Segment Information

6 Months Ended

Jun. 30, 2025

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

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 expenses¹		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 expenses¹		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


	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 expenses¹		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 expenses¹		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

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.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

PC CONNECTION INC 10-Q