CDW (NASDAQ:CDW) Q3 2025 Earnings: EPS Beats, Revenue Misses Estimates

CDW CORP/DE (NASDAQ:CDW) has announced its financial results for the third quarter of 2025, delivering a performance characterized by steady revenue growth that aligned with market expectations, coupled with a slight outperformance on profitability. The market's initial reaction, however, has been muted, with the stock trading slightly lower in pre-market activity following the earnings release.

Earnings and Revenue Versus Estimates

The company's third-quarter results presented a mixed picture relative to analyst forecasts. CDW reported net sales of $5.74 billion, marking a 4.0% increase compared to the same period last year. This figure came in just shy of the analyst consensus estimate of $5.80 billion. On the profitability front, the company reported non-GAAP earnings per share (EPS) of $2.71, which exceeded the estimated $2.65.

Key financial comparisons include:

• Reported Revenue: $5.74 billion
• Estimated Revenue: $5.80 billion
• Reported Non-GAAP EPS: $2.71
• Estimated Non-GAAP EPS: $2.65

While the top-line sales growth was solid, the slight revenue miss appears to be a focal point for investors, overshadowing the positive EPS surprise in early trading.

Market Reaction and Price Action

The immediate market response to the earnings report has been negative. In pre-market trading, CDW shares are down approximately 1.2%. This price action suggests that investors may be focusing more on the revenue coming in below expectations than on the earnings beat. The performance over recent weeks has been relatively flat, indicating a holding pattern as the market awaited these results, with the earnings release now acting as the catalyst for movement.

Quarterly Performance Highlights

Beyond the headline earnings and revenue figures, the company's press release detailed a resilient operational performance in a complex economic environment. Net sales growth was driven by strong demand in networking, mobile devices, and software, though this was partially offset by declines in data storage and servers.

A breakdown of segment performance for the quarter reveals:

• Corporate Segment: Sales of $2.26 billion, up 4.4% year-over-year.
• Small Business Segment: Sales of $434 million, a significant increase of 14.2%.
• Public Segment: Sales of $2.35 billion, a slight increase of 0.6%, with growth in Government and Healthcare offsetting an 8.5% decline in Education.
• Other (UK & Canada): Sales of $698 million, up 9.1%.

Profitability metrics showed a slight expansion in gross profit margin to 21.9%, up from 21.8% a year ago, attributed to a higher contribution from services. However, operating income saw a decrease of 8.0% to $443 million, primarily due to a substantial 12.9% increase in selling and administrative expenses linked to higher performance-based compensation and transformation costs.

Looking Ahead

The company did not provide a specific quantitative financial outlook for the coming quarters in its press release. Instead, management reiterated its long-term target to exceed US IT market growth by 200 to 300 basis points. For investor context, analysts have already established estimates for the company's future performance, projecting sales of $5.38 billion and revenue of $2.52 billion for the fourth quarter of 2025. For the full year, the analyst consensus points to sales of $22.43 billion and revenue of $9.96 billion.

In a separate announcement, CDW also confirmed a 1% increase in its quarterly cash dividend to $0.630 per share, demonstrating a continued commitment to returning value to shareholders.

For a detailed look at historical earnings, future estimates, and analyst projections for CDW, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor does it recommend buying or selling any security. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.