CDW · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

CDW Corp · 2026-11-04 · Importance 31 · Surprise 32 · No source text

Consolidated gross margin fell 140 basis points to 20.5% in the third quarter and 90 basis points to 20.5% for the first nine months, as product mix shifted toward categories with lower margins. Third-quarter Commercial margin declined 120 basis points to 21.1%, Government fell 330 basis points to 19.5%, Education declined 30 basis points to 20.0%, and Other fell 130 basis points to 19.4%. For nine months, Commercial margin fell 70 basis points to 21.6% and Government fell 310 basis points to 19.5%, while Education increased 50 basis points to 17.8% on favorable product mix. Government’s margin pressure reflected lower-margin product categories and services; Education’s quarterly decline reflected lower-margin services.

Key facts

• For the three months ended September 30, 2026, CDW gross profit increased 10.3% to $1,385.3 million, while gross profit margin decreased 140 basis points to 20.5%, primarily because of mix into and lower margins in certain product categories. source
• For the nine months ended September 30, 2026, CDW gross profit increased 7.6% to $3,895.1 million, while gross profit margin decreased 90 basis points to 20.5%, primarily because of mix into and lower margins in certain product categories. source
• For the three months ended September 30, 2026, Commercial gross profit margin decreased 120 basis points to 21.1%, primarily due to mix into and lower margins in data storage and servers and netcomm products. source
• For the three months ended September 30, 2026, Government gross profit margin decreased 330 basis points to 19.5%, attributed primarily to product mix and lower margins in certain product categories and services. source
• For the three months ended September 30, 2026, Education gross profit margin decreased 30 basis points to 20.0%, primarily attributed to lower margins in services. source
• For the three months ended September 30, 2026, Other gross profit margin decreased 130 basis points to 19.4%, primarily attributed to lower margins in certain product categories. source
• For the nine months ended September 30, 2026, Commercial gross profit margin decreased 70 basis points to 21.6%, primarily attributed to mix into and lower margins in data storage and servers and netcomm products. source
• For the nine months ended September 30, 2026, Government gross profit margin decreased 310 basis points to 19.5%, attributed to mix into and lower margins in certain product categories and services. source

Impact estimates