Financial Data and Key Metrics Changes - For Q1 2026, the company reported a 6% increase in gross profits and a 26% year-over-year growth in non-GAAP EPS [10] - Adjusted EBITDA margins were at 5.2%, with a cash conversion of non-GAAP net income at 88% [10] - The company ended Q1 with approximately $125 million in cash and a net debt leverage ratio of approximately zero [13] Business Line Data and Key Metrics Changes - In the Specialty Technology Solutions segment, net sales declined by 5% year-over-year and 9% quarter-over-quarter, with gross profits increasing by 7% year-over-year [11] - The Intellisys and Advisory segment saw a 4% increase in net sales year-over-year, with annualized net billings reaching approximately $2.78 billion [12] Market Data and Key Metrics Changes - The company believes it maintained market share despite the decline in revenue, attributing the challenges to timing issues with larger deals rather than loss of market share [21][22] - The company is focusing on the indirect channel to deliver recurring, complex, and high-value solutions as technology markets converge [5] Company Strategy and Development Direction - The company is investing in its Intelisys and Advisory segment to accelerate new order growth, including expanding its solutions engineering team [6] - The recent acquisition of DataZoom is expected to enhance the company's capabilities in mobile data connectivity and support its strategic plan [13][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reaffirming the full-year net sales growth outlook, expecting revenue growth to accelerate in the second half of the fiscal year [14][45] - The company emphasized that the decline in revenue is not indicative of overall demand weakness but rather a timing issue with large deals [45] Other Important Information - The company is actively pursuing acquisition targets to expand capabilities and drive additional value across its partner ecosystem [13] - The company plans to maintain a target net debt leverage ratio of one to two times adjusted EBITDA while balancing acquisitions and share repurchases [14] Q&A Session Summary Question: Concerns about revenue decline and market share - Management clarified that they prioritize profitable growth and do not believe they are losing market share, attributing revenue challenges to timing and deal structuring [20][21] Question: Sustainability of supplier rebates - Management indicated that supplier programs have evolved and are tied to activities rather than inventory, suggesting sustainability in the rebates [23][24] Question: Details on the DataZoom acquisition - Management described DataZoom as a tuck-in acquisition that will be margin accretive and enhance mobile device sales through improved connectivity solutions [27][28] Question: Guidance on net sales growth - Management reaffirmed guidance based on internal plans and noted that Q1 results were in line with expectations, indicating confidence in future performance [44][45] Question: Business development investments in Intelisys - Management reported double-digit new order growth year-over-year, indicating that investments are translating into pipeline activity [57]

Financial Data and Key Metrics Changes - The company's revenue for 2022 was $1.84 billion, a decrease of 6.5% year on year, primarily due to challenges in the merchant subscription and precise marketing business [3][32] - Adjusted net profit showed a significant loss of $550 million, with a total operating cash outflow of $730 million for the year [4][5] - The adjusted cash flow outflow in the second half of the year was $246 million, down 49.2% half on half, indicating improved cash flow management [5][6] - The company reported a fair value change and financial asset impairment of $568 million, leading to an adjusted net loss of approximately $1.55 billion [5][56] Business Line Data and Key Metrics Changes - Subscription Solutions revenue grew by 8.7% year on year, with a notable increase of 22.4% in the second half of the year [3][32] - Merchant Solutions revenue declined by 29.7%, primarily due to reduced advertising budgets from clients [33][34] - Smart Retail revenue was $53 million, reflecting a year-on-year increase of 5.5%, and accounted for 40% of the subscription solution revenue [7] Market Data and Key Metrics Changes - The company experienced a churn rate of 26% among merchants, with a 15% decline in the number of new merchants [42] - Advertising gross income for the year was $1 billion, with a 38% increase in the second half compared to the first half [34] - The subscription revenue accounted for 70% of total revenue, indicating a stable revenue model amidst market challenges [35] Company Strategy and Development Direction - The company is focusing on three major strategies: moving up market, ecosystem building, and globalization, aiming to enhance market share in various sectors [8][21] - Plans for 2023 include improving products and services, deepening relationships with large customers, and investing in technology infrastructure [21][24] - The company aims to achieve a revenue share of 50% from Smart Retail and targets 1,000 key customers by 2027 [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging external environment due to COVID-19 and its impact on consumer spending and advertising budgets [30][31] - The outlook for 2023 anticipates a recovery in subscription revenue growth of about 20%, with a focus on high-quality growth rather than just numerical growth [61][94] - The company expects to control operating losses to between $100 million and $400 million in 2023, with a potential turnaround in the second half of the year [63] Other Important Information - The company has streamlined operations, resulting in a reduction of staff costs by $320 million, which will continue to benefit financial performance in 2023 [36][54] - The introduction of AI technologies is expected to enhance operational efficiency and create new business models, with ongoing investments in AI applications [66][70] Q&A Session Summary Question: What changes will AI bring to the industry and potential business models? - Management highlighted that AI technologies like ChatGPT could significantly improve R&D efficiency by 10% to 20%, with potential for greater improvements in the future [67][69] Question: What is the outlook for smart retail products and order growth in the coming years? - Management noted a positive growth momentum in smart retail, emphasizing the need for deep vertical cultivation and a rich product system to encourage repeat purchases [76][78] Question: Will achieving breakeven require sacrificing revenue growth? - Management confirmed that while some revenue growth may be sacrificed, the focus is on achieving high-quality growth and maintaining a balance between revenue and cost control [89][91] Question: What is the progress and outlook for video accounts? - Management reported strong growth in video accounts, which are becoming a significant part of the advertising spend, and expressed optimism about future developments in this area [96][98]