Q2 2026 PC Connection Inc Earnings Call Transcript
Key Points
- Record net sales of $854 million, up 12.4% year-over-year, driven by strong demand across all segments.
- Record gross profit of $157.5 million, with gross margin expanding 30 basis points to 18.4%.
- Record operating income of $43 million, with operating margin improving to 5% from 4.1%.
- Record backlog in both Business Solutions and Enterprise Solutions segments, signaling strong future demand.
- Robust growth in key verticals: retail up 31%, manufacturing up 27%, and financial services up 23% year-over-year.
- Uncertainty from supply chain constraints and macroeconomic conditions, including tariffs and cost pressures.
- Sequential revenue expected to decline slightly in Q3 due to pull-forward demand and Microsoft year-end timing.
- Inventory increased by $61.5 million due to strategic commitments, potentially tying up working capital.
- May experienced softer sales, indicating some month-to-month variability in demand.
- Customer purchasing patterns varied, with some delaying orders due to fixed IT budget cycles.
Good afternoon, and welcome to the second quarter 2026 Connection earnings conference call. My name is Shannon, and I will be your coordinator for today.
(Operator Instructions) On the call today are Tim McGrath, President and Chief Executive Officer and Tom Baker, Senior Vice President and Chief Financial Officer. I will now turn the call over to the company.
Thank you, operator, and good afternoon, everyone. I will now read our cautionary note regarding forward-looking statements.
Any statements or references made during the conference call that are not statements of historical facts may be deemed to be forward-looking statements. Various remarks that management may make about the company's future expectations, plans, and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those indicated by these forward-looking statements as a result of
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