IT solutions provider Connection (NASDAQ:CNXN) reported Q2 CY2026 results topping the market’s revenue expectations, with sales up 12.4% year on year to $854 million. Its non-GAAP profit of $1.31 per share was 26% above analysts’ consensus estimates.
Is now the time to buy Connection? Find out by accessing our full research report, it’s free.
Connection (CNXN) Q2 CY2026 Highlights:
- Revenue: $854 million vs analyst estimates of $767.6 million (12.4% year-on-year growth, 11.3% beat)
- Adjusted EPS: $1.31 vs analyst estimates of $1.04 (26% beat)
- Adjusted EBITDA: $48.4 million vs analyst estimates of $34.86 million (5.7% margin, 38.8% beat)
- Operating Margin: 5%, in line with the same quarter last year
- Free Cash Flow was -$65.74 million, down from $24.64 million in the same quarter last year
- Market Capitalization: $2.10 billion
"Our record financial performance reflects more than strong execution—it reflects the value that our customers are placing on their enterprise technology," said Timothy McGrath, President and Chief Executive Officer.
Company Overview
Starting as a small computer products seller in 1982 and evolving into a Fortune 1000 company, Connection (NASDAQ:CNXN) is a technology solutions provider that helps businesses and government agencies design, purchase, implement, and manage their IT infrastructure and systems.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years.
With $2.99 billion in revenue over the past 12 months, Connection is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale.
As you can see below, Connection grew its sales at a sluggish 2.3% compounded annual growth rate over the last five years. This shows it failed to generate demand in any major way and is a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Connection’s annualized revenue growth of 4.1% over the last two years is above its five-year trend, which is encouraging. 
This quarter, Connection reported year-on-year revenue growth of 12.4%, and its $854 million of revenue exceeded Wall Street’s estimates by 11.3%.
Looking ahead, sell-side analysts expect revenue to grow 2.4% over the next 12 months, a slight deceleration versus the last two years. This projection doesn’t excite us and indicates its products and services will see some demand headwinds.
ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable.
These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.
Adjusted Operating Margin
Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.
Connection’s adjusted operating margin has more or less stayed the same over the last 12 months , averaging 3.9% over the last five years. This profitability was lousy for a business services business and caused by its suboptimal cost structure.
Looking at the trend in its profitability, Connection’s adjusted operating margin might have fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
In Q2, Connection generated an adjusted operating margin profit margin of 5.3%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Connection’s EPS grew at 11.4% compounded annual growth rate over the last five years, higher than its 2.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Connection, its two-year annual EPS growth of 8.4% was lower than its five-year trend. We hope its growth can accelerate in the future.
In Q2, Connection reported adjusted EPS of $1.31, up from $0.97 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Connection’s full-year EPS to stay about the same, moving from $3.96 to $3.99.
Key Takeaways from Connection’s Q2 Results
It was good to see Connection beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock remained flat at $83.16 immediately following the results.
Should you buy the stock or not? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).