CDW Corporation

Thank you, Carly.

Good morning, everyone. Joining me today to review our first quarter 2025 results are Chris Leahy, our chair and CEO, and Al Morales, our chief financial officer. Our earnings release was distributed this morning and is available on our website, investor.cdw.com, along with supplemental slides that you can use to follow along during the call. I'd like to remind you that certain comments made in this presentation are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Those statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. Additional information concerning these risks and uncertainties is contained in the earnings release in form 8K refurnished to the SEC today and in the company's other filings with the SEC. CDW assumes no obligation to update the information presented during this webcast. Our presentation also includes certain non-GAAP financial measures, including non-GAAP operating income, non-GAAP operating income margin, non-GAAP net income, and non-GAAP earnings per share. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules. You'll find reconciliation charts in the slides for today's webcast and in our earnings release and Form 8K. Please note, all references to growth rates or dollar amounts changes in our remarks today are versus the comparable period in 2024 with net sales growth rates described on an average daily basis unless otherwise indicated. Steve Maniscalco, replay of this webcast will be posted to our website later today, I want to remind you all that this conference calls property of cdw and may not be recorded or rebroadcast without written specific written permission from the company with that, let me turn the call over to Chris.

Christy Jackiewicz- Thank you Steve good morning everyone i'll begin today's call with a brief overview of our first quarter performance and provide thoughts on our view for the balance of the year. Al will provide additional details on our results, our capital allocation priorities, and further perspective on our outlook. We'll move quickly through our prepared remarks to ensure we have plenty of time for questions. The team had an excellent start to the year with strong execution during a period of rapidly changing market dynamics. Once again, the benefit of our strategic progress was evident with our industry-leading margins. Strong expense management and effective use of capital drove leverage down the P&L. For the quarter, net sales were $5.2 billion, 8% higher than last year on an average daily sales basis. Gross profit was $1.1 billion, 7% higher than last year on an average daily basis. Non-GAAP operating income was $444 million, up 10%. And non-GAAP net income per share was $2.15, up 12%. Broadly speaking, customers remained focused on mission-critical projects and must-dos, and their priorities were consistent with 2024. Laser focus on operating efficiency and expense elasticity was one addition. Client device prioritization, which reflected three factors, need for refresh, the upcoming Windows 10 expiration, and the desire to get ahead of tariff-related price increases. Underlying demand was solid. Commercial market growth was consistent with the favorable trajectory we saw late in the fourth quarter. Tariff uncertainty slowed down major infrastructure investments, but also drove demand for client devices and greater focus on expense elasticity, consumption-based solutions, and services. Federal government market growth was subdued throughout the quarter as agencies digested the impact of new policy priorities. while education growth accelerated towards the end of the quarter, driven by Chromebook demand ahead of potential price increases. First quarter results underscore the power of our full-stack, full lifecycle solutions. The team's ability to provide solutions that address customers' priorities for cost optimization drove excellent performance across services, software, and cloud. Let's take a closer look at how customer priorities and market dynamics impacted end market and portfolio performance in the quarter. As always, there are three main drivers of our results, our balanced portfolio of customer end markets, the breadth of our product solutions and services portfolio, and relentless execution of our three-part growth strategy. First, our balanced portfolio of diverse customer end markets. We have five US channels, corporate, small business, healthcare, government, and education. Each channel is a billion-dollar-plus business annually. Additionally, our UK and Canadian operations together delivered sales of 2.5 billion U.S. dollars last year. Our scale allows us to segment our business into customer end markets with dedicated sellers and technical resources who deeply understand and address the unique priorities of each market. The benefit of our diverse end markets was evident in the first quarter with all customer end markets posting average daily sales growth. Commercial top line performance, which includes corporate and small business, was strong and balanced. Corporate and small business increased by 6% and 8%, respectively. Our ability to address both customer priorities for client devices and customer priorities for cost optimization with as-a-service and ratable solutions drove solid profitability, and our commercial gross margin was steady year over year. Public top line increased by 11%. Healthcare was a standout performer with net sales up 20%, driven by client devices, cloud, and services. Education increased top line by 11% with balanced performance across both K-12 and higher education. K-12 growth was driven by Chromebook, reflecting both customer refresh needs and buying ahead of anticipated tariff price increases, while higher ed growth was driven by security, data center, and services. Government net sales increased slightly as the impact of pauses in federal agency decision-making due to new administration priorities was offset by state and local growth. Other, which represents our UK and Canadian operations, posted a 10% increase led by the UK. The second driver of performance was our broad and deep portfolio of solutions and services, a key point of differentiation for us in the marketplace. This quarter, we had balanced performance across hardware, software, and services, with each increasing by high single digits or better. Hardware increased top line by 7%. Excellent growth in client devices, which increased more than 20%, was partially offset by declines in both net common storage. Software top line increased by 10%. Top line growth was primarily driven by the ongoing shift in spend from traditional networking to software-defined networking architectures. Software gross profit increased faster than net sales. Security performance was strong, consistent with the fourth quarter, with both top line and gross profit growing by low double digits. Priorities met by as-a-service and routable solutions to optimize spend drove excellent performance in cloud, with spend, top line, and gross profit all up meaningful double digits. Customers continue to lean into CDW services to build and execute their strategies, manage expenses, and accomplish mission-critical objectives, which drove a services top line increase of 14%. CDW managed and professional services top line and gross profit both increased by double digits. The third driver of performance is our ongoing investment in our customer-driven strategy. a strategy designed to maximize our relevance and differentiation in the marketplace and continuously fortify our leading position as vendor partner of choice and trusted advisor to our customers. To meet the accelerated pace of change over the last five years, we have concentrated our strategic investments on key high-growth, high-relevance areas like cloud adoption and optimization, cybersecurity, IT workflow optimization, and AI expertise. Given the vital role services play in today's interconnected solutions, recent investments have been focused on embedding services throughout our entire portfolio, including Mission Cloud Services, which closed last November. And just as our previous investments have done, Mission, a leader in AI and a premier AWS partner, furthers our ability to deliver mission-critical outcomes for customers. An ability that is more important than ever in today's dynamic environment where customers continue to move forward with mission critical projects. Movement we are seeing across our portfolio and especially in security where the need to deliver seamless access for employees, while ensuring data protection is crucial. A need that our full suite of security solutions underpinned by products, services and deep expertise addresses. A great example of this in action is the solution CW developed for an American designer and manufacturer of heavy duty commercial truck. An industry leader for more than 100 years, the company had multiple HR systems with employees logging in daily across offices in the United States and around the world. Managing trust and identity required manual intervention and made it difficult to get a global view of the data. Working closely with the company CISO, our team engineered, designed, and implemented a solution that migrated data from on-premises identity governance to cloud-hosted centralized control. Utilizing artificial intelligence to streamline processes, the solution delivered a zero trust environment for nearly 25,000 users. Not only did the solution deliver significant measurable outcomes through enhanced user access, compliance, and operational efficiencies, The scalable automated platform also set the company up for future growth. For CDW, the solution represents a multi-million dollar multi-year software transaction and professional services fees that exceeded $1 million for our team's engineering and implementation work. This is a great example of the power of our strategic investments helping customers achieve mission critical outcomes. And that leads me to a topic that's on everyone's mind, our outlook for the remainder of the year. We are maintaining our 2025 outlook, which calls for US IT market growth to be in the low single digits on a customer spend basis with a CDW growth premium of 200 to 300 basis points. While market parameters have changed since we first shared our outlook with you in February, our current view is underpinned by what we are seeing and hearing in the market, our first quarter performance, and a continued level of prudence. While the start of the second quarter With the start of the second quarter, the overall rhythm of the business has been solid and spend in the commercial market remains healthy. Despite the pull forward of client devices at the end of the first quarter, both written and shipped orders have been consistent with overall first quarter performance. Customers indicate that while they are watchful of the environment, they do not intend to alter their course for now. Maintaining our full-year outlook balances our better-than-expected first quarter results and current customer sentiment with two countervailing factors. First, it recognizes that our federal and education customers will need more time to adjust to recent government efficiency initiatives that will impact their IT planning, prioritization, and in some cases, their budgets. Second, it incorporates a level of general economic uncertainty and caution that could mute growth. Our outlook does not factor in potential wild cards such as recessionary conditions. Of course, the environment remains fluid and, as always, will continue to monitor the market and update our view as necessary throughout the year. There is no doubt that we are operating in uncertain times, but we have experienced uncertainty in the past. During prior periods of uncertainty, most recently a pandemic and post-pandemic supply chain crisis, and before that the financial crisis of 2008 and 2009, our partners and customers turned to us. They recognized the vital role we play in their success and knew that leveraging our strengths would lead to better outcomes for them. Once again, customers and partners are turning to us to help them navigate the challenges of today's dynamic landscape so they can effectively address cloud workload growth, increased security threats, an aging client device base, and significant data challenging. including how to manage data to leverage AI for insights and productivity aspirations. As they always do, our team has rolled up its sleeves. They are working with their customers to scenario plan, determine how to optimize spend, and identify sources of funds. They are also working with customers to test multiple brands for future projects, providing product optionality depending on different tariff scenarios. And to prepare for a potential economic slowdown, the team continues to help customers evaluate the economics of various architectures and procurement models. As our customers navigate this dynamic period, we are ready and confident in the power of our strategy and strength of our business model to weather uncertainty and serve our customers. Regardless of market conditions, we will do what we have done successfully in the past and focus on what we can control. We will manage the business to ensure we remain a vital, valued partner to both customers and vendors and ensure we are well prepared to capitalize on our strengths and accelerate out of the curve. With that, let me turn it over to Al.