Connection Raises Buyback by $50M, Declares $0.20 Dividend; Q4 Billings Up 2.9%
PC Connection’s board declared a $0.20 quarterly dividend payable March 6 and added $50 million to its share repurchase authorization, raising it to $81.2 million. Q4 gross billings rose 2.9% to $1.1 billion and adjusted EPS increased to $0.91 from $0.78 on a 0.8% sales decline.
1. Fourth Quarter 2025 Financial Highlights
PC Connection reported adjusted diluted earnings of $0.91 per share for Q4 2025, surpassing consensus estimates by $0.05 and marking a 16.7% increase from $0.78 in the year‐ago quarter. Gross profit rose 4.5% to $135.6 million, lifting gross margin by 100 basis points to 19.3%. Net sales of $703.0 million were broadly flat year over year, while gross billings grew 2.9% to $1.10 billion. These results were driven by strong productivity in its core Enterprise and Business Solutions units, offsetting a softer Public Sector performance.
2. Segment Performance and Product Mix
The Business Solutions segment achieved net sales growth of 4.2% to $273.5 million, with gross profit up 11.4% to $69.8 million and margin expansion of 160 basis points to 25.5%. Enterprise Solutions delivered 11.9% net sales growth to $338.7 million, while gross billings jumped 16.1% to $457.8 million; gross profit improved to $48.2 million though margin dipped 70 basis points to 14.2%. Public Sector Solutions saw net sales decline 36.8% to $90.8 million, but margin widened by 400 basis points to a record 19.4%. Software sales climbed 24% year over year, now representing 12% of net sales, while notebook and desktop products accounted for 45%.
3. Capital Allocation and Shareholder Returns
Connection’s board declared a quarterly dividend of $0.20 per share, payable March 6, 2026 to shareholders of record February 17, 2026. During Q4, the company repurchased 179,235 shares for $10.7 million, and board approval increased the existing buyback program by $50.0 million, raising total authorization to $81.2 million. Cash, short-term investments and equivalents totaled $406.7 million as of December 31, 2025, providing ample liquidity for continued capital returns.
4. Full Year 2025 Results and Outlook
For the full year, net sales grew 2.5% to $3.86 billion and gross profit increased 3.8%, with gross margin up 20 basis points to 18.8%. Adjusted diluted EPS rose to $3.44 from $3.25 a year ago, even as GAAP net income declined 3.9% to $83.7 million. Adjusted EBITDA climbed 6% to $126.4 million. Management highlighted record segment gross profits in Enterprise and Business Solutions and reiterated its strategy to capitalize on AI-driven IT modernization trends to drive profitable growth and long-term shareholder value.