Gross Profit: $1.1 billion, down 2% year-over-year.
Non-GAAP Operating Income: $404 million, down 7%.
Non-GAAP Net Income per Share: $1.92, down 6%.
Net Sales: $4.9 billion, down 4.5% year-over-year.
Gross Margin: Increased by roughly 50 basis points year-over-year to 21.8%.
Non-GAAP SG&A Expenses: $660 million, up 0.7% year-over-year.
Adjusted Free Cash Flow: $364 million for the quarter.
Future Guidance
Full Year 2024 Gross Profit Growth: Expected to be in the low single digits, reflecting slower start to the year.
2024 Gross Margin: Anticipated to be similar to full year 2023 levels.
Full Year 2024 Non-GAAP Earnings per Share: Expected to be up low single digits year-over-year.
Second Quarter Gross Profit Growth: Anticipated low single-digit growth compared to the prior year.
Capital Allocation: Target to return 50%-75% of adjusted free cash flow to shareholders via dividends and share repurchases in 2024. Over $1 billion of availability under the share repurchase program.
Trends, Market Conditions, Sentiment
Market Conditions: Continued to face challenging and uncertain conditions similar to 2023, with customer sentiment remaining cautious.
Customer Engagement: Delay in customer decision-making and capital investment due to economic, financial uncertainties, and high interest rates.
Portfolio Performance: Hardware sales down 4%, services also decreased by 4%, software net sales declined by 7% but gross profit slightly increased.
AI Adoption: Customers at initial stages of assessing AI adoption, with CDW focused on offering consulting services around AI discovery and operational transition. Early innings, but services are gaining traction.
Vertical Solutions: Noteworthy focus on K-12 and healthcare sectors, leveraging AI and technology to address specific challenges.
Seasonality: The first quarter typically sees a sequential decline from the fourth quarter, which was more pronounced this year due to continued uncertain conditions.
Notable Quotes
Chris Leahy: “Market conditions remained challenging, and first quarter results came in below our expectations… We do not expect demand hockey stick but do see potential for client device refresh and for improved solutions performance.”
Albert Miralles: “The uncertain market conditions we operated under throughout 2023 have persisted into 2024… Our updated full year 2024 expectation is for low single-digit gross profit growth."
"We are laser-focused on delivering exceptional value to our customers… we remain resolute in our strategy and continue to invest to ensure we have the capabilities to deliver full stack solutions and services.”
