Thank you. Good morning, everyone. Joining you remotely today to review our third quarter financial results are Chris Leahy, our Chief Executive Officer; and Collin Kebo, our Chief Financial Officer. Our third quarter earnings release was distributed this morning and is available on our website investor.cdw.com along with supplemental slides that you can use to follow along during the call. I'd like to remind you that certain comments made in this presentation are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Those statements are subject to risks and uncertainties that could cause actual results to differ materially. Additional information concerning these risks and uncertainties is contained in the earnings release and Form 8-K we furnished to the SEC today and in the company's other filings with the SEC. CDW assumes no obligation to update the information presented during this webcast. Our presentation also includes certain non-GAAP financial measures, including non-GAAP operating income and non-GAAP earnings per share. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules. To find reconciliation charts, see the slides for today's webcast and in our earnings release in Form 8-K we furnished to the SEC today. Please note that all references to growth rates or dollar amount increases in our remarks today are versus the comparable period in 2019 unless otherwise indicated. In addition, our references to growth rates for hardware, software, and services today represent U.S. net sales only and do not include the results from CDW U.K. or Canada. A replay of this webcast will be posted to our website later today. I also want to remind you that this conference call is the property of CDW and may not be recorded or rebroadcast without specific written permission from the company. With that, I may turn the call over to Chris.

Thank you, Brittany. I'll begin this morning with an overview of third quarter results and drivers of performance. I'll provide our perspectives on the current macro environment, its impact on our customer end market and how we are responding. Collin will then take you through a more detailed look at our third quarter financials, as well as our liquidity position and capital allocation strategy. We'll move quickly through the prepared remarks to ensure we have plenty of time for questions. For the third quarter, net sales were $4.8 billion, 3.1% below last year and down 3.3% in constant currency. Non-GAAP operating income was $386 million, an increase of 1.5%. Non-GAAP net income per share was $1.83, 8% above last year on a reported basis and up 7.7% in constant currency. The quarter demonstrated the balance and strength of CDW's business model. The diversity of our customer end markets served us well. For our most impacted customer end market, the rate of decline stabilized and generally improved in the quarter. Trends for more resilient customer end markets continue to be strong. Our value proposition really resonated with customers this quarter. There was a flight to quality as customers started to de-risk projects in their technology investments. Our teams are trusted strategic partners to our customers. We compete on value and advice, not on price. We helped customers this quarter across a spectrum of IT priorities. Customers were focused on remote enablement, optimization, cost reduction, security, and leveraging technology for better customer and employee engagement through digital transformation, with an increasing focus on cloud. Customer demand for software-as-a-service increased almost 50% quarter-over-quarter. Customers leveraged our cloud solutions capabilities further bolstered by our acquisition of IGNW at the beginning of the quarter. Our solutions business strengthened this quarter as some customers resumed projects that had been put on hold earlier in the year and others started new projects. During the third quarter, we continued to leverage our distribution centers, extensive logistics capabilities, deep vendor partner relationships, and strong balance sheet and liquidity position to navigate supply challenges. We successfully secured supply in high-demand categories and managed longer lead times for others. Now let's take a deeper look at the customer end market performance. Corporate declined 13%, markedly better than May and June. Solutions strengthened, increasing low single digits year-over-year. The significant quarter-over-quarter improvement in solutions reflected customers restarting infrastructure and project engagement. Transactional projects were down double digits as spending on remote enablement moderated. Small Business also declined 13%, a considerable improvement versus the second quarter. Most product categories declined less this quarter as small business customers remained focused on remote enablement, security, cost management, and optimization. The government team increased net sales high single digits. Federal delivered another strong quarter with net sales up mid-single digits. During the quarter, our device-as-a-service solution for the U.S. Census Bureau contributed less incremental growth than other quarters since the majority of last year's revenue was recognized in the third quarter. We are in the final phase of the project. Data collection has ended and devices are returning to us for decommissioning. Our team has done an excellent job navigating the complexity of this program from the very start. Outside of the census project, the federal team continued to help civilian agencies promote enablement and device refresh. Some Department of Defense solution projects got pushed to future quarters, dampening performance. The state and local team delivered high single-digit growth. IT investments continue to be a priority for public safety. In some cases, budgets were reallocated to support technology initiatives. Our team helps customers enable remote capabilities, enhance security, and optimize technology assets. Education increased over 30% with excellent growth in both K-12 and Higher Ed. In K-12, customers continue to focus on equity and access for students. K-12 growth is driven by strong notebook results and related accessories, security and software, as well as cloud solutions to support remote learning. Higher ed performance strengthened this quarter as schools turned to us to leverage our extensive logistics capability to optimize technology to teach in new formats. Healthcare declined about 25% as budget pressures continued to impact spending. Customers are spending where they have to in areas like security and software. Otherwise, projects are still on hold during this quarter. Other, which represents our U.K. and Canadian operations, decreased 8% on a reported basis. U.K. net sales declined high single digits in constant currency. U.K. corporate and public channels declined as government support programs ramped down during the quarter. Canada net sales decreased low double digits in constant currency, an improvement compared to second quarter performance as some corporate projects came off hold and education remains strong, driven by remote learning needs. As you can see, our third quarter performance benefited from the diversity of our customer base. It also benefited from our deep and broad product portfolio. We were able to meet the varied and shifting demands of our customers. U.S. hardware was down low single digits, with client devices declining 2% due to desktop performance. Demand is still strong driven by our public sector. Software increased low single digits and software gross profit increased strong double digits reflecting the impact of mixing into software as a service. Services grew high single digits driven by strong professional services. Transactions were down slightly on top of last year’s mid-teens growth. Solutions declined low single digits, a significant improvement from last quarter's double digit decline as some customers restarted infrastructure and larger project engagement. We again delivered strong growth in our Cloud practice. Cloud customer spending increased double digits across all customer end markets driven by robust growth in security, collaboration, infrastructure as a service, and productivity. We expect strong customer demand for cloud solutions to continue. Security also continues to be a top priority for customers. Security customer spending grew strong double digits this quarter as customers improve their security frameworks to respond to the increasing threats. Our third quarter operating and financial performance reflected the combined impact of our balanced portfolio customer end market, our full suite of solutions and services across the IT landscape, and our ongoing success executing our three-part strategy for growth. There are important drivers of our past and future performance. Let me review each. As you know, we have five U.S. sales channels: corporate, small business, government, education, and healthcare. This scale enables us to further align sales teams into vertical customer end markets including federal governments, state and local governments, K-12 and higher education, providing deep industry knowledge and insights into our customers' objectives and goals and positioning us as a trusted partner. In addition, we have our U.K. and Canadian operations. The diversity of our customer end markets serves us well when macro or other external challenges impact various industries and customers differently. Next, our offerings are broad and deep. With over 100,000 products, services and solutions from more than 1,000 vendor partners, we are well-positioned to meet our customers’ total needs across the spectrum of IT and can pivot quickly to trends in customer demand. As I shared, the balance of our customer end markets in our offerings are especially relevant in the current environment. And the final driver of our performance is our three-part strategy for growth which is first, to acquire new customers and capture share; second, to enhance our solutions capabilities; and third, to expand our services capabilities. Each pillar is crucial to our ability to profitably assess, design, deploy, and manage the integrated technology solutions our customers want and need today and in the future. Today's environment strengthens our commitment to executing our strategy so we will emerge stronger than ever after this crisis. Let me share a few examples of our strategy in action and how we helped customers this quarter. Our K-12 team was extraordinarily busy this quarter. One reason was the award of a contract from the Mississippi Department of Education to support its Equity in Distance Learning program. This is one of the largest education technology initiatives in the United States in the last decade, funded via the CARES Act. It will help close the technology gap and support all public school districts in the state by providing students and teachers with secure devices and accessories backed by our services. The team leveraged our logistical excellence, our broad services capabilities, and our strong vendor partner relationships to procure and deploy the devices in a supply-constrained environment, all done within a very compressed timeframe given the urgency. This is a great example of how our teams align with their customers' missions and deliver creative solutions and differentiated value. Digital transformation, particularly cloud adoption and integration, is a top priority for many of our customers. Cloud creates complexity, especially if customers integrate their infrastructure balancing applications on-prem and in the cloud. Our team worked with a large retailer to develop its future state business strategy for its on-premise and cloud platform to operate as one. This is a great example of where our services and products and solutions portfolio combined for the best outcome for our customers. It also demonstrates the value IGNW brings to CDW and how we are leveraging its cloud-native service expertise. Another customer in our corporate channel had a problem with their incumbent primary IT partner, which was exacerbated due to the pandemic. The IT director urgently turned to the CDW account manager to help with the company's employees to work from home when the other partner failed to deliver. The account manager responded quickly and exceeded expectations, which has since resulted in the customer moving all of its IT business to CDW. Our team has also helped the customer to develop a strong collaboration platform and is involved in a variety of initiatives including lowering IT costs, increasing flexibility of its on-premise backup storage, evaluating cloud options, shoring up its security, and augmenting its IT staff with CDW resources. Our work here represents another example of how customers turn to us for a high level of customer service, expertise across the full IT lifecycle, and thought leadership. These examples highlight CDW's three-part strategy for growth and how IT is crucial to achieving our customer's objectives. This quarter demonstrated the importance of our competitive advantages, the success of past investments in cloud and security, and our trusted partner relationships with customers. I'm proud of the way our teams continue to execute and deliver. Let me now update you on our efforts to manage COVID-19's impact on our business. We remain focused on three key principles: safeguard the health and well-being of our coworkers, serve the mission-driven needs of our customers, and support our communities. Our office coworkers are still working from home and the team has settled well into the new way of working. We expect most coworkers will be working from home until the start of next summer. Coworker engagement, productivity, and collaboration are strong testament to the strength and resiliency of our culture. We are planning for when and how to return to the office and where and how our coworkers will work in the future. We will remain agile in this unpredictable environment. All distribution and configuration centers are operational and we maintain precautionary measures as advised by public health authorities. These teams have done an exceptional job maintaining a high level of customer service we are known for while taking the necessary precautions. Let's now turn to the fourth quarter. The macroeconomic outlook for the near term and for the foreseeable future remains uncertain. Wildcards include the duration and severity of COVID-19, tomorrow's U.S. elections, additional stimulus programs, supply disruptions, and UK-EU trade negotiations. Therefore, we are not providing 2020 targets. Q4 to-date writing trends for our corporate channel are in line with Q3. Writing trends have improved for our small business channel. Public strength continues to be driven by education and governance offset by healthcare. We are encouraged about our performance and how our teams are executing. That said, we are also cautious about the macro environment. There are a lot of unknowns and factors that we do not control. This is just a time of unprecedented uncertainty. Our customers continue to be in various phases of responding to the macro environment. Some customers remain focused on remote enablement and operational continuity. Others are moving forward with organizational efficiency and optimization. Other customers are investing behind digital transformation including cloud. It's important to remember that cloud is not an endpoint. Cloud is an element of our customers' IT environment and it adds complexity which is central to our value proposition. Our teams help our customers with a full IT solution stack and full IT lifecycle. We will continue to be trusted partners to help our customers smartly deploy their IT resources, adopt modern software and infrastructure patterns and practices, and solve some of their toughest challenges. We believe that technology will be more essential to all sectors of the economy and will play an increasingly important role in the years to come. We have confidence that we have the right strategy in place. The increase to our dividend and the restarting of our share buybacks that we announced today demonstrates the confidence that our board of directors and I have in CDW's strategy and future performance. The investments we have made, including investments to support our cloud and security practices, will enable us to continue to meet our customers' needs. We will help our customers navigate the complex IT landscape and adopt new technologies. While there is uncertainty in the near term, we believe we are making the right moves for long-term success. We are committed to investing in our three-part growth strategy including the capabilities that will position us to best serve our customers, optimize our productivity, and enhance our competitive position. Our role as a trusted strategic partner to our customers is more important now than ever. We will continue to do what we do best: leverage our competitive advantages to help our customers address their IT priorities and achieve their strategic objectives and now execute our competition. Now, Colin will share more details on our financial performance.

Thank you, Chris. Good morning, everyone. I'm going to provide more detail on our third quarter results, liquidity position, and capital allocation priorities. Turning to our third quarter P&L on slide 9, consolidated net sales were $4.8 billion, down 3.1% on a reported and average daily sales basis. In constant currency, consolidated net sales declined by 3.3%. On an average daily sales basis, sequential sales increased 8.9% versus the second quarter. This was higher than historical seasonality primarily due to the adverse impact of COVID-19 on second quarter results. Our customer channels generally performed consistent with the demand and writing commentary shared on our last earnings call. Pockets of supply dislocation continued in the quarter, and we leveraged our distribution capabilities and strong vendor partner relationships to procure the IT products and solutions our customers needed for remote enablement, operations continuity, and resource optimization. Gross profit for the quarter was $826 million, an increase of 1.1%. Gross margin was 17.4%, up 80 basis points over last year. The better-than-expected gross margin expansion was driven by product margin and mixing into netted down revenues primarily from software as a service, which more than offset mixing into public. Turning to SG&A on Slide 10, our non-GAAP SG&A increased 0.7%. The increase was primarily driven by higher payroll costs from the acquisitions of Aptris and IGNW and COVID-19 expenses to safeguard and compensate frontline coworkers, partially offset by continued savings measures, including decreased travel and entertainment and hiring restrictions. In September, to ensure the alignment of our cost structure and resources to best position CDW for future growth, we've reduced our workforce by approximately 2%. Our realignment measures enable us to continue to evolve with customers' most important priorities, ensuring capacity in high-demand areas to support future growth and to continue investing in the business to emerge stronger from the crisis. We recorded a charge of $8.5 million which you can see in the GAAP to non-GAAP reconciliation on Slide 10. Coworker count at the end of the quarter was 9,980, down 68 from the second quarter reflecting the realignment measures and restrictions on hiring and backfills, partially offset by IGNW. Year-over-year coworker count increased to 137, primarily driven by the Aptris and IGNW acquisitions. GAAP operating income was $380 million, down 0.9%. Our non-GAAP operating income, which better reflects operating performance, was $386 million, up 1.5%. Non-GAAP operating income margin was 8.1%. Moving to Slide 11. Interest expense was $40 million, down 5.1%. The decrease was primarily due to a lower LIBOR rate on the term loan. To get to our non-GAAP effective tax rate, we adjust taxes consistent with non-GAAP net income add backs, including excess tax benefits associated with equity-based compensation, which is shown on Slide 13. For the quarter, our non-GAAP effective tax rate was 23.3%, down 250 basis points versus last year's rate. The rate decrease is primarily related to a one-time impact of state tax refunds and reduced global intangible low tax income and non-deductible expenses due to recent IRS regulations. As you can see on Slide 14, with third quarter weighted average diluted shares outstanding of 145 million, GAAP net income per share was $1.33, down 2.6%. Our non-GAAP net income was $265 million in the quarter, up 6.2% compared to last year. Non-GAAP net income per share was $1.83, up 8% from last year. Turning to year-to-date results on Slides 15 through 20, revenue was $13.5 billion, an increase of 0.1% on a reported basis and down 0.4% on an average daily sales basis, as we got one extra selling day in the first quarter of 2020. The extra selling day will reverse in Q4 when we have one fewer selling day compared to the prior year. On a constant currency average daily sales basis, year-to-date consolidated net sales were down 0.3% from the prior year. Gross profit was $2.3 billion, up 3% and gross profit margin was 17.2%, up 40 basis points. Operating income was $847 million and non-GAAP operating income was $1 billion, up 0.2%. Net income was $550 million and non-GAAP net income was $691 million, up 2.6%. Non-GAAP net income per share was $4.77, up 5.2%. Turning to the balance sheet on Slide 21. As of September 30, cash and cash equivalents were $1.25 billion and net debt was $2.7 billion. Liquidity continues to be strong with cash plus revolver availability of approximately $2.2 billion. Year-to-date free cash flow was $837 million, as shown on Slide 22. This is higher than normal seasonality and above last year's $590 million, primarily due to higher cash profit and lower investment in working capital this year. A portion of the better-than-normal seasonality is working capital timing that we expect to reverse over the next few quarters. Moving to Slide 23. The three-month average cash conversion cycle was 16 days, down one day from last year's third quarter. While cash collections were solid in the quarter, DSO increased five days driven by the strength of netted down items such as software-as-a-service, mixing into some larger public customers who can take longer to pay and certain commercial customers extending payments. DPO increased six days driven by the strengthening in netted down items and mixing into vendors with extended payment terms. In the quarter, we returned $54 million of cash to shareholders through dividends and did not repurchase any stock. Turning to capital allocation priorities on Slide 24, as Chris noted, we announced earlier today that the Board of Directors declared a quarterly cash dividend of $0.40 per share to be paid on December 10 to all shareholders of record as of the close of business on November 25. This represents a 5.3% increase over the current dividend. We also announced that we will be resuming share repurchases this quarter. The dividend and share repurchase actions reflect our strong liquidity position, net leverage below the target range, and the free cash flow generation capability of the business. The decision to return capital to shareholders, that’s consistent with our capital allocation priorities, which are, first, to increase the dividend in line with non-GAAP net income. The annual dividend of $1.60 is approximately 25% of trailing 12-month non-GAAP net income through September. The Q4 2020 dividend marks the seventh consecutive year of increases since our initial public offering in 2013, with the dividend growing at a compound annual growth rate of 38 percent from its initial level. We will continue targeting a 25% payout ratio going forward, growing the dividend in line with earnings. Second, ensure we have the right capital structure in place with a targeted net leverage ratio of 2.5 to 3 times. We ended the quarter at 1.8 times, below the low end of the range. Our third capital allocation priority is to supplement organic growth with strategic acquisition. We closed IGNW at the beginning of the third quarter and remained active in evaluating targets and will seek to be opportunistic in this environment. Any decision to deploy capital for acquisitions will be a function of our usual screens, strategic rationale, operating and cultural fit, and financial return. Fourth, as I previously mentioned, we are resuming our share repurchase program. Going forward, we expect to move closer to our target net leverage range through a combination of organic investments, M&A, and/or returning greater than 100% of free cash flow to shareholders. As we always do, and particularly in this uncertain environment, we'll closely monitor the macroeconomic environment, our liquidity, working capital, and leverage, and adjust as needed. Lastly, on the topic of capital, we intend to continue capital expenditure investments in the business. We believe it's important to continue prudently investing in the capabilities that will allow us to better serve customers, drive productivity, and ultimately emerge from this crisis in a stronger competitive position. We previously withdrew our 2020 targets and will not be providing an updated financial outlook. But consistent with the last three quarters, I wanted to provide insights into what we're seeing roughly one month into the fourth quarter from a demand, supply, and operating perspective. On the demand side, activity continues to be mixed across customer end markets. In corporate, October writing declined in line with the level of Q3 writing declines. In small business, October writings improved from Q3 levels. In public, October writings were up year-over-year driven by continued strength in education and government, partially offset by declines in healthcare. While encouraging, as Chris mentioned, we believe it's premature to extrapolate October writings over the balance of the quarter given the wildcards: COVID-19, the election, stimulus, and supply. We expect commercial customers to continue to be cautious. As I previously mentioned, we have one fewer selling day in the fourth quarter which adversely impacts quarterly profit growth by approximately 200 basis points. On the supply side, we continue to navigate through a tough environment with pockets of dislocation extending lead times in certain categories. Notebook supplies, particularly lower-end devices, such as Chromebooks, are tight. Also, freight challenges may develop as we get closer to the holidays. On the operating front, all distribution centers continue to be operational. Finally, I want to provide an update on the device-as-a-service solution for the U.S. Census Bureau. The contribution to third quarter net sales was in line with expectations as we had deployed all of the devices into the field. The contribution to incremental growth was less than preceding quarters since the majority of last year's revenue was recognized in the third quarter. As Chris mentioned, data collection for the U.S. Census has ended and we're in the final phases of the project. Devices are returning to us for decommissioning. From a financial perspective, this year, we now expect the census to contribute up to approximately 180 basis points of incremental net sales growth over 2019. On an absolute basis, we currently expect the census to contribute over 230 basis points of net sales in 2020. The collection and decommissioning timing remain fluid, so we could see some net sales shift into the first quarter of 2021. That concludes the financial summary. With that, I'll ask Jaclyn to open it up for questions. Can we please ask each of you to limit your questions to one with a brief follow-up? Thank you.

Your first question comes from Tim Yang from Citi. Your line is open.

Hi, thank you for the question. Over the past three years, your Q4 gross margin has exceeded that of Q3. What are your expectations for Q4 this year? I believe your mix should improve on a quarter-over-quarter basis due to the recovery, suggesting that your gross margin should also show sequential improvement. What are your thoughts on the gross margin for Q4 this year?

Good morning, Tim. Thanks for joining the call. We're not going to provide guidance on the Q4 outlook. I guess, what I would just share on your observation is that historically, Q3 has been a seasonally high sales quarter driven by strength in education and government which tend to have lower gross margins. So, I think what's happening historically is coming off of that seasonally high quarter where we mix into government and education, you come off of that into Q4 and that's why you would have seen the gross margin pick up historically. I think that given what's happening in the marketplace right now particularly in education, all bets are off on normal seasonality. So I would just offer that response.

I understand. Regarding your comments on Q4 for corporate and SMB writing, it seems there's been a decline compared to the last quarter. You mentioned that this decline is significant on a year-to-year basis. While merchant companies have noted that projects are returning, I'm curious why you're not observing the same growth in U.S. SMB and corporate business. Is this due to a conservative approach, or is it that your visibility isn't showing improvement compared to the previous quarter? Thank you.

Hi Tim, it's Chris. Good morning. And, yeah, I don't think that we saw a nice increase in our solutions project based business. We have mentioned in the last call that customers had continued to pause on moving forward. They were in planning stages. We did see more customers both in our corporate space and small business space start to move forward on infrastructure projects, for example, in larger projects. I would say, you know, on the corporate side there's still caution, and they're not quite as nimble as the small business organizations generally have a lot more kind of bureaucracy and approval to get through. So that seems to be going a little slower, but certainly we're seeing some pick up in both of those segments.

Your next question comes from Amit Daryanani for Evercore. Your line is open.

Good morning and thank you for taking my question. I have two questions as well. First, could you clarify the discussion around writings? It seems that from the corporate side, things are fairly stable compared to what they were in June and so far in the September quarter. In the SMB sector, it appears that the pace of decline is easing. I want to confirm that I understood that correctly. Additionally, can you provide any insights on how transactional versus solutions are trending in terms of writings so far?

Amit, it's Chris. Yes, you read that right. You got that exactly right on the writings the way we described it. But we're not spreading out writings for solutions versus transaction.

Got it. I guess, maybe I would ask you a different one then. If you could talk about what percent of your gross profit dollars today in the September quarter are agency based or weaker in nature and as you do longer term it would be really helpful to understand, what does the growth side look like for that gross profit dollar bucket versus the overall company? And then what are the components within this agency and recurring revenue stream that you have?

Good morning, Amit. Net items made up about 30% of total gross profit dollars in the quarter, which is one of the higher figures we've observed. This primarily reflects the strong shift towards cloud services, especially software-as-a-service, as Chris and I mentioned earlier. This category includes cloud security software and other offerings that account for warranty deductions. We anticipate that customers will continue to transition to cloud services and that there will be strong demand for security software, leading to solid growth in this area. However, the unpredictable factor will be the trend in the hardware side of the business, which has faced challenges during the COVID environment. In the past three years, hardware performance was quite strong, so the direction of this mix will likely depend on how hardware gross profit evolves in the coming quarters and years.

Your next question comes from Adam Tindle from Raymond James. Your line is open.

Okay, thanks. Good morning. Chris, I just wanted to start on the decision to resume share repurchases and how we should read into that. You still have over $2 billion in liquidity. You're below your optimal leverage levels, and, you know, previous discussions before COVID, you were not precluding yourself from a larger-sized acquisition, $1 billion plus type of an acquisition. So, I guess, the question would be, wondering if you could maybe share your latest thoughts on the M&A landscape and how that's evolved?

Absolutely, Adam. The choice to restart our buybacks truly reflects our confidence in our strategy and the performance of our U.S. operations moving forward, along with our robust free cash flow and liquidity. Regarding M&A, I'd like to reiterate what I've mentioned in the past few quarters: we are actively seeking to make prudent investments to enhance high-growth technology segments. Recently, we've made a few acquisitions that enhance our service and cloud-native capabilities, which have been well received by our sales team and strengthen our position with customers. These are the kinds of acquisitions we will continue to pursue. I would say, Adam, that the market feels slightly more accessible now. Organizations are more open to discussions compared to a few months ago. However, as always, we assess potential targets to ensure they align with our strategic capabilities, culture, and operating model, while also being financially viable.

Okay. That's helpful to me. As a follow-up, I wanted to ask about something you previously mentioned regarding letting attrition run its course. It seems like demand is improving a bit, and the EBITDA margin was strong this quarter. I’d like some clarification on the decision to reduce the workforce. I understand it’s not a significant number, but it’s somewhat unusual for CDW. Did expectations for future growth change? Why take that step? Thank you.

Yeah, Adam, it's a great question. And you're right. Those are hard decisions for CDW in particular. It's just the second time in our history that we've had to reduce the workforce, and we reduced it by 2%. But really, this is all about ensuring alignment of our cost structure and resources to best position us for the future. We really need to ensure we've got the resources to continue to evolve with customers in their most important priorities. We wanted to make sure that there's capacity in the high-demand areas to support future growth and continue investing in those more emerging areas. So while we have cut back some positions, we also are hiring in those areas that we think are critical to our future growth.

Your next question comes from Matt Cabral from Credit Suisse. Your line is open.

Chris, you mentioned a lot of moving pieces out there from a macro standpoint in prepared remarks and clearly it’s been a year that's below trend from an IT spending point of view. I guess, just thinking about looking forward, curious if you think customers are sitting now at this point with a meaningful amount of pent-up demand as we head into next year to maybe help turn things around, or if there's a risk of this more sluggish demand environment continuing as we start getting into the next year?

Good morning, Matt. I believe it is possible to have both scenarios. The reason I say this is that until the current medical issue is resolved, it will be challenging to have a clear understanding of the economic environment, which directly affects the uncertainty and actions of our customers. The situation is unclear, making projections difficult. We do have pent-up demand and customers who are actively investing in and implementing technology to gain an advantage. However, the key question is when our customers will feel comfortable enough to make larger investments, and that is tough to predict. We are focusing on staying close to our customers and providing them with the full range of IT services they need, ensuring they receive what they want more effectively than anyone else in the industry can. Yet, predicting the future remains difficult due to the current uncertain outlook.

Your next question comes from Ruplu Bhattacharya from Bank of America. Your line is open.

Hi. Thanks for taking my questions and congratulations on the quarter. I have a high-level question first. With the new restrictions and lockdown measures in Europe, what are your thoughts on that? Also, what percentage of your workforce is currently working from home? Do you believe CDW is better positioned to manage a resurgence of COVID and potential lockdowns?

Good morning, Ruplu. Thank you. Good to hear from you. Yeah, I think that we have to be cautious in all the locations where we start to see more restrictions and lockdown. And for a couple of reasons and for a couple of segments, I think in the U.K., as you know, we have some government stimulus money rolling off and that is tending to have an impact that we're seeing. Add to that, lockdowns and the economic commercial impact that has, we do worry about that. That said, we still have customers, as I said before, who are digitally advanced and really pressing their advantage and absolutely moving forward with some larger projects. Across the U.S., I would also say that cautiously, if you look over the last week or so and the trajectory of uptick in cases is worrisome as different states potentially are moving backwards in their restrictions and lockdown. So look, as I said, I'm so encouraged by the team and the execution and the performance of this team. But I'm highly cautious about the excess exogenous factors that we can't impact.

Great. Thanks for that. And appreciate all the color there. Chris, I wanted to ask you also on the device-as-a-service project. Now that the census project is coming to an end. What's the plan for those devices and can you reuse them in some other program? And how do you see the device-as-a-service business going over the next couple of years? Thank you.

Good morning, Ruplu. I'm going to take that one. Yeah, so we are winding up the device-as-a-service offering to the census; those devices are coming back to CDW for decommissioning. And what we will do then is turn around and resell those to our remarketer and we have plans in place to go ahead and execute against that. In terms of devices and services and offering, I think that will continue to be an opportunity for CDW. Clearly, we have competitive advantages in our ability to bundle integrated solutions across multiple vendors, integrating services, as well as our logistics capabilities. I think what we're doing for the State of Mississippi Department of Education is just another flavor of our ability to deliver that value to customers. And in a world where being able to work productively, remotely from anywhere is becoming increasingly important, I think that's going to be an important part of our growth drivers going forward.

Your next question comes from Shannon Cross from Cross Research. Your line is open.

Thank you very much and good morning. I'm curious about the customer demand for SaaS and, in particular, how much of our revenue is derived from applications compared to the use of cloud for data storage and processing. I'm trying to understand where our customers stand in their cloud journey, and I have a follow-up question. Thank you.

Yeah, Shannon, I guess, let me start where customers are in their cloud progression. I would say that it's a full spectrum. We don’t break all applications versus consumption usage in those numbers. But I would just tell you that we have customers that are across the full spectrum. Small customers fully on cloud, high consumption, medium and large customers who are dealing with heavily cloud-oriented applications but on-prem legacy obligations such as working the cloud and we're working this in terms of modernizing their data center infrastructure to create one cloud environment, if you will, between their public on-prem, private and on-prem legacy work. So it's really hard, I think, to say where customers stand because they're on quite a spectrum, but what I can say is they are all moving to some form of cloud environment. And when I say cloud environment, I don’t mean landing in the cloud because, you know, the cloud is not a place. It's more an operating system. It's a pattern, not a place, and it delivers an experience, not a destination. So what we see ourselves involved in is the planning and design accelerated by this accelerated digital environment to determine what that cloud environment works for a customer, taking into consideration not just the benefits of a cloud-like environment that agility, susceptibility, scalability, but also the cost issues and the legacy technology that they have to deal with. So I'm sorry that's a long-winded answer but we're selling the spectrum. We're helping customers with the spectrum, and our comprehensive suite of capabilities allows us to do that wherever a customer is on their cloud journey.

Okay. Thank you. And then maybe on a segment basis, can you talk about where customers are versus, like, new projects versus continuing to work remote enablement and continuity? I know you mentioned with education, you think it's going to kind of wind up by the end of this year and then or at least hopefully be done pretty much by then. But SMB and maybe enterprise, are you seeing customers still really focused on just making sure their employees have end devices and connectivity, or do you feel like that's kind of done and now people are moving back to, I don't know, prior investments or new opportunities? Thank you.

It's a mix across different segments. In the corporate sector, we've noticed that the work-from-home trend has slowed down a bit. This is especially evident with notebook devices and the initial rush to enable remote work. We need to understand how workplaces will evolve in the future and when and how customers will begin returning to offices, as this will influence their decisions on optimizing either remote work or in-office activities, or a hybrid model. However, there has been a slight moderation in the corporate area. In the small business sector, work-from-home continues to show strength, possibly because small businesses adopted this model a bit later than larger companies. Each segment is quite different. The healthcare sector quickly became a priority for resource allocation, but that has also moderated. Currently, education, including K-12 and higher education, along with the federal sector, are the main areas keeping work-from-home initiatives alive, and the government sector remains strong in supporting remote work.

Your next question comes from Katy Huberty from Morgan Stanley, your line is open.

Collin, as we think about the census project wrapping up over the next quarter and one less selling day, is it possible that the revenue declines don't improve in the fourth quarter or do the improved SMB writings create a tailwind that we continue to see a lesser decline trajectory like what you used on the third quarter?

Yeah, Katy, we're not going to give a specific guide on fourth quarter sales. So what I would say is we do have one fewer day, we report sales on an average daily sales basis. So that would normalize for that. The 200 basis points is really a comment about the impact it has on the bottom half of the P&L, as we get a little bit of deleverage year-over-year. As it relates to the census, I would expect the census to provide solid contributions to the fourth quarter; it is going to provide a benefit. Again, as we look at last year's overlap, most of it was in the third quarter. So it will contribute incrementally year-over-year. And then, I think as it relates to the comments on writing, we are back to the wild cards and I think particularly on the commercial side of the business, how those customers choose to react to the election and what impact the virus and potential additional shutdowns have on their spending plans as we come into the end of the year.

Okay. Thank you. And then just on third quarter margins, you mentioned that product margins were better in the quarter, in addition to the mix shift in netted down revenue. Can you just talk about what drove the better product margins? Is that a mix shift away from client and starting to see some growth again in some of the infrastructure areas like servers and computers?

Yeah. Katy, I would say it was a combination of things. There was some mix within products, so, for example, desktops were pretty soft as notebooks have become the form factor of choice, and desktops tend to have low margins. So that helped the product margin a little bit. But I would say that this pandemic and economic shock is a little bit unique compared to other recessions or slowdowns that we've been through. I think one thing that's different is you have supply-demand imbalance occurring at the same time. And so that supply imbalance has provided a bit of cushion on the margin. The second thing that's unique is just how important technology is to being a part of the solution here, and customers focus on getting things done with partners they trust, and that can manifest itself in speed, level of service, logistics capabilities, but I think what we're seeing is customers just want it done, they want it done quickly, and they want it done right. And maybe we're not going to go through another round of bids through the procurement department or whatever it is, and that has played into, I think, some of the product margin durability that we saw in what you might think would be a period of contraction on the product margin.

Your next question comes from Matthew Sheerin from Stifel. Your line is open.

Chris, in your commentary, you mentioned some customer engagements including some new customer wins due to your capabilities. Can you just talk about that competitive environment? Are you seeing the acceleration of new customer wins due to that, and due to the fact that customers need more help?

Yes, good morning, Matt. I won’t repeat everything Collin just mentioned, but regarding customer sentiment today, technology is increasingly critical and complex, leading customers to seek comprehensive solutions for the challenges they face. With a trusted partner like CDW, they are more inclined to engage with us compared to local vendors. We are observing a competitive landscape, particularly regarding pricing, but the value CDW offers to our customers has gained heightened significance. Customers are focused on de-risking their investments and want assurance that they receive a full suite of advice considering the complexities they encounter, as the stakes for getting their technology right are high. The value CDW provides is resonating strongly in this environment. We are acquiring new customers and growing our existing ones quite rapidly. Additionally, we are witnessing a faster trend toward vendor consolidation, which has always been beneficial for our customers, but this trend has increased significantly in the current environment across all our segments.

Thank you for that. I wanted to revisit the client devices, especially in the commercial sector, which you mentioned has declined. You provided some insights on the trends, but I'm curious if you're observing the same upgrade cycle we experienced last year that has carried into this year because of remote work. Are you noticing indications that this cycle is coming to an end, and will you be facing challenging year-over-year comparisons in the upcoming quarters for client devices?

Sure. Matt, what I would say is that when we entered this year, we believed we were nearing the end of the growth phase for client device refreshes. At the beginning of this year, demand picked up due to work from home, particularly in retail and other digital sectors. We may start to see some additional refresh activity from the 2017 period. However, you're correct that we are facing overlaps from last year's growth and the initial surge at the start of this year, along with factors related to education. The current economic environment and employment situation make it difficult to predict what next year will hold. Nevertheless, work from home has specific requirements to function effectively, and we are continuing to support our mid to large-sized customers with their security, collaboration, and productivity needs. Even if the demand for notebooks isn't as strong right now, we are looking at the entire work-from-home solution, which includes accessories, services, and collaboration tools.

Your next question comes from Keith Housum from Northcoast Research. Your line is open.

Good morning, guys. Hey, I want to explore the supply constraint challenges in the quarter. I think it's well-known one of the challenges getting the Chromebooks in the door. But pressing for rather the commentary, did you see that easing at all during the end of the quarter? And then are there other areas of this analogy is that you see having also some supply constraints that can help out in the fourth quarter?

Good morning, Keith. Yeah, I think the constraints within Chromebooks are well-documented. I don't know that I would say it eased as we exited the quarter; I think it's going to be tight for a while here. Now, obviously, our scale and the fact that we work with multiple OEMs will hopefully help us manage through that and get at least our fair share, as Chris has talked about earlier. In terms of notebooks in general, I would say again, high demand. And we're just seeing longer lead times than normal. We are hearing about component shortages for things that go into Chromebooks and Notebooks, things like panels. In terms of other parts of the market, I would say on the solution side of the business, the supply environment is maybe a little bit better than it was a quarter or two ago. In other areas where we see pockets of dislocation or delays with the other remote, more mission-critical categories, like collaboration, hardware, headsets, and webcams.

Got you. Is it possible to quantify what the supply shortage is perhaps costing business in the third quarter?

It would be quite challenging to assign a specific number to that. I can say that our backlog in the notebook category has increased significantly compared to historical levels.

And your last question comes from Paul Coster from JP Morgan. Your line is open.

Yeah. Thanks for taking my question. I'm wondering, Chris, if you could just elaborate a little bit on the uncertainty you're seeing. I think we all understand the weather and when part of it, but I'm wondering how this part of the uncertainty as well, given that COVID seems to have been an accelerant, as you've described, of change in digitalization, in particular, how many of your customers just feel unsure of what to invest in, given the change to their processes and sort of infrastructure paradigm?

Yeah. That's a great question. I think here's how I would answer it. Their projects that many customers had in place, they're rethinking what those look like now, infrastructure projects, for example, in particular. The good news is we've got that capability to sit down and work through that design with them. And in last quarter's earnings call, I mentioned that that had ticked up. We thought we were starting to sit down and help customers design for a new world. Every customer understands the criticality of technology and the need to get it right and how different it is today than it was literally just 12 months ago, the acceleration of digital, not a new trend, but an acceleration. So we see that as an opportunity to help our customers get the other side of this stronger than ever.

Got you, and one quick follow up for Collin. Can you quantify the revenue headwind associated with the netting down effects of the cloud revenue with the cloud contracts?

Yeah. I mean, Paul, what I would say is we have historically seen netted down items growing faster than full revenue items. So in normal periods of time, I would say that impact has a 200-basis point impact, so a little bit more than that, given the acceleration of it.

There are no further questions. I will turn the call back over to Christine Leahy, CEO. Please go ahead.

Thank you, Jaclyn. I want to take a moment to acknowledge the continued challenges due to the COVID-19 pandemic. I want to recognize the remarkable dedication of all of our coworkers around the globe and their extraordinary commitment to serving our customers, our partners, and all of our CDW stakeholders. They continuously impress me and reaffirm my conviction that we will emerge stronger from this. Thank you. And thank you to our customers for the privilege and opportunity to serve you. To our investors and analysts participating in this call, we appreciate you and your continued interest in and support of CDW. Collin and I look forward to talking with you again next quarter. Take care.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.