Financial Data and Key Metrics Changes - Net sales for Q2 2025 were $759.7 million, an increase of 3.2% year over year [7] - Gross profit reached a record $137.8 million, while gross margins decreased to 18.1%, down 40 basis points from the previous year [7][8] - Net income for Q2 was $24.8 million, a decrease of 5.2% compared to $26.2 million in the prior year [9][14] - Diluted earnings per share for Q2 was $0.97, down $0.02 from the previous year [14] - Adjusted EBITDA for the trailing twelve months was $122.5 million, a decrease of 2% from $125.4 million a year ago [14] Business Segment Performance - Business Solutions segment net sales were $293.2 million, an increase of 5.4% year over year, with gross profit increasing by 3.8% to $68.8 million [10] - Public Sector Solutions segment net sales were $140.5 million, down 11.9% from the previous year, with gross profit decreasing by 11.9% to $21.3 million [10][11] - Enterprise Solutions segment net sales grew 9.1% to $326 million, with gross profit increasing by 3.4% to $47.6 million [11][12] Market Data and Key Metrics Changes - The company noted a decline in sales to state, local government, and educational institutions, which decreased by $20.9 million [10] - Sales to the federal government increased by $1.9 million, indicating mixed performance in the public sector [10] Company Strategy and Industry Competition - The company is focused on driving value through integrated IT solutions and outstanding customer service, with a strong emphasis on data center modernization and edge computing [6][19] - The company plans to invest in education and tools to assist customers with AI and next-generation architectures [19][21] - The backlog is at its highest level in nearly two years, indicating strong future demand [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year, citing a strong pipeline and increased customer activity [27][28] - The company expects less impact from subscription licensing program changes in the second half of the year [18] - Management believes they can outperform the U.S. IT market growth by 200 basis points [22] Other Important Information - The company repurchased approximately 255,000 shares at an average price of $60.95 per share, totaling $15.5 million [15] - Cash flow used in operations for the first half of 2025 was $26.1 million, primarily due to increases in inventory and accounts receivable [15][16] Q&A Session Summary Question: Context for moving into the back half of the year and trends in July - Management noted strong customer discussions and planned rollouts for the second half, with a record backlog and increased activity continuing into July [27][28] Question: Staging inventory for customer rollouts - Approximately 67% to 75% of the staged inventory is customer-specific, with proactive buy-ins to take advantage of favorable pricing [31] Question: Cash flow expectations for the back half of the year - Management expects to generate positive cash flow for the year, with operating cash flow roughly aligning with net income for the quarter [34] Question: Gross margin expectations for the back half of the year - Management anticipates gross margins will hold about where they are, with potential fluctuations of ten to fifteen basis points [40] Question: Exciting vertical markets for the back half of the year - There is optimism in retail and manufacturing markets, with strong outlooks due to solution-driven technologies [41] Question: Long-term growth initiatives - The company is investing in personnel, productivity platforms, and AI initiatives to drive long-term growth [43][44]