CDW Sales Up, Net Income Dips Amid Higher Expenses

TL;DR

**CDW's revenue growth is solid, but rising costs are eating into profits; watch those margins closely.**

AI Summary

CDW Corp reported a mixed financial performance for the nine months ended September 30, 2025. Net sales increased by 6.96% to $16,913.1 million from $15,812.7 million in the prior year period, driven by strong demand for IT solutions. However, net income decreased by 3.26% to $787.1 million from $813.6 million, primarily due to higher selling and administrative expenses, which rose to $2,394.1 million from $2,204.4 million, and increased interest expense, net, of $168.9 million compared to $158.0 million. Operating income also saw a slight decline to $1,224.9 million from $1,242.7 million. The company's cash and cash equivalents decreased to $452.9 million from $503.5 million at December 31, 2024. CDW completed the acquisition of Mission Cloud Services, Inc. for $330 million on November 27, 2024, expanding its cloud capabilities. Share repurchases totaled $500.0 million for the nine months ended September 30, 2025, compared to $354.0 million in the same period last year, indicating continued capital return to shareholders despite the dip in net income.

Why It Matters

CDW's increased sales demonstrate resilience in the IT solutions market, which is crucial for investors looking for growth in a competitive landscape. However, the decline in net income and operating income, coupled with rising selling and administrative expenses, could signal margin pressures or increased investment in growth initiatives. For employees, continued sales growth suggests job stability, while customers benefit from CDW's expanded offerings, particularly with the Mission Cloud Services acquisition. The broader market will watch how CDW balances growth with profitability, especially as it competes with other IT service providers in a dynamic technology environment.

Risk Assessment

Risk Level: medium — The company's net income decreased by 3.26% to $787.1 million for the nine months ended September 30, 2025, despite a 6.96% increase in net sales. This is largely due to a significant rise in selling and administrative expenses to $2,394.1 million from $2,204.4 million, and increased interest expense to $168.9 million. Additionally, accounts receivable, net, increased to $5,785.1 million from $5,135.8 million, and the provision for credit losses rose to $26.5 million from $17.1 million, indicating potential working capital and credit quality risks.

Analyst Insight

Investors should monitor CDW's upcoming earnings calls for management's commentary on expense control and margin improvement strategies. Consider holding existing positions, but new investments might warrant caution until there's clearer evidence of net income stabilization or growth, especially given the increased provision for credit losses.

Financial Highlights

debt To Equity

2.79

revenue

$16.91B

operating Margin

7.24%

total Assets

$15.19B

total Debt

$5.63B

net Income

$787.1M

eps

$5.94

gross Margin

21.39%

cash Position

$452.9M

revenue Growth

+6.96%

Key Numbers

• $16.91B — Net Sales (Increased by 6.96% for the nine months ended September 30, 2025, from $15.81B in 2024.)
• $787.1M — Net Income (Decreased by 3.26% for the nine months ended September 30, 2025, from $813.6M in 2024.)
• $2.21 — Diluted EPS (Q3 2025) (Decreased from $2.34 in Q3 2024.)
• $2.39B — Selling and Administrative Expenses (Increased from $2.20B for the nine months ended September 30, 2024.)
• $500.0M — Common Stock Repurchases (Increased from $354.0M in the prior nine-month period, indicating capital return.)
• $330M — Mission Cloud Services Acquisition (Base purchase price for the acquisition completed on November 27, 2024.)
• $5.78B — Accounts Receivable, Net (Increased from $5.14B at December 31, 2024, potentially impacting cash flow.)
• $26.5M — Provision for Credit Losses (Increased from $17.1M in the prior nine-month period, signaling higher credit risk.)
• $452.9M — Cash and Cash Equivalents (Decreased from $503.5M at December 31, 2024.)
• $5.62B — Long-term Debt (Slightly increased from $5.61B at December 31, 2024.)

Key Players & Entities

• CDW Corp (company) — Registrant and leading multi-brand IT solutions provider
• Mission Cloud Services, Inc. (company) — Acquired by CDW for $330 million
• SEC (regulator) — US Securities and Exchange Commission
• FASB (regulator) — Financial Accounting Standards Board
• $16,913.1 million (dollar_amount) — Net sales for the nine months ended September 30, 2025
• $787.1 million (dollar_amount) — Net income for the nine months ended September 30, 2025
• $2,394.1 million (dollar_amount) — Selling and administrative expenses for the nine months ended September 30, 2025
• $500.0 million (dollar_amount) — Repurchases of common stock for the nine months ended September 30, 2025
• $330 million (dollar_amount) — Purchase price for Mission Cloud Services, Inc.
• $5,785.1 million (dollar_amount) — Accounts receivable, net, as of September 30, 2025

FAQ

Risk Factors

• Increased Provision for Credit Losses [medium — financial]: The provision for credit losses increased to $26.5 million for the nine months ended September 30, 2025, from $17.1 million in the prior year period. This signals a potential increase in the risk of uncollectible accounts receivable.
• Deterioration in Cash Position [medium — financial]: Cash and cash equivalents decreased to $452.9 million as of September 30, 2025, from $503.5 million at December 31, 2024. This reduction in liquidity could impact the company's ability to meet short-term obligations or fund operations.
• Rising Selling and Administrative Expenses [medium — operational]: Selling and administrative expenses increased to $2,394.1 million for the nine months ended September 30, 2025, from $2,204.4 million in the prior year period. This rise, outpacing net sales growth, negatively impacts operating income.
• Intensifying Competition in IT Solutions [medium — market]: CDW operates in a highly competitive IT solutions market, facing pressure from various providers. While demand for IT solutions is strong, increased competition can impact pricing and market share.
• Increased Accounts Receivable [medium — financial]: Accounts receivable, net, increased to $5,785.1 million as of September 30, 2025, from $5,135.8 million at December 31, 2024. While this aligns with increased sales, a significant portion is unbilled ($1,077.3M current, $1,162.5M non-current), potentially delaying cash conversion.
• Impact of Acquisitions on Financials [low — financial]: The acquisition of Mission Cloud Services for $330 million on November 27, 2024, while expanding cloud capabilities, adds integration complexities and potential financial strain if not managed effectively. Purchase price allocation is preliminary.

Industry Context

CDW operates as a leading multi-brand provider of IT solutions, serving diverse sectors including business, government, education, and healthcare. The company offers a broad spectrum of products and services, encompassing hardware, software, and integrated solutions like cloud capabilities, digital experience, and security. The IT solutions market is characterized by rapid technological advancements, evolving customer needs, and intense competition from both large vendors and specialized service providers.

Regulatory Implications

As a publicly traded company, CDW is subject to SEC regulations and US GAAP. Changes in accounting standards, such as those related to revenue recognition (ASC 606) or expense disaggregation, require careful monitoring and implementation. Furthermore, data privacy regulations in the US, UK, and Canada could impact operations and require compliance investments.

What Investors Should Do

1. Monitor expense management
2. Analyze cash flow trends
3. Evaluate acquisition integration
4. Assess credit risk exposure

Key Dates

• 2025-11-27: Acquisition of Mission Cloud Services, Inc. completed — Expanded CDW's cloud capabilities, a strategic move to enhance its service offerings in a growing market segment.
• 2025-09-30: Nine months ended September 30, 2025 financial results reported — Provided insight into the company's performance, showing revenue growth but a decline in net income, highlighting increased expenses.
• 2024-12-31: Year-end financial position as of December 31, 2024 — Established the baseline for comparison for the current reporting period, showing cash and equivalents of $503.5 million and total debt of $5.61 billion.

Glossary

Operating lease right-of-use assets

Assets recognized by a lessee under a lease contract, representing the right to use an underlying asset for the lease term. (These assets, totaling $102.9 million as of September 30, 2025, reflect CDW's obligations for leased properties and equipment.)

Goodwill

An intangible asset that arises when one company acquires another for a price greater than the fair market value of its net assets. (CDW's goodwill of $4,642.1 million as of September 30, 2025, primarily from past acquisitions, indicates significant premium paid for acquired businesses.)

Other intangible assets, net

Intangible assets other than goodwill, such as patents, trademarks, and customer lists, net of accumulated amortization. (These assets, valued at $1,225.7 million as of September 30, 2025, represent valuable non-physical assets of the company.)

Contract liabilities

Obligations to transfer goods or services to a customer for which the company has received consideration from the customer. (CDW has $508.1 million in contract liabilities as of September 30, 2025, representing future revenue from services or products already paid for.)

Accumulated deficit

The cumulative net losses of a company since its inception that have not been offset by net income. (CDW has an accumulated deficit of ($1,311.0 million) as of September 30, 2025, which is a reduction in retained earnings, though common stock and paid-in capital are substantial.)

Provision for Credit Losses

An estimate of the amount of accounts receivable that a company expects to be uncollectible. (The increase to $26.5 million for the nine months ended September 30, 2025, from $17.1 million, indicates a higher perceived risk of customer defaults.)

Year-Over-Year Comparison

Compared to the prior year period, CDW Corp has demonstrated robust revenue growth of 6.96%, reaching $16.91 billion for the nine months ended September 30, 2025. However, this top-line expansion has been overshadowed by a 3.26% decrease in net income to $787.1 million, driven by higher selling and administrative expenses and increased interest costs. While cash reserves have slightly declined, the company has significantly increased its share repurchase program, returning more capital to shareholders despite the dip in profitability. New risks related to increased credit loss provisions and the integration of recent acquisitions are also emerging.

Key Financial Figures

• $0.01 — ich registered Common stock, par value $0.01 per share CDW Nasdaq Global Select Mark

Filing Documents

• cdw-20250930.htm (10-Q) — 1873KB
• cdw-2025930x10qxex311.htm (EX-31.1) — 10KB
• cdw-2025930x10qxex312.htm (EX-31.2) — 10KB
• cdw-2025930x10qxex321.htm (EX-32.1) — 3KB
• cdw-2025930x10qxex322.htm (EX-32.2) — 3KB
• cdw-20250930_g1.jpg (GRAPHIC) — 673KB
• 0001402057-25-000193.txt ( ) — 9060KB
• cdw-20250930.xsd (EX-101.SCH) — 35KB
• cdw-20250930_cal.xml (EX-101.CAL) — 57KB
• cdw-20250930_def.xml (EX-101.DEF) — 108KB
• cdw-20250930_lab.xml (EX-101.LAB) — 451KB
• cdw-20250930_pre.xml (EX-101.PRE) — 288KB
• cdw-20250930_htm.xml (XML) — 1563KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements: Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 3 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 4 Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025 and 2024 5 Consolidated Statements of Cash Flows for the Nine Months Ended Sept ember 30, 2025 and 2024 6 Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9

Management ' s Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management ' s Discussion and Analysis of Financial Condition and Results of Operations 22

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 37

Controls and Procedures

Item 4. Controls and Procedures 37

OTHER INFORMATION

PART II OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 38

Risk Factors

Item 1A. Risk Factors 38

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 38

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 38

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 38

Other Information

Item 5. Other Information 38

Exhibits

Item 6. Exhibits 39 SIGNATURES 40 Table of Contents

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

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 $ 452.9 $ 503.5 Short-term investments — 214.2 Accounts receivable, net of allowance for credit losses of $ 57.8 and $ 43.3 , respectively 5,785.1 5,135.8 Merchandise inventory 504.7 605.3 Miscellaneous receivables 613.3 509.9 Prepaid expenses and other 421.4 404.4 Total current assets 7,777.4 7,373.1 Operating lease right-of-use assets 102.9 120.2 Property and equipment, net 177.1 192.0 Goodwill 4,642.1 4,620.4 Other intangible assets, net 1,225.7 1,356.6 Accounts receivable and other assets, noncurrent 1,272.4 1,016.1 Total Assets $ 15,197.6 $ 14,678.4 Liabilities and Stockholders' Equity Current liabilities: Accounts payable-trade $ 3,678.8 $ 3,381.3 Accounts payable-inventory financing 331.0 355.2 Current maturities of long-term debt 9.1 235.8 Contract liabilities 477.0 491.0 Accrued expenses and other current liabilities: Compensation 282.6 275.8 Advertising 192.7 137.7 Sales and income taxes 116.4 61.6 Other 506.2 536.0 Total current liabilities 5,593.8 5,474.4 Long-term liabilities: Debt 5,619.7 5,607.0 Deferred income taxes 165.3 167.4 Operating lease liabilities 128.8 149.1 Accounts payable and other liabilities 1,150.3 927.8 Total long-term liabilities 7,064.1 6,851.3 Commitments and contingencies (Note 10) Stockholders' equity: Preferred stock, $ 0.01 par value, 100.0 shares authorized; no shares issued or outstanding for both periods — — Common stock, $ 0.01 par value, 1,000.0 shares authorized; 130.3 and 132.6 shares outstanding, respectively 1.3 1.3 Paid-in capital 3,955.9 3,834.4 Accumulated deficit ( 1,311.0 ) ( 1,322.9 ) Accumulated other comprehensive loss ( 106.5 ) ( 160.1 ) Total stockholders' equity 2,539.7 2,352.7 Total Liabilities and Stockholders' E

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 Statem ents 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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) $ 108.7 $ 97.1 Contract liabilities (2)(3) $ 508.1 $ 522.3 (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 $ 138.8 $ 81.5 $ 30.8 $ 11.4 5. Inventory Financing Agreements The Company has entered into agreements with financial institutions to facilitate the purchase of inventory from designated suppliers under ce

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 634.5 634.5 Unsecured Senior Notes Senior notes due 2025 May 2025 4.125 % — 211.1 Senior notes due 2026 December 2026 2.670 % 1,000.0 1,000.0 Senior notes due 2028 April 2028 4.250 % 600.0 600.0 Senior notes due 2028 December 2028 3.276 % 500.0 500.0 Senior notes due 2029 February 2029 3.250 % 700.0 700.0 Senior notes due 2030 March 2030 5.100 % 600.0 600.0 Senior notes due 2031 December 2031 3.569 % 1,000.0 1,000.0 Senior notes due 2034 August 2034 5.550 % 600.0 600.0 Total unsecured senior notes 5,000.0 5,211.1 Receivable financing liability 15.4 21.2 Other long-term obligations 5.9 8.8 Unamortized debt issuance costs and discount ( 27.0 ) ( 32.8 ) Current maturities of long-term debt ( 9.1 ) ( 235.8 ) Total long-term debt $ 5,619.7 $ 5,607.0 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

View Full Filing

View this 10-Q filing on SEC EDGAR