> ## 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. # PC Connection Hears No Year-End Budget Flush, Calling It 'A Little Uncharacteristic' Of The Fourth Quarter - URL: https://www.bullished.co/pc-connection-hears-no-year-end-budget-flush-calling-it-a-little-uncharacteristic-of-the-65f7fc37/ - Published: 2026-10-28T21:27:31.000Z - Updated: 2026-10-28T21:27:31.000Z - Description: The CFO expects fourth-quarter sales to dip 3% or 4% from the third, after a quarter of record net sales of $874.3 million. - Author: Matteo Parrino - Tags: Earnings, CNXN, Industry: Technology [PC Connection](https://www.bullished.co/tag/cnxn/), which sells IT hardware, software and services to businesses and public institutions, is hearing no sign of the year-end budget flush that usually lifts its fourth quarter, CEO Tim McGrath said on the company's earnings call Wednesday. The absence is "a little uncharacteristic of Q4," he said, and CFO Tom Baker expects sales to slip 3% or 4% from the third quarter, when [net sales rose 23.3% to $874.3 million](https://www.wusa9.com/article/syndication/associatedpress/pc-connection-q3-earnings-snapshot/616-bb570f23-f1f2-41fc-bf57-c14fabd74a4c?ref=bullished.co). ## Budget crowding, no flush Asked by a Raymond James analyst about fourth-quarter budget flush, McGrath said the company enters the quarter with a strong backlog and funnel but is not hearing about any specific flush. He described "some budget crowding" as customers decide where to place their IT dollars, and said none has signaled a flush. McGrath also said pricing, supply constraints and macroeconomic uncertainty may affect when customers buy, though he called underlying demand solid. Enterprise Solutions, the segment serving large companies, ended the quarter with a record backlog. ## A 3% to 4% seasonal dip Baker said history shows sales falling 3% or 4% from the third to the fourth quarter. He expects the pattern to repeat and said SG&A, the company's selling and administrative costs, should follow it. September, particularly in enterprise, came in stronger than expected, Baker said, after July and August he called okay. ## Record quarter behind the caution Third-quarter gross profit grew 16.7% to a record $161.9 million, while gross margin fell 110 basis points to 18.5%. Operating income rose 35.4% to $41 million, and [diluted earnings per share were $1.24](https://www.wusa9.com/article/syndication/associatedpress/pc-connection-q3-earnings-snapshot/616-bb570f23-f1f2-41fc-bf57-c14fabd74a4c?ref=bullished.co), up 27.8%. Baker said about half of the margin decline came from a lower mix of software booked on a net basis, and the rest from customer and product mix. Notebook and laptop revenue rose more than 30% while units fell about 5%, which he said hints at the pricing environment. The company ended the quarter with $343.3 million in cash, cash equivalents and short-term investments. Its board declared a $0.20 per share dividend payable November 27, 2026 to holders of record November 10, 2026. ## Looking to 2027 McGrath said the bulk of the endpoint device upgrade cycle is behind the company, and endpoint demand may be down slightly in 2027 from 2026\. He expects demand for on-premises servers, networking, security and software to stay solid. PC Connection's market value was $2.2 billion as of Wednesday's report. Whether fourth-quarter sales follow the 3% to 4% sequential decline Baker described will show how much a strong backlog can offset without a budget flush. ### Sources - [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 - [PC Connection: Q3 Earnings Snapshot | wusa9.com](https://www.wusa9.com/article/syndication/associatedpress/pc-connection-q3-earnings-snapshot/616-bb570f23-f1f2-41fc-bf57-c14fabd74a4c?ref=bullished.co) — Associated Press ### More on PC Connection - [PC Connection CEO Says Most Of The PC Upgrade Cycle Is Behind It, Sees Endpoint Demand Possibly Dipping In 2027](https://www.bullished.co/pc-connection-ceo-says-most-of-the-pc-upgrade-cycle-is-behind-it-sees-endpoint-demand-e956afc0/) - [Connection Profit Climbs 27.2% To $31.5 Million As Server Sales Jump 45%](https://www.bullished.co/connection-profit-climbs-27-2-to-31-5-million-as-server-sales-jump-45-85d4ef41/) - [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/) [All PC Connection (CNXN) coverage →](https://www.bullished.co/tag/cnxn/)