CDW

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the it distribution & solutions stocks, including CDW (NASDAQ:CDW) and its peers. IT Distribution & Solutions will be buoyed by the increasing complexity of IT ecosystems, rising cloud adoption, and demand for cybersecurity solutions. Enterprises are less likely than ever to embark on these complicated journeys solo, and companies in the sector boast expertise and scale in these areas. However, cloud migration also means less need for hardware, which could dent demand for large portions of the product portfolio and hurt margins. Additionally, planning for potentially supply chain disruptions is ongoing, as the COVID-19 pandemic showed how damaging a pause in global trade could be in areas like semiconductor procurement. The 8 it distribution & solutions stocks we track reported a stunning Q2. As a group, revenues beat analysts’ consensus estimates by 9.9% while next quarter’s revenue guidance was 10.4% above. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.1% since the latest earnings results. Serving as a crucial bridge between technology manufacturers and end users since 1984, CDW (NASDAQ:CDW) is a multi-brand provider of information technology solutions that helps businesses and public sector organizations select, implement, and manage hardware, software, and IT services. CDW reported revenues of $6.57 billion, up 10% year on year. This print exceeded analysts’ expectations by 5.2%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 10.8% since reporting and currently trades at $137.30. Is now the time to buy CDW? Access our full analysis of the earnings results here, it’s free. Starting as a small computer products seller in 1982 and evolving into a Fortune 1000 company, Connection (NASDAQ:CNXN) is a technology solutions provider that helps businesses and government agencies design, purchase, implement, and manage their IT infrastructure and systems. Connection reported revenues of $854 million, up 12.4% year on year, outperforming analysts’ expectations by 11.3%. The business had an incredible quarter with a beat of analysts’ EPS estimates. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 6% since reporting. It currently trades at $77.96. Is now the time to buy Connection? Access our full analysis of the earnings results here, it’s free. Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ:PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes. ePlus reported revenues of $649.1 million, flat year on year, exceeding analysts’ expectations by 1.4%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a beat of analysts’ EPS estimates. ePlus delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 10.5% since the results and currently trades at $86.88. Read our full analysis of ePlus’s results here. Serving as the crucial middleman in the technology supply chain, TD SYNNEX (NYSE:SNX) is a global technology distributor that connects thousands of IT manufacturers with resellers, helping businesses access hardware, software, and technology solutions. TD SYNNEX reported revenues of $19.57 billion, up 31% year on year. This print topped analysts’ expectations by 16.6%. Overall, it was an incredible quarter as it also recorded a beat of analysts’ EPS estimates and an impressive beat of analysts’ EPS guidance for next quarter estimates. The stock is down 10.5% since reporting and currently trades at $247.96. Read our full, actionable report on TD SYNNEX here, it’s free. Operating as a crucial link in the technology supply chain since 1992, ScanSource (NASDAQ:SCSC) is a hybrid distributor that connects hardware, software, and cloud services from technology suppliers to resellers and business customers. ScanSource reported revenues of $953.1 million, up 17.3% year on year. This number surpassed analysts’ expectations by 18.8%. It was an incredible quarter as it also produced a beat of analysts’ EPS estimates. ScanSource scored the biggest analyst estimate beat of the whole group. The stock is up 5.5% since reporting and currently trades at $54.23. Read our full, actionable report on ScanSource here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

CDW delivered revenue and non-GAAP earnings per share above Wall Street expectations in Q2, supported by robust demand for AI infrastructure and modernization projects across its Commercial, Government, and International segments. However, the market reacted negatively following the results, with management pointing to a pronounced shift in customer spending towards large-scale hardware and cloud investments that exerted pressure on gross margins. CEO Christine Leahy noted, “Customers are still purchasing technology and reallocating budgets to prioritize mission-critical outcomes,” while CFO Albert Miralles described the technology environment as “more normalized” but still highly dynamic. Is now the time to buy CDW? Find out in our full research report (it’s free). Revenue: $6.57 billion vs analyst estimates of $6.25 billion (10% year-on-year growth, 5.2% beat) Adjusted EPS: $2.91 vs analyst estimates of $2.80 (4% beat) Operating Margin: 6.5%, in line with the same quarter last year Market Capitalization: $16.92 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Adam Tindle (Raymond James) asked about AI’s impact on customer spend with CDW and the evolution of the AI business model. CEO Christine Leahy explained AI is now embedded across hardware, software, and services, with customers increasingly focused on return on investment and scaling proven use cases. Erik Woodring (Morgan Stanley) pressed on gross margin trends and whether pricing discipline was maintained amid large infrastructure deals. CFO Albert Miralles confirmed no like-for-like margin pressure, attributing declines to product mix and larger orders from enterprise clients. Asiya Merchant (Citi) inquired about the timing and profitability of services attached to AI projects. Leahy said services are embedded at every stage of AI adoption and expects managed services to become a more meaningful contributor to profit over several years. David Vogt (UBS) asked about customer tolerance for technology price increases and whether budget reallocations are affecting services demand. Leahy responded customers remain rigorous in technology investments, sometimes shifting funds from other business areas, and stressed that services remain essential even as hardware spending leads. Amit Daryanani (Evercore) questioned engagement with AI “frontier model” vendors and the trend of repatriating workloads on-premises. Leahy noted the channel is increasingly important for AI labs and that CDW supports customers in optimizing costs across hybrid environments. Looking ahead, key catalysts to monitor include (1) the pace at which AI-driven infrastructure investments translate into higher-margin services revenue, (2) the normalization of working capital and improvement in free cash flow conversion, and (3) the ability of international markets to sustain above-average growth. Execution on the “Geared for Growth” efficiency program and the impact of product and customer mix on gross margins will also be key areas of focus. CDW currently trades at $135.35, down from $154 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 8:30 a.m. ET Chair and Chief Executive Officer - Christine Leahy Chief Financial Officer - Albert Miralles Investor Relations - Steven O'Brien Operator: Hello, everyone. Thank you for joining us, and welcome to the CDW Second Quarter Earnings Call. [Operator Instructions] I will now hand the conference over to Steve O'Brien with Investor Relations. Steve, please go ahead. Steven O'Brien: Thank you, Joel. Good morning, everyone. Joining me today to review our second quarter 2026 results are Chris Leahy, our Chair and Chief Executive Officer; and Al Miralles, our Chief Financial Officer. Our earnings release was distributed this morning and is available on our website, investor.cdw.com, along with supplemental slides that you can use to follow along during the call. I'd like to remind you that certain comments made in this presentation are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Those statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. Additional information concerning these risks and uncertainties is contained in the earnings release we furnished to the SEC today and in the company's other filings with the SEC. CDW assumes no obligation to update the information presented during this webcast. Our presentation also includes certain non-GAAP financial measures, for instance, non-GAAP operating income, non-GAAP operating income margin, non-GAAP net income and non-GAAP earnings per diluted share, non-GAAP selling and administrative expenses, non-GAAP effective tax rate, net sales on a constant currency basis, free cash flow and adjusted free cash flow. Non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules. You'll find reconciliation charts in the slides made available on our website and in our earnings release. Please note, all references to growth rates or dollar amount changes in our remarks today are versus the comparable period in 2025, with net sales growth rates described on an average daily basis, unless otherwise indicated. Replay of this webcast will be posted to our website later today. This conference call is property of CDW and may not be recorded or rebroadcast without specific written permission from the company. With that, let me turn the call over to Chris. Christine Leahy: Thank you, Steve, and good morning, everyone. Before we begin our review of the quarter, I want to briefly address the announcement we issued this morning regarding Al's planned retirement. We shared that Al plans to retire in 2027 after an extensive career following the completion of an orderly transition. He'll remain in his current role until his successor is appointed, and we will then continue to serve in an advisory capacity to ensure continuity. The search for his successor is currently underway. On a personal note, I want to thank Al for his many contributions to CDW's success. He has been a trusted partner to me, an exceptional leader for our coworkers and a driving force behind the growth and evolution of our company. I'm grateful that we will continue to benefit from his expertise as we execute a seamless transition. With that, let me turn to the second quarter performance, strategic progress and outlook. Al will then provide additional details on our financial results, capital allocation priorities and expectations for the balance of the year. The team delivered strong results this quarter through disciplined execution and a clear focus on the priorities driving customer demand. Together, they delivered net sales of $6.6 billion, up 10%; gross profit of $1.3 billion, up 6%; non-GAAP operating income of $556 million, up 7%; and non-GAAP earnings per diluted share of $2.91, up 12%. Net sales, gross profit and non-GAAP earnings per share set new all-time quarterly records. These results demonstrate the strength and resilience of CDW's business model in a dynamic technology environment shaped by growing AI complexity, pricing volatility and ongoing memory challenges. Demand remained healthy with AI increasingly influencing customer activity despite cautious and deliberate customer spending. Customer investment in AI readiness and modernization drove strong infrastructure demand. By bringing together the right technology, expertise and execution, the team delivered double-digit top line growth with substantial gross profit dollars. Strong gross profit, combined with operating leverage and disciplined capital allocation, drove 12% non-GAAP earnings per share growth. Today, AI infrastructure implementation is most advanced among our largest customers, which is typical of a major technology transformation cycle. Infrastructure investment comes first, followed by services software and life cycle opportunities as adoption expands, deployment activities broaden across customers of all sizes. What shapes demand may change from quarter-to-quarter, but technology remains essential and increasingly complex. Technology changes, customer priorities change, CDW's role does not. That enduring relevance is the foundation of our value proposition. Let's take a deeper look at how we met customer priorities this quarter. There were 3 primary drivers of performance: our balanced portfolio of customer end markets, the breadth of our full stack capabilities and our growth strategy, which sustains our relevance. First, our diversified customer portfolio. The diversity of our customer end markets is one of the defining strengths of our business model. Today, we operate across 3 U.S. segments: Commercial, Government and Education. Commercial serves customers through dedicated corporate, health care and financial services teams. Within each end market, we align resources by customer size, enterprise, mid-market and small business. Government is aligned around state and local and federal customers, while Education serves both K-12 and higher education institutions. Our other segment represents our combined U.K. and Canadian operations. Each market has dedicated sales teams and deep industry and technical expertise. Let's take a look at how they performed this quarter. Commercial delivered another strong quarter with net sales increasing 9%. Corporate increased 11%, driven by the demand for infrastructure modernization, cloud and AI-readiness initiatives. Healthcare remained a standout performer, growing 9%, driven by demand for mission-critical outcomes, including AI-enabled claims management and clinical documentation. Financial Services increased 2% with continued healthy customer demand. Government net sales increased approximately 14%, driven by improving federal demand and continued momentum across state and local customers. Clients prioritize infrastructure, software life cycle management and productivity initiatives. Education net sales increased by approximately 1%. K-12 demand remained healthy with a strong mix of software services and life cycle offerings despite fulfillment timing shifts. Higher education continued to operate in a constrained funding environment. International once again delivered exceptional growth. Net sales increased approximately 23%, led by a record quarter in Canada and continued strong momentum in the U.K. Demand remained healthy across hardware, software and cloud categories with both the U.K. and Canada delivering mid-teens or better local market growth. The second driver of our results this quarter is the breadth of our full stack, full life cycle offering, which enables us to capture demand across evolving customer priorities and technology trends. During the quarter, success addressing healthy demand for modernization, AI readiness and resilience drove a 10% increase in hardware revenue. Servers, storage and netcomm all delivered very healthy double-digit growth. Notebook and desktops increased a combined 10%, reflecting strong execution and customer willingness to invest in mission-critical technology despite pricing pressures. Higher average selling prices more than offset lower unit volume. Software, cloud and security all delivered healthy top line and gross profit growth. Software increased by low double digits driven by security, application suites and storage and network area management software. Robust cloud growth reflected continued prioritization of application modernization, AI evaluation and hybrid environment optimization. Memory price inflation also contributed to cloud adoption as some customers sought help finding alternatives to hardware expenditures. For security, both top line and gross profit increased double digits, driven by demand for both protecting advanced technology architectures and strengthening governance and compliance capabilities. Services increased 1%. Just like every part of the business, services demand follows customer priorities. This quarter, customer focus on hardware and cloud investments, combined with deployment timing influenced the mix of services demand. We expect a pickup in life cycle and professional services as customers move from procurement to implementation to management. The third performance driver, our growth strategy is crucial to sustaining our relevance. Our strategy is built around an enduring reality. Technology will continue to evolve, but the need for a trusted partner remains constant. As AI adds complexity across the technology landscape, that need has never been greater. Customers increasingly recognize that AI is not a point solution, it's an architectural challenge. AI workloads span on-premises, public cloud, edge and hybrid environments. And as AI scales, organizations must integrate complex technology environments while managing security, governance and risk. Accomplishing this requires a partner that can orchestrate the resources required and deliver the execution needed to turn AI investments into tangible outcomes. CDW is that partner. We bring together the right technology, expertise and execution as we help customers deploy AI with confidence, scale faster and realize value sooner. The strategic implication is straightforward. AI increases our relevance because it increases complexity. And as customers move from AI experimentation to pilots, to implementation, to scaling, we are capturing opportunities today across infrastructure, security, data integration and ongoing life cycle support. Let me share a couple of recent examples that illustrate the role CDW is playing across customers' AI journeys. A Western state's technology office has made substantial progress in its AI journey, launching an AI sandbox, advancing statewide AI literacy and incentivizing agency adoption. As AI activity accelerates, the state faces a challenge common across many organizations, a growing patchwork of AI initiatives without a consistent way to manage, govern and scale them. Through our AI 360 Framework, we designed a solution that is helping the state move from isolated AI projects to a cohesive operating model that integrates strategy, governance, infrastructure, security, data and application development. By bringing together the right technologies, partners, expertise, we are creating a scalable framework for evaluating, deploying and governing AI across agencies, enabling the state to accelerate adoption while maintaining security oversight and ensuring measurable outcomes. This multiyear, multimillion dollar engagement demonstrates the scalability of our model, and we will drive recurring services revenue. We are now productizing the solution to deliver highly relevant and proven AI-driven outcomes at scale to state and local governments across the country. Another engagement, one with a large financial services company, demonstrates the broader services opportunity that is emerging as frontier AI innovation accelerates. Like many enterprise organizations, our customer is dealing with a growing gap between the volume and complexity of new AI-driven threats and the ability of security teams to remediate them quickly and consistently. They need a more coordinated, scalable approach to managing vulnerabilities across their entire technology estate. Through our Claude Mythos AI security vulnerability program, the team brought in CDW expertise across security, observability, cloud DevOps, systems engineering, hybrid infrastructure and global delivery to design a more automated approach to identifying and remediating vulnerabilities at scale. This multimillion dollar engagement demonstrates the power of CDW's integrated capabilities. By bringing together expertise from across the organization, we are solving complex customer challenges and delivering mission-critical outcomes. Two great examples of how we are helping customers deliver AI-driven outcomes today, and the opportunity broadens from here. As inference moves closer to users and devices, AI deployments will require a wider range of technologies and services, creating additional opportunities for CDW to deliver customer outcomes, capture share and drive profitable growth. The same objective driving customer AI adoption, better business and mission outcomes is shaping how we are leveraging AI within CDW. Our approach is straightforward, deploy AI to create measurable value, to improve customer experience and outcomes, increase coworker productivity and generate operating leverage. CDW Assist Super Agent, our AI-powered sales tool, delivers on all 3. It supports account planning, opportunity identification, customer engagement and workflow automation. CDW Super Agent is just one example of how we are putting AI to work. We are embedding AI throughout the business from sales and finance to operations, AI is simplifying processes, improving consistency and increasing efficiency. We are moving with discipline and speed supported by strong governance and security. AI is strengthening how we operate today while creating a meaningful opportunity to drive productivity and profitable growth over the long term. And that leads me to our full stack to our full year outlook. Current market conditions remain constructive. Infrastructure demand is strong, cloud consumption trends are favorable, customer engagement is healthy and AI-related activity continues to expand across industries and customer segments. Written demand, shipping activity and backlog trends remain robust, with writings exceeding invoicing and backlog significantly elevated. Operating excellence and expense discipline remain priorities, and we expect continued improvement in our operating leverage as we move throughout the year. Given this backdrop, we are increasing our full year outlook. We now expect the U.S. IT addressable market to grow in the mid-single digits in 2026 on a customer spend basis, with 200 to 300 basis points of CDW outperformance. In an environment where technology decisions are becoming more consequential, CDW has never been more relevant. Our scale, broad capabilities, deep industry and technical expertise and full stack, full life cycle model ensure that our success is not tied to any single technology category. We help customers maximize the value of their technology investments and capture opportunity wherever demand emerges. Customers rely on us to simplify complexity and translate technology investments into tangible outcomes. Partners rely on us to accelerate adoption, extend the reach of their innovation and bring their technology to market at scale. Our position between customers and partners in the heart of the technology ecosystem reinforces our confidence in the durability of our business model, the strength of our competitive position and the opportunity ahead. Technology evolves, customer priorities change, our value proposition endures. With that, let me turn it over to Al for a more detailed review of our financial performance. Al? Albert Miralles: Thank you, Chris, and good morning, everyone. It has been a privilege to serve as CFO of CDW for the last 5 years. I'm proud of what our team has accomplished and how we've continued to help our customers achieve meaningful outcomes, all while transforming our own business and delivering growth and profitability for our shareholders. I am committed to supporting a smooth transition and will ensure the company is well positioned for continued success. Turning to our results. I will begin with details on our second quarter performance, move to capital allocation priorities and then finish with our outlook for the remainder of 2026. Second quarter gross profit of $1.3 billion was up 6.3% year-over-year. This was modestly above our expectation for a mid-single-digit year-over-year increase. The performance reflected solid demand with customers continuing to prioritize technology investments that support AI, productivity, workplace modernization, infrastructure needs and security. Second quarter gross margin was 20.1%, down 70 basis points year-over-year. As we've discussed in prior quarters, gross margin is sensitive to changes in both customer and product mix. In the second quarter, margins reflected the contribution from large hardware infrastructure opportunities tied to modernization and AI readiness and particularly associated with enterprise customers. To a lesser extent, gross margins also reflected a lower relative contribution from services year-over-year. As Chris mentioned, we view these spending patterns as consistent with the early stages of a technology adoption cycle where infrastructure investment by large enterprise clients often leads followed over time by services, software, security and life cycle opportunities. Importantly, within the quarter, these profitable engagements generated meaningful gross profit dollars and strengthened our position in the AI market. The strategic point is that AI is increasing complexity across the technology stack. Customers are evaluating infrastructure, cloud, security, data and endpoint investments as part of broader modernization programs, and that complexity reinforces the value of CDW's full stack, full life cycle model. Consistent with recent trends, customers navigated a dynamic technology and macro environment. Demand remains stronger where technology investments are tied to operational necessity, productivity, infrastructure and workplace modernization and security. With this being said, netted down revenue streams were up 16.1%, picking back up again this quarter as we expected. They represented 35.9% of gross profit, up 300 basis points year-over-year and 140 basis points quarter-over-quarter. Professional and managed services were impacted this quarter by deployment timing and customer prioritization of hardware and cloud investments. We continue to build our pipeline as customers move modernization, security and AI projects from procurement into implementation, which supports our expectation that the current wave of infrastructure investment will lead to future services growth. Turning to expenses for the second quarter. Non-GAAP SG&A totaled $764 million or 57.9% of gross profit, down 20 basis points year-over-year and down 410 basis points quarter-over-quarter. This was consistent with our expectation that the expense ratio would continue to decrease as we approach the second half of the year. Looking forward, we expect our Geared for Growth efforts to pay dividends in the second half of the year and further improve expense efficiency thereafter as initiatives scale across the organization. Coworker count ended at approximately 14,700, and customer-facing coworker count was 10,300, both down modestly year-over-year and quarter-over-quarter. Our ongoing goal is to balance growth, expansion of capabilities and exceptional customer experience with greater efficiency and cost leverage from our broader operations. Non-GAAP operating income was approximately $556 million, up 7% versus the prior year, delivering some incremental leverage as we expected, and that compared to 6.3% gross profit growth. Non-GAAP operating income margin was 8.5%. Net interest expense increased approximately $3 million year-over-year, driven by higher average borrowings during the quarter. And our non-GAAP effective tax rate was within our target range at 26%. Non-GAAP net income was $370 million in the quarter, up 7.8% on a year-over-year basis. Second quarter non-GAAP net income per diluted share was $2.91, up 11.9% year-over-year. This double-digit EPS growth was above our expectation for high single-digit growth year-over-year. Moving to the balance sheet. At period end, net debt was $5.5 billion. Liquidity stands at $2 billion with cash plus revolver availability. The 3-month average cash conversion cycle was 21 days, within our target of high teens to low 20s. This cash conversion metric reflects a combination of timing, market dynamics, higher hardware sales and proactive inventory positioning to support customer urgency to secure products amid a dynamic environment. We continue to believe our target cash conversion range remains the best guidepost for modeling working capital longer term. Adjusted free cash flow year-to-date was $278 million or 42% of non-GAAP net income for the first half, below our stated rule of thumb of converting 80% to 90% of non-GAAP net income to cash. We continue to expect cash flow conversion to normalize over the balance of the year and have line of sight towards achieving our expectations. We've been focused on managing working capital in a way that supports our customers and drives shareholder value even as ongoing hardware-driven growth and the inflationary price environment has warranted investing in working capital. We've also effectively utilized cash consistent with our 2026 capital allocation objectives during the quarter, including returning $344 million in share repurchases and $80 million in the form of dividends. Through the first half of 2026, we've returned approximately $545 million to shareholders in the form of repurchases compared to $653 million over the entirety of 2025 and $500 million in each of the years 2023 and 2024. This brings me to our capital allocation priorities moving forward. Our first capital priority is to increase the dividend in line with non-GAAP net income growth. We've increased the dividend for 12 consecutive years through 2025. We continue to prudently manage our dividend with respect to the growth environment and target a roughly 25% payout ratio of non-GAAP net income going forward. Our second priority is to ensure we have the right capital structure in place. We ended the second quarter at 2.5x net leverage, within our target range of 2 to 3x. We continue to proactively manage liquidity while maintaining flexibility. Finally, our third and fourth capital allocation priorities of M&A and share repurchases remain important drivers of shareholder value. We continually evaluate M&A opportunities that advance our capabilities and extend our reach and relevance to customers. While we remain active in the M&A market, we have been opportunistic towards share repurchases. With the additional $1 billion authorization announced in the second quarter, we have more than $1.1 billion remaining capacity under our share repurchase program. Now turning to our outlook. Our first half performance was driven by strong underlying demand as customers built out infrastructure for their AI use cases, secured their networks and innovated at the edge. Importantly, while customers acted with urgency around hardware procurement, our written production and backlog trends support our view that the strength we are seeing reflects healthy and durable underlying demand for modernization, security, resiliency and AI readiness. At the same time, we remain prudent in how we view the remainder of the year given the complex variables in play. Factoring in these variables, we are raising our full year outlook and expect gross profit to grow mid-single digits for the full year 2026. This leads to a first half versus second half split that is more aligned to historical second half-weighted seasonality than we originally expected. Based on the anticipated mix of products and end markets, we expect second half gross margins to be below second half 2025 levels. This means full year 2026 gross margin would be modestly below the full year 2025, although well above the levels from 3-plus years ago. Finally, we now expect full year non-GAAP net income per diluted share growth to be at the high end of high single-digit range year-over-year, reflecting our expected gross profit performance, increasing operating leverage from our Geared for Growth initiatives and disciplined execution of our operational and capital allocation priorities. Please remember, we hold ourselves accountable for delivering our financial outlook on a constant currency basis. On that note, our expectation is for currency to be a slight benefit to reported growth rates for the year. Moving to modeling thoughts for the third quarter. We anticipate gross profit to increase at a mid-single-digit year-over-year growth rate. Moving down the P&L, we expect third quarter non-GAAP SG&A to be lower than the second quarter, driven by our Geared for Growth program benefits. This will result in non-GAAP operating expense as a percentage of gross profit that is down both year-over-year and quarter-over-quarter. Finally, we expect third quarter non-GAAP net income per diluted share to also be at the high end of high single-digit growth year-over-year. With that, I want to thank our teams for delivering another strong quarter of execution. Our performance reflects the strength of our customer relationships, the resiliency of our business model and the ability of our coworkers to help customers solve complex technology problems in a changing environment. This concludes the financial summary. As always, we'll provide updated views on the macro environment and our business on our future earnings calls. I will now ask the operator to open up for questions. [Operator Instructions] Thank you. Operator: [Operator Instructions] Your first question is from Adam Tindle with Raymond James. Adam Tindle: Okay. Congrats, Al, on the announcement. Chris, I wanted to start on AI. Those examples that you gave were helpful. I just wonder the customers that are adopting AI, understanding that it's sort of in that larger cohort, maybe you can give investors sort of a view on what the impact is to CDW when those customers are deploying AI. Maybe more specifically, what happens to their spend with CDW? And if you could touch on any updates on the AI line card business model, a little bit more fleshing out of the AI potential tailwinds to CDW, that would be helpful. Christine Leahy: Yes, sure, Adam. And first, I want to start with the -- while we see the technology pick up most strongly first in the enterprise space, as I mentioned, we absolutely are seeing it broaden across all of our industries and customer segments. And we're at the point where we are taking use cases that are proven and working in various industries and scaling them in repeatable offerings for customers. In terms of what they're doing to our business, look, we're not sharing dollars per se, but we perceive that AI is a part and parcel of most of what we're selling from the hardware itself to the software implementation and certainly in the services that we're bringing to bear. So it's really a full stack approach to the technology movement. In terms of customers and where they are in their journey, having moved from pilot to, obviously, implementation, I would say here's what we're observing, which our customers are working hard now on the return on investment and being more deliberate and thoughtful about the analysis around that, which, of course, has played to our strength with the variety of services and analysis and the solutions that we bring to bear. What we are seeing is real focus on those use cases that move the needle in the various industries. So when you think of health care and claims assessment and training tools, if you think of retail with demand forecasting and churn projection, if you think of financial services, obviously, fraud detection, but also trading speed, we really are starting to see use cases come to bear in ways that are going to scale more quickly than they had in the past in our view. So I'd simply say it's a full stack opportunity for us. We think we're incredibly well positioned because CDW has never been about one technology or one part of the stack, it's been about bringing those things together so that they work together. And AI is a great opportunity for us to do this. We're delighted to see the traction across all of our customers taking off, frankly, in a really positive way. And we see lots of tailwinds to continue the acceleration in services and the hardware components. Adam Tindle: Great. Maybe just a quick follow-up for Al. I got to acknowledge that operating income grew faster than gross profit dollars in the quarter. And it looks like we're starting to get at a turning point to get CDW back to the business model that I think investors came to know and love over the years. I guess the question would be, what do you think drove that trend in the quarter, that kind of inflection in better operating leverage? And any learnings that you're having from Geared for Growth or any updates on that $100 million to $200 million of savings that I think you outlined on the last call? Albert Miralles: Yes, sure. Thanks, Adam, and I appreciate your comments. As we said on the last call, we thought that we would see operating leverage inflect in the second quarter. That was more a result of really kind of good old-fashioned discipline around expenses and just broader efficiency efforts, less contribution at large from Geared for Growth. That being said, Adam, our efforts on Geared for Growth through the first half have been significant. And our plan had always been that we'd see those benefits start to pay off in the back half of the year. I would say we are at or beyond our expectations in terms of how those efforts are progressing and likewise with respect to the benefits. So as we approach the back half of the year, those benefits will start to play out, and we would expect both our operating leverage and likewise, our expense ratio to improve on a sequential basis in the back half and certainly into 2027. Operator: Your next question is from Erik Woodring with Morgan Stanley. Erik Woodring: Al, can we maybe just dig down quickly into the non-netted down gross margin trends? So I know you alluded to earlier some spending from large enterprises, some big deals in infrastructure. I want to maybe be a little bit more pointed and ask were there any instances in the quarter where you weren't able to kind of price on a cost-plus basis because of customer feedback to pricing or anything like that? And did you see -- and therefore, did you see any kind of like-for-like margin pressure year-over-year, whether we're looking at services or storage or PC or servers, whatever it may be? And then a quick follow-up, please. Albert Miralles: Sure. Thanks for the question, Erik. First, I would just say the answer is no in terms of like-for-like pressure. We operate in a competitive environment, but we were deeply focused on ensuring we had this pricing discipline and that we were effectively passing through price increases. So that was not a factor in the core of our business. The driver was mix. It was mix into infrastructure products. It was mix at larger dollar tier orders. And then as you noted, with more enterprise customers. And as Chris referenced in her prepared remarks, very common that we see that in early stages of tech adoption really beginning with some of these larger clients and then making its way down to the middle market. And that's part of our encouragement as we are seeing that play out as we speak. That being said, kind of in the current period and potentially in the near term, you could see more of these larger orders and they just naturally come at slightly lower margins. And Erik, I would also just add, at the same time, our mix into services was less so. So I guess maybe further, I would just note on the more positive side, our netted down revenues, really, really strong, grew 16%, 36% of our gross profit. And again, we felt really good about the core of our business, maintaining healthy margins, upholding our cost-plus regime in this dynamic environment. Erik Woodring: Okay. That feedback is incredibly helpful. And then maybe just a quick follow-up. If I just take some of your modeling thoughts on 3Q, some gross margin pressure year-over-year, but gross profit flat sequentially into 3Q, it would imply that revenue is down maybe mid-single digits sequentially in 3Q. That's historically worse than seasonality. So just relative to your qualitative comments on backlog or pipeline or breadth of spend, that feels quite prudent. Could you maybe add some kind of granular commentary just making sure we're thinking about that 3Q, right, and maybe why we would see a below seasonal quarter relative to some of the strength of spend you're alluding to? And that's it for me. Albert Miralles: Sure. Thanks, Erik. Look, I would say the -- you have it right, mid-single digits, it would be kind of flattish sequentially. That's really a function of us while certainly more optimistic given the health trends we're seeing, we continue to layer in a level of prudence. And so spend is there. Our pipeline is there. Through July, our written production is really, really strong and continues to exceed our invoicing, leading to a higher backlog. So the underlying metrics are really, really strong. We just want to be a bit cautious as we typically are. And so while we raised Q3, Q4 with respect to gross profit, we're at mid-single digits. And so there's a bit of a level of prudence there. And likewise, like Q2, what I'd say all of the elements are there for us to outperform, and that's what we're focused on. Operator: Your next question is from Asiya Merchant with Citi. Asiya Merchant: Just if I can dig down a little bit on AI deals that you talked about. I understand initially the adoption is largely with larger organizations. But just help us understand like as you're thinking about this services adoption to follow the infrastructure deals that you're talking about, maybe how we should think about the services attach rate as we progress through this year and as we think about next year? And then in general, would we expect this to be margin accretive or these AI-specific deals accretive or margin neutral over time? Christine Leahy: Yes, sure, Asiya. Well, let's -- let me start with, obviously, what's going on right now, which is we're seeing a lot of demand, and as I mentioned, within the areas of infrastructure, cloud, security and data foundation, so across the full portfolio. But when you think about the adoption curve, which is going to be multiyear and not a single product, that requires readiness. It requires deployment. It requires integration. It requires optimization and ongoing operations. And services is in every single component of those requirements. So when you say attach rate, I would say there's attach rate opportunity, but more importantly, our services are embedded at every stage of the need around AI. Adoption is definitely broadening right now, as I mentioned, beyond large enterprise into, as you heard me say, health care, education, commercial and into smaller businesses as well. So that's the productization that we're working on in the mid-market and smaller businesses that we can create AI solutions that are scalable and proven in the real world. I'd also say that when you think about inference near users and the data, edge is next and there will be incremental demand for edge infrastructure, networking, security, endpoints. And in all of those instances, again, services are critical to the design, deployment and management. Across the whole spectrum, you can expect us to see -- you can expect to see from us continuing growth, particularly across the managed services and the recurring nature of those -- of that business. So we see it as being an increasingly meaningful contributor to our profit growth over the next several years, and we're building a durable engine to achieve that. Asiya Merchant: Great. And if I can, just a quick follow-up. Like earlier in the year, of course, there was a lot of concerns around availability of hardware, memory inflation, et cetera. How would you characterize what's changed here? It seems like the backlog still remains pretty elevated for you guys. But how would you just characterize availability now of product to help meet this backlog? Albert Miralles: Thanks, Asiya. I would call the environment a bit more normalized. There is definitely continued urgency from customers. And I think that speaks to their needs, particularly on the AI side of things, but they've now been at this for 3 quarters. And so I would say things have become more normalized, and that's both from a standpoint of expectations vis-a-vis pricing as well as supply chain needs. The backlog does reflect that there are still delays in product delivery. But I would say the level of consistency and hitting delivery dates has been better. There is not a level of double orders, cancellations and all of those phenomena. So when we add that all up, we would say the markets become more orderly in our space and more normalized and customers have adapted to the environment. So -- and to that end, those variables did not influence our results for the quarter from any meaningful -- in any meaningful way with respect to pull forward or the like. It's become more orderly. Operator: Your next question is from David Vogt with UBS. David Vogt: So maybe, Chris and Al, just a question about demand and elasticity. I understand that you saw relatively strong growth in server, storage, netcomm and some other categories. Can you speak qualitatively to feedback or maybe conversations you're having with customers around their tolerance, if you will, for pretty meaningful price increases across large technology platforms? And the reason why I'm asking, it doesn't sound like you saw any pull forward in the quarter or any sort of degradation in demand. But just would love to kind of get your thoughts in terms of what the feedback has been given that a lot of the OEM partners that you work with have expressed, it sounds like continued price increases as we move through not just the first half of this year, but into the second half of this year? And then I have a follow-up. Christine Leahy: Yes, sure. I'll start the answer. You're right, we have not experienced what I would say is meaningful pull forward in the quarter. In terms of customer engagements and discussions, look, nobody likes it when prices go up. But I would say that our customers are engaging us more frequently and more detailed discussions around analyzing their choices. They're being really rigorous around this because they still have mandates within their organization to deliver on, whether it's a mission outcome or a business outcome. And so customers are still purchasing technology. They're still spending to their budget. And we're actually seeing in cases where budget from other functions within an organization are being reallocated to technology because of the essential nature across their businesses. So it gives us an opportunity with our customers to shine, frankly. And so when you look at -- I'll give you an example, PCs. PCs were very strong in terms of growth this quarter because customers were willing to make the mission-critical investments, notwithstanding the pricing. So I think we're going to continue to see that approach from customers and working more and more with CDW to identify areas where they can cost optimize across their entire technology estate. Albert Miralles: And David, maybe I would just add, if you look across our end markets, there's probably a little bit of a diversity in practice. Obviously, at the enterprise end of things, that have very, very dedicated technology teams. They're very much on top of what's going on in the pricing market, supply chain market. And the implications for them are significant because their purchases can be bigger dollar amounts. As you move down the curve in the mid-market, small education, it's not for a lack of sophistication, but the level of awareness and then acting on things is a little bit different pace than at the enterprise level. I do think that, that has evolved over the last several quarters and you're seeing that play out. And I would say -- and that's why we feel encouraged by the opportunities in front of us as this rolls down the curve and customers look to kind of at scale, take advantage of opportunities in the market to move forward, particularly around their AI needs. David Vogt: Great. And maybe just as a follow-up. And Chris, you touched on it briefly in your other answer to my question. But when you think about prioritization, I think you mentioned, Chris, that customers are looking from pulling spending from other sort of initiatives internally. Is that -- did I hear you correctly? And are you seeing within your own portfolio a shift away from more discretionary programs and products to, I think, as Al just pointed out, more mission-critical. So does that mean that sort of the services vertical for at least the foreseeable future probably suffers some reprioritization relative to hardware in your portfolio? Is that the right way to think about it? Christine Leahy: Yes. No, I wouldn't think about it that way. Let me start with the reallocation of budgets. And this has been a quiet trend for the last couple of quarters, where technology budgets have been increasing a little bit in different areas because the initiatives that they support are specific to functions and CFOs are now saying, well, that now becomes technology spend. So this hasn't been discussed a lot, but it certainly is happening. In terms of services versus hardware, what we're seeing is just the natural uptake of new technology, and we see the infrastructure spend happening right now. But again, there's no component of what we're doing for customers where services are not going to be critical to what they're buying from us. So there's -- I wouldn't think of it as an air gap going forward. I would think of it as the trigger, the start of increasing demand for the services that we bring to bear across the full spectrum of needs. Operator: Your next question is from Amit Daryanani with Evercore. Amit Daryanani: I have 2 as well. I guess maybe the first one to start with AI infrastructure, obviously becoming a big investment area for your customers. I was wondering if you could talk about, a, are you starting to see an uptick in engagement with the frontier model companies as they perhaps look to gain exposure to your customer base? And maybe you can just contrast, how is that engagement different from the hyperscale vendors when they started doing this? And then maybe on the second part on this, are you seeing customers, especially the enterprise customers, evaluate and repatriate workloads back on-prem to optimize the token cost? And is that a better option for CDW versus running things in a public cloud and a frontier model? Christine Leahy: Amit, thanks for the questions. I'll start. In terms of engagement with the AI labs, et cetera, we've made great progress there. And we've been through this cycle before where new partners come on board and they have to kind of sort through the value of the channel. I would say that the AI labs have found very quickly that the channel is a friend, and it's a great route to market for them. So we have seen terrific progress in partner programs, in relationships and building investment from them, et cetera, to bring their capabilities to the market, particularly mid-market is a significant focus from a scale opportunity perspective. And our vertical segment is also a very significantly attractive customer end market for the AI labs. In terms of the second question, which was... Albert Miralles: On-prem. Christine Leahy: Yes. We are seeing repatriation, but this is what I would say, Amit, I don't -- it's not better or worse for us. We're going to help our customers optimize wherever their workload should be. We certainly are seeing larger customers now starting to test in the cloud, et cetera, because of easy access, but getting more rigorous around optimizing costs and, therefore, bringing some workloads back to on-prem. We are seeing some small businesses, for example, heavily leaning into the cloud because they can't afford or get access to the hardware. But the bottom line is, as is always the case with technology, it's about optimizing, optimizing for cost, optimizing for security, optimizing for quality, optimizing for output. And so it's not an if or it's a how do we do this together to deliver -- to achieve our outcomes in the more cost-efficient secure quality way. And that is where we sit. And so we see this as a positive opportunity across the board. Amit Daryanani: Perfect. And Al, if I can just have you clarify this a bit. Free cash flow is fairly muted in Q2, I think, at $27 million and free cash flow as a percent of net income, I think, is at 45%, 46% for the first half. Can you just walk me through what needs to happen in the back half of the year for you to actually get to this 80% to 90% free cash flow conversion? And where would this uptick come from? Albert Miralles: Yes. Sure, Amit. Really timing effect through the first half and particularly in Q2. So we had mentioned in Q4, we would expect in this environment from a pricing and supply chain perspective that we would likely be making working capital investments and we've done just that, right, that is the standing by our customers and ensuring that they get the product they need at the price that they can afford. And so that is what we've been doing to deliver for our customers. That being said, Amit, like if I had to just boil it down, you do have kind of some moving parts with AR and AP. But if I had to boil it down, we have about a $400 million increase in our inventory since the end of the year. And as we sit here now and we start to see an environment that's become more normalized, we would expect that we will rerationalize and ratchet back a bit in that regard. And so it's a bit of a kind of intra-period movement that you're seeing now, but we're super focused on delivering free cash flow, and we know the flywheel effect that, that has. And so the biggest variable will be on the inventory front between here and the end of the year. Operator: Your next question is from Joseph Cardoso with JPMorgan. Joseph Cardoso: Maybe for my first, it's great to see the hardware momentum over the past 2 quarters, along with the signals that it's continuing into the back half. Maybe just given kind of the momentum on the infrastructure side, it sounds like there's a confluence of drivers here we're hearing, project accelerations as customers take actions given the pricing trajectory, demand being stimulated by Mythos and then AI inferencing. I was just hoping if you can help contextualize what you guys are seeing from your customers on the ground around each of those. And of course, if I'm missing anything. And maybe just share how you're thinking about those in terms of materiality and timing? And then I have a follow-up. Christine Leahy: Okay. Joe, could you just characterize the various categories that you just hit? You went quickly and covered a lot of things, and I want to make sure that I answer your question. Just give me the highlights. Joseph Cardoso: Yes, sure. So basically trying to understand what's the demand drivers here and timing of them as it relates to project acceleration due to pricing dynamics, demand stimulated by Mythos and then investments more specifically on AI inferencing? Christine Leahy: Okay. Got you. Okay. So pricing, yes, we said all along, pricing is driving some level of demand, but I would not hover on that too much because as you see, the underlying demand is strong and durable, given our written and invoicing and backlog and how that's all working together. It's certainly a factor, but it's not the biggest factor. Regarding Mythos, yes, that's an important driver right now because -- and just more broadly, I would say what we're seeing from a security perspective and the models hacking going on, that has piqued everybody's interest around security and certainly is driving our security services, consulting and assisting with our customers to try and secure at scale their environments. And then the third one was... Joseph Cardoso: AI inferencing. Christine Leahy: AI inferencing. Well, yes, AI inferencing. This is an interesting one because with token economics, I come back to, it's all about optimizing for our customers. And as you know, we will serve customers regardless of where workloads reside, et cetera. And so we are actually seeing with customers of all sizes, a pickup -- significant pickup in engagement around token economics and the ability -- and how to optimize for models, how to optimize for locations. And so I would call that a significant driver of services for us. And then ultimately, obviously, that is how the hyperscalers and the model makers achieve their return on investment dollars that they're investing now. So CDW will continue to support adoption and consumption and our partners obviously are investing in us doing that. That's the biggest growth vector or growth catalyst right now, I would say. Joseph Cardoso: Got it. I appreciate the color there. And then maybe as my follow-up and turning on to services, which you just mentioned, you touched on it a bit now. But I guess if I can ask in another way, how should we think about the timing of the catch-up that you're pointing to? And do you have visibility into these services? And is it just a dynamic around delayed, for example, due to the installations of all the infrastructure being procured and services are basically going to be stacked on once the infrastructure is installed? Or is there another dynamic at play that makes transparency around timing less granular? Christine Leahy: Yes. No, I would -- 2 things. It is really purely timing and implementation timing. So as we look forward over the next quarters, we're feeling very confident in the engagement with customers, we have good visibility to where those needs are. Given the time line of engagement to execution, it will take a little time for us to see that pick up significantly. But by the time we get through the end of the year and rounding the corner, we'll see the fruits of the labor that we're looking at right now. Operator: At this time, I will now turn the call back to CEO, Chris Leahy, for closing remarks. Christine Leahy: Thank you, Joel, and let me close by recognizing the incredible dedication and hard work of our coworkers around the globe. Their ongoing commitment to serving our customers is what makes us successful. Thank you to our customers for the privilege and opportunity to help you achieve your goals, and thank you to those of you listening for the time and continued interest in CDW. I look forward to talking to you next quarter. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in CDW, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CDW wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* Now, it’s worth noting Stock Advisor’s total average return is 958% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. CDW (CDW) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. CDW (CDW) stock is reacting to a busy August 5 update that combined record second quarter results, a new quarterly dividend declaration, restructuring charges and the planned 2027 retirement of long-serving chief financial officer Albert J. Miralles. See our latest analysis for CDW. The sharp 1 day share price decline of 9.03% following CDW's earnings, dividend and CFO retirement update comes after a 90 day share price return of 27.13%, while the 1 year total shareholder return is down 13.72% and the 5 year total shareholder return is down 23.64%. This suggests that recent momentum has picked up even as longer term returns remain weak. If the reaction to CDW has you reassessing your watchlist, this can be a useful moment to broaden your search and check out 22 top founder-led companies CDW just posted record quarterly results while the stock dropped sharply on margin pressures, restructuring costs and a planned CFO retirement. Is this mainly a sentiment reset, or a fresh signal about what the current price builds in? Against CDW's last close of $140.10, the most followed narrative points to a fair value of $152.56. That gap rests on specific growth and margin assumptions rather than simple sentiment. Read the complete narrative. Read the complete narrative. Want to see what underpins that higher fair value for CDW? The narrative leans heavily on recurring revenue, steadier margins, and a future earnings profile that assumes a higher profit base and a different share count. The key question is how those moving parts fit together over time. Result: Fair Value of $152.56 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, CDW's narrative also leans on assumptions that could crack if lower margin hardware continues to weigh on gross margin or if federal and education funding tightens further. Find out about the key risks to this CDW narrative. With CDW's mixed signals around valuation, margins and leadership, this is a good time to move quickly, test the assumptions, and weigh both sides by reviewing the 5 key rewards and 1 important warning sign If CDW's latest move has you rethinking your portfolio, this is the moment to broaden your research and line up your next potential opportunities before the crowd. Target reliable income by reviewing companies in the 8 dividend fortresses that may suit a steady payout focused approach. Hunt for quality at a discount by scanning the 51 high quality undervalued stocks and see which stocks currently price in lower expectations. Prioritize capital protection by checking the 79 resilient stocks with low risk scores and focus on businesses that score stronger on resilience. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CDW. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in CDW Corporation? Here are five stocks we like better. Record Q2 performance: CDW’s net sales rose 10% to $6.6 billion, while non-GAAP EPS increased 12% to $2.91, driven by infrastructure modernization, AI readiness and security demand. AI and market momentum: Government, international and commercial sales posted strong growth, while hardware and software revenue increased by double digits. Management described AI as a multiyear opportunity spanning infrastructure, security, data integration and lifecycle services. Outlook raised, with cash-flow pressure: CDW raised its 2026 growth outlook and expects to outperform the U.S. IT market by 200–300 basis points, although gross margins are expected to remain below 2025 levels. First-half free-cash-flow conversion fell to 42% due largely to inventory investment, and CFO Al Morales plans to retire in 2027. 5 Ways to Play Retail that will Profit in 2023 CDW (NASDAQ:CDW) reported record second-quarter results for 2026, as demand for infrastructure modernization, artificial intelligence readiness and security helped lift net sales 10% to $6.6 billion. The technology solutions provider said gross profit increased 6% to $1.3 billion, while non-GAAP operating income rose 7% to $556 million. Non-GAAP earnings per diluted share climbed 12% to $2.91. Chief Executive Officer Chris Leahy said net sales, gross profit and non-GAAP EPS each established all-time quarterly records. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Retail Theft Rises: Two Ways For Investors To Beat Shrinkage “Demand remained healthy with AI increasingly influencing customer activity despite cautious and deliberate customer spending,” Leahy said, pointing to customer investments in AI readiness and modernization as drivers of infrastructure demand. Commercial net sales rose 9%, including an 11% increase in corporate sales, which CDW attributed to infrastructure modernization, cloud and AI-readiness programs. Healthcare sales grew 9%, supported by demand for uses including AI-enabled claims management and clinical documentation, while financial-services sales increased 2%. → 3 Drone Stocks That Should Soar After the Summer Slump Government sales increased about 14%, aided by improving federal demand and continued state and local momentum. Education sales rose about 1%, as healthy K-12 demand for software, services and lifecycle offerings offset a constrained funding environment in higher education. International sales increased about 23%, led by a record quarter in Canada and continued momentum in the United Kingdom. Both markets delivered mid-teens or better growth in their local markets, according to the company. Hardware revenue increased 10%, with server, storage and networking posting double-digit growth. Combined notebook and desktop revenue rose 10%, as higher average selling prices more than offset lower unit volume. Software rose by the low double digits, driven by security, application suites, and storage and network-area-management software. Services revenue increased 1%, reflecting customers’ near-term emphasis on hardware and cloud investments as well as deployment timing. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure Leahy said CDW expects lifecycle and professional-services demand to increase as customers transition from procurement to implementation and ongoing management of technology projects. Management described AI as a broad, multiyear opportunity rather than a single-product cycle. Leahy said the company is seeing AI-related opportunities across infrastructure, security, data integration and lifecycle support as customers move from experimentation and pilots toward implementation and scale. She said the initial infrastructure phase of AI adoption has been most advanced among larger customers, but activity is broadening across industries and customer sizes. CDW is developing repeatable AI offerings for mid-market and smaller customers, according to Leahy. The company cited a multiyear, multimillion-dollar engagement with a western state’s technology office, where CDW is helping create a framework for AI strategy, governance, infrastructure, security, data and application development. It also highlighted a multimillion-dollar AI security vulnerability-management engagement with a large financial-services customer. Chief Financial Officer Al Morales said second-quarter gross margin declined 70 basis points year over year to 20.1%, primarily because of product and customer mix rather than like-for-like pricing pressure. Larger infrastructure orders and enterprise customers tend to carry somewhat lower margins, he said, while services mix was also lower during the quarter. Morales said CDW maintained pricing discipline and passed through cost increases in its core business. Netted-down revenue streams increased 16.1% and represented 35.9% of gross profit, up 300 basis points from a year earlier. Non-GAAP selling, general and administrative expense totaled $764 million, or 57.9% of gross profit, down 20 basis points from the prior year. Morales said the operating-income growth rate exceeded gross-profit growth because of expense discipline and efficiency efforts. He said benefits from the company’s “Geared for Growth” initiative are expected to become more apparent in the second half of 2026 and continue into 2027. CDW ended the quarter with approximately 14,700 coworkers, including 10,300 customer-facing employees, both modestly lower than a year earlier. Adjusted free cash flow for the first half was $278 million, or 42% of non-GAAP net income, below the company’s typical target of converting 80% to 90% of non-GAAP net income to cash. Morales attributed the shortfall largely to working-capital investment, including an approximately $400 million increase in inventory since the end of 2025. He said the company expects cash conversion to normalize during the remainder of the year as inventory is rationalized. During the quarter, CDW returned $344 million through share repurchases and $80 million through dividends. The company had more than $1.1 billion remaining under its repurchase authorization after announcing an additional $1 billion authorization in the second quarter. Net debt stood at $5.5 billion, and net leverage was 2.5 times, within CDW’s target range of two to three times. CDW raised its 2026 outlook, now expecting the U.S. IT addressable market to grow at a mid-single-digit rate on a customer-spend basis. The company expects to outperform that market by 200 to 300 basis points. For the full year, CDW expects gross profit to grow at a mid-single-digit rate and non-GAAP EPS growth to reach the high end of the high-single-digit range. It expects second-half gross margins to remain below second-half 2025 levels due to anticipated product and end-market mix, leaving full-year gross margin modestly below 2025. For the third quarter, management projected mid-single-digit gross-profit growth, lower non-GAAP SG&A than in the second quarter, and non-GAAP EPS growth at the high end of the high-single-digit range. Separately, Leahy announced that Morales plans to retire in 2027 following an orderly transition. Morales will remain CFO until a successor is appointed and then serve in an advisory capacity. The company said its search for a successor is underway. CDW (NASDAQ: CDW) is a leading provider of information technology products and integrated solutions for business, government, education and healthcare customers. The company sources and resells hardware and software from major technology vendors and packages those products with professional services, managed services and lifecycle support. Its offerings span IT infrastructure, cloud and data center solutions, cybersecurity, networking, unified communications, endpoint devices, and software licensing and procurement services designed to simplify IT operations for customers. CDW combines a broad product portfolio with consultative sales, implementation and technical support capabilities. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "CDW Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Record quarterly net sales and EPS were driven by robust demand for AI readiness and infrastructure modernization, particularly among large enterprise customers. Management attributes the 10% hardware revenue growth to a 'full stack' approach where AI is increasingly embedded in servers, storage, and networking solutions. The company's diversified portfolio allowed it to offset constrained funding in Higher Education with double-digit growth in Corporate and Federal Government segments. AI is viewed as a significant catalyst for long-term relevance because it increases architectural complexity across on-premises, cloud, and edge environments. Higher average selling prices (ASPs) in notebooks and desktops more than offset lower unit volumes, reflecting customer willingness to invest in mission-critical hardware despite pricing pressures. International performance was a standout, with 23% growth led by record results in Canada and continued momentum in the U.K. across hardware and cloud categories. Internal AI deployment, specifically the 'CDW Assist Super Agent' tool, is being used to drive operating leverage by improving sales productivity and workflow automation. Full-year 2026 U.S. IT market growth is now expected in the mid-single digits, with CDW projected to outperform the market by 200 to 300 basis points. Management expects a pickup in high-margin lifecycle and professional services as customers transition from infrastructure procurement to implementation and management phases. The 'Geared for Growth' initiative is expected to deliver $100 million to $200 million in savings, with benefits scaling significantly in the second half of 2026. Guidance assumes a return to historical second-half weighted seasonality, though gross margins are expected to remain modestly below 2025 levels due to product mix. The company anticipates cash flow conversion to normalize toward the 80% to 90% target in the second half as inventory levels are rationalized. CFO Al Miralles announced his retirement planned for 2027, with a formal successor search underway to ensure an orderly transition. Gross margin compression of 70 basis points was primarily a function of mix, driven by large-scale hardware deals for enterprise clients which typically carry lower margins. Inventory increased by approximately $400 million since year-end as a proactive measure to support customer urgency amid pricing volatility and memory challenges. The company increased its share repurchase authorization by $1 billion, signaling confidence in the business model and a commitment to opportunistic capital return. Management noted that AI is now part of 'part and parcel' of most sales, moving from pilot phases to full-stack implementation across various industries. Customers are becoming more deliberate about ROI analysis, which plays to CDW's strength in providing complex services and solutions. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. The Q2 inflection in operating leverage was driven by 'old-fashioned discipline' rather than the new efficiency program. Geared for Growth benefits are expected to scale in the back half of the year and continue improving the expense ratio into 2027. Management confirmed there was no 'like-for-like' margin pressure; the margin decline was purely a result of product and customer mix. CDW has maintained its 'cost-plus' pricing regime effectively despite the dynamic inflationary environment. While customers dislike price hikes, they are reallocating budgets from other corporate functions to technology because it is viewed as an 'operational necessity.' The mission-critical nature of AI and security initiatives is driving technology spend, with many organizations shifting budgets toward these essential functions to address growing complexity and threats. CDW is seeing some repatriation of workloads to on-premises environments as enterprise customers seek to optimize 'token costs' and security. Management views this as a positive driver for services, as customers require help navigating the complexities of hybrid environment optimization.

CDW Corporation CDW reported second-quarter 2026 non-GAAP earnings per share (EPS) of $2.91, beating the Zacks Consensus Estimate of $2.80. The bottom line increased approximately 12% year over year. CDW generated quarterly net sales of $6.57 billion, representing a 10% year-over-year increase. On a constant currency (cc) basis, revenue increased 9.9%, indicating that growth was primarily driven by stronger customer demand rather than favorable foreign exchange movements. Increased investments across several technology categories, including data storage solutions, enterprise servers, notebooks, mobile devices, software and networking and communications products, led to top-line expansion. These categories continue to benefit from enterprise digital transformation initiatives, hybrid work environments, cybersecurity upgrades and expanding AI infrastructure requirements. The consensus estimate was pinned at $6.26 billion. As organizations move beyond experimenting with AI and start implementing production-scale AI solutions, CDW seems well-positioned to benefit from this shift. CDW expects to outperform the overall U.S. IT market by 200-300 basis points at cc over the long term despite ongoing macroeconomic uncertainties. Management believes several structural trends like infrastructure modernization, cloud migration, AI adoption, increasing cybersecurity investments, growing technology complexity and digital workplace transformation will keep supporting demand. As enterprise environments grow more sophisticated, customers increasingly seek strategic partners capable of delivering comprehensive technology solutions rather than just individual products. Separately, the company announced a quarterly dividend of 63 cents, payable on Sept. 10, 2026, to shareholders on record as of Aug. 25. Image Source: Zacks Investment Research In the past three months, CDW's shares have gained 41.3% compared with the Zacks Computers-IT Services industry’s rise of 3.6%. The Commercial segment continued to be CDW's largest contributor, generating $3.97 billion in sales, an increase of 9.2%. Growth was broad-based across several industries under Commercial. Corporate customers increased spending by 10.7%, Healthcare customers grew 9.1% and Financial Services customers expanded purchases by 1.8%. CDW Corporation price-consensus-eps-surprise-chart | CDW Corporation Quote Government sales reached $848 million, increasing 13.6% year over year, reflecting continued investments by public sector organizations in technology modernization. The Education segment remained relatively stable with 0.7% growth, generating $933 million in revenue. International operations performed exceptionally well. Net sales in Other (the U.K. and Canadian operations) generated $826 million in sales, growing 22.9%, making international markets one of the strongest contributors during the quarter. Gross profit increased 6.3% year over year to $1.32 billion. However, gross margin declined slightly from 20.8% to 20.1%. Management attributed the lower margin primarily to a higher sales mix toward lower-margin hardware and margin pressure in selected hardware categories. These factors were partially offset by higher contributions from netted-down revenue. Although gross margin contracted modestly, the company continued expanding earnings through disciplined cost management and operating efficiency. Non-GAAP operating income increased 7% year over year to $556 million. The non-GAAP operating margin fell to 8.5% from 8.7%. Selling and administrative expenses rose 8.6% to $891 million, primarily due to higher employee compensation, increased performance-based incentives and workplace optimization initiatives. As of June 30, 2026, CDW had $361.8 million of cash and cash equivalents compared with $578.6 million as of March 31. The company had a long-term debt of $5.82 billion compared with $5.64 billion as of March 31, 2026. For the six months that ended June 30, 2026, CDW generated $219.7 million of cash flow from operating activities compared with $443.1 million a year ago. Adjusted free cash flow totaled $278.4 million. CDW currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Wix.com Ltd. WIX reported second-quarter 2026 non-GAAP earnings of $1.39 per share, down 39% year over year but above the Zacks Consensus Estimate of $1.13. Revenues rose 15% year over year to $563.1 million and beat the consensus mark of $554 million. Growth reflected strong Base44 performance and continued core Wix expansion. Cadence Design Systems CDNS, a well-known player in the electronic design automation (EDA) space, recently reported strong second-quarter 2026 results with a record backlog that underscores sustained demand for its solutions. Revenues of $1.584 billion beat the Zacks Consensus Estimate by 0.5% and increased 24.2% year over year. The figure was within the management’s guided range of $1.555-$1.595 billion. All the product groups witnessed double-digit growth. Non-GAAP EPS of $2.11 beat the Zacks Consensus Estimate by 2.9%, increased 27.9% year over year. TELUS Corporation TU reported second-quarter 2026 adjusted earnings per share of C$0.16, down 27% from C$0.22 a year ago. Adjusted net income fell 26% to C$254 million, while operating revenues and other income declined 3% to C$4,929 million, pressured by weaker TELUS Digital results, lower mobile equipment revenues and reduced other income. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CDW Corporation (CDW) : Free Stock Analysis Report TELUS Corporation (TU) : Free Stock Analysis Report Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report Wix.com Ltd. (WIX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Net Sales: $6.6 billion, up 10% year over year, a new all-time quarterly record. Gross Profit: $1.3 billion, up 6.3% year over year, a new all-time quarterly record. Gross Margin: 20.1%, down 70 basis points year over year. Non-GAAP Operating Income: $556 million, up 7% year over year. Non-GAAP Operating Income Margin: 8.5%. Non-GAAP Net Income: $370 million, up 7.8% year over year. Non-GAAP EPS: $2.91 per diluted share, up 11.9% year over year, a new all-time quarterly record. Non-GAAP SG&A: $764 million, or 57.9% of gross profit, down 20 basis points year over year. Segment Performance (Net Sales): Commercial up 9%; Government up approximately 14%; Education up approximately 1%; International up approximately 23%. Product Performance (Net Sales): Hardware revenue up 10%; Software up low double digits; Services up 1%; Cloud and Security both delivered double-digit growth. Cash Flow: Adjusted free cash flow year-to-date was $278 million, or 42% of non-GAAP net income for the first half. Shareholder Returns: Returned $344 million in share repurchases and $80 million in dividends during the quarter. Balance Sheet: Net debt of $5.5 billion; liquidity of $2 billion; net leverage at 2.5 times. Cash Conversion Cycle: 21 days on a 3-month average basis. Warning! GuruFocus has detected 2 Warning Sign with CDW. Is CDW fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record quarterly net sales of $6.6 billion, up 10% year-over-year, with gross profit and non-GAAP EPS also setting all-time highs. Strong demand across diversified end markets, with Commercial up 9%, Government up 14%, and International up 23% (record quarter in Canada). AI-related infrastructure demand driving double-digit growth in servers, storage, and netcomm, with a robust pipeline for future services growth. Operating leverage improving as non-GAAP SG&A as a percentage of gross profit decreased 20 basis points year-over-year, with further benefits expected from Geared for Growth in the second half. Raised full-year outlook for gross profit growth to mid-single digits and EPS growth to the high end of high single digits, reflecting confidence in durable demand. Strong capital returns with $344 million in share repurchases and $80 million in dividends in Q2, supported by a $1.1 billion remaining buyback authorization. Gross margin declined 70 basis points year-over-year due to mix shift toward large enterprise infrastructure deals and lower services contribution. Services revenue growth was only 1% in the quarter, impacted by deployment timing and customer prioritization of hardware and cloud investments. Free cash flow conversion was weak at 42% of non-GAAP net income for the first half, below the 80-90% target, due to working capital investments in inventory. Higher education segment remains constrained by a challenging funding environment, with only 1% growth in the Education segment overall. Net interest expense increased year-over-year due to higher average borrowings, and net leverage stands at 2.5x, within but at the higher end of the target range. Management remains cautious on the second half, expecting gross margins to be below prior year levels and Q3 EPS growth to be at the high end of high single digits, implying a prudent outlook. Q: Can you provide more detail on the impact of AI adoption on customer spending with CDW, and are there any updates on the AI line card business model? A: Christine Leahy (CEO) stated that while AI adoption is most advanced among large enterprises, it is broadening across all industries and customer segments. CDW is taking proven use cases and scaling them into repeatable offerings. AI is part and parcel of most of what CDW sells, from hardware to software implementation and services, representing a full-stack opportunity. Customers are becoming more deliberate about ROI, focusing on use cases that move the needle in their specific industries, such as claims assessment in healthcare and fraud detection in financial services. This creates tailwinds for continued acceleration in both services and hardware components. Q: What drove the inflection in better operating leverage in the quarter, and can you provide updates on the Geared for Growth savings program? A: Albert Miralles (CFO) explained that the operating leverage inflection in Q2 was driven by disciplined expense management and broader efficiency efforts, with less contribution from Geared for Growth at that point. However, the Geared for Growth efforts in the first half have been significant and are at or beyond expectations. The benefits are planned to start paying off in the back half of the year, leading to improved operating leverage and expense ratio on a sequential basis in the back half and into 2027. Q: Were there any instances where you couldn't price on a cost-plus basis due to customer feedback, and did you see any like-for-like margin pressure in specific categories? A: Albert Miralles (CFO) confirmed there was no like-for-like margin pressure. The company maintained pricing discipline and effectively passed through price increases. The gross margin decline was driven by mix, specifically into infrastructure products, larger dollar tier orders, and more enterprise customers. This is consistent with the early stages of technology adoption where large clients lead. The mix into services was also less, but netted down revenues grew 16% and represented 36% of gross profit, indicating a healthy core business. Q: How should we think about the services attach rate as infrastructure deals progress, and will AI-specific deals be margin accretive or neutral over time? A: Christine Leahy (CEO) stated that services are embedded at every stage of the AI adoption curve, including readiness, deployment, integration, optimization, and ongoing operations. Adoption is broadening beyond large enterprise into mid-market and smaller businesses through productization of scalable AI solutions. As inference moves to the edge, there will be incremental demand for edge infrastructure, networking, and security, all requiring services. CDW expects continued growth in managed and recurring services, making it an increasingly meaningful contributor to profit growth over the next several years. Q: How would you characterize product availability and the current supply chain environment, given the elevated backlog? A: Albert Miralles (CFO) described the environment as more normalized. While there is continued urgency from customers, particularly on the AI side, the market has become more orderly. Delivery dates are being hit with better consistency, and there are no signs of double orders or cancellations. Customers have adapted to the environment, and these variables did not meaningfully influence results with respect to pull-forward demand. Q: Can you speak to customer feedback and tolerance for significant price increases from large technology platforms, and did you see any pull-forward in demand? A: Christine Leahy (CEO) noted that while customers don't like price increases, they are engaging CDW more frequently for detailed analysis of their choices. Customers are still purchasing technology and spending to their budgets, with budgets from other functions being reallocated to technology due to its essential nature. For example, PC growth was strong despite pricing because customers are willing to make mission-critical investments. Albert Miralles (CFO) added that there is diversity in practice across end markets, with enterprise customers being more on top of pricing dynamics, while mid-market and small education customers are adapting at a different pace. Q: Are you seeing customers repatriate workloads back on-premises to optimize token costs, and is that a better option for CDW versus public cloud? A: Christine Leahy (CEO) confirmed that CDW is seeing repatriation, but it's not better or worse for the company. CDW helps customers optimize workloads wherever they should reside. Larger customers are testing in the cloud but becoming more rigorous about cost optimization and bringing some workloads back on-prem. Small businesses are leaning into the cloud due to hardware access constraints. The bottom line is about optimizing for cost, security, and quality, which positions CDW as a positive opportunity across the board. Q: What needs to happen in the back half of the year to achieve the 80% to 90% free cash flow conversion, and where will the uptick come from? A: Albert Miralles (CFO) explained that the muted free cash flow is a timing effect from working capital investments made in the first half, particularly a $400 million increase in inventory to support customers amid pricing and supply chain dynamics. As the environment normalizes, CDW expects to rerationalize and ratchet back inventory levels. The biggest variable for cash flow conversion between now and year-end will be on the inventory front. Q: Can you contextualize the demand drivers behind the hardware momentum, including project accelerations due to pricing, demand from security threats, and AI inferencing investments? A: Christine Leahy (CEO) clarified that while pricing is a factor driving some demand, it's not the biggest factor, as underlying demand is strong and durable. Security threats, such as model hacking, are piquing customer interest and driving security services and consulting. AI inferencing and token economics are creating significant engagement with customers of all sizes on how to optimize models and locations, which is a significant driver of services. This supports adoption and consumption, which is the biggest growth catalyst right now. Q: How should we think about the timing of the services catch-up, and do you have visibility into these services? A: Christine Leahy (CEO) stated that the services slowdown is purely a timing and implementation issue. CDW has good visibility into customer needs and engagements. Given the timeline from engagement to execution, it will take a little time for services to pick up significantly, but by the end of the year and into the next, the company expects to see the fruits of current labor. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

CDW (CDW) came out with quarterly earnings of $2.91 per share, beating the Zacks Consensus Estimate of $2.8 per share. This compares to earnings of $2.6 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +3.93%. A quarter ago, it was expected that this information technology company would post earnings of $2.28 per share when it actually produced earnings of $2.28, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates three times. CDW, which belongs to the Zacks Computers - IT Services industry, posted revenues of $6.57 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 5.07%. This compares to year-ago revenues of $5.98 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. CDW shares have added about 13.1% since the beginning of the year versus the S&P 500's gain of 13%. While CDW has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for CDW was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.91 on $5.99 billion in revenues for the coming quarter and $10.75 on $23.57 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computers - IT Services is currently in the bottom 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Serve Robotics Inc. (SERV), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly loss of $0.69 per share in its upcoming report, which represents a year-over-year change of -91.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Serve Robotics Inc.'s revenues are expected to be $3.54 million, up 452.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CDW Corporation (CDW) : Free Stock Analysis Report Serve Robotics Inc. (SERV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research