PC Connection (CNXN) investor relations material

Executive summary

• Net sales for Q2 2026 increased 12.4% year-over-year to $854 million, driven by strong demand, especially in notebooks, mobility, and desktops, and a shift toward enterprise-wide AI adoption.

• Gross profit rose 14.3% to $157.5 million, with gross margin improving to 18.4% from 18.1% a year ago, mainly due to improved invoice margins and increased software sales.

• Operating income for Q2 2026 was $43 million (5.0% of net sales), up from $30.9 million (4.1%) in Q2 2025, reflecting higher sales and gross profit.

• Net income for Q2 2026 increased 33.8% to $33.2 million, with diluted EPS up 35.1% to $1.31.

• Strategy focuses on delivering integrated technology solutions across infrastructure, cloud, software, cybersecurity, AI, and services.

Financial highlights

• Net sales rose 12.4% year-over-year to $854 million, with gross billings up 14% to $1.2 billion and gross profit up 14.3% to $157.5 million.

• Gross margin expanded by 30 basis points to 18.4%.

• Operating income grew 39.2% to $43 million; operating margin reached 5%.

• Net income increased 33.8% to $33.2 million; diluted EPS up 35.1% to $1.31.

• Adjusted EBITDA (TTM) was $144.5 million, up 18% year-over-year.

Outlook and guidance

• Q3 revenue expected to be slightly down sequentially but maintain high single-digit year-over-year growth.

• Backlog remains elevated, with some expected to be relieved in Q3 and some rolling into Q4.

• Company expects to outperform the U.S. IT market by 200 basis points in 2026.

• Management expects to meet cash requirements for the next twelve months and beyond through cash on hand, short-term investments, and cash generated from operations.

• Ongoing investments in IT infrastructure and solution selling personnel are expected to support future growth, though cost of services may rise as headcount increases.