PC Connection (CNXN) Q3 2026 earnings summary

Executive summary

• Q3 net sales reached a record $874.3M, up 23.3% YoY; gross billings and gross profit also set records, and net income rose 27.2% to $31.5M.

• Enterprise and Business Solutions drove growth; strong backlog, customer demand, and AI-related investment supported management’s growth outlook.

Financial highlights

• Q3 gross billings increased 19.4% to $1.3B; diluted EPS was $1.24 vs. $0.97.

• Nine-month net sales rose 12.9% to $2,450.2M, gross profit grew 12.0% to $452.1M, and net income increased to $81.8M from $63.0M.

• Nine-month diluted EPS was $3.23 vs. $2.45; adjusted diluted EPS was $3.31 vs. $2.53.

• Nine-month operating cash flow was negative $39.8M vs. positive $38.0M; receivables and inventory uses of $144.8M and $83.0M were partly offset by a $74.5M increase in payables.

Outlook and guidance

• Q4 expected to follow the historical 3%–4% sequential decline from Q3, with SG&A tracking the trend; backlog and funnel were strong, but no specific budget flush was anticipated.

• 2026 outlook includes expected outperformance of the U.S. IT market by 200 bps.

• Endpoint demand may be slightly below 2026 in 2027 as the upgrade cycle passes; on-premises, agentic servers, networking, security, and software demand expected to remain solid.

• IT infrastructure investments are planned to improve efficiency and customer functionality; service-engineer additions may raise service costs, with returns dependent on service revenue growth.