PC Connection (CNXN) investor relations material

Executive summary

• Net sales for Q3 2025 were $709.1 million, down 2.2% year-over-year, while gross profit reached a record $138.6 million, up 2.4%, and gross margin expanded by 90 basis points to 19.6%.

• Net income for Q3 2025 was $24.7 million, down from $27.1 million last year, with diluted EPS at $0.97.

• Operating income remained flat year-over-year at $30.3 million, with margin improving to 4.3%.

• Business and enterprise solutions segments posted strong growth, while public sector faced headwinds from delayed federal projects and funding uncertainty.

• A quarterly dividend of $0.15 per share was declared, payable November 28, 2025.

Financial highlights

• Adjusted EBITDA for the trailing 12 months was $122.7 million, essentially flat year-over-year.

• Cash and short-term investments totaled $399.2 million as of September 30, 2025.

• SG&A expenses increased to $108.4 million (15.3% of sales) from $105.4 million (14.5%).

• Quarterly dividend of $0.15 per share paid; 84,000 shares repurchased for $5.1 million in Q3.

• Nine-month net sales increased 3.7% year-over-year; gross profit up 3.5%, gross margin flat at 18.6%.

Outlook and guidance

• Expecting mid-single digit sales growth year-over-year in Q4, with public sector recovery timing uncertain.

• Gross margins anticipated to be flat year-over-year in Q4, with slightly higher G&A spending.

• For 2026, projecting continued growth in data center, cloud, cybersecurity, and AI, with overall mid-single digit growth expected.

• Management expects internally generated funds and short-term investments to be sufficient for capital needs for at least the next twelve months.

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