IT solutions provider CDW (NASDAQGS:CDW) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 9.2% year on year to $5.68 billion. Its non-GAAP profit of $2.28 per share was in line with analysts’ consensus estimates.
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CDW (CDW) Q1 CY2026 Highlights:
- Revenue: $5.68 billion vs analyst estimates of $5.47 billion (9.2% year-on-year growth, 3.8% beat)
- Adjusted EPS: $2.28 vs analyst estimates of $2.29 (in line)
- Adjusted Operating Income: $376 million vs analyst estimates of $459.1 million (6.6% margin, 18.1% miss)
- Operating Margin: 6.6%, in line with the same quarter last year
- Free Cash Flow Margin: 4.4%, similar to the same quarter last year
- Market Capitalization: $17.51 billion
"CDW delivered a strong first quarter, reflecting outcome-driven execution in a complex and fast-moving environment," said Christine A. Leahy, chair and chief executive officer, CDW.
Company Overview
Serving as a crucial bridge between technology manufacturers and end users since 1984, CDW (NASDAQ:CDW) is a multi-brand provider of information technology solutions that helps businesses and public sector organizations select, implement, and manage hardware, software, and IT services.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $22.9 billion in revenue over the past 12 months, CDW is a behemoth in the business services sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because finding new avenues for growth becomes difficult when you already have a substantial market presence. To expand meaningfully, CDW likely needs to tweak its prices, innovate with new offerings, or enter new markets.
As you can see below, CDW grew its sales at a tepid 3.9% compounded annual growth rate over the last five years. This shows it failed to generate demand in any major way and is a rough starting point for our analysis.
Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. CDW’s annualized revenue growth of 4.1% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. 
This quarter, CDW reported year-on-year revenue growth of 9.2%, and its $5.68 billion of revenue exceeded Wall Street’s estimates by 3.8%.
Looking ahead, sell-side analysts expect revenue to grow 1.2% over the next 12 months, a slight deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will see some demand headwinds.
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Adjusted Operating Margin
Adjusted operating margin is a key measure of profitability. Think of it as net income (the bottom line) excluding the impact of non-recurring expenses, taxes, and interest on debt - metrics less connected to business fundamentals.
CDW’s adjusted operating margin has more or less stayed the same over the last 12 months , averaging 8.8% over the last five years. This profitability was mediocre for a business services business and caused by its suboptimal cost structure.
Looking at the trend in its profitability, CDW’s adjusted operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
In Q1, CDW generated an adjusted operating margin profit margin of 6.6%, down 1.9 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
CDW’s EPS grew at 7.9% compounded annual growth rate over the last five years, higher than its 3.9% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its adjusted operating margin didn’t improve.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For CDW, its two-year annual EPS growth of 2% was lower than its five-year trend. We hope its growth can accelerate in the future.
In Q1, CDW reported adjusted EPS of $2.28, up from $2.15 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects CDW’s full-year EPS of $10.16 to grow 5.1%.
Key Takeaways from CDW’s Q1 Results
We enjoyed seeing CDW beat analysts’ revenue expectations this quarter. Overall, this print had some key positives. Investors were likely hoping for more, and shares traded down 5.5% to $129.27 immediately following the results.
Is CDW an attractive investment opportunity at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).