In This Article:
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Net Sales: $5.2 billion, up 8% year-over-year on an average daily sales basis.
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Gross Profit: $1.1 billion, up 7% year-over-year on an average daily basis.
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Non-GAAP Operating Income: $444 million, up 10% year-over-year.
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Non-GAAP Net Income Per Share: $2.15, up 12% year-over-year.
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Gross Margin: 21.6%, down 20 basis points year-over-year.
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Non-GAAP SG&A: $678 million, up 2.8% year-over-year.
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Non-GAAP Operating Income Margin: 8.5%, up from 8.3% in the prior year.
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Non-GAAP Net Income: $287 million, up 9.9% year-over-year.
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Adjusted Free Cash Flow: $249 million, representing 87% of non-GAAP net income.
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Net Debt: Approximately $5.2 billion.
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Liquidity: Cash plus revolver availability of approximately $1.7 billion.
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Cash Conversion Cycle: 15 days, down one day from the prior year.
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Share Repurchases and Dividends: $200 million in share repurchases and $83 million in dividends.
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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CDW Corp (NASDAQ:CDW) reported a strong start to 2025 with net sales of $5.2 billion, an 8% increase from the previous year.
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Gross profit increased by 7% to $1.1 billion, and non-GAAP operating income rose by 10% to $444 million.
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The company experienced robust growth in the healthcare sector, with net sales up 20%, driven by client devices, cloud, and services.
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CDW Corp (NASDAQ:CDW) maintained a balanced performance across hardware, software, and services, each increasing by high-single-digits or better.
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The company successfully managed expenses, achieving a non-GAAP SG&A efficiency ratio of 60.4%, down 170 basis points from the previous year.
Negative Points
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Tariff uncertainty has slowed down major infrastructure investments, impacting the growth of certain product categories like NetComm and storage.
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Federal government market growth was subdued due to new policy priorities, affecting IT planning and budgets.
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The company anticipates a more muted environment in the education and federal sectors due to pull-forward demand and government efficiency initiatives.
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CDW Corp (NASDAQ:CDW) expects potential economic uncertainty and caution to impact growth, with no assumptions of recessionary conditions factored into their outlook.
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Gross margins were slightly compressed due to a mix shift towards client devices, which comprised a higher percentage of net sales compared to the previous year.
Q & A Highlights
Q: Can you provide insights into the weaker performance in Netcomm and storage markets? Are these areas experiencing a pause in spending due to tariff uncertainties? A: Christine Leahy, CEO: The weaker performance in networking reflects a shift to software-defined architectures and a pause in larger infrastructure deals due to cautiousness. This is not a long-term concern but rather a timing issue. We are engaged in design discussions, indicating future growth in these categories.