Brittany Smith VP, IR and FP&A
Chris Leahy CEO
Collin Kebo SVP & CFO
Tim Yang Citi
Amit Daryanani Evercore
Adam Tindle Raymond James
Matt Cabral Credit Suisse
Ruplu Bhattacharya Bank of America
Shannon Cross Cross Research
Katy Huberty Morgan Stanley
Matthew Sheerin Stifel
Keith Housum Northcoast Research
Paul Coster JPMorgan
Call transcript
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Ladies and gentlemen, thank you for standing by and welcome to the CDW Third Quarter 2020 Earnings Call. [Operator Instructions]. Thank you. I would now like to hand the conference over to your speaker today Brittany Smith, VP of IR and FP&A. Please go ahead.

Brittany Smith

you. Thank everyone. morning, Good

today Leahy, our and our Financial our remotely results Collin quarter are Chief Chris Chief Officer. to you third review financial Kebo, Joining Executive Officer;

earnings along with remind slide Those and statements quarter Our along statements in this differ this to subject can you supplemental was actual I'd during our Act on presentation that the under that looking morning the made forward call. Reform cause third website is Private release use comments available follow you and distributed to certain of materially. risks considered XXXX. are to could uncertainties Litigation Securities are like that to results

furnished concerning is to of and uncertainties and this these with earnings the contained company's information other release information SEC. the risks webcast. obligation SEC X-K no the CDW assumes filings today the Additional during we presented the update in and Form

includes unless non-gap note SEC most slides non-gap GAAP certain webcast find indicated. growth to including the in are non-GAAP the directly measures, release we share. earnings for SEC today otherwise in are Our in references remarks rates our charts period all in X-K reconciliation have To reconciled XXXX measures today. with accordance per presentation comparable Form non-GAAP measures earnings also and been today's financial and rules. comparable income or in our dollar the increases operating Please that to furnished amount the versus All

the rebroadcast CDW property or turn this Chris. be remind that, conference specific later software you may without With I be sales also our of written and represent posted the or that recorded I net of the to call this today. from and company. permission references may CDW our only the from webcast and for to not is U.K. want call include to services over not to addition, growth today Replay will website hardware, In rates Canada. do U.S. results

Chris Leahy

detailed you, well of I'll end begin of will morning with environment, Collin our third on then this and of our we liquidity market drivers I'll an time customer performance. our quickly on macro how Brittany. and more questions. perspectives position a as you financials, overview allocation responding. results are our impact strategy. current move Thank provide as at and its third quarter for look we quarter through ensure remarks prepared through plenty have capital take We'll to the the

X.X% end basis customer operating net balance increase per a For the Non-GAAP were X% last $X.X down income our X.X% constant currency. reported the and and $XXX billion, quarter Non-GAAP million, was last was model. The $X.XX, third constant The net as markets in currency. business sales an well. and share diversity served income year year above below X.X%. of quarter strength X.X% in on CDW's of demonstrated up of

For continue market customer rate the strong. for to our in stabilized improved resilient most be decline impacted end more a and generally Trends end the of quarter. markets customer

flight to a as de-risk investments. proposition technology in customers quality projects was their this really quarter. start with Our customers value There resonated to

bolstered acquisition by IGNW an digital focus for increasing our customer demand cloud. better IP capabilities Customers the beginning technology Our not cost across the optimization, reduction, further cloud on enablement, leveraged teams to on and our Customer are trusted customers. remote We helped and XX% on increased almost employee transformation, customers spectrum of We this strategic value and price. a compete partners of engagement of our solutions with on security, focused advice, for leveraging at Customers through quarter the software-as-a-service were priorities. quarter-over-quarter. quarter.

and strengthened this quarter year others hold that projects. earlier had projects resumed been Our put in on the as solutions business customers started some new

to secured centers, continue and in supply deep we extensive We liquidity quarter, others. to partner high longer logistics successfully sheet and distribution navigate our vendor challenges. strong supply position managed During capabilities, the for times balance demand relationships, leverage third and lead to categories

a June. let's end market markedly better take customer declined deeper at Corporate look than May performance. XX%, the Now and

net Solutions single Business project the moderated. remote digits remained second enablement, significant with government Transactional digits. as net declined in customers improvement quarter-over-quarter another versus a quarter. increased and Most delivered security, down mid-single strengthened quarter management, also increasing up were less projects digit. low quarter restarting small solutions product customers declined remote spending infrastructure year-over-year. team on reflected improvement digit cost and as optimization. Federal strong categories this sales focused The considerable XX%, The enablement sales business engagement. double Small on single high

device-as-a-service our contributed the the less was quarter than since other incremental last Bureau year's Census the growth for solution revenue in the During of majority U.S. third recognized quarters quarter.

the final are Data of collection for and We us to returning phase the project. in devices ended decommissioning. are has

very device excellent this the project, the help Outside an promote done to and from federal refresh. complexity continued of the navigating Our census job agencies to program enablement start. team of the team civilian has

cases Defense support initiatives. got The was priority high team public reallocated local be future growth. Department to deliver budget technology projects to and solution single-digit for pushed of investments a IT state Some performance. to safety. In quarters continue dampening some

digits Higher results for accessories, to Other, and customers excellent operations, reported as optimize access sales capability in increased on which new U.K. are by to impact software. in logistics over XX% represents growth quarter. technology Canadian X% driven helps growth turned quarter spending software this to well Otherwise, in extensive our in and areas currency. constant to projects security Canada sales net technology net budget notebook U.K. strong K-XX, as decreased capabilities, on by during and and In us support related high off learning. with students. hold spending. quarter and they continued and U.K. as pressures solutions have learning remote focus low on our leverage remote came optimize government about basis. and still and K-XX strengthen K-XX both XX% hold to driven currency, a security needs. customers is corporate single education equity ramped this quarter. declined declined improvement public like team Healthcare schools teach double declined to assets. Ed. and to projects in channels an enable cloud Our second strong performance remains enhanced programs during formats. support as digits Education to corporate Customers compared to are some where performance constant remote security Higher as the continue ed and down decreased

benefited our digits, demands shifting performance. and the of hardware devices benefited We due also As sector. and was to from desktop the base. to client customer by downloading you U.S. customers. the is diversity varied single declining [Indiscernible] public meet can deep still from strong see, our our third It X% of product our performance our portfolio. broad the able quarter were driven

Software service. digits of profit driven services. of grew strong increased year's impact increased Services as high Transactions mixing reflecting mid-teensgrowth. top software gross single last low and single digits digits slightly a down software into strong double on the by were professional

our markets practice. project by driven a as collaboration, from in digit, engagement. single restarted last growth and in Cloud digits customers double customers larger productivity. robust across service, security, declined Cloud increased strong improvement growth significant some spend Solutions infrastructure We decline and digit customer low again end as double delivered infrastructure a quarter's all

to strong frameworks solutions with. improve continues priority customers expect customers. a We grew double increasing respond also as Security Security for to quarter demand customer top security their spend the threats. cloud continue this strong for be customers to digits to

our of three-part of success operating combined There landscape strategy third market, for our portfolio Our important solutions end and past suite across ongoing our quarter of growth. financial reflected are impact full services balanced the IT performance performance. our and and future executing drivers our customer the and

Let me each. review

education and you small sales know, teams goals customer and and as governments, healthcare. deep governments, to scale five corporate, state education, us end us trusted including sales we partner. enables industry insights objectives K-XX government, our further higher U.S. customers' local providing and channels; into align positioning vertical This federal and a into As a and knowledge have markets business,

we external addition, macro of when differently. serve industries well customers and In operation. our our customer have other various diversity Canadian and impact The us U.K. challenges or market end

from total trends needs customers Next, our With XXX,XXX services solutions spectrum over and our vendor products, the deep. in X,XXX than partners, meet IT broad more and quickly offerings across demand. and are to to well-positioned pivot of are we can customer

and capabilities. in to our strengthens commitment to and As this the growth ability customer performance the our integrated enhance capture balance our our expand capabilities. deploy need our are markets in of ever current crucial manage solutions future. design, final first I we relevant share, than strategy to stronger the for our our environment. And especially the new our to acquire executing third, Each solutions want three-part which crisis. in our and so today shared, to is technology environment Today's And the after is offerings end pillar customers will strategy and emerge second, our assess, driver services of profitably to customers

a our this how quarter. customers we Let examples in helped me of few share strategy and action

all strong customers' given of was This the the services time a close in devices of teams initiatives vendor urgency. align help the districts great technology Department the their and and deploy the and its broad with with education extraordinarily our Equity This how via done services. the States school the devices public and the is compressed secure in the support and technology to Act. to within our frame is busy a relationship missions team and on-prem balancing a Distance excellence, in a backed example supply-constrained partner procure in and of integration logistical our will especially United of Education and Learning environment, award contract teachers our capabilities gap very by their quarter. team the priority one is our particular infrastructure One by customers Digital deliver It adoption was creative top reason program. a many our this cloud. in The last Mississippi transformation Cloud decade, cloud if from leveraged integrate Our differentiated in state complexity, for applications the creates and all providing K-XX students value. funded support customers. CARES accessories solutions largest of in

on-premise brings combined best demonstrates one. our and for strategy service products its IGNW expertise. operate outcome services its platform its Our team how to is cloud our the value also to native customers. state with we of example and as and It where worked portfolio solutions cloud large This the to a business a leveraging CDW great develop and for are retailer for future

help to had home account employees from pandemic. exacerbated deliver. manager due company's turned in director quickly account was which IT all failed with with the since customer our CDW the of problem resulted and a the responded urgently channel the to Another IT moving IT partner, exceeded The to manager to corporate primary incumbent this other The to has work partner when business its CDW. customer in which to the expectations,

helping Our its is and a including of team of has strong collaboration increasing to with shoring on-premise customer resources. IT its and the evaluating a augmenting platform costs, options, flexibility variety helped cloud and CDW its backup IT develop staff also storage, up lowering security, initiatives

Our how represents and objectives. examples IT to IT expertise level achieving CDW's leadership. how full for strategy example thought another for work is customer's high here a crucial service, our us These turn lifecycle to growth across of and three-part customers highlight the customer of

competitive partner This relationships execute quarter our continues I'm past importance deliver. success advantages, way of of proud in our investments the customers. to and security the teams demonstrated with trusted and and the cloud our of

communities. our on serve We you update on needs driven on mission business. customers, safeguard health efforts manage principles, well-being to focused the three of support now our our our and coworkers, me and our remain COVID-XX's Let of key the impact

and Our the home the is of working. into well way office coworkers are settled still team working new from

of resiliency to We our expect and and of testament the most summer. home the next are from coworkers working Coworker culture. be collaboration until strong will strength productivity start engagement,

how and for We to when where in office return are work how to coworkers the the will our future. planning and and

for have environment. configuration taking and exceptional we operational distribution We high of done measures agile service unpredictable known an maintain customer we this a are as will advised teams are level precautions. and public maintaining All precautionary by health job necessary the These in remain while centers authorities.

governance uncertain. COVID-XX, QX. Writings supply the our fourth Public and of for the duration trade for and by be outlook providing driven are in to line The by we small turn tomorrow's elections, trends Wildcards the have healthcare. programs, improved writings UK-EU XXXX channel. continues QX now our trends macroeconomic negotiations. education term and future to-date are business corporate not Let's U.S. remains disruptions near target. with for offset the and channel quarter. to Therefore, additional include strength foreseeable for stimulus severity

our about and encouraged are not factors macro That our executing. of unknowns control. There are environment. We also performance cautious we is unprecedented said, about teams that time This lot and are just do the we uncertainty. how the are of a

phases be Our various macro in of customers continue environment. to to responding the

value remain to adds enablement including remote the element is endpoint. remember focused customers proposition. operational Others of and organizational customers And a moving are forward is cloud. customers efficiency behind digital complexity on which and other our not important It's core and our Cloud continuity. are IT cloud that investing optimization. Some it is an transformation environment to with

IT full with customers our lifecycle. full help teams and IT solution stack Our a

to help toughest software will patterns adopt solve some all come. deploy infrastructure and essential and be increasingly customers will play We practices, more economy in be to technology years We to our believe their an of IT of important the their the partners and and resources, role to smartly continue will that trusted modern challenges. sectors

announced that confidence our investments security dividend and right we I strategy our to performance. practices cloud we of our The in continue meet we future today place. directors The have needs. restarting have to to enable and buybacks us share that made investments of customers' We and to and including will support strategy CDW's have our confidence increase board our demonstrate the the have that

navigate We customers IT will the our landscape new technologies. complex and adopt help

believe While uncertainty term, success. we long-term is making near moves there for are the the we in right

to We optimize customers, position. including productivity, three-part serve us are committed growth the will our to investing enhance our in our strategy our best position capabilities and that competitive

than partner customers now trusted Our role ever. important is our as to more a strategic

our do their to We objectives now to best. customers and our do and we competition. what help advantages Leverage will priorities competitive execute continue strategic our IT address their achieve

on Now, Colin details more Colin? will financial performance. our share

Collin Kebo

Chris. on capital everyone. position liquidity you, quarter provide detail allocation morning, Good results, Thank going I'm more to third our priorities. and

Turning billion by X.X% to currency, were sales to $X.X COVID-XX X.X%. basis, results. constant basis. our net on average consolidated a reported versus Sales adverse On was sales second than impact X, the quarter on daily second higher the declined X.X% P&L primarily slide quarter. down sales and quarter daily In third an net average of This Sequential increased consolidated seasonality on due historical sales

and channels generally capabilities demand customer the commentary distribution products performed our the last IT the and supply consistent to of and vendor writings dislocation Our on continued with and our relationships leveraged shared quarter, earnings solutions. call. procure strong partner Pockets we in

last revenues into gross public. year. points XX.X%, product expected down Gross was million, customers $XXX basis an enablement, continuity mixing which expansion by more The better than for netted of for than into Our driven and increase primarily up margin XX as the a service, profit Gross mixing software and remote offset resource margin optimization. quarter was margin was needed over X.X%. operations

workforce on continued SG&A our by savings, ensure to X.X%. alignment Aptris increased acquisitions by payroll In COVID-XX we've primarily higher and non-GAAP approximately position and future best our Turning growth, partially and and CDW offset compensate expenses of was driven decreased the The reduced including entertainment co-workers hiring September Slide costs XX, to increase travel cost resources frontline safeguard by measures our from of IGNW and for to to SG&A structure restrictions. X%. the and

of realignment million the enable non-GAAP stronger growth at down the high in income XXX, down $XXX in GAAP to $X.X on investing a Slide driven crisis. on million, from capacity XX. partially from to Co-worker recorded with IGNW. most coworker can the was and the you XX to the X,XXX increased backfills, count count acquisitions. primarily in and by IGNW business the the X.X%. of the continue to offset operating priorities to second demand reconciliation areas end was quarter restrictions customers' see Our us and hiring which We reflecting charge GAAP by emerge quarter support realignment measures and to Aptris evolve Year-over-year future important measures to ensuring continue

income, Our Non-GAAP X.X%. $XXX performance, non-GAAP was X.X%. million, margin better operating was operating reflects which income up operating

XX. loan. $XX due was to the a primarily expense Slide lower on down to Moving Interest decrease LIBOR rate The million, X.X%. was term

rate, to Slide Slide on based equity shown is effective Our we expense including tax was consistent on the our quarter third benefits rate GAAP to $XX This with XX. for non-GAAP third XXXX. get with $XX which associated non-GAAP taxes XX last and resulted To XXXX effective excess compared shown tax compensation, net adjust XX.X% add in income tax million tax of both of million year. quarter backs,

quarter, down expenses related XXX to low basis reduced a effective last tax our rate rate. time primarily impact recent points tax to non-deductible the rate tax one of due and non-GAAP regulations. For The IRS is decrease state intangible versus and income was year's XX.X%, refunds global

outstanding with per average As GAAP share see X.X%. of on $XXX Slide down income you third quarter weighted diluted $X.XX, XX, million, shares net can was

net non-GAAP in year. from X% X.X% per quarter, to compared up year. Non-GAAP the million net last share income Our $XXX was last $X.XX, was up income

non-GAAP got prior extra average in when basis will margin profit basis, X.X% day day to was sales year. reported sales up down was daily Slides year. was $XXX $XX.X basis The from profit Turning an XX QX were $X X.X% up down of a year-to-date net income average X% income XX, on per and operating X.X%. net currency was Operating million, quarter income $XXX share on Gross results was a and On billion, selling consolidated Non-GAAP selling on net billion, was XX.X%, prior an X.X%. gross was sales X.X%. points. was one in $XXX up through income day billion, to first of million the year-to-date reverse have fewer $X.XX, one XX up we X.X% up non-GAAP basis, revenue increase as income million constant selling we and Net and $X.X daily XXXX. extra compared

on Turning XX. Slide to balance the sheet

and of XX, $XXX September revolver Liquidity shown and be and cash Slide billion. billion. on were Year-to-date is of due cash flow of As profit was strong cash that cash seasonality to $X.X $XXX A and seasonality billion capital $X.X over expect was primarily equivalents normal continues availability this as to better than the lower next plus above portion is with million, normal working quarters. $X.XX than year. cash few capital working million, last higher investment debt reverse free higher net in to we year's This timing XX. the approximately

Slide average quarter. cycle down last The to cash third year's from Moving XX conversion day days, XX. three-month was one

can collections cash While DSO some down days and strength increased strengthen payments. public customers of quarter, the in take the down who and shareholders did increased the with software-as-a-service, In dividends days DPO repurchase were six extended quarter, as mixing $XX extending five mixing longer driven by through customers by terms. to we the payment to not items into into netted solid cash of million driven such in certain commercial pay vendors and returned stock. larger items netted any

December represents today XX. shareholders X.X% of of This to declared dividend. as allocation the a capital of share record over Chris on earlier increase $X.XX all on quarterly Directors of to Board cash be business XX announced of Slide priorities the Turning paid November we on close to as dividend current XX, that the noted, per

The strong XX of in consecutive approximately be XXXX rate position, reflect since consistent with capital shareholders, September. generation that's with share allocation the initial percent non-GAAP flow dividend income compound capability XXXX our that liquidity at seventh net and the the We our offering of resuming the from dividend capital of of dividend line the month below to which The with QX the quarter. target also we year repurchases with of dividend leverage a net income. share $X.XX The first, this decision to increased growing net our repurchase and cash return non-GAAP its actions range trailing are, dividend increases priorities, annual XX% will business. growth free in annual level. The initial public is marks XX through announced

a the going line XX% ratio will dividend We earnings. targeting growing with forward payoff continue in

ended place end ensure with of X.X X.X times. the the have capital of the Second, below range. at low ratio in a quarter the to times we targeted leverage right structure net X We

will of in allocation IGNW active screens, doing I and priority the is usual third for with to environment. financial targets a strategic cultural we this We opportunistic at return. function and rationale, acquisitions closed Any be of acquisition. share and organic strategic as mentioned, to capital quarter beginning repurchase Our are in will supplement be growth to decision Fourth, capital operating deploy seek evaluating previously and our fit program. third the remained our

forward leverage shareholders. M&A, expect closer returning free of and/or investments, organic we to our a move of flow to range to cash net Going XXX% combination target than to greater

As leverage this liquidity, particularly do, and and capital closely working in always uncertain as needed. we environment, the adjust macro-economic we'll and environment, our

in a intend Lastly, targets we last continue supply investments quarters, the We serve it's this operating with continue drive updated a I in business. wanted outlook. we're financial expenditure will our topic XXXX demand, to in insights will better allow the believe into emerge and one and of and capital withdrew that crisis ultimately investing the to competitive previously fourth providing into We position. customers, stronger us But important perspective. capabilities from the quarter not an capital, roughly to from on productivity seeing provide be what month prudently three the to consistent

were level the activity October public, strength improved education writings by demand In partially government continues writings QX be writings driven And October the continued side, October by in small in mixed corporate, In business, line from healthcare. and up QX to offset declined year-over-year in customer declines. of levels. writing end across declines On with markets. in

the supply. quarter stimulus, the wildcard, the balance election, we mentioned, premature extrapolate October believe the Chris as given the writings and encouraging, of over it's While COVID-XX, to

to to continue We be customers cautious. expect commercial

in I have fewer profit day the basis points. which one XXX fourth approximately mentioned, previously As growth selling adversely by impacts we quarterly quarter

supply the closer with are Chromebooks navigate to On food Also, the develop a tight. challenges environment as lower-end Notebook categories. certain devices, supplies side, in as to we of lead may extending freight holidays. dislocation get particularly pockets through such times we continue

front, the to continue distribution centers all be operational. operating On

I Finally, want of we contribution in provide revenue contribution the preceding as U.S. solution an all with of had to device-as-a-service in quarter. into on The third Bureau. the to less net was was update deployed majority the the quarters Census than devices the line quarter last to sales expectations incremental since third was to The year's the field. recognized growth

the Thank basis net shift decommissioning open please ask we the With ask and quarter that, That points brief we you summary. concludes it see over expect fluid, The data to financial From follow-up? to you. approximately the to As incremental we the questions. XXXX. contribute basis, and to Census a so sales net mentioned, census now this your limit net has collection expect up financial project. questions up into returning for to Devices final of basis for first we ended with one perspective, phases for of absolute some On Jaclyn in to Can points the sales XXX census decommissioning. U.S. collection of XXX contribute currently are Chris year, a I'll over timing an we're could growth remain us of sales XXXX. in the of XXXX. each to the


Instructions]. [Operator

Yang comes from Tim Citi. question from first Your

Your open. line is

Tim Yang

the Hi, given be years QX you about mix your quarter-on-quarter was should thanks past the on QX. this than I higher for the gross In your think taking think do margin better QX What basis question. three recovery. year?

be should this -- your do think what for that gross about margin like QX So, margin gross the you sequentially. Is better year?

Collin Kebo

in observation Good outlook. going which has your We're I Thanks tend on morning, provide gross strength a government just guidance not to the margin. guess, QX I to and have that driven by is the would sales been QX for share high quarter what joining seasonally historically Tim. lower education call. on

we So, high would've gross I historically coming you come is into think that and of the why what's and seen QX mix off historically. where government seasonally that happening of you education up into off pick margin that's quarter

given bets off I marketplace think that normal education, now on in in right are particularly happening the what's all seasonality.

I the response. So would offer just

Tim Yang

with quarter, commentaries, the you. then roughly writing leaping your last you year-to-year QX was you last I corporate quarter -- seeing a regarding and basis. And your down think the that I decline think mentioned decline Got and SMB think

You you're obviously conservatives increments that and SMB quite like, back. to companies are why that quarter? is wondering, more conservatism it's Is merchant that coming business. projects in corporate mentioned -- seeing your -- compared or not U.S. last not -- just just you're visibility I Thanks. was like improving

Chris Leahy

business. morning. Good Hi don't Chris. yeah, we it's increase Tim, And, that I solutions based project nice think saw a in our

on on planning see pause start in last business projects, They We customers that on in moving space space of corporate to our through. not stages. We small and projects. business as forward. larger get I had they're forward lot and generally caution a in customers still example, as the infrastructure did have more to were small have bureaucracy to kind side know, more for the you would mentioned there's call quite nimble say, the organizations approval continued both corporate in move and

of So certainly we're going be that in both comes segments. some next those Amit seeing Daryanani Your pick little Operator for from a slower up seems question to Evercore. but

open. Your line is

Amit Daryanani

as Good taking morning guess, I thanks I well. question. two have my and for

discussion. the clarify just firstly, Just writing

September sure up. ease basis any about of a tried to has as side got transactional on right. corporate I far. in guys from what to far? characterize are And writings this I is improve then to decline -- pace the solutions I'm they wanting from June so trending versus things And make quarter are you how what in sense the so stable that about they SMB or think were the the started in

Chris Leahy

Amit, you read it's Yes, Chris. that right.

exactly You transaction. versus described spreading solutions way out But that we got right on for we're writings writings the it. not the

Amit Daryanani

guess, you maybe ask I one then. Got different it. a I would

gross is like do term your look really and growth dollars recurring then September dollar components would understand, of agency quarter If gross that to overall be versus you you what weaker today as And the nature in what have? bucket or percent you revenue could profit company? that agency the within it and stream are based profit for side longer this talk are in the what about helpful the

Collin Kebo

were that strong that and items numbers Good morning, the seen of quarter the Amit. mainly netted into is the Yeah, profit when dollars total software-as-a-service reflects growth about higher our that down specifically both prepared in would XX% which be see approximately cloud talked bucket would we've warranties, I net is in in other things those and cloud security bucket. that software primary the and comments. Chris you down that offerings that software in Included mix

you to In time to expect that how strong over terms trends know, software. we know, would moving demand for think, expect you cloud security customers know, -- and into continue I of, you we

we I So think in expect growth that bucket. would solid

again In business. a in wild goes three strong. the happens been the was little the terms the more I challenged that's part bit think in of hardware very preceding it COVID card it the to of environment. where and Obviously, what years,

couple profit is next probably and So, hardware how mix exactly trends that years. goes more of the a gross quarters I think of function where over


question comes from Raymond from Adam James. next Your Tindle

open. is line Your

Adam Tindle

Chris, morning. how we wanted start decision Good and should into thanks. resume to Okay, to read I repurchases just share that. the on

liquidity. X over in billion have still You

you previous levels an low $X acquisition. a were your precluding not acquisition, type of You're before you larger billion plus COVID yourself and, optimal leverage discussions sized know, from below

you could landscape the share guess, would be, and how question your I maybe on wondering latest stocks So, that's M&A evolved? if

Chris Leahy

I've restart reflection performance Well, confidence both in strategy and particular, and cash our growth last of is prudently are areas. our Adam. liquidity obviously On flow our know I'll we real our you addition, Yeah. M&A in invest Sure, high over buybacks a forward few looking free in U.S. going to position. technology the strong supplement to decision repeat on the what quarters, said to to actively

position out, been that continue and but solidifying acquisitions were a you, cloud -- itself couple and customers. tell us [indiscernible]. say capabilities, ultimately then both recently, and financial of months at. service at with than lenses. operating up taken has look for our our model, of those -- capabilities, are makes know by culture, Adam, I we'll do look as our and had advisor that feels that a organization, really seen acquisitions to discussion been little You've do our which capabilities you couple now I'd capabilities, strategic there would sense. to are Organizations our native We ago, market sales and our open Those in they up the fit of taken very look well our a types the now more

Adam Tindle

a run Okay. on if about corner the just course. That's letting follow the ask Maybe very turning attrition you some wanted helpful in have to a I Looks up, is, aspects, right, of, as talked like its margin previously healthy EBITDA little me. to it bit, quarter. I I kind think, demand was

for a So CDW I maybe it's reduce why future on workforce. so take know, you. What just that? itself, more why to Thank wanted little unusual and a I ever you number color in would bit color growth but -- for change. did that, the do more some expectations of not significant

Chris Leahy

great ensuring in that cost our a of in reduced just it's the really, structure time for that this our question. alignment -- best the us it and is future. workforce, Adam, produced for X%. you're about we've It's And right. history by to the resources CDW and all by hard second position decisions Yeah. But are Those particular.

their wanted areas need priorities. continue high investing and really that resources there's So growth to in to future sure in we've to most demand continue capacity more emerging the customers We areas. those in to got the we to support the ensure with important evolve make

some we we think have in also that we are critical areas those future growth. our to while positions, cutbacks are hiring So


Matt next Your Cabral Credit comes from from question Suisse.

Your line is open.

Matt Cabral

things are IT view. point into this at mentioned forward a risk of head sluggish you to lot there's meaningful help remarks a a trend just getting around, with year you as more of if that's or next as we and thinking out start the if now into from year? below environment maybe next Chris, prepared clearly pent-up looking macro demand in a we curious spent there customers amount pieces continues think sitting point year this of demand turn of standpoint as spending from moving guess, a I an about

Chris Leahy

Matt. morning, Good Yeah.

say it's to this taking. both, closer are obviously -- have think, to say possible it that Because, impact a an is economic environment uncertainty problem very yes think is I it'd I have I would until actions difficult and customers have resolved, our medical I going that? Why do to the on both. to of that be trajectory and has

difficult think I that we murky, makes So two that things. to project. it's very have murkiness certainly it just and

need, are to advantage. implementing have technology as up will, pent-up customer when their pent larger better can we I higher when that's doing just think, they advance, industry the they and But to feeling demand pace they staying spectrum have as sure us that question we're predict do anyone customers, what and comfortable if the it IT nature and a to think get complete the who heard talk our hard it. of We press frankly if buying is difficult it's at future, incredibly we're outlook. me you've when we're pressing to technology -- just is current are demand, make I feeling predict. What far this need about in you that investments the given of enough murky and customers making closer But they becomes for than to the providing else real

Matt Cabral

get forward? the you're going those you don't quarter. what vertical bit education sustainable Why enough there to about are more demand in the and ability just standout meet to supply to little And actually the relative think clearly seeing particularly how then by a was talk headwinds just looking

Chris Leahy

with our Yeah. share our well education issue, we've great It's Supply doing fair than institutions. get a suppliers to an very to question. but been more help isn't

get product You year, we we schools. can't to and the just our large but been it's very schools through the -- -- out unfortunately school a have moving start center supplies the very the amount the configuration at of to of

work were really might see, year like carryover feels been is couple are of the that the lot making year, a literally this a looking demand We of it of you're will, bit Matt, of it think XXXX flow will chain because these year. it from supply the was QX in And and constraints organizations XXXX to like QX. has going assets, you little what period. at plans over into -- I equity pull continue they is see forward, and this that but because feels next if to see a into got pulled QX

opportunities, tell Matt, around like obviously forward will forward. work would there think I that collaboration remote and other going requirements you we Now said, fortify things be to that areas the as


comes next Your from question Ruplu of Bank Bhattacharya from America.

open. is line Your

Ruplu Bhattacharya

the my for questions. on congrats Thanks taking quarter. And Hi.

Just wanted level to first. a question ask high

As is give we handle home? in on Europe, just COVID in CDW resurgence lockdown what from also, new a now measures thoughts there's do your And if -- lockdowns? restrictions many better how you see your percent is And to and us working you that? position think can of in a workforce and

Chris Leahy

U.K., an have said, cautiously to we Good all that and couple last start and are would morning, really cautious their so as potentially locations moving stimulus in the are and think the the is for I restrictions some the and worrisome reasons to digitally from more a a trajectory have I uptick is know, states projects. Yeah, the do if different still impact you. we be Ruplu. lockdown. to forward moving over that pressing off as in lockdown. seeing. with of that cases and that also the for lockdowns in economic Thank have government hear to I and we have you say said where Across restrictions and an I Good tending commercial to money in Add or that we And you rolling you. of week that absolutely is as see couple worry some segments, customers, advantage U.S., has, and we we're look larger before, backwards their advanced impact that. that who about That think,

So look, by the excess factors encouraged so we can of as I'm exogenous cautious this the and the I team. team the said, performance about I'm But execution impact. highly and that

performance-oriented As -- work and is races. far This organization off in. everybody we're the a as settled went ourselves the they team home, set and up from we home, look, to got

they've I think productivity, our sales customers. quickly And and leadership creatively very across and connectivity, huge out with figuring to co-worker human both services great. a doing organizations just kudos our touch been for drive and our sales

Ruplu Bhattacharya

them those wanted is census also you the I end. other ask over the all Great. do Thanks going program? for that. coming an And you project to the appreciate and of for there. see now in years? that reuse the the device-as-a-service device-as-a-service can on the next What's plan to business some how Chris, color devices couple you project, Thank And you.

Collin Kebo

to take offering turn will and devices to in our those that. so for then Ruplu. are have go device-as-a-service around coming CDW we resell what morning, we are is Good census, the one. plans remarketer I'm we Yeah, place do up going that winding and to to ahead those the execute decommissioning. to against And back and

of value becoming another important, drivers productively, Mississippi is that's CDW. I think our offering, that as anywhere of our part in our well to in Education opportunity customers. think Department vendors, work a services important we to an to capabilities. competitive bundle will from where advantages forward. continue for ability logistics across just And the and be to for that and going is State devices being an of be I of think of to services, And ability multiple remotely Clearly, terms as doing flavor integrating In world we're solutions have I to growth what our deliver increasingly going able integrated


Research. Shannon question Cross Cross next from comes from Your

is line Your open.

Shannon Cross

of morning. very you or SaaS. And wondering data I'm cloud actually processing? coming I'm just the much to this their in customer sort specifically and customers is revenue demand for for -- revenue good where Thank you. and how about just general, netted a much follow-up. the in down of then application utilization are our Thank trying storage and versus out progression, have I cloud of figure from

Chris Leahy

versus but across all consumption cloud, cloud if data on are terms spectrum. who medium Shannon, customers cloud you We customers working of legacy to with cloud-oriented as full we're those tell one obligations spectrum. where that applications Small modernizing work. start just in would have I I progression on-prem applications don’t and on heavily customers full this consumption, numbers. public their in environment, on-prem the a their I and customers say on-prem private center cloud such me large break fully working you in high create would that legacy and dealing let But infrastructure Yeah, we are usage between that it's guess, and are their will, the

of the spectrum I hard an say because they can is they're cloud say think say some a you I And quite environment, a because, to system. an stand I cloud place. I delivers where a more all moving form environment. are destination. when don’t to So place cloud what customers pattern, really but mean it the and operating cloud experience, not It's on not landing in It's a not a know, is it's

that design also digital they not cost susceptibility, but a the and to the of determine benefits cloud-like a and legacy see that scalability that with. agility, to accelerated environment into consideration the this we accelerated the involved just technology in deal what have ourselves issues what So environment taking is planning for customer by works environment cloud

and wherever a I'm spectrum. capabilities that's journey. we're So We're to cloud on a sorry with do suite spectrum the our that of answer allows customer us is long-winded but selling the their comprehensive customers helping

Shannon Cross

seeing then. feel kind making are and of new you just you Thank by don't talk you. of versus continuity. to least customers up you. the connectivity get -- sure at know, on versus, you much or still are think their end to where a going and on do and done devices with you like by I focused remote then done And year that’s continuing or basis, education, back enterprise, then now hopefully maybe maybe end investments be SMB But you segment pretty mentioned work or of to, know like, projects it's can have employees are moving really know, Thank Okay. wind opportunities? kind about customers enablement and this people I and you prior new

Chris Leahy

mix Shannon, across a Yeah, segments. it's

and moderated and know, -- If notebook work-from-home moderated you that look bit at corporate, is for the rush example, you we the seen mean the what the then things to I like by the and get terms from optimize the customers they a in devices to either looks to would their that has office or that work then home. expect place you work for in off in decisions, the make hybrid or have of in to when start to and and everybody see land. home. work to help bit we're it from business, we the a how working that work now example, back strength see home to office segment, Small But in take the going corporate they future continue from the going in space. what suspect I had

small there a larger get in maybe part were to could later little some be the businesses. because that Now, than business

high segments. different an for Healthcare perspective front rushed it's across and really it's allocation so us really, they really others. to priority a from end, obviously were And the

And space moderated the in so that's well. as healthcare

well seeing as been education, work through say support. ed, continuing to from as in really higher XX, fairly federal. as home, from as I drivers work be we're that space So the government as K would primary continuing the well robust of home


Your next question Stanley, comes your from open. Katy line Huberty Morgan is from

Katy Huberty

declines revenue the the on possible one project doesn't is third next it improved quarter over you to writings the that like Colin, as census a in what SMB decline we and trajectory quarter up tailwind see we think create wrapping or about lesser use quarter the the continue selling day, a less the do fourth that improve

Collin Kebo

a not to sales. Katy, give on specific quarter guide fourth going we're Yeah,

I So one sales fewer do we day, have would an say we basis. daily what is average sales on report

P&L, XXX half bit about bottom little the that that. normalize So as really deleverage has a for would is on of a it points get The the the basis impact comment of year-over-year. we

we provide the is fourth solid to last a most the expect would to to Again, contribution census, it year's third quarter; relates the was it census benefit. as look the at in it to of overlap, going As provide I quarter.

And I impact we are wild those relates contribute think, of to choose the of So comments the side it spending the to incrementally the then, to we plans writing, particularly and customers how the additional I on shutdowns and to it their think come on year-over-year. cards as will the back business, virus on and election, has the year. the as what react end into commercial potential

Katy Huberty

away in mix addition revenue. margins? drove Okay. then mix quarter growth like just in areas margins Is shift computers? you and infrastructure some Thank you netted that just shift better down starting and the servers quarter, Can third the the a some client in product better about talk from to mentioned And of margins, were to see you. again in what on product the that

Collin Kebo

so, would as tend say has a it pretty was combination the choice, desktops soft desktops form for example, things. mix Katy, products, was to There become within Yeah. I were factor have low of of some notebook margin.

a margin I recessions a that other shock product been little pandemic So we've the to compared would slowdowns But helped little bit. say or economic through. that bit this and unique is that

one supply-demand think you different have thing time. that's is imbalance same the I occurring at

margin is, would of done, on it not has it to whatever department that saw want maybe margin. might that what of we round on seeing imbalance, in go but product we're you I the being they bids some and right. played the to through another think think, that quickly, that's is of And just speed, thing service, in part the capabilities, can trust, And supply technology focus they I of think the what level then of a second that is so the getting margin. things the product done it I period compassion through how or think they a customers on has here we're done and just solution going a cushion think, and important procurement that manifest that customers on bit unique done of it with and partners And is into, be itself logistics I want durability want provided the


question Sheerin Your Stifel. next comes Matthew from from

Your line is open.

Matthew Sheerin

about wins environment? wins you Are that you you talk Chris, more Can due fact and to your capabilities. to customer to engagements need due competitive customer customer including seeing due of just that in customers your that, acceleration the some help? some new mentioned commentary, new the

Chris Leahy

Good Yes. morning, Matt.

is You Collin about complex, issues but and solve. I comprehensive more said, customers technology know, repeat when they a that think what technology just is solutions trying the to need I critical, today, to they're feel everything more won't

with for so leaning start to partner And example, vendors. a CDW, they're CDW valued local like more trusted into versus, inclined

that investments. a there the customers They certainly So what full the of of it technology mentioned out ensure from high as that choice and value we're seeing their getting comprehensive because brings right suite their complexity work environment, get are for of are get perspective, they a to the they're that stakes de-risking as -- want important. suite advice, pricing more competitive would well CDW to -- I that their the they them. facing, to and to become

very brings is the environment. well value So this that CDW in resonating

seeing quickly. And a we're also but pretty customers across a to our seeing that's in the -- frankly, vendor move brought up customers is and all vendor We in customers and segments, new new customers are significantly we're that growing consolidation, frankly. quicker to that's been -- value environment winning of those always it's move ticked

Matthew Sheerin

devices, just I then And down. about wanted that. side it talked the where for Thanks ask to you the on on client Okay. again being particularly commercial

wanted seeing just to client comps to year work due next you have of You But this that's about did you're -- that year in quarters going side? from basically cycle crept home. we and ending be just saw you're seeing. facing year-over-your last that the of couple Are upgrade seeing to if sort device see I obviously some signs faced and into commentary you're some tough on trends

Chris Leahy

into we late I'd we this is what is, Matt, of were when we year, get moderating. say we the were refreshing in thought growth -- innings look, Yeah. coming device, client

that does the lot overlaps learned from home, year, see as hard XXXX new But from et what and beginning certainly, obviously, we period. pickup from facing Now And I it year. et the retail what this year in to to it's next the home more think we're make digital expect the and yes, cetera, the That start said, requirements last home, organizations, cetera. that from might into the of world, you forward picked work of a early to layer effectively. some it cases education right, economic you're of the year we're and work refresh pull up And of going seeing growth just environment then to said. have employment, this that work on say at from

collaboration we to needs, with So in their the productivity continue for mid even security example, that needs, help working space their their they're large suites through. customers with with

So robust notebooks even services as now, solution, the whole if collaboration, cetera. accessories the solution, we including from don't work the the see right it's and and et


next comes Keith from Research. Your from question Housum Northcoast

Your line is open.

Keith Housum

Hey, guys. the morning, challenges quarter. the I Good to in explore want constraints supply

during there that of analogy the out other door. pressing end is at this the I some commentary, you getting are quarter? then all that's you also supply constraints think the having for rather of challenges see the the quarter? it's did And of see in well-known one that fourth easing the Chromebooks in can help areas But the

Collin Kebo

be we know Chromebooks Yeah, quarter, would are I constraints that it it's think to don't Good I morning, say for I think going I here. tight as well-documented. eased Keith. while a the within exited the

and fair least Now, at OEMs about work will Chris manage multiple fact talked help and has through hopefully obviously, our that we us that get with as share, scale earlier. our the

say times lead demand. And we're longer normal. just terms than general, seeing would In I of notebooks again, in high

We things things are Chromebooks hearing component shortages into panels. and Notebooks, that for like about go

of hardware, supply I like is or other categories, better quarter the more a collaboration, we critical the was would headsets dislocation webcams. market, little where the on In delays solution say areas and business In than it of with two the of environment the parts terms see a other ago. pockets other maybe remote, mission bit of or side

Keith Housum

what you. shortage business supply quarter? Is the possible is third it costing quantify perhaps in Got to

Collin Kebo

be to in I Notebook it a up I our difficult where number could it's -- meaningfully is put Boy, mean, run would it's really backlog running where the that. say on historically. category over


Morgan. comes question And Coster your from last JP from Paul

is open. line Your

Paul Coster

taking I'm if a uncertainty just question. Yeah. could seeing. you're my Chris, little bit elaborate you wondering, the Thanks on for

that and paradigm? I their in been COVID how change think is of part described, of change unsure accelerant, of in many given and in, sort to how we the I'm to to the given understand you've part digitalization, infrastructure your uncertainty the as of all as but have just particular, well, when wondering this weather seems it, what invest processes of that of feel customers an

Chris Leahy

a That's Yeah. question. great

the had here's XX how think is them. thought news like today capability it design need And little ago, they're call, into, customer the for would I right design now, example, ticked to I The to up. starting digital, for projects, we had down earnings an than were answer We got customers months just how acceleration. new mentioned but down to is acceleration last with a was Their and what quarter's world. get in and trend, it. a I those not rethinking that through literally it work in and projects -- and that sit technology help new Every that it customers criticality particular. that different good sit many understands the that we've of infrastructure of

So we ever. see that side of the an stronger as help to get opportunity customers our than other this

faster surviving them about. the out competitive notion talking do how what pandemic, lots their how leaner, better future. have are who but and making customers sure to certainly do and more other consistent optimizing through they of are and absolutely we what we're yes, to of come with drumbeat side a So, and that customers the for wondering it, agile just That's is to we this advantage, do,

Paul Coster

with for cloud the revenue headwind up associated -- of, the follow quantify with contracts? revenue quick of The effects you, one down and you, the Got cloud sort the Collin. netting can

Collin Kebo

Yeah. mean, say full down than I I faster netted Paul, revenue seen what would items. we items is have growing historically

the say in acceleration more that, So points normal would of bit than time, periods impact, I impact that a it. has little given XXX of basis so


call further no ahead. go Please Leahy, will Christine There over questions. turn back CEO. are the I to

Chris Leahy

that and customers talking we opportunity thank And customers, we conviction want care. the to will serving call, their reaffirmed the Thank stronger serve acknowledge in To challenges due the for COVID-XX you CDW of emerge investors my Thank commitment and a interest the from you. moment recognize appreciate take your I to our our to in and Take this. and next partners again Jaclyn. want They CDW. continued around you. impress you continued look stakeholders. of me you to pandemic. globe of the participating with our to extraordinary continuously analysts our quarter. remarkable I of and you, our all I to to and dedication all co-workers privilege and and to support forward Collin this our


this Ladies your conference today's and concludes participation. for call. you gentlemen, Thank

now may You disconnect.