Connection Sales Growth Accelerates to a Record Quarter

The Tip Desk · November 2, 2026 · 3 min read

Net sales reached $874.3 million, up 23.3% from a year earlier, as year-over-year growth quickened from 12.4% in the second quarter.

Connection (PC Connection, Inc.; CNXN), an information technology solutions provider to business, government, healthcare and education markets, reported net sales of $874.3 million for the quarter ended September 30, 2026, up 23.3% from a year earlier. That pace quickened from 12.4% growth in the second quarter and 3.0% in the first quarter.

Gross billings rose 19.4% to $1.3 billion. Gross profit increased 16.7% to $161.9 million. Gross margin compressed 110 basis points year over year to 18.5%, reversing a 30-basis-point expansion in the second quarter and a 20-basis-point expansion in the first.

Net income was $31.5 million, or $1.24 a share, compared with $24.7 million, or $0.97 a share, a year earlier. Operating margin expanded to 4.7% from 4.3%. Chief Executive Officer Timothy McGrath said the company delivered record net sales, gross billings and gross profit and translated customer demand into earnings growth.

Enterprise Solutions, the largest reportable unit, posted net sales of $407.5 million, up 27.4%. Gross profit there rose 26.0% to $60.2 million. Gross margin decreased 10 basis points to 14.8%. Business Solutions net sales increased 27.8% to $328.2 million, faster than 17.3% growth in the second quarter and 6.6% in the first. Gross profit in that unit rose 14.9% to $78.2 million. Gross margin fell 270 basis points year over year to 23.8%.

Public Sector Solutions net sales increased 4.6% to $138.6 million, after remaining consistent year over year in the second quarter and falling 31.0% in the first. Gross profit rose 2.9% to $23.5 million. Gross margin decreased 30 basis points to 16.9%.

Servers and storage sales increased 45% year over year and accounted for 9% of net sales, up from 7% a year earlier. Networking sales increased 43% and rose to 8% of net sales from 7%. Notebooks, mobility and desktop sales increased 27% and accounted for 46% of net sales, up from 45%. Software sales increased 23% and remained 13% of net sales. Accessories sales increased 4% and fell to 10% of net sales from 12%.

Selling, general and administrative expenses increased 11.5% to $120.9 million. SG&A as a percentage of net sales decreased to 13.8% from 15.3% a year earlier. Interest income was $2.5 million. Inventory turns declined to 14 from 18 a year earlier. Days sales outstanding held at 74. Cash and cash equivalents and short-term investments were $343.3 million as of September 30, 2026, compared with $406.7 million as of December 31, 2025.

For the nine months ended September 30, 2026, net sales were $2.5 billion, up 12.9%. Gross profit increased 12.0% to $452.1 million. Gross margin decreased 10 basis points to 18.5%. Net income rose 29.9% to $81.8 million, or $3.23 a share. Adjusted diluted EPS was $3.31. Adjusted EBITDA for the twelve months ended September 30, 2026 increased 26% to $155.2 million.

The board declared a quarterly dividend of $0.20 a share, matching the dividend declared with the second-quarter and first-quarter releases. Payment is scheduled for November 27, 2026, to shareholders of record on November 10, 2026.