CDW Corp 10-Q for FY2025 Q3
CDW Corp (CDW)
10-Q
2025-11-04
For: 2025-09-30
View Original
Added on
April 07, 2026
About this 10-Q
CDW Corp filed this 10-Q on November 4, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).
Headline figures
Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $5.74B
- up 4.0% from $5.52B a year earlier
- Net income
- $291M
- down 8.0% from net income of $316.4M a year earlier
- Diluted EPS
- $2.21
- down 5.6% from $2.34 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended September 30, 2025
or
For the transition period from to
Commission File Number: 001-35985
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(847 ) 465-6000
(Registrant’s telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
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). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| ☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | |||||||||||||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of October 30, 2025, there were 130,193,660 shares of common stock, $0.01 par value, outstanding.
CDW CORPORATION AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
| Page | ||||||||
| PART I | FINANCIAL INFORMATION | |||||||
| Item 1. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| PART II | OTHER INFORMATION | |||||||
| Item 1. | ||||||||
| Item 1A. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| Item 5. | ||||||||
| Item 6. | ||||||||
| SIGNATURES | ||||||||
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars and shares in millions, except per share amounts) | |||||||||||
| September 30, 2025 | December 31, 2024 | ||||||||||
| Assets | (unaudited) | ||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Short-term investments | |||||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
| Merchandise inventory | |||||||||||
| Miscellaneous receivables | |||||||||||
| Prepaid expenses and other | |||||||||||
| Total current assets | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Property and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Accounts receivable and other assets, noncurrent | |||||||||||
| Total Assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable-trade | $ | $ | |||||||||
| Accounts payable-inventory financing | |||||||||||
| Current maturities of long-term debt | |||||||||||
| Contract liabilities | |||||||||||
| Accrued expenses and other current liabilities: | |||||||||||
| Compensation | |||||||||||
| Advertising | |||||||||||
| Sales and income taxes | |||||||||||
| Other | |||||||||||
| Total current liabilities | |||||||||||
| Long-term liabilities: | |||||||||||
| Debt | |||||||||||
| Deferred income taxes | |||||||||||
| Operating lease liabilities | |||||||||||
| Accounts payable and other liabilities | |||||||||||
| Total long-term liabilities | |||||||||||
Commitments and contingencies (Note 10) | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | |||||||||
The accompanying notes are an integral part of the Consolidated Financial Statements.
3
CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (dollars and shares in millions, except per share amounts) (unaudited) | ||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Selling and administrative expenses | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | ||||||||||||||||||||||
| Other income (expense), net | ( | |||||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||
| Income tax expense | ( | ( | ( | ( | ||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Net income per common share: | ||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted-average common shares outstanding: | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
The accompanying notes are an integral part of the Consolidated Financial Statements.
4
CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (dollars in millions) (unaudited) | ||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||
| Unrealized gain (loss) from cash flow hedge | ( | ( | ( | |||||||||||||||||||||||
| Reclassification of cash flow hedge to net income | ||||||||||||||||||||||||||
| Foreign currency translation adjustments | ( | |||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | ( | |||||||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | ||||||||||||||||||||||
The accompanying notes are an integral part of the Consolidated Financial Statements.
5
CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in millions) (unaudited) | ||||||||||||||
| Nine Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Equity-based compensation expense | ||||||||||||||
| Deferred income taxes | ( | ( | ||||||||||||
| Provision for credit losses | ||||||||||||||
| Other | ( | |||||||||||||
| Changes in assets and liabilities: | ||||||||||||||
| Accounts receivable | ( | ( | ||||||||||||
| Merchandise inventory | ( | |||||||||||||
| Other assets | ( | ( | ||||||||||||
| Accounts payable-trade | ||||||||||||||
| Other liabilities | ||||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Purchases of short-term investments | ( | |||||||||||||
| Proceeds from short-term investments | ||||||||||||||
| Acquisitions of businesses, net of cash acquired | ( | ( | ||||||||||||
| Other | ( | ( | ||||||||||||
| Net cash provided by (used in) investing activities | ( | |||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Proceeds from borrowings under revolving credit facility | ||||||||||||||
| Repayments of borrowings under revolving credit facility | ( | |||||||||||||
| Proceeds from issuance of long-term debt | ||||||||||||||
| Repayments of long-term debt | ( | |||||||||||||
| Payments to extinguish long-term debt | ( | |||||||||||||
| Payments of debt issuance costs | ( | |||||||||||||
| Proceeds from receivable financing liability | ||||||||||||||
| Repayments of receivable financing liability | ( | ( | ||||||||||||
| Net change in accounts payable-inventory financing | ( | ( | ||||||||||||
| Repurchases of common stock | ( | ( | ||||||||||||
| Proceeds from stock option exercises | ||||||||||||||
| Payment of incentive compensation plan withholding taxes | ( | ( | ||||||||||||
| Dividend payments | ( | ( | ||||||||||||
| Other | ||||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ||||||||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | ( | |||||||||||||
Cash, cash equivalents and restricted cash—beginning of period(1) | ||||||||||||||
Cash, cash equivalents and restricted cash—end of period(1) | $ | $ | ||||||||||||
| Supplementary disclosure of cash flow information: | ||||||||||||||
| Interest paid | $ | ( | $ | ( | ||||||||||
| Income taxes paid, net | $ | ( | $ | ( | ||||||||||
(1)Restricted cash is presented within Prepaid expenses and other on the Consolidated Balance Sheets, as applicable.
The accompanying notes are an integral part of the Consolidated Financial Statements.
6
CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (dollars and shares in millions) (unaudited) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| Common Stock | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Equity-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Shares issued under equity-based compensation plans | — | — | — | |||||||||||||||||||||||||||||||||||
| Coworker Stock Purchase Plan | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Dividends paid ($ | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Incentive compensation plan stock withheld for taxes | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Unrealized gain (loss) from hedge accounting | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Reclassification of cash flow hedge to net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Foreign currency translation and other | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||
| Common Stock | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Equity-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Shares issued under equity-based compensation plans | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Coworker Stock Purchase Plan | — | — | — | |||||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Dividends paid ($ | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Incentive compensation plan stock withheld for taxes | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Unrealized gain (loss) from hedge accounting | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
| Reclassification of cash flow hedge to net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Foreign currency translation and other | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
7
CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (dollars and shares in millions) (unaudited) | |||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||
| Common Stock | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Equity-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
| Shares issued under equity-based compensation plans | — | — | — | ||||||||||||||||||||||||||||||||
| Coworker Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Dividends paid ($ | — | — | ( | — | ( | ||||||||||||||||||||||||||||||
| Incentive compensation plan stock withheld for taxes | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Unrealized gain (loss) from hedge accounting | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Reclassification of cash flow hedge to net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Foreign currency translation and other | — | — | ( | ||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||
| Common Stock | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Equity-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
| Shares issued under equity-based compensation plans | — | — | — | ||||||||||||||||||||||||||||||||
| Coworker Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Dividends paid ($ | — | — | ( | — | ( | ||||||||||||||||||||||||||||||
| Incentive compensation plan stock withheld for taxes | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Unrealized gain (loss) from hedge accounting | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Reclassification of cash flow hedge to net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Foreign currency translation and other | — | — | — | ( | |||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of the Consolidated Financial Statements.
8
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
1. Description of Business and Summary of Significant Accounting Policies
Description of Business
CDW Corporation (“Parent”), a Fortune 500 company and member of the S&P 500 Index, is a leading multi-brand provider of information technology (“IT”) solutions to business, government, education and healthcare customers in the United States (“US”), the United Kingdom (“UK”) and Canada. The Company’s broad array of offerings ranges from discrete hardware and software products to integrated IT solutions and services that include on-premise and cloud capabilities across hybrid infrastructure, digital experience and security.
Throughout this report, the terms the “Company” and “CDW” refer to Parent and its subsidiaries.
Parent has two 100% owned subsidiaries, CDW LLC and CDW Finance Corporation. CDW LLC is an Illinois limited liability company that, together with its 100% owned subsidiaries, holds all material assets and conducts all business activities and operations of the Company. CDW Finance Corporation is a Delaware corporation formed for the sole purpose of acting as co-issuer of certain debt obligations and does not hold any material assets or engage in any business activities or operations.
Basis of Presentation
The accompanying unaudited interim Consolidated Financial Statements as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 (the “Consolidated Financial Statements”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules and regulations of the US Securities and Exchange Commission (the “SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The presentation of the Consolidated Financial Statements requires the Company to make estimates and assumptions that affect reported amounts and related disclosures. In the opinion of management, the Consolidated Financial Statements contain all adjustments (consisting of a normal, recurring nature) necessary to present fairly the Company’s financial position, results of operations, comprehensive income, cash flows and changes in stockholders’ equity as of the dates and for the periods indicated. The unaudited results of operations for such interim periods reported are not necessarily indicative of results for the full year.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Parent and its 100% owned subsidiaries. All intercompany transactions and accounts are eliminated in consolidation.
2. Recent Accounting Pronouncements
In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU removes stage-based capitalization rules for internal-use software to increase the operability of the recognition guidance considering different methods of software development. The ASU is effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities may apply the guidance using a prospective, modified, or retrospective transition approach. The Company is currently evaluating the impact the ASU will have on its Consolidated Financial Statements and related disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides a practical expedient to simplify the estimation of expected credit losses for current accounts receivable and current contract assets that arise from
9
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
transactions accounted for under Topic 606, Revenue from Contracts with Customers. The ASU is effective for annual periods, including interim reporting periods, beginning after December 15, 2025, with early adoption permitted. Entities that elect the practical expedient should apply the amendments in this ASU on a prospective basis. The Company is currently evaluating the impact the ASU will have on its Consolidated Financial Statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-240). This ASU requires entities to disclose disaggregated information about specific natural expense categories in the notes to the financial statements. The ASU is effective for all public entities for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. Entities should apply the amendments on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the impact the ASU will have on its disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU enhances existing income tax disclosures primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The ASU is effective for all public entities for annual periods beginning after December 15, 2024, with early adoption permitted. Entities should apply the amendments on a prospective basis, but retrospective application is permitted. The Company plans to adopt this ASU on a prospective basis in the fourth quarter of 2025. The adoption of this ASU is not expected to have a material impact to the Company’s disclosures.
3. Acquisitions
Mission Cloud Services, Inc. (“Mission”)
On November 27, 2024, the Company completed its acquisition of Mission through a purchase of all the issued and outstanding equity interests for a base purchase price of $330 million. The purchase price allocation is preliminary and is subject to change during the measurement period, which is not to exceed 12 months from the date of the acquisition. During the nine months ended September 30, 2025, there were no material adjustments to the preliminary purchase price allocation.
4. Accounts Receivable and Contract Balances
Accounts Receivable
The following table details the total accounts receivable recognized and the related classification on the Consolidated Balance Sheets:
| September 30, 2025 | December 31, 2024 | |||||||||||||
Accounts receivable, current(1) | $ | $ | ||||||||||||
Unbilled accounts receivable, current(1) | ||||||||||||||
Unbilled accounts receivable, noncurrent(2) | ||||||||||||||
| Total accounts receivable | $ | $ | ||||||||||||
(1)Accounts receivable, current and Unbilled accounts receivable, current are presented within Accounts receivable, net of allowance for credit losses on the Consolidated Balance Sheets.
(2)Unbilled accounts receivable, noncurrent is presented net of allowance for credit losses herein and is presented within Accounts receivable and other assets, noncurrent on the Consolidated Balance Sheets.
From time to time, the Company transfers certain accounts receivable, without recourse, to third-party financial companies as a method to reduce the Company’s credit exposure and accelerate cash collections. Such transfers are recognized as a sale and the related accounts receivable are derecognized from the Consolidated Balance Sheets upon receipt of payment from the third-party financing company. During the nine months ended September 30, 2025 and 2024, the Company sold approximately $456 million and $337 million of accounts receivable, respectively.
Contract Balances
Contract assets and liabilities represent the difference in the timing of revenue recognition from receipt of cash from customers. Contract assets represent revenue recognized on performance obligations satisfied or partially satisfied for
10
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
which the Company has no unconditional right to consideration. Contract liabilities consist of payments received from customers, or such consideration that is contractually due, in advance of providing the product or performing services. The following table details information about the Company’s contract balances recognized on the Consolidated Balance Sheets:
| September 30, 2025 | December 31, 2024 | |||||||||||||
Contract assets(1) | $ | $ | ||||||||||||
Contract liabilities(2)(3) | $ | $ | ||||||||||||
(1)Contract assets are presented within Prepaid expenses and other on the Consolidated Balance Sheets.
(2)Includes $31 million and $31 million of long-term contract liabilities that are presented within Long-term liabilities - Accounts payable and other liabilities on the Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, respectively.
(3)For the nine months ended September 30, 2025 and 2024, the Company recognized revenue of $364 million and $293 million related to its contract liabilities that were included in the beginning balance of the respective periods.
A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The following table represents the total transaction price for the remaining performance obligations as of September 30, 2025 related to non-cancelable managed and professional services contracts whereby the Company is acting as the principal and the duration is longer than 12 months, which is expected to be recognized over future periods.
| Within 1 Year | Years 1-2 | Years 2-3 | Thereafter | |||||||||||||||||||||||
| Remaining performance obligations | $ | $ | $ | $ | ||||||||||||||||||||||
5. Inventory Financing Agreements
The Company has entered into agreements with financial institutions to facilitate the purchase of inventory from designated suppliers under certain terms and conditions to enhance liquidity. Under these agreements, the Company receives extended payment terms and agrees to pay the financial institutions a stated amount of confirmed invoices from its designated suppliers. The Company does not incur any interest or other incremental expenses associated with these agreements as balances are paid when they are due. Additionally, the Company has no involvement in establishing the terms or conditions of the arrangements between its suppliers and the financial institutions.
The amounts outstanding under these agreements as of September 30, 2025 and December 31, 2024 were $331 million and $355 million, respectively, and are separately presented as Accounts payable-inventory financing on the Consolidated Balance Sheets. The majority of such outstanding amounts relates to a floorplan sub-facility that is incorporated in the Company’s Revolving Loan Facility, as defined within Note 6 (Debt). A portion of the Company’s availability under the Revolving Loan Facility is reserved to cover the obligation to pay the financial institution. For additional information regarding the Revolving Loan Facility, see Note 6 (Debt).
11
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
6. Debt
| September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Maturity Date | Interest Rate | Amount | Amount | |||||||||||||||||||||||
| Credit Facility | ||||||||||||||||||||||||||
| Senior unsecured revolving loan facility | December 2026 | Variable | $ | $ | ||||||||||||||||||||||
| Term Loan | ||||||||||||||||||||||||||
| Senior unsecured term loan facility | December 2026 | Variable | ||||||||||||||||||||||||
| Unsecured Senior Notes | ||||||||||||||||||||||||||
| Senior notes due 2025 | May 2025 | |||||||||||||||||||||||||
| Senior notes due 2026 | December 2026 | |||||||||||||||||||||||||
| Senior notes due 2028 | April 2028 | |||||||||||||||||||||||||
| Senior notes due 2028 | December 2028 | |||||||||||||||||||||||||
| Senior notes due 2029 | February 2029 | |||||||||||||||||||||||||
| Senior notes due 2030 | March 2030 | |||||||||||||||||||||||||
| Senior notes due 2031 | December 2031 | |||||||||||||||||||||||||
| Senior notes due 2034 | August 2034 | |||||||||||||||||||||||||
| Total unsecured senior notes | ||||||||||||||||||||||||||
| Receivable financing liability | ||||||||||||||||||||||||||
| Other long-term obligations | ||||||||||||||||||||||||||
| Unamortized debt issuance costs and discount | ( | ( | ||||||||||||||||||||||||
| Current maturities of long-term debt | ( | ( | ||||||||||||||||||||||||
| Total long-term debt | $ | $ | ||||||||||||||||||||||||
As of September 30, 2025, the Company is in compliance with the covenants under its credit agreements and indentures.
Credit Facility
The Company has a variable rate senior unsecured revolving loan facility (the “Revolving Loan Facility”) from which it may draw tranches denominated in US dollars, British pounds or Euros. The interest rate is based on Secured Overnight Financing Rate (“SOFR”) plus a spread adjustment and a margin based on the Company’s senior unsecured rating. The Revolving Loan Facility is used by the Company for borrowings, issuances of letters of credit and floorplan financing. As of September 30, 2025, the Company could have borrowed up to an additional $1.3 billion under the Revolving Loan Facility. As of September 30, 2025, the Revolving Loan Facility had $296 million reserved for the floorplan sub-facility.
Term Loan
The senior unsecured term loan facility (the “Term Loan Facility”) has a variable interest rate. The interest rate is based on SOFR plus a spread adjustment and a margin based on the Company’s senior unsecured rating. No mandatory payments are required on the remaining principal amount until its maturity date on December 1, 2026.
Unsecured Senior Notes
The unsecured senior notes have a fixed interest rate, which is paid semi-annually. In May 2025, the Company repaid the $211 million remaining aggregate principal amount of the 4.125 % Senior Notes due 2025 (the “2025 Notes”) at maturity.
12
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
Receivable Financing
The receivable financing liability relates to certain accounts receivable transferred to third-party financial institutions that did not qualify as a sale under the terms of the agreements. While the terms of such agreements are on a nonrecourse basis, the transfers of accounts receivable could not achieve certain criteria that would allow derecognition of the accounts receivable. The proceeds from these arrangements are recognized as a liability and the associated accounts receivable remains on the Consolidated Balance Sheets until the liability is settled. During the nine months ended September 30, 2025, the Company executed $14 million of transfers under these agreements.
Fair Value
The fair values of the unsecured senior notes were estimated using quoted market prices for identical liabilities that are traded in over-the-counter secondary markets. The fair value of the Term Loan Facility was estimated using dealer quotes and other market observable inputs for comparable liabilities. The unsecured senior notes and Term Loan Facility were classified as Level 2 within the fair value hierarchy. The carrying value of the Revolving Loan Facility approximates fair value.
The approximate fair values and related carrying values of the Company’s long-term debt, including current maturities and excluding unamortized discount and unamortized debt issuance costs, were as follows:
| September 30, 2025 | December 31, 2024 | |||||||||||||
| Fair value | $ | $ | ||||||||||||
| Carrying value | $ | $ | ||||||||||||
7. Fair Value Measurements and Financial Instruments
Derivative Instruments
The Company may use derivative financial instruments to manage its exposure to interest rate risk. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. The following sections detail the Company’s derivative financial instruments.
Interest Rate Collars
The Company’s variable interest rate debt creates interest rate risk. The Company has interest rate collar agreements that provide for a contractually specified interest rate cap and an interest rate floor based on SOFR. The Company receives payment from the counterparty if SOFR is greater than the cap or pays the counterparty if SOFR is below the floor. If SOFR is between the floor and cap, no payment is due to either party. There were no new interest rate collar agreements executed during the nine months ended September 30, 2025.
As of September 30, 2025 and December 31, 2024, the interest rate collar agreements were classified within Other current liabilities and Long-term liabilities - Accounts payable and other liabilities, respectively, on the Consolidated Balance Sheets for which the fair value was not material. The total notional amount of the interest rate collar agreements was $400
The fair values of the Company’s interest rate collar agreements are classified as Level 2 in the fair value hierarchy. The valuation of the interest rate collar agreements is derived using a discounted cash flow analysis on the expected cash receipts or cash disbursements that would occur if variable interest rates rise above or fall below the strike rates of the interest rate cap and interest rate floor, respectively. This analysis reflects the contractual terms of the interest rate collar agreements, including the period to maturity, and uses observable market-based inputs, including SOFR curves and implied volatilities. The Company also incorporates insignificant credit valuation adjustments to appropriately reflect the respective counterparty’s nonperformance risk in the fair value measurements. The counterparty credit spreads are based on publicly available credit information obtained from a third-party credit data provider.
The interest rate collars are designated as cash flow hedges. The changes in the fair value of derivatives that qualify as cash flow hedges are recorded in Accumulated other comprehensive loss (“AOCL”) and are subsequently reclassified into Interest expense, net in the period when the hedged forecasted transaction affects earnings. During the three and
13
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
nine months ended September 30, 2025 and 2024, the changes in fair value for the effective portion of the derivative financial instruments and the reclassification from AOCL to Interest expense, net were not material.
Short-term Investments
Short-term investments, which have a maturity that extends beyond three months but within one year, is comprised of a certificate of deposit. The certificate of deposit with a principal amount of $211 million matured in April 2025 of which the proceeds were used to repay the remaining aggregate principal amount of the 2025 Notes. As of September 30, 2025, there were no Short-term investments outstanding on the Consolidated Balance Sheets.
8. Income Taxes
Income tax expense was $98 million and $111 million for the three months ended September 30, 2025 and 2024, respectively. The effective income tax rate, expressed by calculating the income tax expense as a percentage of Income before income taxes, was 25.3 % and 26.0 % for the three months ended September 30, 2025 and 2024, respectively.
The effective income tax rate for the three months ended September 30, 2025 differed from the US federal statutory rate of 21.0% primarily due to state and local income taxes and nondeductible expenses, partially offset by the anticipated benefit from federal tax credits. The effective income tax rate for the three months ended September 30, 2024 differed from the US federal statutory rate of 21.0% primarily due to state and local income taxes and nondeductible expenses.
Income tax expense was $271 million and $270 million for the nine months ended September 30, 2025 and 2024, respectively. The effective income tax rate was 25.6 % and 24.9 % for the nine months ended September 30, 2025 and 2024, respectively.
The effective income tax rate for the nine months ended September 30, 2025 differed from the US federal statutory rate of 21.0% primarily due to state and local income taxes, partially offset by excess tax benefits on equity-based compensation and the anticipated benefit from federal tax credits. The effective income tax rate for the nine months ended September 30, 2024 differed from the US federal statutory rate of 21.0% primarily due to state and local income taxes, partially offset by excess tax benefits on equity-based compensation.
On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted into law in the US with certain provisions effective in 2025 and other provisions effective after 2025. The Act includes various provisions, including the immediate expensing of domestic research and development expenditures and the restoration of 100% bonus depreciation. These provisions did not have a material impact on the Company’s Consolidated Financial Statements as of September 30, 2025 and for the three and nine months ended September 30, 2025.
9. Earnings Per Share
The numerator for both basic and diluted earnings per share is Net income. The denominator for basic earnings per share is the weighted-average shares outstanding during the period.
A reconciliation of basic weighted-average shares outstanding to diluted weighted-average shares outstanding is as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Basic weighted-average shares outstanding | |||||||||||||||||||||||
Effect of dilutive securities(1) | |||||||||||||||||||||||
Diluted weighted-average shares outstanding(2) | |||||||||||||||||||||||
(1)The dilutive effect of outstanding stock options, restricted stock units, performance share units and Coworker Stock Purchase Plan units is reflected in the diluted weighted-average shares outstanding using the treasury stock method.
(2)There were fewer than 0.2
14
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
10. Commitments and Contingencies
The Company is party to various legal proceedings that arise in the ordinary course of its business, which include commercial, intellectual property, employment, tort and other litigation matters. The Company is also subject to audit by federal, state, international, national, provincial and local authorities, and by various partners, group purchasing organizations and customers, including government agencies, relating to purchases and sales under various contracts. In addition, the Company is subject to indemnification claims under various contracts. From time to time, certain customers of the Company file voluntary petitions for reorganization or liquidation under the US bankruptcy laws or similar laws of the jurisdictions for the Company’s business activities outside of the US. In such cases, certain pre-petition payments received by the Company could be considered preference items and subject to return to the bankruptcy administrator.
As of September 30, 2025, the Company does not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, the Company’s Consolidated Financial Statements could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters.
The Company received a Civil Investigative Demand, issued by the Department of Justice (“DOJ”) on June 11, 2024, in connection with a False Claims Act investigation. The DOJ requested information relating to bids the Company submitted for contracts funded in whole or in part by the Schools and Libraries Program (E-Rate Program). The Company is cooperating with the DOJ and, at this stage of the investigation, is unable to assess the probability of any outcome or the range of possible loss, if any.
11. Segment Information
The Company has three reportable segments: Corporate, Small Business, and Public. In addition, there are two other operating segments: CDW UK and CDW Canada, both of which do not meet the reportable segment quantitative thresholds and, accordingly, are included in an all other category (“Other”). The organizational structure of the Company’s segments is determined based on how the chief operating decision maker (“CODM”), who is the Chief Executive Officer, evaluates performance, allocates resources and manages operations, which is primarily based on customer base. Specifically, the Corporate reportable segment is primarily comprised of private sector business customers with more than 250 employees in the US, the Small Business reportable segment is primarily comprised of private sector business customers with up to 250 employees in the US, and the Public reportable segment is comprised of government agencies and education and healthcare institutions in the US.
The accounting policies used to determine profit and loss measures are consistent across all reportable segments and on a consolidated basis. Additionally, the CODM reviews key profit and loss measures for each reportable segment consistently based on both segment Gross profit and Operating income. Specifically, the CODM reviews Gross profit by segment to evaluate forecasting and overall profitability performance and Operating income by segment to make investment strategy and performance-based compensation decisions. Segment information for Total assets and capital expenditures is not presented given that such information is not used in measuring segment performance or allocating resources between segments.
The Company has centralized logistics and headquarters functions that provide services to the segments. The logistics function includes purchasing, distribution and fulfillment services to support the Corporate, Small Business and Public segments. As a result, costs and intercompany charges associated with the logistics function are fully allocated to all of these segments based on a percent of Net sales. The centralized headquarters function provides services in areas such as accounting, information technology, marketing, legal and coworker services. Headquarters function costs that are not allocated to the segments are included under the heading of “Headquarters” in the tables below.
15
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
Information about the Company’s segments for both the three and nine months ended September 30, 2025 and 2024 is as follows:
| Corporate | Small Business | Public | Other | Headquarters | Total | ||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||
Other segment expense items(1) | |||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Other Segment Information(2) | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization expense | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||
Other segment expense items(1) | |||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Other Segment Information(2) | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization expense | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||
Other segment expense items(1) | |||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Other Segment Information(2) | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization expense | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||
Other segment expense items(1) | |||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Other Segment Information(2) | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization expense | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(1)Primarily includes payroll and other coworker costs, advertising expense and other selling and administrative costs.
(2)Depreciation and amortization expense is primarily included within Other segment expense items.
16
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
Geographic Areas and Revenue Mix
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
| Corporate | Small Business | Public | Other | Total | |||||||||||||||||||||||||
Geography(1) | |||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Rest of World | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Major Product and Services | |||||||||||||||||||||||||||||
| Hardware | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Software | |||||||||||||||||||||||||||||
| Services | |||||||||||||||||||||||||||||
Other(2) | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Sales by Channel | |||||||||||||||||||||||||||||
| Corporate | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Small Business | |||||||||||||||||||||||||||||
| Government | |||||||||||||||||||||||||||||
| Education | |||||||||||||||||||||||||||||
| Healthcare | |||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Timing of Revenue Recognition | |||||||||||||||||||||||||||||
| Transferred at a point in time where CDW is principal | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Transferred at a point in time where CDW is agent | |||||||||||||||||||||||||||||
| Transferred over time where CDW is principal | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
(1)Net sales by geography is generally based on the ship-to address with the exception of certain services that may be performed at, or on behalf of, multiple locations. Such service arrangements are categorized based on the bill-to address. | |||||||||||||||||||||||||||||
(2)Includes items such as delivery charges to customers. | |||||||||||||||||||||||||||||
17
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
| Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||||
| Corporate | Small Business | Public | Other | Total | |||||||||||||||||||||||||
Geography(1) | |||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Rest of World | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Major Product and Services | |||||||||||||||||||||||||||||
| Hardware | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Software | |||||||||||||||||||||||||||||
| Services | |||||||||||||||||||||||||||||
Other(2) | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Sales by Channel | |||||||||||||||||||||||||||||
| Corporate | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Small Business | |||||||||||||||||||||||||||||
| Government | |||||||||||||||||||||||||||||
| Education | |||||||||||||||||||||||||||||
| Healthcare | |||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Timing of Revenue Recognition | |||||||||||||||||||||||||||||
| Transferred at a point in time where CDW is principal | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Transferred at a point in time where CDW is agent | |||||||||||||||||||||||||||||
| Transferred over time where CDW is principal | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
(1)Net sales by geography is generally based on the ship-to address with the exception of certain services that may be performed at, or on behalf of, multiple locations. Such service arrangements are categorized based on the bill-to address. | |||||||||||||||||||||||||||||
(2)Includes items such as delivery charges to customers. | |||||||||||||||||||||||||||||
18
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
| Corporate | Small Business | Public | Other | Total | |||||||||||||||||||||||||
Geography(1) | |||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Rest of World | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Major Product and Services | |||||||||||||||||||||||||||||
| Hardware | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Software | |||||||||||||||||||||||||||||
| Services | |||||||||||||||||||||||||||||
Other(2) | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Sales by Channel | |||||||||||||||||||||||||||||
| Corporate | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Small Business | |||||||||||||||||||||||||||||
| Government | |||||||||||||||||||||||||||||
| Education | |||||||||||||||||||||||||||||
| Healthcare | |||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Timing of Revenue Recognition | |||||||||||||||||||||||||||||
| Transferred at a point in time where CDW is principal | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Transferred at a point in time where CDW is agent | |||||||||||||||||||||||||||||
| Transferred over time where CDW is principal | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
(1)Net sales by geography is generally based on the ship-to address with the exception of certain services that may be performed at, or on behalf of, multiple locations. Such service arrangements are categorized based on the bill-to address. | |||||||||||||||||||||||||||||
(2)Includes items such as delivery charges to customers. | |||||||||||||||||||||||||||||
19
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
| Nine Months Ended September 30, 2024 | |||||||||||||||||||||||||||||
| Corporate | Small Business | Public | Other | Total | |||||||||||||||||||||||||
Geography(1) | |||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Rest of World | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Major Product and Services | |||||||||||||||||||||||||||||
| Hardware | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Software | |||||||||||||||||||||||||||||
| Services | |||||||||||||||||||||||||||||
Other(2) | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Sales by Channel | |||||||||||||||||||||||||||||
| Corporate | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Small Business | |||||||||||||||||||||||||||||
| Government | |||||||||||||||||||||||||||||
| Education | |||||||||||||||||||||||||||||
| Healthcare | |||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Timing of Revenue Recognition | |||||||||||||||||||||||||||||
| Transferred at a point in time where CDW is principal | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Transferred at a point in time where CDW is agent | |||||||||||||||||||||||||||||
| Transferred over time where CDW is principal | |||||||||||||||||||||||||||||
| Total Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
(1)Net sales by geography is generally based on the ship-to address with the exception of certain services that may be performed at, or on behalf of, multiple locations. Such service arrangements are categorized based on the bill-to address. | |||||||||||||||||||||||||||||
(2)Includes items such as delivery charges to customers. | |||||||||||||||||||||||||||||
20
CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data, unless otherwise noted)
The following tables present Net sales by major category for the three and nine months ended September 30, 2025 and 2024. Categories are based upon internal classifications.
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Net Sales | Percentage of Total Net Sales | Net Sales | Percentage of Total Net Sales | ||||||||||||||||||||
| Hardware: | |||||||||||||||||||||||
| Notebooks/Mobile Devices | $ | % | $ | % | |||||||||||||||||||
| Netcomm Products | |||||||||||||||||||||||
| Collaboration | |||||||||||||||||||||||
| Data Storage and Servers | |||||||||||||||||||||||
| Desktops | |||||||||||||||||||||||
| Other Hardware | |||||||||||||||||||||||
| Total Hardware | |||||||||||||||||||||||
Software(1) | |||||||||||||||||||||||
Services(1) | |||||||||||||||||||||||
Other(2) | |||||||||||||||||||||||
| Total Net sales | $ | % | $ | % | |||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Net Sales | Percentage of Total Net Sales | Net Sales | Percentage of Total Net Sales | ||||||||||||||||||||
| Hardware: | |||||||||||||||||||||||
| Notebooks/Mobile Devices | $ | % | $ | % | |||||||||||||||||||
| Netcomm Products | |||||||||||||||||||||||
| Collaboration | |||||||||||||||||||||||
| Data Storage and Servers | |||||||||||||||||||||||
| Desktops | |||||||||||||||||||||||
| Other Hardware | |||||||||||||||||||||||
| Total Hardware | |||||||||||||||||||||||
Software(1) | |||||||||||||||||||||||
Services(1) | |||||||||||||||||||||||
Other(2) | |||||||||||||||||||||||
| Total Net sales | $ | % | $ | % | |||||||||||||||||||
(1)Certain software and services revenues are recorded on a net basis as the Company is acting as an agent in the transaction. As a result, the category percentage of net revenues is not representative of the category percentage of gross profits. | |||||||||||||||||||||||
(2)Includes items such as delivery charges to customers. | |||||||||||||||||||||||
21
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Unless otherwise indicated or the context otherwise requires, as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the terms “we,” “us,” “the Company,” “our,” “CDW” and similar terms refer to CDW Corporation and its subsidiaries. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the unaudited interim Consolidated Financial Statements and the related notes included elsewhere in this report and with the audited Consolidated Financial Statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. This discussion contains forward-looking statements that are subject to numerous risks and uncertainties. Actual results may differ materially from those contained in any forward-looking statements. See “Forward-Looking Statements” at the end of this discussion.
Overview
CDW Corporation (“Parent”), a Fortune 500 company and member of the S&P 500 Index, is a leading multi-brand provider of information technology (“IT”) solutions to business, government, education and healthcare customers in the United States (“US”), the United Kingdom (“UK”) and Canada. Our broad array of offerings ranges from discrete hardware and software products to integrated IT solutions and services that include on-premise and cloud capabilities across hybrid infrastructure, digital experience and security.
We have three reportable segments: Corporate, Small Business and Public. Our Corporate segment primarily serves US private sector business customers with more than 250 employees. Our Small Business segment primarily serves US private sector business customers with up to 250 employees. Our Public segment is comprised of government agencies and education and healthcare institutions in the US. We also have two other operating segments: CDW UK and CDW Canada, each of which do not meet the reportable segment quantitative thresholds and, accordingly, are included in an all other category (“Other”).
We are vendor, technology and consumption model unbiased, with a solutions portfolio including more than 100,000 products and services from more than 1,000 leading and emerging brands. Our solutions are delivered in physical, virtual and cloud-based environments through approximately 10,700 customer-facing coworkers, including sellers, highly-skilled specialists and engineers. We are a leading sales channel partner for many original equipment manufacturers, software publishers, cloud providers (collectively, our “vendor partners”), and wholesale distributors, whose products we sell or include in the solutions we offer. We provide our vendor partners with a cost-effective way to reach customers and deliver a consistent brand experience through our established end-market coverage, technical expertise and extensive customer access.
We may sell all or only select products that our vendor partners offer. Each vendor partner agreement provides for specific terms and conditions, which may include one or more of the following: product return privileges, price protection policies, purchase discounts and vendor incentive programs, such as purchase or sales rebates and cooperative advertising reimbursements. We also resell software for major software publishers. Our agreements with software publishers allow the end-user customer to acquire software or licensed products and services. In addition to helping our customers determine the best software solutions for their needs, we help them manage their software agreements, including warranties and renewals. A significant portion of our advertising and marketing expenses are reimbursed through cooperative advertising programs with our vendor partners. These programs are at the discretion of our vendor partners and are typically tied to sales or other commitments to be met by us within a specified period of time.
Trends and Key Factors Affecting our Financial Performance
We believe the following key factors may have a meaningful impact on our business performance, influencing our ability to generate sales and achieve our targeted financial and operating results:
•General economic conditions are a key factor affecting our results as they can impact our customers’ willingness and ability to spend on information technology. The prevailing economic conditions remain challenging, largely due to ongoing uncertainty surrounding evolving global trade policies and geopolitical conditions, along with other drivers. These dynamics may continue to influence supply chains, drive inflationary pressures and affect interest rates. The uncertainty in the current economic environment has impacted and may continue to impact the timing of our customers’ investments in technology.
•Customers are evaluating the complex technology landscape in order to balance priorities and focus on solutions that lead to business optimization, cost management and security risk management, among other factors, resulting in a more measured approach to their IT spending. We have orchestrated solutions that leverage security, software, artificial intelligence, hybrid and cloud offerings to help customers achieve their objectives.
•Changes and uncertainty related to spending policies, budget priorities, timing and funding levels are key factors influencing the purchasing levels of government, healthcare and education customers. As the duration and ongoing
22
impact of current economic conditions, including the US government shutdown, remain uncertain, current and future budget priorities and funding levels for government, healthcare and education customers may be adversely affected, leading to lower IT spend.
•Technology trends drive customer purchasing behaviors in the market. Current technology trends are focused on delivering greater flexibility and efficiency, as well as designing and managing IT securely. These trends are driving customer adoption of cloud, artificial intelligence, software defined architectures and hybrid on-premise and off-premise combinations. The trends are further driven by the evolution of the IT consumption model to more “as a service” offerings, including software as a service and infrastructure as a service, in addition to ongoing managed and professional service arrangements. Technology trends are likely to evolve and customers will prioritize spend that will produce the most important outcomes for their business.
Key Business Metrics
We monitor a number of financial and non-financial measures and ratios on a regular basis in order to track the progress of our business and make adjustments as necessary. Financial measures include both US GAAP, the accounting principles generally accepted in the United States of America, and Non-GAAP, which excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with US GAAP. We believe that the most important of these measures and ratios include Gross profit, Gross profit margin, Operating income, Operating income margin, Non-GAAP operating income, Non-GAAP operating income margin, Net income, Non-GAAP net income, Net income per diluted share, Non-GAAP net income per diluted share, Average daily sales, Net cash provided by operating activities, Adjusted free cash flow, Cash conversion cycle, and Net debt. These measures and ratios are closely monitored by management, so that actions can be taken, as necessary, in order to achieve financial objectives.
For the definitions, discussion of management’s use of Non-GAAP measures and reconciliations to the most directly comparable US GAAP measure, see “Results of Operations - Non-GAAP Financial Measure Reconciliations.”
The results of certain key business metrics for the comparative periods are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (dollars in millions, except per share amounts and percentages) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net sales | $ | 5,737.4 | $ | 5,516.6 | $ | 16,913.1 | $ | 15,812.7 | |||||||||||||||
| Gross profit | $ | 1,255.5 | $ | 1,200.7 | $ | 3,619.0 | $ | 3,447.1 | |||||||||||||||
| Gross profit margin | 21.9 | % | 21.8 | % | 21.4 | % | 21.8 | % | |||||||||||||||
| Operating income | $ | 443.3 | $ | 481.6 | $ | 1,224.9 | $ | 1,242.7 | |||||||||||||||
| Operating income margin | 7.7 | % | 8.7 | % | 7.2 | % | 7.9 | % | |||||||||||||||
| Non-GAAP operating income | $ | 530.6 | $ | 534.0 | $ | 1,494.3 | $ | 1,447.8 | |||||||||||||||
| Non-GAAP operating income margin | 9.2 | % | 9.7 | % | 8.8 | % | 9.2 | % | |||||||||||||||
| Net income | $ | 291.0 | $ | 316.4 | $ | 787.1 | $ | 813.6 | |||||||||||||||
| Non-GAAP net income | $ | 357.2 | $ | 354.9 | $ | 987.4 | $ | 954.5 | |||||||||||||||
| Net income per diluted share | $ | 2.21 | $ | 2.34 | $ | 5.94 | $ | 6.00 | |||||||||||||||
| Non-GAAP net income per diluted share | $ | 2.71 | $ | 2.63 | $ | 7.45 | $ | 7.04 | |||||||||||||||
Average daily sales(1) | $ | 89.6 | $ | 86.2 | $ | 88.6 | $ | 82.4 | |||||||||||||||
(1)Defined as Net sales divided by the number of selling days. There were 64 selling days for both the three months ended September 30, 2025 and 2024. There were 191 and 192 selling days for the nine months ended September 30, 2025 and 2024, respectively.
| (dollars in millions) | September 30, 2025 | September 30, 2024 | |||||||||
Net debt(1) | $ | 5,175.9 | $ | 4,872.3 | |||||||
Cash conversion cycle (in days)(2) | 11 | 17 | |||||||||
| Net cash provided by operating activities | $ | 771.4 | $ | 932.0 | |||||||
Adjusted free cash flow(3) | $ | 668.0 | $ | 764.1 | |||||||
(1)Defined as total debt minus Cash and cash equivalents and Short-term investments.
(2)Defined as days of sales outstanding related to the current portion of Accounts receivable and certain receivables due from vendors, plus days of supply in Merchandise inventory, minus days of purchases outstanding related to the current portion of Accounts payable-trade and Accounts payable-inventory financing, based on a rolling three-month average.
(3)Defined as Net cash provided by operating activities less Capital expenditures, adjusted to include cash flows from financing activities that relate to the purchase of inventory.
23
Results of Operations
Results of operations, including Gross profit margin and Operating income margin, expressed as Gross profit and Operating income as a percentage of Net sales, respectively, for the three and nine months ended September 30, 2025 and 2024 are below. For additional information on Net sales, Gross profit and Operating income by segment, see the “Segment Results of Operations.”
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| (dollars in millions, except percentages) | 2025 | 2024 | Percent Change | 2025 | 2024 | Percent Change | |||||||||||||||||||||||||||||
| Net sales | $ | 5,737.4 | $ | 5,516.6 | 4.0 | % | $ | 16,913.1 | $ | 15,812.7 | 7.0 | % | |||||||||||||||||||||||
| Cost of sales | 4,481.9 | 4,315.9 | 3.8 | 13,294.1 | 12,365.6 | 7.5 | |||||||||||||||||||||||||||||
| Gross profit | 1,255.5 | 1,200.7 | 4.6 | 3,619.0 | 3,447.1 | 5.0 | |||||||||||||||||||||||||||||
| Gross profit margin | 21.9 | % | 21.8 | % | 21.4 | % | 21.8 | % | |||||||||||||||||||||||||||
| Selling and administrative expenses | 812.2 | 719.1 | 12.9 | 2,394.1 | 2,204.4 | 8.6 | |||||||||||||||||||||||||||||
| Operating income | 443.3 | 481.6 | (8.0) | 1,224.9 | 1,242.7 | (1.4) | |||||||||||||||||||||||||||||
| Operating income margin | 7.7 | % | 8.7 | % | 7.2 | % | 7.9 | % | |||||||||||||||||||||||||||
| Interest expense, net | (55.0) | (54.4) | 1.1 | (168.9) | (158.0) | 6.9 | |||||||||||||||||||||||||||||
| Other income (expense), net | 1.1 | 0.4 | nm* | 2.3 | (0.8) | nm* | |||||||||||||||||||||||||||||
| Income before income taxes | 389.4 | 427.6 | (8.9) | 1,058.3 | 1,083.9 | (2.4) | |||||||||||||||||||||||||||||
| Income tax expense | (98.4) | (111.2) | (11.5) | (271.2) | (270.3) | 0.3 | |||||||||||||||||||||||||||||
| Net income | $ | 291.0 | $ | 316.4 | (8.0) | % | $ | 787.1 | $ | 813.6 | (3.3) | % | |||||||||||||||||||||||
*nm - Not meaningful
Three months ended September 30, 2025 compared with the three months ended September 30, 2024
Net sales increased $221 million, or 4.0%, with higher Net sales across all operating segments. The increase was primarily due to increased customer demand for netcomm products, notebooks/mobile devices, desktops, software and services, partially offset by a decrease in data storage and servers. Broadly, while economic and geopolitical uncertainty persists, certain end-markets continued to experience improved customer spending during the period.
Gross profit increased $55 million, or 4.6%, primarily due to higher Net sales and gross profit margin. Gross profit margin increased 10 basis points which is attributed to increased rate in services and a higher contribution of netted down revenue.
Selling and administrative expenses increased $93 million, or 12.9%, primarily due to higher performance-based compensation, transformation and other related costs and amortization expense on acquisition-related intangible assets.
Operating income decreased $38 million, or 8.0%, to $443 million for the three months ended September 30, 2025, compared to $482 million for the three months ended September 30, 2024.
Interest expense, net includes interest expense and interest income. Interest expense, net remained relatively consistent with the prior year.
Income tax expense decreased $13 million, or 11.5%. The effective income tax rate, expressed by calculating the income tax expense as a percentage of Income before income taxes, was 25.3% and 26.0% for the three months ended September 30, 2025 and 2024, respectively. The decrease in the effective income tax rate was primarily attributable to the anticipated benefit from federal tax credits.
Nine months ended September 30, 2025 compared with the nine months ended September 30, 2024
Net sales increased $1,100 million, or 7.0%, with higher Net sales across all operating segments. The increase was primarily due to customer demand for notebooks/mobile devices, software, desktops, netcomm products and services. Broadly, while economic and geopolitical uncertainty persists, certain end-markets continued to experience improved customer spending during the period.
Gross profit increased $172 million, or 5.0%, primarily due to higher Net sales, partially offset by lower gross profit margin. Gross profit margin decreased 40 basis points which is attributed to decreased rate and increased mix in certain hardware categories.
24
Selling and administrative expenses increased $190 million, or 8.6%, primarily due to higher performance-based compensation, transformation and other related costs and amortization expense on acquisition-related intangible assets.
Operating income decreased $18 million, or 1.4%, to $1,225 million for the nine months ended September 30, 2025, compared to $1,243 million for the nine months ended September 30, 2024.
Interest expense, net includes interest expense and interest income. Interest expense, net increased $11 million, or 6.9%, primarily due to lower interest income earned on cash balances and a higher fixed interest rate on unsecured senior notes, partially offset by a lower variable interest rate on the senior unsecured term loan.
Income tax expense increased $1 million, or 0.3%. The effective income tax rate, expressed by calculating the income tax expense as a percentage of Income before income taxes, was 25.6% and 24.9% for the nine months ended September 30, 2025 and 2024, respectively. The increase in the effective income tax rate was primarily attributable to lower excess tax benefits on equity-based compensation, partially offset by the anticipated benefit from federal tax credits.
Segment Results of Operations
Net sales by segment for the comparative periods are as follows:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | Net Sales | Percentage of Total Net Sales | Net Sales | Percentage of Total Net Sales | Dollar Change | Percent Change(1) | Average Daily Sales Percent Change(1) | ||||||||||||||||||||||||||||||||||
| Corporate | $ | 2,255.4 | 39.3 | % | $ | 2,161.2 | 39.2 | % | $ | 94.2 | 4.4 | % | 4.4 | % | |||||||||||||||||||||||||||
| Small Business | 433.8 | 7.6 | 379.7 | 6.9 | 54.1 | 14.2 | 14.2 | ||||||||||||||||||||||||||||||||||
| Public: | |||||||||||||||||||||||||||||||||||||||||
| Government | 744.7 | 13.0 | 691.0 | 12.5 | 53.7 | 7.8 | 7.8 | ||||||||||||||||||||||||||||||||||
| Education | 911.2 | 15.9 | 995.7 | 18.0 | (84.5) | (8.5) | (8.5) | ||||||||||||||||||||||||||||||||||
| Healthcare | 693.9 | 12.1 | 649.0 | 11.8 | 44.9 | 6.9 | 6.9 | ||||||||||||||||||||||||||||||||||
| Total Public | 2,349.8 | 41.0 | 2,335.7 | 42.3 | 14.1 | 0.6 | 0.6 | ||||||||||||||||||||||||||||||||||
Other(2) | 698.4 | 12.1 | 640.0 | 11.6 | 58.4 | 9.1 | 9.1 | ||||||||||||||||||||||||||||||||||
| Total Net sales | $ | 5,737.4 | 100.0 | % | $ | 5,516.6 | 100.0 | % | $ | 220.8 | 4.0 | % | 4.0 | % | |||||||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | Net Sales | Percentage of Total Net Sales | Net Sales | Percentage of Total Net Sales | Dollar Change | Percent Change(1) | Average Daily Sales Percent Change(1) | ||||||||||||||||||||||||||||||||||
| Corporate | $ | 7,072.9 | 41.8 | % | $ | 6,492.3 | 41.1 | % | $ | 580.6 | 8.9 | % | 9.5 | % | |||||||||||||||||||||||||||
| Small Business | 1,269.7 | 7.5 | 1,143.5 | 7.2 | 126.2 | 11.0 | 11.6 | ||||||||||||||||||||||||||||||||||
| Public: | |||||||||||||||||||||||||||||||||||||||||
| Government | 1,939.0 | 11.5 | 1,873.4 | 11.8 | 65.6 | 3.5 | 4.0 | ||||||||||||||||||||||||||||||||||
| Education | 2,470.3 | 14.6 | 2,609.9 | 16.5 | (139.6) | (5.3) | (4.9) | ||||||||||||||||||||||||||||||||||
| Healthcare | 2,110.3 | 12.5 | 1,820.4 | 11.5 | 289.9 | 15.9 | 16.5 | ||||||||||||||||||||||||||||||||||
| Total Public | 6,519.6 | 38.6 | 6,303.7 | 39.8 | 215.9 | 3.4 | 4.0 | ||||||||||||||||||||||||||||||||||
Other(2) | 2,050.9 | 12.1 | 1,873.2 | 11.9 | 177.7 | 9.5 | 10.1 | ||||||||||||||||||||||||||||||||||
| Total Net sales | $ | 16,913.1 | 100.0 | % | $ | 15,812.7 | 100.0 | % | $ | 1,100.4 | 7.0 | % | 7.5 | % | |||||||||||||||||||||||||||
(1)There were 64 selling days for both the three months ended September 30, 2025 and 2024. There were 191 and 192 selling days for the nine months ended September 30, 2025 and 2024, respectively. Average daily sales is defined as Net sales divided by the number of selling days.
(2)Includes the financial results for our other operating segments, CDW UK and CDW Canada, which do not meet the reportable segment quantitative thresholds.
25
Gross profit by segment for the comparative periods are as follows:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| (dollars in millions) | Gross Profit | Gross Profit Margin | Gross Profit | Gross Profit Margin | Dollar Change | Percent Change | |||||||||||||||||||||||||||||
Segments:(1) | |||||||||||||||||||||||||||||||||||
| Corporate | $ | 521.4 | 23.1 | % | $ | 510.2 | 23.6 | % | $ | 11.2 | 2.2 | % | |||||||||||||||||||||||
| Small Business | 99.1 | 22.8 | 88.2 | 23.2 | 10.9 | 12.4 | |||||||||||||||||||||||||||||
| Public | 490.1 | 20.9 | 476.8 | 20.4 | 13.3 | 2.8 | |||||||||||||||||||||||||||||
Other(2) | 144.9 | 20.7 | 125.5 | 19.6 | 19.4 | 15.5 | |||||||||||||||||||||||||||||
| Total Gross profit | $ | 1,255.5 | 21.9 | % | $ | 1,200.7 | 21.8 | % | $ | 54.8 | 4.6 | % | |||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| (dollars in millions) | Gross Profit | Gross Profit Margin | Gross Profit | Gross Profit Margin | Dollar Change | Percent Change | |||||||||||||||||||||||||||||
Segments:(1) | |||||||||||||||||||||||||||||||||||
| Corporate | $ | 1,628.8 | 23.0 | % | $ | 1,540.8 | 23.7 | % | $ | 88.0 | 5.7 | % | |||||||||||||||||||||||
| Small Business | 282.3 | 22.2 | 265.7 | 23.2 | 16.6 | 6.2 | |||||||||||||||||||||||||||||
| Public | 1,288.8 | 19.8 | 1,273.8 | 20.2 | 15.0 | 1.2 | |||||||||||||||||||||||||||||
Other(2) | 419.1 | 20.4 | 366.8 | 19.6 | 52.3 | 14.3 | |||||||||||||||||||||||||||||
| Total Gross profit | $ | 3,619.0 | 21.4 | % | $ | 3,447.1 | 21.8 | % | $ | 171.9 | 5.0 | % | |||||||||||||||||||||||
(1)Segment gross profit includes the segment’s direct gross profit, allocations for gross profit from logistics services and allocations for certain inventory adjustments, volume rebates and cooperative advertising from vendors.
(2)Includes the financial results for our other operating segments, CDW UK and CDW Canada, which do not meet the reportable segment quantitative thresholds.
26
Operating income by segment for the comparative periods are as follows:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| (dollars in millions) | Operating Income | Percentage of Segment Net Sales | Operating Income | Percentage of Segment Net Sales | Dollar Change | Percent Change | |||||||||||||||||||||||||||||
Segments:(1) | |||||||||||||||||||||||||||||||||||
| Corporate | $ | 195.3 | 8.7 | % | $ | 209.0 | 9.7 | % | $ | (13.7) | (6.6) | % | |||||||||||||||||||||||
| Small Business | 53.7 | 12.4 | 45.6 | 12.0 | 8.1 | 17.8 | |||||||||||||||||||||||||||||
| Public | 231.9 | 9.9 | 240.2 | 10.3 | (8.3) | (3.5) | |||||||||||||||||||||||||||||
Other(2) | 43.0 | 6.2 | 32.5 | 5.1 | 10.5 | 32.3 | |||||||||||||||||||||||||||||
Headquarters(3) | (80.6) | nm* | (45.7) | nm* | (34.9) | (76.4) | |||||||||||||||||||||||||||||
| Total Operating income | $ | 443.3 | 7.7 | % | $ | 481.6 | 8.7 | % | $ | (38.3) | (8.0) | % | |||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| (dollars in millions) | Operating Income | Percentage of Segment Net Sales | Operating Income | Percentage of Segment Net Sales | Dollar Change | Percent Change | |||||||||||||||||||||||||||||
Segments:(1) | |||||||||||||||||||||||||||||||||||
| Corporate | $ | 659.1 | 9.3 | % | $ | 584.0 | 9.0 | % | $ | 75.1 | 12.9 | % | |||||||||||||||||||||||
| Small Business | 144.9 | 11.4 | 137.7 | 12.0 | 7.2 | 5.2 | |||||||||||||||||||||||||||||
| Public | 560.6 | 8.6 | 575.4 | 9.1 | (14.8) | (2.6) | |||||||||||||||||||||||||||||
Other(2) | 124.7 | 6.1 | 82.0 | 4.4 | 42.7 | 52.1 | |||||||||||||||||||||||||||||
Headquarters(3) | (264.4) | nm* | (136.4) | nm* | (128.0) | (93.8) | |||||||||||||||||||||||||||||
| Total Operating income | $ | 1,224.9 | 7.2 | % | $ | 1,242.7 | 7.9 | % | $ | (17.8) | (1.4) | % | |||||||||||||||||||||||
*nm - Not meaningful
(1)Segment operating income includes the segment’s direct operating income, allocations for certain headquarters function costs, allocations for income and expenses from logistics services, certain inventory adjustments and volume rebates and cooperative advertising from vendors.
(2)Includes the financial results for our other operating segments, CDW UK and CDW Canada, which do not meet the reportable segment quantitative thresholds.
(3)Includes headquarters function costs that are not allocated to the segments.
Three months ended September 30, 2025 compared with the three months ended September 30, 2024
Corporate segment Net sales increased $94 million, or 4.4%, primarily due to an increase in netcomm products, software and desktops.
Corporate segment Gross profit dollars increased $11 million, or 2.2%, primarily due to higher Net sales, partially offset by lower gross profit margin. Gross profit margin decreased 50 bps, to 23.1%, which is attributed to lower contribution of netted down revenue and mixing into certain lower margin hardware categories.
Corporate segment Operating income decreased $14 million, or 6.6%, primarily due to higher performance-based compensation and amortization expense on acquisition-related intangible assets, partially offset by higher Gross profit dollars.
Small Business segment Net sales increased $54 million, or 14.2%, primarily due to an increase in notebooks/mobile devices, software and desktops.
Small Business segment Gross profit increased $11 million, or 12.4%, primarily due to higher Net sales, partially offset by lower gross profit margin. Gross profit margin decreased 40 bps, to 22.8%, which is attributed to mixing into certain lower margin hardware categories, partially offset by higher contribution of netted down revenue.
Small Business segment Operating income increased $8 million, or 17.8%, primarily due to higher Gross profit dollars, partially offset by higher performance-based compensation and an increased provision for expected credit losses.
27
Public segment Net sales increased $14 million, or 0.6%, primarily due to an increase in services in the government and healthcare sales channels and software in the education sales channel, partially offset by a decrease in hardware in the education sales channel.
Public segment Gross profit dollars increased $13 million, or 2.8%, primarily due to higher Net sales and gross profit margin. Gross profit margin increased 50 bps, to 20.9%, which is primarily attributed to a higher contribution of netted down revenue, mixing into services and mixing out of certain lower margin hardware categories.
Public segment Operating income decreased $8 million, or 3.5%, primarily due to higher payroll costs, including performance-based compensation, and higher transformation and other related costs, partially offset by higher Gross profit dollars.
Net sales in Other increased $58 million, or 9.1%, primarily due to an increase in hardware within the UK and Canada operations, partially offset by a decrease in software within the Canada and UK operations.
Other Gross profit dollars increased $19 million, or 15.5%, primarily due to higher Net sales and Gross profit margin. Gross profit margin increased 110 bps, to 20.7%, which is primarily attributed to increased rate in certain hardware categories.
Other Operating income increased $11 million, or 32.3%, primarily due to higher Gross profit dollars within the UK operations, partially offset by higher performance-based compensation and workplace optimization costs within the UK and Canada operations.
Nine months ended September 30, 2025 compared with the nine months ended September 30, 2024
Corporate segment Net sales increased $581 million, or 8.9%, primarily due to an increase in notebooks/mobile devices, software, netcomm products, desktops and data storage and servers.
Corporate segment Gross profit dollars increased $88 million, or 5.7%, primarily due to higher Net sales, partially offset by lower gross profit margin. Gross profit margin decreased 70 bps, to 23.0%, which is attributed to decreased rate in certain hardware categories and mixing into lower margin hardware categories.
Corporate segment Operating income increased $75 million, or 12.9%, primarily due to higher Gross profit dollars, partially offset by higher performance-based compensation and increased amortization expense on acquisition-related intangible assets.
Small Business segment Net sales increased $126 million, or 11.0%, primarily due to an increase in notebooks/mobile devices, software, and data storage and servers.
Small Business segment Gross profit increased $17 million, or 6.2%, primarily due to higher Net sales, partially offset by lower gross profit margin. Gross profit margin decreased 100 bps, to 22.2%, which is attributed to lower contribution of netted down revenue.
Small Business segment Operating income increased $7 million, or 5.2%, primarily due to higher Gross profit dollars, partially offset by higher performance-based compensation and an increased provision for expected credit losses.
Public segment Net sales increased $216 million, or 3.4%, primarily due to an increase in desktops in the healthcare and government sales channels, software in the healthcare and education sales channels, services across all sales channels and notebooks/mobile devices in the healthcare sales channel, partially offset by hardware in the education sales channel.
Public segment Gross profit dollars increased $15 million, or 1.2%, primarily due to higher Net sales, partially offset by lower gross profit margin. Gross profit margin decreased 40 bps, to 19.8%, which is attributed to decreased rate in certain hardware categories, partially offset by mixing into services.
Public segment Operating income decreased $15 million, or 2.6%, primarily due to higher performance-based compensation and an increased provision for expected credit losses, partially offset by higher Gross profit dollars.
Net sales in Other increased $178 million, or 9.5%, primarily due to an increase in notebooks/mobile devices, desktops and services within UK and Canada operations.
Other Gross profit dollars increased $52 million, or 14.3%, primarily due to higher Net sales and Gross profit margin. Gross profit margin increased 80 bps, to 20.4%, which is attributed to higher contribution of netted down revenue and increased rate in certain hardware categories.
Other Operating income increased $43 million, or 52.1%, primarily due to higher Gross profit dollars and lower transformation and other related costs, partially offset by higher performance-based compensation within the UK operations.
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Non-GAAP Financial Measure Reconciliations
Generally, a non-GAAP financial measure is a numerical measure of a company’s performance or financial condition that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with US GAAP. Non-GAAP measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures.
Our non-GAAP performance measures include Non-GAAP operating income, Non-GAAP operating income margin, Non-GAAP net income, Non-GAAP net income per diluted share and Net sales on a constant currency basis, and our non-GAAP financial condition measures include Free cash flow and Adjusted free cash flow. These non-GAAP performance measures and non-GAAP financial condition measures are collectively referred to as “non-GAAP financial measures.”
Non-GAAP operating income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, equity-based compensation and the associated payroll taxes, acquisition and integration expenses, transformation initiatives and workplace optimization. Non-GAAP operating income margin is defined as Non-GAAP operating income as a percentage of Net sales. Non-GAAP net income and Non-GAAP net income per diluted share exclude, among other things, charges related to the amortization of acquisition-related intangible assets, equity-based compensation and the associated payroll taxes, acquisition and integration expenses, transformation initiatives, workplace optimization and their associated income tax effects. Net sales on a constant currency basis is defined as Net sales excluding the impact of foreign currency translation on Net sales. Free cash flow is defined as Net cash provided by operating activities less capital expenditures. Adjusted free cash flow is defined as Free cash flow adjusted to include certain cash flows from financing activities incurred in the normal course of operations or as capital expenditures.
We believe our non-GAAP performance measures provide analysts, investors and management with useful information regarding the underlying operating performance of our business, as they remove the impact of items that management believes are not reflective of underlying operating performance. Management uses these measures to evaluate period-over-period performance as management believes they provide a more comparable measure of the underlying business. We also present non-GAAP financial condition measures as we believe they provide analysts, investors and management with more information regarding our liquidity and capital resources. Certain non-GAAP financial measures are also used to determine certain components of performance-based compensation.
We have included reconciliations of our non-GAAP financial measures to the most comparable US GAAP financial measures for the three and nine months ended September 30, 2025 and 2024 below.
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Non-GAAP operating income and Non-GAAP operating income margin
| Three Months Ended September 30, | |||||||||||||||||||||||
| (dollars in millions) | 2025 | Percentage of Net Sales | 2024 | Percentage of Net Sales | |||||||||||||||||||
| Operating income, as reported | $ | 443.3 | 7.7 | % | $ | 481.6 | 8.7 | % | |||||||||||||||
Amortization of intangibles(1) | 42.4 | 37.7 | |||||||||||||||||||||
| Equity-based compensation | 27.1 | 2.7 | |||||||||||||||||||||
Transformation initiatives(2) | 13.0 | 8.3 | |||||||||||||||||||||
| Acquisition and integration expenses | 1.1 | 0.5 | |||||||||||||||||||||
Workplace optimization(3) | 2.7 | 2.2 | |||||||||||||||||||||
| Other adjustments | 1.0 | 1.0 | |||||||||||||||||||||
| Non-GAAP operating income | $ | 530.6 | 9.2 | % | $ | 534.0 | 9.7 | % | |||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||
| (dollars in millions) | 2025 | Percentage of Net Sales | 2024 | Percentage of Net Sales | |||||||||||||||||||
| Operating income, as reported | $ | 1,224.9 | 7.2 | % | $ | 1,242.7 | 7.9 | % | |||||||||||||||
Amortization of intangibles(1) | 127.6 | 113.2 | |||||||||||||||||||||
| Equity-based compensation | 71.1 | 50.8 | |||||||||||||||||||||
Transformation initiatives(2) | 44.1 | 23.1 | |||||||||||||||||||||
| Acquisition and integration expenses | 6.0 | 2.1 | |||||||||||||||||||||
Workplace optimization(3) | 15.5 | 9.5 | |||||||||||||||||||||
| Other adjustments | 5.1 | 6.4 | |||||||||||||||||||||
| Non-GAAP operating income | $ | 1,494.3 | 8.8 | % | $ | 1,447.8 | 9.2 | % | |||||||||||||||
(1)Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
(2)Includes costs related to strategic transformation initiatives focused on optimizing various operations and systems.
(3)Includes costs related to workforce reductions and charges related to the reduction of our real estate lease portfolio.
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Non-GAAP net income and Non-GAAP net income per diluted share
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||
| (dollars and shares in millions, except per share amounts) | Income before income taxes | Income tax expense(1) | Net income | Income before income taxes | Income tax expense(1) | Net income | |||||||||||||||||||||||||||||||||||
| US GAAP, as reported | $ | 389.4 | $ | (98.4) | $ | 291.0 | $ | 427.6 | $ | (111.2) | $ | 316.4 | |||||||||||||||||||||||||||||
Amortization of intangibles(2) | 42.4 | (11.0) | 31.4 | 37.7 | (9.8) | 27.9 | |||||||||||||||||||||||||||||||||||
| Equity-based compensation | 27.1 | (5.6) | 21.5 | 2.7 | (0.3) | 2.4 | |||||||||||||||||||||||||||||||||||
Transformation initiatives(3) | 13.0 | (3.4) | 9.6 | 8.3 | (2.1) | 6.2 | |||||||||||||||||||||||||||||||||||
| Acquisition and integration expenses | 1.1 | (0.3) | 0.8 | 0.5 | (0.1) | 0.4 | |||||||||||||||||||||||||||||||||||
Workplace optimization(4) | 2.7 | (0.7) | 2.0 | 2.2 | (0.6) | 1.6 | |||||||||||||||||||||||||||||||||||
| Other adjustments | 1.0 | (0.1) | 0.9 | 0.1 | (0.1) | — | |||||||||||||||||||||||||||||||||||
| Non-GAAP | $ | 476.7 | $ | (119.5) | $ | 357.2 | $ | 479.1 | $ | (124.2) | $ | 354.9 | |||||||||||||||||||||||||||||
| Net income per diluted share, as reported | $ | 2.21 | $ | 2.34 | |||||||||||||||||||||||||||||||||||||
| Non-GAAP net income per diluted share | $ | 2.71 | $ | 2.63 | |||||||||||||||||||||||||||||||||||||
| Shares used in computing US GAAP and Non-GAAP net income per diluted share | 131.8 | 134.9 | |||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||
| (dollars and shares in millions, except per share amounts) | Income before income taxes | Income tax expense(1) | Net income | Income before income taxes | Income tax expense(1) | Net income | |||||||||||||||||||||||||||||||||||
| US GAAP, as reported | $ | 1,058.3 | $ | (271.2) | $ | 787.1 | $ | 1,083.9 | $ | (270.3) | $ | 813.6 | |||||||||||||||||||||||||||||
Amortization of intangibles(2) | 127.6 | (33.2) | 94.4 | 113.2 | (29.4) | 83.8 | |||||||||||||||||||||||||||||||||||
| Equity-based compensation | 71.1 | (17.6) | 53.5 | 50.8 | (23.4) | 27.4 | |||||||||||||||||||||||||||||||||||
Transformation initiatives(3) | 44.1 | (11.5) | 32.6 | 23.1 | (6.0) | 17.1 | |||||||||||||||||||||||||||||||||||
| Acquisition and integration expenses | 6.0 | (1.6) | 4.4 | 2.1 | (0.5) | 1.6 | |||||||||||||||||||||||||||||||||||
Workplace optimization(4) | 15.5 | (4.0) | 11.5 | 9.5 | (2.5) | 7.0 | |||||||||||||||||||||||||||||||||||
| Other adjustments | 5.1 | (1.2) | 3.9 | 5.5 | (1.5) | 4.0 | |||||||||||||||||||||||||||||||||||
| Non-GAAP | $ | 1,327.7 | $ | (340.3) | $ | 987.4 | $ | 1,288.1 | $ | (333.6) | $ | 954.5 | |||||||||||||||||||||||||||||
| Net income per diluted share, as reported | $ | 5.94 | $ | 6.00 | |||||||||||||||||||||||||||||||||||||
| Non-GAAP net income per diluted share | $ | 7.45 | $ | 7.04 | |||||||||||||||||||||||||||||||||||||
| Shares used in computing US GAAP and Non-GAAP net income per diluted share | 132.6 | 135.5 | |||||||||||||||||||||||||||||||||||||||
(1)Income tax on non-GAAP adjustments includes excess tax benefits associated with equity-based compensation.
(2)Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names.
(3)Includes costs related to strategic transformation initiatives focused on optimizing various operations and systems.
(4)Includes costs related to workforce reductions and charges related to the reduction of our real estate lease portfolio.
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Net sales on a constant currency basis
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | 2025 | 2024 | Percent Change(1) | 2025 | 2024 | Percent Change(1) | Average Daily Sales Percent Change(1) | ||||||||||||||||||||||||||||||||||||||||
| Net sales, as reported | $ | 5,737.4 | $ | 5,516.6 | 4.0 | % | $ | 16,913.1 | $ | 15,812.7 | 7.0 | % | 7.5 | % | |||||||||||||||||||||||||||||||||
Foreign currency translation(2) | — | 13.3 | — | 18.0 | |||||||||||||||||||||||||||||||||||||||||||
| Net sales, on a constant currency basis | $ | 5,737.4 | $ | 5,529.9 | 3.8 | % | $ | 16,913.1 | $ | 15,830.7 | 6.8 | % | 7.4 | % | |||||||||||||||||||||||||||||||||
(1)There were 64 selling days for both the three months ended September 30, 2025 and 2024. There were 191 and 192 selling days for the nine months ended September 30, 2025 and 2024, respectively. Average daily sales is defined as Net sales divided by the number of selling days.
(2)Represents the effect of translating the prior year results of CDW UK and CDW Canada at the average exchange rates applicable in the current year.
Free cash flow and Adjusted free cash flow
| Nine Months Ended September 30, | ||||||||||||||
| (dollars in millions) | 2025 | 2024 | ||||||||||||
| Net cash provided by operating activities | $ | 771.4 | $ | 932.0 | ||||||||||
| Capital expenditures | (79.2) | (94.0) | ||||||||||||
| Free cash flow | 692.2 | 838.0 | ||||||||||||
| Net change in accounts payable - inventory financing | (24.2) | (73.9) | ||||||||||||
Adjusted free cash flow(1) | $ | 668.0 | $ | 764.1 | ||||||||||
(1)Defined as Net cash provided by operating activities less Capital expenditures, adjusted to include cash flows from financing activities that relate to the purchase of inventory.
Seasonality
While we have not historically experienced significant seasonality throughout the year, sales in our Public segment have historically been higher in the second and third quarter than in other quarters primarily due to the buying patterns of education and government customers.
Liquidity and Capital Resources
Overview
We finance our operations and capital expenditures with cash from operations and borrowings under our variable rate senior unsecured revolving loan facility (the “Revolving Loan Facility”). As of September 30, 2025, we had $1.3 billion of availability for borrowings under our Revolving Loan Facility. Our liquidity and borrowing plans are established to align with our financial and strategic planning processes and ensure we have the necessary funding to meet our operating commitments, which primarily include the purchase of inventory, payroll and general expenses. We also take into consideration our overall capital allocation strategy, which includes dividend payments, assessment of debt levels, acquisitions and share repurchases. We believe we have adequate sources of liquidity and funding available for at least the next year; however, there are a number of factors that may negatively impact our available sources of funds. The amount of cash generated from operations will be dependent upon factors such as the successful execution of our business plan, general economic conditions and working capital management.
Long-Term Debt and Financing Arrangements
As of September 30, 2025, we had total unsecured indebtedness of $5.6 billion, and we were in compliance with the covenants under our credit agreements and indentures.
During the second quarter of 2025, we repaid the $211 million remaining aggregate principal amount of the 4.125% Senior Notes due 2025 (the “2025 Notes”) at maturity.
We may from time to time repurchase one or more series of our outstanding unsecured senior notes, depending on market conditions, contractual commitments, our capital needs and other factors. Repurchases of our senior notes may be made by open market or privately negotiated transactions and may be pursuant to Rule 10b5-1 plans or otherwise.
For additional information regarding our debt and refinancing activities, see Note 6 (Debt) to the accompanying Consolidated Financial Statements.
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Inventory Financing Agreements
We have entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers under certain terms and conditions to enhance working capital. These amounts are classified separately as Accounts payable-inventory financing on the Consolidated Balance Sheets. We do not incur any interest expense or other incremental expenses associated with these agreements as balances are paid when they are due. For additional information, see Note 5 (Inventory Financing Agreements) to the accompanying Consolidated Financial Statements.
Share Repurchase Program
During the nine months ended September 30, 2025, we repurchased 2.9 million shares of our common stock for $500 million under the previously announced share repurchase program. For additional information on our share repurchase program, see “Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds.”
Dividends
A summary of 2025 dividend activity for our common stock is as follows:
| Dividend Amount | Declaration Date | Record Date | Payment Date | |||||||||||||||||
| $0.625 | February 4, 2025 | February 25, 2025 | March 11, 2025 | |||||||||||||||||
| $0.625 | May 6, 2025 | May 26, 2025 | June 10, 2025 | |||||||||||||||||
| $0.625 | August 5, 2025 | August 25, 2025 | September 10, 2025 | |||||||||||||||||
On November 4, 2025, we announced that our Board of Directors declared a quarterly cash dividend on our common stock of $0.630 per share. The dividend will be paid on December 10, 2025 to all stockholders of record as of the close of business on November 25, 2025.
The payment of any future dividends will be at the discretion of our Board of Directors and will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions (including in current or future agreements governing our indebtedness), restrictions imposed by applicable law, tax considerations and other factors that our Board of Directors deems relevant.
Cash Flows
Cash flows from operating, investing and financing activities are as follows:
| Nine Months Ended September 30, | |||||||||||
| (dollars in millions) | 2025 | 2024 | |||||||||
| Net cash provided by operating activities | $ | 771.4 | $ | 932.0 | |||||||
| Net cash provided by (used in) investing activities | 124.7 | (305.5) | |||||||||
| Net cash used in financing activities | (968.7) | (270.7) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 18.0 | 2.2 | |||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (54.6) | $ | 358.0 | |||||||
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Operating Activities
Cash flows from operating activities are as follows:
| Nine Months Ended September 30, | |||||||||||||||||
| (dollars in millions) | 2025 | 2024 | Change | ||||||||||||||
| Net income | $ | 787.1 | $ | 813.6 | $ | (26.5) | |||||||||||
Adjustments for the impact of non-cash items(1) | 315.3 | 250.0 | 65.3 | ||||||||||||||
| Net income adjusted for the impact of non-cash items | 1,102.4 | 1,063.6 | 38.8 | ||||||||||||||
| Changes in assets and liabilities: | |||||||||||||||||
| Accounts receivable | (633.0) | (320.9) | (312.1) | ||||||||||||||
| Merchandise inventory | 106.8 | (10.5) | 117.3 | ||||||||||||||
| Accounts payable-trade | 273.8 | 287.5 | (13.7) | ||||||||||||||
| Other | (78.6) | (87.7) | 9.1 | ||||||||||||||
| Net cash provided by operating activities | $ | 771.4 | $ | 932.0 | $ | (160.6) | |||||||||||
(1)Includes items such as depreciation and amortization, deferred income taxes, provision for credit losses and equity-based compensation expense.
Net cash provided by operating activities decreased $161 million for the nine months ended September 30, 2025 compared to September 30, 2024. This decrease is primarily attributable to Accounts receivable, partially offset by Merchandise inventory. The decrease from Accounts receivable was primarily due to higher sales activity in 2025 and timing of collections. The increase from Merchandise inventory is primarily due to sale of inventory on hand.
In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle, defined as days of sales outstanding (DSO) in accounts receivable plus days of supply in inventory (DIO) minus days of purchases outstanding (DPO) in accounts payable, based on a rolling three-month average. Netted down revenue results in an increase to both DSO and DPO as the corresponding receivables and payables reflect the gross amounts due from customers and due to vendors while the corresponding sales and cost of sales are reflected on a net basis within Net sales. Additionally, as customers continue to shift to multi-year software purchases, unbilled receivables and DSO are expected to increase. This customer shift in purchasing is also expected to increase accounts payable and DPO, as the timing of vendor payments aligns with customer collections. Components of our cash conversion cycle are as follows:
| September 30, | |||||||||||
| (in days) | 2025 | 2024 | |||||||||
Days of sales outstanding (DSO)(1) | 92 | 79 | |||||||||
Days of supply in inventory (DIO)(2) | 12 | 14 | |||||||||
Days of purchases outstanding (DPO)(3) | (93) | (76) | |||||||||
| Cash conversion cycle | 11 | 17 | |||||||||
(1)Represents the rolling three-month average of the balance of the current portion of Accounts receivable, net at the end of the period, divided by average Net sales for the same three-month period. Also incorporates components of other miscellaneous receivables.
(2)Represents the rolling three-month average of the balance of Merchandise inventory at the end of the period divided by average Cost of sales for the same three-month period.
(3)Represents the rolling three-month average of the combined balance of the current portion of Accounts payable-trade, excluding cash overdrafts, and Accounts payable-inventory financing at the end of the period divided by average Cost of sales for the same three-month period.
The cash conversion cycle decreased to 11 days at September 30, 2025, compared to 17 days at September 30, 2024. The improvement was primarily due to an increase in DPO, partially offset by an increase in DSO. Both metrics increased due to multi-year transactions and the timing of payments and collections, with DPO increasing more significantly due to timing of payments during the quarter. DIO declined by 2 days as a result of lower stocking positions.
Investing Activities
Net cash provided by investing activities increased $430 million for the nine months ended September 30, 2025 compared to September 30, 2024. This increase was primarily driven by 2024 cash outflow to purchase a certificate of deposit and 2025 cash inflow due to maturity of the certificate of deposit.
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Financing Activities
Net cash used in financing activities increased $698 million for the nine months ended September 30, 2025 compared to September 30, 2024. This increase was primarily driven by long-term debt issuance in 2024 and repayment of long-term debt in 2025, partially offset by extinguishment of long-term debt in 2024.
Issuers and Guarantors of Debt Securities
Each series of our outstanding unsecured senior notes (the “Notes”) is issued by CDW LLC and CDW Finance Corporation (the “Issuers”) and is guaranteed by Parent and certain of CDW LLC’s direct and indirect, 100% owned, domestic subsidiaries (the “Guarantor Subsidiaries” and, together with Parent, the “Guarantors”). All guarantees by Parent and the Guarantor Subsidiaries are joint and several, and full and unconditional; provided that guarantees by the Guarantor Subsidiaries are subject to certain customary release provisions contained in the indentures governing the Notes.
The Notes and the related guarantees are the Issuers’ and the Guarantors’ senior unsecured obligations and are:
•structurally subordinated to all existing and future indebtedness and other liabilities of our non-guarantor subsidiaries; and
•rank equal in right of payment with all of the Issuers’ and the Guarantors’ existing and future unsecured senior debt.
The following tables set forth Balance Sheet information as of September 30, 2025 and December 31, 2024, and Statement of Operations information for the nine months ended September 30, 2025 and for the year ended December 31, 2024. The financial information includes the accounts of the Issuers and the accounts of the Guarantors (the “Obligor Group”). The financial information of the Obligor Group is presented on a combined basis and the intercompany balances and transactions between the Obligor Group have been eliminated.
Balance Sheet Information
| (dollars in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Current assets | $ | 6,628.3 | $ | 6,395.9 | |||||||
| Goodwill | 4,278.0 | 4,158.3 | |||||||||
| Other assets | 2,644.9 | 2,502.1 | |||||||||
| Total Non-current assets | $ | 6,922.9 | $ | 6,660.4 | |||||||
| Current liabilities | $ | 5,034.7 | $ | 4,990.6 | |||||||
| Long-term debt | 5,619.6 | 5,606.8 | |||||||||
| Other liabilities | 1,372.3 | 1,166.1 | |||||||||
| Total Long-term liabilities | $ | 6,991.9 | $ | 6,772.9 | |||||||
Statement of Operations Information
| (dollars in millions) | Nine Months Ended September 30, 2025 | Year Ended December 31, 2024 | |||||||||
| Net sales | $ | 14,864.0 | $ | 18,494.0 | |||||||
| Gross profit | 3,220.1 | 4,116.9 | |||||||||
| Operating income | 1,127.7 | 1,560.5 | |||||||||
| Net income | 716.9 | 1,014.1 | |||||||||
Commitments and Contingencies
The information set forth in Note 10 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements is incorporated herein by reference.
Critical Accounting Policies and Estimates
Our critical accounting policies have not changed from those reported in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.
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Recent Accounting Pronouncements
The information set forth in Note 2 (Recent Accounting Pronouncements) to the accompanying Consolidated Financial Statements is incorporated herein by reference.
Forward-Looking Statements
This report contains “forward-looking statements” within the meaning of the federal securities laws. All statements other than statements of historical fact are forward-looking statements. These statements relate to analyses and other information, which are based on forecasts of future results or events and estimates of amounts not yet determinable. These statements also relate to our future prospects, growth, developments and business strategies. We claim the protection of The Private Securities Litigation Reform Act of 1995 for all forward-looking statements in this report.
These forward-looking statements are identified by the use of terms and phrases such as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “goal,” “intend,” “plan,” “potential,” “predict,” “project,” “target” and similar terms and phrases or future or conditional verbs such as “could,” “may,” “should,” “will,” and “would.” However, these words are not the exclusive means of identifying such statements. Although we believe that our plans, intentions and other expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations. All forward-looking statements are subject to risks and uncertainties that may cause actual results or events to differ materially from those that we expected.
Important factors that could cause actual results or events to differ materially from our expectations, or cautionary statements, are disclosed under the section entitled “Trends and Key Factors Affecting our Financial Performance” above, the section entitled “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2024 and from time to time in our subsequent Quarterly Reports on Form 10-Q and our other US Securities and Exchange Commission (“SEC”) filings and public communications. These factors include, among others:
•inflationary pressures and the level of interest rates;
•relationships with our vendor partners and wholesale distributors and the terms of their agreements;
•continued innovations in technology by our vendor partners;
•the use or capabilities of artificial intelligence;
•substantial competition that could reduce our market share;
•the continuing development, maintenance and operation of our information technology systems;
•potential breaches of data security and failure to protect our information technology systems from cybersecurity threats;
•potential failures to provide high-quality services to our customers;
•potential losses of any key personnel, significant increases in labor costs or ineffective workforce management;
•potential service failures or disruptions related to outsourcing arrangements with certain business processes;
•potential adverse occurrences at one of our primary facilities or third-party data centers, including as a result of climate change;
•increases in the cost of commercial delivery services or disruptions of those services;
•exposure to accounts receivable and inventory risks;
•the costs and risks associated with, and the successful and timely execution and effects of, acquisitions or entry into joint ventures;
•fluctuations in our operating results;
•fluctuations in foreign currency;
•global and regional economic and political conditions, including the impact of pandemics and armed conflicts;
•decreases, delays or changes in spending on technology products and services, including impacts of adverse changes in government spending and funding policies, federal procurement policies and US government shutdowns;
•potential interruptions of the flow of products from suppliers including uncertainty over global trade policies and the financial impact of related tariffs;
•potential failures to comply with Public segment contracts or applicable laws and regulations;
•current and future legal proceedings, investigations and audits, including intellectual property infringement claims;
36
•changes in laws, including regulations or interpretations thereof, and including evolving laws and regulations and regulatory overhaul during any changes in federal administration, or the potential failure to meet stakeholder expectations on environmental sustainability and corporate responsibility matters;
•our level of indebtedness;
•restrictions imposed by agreements relating to our indebtedness on operations and liquidity;
•failure to maintain the ratings assigned to our debt securities by rating agencies;
•changes in, or the discontinuation of, our share repurchase program or dividend payments; and
•other risk factors or uncertainties identified from time to time in our filings with the SEC.
All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by those cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties.
We caution you that the important factors referenced above may not reflect all of the factors that could cause actual results or events to differ from our expectations. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this report are made only as of the date hereof or, with respect to any documents incorporated by reference, available at the time such document was prepared or filed with the SEC. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
See “Quantitative and Qualitative Disclosures of Market Risks” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. As of September 30, 2025, there have been no material changes in this information.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, has concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, and that information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely discussions regarding required disclosure.
Changes in Internal Control over Financial Reporting
During the three months ended September 30, 2025, the Company implemented a new enterprise resource planning (“ERP”) system. As a result of this implementation, the Company made certain changes to its internal controls over financial reporting related to the associated processes. The Company will continue to monitor further changes, if any, during subsequent periods to evaluate the effectiveness of internal controls over financial reporting.
Except for the ERP implementation and associated processes, there have not been any other changes in the Company’s internal control over financial reporting during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings
The information set forth in Note 10 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements included in “Part I, Item 1. Financial Statements” of this report is incorporated herein by reference.
Item 1A. Risk Factors
See “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.
Issuer Purchases of Equity Securities
Information relating to the Company’s purchases of its common stock during the three months ended September 30, 2025 is as follows:
| Period | Total Number of Shares Purchased (in millions) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (in millions) | Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(1) (in millions) | ||||||||||||||||||||||
| July 1 through July 31, 2025 | 0.1 | $ | 179.91 | 0.1 | $ | 966.4 | ||||||||||||||||||||
| August 1 through August 31, 2025 | 0.3 | 165.75 | 0.3 | 924.5 | ||||||||||||||||||||||
| September 1 through September 30, 2025 | 0.5 | 165.02 | 0.5 | 837.6 | ||||||||||||||||||||||
| Total | 0.9 | 0.9 | ||||||||||||||||||||||||
(1)The amounts presented in this column are the remaining total authorized value to be spent after each month’s repurchases.
On February 5, 2025, we announced that our Board of Directors authorized a $750 million increase to our share repurchase program (which was incremental to the remaining amount under the $750 million authorization announced on February 7, 2024) under which we may repurchase shares of our common stock from time to time in privately negotiated transactions, open market purchases or other transactions as permitted by securities laws and other legal requirements. The timing and amounts of any purchases will be based on market conditions and other factors including but not limited to share price, regulatory requirements and capital availability. The program does not require the purchase of any minimum dollar amount or number of shares, and the program may be modified, suspended or discontinued at any time.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
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Item 6. Exhibits
| Exhibit | Description | |||||||
| 31.1* | ||||||||
| 31.2* | ||||||||
| 32.1** | ||||||||
| 32.2** | ||||||||
| 101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
________________
* Filed herewith
** These items are furnished and not filed.
39
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CDW CORPORATION | |||||||||||||||||
| Date: | November 4, 2025 | By: | /s/ Albert J. Miralles | ||||||||||||||
| Albert J. Miralles | |||||||||||||||||
| Chief Financial Officer and Executive Vice President, Enterprise Business Operations | |||||||||||||||||
| (Duly authorized officer and principal financial officer) | |||||||||||||||||
40
Exhibit 31.1
CERTIFICATION PURSUANT TO RULE 13a-14(a) or 15d-14(a) UNDER
THE SECURITIES EXCHANGE ACT OF 1934
I, Christine A. Leahy, certify that:
1.I have reviewed this quarterly report on Form 10-Q of CDW Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| /s/ Christine A. Leahy | ||
| Christine A. Leahy | ||
| Chair, President and Chief Executive Officer | ||
| CDW Corporation | ||
| November 4, 2025 | ||
Exhibit 31.2
CERTIFICATION PURSUANT TO RULE 13a-14(a) or 15d-14(a) UNDER
THE SECURITIES EXCHANGE ACT OF 1934
I, Albert J. Miralles, certify that:
1.I have reviewed this quarterly report on Form 10-Q of CDW Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| /s/ Albert J. Miralles | ||
| Albert J. Miralles | ||
| Chief Financial Officer and Executive Vice President, Enterprise Business Operations | ||
| CDW Corporation | ||
| November 4, 2025 | ||
Exhibit 32.1
CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63
OF TITLE 18 OF THE UNITED STATES CODE
I, Christine A. Leahy, the chief executive officer of CDW Corporation ("CDW"), certify that (i) the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025 (the "10-Q") of CDW fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the 10-Q fairly presents, in all material respects, the financial condition and results of operations of CDW.
| /s/ Christine A. Leahy | ||
| Christine A. Leahy | ||
| Chair, President and Chief Executive Officer | ||
| CDW Corporation | ||
| November 4, 2025 | ||
Exhibit 32.2
CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63
OF TITLE 18 OF THE UNITED STATES CODE
I, Albert J. Miralles, the chief financial officer of CDW Corporation ("CDW"), certify that (i) the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025 (the "10-Q") of CDW fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the 10-Q fairly presents, in all material respects, the financial condition and results of operations of CDW.
| /s/ Albert J. Miralles | ||
| Albert J. Miralles | ||
| Chief Financial Officer and Executive Vice President, Enterprise Business Operations | ||
| CDW Corporation | ||
| November 4, 2025 | ||