CDW product sales to large accounts slump in Q1.

Jeff O'Heir

April 19, 2023

3 Min Read
CDW revenue down
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CDW revenue and earnings sank 10% below expectations in the first quarter, “disappointing” preliminary first-quarter numbers just revealed by the company. The tech giant also lowered its outlook for fiscal year 2023, from flat IT spending to a single digit decline.

While CDW did not mention declines in specific product categories, PC shipments and sales took a huge hit in the first quarter, as some analysts have recently reported.

First-quarter CDW sales came in at about $5.1 billion, compared to some analysts’ expectations of $5.58 billion. Christine Leahy, CDW president and CEO, blamed the drop in part on “cautious” spending from large accounts. CDW revenue from solutions fared better, but still fell short of predictions.

Caution During Economic Uncertainty Hurt CDW Revenue

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CDW’s Christine Leahy

“The first quarter was marked by a period of intensifying economic uncertainty that led our customers to spend more cautiously and prioritize mission critical initiatives,” Leahy said. “Volume declines were most acute with our largest commercial customers and across transactional products. Solutions were more resilient, but performance also came in below our expectations. While these results were disappointing, the team executed well in a rapidly changing environment.”

CDW expects the entire U.S. IT market to drop in 2023.

“Given first-quarter market performance and near-term conditions, we currently expect the U.S. IT market to decline at a high single-digit rate in 2023, recognizing that a number of wildcards may impact this view as the year progresses,” she said.

Strong, Horizontal MSPs Can Weather Most Storms

A steep drop in global PC shipments last quarter also added to the slowdown some channel partners face.

A recent Canalys study reported that suppliers shipped 54 million PCs worldwide during the first quarter of 2023. That’s 26 million fewer units than the same period a year ago, adding up to a precipitous 33% decline. Canalys said the report marked the fourth consecutive quarterly drop in PC shipments.

IDC also released some gloomy numbers. In the preliminary release of its Q1 2023 Worldwide Quarterly PC Device Tracker, IDC said suppliers shipped 23.3 million fewer PCs year-over-year.

MSPs expected a slowdown in the sales of PCs and other products this year, especially following the big uptick in sales during the pandemic. Inflation, high interest rates and tumultuous markets have also caused a pullback in corporate spending and forced some MSPs’ customers to close.

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ITS’ Tom Andrulis

Tom Andrulis, CEO of Las Vegas-based Intelligent Technical Solutions, defined the economy as a bit “wobbly.” But MSPs with a strong horizontal position, he said, are built to weather most economic storms.

“I don’t think MSPs are going to suffer that much through every downturn, unless someone is specialized in a vertical market that really tanks,” said Andrulis, who recently spoke to us about his company’s M&A activity. “That’s one of the reasons why we’re so horizontal. You can have the financial or mortgage market tank and we’re still good. MSPs can survive.”

Want to contact the author directly about this story? Have ideas for a follow-up article? Email Jeff O’Heir or connect with him on LinkedIn.

About the Author(s)

Jeff O'Heir

Jeff O’Heir is a journalist and editor who has spent much of his career covering the business leaders, issues and trends that define the IT and consumer technology channels. His work in print, online and on stage has showcased, educated and connected small and large solution providers, MSPs, channel pros and vendors. During his career, Jeff has also covered engineering technologies and breakthroughs, crime, politics, food and the arts.

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