Wed, Apr 30, 8:13 PM (23 days ago)
**PC Connection, Inc. (CNXN) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** $701.0 million, up 10.9% from $632.0 million in Q1 2024. - **Gross Profit:** $127.3 million, up 7.8% from $118.1 million in Q1 2024. - **Gross Margin:** 18.2%, down from 18.7% in Q1 2024 due to a shift in product mix. - **Operating Income:** $14.5 million, up from $13.5 million in Q1 2024. - **Net Income:** $13.5 million, up from $13.2 million in Q1 2024. - **Earnings per Share (EPS):** $0.52 basic, $0.51 diluted, up from $0.50 in Q1 2024. **Cash Flow:** - **Operating Cash Flow:** $(52.4) million, down from $57.3 million in Q1 2024. - **Investing Cash Flow:** $104.7 million, up from $(51.6) million in Q1 2024. - **Financing Cash Flow:** $(48.2) million, down from $(3.1) million in Q1 2024. - **Cash and Cash Equivalents:** $182.5 million, up from $147.5 million in Q1 2024. **Segment Performance:** - **Enterprise Solutions:** Revenue up 5.4%, gross margin down 90 basis points. - **Business Solutions:** Revenue up 1.0%, gross margin up 170 basis points. - **Public Sector Solutions:** Revenue up 54.7%, gross margin down 240 basis points. **Trends and Uncertainties:** - **Product Mix Shift:** Increased sales in lower-margin endpoint devices. - **Tariffs and Inflation:** Potential impact on inventory costs and pricing. - **Macroeconomic Factors:** Economic slowdowns, inflation, and interest rates may affect IT investments. - **Competition:** Significant price competition and direct sales by manufacturers. **Future Operations:** - **Investments:** Continued investment in IT solutions and infrastructure. - **Cost Management:** Initiatives to lower cost structure, including severance expenses. - **Dividends:** Declared a quarterly cash dividend of $0.15 per share. - **Share Repurchase:** Authorized a $50,000 increase to the share repurchase program. **Liquidity and Capital Resources:** - **Cash and Short-Term Investments:** $340.4 million. - **Credit Facility:** Expired March 31, 2025, not renewed. - **Supplier Finance Programs:** Agreements with financial institutions to enhance liquidity. **Controls and Procedures:** - **Disclosure Controls:** Effective at the reasonable assurance level. - **Internal Control:** No material changes affecting financial reporting. **Risk Factors:** - **Market Risks:** No material changes since December 31, 2024. - **Legal Proceedings:** No material adverse effects expected. **Summary:** PC Connection, Inc. reported a strong Q1 2025 with increased revenue and net income, despite a slight decline in gross margin due to product mix shifts. The company continues to invest in IT solutions and manage costs, while navigating macroeconomic uncertainties and competitive pressures. The financial health remains robust with significant cash and short-term investments, and a strategic approach to share repurchases and dividends.