CDW posts 9.9% revenue growth but margin pressure and buybacks mask weak core earnings

CDW Corporation reported a 9.9% year-over-year revenue increase, driven mainly by a 10% rise in hardware sales, while service revenues remained flat. Despite top-line growth, the company faced margin compression as costs of goods sold grew faster than revenue, leading to operating leverage erosion. Earnings per share rose 4.8%, primarily due to aggressive share buybacks reducing the share count by 3.5%, rather than improvements in core operations. The outlook remains cautious with slowing revenue growth and ongoing margin pressure, prompting a Hold rating on the stock.