Financial Analysis

14. COMMITMENTS AND CONTINGENCIES Contingencies The Company is subject to various legal proceedings and claims, which have arisen during the ordinary course of business. In the opinion of the Companys management, the outcome of such matters is not expected to have a material effect on the Companys business, financial position, results of operations, or cash flows. The Company records a liability when it believes that a loss is both probable and reasonably estimable. On a quarterly basis, the Company reviews each of these legal proceedings to determine whether it is probable, reasonably possible, or remote that a liability has been incurred and, if it is at least reasonably possible, whether a range of loss can be reasonably estimated. Significant judgment is required to determine both the likelihood of there being a loss and the estimated amount of such loss. Until the final resolution of such matters, there may be an exposure to loss in excess of the amount recorded, and such amounts could be material. The Company expenses legal fees in the period in which they are incurred. 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, and such outcomes could have a material negative impact on the Companys financial position, results of operations, and cash flows. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

13. EMPLOYEE BENEFIT PLAN The Company has a contributory profit-sharing and employee savings plan covering all qualified employees. No contributions to the profit-sharing element of the plan were made by the Company in 2025, 2024, and 2023. The Company made matching contributions to the employee savings element of such plan of $7,236, $6,765, and $6,873 in 2025, 2024, and 2023, respectively. …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

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 this 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 Secured Overnight Financing Rate, or SOFR, plus 1.00% per annum, but at no time less than 1.00% per annum. Cash paid for interest was $0, $6, and $24 for the years ended December 31, 2025, 2024, and 2023, respectively. Cash receipts were automatically applied against any outstanding borrowings. During the years ended December 31, 2025 and 2024, the Company borrowed incremental amounts that were each repaid in full. These borrowings for the years ended December 31, 2025 and 2024 totaled $732 and $26,051, 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 December 31, 2024. …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following tables represent a disaggregation of revenue from arrangements with customers for the years ended December 31, 2025, 2024, and 2023, along with the segment for each category (in thousands). Year Ended December 31, 2025 Enterprise Solutions Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 395,257 $ 396,844 $ 201,207 $ 993,308 Desktops 197,821 97,416 56,524 351,761 Software 124,341 152,182 44,603 321,126 Servers/Storage 74,993 95,920 49,478 220,391 Net/Com Products 83,047 79,273 39,698 202,018 Displays and Sound 119,908 85,785 44,712 250,405 Accessories 179,000 97,913 42,208 319,121 Other Hardware/Services 108,053 76,521 30,042 214,616 Total net sales $ 1,282,420 $ 1,081,854 $ 508,472 $ 2,872,746 Year Ended December 31, 2024 Enterprise Solutions Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 368,678 $ 373,364 $ 251,949 $ 993,991 Desktops 176,027 73,540 48,690 298,257 Software 105,120 136,462 43,862 285,444 Servers/Storage 54,230 110,338 40,519 205,087 Net/Com Products 89,008 81,108 40,472 210,588 Displays and Sound 132,112 83,283 57,430 272,825 Accessories 158,562 114,266 49,923 322,751 Other Hardware/Services 97,411 76,778 38,986 213,175 Total net sales $ 1,181,148 $ 1,049,139 $ 571,831 $ 2,802,118 Year Ended December 31, 2023 Enterprise Solutions Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 391,667 $ 352,116 $ 207,887 $ 951,670 Desktops 137,679 73,302 55,946 266,927 Software 124,478 157,715 47, …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

3. FAIR VALUE MEASUREMENTS Cash equivalents and short-term investments consist of the following (in thousands): December 31, 2025 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents: Money market funds $ 170,826 $ $ $ 170,826 Short-term investments: U.S. Government treasury securities 213,358 99 213,457 Total $ 384,184 $ 99 $ $ 384,283 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 in its consolidated balance sheets and unrealized gains and losses are reported as a component of accumulated other comprehensive 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 maturi …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

4. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill is held by the Companys Enterprise Solutions and Business Solutions segments. Goodwill and intangible assets with indefinite lives are subject to an annual impairment test as of November 30 and tested more frequently if events or circumstances occur that would indicate a potential decline in fair value. In 2025 and 2024, the Company performed a qualitative step 0 analysis. Accounting Standards Codification 350 Intangible Goodwill and Other states that an entity may assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. This analysis allows the Company to consider qualitative factors that might impact the carrying amount of its goodwill to determine whether a more detailed quantitative analysis would be necessary. Factors considered when performing the impairment assessment included the Companys performance relative to historical and projected future operating results, macroeconomic conditions, industry and market trends, cost factors that may have a negative impact on earnings and cash flows, changes in the Companys stock price and market capitalization, and other relevant entity-specific events. Based on the above qualitative analysis, the Company determined goodwill was not impaired as of December 31, 2025 and 2024. The carrying amount of goodwill for the periods presented is detailed below (in thousands) …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

12. INCOME TAXES There are no foreign amounts included in income before taxes on the consolidated statements of income. The provision for income taxes consisted of the following (in thousands): Years Ended December 31, 2025 2024 2023 Current: Federal $ 19,160 $ 23,642 $ 24,648 State 6,006 7,528 7,343 Total current 25,166 31,170 31,991 Deferred: Federal 4,598 (690) (1,845) State 242 (88) (303) Total deferred 4,840 (778) (2,148) Provision for income taxes $ 30,006 $ 30,392 $ 29,843 A reconciliation of the Companys provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows (dollars in thousands): Year Ended December 31, 2025 Amount Percent Federal income taxes, at statutory tax rate $ 23,883 21.0 % State and local income taxes, net of federal effect 1 4,812 4.2 Tax credits (23) Nondeductible expenses Nondeductible compensation 1,127 1.0 Other 144 0.1 Other, net 63 0.1 Income tax provision $ 30,006 26.4 % 1) The state and local jurisdictions that make up the majority ( greater than 50% ) of the tax effect in this category are California, New York, Massachusetts, Florida, and New York City. A reconciliation of the Companys provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows (in thousands): Years Ended December …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

7. LEASES The Company leases certain facilities from a related party, which is affiliated with the Company through common ownership. The costs for these leases are presented within short-term lease cost in the below table. As of December 31, 2025, the Company had no leases that were classified as financing leases and there were no additional significant operating or financing leases that have not yet commenced. Refer to the following table for quantitative information related to the Companys leases for the years ended December 31, 2025 and 2024 (dollars in thousands): Year Ended December 31, 2025 Related Parties Others Total Lease Cost Capitalized operating lease cost $ $ 1,852 $ 1,852 Short-term lease cost 1,679 655 2,334 Total lease cost $ 1,679 $ 2,507 $ 4,186 Other Information Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases: Operating cash flows $ $ 1,963 $ 1,963 Weighted-average remaining lease term (in years): Capitalized operating leases 1.45 1.45 Weighted-average discount rate: Capitalized operating leases 0.00% 4.39% 4.39% Year Ended December 31, 2024 Related Parties Others Total Lease Cost Capitalized operating lease cost $ $ 1,941 $ 1,941 Short-term lease cost 1,830 569 2,399 Total lease cost $ 1,830 $ 2,510 $ 4,340 Other Information Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases: Operating cash flows $ $ 2,078 $ 2,078 Weighted-average remaining lease te …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recently Adopted and Recently Issued Financial Accounting Standards In December 2023, the FASB issued 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 Companys annual reporting periods beginning January 1, 2025, with early adoption permitted. The Company adopted this standard for the fiscal year ended December 31, 2025 and applied the new disclosure requirements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. See Note 12, Income Taxes to the consolidated financial statements for more information on the effect of this ASU adoption. 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 Companys annual reporting periods beginning January 1, 2027, and for interim reporting periods beginning January 1, 20 …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"2. REVENUE Nature of Products and Services IT products typically represent a distinct performance obligation, and revenue is recognized at the point in time when control is transferred to the customer which is generally upon delivery to the customer. The Company recognizes revenue as the principal in the transaction with the customer (i.e., on a gross basis), as it controls the product prior to delivery to the customer and derives the economic benefits from the sales transaction given the Companys control over customer pricing. The Company does not recognize revenue for goods that remain in its physical possession before the customer has the ability to direct the use of, and obtain substantially all of the remaining benefits from the products, the goods are ready for physical transfer to and identified as belonging to the customer, and when the Company has no ability to use the product or to direct it to another customer. Licenses for on-premise software provide the customer with a right to take possession of the software. Customers may purchase perpetual licenses or enter into subscriptions to the licensed software. The Company is the principal in these transactions and recognizes revenue for the on-premise license at the point in time when the software is made available to the customer and the commencement of the term of the software license or when the renewal term begins, as applicable. For certain on-premise licenses for security software, the customer derives substanti …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

15. SEGMENT AND RELATED DISCLOSURES The internal reporting structure used by the Companys chief operating decision maker, or CODM, to assess performance and allocate resources determines the basis for the Companys operating segments. The Companys operations are organized under three reporting segmentsthe Enterprise Solutions segment, which serves primarily medium-to-large corporations; the Business Solutions segment, which serves primarily SMBs; 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 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 Companys 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 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PC Connection, Inc. is a Fortune 1000 Global Solutions Provider that simplifies information technology, or IT, guiding the connection between people and technology. The Companys dedicated account managers partner with customers to design, deploy, and support cutting-edge IT environments using the latest hardware, software, and services. The Company provides a wide range of IT solutions, from the desktop to the cloudincluding computer systems, data center solutions, security, artificial intelligence, software and peripheral equipment, networking communications, and other products and accessories that the Company develops internally and secures from manufacturers, distributors, and other suppliers. The Technology Solutions and Services Organization and state-of-the-art ISO 9001:2015 SOC 2 Type 2 certified Technology Integration and Distribution Center offer end-to-end services related to the design, configuration, and implementation of IT solutions. The Company also provides a comprehensive portfolio of managed services and professional services. These services are performed by the Companys personnel and by third-party providers. The Companys GlobalServe offering ensures worldwide coverage for the Companys multinational customers, delivering global procurement solutions through the Companys network of in-country suppliers in over 150 countries. The Company operates through three operating segments: Connection Enterprise Solutions se …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Note 8Commitments 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 Companys 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 Companys financial position, results of operations, and/or cash flows. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Note 9Bank 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 Companys 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 three months ended March 31, 2025, the Company borrowed incremental amounts that were each repaid in full. These borrowings for the three months ended March 31, 2025 totaled $732; 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. …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following tables represent a disaggregation of revenue from arrangements with customers for the three months ended June 30, 2026 and 2025, along with the segment for each category (in thousands). Three Months Ended June 30, 2026 Enterprise Solutions Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 123,005 $ 154,652 $ 61,240 $ 338,897 Desktops 53,221 26,813 16,541 96,575 Software 31,380 38,001 9,524 78,905 Servers/Storage 23,177 25,900 9,178 58,255 Net/Com Products 22,272 27,351 11,042 60,665 Displays and Sound 38,565 23,896 13,979 76,440 Accessories 48,381 26,905 11,531 86,817 Other Hardware/Services 29,619 20,352 7,471 57,442 Total net sales $ 369,620 $ 343,870 $ 140,506 $ 853,996 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 The following tables represent a disaggregation of revenue from arrangements with customers for the six months ended June 30, 2026 and 2025, along with the segment for each category (in thousands). Six Months Ended June 30, 2026 Enterprise Solutions Business Solution …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

Note 3Fair Value Measurements Cash equivalents and short-term investments as of June 30, 2026 and December 31, 2025 consist of the following (in thousands): June 30, 2026 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents: Money market funds $ 88,021 $ $ $ 88,021 Short-term investments: U.S. Government treasury securities 217,236 (263) 216,973 Total $ 305,257 $ $ (263) $ 304,994 December 31, 2025 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents: Money market funds $ 170,826 $ $ $ 170,826 Short-term investments: U.S. Government treasury securities 213,358 99 213,457 Total $ 384,184 $ 99 $ $ 384,283 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 …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Note 5 Leases The Company leases certain facilities from a related party, which is a company affiliated with it through common ownership. The costs for these leases are presented within short-term lease cost in the below table. As of June 30, 2026, there were no additional significant operating leases that have not yet commenced. Refer to the following table for quantitative information related to the Companys leases for the three and six months ended June 30, 2026 and 2025 (dollars in thousands): Three Months Ended June 30, 2026 Six Months Ended June 30, 2026 Related Parties Others Total Related Parties Others Total Lease Cost Capitalized operating lease cost $ $ 496 $ 496 $ $ 1,017 $ 1,017 Short-term lease cost 419 192 611 837 333 1,170 Total lease cost $ 419 $ 688 $ 1,107 $ 837 $ 1,350 $ 2,187 Other Information Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases: Operating cash flows $ $ 391 $ 391 $ $ 854 $ 854 Right-of-use assets obtained in exchange for lease obligations Operating leases $ $ 555 $ 555 $ $ 6,611 $ 6,611 Weighted-average remaining lease term (in years): Capitalized operating leases 6.51 6.51 Weighted-average discount rate: Capitalized operating leases 0.00% 4.64% 4.64% 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 1,13 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recently Issued Financial Accounting Standards 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 Companys 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. In July 2025, the FASB issued ASU 2025-05, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets . This guidance provides a practical expedient related to estimating expected credit losses for accounts receivable and contract assets by assuming that current conditions remain unchanged over the life of the asset. This ASU is effective for the Companys annual reporting periods beginning January 1, 2026, and for interim reporting periods beginning January 1, 2027, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. In September 2025, the FASB issued ASU …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"Note 2Revenue 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, 2026 and 2025, along with the segment for each category (in thousands). Three Months Ended June 30, 2026 Enterprise Solutions Business Solutions Public Sector Solutions Total Notebooks/Mobility $ 123,005 $ 154,652 $ 61,240 $ 338,897 Desktops 53,221 26,813 16,541 96,575 Software 31,380 38,001 9,524 78,905 Servers/Storage 23,177 25,900 9,178 58,255 Net/Com Products 22,272 27,351 11,042 60,665 Displays and Sound 38,565 23,896 13,979 76,440 Accessories 48,381 26,905 11,531 86,817 Other Hardware/Services 29,619 20,352 7,471 57,442 Total net sales $ 369,620 $ 343,870 $ 140,506 $ 853,996 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 …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Note 7Segment Information The internal reporting structure used by the Companys chief operating decision maker, or CODM, to assess performance and allocate resources determines the basis for the Companys operating segments. The Companys operations are organized under three reporting segmentsthe 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 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 Companys 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, an …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing