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 [9] - Adjusted EBITDA margins were at 5.2%, with cash conversion of non-GAAP net income at 88% [9] - The company ended Q1 with approximately $125 million in cash and a net debt leverage ratio close to zero [10] 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, influenced by approximately $40 million of large deal pull-ins in Q4 [9] - The Intellisys and advisory segment saw a 4% increase in net sales year-over-year, with annualized net billings reaching approximately $2.78 billion [10] Market Data and Key Metrics Changes - The percentage of gross profits from recurring revenues in the specialty technology solutions segment was approximately 13% [10] - The company maintained its market share despite the decline in net sales, indicating stability in its competitive position [10] Company Strategy and Development Direction - The company is focusing on helping channel partners transition from traditional VAR to solution providers and technology architects, emphasizing the importance of integrated converged solutions [4][5] - Recent acquisitions, including DataZoom, are expected to enhance the company's capabilities in mobile data connectivity and support its strategic goals [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future growth of technology distribution, driven by the convergence of hardware, software, and services [4] - The company reaffirmed its full-year outlook, expecting net sales growth between $3.1 billion and $3.3 billion, with adjusted EBITDA ranging from $150 million to $160 million [12] Other Important Information - The company is actively pursuing acquisitions to expand its capabilities and drive additional value across its partner ecosystem [11] - The management highlighted the importance of gross profit growth as a key performance indicator moving forward [16] Q&A Session Summary Question: Concerns about top-line revenue decline - Management clarified that they prioritize profitable growth and do not believe they are losing market share, attributing revenue challenges to timing and deal structuring rather than demand weakness [14][17] Question: Sustainability of supplier rebates - Management indicated that supplier programs have evolved and are tied more to activities rather than inventory, suggesting sustainability in the rebates received [18] Question: Insights on DataZoom acquisition - The acquisition is expected to be margin accretive and enhance the company's ability to sell more mobile devices by integrating connectivity solutions [20][21] Question: Guidance on net sales growth - Management reaffirmed confidence in their guidance, citing that Q1 results were in line with expectations and that large deals are merely delayed rather than canceled [36][40] Question: Business development investments in Intellisys - Management reported double-digit new order growth year-over-year, indicating that investments are translating into pipeline activity [49]

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]