PC CONNECTION INC 10-Q

PC CONNECTION, INC._June 30, 2025 Table of Contents b UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934* For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 0-23827 PC CONNECTION, INC. (Exact name of registrant as specified in its charter) ​ ​ Delaware 02-0513618 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) ​ ​ ​ ​ ​ 730 Milford Road ​ Merrimack , New Hampshire 03054 (Address of principal executive offices) (Zip Code) ​ ​ ​ ​ ​ ​ ( 603 ) 683-2000 ​ ​ (Registrant's telephone number, including area code) ​ Former name, former address and former fiscal year, if changed since last report: N/A ​ Securities registered pursuant to Section 12(b) of the Act: C Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value CNXN Nasdaq Global Select Market ​ Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ​ ​ ​ ​ Large accelerated filer ☑ ​ Accelerated filer ☐ ​ Non-accelerated filer ☐ ​ Smaller reporting company ☐ ​ ​ ​ Emerging growth company ☐ ​ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻ ​ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑ The number of shares outstanding of the issuer’s common stock as of July 23, 2025 was 25,389,003 . ​ Table of Contents PC CONNECTION, INC. AND SUBSIDIARIES FORM 10-Q TABLE OF CONTENTS ​ ​ ​ ​ PART I FINANCIAL INFORMATION ​ ​ ​ ​ ​ ​ Page ITEM 1. Unaudited Condensed Consolidated Financial Statements: ​ ​ ​ ​ ​ Condensed Consolidated Balance Sheets–June 30, 2025 and December 31, 2024 1 ​ ​ ​ ​ Condensed Consolidated Statements of Income–Three and Six Months Ended June 30, 2025 and 2024 2 ​ ​ ​ ​ Condensed Consolidated Statements of Other Comprehensive Income–Three and Six Months Ended June 30, 2025 and 2024 3 ​ ​ ​ ​ Condensed Consolidated Statements of Stockholders’ Equity–Three and Six Months Ended June 30, 2025 and 2024 4 ​ ​ ​ ​ Condensed Consolidated Statements of Cash Flows–Three and Six Months Ended June 30, 2025 and 2024 6 ​ ​ ​ ​ Notes to Unaudited Condensed Consolidated Financial Statements 7 ​ ​ ​ ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 17 ​ ​ ​ ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 28 ​ ​ ​ ITEM 4. Controls and Procedures 28 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PART II OTHER INFORMATION ​ ​ ​ ​ ITEM 1 . Legal Proceedings 30 ​ ​ ​ ITEM 1A . Risk Factors 30 ​ ​ ​ ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 30 ​ ​ ​ ITE M 5. Other Information 30 ​ ​ ​ ITEM 6 . Exhibits 31 ​ ​ ​ SIGNATURES 32 ​ ​ ​ ​ ​ ​ Table of Contents PART I ― FINANCIAL INFORMATION Item 1. Financial Statements ​ ​ PC CONNECTION, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET S (Unaudited) (amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2025 2024 ASSETS ​ ​ ​ ​ ​ ​ Current Assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 186,744 ​ $ 178,318 Short-term investments ​ ​ 159,350 ​ ​ 264,295 Accounts receivable, net ​ 637,037 ​ 611,433 Inventories, net ​ 133,487 ​ 95,054 Prepaid expenses and other current assets ​ 22,449 ​ 17,750 Total current assets ​ 1,139,067 ​ 1,166,850 Property and equipment, net ​ 48,267 ​ 52,520 Right-of-use assets ​ ​ 2,219 ​ ​ 3,077 Goodwill ​ 73,602 ​ 73,602 Intangibles, net ​ 1,599 ​ 2,209 Other assets ​ 4,523 ​ 1,096 Total Assets ​ $ 1,269,277 ​ $ 1,299,354 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Current Liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 303,756 ​ $ 300,242 Accrued payroll ​ 23,444 ​ 23,330 Accrued expenses and other liabilities ​ 41,076 ​ 47,633 Total current liabilities ​ 368,276 ​ 371,205 Deferred income taxes ​ 15,031 ​ 15,091 Non-current operating lease liabilities ​ ​ 634 ​ ​ 1,552 Other liabilities ​ 516 ​ 516 Total Liabilities ​ 384,457 ​ 388,364 Stockholders’ Equity: ​ ​ ​ ​ ​ ​ Common stock ​ 294 ​ 294 Additional paid-in capital ​ 141,406 ​ 137,036 Retained earnings ​ 868,016 ​ 837,466 Accumulated other comprehensive (loss) income ​ ​ ( 53 ) ​ ​ 174 Treasury stock, at cost ​ ​ ( 124,843 ) ​ ​ ( 63,980 ) Total Stockholders’ Equity ​ 884,820 ​ 910,990 Total Liabilities and Stockholders’ Equity ​ $ 1,269,277 ​ $ 1,299,354 ​ ​ ​ See notes to unaudited condensed consolidated financial statements. 1 Table of Contents PC CONNECTION, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOM E (Unaudited) (amounts in thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 30, ​ June 30, ​ 2025 2024 2025 2024 Net sales ​ $ 759,693 ​ $ 736,479 ​ $ 1,460,739 ​ $ 1,368,504 Cost of sales ​ 621,927 ​ 599,937 ​ 1,195,662 ​ 1,113,890 Gross profit ​ 137,766 ​ 136,542 ​ 265,077 ​ 254,614 Selling, general and administrative expenses ​ 106,869 ​ 105,208 ​ 216,728 ​ 209,816 Severance expenses ​ ​ — ​ ​ 415 ​ ​ 2,930 ​ ​ 415 Income from operations ​ 30,897 ​ 30,919 ​ 45,419 ​ 44,383 Interest income, net ​ 3,216 ​ 4,649 ​ 7,116 ​ 9,216 Other income ​ — ​ — ​ 76 ​ — Income before taxes ​ 34,113 ​ 35,568 ​ 52,611 ​ 53,599 Income tax provision ​ ( 9,324 ) ​ ( 9,407 ) ​ ( 14,341 ) ​ ( 14,284 ) Net income ​ $ 24,789 ​ $ 26,161 ​ $ 38,270 ​ $ 39,315 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per common share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.98 ​ $ 0.99 ​ $ 1.49 ​ $ 1.49 Diluted ​ $ 0.97 ​ $ 0.99 ​ $ 1.48 ​ $ 1.48 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares used in computation of earnings per common share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ 25,405 ​ 26,348 ​ 25,739 ​ 26,355 Diluted ​ 25,520 ​ 26,520 ​ 25,860 ​ 26,522 ​ ​ ​ See notes to unaudited condensed consolidated financial statements. 2 Table of Contents PC CONNECTION, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (Unaudited) (amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 30, ​ June 30, ​ 2025 2024 2025 2024 Net income ​ $ 24,789 ​ $ 26,161 ​ $ 38,270 ​ $ 39,315 Other comprehensive loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized losses on available-for-sale investments, net of tax of $ 30 and $ 60 for the three and six months ended June 30, 2025, respectively, and net of tax of $ 11 and $ 49 for the three and six months ended June 30, 2024, respectively ​ ( 114 ) ​ ( 41 ) ​ ( 227 ) ​ ( 184 ) Comprehensive income ​ $ 24,675 ​ $ 26,120 ​ $ 38,043 ​ $ 39,131 ​ ​ ​ ​ ​ See notes to unaudited condensed consolidated financial statements. 3 Table of Contents ​ ​ PC CONNECTION, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2025 ​ ​ Common Stock ​ Additional ​ Retained ​ Accumulated Other ​ Treasury Shares ​ ​ ​ ​ Shares Amount Paid-In Capital Earnings Comprehensive (Loss) Income Shares Amount Total Balance - March 31, 2025 29,415 ​ $ 294 ​ $ 138,725 ​ $ 847,037 $ 61 ( 3,787 ) ​ $ ( 109,142 ) ​ $ 876,975 Stock-based compensation expense — ​ — ​ 2,461 ​ — — — ​ — ​ 2,461 Restricted stock units vested 13 ​ — ​ — ​ — — — ​ — ​ — Shares withheld for taxes paid on stock awards — ​ — ​ ( 399 ) ​ — — — ​ — ​ ( 399 ) Repurchase of common stock for treasury — ​ — ​ — ​ — — ( 255 ) ​ ( 15,701 ) ​ ( 15,701 ) Issuance of common stock under Employee Stock Purchase Plan 10 ​ ​ — ​ ​ 619 ​ ​ — ​ ​ — ​ — ​ ​ — ​ 619 Dividend declaration ($ 0.15 per share) — ​ — ​ — ​ ( 3,810 ) — — ​ — ​ ( 3,810 ) Net income — ​ — ​ — ​ 24,789 — — ​ — ​ 24,789 Other comprehensive loss, net of tax ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 114 ) ​ — ​ ​ — ​ ​ ( 114 ) Balance - June 30, 2025 29,438 ​ $ 294 ​ $ 141,406 ​ $ 868,016 $ ( 53 ) ( 4,042 ) ​ $ ( 124,843 ) ​ $ 884,820 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2024 ​ ​ Common Stock ​ Additional ​ Retained ​ Accumulated Other ​ Treasury Shares ​ ​ ​ ​ Shares Amount Paid-In Capital Earnings Comprehensive (Loss) Income Shares Amount Total Balance - March 31, 2024 29,271 ​ $ 293 ​ $ 132,596 ​ $ 771,416 $ ( 62 ) ( 2,905 ) ​ $ ( 51,571 ) ​ $ 852,672 Stock-based compensation expense ​ — ​ ​ — ​ ​ 2,248 ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ 2,248 Restricted stock units vested 14 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ — Shares withheld for taxes paid on stock awards — ​ ​ — ​ ​ ( 414 ) ​ ​ — ​ ​ — ​ — ​ ​ — ​ ( 414 ) Repurchase of common stock for treasury — ​ — ​ — ​ — — ( 57 ) ​ ( 3,600 ) ​ ( 3,600 ) Issuance of common stock under Employee Stock Purchase Plan 9 ​ ​ — ​ ​ 537 ​ ​ — ​ ​ — ​ — ​ ​ — ​ 537 Dividend declaration ($ 0.10 per share) — ​ — ​ — ​ ( 2,635 ) — — ​ — ​ ( 2,635 ) Net income — ​ — ​ — ​ 26,161 — — ​ — ​ 26,161 Other comprehensive loss, net of tax — ​ — ​ — ​ — ( 41 ) — ​ — ​ ( 41 ) Balance - June 30, 2024 29,294 ​ $ 293 ​ $ 134,967 ​ $ 794,942 $ ( 103 ) ( 2,962 ) ​ $ ( 55,171 ) ​ $ 874,928 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See notes to unaudited condensed consolidated financial statements. 4 Table of Contents ​ ​ Six Months Ended June 30, 2025 ​ ​ Common Stock ​ Additional ​ Retained ​ Accumulated Other ​ Treasury Shares ​ ​ ​ ​ Shares Amount Paid-In Capital Earnings Comprehensive (Loss) Income Shares Amount Total Balance - December 31, 2024 29,390 ​ $ 294 ​ $ 137,036 ​ $ 837,466 $ 174 ( 3,090 ) ​ $ ( 63,980 ) ​ $ 910,990 Stock-based compensation expense — ​ — ​ 4,669 ​ — — — ​ — ​ 4,669 Restricted stock units vested 38 ​ — ​ — ​ — — — ​ — ​ — Shares withheld for taxes paid on stock awards — ​ — ​ ( 918 ) ​ — — — ​ — ​ ( 918 ) Repurchase of common stock for treasury — ​ — ​ — ​ — — ( 952 ) ​ ( 60,863 ) ​ ( 60,863 ) Issuance of common stock under Employee Stock Purchase Plan 10 ​ — ​ 619 ​ ​ — ​ ​ — ​ — ​ ​ — ​ 619 Dividend declaration ($ 0.15 per share) — ​ — ​ — ​ ( 7,720 ) — — ​ — ​ ( 7,720 ) Net income — ​ — ​ — ​ 38,270 — — ​ — ​ 38,270 Other comprehensive loss, net of tax ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 227 ) ​ — ​ ​ — ​ ​ ( 227 ) Balance - June 30, 2025 29,438 ​ $ 294 ​ $ 141,406 ​ $ 868,016 $ ( 53 ) ( 4,042 ) ​ $ ( 124,843 ) ​ $ 884,820 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2024 ​ ​ Common Stock ​ Additional ​ Retained ​ Accumulated Other ​ Treasury Shares ​ ​ ​ ​ Shares Amount Paid-In Capital Earnings Comprehensive (Loss) Income Shares Amount Total Balance - December 31, 2023 29,262 ​ $ 293 ​ $ 130,878 ​ $ 760,898 ​ $ 81 ​ ( 2,902 ) ​ $ ( 51,383 ) ​ $ 840,767 Stock-based compensation expense ​ — ​ ​ — ​ ​ 4,197 ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ 4,197 Restricted stock units vested 23 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ — Shares withheld for taxes paid on stock awards — ​ ​ — ​ ​ ( 645 ) ​ ​ — ​ ​ — ​ — ​ ​ — ​ ( 645 ) Repurchase of common stock for treasury — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ( 60 ) ​ ​ ( 3,788 ) ​ ( 3,788 ) Issuance of common stock under Employee Stock Purchase Plan 9 ​ — ​ 537 ​ — — — ​ — ​ 537 Dividend declaration ($ 0.10 per share) — ​ — ​ — ​ ( 5,271 ) — — ​ — ​ ( 5,271 ) Net income — ​ — ​ — ​ 39,315 — — ​ — ​ 39,315 Other comprehensive loss, net of tax — ​ — ​ — ​ — ( 184 ) — ​ — ​ ( 184 ) Balance - June 30, 2024 29,294 ​ $ 293 ​ $ 134,967 ​ $ 794,942 $ ( 103 ) ( 2,962 ) ​ $ ( 55,171 ) ​ $ 874,928 ​ ​ See notes to unaudited condensed consolidated financial statements. 5 Table of Contents PC CONNECTION, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW S (Unaudited) (amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 30, ​ 2025 2024 Cash Flows (used in) provided by Operating Activities: ​ ​ ​ ​ ​ ​ Net income ​ $ 38,270 ​ $ 39,315 Adjustments to reconcile net income to net cash (used in) provided by operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 5,965 ​ 6,539 Adjustments to credit losses reserve ​ 1,058 ​ 410 Stock-based compensation expense ​ 4,669 ​ 4,197 Deferred income taxes ​ — ​ 1,623 Amortization of discount on short-term investments, net ​ ( 1,672 ) ​ ( 5,593 ) Gain on sale of short-term investments ​ ( 76 ) ​ — Loss on disposal of fixed assets ​ 20 ​ 36 Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ Accounts receivable ​ ( 26,662 ) ​ 7,598 Inventories ​ ( 38,433 ) ​ ( 12,434 ) Prepaid expenses and other current assets ​ ( 4,142 ) ​ ( 5,823 ) Other non-current assets ​ ( 1,629 ) ​ 448 Accounts payable ​ 3,368 ​ 53,172 Accrued expenses and other liabilities ​ ( 6,865 ) ​ 6,188 Net cash (used in) provided by operating activities ​ ( 26,129 ) ​ 95,676 Cash Flows provided by (used in) Investing Activities: ​ ​ ​ ​ ​ ​ Purchases of short-term investments ​ ​ ( 52,358 ) ​ ​ ( 203,278 ) Proceeds from sale of short-term investments ​ ​ 108,763 ​ ​ — Maturities of short-term investments ​ ​ 50,000 ​ ​ 103,280 Purchases of property and equipment ​ ​ ( 3,331 ) ​ ​ ( 3,427 ) Net cash provided by (used in) investing activities ​ 103,074 ​ ( 103,425 ) Cash Flows used in Financing Activities: ​ ​ ​ ​ ​ ​ Proceeds from short-term borrowings ​ 732 ​ 10,560 Repayment of short-term borrowings ​ ​ ( 732 ) ​ ​ ( 10,560 ) Purchase of common stock for treasury shares ​ ( 60,464 ) ​ ( 3,613 ) Payments for excise tax on treasury purchases ​ ( 36 ) ​ — Dividend payments ​ ( 7,720 ) ​ ( 5,271 ) Issuance of stock under Employee Stock Purchase Plan ​ ​ 619 ​ ​ 537 Payment of payroll taxes on stock-based compensation through shares withheld ​ ( 918 ) ​ ( 645 ) Net cash used in financing activities ​ ( 68,519 ) ​ ( 8,992 ) Increase (decrease) in cash and cash equivalents ​ 8,426 ​ ( 16,741 ) Cash and cash equivalents, beginning of period ​ 178,318 ​ 144,954 Cash and cash equivalents, end of period ​ $ 186,744 ​ $ 128,213 ​ ​ ​ ​ ​ ​ ​ Non-cash Investing and Financing Activities: ​ ​ ​ ​ ​ ​ Accrued purchases of property and equipment ​ $ 346 ​ $ 347 Accrued purchase of treasury shares ​ $ 66 ​ $ 211 Accrued excise tax on treasury purchases ​ $ 572 ​ $ 18 Supplemental Cash Flow Information: ​ ​ ​ ​ ​ ​ Income taxes paid ​ $ 18,171 ​ $ 17,946 Interest paid ​ $ — ​ $ 2 ​ ​ ​ ​ ​ See notes to unaudited condensed consolidated financial statements. 6 Table of Contents PC CONNECTION, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENT S (Unaudited) (amounts in thousands, except per share data) Note 1– Basis of Presentation ​ The accompanying unaudited condensed consolidated financial statements of PC Connection, Inc. and its subsidiaries, or the Company, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting and in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Such principles were applied on a basis consistent with the accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. ​ In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the interim periods reported and of the Company’s financial condition as of the date of the interim balance sheet. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. The operating results for the three and six months ended June 30, 2025 may not be indicative of the results expected for any succeeding quarter or the entire year ending December 31, 2025. ​ Certain amounts in the prior period’s condensed consolidated financial statements have been reclassified to conform with the current period presentation. ​ Use of Estimates in the Preparation of Financial Statements ​ The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts and disclosures of assets and liabilities and the reported amounts and disclosures of revenue and expenses during the period. Management bases its estimates and judgments on the information available at the time and various other assumptions believed to be reasonable under the circumstances. By nature, estimates are subject to an inherent degree of uncertainty. Actual results could differ from those estimates and assumptions. ​ Cash and Cash Equivalents and Investments ​ The Company considers all highly liquid short-term investments with original maturities of 90 days or less to be cash equivalents. The carrying value of the Company’s cash equivalents approximates fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ​ At the time of purchase, the Company determines the appropriate classification of investments based upon its intent with regard to such investments. All of the Company’s investments are classified as available-for-sale. The Company classifies investments as short-term when their remaining contractual maturities are one year or less from the balance sheet date, and as long-term when the investment has a remaining contractual maturity of more than one year from the balance sheet date. The Company records investments at fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive (loss) income on the condensed consolidated balance sheets. ​ Included in interest income, net on the condensed consolidated statements of income is interest income on cash equivalents and short-term investments of $ 3,217 and $ 7,018 for the three and six months ended June 30, 2025, respectively, and $ 4,655 and $ 9,220 for the three and six months ended June 30, 2024, respectively. ​ 7 Table of Contents Treasury Stock, at Cost ​ The total repurchases for the six months ended June 30, 2025 and 2024 were recorded as treasury stock of $ 60,863 and $ 3,788 , respectively. Such costs reflect the applicable one percent excise tax imposed by the Inflation Reduction Act of 2022 on the net value of certain stock repurchases made after December 31, 2022. ​ Severance Expenses ​ The severance expenses recorded for the six months ended June 30, 2025 and the three and six months ended June 30, 2024 were related to involuntary reductions in the Company’s workforce to lower the Company’s cost structure and included cash severance and other related termination benefits. The majority of these costs are expected to be paid within a year of the applicable termination. Included in accrued expenses and other liabilities on the condensed consolidated balance sheets as of June 30, 2025 was $ 1,394 related to unpaid severance expenses. ​ Recently Issued Financial Accounting Standards ​ In December 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This guidance is intended to improve the transparency of income tax disclosures through, among other things, enhancement of the disclosure requirements within the rate reconciliation, as well as increased income tax disaggregation disclosures. This ASU is effective for the Company’s annual reporting periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statement disclosures. ​ In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . This guidance is intended to provide more detailed disclosure about certain costs and expenses presented in the income statement, including inventory purchases, employee compensation, selling expenses, and depreciation expense. This ASU is effective for the Company’s annual reporting periods beginning January 1, 2027, and for interim reporting periods beginning January 1, 2028, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. ​ Note 2–Revenue ​ The Company disaggregates revenue from its arrangements with customers by type of products and services, as it believes this method best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. ​ The following tables represent a disaggregation of revenue from arrangements with customers for the three months ended June 30, 2025 and 2024, along with the segment for each category (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2025 ​ Enterprise Solutions Business Solutions ​ Public Sector Solutions Total Notebooks/Mobility ​ $ 97,683 ​ $ 106,075 ​ $ 57,460 ​ $ 261,218 Desktops ​ ​ 57,713 ​ ​ 28,559 ​ ​ 17,020 ​ ​ 103,292 Software ​ ​ 23,389 ​ ​ 37,576 ​ ​ 7,641 ​ ​ 68,606 Servers/Storage ​ ​ 21,724 ​ ​ 34,127 ​ ​ 15,432 ​ ​ 71,283 Net/Com Products ​ ​ 23,532 ​ ​ 19,496 ​ ​ 11,368 ​ ​ 54,396 Displays and Sound ​ 30,052 ​ 23,595 ​ 13,657 ​ 67,304 Accessories ​ 44,142 ​ 24,515 ​ 10,004 ​ 78,661 Other Hardware/Services ​ 27,776 ​ 19,225 ​ 7,932 ​ 54,933 Total Net sales ​ $ 326,011 ​ $ 293,168 ​ $ 140,514 ​ $ 759,693 ​ 8 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2024 ​ Enterprise Solutions Business Solutions ​ Public Sector Solutions Total Notebooks/Mobility ​ $ 89,802 ​ $ 97,841 ​ $ 69,816 ​ $ 257,459 Desktops ​ ​ 52,680 ​ ​ 20,105 ​ ​ 12,792 ​ ​ 85,577 Software ​ ​ 21,628 ​ ​ 37,775 ​ ​ 9,571 ​ ​ 68,974 Servers/Storage ​ ​ 15,691 ​ ​ 34,056 ​ ​ 13,640 ​ ​ 63,387 Net/Com Products ​ ​ 19,107 ​ ​ 19,845 ​ ​ 14,312 ​ ​ 53,264 Displays and Sound ​ 37,265 ​ 19,981 ​ 16,745 ​ 73,991 Accessories ​ 38,645 ​ 28,663 ​ 11,470 ​ 78,778 Other Hardware/Services ​ 23,990 ​ 19,932 ​ 11,127 ​ 55,049 Total Net sales ​ $ 298,808 ​ $ 278,198 ​ $ 159,473 ​ $ 736,479 ​ The following tables represent a disaggregation of revenue from arrangements with customers for the six months ended June 30, 2025 and 2024, along with the segment for each category (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2025 ​ Enterprise Solutions Business Solutions ​ Public Sector Solutions Total Notebooks/Mobility ​ $ 185,225 ​ $ 208,421 ​ $ 125,038 ​ $ 518,684 Desktops ​ ​ 111,185 ​ ​ 52,352 ​ ​ 29,879 ​ ​ 193,416 Software ​ ​ 56,834 ​ ​ 69,762 ​ ​ 16,373 ​ ​ 142,969 Servers/Storage ​ ​ 39,626 ​ ​ 54,417 ​ ​ 27,367 ​ ​ 121,410 Net/Com Products ​ ​ 41,787 ​ 37,511 ​ ​ 21,220 ​ 100,518 Displays and Sound ​ 53,064 ​ ​ 42,903 ​ 24,199 ​ ​ 120,166 Accessories ​ 83,949 ​ 48,175 ​ 25,733 ​ 157,857 Other Hardware/Services ​ 52,344 ​ 38,012 ​ 15,363 ​ 105,719 Total Net sales ​ $ 624,014 ​ $ 551,553 ​ $ 285,172 ​ $ 1,460,739 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2024 ​ Enterprise Solutions Business Solutions ​ Public Sector Solutions Total Notebooks/Mobility ​ $ 180,033 ​ $ 189,997 ​ $ 108,698 ​ $ 478,728 Desktops ​ ​ 90,717 ​ ​ 38,223 ​ ​ 21,539 ​ ​ 150,479 Software ​ ​ 48,748 ​ ​ 68,427 ​ ​ 15,121 ​ ​ 132,296 Servers/Storage ​ ​ 28,058 ​ ​ 55,667 ​ ​ 22,146 ​ 105,871 Net/Com Products ​ ​ 39,069 ​ ​ 41,690 ​ ​ 19,917 ​ 100,676 Displays and Sound ​ 68,529 ​ 41,733 ​ 27,348 ​ ​ 137,610 Accessories ​ 80,177 ​ 59,036 ​ 19,066 ​ ​ 158,279 Other Hardware/Services ​ 46,136 ​ 39,294 ​ 19,135 ​ 104,565 Total Net sales ​ $ 581,467 ​ $ 534,067 ​ $ 252,970 ​ $ 1,368,504 ​ Contract Balances ​ The following table provides information about contract liabilities from arrangements with customers as of June 30, 2025 and December 31, 2024 (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2025 December 31, 2024 Contract liabilities, which are included in accrued expenses and other liabilities ​ $ 10,227 ​ $ 10,290 ​ 9 Table of Contents Changes in the contract liability balances during the six months ended June 30, 2025 and 2024 are as follows (in thousands): ​ ​ ​ ​ ​ 2025 Balance at December 31, 2024 ​ $ 10,290 Cash received in advance and not recognized as revenue ​ 25,180 Amounts recognized as revenue as performance obligations satisfied ​ ( 25,243 ) Balance at June 30, 2025 ​ $ 10,227 ​ ​ ​ ​ ​ ​ 2024 Balance at December 31, 2023 ​ $ 4,206 Cash received in advance and not recognized as revenue ​ 9,769 Amounts recognized as revenue as performance obligations satisfied ​ ( 6,875 ) Balance at June 30, 2024 ​ $ 7,100 ​ ​ Note 3–Fair Value Measurements ​ Cash equivalents and short-term investments as of June 30, 2025 and December 31, 2024 consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2025 ​ Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds ​ $ 169,235 ​ $ — ​ $ — ​ $ 169,235 Short-term investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government treasury securities ​ ​ 159,417 ​ ​ 1 ​ ​ ( 68 ) ​ ​ 159,350 Total ​ $ 328,652 ​ $ 1 ​ $ ( 68 ) ​ $ 328,585 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds ​ $ 161,094 ​ $ — ​ $ — ​ $ 161,094 Short-term investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Government treasury securities ​ ​ 264,074 ​ ​ 309 ​ ​ ( 88 ) ​ ​ 264,295 Total ​ $ 425,168 ​ $ 309 ​ $ ( 88 ) ​ $ 425,389 ​ Investments with maturities of 90 days or less from the date of purchase are classified as cash equivalents; investments with maturities of greater than 90 days from the date of purchase but less than one year are generally classified as short-term investments; and investments with maturities of one year or greater from the date of purchase are generally classified as long-term investments. All short-term investments had stated maturity dates of less than one year. The Company has recorded the securities at fair value on its condensed consolidated balance sheets and unrealized gains and losses are reported as a component of accumulated other comprehensive (loss) income. The amount of realized gains and losses reclassified into earnings and the related adjustments to deferred taxes are based on the specific identification of the securities sold or securities that reached maturity date. ​ 10 Table of Contents Fair Value ​ The Company measures certain financial assets at fair value. Fair value is determined based upon the exit price that would be received to sell an asset in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques are classified based on a three-level hierarchy, as follows: ​ ● Level 1 inputs: Quoted prices for identical assets or liabilities in active markets; ​ ● Level 2 inputs: Observable inputs other than those described as Level 1; and ​ ● Level 3 inputs: Unobservable inputs that are supported by little or no market activities and are based on significant assumptions and estimates. ​ As of June 30, 2025 and December 31, 2024, the fair values of the Company’s investments were all measured using level 1 inputs. ​ ​ Note 4–Earnings Per Share ​ Basic earnings per common share is computed using the weighted average number of shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributable to non-vested stock units and stock options outstanding, if dilutive. ​ The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2025 and 2024 (in thousands, except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ 2025 2024 2025 2024 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 24,789 ​ $ 26,161 ​ $ 38,270 ​ $ 39,315 Denominator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator for basic earnings per share ​ $ 25,405 ​ $ 26,348 ​ $ 25,739 ​ $ 26,355 Dilutive effect of employee stock awards ​ 115 ​ 172 ​ 121 ​ 167 Denominator for diluted earnings per share ​ $ 25,520 ​ $ 26,520 ​ $ 25,860 ​ $ 26,522 Earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.98 ​ $ 0.99 ​ $ 1.49 ​ $ 1.49 Diluted ​ $ 0.97 ​ $ 0.99 ​ $ 1.48 ​ $ 1.48 ​ For the three and six months ended June 30, 2025 and 2024, the Company had no outstanding non-vested stock units that were excluded from the computation of diluted earnings per share because including them would have had an anti-dilutive effect. ​ 11 Table of Contents Note 5 – Leases ​ The Company leases certain facilities from a related party, which is a company affiliated with it through common ownership. ​ As of June 30, 2025, there were no additional significant operating leases that have not yet commenced. Refer to the following table for quantitative information related to the Company’s leases for the three and six months ended June 30, 2025 and 2024 (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2025 Six Months Ended June 30, 2025 ​ Related Parties ​ Others ​ Total Related Parties ​ Others ​ Total Lease Cost ​ ​ ​ ​ ​ ​ Capitalized operating lease cost ​ $ — ​ $ 461 ​ $ 461 ​ $ — ​ $ 922 ​ $ 922 Short-term lease cost ​ 420 ​ 148 ​ 568 ​ 840 ​ 296 ​ 1,136 Total lease cost ​ $ 420 ​ $ 609 ​ $ 1,029 ​ $ 840 ​ $ 1,218 ​ $ 2,058 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Information ​ ​ ​ ​ ​ ​ Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating cash flows ​ $ — ​ $ 512 ​ $ 512 ​ $ — ​ $ 1,025 ​ $ 1,025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average remaining lease term (in years): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized operating leases ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ 1.63 ​ ​ 1.63 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average discount rate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized operating leases ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 0.00 % ​ ​ 4.32 % ​ ​ 4.32 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2024 Six Months Ended June 30, 2024 ​ Related Parties ​ Others ​ Total Related Parties ​ Others ​ Total Lease Cost ​ ​ ​ ​ ​ ​ Capitalized operating lease cost ​ $ — ​ $ 485 ​ $ 485 ​ $ — ​ $ 944 ​ $ 944 Short-term lease cost ​ 421 ​ 140 ​ 561 ​ 841 ​ 281 ​ 1,122 Total lease cost ​ $ 421 ​ $ 625 ​ $ 1,046 ​ $ 841 ​ $ 1,225 ​ $ 2,066 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Information ​ ​ ​ ​ ​ ​ Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating cash flows ​ $ — ​ $ 532 ​ $ 532 ​ $ — ​ $ 977 ​ $ 977 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average remaining lease term (in years): ​ ​ ​ ​ ​ ​ Capitalized operating leases ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ 2.43 ​ ​ 2.43 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average discount rate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized operating leases ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3.92 % ​ ​ 4.28 % ​ ​ 4.21 % 12 Table of Contents ​ As of June 30, 2025, future lease payments over the remaining term of capitalized operating leases were as follows (in thousands): ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ ​ 2025, excluding the six months ended June 30, 2025 ​ $ 1,037 2026 ​ 1,205 2027 ​ 237 2028 ​ 161 2029 ​ ​ — Thereafter ​ ​ — ​ ​ ​ 2,640 Imputed interest ​ ​ ( 89 ) Lease liability balance at June 30, 2025 ​ $ 2,551 ​ As of June 30, 2025, the right-of-use, or ROU, asset had a balance of $ 2,219 . The long-term lease liability was $ 634 and the short-term lease liability, which is included in accrued expenses and other liabilities on the condensed consolidated balance sheets, was $ 1,917 . As of December 31, 2024, the ROU asset had a balance of $ 3,077 . The long-term lease liability was $ 1,552 and the short-term lease liability, which is included in accrued expenses and other liabilities on the condensed consolidated balance sheets, was $ 1,805 . ​ Note 6–Accumulated Other Comprehensive (Loss) Income ​ Accumulated other comprehensive (loss) income, which is included as a component of stockholders’ equity, is comprised of unrealized gains and losses on short-term investments, net of tax. The changes in accumulated other comprehensive (loss) income were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 30, 2025 Balance - December 31, 2024 ​ $ 174 Other comprehensive loss before reclassifications, net of tax ​ ​ ( 56 ) Less amounts reclassified from accumulated other comprehensive (loss) income, net of tax ​ 171 Net other comprehensive loss ​ ​ ( 227 ) Balance - June 30, 2025 ​ $ ( 53 ) ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 30, 2024 Balance - December 31, 2023 ​ $ 81 Other comprehensive loss before reclassifications, net of tax ​ ​ ( 158 ) Less amounts reclassified from accumulated other comprehensive (loss) income, net of tax ​ 26 Net other comprehensive loss ​ ​ ( 184 ) Balance - June 30, 2024 ​ $ ( 103 ) ​ Included in amounts reclassified from accumulated other comprehensive (loss) income, net of tax for the six months ended June 30, 2025 is $ 76 of realized gain, which is included in “Other income” on the unaudited condensed consolidated statements of income. ​ Note 7–Segment Information ​ The internal reporting structure used by the Company’s chief operating decision maker, or CODM, to assess performance and allocate resources determines the basis for the Company’s operating segments. The Company’s operations are organized under three reporting segments—the Enterprise Solutions segment, which serves primarily medium-to-large corporations; the Business Solutions segment, which serves primarily small- to medium-sized businesses; and the Public Sector Solutions segment, which serves primarily federal, state, and local government and educational institutions. In addition, the Headquarters/Other provides services in areas such as finance, human resources, IT, marketing, and product management. Most of the operating costs associated with the Headquarters/Other functions are charged to the operating segments based on their estimated usage of the underlying functions. The Company reports 13 Table of Contents these charges to the operating segments as “Allocations”. Headquarters/Other amounts that are not allocated to the operating segments are shown as reconciling items in the tables below. ​ The Company’s CODM is its Chief Executive Officer, and he assesses the segments’ performance by using each segments’ operating income (which includes certain corporate overhead allocations attributable to each of the segments). Net sales presented below exclude inter-segment product revenues. The CODM uses operating income for each segment in the annual budget, periodic forecasting, and quarterly results processes. ​ Segment information applicable to the Company’s operating segments and the related reconciliations to consolidated amounts for the three and six months ended June 30, 2025 and 2024 are shown below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2025 ​ ​ Enterprise Solutions Business Solutions ​ Public Sector Solutions Total Net sales $ 326,011 ​ $ 293,168 ​ $ 140,514 ​ $ 759,693 Cost of sales ​ 278,389 ​ 224,319 ​ 119,219 ​ ​ ​ Personnel costs ​ 16,995 ​ 17,662 ​ 9,273 ​ ​ ​ Marketing ​ ​ 787 ​ ​ 2,564 ​ ​ 575 ​ ​ ​ Allocated corporate overhead ​ ​ 18,069 ​ ​ 21,521 ​ ​ 10,761 ​ ​ ​ Depreciation and amortization ​ ​ 195 ​ ​ 155 ​ ​ 22 ​ ​ ​ Other segment expenses 1 ​ ​ 1,230 ​ ​ 1,383 ​ ​ 2,796 ​ ​ ​ Operating income (loss) ​ $ 10,346 ​ $ 25,564 ​ $ ( 2,132 ) ​ $ 33,778 Unallocated Headquarters/Other expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 2,881 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3,216 Income before taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 34,113 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2025 ​ ​ Enterprise Solutions Business Solutions ​ Public Sector Solutions Total Net sales $ 624,014 ​ $ 551,553 ​ $ 285,172 ​ $ 1,460,739 Cost of sales ​ 534,094 ​ 417,297 ​ 244,271 ​ ​ ​ Personnel costs ​ 33,165 ​ 35,437 ​ 18,859 ​ ​ ​ Marketing ​ ​ 2,884 ​ ​ 7,403 ​ ​ 1,659 ​ ​ ​ Allocated corporate overhead ​ ​ 36,359 ​ ​ 42,997 ​ ​ 21,499 ​ ​ ​ Depreciation and amortization ​ ​ 387 ​ ​ 310 ​ ​ 45 ​ ​ ​ Other segment expenses 1 ​ ​ 2,277 ​ ​ 4,128 ​ ​ 4,313 ​ ​ ​ Operating income (loss) ​ $ 14,848 ​ $ 43,981 ​ $ ( 5,474 ) ​ $ 53,355 Unallocated Headquarters/Other expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 7,936 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7,116 Other income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 76 Income before taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 52,611 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment assets ​ $ 753,931 ​ $ 591,894 ​ $ 88,650 ​ $ 1,434,475 Headquarters/Other assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 165,198 ) Consolidated assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,269,277 ​ 14 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2024 ​ ​ Enterprise Solutions Business Solutions ​ Public Sector Solutions Total Net sales $ 298,808 ​ $ 278,198 ​ $ 159,473 ​ $ 736,479 Cost of sales ​ 252,763 ​ 211,872 ​ 135,302 ​ ​ ​ Personnel costs ​ 15,346 ​ 18,124 ​ 9,370 ​ ​ ​ Marketing ​ ​ 757 ​ ​ 3,672 ​ ​ 812 ​ ​ ​ Allocated corporate overhead ​ ​ 18,433 ​ ​ 20,689 ​ ​ 10,345 ​ ​ ​ Depreciation and amortization ​ ​ 221 ​ ​ 147 ​ ​ 23 ​ ​ ​ Other segment expenses 1 ​ ​ 1,058 ​ ​ 1,465 ​ ​ 907 ​ ​ ​ Operating income ​ $ 10,230 ​ $ 22,229 ​ $ 2,714 ​ $ 35,173 Unallocated Headquarters/Other expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 4,254 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4,649 Income before taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 35,568 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2024 ​ ​ Enterprise Solutions Business Solutions ​ Public Sector Solutions Total Net sales $ 581,467 ​ $ 534,067 ​ $ 252,970 ​ $ 1,368,504 Cost of sales ​ 492,688 ​ 407,377 ​ 213,825 ​ ​ ​ Personnel costs ​ 30,815 ​ 36,087 ​ 17,661 ​ ​ ​ Marketing ​ ​ 2,644 ​ ​ 8,002 ​ ​ 1,995 ​ ​ ​ Allocated corporate overhead ​ ​ 36,815 ​ ​ 41,197 ​ ​ 20,599 ​ ​ ​ Depreciation and amortization ​ ​ 426 ​ ​ 310 ​ ​ 46 ​ ​ ​ Other segment expenses 1 ​ ​ 2,002 ​ ​ 3,076 ​ ​ 1,480 ​ ​ ​ Operating income (loss) ​ $ 16,077 ​ $ 38,018 ​ $ ( 2,636 ) ​ $ 51,459 Unallocated Headquarters/Other expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 7,076 ) Interest income, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 9,216 Income before taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 53,599 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment assets ​ $ 729,450 ​ $ 537,655 ​ $ 107,382 ​ $ 1,374,487 Headquarters/Other assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 91,002 ) Consolidated assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,283,485 ​ 1) Other segment expenses for each of the reportable segments include service contracts/subscriptions, professional fees, facilities operations, credit card fees, and other miscellaneous expenses . ​ The assets of the Company’s three operating segments presented above consist primarily of accounts receivable, net intercompany receivables, goodwill, and other intangibles, net. Assets reported under the Headquarters/Other are managed by corporate headquarters, including cash and cash equivalents, short-term investments, inventories, property and equipment, ROU assets, and intercompany balance, net. As of June 30, 2025 and 2024, total assets for the Headquarters/Other were presented net of intercompany balance eliminations of $ 46,339 and $59,751 , respectively. The Company’s capital expenditures consist largely of IT hardware and software purchased to maintain or upgrade its management information systems. These information systems serve all of the Company’s segments, to varying degrees, and accordingly, the CODM does not evaluate capital expenditures on a segment-by-segment basis. ​ Note 8–Commitments and Contingencies ​ The Company is subject to various legal proceedings and claims, which have arisen during the ordinary course of business. The outcomes of such matters are not expected to have a material, adverse effect on the Company’s financial position, results of operations, and/or cash flows. ​ The Company is subject to audits by states on sales and income taxes, employment matters, and other assessments. Additional liabilities for these and other audits could be assessed, but such outcomes are not expected to have a material, adverse impact on the Company’s financial position, results of operations, and/or cash flows. ​ 15 Table of Contents Note 9–Bank Borrowings ​ The Company previously had a $ 50,000 credit facility collateralized by its account receivables that expired March 31, 2025 that the Company elected not to renew or replace. Amounts outstanding under the credit facility bore interest at the daily Bloomberg Short-Term Bank Yield Index, or BSBY Rate, plus a spread based on the Company’s funded debt ratio, or in the absence of BSBY Rate, the prime rate ( 7.50 % at March 31, 2025). ​ Cash receipts were automatically applied against any outstanding borrowings. During the six months ended June 30, 2025 and 2024, the Company borrowed incremental amounts that were each repaid in full. These borrowings for the six months ended June 30, 2025 and 2024 totaled $ 732 and $ 10,560 , respectively; however, at no time were the outstanding borrowings greater than the $ 50,000 limit under the credit facility. The Company had no outstanding borrowings under the credit facility immediately prior to the expiration of the credit facility, or as of June 30, 2024. ​ Note 10–Supplier Finance Programs ​ The Company has agreements with third-party financial institutions, instituted by request of participating suppliers, that allow for the ability to finance payment obligations from the Company. The third-party financial institutions have separate arrangements with the Company’s suppliers and provide them with the option to request early payment for invoices confirmed by the Company. The Company does not determine the terms or conditions of the arrangements between the third-parties and its suppliers and receives no compensation from the third-party financial institutions. The Company’s obligation to its suppliers, including amounts due and scheduled payment dates, are not impacted by the suppliers’ decisions to finance amounts under the arrangements. The payment terms under these arrangements are typical with industry standards and range from 30 to 50 days . The agreements with the financial institutions are collateralized by the inventory purchased through the financing agreements. The Company’s outstanding payment obligations under the supplier finance programs, which are included in accounts payable on the condensed consolidated balance sheets, were $ 62,448 and $ 47,763 at June 30, 2025 and December 31, 2024, respectively. The rollforward of the Company’s outstanding obligations confirmed as valid under the supplier finance programs for the six months ended June 30, 2025 is as follows (in thousands): ​ ​ ​ ​ ​ ​ 2025 Confirmed obligations outstanding at December 31, 2024 ​ $ 47,763 Invoices confirmed ​ 248,813 Confirmed invoices paid ​ ( 234,128 ) Confirmed obligations outstanding at June 30, 2025 ​ $ 62,448 ​ ​ Note 11–Subsequent Events ​ The One Big Beautiful Bill Act, or OBBBA, was enacted on July 4, 2025. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through future years. We are currently assessing its impact on our consolidated financial statements. ​ ​ ​ 16 Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS ​ This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements generally relate to future events or our future financial or operating performance and include statements concerning, among other things, our future financial results, business plans (including statements regarding new products and services we may offer and future expenditures, costs and investments), liabilities, impairment charges, competition, and the expected impact of current macroeconomic conditions on our businesses and results of operations. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “would,” “should,” “expects,” “plans,” “could,” “intends,” “target,” “projects,” “believes,” “estimates,” “anticipates,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These statements reflect our current views and are based on assumptions as of the date of this report. Such assumptions are based upon internal estimates and other analyses of current market conditions and trends, management expectations, plans, and strategies, economic conditions, and other factors. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements. ​ Such differences may result from actions taken by us, including expense reduction or strategic initiatives (including reductions in force, capital investments and new or expanded product offerings or services), the execution of our business plans (including our inventory management, cost structure and management and other personnel decisions) or other business decisions, as well as from developments beyond our control, including: ​ ● macroeconomic factors facing the global economy, including disruptions in or increased volatility of the capital markets, changes in trade policy, which may include the imposition of tariffs or other trade barriers, economic sanctions and economic slowdowns or recessions, changes in tax policy, rising inflation and changing interest rates modifying our potential for investment income and the timing or reducing the level of investment our customers are willing to make in IT products; ● substantial competition reducing our market share; ● significant price competition reducing our profit margins; ● the loss of any of our major vendors adversely affecting the number or type of products we may offer; ● virtualization of information technology, or IT, resources and applications, including networks, servers, applications, and data storage disrupting or altering our traditional distribution models; ● service interruptions at third-party shippers negatively impacting our ability to deliver the products we offer to our customers; ● increases in shipping and postage costs reducing our margins and adversely affecting our results of operations; ● loss of key persons or the inability to attract, train and retain qualified personnel adversely affecting our ability to operate our business; and ● cyberattacks or the failure to safeguard personal information and our IT systems resulting in liability and harm to our reputation. Additional factors include those described in our Annual Report on Form 10-K for the year ended December 31, 2024, including under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” in our subsequent quarterly reports on Form 10-Q, including under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in the other subsequent filings we make with the Securities and Exchange Commission from time to time. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances. You should not place undue reliance on the forward-looking statements. We assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made except as required by law. Unless the context otherwise requires, we use the terms “Connection”, the “Company”, “we”, “us”, and “our” in this Quarterly Report on Form 10-Q to refer to PC Connection, Inc. and its subsidiaries. 17 Table of Contents OVERVIEW ​ We are a Fortune 1000 Global Solutions Provider that simplifies the IT customer experience, guiding the connection between people and technology. Our dedicated account managers partner with customers to design, deploy, and support cutting-edge IT environments using the latest hardware, software, and services. We provide a wide range of IT solutions, from the desktop to the cloud—including computer systems, data center solutions, software and peripheral equipment, networking communications, and other products and accessories that we purchase from manufacturers, distributors, and other suppliers. Our Technology Solutions Organization, or TSO, and state-of-the-art Technology Integration and Distribution Center with ISO 9001:2015 certified technical configuration lab offer end-to-end services related to the design, configuration, and implementation of IT solutions. Our team also provides a comprehensive portfolio of managed services and professional services. These services are performed by our personnel and by third-party providers. Our GlobalServe offering ensures worldwide coverage for our multinational customers, delivering global procurement solutions through our network of in-country suppliers in over 150 countries. ​ The “Connection®” brand includes Connection Enterprise Solutions, Connection Business Solutions, and Connection Public Sector Solutions, which provide IT solutions and services to enterprise, small- to medium-sized businesses, and public sector markets. ​ Financial results for each of our segments are included in the financial statements attached hereto. We generate sales through (i) outbound inside sales and field sales contacts by sales representatives focused on the business, educational, healthcare, retail, manufacturing, and government markets, (ii) our websites, and (iii) direct responses from customers responding to our advertising media. We offer a broad selection of over 460,000 products at competitive prices, including products from vendors like Apple, Cisco, Dell Inc., Hewlett-Packard Inc., Hewlett-Packard Enterprise, Intel, Lenovo, Microsoft Corporation, and VMware, and we partner with more than 2,500 suppliers. We are able to leverage our state-of-the art logistic capabilities to rapidly ship product to customers. ​ As a value-added reseller in the IT supply chain, we do not manufacture IT hardware or software products. We are dependent on our suppliers—manufacturers and distributors that historically have only sold to resellers rather than directly to end users. However, certain manufacturers have, on multiple occasions, sold or attempted to sell directly to our customers, and in some cases, have restricted our ability to sell their products directly to certain customers, thereby attempting to and, in some cases successfully, eliminate our role. We believe that the success of these direct sales efforts by manufacturers will depend on their ability to meet our customers’ ongoing demands and provide solutions to meet their needs. We believe more of our customers are seeking out comprehensive and integrated IT solutions, rather than the ability to acquire specific IT products on a one-off basis. Our advantage is our ability to be product-neutral and provide a broader combination of products, services, and advice tailored to our customers’ individual needs. By providing customers with customized solutions from a variety of manufacturers, we believe we can mitigate the negative impact of continued direct sales initiatives from individual manufacturers. Through the formation of our TSO, we are able to provide customers complete IT solutions, from identifying their needs, to designing, developing, and managing the integration of products and services to implement their IT projects. Such service offerings carry higher margins than traditional product sales. Additionally, the technical certifications of our service engineers permit us to offer higher-end, more complex products that generally carry higher gross margins. We expect these service offerings and technical certifications to continue to play a role in sales generation and gross margin improvements in this competitive environment. ​ The primary challenges we continue to face in effectively managing our business are (1) increasing our product and service revenues while at the same time improving our gross margin in all three segments, (2) recruiting, retaining, and improving the productivity of our sales and technical support personnel, and (3) effectively controlling our selling, general and administrative, or SG&A, expenses while making major investments in our IT systems and solution selling personnel, especially in relation to changing revenue levels. ​ To support future growth, we have invested and expect to continue to invest in our IT solutions business, which requires the addition of highly skilled service engineers. Although we expect to realize the ultimate benefit of higher-margin service revenues under this multi-year initiative, we believe that our cost of services will increase as we add additional service engineers. If our service revenues do not grow enough to offset the cost of these headcount additions, our operating results may be negatively impacted. ​ 18 Table of Contents Market conditions and technology advances significantly affect the demand for our products and services. Virtual delivery of software products and advanced Internet technology providing customers enhanced functionality have substantially increased customer expectations, requiring us to invest on an ongoing basis in our own IT infrastructure to meet these new demands. ​ Our investments in IT infrastructure are designed to enable us to operate more efficiently and provide our customers enhanced functionality. ​ The new U.S. administration has announced or imposed a series of tariffs on U.S. trading partners. In response, several countries have threatened or imposed retaliatory measures. The imposition of new tariffs or increases in existing tariffs on goods imported from countries where our suppliers operate could result in increased inventory costs. These cost increases may reduce our margins or require us to raise prices. We continue to assess the impact of the tariffs on our supply chain. In addition, these actions and threatened actions and increased volatility in financial markets may affect customer decisions about the timing or size of IT investments. ​ RESULTS OF OPERATIONS ​ The following table sets forth information derived from our statements of income expressed as a percentage of net sales for the periods indicated (dollars in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ Six Months Ended June 30, ​ ​ 2025 2024 ​ 2025 2024 Net sales ​ $ 759.7 ​ $ 736.5 ​ ​ $ 1,460.7 ​ $ 1,368.5 ​ Gross margin ​ ​ 18.1 % ​ 18.5 % ​ ​ 18.1 % ​ 18.6 % Selling, general and administrative expenses ​ 14.1 % 14.3 % ​ 14.8 % 15.3 % Income from operations ​ 4.1 % 4.2 % ​ 3.1 % 3.2 % ​ Net sales of $759.7 million for the second quarter of 2025 reflect an increase of $23.2 million, or 3.2% compared to the second quarter of 2024. The increase was primarily driven by increases in net sales of desktops, servers/storage, notebooks/mobility, and net/com products of $17.7 million, $7.9 million, $3.8 million, and $1.1 million, respectively, as shown in the table in Note 2 “Revenue” in the Notes to our Unaudited Condensed Consolidated Financial Statements. These increases were partially offset by a decrease in net sales of displays and sound of $6.7 million. Gross profit for the second quarter of 2025 increased year-over-year by $1.3 million, or 0.9%, to $137.8 million as illustrated in the table and the discussion beginning on page 21 of this Quarterly Report on Form 10-Q. Gross margin decreased to 18.1% from 18.5% a year ago. The decrease in gross margin was primarily driven by reduced software agency fees in the current period. SG&A expenses increased year-over-year by $1.7 million, or 1.6%, to $106.9 million. SG&A expenses as a percentage of net sales decreased to 14.1% compared to 14.3% a year ago. The increase in SG&A expenses is primarily due to an increase in professional fees as shown in the table on page 20 of this Quarterly Report on Form 10-Q. Operating income for the second quarter of 2025 remained substantially the same year-over-year both in dollars and as a percentage of net sales. ​ 19 Table of Contents Net Sales Distribution ​ The following table sets forth our percentage of net sales by segment and product mix for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ Six Months Ended June 30, ​ ​ ​ 2025 2024 ​ ​ 2025 2024 ​ Operating Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Enterprise Solutions ​ 43 % 40 % ​ 43 % 43 % Business Solutions ​ 39 ​ 38 ​ ​ 38 ​ 39 ​ Public Sector Solutions ​ 18 22 ​ 19 18 Total ​ 100 % 100 % ​ 100 % 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product Mix ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notebooks/Mobility ​ 34 % 35 % ​ 36 % 35 % Desktops ​ 14 ​ 12 ​ ​ 13 ​ 11 ​ Software ​ 9 ​ 9 ​ ​ 10 ​ 10 ​ Servers/Storage ​ 9 9 ​ 8 ​ 8 Net/Com Products ​ 7 7 ​ 7 7 Displays and Sound ​ 9 10 ​ 8 ​ 10 Accessories ​ 10 ​ 11 ​ ​ 11 ​ 11 ​ Other Hardware/Services ​ 8 7 ​ 7 8 Total ​ 100 % 100 % ​ 100 % 100 % ​ Gross Profit Margin ​ The following table summarizes our gross margin, as a percentage of net sales, for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ Six Months Ended June 30, ​ ​ ​ 2025 ​ 2024 ​ ​ 2025 2024 ​ Operating Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Enterprise Solutions ​ 14.6 % 15.4 % ​ 14.4 % 15.3 % Business Solutions ​ 23.5 ​ 23.8 ​ ​ 24.3 ​ 23.7 ​ Public Sector Solutions ​ 15.2 15.2 ​ 14.3 15.5 Total Company ​ 18.1 % 18.5 % ​ 18.1 % 18.6 % ​ Operating Expe nses ​ The following table reflects our SG&A expenses for the periods indicated (dollars in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ Six Months Ended June 30, ​ ​ ​ 2025 ​ 2024 ​ ​ 2025 ​ 2024 ​ Personnel costs ​ $ 81.2 ​ $ 81.1 ​ ​ $ 164.1 ​ $ 159.6 ​ Marketing ​ 4.4 ​ 5.2 ​ ​ 12.4 ​ 12.6 ​ Service contracts/subscriptions ​ ​ 6.4 ​ ​ 5.7 ​ ​ ​ 13.2 ​ ​ 11.7 ​ Professional fees ​ 4.9 ​ 3.1 ​ ​ 8.1 ​ 6.5 ​ Depreciation and amortization ​ 2.9 ​ 3.2 ​ ​ 6.0 ​ 6.5 ​ Facilities operations ​ 1.9 ​ 1.9 ​ ​ 3.7 ​ 3.7 ​ Credit card fees ​ 1.6 ​ 1.7 ​ ​ 3.0 ​ 3.3 ​ Other ​ 3.6 ​ 3.3 ​ ​ 6.2 ​ 5.9 ​ Total SG&A expense ​ $ 106.9 ​ $ 105.2 ​ ​ $ 216.7 ​ $ 209.8 ​ As a percentage of net sales ​ ​ 14.1 % ​ 14.3 % ​ ​ 14.8 % ​ 15.3 % ​ 20 Table of Contents Severance Expenses ​ There were no severance expenses incurred during the three months ended June 30, 2025. During the six months ended June 30, 2025, we undertook actions to lower our cost structure. In connection with these initiatives, we incurred severance expenses of $2.9 million which included cash severance and other related termination benefits. We incurred severance expenses of $0.4 million for each of the three and six months ended June 30, 2024. ​ Year-Over-Year Comparisons ​ In this section and elsewhere in this Quarterly Report on Form 10-Q we refer to changes in year-over-year results. Unless context otherwise requires, such references refer to changes between the three months ended June 30, 2025 and the three months ended June 30, 2024; and changes between the six months ended June 30, 2025 and the six months ended June 30, 2024. ​ Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024 ​ Changes in net sales and gross profit by segment are shown in the following table (dollars in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ $ ​ % ​ ​ Amount Net Sales Amount Net Sales Change ​ Change Net Sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Enterprise Solutions ​ $ 326.0 42.9 % $ 298.8 40.5 % $ 27.2 ​ 9.1 % Business Solutions ​ ​ 293.2 ​ 38.6 ​ ​ 278.2 ​ 37.8 ​ ​ 15.0 ​ 5.4 ​ Public Sector Solutions ​ 140.5 18.5 ​ 159.5 21.7 (19.0) ​ (11.9) Total ​ $ 759.7 ​ 100.0 % $ 736.5 ​ 100.0 % $ 23.2 ​ 3.2 % Gross Profit: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Enterprise Solutions ​ $ 47.6 14.6 % $ 46.1 15.4 % $ 1.5 ​ 3.4 % Business Solutions ​ ​ 68.9 ​ 23.5 ​ ​ 66.3 ​ 23.8 ​ ​ 2.6 ​ 3.8 ​ Public Sector Solutions ​ 21.3 15.2 ​ 24.1 15.2 (2.8) ​ (11.9) Total ​ $ 137.8 ​ 18.1 % $ 136.5 ​ 18.5 % $ 1.3 ​ 0.9 % ​ Net sales increased for the second quarter of 2025 compared to the second quarter of 2024, as explained by the year-over-year changes discussed below: ​ ● Net sales of $326.0 million for the Enterprise Solutions segment reflect an increase of $27.2 million, or 9.1%. The increase in net sales is primarily due to increases in net sales of notebooks/mobility, servers/storage, accessories, desktops, net/com products, other hardware/services, and software of $7.9 million, $6.0 million, $5.5 million, $5.0 million, $4.4 million, $3.8 million, and $1.8 million, respectively. These increases were partially offset by a decrease in net sales of displays and sound of $7.2 million. ​ ● Net sales of $293.2 million for the Business Solutions segment reflect an increase of $15.0 million, or 5.4%. The increase in net sales is primarily due to increases in net sales of desktops, notebooks/mobility, and displays and sound of $8.5 million, $8.2 million, and $3.6 million, respectively. These increases were partially offset by decreases in net sales of accessories and other hardware/services of $4.1 million and $0.7 million, respectively. ​ ● Net sales of $140.5 million for the Public Sector Solutions segment reflect a decrease of $19.0 million, or 11.9%. Sales to the federal government increased by $1.9 million, or 7.8%, compared to the prior year quarter, while sales to state and local government and educational institutions decreased by $20.9 million, or 15.6%. The decrease in sales to state and local government and educational institutions was primarily driven by the timing of purchases associated with a few large K-12 customers. The decrease in net sales is primarily due to decreases in net sales of notebooks/mobility, other hardware/services, displays and sound, net/com products, software, and accessories of $12.4 million, $3.2 million, $3.1 million, $2.9 million, $1.9 million, and $1.5 million, respectively. These decreases were partially offset by increases in net sales of desktops and servers/storage of $4.2 million and $1.8 million, respectively. ​ 21 Table of Contents Gross profit for the second quarter of 2025 increased year-over-year, while gross margin for the second quarter of 2025 decreased year-over-year, as explained by the year-over-year changes discussed below: ​ ● Gross profit for the Enterprise Solutions segment increased by $1.5 million year-over-year primarily due to the increase in net sales as discussed in the preceding paragraph. Gross margin decreased by 80 basis points primarily due to reduced software agency fees, as well as a decrease in the amount of software sales recognized on a net basis. ​ ● Gross profit for the Business Solutions segment increased by $2.6 million year-over-year primarily due to the increase in net sales as discussed in the preceding paragraph. Gross margin decreased by 30 basis points primarily due to reduced software agency fees. ​ ● Gross profit for the Public Sector Solutions segment decreased by $2.8 million primarily due to the decrease in net sales as discussed in the preceding paragraph. Gross margin remained substantially the same year-over-year. ​ Selling, general and administrative expenses for the second quarter of 2025 increased in dollars but decreased as a percentage of net sales compared to the second quarter of 2024. SG&A expenses attributable to our three segments and the remaining unallocated Headquarters/Other expenses are summarized in the table below (dollars in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Net ​ ​ ​ ​ Segment Net ​ $ ​ % ​ ​ Amount Sales Amount Sales Change ​ Change Enterprise Solutions ​ $ 37.3 11.4 % $ 35.8 12.0 % $ 1.5 ​ 4.1 % Business Solutions ​ ​ 43.3 ​ 14.8 ​ ​ 44.1 ​ 15.9 ​ ​ (0.8) ​ (1.9) ​ Public Sector Solutions ​ 23.4 16.7 ​ 21.5 13.5 1.9 9.2 Headquarters/Other, unallocated ​ 2.9 ​ ​ ​ 3.8 ​ ​ (0.9) (24.9) Total ​ $ 106.9 ​ 14.1 % $ 105.2 ​ 14.3 % $ 1.7 ​ 1.6 % ​ ● SG&A expenses for the Enterprise Solutions segment increased year-over-year in dollars but decreased as a percentage of net sales. The year-over-year change in SG&A dollars was primarily attributable to an increase in personnel costs of $1.7 million. SG&A expenses as a percentage of net sales were 11.4% for the Enterprise Solutions segment for the second quarter of 2025, which reflects a decrease of 60 basis points and is primarily due to the increase in net sales discussed above. ​ ● SG&A expenses for the Business Solutions segment decreased year-over-year both in dollars and as a percentage of net sales. The year-over-year change in SG&A dollars was primarily attributable to decreases in marketing and personnel costs of $1.1 million and $0.5 million, respectively, partially offset by an increase in use of shared Headquarter services of $0.8 million. SG&A expenses as a percentage of net sales were 14.8% for the Business Solutions segment for the second quarter of 2025, which reflects a decrease of 110 basis points and is primarily due to the increase in net sales discussed above, combined with the decrease in SG&A dollars. ​ ● SG&A expenses for the Public Sector Solutions segment increased year-over-year both in dollars and as a percentage of net sales. The year-over-year change in SG&A dollars was primarily attributable to increases in professional fees and use of shared Headquarter services of $1.5 million and $0.4 million, respectively . SG&A expenses as a percentage of net sales were 16.7% for the Public Sector Solutions segment for the second quarter of 2025, which reflects an increase of 320 basis points and is primarily due to the decrease in net sales discussed above, combined with the increase in SG&A dollars . ​ ● SG&A expenses for the Headquarters/Other decreased year-over-year by $0.9 million primarily due to a decrease in personnel costs of $1.0 million and an increase in the allocated amounts to the sales segments of $0.9 million, partially offset by an increase in service contracts/subscriptions of $1.0 million. The Headquarters/Other provides services to the three segments in areas such as finance, distribution center, human resources, IT, marketing, and product management. Most of the operating costs associated with such corporate Headquarters/Other services are charged to the segments based on their estimated allocation usage of the underlying services. 22 Table of Contents ​ Severance expenses were not incurred during the second quarter of 2025. Severance expenses were $0.4 million for the second quarter of 2024. The severance expenses were related to an involuntary reduction in our workforce to lower our cost structure and included cash severance and other related termination benefits. ​ Income from operations for the second quarter of 2025 was $30.9 million, which was consistent with the prior year quarter. Income from operations as a percentage of net sales was 4.1% for the second quarter of 2025, which was consistent with the prior year quarter. ​ Interest income, net for the second quarter of 2025 decreased to $3.2 million, compared to $4.6 million for the second quarter of 2024, primarily due to a decrease in interest income of $1.4 million. The decrease in interest income is primarily a result of lower realized interest rates in the current period combined with lower cash equivalent and investment balances in the current period. ​ Income taxes. Our provision for income taxes for the second quarter of 2025 decreased to $9.3 million, compared to $9.4 million for the second quarter of 2024. Our effective tax rate was 27.3% for the quarter ended June 30, 2025, compared to 26.4% for the quarter ended June 30, 2024. The increase in the effective tax rate was primarily due to non-recurring benefits included in the prior year period. ​ Net income for the second quarter of 2025 decreased to $24.8 million, compared to $26.2 million for the second quarter of 2024, primarily due to the decrease in interest income, net, as discussed above. ​ Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024 ​ Changes in net sales and gross profit by segment are shown in the following table (dollars in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ $ ​ % ​ ​ Amount Net Sales Amount Net Sales Change ​ Change Net Sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Enterprise Solutions ​ $ 624.0 42.7 % $ 581.4 42.5 % $ 42.6 ​ 7.3 % Business Solutions ​ ​ 551.5 ​ 37.8 ​ ​ 534.1 ​ 39.0 ​ ​ 17.4 ​ 3.3 ​ Public Sector Solutions ​ 285.2 19.5 ​ 253.0 18.5 32.2 ​ 12.7 Total ​ $ 1,460.7 ​ 100.0 % $ 1,368.5 ​ 100.0 % $ 92.2 ​ 6.7 % Gross Profit: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Enterprise Solutions ​ $ 89.9 14.4 % $ 88.8 15.3 % $ 1.1 ​ 1.3 % Business Solutions ​ ​ 134.3 ​ 24.3 ​ ​ 126.7 ​ 23.7 ​ ​ 7.6 ​ 6.0 ​ Public Sector Solutions ​ 40.9 14.3 ​ 39.1 15.5 1.8 ​ 4.5 Total ​ $ 265.1 ​ 18.1 % $ 254.6 ​ 18.6 % $ 10.5 ​ 4.1 % ​ Net sales increased for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, as explained by the year-over-year changes discussed below: ​ ● Net sales of $624.0 million for the Enterprise Solutions segment reflect an increase of $42.6 million, or 7.3%. The increase in net sales is primarily due to increases in net sales of desktops, servers/storage, software, other hardware/services, notebooks/mobility, accessories, and net/com products of $20.5 million, $11.6 million, $8.1 million, $6.2 million, $5.2 million, $3.8 million, and $2.7 million, respectively. These increases were partially offset by a decrease in net sales of displays and sound of $15.5 million. ​ ● Net sales of $551.5 million for the Business Solutions segment reflect an increase of $17.4 million, or 3.3%. The increase in net sales is primarily due to increases in net sales of notebooks/mobility, desktops, software, and displays and sound of $18.4 million, $14.1 million, $1.3 million, and $1.2 million, respectively. These increases were partially offset by decreases in net sales of accessories, net/com products, other hardware/services, and servers/storage of $10.9 million, $4.2 million, $1.3 million, and $1.3 million, respectively. ​ 23 Table of Contents ● Net sales of $285.2 million for the Public Sector Solutions segment reflect an increase of $32.2 million, or 12.7%. Sales to the federal government increased by $42.1 million, or 98.0%, compared to the prior year quarter, while sales to state and local government and educational institutions decreased by $9.9 million, or 4.7%. The increase in sales to the federal government was primarily driven by a few large orders in the current period. The increase in net sales is primarily due to increases in net sales of notebooks/mobility, desktops, accessories, servers/storage, net/com products, and software of $16.3 million, $8.3 million, $6.7 million, $5.2 million, $1.3 million, and $1.3 million, respectively. These increases were partially offset by decreases in net sales of other hardware/services and displays and sound of $3.8 million and $3.1 million, respectively. ​ Gross profit for the six months ended June 30, 2025 increased year-over-year, while gross margin for the second quarter of 2025 decreased year-over-year, as explained by the year-over-year changes discussed below: ​ ● Gross profit for the Enterprise Solutions segment increased by $1.1 million year-over-year primarily due to the increase in net sales as discussed in the preceding paragraph. Gross margin decreased by 90 basis points primarily due to reduced software agency fees, as well as a shift in product mix to lower-margin sales of desktops as shown in the table in Note 2 “Revenue” in the Notes to the Unaudited Condensed Consolidated Financial Statements and a decrease in the amount of software sales recognized on a net basis. ​ ● Gross profit for the Business Solutions segment increased by $7.6 million year-over-year primarily due to an increase in net sales of notebooks/mobility and desktops at improved margins, as well as changes in customer mix. Gross margin increased by 60 basis points primarily due to improved margins on sales of notebooks/mobility and desktops, as well as changes in customer mix. ​ ● Gross profit for the Public Sector Solutions segment increased by $1.8 million primarily due to the increase in net sales as discussed in the preceding paragraph. Gross margin decreased by 120 basis points primarily due to a few low-margin deals in the current period. ​ Selling, general and administrative expenses for the six months ended June 30, 2025 increased in dollars but decreased as a percentage of net sales compared to the six months ended June 30, 2024. SG&A expenses attributable to our three segments and the remaining unallocated Headquarters/Other expenses are summarized in the table below (dollars in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Net ​ ​ ​ ​ Segment Net ​ $ ​ % ​ ​ Amount Sales Amount Sales Change ​ Change Enterprise Solutions ​ $ 75.1 12.0 % $ 72.7 12.5 % $ 2.4 ​ 3.3 % Business Solutions ​ ​ 88.6 ​ 16.1 ​ ​ 88.7 ​ 16.6 ​ ​ (0.1) ​ (0.1) ​ Public Sector Solutions ​ 46.4 16.3 ​ 41.8 16.5 4.6 ​ 11.0 Headquarters/Other, unallocated ​ 6.6 ​ ​ ​ 6.6 ​ ​ — ​ — Total ​ $ 216.7 ​ 14.8 % $ 209.8 ​ 15.3 % $ 6.9 ​ 3.3 % ​ ● SG&A expenses for the Enterprise Solutions segment increased year-over-year in dollars but decreased as a percentage of net sales. The year-over-year change in SG&A dollars was primarily attributable to an increase in personnel costs of $2.3 million. SG&A expenses as a percentage of net sales were 12.0% for the Enterprise Solutions segment for the six months ended June 30, 2025, which reflects a decrease of 50 basis points and is primarily due to the increase in net sales discussed above. ​ ● SG&A expenses for the Business Solutions segment remained substantially the same year-over-year in dollars but decreased as a percentage of net sales. An increase in the use of shared Headquarter services of $1.8 million was offset by decreases in personnel costs, marketing, credit card fees, professional fees, and facilities operations of $0.6 million, $0.6 million, $0.4 million, $0.1 million, and $0.1 million, respectively. SG&A expenses as a percentage of net sales were 16.1% for the Business Solutions segment for the six months ended June 30, 2025, which reflects a decrease of 50 basis points and is primarily due to the increase in net sales discussed above . ​ 24 Table of Contents ● SG&A expenses for the Public Sector Solutions segment increased year-over-year in dollars but decreased as a percentage of net sales. The year-over-year change in SG&A dollars was primarily attributable to increases in professional fees, personnel costs, use of shared Headquarter services, and other expenses of $2.2 million, $1.2 million, $0.9 million, and $0.5 million, respectively . SG&A expenses as a percentage of net sales were 16.3% for the Public Sector Solutions segment for the six months ended June 30, 2025, which reflects a decrease of 20 basis points and is primarily due to the increase in net sales discussed above . ​ ● SG&A expenses for the Headquarters/Other remained substantially the same year-over-year. Increases in service contracts/subscriptions, personnel costs, and marketing of $1.8 million, $1.6 million, and $0.4 million, respectively, were offset by an increase in the allocated amounts to the sales segments of $2.2 million, as well as decreases in professional fees, depreciation and amortization, and other expenses of $0.9 million, $0.5 million, and $0.2 million, respectively. The Headquarters/Other provides services to the three segments in areas such as finance, distribution center, human resources, IT, marketing, and product management. Most of the operating costs associated with such corporate Headquarters/Other services are charged to the segments based on their estimated allocation usage of the underlying services. ​ Severance expenses for the six months ended June 30, 2025 were $2.9 million, compared to $0.4 million for the six months ended June 30, 2024. The severance expenses were related to an involuntary reduction in our workforce to lower our cost structure and included cash severance and other related termination benefits. ​ Income from operations for the six months ended June 30, 2025 increased to $45.4 million, compared to $44.4 million for the six months ended June 30, 2024, primarily due to the increase in gross profit, partially offset by the increases in SG&A expenses and severance expenses, as discussed above. Income from operations as a percentage of net sales was 3.1% for the six months ended June 30, 2025, which was consistent with the prior year period. ​ Interest income, net for the six months ended June 30, 2025 decreased to $7.1 million, compared to $9.2 million for the six months ended June 30, 2024, primarily due to a decrease in interest income of $2.1 million. The decrease in interest income is primarily a result of lower realized interest rates in the current period combined with lower cash equivalent and investment balances in the current period. ​ Income taxes. Our provision for income taxes for the six months ended June 30, 2025 remained consistent year-over-year. Our effective tax rate was 27.3% for the six months ended June 30, 2025, compared to 26.6% for the six months ended June 30, 2024. The increase in the effective tax rate was primarily due to non-recurring benefits included in the prior year period. ​ Net income for the six months ended June 30, 2025 decreased to $38.3 million, compared to $39.3 million for the six months ended June 30, 2024, primarily due to the decrease in interest income, net, partially offset by the increase in income from operations, as discussed above. ​ Liquidity and Capital Resources ​ Our primary sources of liquidity are internally generated funds from operations and short-term investments. We have historically used and expect to use in the future those funds to meet our capital requirements, which consist primarily of working capital for operational needs, capital expenditures for computer equipment and software used in our business, repurchases of our common stock for treasury, dividend payments, and as opportunities arise, possible acquisitions of new businesses. ​ We believe that funds generated from operations and short-term investments will be sufficient to finance our working capital, capital expenditures, and other requirements for at least the next twelve calendar months and beyond such twelve calendar month period. Our investments in IT systems and infrastructure are designed to enable us to operate more efficiently and to provide our customers enhanced functionality. ​ 25 Table of Contents We expect to meet our cash requirements for the next twelve months and beyond through a combination of cash on hand, short-term investments, and cash generated from operations, as follows: ​ ● Cash and Cash Equivalents . As of June 30, 2025, we had $186.7 million in cash and cash equivalents. ​ ● Short-term Investments . As of June 30, 2025, we had $159.4 million in short-term investments. ​ ● Cash Generated from Operations . We expect to generate cash flows from operations in excess of operating cash needs by generating earnings and managing net changes in inventories and receivables with changes in payables to generate positive cash flow. ​ Our ability to continue funding our planned growth, both internally and externally, is dependent upon our ability to generate sufficient cash flow from operations or to obtain additional funds through equity or debt financing, or from other sources of financing, as may be required. While we do not anticipate needing any additional sources of financing to fund our operations at this time, if demand for IT products declines, or our customers are materially adversely impacted by the developing macroeconomic trends characterized by inflation and increased interest rates, our cash flows from operations may be substantially affected. ​ Dividends ​ A summary of 2025 dividend activity for our common stock is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividend Amount Declaration Date Record Date Payment Date $ 0.15 ​ February 4, 2025 ​ February 25, 2025 ​ March 14, 2025 $ 0.15 ​ April 29, 2025 ​ May 13, 2025 ​ May 30, 2025 ​ On July 30, 2025, we announced that our Board of Directors declared a quarterly cash dividend on our common stock of $0.15 per share. The dividend will be paid on August 29, 2025 to all stockholders of record as of the close of business on August 12, 2025. The declaration and payment of any future dividends is at the discretion of our Board of Directors and will depend upon our financial position, strategic plans, general business conditions and any other factors deemed relevant by our Board of Directors. ​ Summary of Sources and Uses of Cash ​ Cash flows from operating, investing and financing activities for the six months ended June 30, 2025 and 2024, as reflected in our Unaudited Condensed Consolidated Statements of Cash Flows included in Item 1 of this Quarterly Report on Form 10-Q, are summarized in the following table (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ 2025 2024 Net cash (used in) provided by operating activities ​ $ (26.2) ​ $ 95.7 Net cash provided by (used in) investing activities ​ 103.1 ​ (103.4) Net cash used in financing activities ​ (68.5) ​ (9.0) Increase (decrease) in cash and cash equivalents ​ $ 8.4 ​ $ (16.7) ​ Cash used in operating activities was $26.2 million for the six months ended June 30, 2025. Cash used in operating activities resulted primarily from an increase in inventory of $38.4 million, an increase in accounts receivable of $26.7 million, a decrease in accrued expenses and other liabilities of $6.9 million, and an increase in other non-current assets of $1.6 million. These outflows were partially offset by $38.3 million of net income and positive net adjustments to net income of $10.0 million for the six months ended June 30, 2025. The increase in inventory was primarily attributable to inventory purchases related to large customer rollouts and management associated with anticipated tariffs. The increase in accounts receivable was primarily driven by the timing of payments. For the six months ended June 30, 2024, cash provided by operating activities resulted primarily from net income adjusted for non-cash charges of $46.5 million, an increase in accounts payable of $53.2 million, and a decrease in accounts receivable of $7.6 million, partially offset by an increase in inventory of $12.4 million. ​ 26 Table of Contents In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle, defined as days of sales outstanding in accounts receivable plus days of supply in inventory minus days of purchases outstanding in accounts payable, based on a rolling three-month average. Components of our cash conversion cycle are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, (in days) ​ 2025 ​ 2024 Days of sales outstanding (DSO) (1) ​ ​ 68 ​ ​ 68 Days of supply in inventory (DIO) (2) ​ ​ 20 ​ ​ 21 Days of purchases outstanding (DPO) (3) ​ ​ (44) ​ ​ (48) Cash conversion cycle ​ ​ 44 ​ ​ 41 ​ (1) Represents the trade receivable at the end of the quarter divided by average daily net sales for the same three-month period. ​ (2) Represents the inventory balance at the end of the quarter divided by average daily cost of sales for the same three-month period. ​ (3) Represents the accounts payable balance at the end of the quarter divided by average daily cost of sales for the same three-month period. ​ The cash conversion cycle increased to 44 days at June 30, 2025, compared to 41 days at June 30, 2024, as evidenced in the above cash conversion table. The decrease in DIO is primarily due to the decrease in inventory as of June 30, 2025 compared to June 30, 2024 combined with the increase in cost of sales for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease in DPO is primarily due to the decrease in accounts payable as of June 30, 2025 compared to June 30, 2024 combined with the increase in cost of sales for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. ​ Cash provided by investing activities for the six months ended June 30, 2025 consisted of $52.4 million of purchases of U.S. Government treasury securities, $108.8 million of sales of U.S. Government treasury securities, $50.0 million of maturities of U.S. Government treasury securities, and $3.3 million of purchases of property and equipment. These property and equipment expenditures were primarily for computer equipment and capitalized internally developed software in connection with investments in our IT infrastructure. In the prior year period, investing activities consisted of $203.3 million of purchases of U.S. Government treasury securities, $103.3 million of maturities of U.S. Government treasury securities, and $3.4 million of purchases of property and equipment . ​ Cash used in financing activities for the six months ended June 30, 2025 consisted primarily of $0.7 million of aggregate borrowings and repayments, $60.5 million of treasury purchases, $7.7 million of dividend payments, $0.6 million of issuances of stock under the Employee Stock Purchase Plan, and $0.9 million of payments of payroll taxes on stock-based compensation through shares withheld. In the prior year period, financing activities consisted of $10.6 million of aggregate borrowings and repayments, $3.6 million of treasury purchases, $5.3 million of dividend payments, $0.5 million of issuances of stock under the Employee Stock Purchase Plan, and $0.6 million of payments of payroll taxes on stock-based compensation through shares withheld. ​ Debt Instruments, Contractual Agreements, and Related Covenants ​ Below is a summary of certain provisions of our credit facility and other contractual obligations. For more information about our obligations, commitments, and contingencies, see our condensed consolidated financial statements and the accompanying notes included in this Quarterly Report on Form 10-Q . ​ Credit Facility. Our credit facility collateralized by our accounts receivable expired March 31, 2025. We did not elect to extend or replace this credit facility given our significant cash, cash equivalent, and short-term investment balances. Amounts outstanding under this credit facility bore interest at the greatest of (i) the prime rate (7.50% at March 31, 2025), (ii) the federal funds effective rate plus 0.50% per annum, and (iii) the daily BSBY Rate, plus 1.00% per annum, but at no time less than 0% per annum. While we used this credit facility from time to time, we did not have borrowings outstanding at any recent quarter-end nor immediately prior to the expiration of the credit facility. ​ 27 Table of Contents Cash receipts were automatically applied against any outstanding borrowings. Any excess cash on account could either remain on account to generate earned credits to offset up to 100% of cash management fees, or be invested in short-term qualified investments. Borrowings under the credit facility were classified as current in our condensed consolidated balance sheets. ​ Supplier Finance Programs. We have entered into agreements with financial institutions to facilitate the purchase of inventory from designated suppliers under certain terms and conditions to enhance liquidity. We do not incur any interest or other incremental expenses associated with these agreements as balances are paid when they are due. See “Note 10 “Supplier Finance Programs” of our Unaudited Condensed Consolidated Financial Statements for additional information. ​ Operating Leases. We lease facilities from a related party, which is a company affiliated with us through common ownership, and facilities from third parties under non-cancelable operating leases. Certain leases require us to pay real estate taxes, insurance, and common area maintenance charges. See “Item 2. Properties” in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information regarding our operating leases. ​ Factors Affecting Sources of Liquidity ​ Internally Generated Funds. The key factors affecting our internally generated funds are our ability to manage costs and fully achieve our operating efficiencies, timely collection of our customer receivables, and management of our inventory levels. ​ Credit Facility. Our credit facility collateralized by our accounts receivable expired March 31, 2025 and we elected not to renew or replace the credit facility given our significant cash, cash equivalent, and short-term investment balances. ​ Capital Markets. Our ability to raise additional funds in the capital market depends upon, among other things, general economic conditions, the condition of the IT industry, our financial performance and stock price, and the state of the capital markets. In addition, market volatility, inflation and interest rate fluctuations may increase our cost of financing or restrict our access to potential sources of future liquidity. ​ APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES ​ Our critical accounting policies and estimates have not materially changed from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2024. ​ RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS ​ Recently issued financial accounting standards are detailed in Note 1, “Basis of Presentation,” in the Notes to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. ​ Item 3. Quantitative and Qualitative Disclosures About Market Risk ​ For a description of our market risks, see Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2024. No material changes related to our market risks have occurred since December 31, 2024. ​ Item 4. Controls and Procedures ​ Disclosure Controls and Procedures ​ Our management, with the participation of our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. 28 Table of Contents Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as described above. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level. ​ Changes in Internal Control over Financial Reporting ​ There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ​ 29 Table of Contents PART II ― OTHER INFORMATIO N ​ Item 1. Legal Proceedings ​ For information related to legal proceedings, see the discussion in Note 8 - “Commitments and Contingencies” in the Notes to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which information is incorporated by reference into this Part II, Item 1. ​ Item 1A. Risk Factors ​ In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which could materially affect our business, financial position, and results of operations. Risk factors which could cause actual results to differ materially from those suggested by forward-looking statements include but are not limited to those discussed or identified in this document, in our other public filings with the SEC, and those contained in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024. ​ Item 2. Unregistered Sales of Equity Securities and Use of Proceeds ​ Repurchases under our stock repurchase program are made from time to time at management’s discretion in accordance with applicable federal securities laws. All repurchases of our common stock have been recorded as treasury stock. The following table summarizes information relating to purchases of common stock made by or on our behalf during the quarter ended June 30, 2025 (dollars in thousands, except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuer Purchases of Equity Securities ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Approximate Dollar Value ​ ​ ​ ​ ​ ​ Shares Purchased as ​ of Shares that May Yet Be ​ ​ Total Number ​ ​ ​ Part of Publicly ​ Purchased Under the Plans ​ ​ of Shares ​ Average Price Paid ​ Announced Plans or ​ or Programs Period Purchased Per Share Programs (1) (in millions) (1)(2) 04/01/25-04/30/25 ​ 237,011 ​ $ 60.67 ​ 237,011 ​ $ 50.5 05/01/25-05/31/25 ​ — ​ $ — ​ — ​ $ 50.5 06/01/25-06/30/25 ​ 17,684 ​ $ 64.79 ​ 17,684 ​ $ 49.4 ​ ​ 254,695 ​ $ 60.95 ​ 254,695 ​ ​ ​ ​ (1) We have repurchased in aggregate approximately 3.9 million shares of our common stock for approximately $120.6 million pursuant to the repurchase program approved by our Board of Directors. ​ (2) On March 28, 2001, we announced that our Board of Directors authorized the spending of up to $15.0 million to repurchase shares of our common stock. On each of February 11, 2014, December 17, 2018, November 22, 2022, May 1, 2024, and April 30, 2025, our Board of Directors approved increases of $15.0 million, $25.0 million, $25.0 million, $40.0 million, and $50.0 million, respectively, to the repurchase program bringing the aggregate authorized amount under the repurchase program to $170.0 million. There is no fixed termination date for this repurchase program. Purchases may be made in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions. The timing and amount of any share repurchases will be based on market conditions and other factors. ​ Item 5. Other Information ​ Director and Officer Trading Arrangements ​ None of our directors or officers (as defined in Exchange Act Rule 16a-1(f)) adopted or terminated a Rule 10b5-1 trading agreement or a non-Rule 10b5-1 trading agreement (as each term is defined in Item 408(c) of Regulation S-K) during the second quarter of 2025. ​ 30 Table of Contents Item 6. Exhibits ​ ​ ​ ​ ​ Exhibit Number ​ Description ​ ​ ​ ​ 3.1 ​ ​ Amended and Restated Certificate of Incorporation of PC Connection, Inc., as amended (incorporated by reference to Exhibit 3.1 to the Company’s registration statement on Form S-4 (333-63272) filed on June 19, 2001) . ​ ​ ​ ​ 3.2 ​ ​ Amended and Restated Bylaws of PC Connection, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K, filed on January 9, 2008). ​ 10.1 * ​ 2020 Stock Incentive Plan, as amended. ​ ​ ​ ​ 10.2 * ​ Amended and Restated 1997 Employee Stock Purchase Plan, as amended. ​ ​ ​ ​ 31.1 ** ​ Certification of the Company’s President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ​ ​ ​ ​ 31.2 ** ​ Certification of the Company’s Senior Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ​ ​ ​ ​ 32.1 ** ​ Certification of the Company’s President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ​ ​ ​ ​ 32.2 ** ​ Certification of the Company’s Senior Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ​ ​ ​ ​ 101.INS ** ​ Inline XBRL Instance Document* - The Instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. ​ ​ ​ ​ 101.SCH ** ​ Inline XBRL Taxonomy Extension Schema Document. ​ ​ ​ ​ 101.CAL ** ​ Inline XBRL Taxonomy Calculation Linkbase Document. ​ ​ ​ ​ 101.DEF ** ​ Inline XBRL Taxonomy Extension Definition Linkbase Document ​ ​ ​ ​ 101.LAB ** ​ Inline XBRL Taxonomy Label Linkbase Document. ​ ​ ​ ​ 101.PRE ** ​ Inline XBRL Taxonomy Presentation Linkbase Document. ​ ​ ​ ​ 104 ** ​ Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101). * Management contract or compensatory plan or arrangement and submitted electronically herewith. ** Submitted electronically herewith. ​ Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at June 30, 2025 and December 31, 2024, (ii) Condensed Consolidated Statements of Income for the three and six months ended June 30, 2025 and 2024, (iii) Condensed Consolidated Statements of Other Comprehensive Income for the three and six months ended June 30, 2025 and 2024, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2025 and 2024, (v) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024, and (vi) Notes to Unaudited Condensed Consolidated Financial Statements. 31 Table of Contents SIGNATURE S Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PC CONNECTION, INC. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Date: July 30, 2025 ​ By: /s/ TIMOTHY J. MCGRATH ​ ​ ​ ​ Timothy J. McGrath ​ ​ ​ ​ President and Chief Executive Officer (Duly Authorized Officer) ​ ​ ​ ​ ​ Date: July 30, 2025 ​ By: /s/ THOMAS C. BAKER ​ ​ ​ ​ Thomas C. Baker ​ ​ ​ ​ Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) ​ ​ ​ ​ 32