CDW Reports Third Quarter 2024 Earnings
CDW reported third quarter 2024 financial results with net sales of $5.52 billion, down 2.0% from Q3 2023. The company maintained a gross profit margin of 21.8%, while operating income increased slightly by 0.7% to $482 million. Net income remained stable at $316 million, with earnings per diluted share increasing 1.0% to $2.34. The decline in net sales was primarily driven by lower performance in Public and Corporate segments, partially offset by growth in UK and Canadian operations. The company announced a quarterly cash dividend of $0.625 per share.
CDW ha riportato i risultati finanziari del terzo trimestre 2024 con vendite nette di 5,52 miliardi di dollari, in calo del 2,0% rispetto al terzo trimestre 2023. L'azienda ha mantenuto un margine di profitto lordo del 21,8%, mentre il reddito operativo è aumentato leggermente dello 0,7% a 482 milioni di dollari. L'utile netto è rimasto stabile a 316 milioni di dollari, con un utile per azione diluita aumentato dell'1,0% a 2,34 dollari. Il calo delle vendite nette è stato principalmente influenzato da una performance inferiore nei segmenti Pubblico e Corporate, parzialmente compensata dalla crescita delle operazioni nel Regno Unito e in Canada. L'azienda ha annunciato un dividendo in contante trimestrale di 0,625 dollari per azione.
CDW informó los resultados financieros del tercer trimestre de 2024 con ventas netas de 5.52 mil millones de dólares, una disminución del 2.0% en comparación con el tercer trimestre de 2023. La empresa mantuvo un margen de utilidad bruta del 21.8%, mientras que el ingreso operativo aumentó ligeramente un 0.7% a 482 millones de dólares. El ingreso neto se mantuvo estable en 316 millones de dólares, con ganancias por acción diluida aumentando un 1.0% a 2.34 dólares. La disminución en las ventas netas se debió principalmente al bajo desempeño en los segmentos Público y Corporativo, parcialmente compensado por el crecimiento en las operaciones del Reino Unido y Canadá. La empresa anunció un dividendo en efectivo trimestral de 0.625 dólares por acción.
CDW는 2024년 3분기 재무 결과를 발표했으며, 순매출이 55억 2천만 달러로 2023년 3분기 대비 2.0% 감소했습니다. 회사는 21.8%의 총 이익률을 유지했으며, 운영 소득은 0.7% 소폭 증가하여 4억 8천 2백만 달러에 달했습니다. 순이익은 3억 1천 6백만 달러로 안정세를 유지했으며, 희석 기준 주당 순이익은 1.0% 증가한 2.34 달러를 기록했습니다. 순매출 감소는 주로 공공 및 기업 부문의 성과 저조로 인한 것이며, 영국과 캐나다 운영에서의 성장으로 일부 상쇄되었습니다. 회사는 주당 0.625달러의 분기 현금 배당금을 발표했습니다.
CDW a annoncé ses résultats financiers pour le troisième trimestre 2024, avec un chiffre d'affaires net de 5,52 milliards de dollars, en baisse de 2,0 % par rapport au troisième trimestre 2023. L'entreprise a maintenu une marge brute de 21,8 %, tandis que le résultat d'exploitation a légèrement augmenté de 0,7 % pour atteindre 482 millions de dollars. Le résultat net est resté stable à 316 millions de dollars, avec un bénéfice par action dilué en hausse de 1,0 %, atteignant 2,34 dollars. La baisse des ventes nettes a été principalement causée par une performance inférieure dans les segments public et entreprise, partiellement compensée par la croissance des opérations au Royaume-Uni et au Canada. L'entreprise a annoncé un dividende trimestriel en espèces de 0,625 dollar par action.
CDW hat die Finanzergebnisse für das dritte Quartal 2024 veröffentlicht, mit einem Nettoumsatz von 5,52 Milliarden Dollar, was einem Rückgang von 2,0% im Vergleich zum Q3 2023 entspricht. Das Unternehmen hielt eine Bruttomarge von 21,8% aufrecht, während das Betriebsergebnis leicht um 0,7% auf 482 Millionen Dollar anstieg. Der Nettogewinn blieb mit 316 Millionen Dollar stabil, die verwässerten Erträge pro Aktie stiegen um 1,0% auf 2,34 Dollar. Der Rückgang der Nettoumsätze wurde hauptsächlich durch eine geringere Leistung in den Segmenten öffentliche Hand und Unternehmen verursacht, was teilweise durch das Wachstum der Geschäfte im Vereinigten Königreich und Kanada ausgeglichen wurde. Das Unternehmen gab eine vierteljährliche Bar-Dividende von 0,625 Dollar pro Aktie bekannt.
- Maintained stable gross profit margin at 21.8%
- Operating income increased 0.7% to $482 million
- Net income per diluted share grew 1.0% to $2.34
- UK and Canadian operations showed 4.8% growth
- Healthcare customer sales increased 3.1%
- Net sales decreased 2.0% to $5.52 billion
- Average daily sales declined 3.5%
- Corporate segment sales dropped 4.4%
- Public segment sales fell 5.1%
- Government and Education sales decreased 12.3% and 4.5% respectively
- Non-GAAP net income declined 3.9% to $355 million
Insights
CDW's Q3 2024 results reveal a challenging market environment with net sales declining
- Corporate segment decline of
4.4% on average daily sales basis - Public sector weakness, particularly in Government (
-12.3% ) and Education (-4.5% ) - Elongated customer decision-making cycles due to economic uncertainty
The bright spots include Healthcare customer growth of
The IT solutions market is showing signs of selective spending patterns, with customers prioritizing cloud and end-point solutions while deferring hardware investments. This shift reflects broader industry trends where:
- Mission-critical IT operations and cloud services maintain momentum
- Hardware refresh cycles are extending due to budget constraints
- International markets show resilience compared to domestic segments
CDW's position as a multi-brand provider serving over 250,000 customers and partnerships with 1,000+ technology brands provides defensive characteristics. However, the
Resilient Margins Reinforce Integrity of the Strategy, Cash Flow Enhances Strategic Flexibility
(Dollars in millions, except per share amounts and percentage) |
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
|
2024 |
|
|
2023 |
|
% Chg. |
|
2024 |
|
|
2023 |
|
% Chg. |
|||
Net Sales |
$ |
5,516.6 |
|
$ |
5,628.3 |
|
(2.0 |
) |
$ |
15,812.7 |
|
$ |
16,357.5 |
|
(3.3 |
) |
Gross Profit |
$ |
1,200.7 |
|
$ |
1,227.7 |
|
(2.2 |
) |
$ |
3,447.1 |
|
$ |
3,498.6 |
|
(1.5 |
) |
Gross Profit Margin |
|
21.8 |
% |
|
21.8 |
% |
|
|
21.8 |
% |
|
21.4 |
% |
|
||
Operating Income |
$ |
481.6 |
|
$ |
478.4 |
|
0.7 |
|
$ |
1,242.7 |
|
$ |
1,245.9 |
|
(0.3 |
) |
Non-GAAP Operating Income1 |
$ |
534.0 |
|
$ |
556.3 |
|
(4.0 |
) |
$ |
1,447.8 |
|
$ |
1,520.4 |
|
(4.8 |
) |
Net Income |
$ |
316.4 |
|
$ |
315.5 |
|
0.3 |
|
$ |
813.6 |
|
$ |
808.2 |
|
0.7 |
|
Non-GAAP Net Income1 |
$ |
354.9 |
|
$ |
369.4 |
|
(3.9 |
) |
$ |
954.5 |
|
$ |
997.1 |
|
(4.3 |
) |
Net Income per Diluted Share |
$ |
2.34 |
|
$ |
2.32 |
|
1.0 |
|
$ |
6.00 |
|
$ |
5.92 |
|
1.3 |
|
Non-GAAP Net Income per Diluted Share1 |
$ |
2.63 |
|
$ |
2.72 |
|
(3.2 |
) |
$ |
7.04 |
|
$ |
7.31 |
|
(3.6 |
) |
Average Daily Sales2 |
$ |
86.2 |
|
$ |
89.3 |
|
(3.5 |
) |
$ |
82.4 |
|
$ |
85.6 |
|
(3.8 |
) |
1 Non-GAAP measures used in this release that are not based on accounting principles generally accepted in |
||||||||||||||||
2 Defined as Net sales divided by the number of selling days. There were 64 and 63 selling days for the three months ended September 30, 2024 and 2023, respectively. There were 192 and 191 selling days for the nine months ended September 30, 2024 and 2023, respectively. |
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CDW Corporation (Nasdaq: CDW), a leading multi-brand provider of information technology solutions to business, government, education and healthcare customers in
"The team's value as a trusted advisor and ability to meet our customers' most pressing needs drove strong performance in cloud and end-point solutions," said Christine A. Leahy, chair and chief executive officer, CDW. "While this performance delivered resilient margins that reinforce the integrity of our strategy, it was not enough to offset the impact of lower hardware solutions demand."
"Persistent economic uncertainty and growing complexity in the technology landscape resulted in elongated customer decision making and delays in projects," said Albert J. Miralles, chief financial officer, CDW. "Despite the challenging market, our ability to optimize cash flow generation through effective management of our working capital provides strategic flexibility across our capital priorities including M&A and share repurchases."
"In this evolving and dynamic business environment, our value proposition is stronger than ever as customers turn to CDW to help them address mission-critical IT and operational needs across the full IT solutions stack and lifecycle. We continue to target exceeding US IT market growth by 200 to 300 basis points on a constant currency basis. To achieve this, we remain laser focused on meeting the needs of our more than 250,000 customers around the globe and remaining the partner of choice for more than 1,000 leading and emerging technology brands as the IT market evolves," concluded Leahy.
Third Quarter of 2024 Highlights:
Net sales in the third quarter of 2024 were
-
Corporate segment Net sales of
$2,161 million -
Small Business segment Net sales of
$380 million -
Public segment Net sales of
$2,336 million -
Net sales for CDW's
UK and Canadian operations, combined as "Other" for financial reporting purposes, were$640 million
Gross profit in the third quarter of 2024 was
Selling and administrative expenses were
Operating income was
Interest expense, net includes interest expense and interest income. Interest expense, net was
The effective tax rate was 26.0 percent in the third quarter of 2024, compared to 24.8 percent in the third quarter of 2023, which resulted in income tax expense of
Net income remained consistent at
Weighted-average diluted shares outstanding were 135 million for the third quarter of 2024, compared to 136 million for the third quarter of 2023. Net income per diluted share for the third quarter of 2024 was
Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of the federal securities laws. All statements other than statements of historical fact are forward-looking statements. These statements relate to analyses and other information, which are based on forecasts of future results or events and estimates of amounts not yet determinable. These statements also relate to our future prospects, growth, developments and business strategies. We claim the protection of The Private Securities Litigation Reform Act of 1995 for all forward-looking statements in this release.
These forward-looking statements are identified by the use of terms and phrases such as "anticipate," "assume," "believe," "estimate," "expect," "goal," "intend," "plan," "potential," "predict," "project," "target" and similar terms and phrases or future or conditional verbs such as "could," "may," "should," "will," and "would." However, these words are not the exclusive means of identifying such statements. Although we believe that our plans, intentions and other expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations. All forward-looking statements are subject to risks and uncertainties that may cause actual results or events to differ materially from those that we expected.
Important factors that could cause actual results or events to differ materially from our expectations, or cautionary statements, are disclosed under the sections entitled "Risk Factors" and "Trends and Key Factors Affecting our Financial Performance" included in our Annual Report on Form 10-K for the year ended December 31, 2023 and from time to time in our subsequent Quarterly Reports on Form 10-Q and our other US Securities and Exchange Commission ("SEC") filings and public communications. These factors include, among others, inflationary pressures; level of interest rates; CDW's relationships with vendor partners and terms of their agreements; continued innovations in technology by CDW's vendor partners; the use or capabilities of artificial intelligence; substantial competition that could reduce CDW's market share; the continuing development, maintenance and operation of CDW's information technology systems; potential breaches of data security and failure to protect our information technology systems from cybersecurity threats; potential failures to provide high-quality services to CDW's customers; potential losses of any key personnel, significant increases in labor costs or ineffective workforce management; potential adverse occurrences at one of CDW's primary facilities or third-party data centers, including as a result of climate change; increases in the cost of commercial delivery services or disruptions of those services; CDW's exposure to accounts receivable and inventory risks; future acquisitions or alliances; fluctuations in CDW's operating results; fluctuations in foreign currency; global and regional economic and political conditions, including the impact of pandemics such as COVID-19 and armed conflicts; potential interruptions of the flow of products from suppliers; decreases in spending on technology products and services, including impacts of adverse change in government spending policies; potential failures to comply with Public segment contracts or applicable laws and regulations; current and future legal proceedings, investigations and audits, including intellectual property infringement claims; changes in laws, including regulations or interpretations thereof, or the potential failure to meet stakeholder expectations on environmental sustainability and corporate responsibility matters; CDW's level of indebtedness; restrictions imposed by agreements relating to CDW's indebtedness on its operations and liquidity; failure to maintain the ratings assigned to CDW's debt securities by rating agencies; changes in, or the discontinuation of, CDW's share repurchase program or dividend payments; and other risk factors or uncertainties identified from time to time in CDW's filings with the SEC. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by those cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements made in this release in the context of these risks and uncertainties.
We caution you that the important factors referenced above may not reflect all of the factors that could cause actual results or events to differ from our expectations. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this release are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Non-GAAP Financial Information
Generally, a non-GAAP financial measure is a numerical measure of a company's performance or financial condition that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with US GAAP. Non-GAAP measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures.
Our non-GAAP performance measures include Non-GAAP operating income, Non-GAAP operating income margin, Non-GAAP net income, Non-GAAP net income per diluted share and Net sales on a constant currency basis, and our non-GAAP financial condition measures include Free cash flow and Adjusted free cash flow. These non-GAAP performance measures and non-GAAP financial condition measures are collectively referred to as "non-GAAP financial measures."
Non-GAAP operating income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, equity-based compensation and the associated payroll taxes, acquisition and integration expenses, transformation initiatives and workplace optimization. Non-GAAP operating income margin is defined as Non-GAAP operating income as a percentage of Net sales. Non-GAAP net income and Non-GAAP net income per diluted share exclude, among other things, charges related to acquisition-related intangible asset amortization, equity-based compensation, acquisition and integration expenses, transformation initiatives, workplace optimization and the associated tax effects of each. Net sales on a constant currency basis is defined as Net sales excluding the impact of foreign currency translation on Net sales. Free cash flow is defined as Net cash provided by operating activities less capital expenditures. Adjusted free cash flow is defined as Free cash flow adjusted to include certain cash flows from financing activities incurred in the normal course of operations or as capital expenditures.
We believe our non-GAAP performance measures provide analysts, investors and management with useful information regarding the underlying operating performance of our business, as they remove the impact of items that management believes are not reflective of underlying operating performance. Management uses these measures to evaluate period-over-period performance as management believes they provide a more comparable measure of the underlying business. We also present non-GAAP financial condition measures as we believe they provide analysts, investors and management with more information regarding our liquidity and capital resources. Certain non-GAAP financial measures are also used to determine certain components of performance-based compensation.
Our outlook includes non-GAAP financial measures because certain reconciling items are dependent on future events that either cannot be controlled, such as currency impacts or interest rates, or reliably predicted because they are not part of our underlying performance, such as refinancing activities or acquisition and integration expenses.
The financial statement tables that accompany this press release include a reconciliation of non-GAAP financial measures to the most comparable US GAAP financial measures.
About CDW
CDW Corporation is a leading multi-brand provider of information technology solutions to business, government, education and healthcare customers in
Webcast
CDW Corporation will hold a conference call today, October 30, 2024 at 7:30 a.m. CT/8:30 a.m. ET to discuss its third quarter financial results. The conference call, which will be broadcast live via the Internet, and a copy of this press release along with supplemental slides used during the call, can be accessed on CDW’s website at investor.cdw.com. For those unable to participate in the live call, a replay of the webcast will be available at investor.cdw.com approximately 90 minutes after the completion of the call and will be accessible on the site for approximately one year.
CDWPR-FI
CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (dollars and shares in millions, except per-share amounts) (unaudited) |
||||||||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales |
|
$ |
5,516.6 |
|
|
$ |
5,628.3 |
|
|
(2.0 |
)% |
|
$ |
15,812.7 |
|
|
$ |
16,357.5 |
|
|
(3.3 |
)% |
Cost of sales |
|
|
4,315.9 |
|
|
|
4,400.6 |
|
|
(1.9 |
) |
|
|
12,365.6 |
|
|
|
12,858.9 |
|
|
(3.8 |
) |
Gross profit |
|
|
1,200.7 |
|
|
|
1,227.7 |
|
|
(2.2 |
) |
|
|
3,447.1 |
|
|
|
3,498.6 |
|
|
(1.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling and administrative expenses |
|
|
719.1 |
|
|
|
749.3 |
|
|
(4.0 |
) |
|
|
2,204.4 |
|
|
|
2,252.7 |
|
|
(2.1 |
) |
Operating income |
|
|
481.6 |
|
|
|
478.4 |
|
|
0.7 |
|
|
|
1,242.7 |
|
|
|
1,245.9 |
|
|
(0.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net |
|
|
(54.4 |
) |
|
|
(57.4 |
) |
|
(5.2 |
) |
|
|
(158.0 |
) |
|
|
(173.3 |
) |
|
(8.8 |
) |
Other income (expense), net |
|
|
0.4 |
|
|
|
(1.2 |
) |
|
nm* |
|
|
(0.8 |
) |
|
|
(3.1 |
) |
|
(74.2 |
) |
|
Income before income taxes |
|
|
427.6 |
|
|
|
419.8 |
|
|
1.9 |
|
|
|
1,083.9 |
|
|
|
1,069.5 |
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income tax expense |
|
|
(111.2 |
) |
|
|
(104.3 |
) |
|
6.6 |
|
|
|
(270.3 |
) |
|
|
(261.3 |
) |
|
3.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income |
|
$ |
316.4 |
|
|
$ |
315.5 |
|
|
0.3 |
% |
|
$ |
813.6 |
|
|
$ |
808.2 |
|
|
0.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
$ |
2.37 |
|
|
$ |
2.35 |
|
|
0.7 |
% |
|
$ |
6.07 |
|
|
$ |
6.00 |
|
|
1.2 |
% |
Diluted |
|
$ |
2.34 |
|
|
$ |
2.32 |
|
|
1.0 |
% |
|
$ |
6.00 |
|
|
$ |
5.92 |
|
|
1.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
|
133.5 |
|
|
|
134.1 |
|
|
|
|
|
134.0 |
|
|
|
134.8 |
|
|
|
||
Diluted |
|
|
134.9 |
|
|
|
135.9 |
|
|
|
|
|
135.5 |
|
|
|
136.4 |
|
|
|
||
*nm - Not meaningful |
||||||||||||||||||||||
CDW CORPORATION AND SUBSIDIARIES NET SALES DETAIL (dollars in millions) (unaudited) |
|||||||||||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
% Change(i) |
|
Average
|
|
|
2024 |
|
|
2023 |
|
% Change(i) |
|
Average
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate |
$ |
2,161.2 |
|
$ |
2,226.5 |
|
(2.9 |
)% |
|
(4.4 |
)% |
|
$ |
6,492.3 |
|
$ |
6,675.2 |
|
(2.7 |
)% |
|
(3.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Small Business |
|
379.7 |
|
|
378.4 |
|
0.3 |
|
|
(1.2 |
) |
|
|
1,143.5 |
|
|
1,186.0 |
|
(3.6 |
) |
|
(4.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Public: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government |
|
691.0 |
|
|
775.7 |
|
(10.9 |
) |
|
(12.3 |
) |
|
|
1,873.4 |
|
|
2,008.4 |
|
(6.7 |
) |
|
(7.2 |
) |
Education |
|
995.7 |
|
|
1,026.7 |
|
(3.0 |
) |
|
(4.5 |
) |
|
|
2,609.9 |
|
|
2,719.2 |
|
(4.0 |
) |
|
(4.5 |
) |
Healthcare |
|
649.0 |
|
|
619.7 |
|
4.7 |
|
|
3.1 |
|
|
|
1,820.4 |
|
|
1,802.4 |
|
1.0 |
|
|
0.5 |
|
Total Public |
|
2,335.7 |
|
|
2,422.1 |
|
(3.6 |
) |
|
(5.1 |
) |
|
|
6,303.7 |
|
|
6,530.0 |
|
(3.5 |
) |
|
(4.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other |
|
640.0 |
|
|
601.3 |
|
6.4 |
|
|
4.8 |
|
|
|
1,873.2 |
|
|
1,966.3 |
|
(4.7 |
) |
|
(5.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Net sales |
$ |
5,516.6 |
|
$ |
5,628.3 |
|
(2.0 |
)% |
|
(3.5 |
)% |
|
$ |
15,812.7 |
|
$ |
16,357.5 |
|
(3.3 |
)% |
|
(3.8 |
)% |
| (i) | There were 64 and 63 selling days for the three months ended September 30, 2024 and 2023, respectively. There were 192 and 191 selling days for the nine months ended September 30, 2024 and 2023, respectively. Average Daily Sales is defined as Net sales divided by the number of selling days. |
CDW CORPORATION AND SUBSIDIARIES TIMING OF REVENUE RECOGNITION (dollars in millions) (unaudited) |
||||||||||||||
|
Three Months Ended September 30, 2024 |
|||||||||||||
|
Corporate |
|
Small Business |
|
Public |
|
Other |
|
Total |
|||||
Timing of Revenue Recognition |
|
|
|
|
|
|
|
|
|
|||||
Transferred at a point in time where CDW is principal |
$ |
1,799.8 |
|
$ |
328.1 |
|
$ |
2,053.4 |
|
$ |
539.7 |
|
$ |
4,721.0 |
Transferred at a point in time where CDW is agent |
|
197.5 |
|
|
37.0 |
|
|
160.0 |
|
|
33.6 |
|
|
428.1 |
Transferred over time where CDW is principal |
|
163.9 |
|
|
14.6 |
|
|
122.3 |
|
|
66.7 |
|
|
367.5 |
Total Net sales |
$ |
2,161.2 |
|
$ |
379.7 |
|
$ |
2,335.7 |
|
$ |
640.0 |
|
$ |
5,516.6 |
|
|
|
|
|
|
|
|
|
|
|||||
|
Three Months Ended September 30, 2023 |
|||||||||||||
|
Corporate |
|
Small Business |
|
Public |
|
Other |
|
Total |
|||||
Timing of Revenue Recognition |
|
|
|
|
|
|
|
|
|
|||||
Transferred at a point in time where CDW is principal |
$ |
1,861.9 |
|
$ |
333.1 |
|
$ |
2,169.3 |
|
$ |
520.3 |
|
$ |
4,884.6 |
Transferred at a point in time where CDW is agent |
|
192.9 |
|
|
37.1 |
|
|
143.9 |
|
|
25.8 |
|
|
399.7 |
Transferred over time where CDW is principal |
|
171.7 |
|
|
8.2 |
|
|
108.9 |
|
|
55.2 |
|
|
344.0 |
Total Net sales |
$ |
2,226.5 |
|
$ |
378.4 |
|
$ |
2,422.1 |
|
$ |
601.3 |
|
$ |
5,628.3 |
|
Nine Months Ended September 30, 2024 |
|||||||||||||
|
Corporate |
|
Small Business |
|
Public |
|
Other |
|
Total |
|||||
Timing of Revenue Recognition |
|
|
|
|
|
|
|
|
|
|||||
Transferred at a point in time where CDW is principal |
$ |
5,409.5 |
|
$ |
997.0 |
|
$ |
5,561.3 |
|
$ |
1,593.8 |
|
$ |
13,561.6 |
Transferred at a point in time where CDW is agent |
|
585.5 |
|
|
110.3 |
|
|
402.7 |
|
|
95.6 |
|
|
1,194.1 |
Transferred over time where CDW is principal |
|
497.3 |
|
|
36.2 |
|
|
339.7 |
|
|
183.8 |
|
|
1,057.0 |
Total Net sales |
$ |
6,492.3 |
|
$ |
1,143.5 |
|
$ |
6,303.7 |
|
$ |
1,873.2 |
|
$ |
15,812.7 |
|
|
|
|
|
|
|
|
|
|
|||||
|
Nine Months Ended September 30, 2023 |
|||||||||||||
|
Corporate |
|
Small Business |
|
Public |
|
Other |
|
Total |
|||||
Timing of Revenue Recognition |
|
|
|
|
|
|
|
|
|
|||||
Transferred at a point in time where CDW is principal |
$ |
5,614.6 |
|
$ |
1,053.3 |
|
$ |
5,858.6 |
|
$ |
1,718.1 |
|
$ |
14,244.6 |
Transferred at a point in time where CDW is agent |
|
563.3 |
|
|
106.8 |
|
|
362.1 |
|
|
80.9 |
|
|
1,113.1 |
Transferred over time where CDW is principal |
|
497.3 |
|
|
25.9 |
|
|
309.3 |
|
|
167.3 |
|
|
999.8 |
Total Net sales |
$ |
6,675.2 |
|
$ |
1,186.0 |
|
$ |
6,530.0 |
|
$ |
1,966.3 |
|
$ |
16,357.5 |
CDW CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in millions) |
||||||||
|
September 30, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
|||
Assets |
(unaudited) |
|
|
|
(unaudited) |
|||
|
|
|
|
|
|
|||
Current assets: |
|
|
|
|
|
|||
Cash and cash equivalents |
$ |
946.7 |
|
$ |
588.7 |
|
$ |
440.7 |
Short-term investments |
|
211.7 |
|
|
— |
|
|
— |
Accounts receivable, net of allowance for credit losses
of |
|
4,894.0 |
|
|
4,567.5 |
|
|
4,418.5 |
Merchandise inventory |
|
682.5 |
|
|
668.1 |
|
|
706.4 |
Miscellaneous receivables |
|
520.1 |
|
|
470.5 |
|
|
489.7 |
Prepaid expenses and other |
|
406.6 |
|
|
410.2 |
|
|
403.1 |
Total current assets |
|
7,661.6 |
|
|
6,705.0 |
|
|
6,458.4 |
|
|
|
|
|
|
|||
Operating lease right-of-use assets |
|
129.2 |
|
|
128.8 |
|
|
133.1 |
Property and equipment, net |
|
193.1 |
|
|
195.5 |
|
|
194.9 |
Goodwill |
|
4,424.5 |
|
|
4,413.4 |
|
|
4,417.4 |
Other intangible assets, net |
|
1,259.7 |
|
|
1,369.7 |
|
|
1,384.9 |
Other assets |
|
708.6 |
|
|
472.2 |
|
|
286.6 |
Total assets |
$ |
14,376.7 |
|
$ |
13,284.6 |
|
$ |
12,875.3 |
|
|
|
|
|
|
|||
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Current liabilities: |
|
|
|
|
|
|||
Accounts payable - trade |
$ |
3,179.9 |
|
$ |
2,881.0 |
|
$ |
2,616.7 |
Accounts payable - inventory financing |
|
357.0 |
|
|
430.9 |
|
|
620.0 |
Current maturities of long-term debt |
|
423.2 |
|
|
613.1 |
|
|
40.0 |
Contract liabilities |
|
474.7 |
|
|
487.4 |
|
|
438.9 |
Accrued expenses and other current liabilities |
|
1,023.8 |
|
|
1,029.6 |
|
|
1,066.5 |
Total current liabilities |
|
5,458.6 |
|
|
5,442.0 |
|
|
4,782.1 |
|
|
|
|
|
|
|||
Long-term liabilities: |
|
|
|
|
|
|||
Debt |
|
5,607.5 |
|
|
5,031.8 |
|
|
5,661.5 |
Deferred income taxes |
|
145.1 |
|
|
171.4 |
|
|
171.8 |
Operating lease liabilities |
|
158.7 |
|
|
164.0 |
|
|
168.8 |
Other liabilities |
|
657.5 |
|
|
432.9 |
|
|
281.1 |
Total long-term liabilities |
|
6,568.8 |
|
|
5,800.1 |
|
|
6,283.2 |
|
|
|
|
|
|
|||
Total stockholders’ equity |
|
2,349.3 |
|
|
2,042.5 |
|
|
1,810.0 |
Total liabilities and stockholders’ equity |
$ |
14,376.7 |
|
$ |
13,284.6 |
|
$ |
12,875.3 |
CDW CORPORATION AND SUBSIDIARIES DEBT AND WORKING CAPITAL INFORMATION (dollars in millions) (unaudited) |
|||||||||||
|
September 30, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
||||||
Debt and Revolver Availability |
|
|
|
|
|
||||||
Cash and cash equivalents |
$ |
946.7 |
|
|
$ |
588.7 |
|
|
$ |
440.7 |
|
Short-term investments |
|
211.7 |
|
|
|
— |
|
|
|
— |
|
Total debt |
|
6,030.7 |
|
|
|
5,644.9 |
|
|
|
5,701.5 |
|
Net debt(i) |
|
4,872.3 |
|
|
|
5,056.2 |
|
|
|
5,260.8 |
|
Revolver availability |
|
1,254.4 |
|
|
|
1,208.1 |
|
|
|
942.4 |
|
Cash plus revolver availability |
|
2,201.1 |
|
|
|
1,796.8 |
|
|
|
1,383.1 |
|
|
|
|
|
|
|
||||||
Working Capital(ii) |
|
|
|
|
|
||||||
Days of sales outstanding |
|
79 |
|
|
|
77 |
|
|
|
73 |
|
Days of supply in inventory |
|
14 |
|
|
|
13 |
|
|
|
14 |
|
Days of purchases outstanding |
|
(76 |
) |
|
|
(73 |
) |
|
|
(72 |
) |
Cash conversion cycle |
|
17 |
|
|
|
17 |
|
|
|
15 |
|
| (i) | Defined as Total debt minus Cash and cash equivalents and Short-term investments |
|
| (ii) | Based on a rolling three-month average |
CDW CORPORATION AND SUBSIDIARIES CASH FLOW INFORMATION (dollars in millions) (unaudited) |
||||||||
|
|
Nine Months Ended
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
||||
Net cash provided by operating activities |
|
$ |
932.0 |
|
|
$ |
1,062.2 |
|
|
|
|
|
|
||||
Capital expenditures |
|
|
(94.0 |
) |
|
|
(114.7 |
) |
Purchases of short-term investments |
|
|
(211.1 |
) |
|
|
— |
|
Other cash flows used in investing activities |
|
|
(0.4 |
) |
|
|
(81.2 |
) |
Net cash used in investing activities |
|
|
(305.5 |
) |
|
|
(195.9 |
) |
|
|
|
|
|
||||
Net change in accounts payable - inventory financing |
|
|
(73.9 |
) |
|
|
165.4 |
|
Other cash flows used in financing activities |
|
|
(196.8 |
) |
|
|
(905.1 |
) |
Net cash used in financing activities |
|
|
(270.7 |
) |
|
|
(739.7 |
) |
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
|
2.2 |
|
|
|
(1.1 |
) |
Net increase in cash and cash equivalents |
|
|
358.0 |
|
|
|
125.5 |
|
Cash and cash equivalents - beginning of period |
|
|
588.7 |
|
|
|
315.2 |
|
Cash and cash equivalents - end of period |
|
$ |
946.7 |
|
|
$ |
440.7 |
|
|
|
|
|
|
||||
Supplementary disclosure of cash flow information: |
|
|
|
|
||||
Interest paid |
|
$ |
(146.9 |
) |
|
$ |
(141.2 |
) |
Income taxes paid, net |
|
$ |
(279.1 |
) |
|
$ |
(285.1 |
) |
CDW CORPORATION AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURE RECONCILIATIONS |
||||||||||||||||||||||||
CDW has included reconciliations of Non-GAAP operating income, Non-GAAP operating income margin, Non-GAAP net income, Non-GAAP net income per diluted share and Net sales on a constant currency basis for the three and nine months ended September 30, 2024 and 2023 below. In addition, a reconciliation of Free cash flow and Adjusted free cash flow is included for the nine months ended September 30, 2024 and 2023. |
||||||||||||||||||||||||
CDW CORPORATION AND SUBSIDIARIES NON-GAAP OPERATING INCOME AND NON-GAAP OPERATING INCOME MARGIN (dollars in millions) (unaudited) |
||||||||||||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|||||||||||||||||||||
|
2024 |
|
% of Net
|
|
2023 |
|
% of Net
|
|
2024 |
|
% of Net
|
|
2023 |
|
% of Net
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income, as reported |
$ |
481.6 |
|
8.7 |
% |
|
$ |
478.4 |
|
|
8.5 |
% |
|
$ |
1,242.7 |
|
7.9 |
% |
|
$ |
1,245.9 |
|
7.6 |
% |
Amortization of intangibles(i) |
|
37.7 |
|
|
|
|
37.3 |
|
|
|
|
|
113.2 |
|
|
|
|
116.2 |
|
|
||||
Equity-based compensation |
|
2.7 |
|
|
|
|
26.0 |
|
|
|
|
|
50.8 |
|
|
|
|
71.6 |
|
|
||||
Transformation initiatives(ii) |
|
8.3 |
|
|
|
|
6.4 |
|
|
|
|
|
23.1 |
|
|
|
|
16.0 |
|
|
||||
Acquisition and integration expenses |
|
0.5 |
|
|
|
|
7.1 |
|
|
|
|
|
2.1 |
|
|
|
|
24.7 |
|
|
||||
Workplace optimization(iii) |
|
2.2 |
|
|
|
|
(0.4 |
) |
|
|
|
|
9.5 |
|
|
|
|
42.5 |
|
|
||||
Other adjustments |
|
1.0 |
|
|
|
|
1.5 |
|
|
|
|
|
6.4 |
|
|
|
|
3.5 |
|
|
||||
Non-GAAP operating income |
$ |
534.0 |
|
9.7 |
% |
|
$ |
556.3 |
|
|
9.9 |
% |
|
$ |
1,447.8 |
|
9.2 |
% |
|
$ |
1,520.4 |
|
9.3 |
% |
| (i) | Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names. |
|
| (ii) | Includes costs related to strategic transformation initiatives focused on optimizing various operations and systems. |
|
| (iii) | Includes costs related to the workforce reduction program and charges related to the reduction of our real estate lease portfolio. |
CDW CORPORATION AND SUBSIDIARIES NON-GAAP NET INCOME AND NON-GAAP NET INCOME PER DILUTED SHARE (dollars and shares in millions, except per-share amounts) (unaudited) |
||||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
|
|
|||||||||||||||||||||||||||
|
2024 |
|
2023 |
|
|
|||||||||||||||||||||||||
|
Income before Income Taxes |
|
Income Tax Expense(i) |
|
Net Income |
|
Effective Tax Rate |
|
Income before Income Taxes |
|
Income Tax Expense(i) |
|
Net Income |
|
Effective Tax Rate |
|
Net Income % Change |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
US GAAP, as reported |
$ |
427.6 |
|
$ |
(111.2 |
) |
|
$ |
316.4 |
|
26.0 |
% |
|
$ |
419.8 |
|
|
$ |
(104.3 |
) |
|
$ |
315.5 |
|
|
24.8 |
% |
|
0.3 |
% |
Amortization of intangibles(ii) |
|
37.7 |
|
|
(9.8 |
) |
|
|
27.9 |
|
|
|
|
37.3 |
|
|
|
(9.7 |
) |
|
|
27.6 |
|
|
|
|
|
|||
Equity-based compensation |
|
2.7 |
|
|
(0.3 |
) |
|
|
2.4 |
|
|
|
|
26.0 |
|
|
|
(10.3 |
) |
|
|
15.7 |
|
|
|
|
|
|||
Transformation initiatives(iii) |
|
8.3 |
|
|
(2.1 |
) |
|
|
6.2 |
|
|
|
|
6.4 |
|
|
|
(1.7 |
) |
|
|
4.7 |
|
|
|
|
|
|||
Acquisition and integration expenses |
|
0.5 |
|
|
(0.1 |
) |
|
|
0.4 |
|
|
|
|
7.1 |
|
|
|
(1.8 |
) |
|
|
5.3 |
|
|
|
|
|
|||
Workplace optimization(iv) |
|
2.2 |
|
|
(0.6 |
) |
|
|
1.6 |
|
|
|
|
(0.4 |
) |
|
|
— |
|
|
|
(0.4 |
) |
|
|
|
|
|||
Other adjustments |
|
0.1 |
|
|
(0.1 |
) |
|
|
— |
|
|
|
|
1.5 |
|
|
|
(0.5 |
) |
|
|
1.0 |
|
|
|
|
|
|||
Non-GAAP |
$ |
479.1 |
|
$ |
(124.2 |
) |
|
$ |
354.9 |
|
25.9 |
% |
|
$ |
497.7 |
|
|
$ |
(128.3 |
) |
|
$ |
369.4 |
|
|
25.8 |
% |
|
(3.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income per diluted share |
|
|
|
|
$ |
2.34 |
|
|
|
|
|
|
|
$ |
2.32 |
|
|
|
|
|
||||||||||
Non-GAAP net income per diluted share |
|
|
|
|
$ |
2.63 |
|
|
|
|
|
|
|
$ |
2.72 |
|
|
|
|
|
||||||||||
Shares used in computing US GAAP and Non-GAAP net income per diluted share |
|
|
|
|
|
134.9 |
|
|
|
|
|
|
|
|
135.9 |
|
|
|
|
|
||||||||||
| (i) | Income tax on non-GAAP adjustments includes excess tax benefits associated with equity-based compensation. |
|
| (ii) | Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names. |
|
| (iii) | Includes costs related to strategic transformation initiatives focused on optimizing various operations and systems. |
|
| (iv) | Includes costs related to the workforce reduction program and charges related to the reduction of our real estate lease portfolio. |
CDW CORPORATION AND SUBSIDIARIES NON-GAAP NET INCOME AND NON-GAAP NET INCOME PER DILUTED SHARE (dollars and shares in millions, except per-share amounts) (unaudited) |
||||||||||||||||||||||||||||
|
Nine Months Ended September 30, |
|
|
|||||||||||||||||||||||||
|
2024 |
|
2023 |
|
|
|||||||||||||||||||||||
|
Income before Income Taxes |
|
Income Tax Expense(i) |
|
Net Income |
|
Effective Tax Rate |
|
Income before Income Taxes |
|
Income Tax Expense(i) |
|
Net Income |
|
Effective Tax Rate |
|
Net Income % Change |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
US GAAP, as reported |
$ |
1,083.9 |
|
$ |
(270.3 |
) |
|
$ |
813.6 |
|
24.9 |
% |
|
$ |
1,069.5 |
|
$ |
(261.3 |
) |
|
$ |
808.2 |
|
24.4 |
% |
|
0.7 |
% |
Amortization of intangibles(ii) |
|
113.2 |
|
|
(29.4 |
) |
|
|
83.8 |
|
|
|
|
116.2 |
|
|
(30.2 |
) |
|
|
86.0 |
|
|
|
|
|||
Equity-based compensation |
|
50.8 |
|
|
(23.4 |
) |
|
|
27.4 |
|
|
|
|
71.6 |
|
|
(32.7 |
) |
|
|
38.9 |
|
|
|
|
|||
Transformation initiatives(iii) |
|
23.1 |
|
|
(6.0 |
) |
|
|
17.1 |
|
|
|
|
16.0 |
|
|
(4.2 |
) |
|
|
11.8 |
|
|
|
|
|||
Acquisition and integration expenses |
|
2.1 |
|
|
(0.5 |
) |
|
|
1.6 |
|
|
|
|
24.7 |
|
|
(6.4 |
) |
|
|
18.3 |
|
|
|
|
|||
Workplace optimization(iv) |
|
9.5 |
|
|
(2.5 |
) |
|
|
7.0 |
|
|
|
|
42.5 |
|
|
(11.1 |
) |
|
|
31.4 |
|
|
|
|
|||
Other adjustments |
|
5.5 |
|
|
(1.5 |
) |
|
|
4.0 |
|
|
|
|
3.5 |
|
|
(1.0 |
) |
|
|
2.5 |
|
|
|
|
|||
Non-GAAP |
$ |
1,288.1 |
|
$ |
(333.6 |
) |
|
$ |
954.5 |
|
25.9 |
% |
|
$ |
1,344.0 |
|
$ |
(346.9 |
) |
|
$ |
997.1 |
|
25.8 |
% |
|
(4.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income per diluted share, as reported |
|
|
|
|
$ |
6.00 |
|
|
|
|
|
|
|
$ |
5.92 |
|
|
|
|
|||||||||
Non-GAAP net income per diluted share |
|
|
|
|
$ |
7.04 |
|
|
|
|
|
|
|
$ |
7.31 |
|
|
|
|
|||||||||
Shares used in computing US GAAP and Non-GAAP net income per diluted share |
|
|
|
|
|
135.5 |
|
|
|
|
|
|
|
|
136.4 |
|
|
|
|
|||||||||
| (i) | Income tax on non-GAAP adjustments includes excess tax benefits associated with equity-based compensation. |
|
| (ii) | Includes amortization expense for acquisition-related intangible assets, primarily customer relationships, customer contracts and trade names. |
|
| (iii) | Includes costs related to strategic transformation initiatives focused on optimizing various operations and systems. |
|
| (iv) | Includes costs related to the workforce reduction program and charges related to the reduction of our real estate lease portfolio. |
CDW CORPORATION AND SUBSIDIARIES NET SALES ON A CONSTANT CURRENCY BASIS (dollars in millions) (unaudited) |
||||||||||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||||||||||
|
|
|
2024 |
|
|
2023 |
|
% Change(i) |
|
Average Daily Sales % Change(i) |
|
|
2024 |
|
|
2023 |
|
% Change(i) |
|
Average Daily Sales % Change(i) |
||||
Net sales, as reported |
|
$ |
5,516.6 |
|
$ |
5,628.3 |
|
(2.0 |
)% |
|
(3.5 |
)% |
|
$ |
15,812.7 |
|
$ |
16,357.5 |
|
(3.3 |
)% |
|
(3.8 |
)% |
Foreign currency translation(ii) |
|
|
— |
|
|
6.6 |
|
|
|
|
|
|
— |
|
|
27.2 |
|
|
|
|
||||
Net sales, on a constant currency basis |
|
$ |
5,516.6 |
|
$ |
5,634.9 |
|
(2.1 |
)% |
|
(3.6 |
)% |
|
$ |
15,812.7 |
|
$ |
16,384.7 |
|
(3.5 |
)% |
|
(4.0 |
)% |
| (i) | There were 64 and 63 selling days for the three months ended September 30, 2024 and 2023, respectively. There were 192 and 191 selling days for the nine months ended September 30, 2024 and 2023, respectively. Average daily sales is defined as Net sales divided by the number of selling days. |
|
| (ii) |
Represents the effect of translating the prior year results of CDW |
CDW CORPORATION AND SUBSIDIARIES FREE CASH FLOW AND ADJUSTED FREE CASH FLOW (dollars in millions) (unaudited) |
|||||||
|
Nine Months Ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
$ |
932.0 |
|
|
$ |
1,062.2 |
|
Capital expenditures |
|
(94.0 |
) |
|
|
(114.7 |
) |
Free cash flow |
|
838.0 |
|
|
|
947.5 |
|
Net change in accounts payable - inventory financing |
|
(73.9 |
) |
|
|
165.4 |
|
Adjusted free cash flow(i) |
$ |
764.1 |
|
|
$ |
1,112.9 |
|
| (i) | Defined as Net cash provided by operating activities less capital expenditures, adjusted to include cash flows from financing activities that relate to the purchase of inventory. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241030091489/en/
Investor Inquiries
Steven O’Brien
Vice President, Investor Relations
(847) 968-0238
investorrelations@cdw.com
Media Inquires
Sara Granack
Vice President, Corporate Communications
(847) 419-7411
mediarelations@cdw.com
Source: CDW Corporation
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