The strong revenue acceleration to 23.3% YoY from 12.9% in the first nine months suggests the AI-driven IT refresh cycle is gaining momentum. Monitor the Q4 earnings call for guidance on whether the gross margin compression stabilizes and for any updates on the share repurchase program, which had $81.2M remaining as of the prior filing.
Price Chart
Executive Summary
PC Connection reported Q3 2026 results with net sales of $874.3M (+23.3% YoY) and diluted EPS of $1.24 (+27.8% YoY), both well above consensus estimates of $773.7M and $1.04. Revenue growth was broad-based across all three segments, led by Enterprise (+27.4%) and Business Solutions (+27.8%). Gross margin contracted 110 bps to 18.5% due to mix shift, but operating margin expanded to 4.7% from 4.3% on SG&A leverage. The company also declared a $0.20 quarterly dividend.
Key Financial Metrics
Key Facts
- Net sales of $874.3M, up 23.3% YoY, above the $773.7M consensus
- Diluted EPS of $1.24, up 27.8% YoY, above the $1.04 consensus
- Gross margin declined 110 bps to 18.5% from 19.6%
- Operating margin improved to 4.7% from 4.3%
- Enterprise Solutions net sales up 27.4% to $407.5M
- Business Solutions net sales up 27.8% to $328.2M
- Public Sector Solutions net sales up 4.6% to $138.6M
- Servers/storage sales up 45% YoY; networking sales up 43% YoY
- LTM Adjusted EBITDA of $155.2M, up 26% YoY
- Quarterly dividend of $0.20 per share declared
Financial Impact
Net sales beat consensus by $100.6M (13.0%); EPS beat consensus by $0.20 (19.2%)
Segment Breakdown
| Segment | Revenue | Growth |
|---|---|---|
| Enterprise Solutions | $407.5M | +27.4% |
| Business Solutions | $328.2M | +27.8% |
| Public Sector Solutions | $138.6M | +4.6% |
Risk Factors
- Gross margin contracted 110 bps YoY, driven by mix shift toward lower-margin Enterprise Solutions
- Cash and short-term investments declined to $343.3M from $406.7M at year-end 2025
- Operating cash flow was negative $39.8M for the first nine months of 2026 vs positive $38.0M a year ago, driven by working capital build
- Inventory turns slowed to 14 from 18 a year ago
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001104659-26-119620 |
| Document: cnxn-20261028x8k.htm | 0001104659-26-119620 |
| Document: 0001104659-26-119620-index-headers.html | 0001104659-26-119620 |
| Document: 0001104659-26-119620-index.html | 0001104659-26-119620 |
| Document: 0001104659-26-119620.txt | 0001104659-26-119620 |
| 8-K Data (Synthetic) | 0001104659-26-119620 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 28, 2026 1d ago | 8-K | $86.50 | awaiting T+20 | awaiting T+20 | $85.62 (−1.02%) |
Oct 16, 2026 13d ago | 3 | $86.60 | awaiting T+20 | awaiting T+20 | $85.62 (−1.13%) |
Oct 14, 2026 15d ago | 8-K | $91.68 | awaiting T+20 | awaiting T+20 | $85.62 (−6.61%) |
Aug 6, 2026 11w ago | Insider Cluster | $84.14 $84.35 | ▲ +0.25% | ▲ +0.65% | $85.62 (+1.76%) |
Aug 5, 2026 12w ago | Insider Cluster | $86.39 $83.53 | ▲ +3.31% | ▲ +3.91% | $85.62 (+0.89%) |
Aug 3, 2026 12w ago | Insider Cluster | $86.58 $80.07 | ▼ −7.52% | ▼ −6.28% | $85.62 (−1.11%) |
US Market Status
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