PC Connection (NASDAQ:CNXN) Announces Quarterly Earnings Results

PC Connection (NASDAQ:CNXN) posted its earnings results on Wednesday. The company reported $1.24 earnings per share for the quarter, topping the consensus estimate of $1.04 by $0.20, FiscalAI reports. The company had revenue of $874.31 million for the quarter, compared to analyst estimates of $773.74 million. PC Connection had a net margin of 3.25% and a return on equity of 11.54%.

Here are the key takeaways from PC Connection’s conference call:

• Record third-quarter results included net sales of $874.3 million, up 23.3% year over year, record gross profit of $161.9 million, and diluted EPS of $1.24, up 27.8%.
• Enterprise Solutions and Business Solutions posted strong growth of 27.4% and 27.8%, respectively, while Enterprise Solutions ended with a record backlog and broad demand for AI-ready infrastructure, endpoints, software, and services.
• Operating leverage improved as SG&A declined to 13.8% of sales, driving a 35.4% increase in operating income to $41 million; Connection also maintained significant liquidity with $343.3 million in cash and short-term investments.
• Gross margin fell 110 basis points to 18.5%, primarily due to customer and product mix, large endpoint rollouts, pricing pressures, and a lower contribution from software recognized on a net basis.
• Management expects fourth-quarter sales to decline seasonally by roughly 3% to 4% from the third quarter and said there is no clear evidence of a year-end budget flush. For 2027, endpoint demand may be modestly lower after the upgrade cycle, although on-premises infrastructure, networking, security, software, and AI-related demand are expected to remain solid.

PC Connection Trading Down 1.0%

Shares of PC Connection stock opened at $85.62 on Friday. The business has a 50-day moving average price of $86.59 and a two-hundred day moving average price of $72.18. PC Connection has a 1-year low of $54.97 and a 1-year high of $96.90. The company has a market cap of $2.16 billion, a P/E ratio of 21.14, a PEG ratio of 2.07 and a beta of 0.81.

PC Connection Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Friday, November 27th. Shareholders of record on Tuesday, November 10th will be issued a dividend of $0.20 per share. The ex-dividend date is Tuesday, November 10th. This represents a $0.80 annualized dividend and a yield of 0.9%. PC Connection’s dividend payout ratio (DPR) is presently 19.75%.

Key Stories Impacting PC Connection

Here are the key news stories impacting PC Connection this week:

• Positive Sentiment: Q3 results exceeded expectations: PC Connection reported adjusted earnings of $1.24 per share, up from $0.97 a year earlier and above the $1.04 consensus estimate. Revenue reached $874.31 million, substantially exceeding the $773.74 million analyst forecast. PC Connection Q3 2026 earnings report
• Positive Sentiment: AI server demand is supporting growth: Coverage highlighted record quarterly revenue driven by a surge in AI server demand, suggesting that PC Connection may be benefiting from continued enterprise infrastructure spending. PC Connection Q3 2026 AI server coverage
• Positive Sentiment: Sidoti raised its profit outlook: Sidoti increased its EPS forecast for Q4 2026 to $1.06 from $1.00, FY2026 to $4.38 from $4.08, and FY2027 to $4.68 from $4.55. The firm projects FY2028 EPS of $5.15, indicating expectations for continued earnings growth.
• Positive Sentiment: Dividend provides shareholder support: The company declared a quarterly dividend of $0.20 per share, or $0.80 annualized, payable November 27 to shareholders of record November 10. PC Connection quarterly dividend announcement
• Neutral Sentiment: Valuation remains a consideration: With a reported P/E ratio near 21, investors may expect sustained growth from the AI infrastructure opportunity and strong execution following the earnings beat.

Insider Activity at PC Connection

In other PC Connection news, Director David Beffa-Negrini sold 5,000 shares of the firm’s stock in a transaction on Friday, August 14th. The stock was sold at an average price of $81.05, for a total transaction of $405,250.00. Following the transaction, the director directly owned 60,875 shares in the company, valued at approximately $4,933,918.75. This trade represents a 7.59% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Chairman Patricia Gallup sold 7,192 shares of the stock in a transaction dated Wednesday, October 21st. The shares were sold at an average price of $87.20, for a total transaction of $627,142.40. Following the transaction, the chairman owned 6,899,191 shares of the company’s stock, valued at approximately $601,609,455.20. The trade was a 0.10% decrease in their position. The SEC filing for this sale provides additional information. In the last ninety days, insiders have sold 62,136 shares of company stock valued at $5,312,310. Insiders own 56.60% of the company’s stock.

Analysts Set New Price Targets

Several analysts have issued reports on CNXN shares. Zacks Research lowered PC Connection from a “strong-buy” rating to a “hold” rating in a research note on Monday, September 28th. Weiss Ratings upgraded PC Connection from a “buy (b-)” rating to a “buy (b)” rating in a research note on Thursday, October 8th. One research analyst has rated the stock with a Buy rating and one has given a Hold rating to the company’s stock. According to data from MarketBeat.com, PC Connection has a consensus rating of “Moderate Buy”.

About PC Connection

PC Connection, Inc is an information technology solutions provider that supplies technology products, services and expertise to businesses, government agencies, educational institutions and other organizations. The company helps customers plan, acquire, deploy and manage IT environments across workplace, data center, networking, security and cloud infrastructure.

Its offerings include computers, servers, storage systems, networking equipment, software, peripherals and related technology accessories.