Loading...
01/11 03:33
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance with 8% sales growth and 12% EPS increase, despite a slight margin decline. The company is committed to shareholder returns via dividends and buybacks. However, challenges like economic uncertainty and supply chain issues persist. The Q&A section suggests management confidence in overcoming pricing pressures and maintaining demand. The stock is likely to react positively, given the robust financials and strategic focus, despite some uncertainties. Without market cap data, a moderate positive prediction is prudent.
Net Sales $5.2 billion, 8% higher year-over-year due to strong execution and demand for client devices, cloud, security, and services.
Gross Profit $1.1 billion, 7% higher year-over-year, driven by increased demand for client devices and effective expense management.
Non-GAAP Operating Income $444 million, up 10% year-over-year, attributed to expense leverage on gross profit growth.
Non-GAAP Net Income $287 million, up 9.9% year-over-year, impacted by slightly higher interest expense and lower interest income.
Non-GAAP Earnings per Share $2.15, up 12% year-over-year, reflecting strong net income growth.
Gross Margin 21.6%, down 20 basis points year-over-year, consistent with 2024 levels despite strong client device performance.
Adjusted Free Cash Flow $249 million, reflecting 87% of non-GAAP net income, consistent with expectations.
Net Debt $5.2 billion, up $40 million from the previous quarter, maintaining a strong liquidity position.
SG&A Expenses $678 million, up 2.8% year-over-year, due to higher gross profit achievement.
Cash Conversion Cycle 15 days, down one day year-over-year, reflecting effective management of working capital.
Client Devices: Client devices increased more than 20%, driven by refresh needs and upcoming Windows 10 expiration.
Cloud Solutions: Cloud solutions saw significant growth, with spend, top-line, and gross profit all up meaningful double-digits.
Security Solutions: Security performance was strong, with both top-line and gross profit growing by low-double-digits.
Commercial Market Growth: Commercial market growth was consistent with the favorable trajectory seen late in the fourth quarter.
Education Market Growth: Education growth accelerated towards the end of the quarter, driven by Chromebook demand ahead of potential price increases.
Healthcare Market Growth: Healthcare was a standout performer with net sales up 20%, driven by client devices, cloud, and services.
Gross Profit: Gross profit was $1.1 billion, 7% higher than last year on an average daily sales basis.
Non-GAAP Operating Income: Non-GAAP operating income was $444 million, up 10% year-over-year.
Cash Conversion Cycle: The three-month average cash conversion cycle was 15 days, down one day from the prior year.
Acquisition of Mission Cloud Services: Recent acquisition of Mission Cloud Services enhances CDW's ability to deliver mission-critical outcomes for customers.
Investment in AI and Cybersecurity: Strategic investments focused on cloud adoption, cybersecurity, IT workflow optimization, and AI expertise.
Tariff Uncertainty: Tariff uncertainty has slowed down major infrastructure investments, impacting customer spending and driving demand for client devices.
Federal Government Market: Federal government market growth was subdued due to agencies adjusting to new policy priorities, affecting IT planning and budgets.
Economic Uncertainty: General economic uncertainty and caution could mute growth, with potential recessionary conditions not factored into the outlook.
Supply Chain Challenges: The company has faced supply chain challenges in the past, particularly during the pandemic and post-pandemic periods, which could re-emerge.
Client Device Prioritization: Customers are prioritizing client devices due to the need for refresh, upcoming Windows 10 expiration, and tariff-related price increases.
International Market Volatility: International markets face ongoing economic and political uncertainty, which may impact customer spending.
Government and Education Spending: Spending in government and education channels is expected to be impacted by new government efficiency initiatives.
Strategic Investments: CDW has concentrated its strategic investments on key high-growth areas such as cloud adoption, cybersecurity, IT workflow optimization, and AI expertise.
Customer-Driven Strategy: CDW's ongoing investment in a customer-driven strategy aims to maximize relevance and differentiation in the marketplace.
Acquisition of Mission Cloud Services: The acquisition of Mission Cloud Services is a strategic move to enhance CDW's capabilities in delivering mission-critical outcomes for customers.
2025 IT Market Growth Outlook: CDW maintains its 2025 outlook for US IT market growth to be in the low-single-digits, with a growth premium of 200 to 300 basis points.
Gross Profit Growth Expectations: CDW expects low-single-digit gross profit growth for the full year 2025, with gross margins remaining stable.
Earnings Per Share Projection: Full year non-GAAP earnings per diluted share are expected to grow low-single-digits year-over-year.
Second Quarter Guidance: For Q2, CDW anticipates mid to high-single-digit gross profit growth sequentially, leading to low-single-digit year-over-year growth.
Dividends Paid: $83 million in the form of dividends for Q1 2025.
Dividend Growth Target: Targeting a roughly 25% payout ratio of non-GAAP net income going forward.
Consecutive Dividend Increases: Increased the dividend for eleven consecutive years through 2024.
Share Repurchases: Returned approximately $200 million in share repurchases for Q1 2025.
Capital Allocation Target: Targeting to return 50% to 75% of adjusted free cash flow to shareholders via dividends and share repurchases.
The earnings call shows a strong performance in services with a 9% increase and improved gross margins. The Q&A highlights cautious optimism, with management addressing potential risks like the federal shutdown and macroeconomic uncertainties. However, growth in the small business segment and services, along with strategic investments in AI and cloud, indicate a positive outlook. Despite some management vagueness, the strong services growth and strategic focus suggest a positive stock price movement.
The earnings call summary presents a mixed picture. While there are positive elements like strong corporate performance and strategic investments, the cautious guidance and expected deceleration in growth rates weigh negatively. The Q&A reveals management's prudence and challenges in certain segments, which tempers optimism. Despite some strong aspects, such as AI impact and customer-driven strategy, the overall sentiment remains neutral due to the conservative outlook and lack of clear guidance improvements.
The earnings call highlights strong financial performance with 8% sales growth and 12% EPS increase, despite a slight margin decline. The company is committed to shareholder returns via dividends and buybacks. However, challenges like economic uncertainty and supply chain issues persist. The Q&A section suggests management confidence in overcoming pricing pressures and maintaining demand. The stock is likely to react positively, given the robust financials and strategic focus, despite some uncertainties. Without market cap data, a moderate positive prediction is prudent.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
