CDW (CDW) Q3 2025 earnings summary

Executive summary

• Q3 2025 net sales rose 4.0% year-over-year to $5.74 billion, with gross profit up 4.6% to $1.26 billion and gross margin improving to 21.9%.

• Operating income declined 8.0% to $443 million, while non-GAAP operating income was $531 million, down 0.6% year-over-year.

• Net income fell 8.0% to $291 million, but non-GAAP net income per diluted share rose 3.0% to $2.71.

• Adjusted free cash flow for the quarter was $209 million, with year-to-date free cash flow at $668 million.

• Board approved a quarterly dividend of $0.630 per share, payable December 10, 2025.

Financial highlights

• Gross profit margin was 21.9%, up 10 basis points year-over-year.

• Operating income margin decreased to 7.7% from 8.7% year-over-year.

• Non-GAAP operating income margin was 9.2%, down 50 basis points year-over-year.

• Cash conversion cycle was 11 days, improved from 17 days a year ago.

• Net debt stood at $5.18 billion as of September 30, 2025.

Outlook and guidance

• Targets exceeding US IT market growth by 200–300 basis points on a constant currency basis.

• Expects low- to mid-single digit gross profit growth and low-single digit non-GAAP net income per diluted share growth for 2025.

• 2025 gross margins expected to be consistent with 2024 and well above rates from three-plus years ago.

• Fourth-quarter non-GAAP net income per diluted share expected to be down slightly year-over-year and sequentially.

• Outlook assumes continued friction in government and education, potential healthcare funding shortfalls, and general economic caution.