PC Connection Reports 3.2% Net Sales Increase to $759.7 Million in Q2 2025

PC Connection, Inc. reported a net sales increase of 3.2% for the second quarter of 2025, reaching $759.7 million compared to $736.5 million in the same period last year. The company's gross profit also saw a slight increase, rising to $137.8 million from $136.5 million, although the gross margin decreased to 18.1% from 18.5%. This decline in gross margin was attributed to reduced software agency fees. Operating income remained stable at $30.9 million, consistent with the prior year, while net income fell to $24.8 million from $26.2 million, primarily due to a decrease in interest income.

For the first half of 2025, PC Connection's net sales totaled $1.46 billion, a 6.7% increase from $1.37 billion in the same period of 2024. The Enterprise Solutions segment led this growth with a 7.3% increase in sales, driven by higher demand for desktops and servers. The Public Sector Solutions segment also experienced a notable 12.7% increase, largely due to significant federal government orders. However, the Business Solutions segment saw a modest 3.3% increase, reflecting mixed performance across product categories.

The company’s selling, general, and administrative (SG&A) expenses increased by 1.6% year-over-year to $106.9 million for the second quarter, while the SG&A as a percentage of net sales decreased to 14.1% from 14.3%. This was primarily due to increased professional fees. For the first half of 2025, SG&A expenses rose to $216.7 million, up from $209.8 million, but as a percentage of net sales, it decreased to 14.8% from 15.3%. The company also incurred severance expenses of $2.9 million during the first half of 2025, compared to $0.4 million in the same period last year.

In terms of operational metrics, PC Connection's cash and cash equivalents increased to $186.7 million as of June 30, 2025, up from $178.3 million at the end of 2024. The company also reported a cash conversion cycle of 44 days, an increase from 41 days a year earlier, indicating a longer time to convert inventory and receivables into cash. The company’s total assets decreased slightly to $1.27 billion from $1.30 billion at the end of 2024, while total liabilities also saw a minor reduction.

Looking ahead, PC Connection remains focused on enhancing its IT solutions business and expects to continue investing in its infrastructure and skilled personnel to support growth. The company anticipates that its ability to generate cash flow from operations will be sufficient to meet its capital requirements for the foreseeable future, although it acknowledges potential challenges from macroeconomic conditions, including inflation and interest rate fluctuations.