Connection's third quarter was marked by robust demand across all core product categories, which management attributed to ongoing enterprise investment in digital workspace, modern infrastructure, and supply chain solutions. CEO Tim McGrath noted that endpoint devices, software, server storage, and networking all posted double-digit growth, with the company benefiting from customers accelerating purchases ahead of anticipated price increases. Management highlighted exceptional performance in the Business Solutions and Enterprise Solutions segments, as well as strong customer engagement in healthcare, financial services, and manufacturing.
Is now the time to buy CNXN? Find out in our full research report (it’s free for active Edge members).
Connection (CNXN) Q3 2026 highlights:
- Revenue $874.3 million vs S&P analysts’ estimates of $773.7 million (23.3% year-on-year growth, 13% beat)
- Adjusted EPS $1.24 vs S&P analysts’ estimates of $1.04 (19.2% beat)
- Adjusted EBITDA $46.28 million vs analyst estimates of $40.55 million (5.3% margin, 14.1% beat)
- Operating margin 4.7%, in line with the same quarter last year
- Market capitalization $2.16 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our top 5 analyst questions from Connection’s Q3 earnings call
- Anthony Lebiedzinski (Sidoti): asked about the surprising sequential strength in Q3 versus Q2. CEO Tim McGrath explained that device and AI-driven demand remained strong, with September notably outperforming expectations, especially in enterprise.
- Anthony Lebiedzinski (Sidoti): inquired about the Public Sector segment’s slower growth. McGrath noted robust state and local government business, with federal still rebuilding, but expressed optimism for continued growth in public sector.
- Anthony Lebiedzinski (Sidoti): sought insights on the sustainability of recent trends into next year. McGrath said device upgrade demand may moderate, but infrastructure, networking, and software are expected to remain solid.
- Logan Katzman (Raymond James): questioned gross margin trends and competitive pricing. CFO Tom Baker attributed margin compression to lower-margin endpoint sales and software accounting, while McGrath described the IT environment as broadly strong for competitors.
- Logan Katzman (Raymond James): asked about potential changes in supplier partner programs. McGrath responded that while subscription partners frequently update programs, no major disruptive changes were expected from key vendors like Microsoft, VMware, or Broadcom.
Catalysts in upcoming quarters
Looking ahead, the StockStory team will be monitoring (1) the pace of AI-related infrastructure deployments and whether demand for data center modernization persists; (2) the ability of Connection to sustain growth in key verticals such as healthcare and manufacturing; and (3) the evolution of customer spending patterns as the device refresh cycle slows. We will also track developments in supplier relationships and any updates to partner program structures.
Connection currently trades at $84.93, down from $86.50 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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