CDW delivered solid top-line growth driven by infrastructure hardware demand, but margin compression (gross -60bps, operating -40bps) signals cost headwinds from compensation and AI investments. The stock may trade range-bound as the market weighs revenue momentum against margin erosion. Watch for commentary on the earnings call regarding FY2026 margin trajectory and IT spending outlook.
Price Chart
Executive Summary
CDW reported Q1 2026 results with net sales of $5.68B (+9.2% YoY) and GAAP EPS of $1.82 (+7.9% YoY), while non-GAAP EPS was $2.28 (+6.3% YoY). The company maintained its quarterly dividend at $0.630/share. Revenue growth was broad-based across segments, but gross margin contracted 60bps to 21.0% and operating margin declined 40bps to 6.6%, signaling ongoing cost pressures and mix shift.
Key Financial Metrics
Key Facts
- Q1 2026 net sales $5,679.8M, up 9.2% YoY from $5,199.1M
- GAAP diluted EPS $1.82 vs $1.69 YoY, up 7.9%
- Non-GAAP diluted EPS $2.28 vs $2.15 YoY, up 6.3%
- Gross profit margin declined to 21.0% from 21.6% YoY
- Operating income margin declined to 6.6% from 7.0% YoY
- Non-GAAP operating margin declined to 8.0% from 8.5% YoY
- Quarterly cash dividend maintained at $0.630 per share
- Commercial segment net sales +9.6%, Government +4.6%, Education +2.5%, Other +17.9%
- Net cash from operations $274.8M vs $287.2M YoY
- Share count declined to 129.5M diluted from 133.5M YoY due to buybacks
Financial Impact
Revenue beat consensus by ~3.5% ($5.68B vs $5.49B est), but GAAP EPS of $1.82 is below the Street non-GAAP consensus of $2.15. Margin compression is the key negative offset to top-line strength.
Risk Factors
- Gross margin compression from lower netted-down revenue contribution
- Selling & administrative expenses growing faster than revenue (7.0% vs 9.2%)
- Elevated accounts receivable DSO of 96 days vs 86 a year ago
- Inventory build of $820.6M vs $563.4M at year-end 2025
- No formal FY2026 guidance provided beyond targeting 200-300bps above US IT market growth
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001402057-26-000023 |
| Document: cdw-20260506.htm | 0001402057-26-000023 |
| Document: cdw-2026331dividendrelease.htm | 0001402057-26-000023 |
| Document: 0001402057-26-000023-index-headers.html | 0001402057-26-000023 |
| Document: 0001402057-26-000023-index.html | 0001402057-26-000023 |
| Document: 0001402057-26-000023.txt | 0001402057-26-000023 |
| 8-K Data (Synthetic) | 0001402057-26-000023 |
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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