PC Connection, Inc.

Thank you, operator, and good afternoon, everyone. And welcome to the first quarter 2025 Connections Earnings Conference Call. My name is Deedee, and I will be the coordinator for today. At this time, all participants are in listen-only mode. Following the prepared remarks, there will be a question and answer session. As a reminder, this conference call is the property of Connections. and may not be recorded or rebroadcast without specific permission from the company. On the call today are Tim McGrath, President and Chief Executive Officer, and Tom Baker, Senior Vice President and Chief Financial Officer. I will now turn the call over to the company.

Thank you, operator, and good afternoon, everyone. I will now read our cautionary note regarding forward-looking statements. Any statements or references made during the conference call that are not statements of historical fact may be deemed to be forward-looking statements. Various remarks that management may make about the company's future expectations, plans, and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements, as a result of various important factors, including those discussed in the risk factors section of the company's annual report on Form 10-K for the year ended December 31, 2024, which is on file with the Securities and Exchange Commission, as well as in other documents that the company files with the Commission from time to time. In addition, any forward-looking statements represent management's view as of today and should not be relied upon as representing views as of any subsequent date. While the company may elect to update forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so other than as required by law, even if estimates change. And therefore, you should not rely on these forward-looking statements as representing management's views as of any date subsequent to today. During this call, non-GAAP financial measures will be discussed. A reconciliation between any non-GAAP financial measure discussed and its most directly comparable GAAP measure is available in today's earnings release and on the company's website at www.connection.com. Please note that unless otherwise stated, all references to first quarter 2025 comparisons are being made against the first quarter of 2024. Today's call is being webcast and will be available on Connection's website. The earnings release will be available on the SEC website at www.sec.gov and in the investor relations section of our website at www.ir.connection.com. I would now like to turn the call over to our host, Tim McGrath, President and CEO. Tim?

Thank you, Samantha. Good afternoon, everyone, and thank you for joining us today for Connections Q1 2025 conference call. I'll begin this afternoon with an overview of our first quarter results and highlights of our performance. Tom will then walk us through a more detailed look at our financials. Our team remained focused on delivering extraordinary value through integrated IT solutions and customer service. This resulted in consolidated net sales of $701 million an increase of 10.9% in the first quarter. We delivered a solid start to 2025 in a dynamic macroeconomic environment. The quarter was characterized by some customers accelerating purchases in an attempt to minimize the impact of tariffs, while others elected to delay purchases due to uncertainty with respect to the near-term economic environment. Gross profit increased by nearly 8% to $127.3 million while gross margins were down slightly to 18.2%, 50 basis points below last year. As predicted, our mix shifted towards notebooks and desktops as customers executed on their device refresh initiatives. We continued our focus on driving internal efficiencies and reducing costs, resulting in operating income of 14.5 million in Q1, an increase of 7.9% compared to Q1 2024. Operating income as a percentage of sales remained flat at 2.1% year over year, although operating income excluding severance expense was $17.5 million, an increase of 29.6%. Operating income excluding severance expenses as a percentage of sales was 2.5%, an increase of 40 basis points. Net income was $13.5 million, an increase of 2.5% compared to $13.2 million in the prior year quarter. In Q1 2025, our diluted earnings per share was $0.51, an increase of 2% from $0.50 in Q1 2024. However, adjusted diluted earnings per share was $0.60, an increase of 20%. In Q1, notebooks and desktops net sales increased 21% year over year and were up 7% on a sequential basis as a result of customers moving forward with their device refresh initiatives. Revenue for advanced technologies and integrated solutions increased by 7%, propelled by sales of software and service storage solutions. Customer priorities around data center refresh Server consolidation and edge computing are gaining momentum. We'll now look a little deeper into our segment performance. In our business solution segment, our Q1 net sales were 258.4 million, an increase of 1% compared to the prior year. Our gross profit, which we believe is a better indicator of our performance, increased by 8.4% to 65.4 million compared to the prior year. Gross margin increased 170 basis points compared to the prior year quarter to 25.3%. Gross margins were favorably affected by both customer and product mix. In our public sector solutions business, Q1 net sales were 144.6 million, 54.7% higher than a year ago. Sales to the federal government increased by 40 million, while sales to state and local government and educational institutions increased by 11 million. Gross profit for the public sector segment was 19.6 million, an increase of 30.9% compared to Q1 24. Gross margin decreased by 240 basis points to 13.6% for the quarter compared to the prior year. The revenue increase and margin decline resulted from a few large project rollouts in Q1 2025 that were at lower than average margins. In our enterprise solution segment, Q1 net sales grew 5.4% to $298 million compared to last year. Our strategy to deliver enterprise solutions is taking hold as we drove an increase of 8% in advanced technologies. Growth profit for the enterprise segment was 42.3 million, 1% lower than the prior year. Growth margin decreased by 90 basis points to 14.2% for the quarter. The margin decrease was a result of the expected lower license fees from enterprise agreements. I'll now turn the call over to Tom to discuss additional financial highlights from our income statement, balance sheet, and cash flow statement. Tom?