stockrowWhat it does
CDW sells information technology products and services to businesses, government agencies, schools and healthcare organizations. Founded in 1984 and headquartered in Vernon Hills, it is led by Chair and Chief Executive Officer Christine A. Leahy.
The company sits between technology suppliers and the organizations that use their products. A customer can buy individual devices or software through CDW, or ask it to assemble products and services from several suppliers into a working system. CDW also helps customers choose, install and manage technology.
Its hardware offerings include notebooks, mobile devices, networking equipment, servers and storage. Software ranges from security and productivity applications to cloud solutions. Services include advice and design, software development, implementation, ongoing management and warranties.
CDW works across technology installed at a customer’s premises, systems run in the cloud and combinations of the two. Its work includes connecting employees to applications and communications tools, securing systems, modernizing infrastructure and developing applications. It also helps customers plan and implement AI-related technology.
The company’s sales teams work with specialists and engineers who design and deliver solutions. CDW serves customers primarily in the United States, United Kingdom and Canada, and can provide integrated solutions in other countries for customers based in those markets.
How it makes money
CDW earns revenue by reselling hardware and software and by providing services. It buys products from technology vendors and distributors, then sells them either individually or as part of a broader solution. It can also resell cloud services and licensed software. Its services span initial advice and design through implementation, management and warranties.
For Q3 2026, net sales were $6.8 billion.
Hardware made up most of the company’s reported net sales in 2025, with software and services accounting for smaller portions. Some software and services revenue is recorded on a net basis for accounting purposes, so their shares of reported sales do not represent their shares of gross profit. In Q3 2026, CDW said hardware growth included infrastructure modernization and AI-related investment. Client-device unit volumes declined, but higher average selling prices more than offset the decline, reflecting price increases and demand for more capable configurations.
CDW also manages software agreements, including warranties and renewals. Managed services and ongoing support can extend beyond an initial product sale, while cloud and software subscriptions offer other continuing customer relationships. CDW expects services opportunities to follow as infrastructure, security and AI projects move from procurement into implementation, integration and ongoing management.
Since January 2026, the company has organized its US reporting around Commercial, Government and Education. Commercial includes corporate, financial services and healthcare customers, with small businesses included across its channels. UK and Canadian operations are reported in Other.
Customers and how it sells
CDW serves over 250,000 business, government, education and healthcare customers. Its sales teams are organized around customer markets and supported by specialists and engineers who help design and implement solutions for different needs.
The company has dedicated US channels for corporate, small business, government, education and healthcare customers. Financial services and healthcare are distinct channels within the Commercial segment under the reporting structure introduced in 2026. Government covers federal, state and local agencies, while Education covers primary, secondary and higher education institutions.
The US business represented approximately 90% of net sales in 2025. Each of the five US customer channels generated $1.7 billion or greater in net sales that year. UK and Canadian customers combined generated $2.7 billion in 2025. CDW can provide integrated IT solutions in approximately 150 countries for customers whose primary locations are in the US, UK and Canada.
Its customers’ priorities differ by market. CDW says commercial customers invest in infrastructure, cloud, AI readiness and devices; government customers focus on operational efficiency and control of data and infrastructure; and educational institutions invest in security and learning environments. The company also provides vendor partners with access to its customer base and established sales channels.
Suppliers and costs
CDW offers products and services from more than 1,000 vendor partners, including Cisco, Dell Technologies, Microsoft and Hewlett Packard Enterprise. It buys from vendors directly and from wholesale distributors, which also provide logistics and supply-chain services. CDW generated over $2.0 billion of net sales from each of its three largest vendor partners in 2025.
Supplier agreements can include purchase discounts, price protection, return privileges and incentives such as rebates and advertising reimbursements. Certifications from major partners give CDW access to pricing, tools and incentive programs. The company says competitive sources of supply are available in substantially all of its product categories.
CDW operates distribution centers and also arranges for vendors and distributors to ship directly to customers. These drop shipments represented approximately 51% of total North America net sales in 2025. Operating commitments include inventory purchases, payroll and general expenses. Selling and administrative expenses increased $267 million in 2025, primarily because of performance-based compensation, transformation and coworker-related costs. A significant portion of marketing expenses is reimbursed through vendor cooperative advertising programs.
- Revenue$22.4B
- Cost of revenue−$17.6B
- Selling, general and administrative−$3.2B
- Operating income$1.7B
Competitive position
CDW competes in fragmented markets served by IT resellers and solutions providers. Rivals include manufacturers selling directly to customers, service providers and systems integrators, cloud providers, online marketplaces, e-commerce companies and office supply retailers. Smaller local resellers may focus on a narrower group of products or vendors. Competition involves price and availability as well as technical expertise, service, delivery speed and the ability to tailor solutions.
It was reported on 13 October 2026 that Avnet competes with CDW as a broader IT distributor, though Avnet’s overlap with CDW is minimal because it supplies components earlier in the technology chain.
CDW’s customer access, vendor relationships and technical staff support its position in the market. It offers products and services from more than 1,000 partners and has approximately 10,500 customer-facing coworkers. More than 50% of US net sales are generated by account managers with more than seven years of tenure at CDW.
Our reading: Customer relationships and specialized staff provide a meaningful competitive asset because they combine access to buyers with help designing and implementing systems. Our reading: The breadth of vendor relationships is useful but not exclusive protection, because suppliers can also sell directly and the market has many other channels.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Avnet | Broader IT distribution; limited overlap in the technology supply chain | Low |
Growth opportunities
CDW expects demand for IT in its markets to outpace general economic growth, supported by hybrid and cloud computing, AI and customer demand for security, efficiency and productivity. Its offerings address infrastructure modernization, cloud adoption, security, software development and the services needed to deploy and manage those technologies.
Net sales increased $1,425 million, or 6.8%, in 2025, with higher sales across all operating segments. Customer demand increased particularly in notebooks and mobile devices, software, desktops, services and networking products. In Q3 2026, net sales increased 18% to $6.8 billion. CDW said hardware growth included investment in modernization and AI infrastructure, while professional and managed services returned to growth.
In September 2026, CDW completed its $525 million acquisition of Lovelytics, a data and AI services firm. CDW says the acquisition expands its modern cloud, data and AI capabilities. It plans to operate Lovelytics largely separately for a period while using CDW as a sales channel.
For 2026, CDW expects the US IT addressable market to grow at a high single-digit rate on a customer-spend basis and expects 300-400 basis points of outperformance against that market. It expects full-year gross profit growth at a mid to high single-digit rate and a lower gross margin than in 2025, reflecting anticipated product and customer mix.
- $20.8BFY2021
- $23.7BFY2022
- $21.4BFY2023
- $21.0BFY2024
- $22.4BFY2025
Structural risks
- Supplier relationships: CDW depends on its vendor partners and wholesale distributors and the terms of its agreements with them. Incentives, discounts and other agreement terms affect how it purchases and markets products.
- Customer spending: Economic and political conditions can affect customers’ willingness and ability to invest in technology. Changes in spending policies, budgets and funding can also reduce purchases by government, healthcare and education customers.
- Competition and technology change: Manufacturers, cloud providers and other channels compete with CDW. New technologies and consumption models can create offerings for CDW to sell, but can also disrupt its business model and create competitors.
- Public-sector compliance: Failure to comply with public-sector contracts or applicable laws and regulations can result in termination, fines or other liabilities. Changes in procurement rules can also affect the business.
- Debt and financing: Debt service requires cash that could otherwise be used for working capital, investment or acquisitions. Debt agreements also contain restrictive covenants and indebtedness can limit financing flexibility.
- Margins and mix: CDW expects its full-year 2026 gross margin to be below 2025’s level based on anticipated product and customer mix. Large infrastructure projects carry higher hardware content, and services opportunities may follow at later stages of deployment.
Bottom line
Our reading
CDW combines a hardware and software resale business with advice, integration and ongoing services for a broad customer base. Our reading: Its customer access, vendor relationships and technical staff support that model, but suppliers also have direct routes to buyers. Growth in AI infrastructure can create later service opportunities, while product mix, customer budgets and dependence on vendor terms remain important exposures.