CDW Corporation (NASDAQ:CDW) reported second-quarter results that exceeded Wall Street expectations for both earnings and revenue, but shares dropped more than 8% in pre-market trading as investors focused on weaker margins and higher restructuring costs.
The technology solutions provider posted adjusted earnings of $2.91 per share, ahead of the analyst consensus estimate of $2.79. Revenue increased 10.0% year over year to $6.57 billion, surpassing market expectations of $6.2 billion.
Margin pressure weighs on investor sentiment
Despite the stronger top-line performance, CDW’s gross profit margin narrowed to 20.1%, down from 20.8% in the second quarter of 2025.
The company said the decline reflected a shift in sales towards lower-margin hardware products.
CDW also recorded workplace optimisation costs of $44.2 million during the quarter, primarily related to workforce reductions and the consolidation of its real estate portfolio.
AI and cloud demand support growth
Chair and Chief Executive Officer Christine A. Leahy said customer investment in technology infrastructure continued to drive demand.
“CDW delivered strong second quarter results as customers advanced investments in infrastructure modernization, cloud, and AI-enabled technologies,” Leahy said. “As organizations move beyond AI exploration and focus on scaling practical use cases, they increasingly rely on trusted partners with the expertise to integrate solutions across the full technology stack.”
Adjusted operating income increased 7.0% year over year to $556.0 million.
However, adjusted operating margin edged lower to 8.5%, compared with 8.7% in the same period last year.
Net income rose 1.2% to $274.4 million, while adjusted net income increased 7.8% to $370.4 million.
Growth recorded across key business segments
Commercial sales increased 9.2% to $3.97 billion during the quarter.
Government revenue climbed 13.6% to $848.0 million, while Education sales rose 0.7% to $933.1 million.
The company’s Other segment, which includes its operations in the UK and Canada, delivered the strongest growth, with revenue rising 22.9% to $825.7 million.
Quarterly dividend approved
CDW’s board of directors also approved a quarterly dividend of $0.630 per share.
The dividend will be paid on 10 September 2026 to eligible shareholders.
CDW Corporation stock price
