CDW Corporation reported a 6% decline in fourth-quarter revenue to $1.98 billion, missing analyst expectations. The drop was driven by reduced spending on legacy cybersecurity infrastructure and tighter enterprise IT budgets.
- Q4 revenue: $1.98 billion, down 6% YoY
- Missed consensus estimate of $2.05 billion
- Gross profit margin fell to 15.2% from 16.4%
- Operating income declined 12% to $128 million
- Revised 2026 guidance to mid-single-digit growth
- Stock dropped 5.3% in after-hours trading
CDW Corporation saw its fourth-quarter revenue fall to $1.98 billion, a 6% decrease compared to the same period last year. This decline marked the first year-over-year drop in revenue since 2021 and came in below the consensus estimate of $2.05 billion, according to internal financial disclosures. The company attributed the shortfall to a strategic shift in client spending patterns, particularly within the federal and commercial sectors. Organizations are reallocating budgets away from traditional cybersecurity hardware and software toward managed security services and cloud-native protection solutions, a trend that has not yet fully translated into CDW’s product mix. Gross profit margin contracted to 15.2% from 16.4% in Q4 2024, reflecting increased discounting in response to competitive pressure and lower demand for on-premise security tools. Operating income declined by 12% year-over-year, totaling $128 million, as the company absorbed higher logistics and inventory costs during the quarter. The results prompted a reevaluation of CDW’s full-year 2026 guidance, with management now projecting mid-single-digit revenue growth, down from an earlier outlook of high-single-digit expansion. The stock reacted with a 5.3% decline in after-hours trading, affecting both institutional and retail investor sentiment. The Q4 performance underscores the broader IT services sector’s challenges in adapting to fast-evolving cybersecurity models.