PC Connection (CNXN) Q4 2024 earnings summary

Executive summary

• Full-year 2024 revenue was $2.8 billion, down 1.7% year-over-year, while gross profit rose 1.6% to $519.8 million.

• Net income for 2024 increased 4.6% to $87.1 million; EPS was $3.29, up from $3.15.

• Q4 2024 net sales grew 1.8% to $708.9 million, but net income fell 12.9% to $20.7 million; Q4 EPS was $0.78, down 12.8%.

• Board declared a quarterly dividend of $0.15 per share, payable March 14, 2025.

• Record gross margins attributed to advanced technology sales, including cloud, software, and security solutions.

Financial highlights

• Gross margin for 2024 reached a record 18.6%, up 60 basis points year-over-year.

• Q4 gross margin was 18.3%, down 30 basis points due to product mix.

• SG&A for 2024 increased 4% to $422.3 million; Q4 SG&A rose 5.2% due to investments in sales and technical capabilities.

• Adjusted EBITDA for the trailing 12 months was $118.9 million, down 5% year-over-year.

• Adjusted diluted EPS for 2024 was $3.25, up slightly from $3.23 in 2023.

Outlook and guidance

• Q1 2025 is expected to be flat or up low single digits in top-line growth.

• Management expects gradual improvement in the IT products and solutions market as 2025 progresses, aiming to outperform the U.S. IT market growth rate by 200 basis points.

• Anticipated growth in data center, infrastructure, and device refresh projects, driven by AI and server consolidation.