PC Connection (CNXN) Earnings Date & Reports

Key Takeaways

• Net sales rose 23.3% year over year to $874.3 million, well above the consensus estimate of roughly $772 million.
• Diluted earnings per share (EPS) came in at $1.24, topping the $1.04 consensus estimate and up from $0.97 a year earlier.
• Gross profit grew 16.7% to $161.9 million, while gross margin declined 110 basis points to 18.5% on product and customer mix.
• Net income climbed 27.2% to $31.5 million, supported by strong demand across the Enterprise and Business Solutions segments.
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Earnings Context and Why It Matters

PC Connection, Inc. — which operates under the "Connection" brand — is a leading provider of information technology (IT) solutions to business, government, healthcare, and education customers. Its quarterly results offer a timely read on corporate and public-sector technology spending, making the report closely watched by investors seeking signals on IT demand. The company entered this quarter with momentum, having posted solid year-over-year gains in its first and second quarters of 2026. With industry-wide memory constraints and related price increases shaping the technology supply chain, the third-quarter report serves as an important gauge of how effectively Connection can navigate a dynamic cost environment while sustaining profitable growth across its three operating segments.

Reported Results

Connection reported net sales of $874.3 million for the third quarter of 2026, up 23.3% from $709.1 million in the same period a year earlier. Gross billings rose 19.4% to $1.3 billion. Gross profit increased 16.7% to $161.9 million, while gross margin declined 110 basis points to 18.5%, reflecting shifts in product and customer mix.

Net income advanced 27.2% to $31.5 million, and diluted EPS reached $1.24, compared with $0.97 in the prior-year quarter. Both top-line and bottom-line results exceeded consensus expectations, which called for EPS of approximately $1.04 on revenue near $772 million. Income from operations grew to $41.0 million from $30.3 million a year earlier, even as selling, general, and administrative (SG&A) expenses rose to $120.9 million from $108.4 million.

By segment, Enterprise Solutions led growth with net sales of $407.5 million, up from $319.7 million. Business Solutions net sales rose to $328.2 million from $256.8 million, while Public Sector Solutions increased to $138.6 million from $132.5 million.

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Market Reaction and Investor Sentiment

The third-quarter results arrived after the market close on October 28, 2026, alongside the company's quarterly conference call. Heading into the release, consensus expectations had been relatively measured, with analysts modeling EPS of about $1.04 on revenue near $772 million. By delivering sales growth of 23.3% and EPS of $1.24, Connection cleared both bars by a meaningful margin, a combination that generally draws a favorable reaction from investors focused on accelerating demand. The primary area of scrutiny is the 110-basis-point decline in gross margin, which reflects mix shifts that investors will likely weigh against the strength of the top-line performance when assessing the quality of the quarter.

Forward Outlook and Key Factors to Monitor

Following this report, investors will be watching whether Connection can sustain its double-digit sales growth while managing the margin pressures tied to product and customer mix. Management has previously highlighted industry-wide memory constraints and related price increases, which have influenced customer purchasing behavior, including some advanced buying and order pull-ins.

Several factors warrant attention in the coming quarters. First, the trajectory of gross margin will be important, since the decline to 18.5% shows that rapid sales growth is not automatically translating into proportionally higher profitability. Second, demand signals across the Enterprise, Business, and Public Sector segments will help clarify whether the quarter's strength reflects broad-based IT spending or timing-driven purchases.

Finally, supply chain conditions, component pricing, and the company's disciplined expense management will shape operating leverage. Connection's strong cash position and disciplined cost controls provide flexibility, but the balance between growth investment and margin preservation remains a key theme to monitor in subsequent reports.

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