Christine A. Leahy
President & Chief Executive Officer at CDW
Thank you, Steve. Good morning, everyone. I'll begin today's call with a brief overview of our results, strategic progress and outlook, and Al will run through the financials and our capital allocation priorities, and then we'll move right to your questions. We had an outstanding start to the year. The teams continued to execute well in a challenging supply environment and delivered exceptional top line growth and profitability. For the first quarter, net sales were $5.9 billion, 23% higher than last year. Non-GAAP operating income was $462 million, up 26%, and non-GAAP net income per share was $2.20, up 26% on a reported basis. These exceptional results reflect our ability to address customer priorities with solutions across the full spectrum of IT and the inclusion of Sirius. Customers continue to evolve as we move ahead into the new normal, digital transformation, agility and security remained top concerns with return-to-office driving collaboration, networking and endpoint solutions.
Customers want to manage costs while meeting or exceeding coworker and customer service level requirements. At the same time, customers across our diverse end markets are seeking ways to supplement technology resources in today's war for talent environment. Our ability to meet all these needs led to a broad-based and balanced performance. There were three drivers of our performance during the quarter. The first driver was our broad and diverse portfolio of customer end markets. As you know, we have five U.S. sales channels: Corporate, Small Business, Healthcare, Government and Education. Each of these channels is a meaningful business on its own with 2021 annual sales ranging from $1.8 billion to over $6 billion. Within each channel, teams are further segmented to focus on customer end markets, including geography and verticals. We also have our U.K. and Canadian operations, which together delivered USD2.6 billion in 2021 sales.
This scale and balance across customer end markets positions us to perform when external factors impact certain sectors or geographies. This quarter, our commercial markets, corporate and small business, along with our health care and international markets, all delivered strong double-digit growth. As expected, education and government growth was depressed as they lapped strong prior year stimulus and large deal-driven results. Our corporate team delivered a 46% increase. Growth was strong and balanced across transactions and solutions. The team did an excellent job addressing customer demand for return to work solutions, digital transformation and the need for agility and security. Unit growth, coupled with ASP increases, resulted in another quarter of strong double-digit growth in client devices and cloud spend was excellent.
Small Business posted a 21% increase. Performance was broad-based across both transactions and solutions. return-to-office strategy and modernizing workspaces drove strong collaboration, networking and security growth for hybrid work environment. Remote enablement drove another strong quarter of client device growth, up double digits, both in unit and ASPs. Security performance was up mid-teens and cloud spend was robust. Public posted a 6% increase on top of last year's exceptional 20% plus growth. Health care increased 27%, ongoing focus on driving productivity to offset higher costs from staffing shortages and other acute care needs led to double-digit solutions growth. Cloud adoption was strong driven by the speed and efficiency cloud solutions can deliver. Government posted a mid-single-digit increase.
State and local delivered a high single-digit increase driven by client devices and security. As we shared last quarter, we continue to help our customers as they work through the various funding opportunities and multiyear phasing and expect projects to continue to be implemented as we move through 2022. Federal performance played out as expected and was balanced across both the Department of Defense and civilian while lapping tough compares. As we shared last quarter, we continue to experience the lumpiness, the lumpy nature of government contracts and contracting changes. There is no change to our expectation that growth will return later in the year. Higher ed's strong double-digit performance was offset by the expected decline in K-12 and overall education sales decreased 4% off the first quarter of 2021's remarkable 101% growth. The higher ed team continues to help customers implement student success programs using technology to give an institution an edge with comprehensive endpoint solutions, improved security, campus connectivity and enhanced dorm room experiences.
The team delivered excellent client device growth and school systems tapped our capabilities to address the war-for-technology talent, which drove increased usage of CDW services to fill the gap in staffing needs. While K-12 delivered strong nonseasonal results, they posted a year-over-year decline on top of last year's exceptional 100% growth. Emergency connectivity funding, which was expected to end during the first half of 2022 was extended and a third wave was announced, adding complexity to an already challenging process. Many school systems are leveraging the extended funding window to digest better options and plans for their IT spend. Other, our combined U.K. and Canada results increased 13% on a reported basis. U.K. grew double digits in local currency and Canada increased high single digits in local currency. Each market saw balanced strength across both commercial and public customers. Customer priorities remain similar to those in the U.S.
The second driver of first quarter performance with our broad and deep product and solutions portfolio, our ability to address customer priorities across the entire IT continuum drove excellent performance across both our solutions and transactions portfolios. We continue to leverage our competitive advantages, including our distribution centers, extensive logistics capabilities, deep vendor partner relationships and strong balance sheet and liquidity position to navigate an ongoing supply challenge. U.S. hardware increased high teens. Growth was broad-based and included double-digit increases in NetComm, servers and server management, client devices and video/audio. This exceptional performance was on top of 2021's first quarter double-digit hardware growth. Demand continued to outpace supply in several key areas, notably in the networking space and remaining orders built during the quarter.
Customers once again placed orders to get in line for second half 2022 projects, especially in NetComm. U.S. software posted a 40% increase, driven by success helping customers upgrade their edge and secure their IT environments with double-digit increases in network management software and security software. Cloud was a meaningful contributor to this quarter's strong performance with significant double-digit increases in customer spend and gross profit, led by productivity, platform, security and collaboration workloads. U.S. services sales doubled. Growth was broad-based and balanced driven by professional services, managed services and warranties. As you can see, excellent broad and balanced performance across the business. And that leads to the third driver of our performance this quarter, our customer and coworker centric strategy.
Over the past three years, we have executed against our strategy to enhance our high relevant and high-growth solutions and services with both organic and inorganic investments, eight acquisitions have deepened and advanced our services capabilities, including automation, cloud native and DevOps, cybersecurity and our services scale and reach. We welcomed nearly 3,000 new coworkers from these eight acquisitions with more than half in technical roles. Since year-end 2018, our technical team has doubled in size. And at the end of this first quarter was more than 5,000 strong. Today, technical coworkers comprise more than half of all customer-facing coworkers, together with their other CDW colleagues, they form an amazing high-performing team, a high-performing team that is a key competitive advantage for CDW, a team that is the most engaged, enabled and energized team in the industry. All our investments, whether homegrown or inorganic, are intended to maximize our key point of differentiation in the marketplace.
We are a one-stop trusted partner with capabilities across the entire continuum of IT. -- capabilities that help customers achieve the outcomes they need from technology so they can do great things. Let me share a couple of recent customer examples that demonstrate how our investments help customers achieve outcomes. A soft drink manufacturer wanted to upgrade their on-premise voice system. The customer had two desired outcomes for the solution. Number one, flexibility to expand as their business grew, and number two, an excellent user experience. Since IT staff was focused on other priorities, the solution needed to be managed off-premise, leveraging CDW's world-class unified communications as a service capability and ServiceNow capabilities, the team designed a flexible and cost competitive integrated full stack managed collaboration anywhere solution.
The solution included CDW professional services for upfront design, planning, configuration and deployment and CDW managed services to provide ongoing MCA support and integration with our ServiceNow ticketing platform, a great outcome for the customer and for the team who bested large telecom providers to win the deal. They also deepened their relationship with the customer and delivered more than $3 million in licensing and services revenues. The second example of how our investments enable customers to achieve the outcomes they need is the recent adoption of Focal Point Academy by a major technology company. Focal Point Academy is a bespoke training program that delivers workforce development programs that solve today's greatest cybersecurity problems, finding, training and retaining skilled cyber professionals.
Focal Point Academy's operationally focused portfolio, which covers high-demand topics like threat hunting and application security, coupled with its ability to train and develop both senior and junior technical professionals was exactly what the customer needed to achieve its desired outcome of mitigating risk. Prior to our acquisition of Focal Point, we would not have been able to deliver this important global solution and further deepen our relationship with the customer. Investments in our customer and coworker-centric growth strategy are integral to our ability to consistently and profitably outgrow the U.S. IT market. And that leads to our expectations for the rest of the year. During the balance of 2022, we will continue to execute against our strategy to deepen our services and solutions capabilities. We are making excellent integration progress with Sirius, and that will remain a key focus area for the balance of 2022 as will investments in our coworkers and our own digital transformation. We will continue to balance investments with our growth and profitability expectations, which are now higher than previously shared at year-end.
Given our excellent momentum coming into the second quarter and first quarter performance, we now expect to outperform the U.S. IT market by 325 to 425 basis points, 125 basis points higher than our view at year-end 2021. Our view of U.S. IT market growth has also increased, and we now look for 2022 growth of 4%, which is 50 basis points above our prior view. Taken together, this equates to constant currency growth of 7.25% to 8.25%, above 2021 combined CDW revenues of $22.8 billion. Recall, 2021 combined CDW is calculated as those Sirius had been acquired on January 1, 2021, instead of its actual acquisition date of December 1. On a reported basis, our outlook represents a 17.5% to 18.5% increase over 2021 results. This outlook reflects our baseline expectations that given 2021 second half strong hardware performance we will mix into more cloud and security in the back half of this year. It also reflects our expectation that supply constraints remain relatively consistent with the first half of the year.
As always, we remain mindful of our wildcards, the potential for further disruptions to the supply chain, changes in COVID or macroeconomic performance and we will keep a watchful eye on these and other potential issues. As we always do, we will provide an update on our view on our next call. In the meantime, we will continue to do what we do best, which is leverage our competitive advantages and out-execute the competition. We will also continue to invest to ensure we remain our customers' trusted partner who delivers the outcomes they need, whether for innovation, cost management, agility, risk mitigation or user experience. If the past two years have shown us anything, it is that our role as a trusted strategic partner to our customers is more important now than ever.
Let me turn it over to Al now who will provide more detail on our financials and outlook. Al?
