PC Connection (CNXN) Q1 2025 Earnings Call April 30, 2025 04:30 PM ET Company Participants Samantha Smith - Account ManagerTimothy McGrath - President & CEOThomas Baker - Senior VP, CFO & TreasurerAdam Tindle - Managing Director Conference Call Participants Anthony Lebiedzinski - Senior Equity Research Analyst Operator Thank you, operator, and good afternoon, everyone. Welcome to the First Quarter twenty twenty five Connections Earnings Conference Call. My name is Deedee, and I will be the coordinator for t ...

Financial Data and Key Metrics Changes - Gross merchandise volume (GMV) grew nearly 2% to approximately $18.8 billion, marking the fourth consecutive quarter of positive GMV growth [7][34] - Revenue increased over 1% to $2.58 billion, with non-GAAP earnings per share growing by 10% to $1.38 [8][34] - Non-GAAP operating income was reported at $771 million, with a non-GAAP operating margin of 29.8% [34][40] - Free cash flow generated in Q1 was $644 million, with cash and non-equity investments totaling $6.2 billion at the end of the quarter [42] Business Line Data and Key Metrics Changes - Focus category GMV grew over 6% in Q1, with collectibles being the largest contributor to growth, particularly in trading cards [11][35] - The fashion category generated over $10 billion of GMV annually, with significant improvements in customer experience and AI-powered shopping features [13][15] - First-party advertising revenue grew 14%, with total advertising revenue reaching $442 million, representing GMV penetration of nearly 2.4% [23][39] Market Data and Key Metrics Changes - U.S. GMV grew nearly 0.5% in Q1, driven by focus categories, particularly trading cards [36] - International GMV grew nearly 3% on an FX neutral basis, although the macro environment in international markets, especially Germany and the UK, was weaker than in the U.S. [37][38] - Trailing twelve-month active buyers grew over 1% to 134 million, with spending per enthusiast buyer remaining over $3,100 [38] Company Strategy and Development Direction - The company is focused on leveraging its extensive selection of pre-loved and refurbished goods to mitigate consumer pressure during rising costs [10][11] - Strategic partnerships, such as with Collectors and PSA, are enhancing the marketplace's value proposition, particularly in trading cards [12] - The company is evolving its leadership structure to enhance innovation and cross-functional collaboration, with a focus on AI integration [30][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty created by tariffs and trade policy changes but expressed confidence in the company's ability to navigate these challenges [9][43] - The outlook for Q2 includes GMV expectations between $18.6 billion and $19.1 billion, with revenue forecasts between $2.59 billion and $2.66 billion [44][45] - For 2025, the company anticipates low single-digit GMV growth on an FX neutral basis, driven by focus categories and geo-specific investments [48] Other Important Information - The company returned approximately $760 million to shareholders through repurchases and cash dividends in Q1 [8][34] - Changes in leadership were announced, with Steve Priest stepping down as CFO and Peggy Alford set to take over [28][29] Q&A Session Summary Question: Demand elasticity in the current commerce landscape - Management noted that eBay is in a strong position to leverage its global seller base and adapt to changes in trade policies, with a focus on used goods during consumer pressure [55] Question: Impact of China tariffs on eBay's business - Management indicated that the Greater China to U.S. corridor accounts for about 5% of total GMV, with tools like Speedpack helping to manage tariff complexities [61][62] Question: Advertising revenue durability amid macro changes - Management reported strong demand for advertising, with no material impact from tariffs observed to date [68] Question: Resilience of eBay during potential consumer pullback - Management expressed confidence in eBay's resilience due to its inventory mix, which includes a significant portion of used and refurbished goods [85][86] Question: Competitive landscape changes due to macro shifts - Management is leveraging its competitive advantage in pre-owned goods and is actively marketing to attract new sellers, which is expected to enhance overall marketplace activity [92][95]

Financial Data and Key Metrics Changes - The company reported net sales of CHF 3.3 billion and EBIT of CHF 384 million, both marginally higher than the previous year [14] - Adjusted EPS grew by 5% on a comparable basis, benefiting from cost management and improved healthcare volumes [15] - The company expects adjusted EPS for fiscal 2025 to be in the range of $0.72 to $0.74 per share, reflecting two months of earnings from the legacy Berry business [25] Business Line Data and Key Metrics Changes - In the Flexibles segment, volumes were up 1% year-over-year, with modest share gains in healthcare and protein, offset by weaker consumer demand in North America [16] - The Rigid Packaging segment faced challenges, with net sales approximately 3% lower than last year due to a 2% decline in overall volumes and unfavorable price mix impacts [20] - Adjusted EBIT for the Rigid Packaging segment was £55 million, impacted by lower volumes and price mix headwinds [21] Market Data and Key Metrics Changes - North American volumes were down low single digits, particularly in the Beverage sector, which saw a high single-digit decline [17][32] - Europe, Asia Pacific, and Latin America achieved low to mid single-digit volume growth, with China and India showing mid to high single-digit growth [16][17] - The healthcare market continued to improve, with medical volumes up in the high single digits, indicating strong demand for pharmaceutical packaging [18] Company Strategy and Development Direction - The company aims to deliver identified synergies and accelerate earnings growth following the merger with Berry Global, with a synergy run rate expected to start strong in fiscal 2026 [8][12] - The combined entity will focus on higher value, faster-growing end markets, optimizing R&D investments to address complex functionality and sustainability challenges [11] - The company plans to prune its portfolio to enhance growth rates, margins, and cash generation across remaining segments [11][56] Management's Comments on Operating Environment and Future Outlook - Management noted a variable and uncertain demand environment, particularly in North America, driven by consumer affordability issues and inflation [32][34] - The company remains confident in achieving significant EPS growth through synergies, independent of macroeconomic conditions [26][41] - Management anticipates muted overall demand in Q4, aligning with current macroeconomic conditions, but expects to maintain earnings within original guidance [25] Other Important Information - The company has returned £550 million in cash to shareholders through dividends, with a 2% increase in the March dividend compared to the previous year [24] - The integration teams have already identified €650 million in synergies, with €260 million expected to benefit fiscal 2026 earnings [12][26] Q&A Session Summary Question: Insights on North American volume decline - Management indicated that North American Beverage business saw high single-digit declines due to weak consumer demand, particularly in discretionary categories [32][34] Question: Synergy-driven EPS growth assumptions - Management confirmed that the €260 million in synergies for fiscal 2026 is expected to provide a 12% EPS uplift, independent of organic growth assumptions [36][41] Question: Breakdown of synergies, particularly procurement - Management stated that procurement will be a major contributor to synergies, with initial focus on SG&A, followed by procurement and operations [46][49] Question: Portfolio pruning timing and strategy - Management emphasized the importance of dynamic portfolio management and indicated that the assessment of businesses will continue, but timing for execution remains uncertain [55][56] Question: Procurement synergies and supplier engagement - Management highlighted the importance of harmonizing supplier terms and leveraging the combined entity's purchasing power to achieve procurement synergies [95][96]

Equinix (EQIX) Q1 2025 Earnings Call April 30, 2025 05:30 PM ET Company Participants Chip Newcom - Senior Director, Investor RelationsAdaire Fox-Martin - CEO & PresidentKeith Taylor - CFOAri Klein - Director - Equity ResearchJonathan Atkin - Managing DirectorVikram Malhotra - Managing DirectorMichael Funk - SVPTimothy Horan - Managing DirectorMichael Elias - Director Conference Call Participants Matt Niknam - AnalystEric Luebchow - Director - Senior Equity AnalystMichael Rollins - Analyst Operator Good afte ...

Microsoft (MSFT) Q3 2025 Earnings Call April 30, 2025 05:30 PM ET Speaker0 Greetings, and welcome to the Microsoft Fiscal Year twenty twenty five Third Quarter Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Jonathan Nielsen, Vice President of Investor Relations. Please go ahead. Speaker1 Good afternoon, and thank you for ...

Financial Data and Key Metrics Changes - Amcor reported net sales of CHF 3.3 billion and EBIT of CHF 384 million, both marginally higher than the previous year [13] - Adjusted EPS grew by 5% on a comparable basis, benefiting from cost management and improved healthcare volumes [14] - The company expects adjusted EPS for fiscal 2025 to be in the range of $0.72 to $0.74 per share [24] Business Line Data and Key Metrics Changes - In the Flexibles segment, volumes increased by 1%, with modest share gains in healthcare and protein, but offset by weaker consumer demand in North America [15] - The Rigid Packaging segment faced challenges, with net sales approximately 3% lower than last year due to a 2% decline in volumes and unfavorable price mix [19] - Adjusted EBIT for the Rigid Packaging segment was £55 million, impacted by lower volumes and price mix headwinds [20] Market Data and Key Metrics Changes - North American volumes declined by low single digits, particularly in the Beverage sector, while Europe, Asia Pacific, and Latin America saw low to mid single-digit growth [16] - Healthcare volumes improved, with medical volumes up in the high single digits, indicating a recovery in pharmaceutical packaging demand [17] - The overall demand environment in North America became more variable and uncertain, affecting consumer demand [23] Company Strategy and Development Direction - The merger with Berry Global is expected to deliver significant synergies, with an identified total of €650 million over three years, leading to an estimated EPS accretion of over 35% [11] - The company aims to refine its portfolio mix to focus on higher value, faster-growing end markets, enhancing growth rates and margins [10] - Amcor is committed to maintaining a strong investment-grade balance sheet while increasing long-term EPS growth and shareholder value [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving synergies despite a challenging macroeconomic environment, with a clear visibility to significant EPS growth driven by synergies alone [25] - The company anticipates muted overall demand in Q4, aligning with the current macroeconomic conditions and uncertainty around tariff impacts [23] - Management highlighted the importance of understanding consumer behavior changes, particularly in response to inflation and economic uncertainty [70] Other Important Information - The company has returned £550 million in cash to shareholders through a growing dividend, with a declared dividend of $12.75 per share, a 2% increase from the previous year [22] - Amcor's R&D investment is approximately €180 million annually, with over 1,500 R&D professionals dedicated to addressing complex challenges in functionality and sustainability [10] Q&A Session Summary Question: Insights on North American volume decline - Management noted that North American Beverage business saw high single-digit volume declines, primarily due to weak consumer demand and inflationary pressures [31][32] Question: Synergy-driven EPS growth assumptions - Management confirmed that the €260 million in synergies expected for fiscal 2026 is achievable even in a challenging macro environment, with confidence in delivering these synergies [41][42] Question: Breakdown of procurement synergies - Management indicated that procurement synergies will be a major contributor, with initial focus on SG&A, followed by procurement and operations [47][50] Question: Impact of consumer behavior on growth outlook - Management acknowledged that consumer demand has weakened, leading to changes in purchasing behavior, which affects customer forecasts [70][72] Question: Structural issues in North American Beverage business - Management clarified that the current volume decline is not deemed structural, and improvements are expected as volumes recover [80][82]

Financial Data and Key Metrics Changes - The company's net sales for Q1 2025 were $1.2 billion, down 3.4% compared to Q1 2024, but showed a constant currency growth of 1.4% year over year [10][27] - Adjusted EBITDA for Q1 was $165 million, exceeding guidance, with adjusted EBITDA margins at 13.5%, up 260 basis points year over year [28] - The total leverage ratio was reduced to three times as of March 31, achieving the target set for the end of 2025 nine months ahead of schedule [11][31] Business Line Data and Key Metrics Changes - The number of new distributors joining Herbalife worldwide increased by 16% year over year, marking the fourth consecutive quarter of new distributor growth [12] - The company reported a gross profit margin improvement to 78.3%, up 80 basis points compared to Q1 2024, driven by pricing actions and reduced input costs [28] Market Data and Key Metrics Changes - In Latin America, net sales were down 4% on a reported basis but up 11% on a local currency basis, with a 4% increase in volumes [33] - EMEA net sales were down 2% year over year on a reported basis, while up 3% on a local currency basis, with a 5% decline in volume [34] - North America saw a 4% decrease in net sales year over year, primarily due to an 8% reduction in volumes [35] Company Strategy and Development Direction - The company aims to lead in the health and wellness economy by leveraging its distributor network and enhancing its product offerings through technology and personalization [7][8] - Recent acquisitions of Protocol Health, Pruvit Ventures, and Link Biosciences are intended to strengthen the company's position in personalized health solutions [13][21] - The focus will be on innovation, operational excellence, and sustainable growth rather than just short-term gains [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to adapt to changing consumer expectations and the gig economy, viewing these changes as opportunities for growth [6][8] - The company expects FX to remain a significant headwind for the remainder of 2025, impacting both net sales and adjusted EBITDA [40][43] - The outlook for Q2 2025 includes expected net sales to range from down 3.5% to up 0.5% year over year, with a constant currency basis expectation of down 0.5% to up 3.5% [41][44] Other Important Information - The company plans to launch a beta version of the Protocol platform in July 2025, with a commercial release planned for Q4 2025 [17][18] - The total cash consideration paid for recent acquisitions was $25.5 million, with contingent payments of up to $5 million based on successful launches [39] Q&A Session Summary Question: Can you expand on the monetization strategy of Protocol? - Management indicated that it is early to discuss ROI, but the digital platform aims to support product consumption and distributor engagement [47][50] Question: What is driving the sequential decline in distributor KPIs in North America? - Management noted that the quarter started strong but faced challenges in February, with expectations for improvement in Q2 [61][63] Question: Why was the constant currency sales guidance for 2025 reduced? - The reduction was primarily due to rolling in Q1 trends, with some weakness noted in Asia Pacific and cautious expectations for China [66][67] Question: What are the intentions for Link Biosciences? - The company aims to target both athletes and a more general audience, focusing on hyper-customization in health products [71][75] Question: Is there any additional CapEx associated with the recently acquired assets? - Management confirmed that the CapEx guidance was lowered due to underspending in Q1, but future months will include necessary expenditures for the acquisitions [92][93]

Financial Data and Key Metrics Changes - Gross merchandise volume (GMV) grew nearly 2% to approximately $18.8 billion, marking the fourth consecutive quarter of positive GMV growth [6][33] - Revenue increased over 1% to $2.58 billion, with non-GAAP earnings per share growing by 10% to $1.38 [6][33] - Non-GAAP operating income was reported at $771 million, and approximately $760 million was returned to shareholders through repurchases and cash dividends [6][33] Business Line Data and Key Metrics Changes - Focus category GMV grew over 6% in Q1, with collectibles being the largest contributor to growth, particularly in trading cards [9][10] - The fashion category generated over $10 billion of GMV annually, with significant improvements in customer experience and AI-powered shopping features [11][12] - Advertising revenue grew 14% in Q1, with first-party ads contributing significantly to this growth [22][39] Market Data and Key Metrics Changes - U.S. GMV grew nearly 5% in Q1, driven by focus categories, especially trading cards [34] - International GMV grew nearly 3% on an FX neutral basis, with macroeconomic conditions in international markets being weaker than in the U.S. [36] - Trailing twelve-month active buyers grew over 1% to 134 million, with spending per enthusiast buyer remaining over $3,100 [37] Company Strategy and Development Direction - The company is focused on navigating trade policy changes and supporting sellers and buyers through its Speedpack shipping program [7][8] - Strategic partnerships, such as with Collectors and PSA, are enhancing the marketplace's value proposition [10] - The leadership structure is evolving to enhance innovation and collaboration, with a focus on AI integration across various functions [29][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty in the macro environment but expressed confidence in the company's resilience due to its diverse inventory and seller base [54][100] - The company expects GMV for Q2 to be between $18.6 billion and $19.1 billion, reflecting FX neutral growth between negative 1% and positive 2% year over year [44] - For 2025, the company anticipates low single-digit GMV growth on an FX neutral basis, driven by focus categories and geo-specific investments [47][48] Other Important Information - The company announced leadership changes, with Peggy Alford set to become the new CFO [26][28] - The company is targeting share repurchases of at least $2 billion in 2025 while maintaining flexibility for opportunistic investments [49] Q&A Session Summary Question: How to think about demand elasticity in a rising pricing environment? - Management noted that eBay's vast seller base can leverage shipping solutions to adapt to trade policy changes, and the marketplace tends to be resilient during periods of consumer pressure [54][55] Question: Impact of China tariffs on eBay's business? - Management indicated that approximately 5% of total GMV comes from the Greater China to U.S. corridor, and the company has tools to help sellers navigate tariff complexities [60][61] Question: Durability of advertising revenue amid macro changes? - Management reported strong demand for advertising, with no material impact from tariffs observed to date [67] Question: How does eBay view the concept of agentic commerce? - Management expressed confidence in the progress made with AI tools and their integration into the customer experience, enhancing efficiency and engagement [74][75] Question: Health of consumer and leading indicators? - Management characterized U.S. demand as resilient, while noting concerns in international markets, particularly in Germany and the UK [100][101]

Financial Data and Key Metrics Changes - In Q1 2025, Equinix reported revenues of $2.2 billion, an 8% year-over-year increase, excluding the impact of Power Pass Through [8][24] - Adjusted EBITDA margins increased to 48% of revenues, and AFFO per share rose by 9% year-over-year, both exceeding expectations due to strong operating performance and lower utility costs [10][25] - Global Q1 AFFO was $947 million, up 13% year-over-year, significantly above expectations [25] Business Line Data and Key Metrics Changes - Strong recurring revenue growth was noted, driven by the impact of bookings from the second half of 2024 [8] - Interconnection revenues grew by 9% year-over-year, with over 486,000 total interconnections deployed [17] - The Secure Cabinet Express product saw a nearly 300% increase year-over-year, accounting for one-third of all new cabinet sales in Q1 [16] Market Data and Key Metrics Changes - Recurring revenues grew fastest in the APAC region at 8%, followed by The Americas and EMEA regions at 7% [28] - The Americas region delivered its best gross and net bookings performance to date, with strong demand from financial services and AI-oriented customers [28] - EMEA experienced solid gross booking performance but was impacted by anticipated churn [28] Company Strategy and Development Direction - Equinix is focusing on three strategic moves: serving customers better, solving smarter, and building bolder [15] - The company is shifting its strategy to build fewer, larger IBXs, with 56 major projects underway across 33 metros in 24 countries [18] - The company is closely monitoring the macroeconomic environment while maintaining confidence in the demand for digital infrastructure [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for digital infrastructure persisting through varying business cycles and economic policies [21] - The company is committed to delivering value to customers and stakeholders, focusing on innovation and operational excellence [37] - Management noted that customer demand remains strong, with no significant shifts observed in April [44] Other Important Information - The company raised its guidance for revenues, adjusted EBITDA, and AFFO for 2025 based on strong Q1 performance [34] - Capital expenditures for 2025 are expected to range between $3.4 billion and $3.7 billion, reflecting newly approved projects and higher FX rates [35] Q&A Session Summary Question: What is driving the improvements in sales cycles? - Management noted that strong Q1 performance and improved deal conversion contributed to shorter sales cycles, with no significant shifts in demand observed in April [44][46] Question: What are the expectations for recurring revenue growth in the second half of the year? - Management indicated that strong bookings momentum from Q1 and Q2 will support recurring revenue growth in the second half of 2025, despite challenges in EMEA due to churn [55][56] Question: Can you provide an update on the U.S. XScale joint venture? - Management confirmed a strong pipeline for XScale opportunities, with ongoing projects and a positive demand profile despite some challenges in the market [66][68]

Financial Data and Key Metrics Changes - Revenue for the quarter was $70.1 billion, up 13% in constant currency [29] - Gross margin dollars increased 11% in constant currency, while operating income increased 16% in constant currency [29] - Earnings per share was $3.46, an increase of 18% in constant currency [29] Business Line Data and Key Metrics Changes - Microsoft Cloud revenue was $42.4 billion, growing 20% in constant currency [32] - Productivity and Business Processes revenue was $29.9 billion, growing 10% in constant currency, driven by LinkedIn and Microsoft 365 [33] - Intelligent Cloud segment revenue was $26.8 billion, growing 21% in constant currency, with Azure revenue growing 33% [37] - More Personal Computing revenue was $13.4 billion, growing 6% in constant currency, with gaming revenue increasing 56% [39][40] Market Data and Key Metrics Changes - Commercial bookings increased 18% in constant currency, significantly ahead of expectations [30] - Commercial remaining performance obligation increased to $315 billion, up 34% in constant currency [30] - LinkedIn membership grew at double digits year over year, with time spent on the platform up 36% [22] Company Strategy and Development Direction - The company continues to focus on cloud and AI as essential drivers for business growth, with significant investments in data center capacity and AI infrastructure [6][7] - Microsoft aims to optimize efficiencies across all layers of its operations, from data center design to model optimization [7] - The company is expanding its AI capabilities and integrating them into various products, including Microsoft 365 and Dynamics 365 [15][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for cloud services and AI, despite potential economic uncertainties [81] - The company anticipates continued growth in its cloud and AI segments, with a focus on helping customers navigate economic challenges [82] - Management highlighted the importance of maintaining a balanced approach to data center investments and workload growth [60][65] Other Important Information - Capital expenditures for the quarter were $21.4 billion, slightly lower than expected [41] - Free cash flow was $20.3 billion, driven by strong cloud billings and collections [42] - The company returned $9.7 billion to shareholders through dividends and share repurchases, an increase of 15% year over year [42] Q&A Session Summary Question: Data center commitments and AI demand - Management clarified that adjustments to data center commitments are ongoing and are based on future workload growth [60][61] - The company is currently short on power in specific locations, impacting its ability to build or lease at desired rates [63][67] Question: Accelerating demand for cloud migrations - Management noted three key trends driving cloud migrations: classic migrations, data growth, and cloud-native growth [72][75] Question: Stability and sustainability in a potential recession - Management emphasized a focus on helping customers during economic turbulence, leveraging cloud efficiencies to mitigate impacts [81][82] Question: Azure growth and non-AI services - The majority of Azure's outperformance was attributed to non-AI services, with strong demand from enterprise customers [86][88]