CDW Corporation

Thank you, Carly. Good morning, everyone.

Joining me today to review our third quarter 2025 results are Chris Leahy, our Chair and Chief Executive Officer and Al Morales, our Chief Financial Officer. Our earnings release was distributed this morning and is available on our website, investor.cdw.com, along with the supplemental slides that you can use to follow along during the call. I'd like to remind you that certain comments made in this presentation are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Those statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. Additional information concerning these risks and uncertainties is contained in the earnings release in Form 8K we furnished to the SEC today and in the company's other filings with the SEC. CDW assumes no obligation to update the information presented during this webcast. Our presentation also includes certain non-GAAP financial measures, including non-GAAP operating income, non-GAAP operating income margin, non-GAAP net income, and non-GAAP earnings per share. non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules. You'll find the reconciliation charts in the slides for today's webcast and in our earnings release in Form 8-K. Please note all references to growth rates or dollar amount changes in our remarks today are versus the comparable period in 2024 when net sales growth rates described on an average daily basis unless otherwise indicated. Steve Monowitz, replay of this webcast will be posted to our website later today, I want to remind you that this conference calls the property of cdw and may not be recorded or rebroadcast without specific written permission from the company with that, let me turn the call over to Chris.

Kristen Engels, Thank you, Stephen good morning everyone i'll begin with a high level overview of our third quarter financial and strategic performance and share some thoughts on the balance of the year. I will take you through a more detailed look at our results, capital strategy and priorities and full year outlook. We will move quickly through our prepared remarks to ensure we have plenty of time for Q&A. Third quarter results underscore the power of our full stack, full lifecycle solutions. The team executed well in an extremely dynamic and complex environment. For the quarter, consolidated net sales were $5.7 billion, up 4% above last year. Gross profit was $1.3 billion, up 5%. Non-GAAP operating income was $531 million, down 1%. Non-GAAP net income per share was $2.71, up 3%. And we delivered adjusted free cash flow of $209 million. These results reflect the power of strong execution when coupled with our extensive portfolio of products, services, solutions, and diverse customer and markets. They also reflect the power of our deep end market knowledge and strong durable customer relationships. You see the benefit of this in our government education results. Armed with insights into evolving protocols, funding mechanisms, and budget priorities, our team drew on their combined deep industry expertise and trusted customer relationships to guide clients through an unprecedented period of change. During the quarter, customer priorities remained focused on must-dos, such as security enhancements and client device upgrades that are foundational to enabling modern work. And once again, major capital investments were heavily scrutinized. Corporate and small business customers also prioritized pre-production AI trials to prove out use cases to validate concepts and ROIs. These priorities led to strength in cloud, software, and services. Let's take a deeper look at how customer priorities and unique market dynamics shaped performance across our end markets and portfolio in the quarter. As always, there are three main drivers of our results, our balanced portfolio of customer end markets, the breadth of our products, services, and solutions, and relentless execution of our three-part strategy. First, our balanced portfolio of diverse customer end markets. We have five U.S. sales channels, corporate, small business, healthcare, government, and education. Each channel is a billion dollar plus business annually. Additionally, our UK and Canadian operations together delivered sales of $2.5 billion last year. Our scale allows us to segment our businesses into customer end markets with dedicated sales professionals, industry experts, and technical resources who deeply understand the unique priorities of each market. When end markets behave differently from each other, the diversity of our customer base serves us well. The benefit of our scale and end market diversity was evident once again in the third quarter. Small business delivered double digit growth in top line and gross profit as customers continue to lean more into technology in this dynamic environment. Growth was powered by success delivering cloud and client device solutions. While still nascent, we saw an uptick in AI workstations, which are particularly well suited for small businesses. Functioning as mini AI servers capable of running AI models locally at the network edge, AI workstations enable rapid prototyping and deployment of advanced models, helping small businesses innovate faster. Corporate delivered mid single digit top line growth with low single digit gross profit. The team's ability to address customer focus on mission critical priorities drove excellent performance and security and cloud gross profit and top line. Client devices also remained a priority, increasing mid-single digits in top line and double digits in gross profit. The team's success addressing these priorities offset lower demand for infrastructure solutions. The public team executed well within unsettled markets, delivering 1% top line growth with low single digit gross profit. Government net sales increased 8%. State and local delivered an impressive quarter with double digit net sales and gross profit growth. which more than offset the anticipated decline in federal. Both teams navigated the post-DOGE landscape with agility and precision, with the federal team showcasing our strategic value to their agency customers, laying a solid foundation for future growth. Growth in higher ed was offset by an expected decline in K-12, and total education net sales declined 9%. Gross margin benefited from a shift in K-12 mix away from Chromebooks, coupled with strong cloud and software growth, and the teams delivered combined gross profit growth despite the decline in net sales. Similar to education, healthcare gross profit grew faster than its 7% top-line growth. Growth was driven by cloud solutions that deliver clinical continuity and security, which remain top priorities. The dynamic in the quarter was consistent with the strong performance in the prior four quarters. We are watching for signs of customer hesitancy caused by changes in funding, particularly among healthcare clients relying on Medicare payments, which can constitute up to 30% of their cash flow. Standout performance was delivered once again by our UK and Canadian operations, together reported as other, which increased net sales by 9%. Both teams executed extremely well under unsettled conditions. UK net sales increased by double digits and Canada by mid-single digits. Profitability in both markets grew faster than net sales. Clearly, this quarter's results demonstrate the power of the first driver of our performance, our balanced portfolio of customer and markets. It also demonstrates the power of the second driver of our performance, the breadth of our full-stack, full-life cycle offerings. The team's ability to address customers' top priorities drove balanced performance across the portfolio. Hardware top line increased 3%. Following last quarter's strong solutions hardware performance, the lumpiness in enterprise projects we have seen in recent years continued, and growth was more muted, with strength in netcom and servers partially offset by a decline in storage. Consolidated client device growth continued at a healthy 7% pace, with growth across most end markets, partially offset by declines in K-12 and federal. Software increased 4% with excellent gross profit performance driven by cloud and security. Beyond security, top customer software priorities included network resiliency, next generation customer service and support, and application suites tied to operating system and device refresh. Services was a standout performer, up 9% top line, and contributing 9% of total CDW top line this quarter, up from 5% in 2020. Strong performance was powered by double digit top line and profit increases in CDW professional and managed services. This quarter, services delivered nearly one-third of our total gross profit growth and bolstered gross margin. And that brings us to the final performance driver this quarter, the impact of our strategic investments, investments designed to create better outcomes for our business and for our customers, investments that are focused on enhancing our customer-facing capabilities and our internal capabilities, which together drive profitable growth by improving how we operate and how we serve. During the quarter, we made progress on our company-wide evolution to embed AI into the core of how we operate, serve, and grow, a strategy designed to drive productivity and efficiency and empower our coworkers. From conversational AI on CDW.com that enhances product discovery and improves sales conversion to intelligent agents that streamline pre-sales qualification and self-directed agents created by our coworkers, we are embedding AI across the enterprise. efforts, while earlier in the adoption cycle, are already translating into better coworker and customer experiences as we scale AI across our business, we are unlocking new levels of agility, efficiency, and service quality. Our AI offerings enable our customers to unlock value as well. As with prior waves of innovation, customers are focused on translating AI's potential into measurable business impact. This is particularly true for customers looking to harness AI to leapfrog traditional barriers and gain a competitive edge. And just like our prior innovation cycles, while eager to accelerate adoption and capture value, many customers don't have time or resources for trial and error and need a trusted partner to guide them. That's where CDW comes in. With our deep expertise and comprehensive portfolio, we are delivering enterprise-grade AI solutions that are practical, secure, and scalable. Whether it's intelligent search, workflow automation, or embedded AI-powered diagnostics, our solutions unlock real business value without the complexity or cost of building from scratch, while avoiding pitfalls and ensuring long-term success. A standout example of this is a recent engagement with a national service company, an engagement where CDW designed a comprehensive AI data hardware and software solution. By integrating CDW advisory services, development cloud architecture, and hardware prototyping, our solution delivers cloud-native architecture, embedded systems, and centralized observability tools, all tailored to the customer's unique operational needs. The solution includes AI-powered diagnostics and real-time performance dashboards, which together create a smarter, more scalable infrastructure. The outcome? data-driven decisions that are enabling smarter operations with greater efficiency, like predictive maintenance and supply chain management, and data that unlocks new revenue streams aligned to their business goals. This project exemplifies our value proposition for customers, deliver enterprise-grade technology and AI capabilities in a way that's accessible, customizable, and outcomes-driven. This is the heart of our value proposition, driving tangible business outcomes that meet customers where they are, Our value proposition shines in AI where we help customer move beyond the hype to unlock tangible value. That leads me to our expectations for growth for the remainder of the year. Given our year-to-date performance and current market conditions, we are maintaining our prudent full-year outlook, which calls for US IT market growth to be in the low single digits on a customer spend basis with CEW growth premium of 200 to 300 basis points. Clearly, we are operating under a lot of unknowns, including the duration of the government shutdown, which could not only impact federal results, but could have an impact on other end markets, including healthcare and education. At the same time, the wildcards we spoke about last quarter, including recessionary conditions, higher inflation, increased geopolitical unrest, and outside changes to announced tariffs persist. I know many of you may be wondering what we expect for 2026. As is our custom, we are in the middle of our planning process and will provide our thoughts on our year-end conference call. As we look forward, regardless of market conditions, our focus remains squarely on execution, leveraging our competitive strength to deliver consistent customer value and controlling what we can control. In a time of unprecedented technological change and uncertain market conditions, our value proposition has never been stronger. customers are turning to CDW as a trusted partner to help them navigate complexity, unlock opportunity, and drive meaningful outcomes. We're confident in our strategy, grounded in our capabilities, and committed to delivering results. With that, let me turn it over to Al, who will share more details on financial performance. Al?