PC Connection, Inc.

What they do

PC Connection resells over 460,000 IT products from more than 1,600 suppliers, including Apple, Cisco, Dell, HP, and Microsoft, and provides design, integration, deployment, and support services. It operates three segments: Connection Enterprise Solutions (large enterprise), Connection Business Solutions (SMBs), and Connection Public Sector Solutions (government/education). The company also offers managed and professional services, with global procurement via GlobalServe in over 150 countries. Sales are driven by 679 inside and field sales representatives, plus e-commerce websites.

Revenue drivers

• Enterprise Solutions — Largest segment, generating net sales of $369.6 million in Q2 2026 (13.4% y/y growth), with gross margin 14.9%.
• Business Solutions (SMB) — Net sales of $343.9 million in Q2 2026 (17.3% y/y growth), with the highest gross margin of 23.0%.
• Public Sector Solutions — Net sales flat at $140.5 million in Q2 2026, but gross profit up 9.2% y/y and gross margin improved to 16.5%.
• Notebook/Mobility and Desktop — Largest product category, accounting for 51% of net sales in Q2 2026 (up from 48% a year ago), with sales up 19% y/y.

Recent performance

Q2 2026 net sales rose 12.4% y/y to $854.0 million, with gross profit up 14.3% to $157.5 million and net income up 33.8% to $33.2 million (diluted EPS $1.31 vs. $0.97). First half 2026 net sales reached $1.6 billion (up 7.9% y/y), and net income was $50.4 million (up 31.7%). Gross margin improved 30 basis points to 18.4% in both Q2 and H1. Full-year 2025 revenue was $2.87 billion with net income of $83.7 million. The company also declared a quarterly dividend of $0.20 per share.

Strategy

Management emphasizes modernization of infrastructure, security, cloud/data platforms, and AI-related solutions to meet customer demand. The company invests in its Technology Solutions and Services Organization and ISO-certified Technology Integration and Distribution Center. It grew sales representative headcount to 679 and focuses on vertical markets (healthcare, retail, finance, manufacturing) via its Industry Solutions Group. GlobalServe is used to support multinational customers, and the company continues to develop internal products and digital platforms like cnxnhelix.com. Recent record performance is attributed to customers' growing adoption of AI and enterprise technology.

Risks

• Demand variability — Sales can fluctuate due to shifts in customer IT spending, interest rates, inflation, and government spending, making profitability hard to predict.
• Supply constraints — Global memory (DRAM and NAND) shortages and other supply issues could limit product availability and raise costs.
• Competition and price pressure — Substantial competition and significant price competition could reduce market share and profit margins.
• Vendor and partner dependence — Loss of major vendors or changes in referral fee structures could reduce product offerings and profitability.

Outlook

Management expects ongoing customer demand for AI and enterprise technology to drive growth, as reflected in record Q2 results. They anticipate continued investment in infrastructure, security, and cloud/data solutions. However, they caution that macroeconomic conditions, including tariffs, trade policy, and interest rates, could impact future results. The company does not provide quantitative forward guidance.