CDW · 10-Q · 2026Q3 · Full report

Supply Chain And Inventory

CDW Corp · 2026-11-04 · Importance 26 · Surprise 24

CDW reported higher inventory associated with customer-driven stocking positions as demand increased, hardware costs rose, and inventory was held under product financing arrangements. The company said these factors increased days of inventory outstanding, alongside higher days sales outstanding from collection timing and increased sales activity. The filing describes product financing as a way to support a customer’s hardware procurement program and mitigate the working-capital timing gap between inventory procurement and customer collections.

Key facts

• During the second quarter of 2026, CDW entered a product financing arrangement with an independent third-party intermediary to support a customer’s hardware procurement program and mitigate the working-capital impact of the timing difference between inventory procurement and customer collections. source
• CDW retains the economic benefits and risks of inventory held by the product-financing intermediary, and contractual financing costs are recognized as interest expense over the arrangement’s term. source
• CDW faces potential disruptions in supplier product supply, including capacity limitations and cost increases resulting from heightened demand related to AI workloads. source
• CDW’s cash conversion cycle increase reflected higher DSO from collection timing and increased sales activity, and higher DIO from customer stocking positions, higher hardware cost, and inventory under product financing arrangements. source
• CDW faces exposure to accounts receivable and inventory risks. source
• The merchandise inventory cash-flow decrease was primarily due to customer-driven stocking positions from higher demand, increased hardware cost, and inventory held under product financing arrangements. source