CDW shares plunge 20 per cent despite upbeat Q1 results

CDW UK delivered high single-digit growth thanks to private sector demand

CDW has posted revenues on the up for the first quarter of 2026 despite a double-digit drop in shares, as the UK holds its own through the private sector.

Net sales grew 9.2 per cent to $5.68bn (£4.1bn) in Q1 driven by increased customer demand for data storage and servers, netcomm products, software, and notebooks/mobile devices.

The world's largest reseller said that while economic and geopolitical uncertainty persists, all segments continued to experience improved customer spending in Q1.

Commercial net sales were up 9.6 per cent to $3.6bn owing to a rise in financial services, corporate and healthcare customers.

Government sales climbed 4.6 per cent to $633m, while education increased 2.5 per cent to $675m.

Net sales for CDW UK, ranked number five in CRN’s Top VARs, were combined with the group’s Canadian operations, and came in at $803m, leaping 17.9 per cent year-on-year.

However, CDW chair and CEO Christine Leahy (pictured) revealed in an earnings call that the UK delivered high single-digit local currency growth driven by private sector demand.

Group net income rose 4.7 per cent year-on-year to $235m (£172m).

“Strong demand for infrastructure hardware, combined with disciplined execution, drove solid net sales growth and resilient profitability in the first quarter,” said Albert J. Miralles, chief financial officer at CDW.

“We continue to prioritise disciplined working capital management while supporting our customers in a dynamic environment, enabling strong cash flow and capital flexibility.”

Despite the overall positive quarter, shares for the NASDAQ-listed firm plummeted 20 per cent after the company reported gross margin pressure with a lower mix of cloud and SaaS revenues.

Hardware revenue expanded ten per cent, with networking, servers, and enterprise storage each increasing over 20 per cent.

Software revenue increased 11 per cent, as licensing for AI readiness and core workloads led growth; however, cloud spend growth moderated as customers prioritized hardware.

Services revenue came in flat overall; declines in warranties offset gains in professional and managed services, which contributed nearly 15 per cent of gross profit growth.