Financial Data and Key Metrics Changes - The company reported a 26% increase in net sales compared to the same period last year, with organic constant currency net sales growth of 26.3% driven by net price realization of approximately five points and volume growth of approximately 21 points [29] - Adjusted gross margin decreased by five to ten basis points to 38.1% due to commodity inflation and incremental tariff expenses, although gross margin was higher than expected due to timing of cocoa hedges and lower tariff expenses [33][40] - Adjusted earnings per share declined by 4.7% year over year, impacted by incremental commodity costs and a higher tax rate [37] Business Line Data and Key Metrics Changes - North America Confectionery segment net sales grew by 32%, with volume increasing by 25%, benefiting from Easter timing and inventory changes related to ERP system implementation [30] - North America Salty Snacks segment net sales increased by 8.8%, with volume growth of over 4% driven by Dots and Skinny Pop [31] - International segment net sales increased by 4.4%, but volume growth was below expectations primarily due to category softness in Mexico and lower export market demand [32] Market Data and Key Metrics Changes - Hershey's U.S. retail sales for candy, mint, and gum increased by 21.8%, outpacing the category increase of 17.9% [8] - The company gained approximately 90 basis points of market share in the non-seasonal candy, mint, and gum category [9] - Constant currency net sales in Brazil increased by double digits, while growth in Europe was mid-single digits led by the U.K. [20] Company Strategy and Development Direction - The company aims to be a leading snacking powerhouse, with a focus on balanced growth and mitigating cocoa inflation through enhanced productivity and strategic pricing [7][21] - A new pricing action on the entirety of the U.S. Confection portfolio is expected to deliver an estimated 16 points of pricing contribution to overall company sales [25] - The company is implementing a Smart Complexity initiative to simplify packaging and optimize manufacturing efficiency, raising its savings target to $400 million [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying trajectory of the business, expecting robust results to continue in the second half of the year [21] - The company anticipates adjusted earnings per share to decline between 36% to 38% for the year due to higher cocoa costs and tariffs [40] - Management remains hopeful for improvements in tariff conditions but does not plan for relief in 2025 [39] Other Important Information - The company announced the appointment of Kirk Tanner as the new President and CEO, effective August 18 [5] - The Pokémon program has shown strong initial velocities, significantly outperforming other limited-time offers [14] - Capital expenditures in Q2 totaled $231 million, with full-year expectations between $425 million and $450 million [37] Q&A Session Summary Question: What are the expectations for the second half of the year? - Management expects an acceleration in performance to 2% to 4% growth, supported by strong innovation and merchandising plans [38] Question: How is the company addressing cocoa inflation? - The company is implementing pricing actions and hedging strategies to manage cocoa costs and restore margins over time [22][28] Question: What is the outlook for international markets? - The full-year constant currency segment net sales growth outlook for international markets remains low single digits, with expectations for reacceleration in the second half [20]

Financial Data and Key Metrics Changes - Gross billings increased 52% to $605 million compared to $397 million in the year-ago quarter [20] - Net sales in Q4 2024 increased 51% to $161.8 million from $106.8 million, driven by organic growth and contributions from the acquisition of DSS [21] - Gross profit rose 48% to $31.2 million compared to $21.1 million, with gross profit as a percentage of gross billings at 5.2%, down from 5.3% [22] - Net income increased 33% to $7 million or $1.52 per diluted share, compared to $5.2 million or $1.15 per diluted share for the same period in 2023 [23] - Adjusted net income increased 87% to $10.3 million or $2.26 per diluted share [24] - Adjusted EBITDA increased 75% to $16.1 million, with an effective margin of 51.5%, up from 43.7% [24][25] Business Line Data and Key Metrics Changes - Distribution segment gross billings increased 57% to $582 million, while Solutions segment gross billings decreased 9% to $23 million [20] Market Data and Key Metrics Changes - Security continues to lead growth, making up between 55% and 65% of the portfolio, with new investments flowing into vendors for AI enhancements [38] Company Strategy and Development Direction - The company focuses on organic growth by deepening relationships with existing vendors and signing new emerging vendors [8] - Plans to continue evaluating M&A opportunities to enhance service offerings and expand geographic footprint [17][27] - The implementation of a new ERP system aims to streamline processes and enhance data accessibility [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, highlighting a solid foundation for organic growth and improved operating leverage [17] - The exit of Citrix from the channel is viewed as an opportunity to diversify offerings [17] - The company is well-positioned to deliver growth and enhance profitability in 2025 [28] Other Important Information - Cash and cash equivalents were $29.8 million as of December 31, 2024, down from $36.3 million a year earlier, primarily due to the acquisition of DSS [26] - A quarterly dividend of $0.17 per share was declared, payable on March 21, 2025 [27] Q&A Session Summary Question: Did you have any large unexpected deals in the quarter? - Management confirmed a large VAST deal at the end of Q4 contributed positively to the results, alongside strong growth across all divisions [35][36] Question: Did security continue to lead growth amongst your segments? - Yes, security remains a significant portion of the portfolio, with new investments enhancing vendor products [38] Question: How did DSS perform versus your expectations? - DSS performed well year-over-year, although Q4 is not their largest quarter due to their focus on the education market [40] Question: Of the number of vendors added for the year, were all of them productive? - All 13 signed vendors are performing, but management continues to push for better performance from those that were onboarded earlier [42][44]