CDW’s Q4 results were greeted with a positive market reaction, reflecting stronger-than-anticipated demand across key IT categories. Management attributed the quarter’s momentum to double-digit growth in cloud, software, and professional services, as well as robust expansion in small business and education segments. CEO Christine Leahy pointed to a “strong finish to a complex year,” emphasizing the role of the company’s diverse end markets and broad solution set in offsetting soft spots in federal government and corporate spending.
Is now the time to buy CDW? Find out in our full research report (it’s free for active Edge members).
CDW (CDW) Q4 CY2025 Highlights:
- Revenue: $5.51 billion vs analyst estimates of $5.34 billion (6.3% year-on-year growth, 3.1% beat)
- Adjusted EPS: $2.57 vs analyst estimates of $2.44 (5.1% beat)
- Adjusted EBITDA: $542.6 million vs analyst estimates of $517.1 million (9.8% margin, 4.9% beat)
- Operating Margin: 7.8%, in line with the same quarter last year
- Market Capitalization: $18.6 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From CDW’s Q4 Earnings Call
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David Vogt (UBS) pressed for details on the impact of memory price increases and demand pull-forward. CEO Christine Leahy explained that visibility is limited, but expects a similar level of pull-forward in Q1 and sees hardware demand as “a little choppier” through the year.
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Adam Tindle (Raymond James) asked about gross margin dynamics amid shifting product mix and inflation. CFO Albert Miralles said gross margin could see a modest pickup, especially as software and services grow, but noted moving parts in the memory environment.
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Amit Daryanani (Evercore ISI) questioned how customers are reallocating IT budgets, particularly between hardware and solutions. Leahy responded that cloud, SaaS, and security categories are expected to carry more weight, while networking remains resilient.
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Erik Woodring (Morgan Stanley) inquired about CDW’s reduced market outperformance relative to prior years. Leahy linked this to the growing share of “netted down” revenue and changing product mix, but emphasized confidence in ongoing share gains.
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Ruplu Bhattacharya (BofA) sought clarity on margin sustainability and AI-related services demand. Miralles noted that non-netted down margins remain strong, while Leahy highlighted growing AI engagement from small and mid-sized customers.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will track (1) the progression of AI and cloud adoption from pilot to production across customer segments, (2) the company’s ability to achieve operating leverage as service lines expand, and (3) the impact of memory price volatility and potential supply constraints on hardware demand. Updates on the integration of recent acquisitions and new segment reporting will also be important indicators of strategic execution.
CDW currently trades at $142.83, up from $126.16 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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