PC Connection Q2: Sales Jump 12%, Margins Widen, Stock Near Peak
CNXN sits 51% above its 52-week low of $54.965.
Summary
Q2 2026 net sales hit $854M (+12.4% YoY) and net income reached $33.2M (+34% YoY), with both gross and operating margins expanding. The balance sheet carries $341M in cash and investments and no debt.
Key Events · Earnings and Guidance · CNXN
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Revenue Surges 12.4%
Driven by robust demand for notebooks/mobility, software, and accessories across all segments, Q2 net sales reached $854.0M, up from $759.7M a year ago.
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Margins Expand
A favorable mix shift toward higher-margin software and services lifted gross margin to 18.4% from 18.1%, while operating margin rose to 5.0% from 4.1%.
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Earnings Jump 34%
Net income climbed to $33.2M ($1.31 diluted EPS) from $24.8M ($0.97 diluted EPS) in the prior-year quarter, fueled by revenue growth and margin expansion.
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Fortress Balance Sheet
Quarter-end cash and short-term investments totaled $340.7M, with no outstanding debt, providing ample liquidity for operations, dividends, and buybacks.
Analysis · CNXN · Trade & Services
A standout second quarter saw net sales climb 12.4% to $854 million, while net income surged 34% to $33.2 million. The gross margin expanded 30 basis points to 18.4%, helped by a favorable mix shift toward higher-margin software and services. Operating leverage pushed the operating income margin to 5.0% from 4.1% a year ago. The balance sheet remains rock-solid, with $341 million in cash and short-term investments and zero debt. Although the stock is trading near its 52-week high—suggesting the market anticipated much of this strength—the size of the beat and the margin gains confirm the business is performing at full throttle.
At the time of this filing, CNXN was trading at $82.97 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $2.1B. The 52-week trading range was $54.97 to $84.81. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.