CDW Corp

CDW Corporation is a Fortune 500 company and member of the S&P 500 Index, operating as a leading multi-brand provider of information technology solutions to business, government, education, and healthcare customers in the United States, the United Kingdom, and Canada. The company's broad array of offerings ranges from discrete hardware and software products to integrated IT solutions and services that include on-premise and cloud capabilities across hybrid infrastructure, digital experience, and security. CDW is vendor, technology, and consumption model unbiased, offering a broad selection of products and multi-branded IT solutions delivered in physical, virtual, and cloud-based environments through approximately 10,500 customer-facing coworkers, including sellers, highly-skilled specialists, and engineers. The company provides integrated IT solutions to over 250,000 customers and has capabilities to provide integrated IT solutions in approximately 150 countries for customers with primary locations in the US, UK, and Canada, which are large and growing markets that are highly fragmented and served by thousands of IT resellers and solutions providers. Demand for IT is expected to outpace general economic growth in the markets served, fueled by new technologies, including hybrid and cloud computing and artificial intelligence, as well as growing end-user demand for security, efficiency, and productivity.

The market for technology products, solutions, and services is highly competitive and subject to economic conditions and rapid technological changes. CDW faces competition from resellers, manufacturers who sell directly to customers, large service providers and system integrators, cloud providers, hyperscaler marketplaces, e-commerce companies, and office supply retailers, among others, as well as from smaller, local, or regional value-added resellers. The company believes it has sustainable, competitive advantages that differentiate it in the marketplace, including scale, a performance-driven culture, and enhanced capabilities. CDW's scale enables a national and international footprint and investment in resources to meet specific customer end-market needs, with sellers organized around unique customer end-markets that are both vertically and geographically focused. The company has cross-border relationships that enable it to serve the needs of its US, UK, and Canadian-based customers in approximately 150 countries. CDW offers more than 100,000 products and services from more than 1,000 vendor partners, including well-established companies such as Adobe, APC, Apple, Amazon Web Services, Broadcom Inc., Cisco, Dell Technologies, Google, Hewlett Packard Enterprise, HP Inc., IBM, Intel, Lenovo, Microsoft, NetApp, Nutanix, Nvidia, Palo Alto Networks, Pure Storage, and Samsung, as well as from emerging technology companies. In 2025, CDW generated over $2.0 billion of Net sales from each of its three largest vendor partners.

CDW generates revenue by procuring products from vendor partners and wholesale distributors and providing added value to customers by helping them navigate through complex options and implement the best solution for their business. The company's offerings range from discrete hardware and software products and services to complex integrated solutions including one or more of these elements. Revenue is generated through the sale of hardware, software, and services, with certain software and services revenue recorded on a net basis for accounting purposes. The company serves customers through sales teams focused on customer end-markets that are supported by highly-skilled specialists and engineers, with three reportable segments: Corporate, Small Business, and Public. CDW's customer base includes over 250,000 business, government, education, and healthcare customers throughout the US, UK, and Canada, and the company believes this diversity of customer end-markets provides multiple avenues for growth and has been a key factor in its ability to weather economic and technology cycles and gain market share.

CDW's hardware category includes notebooks/mobile devices (including tablets), network communications (netcomm products), collaboration hardware, data storage and servers, desktop computers, and other hardware. For the year ended December 31, 2025, total hardware Net sales were $16,070.6 million ¹, representing 71.6% of total Net sales, compared to $15,219.1 million ² in 2024 and $15,702.6 million ³ in 2023. Within hardware, notebooks/mobile devices generated $5,638.0 million ⁴ in 2025, netcomm products generated $2,687.3 million ⁵, collaboration hardware generated $1,757.8 million ⁶, data storage and servers generated $2,151.9 million ⁷, desktops generated $1,332.8 million ⁸, and other hardware generated $2,502.8 million ⁹. The software category includes cloud solutions, software assurance, application suites, security, virtualization, collaboration, and productivity applications, operating systems, and network management, with Net sales of $4,203.0 million ¹⁰ in 2025, representing 18.7% of total Net sales, compared to $3,804.4 million ¹¹ in 2024 and $3,799.3 million ¹² in 2023. Services include advisory and design, software development, implementation, managed services, and warranties, with Net sales of $2,035.7 million ¹³ in 2025, representing 9.1% of total Net sales, compared to $1,867.3 million ¹⁴ in 2024 and $1,761.3 million ¹⁵ in 2023. Other items, such as delivery charges to customers, generated $114.8 million ¹⁶ in 2025.

CDW has built a robust portfolio of integrated IT solutions across hybrid infrastructure, digital experience, security, digital velocity, and services that are provided in on-premise, hybrid, or cloud-based environments. Hybrid Infrastructure solutions assess customer application infrastructure needs, design flexible, resilient, and efficient solutions, and manage the solution throughout its lifecycle, encompassing converged and hyper-converged infrastructure, physical and virtualized servers, software defined automation and orchestration solutions, hybrid storage, energy-efficient power and cooling, and data center networking. Digital Experience solutions build end-to-end solutions that deliver access to applications to improve customer productivity regardless of device or location, connecting physical devices including laptops, desktops, IP Phones, mobile devices, and print systems, and utilizing collaboration solutions to unite applications via integration of products that facilitate multiple enterprise communication methods including email, persistent chat, social media, voice, and video, as well as hosting cloud-based collaboration solutions and enabling customers with AI solutions. Security solutions assess customer security needs and provide tools and services to help manage risk, increase business continuity and operational efficiency, and improve end user experience, combining expertise in advisory, design, solution architecture, and implementation services across categories such as endpoint security, email security, web security, intrusion prevention, identity and access management, next-generation firewall, security service edge, security information and event management, exposure and threat management, governance, risk and compliance, data security and governance, cloud infrastructure entitlement management, virtual private network services, network access control, and physical security. Digital Velocity solutions deliver advanced digital transformation solutions that enable organizations to modernize their IT infrastructure, applications, and operations, leveraging expertise in cloud-native deployment, DevOps, AI, and automation, and enabling specific customer business needs through customer software engineering engagements providing custom application development, modernization, and integration services, as well as talent orchestration solutions.

During the year ended December 31, 2025, CDW repurchased 4.0 million ¹⁷ shares of its common stock for $653 million ¹⁸ under the previously announced share repurchase program. On February 5, 2025, the Board of Directors authorized a $750 million ¹⁹ increase to the share repurchase program, and as of December 31, 2025, the company had approximately $685 million ²⁰ remaining under the program. In the second quarter of 2025, CDW repaid the $211 million ²¹ remaining aggregate principal amount of the 4.125% Senior Notes due 2025 at maturity. In December 2025, the company entered into a new credit agreement consisting of a five-year $2.25 billion ²² senior unsecured revolving loan facility and a five-year $634.5 million ²³ senior unsecured term loan facility, with the revolving loan facility replacing the previous facility and increasing borrowing capacity by $650 million ²⁴. CDW also implemented a new enterprise resource planning system in 2025, along with the execution of other system transformation initiatives, and expects to continue advancing these initiatives through incremental releases in 2026. The company paid quarterly cash dividends totaling $2.505 ²⁵ per share in 2025, and on February 4, 2026, declared a quarterly cash dividend of $0.630 ²⁶ per share payable on March 10, 2026.

For the year ended December 31, 2025, CDW reported Net sales of $22,424.1 million ²⁷, an increase of 6.8% compared to $20,998.7 million ²⁸ in 2024. Gross profit was $4,873.4 million ²⁹ in 2025, up 5.9% from $4,602.4 million ³⁰ in 2024, while gross profit margin decreased 20 basis points to 21.7% ³¹ from 21.9% ³² in the prior year. Operating income was $1,655.6 million ³³ in 2025, compared to $1,651.3 million ³⁴ in 2024, with operating income margin declining to 7.4% ³⁵ from 7.9% ³⁶. Net income was $1,066.6 million ³⁷ in 2025, compared to $1,077.8 million ³⁸ in 2024, a decrease of 1.0%. Diluted earnings per share were $8.08 ³⁹ in 2025, compared to $7.97 ⁴⁰ in 2024. Non-GAAP net income per diluted share was $10.02 ⁴¹ in 2025, compared to $9.52 ⁴² in 2024. Net cash provided by operating activities was $1,205.2 million ⁴³ in 2025, compared to $1,277.3 million ⁴⁴ in 2024.

A key growth vector for CDW is the expansion of its services and solutions business, particularly in cloud-based and AI-enabled offerings. The company has built a robust portfolio of integrated IT solutions across hybrid infrastructure, digital experience, security, and digital velocity, which are provided in on-premise, hybrid, or cloud-based environments. CDW's migration, integration, and managed services help customers simplify cloud adoption and management across the entire IT lifecycle, and its engineers work with customers to design cloud solutions meeting their organizational, technology, and financial objectives. The company enables customers with AI solutions that empower end users and drive efficiency in business-critical functions, and it plans to further invest resources to embed AI capabilities throughout its operations and enterprise to drive scale and efficiency. CDW also delivers advanced digital transformation solutions through its Digital Velocity offerings, leveraging expertise in cloud-native deployment, DevOps, AI, and automation, and provides customer software engineering engagements for custom application development, modernization, and integration services, as well as talent orchestration solutions.

Another major growth vector is CDW's focus on expanding its customer base and deepening relationships within its existing end-markets. The company serves over 250,000 business, government, education, and healthcare customers throughout the US, UK, and Canada, and believes this diversity of customer end-markets provides multiple avenues for growth. In the US business, which represents approximately 90% of Net sales, CDW has five dedicated customer channels: corporate, small business, government, education, and healthcare, each of which generated $1.7 billion or greater in Net sales in 2025. Effective January 1, 2026, CDW realigned its customer-facing organization to better meet the evolving needs of its customers and end markets, resulting in three new reportable segments: Commercial, Government, and Education. The Commercial segment will be comprised of corporate, financial services, and healthcare customers in the US, with small business customers included across the customer channels within this segment. The Government segment will be comprised of federal, state, and local agencies in the US, and the Education segment will be comprised of primary, secondary, and higher education institutions in the US. CDW UK and CDW Canada will remain unchanged in an all other category.

CDW's margin trajectory is influenced by several factors, including product mix, pricing pressures, and the cost structure. Gross profit margin decreased 20 basis points to 21.7% in 2025, primarily driven by decreased rates in certain hardware categories. Selling and administrative expenses increased 9.0% in 2025, primarily due to higher performance-based compensation, transformation related costs, and coworker-related costs. The company recorded $57.9 million ⁴⁵ in transformation initiative costs and $16.2 million ⁴⁶ in workplace optimization costs in 2025. Non-GAAP operating income margin was 8.9% ⁴⁷ in 2025, compared to 9.3% ⁴⁸ in 2024. The company expects to continue advancing its system transformation initiatives through incremental releases in 2026, which may continue to impact costs.

CDW's operational outlook includes continued investment in its information technology systems and infrastructure. In 2025, the company implemented a new enterprise resource planning system, along with the execution of other system transformation initiatives, resulting in more streamlined and efficient processes, and expects to continue advancing these initiatives through incremental releases in 2026. The company operates two distribution centers in North America and one distribution center in the UK, which combined provide more than 1 million square feet in size, and handles and ships approximately 22 million units annually on an aggregate basis from its distribution centers. CDW also has drop-shipment arrangements with many of its OEMs and wholesale distributors, which represented approximately 51% of total North America Net sales in 2025. The company has approximately 14,800 coworkers across the globe, with 11,200 coworkers in the US and 3,600 coworkers in international locations.

CDW's capital allocation strategy includes investments in the business, dividend payments, assessment of debt levels, acquisitions, and share repurchases. Capital expenditures were $117.1 million ⁴⁹ in 2025, compared to $122.6 million ⁵⁰ in 2024. The company has a share repurchase program under which it may repurchase shares of its common stock, and as of December 31, 2025, had approximately $685 million ⁵¹ remaining under the program. CDW paid quarterly cash dividends totaling $2.505 ⁵² per share in 2025, and on February 4, 2026, declared a quarterly cash dividend of $0.630 ⁵³ per share. The company's total debt outstanding as of December 31, 2025, was $5.6 billion ⁵⁴, with $635 million ⁵⁵ of variable rate debt outstanding. CDW had $1.9 billion ⁵⁶ of availability for borrowings under its Revolving Loan Facility as of December 31, 2025.

CDW faces several structural headwinds and execution risks that management has explicitly flagged. The prevailing economic conditions remain challenging, largely due to ongoing uncertainty surrounding evolving global trade policies and geopolitical conditions, which may continue to influence supply chains, drive inflationary pressures, and affect interest rates, impacting the timing of customers' investments in technology. Customers are evaluating the complex technology landscape to balance priorities and focus on solutions that lead to business optimization, cost management, and security risk management, resulting in a more measured approach to their IT spending. Changes and uncertainty related to spending policies, budget priorities, timing, and funding levels are key factors influencing the purchasing levels of government, healthcare, and education customers, and as the duration and ongoing impact of current economic conditions remain uncertain, including any US government shutdowns, current and future budget priorities and funding levels for these customers may be adversely affected, leading to lower IT spend.

Technology trends drive customer purchasing behaviors, with current trends focused on delivering greater flexibility and efficiency, as well as designing and managing IT securely, while balancing product availability creating an inflationary environment. These trends are driving customer adoption of cloud, AI, software defined architectures, and hybrid on-premise and off-premise combinations, as well as the evolution of the IT consumption model to more as-a-service solutions. CDW faces risks from the rapid evolution of technology, including the potential that cloud-based solutions and technology solutions as a service could increase the amount of sales directly to customers rather than through solutions providers like CDW, or could reduce the amount of hardware sold. The company also faces risks from growing hyperscaler marketplaces such as AWS Marketplace, Google Cloud Marketplace, and Microsoft Marketplace, and evolving partner authorization and incentive models that could change the role of traditional resellers, limit access to offerings, pressure margins, and restrict participation in certain channels.

CDW's business is highly dependent on its relationships with vendor partners and wholesale distributors, and a significant portion of sales are derived from products manufactured by Apple, Cisco, Dell Technologies, HP Inc., Lenovo, and Microsoft, while purchases from two wholesale distributors, Ingram Micro and TD SYNNEX, represent over 25% of total purchases. The loss of, or change in business relationship with, any of these key partners could reduce supply and impact costs. The company faces substantial competition from resellers, manufacturers selling directly, large service providers, cloud providers, and e-commerce companies, and the evolving competitive landscape, including growing hyperscaler marketplaces and changing partner authorization models, could pressure margins and restrict channel participation. CDW is exposed to accounts receivable and inventory risks, with accounts receivable, net of allowance for credit losses, totaling $6,312.4 million ⁵⁷ as of December 31, 2025, and the company recorded a provision for credit losses of $37.2 million ⁵⁸ in 2025. The company's level of indebtedness, with $5.6 billion ⁵⁹ of total debt outstanding and $635 million ⁶⁰ of variable rate debt as of December 31, 2025, could require a substantial portion of cash flow for debt service, limit flexibility, and increase vulnerability to adverse economic conditions. Decreases or delays in spending on technology products and services by customers, particularly in the public sector due to government spending policies and budget priorities, could adversely impact the business, as sales to public sector customers are highly regulated and subject to risks including termination of contracts and suspension from doing business with governmental entities.

Management's message emphasizes CDW's position as a leading multi-brand provider of IT solutions and its value proposition to both customers and vendor partners. The company's goal is to have customers view CDW as a trusted adviser and extension of their IT workforce, simplifying the complexities of technology solutions across design, selection, procurement, integration, and management. Management highlights the company's competitive advantages of scale, performance-driven culture, and enhanced capabilities, which are expected to help drive sustainable, profitable growth. Key strategic priorities for the period ahead include continuing to invest in the company's services and solutions capabilities, particularly in cloud, AI, and security, to meet evolving customer needs, and executing on strategic transformation initiatives to optimize operations and systems, including the new ERP system implementation. Management also emphasizes the importance of the company's human capital, with a focus on attracting, developing, engaging, and retaining key personnel, and maintaining a performance-driven culture underpinned by a competitive compensation program.