CNXN

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. PC Connection (CNXN) is back on investor radar after reporting Q2 2026 earnings and reaffirming a quarterly dividend, giving you fresh numbers to assess both its profitability and shareholder payout. See our latest analysis for PC Connection. PC Connection's recent Q2 update and dividend affirmation come after a strong run, with an 8.9% 1 month share price return and a 26.5% 3 month share price return. The 5 year total shareholder return of 88.2% points to momentum that has built over a longer period. If you are looking beyond PC Connection for other potential ideas, this could be a useful moment to scan the market using the 19 top founder-led companies After a sharp move higher and a fresh set of earnings and dividend numbers, PC Connection now sits at a very different entry point for new money. Does the current valuation still leave the risk reward skewed to buyers? On the latest numbers, PC Connection trades on a P/E of 22.2x, which sits above its peer average yet below the broader US Electronic industry, giving you a mixed valuation signal at the current $84.14 share price. The P/E ratio compares the share price to earnings per share. For a profitable IT solutions company like PC Connection, it is a simple way to see how much investors are paying for each dollar of earnings. A higher P/E can reflect confidence in future profit growth, while a lower P/E can point to more muted expectations or perceived risks. In PC Connection's case, the 22.2x P/E is described as expensive relative to the peer group average of 17.7x, and also above an estimated fair P/E of 20.8x that the SWS fair ratio model suggests the market could gravitate toward. At the same time, the stock is described as good value compared to the wider US Electronic industry average P/E of 31.6x, which highlights that investors are paying less for PC Connection's earnings than for the sector overall. This combination of an above peer average P/E, a premium to the fair ratio level, and a discount to the broader industry sends a clear message. Within its closer peer set, the stock screens as expensive. Against the wider sector, it looks cheaper, which may reflect differences in growth expectations, business mix or quality between PC Connection and higher rated electronics stocks. Explore the SWS fair ratio for PC Connection Result: Price-to-earnings of 22.2x (OVERVALUED) However, PC Connection's higher P/E relative to peers, along with the stock trading slightly above the latest analyst price target of $83, could limit upside if sentiment cools. Find out about the key risks to this PC Connection narrative. The P/E discussion suggests PC Connection might be priced a little rich versus peers, yet the SWS DCF model points in a very different direction. In that framework, the stock at $84.14 is described as trading well below an estimated future cash flow value of $408.49, which indicates a very large valuation gap. If earnings and cash flows align more closely with that DCF path, the share price could have substantially more potential than the P/E comparison alone suggests. If they do not, the P/E warning sign may carry more weight. Which set of assumptions do you feel more comfortable using for your own decision making? Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out PC Connection for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 52 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. With mixed signals across P/E and DCF views on PC Connection, this is a moment to move quickly and test the numbers yourself. Weigh the concerns against the potential upsides and see how they fit your own risk tolerance by checking the 3 key rewards and 1 important warning sign If PC Connection has your attention, do not stop here. The market is full of other stocks with different strengths that could suit your goals and risk appetite. Prioritise resilient balance sheets and fundamentals by scanning companies in the solid balance sheet and fundamentals stocks screener (48 results) that may better match your comfort with financial strength. Hunt for potential mispriced opportunities by reviewing the 52 high quality undervalued stocks and see which stocks currently trade at a discount based on key fundamentals. Target cash flow you can track by checking the 8 dividend fortresses and compare yields, payout history, and financial backing in one place. 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 CNXN. Have feedback on this article? 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Image source: The Motley Fool. Wednesday, July 29, 2026 at 4:30 p.m. ET President and Chief Executive Officer - Timothy McGrath Senior Vice President and Chief Financial Officer - Thomas Baker Operator: Thank you. Good afternoon and welcome to the Second Quarter of the 2026 Connection Earnings Conference Call. My name is Shannon and I will be your coordinator for today. As a reminder, this conference call is the property of Connection and may not be recorded or rebroadcast without specific permission from the company. On the call today are Tim McGrath, President and Chief Executive Officer, and Tom Baker, Senior Vice President and Chief Financial Officer. I will now turn the call over to the company. Unknown Executive: Thank you, operator, and good afternoon, everyone. I will now read our cautionary note regarding forward-looking statements. Any statements or references made during the conference call that are not statements of historical fact may be deemed to be forward-looking statements. Various remarks that management may make about the company's future expectations, plans, and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. The actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factor section of the company's Annual Report on the Form 10-K for the year ended December 31, 2025, which is on file with the Securities and Exchange Commission as well as in other documents that the company files with the Commission from time to time. In addition, any forward-looking statements represent management's view as of today and should not be relied upon as representing views as of any subsequent date. While a company may elect to update forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so other than as required by law even if estimates change. Therefore, you should not rely on these forward-looking statements as representing management's views as of any date subsequent to today. During this call, non-GAAP financial measures will be discussed. A reconciliation between any non-GAAP financial measure discussed and its most directly comparable GAAP measure is available in today's earnings release and on the company's website at www.connection.com. Please note that unless otherwise stated, all references to second quarter 2026 comparisons are being made against the second quarter 2025. Today's call is being webcast and will be available on Connection's website. The earnings release will be available on the SEC website at www.sec.gov and in the investors' relations section of our website at www.connection.com. I would now like to turn the call over to our host, Tim McGrath, President and CEO. Timothy McGrath: Thank you, Samantha. Good afternoon, everyone, and thank you for joining us today for Connection's Q2 2026 Conference Call. I'll begin this afternoon with an overview of our second quarter results and highlights of our performance. Tom will then walk us through a more detailed look at our financials. Connection delivered strong results in the second quarter, highlighted by record net sales, record gross billings, and record gross profits. Our results reinforce what we believe is a fundamental shift taking place across enterprise technology, as organizations are beginning to move beyond AI experimentation and into enterprise-wide AI adoption. As they do, they're looking for trusted partners that can help them modernize infrastructure, strengthen security, integrate cloud and data platforms, and deploy AI in ways that deliver measurable business outcomes. Our strategy is centered on delivering full-stack technology solutions to bring together infrastructure, cloud, software, cybersecurity, AI, and services into a single integrated customer experience. Through our technical solutions organization, TSX, powered by Helix, our Center for AI and Applied Robotics, we're helping customers evaluate, deploy, and scale AI with confidence while accelerating their broader digital transformation initiatives. In Q2, net sales were $854 million, representing a 12.4% increase year-over-year. The increase in net sales was driven by 19.5% growth in notebooks, mobility, and desktops. This growth was a combination of higher average selling price and a 3% increase in units sold. Software grew 15%, while networking increased 11.5% in the quarter. Gross billings increased 14% to $1.2 billion compared to $1 billion in the prior year quarter. Gross profit increased 14.3% to a record $157.5 million and gross margin expanded by 30 basis points to 18.4%. The investment continues across networking, storage, server, software, and modern workplace technologies. We believe these investments form the foundation for future AI deployment. During the quarter, we continued to navigate the pricing and supply dynamics we discussed last quarter. Our teams worked closely with customers and strategic partners to manage supply constraints, optimize purchasing decisions, and maintain business continuity. While some customers accelerated purchases and others took a more measured approach, our diversified customer base, broad partner ecosystem, and disciplined execution enabled us to successfully navigate these dynamics across all three sales segments. With that, let's turn to our segment performance. Our Business Solutions segment delivered another outstanding quarter, demonstrating the strength of our customer relationships and the continued demand for modern workplace technologies. Net sales increased 17.3% to a record $343.9 million, while gross profit rose 14.9% to a record $79.1 million. Gross billings grew 16.7% to $496.1 million. Gross margin was 23% compared with 23.5% in the prior year quarter, reflecting a higher mix of endpoint devices and changes in customer mix. Demand remained broad-based across the portfolio with double-digit growth across endpoint devices, NetCom, and storage. Customer purchasing patterns in the Business Solutions segment continued to vary during the quarter, as some pulled forward demand in advance of price increases. Despite the pull-forward in demand, we have good momentum in the Business Solutions group, as backlog is at its highest level in three years. With Public Sector Solutions, net sales were $140.5 million, consistent with the prior year, while gross billings increased 1.7% to $197.1 million. Importantly, gross margins expanded 130 basis points to 15.5%, reflecting a favorable customer mix. Government agencies continue to prioritize modernization initiatives focused on cybersecurity, cloud adoption, and operational efficiency. As these organizations increasingly evaluate how AI can enhance mission outcomes, they require trusted technology partners capable of integrating infrastructure, software, security, and services within highly regulated environments. Our Enterprise Solutions segment also delivered an outstanding quarter, reflecting continued customer investment in technology modernization and the growing demand for enterprise AI-ready infrastructure. Net sales increased 13.4% to $369.6 million driven by strong demand for endpoint devices, software, servers, and services. Gross profit grew 15.8% to $55.2 million, while gross billings increased 17% to $477 million. Gross margin expanded 30 basis points to 14.9%, benefiting from favorable product mix and particularly strong growth in services. Enterprise customers experienced the greatest impact from the supply chain dynamics we discussed earlier. Some customers accelerated purchases into the quarter, while others delayed ordering during the second quarter because of fixed IT budget cycles. We also saw customers make strategic inventory commitments to secure supply. While these commitments did not affect our revenue or profitability, they increased inventory and we believe reflect customers' confidence in future deployment schedules. Importantly, Enterprise Solutions ended the quarter with a record backlog. We believe this, combined with continued demand for infrastructure modernization to support enterprise AI adoption, positions us well for continued momentum into the third quarter. Across each of our three sales segments, we continue to see the same underlying trend. Customers are investing in modern infrastructure, modern device, edge computing, cybersecurity, cloud and AI. Not as isolated technologies, but as integrated enterprise platforms. With that, I'll turn the call over to Tom for a review of our financial results in greater detail. Tom? Thomas Baker: Thanks, Tim. In the second quarter, SG&A increased 7.1% to $114.5 million year-over-year, driven by an increase in variable compensation due to higher levels of gross profit in the quarter and an increase in marketing costs due to the timing of activities. SG&A was 13.4% of net sales, down 70 basis points year-over-year, reflecting our continued focus on efficiency and scale. Operating income increased by 39.2% to a record $43 million year-over-year, demonstrating strong operating leverage as we continue to balance expense discipline with targeted investment in areas of our business that will drive future growth. Operating income margin improved to a record 5% compared to 4.1% last year. Interest income for the quarter was $2.5 million compared to $3.2 million last year, primarily a function of lower cash balances and interest rates. Our effective tax rate for the quarter was 27.2%, down from 27.3% in the prior year. As a result, net income for the second quarter increased 33.8% to a record $33.2 million, reflecting strong underlying earnings performance. Diluted earnings per share were $1.31, an increase of 35.1%, or $0.34 compared to the prior year. On a trailing 12-month basis, adjusted EBITDA was $144.5 million compared to $122.5 million a year ago, an increase of 18% resulting from improved earnings. During the quarter, we continued to return capital to shareholders through dividends as we paid a quarterly dividend of $0.20 per share. We also announced today that our board of directors has declared a $0.27 per share dividend. The dividend is payable on August 28, 2026 to shareholders of record as of August 11, 2026. As of today, we have $81.2 million remaining for stock repurchases under our existing stock repurchase program. Turning to the balance sheet and cash flow, cash used from operations from the first half of 2026 was $49.5 million, reflecting positive working capital investments to support growth. This included a $61.5 million increase in inventory and an $80.6 million increase in accounts receivable, partially offset by a $39.3 million increase in accounts payable. Cash used in investing activities totaled $6.4 million, driven by $105.7 million of new investment purchases and $3.9 million of purchases of property, plant, and equipment, partially offset by $103.2 million investment maturities. Cash used in financing activities was $13.6 million, reflecting our ongoing share repurchase activity of $2.5 million and dividend payments of $10.1 million to shareholders. We ended the quarter with a strong liquidity position, $340.7 million in cash, cash equivalents, and short-term investments, providing significant flexibility to execute our strategic priorities and continue returning capital to shareholders. We believe our disciplined approach to capital allocation, continued focus on margin execution, and targeted strategic investments position us well for the remainder of 2026 and beyond. I will now turn the call back over to Tim to discuss current market trends. Timothy McGrath: Thanks, Tom. We had good growth across each of our key vertical markets. In retail, net sales grew 31% year-over-year, while gross profit increased 29%. Retail remained one of our strongest performing verticals as customers accelerated investments in networking, storage, security, and AI-ready endpoints. In healthcare, net sales grew 15% and gross profit grew 14% year-over-year. Healthcare organizations continue to modernize technology environments while balancing security, compliance, and operational efficiency. In financial services, net sales increased 23% while gross profit grew 17% year-over-year. Financial institutions continue to prioritize cybersecurity, infrastructure modernization, and digital transformation as they prepare their environments for AI-enabled applications. In manufacturing, net sales increased 27% while gross profit increased 8% year-over-year, reflecting broad-based demand across our manufacturing customer base. Endpoint in the digital workspace remained an important growth driver. We also saw increasing investment in the data center technologies that enable enterprise AI adoption, including compute, storage, networking, and security. Manufacturers continue to focus on automation, operational resilience, productivity improvement, and supply chain optimization despite ongoing geopolitical tariffs and cost pressures. The value we deliver to customers continues to be validated by our strategic partners and independent third parties. During the quarter, we were honored with awards that reflect the strength of our execution, our solution capabilities, and our commitment to customer success. We were recognized as Dell's 2026 North America Channel Services Sales Partner of the Year. This award recognizes partners that demonstrate exceptional performance, innovation, and customer impact. We were named to TIME Magazine's 2026 list of America's best companies. This recognition is based on employee satisfaction, financial performance, and ESG transparency, reflecting the strength of our culture, our disciplined execution, and our long-term commitment to creating value for customers, employees, and shareholders. Looking forward, although AI may enter the enterprise as software, it runs on a foundation that includes compute, storage, networking, security, and cloud, as well as on the services required to design, deploy, secure, and manage those environments at scale. Through TSX, powered by Helix, our Center for AI and Applied Robotics, and our broad solutions portfolio, Connection gives customers a single, accountable path from AI capability to business outcomes. Toward that end, we continue to see strong customer engagement as organizations modernize their data centers, refresh AI-ready endpoints, strengthen their security posture, and prepare their environments for enterprise AI. These areas continue to drive healthy pipeline growth and represent some of our largest opportunities going forward. While short-term demand variability may occur as customers manage procurement cycles and supply chain dynamics, we continue to work closely with our partners and customers to minimize those impacts. More importantly, the long-term technology trends driving our business remain very much intact. And we believe Connection is well positioned to deliver sustained profitable growth. And our confidence in the business is underpinned by several long-term technology trends that continue to drive customer activity, expand our pipeline, and create opportunities across our business. The PC refresh cycle continues through 2026 as customers modernize aging fleets, complete Windows 11 migrations, and adopt AI-enabled devices that provide enhanced performance, security, and user experiences. Data center modernization remains a core priority as customers build the compute, storage, networking, cloud, and security foundations required to support increasingly complex data-intensive workloads. We continue to expand our technical services organization to help customers design, deploy, secure, and manage complex technology environments throughout the entire lifecycle. And we're investing in training and tools to ensure that our teams are fully equipped through AI adoption and next-generation architectures at scale and help them turn technology investments into measurable business outcomes. As we move forward, our backlog remains elevated relative to the past few years despite record net sales in the quarter. While we've benefited from price inflation and healthy demand, there is some uncertainty that supply chain constraints and other macroeconomic conditions still exist. However, demand continues to be solid through Q3. We're positioning Connection for sustained long-term growth, and we expect to continue to outperform the U.S. IT market by 200 basis points this year. In a world where technology changes fast, expertise wins, and that's where Connection continues to differentiate. We will now entertain your questions. Operator? Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of Anthony Lebiedzinski with Sidoti. Your line is now open. Anthony Lebiedzinski: Could you comment first on the monthly trends that you saw in the quarter? It sounds like July has also continued at a similar pace, but if you could add any other trends commentary about it, that'd be great. Thomas Baker: What we saw, Anthony, is we had a really strong April and a reasonably strong June, and May was, frankly, a little bit soft. I'm not quite sure why that happened that way, but that's kind of the way it rolled through. We had a really good year-end with Microsoft this year. And to that end, I think, as we look forward, you know, I think our sequentially will probably be down a little bit, I would say, in revenues next quarter compared to this quarter and probably in the, you know, year-on-year and like the high single digits in terms of growth. Timothy McGrath: You asked about July. And July did start and is going strong with solid momentum. Anthony Lebiedzinski: That's great to hear. And then, so you gave some color about the notebooks, mobility, and desktops in terms of inflation and pricing versus units. Now on a consolidated level, can you help us out as far as maybe giving us a little bit more context as to just pricing versus unit dynamics? Timothy McGrath: Yes, so Anthony, thanks. So in units, we were up 3% for endpoint devices. So the unit count was up 3%. The revenue was up about 19% overall. So that's kind of how that breaks out. Anthony Lebiedzinski: Right, right. Okay. And then, but as far as on a consolidated basis for the whole company, as far as all the product categories, if you could maybe just give a little bit more color as far as pricing versus units. Thomas Baker: Yes, I think in the servers and networking, I mean, it's obviously a little inflation built in there too, particularly strong software quarter, like I said, with Microsoft year-end. So that helped the margins a little bit as all that stuff or most of that stuff gets netted down to revenue and gross profit are equal. So I think that's kind of what we saw. I think in terms of what we saw with the mobility and desktops, there was absolutely price inflation. And I think we did a reasonably good job pushing that through and maintaining our margins. Anthony Lebiedzinski: Got you. Okay. And then last for me, as far as on the balance sheet, as you pointed out, Tom, your accounts receivable and inventories were up as well as accounts payable. How do you see these settling by the end of the year? Any sort of ballpark estimate as to like where we could see those? Thomas Baker: Yes. So the timing in the quarter, which was, you know, your first question has a lot to do with what that receivable balance looks like. And I think we had about 40% of our revenue in June. So that obviously, you know, elevates that balance. And especially when you look at our gross billings, which are up even more than our revenue, that's reflective of what's in that receivable balance. If business kind of stays at this level, receivables probably don't come down a ton. Where I think we'll see a little bit more movement is on the inventory, because we did bring in a bunch of inventory and we're kind of deploying that for our customers over time. So I would expect sequentially the inventory balance to come down a little bit by the end of the year, say $150 million range. Anthony Lebiedzinski: Got it. All right. Well, that's very helpful. Well, thank you very much and best of luck. Operator: Thank you. Our next question comes from the line of Logan Katzman with Raymond James. Your line is now open. Logan Katzman: This is Logan on for Adam. It was helpful hearing you kind of talk about your thoughts on the sequential revenue growth here. But given the record backlog you guys have in Enterprise Solutions and your high backlog in Business Solutions, I'm just curious, you know, how all of that's kind of informing the gross profit dollar growth and EPS expectations through the end of the year. Timothy McGrath: Thanks, Logan. There are two things that jump out at us right away. The first is, as Tom mentioned, with our Microsoft business, June is their year-end and that's traditionally, the month of June is a large Microsoft month for us, and we did see that this year. Also, historically, Q2 is usually slightly larger than Q3. They're close, but slightly larger. So given the combination of pull-ins, the Microsoft year-end, and just the history of Q2 versus Q3, we feel like sequentially Q3 might be down a little, but we're pretty confident about the quarter overall. Logan Katzman: Okay, that's helpful. Thank you. Can you help quantify the pull-in activities that you saw in the quarter? And then I think you also called out maybe some headwinds from some of the late purchases. Is there any way you could quantify both those impacts? Thomas Baker: Yes, it's hard to quantify all the pull-ins because we don't always know what's in the customer's mindset. Some we know explicitly. I mean, we had a couple of customers we probably did over $10 million of business with that were pretty clearly pull-ins. So I would say it's, you know, it certainly wasn't 10% of the business, was, let's say, mid-single digits, maybe a little lower overall. And then the question is, on some of this stuff, the supply chain issues worked their way through. When is the backlog going to get relieved? Because we do have a good, solid backlog, but it's just... It feels like some of it will go out in Q3, and I know some of it's going to roll into at least Q4. So it's a little bit difficult to quantify specifically at this point. Logan Katzman: No, that's super helpful. Thank you. Timothy McGrath: Thank you, Logan. Operator: Thank you, and I'm currently showing no further questions at this time. I'd now like to turn the call back over to Tim McGrath for closing remarks. Timothy McGrath: Thank you, Shannon. I'd like to thank all of our customers, vendor partners, and shareholders for the continued support, and once again, our co-workers for their efforts and extraordinary dedication. I'd also like to thank those of you listening to our call this afternoon. Your time and interest in Connection are greatly appreciated. Have a great evening. Operator: This concludes today's conference. Thank you for your participation. You may now disconnect. Before you buy stock in PC Connection, 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 PC Connection 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 $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* Now, it’s worth noting Stock Advisor’s total average return is 953% — 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 7, 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 positions in and recommends PC Connection. The Motley Fool has a disclosure policy. PC Connection (CNXN) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

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. Management attributes record results to a fundamental shift where organizations are moving beyond AI experimentation into enterprise-wide adoption. Net sales growth of 12.4% was primarily driven by a 19.5% surge in endpoint devices, resulting from a 3% unit increase combined with higher average selling prices. The Business Solutions segment saw record sales as customers pulled forward demand to get ahead of anticipated price increases. Enterprise Solutions growth was fueled by modernization of data centers and 'AI-ready' infrastructure, though some customers delayed orders due to fixed IT budget cycles. Strategic inventory commitments were made to secure supply amidst ongoing constraints, reflecting customer confidence in future deployment schedules despite not impacting current revenue. The company is positioning itself as a full-stack provider through its TSX and Helix AI centers to bridge the gap between AI capability and measurable business outcomes. Management expects to outperform the U.S. IT market by 200 basis points for the full year 2026. The PC refresh cycle is expected to persist through 2026, driven by Windows 11 migrations and the adoption of AI-enabled devices. Third quarter revenue is projected to be sequentially lower than Q2 due to the typical seasonal peak of Microsoft year-end renewals in June. Backlog remains at record or multi-year highs across segments, providing a buffer against short-term demand variability and supply chain uncertainty. Inventory levels are expected to normalize by year-end, with a projected reduction to approximately the $150 million range as products are deployed for customers. Supply chain dynamics continue to cause friction, leading to strategic inventory builds and varied purchasing patterns across the enterprise segment. Operating income margin reached a record 5%, demonstrating significant operating leverage as sales growth outpaced a 7.1% increase in SG&A. Manufacturing customers are facing ongoing headwinds from geopolitical tariffs and cost pressures, though they continue to invest in automation and resilience. The company increased its quarterly dividend to $0.27 per share, reflecting confidence in its liquidity position and cash flow generation. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted a strong April and June but a 'soft' May, with July showing solid early momentum. Year-over-year growth for Q3 is anticipated to be in the high single digits, slightly lower than Q2's double-digit pace. The 19% revenue growth in endpoints was heavily weighted toward price inflation, as unit volume only grew by 3%. Management confirmed they have been successful in pushing through these price increases to maintain margins. Explicit pull-ins from large customers were estimated to represent mid-single digits or slightly less of the total business. While some backlog will be relieved in Q3, management expects a portion to roll into Q4 due to ongoing supply chain timing.

This article first appeared on GuruFocus. Net Sales: Record $854 million, a 12.4% increase year-over-year. Gross Billings: Increased 14% to $1.2 billion. Gross Profit: Record $157.5 million, a 14.3% increase. Gross Margin: Expanded by 30 basis points to 18.4%. Operating Income: Record $43 million, a 39.2% increase. Operating Income Margin: Record 5%, compared to 4.1% last year. Net Income: Record $33.2 million, a 33.8% increase. Diluted Earnings Per Share (EPS): $1.31, an increase of 35.1%. SG&A: $114.5 million, or 13.4% of net sales, down 70 basis points year-over-year. Business Solutions Segment Net Sales: Record $343.9 million, a 17.3% increase. Business Solutions Segment Gross Profit: Record $79.1 million, a 14.9% increase. Public Sector Solutions Net Sales: $140.5 million, consistent with the prior year. Enterprise Solutions Segment Net Sales: $369.6 million, a 13.4% increase. Enterprise Solutions Segment Gross Profit: $55.2 million, a 15.8% increase. Cash and Cash Equivalents and Short-Term Investments: $340.7 million. Cash Used from Operations (First Half of 2026): $49.5 million. Dividend: $0.20 per share declared. Warning! GuruFocus has detected 6 Warning Sign with CNXN. Is CNXN fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record net sales of $854 million, up 12.4% year-over-year, driven by strong demand across all segments. Record gross profit of $157.5 million, with gross margin expanding 30 basis points to 18.4%. Record operating income of $43 million, with operating margin improving to 5% from 4.1%. Record backlog in both Business Solutions and Enterprise Solutions segments, signaling strong future demand. Robust growth in key verticals: retail up 31%, manufacturing up 27%, and financial services up 23% year-over-year. Uncertainty from supply chain constraints and macroeconomic conditions, including tariffs and cost pressures. Sequential revenue expected to decline slightly in Q3 due to pull-forward demand and Microsoft year-end timing. Inventory increased by $61.5 million due to strategic commitments, potentially tying up working capital. May experienced softer sales, indicating some month-to-month variability in demand. Customer purchasing patterns varied, with some delaying orders due to fixed IT budget cycles. Q: Can you comment on the monthly trends you saw in the second quarter and how July is shaping up?A: Thomas Baker (CFO): We had a really strong April and a reasonably strong June, but May was a little soft. July has started and is going strong with solid momentum. Sequentially, Q3 revenues will probably be down a little compared to Q2, with year-over-year growth in the high single-digits. Q: Can you provide more context on the pricing versus unit dynamics for the quarter?A: Timothy McGrath (CEO): For endpoint devices, units were up 3% while revenue was up about 19%, showing significant price inflation. Thomas Baker (CFO): There was also some inflation in servers and networking. We had a particularly strong software quarter due to Microsoft's year-end, which helped margins. Q: How do you see accounts receivable and inventory settling by the end of the year?A: Thomas Baker (CFO): The timing of revenue in the quarter impacts receivables; about 40% of our revenue was in June, elevating that balance. If business stays at this level, receivables won't come down much. However, we expect inventory to decrease sequentially to around $150 million by year-end as we deploy the inventory we brought in for customers. Q: Given the record backlog in Enterprise Solutions and high backlog in Business Solutions, how does that inform gross profit dollar growth and EPS expectations?A: Timothy McGrath (CEO): Historically, Q2 is slightly larger than Q3. Combined with the pull-in activity and Microsoft's year-end in June, we feel Q3 might be down a little sequentially, but we are still confident about the quarter overall. Q: Can you help quantify the pull-in activities and delayed purchases you saw in the quarter?A: Thomas Baker (CFO): It's hard to quantify exactly, but we had a couple of customers who did over $10 million of business that were clearly pulling forward demand. Overall, it was in the mid-single-digit percentage range of the business, maybe a little lower. Some of the backlog from delayed purchases will go out in Q3, and some will roll into Q4. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in PC Connection, Inc.? Here are five stocks we like better. Record Q2 performance: Net sales rose 12.4% year over year to $854 million, while gross profit increased 14.3% to $157.5 million. Operating income climbed 39.2% to $43 million, and diluted EPS rose 35.1% to $1.31. Broad-based technology demand: Growth was led by notebooks, mobility products and desktops, with additional strength in software, networking and AI-ready infrastructure. Business Solutions and Enterprise Solutions posted double-digit sales growth, while both segments ended the quarter with elevated or record backlogs. Positive but measured outlook: Management reported strong July activity and expects high-single-digit year-over-year revenue growth in Q3, though sequential revenue may decline after a strong June. Long-term drivers include PC refreshes, Windows 11 migrations, AI-enabled devices, data-center modernization and technical services, despite ongoing supply-chain and macroeconomic uncertainty. PC Connection (NASDAQ:CNXN) reported record second-quarter results as demand for endpoint devices, software, networking and AI-ready infrastructure lifted sales and profitability, while management said elevated backlog and solid July activity support continued momentum into the third quarter. For the second quarter of 2026, net sales increased 12.4% from a year earlier to a record $854 million. Gross billings rose 14% to $1.2 billion, while gross profit increased 14.3% to a record $157.5 million. Gross margin expanded 30 basis points to 18.4%. → This Tiny AI Supplier Could Be More Important Than the Chipmakers President and CEO Tim McGrath said the results reflect what the company views as a shift from AI experimentation toward broader enterprise adoption. Customers are seeking help to modernize infrastructure, cybersecurity, cloud and data platforms in preparation for AI deployments, he said. “Customers are investing in modern infrastructure, modern device, edge computing, cybersecurity, cloud, and AI, not as isolated technologies, but as integrated enterprise platforms,” McGrath said. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Growth was led by notebooks, mobility products and desktops, where sales rose 19.5%. The increase reflected both higher average selling prices and a 3% increase in units sold, according to management. Software sales grew 15%, while networking revenue rose 11.5%. McGrath said the company continued to manage supply constraints and pricing dynamics during the quarter. Some customers accelerated purchases ahead of anticipated price increases, while others took a more measured approach. The company said its diversified customer base and broad partner ecosystem helped it navigate those conditions across its three sales segments. Business Solutions: Net sales increased 17.3% to a record $343.9 million, while gross billings grew 16.7% to $496.1 million. Gross margin was 23%, compared with 23.5% a year earlier, reflecting a higher mix of endpoint devices and changes in customer mix. Backlog reached its highest level in three years. Public Sector Solutions: Net sales were $140.5 million, consistent with the prior-year quarter, while gross billings increased 1.7% to $197.1 million. Gross margin expanded 130 basis points to 16.5% due to favorable customer mix. Enterprise Solutions: Net sales rose 13.4% to $369.6 million, with demand for endpoint devices, software, servers and services. Gross profit increased 15.8% to $55.2 million, gross billings climbed 17% to $477 million, and gross margin improved 30 basis points to 14.9%. The segment ended the quarter with record backlog. → Innovative ETF Strategies That Are Paying Off This Summer Enterprise customers were most affected by supply-chain dynamics, McGrath said. Some accelerated purchases, while others deferred orders because of fixed IT budget cycles. Customers also made strategic inventory commitments to secure supply, which increased inventory but did not affect revenue or profitability, according to the company. Senior Vice President and CFO Tom Baker said selling, general and administrative expense increased 7.1% to $114.5 million, driven by higher variable compensation associated with gross-profit growth and the timing of marketing activity. However, SG&A fell 70 basis points as a percentage of sales to 13.4%. Operating income increased 39.2% to a record $43 million, and operating margin improved to a record 5% from 4.1% in the prior-year period. Net income rose 33.8% to a record $33.2 million, while diluted earnings per share increased 35.1%, or $0.34, to $1.31. On a trailing 12-month basis, adjusted EBITDA was $144.5 million, up 18% from $122.5 million a year earlier. Interest income declined to $2.5 million from $3.2 million, which Baker attributed primarily to lower cash balances and interest rates. The company paid a quarterly dividend of $0.20 per share and said its board declared another $0.20-per-share dividend payable Aug. 28 to shareholders of record as of Aug. 11. Connection had $81.2 million remaining under its existing share repurchase authorization. Connection ended the quarter with $340.7 million in cash equivalents and short-term investments. Cash used in operations during the first half totaled $49.5 million, reflecting working-capital investments, including a $61.5 million increase in inventory and an $80.6 million increase in accounts receivable, partly offset by a $39.3 million increase in accounts payable. Management said July began strongly, although Baker expects third-quarter revenue to be modestly lower sequentially than the second quarter. He said year-over-year revenue growth in the third quarter could be in the high single digits. Baker attributed the expected sequential decline in part to a strong June tied to Microsoft’s year-end, as well as the historical pattern of the second quarter being slightly larger than the third. He said customer pull-ins represented mid-single digits of overall business, though the exact impact is difficult to quantify. Management expects inventory to decline sequentially as products are deployed for customers, with Baker estimating the inventory balance could be in the $150 million range by year-end. Receivables may not decline substantially if business remains at current levels, he added, noting that about 40% of quarterly revenue occurred in June. McGrath said retail, healthcare, financial services and manufacturing all posted growth during the quarter. Retail net sales rose 31%, financial-services sales increased 23%, manufacturing sales grew 27%, and healthcare sales increased 15%. Looking ahead, the company cited the PC refresh cycle, Windows 11 migrations, AI-enabled devices, data-center modernization and demand for technical services as long-term growth drivers. McGrath said demand remains solid through the third quarter and that Connection expects to outperform the U.S. IT market by 200 basis points in 2026, while acknowledging continuing supply-chain and macroeconomic uncertainty. PC Connection, Inc (NASDAQ: CNXN), now operating under the trade name Connection, is a value-added provider of information technology solutions founded in 1982 and headquartered in Merrimack, New Hampshire. The company offers a broad portfolio of hardware and software products sourced from leading technology vendors, alongside professional services designed to help organizations design, deploy and maintain IT environments. Connection's product offerings encompass desktop and notebook computers, servers and storage systems, networking and cybersecurity solutions, as well as cloud and virtualization technologies. 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 "PC Connection Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

SECOND QUARTER SUMMARY: Net sales: $854.0 million, up 12.4% y/y Gross billings: $1.2 billion, up 14.0% y/y1 Gross profit: $157.5 million, up 14.3% y/y Gross margin: 18.4%, up 30 basis points y/y Net income: $33.2 million, up 33.8% y/y Diluted EPS: $1.31, compared to $0.97 y/y Adjusted Diluted EPS: $1.31, compared to $0.972 FIRST HALF OF 2026 SUMMARY: Net sales: $1.6 billion, up 7.9% y/y Gross billings: $2.2 billion, up 9.3% y/y1 Gross profit: $290.2 million, up 9.5% y/y Gross margin: 18.4%, up 30 basis points y/y Net income: $50.4 million, up 31.7% y/y Diluted EPS: $1.99, compared to $1.48 y/y Adjusted Diluted EPS: $2.08, compared to $1.562 MERRIMACK, N.H., July 29, 2026--(BUSINESS WIRE)--Connection (PC Connection, Inc.; NASDAQ: CNXN), a leading information technology solutions provider to business, government, healthcare and education markets, today announced results for the second quarter ended June 30, 2026. The Company also announced that its Board of Directors declared a quarterly dividend of $0.20 per share of the Company’s common stock. Payment will be made on August 28, 2026, to shareholders of record on August 11, 2026. "Our record financial performance reflects more than strong execution—it reflects the value that our customers are placing on their enterprise technology," said Timothy McGrath, President and Chief Executive Officer. McGrath continued, "As organizations increasingly operationalize AI, they need trusted partners like Connection who can modernize infrastructure, strengthen security, integrate cloud and data platforms, and deliver measurable business outcomes." Second Quarter of 2026 Results: Net sales for the quarter ended June 30, 2026 increased by 12.4%, year over year. Gross billings increased by 14.0% to $1.2 billion, compared to $1.0 billion in the second quarter of 20251. Gross profit increased by 14.3% to $157.5 million, compared to $137.8 million for the second quarter of 2025, and gross margin increased 30 basis points to 18.4%, compared to the prior year quarter. Net income increased 33.8% to $33.2 million, or $1.31 per diluted share, compared to $24.8 million, or $0.97 per diluted share, for the second quarter of 2025. Performance by Segment: Net sales for the Business Solutions segment increased by 17.3% to $343.9 million in the second quarter of 2026, compared to $293.2 million in the prior year quarter. Gross billings increased by 16.7% to $496.1 million, compared to $425.1 million in the prior year quarter1. Gross profit increased by 14.9% to $79.1 million, compared to $68.9 million in the prior year quarter. Gross margin decreased by 50 basis points to 23.0% for the second quarter of 2026. Net sales for the Public Sector Solutions segment remained consistent at $140.5 million for the second quarter of 2026 and 2025. Gross billings increased by 1.7% to $197.1 million, compared to $193.8 million in the prior year quarter1. Gross profit increased by 9.2% to $23.2 million, compared to $21.3 million in the prior year quarter. Gross margin increased by 130 basis points to 16.5% for the second quarter of 2026. Net sales for the Enterprise Solutions segment increased by 13.4% to $369.6 million in the second quarter of 2026, compared to $326.0 million in the prior year quarter. Gross billings increased by 17.0% to $477.0 million, compared to $407.5 million in the prior year quarter1. Gross profit increased by 15.8% to $55.2 million, compared to $47.6 million in the prior year quarter. Gross margin increased by 30 basis points to 14.9% for the second quarter of 2026. Sales by Product Mix: Notebook/mobility and desktop sales increased by 19% year over year and accounted for 51% of net sales in the second quarter of 2026, compared to 48% of net sales in the second quarter of 2025. Software sales increased by 15% year over year and accounted for 9% of net sales in the second quarter of both 2026 and 2025. Servers/storage sales decreased by 18% year over year and accounted for 7% of net sales in the second quarter of 2026, compared to 9% of net sales in the second quarter of 2025. Networking sales increased by 12% year over year and accounted for 7% of net sales in the second quarter of both 2026 and 2025. Accessories sales increased by 10% year over year and accounted for 10% of net sales in the second quarter of both 2026 and 2025. Selling, general and administrative ("SG&A") expenses increased in the second quarter of 2026 by 7.1% to $114.5 million from $106.9 million in the prior year quarter. SG&A as a percentage of net sales decreased to 13.4%, compared to 14.1% in the prior year quarter. Interest income in the second quarter of 2026 was $2.5 million, compared to $3.2 million in the second quarter of 2025. Cash and cash equivalents and short-term investments were $340.7 million as of June 30, 2026, compared to $406.7 million as of December 31, 2025. Six Months of 2026 Results: Net sales for the six months ended June 30, 2026 increased by 7.9%, compared to the six months ended June 30, 2025. Gross billings increased by 9.3% to $2.2 billion, compared to $2.0 billion for the six months ended June 30, 20251. Gross profit increased by 9.5% to $290.2 million, compared to $265.1 million for the six months ended June 30, 2025, and gross margin increased 30 basis points to 18.4%, compared to the six months ended June 30, 2025. Net income for the six months ended June 30, 2026 increased by 31.7% to $50.4 million, or $1.99 per diluted share, compared to net income of $38.3 million, or $1.48 per diluted share, for the six months ended June 30, 2025. Adjusted Diluted Earnings per Share2 increased to $2.08 per share for the six months ended June 30, 2026, compared to $1.56 per share for the six months ended June 30, 2025. Earnings before interest, taxes, depreciation and amortization, adjusted for stock-based compensation expense, restructuring and other charges and non-routine legal settlements ("Adjusted EBITDA")2 increased 18% to $144.5 million for the twelve months ended June 30, 2026, compared to $122.5 million for the twelve months ended June 30, 2025. Conference Call and Webcast Connection will host a conference call and live web cast today, July 29, 2026 at 4:30 p.m. EDT to discuss its second quarter financial results. For participants who would like to participate via telephone, please register here to receive the dial-in number along with a unique PIN number that is required to access the call. A web-cast of the conference call, which will be broadcast live via the Internet, and a copy of this press release, can be accessed on Connection’s website at ir.connection.com. For those unable to participate in the live call, a replay of the webcast will be available at ir.connection.com approximately 90 minutes after the completion of the call and will be accessible on the site for approximately one year. Non-GAAP Financial Information EBITDA, Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings per Share are non-GAAP financial measures. These measures are included to provide additional information with respect to the Company’s operating performance and earnings. Non-GAAP measures are not a substitute for GAAP measures and should be considered together with the GAAP financial measures. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Definitions for each Non-GAAP measure and a reconciliation to their most directly comparable GAAP measures are available in the tables at the end of this release. About Connection PC Connection, Inc. and its subsidiaries, dba Connection, (www.connection.com; NASDAQ: CNXN) is a Fortune 1000 company headquartered in Merrimack, NH. With offices throughout the United States, Connection delivers custom-configured IT solutions from its ISO 9001:2015 SOC 2 Type 2 certified Technology Integration and Distribution Center in Wilmington, OH. In addition, the Company has more than 5,000 professional certifications to ensure that it can solve the most complex issues of its customers. Connection also services international customers through its GlobalServe subsidiary, a global IT procurement and service management company. Investors and media can find more information about Connection at http://ir.connection.com. Connection Business Solutions (800.800.5555) is a rapid-response provider of IT products and services serving primarily the small- and medium-sized business sector. It offers more than 460,000 brand-name products through its staff of technically trained sales account managers, publications, and its website at www.connection.com. Connection–Enterprise Solutions (561.237.3300), www.connection.com/enterprise, provides corporate technology buyers with best-in-class IT solutions, in-depth IT supply-chain expertise, and real-time access to over 460,000 products and 1,600 vendors through MarkITplace®, a proprietary next-generation, cloud-based supply chain solution. The team’s engineers, software licensing specialists, and subject matter experts help reduce the cost and complexity of buying hardware, software, and services throughout the entire IT lifecycle. Connection Public Sector Solutions (800.800.0019), is a rapid-response provider of IT products and services to federal, state, and local government agencies and educational institutions through specialized account managers, publications, and online at www.connection.com/publicsector. Cautionary Note Regarding Forward-Looking Statements This earnings release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance and include statements concerning, among other things, our future financial results, business plans (including statements regarding new products and services we may offer and future expenditures, costs and investments), liabilities, impairment charges, competition and the expected impact of current macroeconomic conditions on our businesses and results of operations. You can generally identify forward-looking statements because they may contain words such as "may," "will," "would," "should," "expects," "plans," "could," "intends," "target," "projects," "believes," "estimates," "anticipates," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions, although not all forward-looking statements include such terms. These statements reflect our current views and are based on assumptions as of the date of this report. Such assumptions are based upon internal estimates and other analysis of current market conditions and trends, management’s expectations, plans and strategies, economic conditions and other factors. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements. Such differences may result from actions taken by us, including expense reduction or strategic initiatives (including reductions in force, capital investments and new or expanded product offerings or services), the execution of our business plans (including our inventory management, cost structure and management and other personnel decisions) or other business decisions, as well as from developments beyond our control, including; macroeconomic factors facing the global economy, including disruptions in or increased volatility of the capital markets, changes in trade policy, which may include the imposition of tariffs or other trade barriers, economic sanctions and economic slowdowns or recessions, government shutdowns, the impact of conflicts in Iran and the Middle East, changes in tax policy, rising inflation and changing interest rates modifying our potential for investment income and the timing thereof or reducing the level of investment our customers are willing to make in IT products; supply constraints, such as the global memory (DRAM and NAND) shortage; substantial competition reducing our market share; significant price competition reducing our profit margins; the loss of any of our major vendors adversely affecting the number or type of products we may offer; virtualization of information technology resources and applications, including networks, servers, applications, and data storage disrupting or altering our traditional distribution models; service interruptions at third party shippers negatively impacting our ability to deliver the products we offer to our customers; increases in shipping and postage costs reducing our margins and adversely affecting our results of operations; loss of key persons or the inability to attract, train and retain qualified personnel adversely affecting our ability to operate our business; and cyberattacks or the failure to safeguard personal information and our IT systems resulting in liability and harm to our reputation. Additional factors include those described in our Annual Report on Form 10-K for the year ended December 31, 2025, including under the captions "Risk Factors," "Management’s Discussion and Analysis of Financial Condition and Results of Operations," and "Business," in our subsequent Quarterly Reports on Form 10-Q, including under the captions "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations," and in the other subsequent filings we make with the Securities and Exchange Commission from time to time. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances. You should not place undue reliance on the forward-looking statements included in this release. We assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made except as required by law. CONSOLIDATED SELECTED FINANCIAL INFORMATION REVENUE AND MARGIN INFORMATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME CONDENSED CONSOLIDATED BALANCE SHEETS CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS EBITDA AND ADJUSTED EBITDA A reconciliation of EBITDA and Adjusted EBITDA to Net Income is detailed below. Adjusted EBITDA is defined as EBITDA (defined as earnings before interest, taxes, depreciation and amortization) adjusted for stock-based compensation, severance expenses and non-routine legal settlements. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either includes or excludes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance including our ability to fund our future capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreement. When analyzing our operating performance, investors should use EBITDA and Adjusted EBITDA in addition to, and not as alternatives for Net income or any other performance measure presented in accordance with GAAP. Our non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE A reconciliation of Adjusted Net Income to Net Income is detailed below. Adjusted Net Income is defined as Net Income plus severance expenses, net of tax plus or minus loss or income from non-routine legal settlements. A reconciliation of Adjusted Diluted Earnings per Share to Diluted Earnings per Share is detailed below. Adjusted Diluted Earnings per Share is defined as diluted earnings per share adjusted for severance expenses, net of tax. Adjusted Net Income and Adjusted Diluted Earnings Per Share are considered non-GAAP financial measures (see note above in EBITDA and Adjusted EBITDA for a description of non-GAAP financial measures). The Company believes that Adjusted Net Income and Adjusted Diluted Earnings per Share provide helpful information with respect to the Company's operating performance. When analyzing our operating performance, investors should use Adjusted Net Income and Adjusted Diluted Earnings per Share in addition to, and not as alternatives for Net income and Diluted Earnings per Share or any other performance measure presented in accordance with GAAP. Our non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. View source version on businesswire.com: https://www.businesswire.com/news/home/20260729538044/en/ Contacts Investor Relations Contact: Thomas Baker, 603.683.2505Senior Vice President, CFO, and [email protected]

PC Connection (CNXN) came out with quarterly earnings of $1.31 per share, beating the Zacks Consensus Estimate of $1.04 per share. This compares to earnings of $0.97 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +25.96%. A quarter ago, it was expected that this information technology services provider would post earnings of $0.62 per share when it actually produced earnings of $0.77, delivering a surprise of +24.19%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. PC Connection, which belongs to the Zacks Retail - Computer Hardware industry, posted revenues of $854 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 11.25%. This compares to year-ago revenues of $759.69 million. The company has topped consensus revenue estimates two 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. PC Connection shares have added about 43.9% since the beginning of the year versus the S&P 500's gain of 8.5%. While PC Connection 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 PC Connection 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 $1.05 on $754.17 million in revenues for the coming quarter and $3.93 on $3 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, Retail - Computer Hardware is currently in the top 40% 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. Capri Holdings (CPRI), another stock in the broader Zacks Retail-Wholesale sector, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This luxury retailer is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of -20%. The consensus EPS estimate for the quarter has been revised 0.8% lower over the last 30 days to the current level. Capri Holdings' revenues are expected to be $751.8 million, down 5.7% 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 PC Connection, Inc. (CNXN) : Free Stock Analysis Report Capri Holdings Limited (CPRI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

MERRIMACK, N.H., July 15, 2026--(BUSINESS WIRE)--Connection (PC Connection, Inc.; NASDAQ: CNXN), a leading information technology solutions provider to business, government, healthcare and education markets, will release its second quarter 2026 operating results after close of market on Wednesday, July 29, 2026. At 4:30 p.m. EDT on that date, management will review these results during their quarterly conference call. For participants who would like to participate via telephone, please register here to receive the dial-in number along with a unique PIN number that is required to access the call. The live webcast and replays of the conference call can be accessed online through the investor relations section of our website at https://ir.connection.com. About Connection PC Connection, Inc. and its subsidiaries, dba Connection, (www.connection.com; NASDAQ: CNXN) is a Fortune 1000 company headquartered in Merrimack, NH. With offices throughout the United States, Connection delivers custom-configured IT solutions from its ISO 9001:2015 SOC 2 Type 2 certified Technology Integration and Distribution Center in Wilmington, OH. In addition, the Company has more than 5,000 professional certifications to ensure that it can solve the most complex issues of its customers. Connection also services international customers through its GlobalServe subsidiary, a global IT procurement and service management company. Investors and media can find more information about Connection at http://ir.connection.com. Connection Business Solutions (800.800.5555) is a rapid-response provider of IT products and services serving primarily the small- and medium-sized business sector. It offers more than 460,000 brand-name products through its staff of technically trained sales account managers, publications, and its website at www.connection.com. Connection Enterprise Solutions (561.237.3300), www.connection.com/enterprise, provides corporate technology buyers with best-in-class IT solutions, in-depth IT supply-chain expertise, and real-time access to over 460,000 products and 1,600 vendors through MarkITplace®, a proprietary next-generation, cloud-based supply chain solution. The team’s engineers, software licensing specialists, and subject matter experts help reduce the cost and complexity of buying hardware, software, and services throughout the entire IT lifecycle. Connection Public Sector Solutions (800.800.0019), is a rapid-response provider of IT products and services to federal, state, and local government agencies and educational institutions through specialized account managers, publications, and online at www.connection.com/publicsector. ### View source version on businesswire.com: https://www.businesswire.com/news/home/20260715307428/en/ Contacts Corporate Communications Contact: Jeff Frank, [email protected] Investor Relations Contact: Thomas Baker, 603.683.2505Senior Vice President, CFO, and [email protected]