Thank you, Joel. Good morning, everyone.

Joining me today to review our third quarter 2026 results are Chris Leahy, our Chair and Chief Executive Officer, and Al Miralles, our Chief Financial Officer. Our earnings release was distributed this morning and is available on our website, investor.cdw.com, along with supplemental slides that you can use to follow along during the call.

I'd like to remind you that certain comments made in this presentation are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Those statements are subject to a number of risks and uncertainties that could cause actual results to differ materially.

Additional information concerning these risks and uncertainties is contained in the earnings release we furnished to the SEC today and in the company's other filings with the SEC. CDW assumes no obligation to update the information presented during this webcast.

Our presentation also includes certain non-GAAP financial measures, for instance, non-GAAP operating income, non-GAAP operating income margin, non-GAAP net income, and non-GAAP earnings per diluted share, non-GAAP selling and administrative expenses, and non-GAAP effective tax rate, net sales on a constant currency basis, free cash flow, and adjusted free cash flow. Non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules.

You'll find reconciliation charts in the slides made available on our website and in our earnings release. Please note that all references to growth rates or dollar amounts changes in our remarks today are versus the comparable period in 2025, with net sales growth rates described on an average daily basis, unless otherwise indicated.

Replay of this webcast will be posted to our website later today. This conference call is property of CDW and may not be recorded or rebroadcast without specific written permission from the company.

With that, let me turn the call over to Chris.

Thank you, Steve, and good morning, everyone. I'll begin with an overview of our third quarter performance, strategic progress, and outlook.

Al will then provide detail on the financial results, capital allocation, and expectations for the balance of the year. The team executed with precision and delivered record performance in a dynamic technology environment shaped by prioritization of infrastructure modernization and AI adoption.

For the quarter, net sales increased 18% to $6.8 billion. Gross profit was $1.4 billion, 10% above last year.

Expense efficiency delivered operating leverage, and non-GAAP operating income increased by 17% to $620 million, while we continued to invest in our coworkers, industry specialization, and AI capabilities. Opportunistic share repurchases contributed to 20% growth in non-GAAP net income per diluted share of $3.26, and disciplined working capital management converted performance into adjusted free cash flow of more than $500 million.

These results demonstrate the power of our model: capture demand wherever it is most impactful to our customers, and convert it into profitable growth. Meeting customer priorities drove record quarterly sales in both hardware and software, with both contributing to double-digit gross profit growth.

Momentum in AI enterprise adoption drove strong infrastructure investment, propelling hardware growth ahead of software. This delivered significant profit dollars today and opportunities for solutions and services over time.

Capturing demand where it matters most to customers means mix will vary quarter to quarter. We expect that.

What does not change is the underlying trajectory. Our strategy is driving stronger economics over time.

Over the past five years, gross profit has increased at more than twice the rate of net sales. This quarter's performance reflects the power of strong execution and value of our deep industry and technology expertise.

Let's take a look at the three drivers of performance this quarter: the breadth and depth of our customer and markets, our full-stack, full-lifecycle portfolio, and our growth strategy, which underpins our value proposition in an AI-forward world. First, our customer and markets.

Our three US segments are Commercial, Government, and Education, and our UK and Canadian operations are reported as Other. Within each, we align resources by customer type, size, and complexity.

Our unmatched scale powers this level of segmentation. Customer breadth sharpens our view of where demand is moving, and our deep specialization turns that insight into precise execution for each customer and market.

With hundreds of thousands of customers, we have a unique view of technology priorities and how they are evolving. What we see is convergence: customers are modernizing and optimizing their foundations, advancing their AI priorities, and demanding measurable returns on technology investments.

We also see a familiar pattern in technology adoption: AI is starting with infrastructure for large, sophisticated customers, expanding across the stack, and then out to the mid-market, small business, and public sector. Across those markets, customer priorities are consistent.

What differs is the outcomes customers are solving for. You see that in this quarter's broad-based growth: Commercial top line increased 21%, International 26%, Government 10%, and Education 8%.

For Commercial, capacity and productivity drove investment. Corporate customers built more resilient, scalable environments to support increasingly complex workloads, driving investment across infrastructure modernization, cloud, AI readiness, and more capable client devices.

Small businesses emphasized productivity, cost control, and security. For Financial Services, it was speed with control, investing to act on data faster, strengthen resiliency, and improve decision-making while maintaining security, governance, and cost discipline.

For Healthcare, doing more with constrained resources remained a top priority. Investments centered on improving clinical workflows and operating efficiency while managing continued reimbursement and funding pressures.

For Government, technology investment was tied directly to mission. Federal and state and local customers prioritized operating efficiency and control of critical data and infrastructure.

Education institutions invested to secure learning environments, improve student outcomes, and ensure responsible AI adoption, with K-12 extending device lives, and higher education emphasizing optimization, security, and greater value from data. International reflected many of these same priorities: modernization, resilience, and efficiency drove more than 20% growth in both the UK and Canada.

Success addressing distinct end-market priorities underscores the value of our second performance driver, our full-stack, full-lifecycle portfolio, which delivers multiple paths to growth. Investments in modernization and AI prioritization pulled through demand across the technology stack, driving excellent performance across hardware and software.

Availability of product and delivery conditions showed signs of normalizing, with fewer surprises than earlier in the year. Hardware increased 21%, driven by modernization, including AI-related investment from foundational infrastructure to significant AI factory deployments.

Data storage and servers more than doubled, while NetComm increased 9%, investments that create follow-on opportunities across the lifecycle. Client device performance was also strong, up 19%.

Customers invested in greater processing power, memory, and security to support evolving workloads and extend device lives. Although unit volumes declined, higher average selling prices more than offset the decline, reflecting both price increases and demand for more capable configurations.

Modern technology environments are inherently hybrid, spanning hardware, software, cloud, and services, and as these environments become more interconnected, customer investment increasingly extends across multiple parts of the technology stack. You see this in our software and cloud performance.

Software increased 14%, driven by double-digit growth across network management, virtualization, and operating systems. Cloud delivered stellar growth, reflecting broad demand across SaaS and IaaS solutions and workloads.

Services lead, enable, and extend the technology lifecycle. Professional and managed services returned to growth, up 2%.

Performance continued to reflect the timing of large deployments, with services opportunities following as deployments move through the technology lifecycle. Our ability to capture opportunities across the full technology lifecycle is underpinned by our third performance driver, our growth strategy.

Our growth strategy is anchored in our North Star: relevance. Relevance defines how we win.

Scale sustains it with reach and insight. Specialized expertise turns that insight into action, and repeatable solutions extend our impact.

Today, relevance matters more than ever. Today's technology decisions are business decisions and mission decisions.

As the stakes rise and AI investment grows, decisions are more consequential than ever. Getting those decisions right starts with the right foundation: data.

Turning enterprise data and context into trusted intelligence is essential to scaling AI. AI adoption is creating an explosion of data, much of it fragmented across applications, clouds, and infrastructure.

Trusted, secure, and usable information is essential. Our recent addition of Lovanalytics deepens the expertise we bring to this foundational work across data strategy and engineering, analytics, generative AI and machine learning, and data migration and modernization.

AI is in a consequential phase of its acceleration. The market is shifting from experimentation and task-level productivity to production, workflow redesign, and performance.

As it moves from fulfilling more tasks to changing how work gets done, AI unlocks greater productivity, capacity, speed, innovation, better decision-making, and results. Realizing that potential starts with the outcome.

CDW's AI-first perspective puts outcomes first, then builds the strategy around what must connect across both the technology and the organization to deliver it. Customers will move at different speeds and from different starting points, but the six AI imperatives are the same: enterprise data needs to become trusted intelligence, infrastructure must be ready, AI needs to move into applications and workflows, and security, governance, and economics must keep pace.

Bringing those elements together is at the heart of what CDW does. We orchestrate environments, connecting across the technology stack to deliver outcomes.

Our position at the center of the technology ecosystem makes this orchestration possible. No single vendor can address every requirement.

We connect partner innovation and customer needs, bringing together the right technology, expertise, and services. Few providers can bring it all together.

CDW can. Significant AI capacity has been built.

Return on that investment depends on adoption and sustained consumption. We know how to drive both.

Our cloud performance demonstrates our success connecting innovation to customer needs and turning partner capacity into sustained consumption. AI is broader and more complex, making our role even more valuable.

AI momentum is building across the enterprise market, and we are selectively serving customers in this space, including those at the cutting edge, while staying disciplined on economics and returns. Now, the next phase of adoption is underway, broadening into the mid-market, small business, and public sector.

Across these markets, teams are accelerating adoption and turning it into sustained consumption. Here's a customer example that shows what that looks like in practice.

A major international airport's goal was clear: move its critical terminal transportation system toward near-zero outages. The team developed a solution that seamlessly brings together AI, computer vision, LiDAR, telemetry, machine learning, and advanced infrastructure.

This integrated solution continuously monitors the entire system and identifies potential issues before they disrupt operations, enabling corrective action sooner. The outcomes matter: greater system reliability, reduced downtime, more efficient use of maintenance resources, and better experience for the millions of passengers who rely on one of the world's busiest airports.

For CDW, related production monitoring and cloud analytics opportunities total about $2 million. This is orchestration in action: connecting technology, services, and expertise to deliver a critical business outcome.

It's also a great example of how we are turning what was once bespoke into repeatable solutions, and what is repeatable into scalable outcomes. We've built an AI IoT solution that is extensible across multiple operational environments, from transportation systems to water and power infrastructure.

This is how our AI flywheel works: solve, learn, repeat, and scale across industries, customer sizes, and stages of adoption. Because for our customers, the larger AI opportunity is not simply doing tasks faster; the opportunity is in changing how customers operate to deliver meaningful outcomes.

Helping customers achieve this quickly and efficiently requires even more than a broad portfolio and the ability to connect technologies; it requires the scale to turn insight into precision to deliver faster, more cost-effective time to value. Our scale is a compounding advantage that extends well beyond AI.

As technology change accelerates across the ecosystem, our deep customer understanding positions us to capture demand wherever customers invest. That leads me to our outlook.

Current market conditions remain constructive. Customer engagement and written demand remain healthy.

Writings continue to outpace invoicing, and backlog is building, particularly in enterprise infrastructure. Given this backdrop, we are increasing our full year outlook.

We now expect the US IT addressable market to grow at a high single-digit rate in 2026 on a customer spend basis, and we see 300 to 400 basis points of CDW outperformance compared to the market. The opportunity ahead is significant.

Technology is undergoing tectonic change. In an AI-forward world, we translate customer investment into outcomes, and partner innovation into adoption and sustained consumption.

Demand will shift. Technology will evolve.

What endures is our relevance, powered by advantages that compound: unmatched scale, deep customer relationships, specialized expertise, and a unique position at the center of the technology ecosystem. That gives us confidence in our strategy, the opportunity ahead, and the forward earnings power behind today's dividend increase.

With that, let me turn it over to Al.

Thank you, Chris, and good morning, everyone. I'll begin with details on our third quarter performance, move to capital allocation priorities, and then finish with our outlook for the remainder of 2026.

As Chris mentioned, this quarter demand was strongest in AI-driven hybrid infrastructure and data center modernization, particularly in servers, storage, and cloud, and we're also seeing those investments pull through opportunities across networking, data governance, security, and services. The AI market is increasing both the scale and complexity of customer technology environments.

Customers are evaluating how infrastructure, cloud, data, applications, security, and endpoints work together in a secure, governed, and cost-effective architecture, reinforcing the value of CDW's full-stack, full-lifecycle model. Third quarter gross profit of $1.4 billion increased 10.3% year-over-year.

This is well above our expectation for a mid single-digit year-over-year increase. Spending is increasingly tied to measurable efficiency gains, data governance, and cost optimization with focus on ROI.

Third quarter gross margin was 20.5%, down 140 basis points year-over-year, but up 40 basis points from the second quarter. As we've discussed in prior quarters, gross margin will vary with changes in product and end-market mix.

In the current environment, our mix continues to be weighted toward large infrastructure projects, which carry higher hardware content. We experienced meaningful growth in cloud, SaaS, and IaaS solutions, which are transferred at a point in time where CDW is agent, also known as our netted-down business.

Demand also remained strong among large enterprise and financial services customers making significant investments in hardware infrastructure, particularly servers and storage. These large projects generated meaningful gross profit dollars and helped to drive upside to that end in the third quarter.

Over time, they also create opportunities for additional solutions and services. Netted-down revenue streams increased 17.1% year-over-year and accelerated from the second quarter growth.

They represented a record 38.2% of gross profit, up 220 basis points year-over-year and 230 basis points quarter-over-quarter. Professional and managed services returned to growth in the quarter, while continuing to be impacted by deployment timing and customer prioritization of hardware and cloud investments.

As infrastructure, security, and AI projects move from procurement into implementation, integration, and ongoing management, we continue to expect services opportunities to follow. Turning to expenses for the third quarter.

Non-GAAP SG&A totaled $766 million, up 5.6% year-over-year. The increase was primarily incentive-related, reflecting higher performance-based compensation tied to stronger gross profit growth.

As expected, we began to capture benefits associated with our geared for growth efforts. As a percentage of gross profit, non-GAAP SG&A was 55.3%, an improvement of 240 basis points year-over-year and 260 basis points from the second quarter, consistent with our prior expectation for improvement on both a year-over-year and sequential basis.

Keep in mind that geared for growth's long-term objective is durable operating leverage, which incorporates both expense efficiencies and savings used for reinvestment. Seasonality impacts the expense leverage ratio, improvement will not always be linear on a sequential basis.

Coworker count totaled 14,600, while customer-facing coworker count was approximately 10,500. Our head count in the quarter reflects the addition of approximately 600 new coworkers from the Lovanalytics acquisition.

We remain laser-focused on our goals to balance growth, expansion of capabilities, and exceptional customer experience with greater efficiency and cost leverage from our broader operations. Non-GAAP operating income was approximately $620 million, up 16.8% year-over-year, demonstrating strong operating leverage.

Notwithstanding the lower gross margin profile of the business compared to the prior year, non-GAAP operating income margin was solid at 9.2%, highlighting the flexibility of our operating model. Net interest expense was in line with our expectations at $66 million.

This year, interest expense has been influenced by higher average borrowings under our revolving loan facility and lower interest income on cash balances. Our non-GAAP effective tax rate was within our range at 26%.

Non-GAAP net income was $410 million, up 14.8% year-over-year. Third quarter non-GAAP net income per diluted share was $3.26, up 20.4% year-over-year, well above our expectation for growth at the high end of high single digits, impacted by the strong operating performance combined with our opportunistic share repurchases through 2026.

Moving to the balance sheet. At period end, net debt was $5.6 billion, and liquidity was $3.4 billion, with cash plus revolver availability.

During the quarter, we issued $1.5 billion of new senior notes. We will use the net proceeds to repay our $1 billion December 2026 senior notes at maturity, with the remainder used to fund the Lovanalytics acquisition.

The three-month average cash conversion cycle was 20 days, within our targeted range of high teens to low 20s. We continue to believe our target cash conversion range remains the best guidepost for modeling working capital longer term.

Adjusted free cash flow was $506 million in the quarter, or 123% of non-GAAP net income, driven by profit growth and disciplined working capital management. That brings year-to-date adjusted free cash flow to $785 million, or 73% of non-GAAP net income, slightly below our stated long-term rule of thumb of converting 80% to 90% of non-GAAP net income to cash, but demonstrating significant progress towards this annual goal.

We have line of sight towards achieving our cash flow objectives. This year, we've been focused on managing these objectives in a way that supports our customers and drives shareholder value, even as ongoing hardware-driven growth has warranted investing in working capital.

In the quarter, we utilized cash consistent with our 2026 capital allocation objectives, returning $108 million through share repurchases and $79 million through dividends. Year-to-date, we've returned approximately $892 million to shareholders, or 114% of adjusted free cash flow, well ahead of our 2026 target of returning 50% to 75%.

Year-to-date share repurchases of $653 million already match our total for all of 2025. We have repurchased a total of 5.3 million shares this year at an average price of approximately $123 per share.

That brings me to our capital allocation priorities moving forward. Our first capital priority is increase the dividend in line with non-GAAP net income growth.

Today, we announced approximately 8% increase in our quarterly dividend to 68 cents per share, or two dol- $2.72 annually, our 13th consecutive year of an increase. We continue to prudently manage our dividend with respect to the growth environment, and target a roughly 25% payout ratio of non-GAAP net income.

Our second priority is ensure we have the right capital structure in place. We ended the third quarter at 2.5 times net leverage, within our targeted range of two to three times.

We continue to proactively manage liquidity while maintaining flexibility. Finally, our third and fourth capital allocation priorities of M&A and share repurchases remain important drivers of shareholder value.

On September 25th, we completed the acquisition of Lovanalytics, a leading data and AI services firm, for $525 million. Lovanalytics expands our capabilities and our services and solution offerings in modern cloud, data, and AI.

While we remain active in the M&A market, we will also continue to be opportunistic towards share repurchases, with approximately $1 billion remaining under our authorization. Now turning to our outlook.

Budgets remain concentrated on the areas of greatest strategic importance, including infrastructure modernization, security and resiliency, cloud adoption and optimization, AI-ready data and applications, and targeted device investments. Healthy written production and an elevated backlog support our view that underlying demand will remain durable in Q4.

At the same time, we remain balanced given the complex and rapidly evolving technology landscape. Factoring in these variables, we now expect gross profit to grow at a mid to high single-digit rate for the full year 2026, up from our prior expectation of mid single digits.

This leads to a first half versus second half split in the range of 48% to 52%, which is aligned to historical second-half-weighted seasonality. Based on the anticipated mix of products and end markets, we continue to expect full year 2026 gross margin to be down compared to the full year 2025.

The outlook for net interest expense is now higher, in the range of 250 50 $255 to $260 million, driven by the $1.5 billion notes issuance during the third quarter. Finally, we now expect full year non-GAAP net income per diluted share growth to be in the low double-digit range year-over-year, up from our prior expectation for high single-digit growth.

Please remember we hold ourselves accountable for delivering our financial outlook on a constant currency basis. On that note, our expectation is for currency to be relatively neutral to reported growth rates for the full year.

Moving to modeling thoughts for the fourth quarter, we anticipate gross profit to increase at a mid single-digit rate year-over-year, which equates to a seasonal low to mid single-digit decline sequentially. Moving down the P&L, we expect fourth quarter non-GAAP SG&A to increase at a low single-digit rate year-over-year and sequentially.

Non-GAAP operating expense as a percentage of gross profit will demonstrate continued efficiency improvement on a year-over-year basis, driven by our geared for growth efforts. Finally, we expect fourth quarter non-GAAP net income per diluted share to increase at a low double-digit rate year-over-year.

With that, I want to thank our coworkers for an exceptional quarter of execution. Our performance reflects the strength of our customer relationships, the power of our business model, and our ability to help customers navigate increasing complexity.

This concludes the financial summary. I will now ask the operator to open up for questions, and we would ask each of you to limit your questions to one with a brief follow-up.

Thank you.

Great. Thanks, guys, for taking my questions.

Appreciate all the detail. Maybe, Chris and Al, can you talk to the demand drivers in the quarter?

I know you mentioned a lot of infrastructure programs and projects in the quarter, but can you maybe speak to a little bit more granular what you're seeing from a pricing backdrop, a supply chain backdrop, and sort of a demand backdrop? For example, how much of the strength that you're seeing in server, storage, networking infrastructure is price-driven versus demand-driven?

Are you able to satisfy the demand that you see out there, or are there any sort of supply constraints that are maybe potentially impacting your ability to convert that demand into revenue? Thank you.

David, thanks for the question. I'd start by saying that we're seeing demand remain resilient.

When you think about what's been driving it, obviously, pricing is impacting results, but, look, there are needs that the customers are leaning into that we've been seeing very high on the list. Think AI readiness, think data growth, network modernization, cybersecurity, resiliency, and hybrid architectures, all really in the preparation stage for utilizing AI.

What we are seeing is working with customers to make trade-offs in their budgets, in some cases move to fewer units and higher capacity, but at the end of the day, we see the durability of that demand continuing. In terms of the pricing itself, I'll let Al address that.

Thanks for the question, David. I would say that the market is still driven by supply variables as well as pricing, but if we look across our different product sets, the growth was substantially driven by units, and I'll give you one exception in a second.

If we look at the areas of greatest strength, servers, storage, definitely strong unit growth, strong volume of customer spend coming through. While those buyers are influenced by price, that was not the driver of our growth; it was more so on the unit side.

Now, the one standout in that regard, no surprise, would be client devices. That is, client devices grew at a nice clip at 19%, units were down, and ASPs were up.

I will just note as well on client, the one kind of net for us is the ASPs were up partially because customers are choosing to move to more richer configurations, it's not just price movement.

Great. Maybe just, Al, as a quick follow-up.

If I just take your comments around pricing on client devices, units, and your netted-down mix, maybe can you flush out where you saw a little bit of margin pressure? Is it just the configurations within server, storage of lower margin or other infrastructure assets?

I'm just trying to get a sense, because it looked like your product gross margin ex netted-down maybe ticked down slightly sequentially in the quarter.

Happy to take that, David. First, like Chris said, the demand was broad-based across all of our end markets.

That being said, our results reflected significant upside relative to our expectations. A good piece of that overperformance came from our enterprise customers and our financial services customers focused on infrastructure.

That was not a phenomena of like-for-like margin compression, more a function of mixing strong into particular products and mixing strong into particular end markets like those two noted will have an impact on your margin. We do believe that that is part and parcel to where we are in the adoption cycle with AI.

At the end of the day, we are most guided by how do we drive gross profit growth, how do we get operating leverage? While we care about kind of where we spot the gross margin, it's not the only variable for the quarter.

Great. Thank you very much.

Appreciate it. Thanks, guys.

Thanks a lot, and congrats on a nice set of numbers here, guys. Chris, I just want to talk about the high single-digit IT spend expectation for the year you talked about.

Can you just talk about how do you see the mix between hardware and software sort of tracking? When you talk to your vendors, they sort of share that sentiment that, hey, demand is much ahead of supply right now, and you sort of echoed that as well.

Does that suggest that these high single-digit IT spend growth rates could persist beyond calendar '26? Just trying to get a sense of the durability of the goodness we're seeing over here, especially if demand seems to be in excess of supply.

Amit, thanks for the question. Look, as I mentioned in the last questions, the demand that we're seeing is based on a number of factors, our customers are not choosing not to purchase.

They're just getting really disciplined in what they're buying and how they're buying. At the end of the day, the data explosion, the need to be ready for AI, cybersecurity risks that are exponentially expanding, and the need for optimization across hybrid infrastructure, we're just finding that to be durable is what I would say.

As I think forward, I don't want to project too much forward, but the bottom line is they're evaluating what they need based on the component parts of being successful in AI, and we don't see that dampening anytime soon. I don't want to project into 2027, but what we see now is strength.

We think the underlying demand drivers will continue, and we would expect to take advantage of those in 2027.

Perfect. Thank you for that.

If I can just follow up, I think your gross profit dollars were up 10% year-over-year. Your operating income dollars were up 17%.

Clearly some fairly impressive OpEx leverage in the model in the quarter. Can you just talk about what exactly is driving that?

Is that the Geared for Growth perhaps ahead of track? You could update us on that, or were there other factors that helped that OpEx leverage in the quarter?

Thank you.

Good morning, Amit. I'll take this.

Substantially what you're seeing there in terms of the operating leverage is our Geared for Growth efforts kicking in and those savings coming to fruition in the quarter. We had previously given indications of what that run rate expense base could look like as we go into 2027, as we go into 2028.

I would say we are at or above expectations in terms of the progress therein. The one caveat I would give you, Amit, is a great print for us in that regard in terms of that SG&A ratio at 55%, but there will be variability in terms of when the savings land relative to our reinvestment.

Therefore, I'll take you back to our commitment is year-over-year improvement in our operating leverage. That does not mean that every quarter will be perfectly linear with respect to that SG&A ratio, but super pleased with our progress to date.

Perfect. Thank you.

Great. Good morning, guys, and appreciate the option here.

In terms of the Lovanalytics acquisition that just closed here, I guess can we stretch you guys to deep dive a little bit deeper into it in terms of the acquisition you make, in terms of how you guys are going to manage them and integrate within the existing CDW portfolio, and the type of revenue synergies that we can expect going forward from the acquisition?

Sure. I'll start.

Look, we're very excited about the acquisition. It's not just a great company, it's a great team of people.

As we've said, it really expands our modern cloud, data, analytics, and AI capabilities that are very much at the front end of AI adoption. Look, in terms of the integration, we are doing our greenhouse approach, and we've shared that with investors before.

With a company like Lovanalytics, the size that they are, the capabilities they have, we like to operate them almost separately for a period of time and use CDW as a channel. The reason is, look, we don't want to overwhelm them.

We want to keep the growth going, and we want to be really disciplined about the opportunities from our broad base of customers that we bring to Lovanalytics. Far, good.

It's worked in the past, and we're really looking forward to growing that business and utilizing their skill sets across our broad customer base.

Maybe, Keith, I'll just add to your question on how does that get baked into our outlook. Like Chris said, super excited about this business.

Our focus, particularly in Q4, is getting off to a great start with respect to our integration and scaling the business. Our incorporation of Lovanalytics in the Q4 outlook is measured, as you would expect from us.

As we look into 2027, we will certainly provide more in terms of what we think the contribution effect is. You should think of this business as smaller relative to the obvious overall scale of CDW, but growing very fast, and so we're really excited about the prospects of what the future holds here.

Great. If I can just follow up on that.

In terms of the financial profile, is it accretive to margins or is it a case of more of a rounding error and probably won't be able to see it?

Gross margins for sure, accretive, right? It is a professional services business, the margins are quite rich.

Our focus is going to be how do we help them to continue to scale, we get all of the advantages of those richer margins.

Great. Thank you.

Hi, thanks for taking my questions. The first one is on gross margins.

You've talked about AI several times. What percent of revenue or what percent of gross profit were AI infrastructure sales?

Are margins lower on the AI sales? Beyond that, did vendor incentives or competitive pricing have any influence on gross margin?

I have a follow-up.

Ruplu, let me start on that one, and let me zoom way out to start. When we think about AI, it's not a single product category.

It's a multi-year opportunity and a full-stack solution. It's a great question, but if you look at the growth in infrastructure, whether you take a single piece of hardware or a single GPU, yes, that can be dilutive to our underlying business margins of 21%, but we look at it in the context of our customers' broader imperative to get value out of AI and what's required to deliver on their outcomes.

We don't think about it as just selling a single component, but selling solutions across the entirety of the infrastructure, data, application layer, workflows, security, and economics. We are so well-positioned with our full-stack, full-lifecycle to help our customers connect and orchestrate the spectrum of technology, services, and expertise required to help them, and to ensure that they work within the confines of their current environment.

That's how we think about bringing value to our customers, and ultimately richer economics to the business.

Thanks for the details there, Chris. For my follow-up, can I ask, you've raised your target for customer spend to 300 to 400 bps premium to US IT growth.

What is driving that more? Is that data center equipment or is that on the client devices side?

Could any of that be related to a pull-forward of purchasing because of fears of component availability or higher pricing going forward? Or do you think that client budgets are actually going up?

Thank you.

It's a great question. I'd say this.

It's both, but more heavily weighted to infrastructure. We know historically when we have very, very strong hardware performance that we outperform the market by several hundred basis points versus our typical 200 to 300, and we expect to do the same here.

In terms of pull-forward, immaterial, frankly, because when we look at all the leading indicators, we look at writings, we look at invoicing, we look at backlog, we are not seeing what I would say is a flush or pull-forward. We feel confident in the numbers that we've put out there.

Thanks for all the details.

Hi, good morning. Much of my questions have been answered, but perhaps you could just give a little bit more color as to, obviously, tremendous performance in double-digit GP growth, only mid single-digit growth in SG&A.

Just wondering to what extent was the RIF material to that, and at what point do you guys think you'll start reinvesting in the business? It seems that you guys are net hiring in terms of other roles into some more advanced roles, maybe AI skills, etc.

These people will generally be more expensive than perhaps people who've left the organization. Maybe you can give a sort of a few quarters forward-looking outlook in terms of how kind of investment in the business versus the Geared for Growth program?

Hi, Guy. Happy to take that.

In the quarter, just reminder, Geared for Growth, focus on broad productivity, incorporation, integration of AI in our work processes, looking deeply at our quote-to-cash efforts to figure out how do we kind of create a better experience and streamline the work we do and drivers of efficiency therein. All of those efforts are in flight, have played out.

With respect to Q3, there certainly is a coworker component that drove some of those savings. I won't parse out all of the details, but I think you can get a sense from that as you unpack the coworker count.

Our coworker count was 14,600, but about 600 of that is from Lovanalytics, you can get a sense for just the impact vis-a-vis productivity. Importantly, and you noted it, we are investing back in the business, and couple things I'd note, and Chris may jump in here as well: we are investing in our services capabilities, including deepening our data and AI practice areas, and you saw that with the Lovanalytics acquisition; we continue to hone and improve upon our go-to-market engine; and then again, I'll just say we're focused on our end-to-end customer experience, quote-to-cash, and how do we really make a better experience for our customers.

There's some of the big areas that we've been focused on investing. Some of those are coming to fruition, but expect them to accelerate as we look into 2027.

The only thing I would add is that these efforts are not purely cost-lowering attempts. We're basically changing the way that we operate the business to create durable capacity to both invest on a continued basis back into the business and to provide returns to our shareholders.

The focus is both on growth overall and efficiency.

Thank you.

Hey, good morning, and thanks for the questions here. Maybe for my first one, wanted to touch on the commentary around order intake out认pacing invoicing, and how that's translating into backlog, and maybe more importantly, your visibility.

Just curious, given all the dynamics you're seeing, if that is driving a greater visibility and should we be thinking about that's translating to something more multi-quarter in nature? Where maybe that backlog build is happening as it relates to the portfolio?

Then I do have a follow-up.

Good morning, Joe. First, on the visibility, I would say consistent with last quarter, visibility continues to improve.

We feel like order times and delivery are largely within reason. There's always exceptions, but for the most part, it's operating in a pretty orderly fashion.

There's that supply chain element. In terms of just the balance of written orders, invoicing, backlog, here's what I'd say.

Because the supply chain environment continues to be reasonably orderly, we had good conversion of the backlog during the quarter, but we replenished that backlog with stronger written orders. That is, and Chris mentioned this, written orders are exceeding invoicing, which means that our backlog continues to grow.

Things are operating as we'd expect. Those health metrics we view as very positive, and a really good indication of both customer engagement and spend potential as we look forward.

Yep, got it. Thank you, Al.

Then maybe as my follow-up, it's good to see the services return to growth here, but I think again pointing to this deployment dynamic, maybe can you just help us think through the timing about a potential services catch-up, or should we really be thinking about this more longer in the tooth in nature, just given kind of you guys pointing to more of the lifecycle and maybe the addressable opportunity over that? Maybe just as a second part to this, just curious, is the higher hardware prices making services look maybe a little bit softer from a comparison purpose?

If we ignore that kind of dynamic, is there any underlying change in terms of the level of attach you're seeing from a hardware perspective, just given maybe a distortion on the pricing side? Thank you.

Joe, let me take that. Let me just start with the end, which is where customers are focused, and therefore where we're focused.

You're right. Customers have been allocating their budgets to infrastructure, hardware, cloud, and just the foundational needs to become AI-ready.

That's where the budgets have been going, and that's obviously where we help our customers. We follow them where they need to go.

That does impact the timing to some extent of services. Look, services did return to growth, and we're happy to see that.

It was earlier than we expected on the professional services side. Delighted to see that.

Good job by the team. What I would say is we are continuing to see constructive engagement and pipeline around implementation, around optimization, security, governance, data, and just ongoing operations, the full lifecycle.

It is just the nature of lifecycle that procurement and deployment and implementation occur at different stages. When you think about the broader consulting, integration, and managed services needs, those tend to come in the middle and at the end of the projects.

I would think about this over the course of several quarters. I think you said long in the tooth.

It won't be an immediate catch-up. It will just be the natural unfolding of the lifecycle.

If I just give you a tangible way to think about it, and I'll use Lovanalytics and data, on the front end of an engagement there, we're going to do advisory services, and that might include AI and data strategy and an assessment around maturity, and a road map build, and use case prioritization, etc. That's great.

That's strategic. Then we move into the implementation, and that will be more when we are actually deploying.

An example would be to migrate legacy data warehouses. That's in the implementation and deployment stage.

Then ultimately, operating to keep the environment secure, you'll see managed services, for example, with FinOps to be a single point to monitor and control cost. That is the way that the life cycle of services flows out, and we expect it to be that as we move forward.

As I said, we're happy to see we're back to growth, albeit modest, but still ahead of what we expected.

Thank you. Appreciate all the color.

Thank you very much. Let me close by recognizing the dedication and hard work of our nearly 15,000 coworkers around the globe.

Their commitment to serving our customers is what makes our success possible. Thank you to our customers for the privilege of helping you achieve your goals, and to our partners for their continued collaboration as we bring the best of the technology ecosystem together for our customers.

Thank you to those listening for the time and continued interest in CDW. We look forward to speaking with you next quarter.