# PC CONNECTION INC (CNXN) Informational only - not investment advice. CIK: 0001050377 SIC: 5045 Wholesale-Computers & Peripheral Equipment & Software SIC breadcrumb: [Wholesale Trade](/division/F/) > [SIC Major Group 50](/major-group/50/) > [SIC 5045 Wholesale-Computers & Peripheral Equipment & Software](/industry/5045/) Latest 10-K filed: 2026-02-24 SEC page: https://www.sec.gov/edgar/browse/?CIK=1050377 Filing source: https://www.sec.gov/Archives/edgar/data/1050377/000110465926019108/cnxn-20251231x10k.htm ## At a glance FY2025 · period end 2025-12-31 · filed 2026-02-24 · accession 0001104659-26-019108 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001050377.json | Metric | Value | FY | Provenance | | --- | ---: | ---: | --- | | Revenue | 2,872,746,000 USD | 2025 | verified | | Net income | 83,722,000 USD | 2025 | verified | | Assets | 1,350,925,000 USD | 2025 | verified | | Free cash flow | 58,049,000 USD | 2025 | computed | | Net margin | 2.91% | 2025 | computed | | Operating margin | 3.46% | 2025 | computed | | Revenue YoY | +2.52% | 2025 | computed | | ROE | 9.20% | 2025 | computed | Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity. No market price, no rating, no forecast on this site. Not investment advice. ### Peer percentile fingerprint | Ratio | CNXN | Peer median | Percentile | N | | --- | ---: | ---: | ---: | ---: | | Net margin | 2.9% | 2.8% | 53 | 39 | | Operating margin | 3.5% | 5.0% | 36 | 37 | | Revenue growth | 2.5% | 4.0% | 32 | 39 | | FCF margin | 2.0% | 2.4% | 46 | 38 | | ROE | 9.2% | 9.1% | 53 | 39 | | ROA | 6.2% | 3.9% | 71 | 39 | | Liabilities / equity | 0.48 | 1.51 | 8 | 39 | | Current ratio | 2.90 | 2.21 | 73 | 38 | Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 50 SIC Major Group 50, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking. ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 2872746000 | USD | 2025 | 2026-02-24 | | Net income | 83722000 | USD | 2025 | 2026-02-24 | | Assets | 1350925000 | USD | 2025 | 2026-02-24 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001050377.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | | | | | | 2,692,592,000 | 2,911,883,000 | 2,699,489,000 | 2,820,034,000 | 2,590,290,000 | 2,892,595,000 | 3,124,996,000 | 2,850,644,000 | 2,802,118,000 | 2,872,746,000 | | Net income | | | | | | | | 48,111,000 | 54,857,000 | 64,592,000 | 82,111,000 | 55,765,000 | 69,906,000 | 89,219,000 | 83,271,000 | 87,095,000 | 83,722,000 | | Operating income | | | | | | | | 80,520,000 | 77,527,000 | 85,686,000 | 111,972,000 | 72,074,000 | 96,517,000 | 120,552,000 | 103,153,000 | 97,062,000 | 99,282,000 | | Gross profit | | | | | | | | 371,157,000 | 382,076,000 | 411,086,000 | 451,310,000 | 418,807,000 | 464,579,000 | 526,177,000 | 511,736,000 | 519,794,000 | 539,330,000 | | Diluted EPS | | | | | | | | 1.80 | 2.04 | 2.41 | 3.10 | 2.12 | 2.65 | 3.37 | 3.15 | 3.29 | 3.27 | | Operating cash flow | | | | | | | | 33,586,000 | 19,320,000 | 86,839,000 | 36,603,000 | 36,098,000 | 57,754,000 | 34,889,000 | 197,954,000 | 173,868,000 | 65,438,000 | | Capital expenditures | | | 10,855,000 | 9,250,000 | 7,607,000 | 7,609,000 | 12,337,000 | 11,885,000 | 11,803,000 | | | | | | 9,595,000 | 7,575,000 | 7,389,000 | | Dividends paid | | | | | | | | 10,591,000 | 9,041,000 | 9,122,000 | 8,452,000 | 8,427,000 | 34,599,000 | 8,948,000 | 8,410,000 | 10,527,000 | 15,298,000 | | Share buybacks | 425,000 | 2,857,000 | 3,823,000 | 7,813,000 | | | | | | 15,375,000 | 4,478,000 | 10,222,000 | | | 5,392,000 | 12,375,000 | 76,265,000 | | Assets | | | | | | | | 686,134,000 | 747,851,000 | 805,355,000 | 937,335,000 | 1,015,373,000 | 1,083,383,000 | 1,099,826,000 | 1,188,381,000 | 1,299,354,000 | 1,350,925,000 | | Liabilities | | | | | | | | 252,692,000 | 265,599,000 | 279,452,000 | 340,023,000 | 379,046,000 | 400,910,000 | 333,651,000 | 347,614,000 | 388,364,000 | 440,795,000 | | Stockholders' equity | | | | | | | | 433,442,000 | 482,252,000 | 525,903,000 | 597,312,000 | 636,327,000 | 682,473,000 | 766,175,000 | 840,767,000 | 910,990,000 | 910,130,000 | | Cash and cash equivalents | | | | | | | | 49,180,000 | 49,990,000 | 91,703,000 | 90,060,000 | 95,655,000 | 108,310,000 | 122,930,000 | 144,954,000 | 178,318,000 | 193,221,000 | | Free cash flow | | | | | | | | 21,701,000 | 7,517,000 | | | | | | 188,359,000 | 166,293,000 | 58,049,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | | | | | | | 1.79% | 1.88% | 2.39% | 2.91% | 2.15% | 2.42% | 2.86% | 2.92% | 3.11% | 2.91% | | Operating margin | | | | | | | | 2.99% | 2.66% | 3.17% | 3.97% | 2.78% | 3.34% | 3.86% | 3.62% | 3.46% | 3.46% | | Return on equity | | | | | | | | 11.10% | 11.38% | 12.28% | 13.75% | 8.76% | 10.24% | 11.64% | 9.90% | 9.56% | 9.20% | | Return on assets | | | | | | | | 7.01% | 7.34% | 8.02% | 8.76% | 5.49% | 6.45% | 8.11% | 7.01% | 6.70% | 6.20% | | Liabilities / equity | | | | | | | | 0.58 | 0.55 | 0.53 | 0.57 | 0.60 | 0.59 | 0.44 | 0.41 | 0.43 | 0.48 | | Current ratio | | | | | | | | 2.43 | 2.48 | 2.58 | 2.51 | 2.51 | 2.49 | 3.07 | 3.20 | 3.14 | 2.90 | ## As-reported value updates No tracked differences above grepcent's stated thresholds and capped precision rule were found between the earliest XBRL-filed value and the value currently on file for the standardized annual metrics grepcent tracks. ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-07-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001050377.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q3 | 2022-09-30 | | | 0.88 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.54 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | | | 0.75 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 693,086,000 | 25,598,000 | 0.97 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 696,466,000 | 23,778,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 632,025,000 | 13,154,000 | 0.50 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 736,479,000 | 26,161,000 | 0.99 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 724,717,000 | 27,059,000 | 1.02 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 708,897,000 | 20,721,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 701,046,000 | 13,481,000 | 0.51 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 759,693,000 | 24,789,000 | 0.97 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 709,068,000 | 24,740,000 | 0.97 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 702,939,000 | 20,712,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 721,866,000 | 17,223,000 | 0.68 | reported discrete quarter | | 2026-Q2 | 2026-06-30 | 853,996,000 | 33,168,000 | 1.31 | reported discrete quarter | ## Filed narrative (10-K & 10-Q) ## Business Verbatim Item 1 Business section from CNXN's latest 10-K: [/company/CNXN/business/](/company/CNXN/business/). ## Risk Factors Verbatim Item 1A Risk Factors from CNXN's latest 10-K: [/company/CNXN/risk-factors/](/company/CNXN/risk-factors/). ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1050377/000110465926088136/cnxn-20260630x10q.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-07-29 Report date: 2026-06-30 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS ​ This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements generally relate to future events or our future financial or operating performance and include statements concerning, among other things, our future financial results, business plans (including statements regarding new products and services we may offer and future expenditures, costs and investments), liabilities, impairment charges, competition, and the expected impact of current macroeconomic conditions on our businesses and results of operations. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “would,” “should,” “expects,” “plans,” “could,” “intends,” “target,” “projects,” “believes,” “estimates,” “anticipates,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These statements reflect our current views and are based on assumptions as of the date of this report. Such assumptions are based upon internal estimates and other analyses of current market conditions and trends, management expectations, plans, and strategies, economic conditions, and other factors. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements. ​ Such differences may result from actions taken by us, including expense reduction or strategic initiatives (including reductions in force, capital investments and new or expanded product offerings or services), the execution of our business plans (including our inventory management, cost structure and management and other personnel decisions) or other business decisions, as well as from developments beyond our control, including: ​ [[GREPCENT_TABLE]] [["","\u25cf","macroeconomic factors facing the global economy, including disruptions in or increased volatility of the capital markets, changes in trade policy, which may include the imposition of tariffs or other trade barriers, economic sanctions and economic slowdowns or recessions, government shutdowns, the impact of conflicts in Iran and the Middle East, changes in tax policy, rising inflation and changing interest rates modifying our potential for investment income and the timing thereof or reducing the level of investment our customers are willing to make in IT products;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","supply constraints, such as the global memory (DRAM and NAND) shortage;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","substantial competition reducing our market share;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","significant price competition reducing our profit margins;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","the loss of any of our major vendors adversely affecting the number or type of products we may offer;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","virtualization of information technology, or IT, resources and applications, including networks, servers, applications, and data storage disrupting or altering our traditional distribution models;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","service interruptions at third-party shippers negatively impacting our ability to deliver the products we offer to our customers;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","increases in shipping and postage costs reducing our margins and adversely affecting our results of operations;"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","loss of key persons or the inability to attract, train and retain qualified personnel adversely affecting our ability to operate our business; and"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","\u25cf","cyberattacks or the failure to safeguard personal information and our IT systems resulting in liability and harm to our reputation."]] [[/GREPCENT_TABLE]] Additional factors include those described in our Annual Report on Form 10-K for the year ended December 31, 2025, including under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” in our subsequent quarterly reports on Form 10-Q, including under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in the other subsequent filings we make with the Securities and Exchange Commission from time to time. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances. You should not place undue reliance on the forward-looking statements. We assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made except as required by law. Unless the context otherwise requires, we use the terms “Connection”, the “Company”, “we”, “us”, and “our” in this Quarterly Report on Form 10-Q to refer to PC Connection, Inc. and its subsidiaries. 17 Table of Contents OVERVIEW ​ We are a Fortune 1000 Global Solutions Provider that simplifies IT, guiding the connection between people and technology. Our dedicated account managers partner with customers to design, deploy, and support cutting-edge IT environments using the latest hardware, software, and services. We provide a wide range of IT solutions, from the desktop to the cloud—including computer systems, data center solutions, security, artificial intelligence, software and peripheral equipment, networking communications, and other products and accessories that we develop internally and secure from manufacturers, distributors, and other suppliers. Our Technology Solutions and Services Organization, or TSSO, and state-of-the-art ISO 9001:2015 SOC 2 Type 2 certified Technology Integration and Distribution Center offer end-to-end services related to the design, configuration, and implementation of IT solutions. Our team also provides a comprehensive portfolio of managed services and professional services. These services are performed by our personnel and by third-party providers. Our GlobalServe offering ensures worldwide coverage for our multinational customers, delivering global procurement solutions through our network of in-country suppliers in over 150 countries. ​ The “Connection” brand includes Connection Enterprise Solutions, Connection Business Solutions, and Connection Public Sector Solutions, which provide IT solutions and services to enterprise, small- to medium-sized businesses, and public sector markets. ​ Financial results for each of our segments are included in the financial statements attached hereto. We generate sales through (i) outbound inside sales and field sales contacts by sales representatives focused on the business, educational, healthcare, retail, manufacturing, and government markets, (ii) our websites, and (iii) direct responses from customers responding to our advertising media. We offer a broad selection of over 460,000 products at competitive prices, including products from vendors like Apple, Cisco, Dell Inc., HP Inc., Hewlett-Packard Enterprise, Intel, Lenovo, Microsoft Corporation, and VMware by Broadcom, and we partner with more than 1,600 suppliers. We are able to leverage our state-of-the art logistic capabilities to rapidly ship product to customers. ​ As a value-added reseller in the IT supply chain, we do not manufacture IT hardware or software products. We are dependent on our suppliers—manufacturers and distributors that historically have only sold to resellers rather than directly to end users. However, certain manufacturers have, on multiple occasions, sold or attempted to sell directly to our customers, and in some cases, have restricted our ability to sell their products directly to certain customers, thereby attempting to and, in some cases successfully, eliminate our role. We believe that the success of these direct sales efforts by manufacturers will depend on their ability to meet our customers’ ongoing demands and provide solutions to meet their needs. We believe more of our customers are seeking out comprehensive and integrated IT solutions, rather than the ability to acquire specific IT products on a one-off basis. Our advantage is our ability to be product-neutral and provide a broader combination of products, services, and advice tailored to our customers’ individual needs. By providing customers with customized solutions from a variety of manufacturers, we believe we can mitigate the negative impact of continued direct sales initiatives from individual manufacturers. Through the formation of our TSSO, we are able to provide customers complete IT solutions, from identifying their needs, to designing, developing, and managing the integration of products and services to implement their IT projects. Such service offerings carry higher margins than traditional product sales. Additionally, the technical certifications of our service engineers permit us to offer higher-end, more complex products that generally carry higher gross margins. We expect these service offerings and technical certifications to continue to play a role in sales generation and gross margin improvements in this competitive environment. ​ The primary challenges we continue to face in effectively managing our business are (1) increasing our product and service revenues while at the same time improving our gross margin in all three segments, (2) recruiting, retaining, and improving the productivity of our sales and technical support personnel, and (3) effectively controlling our selling, general and administrative, or SG&A, expenses while making major investments in our IT systems and solution selling personnel, especially in relation to changing revenue levels. ​ To support future growth, we have invested and expect to continue to invest in our IT solutions business, which requires the addition of highly skilled service engineers. Although we expect to realize the ultimate benefit of higher-margin service revenues under this multi-year initiative, we believe that our cost of services will increase as we add additional service engineers. If our service revenues do not grow enough to offset the cost of these headcount additions, our operating results may be negatively impacted. ​ 18 Table of Contents Market conditions and technology advances significantly affect the demand for our products and services. Virtual delivery of software products and advanced Internet technology providing customers enhanced functionality have substantially increased customer expectations, requiring us to invest on an ongoing basis in our own IT infrastructure to meet these new demands. ​ Our investments in IT infrastructure are designed to enable us to operate more efficiently and provide our customers enhanced functionality. ​ The ongoing global memory shortage (DRAM and NAND) could result in increased inventory costs, which may reduce our margins or require us to raise prices. The memory shortage could additionally result in a lack of availability of products, which could negatively impact our results of operations. As a result of these ongoing and anticipated shortages, we may purchase product in advance of customer orders, while customers may accelerate or delay purchasing depending on their capital resources. ​ The U.S. administration has announced [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A (excerpt) Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1050377/000110465926019108/cnxn-20251231x10k.htm Complete FY 2025 MD&A: /company/CNXN/mda/fy2025/ Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Filing date: 2026-02-24 Report date: 2025-12-31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ The following Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, is intended to promote an understanding of our results of operations and financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K. This section discusses the results of operations for the year ended December 31, 2025 and year-to-year comparison between the year ended December 31, 2025 and the year ended December 31, 2024. Discussion of the year ended December 31, 2024 and the year-to-year comparison between the year ended December 31, 2024 and the year ended December 31, 2023 can be found in Part II, Item 7 “Management’s Discussions and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024. Our MD&A also includes discussion of certain forward-looking trends and other statements that predict or anticipate future business or financial results that are subject to important factors that could cause our actual results to differ materially from those indicated. See “Cautionary Note Concerning Forward-Looking Statements” and “Item 1A. Risk Factors” of this Annual Report on Form 10-K. ​ OVERVIEW ​ We are a Fortune 1000 Global Solutions Provider that simplifies IT, guiding the connection between people and technology. Our dedicated account managers partner with customers to design, deploy, and support cutting-edge IT environments using the latest hardware, software, and services. We provide a wide range of IT solutions, from the desktop to the cloud—including computer systems, data center solutions, security, AI, software and peripheral equipment, networking communications, and other products and accessories that we develop internally and secure from manufacturers, distributors, and other suppliers. Our TSSO and state-of-the-art ISO 9001:2015 SOC 2 Type 2 certified TIDC offer end-to-end services related to the design, configuration, and implementation of IT solutions. Our team also provides a comprehensive portfolio of managed services and professional services. These services are performed by our personnel and by third-party providers. Our GlobalServe offering ensures worldwide coverage for our multinational customers, delivering global procurement solutions through our network of in-country suppliers in over 150 countries. ​ The “Connection” brand includes Connection Enterprise Solutions, Connection Business Solutions, and Connection Public Sector Solutions, which provide IT solutions and services to enterprise, SMBs, and public sector markets. ​ Financial results for each of our segments are included in the financial statements attached hereto. We generate sales through (i) outbound inside sales and field sales contacts by sales representatives focused on the business, educational, healthcare, retail, manufacturing, and government markets, (ii) our websites, and (iii) direct responses from customers responding to our advertising media. We offer a broad selection of over 460,000 products at competitive prices, including products from vendors like Apple, Cisco, Dell Inc., HP Inc., Hewlett-Packard Enterprise, Intel, Lenovo, Microsoft Corporation, and VMware by Broadcom, and we partner with more than 1,600 suppliers. We are able to leverage our state-of-the art logistic capabilities to rapidly ship product to customers. ​ As a value-added reseller in the IT supply chain, we do not manufacture IT hardware or software products. We are dependent on our suppliers—manufacturers and distributors that historically have only sold to resellers rather than directly to end users. However, certain manufacturers have, on multiple occasions, sold or attempted to sell directly to our customers, and in some cases, have restricted our ability to sell their products directly to certain customers, thereby attempting to and, in some cases successfully, eliminate our role. We believe that the success of these direct sales efforts by manufacturers will depend on their ability to meet our customers’ ongoing demands and provide solutions to meet their needs. We believe more of our customers are seeking out comprehensive and integrated IT solutions, rather than the ability to acquire specific IT products on a one-off basis. Our advantage is our ability to be product-neutral and provide a broader combination of products, services, and advice tailored to our customers’ individual needs. By providing customers with customized solutions from a variety of manufacturers, we believe we can mitigate the negative impact of continued direct sales initiatives from individual manufacturers. Through the formation of our TSSO, we are able to provide customers complete IT solutions, from identifying their needs, to designing, developing, and managing the integration of products and services to implement their IT projects. Such service offerings carry higher margins than traditional product sales. Additionally, the technical certifications of our service engineers permit us to offer higher-end, more complex products that generally carry higher gross margins. We expect these service offerings and technical 29 Table of Contents certifications to continue to play a role in sales generation and gross margin improvements in this competitive environment. ​ The primary challenges we continue to face in effectively managing our business are (1) increasing our product and service revenues while at the same time improving our gross margin in all three segments, (2) recruiting, retaining, and improving the productivity of our sales and technical support personnel, and (3) effectively controlling our SG&A expenses while making major investments in our IT systems and solution selling personnel, especially in relation to changing revenue levels. ​ To support future growth, we have invested and expect to continue to invest in our IT solutions business, which requires the addition of highly skilled service engineers. Although we expect to realize the ultimate benefit of higher-margin service revenues under this multi-year initiative, we believe that our cost of services will increase as we add additional service engineers. If our service revenues do not grow enough to offset the cost of these headcount additions, our operating results may be negatively impacted. ​ Market conditions and technology advances significantly affect the demand for our products and services. Virtual delivery of software products and advanced Internet technology providing customers enhanced functionality have substantially increased customer expectations, requiring us to invest on an ongoing basis in our own IT infrastructure to meet these new demands. ​ Our investments in IT infrastructure are designed to enable us to operate more efficiently and provide our customers enhanced functionality. ​ Trends and Key Factors Affecting our Financial Performance ​ [[GREPCENT_TABLE]] [["","\u25cf","As the AI market continues to evolve, it is difficult to predict and forecast its potential impact on our business and results of operations in the future. We may be required to make significant investments to keep up with increasing competition surrounding AI. Additionally, potential issues with the AI products we sell could have an adverse effect on our business and results of operations in the future."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","Inflation due to, among other things, higher interest rates and the uncertain economic environment, impacts product costs and wages. The increased product costs and wages due to inflation may adversely affect our business, financial condition and results of operations. If product costs and wages increase significantly or for an extended period of time, we may not be able to adjust prices to sufficiently offset the effect of the various cost increases without negatively impacting customer demand."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","The Federal Reserve decreased interest rates in 2025, but it is uncertain whether interest rates will remain the same, decrease, or increase in 2026. Should we need to borrow in the future, we may be exposed to high interest rates. Additionally, if interest rates were to decrease, our interest income on our cash equivalents and short-term investments would also decrease."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","The impact of tariffs remains uncertain. If the economic impact of any imposed tariff is passed through to us by our vendors, our results of operations could be impacted."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","Changes in partner funding programs could change the amount of incentives received by us, which could impact our results of operations."]] [[/GREPCENT_TABLE]] ​ [[GREPCENT_TABLE]] [["","\u25cf","The possibility of a U.S. Government shutdown could adversely impact our results of operations, particularly within our Public Sector Solutions segment."]] [[/GREPCENT_TABLE]] ​ 30 Table of Contents KEY OPERATING METRIC ​ Gross Billings ​ We utilize key operating metrics to track and assess the performance of our business, including gross billings. Gross billings is the total dollar value of goods and services billed during the period, net of customer returns, credit memos, and any applicable sales or other taxes and includes agency fees, and freight. As certain transactions are recognized on a net basis, gross billings include amounts not recognized in net sales. ​ We use the gross billings operating metric for planning, forecasting, and evaluating the sales performance of our operating segments by providing insight into the total value of our business transactions. We believe that gross billings provides the same insight to investors. ​ The following table sets forth the gross billings for each of our operating segments and our consolidated entity (in millions): ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Years Ended December 31,"],["\u200b","\u200b","2025","\u200b \u200b \u200b","2024","\u200b \u200b \u200b","2023"],["Gross billings","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Enterprise Solutions","\u200b","$","1,687.4","\u200b","$","1,558.7","\u200b","$","1,547.9"],["Business Solutions","\u200b","","1,691.5","\u200b","","1,632.1","\u200b","","1,601.7"],["Public Sector Solutions","\u200b","\u200b","755.2","\u200b","","836.1","\u200b","","823.3"],["Total gross billings","\u200b","$","4,134.1","\u200b","$","4,026.9","\u200b","$","3,972.9"]] [[/GREPCENT_TABLE]] ​ RESULTS OF OPERATIONS ​ The following table sets forth information derived from our statements of income expressed as a percentage of net sales for the periods indicated (dollars in millions): ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Years Ended December 31,"],["\u200b","\u200b","\u200b","2025","\u200b","\u200b","2024","\u200b \u200b \u200b","\u200b","2023","\u200b"],["Net sales","\u200b","$","2,872.7","\u200b","$","2,802.1","\u200b","$","2,850.6","\u200b"],["Gross margin","\u200b","\u200b","18.8","%","\u200b","18.6","%","\u200b","18.0","%"],["Selling, general and administrative expenses","\u200b","","15.1","%","","15.1","%","","14.2","%"],["Income from operations","\u200b","","3.5","%","","3.5","%","","3.6","%"]] [[/GREPCENT_TABLE]] ​ Net sales of $2,872.7 million in 2025 reflected an increase of $70.6 million compared to 2024, which was driven by higher net sales for our Enterprise Solutions and Business Solutions segments as shown [Excerpt truncated for page length; the complete text is on the linked full-MD&A page.] Read the full FY 2025 MD&A: /company/CNXN/mda/fy2025/ All MD&A years: /company/CNXN/mda/ ## MD&A history Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page. - [FY 2024 MD&A](/company/CNXN/mda/fy2024/): filed 2025-02-24; accession 0001558370-25-001382 (https://www.sec.gov/Archives/edgar/data/1050377/000155837025001382/cnxn-20241231x10k.htm) - [FY 2023 MD&A](/company/CNXN/mda/fy2023/): filed 2024-03-07; accession 0001558370-24-002727 (https://www.sec.gov/Archives/edgar/data/1050377/000155837024002727/cnxn-20231231x10k.htm) - [FY 2022 MD&A](/company/CNXN/mda/fy2022/): filed 2023-03-06; accession 0001558370-23-002947 (https://www.sec.gov/Archives/edgar/data/1050377/000155837023002947/cnxn-20221231x10k.htm) - [FY 2021 MD&A](/company/CNXN/mda/fy2021/): filed 2022-03-14; accession 0001558370-22-003574 (https://www.sec.gov/Archives/edgar/data/1050377/000155837022003574/cnxn-20211231x10k.htm) ## Macro cross-references Indicators mapped to this company's SIC classification (industry 5045 Wholesale-Computers & Peripheral Equipment & Software) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim. - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity Macro-to-micro threads including this sector: [Money & trade](/thread/money-trade/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/). All macro indicators: /indicators/ ## For LLMs & downloads Markdown twin: /company/CNXN.md · JSON record: /company/CNXN.json · verified financials: /company/CNXN/financials.json / /company/CNXN/financials.csv · machine TOC for the whole site: /llms.txt