CDW Corporation (NASDAQ:CDW) closed its 2025 fiscal year with a fourth-quarter earnings report that delivered a mixed financial picture, characterized by revenue that modestly exceeded expectations and earnings that met them, against a backdrop of disciplined capital management and a cautiously optimistic outlook for the year ahead.
Fourth Quarter Performance vs. Estimates
The company reported net sales of $5.511 billion for the quarter ended December 31, 2025, representing a 6.3% increase over the prior year. This top-line figure came in ahead of analyst estimates, which had projected revenue of approximately $5.342 billion. On an average daily sales basis, which accounts for the number of selling days in the period, net sales grew by 4.6%.
The bottom-line performance, as measured by non-GAAP earnings per share (EPS), was $2.57. This result was essentially in line with the consensus estimate of $2.47, showing a slight beat. The company's GAAP diluted EPS was $2.14, up 8.8% year-over-year.
Key financial highlights from the quarter include:
- Revenue Beat: Reported sales of $5.511B vs. an estimated $5.342B.
- EPS In-Line/Modest Beat: Non-GAAP EPS of $2.57 vs. an estimated $2.47.
- Segment Growth: The Public segment saw sales rise 7.0%, driven by education, healthcare, and government customers. Small Business sales surged 18.4%, while the Corporate segment was essentially flat.
- Profitability: Gross profit increased 8.6% to $1.254 billion, with margin expansion to 22.8% from 22.3% a year ago.
Full-Year 2025 and Market Reaction
For the full year 2025, CDW reported net sales of $22.424 billion, a 6.8% increase. However, net income saw a slight decrease of 1.0% to $1.067 billion, while non-GAAP net income grew 2.8% to $1.323 billion. The company highlighted strong cash flow generation, which enabled it to return approximately $982 million to shareholders through dividends and share repurchases during the year.
The initial market reaction to the earnings release appears cautiously positive. In pre-market trading following the announcement, the stock showed an increase of over 4.6%. This suggests investors were encouraged by the revenue beat and the company's stable performance in a complex environment. Over the past month, the stock had declined roughly 5.6%, making the post-earnings bounce a notable reversal.
Management Commentary and Forward Outlook
In the earnings release, CEO Christine Leahy emphasized the company's role as a trusted advisor and the resilience of its diversified customer base. She noted that customers are turning to CDW for guidance on their AI journeys alongside other mission-critical IT needs.
CFO Albert Miralles pointed to strong gross profit growth and cash flow, which provided flexibility for mergers and acquisitions and shareholder returns. Looking ahead, the company provided a qualitative outlook, stating it continues "to target exceeding US IT addressable market growth by 200 to 300 basis points" for 2026.
This internal target can be juxtaposed against current analyst expectations. Wall Street is currently modeling sales of approximately $22.962 billion for CDW in 2026, which would represent year-over-year growth in the low single-digit percentage range. The company's ambition to outpace the broader IT market will be a key metric watched by investors in the coming quarters. Analysts are also forecasting Q1 2026 revenue of around $5.318 billion.
Conclusion
CDW's Q4 2025 results demonstrate its ability to navigate a persistent environment of economic uncertainty, delivering steady growth and meeting profit expectations. The revenue beat and reaffirmed commitment to shareholder returns, including a newly declared quarterly cash dividend of $0.630 per share, seem to have resonated positively with the market, as indicated by the pre-market rally. The focus now shifts to the company's execution in 2026 and its ability to deliver on its goal of outperforming the IT market, a target that aligns with but will need to be achieved against existing analyst forecasts.
For a detailed look at historical earnings and future analyst estimates for CDW, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, nor does it recommend any investment action. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
