CDW Revenue Rises 18% on AI Infrastructure Demand
The IT solutions provider beat analyst estimates for third-quarter 2026 earnings and raised its dividend.
Updated on Nov. 4, 2026 in Corporate Finance
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CDW reported third-quarter 2026 revenue up 18% year over year to $6.754 billion, with adjusted EPS of $3.26 above the $2.98 analyst estimate. Shares rose 9% following the report.
Why it matters
Demand from AI infrastructure and data center modernization is driving customer spending on servers, storage and cloud solutions. The results signal continued momentum for IT channel providers as customers move toward production AI deployments.
Adjusted operating income rose 16.8% year over year to $620 million, and adjusted free cash flow reached $506 million in the quarter. Gross profit increased 10.3% to $1.4 billion, though gross margin declined to 20.5%.
The players
CDW Corporation
CDW is a Fortune 500 provider of information technology solutions to business, government and education customers in the United States, the United Kingdom and Canada.
The details
Commercial sales rose 21% and International sales increased 26% during the quarter. CDW completed its $525 million acquisition of Lovelytics on September 25, and returned $187 million to shareholders through buybacks and dividends.
Timeline
September 25, 2026: CDW completed its acquisition of Lovelytics.
Q3 2026: Third-quarter results reported, with buybacks and dividends totaling $187 million.
November 4, 2026: CDW shares traded higher following the earnings report.
Market Dynamics
CDW expects U.S. IT market growth in the high single digits for full-year 2026 and aims to outperform that market by 300-400 basis points. The company's guidance reflects an AI-driven spending cycle now flowing through IT resellers and integrators.
Shareholders received a quarterly dividend increase of 8% to $0.68 per share, and the company's adjusted free cash flow of $506 million supports continued capital returns. Investors tracking IT services stocks can use CDW's full-year guidance as a benchmark for sector growth expectations.
The takeaway
Strong demand for AI infrastructure is lifting IT channel revenue, but rising hardware mix is compressing margins. Investors should watch whether gross margin stabilizes as customers move from pilot projects to full production deployments.
Further reading
Explore more Corporate Finance coverage for context on how company earnings and capital allocation decisions play out across the U.S. market.
Source note: This article includes information reported by Benzinga.
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