The sharp increase in **Cash and cash equivalents** in Q3 2024 was driven by a combination of factors. **Net cash provided by operating activities** remained robust, and notably, there was a substantial decrease in **cash used in financing activities** (from **$739.7 million** to **$270.7 million**), which significantly bolstered liquidity. Furthermore, there was a positive impact from **exchange rate changes** (a gain of **$2.2 million**), all of which more than offset the increased cash outflows from **investing activities**—mainly due to higher expenditures on short-term investments. Overall, these factors resulted in a net increase in cash and cash equivalents of **$358.0 million** for the nine months ended September 30, 2024.  **[0001402057-24-000181_cdw-2024930earningsrelease.htm:11]** 

Why did Cash and cash equivalents increase so sharply in Q3 2024?

The jump in **Total Assets** in Q3 2024 was driven by several factors. **Cash and cash equivalents** increased significantly from **$588.7 million** to **$946.7 million**, which was supported by robust operating cash flow. Additionally, the introduction of **short-term investments** of **$211.7 million** that were not present previously added to the total. Increases in **accounts receivable** (from **$4,567.5 million** to **$4,894.0 million**) and **other assets** (from **$472.2 million** to **$708.6 million**) further contributed to the rise, despite a partial offset from a decline in **other intangible assets, net** (from **$1,369.7 million** to **$1,259.7 million**).  **[0001402057-24-000181_cdw-2024930earningsrelease.htm:11]** **[0001402057-24-000181_cdw-2024930earningsrelease.htm:3]** 

What drove the jump in Total Assets in Q3 2024?

The reduction in long-term debt during Q2 2024 was driven primarily by a significant reclassification of **$1,203.5 million** from long-term debt to current maturities of long-term debt, which accounted for a major portion of the decrease. Additionally, there were **no new borrowings** under the revolving credit and term loan facilities, and CDW actively managed its debt levels through modest debt repayment that decreased net debt by **$93 million**. Together, these factors contributed to a total decrease of **$607 million** in long-term debt during the quarter.  **[0001402057-24-000135_cdw-2024630earningsrelease.htm:11]** **[0001402057-24-000138_cdw-20240630.htm:10]** **[0001402057-24-000138_cdw-20240630.htm:2]** **[CDW_3395270_6]** 

Why did long-term debt drop in Q2 2024?

The **current maturities of long-term debt nearly doubled** in Q2 2024 as a result of a **reclassification of the Senior Notes due December 2024**. The principal amount of **$575 million** was shifted from long-term debt to current liabilities because these notes were approaching their maturity date within the next 12 months, in line with standard accounting practices.  **[0001402057-24-000135_cdw-2024630earningsrelease.htm:11]** **[0001402057-24-000138_cdw-20240630.htm:10]** 

Why did current maturities of long-term debt nearly double in Q2 2024?

d6047b902c30973945af8114654f0c7eb6a46462bf75ab0a92341848bd2f6823

CDW's Q4 2023 Net Sales were lower primarily due to **economic uncertainty** that led customers to delay or reduce hardware spending, which in turn impacted multiple segments of the business. The **decline in sales across key segments**—including Corporate, Small Business, Public, and regions like the UK and Canada—combined with a **shift in customer preference toward cloud and SaaS solutions** that "net down" revenue, further contributed to the lower net sales figures in the quarter.  **[0001402057-24-000002_cdw-20231231earningsrelease.htm:1]** **[0001402057-24-000002_cdw-20231231earningsrelease.htm:3]** 

Why were Net Sales so low in Q4 2023?

CDW’s FY 2023 net sales decline was primarily driven by **continued economic uncertainty**, which led customers to **refocus their business priorities** and subsequently **reduce or delay their hardware spending**. This shift in customer behavior affected all of the company’s operating segments.  **[0001402057-24-000002_cdw-20231231earningsrelease.htm:3]** **[0001402057-24-000015_cdw-20231231.htm:49]** 

What factors contributed to the decline in FY 2023 Net Sales?

CDW’s net income was lower in Q1 2024 primarily because of a drop in operating performance. The company experienced a **4.5% decline in net sales**—from **$5,103.1 million** to **$4,872.7 million**—and a **7.7% decrease in operating income**, which were the key factors behind the reduced net income of **$216.1 million** compared to **$230.1 million** in Q1 2023. Additionally, while there were offsets from lower net interest expense and a marginally decreased tax expense due to a lower effective tax rate, these adjustments did not fully counterbalance the declines in net sales and operating income.  **[0001402057-24-000085_cdw-2024331earningsrelease.htm:0]** **[0001402057-24-000085_cdw-2024331earningsrelease.htm:1]** 

Why was Net Income lower in Q1 2024?

In Q2 2024, the improvement in **Operating Income** was primarily driven by a decrease in headquarters function costs associated with the workplace optimization expenses that were incurred in Q2 2023. Additionally, a reduction in **selling and administrative expenses**—also due to the absence of those workplace optimization costs—contributed to the improvement. This favorable cost dynamic was further supported by an improvement in gross profit margins driven by a higher contribution from netted down revenue, particularly from software as a service.  **[0001402057-24-000138_cdw-20240630.htm:22]** 

What drove the improvement in Operating Income in Q2 2024?

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In Q2 2024, the decline in operating cash flow was primarily driven by several timing and balance sheet factors. Specifically, a **significantly larger negative impact from accounts receivable** (a decrease of **$161.5 million** compared to **$13.0 million** in the prior period) and adverse changes in merchandise inventory (a negative impact of **$57.7 million** instead of a positive **$17.0 million**) were key factors. Additionally, while improvements in accounts payable helped by contributing **$236.9 million**, these were partly offset by a **$102.6 million** negative effect from changes in other assets and liabilities, particularly due to higher vendor receivables. These factors collectively contributed to the sharp drop in operating cash flow reported in Q2 2024.  **[0001402057-24-000138_cdw-20240630.htm:34]** 

Why did Operating Cash Flow drop so sharply in Q2 2024?

The available documents do not provide any specific details or factors that contributed to the unusually low **Free Cash Flow** in Q2 2024.  **[0001402057-24-000088_cdw-20240331.htm:3]** **[0001402057-24-000138_cdw-20240630.htm:3]** **[0001402057-24-000138_cdw-20240630.htm:30]** **[0001402057-24-000135_cdw-2024630earningsrelease.htm:11]** 

What factors contributed to the unusually low Free Cash Flow in Q2 2024?

The documents do not provide any specific details on what drove the significant increase in **Free Cash Flow** in **FY 2023** [N/A].

What drove the significant increase in Free Cash Flow in FY 2023?

bac85a3b79ab450e430142cc742cdbe6cc1ada529c302e25039d72a9973e8401

91a0423107f38c2a3e5f468b5b205810260a31476bb28fdb452167ae571a06ad

Net Sales (USD, millions)

Cost of Sales (USD, millions)

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Selling and Administrative Expenses (USD, millions)

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Interest Expense, Net (USD, millions)

Other (Expense) Income, Net (USD, millions)

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Income Tax Expense (USD, millions)

Net Income (USD, millions)

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Income taxes paid, net (USD, millions)

Cash and cash equivalents—beginning of period (USD, millions)

Cash and cash equivalents—end of period (USD, millions)

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44b3a6225997275f8478ed98b841238e079bdd6b13cf1135fa19bfe4faea97af

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bfb3e8273a0e5454ea3056508c6e90fb859ab689394043c75dd7102aaa0e5032

Days of Sales Outstanding (days)

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United States

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Total Revenue

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CDW (CDW)

Financials