Connection’s Shareholder Returns Strengthen on Robust Profitability

Connection US76122Q1058

Connection concluded its 2025 fiscal year by demonstrating a powerful focus on profitability, which translated directly into enhanced rewards for its investors. The company announced a substantial dividend increase alongside an expansion of its share repurchase authorization, moves supported by a significant expansion in its gross margin despite a slight dip in quarterly revenue.

In a decisive move to return capital, Connection's board approved a 33% hike in its quarterly cash dividend, raising it to $0.20 per share from the previous $0.15. Shareholders of record as of the market close on February 17, 2026, will receive this increased payment on March 6, 2026.

Simultaneously, the company augmented its existing share buyback program by an additional $50 million, bringing the total authorization to $220 million. As of the end of fiscal 2025, approximately $81.2 million remained available under this program for future repurchases.

Margin Expansion Offsets Revenue Softness

The fourth quarter saw net sales edge down to $702.9 million from $708.9 million in the prior-year period. However, Connection's financial performance was marked by a notable improvement in profitability. Gross profit climbed 4.5% to $135.6 million, driving the gross margin up by 100 basis points to 19.3%.

Quarterly net income reached $20.7 million, resulting in diluted earnings per share (EPS) of $0.82, an improvement from $0.78 a year earlier. On an adjusted basis, EPS for the quarter stood at $0.91. For the full fiscal year 2025, the company reported revenue of $2.87 billion and net income of $83.7 million, equating to a full-year EPS of $3.27.

Segment Performance and Strategic Inventory Build

The Business Solutions and Enterprise Solutions divisions both achieved record gross profit during the period. This strength was primarily fueled by sustained corporate investment in modern data center infrastructure and software solutions.

Conversely, the Public Sector Solutions segment experienced a softer performance. The conclusion of a major contract and timing delays on several projects weighed on results in this area. From a strategic standpoint, management proactively increased inventory levels by $48.5 million. This decision is aimed at mitigating the impact of anticipated price increases and ensuring smooth execution for upcoming customer rollouts.

Solid Financial Foundation

Connection finished the year with a strong liquidity position, holding $406.7 million in cash and cash equivalents. The balance sheet is further supported by full-year operating cash flow of $65.4 million. The next key date for investors is the February 17, 2026 record date for the increased dividend qualification.

@ boerse-global.de | US76122Q1058 CONNECTION’S