Financial Data and Key Metrics Changes - For the full year 2024, revenue was $2.8 billion, a decrease of 1.7% compared to the prior year, while gross profit was $519.8 million, an increase of 1.6% [9] - Gross margin reached a record 18.6%, growing 60 basis points [9] - SG&A was $422.3 million, an increase of 4% compared to the prior year [10] - Net income was $87.1 million, an increase of 4.6% compared to the prior year, with earnings per diluted share at $3.29 for 2024 compared to $3.15 in the prior year [10] - Q4 consolidated net sales were $708.9 million, an increase of 1.8% compared to last year, while net income in Q4 was $20.7 million, a decrease of 12.9% [11][12] Business Line Data and Key Metrics Changes - In the Business Solutions segment, Q4 net sales were $262.4 million, down 3.7% year-over-year, with a 12% decrease in advanced technology products [15] - Public Sector Solutions Q4 net sales were $143.7 million, up 42.9% year-over-year, with gross profit increasing by 30.2% [16] - Enterprise Solutions segment Q4 net sales were $302.7 million, down 6.4% year-over-year, with gross profit decreasing by 9.3% [18] Market Data and Key Metrics Changes - Overall IT spending was lower than expected in Q4 and for all of 2024, with customers delaying investments in large advanced technology projects [27] - There was year-over-year growth in the device ecosystem, including endpoint and related categories, but many customers delayed investments [28] Company Strategy and Development Direction - The company made significant investments in 2024 to improve business capabilities, including a world-class CRM system and AI-enabled workflow tools [29] - Strategic investments are expected to position the company for success in 2025, with anticipated growth driven by data center and infrastructure projects [30] - The company aims to outperform the US IT market growth rate by 200 basis points in 2025 [35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, citing a large number of projects in the pipeline and expected customer investments in data center and infrastructure projects [30][34] - There are macroeconomic events that could impact customer investment timing, including developments in the AI landscape and potential tariffs [34] Other Important Information - The company announced a 50% increase in its quarterly dividend to $0.15 per share, payable on March 14, 2025 [22] - Cash flow generated from operations for the year was $173.9 million, with a decrease in inventory benefiting cash from operations [24] Q&A Session Summary Question: Can you comment on the sales progression during the quarter? - October was better than previous years, November was markedly worse, and December was about the same, with expectations for Q1 to be flat or up very low single digits [39] Question: Which vertical markets do you see having the most opportunity? - The large enterprise group has many new projects, with optimism in retail, healthcare, and manufacturing sectors [42][43] Question: How should we think about expected expense growth versus gross profit growth? - SG&A is expected to grow around 3-4% year-on-year, reflecting investments in resources to prepare for future growth [46] Question: What are the expected impacts from tariffs? - The complexity of supply chains makes predictions difficult, but the company is engaging customers to plan for contingencies [50][51]

Core Viewpoint - PC Connection (CNXN) reported quarterly earnings of $0.78 per share, missing the Zacks Consensus Estimate of $0.90 per share, representing a year-over-year decline from $0.90 per share [1][2] Financial Performance - The company posted revenues of $708.9 million for the quarter ended December 2024, which was 1.02% below the Zacks Consensus Estimate and an increase from $696.47 million year-over-year [2] - Over the last four quarters, PC Connection has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Performance - PC Connection shares have increased approximately 5.1% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.60 on revenues of $664.66 million, and for the current fiscal year, it is $3.59 on revenues of $2.93 billion [7] - The estimate revisions trend for PC Connection is currently unfavorable, leading to a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Retail - Computer Hardware industry, to which PC Connection belongs, is currently ranked in the bottom 6% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Performance - Net sales for Q4 2024 increased by 1.8% year over year to $708.9 million, while full year net sales decreased by 1.7% to $2.8 billion[3][11] - Gross profit for Q4 2024 was flat at $129.8 million, with a gross margin of 18.3%, down 30 basis points year over year; for the full year, gross profit increased by 1.6% to $519.8 million, with a gross margin of 18.6%, up 60 basis points[5][11] - Net income for Q4 2024 decreased by 12.9% to $20.7 million, or $0.78 per diluted share, compared to $23.8 million, or $0.90 per diluted share, in the prior year quarter; full year net income increased by 4.6% to $87.1 million, or $3.29 per diluted share[3][11] - Adjusted EBITDA for the full year 2024 decreased by 5% to $118.9 million compared to $125.5 million in 2023[12] - Adjusted EBITDA for Q4 2024 was $28,083, down 14% from $32,738 in Q4 2023; for the year, it decreased by 5% to $118,936 from $125,516[33] - Adjusted Net Income for Q4 2024 was $20,721, a decrease of 13% from $23,778 in Q4 2023; for the year, it increased by 1% to $86,142 from $85,249[36] - Diluted Earnings per Share for Q4 2024 was $0.78, down 13% from $0.90 in Q4 2023; for the year, it increased by 4% to $3.29 from $3.15[36] Segment Performance - The Business Solutions segment saw a 3.7% decrease in net sales to $262.4 million in Q4 2024, while the Public Sector Solutions segment experienced a 42.9% increase to $143.7 million[6] - Notebook/mobility and desktop sales increased by 14% year over year, accounting for 46% of net sales in Q4 2024, while software sales decreased by 35%[14] Expenses and Investments - Selling, general and administrative expenses increased to $107.1 million in Q4 2024, representing 15.1% of net sales, up from 14.6% in the prior year quarter[9] - The company made significant investments in AI and modern infrastructure to enhance integrated solutions capabilities[2] - Stock-based compensation expense increased by 43% to $2,279 in Q4 2024 from $1,597 in Q4 2023; for the year, it rose by 21% to $8,475 from $7,022[33] Cash and Assets - Cash and cash equivalents and short-term investments were $442.6 million as of December 31, 2024, compared to $297.2 million a year earlier[10] - Total assets increased to $1,299,354,000 from $1,188,381,000 year-over-year[30] - Cash and cash equivalents rose to $178,318,000, up from $144,954,000 in the previous year[30] Market and Shareholder Information - The company declared a quarterly dividend of $0.15 per share, payable on March 14, 2025[1] - Market capitalization increased to $1,821,801,000 from $1,771,656,000 year-over-year[26] - Total stockholders' equity grew to $910,990,000, compared to $840,767,000 in the previous year[30] Cash Flow - Cash provided by operating activities for Q4 2024 was $25,248, compared to $12,289 in Q4 2023; for the year, it decreased to $173,868 from $197,954[31] - Cash used in investing activities for Q4 2024 was $5,603, significantly lower than $104,148 in Q4 2023; for the year, it decreased to $115,286 from $160,202[31] - Cash used in financing activities for Q4 2024 was $8,838, compared to $3,696 in Q4 2023; for the year, it increased to $25,218 from $15,728[31] Other Financial Metrics - Inventory turns improved to 23, compared to 17 in the same quarter last year[26] - The product mix showed an increase in Notebooks/Mobility sales to 36% of net sales, up from 32%[26] - The company recorded $1.7 million of income from a legal settlement, impacting other income positively[34] - The company reported a decrease in accounts receivable by $27,441 in Q4 2024 compared to a decrease of $19,270 in Q4 2023[31]

Core Viewpoint - The market anticipates that PC Connection (CNXN) will report flat earnings of $0.90 per share for the quarter ended December 2024, with revenues expected to increase by 2.8% to $716.23 million compared to the previous year [1][3]. Earnings Expectations - The upcoming earnings report is scheduled for February 5, and the stock price may rise if actual results exceed expectations, while a miss could lead to a decline [2]. - The consensus EPS estimate has been revised down by 6.25% over the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for PC Connection is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +2.22% [10][11]. - A positive Earnings ESP is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. Historical Performance - In the last reported quarter, PC Connection was expected to earn $1.01 per share but reported $0.97, resulting in a surprise of -3.96% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [13]. Conclusion - PC Connection is viewed as a compelling candidate for an earnings beat, but investors should consider other factors that may influence stock performance beyond earnings results [16].

PC Connection (CNXN) came out with quarterly earnings of $0.97 per share, missing the Zacks Consensus Estimate of $1.01 per share. This compares to earnings of $0.97 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -3.96%. A quarter ago, it was expected that this information technology services provider would post earnings of $0.83 per share when it actually produced earnings of $1, delivering a surprise of 20.48%.Over the last ...

Financial Data and Key Metrics Changes - Connection achieved record net income with earnings per share of $1.02 for Q3 2024, a 5.4% increase from $0.97 in Q3 2023 [11][15] - Consolidated net sales were $724.7 million, up 4.6% year-over-year, while gross profit increased 2.7% to $135.4 million [15][22] - Operating income decreased by 6.2% to $30 million, with operating income as a percentage of sales at 4.1%, down from 4.6% in the prior year [15][22] Business Segment Performance - Business Solutions segment net sales were $252.6 million, down 6.1% year-over-year, with a 20% decrease in advanced technology product sales [16] - Public Sector Solutions net sales increased by 18.7% to $175.1 million, driven by Federal Government sales [18] - Enterprise Solutions segment net sales rose 7.4% to $297 million, with a 14% increase in endpoint device sales [20] Market Data and Key Metrics Changes - Healthcare revenue increased by 20% year-over-year, while retail revenue grew by 23% due to device refresh initiatives [29] - Manufacturing revenue saw a 1% increase, focusing on productivity gains and cybersecurity [30] - Financial Services revenue increased by 5%, driven by investments in cybersecurity and interoperability [31] Company Strategy and Industry Competition - The company is focused on navigating the evolving technology landscape, emphasizing AI and digital transformation [10][36] - Strategic investments are being made in technical sales and customer engagement to enhance capabilities [55] - The competitive environment is intensifying as customers remain cautious about IT budgets and AI adoption [41] Management's Comments on Operating Environment and Future Outlook - Management noted that demand for advanced technologies has been negatively impacted by customer uncertainty regarding IT roadmaps [13] - A delayed recovery in demand is expected to continue into 2024, with cautious spending anticipated [34][35] - The company remains optimistic about growth in 2025, particularly in device demand and advanced technologies [35] Other Important Information - SG&A expenses increased by 5.6% due to investments in sales and marketing [21] - Cash flow from operations for the first nine months of 2024 was $148.6 million, with a decrease in accounts receivable and inventory [25][26] - The company declared a quarterly dividend of $0.10 per share, payable on November 29, 2024 [24] Q&A Session Summary Question: Competitive environment and gross margin pressure - Management indicated that gross margin pressure was primarily due to large project rollouts, particularly with the Federal Government [40] Question: Impact on operating margin and earnings growth - Management expects overall gross profit growth despite margin rate compression, with ongoing investments aimed at improving technical sales capabilities [44] Question: Trends for Q4 and budget flush expectations - Management noted that Q4 is expected to be similar to Q3, with cautious customer behavior continuing [46][48] Question: Timing for benefits from AI readiness investments - Management anticipates seeing tangible benefits from investments in technical sales by Q2 2025, with ongoing improvements expected [56] Question: Recovery outlook for Business Solutions segment - Management sees potential recovery in the Enterprise business but expects the SMB segment to be slower due to macroeconomic concerns [59]

Financial Performance - Net sales for Q3 2024 reached $724.7 million, an increase of $31.6 million or 4.6% compared to Q3 2023[67] - Gross profit for Q3 2024 increased by $3.5 million or 2.7% year-over-year, totaling $135.4 million, while gross margin decreased to 18.7% from 19.0%[67] - Operating income for Q3 2024 decreased by $2.0 million year-over-year, resulting in an operating margin of 4.1%[68] - Net income for the third quarter of 2024 increased to $27.1 million, compared to $25.6 million in the same quarter of 2023, primarily due to higher interest income and other income[92] - Net sales for the nine months ended September 30, 2024, decreased to $2,093.2 million, a decline of $61.0 million or 2.8% compared to the same period in 2023[93] - Gross profit for the total company increased to $390.0 million, reflecting a year-over-year increase of $8.0 million or 2.1%[93] - Net income for the nine months ended September 30, 2024, increased to $66.4 million, compared to $59.5 million in the same period of 2023[111] Segment Performance - The Enterprise Solutions segment accounted for 41% of net sales in Q3 2024, up from 40% in Q3 2023[69] - Enterprise Solutions segment net sales reached $297.0 million, up $20.4 million or 7.4% year-over-year, driven by increases in displays and sound, desktops, and accessories[75] - Public Sector Solutions segment net sales increased by $27.6 million or 18.7% to $175.1 million, with federal government sales rising by $25.6 million or 97.2%[76] - Business Solutions segment net sales decreased by $16.4 million or 6.1% to $252.6 million, primarily due to declines in net/com products and other hardware/services[77] - Enterprise Solutions segment net sales remained stable at $878.4 million, while Business Solutions and Public Sector Solutions segments saw declines of 2.0% and 9.6%, respectively[93][96][97] Expenses and Margins - SG&A expenses rose by $5.6 million or 5.6% year-over-year to $105.4 million, with SG&A as a percentage of net sales increasing to 14.5%[67] - Selling, general and administrative (SG&A) expenses rose to $105.4 million, an increase of $5.6 million or 5.6% from $99.8 million, representing 14.5% of net sales[83] - SG&A expenses increased to $315.2 million, representing 15.1% of net sales, an increase of 70 basis points compared to the prior year[101] - Income from operations decreased slightly to $74.4 million, with an operating margin of 3.6%, up from 3.5% in the previous year[108] Cash and Investments - As of September 30, 2024, the company had $167.5 million in cash and cash equivalents and $261.6 million in short-term investments[115] - Cash used in investing activities increased significantly to $(109.7) million in 2024 from $(56.1) million in 2023, primarily due to $255.1 million in purchases of U.S. Government treasury securities[121] - Cash used in financing activities was $(16.4) million for the nine months ended September 30, 2024, compared to $(12.0) million in 2023, reflecting increased borrowings and repayments[121] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $148.7 million, a decrease of 19.93% from $185.7 million in the same period of 2023[121] Interest and Tax - Interest income, net rose to $4.8 million, an increase of $2.1 million from $2.7 million in the prior year quarter, attributed to higher cash equivalent balances and interest rates[90] - Interest income increased significantly to $14.1 million, up from $5.8 million, primarily due to higher cash equivalent balances and interest rates[109] - The effective tax rate decreased to 26.0% for the quarter ended September 30, 2024, compared to 26.3% for the same quarter in 2023[91] Operational Efficiency - The cash conversion cycle improved to 40 days as of September 30, 2024, down from 51 days in 2023, indicating better efficiency in managing working capital[126] - Days of sales outstanding (DSO) decreased to 67 days in September 2024 from 71 days in September 2023, contributing to the improved cash conversion cycle[124] - The company continues to monitor its cash conversion cycle to manage working capital and operating cash needs effectively[124] Dividends and Shareholder Returns - The company declared a quarterly cash dividend of $0.10 per share, to be paid on November 29, 2024[119] Debt and Financial Ratios - The company had no outstanding borrowings under its credit facility as of September 30, 2024, with a borrowing capacity of up to $50.0 million[132] - The funded debt ratio was calculated at 0.0 to 1.0 as of September 30, 2024, well below the maximum limit of 2.0 to 1.0, allowing for potential borrowings[136] - Minimum consolidated net worth was calculated at $636.2 million as of September 30, 2024, exceeding the required minimum of $346.7 million[137] - Cash receipts are automatically applied against any outstanding borrowings, allowing for efficient cash management[133] Strategic Initiatives - The company plans to continue investing in IT solutions, anticipating higher-margin service revenues despite increased service costs[63] - The company faces challenges in managing SG&A expenses while investing in IT systems and personnel to support growth[62] - The product mix shift towards lower-margin endpoint devices contributed to the decrease in gross margin[67] - The company partners with over 2,500 suppliers and offers over 460,000 products, including major brands like Apple and Cisco[60] - Restructuring and other charges decreased to $0.4 million from $2.7 million in the prior year, primarily related to workforce reductions[107]

Exhibit 99.1 Investor Relations Contact: Thomas Baker, 603.683.2505 Senior Vice President, CFO, and Treasurer tom@connection.com CONNECTION (CNXN) REPORTS THIRD QUARTER 2024 RESULTS THIRD QUARTER SUMMARY: ● Net sales: $724.7 million, increase of 4.6% y/y ● Gross profit: $135.4 million, increase of 2.7% y/y ● Gross margin: 18.7%, decrease of 30 basis points y/y ● Net income: $27.1 million, increase of 5.7% y/y ● Diluted EPS: $1.02, compared to $0.97 y/y Merrimack, NH—October 30, 2024—Connection (PC Connectio ...

Core Viewpoint - The market anticipates that PC Connection (CNXN) will report a year-over-year increase in earnings due to higher revenues for the quarter ended September 2024, with results expected on October 30 [1] Earnings Expectations - The consensus estimate for quarterly earnings is $1.01 per share, reflecting a year-over-year increase of 4.1% [2] - Expected revenues are $726.98 million, which is a 4.9% increase from the same quarter last year [2] Estimate Revisions - The consensus EPS estimate has been revised 0.49% lower in the last 30 days, indicating a reassessment by analysts [3] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -5.47%, indicating bearish sentiment among analysts [4][6] - The stock currently holds a Zacks Rank of 4, complicating predictions for an earnings beat [6] Historical Performance - In the last reported quarter, PC Connection had an earnings surprise of +20.48%, reporting earnings of $1 per share against an expectation of $0.83 [7] - Over the past four quarters, the company has beaten consensus EPS estimates three times [7] Conclusion - Despite the potential for an earnings beat, PC Connection does not appear to be a compelling candidate for such an outcome based on current estimates and rankings [8]

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