CNXN | Market Cap: $2.0B (07/13/26)
Industry:
Hardware

DESCRIPTION

Connection is a U.S. IT products and solutions reseller, selling hardware, software, and services to businesses, governments, and educational institutions. Connection offers over 460,000 products from more than 1,600 vendors — including Microsoft, HP, Dell, Apple, Cisco, and Lenovo — and positions itself as a one-stop procurement source for IT buyers. The company sells primarily through dedicated account managers who manage long-term relationships with named accounts, supplemented by e-commerce via customized web portals. Connection also operates a Technology Integration and Distribution Center in Wilmington, Ohio, where it performs custom configuration, imaging, and kitting. Connection operates through three segments: Enterprise Solutions (~44% of revenue), Business Solutions serving SMBs (~38%), and Public Sector Solutions (~18%). The company makes money on the spread between what it pays for IT products and services and what it charges customers. Product mix is the key driver of profitability: hardware carries low margins, while cloud, cybersecurity, and managed services carry higher margins and are recognized on a net basis, so revenue and gross profit can move in opposite directions when mix shifts. Beyond product resale, Connection is pushing into higher-value cloud (particularly Azure), cybersecurity, data center modernization, and AI infrastructure services under its CNXN Helix initiative. Connection carries a strong balance sheet and returns capital primarily through share repurchases and dividends.

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