> ## Content Index
> Fetch the complete content index at: https://www.bullished.co/llms.txt
> Use this file to discover other available public pages before exploring further.

# Connection Profit Climbs 27.2% To $31.5 Million As Server Sales Jump 45%
- URL: https://www.bullished.co/connection-profit-climbs-27-2-to-31-5-million-as-server-sales-jump-45-85d4ef41/
- Published: 2026-10-28T21:26:44.000Z
- Updated: 2026-10-28T21:26:44.000Z
- Description: The IT reseller posted record net sales, gross billings and gross profit, but margins thinned and nine-month operating cash flow turned negative.
- Author: Matteo Parrino
- Tags: SEC Filings, CNXN, Industry: Technology

Connection, which sells computers, software, networking gear and IT services to businesses and public institutions, said third-quarter net income rose 27.2% to [$31.5 million](https://www.sec.gov/Archives/edgar/data/0001050377/000110465926119620/cnxn-ex99d1.htm?ref=bullished.co), or $1.24 a diluted share, against $0.97 a year earlier. The results, in an [8-K filed Wednesday](https://www.sec.gov/Archives/edgar/data/0001050377/000110465926119620/cnxn-20261028x8k.htm?ref=bullished.co), came with a $0.20 quarterly dividend.

## Sales up 23.3%, margin down 110 points

Net sales reached $874.3 million, up 23.3% from a year earlier. Gross billings rose 19.4% to $1.3 billion, and gross profit rose 16.7% to $161.9 million.

Gross margin fell 110 basis points (1.1 percentage points) to 18.5%. Selling and administrative costs grew 11.5% to $120.9 million, but fell to 13.8% of sales from 15.3%.

CEO Timothy McGrath said Connection "delivered record net sales, gross billings, and gross profit in the third quarter." He added that "AI is expanding the opportunities across the technology lifecycle."

## Servers and networking lead the mix

Servers and storage sales rose 45% and made up 9% of net sales, up from 7%. Networking sales rose 43% to 8% of sales, also from 7%. Notebooks and desktops rose 27% and were 46% of sales, software rose 23%, and accessories rose 4%.

Business Solutions, which serves small and medium-sized companies, grew sales 27.8% to $328.2 million, but its gross margin dropped 270 basis points to 23.8%. Enterprise Solutions, for large companies, rose 27.4% to $407.5 million, with margin at 14.8%. Public Sector Solutions, serving government and schools, rose 4.6% to $138.6 million.

## Cash drained by receivables and inventory

For the first nine months, operations used $39.8 million in cash, against $38.0 million provided a year earlier. Receivables grew $144.8 million and inventories $83.0 million over that span. Cash and short-term investments stood at $343.3 million at September 30, down from $406.7 million at the end of 2025.

Nine-month net income rose 29.9% to $81.8 million, or $3.23 a diluted share. Adjusted diluted earnings per share, which excludes severance costs, were $3.31 against $2.53.

The board declared a $0.20 dividend payable November 27 to holders of record on November 10\. Management held a call at 4:30 p.m. EDT Wednesday.

The company's closing price was $90.23 at September 30, against $61.99 a year earlier, for a market value of about $2.28 billion.

Learn

- [Item 2.02: results of operations →](https://www.bullished.co/learn/8-k-items-explained/#item-202-results-of-operations)  
From 8-K Items Explained: What Every Item Code From 1.01 To 9.01 Tells You, With Examples

### Sources

- [8-K Filing — PC CONNECTION INC (CNXN)](https://www.sec.gov/Archives/edgar/data/0001050377/000110465926119620/cnxn-20261028x8k.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit cnxn-ex99d1.htm — PC CONNECTION INC 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001050377/000110465926119620/cnxn-ex99d1.htm?ref=bullished.co) — SEC EDGAR

### More on PC Connection

- [PC Connection Earned $81.8 Million In Nine Months, Yet Operations Burned $39.8 Million In Cash](https://www.bullished.co/pc-connection-earned-81-8-million-in-nine-months-yet-operations-burned-39-8-million-in-b7bfcacd/)
- [PC Connection Names Ex-Tusker CEO Matt Zafirovski President And COO At $700,000 Base Salary](https://www.bullished.co/pc-connection-names-ex-tusker-ceo-matt-zafirovski-president-and-coo-at-700-000-base-salary-cb12b666/)

[All PC Connection (CNXN) coverage →](https://www.bullished.co/tag/cnxn/)