for the quarter reached $932 million, down 5.2% from a year ago. The top-line contraction was attributable to earlier announced divestitures and product lifecycle optimization efforts. However, the figure outperformed management’s expectations ($900-$930 million) and beat the consensus estimate by 1.9%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research