CDW's Q4 EPS Beats Estimates at $2.57, Sales Grow 6.3% to $5.51B
CDW reported Q4 fiscal 2025 adjusted EPS of $2.57 (vs. $2.44 est.) and net sales of $5.51B, marking 6.3% year-over-year growth driven by notebooks, software and services. The board approved a $0.63 quarterly dividend and management highlighted accelerating AI demand across all customer segments.
1. Q4 2025 Financial Results Highlight Strong Top-Line Growth
CDW reported net sales of $5.51 billion in the fourth quarter of 2025, up 6.3% year-over-year on 63 selling days versus 62 a year earlier. On an average daily sales basis, revenue rose 4.6%. Adjusted earnings per share reached $2.57, surpassing the prior-year figure of $2.48 and topping consensus forecasts by 5.3%. Net income of $279.5 million represented a 5.8% increase over the prior fourth quarter, reflecting both strong software and hardware demand and effective expense management.
2. Diversified Segment Performance Fuels Growth
In the Corporate segment, net sales were $2.37 billion, a slight 0.6% decline, as large enterprises moderated spending on desktops. The Small Business unit delivered $457 million in revenue, up 18.4%, driven by accelerated notebook and mobile-device purchases. Public sector sales rose 7.0% to $2.016 billion, led by 12.9% growth in education, 4.6% in healthcare and 4.3% in government. International operations (UK & Canada) generated $669 million, an 8.4% increase, reflecting robust software-as-a-service renewals.
3. Margins Show Mixed But Resilient Trends
Gross profit climbed to $1.254 billion, an 8.6% increase, lifting gross margin to 22.8% from 22.3%. Selling and administrative expenses rose 10.3% to $824 million, driven by higher performance-based compensation, exerting pressure on operating leverage. As a result, adjusted operating margin narrowed to 9.1% from 9.6% a year earlier. The effective tax rate improved slightly to 24.3%, supporting adjusted net income margin of 6.1%, in line with management expectations.
4. Capital Allocation and 2026 Outlook
CDW ended the quarter with $618.7 million in cash and cash equivalents and returned approximately $982 million to shareholders in 2025 through dividends and share repurchases. The board approved a quarterly cash dividend of $0.63 per share payable March 10 to holders of record on February 25. Management emphasized continued investments in artificial intelligence solutions, targeting to outpace addressable market growth by 200–300 basis points in 2026, and reaffirmed its commitment to disciplined working capital management and strategic M&A to sustain long-term shareholder value.