CDW Corp
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 30, 2024
CDW$157.00-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0001402057-24-000138
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001402057-24-000182
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 137 previous paragraphs and 139 current paragraphs.
83 unchanged; 40 reworded; 15 added; 13 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Gross profit decreased $27 million, or 2.2%, primarily due to lower Net sales across various hardware categories, partially offset by increased netted down revenue. Gross profit margin, expressed as Gross profit as a percentage of Net sales, remained consistent at 21.8%.
Current report
Selling and administrative expenses decreased $30 million, or 4.0%, primarily due to lower performance-based compensation, including equity-based compensation, consistent with lower attainment against certain financial measures.
Current report
Operating income increased $3 million, or 0.7%, to $482 million for the three months ended September 30, 2024 compared to $478 million for the three months ended September 30, 2023.
Current report
Nine months ended September 30, 2024 compared with the nine months ended September 30, 2023
Current report
Operating income decreased $3 million, or 0.3%, to $1,243 million for the nine months ended September 30, 2024 compared to $1,246 million for the nine months ended September 30, 2023.
Current report
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Current report
Corporate segment Operating income decreased $2 million, or 1.0%, primarily due to lower Gross profit dollars, partially offset by lower performance-based compensation, including equity-based compensation, consistent with lower attainment against certain financial measures.
Current report
Small Business segment Net sales remained relatively consistent with an increase of $1 million, or 0.3%, primarily due to an increase in services, partially offset by a decrease in data storage and servers. As a result, Gross profit dollars remained relatively consistent.
Current report
Small Business segment Operating income remained relatively consistent for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 with an increase of $0.3 million or 0.7%.
Current report
Public segment Operating income increased $3 million, or 1.3%, as Gross profit dollars declined but were more than offset by lower performance-based compensation, including equity-based compensation, consistent with lower attainment against certain financial measures.
Current report
Nine months ended September 30, 2024 compared with the nine months ended September 30, 2023
Current report
Corporate segment Operating income decreased $27 million, or 4.4%, primarily due to lower Gross profit dollars, partially offset by lower performance-based compensation, including equity-based compensation, consistent with lower attainment against certain financial measures.
Current report
Small Business segment Operating income increased $9 million, or 6.6%, as Gross profit dollars declined but were more than offset by a decrease across various selling and administrative expenses.
Current report
Public segment Operating income remained consistent for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 with an increase of $1 million, or 0.1%, as Gross profit dollars declined but were more than offset by lower performance-based compensation, including equity-based compensation, consistent with lower attainment against certain financial measures.
Current report
During the third quarter of 2024, we issued $600 million aggregate principal amount of 5.100% Senior Notes due 2030 and $600 million aggregate principal amount of 5.550% Senior Notes due 2034 (collectively, the “Notes”). Concurrent with the Notes issuance, we settled a cash tender offer for $391 million and $389 million of the outstanding aggregate principal amounts under the 5.500% Senior Notes due 2024 and the 4.125% Senior Notes due 2025, respectively.
Removed paragraphs (13)
Previous report
Selling and administrative expenses decreased $19 million, or 2.5%, primarily due to workplace optimization costs in the second quarter of 2023 with no similar activity in the current quarter, partially offset by increased transformation and other related costs.
Previous report
Operating income increased $21 million, or 5.1%, primarily driven by a decrease in headquarters function costs associated with workplace optimization costs in the second quarter of 2023, partially offset by a decrease in Operating income by the Corporate, Other and Public operating segments.
Previous report
Six months ended June 30, 2024 compared with the six months ended June 30, 2023
Previous report
Operating income decreased $6 million, or 0.8%, primarily driven by a decrease in headquarters function costs associated with workplace optimization costs in the second quarter of 2023, partially offset by a decrease in Operating income by the Corporate, Other and Public operating segments.
Previous report
Income tax expense increased $2 million, or 1.3%. The effective tax rate was 24.2% for both the six months ended June 30, 2024 and 2023.
Previous report
Corporate segment Operating income decreased $10 million, or 4.6%, primarily due to lower Gross profit dollars and higher bad debt expense for expected credit losses, partially offset by lower integration expenses.
Previous report
Small Business segment Operating income increased $3 million, or 7.5%, primarily due to higher Gross profit dollars.
Previous report
Other Operating income decreased $8 million, or 25.3%, primarily due to lower Gross profit dollars and increased transformation initiative expense related to the UK operations.
Previous report
Six months ended June 30, 2024 compared with the six months ended June 30, 2023
Previous report
Corporate segment Operating income decreased $25 million, or 6.2%, primarily due to lower Gross profit dollars and higher bad debt expense for expected credit losses, partially offset by lower integration expenses.
Previous report
Small Business segment Net sales decreased $44 million, or 5.4%, primarily due to a decline across all hardware categories. Despite this decrease in Net sales, Gross profit dollars were higher primarily due to increased netted down revenue.
Previous report
Small Business segment Operating income increased $8 million, or 9.8%, primarily due to higher Gross profit dollars and lower bad debt expense for reduced expected credit losses.
Previous report
Public segment Operating income decreased $3 million, or 0.8%, primarily due to higher payroll expenses, partially offset by lower bad debt expense for reduced expected credit losses, lower integration expenses and higher Gross profit dollars.
Reworded paragraphs (40)
Previous wording
We are vendor, technology and consumption model unbiased, with a solutions portfolio including more than 100,000 products and services from more than 1,000 leading and emerging brands. Our solutions are delivered in physical, virtual and cloud-based environments through approximately 11,000 customer-facing coworkers, including sellers, highly-skilled technology specialists and advanced service delivery engineers. We are a leading sales channel partner for many original equipment manufacturers, software publishers and cloud providers (collectively, our “vendor partners”), whose products we sell or include in the solutions we offer. We provide our vendor partners with a cost-effective way to reach customers and deliver a consistent brand experience through our established end-market coverage, technical expertise and extensive customer access.
Current wording
We are vendor, technology and consumption model unbiased, with a solutions portfolio including more than 100,000 products and services from more than 1,000 leading and emerging brands. Our solutions are delivered in physical, virtual and cloud-based environments through approximately 11,200 customer-facing coworkers, including sellers, highly-skilled technology specialists and advanced service delivery engineers. We are a leading sales channel partner for many original equipment manufacturers, software publishers and cloud providers (collectively, our “vendor partners”), whose products we sell or include in the solutions we offer. We provide our vendor partners with a cost-effective way to reach customers and deliver a consistent brand experience through our established end-market coverage, technical expertise and extensive customer access.
Previous wording
•General economic conditions are a key factor affecting our results as they can impact our customers’ willingness and ability to spend on information technology. Macroeconomic uncertainty persists as a result of the current inflationary environment and corresponding heightened levels of interest rates driven by monetary policy. The uncertainty in the current economic environment resulted in, and may continue to result in, a delay, pause or reduction of investments in technology by our customers.
Current wording
•General economic conditions are a key factor affecting our results as they can impact our customers’ willingness and ability to spend on information technology. Macroeconomic uncertainty persists as a result of the inflationary environment and corresponding level of interest rates driven by monetary policy. The uncertainty in the current economic environment resulted in, and may continue to result in, a delay, pause or reduction of investments in technology by our customers.
Previous wording
•Changes in spending policies, budget priorities, timing and funding levels, including current and future stimulus packages, are key factors influencing the purchasing levels of government, healthcare and education customers. As the duration and ongoing impact of current economic conditions remain uncertain, current and future budget priorities and funding levels for government, healthcare and education customers may be adversely affected, leading to lower IT spend.
Current wording
•Changes and uncertainty related to spending policies, budget priorities, timing and funding levels, including current and future stimulus packages, are key factors influencing the purchasing levels of government, healthcare and education customers. As the duration and ongoing impact of current economic conditions remain uncertain, current and future budget priorities and funding levels for government, healthcare and education customers may be adversely affected, leading to lower IT spend.
Previous wording
(1) Defined as Net sales divided by the number of selling days. There were 64 selling days for both the three months ended June 30, 2024 and 2023. There were 128 selling days for both the six months ended June 30, 2024 and 2023.
Current wording
(1)Defined as Net sales divided by the number of selling days. There were 64 and 63 selling days for the three months ended September 30, 2024 and 2023, respectively. There were 192 and 191 selling days for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
(1) Defined as total debt minus Cash and cash equivalents.
Current wording
(1)Defined as total debt minus Cash and cash equivalents and Short-term investments.
Previous wording
(2) Defined as days of sales outstanding in Accounts receivable and certain receivables due from vendors plus days of supply in Merchandise inventory minus days of purchases outstanding in Accounts payable-trade and Accounts payable-inventory financing, based on a rolling three-month average.
Current wording
(2)Defined as days of sales outstanding in Accounts receivable and certain receivables due from vendors plus days of supply in Merchandise inventory minus days of purchases outstanding in Accounts payable-trade and Accounts payable-inventory financing, based on a rolling three-month average.
Previous wording
(3) Defined as Net cash provided by operating activities less Capital expenditures, adjusted to include cash flows from financing activities that relate to the purchase of inventory.
Current wording
(3)Defined as Net cash provided by operating activities less Capital expenditures, adjusted to include cash flows from financing activities that relate to the purchase of inventory.
Previous wording
Results of operations, including Gross profit margin and Operating income margin, expressed as Gross profit and Operating income as a percentage of Net sales, respectively, for the three and six months ended June 30, 2024 and 2023 are below. For additional information on Net sales and Operating income by segment, see the “Segment Results of Operations.”
Current wording
Results of operations, including Gross profit margin and Operating income margin, expressed as Gross profit and Operating income as a percentage of Net sales, respectively, for the three and nine months ended September 30, 2024 and 2023 are below. For additional information on Net sales and Operating income by segment, see the “Segment Results of Operations.”
Previous wording
Net sales decreased $433 million, or 4.0%, with lower Net sales across all operating segments. Continued economic uncertainty and the complex technology landscape has led customers to be cautious and measured in their approach to technology spending, leading to a decline in Net sales.
Current wording
Net sales decreased $112 million, or 2.0%, with lower Net sales in the Public and Corporate segments, partially offset by UK and Canadian operations. The decrease was primarily due to a decrease in netcomm products, partially offset by an increase in notebooks/mobile devices. Continued economic uncertainty and the complex technology landscape has led customers to be cautious and measured in their approach to technology spending, leading to a decline in Net sales.
Previous wording
Interest expense, net includes interest expense and interest income. Interest expense, net decreased $6 million, or 10.1%, primarily due to increased interest income earned on higher average cash balances and decreased interest expense on lower debt levels.
Current wording
Interest expense, net includes interest expense and interest income. Interest expense, net decreased $3 million, or 5.2%, primarily due to increased interest income earned on higher average cash balances, partially offset by increased interest expense on higher debt levels.
Previous wording
Income tax expense increased $8 million, or 8.6%. The effective tax rate, expressed by calculating the income tax expense as a percentage of Income before income taxes, was 26.0% and 25.7% for the three months ended June 30, 2024 and 2023, respectively. The increase in the effective tax rate was primarily attributable to lower excess tax benefits on equity-based compensation.
Current wording
Income tax expense increased $7 million, or 6.6%. The effective tax rate, expressed by calculating income tax expense as a percentage of Income before income taxes, was 26.0% and 24.8% for the three months ended September 30, 2024 and 2023, respectively. The increase in the effective tax rate was primarily attributable to lower excess tax benefits on equity-based compensation.
Previous wording
Net sales decreased $203 million, or 3.6%, with lower Net sales across all operating segments. Continued economic uncertainty and the complex technology landscape has led customers to be cautious and measured in their approach to technology spending, leading to a decline in Net sales.
Current wording
Net sales decreased $545 million, or 3.3%, with lower Net sales across all operating segments. The decrease was primarily due to a decrease in netcomm and collaboration products, partially offset by an increase in notebooks/mobile devices. Continued economic uncertainty and the complex technology landscape has led customers to be cautious and measured in their approach to technology spending, leading to a decline in Net sales.
Previous wording
Gross profit decreased $25 million, or 1.1%. Gross profit margin, expressed as Gross profit as a percentage of Net sales, increased 60 basis points primarily driven by a higher contribution of netted down revenue, primarily software as a service, partially offset by an increased mix into notebooks/mobile devices.
Current wording
Gross profit decreased $52 million, or 1.5%. Gross profit margin, expressed as Gross profit as a percentage of Net sales, increased 40 basis points primarily driven by a higher contribution of netted down revenue, primarily software as a service, partially offset by an increased mix into notebooks/mobile devices.
Previous wording
Selling and administrative expenses decreased $18 million, or 1.2%, primarily due to lower workplace optimization costs, partially offset by increased transformation and other related costs.
Current wording
Selling and administrative expenses decreased $48 million, or 2.1%, primarily due to lower performance-based compensation, including equity-based compensation, consistent with lower attainment against certain financial measures, and lower workplace optimization costs, partially offset by increased transformation and other related costs.
Previous wording
Interest expense, net, decreased $12 million, or 10.6%, primarily due to increased interest income earned on higher average cash balances and decreased interest expense on lower debt levels, partially offset by a higher variable interest rate on the senior unsecured term loan.
Current wording
Interest expense, net decreased $15 million, or 8.8%, primarily due to increased interest income earned on higher average cash balances and decreased interest expense on lower average debt levels during 2024, partially offset by higher variable interest rate on the senior unsecured term loan.
Previous wording
Net sales by segment, in dollars and as a percentage of total Net sales, and the year-over-year dollar and percentage change in Net sales by segment are as follows:
Current wording
Net sales by segment, in dollars and as a percentage of total Net sales, and the year-over-year dollar, percentage and average daily sales percentage change in Net sales by segment are as follows:
Previous wording
(1)There were 64 selling days for both the three months ended June 30, 2024 and 2023. There were 128 selling days for both the six months ended June 30, 2024 and 2023. Average daily sales is defined as Net sales divided by the number of selling days.
Current wording
(1)There were 64 and 63 selling days for the three months ended September 30, 2024 and 2023, respectively. There were 192 and 191 selling days for the nine months ended September 30, 2024 and 2023, respectively. Average daily sales is defined as Net sales divided by the number of selling days.
Previous wording
Corporate segment Net sales decreased $118 million, or 2.6%, primarily due to a decrease in netcomm products, partially offset by an increase in notebooks/mobile devices. As a result, Gross profit dollars also decreased although partially offset by increased netted down revenue.
Current wording
Corporate segment Net sales decreased $65 million, or 2.9%, primarily due to a decrease in netcomm products, partially offset by an increase in notebooks/mobile devices. As a result, Gross profit dollars also decreased.
Previous wording
Public segment Net sales decreased $52 million, or 2.3%, with lower Net sales across various categories, primarily driven by a decrease in netcomm products across all sales channels and collaboration hardware within the Education sales channel, partially offset by an increase in notebooks/mobile devices within the Education sales channel and services within the Government sales channel. Despite this decrease in Net sales, Gross profit dollars were higher due to increased netted down revenue.
Current wording
Public segment Net sales decreased $86 million, or 3.6%, primarily due to a decrease across various hardware categories. Most notably, netcomm products decreased within the Healthcare and Education sales channels, data storage and servers decreased within the Government sales channel and various other hardware products decreased across all sales channels. These decreases were partially offset by an increase in notebooks/mobile devices within the Education and Healthcare sales channels. As a result, Gross profit dollars decreased although partially offset by increased netted down revenue.
Previous wording
Net sales in Other, which is comprised of results from our UK and Canadian operations, decreased $132 million, or 9.7%, primarily due to a decrease in software related to the UK operations and a decrease across various hardware categories within UK and Canadian operations, resulting in lower Gross profit dollars.
Current wording
Net sales in Other, which is comprised of results from our UK and Canadian operations, increased $39 million, or 6.4%, primarily due to an increase in data storage and servers and services related to UK and Canadian operations. As a result, Gross profit dollars also increased.
Previous wording
Public segment Operating income decreased $1 million, or 0.5%, primarily due to higher payroll expenses, partially offset by higher Gross profit dollars.
Current wording
Other Operating income increased $2 million, or 7.3%, primarily due to higher Gross profit dollars, partially offset by higher payroll expenses and increased transformation and other related costs.
Previous wording
Corporate segment Net sales decreased $50 million, or 2.2%, primarily due to a decrease in netcomm products, partially offset by an increase in notebooks/mobile devices. As a result, Gross profit dollars also decreased although partially offset by increased netted down revenue.
Current wording
Corporate segment Net sales decreased $183 million, or 2.7%, primarily due to a decrease in netcomm products, partially offset by an increase in notebooks/mobile devices. As a result, Gross profit dollars decreased although partially offset by increased netted down revenue.
Previous wording
Small Business segment Net sales decreased $13 million, or 3.4%, primarily due to a decline across all hardware categories and software, partially offset by services. Despite this decrease in Net sales, Gross profit dollars were higher primarily due to increased netted down revenue.
Current wording
Small Business segment Net sales decreased $43 million, or 3.6%, primarily due to a decline across all hardware categories, partially offset by an increase in services. As a result, Gross profit dollars decreased although partially offset by increased netted down revenue.
Previous wording
Public segment Net sales decreased $140 million, or 3.4%, primarily due to a decrease in netcomm products across all sales channels and collaboration hardware within the Education sales channel, partially offset by increase in notebooks/mobile devices across all sales channels. Despite this decrease in Net sales, Gross profit dollars were higher due to increased netted down revenue.
Current wording
Public segment Net sales decreased $226 million, or 3.5%, primarily due to a decrease across various hardware categories. Most notably, netcomm products decreased across all sales channels and collaboration products decreased within the Education sales channel, partially offset by an increase in notebooks/mobile devices across all sales channels. As a result, Gross profit dollars decreased although partially offset by increased netted down revenue.
Previous wording
Net sales in Other, which is comprised of results from our UK and Canadian operations, decreased $88 million, or 12.7%, primarily due to a decrease across various hardware categories and software related to UK operations, resulting in a decrease in Gross profit dollars.
Current wording
Net sales in Other, which is comprised of results from our UK and Canadian operations, decreased $93 million, or 4.7%, primarily due to a decrease in software related to the UK operations. As a result, Gross profit dollars decreased although partially offset by increased netted down revenue.
Previous wording
Other Operating income decreased $19 million, or 28.2%, primarily due to lower Gross profit dollars, increased transformation initiative expense and less favorable bad debt expense for expected credit losses.
Current wording
Other Operating income decreased $17 million, or 17.3%, primarily due to increased transformation initiative expense and less favorable bad debt expense for expected credit losses.
Previous wording
We have included reconciliations of our non-GAAP financial measures to the most comparable US GAAP financial measures for the three and six months ended June 30, 2024 and 2023 below.
Current wording
We have included reconciliations of our non-GAAP financial measures to the most comparable US GAAP financial measures for the three and nine months ended September 30, 2024 and 2023 below.
Previous wording
(1)There were 64 selling days for both the three months ended June 30, 2024 and 2023. There were 128 selling days for both the six months ended June 30, 2024 and 2023. Average daily sales is defined as Net sales divided by the number of selling days.
Current wording
(1)There were 64 and 63 selling days for the three months ended September 30, 2024 and 2023, respectively. There were 192 and 191 selling days for the nine months ended September 30, 2024 and 2023, respectively. Average daily sales is defined as Net sales divided by the number of selling days.
Previous wording
We finance our operations and capital expenditures with cash from operations and borrowings under our variable rate senior unsecured revolving loan facility (the “Revolving Loan Facility”). As of June 30, 2024, we had $1.2 billion of availability for borrowings under our Revolving Loan Facility. Our liquidity and borrowing plans are established to align with our financial and strategic planning processes and ensure we have the necessary funding to meet our operating commitments, which primarily include the purchase of inventory, payroll and general expenses. We also take into consideration our overall capital allocation strategy, which includes dividend payments, assessment of debt levels, acquisitions and share repurchases. We believe we have adequate sources of liquidity and funding available for at least the next year; however, there are a number of factors that may negatively impact our available sources of funds. The amount of cash generated from operations will be dependent upon factors such as the successful execution of our business plan, general economic conditions and working capital management.
Current wording
We finance our operations and capital expenditures with cash from operations and borrowings under our variable rate senior unsecured revolving loan facility (the “Revolving Loan Facility”). As of September 30, 2024, we had $1.3 billion of availability for borrowings under our Revolving Loan Facility. Our liquidity and borrowing plans are established to align with our financial and strategic planning processes and ensure we have the necessary funding to meet our operating commitments, which primarily include the purchase of inventory, payroll and general expenses. We also take into consideration our overall capital allocation strategy, which includes dividend payments, assessment of debt levels, acquisitions and share repurchases. We believe we have adequate sources of liquidity and funding available for at least the next year; however, there are a number of factors that may negatively impact our available sources of funds. The amount of cash generated from operations will be dependent upon factors such as the successful execution of our business plan, general economic conditions and working capital management.
Previous wording
As of June 30, 2024, we had total unsecured indebtedness of $5.6 billion, and we were in compliance with the covenants under our credit agreements and indentures.
Current wording
As of September 30, 2024, we had total unsecured indebtedness of $6.0 billion, and we were in compliance with the covenants under our credit agreements and indentures.
Previous wording
We may from time to time repurchase one or more series of our outstanding unsecured senior notes, depending on market conditions, contractual commitments, our capital needs and other factors. Repurchases of our senior notes may be made by open market or privately negotiated transactions and may be pursuant to Rule 10b5-1 plans or otherwise.
Current wording
We may from time to time repurchase one or more series of our outstanding unsecured senior notes, depending on market conditions, contractual commitments, our capital needs and other factors. Repurchases of our senior notes may be made by open market or privately negotiated transactions and may be pursuant to Rule 10b5-1 plans or otherwise. On October 7, 2024, we redeemed the remaining outstanding 5.500% Senior Notes due 2024, which were scheduled to mature on December 1, 2024, at par for $184 million.
Previous wording
During the six months ended June 30, 2024, we repurchased 1.1 million shares of our common stock for $254 million under the previously announced share repurchase program. For additional information on our share repurchase program, see “Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds.”
Current wording
During the nine months ended September 30, 2024, we repurchased 1.6 million shares of our common stock for $354 million under the previously announced share repurchase program. For additional information on our share repurchase program, see “Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds.”
Previous wording
On July 31, 2024, we announced that our Board of Directors declared a quarterly cash dividend on our common stock of $0.620 per share. The dividend will be paid on September 10, 2024 to all stockholders of record as of the close of business on August 26, 2024.
Current wording
On October 30, 2024, we announced that our Board of Directors declared a quarterly cash dividend on our common stock of $0.625 per share. The dividend will be paid on December 10, 2024 to all stockholders of record as of the close of business on November 25, 2024.
Previous wording
(2)The change is primarily due to timing of collections, including multi-year transactions, partially offset by lower sales activity.
Current wording
(2)The change is primarily due to timing of collections, including multi-year transactions.
Previous wording
(3)The change is primarily due to strategic and customer-driven stocking positions.
Current wording
(3)The change is primarily due to customer-driven stocking positions.
Previous wording
(4)The change is primarily due to timing of payments, partially offset by lower sales activity.
Current wording
(4)The change is primarily due to timing of payments, including multi-year transactions.
Previous wording
The cash conversion cycle increased to 17 days at June 30, 2024, compared to 14 days at June 30, 2023. The overall increase was primarily driven by an increase in DSO due to timing of collections, including multi-year transactions. In addition, netted down revenue has an unfavorable impact to DSO and a favorable impact to DPO as the corresponding receivables and payables reflect the gross amounts due from customers and due to vendors while the corresponding sales and cost of sales are reflected on a net basis within Net sales.
Current wording
The cash conversion cycle increased to 17 days at September 30, 2024, compared to 15 days at September 30, 2023. The overall increase was primarily driven by an increase in DSO due to multi-year transactions and timing of collections. This was partially offset by an increase in DPO due to multi-year transactions and timing of payments. Netted down revenue results in an increase to both DSO and DPO as the corresponding receivables and payables reflect the gross amounts due from customers and due to vendors while the corresponding sales and cost of sales are reflected on a net basis within Net sales.
Previous wording
Net cash used in investing activities decreased $86 million for the six months ended June 30, 2024 compared to June 30, 2023. This decrease was primarily due to cash flows for acquisitions in 2023.
Current wording
Net cash used in investing activities increased $110 million for the nine months ended September 30, 2024 compared to September 30, 2023. This increase was primarily due to purchases of short-term investments with no similar activity in the prior year, partially offset by cash flows for acquisitions in 2023.
Previous wording
Net cash used in financing activities decreased $110 million for the six months ended June 30, 2024 compared to June 30, 2023. This decrease was primarily driven by lower share repurchases and lower repayments on debt, partially offset by decreased activity associated with inventory financing arrangements. For additional information regarding the inventory financing agreements and debt activities, see Note 4 (Inventory Financing Agreements) and Note 6 (Debt) to the accompanying Consolidated Financial Statements.
Current wording
Net cash used in financing activities decreased $469 million for the nine months ended September 30, 2024 compared to September 30, 2023. This decrease was primarily driven by the Notes issuance and lower share repurchases, partially offset by the payments related to the settlement on the cash tender offer and decreased activity associated with inventory financing arrangements. For additional information regarding the inventory financing agreements, see Note 4 (Inventory Financing Agreements) and for debt activities, see Note 5 (Debt) to the accompanying Consolidated Financial Statements.
Previous wording
The following tables set forth Balance Sheet information as of June 30, 2024 and December 31, 2023, and Statement of Operations information for the six months ended June 30, 2024 and for the year ended December 31, 2023. The financial information includes the accounts of the Issuers and the accounts of the Guarantors (the “Obligor Group”). The financial information of the Obligor Group is presented on a combined basis and the intercompany balances and transactions between the Obligor Group have been eliminated.
Current wording
The following tables set forth Balance Sheet information as of September 30, 2024 and December 31, 2023, and Statement of Operations information for the nine months ended September 30, 2024 and for the year ended December 31, 2023. The financial information includes the accounts of the Issuers and the accounts of the Guarantors (the “Obligor Group”). The financial information of the Obligor Group is presented on a combined basis and the intercompany balances and transactions between the Obligor Group have been eliminated.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Income tax expense increased $9 million, or 3.4%. The effective tax rate was 24.9% and 24.4% for the nine months ended September 30, 2024 and 2023, respectively. The increase in the effective tax rate was primarily attributable to lower excess tax benefits on equity-based compensation.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Gross profit increased $2 million, or 0.1%. Gross profit margin, expressed as Gross profit as a percentage of Net sales, increased 80 basis points primarily due to a higher contribution of netted down revenue, primarily software as a service, partially offset by an increased mix into notebooks/mobile devices.