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Performance was driven by agility in securing supply and capturing robust demand for AI investment and infrastructure modernization, resulting in 9% consolidated net sales growth.

Management attributed strong Commercial segment performance to broad-based demand for infrastructure hardware, specifically networking, storage, and servers, which grew over 20%.

The company successfully navigated memory supply and pricing constraints by leveraging partner relationships and balance sheet strength to secure product for customers ahead of price increases.

A strategic shift is occurring as customers move from AI exploration to production environments, increasing the relevance of CDW's orchestration and integration capabilities.

The 'Geared for Growth' initiative was launched to embed AI across operations, aiming to translate productivity gains into operating leverage and enhanced customer experience.

Gross margin compression of 60 basis points was primarily due to a lower mix of netted-down revenues as customers prioritized hardware acquisition over software and services.

Management maintains a prudent outlook for the U.S. IT addressable market to grow in the low single digits for 2026, targeting 200 to 300 basis points of outperformance.

Full-year gross profit growth expectations were raised to the low-to-mid single-digit range, driven by strong Q1 order activity flowing into the Q2 backlog.

The 'Geared for Growth' program is expected to deliver annual run-rate savings of $100 million to $200 million by 2027-2028, with benefits beginning to accrue in the second half of 2026.

Guidance assumes a normalization of product mix in the second half of the year, with netted-down revenues and services expected to regain priority over hardware.

The outlook does not factor in potential recessionary conditions or extreme geopolitical risks, maintaining a cautious stance on second-half macroeconomic uncertainty.

Federal segment performance was impacted by budget timing and procurement delays stemming from the previous year's government shutdown.

Inventory levels increased significantly to approximately $450 million to ensure supply availability for customers facing memory price hikes and lead-time extensions.

The company finalized a relationship with provider Boost Run to offer GPU-as-a-service, addressing customer constraints in accessing high-performance AI infrastructure.

Capital allocation remains focused on dividends and opportunistic share repurchases, with $282 million returned to shareholders in Q1, representing 112% of adjusted free cash flow.

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Management stated that AI deals are generally margin-accretive due to higher-value services attachment and recurring revenue components.

AI is becoming embedded across the entire technology stack, which CDW believes will drive long-term margin expansion through complex orchestration requirements.

The Q2 outlook was raised primarily due to elevated backlog and continued order activity, though management remains cautious about the second half of the year.

Backlog composition mirrors the current high-demand mix for solutions hardware and client devices that faced shipment delays in Q1.

Management dismissed concerns regarding OEMs squeezing channel partners, noting that CDW's scale and orchestration role make them more essential to partners during AI transitions.

Relationships with partners remain strong as the complexity of AI deployments increases the value of CDW's integration services.

The $100 million to $200 million in savings will come from a mix of increased productivity and cost efficiencies across core end-to-end processes.

Management intends to reinvest approximately half of these savings back into the business to fuel further growth and ROI-driven initiatives.

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