Connection Posts Record Quarterly Sales of $874.3 Million, Up 23.3%
Key Facts
Connection, also known as PC Connection and listed on Nasdaq under the ticker CNXN, reported on October 28 results for the third quarter ended September 30, 2026, posting record net sales of $874.3 million, up 23.3% year over year. Gross billings totaled $1.3 billion, up 19.4% from the same period. Gross profit also rose 16.7% to $161.9 million, while net income increased 27.2% to $31.5 million. Diluted earnings per share were $1.24, compared with $0.97 a year earlier. Chief Executive Timothy McGrath said the company converted "strong customer demand and disciplined execution into earnings growth" during the quarter.
Sales growth came alongside a decline in gross margin, which fell 110 basis points to 18.5% compared with the third quarter last year. In the previous quarter, the margin was 18.4%, according to the company’s second-quarter 2026 results. Net sales in that quarter were $854.0 million, up 12.4% year over year, while net income rose 33.8% to $33.2 million. The comparison shows that sales growth accelerated in the third quarter, while net income growth was slower than in the previous quarter. A year earlier, third-quarter sales had fallen 2.2% to $709.1 million, and net income declined 8.6% to $24.7 million, with a gross margin of 19.6%.
Sales growth varied across the company’s segments: business solutions sales rose 27.8% to $328.2 million, and enterprise solutions sales increased 27.4% to $407.5 million. Public sector solutions, by contrast, recorded slower growth of 4.6%, with sales reaching $138.6 million. Business and enterprise were therefore the fastest-growing segments among those reported by the company. The gap highlights differing demand trends between the commercial and enterprise customer base on one hand and the public sector on the other. The company did not break out how much each segment contributed to the overall sales increase in the reported figures.
Product categories linked to technology infrastructure also posted strong growth, with server and storage sales up 45% year over year and accounting for 9% of net sales. Networking sales rose 43% and made up 8% of net sales. In its July results, McGrath said organizations expanding their use of artificial intelligence need partners to modernize infrastructure, strengthen security and integrate cloud and data platforms. In the third-quarter results statement, he said AI is expanding opportunities across the technology lifecycle. McGrath attributed the record results to strong demand and disciplined execution, linking them to earnings growth; the statement did not quantify AI’s effect on quarterly sales.
In the first nine months of 2026, Connection sales totaled about $2.5 billion, up 12.9% from the same period a year earlier. Net income for the nine months rose 29.9% to $81.8 million. In August, the company said its subsidiary GovConnection had won a federal government Category A contract under NASA’s broad-based procurement program, making IT products and services available to federal agencies. The company also announced on October 14 that Matt Zafirovski would join as president and chief operating officer, with his appointment effective October 12 and reporting to McGrath. These developments provide institutional context for the quarterly results alongside the operating figures the company reported.
The company declared a quarterly dividend of $0.20 per share, payable on November 27, 2026, to shareholders of record on November 10. Connection held its third-quarter results conference on October 28 at 4:30 p.m. Eastern Time. The dividend payment date follows the results announcement, while the company set the shareholder record date more than two weeks earlier. The results statement did not comment on the stock’s movement after the announcement. The source also did not provide an analyst consensus estimate against which to assess the results relative to market expectations.