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# PC Connection Earned $81.8 Million In Nine Months, Yet Operations Burned $39.8 Million In Cash
- URL: https://www.bullished.co/pc-connection-earned-81-8-million-in-nine-months-yet-operations-burned-39-8-million-in-b7bfcacd/
- Published: 2026-10-28T20:33:06.000Z
- Updated: 2026-10-28T20:33:06.000Z
- Description: Receivables and inventory ate the cash as profit climbed, and cash and equivalents fell to $124.6 million from $193.2 million at year-end.
- Author: Matteo Parrino
- Tags: SEC Filings, CNXN, Industry: Technology

[PC Connection](https://www.bullished.co/tag/cnxn/), which sells IT hardware, software and services to businesses and public institutions, earned [$81.8 million](https://www.sec.gov/Archives/edgar/data/0001050377/000110465926119623/cnxn-20260930x10q.htm?ref=bullished.co) in the first nine months of 2026, up from $63.0 million, but operations consumed $39.8 million in cash against a $38.0 million inflow a year earlier, according to its 10-Q filed Wednesday.

## Where the cash went

Customer receivables absorbed $144.8 million of cash, against $6.5 million a year earlier. Inventories took $83.0 million, versus $40.0 million. Payables offset part of that, supplying $74.5 million against $11.9 million.

The company ties the inventory build to "bringing in inventory for several large scale customer deployments" and the receivables swing to the timing of customer deliveries. Payables include supplier-finance obligations of $65.9 million, up from $58.6 million at December 31, 2025.

The cash conversion cycle, the days it takes to turn purchases into collected cash, lengthened to 50 days from 46 a year earlier. Days of supply in inventory rose to 29 from 22.

## Record sales, thinner margin

Net sales for the third quarter rose 23.3% to $874.3 million, and quarterly net income reached $31.5 million, the [earnings release](https://www.sec.gov/Archives/edgar/data/0001050377/000110465926119620/cnxn-ex99d1.htm?ref=bullished.co) shows. Gross margin slid to 18.5% from 19.6% in the quarter. Nine-month income from operations was $104.2 million, compared with $75.7 million.

The company says it has bought product ahead of customer orders because of the global memory shortage and tariff-related cost risk. Cash and equivalents ended September at $124.6 million, down from $193.2 million at year-end, even after $15.1 million of dividend payments. It also held $218.7 million in short-term investments.

## Federal sales fall, new president arrives

Public Sector sales to the federal government fell $53.3 million, or 46.7%, in the nine months, which the company attributes to a few large orders in the prior period that did not repeat. The segment posted a $6.5 million operating loss.

Matthew Zafirovski started October 12, 2026, as the company's new president and COO. Timothy McGrath ceased serving as President but remains CEO.

The company's headquarters lease with a related party has expired, and it occupies the space month to month. It says it intends to sign a written long-term lease. The board declared a $0.20 quarterly dividend payable November 27.

The company says it expects operations to generate cash by managing inventories and receivables against payables.

### Sources

- [10-Q Filing — PC Connection (CNXN)](https://www.sec.gov/Archives/edgar/data/0001050377/000110465926119623/cnxn-20260930x10q.htm?ref=bullished.co) — SEC EDGAR
- [10-Q Filing — PC Connection (CNXN), Q2 FY2026 filed 2026-07-29 (comparison basis)](https://www.sec.gov/Archives/edgar/data/0001050377/000110465926088136/cnxn-20260630x10q.htm?ref=bullished.co) — SEC EDGAR
- [Earnings release (8-K Item 2.02, cnxn-ex99d1.htm) — PC Connection, filed 2026-10-28](https://www.sec.gov/Archives/edgar/data/0001050377/000110465926119620/cnxn-ex99d1.htm?ref=bullished.co) — SEC EDGAR
- [Is PC Connection (CNXN) Stock Already Pricing In Too Much Earnings Hope?](https://finance.yahoo.com/markets/stocks/articles/pc-connection-cnxn-stock-already-111424675.html?ref=bullished.co) — Yahoo Finance

### More on PC Connection

- [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/)