Financial Data and Key Metrics Changes - Non-GAAP gross billings for Q1 2026 reached $25.8 billion, a 24% increase year-over-year, or 20% in constant currency, exceeding guidance [12] - Non-GAAP operating income was $590 million, up 48% year-over-year, or 44% in constant currency [12] - Non-GAAP earnings per share increased by 69% year-over-year to $4.73, surpassing guidance [12] - GAAP operating income was $489 million, a 61% increase year-over-year, while GAAP earnings per share rose by 104% to $4.04 [13] Business Line Data and Key Metrics Changes - Distribution generated non-GAAP gross billings of $22 billion, a 17% increase year-over-year, driven by strength across product categories and geographies [13] - Endpoint Solutions increased by 14% year-over-year, supported by ongoing PC refresh activity [13] - Advanced Solutions grew by 19% year-over-year, driven by strength in infrastructure, security, and software [13] - Hyve generated non-GAAP gross billings of $3.8 billion, a 95% increase year-over-year, with manufacturing and assembly growing in the mid-70%s [14][15] Market Data and Key Metrics Changes - The European distribution market grew mid-single digits in Q1, while the company achieved double-digit growth, significantly outpacing the market [95] - The company noted strong demand for PCs across all regions except Latin America, with expectations for continued growth driven by B2B demand [27] Company Strategy and Development Direction - The company has updated its reportable segments to focus on Distribution and Hyve, reflecting distinct value propositions and growth drivers [5] - Strategic pillars include omnichannel engagement, specialized go-to-market, best-in-class enablement, and expanding brand visibility [6] - Hyve is evolving its strategy towards complete system-level solutions across compute, networking, and storage offerings [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term value creation opportunities across both Distribution and Hyve, with expanding addressable markets [11] - The company remains cautiously optimistic for the second half of the fiscal year, acknowledging strong demand but potential challenges from the macro environment [34] - Management highlighted that price increases are expected to continue, but they have not yet seen significant demand destruction [62][70] Other Important Information - Free cash flow usage for the quarter was approximately $929 million, with $1.2 billion generated over the trailing twelve months [16] - The company returned $118 million to shareholders through share repurchases and dividends [17] - A cash dividend of $0.48 per common share was approved, payable on April 29, 2026 [17] Q&A Session Summary Question: Can you elaborate on the growth in Hyve Solutions? - Growth was primarily from two main customers, with diversification expected to ramp up towards the end of fiscal year 2026 [22] Question: What is the outlook for PC demand? - The company remains optimistic about PC demand, particularly in B2B, despite potential unit reductions due to price increases [27][28] Question: How do you view the impact of inflation on margins? - No impact on margins was observed in Q1, as inventory was built to manage price increases effectively [36] Question: What is the expected impact of price increases on demand? - Demand remains strong, and while some elasticity is expected, price increases are anticipated to offset any potential decline in unit demand [62][70] Question: Can you discuss the growth in supply chain services? - Supply chain services grew significantly due to increased customer requests driven by pricing volatility [56] Question: What is the company's approach to M&A? - M&A is a core strategy for accelerating execution, with strict financial discipline in evaluating opportunities [97]

Financial Data and Key Metrics Changes - For Q4 2025, non-GAAP gross billings reached $24.3 billion, a 15% increase year over year, or 13% in constant currency, while non-GAAP diluted earnings per share rose 24% year over year to $3.83, setting new records for the company [4][5] - Gross operating margins expanded year over year due to operational efficiencies and disciplined margin management, with non-GAAP operating income increasing 18% year over year to $497 million [16][17] - Free cash flow for the quarter was $1.4 billion, contributing to a total of $1.4 billion for the fiscal year, marking the third consecutive year of generating over $1 billion in annual free cash flow [17][18] Business Line Data and Key Metrics Changes - The Endpoint Solutions portfolio saw a 12% increase in gross billings year over year, driven by demand for PCs and the Windows 11 refresh [14][15] - The Advanced Solutions portfolio increased gross billings by 17% year over year, with Hive contributing over 50% growth, primarily from server and networking rack builds [15][16] - Hive's operating income also grew significantly year over year, indicating its increasing importance in the overall business mix [5][12] Market Data and Key Metrics Changes - North America experienced steady growth, supported by demand across key customer segments and increased security requirements [6] - Europe outperformed expectations with growth driven by infrastructure software and PC device upgrades, despite a slow macroeconomic backdrop [6] - Asia-Pacific and Japan remained key growth engines, fueled by rapid cloud expansion and strong demand from digitizing economies [6][7] Company Strategy and Development Direction - The company is focusing on four strategic pillars: omnichannel engagement, specialized go-to-market, best-in-class enablement, and expanding brand visibility [8][12] - Investments in the Partner-First Digital Bridge and AI capabilities are aimed at enhancing customer engagement and simplifying transactions [8][9] - The company aims to strengthen its competitive position as a strategic business partner, focusing on sustainable long-term growth [12][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term value proposition of Hive and IT distribution, highlighting substantial untapped market opportunities [13][14] - The company anticipates continued growth in the PC market, driven by ongoing refresh cycles and AI compatibility [62] - Guidance for Q1 2026 includes non-GAAP gross billings expected to range from $22.7 billion to $23.7 billion, reflecting a 12% increase at the midpoint [21][22] Other Important Information - The company returned $742 million to shareholders in FY25, representing approximately 61% of free cash flow during that period [18] - The board approved a cash dividend of $0.48 per common share, payable on January 30, 2026 [21] Q&A Session Summary Question: Growth in Europe and Asia-Pacific - Management noted that growth in Asia-Pacific is driven by market share gains and investments in high-growth segments, particularly in India [25][26] - In Europe, the company is gaining significant market share through a well-executed strategy targeting high-growth technologies [28][29] Question: Impact of Component Costs on Demand - Management confirmed that while memory prices have increased, they have not seen demand destruction, and guidance reflects regional forecasts [32][33] Question: Visibility for Hyve Programs - Management expressed confidence in the margin profile of Hyve and noted ongoing investments to expand capabilities and capture new programs [60][61] Question: Net Revenue Conversion and Software Growth - Management indicated that the increase in netted down effects is due to a higher mix of software and Hive programs, which are expected to grow as a portion of overall billings [70][71]