Company Overview - CDW Corporation, based in Vernon Hills, Illinois, provides IT solutions across the United States, the United Kingdom, and Canada, with a market cap of $21.5 billion [1][2] Stock Performance - CDW stock has experienced a significant decline of 28.8% from its 52-week high of $230.86 reached on September 20, 2024, and has dropped nearly 6% over the past three months, underperforming the Nasdaq Composite's 12.6% increase during the same period [3] - Over the longer term, CDW stock has decreased by 5.6% in 2025 and 24.9% over the past 52 weeks, while the Nasdaq Composite has gained 14.7% year-to-date and 26% over the past year [4] Financial Performance - In Q2, CDW reported net sales of approximately $6 billion, reflecting a year-over-year increase of 10.2%, which exceeded analysts' expectations by 8.6%. However, there was a slight contraction in gross margins, resulting in a modest 3.9% growth in non-GAAP EPS to $2.60, also surpassing consensus estimates [5] Competitive Position - CDW has outperformed its peer, Gartner, Inc., which has seen a 49% decline year-to-date and a 51.1% drop over the past 52 weeks [6] - Among 12 analysts covering CDW stock, the consensus rating is a "Moderate Buy," with a mean price target of $206.80, indicating a potential upside of 25.9% from current price levels [6]

Market Performance - All three major U.S. equity benchmarks, including the S&P 500, Nasdaq 100, and Dow Jones, reached record highs as investors favored risk assets amid expectations of falling interest rates [1][2] - The S&P 500 rose 0.8% to 6,585.53, the Nasdaq 100 increased 0.7% to 24,012.41, and the Dow Jones jumped 1.3% to 46,087.94 [2][7] - The Vanguard S&P 500 ETF increased by 0.8% to $604.49, while the SPDR Dow Jones Industrial Average rose 1.2% to $461.58 [7] Sector Performance - All 11 S&P sectors experienced gains, with consumer discretionary, materials, and financials leading the way [3] - The Consumer Discretionary Select Sector SPDR Fund outperformed, increasing by 1.3%, while the Energy Select Sector SPDR Fund lagged with a 0.1% rise [7] Company Performance - Top gainers in the S&P 500 included Synopsys, Inc. (+11.11%), Centene Corporation (+10.66%), and Micron Technology, Inc. (+9.57%) [8] - Notable losers included Delta Air Lines, Inc. (-4.30%), Oracle Corporation (-3.38%), and Netflix, Inc. (-2.83%) [9]

Group 1 - CDW is participating in Citi Research's Global TMT Conference, marking its 33rd Annual Conference [1] - Asiya Merchant, VP & Analyst at Citi Research, oversees tech hardware and tech supply chain stocks [1] - Chris Leahy and Al Miralles from CDW are present at the conference [1] Group 2 - The format of the session is a fireside chat, allowing for both prepared remarks and audience questions [2] - The investment community is encouraged to engage by raising hands for Q&A [2]

Summary of CDW (CDW) 2025 Conference Call Company Overview - **Company**: CDW - **Event**: 2025 Conference - **Date**: September 03, 2025 - **Speakers**: Christine Leahy, Al Miralles, Sia Merchant Key Points Industry and Market Performance - CDW reported a **10% year-on-year growth** in Q2 2025, indicating strong performance despite market complexities [6][7] - The company characterized its business as **highly resilient**, with strong execution across all end markets, particularly in the enterprise sector, which performed better than expected [7][9] - Caution was expressed regarding the second half of the year, particularly in federal and education markets, due to **administration policy changes** and funding challenges [9][10] Growth and Outlook - CDW's outlook for the second half of 2025 is **prudent**, with expectations of muted performance in federal and education sectors, despite potential catalysts for growth [9][10] - The company is looking for **consistent growth** in enterprise and small business sectors, along with clarity in budgetary and policy areas for education and federal government [13] Competitive Positioning - CDW has evolved from a reseller to a **technology integrator**, enhancing its relevance in a complex technology landscape [17][18] - The company benefits from its scale, which provides advantages in verticalization and cost leverage, making it a preferred partner for technology solutions [18][19] - CDW's partner ecosystem is robust, with strong relationships that position it as a leading channel player [19] Cloud and AI Integration - The transition to cloud services is complex, and CDW emphasizes the need for **advisory services** to help customers optimize their technology investments [23][24] - AI adoption among customers is increasing, with CDW positioned as a key partner in helping organizations become **AI-ready** [35][36] - The company is committed to being an **AI-native workforce**, integrating AI tools to enhance productivity internally [46][47] Financial Performance and Margins - CDW expects margins to remain consistent with 2024, driven by growth in solutions and services, particularly in higher-margin areas [26][32] - The company is focused on **durable gross profit growth** through strategic investments across the business cycle [29][30] - Free cash flow generation is strong, with a disciplined approach to capital allocation, including potential M&A opportunities [60] Strategic Acquisitions - CDW recently acquired **Mission Cloud Services**, enhancing its cloud solution capabilities and integration with AWS [61][62] - The integration of Mission Cloud is performing well, contributing positively to CDW's sales and AWS relationships [63] Investor Insights - Investors may underestimate the **complexity of the technology landscape**, which creates opportunities for CDW as businesses seek guidance in navigating new technologies [65][66] - The company is optimistic about future growth driven by AI and other secular catalysts, despite a cautious near-term outlook [64] Additional Important Points - CDW's diverse portfolio allows it to adapt to various market conditions, providing a buffer against macroeconomic events [20] - The company is actively investing in higher-margin areas such as managed services and security, which are expected to drive future profitability [32]

Investment Rating - The report maintains a constructive outlook on shares of Amphenol Corp (APH), Dell Technologies (DELL), Corning Inc (GLW), Hewlett Packard Enterprise (HPE), and the memory/disk drive sector including Seagate Technology (STX), Western Digital Corp (WDC), and SanDisk Corp (SNDK) [4]. Core Insights - The upcoming Citi's 33rd annual Global Technology Conference will feature over 240 technology companies, focusing on updates regarding customer and enterprise demand dynamics, as well as supply chain conditions [1]. - Key investor questions include the impact of Generative AI on infrastructure spending, enterprise spending intentions, consumer spending trends, margin impacts from rising component costs, and capital allocation strategies [2][3]. Company Summaries - **Amphenol Corp (APH)**: Current price at $109.36 with a market cap of $133.52 billion. The target price is set at $125.00 with an expected share price return of 14.3% [7]. - **CDW Corp (CDW)**: Current price at $167.00 with a market cap of $21.89 billion. The target price is $200.00 with an expected share price return of 19.8% [7]. - **Corning Inc (GLW)**: Current price at $65.77 with a market cap of $56.34 billion. The target price is $72.00 with an expected share price return of 9.5% [7]. - **Dell Technologies (DELL)**: Current price at $130.84 with a market cap of $88.50 billion. The target price is $160.00 with an expected share price return of 22.3% [7]. - **Hewlett Packard Enterprise (HPE)**: Current price at $22.45 with a market cap of $29.46 billion. The target price is $25.00 with an expected share price return of 11.4% [7]. - **SanDisk Corp (SNDK)**: Current price at $46.37 with a market cap of $6.76 billion. The target price is $57.00 with an expected share price return of 22.9% [7]. - **Seagate Technology (STX)**: Current price at $159.19 with a market cap of $33.86 billion. The target price is $167.00 with an expected share price return of 4.9% [7]. - **Western Digital Corp (WDC)**: Current price at $76.97 with a market cap of $26.70 billion. The target price is $88.00 with an expected share price return of 14.3% [7].

Group 1 - The core viewpoint is a reiteration of a buy rating on CDW Corporation, highlighting the significance of a hardware refresh cycle that is expanding, leading to increased infrastructure spending [1] - The hardware refresh cycle is expected to contribute to higher-value infrastructure spending, which is beneficial for CDW Corporation [1] Group 2 - The investment approach focuses on identifying undervalued companies with long-term growth potential, emphasizing a blend of value investing principles [1] - The strategy involves purchasing quality companies at a discount to their intrinsic value and holding them for long-term earnings and shareholder returns [1]

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The section presents unaudited consolidated financial statements for the periods ended June 30, 2025 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $15.27 billion, driven by higher accounts receivable and inventory Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $7,836.5 | $7,373.1 | | **Total Assets** | **$15,265.7** | **$14,678.4** | | **Total Current Liabilities** | $5,805.7 | $5,474.4 | | **Total Long-term Debt** | $5,623.2 | $5,607.0 | | **Total Liabilities** | $12,798.5 | $12,325.7 | | **Total Stockholders' Equity** | $2,467.2 | $2,352.7 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Net sales grew 10.2% in Q2 2025, though operating income and diluted EPS saw slight declines Key Performance Indicators - Three Months Ended June 30 (in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $5,976.6 | $5,423.4 | 10.2% | | Gross profit | $1,241.2 | $1,183.1 | 4.9% | | Operating income | $420.2 | $433.1 | -3.0% | | Net income | $271.2 | $281.1 | -3.5% | | Diluted EPS | $2.05 | $2.07 | -1.0% | Key Performance Indicators - Six Months Ended June 30 (in millions, except EPS) | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $11,175.7 | $10,296.1 | 8.5% | | Gross profit | $2,363.5 | $2,246.4 | 5.2% | | Operating income | $781.6 | $761.1 | 2.7% | | Net income | $496.1 | $497.2 | -0.2% | | Diluted EPS | $3.73 | $3.66 | 1.9% | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased to $443.1 million due to working capital changes Cash Flow Summary - Six Months Ended June 30 (in millions) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $443.1 | $589.9 | | Net cash provided by (used in) investing activities | $154.6 | $(60.6) | | Net cash (used in) financing activities | $(649.2) | $(449.6) | | **Net (decrease) increase in cash** | **$(26.5)** | **$76.6** | - Key financing activities in the first six months of 2025 included **$350.1 million in common stock repurchases** and **$165.1 million in dividend payments**[16](index=16&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment performance, debt, and legal matters - The company is a leading multi-brand provider of IT solutions to business, government, education, and healthcare customers in the US, UK, and Canada[24](index=24&type=chunk) - Total long-term debt stood at **$5.62 billion** as of June 30, 2025, and the company repaid **$211 million** of its 4.125% Senior Notes in May 2025[44](index=44&type=chunk)[47](index=47&type=chunk) - The company received a Civil Investigative Demand from the Department of Justice related to a **False Claims Act investigation** concerning the E-Rate Program, with the outcome currently indeterminable[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial results, highlighting sales growth offset by margin pressure - Key factors affecting performance include general economic conditions, a measured approach to IT spending by customers, and technology trends driving adoption of cloud, AI, and hybrid solutions[94](index=94&type=chunk)[96](index=96&type=chunk) Key Business Metrics Summary | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales ($M) | $5,976.6 | $5,423.4 | $11,175.7 | $10,296.1 | | Gross profit margin | 20.8% | 21.8% | 21.1% | 21.8% | | Operating income margin | 7.0% | 8.0% | 7.0% | 7.4% | | Non-GAAP operating income margin | 8.7% | 9.4% | 8.6% | 8.9% | | Non-GAAP net income per diluted share | $2.60 | $2.50 | $4.74 | $4.41 | [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Q2 2025 net sales grew 10.2%, but a decline in gross margin led to lower operating income - **Q2 2025 vs Q2 2024:** Net sales increased by **$553 million (10.2%)**, but Gross Profit only grew by **$58 million (4.9%)** due to a 100 basis point decline in gross profit margin, leading to a **$13 million (3.0%) decrease in Operating Income**[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - **H1 2025 vs H1 2024:** Net sales increased by **$880 million (8.5%)**, and Gross Profit grew by **$117 million (5.2%)**, resulting in an Operating Income increase of **$21 million (2.7%)**[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [Segment Results of Operations](index=28&type=section&id=Segment%20Results%20of%20Operations) The Corporate segment led sales growth, while the Public segment's operating income declined Net Sales Growth by Segment - Q2 2025 vs Q2 2024 | Segment | Q2 2025 Net Sales ($M) | % Change YoY | | :--- | :--- | :--- | | Corporate | $2,581.5 | 17.6% | | Small Business | $431.3 | 12.6% | | Public | $2,291.7 | 2.2% | | Other | $672.1 | 11.6% | Operating Income by Segment - Q2 2025 vs Q2 2024 | Segment | Q2 2025 Op. Income ($M) | % Change YoY | | :--- | :--- | :--- | | Corporate | $243.1 | 23.4% | | Small Business | $47.8 | 4.8% | | Public | $187.5 | -10.4% | | Other | $42.6 | 76.0% | | Headquarters (cost) | $(100.8) | -135.0% | - The Public segment's performance was mixed: **Healthcare sales grew 24.1%**, Government sales grew 2.7%, but **Education sales declined 10.9%** year-over-year in Q2 2025[113](index=113&type=chunk)[124](index=124&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by operations and a revolving facility despite lower operating cash flow - As of June 30, 2025, the company had **$1.2 billion of availability** under its Revolving Loan Facility and total unsecured debt of **$5.6 billion**[150](index=150&type=chunk)[151](index=151&type=chunk) - During H1 2025, the company repurchased **2.0 million shares for $350 million**[154](index=154&type=chunk) - The cash conversion cycle decreased by one day to **16 days**, driven by an increase in Days of Purchases Outstanding (DPO)[159](index=159&type=chunk)[161](index=161&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk disclosures remain materially unchanged from the previous annual report - There have been **no material changes** in market risk information since the last annual report[176](index=176&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective with no material changes to internal controls - Management concluded that disclosure controls and procedures were **effective** as of the end of the period covered by the report[177](index=177&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[178](index=178&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings and a DOJ investigation - The company is subject to various legal proceedings and is cooperating with a **Department of Justice investigation** related to the Schools and Libraries Program (E-Rate Program)[63](index=63&type=chunk)[66](index=66&type=chunk)[180](index=180&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) Risk factors remain materially unchanged from the 2024 Annual Report on Form 10-K - There are **no material changes** to the risk factors previously disclosed in the company's 2024 Form 10-K[181](index=181&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 0.9 million shares for $150 million in Q2 2025 Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased (millions) | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 0.2 | $152.83 | | May 2025 | 0.3 | $182.93 | | June 2025 | 0.4 | $175.94 | | **Total** | **0.9** | **-** | - As of June 30, 2025, **$987.5 million remained available** for future repurchases under the authorized program[183](index=183&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including certifications and XBRL data - Exhibits filed include CEO and CFO certifications pursuant to Rule 15d-14(a) and 18 U.S.C. 1350, as well as Inline XBRL documents[188](index=188&type=chunk)

Core Insights - CDW Corporation reported second-quarter 2025 non-GAAP EPS of $2.60, exceeding the Zacks Consensus Estimate of $2.49, with a year-over-year increase of 3.9% [1][9] - Net sales for the quarter reached $5.98 billion, reflecting a solid 10.2% year-over-year growth, with a 9.8% increase on a constant currency basis [2][9] Financial Performance - The Corporate segment's net sales were $2.6 billion, up 17.6% year-over-year, while the Small Business segment reported $431 million in net sales, a 12.6% increase [7] - The Public segment generated $2.3 billion in revenues, representing a 2.2% growth, driven by a 24.1% increase in Healthcare and a 2.7% increase in Government, offset by a 10.9% decline in Education [7] - Gross profit grew 4.9% year-over-year to $1.24 billion, but gross margin declined from 21.8% to 20.8% due to pricing pressures [11] - Non-GAAP operating income increased 1.8% year-over-year to $519.7 million, with non-GAAP operating margin falling to 8.7% from 9.4% [11] Market Dynamics - Growth was supported by strong demand in IT lifecycle services, device refresh cycles, and international markets [9] - CDW's customer-focused approach and extensive product portfolio are crucial for addressing complex technology needs across the IT stack [4] Future Outlook - CDW aims to outpace U.S. IT market growth by 200–300 basis points on a constant currency basis, focusing on trends like cloud modernization and cybersecurity [5] - The company announced a quarterly dividend of 62.5 cents, payable on September 10, 2025 [5] Share Performance - Following strong demand across core commercial and international markets, CDW's shares rose 4.3% in pre-market trading on August 6 [6] - Over the past year, CDW's shares have declined by 21%, compared to a 3.1% decline in the Zacks Computers-IT Services industry [6] Balance Sheet and Cash Flow - As of June 30, 2025, CDW had $481 million in cash and cash equivalents, with long-term debt remaining at $5.623 billion [13] - For the first half of 2025, CDW generated $443.1 million in cash flow from operating activities, down from $589.9 million a year ago [13]

Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2025 were $6 billion, up 10% year-over-year [8] - Gross profit was $1.2 billion, an increase of 5% [8] - Non-GAAP operating income rose to $520 million, up 2% [8] - Non-GAAP net income per share was $2.60, reflecting a 4% increase [9] - Adjusted free cash flow for the quarter was $210 million [9] Business Line Data and Key Metrics Changes - Corporate net sales increased by 18%, while small business sales rose by 13% [12] - Health care sales surged by 24%, while education saw an 11% decline [13] - Hardware sales grew by 9%, driven by infrastructure solutions and client devices [17] - Software sales increased by 16%, with strong growth across all markets except K-12 [18] - Services revenue was up 8%, with professional managed services growing by 13% [18] Market Data and Key Metrics Changes - The commercial market showed strong performance, offsetting declines in federal and education sectors [12][14] - UK and Canadian operations reported a combined top line increase of 12% [16] - Federal market performance was mixed, with a 3% increase in government sales but declines in federal purchases [15] Company Strategy and Development Direction - The company maintains a focus on full stack, full life cycle solutions to address customer needs [6][19] - Strategic investments in services capabilities are seen as key differentiators in the market [19] - The company aims to navigate market dislocations in government and education while leveraging its scale and expertise [24][25] Management's Comments on Operating Environment and Future Outlook - Management expects continued challenges in the government and education sectors for the remainder of the year [23][24] - The outlook for 2025 remains cautious, with low single-digit growth anticipated for the IT market [23][38] - Management emphasizes a commitment to delivering customer value and executing with precision [25] Other Important Information - Non-GAAP SG&A expenses totaled $722 million, up 7.2% year-over-year [30] - The company returned approximately $150 million in share repurchases and $82 million in dividends during the quarter [33] - The liquidity position remains strong, with cash and revolver availability of approximately $1.7 billion [32] Q&A Session Summary Question: Performance vs. Market Expectations - Analyst inquired about the company's outperformance relative to market expectations and share gain [43] - Management confirmed confidence in outperforming the market by 200 to 300 basis points, attributing recent performance to strong execution and customer demand [44][45] Question: Product Segment Performance - Analyst asked about the performance of hardware segments and market cycles [46] - Management noted mid-cycle strength in client devices and an uptick in infrastructure hardware demand [47][48] Question: Corporate Market Strength - Analyst sought clarification on the motivating factors behind strong corporate market performance [54] - Management highlighted pent-up demand and strategic investments as key drivers [57][59] Question: Free Cash Flow Conversion - Analyst questioned the subdued free cash flow conversion rate [67] - Management attributed this to timing effects and expects improvement in the second half of the year [68] Question: AI Impact on Revenues - Analyst asked about the influence of AI on client device upgrades and data center demand [97] - Management indicated a growing urgency around AI, with increased conversations and demand across all product lines [99][100]

Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2025 were $6 billion, up 10% year-over-year [6] - Gross profit was $1.2 billion, an increase of 5% [6] - Non-GAAP operating income rose to $520 million, up 2% [6] - Non-GAAP net income per share was $2.60, reflecting a 4% increase [7] - Adjusted free cash flow for the quarter was $210 million [7] Business Line Data and Key Metrics Changes - Corporate net sales increased by 18%, while small business sales rose by 13% [10] - Health care sales surged by 24%, while education saw an 11% decline [11][12] - Hardware sales grew by 9%, driven by infrastructure solutions and client devices [15] - Software sales increased by 16%, with strong growth across all markets except K-12 [16] Market Data and Key Metrics Changes - U.S. IT market growth is expected to be in the low single digits, with CDW targeting a growth premium of 200 to 300 basis points [22] - Federal and education markets are facing ongoing challenges, impacting overall performance [22] - UK and Canadian operations reported a combined top line increase of 12% [14] Company Strategy and Development Direction - The company emphasizes a diversified portfolio of products and services to navigate market complexities [6] - Focus on full stack, full life cycle solutions to enhance customer relationships and drive growth [18] - Continued investment in AI capabilities to support customer needs across various sectors [19] Management's Comments on Operating Environment and Future Outlook - Management expects continued challenges in government and education sectors, impacting growth [22] - The company remains committed to executing its strategy and maximizing its business model strengths [23] - Anticipated gross profit growth for the full year 2025 is expected to be low to mid single digits [37] Other Important Information - Non-GAAP SG&A expenses totaled $722 million, up 7.2% year-over-year [29] - The company returned approximately $150 million in share repurchases and $82 million in dividends [32] - The cash conversion cycle was 16 days, reflecting effective working capital management [31] Q&A Session Summary Question: Regarding outperformance versus market expectations - Management confirmed that the outperformance is driven by market conditions and customer demand, expecting to maintain a growth premium [44] Question: Insights on hardware market cycles - Management indicated that the client device refresh cycle is mid-cycle, with positive trends in infrastructure hardware [47][50] Question: Factors behind corporate market strength - The corporate market's strength is attributed to pent-up demand and strategic investments in mission-critical technology [57] Question: Guidance for Q4 earnings - Management expressed conservatism in Q4 guidance due to expected softness in federal and education segments [82] Question: Impact of AI on revenues - AI is becoming a significant part of customer conversations, with increasing demand for AI-driven solutions across client devices and infrastructure [96] Question: M&A opportunities - The company is focused on growing capabilities in high-relevance areas, particularly in services-led capabilities [102]