Strategic Performance Drivers – Record quarterly net sales and EPS were driven by robust demand for AI readiness and infrastructure modernization, particularly among large enterprise customers. – Management attributes the 10% hardware revenue growth to a ‘full stack’ approach…
ere AI is increasingly embedded in servers, storage, and networking solutions. – The company’s diversified portfolio allowed it to offset constrained funding in Higher Education with double-digit growth in Corporate and Federal Government segments. – AI is viewed as a significant catalyst for long-term relevance because it increases architectural complexity across on-premises, cloud, and edge environments. – Higher average selling prices (ASPs) in notebooks and desktops more than offset lower unit volumes, reflecting customer willingness to invest in mission-critical hardware despite pricing pressures. – International performance was a standout, with 23% growth led by record results in Canada and continued momentum in the U.K. across hardware and cloud categories. – Internal AI deployment, specifically the ‘CDW Assist Super Agent’ tool, is being used to drive operating leverage by improving sales productivity and workflow automation. Strategic Outlook and Guidance Assumptions – Full-year 2026 U.S
IT market growth is now expected in the mid-single digits, with CDW projected to outperform the market by 200 to 300 basis points. – Management expects a pickup in high-margin lifecycle and professional services as customers transition from infrastructure procurement to implementation and management phases. – The ‘Geared for Growth’ initiative is expected to deliver $100 million to $200 million in savings, with benefits scaling significantly in the second half of 2026. – Guidance assumes a return to historical second-half weighted seasonality, though gross margins are expected to remain modestly below 2025 levels due to product mix. – The company anticipates cash flow conversion to normalize toward…