Nasdaq:CDW
CDW Corp
A premier global reseller of technology products and provider of IT services supporting Fortune 500 enterprises with cloud, security, and infrastructure solutions.
Key Metrics
Investment Thesis
Bull Case
CDW offers attractive value through its consistent free cash flow generation which funds aggressive capital return programs including $653M in buybacks and a growing dividend, signaling management confidence in long-term growth prospects. The company's diversified revenue streams between high-volume hardware sales and recurring service contracts provide resilience against cyclical downturns in the broader technology sector.
Bear Case
Investors should be cautious regarding the stagnation in net income trends over the past three years, suggesting potential margin pressure or pricing power limitations in a commoditized market. The company carries significant long-term debt obligations of $4.62B and substantial current liabilities of $7.23B which could constrain financial flexibility if interest rates rise or credit ratings are downgraded.
About CDW Corp
CDW Corp is a leading global technology solutions provider serving over 80% of Fortune 500 companies with its core business segments including IT services, technology procurement, and managed services across North America and Europe. The company leverages its massive $6.31B accounts receivable and extensive supply chain to offer enterprise clients customized cloud migration, cybersecurity, and infrastructure solutions while maintaining robust cash flow generation of $1.21B. Operating in the competitive enterprise IT resale and managed services market, CDW bridges the gap between major technology vendors and end-users with a focus on digital transformation.
Analysis
Management Discussion
Despite a slight revenue contraction from 2023 to 2024 before recovering in 2025, CDW maintained consistent profitability with net income stabilizing around $1.07B-$1.10B over the last five years. The company demonstrated strong operational efficiency with cash flow from operations of $1.21B significantly exceeding net profit, allowing for substantial share repurchases of $653M and dividend payments of $328.6M while managing debt levels.
Industry Overview
The enterprise IT services industry is currently undergoing a structural shift towards cloud-native architectures and AI-driven security solutions, forcing traditional resellers to evolve from product distributors to strategic technology partners. Companies in this sector face pressure to differentiate through value-added services as hyperscalers attempt to capture resale revenue directly from end customers.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $23.75B | $21.38B | $21.00B | $22.42B |
| Cost of Revenue | $19.06B | $16.72B | $16.40B | $17.55B |
| Gross Profit | $4.69B | $4.65B | $4.60B | $4.87B |
| Operating Expenses | $2.95B | $2.97B | $2.95B | $3.22B |
| Operating Income | $1.74B | $1.68B | $1.65B | $1.66B |
| G&A | $2.95B | $2.97B | $2.95B | $3.22B |
| Stock-Based Comp | $91.1M | $93.7M | $64.7M | $83.6M |
| D&A | $290.6M | $270.7M | $275.3M | $295.6M |
| Depreciation | $58.0M | $52.0M | $53.0M | $48.0M |
| Amortization | $233.0M | $219.0M | $222.0M | $248.0M |
| Other OpEx | $0 | $0 | $0 | $0 |
| Non-Operating Income | $-247.4M | $-230.7M | $-215.9M | $-228.2M |
| Pre-Tax Income | $1.49B | $1.45B | $1.44B | $1.43B |
| Income Tax | $373.3M | $345.9M | $357.6M | $360.8M |
| Continuing Ops | $1.11B | $1.10B | $1.08B | $1.07B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $1.11B | $1.10B | $1.08B | $1.07B |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $1.11B | $1.10B | $1.08B | $1.07B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $6.56B | $6.71B | $7.37B | $8.50B |
| Cash & Equivalents | $315.2M | $588.7M | $503.5M | $618.7M |
| Marketable Securities | — | — | $214.2M | $0 |
| Accounts Receivable | $4.46B | $4.57B | $5.14B | $6.31B |
| Inventory | $800.2M | $668.1M | $605.3M | $563.4M |
| Prepaid Expenses | $498.2M | $410.2M | $404.4M | $452.0M |
| Other Current Assets | $489.1M | $470.5M | $509.9M | $554.0M |
| Long-Term Assets | $6.57B | $6.58B | $7.31B | $7.53B |
| PP&E (Net) | $188.8M | $195.5M | $192.0M | $171.5M |
| Intangibles | $1.49B | $1.37B | $1.36B | $1.19B |
| Goodwill | $4.34B | $4.41B | $4.62B | $4.66B |
| Operating Leases | $149.2M | $128.8M | $120.2M | $136.7M |
| Other LT Assets | $396.1M | $472.2M | $1.02B | $1.37B |
| Total Assets | $13.13B | $13.28B | $14.68B | $16.03B |
| Current Liabilities | $4.95B | $5.44B | $5.47B | $7.23B |
| Current Debt | $56.3M | $613.1M | $235.8M | $1.01B |
| Current Leases | $31.9M | $34.0M | $32.2M | $32.9M |
| Deferred Revenue | $485.5M | $487.4M | $491.0M | $534.0M |
| Other Current Liab | $4.37B | $4.31B | $4.72B | $5.65B |
| Long-Term Liabilities | $6.58B | $5.80B | $6.85B | $6.20B |
| Long-Term Debt | $5.87B | $5.03B | $5.61B | $4.62B |
| LT Operating Leases | $175.2M | $164.0M | $149.1M | $157.8M |
| Other LT Liab | $539.5M | $604.3M | $1.10B | $1.42B |
| Total Liabilities | $11.53B | $11.24B | $12.33B | $13.42B |
| Shareholders' Equity | $1.60B | $2.04B | $2.35B | $2.61B |
| Retained Earnings | $-1.76B | $-1.53B | $-1.32B | $-1.27B |
| AOCI | $-152.4M | $-124.6M | $-160.1M | $-99.8M |
| Total L&E | $13.13B | $13.28B | $14.68B | $16.03B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $1.11B | $1.10B | $1.08B | $1.07B |
| Non-Cash Adjustments | $106.2M | $878.5M | $-1.86B | $-2.59B |
| Working Capital Changes | $115.2M | $-384.1M | $2.06B | $2.73B |
| Cash from Operations | $1.34B | $1.60B | $1.28B | $1.21B |
| Capital Expenditures | $127.8M | $148.2M | $122.6M | $117.1M |
| Cash from Investing | $-164.5M | $-229.6M | $-659.2M | $70.2M |
| Debt Issuances | $0 | $0 | $1.20B | $592.5M |
| Debt Repayments | $635.5M | $150.0M | $0 | $211.1M |
| Share Buybacks | $0 | $500.0M | $500.0M | $653.0M |
| Dividends Paid | $282.6M | $321.5M | $332.1M | $328.6M |
| Cash from Financing | $-1.10B | $-1.10B | $-686.9M | $-1.18B |
| FX Effect | $-12.2M | $3.1M | $-12.2M | $20.3M |
| Net Change in Cash | $57.1M | $273.5M | $-81.0M | $111.2M |
| Beginning Cash | $258.1M | $315.2M | $588.7M | $507.7M |
| Ending Cash | $315.2M | $588.7M | $507.7M | $618.9M |
Frequently Asked Questions
How does CDW Corp make money?
The company's revenue is primarily driven by its Technology Procurement segment which aggregates hardware and software from major vendors, its IT Services segment providing managed services and cybersecurity solutions, and its Direct Sales channel serving large enterprise accounts directly. Financial data indicates a strong reliance on current deferred revenue of $534M to recognize service performance over time alongside significant gross profit margins generated from high-margin service offerings.
What are the main risks for CDW?
Intensifying competition from cloud-native hyperscalers and direct manufacturer programs could compress the company's gross margins and erode its market share in technology procurement. Exposure to foreign exchange fluctuations, evidenced by non-operating losses of $228.2M, alongside potential supply chain disruptions affecting inventory levels of $563.4M poses operational risks to cash flow stability.
What is CDW's competitive advantage?
CDW possesses an extensive global distribution network and deep relationships with top-tier technology vendors that provide exclusive access to new product launches and volume rebates. The company's ability to deliver complex, integrated IT solutions rather than just commodities creates a sticky customer base with high switching costs for enterprise clients seeking end-to-end digital transformation support.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.