Core Insights - The first quarter of 2025 was significantly impacted by macroeconomic uncertainty, leading to postponed projects and reduced revenue for NNIT [2][3] - NNIT has adjusted its capacity and implemented cost-reducing measures, including a workforce reduction of approximately 100 employees [2][6] - The financial outlook for 2025 has been revised downward due to ongoing geopolitical unrest and customer hesitance [3][4] Financial Performance - Q1 2025 revenue was DKK 464.1 million, showing a slight increase of 0.2% compared to Q1 2024, which had a growth of 12.2% [4][6] - Group operating profit excluding special items decreased to DKK 18.0 million in Q1 2025 from DKK 23.9 million in Q1 2024, with a margin decline from 5.2% to 3.9% [4][6] - Special items in Q1 2025 amounted to DKK 25.3 million, primarily due to restructuring costs [6] Regional Insights - The European region, particularly in IT Life Science solutions, experienced project postponements, negatively affecting revenue [6] - Region Denmark showed a growth of around 4%, with specific solutions in the public sector growing by 8% [6] Adjusted Financial Outlook - The organic growth forecast for 2025 has been adjusted to a range of 0% to 5%, down from the previous 7% to 10% [6] - The group operating profit margin excluding special items is maintained at 7% to 9%, supported by significant cost-reducing initiatives [6]

Core Viewpoint - NNIT's financial performance in Q1 2025 was impacted by increased macroeconomic and geopolitical uncertainty, leading to an adjustment in the 2025 financial outlook [1] Financial Performance Summary - Q1 2025 Group revenue was DKK 464 million, slightly up from DKK 463 million in Q1 2024, but organic growth was negative at -0.8% compared to 8.0% in Q1 2024 [3][4] - Group operating profit excluding special items was DKK 18 million, down from DKK 24 million in Q1 2024, resulting in a margin of 3.9%, compared to 5.2% in the previous year [3][4] - Special items for the Group amounted to DKK 25 million, primarily due to restructuring costs, contrasting with an income of DKK 11.3 million in Q1 2024 [3][4] Regional Performance Summary - **Region Europe**: Revenue decreased to DKK 119 million from DKK 126 million, with a regional operating profit margin of 10.0%, down from 11.2% [4] - **Region US**: Revenue decreased to DKK 87 million from DKK 93 million, but regional operating profit margin improved to 30.4% from 19.0% [4] - **Region Asia**: Revenue increased to DKK 37 million from DKK 32 million, with a regional operating profit margin of 7.6%, up from -5.3% [4] - **Region Denmark**: Revenue increased to DKK 221 million from DKK 212 million, but regional operating profit margin decreased to 15.1% from 22.6% [4] Outlook and Cost Management - Organic revenue growth is now expected to be between 0% to 5%, down from a previous forecast of 7% to 10%, due to project postponements and slower sales pipeline materialization [2] - The Group operating profit margin excluding special items is maintained at 7% to 9%, supported by significant cost-reducing initiatives, including capacity adjustments and reduced spending [2][4]

Core Viewpoint - CDW is expected to report quarterly earnings of $1.96 per share, reflecting a 2.1% increase year-over-year, with revenues projected at $4.89 billion, a 0.4% increase compared to the previous year [1]. Earnings Estimates - Over the last 30 days, the consensus EPS estimate has been revised downward by 2.8%, indicating a collective reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts estimate 'Public- Government' revenues to be $497.84 million, representing an 8.4% decrease year-over-year [4]. - 'Net sales- Public' are projected at $1.73 billion, indicating a 0.3% increase from the previous year [5]. - 'Public- Healthcare' is expected to reach $630.71 million, reflecting a 7.9% increase year-over-year [5]. - 'Net sales- Small Business' are estimated at $380.47 million, showing a slight decrease of 0.1% from the prior year [5]. - 'Public- Education' is projected at $601.26 million, a 0.8% increase from the previous year [6]. - 'Net sales- Corporate' are expected to be $2.16 billion, indicating a 0.9% increase year-over-year [6]. - 'Net sales- Other' are projected at $637.67 million, reflecting a 1% increase from the prior year [6]. Major Product and Services Estimates - 'Net sales- Major Product and Services- Other' are expected to be $25.82 million, indicating a 2.2% decrease year-over-year [7]. - 'Net sales- Major Product and Services- Hardware- Notebooks/Mobile Devices' are projected at $1.18 billion, reflecting a 3.5% increase [7]. - 'Net sales- Major Product and Services- Hardware- Netcomm Products' are estimated at $587.46 million, indicating a 3.1% increase [8]. - 'Net sales- Major Product and Services- Hardware- Desktops' are expected to reach $260.28 million, reflecting a 0.7% increase [8]. - Overall, 'Net sales- Major Product and Services- Hardware' are projected at $3.54 billion, indicating a slight decrease of 0.1% year-over-year [9]. Stock Performance - CDW shares have increased by 7.2% over the past month, contrasting with a 0.5% decline in the Zacks S&P 500 composite [9].

Core Viewpoint - The article emphasizes that technological self-sufficiency is a key investment theme, particularly in the context of ongoing US-China trade tensions, which are seen as a competition in the technology sector [1][3]. Industry Insights - The concept of self-sufficiency refers to the ability to independently research, design, and control core technologies across the entire lifecycle of information systems, from hardware to software [2]. - The Chinese government has highlighted the importance of building self-sufficient industrial and supply chains, particularly in sectors such as integrated circuits, industrial mother machines, medical equipment, and advanced materials [2]. Investment Opportunities - Various institutions believe that technological self-sufficiency has become a reliable investment direction, with a focus on domestic demand in technology, particularly in areas like domestic computing power [4][5]. - Securities firms such as Everbright Securities and Huafu Securities are optimistic about investment opportunities in the semiconductor industry, recommending attention to wafer manufacturing and AI computing power chips [6]. Market Growth Projections - The China Investment Industry Research Institute projects that the market size of self-sufficient industries will reach 1.47 trillion yuan by 2027, indicating significant market potential [7]. - A selection of 50 potential stocks in the self-sufficient technology sector was made based on three criteria: research and development intensity, gross profit margin, and the ratio of contract liabilities to revenue [7]. Stock Performance and Predictions - Among the 50 identified stocks, 14 have seen upward adjustments in profit forecasts post-annual report releases, with two stocks, Foxit Software and Rainbow Technology, experiencing over 50% increases in 2025 profit predictions [9]. - Foxit Software's net profit forecast for 2025 was raised by 152.78% to 91 million yuan, reflecting strong recent performance [10]. - Rainbow Technology's net profit forecast for 2025 was increased by 58.27% to 220 million yuan, driven by its focus on technological innovation [10][11]. Institutional Interest - Six stocks from the identified 50 have received net purchases exceeding 100 million yuan from institutional investors, with Chip Origin Technology and China Software being notable examples [12]. - Chip Origin Technology has a range of self-sufficient processor IPs applicable in various fields, while China Software is recognized as a leading state-owned enterprise in software, benefiting from its strategic position and brand recognition [12][13].

Financial Performance - Total company revenue declined by 11.4% year-over-year to $432 million, or 8.5% in constant currency, driven by software license renewals and lower client volumes[13] - Ex-L&S revenue decreased by 10.4% year-over-year to $361 million, or 5.5% in constant currency, due to lower volumes with existing clients[13] - Total Company gross margin was 24.9%, a decrease of 300 bps year-over-year[21] - Ex-L&S gross margin was 17.8%, a decrease of 20 bps year-over-year[21] - GAAP Operating Profit decreased to $5.1 million from $17.7 million, while Non-GAAP Operating Profit decreased to $11.9 million from $34.4 million[55] - GAAP Diluted Loss Per Share was ($0.42), compared to ($2.18) in the prior year; Non-GAAP Diluted Loss Per Share was ($0.05) compared to earnings of $0.04 in the prior year[59] Sales Metrics and Outlook - Total Company Total Contract Value (TCV) increased by 17% year-over-year to $434 million[11] - Ex-L&S New Business TCV increased by 83% year-over-year to $337 million, driven by new logo signings[11] - The company reiterated full-year constant currency revenue growth guidance of +0.5% to +2.5%[9] - The company increased full-year L&S revenue expectations to $410 million, up from $390 million[9]

Financial Data and Key Metrics Changes - First quarter revenue was $432 million, down 11.4% year over year as reported and 8.5% in constant currency, primarily due to license and support renewal timing [24] - First quarter adjusted EBITDA was $40 million, with a margin of 9.3% [32] - First quarter net income was negative $30 million, translating to a diluted loss of $0.42 per share [33] - First quarter pre-pension free cash flow was $23 million, up $11 million year over year [33] Business Line Data and Key Metrics Changes - Digital Workplace Solutions segment revenue declined 7.5% year over year to $119 million, primarily driven by lower field service volumes [26] - Cloud Applications and Infrastructure Solutions revenue declined 3.3% year over year to $177 million, affected by lower volumes with existing clients [27] - Enterprise Computing Solutions revenue was down 11.2% year over year to $119 million, due to license and support renewal timing [28] Market Data and Key Metrics Changes - First quarter new business total contract value (TCV) was $434 million, including $337 million from new business signings, up more than 50% sequentially and more than 80% year over year [9] - Backlog at the end of the first quarter was $2.9 billion, up 2% sequentially and 4% year over year [29] Company Strategy and Development Direction - The company is focused on enhancing free cash flow by optimizing delivery and improving cash conversion efficiency [6] - The ClearPath Forward 02/1950 strategy aims to expand and enhance the ecosystem of software and industry solutions [16] - The company is investing in technology, talent, and innovation to solidify its operating systems at the core of clients' IT operations [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full year revenue growth guidance and profitability guidance, despite macroeconomic uncertainties [18][78] - The company expects delayed client decision-making to have a marginal impact on revenue trajectory, but believes its diverse solution portfolio provides stability [19][21] - Management noted that clients are focused on modernizing applications and enhancing security, which supports growth in the security segment [12][13] Other Important Information - The company achieved titanium partner status at Dell, enhancing growth incentives and access to resources [17] - The first quarter gross profit was $108 million, with a gross margin of 24.9% [30] - The company is actively monitoring market conditions to opportunistically expand its debt structure and advance its pension mitigation strategy [39] Q&A Session Summary Question: What is enabling the L and S upside in revenues? - Management indicated that increased consumption and longer contract extensions are driving the upside in license and support revenues [44][46] Question: What types of sequential growth assumptions are needed in ex L and S and L and S? - Management expects increasing growth assumptions every quarter, with significant contracts expected in Q3 and Q4 [50][52] Question: How confident are you in your 2026 targets? - Management remains confident in meeting cash flow expectations and has not seen a decline in pipeline quality despite macro uncertainties [59][60] Question: How is the quality of the backlog assessed? - Management stated that the pipeline is growing and the quality is better aligned to solutions that the company can win, with no need for natural pairing [68][75]

Financial Data and Key Metrics Changes - First quarter revenue was $432 million, down 11.4% year over year as reported and 8.5% in constant currency, primarily due to license and support renewal timing [24][25] - First quarter non-GAAP operating profit margin was 2.8%, compared to 7.1% in the prior period, in line with low single-digit expectations [32] - First quarter net income was negative $30 million, translating to a diluted loss of $0.42 per share [33] Business Line Data and Key Metrics Changes - Digital Workplace Solutions segment revenue declined 7.5% year over year to $119 million, driven by lower field service volumes and discretionary project work [26] - Cloud Applications and Infrastructure Solutions revenue declined 3.3% year over year to $177 million, impacted by lower volumes with existing clients [27] - Enterprise Computing Solutions revenue was down 11.2% year over year to $119 million, primarily due to license and support renewal timing [28] Market Data and Key Metrics Changes - First quarter total contract value was $434 million, including $337 million from new business signings, up more than 50% sequentially and more than 80% year over year [9][29] - Backlog was $2.9 billion, up 2% sequentially and 4% year over year, with double-digit year-over-year backlog growth in Digital Workplace Solutions [29] Company Strategy and Development Direction - The company continues to execute its ClearPath Forward 02/1950 strategy, focusing on expanding its ecosystem and enhancing client relationships [16][77] - Investments in technology, talent, and innovation are aimed at solidifying the company's operating systems at the core of clients' IT operations [16] - The company is actively monitoring market conditions to opportunistically expand its debt structure and advance its pension mitigation strategy [77] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year revenue growth guidance and profitability guidance, citing resilience in diverse revenue streams [77] - The company anticipates a sequential ramp in revenue growth throughout the year, particularly in the second half due to renewal timing [48][39] - Management noted that macroeconomic factors are causing some delays in client decision-making but do not significantly impact the overall pipeline and backlog [60][62] Other Important Information - First quarter capital expenditures totaled approximately $20 million, relatively flat year over year [33] - Pre-pension free cash flow was $23 million, up $11 million year over year, while free cash flow was $13 million, more than doubling compared to the previous year [33][34] - The company achieved titanium partner status at Dell, enhancing growth incentives and access to resources [17] Q&A Session Summary Question: What is enabling the L and S upside in revenues? - Management indicated that increased consumption and longer contract extensions are driving the upside in license and support revenues [44][46] Question: What types of sequential growth assumptions are needed in ex L and S and L and S? - Management expects increasing growth assumptions every quarter, with significant contracts expected in Q3 and Q4 [49][51] Question: How confident are you in your 2026 targets? - Management remains confident in meeting cash flow expectations and has not changed its trajectory for 2026 [58] Question: Have you seen any hesitation among customers based on macro uncertainties? - Management acknowledged some delays in contract signing but noted that the pipeline and backlog continue to grow [60][62] Question: Any broader strategic changes since leadership transition? - Management confirmed that the strategic focus remains consistent, emphasizing market awareness, solution distinction, and associate development [68][70]

Financial Data and Key Metrics Changes - In Q1 2025, net revenue was $2.1 billion, a decrease of 12% compared to the previous year, driven by a 13% decline in product revenue, particularly on-prem software [21][22] - Adjusted diluted earnings per share were $2.6, down 13%, primarily due to lower gross profit, partially offset by lower adjusted SG&A expenses [24] - Gross profit decreased by 8%, with a gross margin of 19.3%, an increase of 80 basis points due to a favorable product mix [22][23] Business Line Data and Key Metrics Changes - Hardware revenue increased by 1%, marking the first growth in ten quarters, with strong performance in servers and storage [21][22] - Cloud gross profit was $103 million, a decrease of 3%, while SaaS and Infrastructure as a Service gross profit grew by 17% [22][24] - Insight Core Services revenue decreased by 2%, with gross profit down 4% due to delays in projects from large enterprise clients [7][22] Market Data and Key Metrics Changes - The macro environment has deteriorated, leading to increased volatility and uncertainty, impacting large enterprise clients' spending [7][18] - Demand for hardware is expected to grow in the mid-single digits, while cloud gross profit is anticipated to be flat to slightly down [20][28] Company Strategy and Development Direction - The company aims to accelerate profitable growth by enhancing consulting engagement models and leveraging GenAI technologies [10][11] - Focus on driving attached services to hardware sales and improving supply chain management in response to market dynamics [10][20] - The strategy includes becoming a leading solutions integrator, emphasizing AI, data, and cloud services [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about hardware spending and AI interest, despite the uncertain macro environment [36][38] - The company anticipates that the second half of 2025 will be stronger than the first half, with improvements in services spending expected [18][19] - Ongoing challenges are expected, particularly with large enterprise clients in North America, but the fundamentals driving the tech industry remain strong [20][28] Other Important Information - The company has been recognized for its diversity and workplace environment, receiving accolades such as Newsweek's America's Greatest Workplaces for Diversity for 2025 [17] - The company has ample liquidity with $1.3 billion available under its ABL facility, allowing it to meet operational needs [27] Q&A Session Summary Question: What drives the confidence in the guidance despite a tougher macro backdrop? - Management noted good momentum in hardware spending and AI interest, alongside effective navigation of partner program changes [34][36] Question: Are there any demand pull-ins from customers? - Minimal pull-ins were observed in Q1, primarily device-related, with a general movement towards leveraging AI technologies [41][43] Question: What are the expectations regarding vendor pricing in light of tariffs? - Some OEMs have raised prices, but generally, pricing has been subdued, with a slight positive impact expected from tariffs [51][53] Question: What is the outlook for the services business? - The services business is expected to improve in the second half of the year, aligning with hardware sales recovery [73]

Q1 2025 Financial Performance - Net sales decreased by 12% year-over-year to $21 billion[25] - Gross profit decreased by 8% year-over-year to $406 million[25] - Cloud gross profit decreased by 3% year-over-year to $103 million[25] - Insight Core Services gross profit decreased by 4% year-over-year to $73 million[25] - Earnings from operations decreased by 40% year-over-year to $60 million[25] - Adjusted earnings from operations decreased by 16% year-over-year to $102 million[25] - GAAP diluted earnings per share decreased by 87% year-over-year to $022[25] - Adjusted diluted earnings per share decreased by 13% year-over-year to $206[25] Debt and Capital Allocation - Total debt balance at March 31, 2025, was $9612 million, an increase of $796 million year-over-year[28] - The company spent $574 million on acquisitions, share repurchases, and warrant settlements[28] 2025 Outlook - The company expects low single-digit gross profit growth for the full year 2025[31] - The company anticipates a gross margin of approximately 20% for the full year 2025[31] - The company projects adjusted diluted EPS to be in the range of $970 to $1010 for the full year 2025[31]

Financial Data and Key Metrics Changes - First quarter revenue was $432 million, down 11.4% year over year as reported and 8.5% in constant currency, primarily due to license and support (LNS) renewal timing [25][26] - First quarter net income was negative $30 million, translating to a diluted loss of $0.42 per share, while adjusted net loss was $3 million for the quarter, a diluted loss per share of $0.05 [35] - First quarter non-GAAP operating profit margin was 2.8%, compared to 7.1% in the prior period, in line with low single-digit expectations [34] Business Line Data and Key Metrics Changes - Digital Workplace Solutions (DWS) revenue declined 7.5% year over year to $119 million, primarily driven by lower field service volumes and discretionary project work [27] - Cloud Applications and Infrastructure Solutions revenue declined 3.3% year over year to $177 million, affected by lower volumes with existing clients [28] - Enterprise Computing Solutions revenue was down 11.2% year over year to $119 million, due to LNS renewal timing [29] Market Data and Key Metrics Changes - First quarter total contract value was $434 million, including $337 million from new business signings, up more than 50% sequentially and more than 80% year over year [9][30] - Backlog at the end of the first quarter was $2.9 billion, up 2% sequentially and 4% year over year [30] - The company expects a growing PC refresh cycle to support field service volumes as clients begin upgrades related to AI and Windows 11 [7] Company Strategy and Development Direction - The company is focused on enhancing free cash flow by optimizing delivery and improving cash conversion efficiency [6] - The ClearPath Forward 02/1950 strategy aims to expand and enhance the ecosystem of Unisys software and industry solutions [17][78] - The company is actively monitoring market conditions to opportunistically expand its debt structure and advance its pension mitigation strategy [21][78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full year revenue growth guidance and profitability guidance, citing resilience in diverse revenue streams [78] - The company anticipates delayed client decision-making due to macroeconomic uncertainties but believes this will have a marginal impact on overall revenue [21][62] - Management noted that security remains an area of outsized growth within the market, with ongoing enhancements to the security portfolio [13] Other Important Information - First quarter capital expenditures totaled approximately $20 million, relatively flat year over year [35] - The company achieved a strong liquidity position with cash balances increasing to $393 million as of March 31 [36] - The company was elevated to disruptor status in AI services and named a leader in attack surface management by industry analysts [18] Q&A Session Summary Question: What is enabling the L and S upside in revenues? - Management indicated that increased consumption and longer contract extensions are driving the L and S revenue upside, with clients extending contracts from three to five years to seven years [46][48] Question: What types of sequential growth assumptions are needed in ex L and S and L and S? - Management expects increasing growth assumptions every quarter, with Q2 showing a slight uptick and more significant growth anticipated in Q3 and Q4 [51][52] Question: How confident is the company in its 2026 targets? - Management remains confident in meeting cash flow expectations and sees no change in the trajectory for 2026 targets [60] Question: How is the quality of the pipeline and backlog assessed amid macro uncertainties? - Management reported that the pipeline is growing, with no need for natural pairing, and the quality of the pipeline is better aligned to solutions that can be won [72][75]