Connection Achieves Record-Breaking Quarter with Strong Execution Across Strategic Pillars
Good afternoon, everyone. Connection's Q3 2026 conference call is underway, and the company is reporting outstanding results for the quarter. According to Tim McGrath, President and Chief Executive Officer, Connection delivered record net sales, gross billings, and gross profit in Q3 2026.
The increase in net sales was driven across all product categories, with notebooks, mobility, and desktops growing 26.6%, software increasing 23.2%, server storage up 45.1%, and networking improving by 43.3% in the quarter. Gross billings increased 19.4% to $1.3 billion, compared to $1.1 billion in the prior year quarter.
Gross profit grew 16.7% to a record $161.9 million, and gross margin declined by 110 basis points to 18.5%. The margin change was driven by customer mix, including large project rollouts in the quarter and a lower contribution of netted down revenue. Pricing pressures and supply chain conditions continued to influence customer spending during the quarter.
Despite these challenges, Connection's strategy is expected to become even more relevant as AI continues to reshape enterprise technology investment. The company believes its solutions and expertise will help customers innovate with confidence and optimize the value of their technology investments. In fact, Tom Baker, Senior Vice President and Chief Financial Officer, noted that some customers accelerated purchases ahead of further price increases, while others delayed investments or extended the life of existing assets.
Connection's supply chain and lifecycle capabilities enable customers to effectively manage their costs, protect their technology investments, and maintain business continuity. This reinforces the company's role as a trusted partner in an increasingly complex market.
The third quarter results reflect strong execution within Connection's three strategic pillars: digital workspace, modern infrastructure and multicloud, and supply chain and lifecycle. As AI continues to transform enterprise technology investment, Connection is well-positioned to capitalize on this trend and drive long-term growth for its customers and shareholders.
