Monitor the conference call for management's outlook on margin trajectory and working capital normalization. The sustained margin compression and sharp cash flow decline warrant caution despite the revenue beat; any guidance downgrade on margins could weigh on the stock.
Price Chart
Executive Summary
CDW reported Q2 2026 revenue of $6.57B (up 10.0% YoY, beating $6.21B consensus) and non-GAAP EPS of $2.91 (beating $2.80 consensus by 3.9%), driven by demand for infrastructure hardware and AI-enabled solutions. However, gross margin compressed 70bps to 20.1% and H1 operating cash flow fell 50% to $219.7M due to working capital build, presenting a mixed signal that tempers the top-line beat.
Key Financial Metrics
Key Facts
- Net sales Q2 2026: $6,572.2M vs $5,976.6M YoY (+10.0%)
- GAAP diluted EPS: $2.15 vs $2.05 YoY (+5.1%)
- Non-GAAP diluted EPS: $2.91 vs $2.60 YoY (+11.9%), beat consensus of $2.80 by 3.9%
- Gross profit margin declined to 20.1% from 20.8% YoY, driven by hardware mix shift and lower margins in certain categories
- Operating income margin fell to 6.5% from 7.0% YoY
- H1 2026 net cash from operations: $219.7M vs $443.1M YoY (-50%), dragged by accounts receivable and inventory growth
- Net debt rose to $5.46B from $5.01B at year-end 2025; revolver availability fell to $1.68B from $1.93B
- Quarterly dividend maintained at $0.630 per share (payable September 10, 2026)
- $1.14B remaining under share repurchase authorization as of June 30, 2026
- Workplace optimization charges of $44.2M in Q2 2026 (included in non-GAAP adjustments)
Financial Impact
Revenue beat by ~$362M (+5.8% vs consensus), EPS beat by $0.11 (+3.9% vs consensus). No material litigation or regulatory exposure noted.
Risk Factors
- Further gross margin compression from hardware mix shift and competitive pricing
- Working capital drag on free cash flow if receivable and inventory build persist
- Rising net debt and lower revolver availability reduce financial flexibility
- Government spending uncertainty and potential US budget disruptions
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001402057-26-000062 |
| Document: cdw-20260805.htm | 0001402057-26-000062 |
| Document: cdw-2026630dividendrelease.htm | 0001402057-26-000062 |
| Document: 0001402057-26-000062-index-headers.html | 0001402057-26-000062 |
| Document: 0001402057-26-000062-index.html | 0001402057-26-000062 |
| Document: 0001402057-26-000062.txt | 0001402057-26-000062 |
| 8-K Data (Synthetic) | 0001402057-26-000062 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 26, 2026 5w ago | Institutional Cluster | $148.97 $139.46 | ▼ −6.38% | ▼ −5.88% | $133.29 (−10.53%) |
Aug 5, 2026 8w ago | 8-K | $139.52 $148.67 | ▲ +6.56% | ▲ +7.16% | $133.29 (−4.46%) |
Aug 5, 2026 8w ago | 8-K | $139.52 $148.67 | ▲ +6.56% | ▲ +7.16% | $133.29 (−4.46%) |
May 13, 2026 20w ago | 8-K | $100.11 $129.13 | ▲ +28.99% | ▲ +29.60% | $133.29 (+33.14%) |
May 6, 2026 21w ago | 8-K | $108.43 $137.30 | ▲ +26.63% | ▲ +23.85% | $133.29 (+22.93%) |
May 1, 2026 22w ago | 8-K | $135.25 $140.98 | ▲ +4.24% | ▼ −1.41% | $133.29 (−1.45%) |
US Market Status
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