CDW still sees “potential for market growth” in 2024, its CEO Christine Leahy said, despite it posting a decline in both US and international sales in Q1.
The world’s largest reseller trailed expectations by posting revenues of $4.87bn in the first three months of the year, down 4.5% year on year. Gross profit and net income were also down by 2.4% to $1.06bn and 6.1% to $216m, respectively.
First quarter IT market conditions were “weaker than expected”, with “caution, concern and complexity” adversely impacting spending, CFO Albert Miralles said.
CDW’s UK and Canadian operations – which together turned over $2.6bn in 2023 – continued to experience “challenging market conditions” during the quarter. Both saw revenues decline by “mid single digits”.
“Both teams continue to execute well and are leveraging their capabilities to deliver great outcomes for our customers,” Leahy said on a Q1 earnings call (a transcript of which can be found here), however.
The results come after Computacenter pointed to a decline in both services and hardware revenues in its Q1, despite maintaining it is on course to make “further progress” in 2024.
“We still see potential for market growth”
Although CDW had “a solid pipeline with deals being pushed out”, sales and gross profit lagged, Leahy added of the overall performance.
She did, however, double down on previously expressed expectations that the NASDAQ-listed giant could outgrow the low single digit growth predicted for the US IT market in 2024 by 200 to 300 basis points.
“Despite the slow start to the year, we still see potential for market growth,” she said.
The complexity of adopting AI plays to CDW’s strengths, Leahy claimed.
“Essentially, [customers] are exploring the art of the possibility and working through the science of exactly how do we do this,” she said.
“We know how to bridge the gap between the promise of technology and transformational outcomes. And since deploying AI drives the need for technology investment across the full stack, with entry points across the entire stack, we are uniquely positioned to serve our customers and we are doing that today to support our customers as they navigate successful AI adoption, we offer two broad areas of consulting services.”
