NASDAQ$CNXN

PC Connection Inc · Q1 2023 earnings

Q1 2023 earnings · · Investor relations

Briefing

Connection's Q1 2023 performance was impacted by customer caution amidst economic uncertainty, resulting in decreased sales and net income despite growth in specific sectors and record gross margin.

Connection (PC Connection, Inc.) reported a decrease in net sales by 7.7% year-over-year to $727.5 million for Q1 2023. Net income also decreased by 34.8% to $14.2 million, with diluted EPS down 34.9% to $0.54. Adjusted EPS decreased by 31.9% to $0.56. Despite overall declines, the company saw growth in software, security, and networking solutions, leading to a record first-quarter gross margin.

  • Net sales decreased by 7.7% year-over-year, totaling $727.5 million.
  • Net income decreased by 34.8% year-over-year, reaching $14.2 million.
  • Diluted EPS decreased by 34.9% year-over-year, amounting to $0.54.
  • Gross margin expanded by 53 basis points to 16.8%.

Headline financials

Total Revenue

$728M

Previous: $788M-7.7%
EPS (adj)

$0.56

Previous: $0.83-32.5%
Gross Margin

16.8%

No prior period
Operating Margin

2.5%

No prior period
Inventory Turns

12

No prior period
Days Sales Outstanding

71

No prior period
Capital Expenditures

$1.88M

No prior period
Free Cash Flow

$14.2M

Previous: $21.8M-34.8%
Net Income

$14.2M

Previous: $21.8M-34.8%
Operating Income

$18.1M

Previous: $30.1M-39.9%
Gross Profit

$122M

Previous: $128M-4.7%
Cash & Equivalents

$135M

Previous: $67.4M+100.0%
Total Assets

$1.12B

Previous: $1.1B+1.6%
Stock-Based Comp

$1.85M

Previous: $1.38M+34.1%

Revenue & EPS history

PC Connection · Revenue · Quarterly

$728M

Q1 2023-7.7%vs Q1 2022
Beat estimate in 7 of 15 quarters(47%)
ActualEstimate

Revenue by segment

PC Connection · $728M total across 3 segments · Q1 2023

  • Enterprise Solutions
    $314M-6.4%
  • Business Solutions
    $273M-14.8%
  • Public Sector Solutions
    $140M+6.0%

Forward guidance

This report does not contain forward guidance. Therefore, I cannot complete this section.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2023

Historical avgQ1 2023

+1.3%

Avg return

Earnings day

+0.7%

Avg return

5 days after

+1.6%

Avg return

30 days after

60%

39 / 65 earnings

Positive

+21.8%

Q2 2019

Best reaction

-24.3%

Q4 2019

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+2.6%+3.1%+9.8%
Q4 2025+9.1%+8.4%+0.9%
Q3 2025-1.3%-3.8%-4.7%
Q1 2025+7.0%+9.8%+5.4%
Q4 2024-10.8%-8.6%-11.2%
Q3 2024-8.0%-2.7%+4.9%
Q2 2024+6.7%-0.3%+3.8%
Q1 2024-4.3%+0.2%+9.1%
Q4 2023+8.5%+5.6%+0.3%
Q3 2023+5.3%+11.8%+11.8%
Q2 2023+5.5%+8.5%+9.2%
Q1 2023-2.8%-2.0%+16.5%
Q4 2022-14.2%-13.5%-11.3%
Q3 2022-7.4%-5.3%+5.5%
Q2 2022+2.5%+3.0%+2.2%
Q1 2022-3.5%-6.2%-8.7%
Q4 2021+15.2%+10.9%+18.4%
Q3 2021+6.9%+1.9%-6.5%
Q2 2021-0.6%+2.3%+3.8%
Q1 2021-1.1%-3.7%+1.4%
Q4 2020-10.3%-9.7%-10.0%
Q3 2020+3.7%-5.9%-8.0%
Q2 2020-0.7%+0.4%-4.1%
Q1 2020+6.9%-7.2%+0.7%
Q4 2019-24.3%-19.8%-22.1%
Q3 2019+11.5%+12.8%+12.6%
Q2 2019+21.8%+12.4%+7.7%
Q1 2019+1.3%-4.0%-13.3%
Q4 2018+19.4%+19.1%+15.7%
Q3 2018-7.9%-5.9%-5.4%
Q2 2018+11.3%+12.5%+16.8%
Q1 2018+9.6%+9.9%+10.6%
Q4 2017+0.7%-3.9%+3.7%
Q3 2017+0.1%+0.7%-1.7%
Q2 2017-5.4%-5.2%-10.6%
Q1 2017+3.2%+7.9%-3.4%
Q4 2016+2.5%+0.3%-1.0%
Q3 2016-6.4%-6.5%+9.1%
Q2 2016+2.1%+1.4%+5.0%
Q1 2016-0.2%
Q4 2015-0.4%
Q3 2015-0.4%
Q2 2015-1.2%
Q1 2015-1.5%
Q4 2014-0.3%
Q3 2014+1.6%
Q2 2014+1.4%
Q1 2014+2.1%
Q4 2013+2.2%
Q3 2013+0.0%
Q2 2013-4.0%
Q1 2013+0.6%
Q4 2012+3.1%
Q3 2012-4.6%
Q2 2012+1.9%
Q1 2011+4.1%
Q1 2012+1.5%
Q4 2009-0.7%
Q4 2011-0.7%
Q3 2010+1.0%
Q3 2011+1.0%
Q4 2010+7.0%
Q2 2011+7.0%
Q2 2010+7.0%
Q1 2010+5.6%

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