PC Connection, Inc. Reports Financial Results for the Quarter Ended March 31, 2026
PC Connection, Inc. reported its financial results for the quarter ended March 31, 2026. The company’s revenue increased by 4.5% to $444.8 million, driven by growth in its enterprise and SMB segments. Net income rose to $12.1 million, or $0.48 per diluted share, compared to $9.5 million, or $0.38 per diluted share, in the same period last year. The company’s gross margin expanded by 120 basis points to 12.4%, while operating expenses increased by 3.5% to $143.1 million. As of March 31, 2026, the company had cash and cash equivalents of $143.1 million and total debt of $150 million. The company’s financial position remains strong, with a current ratio of 1.43 and a debt-to-equity ratio of 0.59.
Overview
Connection, a Fortune 1000 Global Solutions Provider, simplifies IT and guides the connection between people and technology. The company provides 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. Connection’s Technology Solutions and Services Organization (TSSO) and ISO 9001:2015 SOC 2 Type 2 certified Technology Integration and Distribution Center offer end-to-end IT services and solutions.
Key Operating Metric
Gross Billings: Connection uses gross billings, the total dollar value of goods and services billed during the period, as a key operating metric to track and assess the performance of its business. Gross billings provide insight into the total value of Connection’s business transactions.
Results of Operations
- Net sales for Q1 2026 were $721.9 million, an increase of 3.0% compared to Q1 2025. The increase was driven by higher sales across several product categories.
- Gross profit increased 4.3% year-over-year to $132.7 million, with gross margin improving to 18.4% from 18.2% a year ago. The increase was primarily due to higher software sales recognized on a net basis.
- SG&A expenses as a percentage of net sales decreased to 15.2% from 15.7% a year ago, primarily due to the increase in net sales.
- Operating income as a percentage of net sales increased to 2.8% from 2.1% a year ago, driven by the increases in net sales and gross profit.
Segment Performance
- Enterprise Solutions segment net sales increased 16.3% year-over-year, driven by growth across multiple product categories.
- Business Solutions segment net sales increased 6.6%, with growth across all product categories.
- Public Sector Solutions segment net sales decreased 31.0%, primarily due to a decline in federal government sales.
Liquidity and Capital Resources
- Connection expects to meet its cash requirements for the next 12 months and beyond through a combination of cash on hand, short-term investments, and cash generated from operations.
- The company’s cash conversion cycle decreased to 46 days at March 31, 2026, compared to 53 days a year earlier.
- Connection used $3.1 million in investing activities and $8.2 million in financing activities during Q1 2026.
Outlook
Connection continues to face challenges in increasing product and service revenues while improving gross margins, recruiting and retaining sales and technical personnel, and controlling SG&A expenses. The company’s investments in IT solutions and services are designed to enable it to operate more efficiently and provide enhanced functionality to customers.
