Oct 29, 2026 earnings call — Record quarter driven by AI infrastructure and XVantage
Guided Q4 net sales of $17.5 billion to $17.9 billion, roughly 19% year-over-year growth at the midpoint.
Revenue $15.2B (est $13.8B) · EPS $0.91 (est $0.78) · Next-quarter revenue outlook $17.5B–$17.9B
Key quotes
"Advanced Solutions was our strongest contributor, growing 40% year-over-year with another quarter of strong sales of AI infrastructure and GPUs."
"Across our 22 platform countries, average revenue per customer on XVantage increased 39% year-over-year."
"This quarter, we built on that momentum and delivered a record third quarter, exceeding our guidance on all financial metrics."
Analyst Q&A 11
AI GPU sales and Advanced Solutions
Q (Joseph Cardoso · JPMorgan): They asked how Advanced Solutions growth looks if you exclude GPU AI sales, where the strength is coming from, and whether GPU sales will become more predictable into Q4.
A: Management said GPU and AI infrastructure grew from about 700 million last year to 1.8 billion this year. They also said there is healthy double-digit growth across the rest of Advanced Solutions, and that AI deals are showing up in more regions. They noted the business can be spotty within a quarter, so they will keep giving transparency on quarter-end outcomes.
"As we look at the pipelines, we do get visibility to the products that were coming through." — Paul Bay
Q4 revenue by business line
Q (Katherine Murphy · Goldman Sachs): The analyst asked for top-line expectations by segment for Q4 and what drove outperformance in core Advanced Solutions.
A: Management guided roughly 17% to 20% growth for Q4 and said that includes the extra week. They said client and endpoint should be lower double digits, Advanced Solutions and Lifecycle healthier double digits, and cloud stronger double digits. For core Advanced Solutions (excluding AI deals), they said networking and server strength drove outperformance, including refresh, Wifi 7, campus modernization, and AI server demand.
"I think we're talking about 17% to 20% rough growth rate in our guide." — Michael Zilis
PC demand sustainability
Q (Ruplu Bhattacharya · BofA): They asked whether PC demand is sustainable into December quarter and next year, and how demand differs across SMB, mid-market, and large customers.
A: Management said PC growth is durable but in the later innings of the cycle. They noted units were down low-double-digits but higher ASPs offset the unit decline and that AI PCs were about 50% of PC revenue in Q3. They reported enterprise up solid double digits, VAR flattish, and SMB up in the teens, with SMB being more price sensitive and mixed in timing and adoption.
"We would define we're in the later innings, but we're not done yet" — Paul Bay
Growth trajectory next years
Q (Erik Woodring · Morgan Stanley): They asked how to reconcile this year's ~17% growth with the longer-term 4%–6% CAGR guidance and what revenue shape might look like next year and beyond.
A: Management said next year likely moves to lower single-digit growth, which is part of the 4% to 6% CAGR shown at Capital Markets Day, and that would imply higher single digits in later years. They noted factors to consider include ASP trends flattening over time, a PC refresh that has some legs but not as long, and the extra week this year. They emphasized focus on higher growth in gross profit and bottom-line relative to revenue.
"And then lastly, just mechanically, we have an extra week in the current year. So that 4% to 6% CAGR that we disclosed on the Capital Markets Day was assuming probably a lower single-digit growth next year, but that would imply certainly higher single digits for the outlying 2 years in that CAGR." — Michael Zilis
Why gross margin fell
Q (Adam Tindle · Raymond James): He asked why gross margin was down another ~30 basis points year-over-year despite growth in higher-margin categories.
A: Management said a big factor is the outsized growth of GPU and AI infrastructure, which was about 700 million last year and 1.8 billion this year. Excluding that GPU/AI mix, gross margin was roughly flat year-over-year (7.06% versus 7.10%). They also cited geographic and customer mix shifts, including stronger Asia Pacific share, as other mix factors.
"So that's part of the reason we called out when you look at our gross margin, excluding that outsized growth of that GPU and AI infrastructure, our gross margin this quarter was 7.06%." — Michael Zilis
Q4 cash flow and XVantage users
Q (David Paige Papadogonas · RBC): He asked if a Q4 'hockey stick' in free cash flow should still be expected and whether XVantage usage is growing more with large enterprises or SMBs.
A: Management said they do expect pretty solid cash flow in Q4 but noted reaching full-year positive free cash flow may be challenging because growth requires working capital. They said XVantage is primarily an SMB play where growth is occurring, with self-service orders representing 70% of orders and increased engagement and revenue per SMB customer. They described XVantage as moving from transaction automation to an intelligent operating model that drives demand.
"Yes. So yes, David, I think we do expect to see a pretty solid cash flow in Q4." — Michael Zilis
Supply chain risk to guidance
Q (Keith Housum · Northcoast): They asked whether any supply chain constraints are appearing that could limit the guidance and how to model the extra week in Q4.
A: Management said they are not seeing anything out of the ordinary and that pipeline and back orders have not meaningfully increased. They commented that solution providers have better visibility and more consistency on lead times now. They reiterated modeling guidance includes a similar 2% to 3% net impact from supply constraints and suggested using ~7%–8% as a proxy for the extra week impact.
"So I see nothing out of the ordinary right now." — Paul Bay
Q4 gross profit midpoint drivers
Q (Eleanor Dyke · William Blair): She asked why the midpoint of Q4 gross profit guidance is a bit lower than this quarter and what is assumed.
A: Management said Q4 is typically a lower-margin quarter due to mix, including more PC and mobility and how projects close. They said the guide also includes continued healthy pipeline for GPU and AI infrastructure, and margins would be in the high 6s excluding that GPU/AI piece, which is comparable to last year's Q4. They saw no notable regional customer behavior differences for client and endpoint growth.
"So Q4 typically is our -- is a lower margin quarter just on mix factors." — Michael Zilis
XVantage margin impact and PC outlook
Q (Alek Valero · Loop Capital): He asked when Phase 3 XVantage pricing and AI/data levers will show in margins, and separately whether ASPs will offset PC unit declines given industry views of softer PC volumes in 1H27.
A: Management said they have started to see positive signs from the next phase of their platform work, particularly in North America, though initiatives launched late in the quarter. On PCs, they said the quarter matched market indicators: a low-double-digit decline in PC units, but ASPs are still offsetting that unit decline and AI PC mix supports pricing and demand smoothing.
"And so we're starting to see that Phase II really starting to land in North America and positive results." — Paul Bay
2027 free cash flow expectations
Q (Caden Dahl · Evercore): They asked how free cash flow might play out in 2027 given the revenue normalization and any targets the company has.
A: Management referred to their Capital Markets Day plan that expects more predictable working capital needs as growth normalizes. They gave a target to generate free cash flow equal to 30% or more of adjusted EBITDA on an annual basis, while noting quarter-to-quarter seasonality can vary.
"Our target is on an annual basis to generate free cash flow equivalent to 30% or more of our adjusted EBITDA." — Michael Zilis
PC units versus price split
Q (BNP Paribas): They asked for the split between units and price for client and endpoint growth, and how GTM is managed given an expected PC volume challenge into early 2027.
A: Management said client and endpoint growth came from notebooks and desktops but the revenue growth was offset by a low-double-digit decline in units. They reiterated focus on refresh and indicated higher ASPs helped offset unit declines, consistent with earlier comments on AI PC mix and pricing.
"And specifically in the Client Endpoint Solution PCs was -- the growth was more than offset by the low-double-digit decline in units." — Paul Bay