PC Connection, Inc.

Good afternoon and welcome to the second quarter 2026 Connection earnings conference call. My name is Shannon and I will be your coordinator for today. At this time, all participants are in a listening mode. Following the prepared remarks, there will be a question and answer session. As a reminder, this conference call is the property of Connection 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 factor section of the company's annual report on the Form 10-K for the year ended December 31st, 2025, which is on file with the Securities and Exchange Commission as well as 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 second quarter 2020 comparisons are being made against the second quarter 2025. 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 investors relations section of our website at www.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 Q2 2026 Conference Call. I'll begin this afternoon with an overview of our second quarter results and highlights of our performance. Tom will then walk us through a more detailed look at our financials. Connection delivered strong results in the second quarter, highlighted by record net sales, record gross billing, and record gross profit. Our results reinforce what we believe is a fundamental shift taking place across enterprise technology, as organizations are beginning to move beyond AI experimentation and into enterprise-wide AI adoption. As they do, They're looking for trusted partners that can help them modernize infrastructure, strengthen security, integrate cloud and data platforms, and deploy AI in ways that deliver measurable business outcomes. Our strategy is centered on delivering full-stack technology solutions that bring together infrastructure, cloud, software, Thank you for joining us today. In Q2, net sales were 854 million, representing a 12.4% increase year over year. The increase in net sales was driven by 19.5% growth in notebooks, mobility, and desktops. This growth was a combination of higher average selling price and a 3% increase in units sold. Software grew 15%, while networking increased 11.5% in the quarter. Gross billings increased 14% to $1.2 billion compared to $1 billion in the prior year quarter. Gross profit increased 14.3% to a record $157.5 million, and gross margin expanded by 30 basis points to 18.4%. Investment continues across networking, storage, server, software, and modern workplace technologies. We believe these investments form the foundation for future AI deployment. During the quarter, we continued to navigate the pricing and supply dynamics we discussed last quarter. Our teams worked closely with customers and strategic partners to manage supply constraints, optimize purchasing decisions, and maintain business continuity. While some customers accelerated purchases and others took a more measured approach, Our diversified customer base, broad partner ecosystem, and disciplined execution enabled us to successfully navigate these dynamics across all three sales segments. With that, let's turn to our segment performance. Our business solutions segment delivered another outstanding quarter, demonstrating the strength of our customer relationships and the continued demand for modern workplace technologies. Net sales increased 17.3% to a record $343.9 million, while gross profit rose 14.9% to a record $79.1 million. Gross billings grew 16.7% to $496.1 million. Gross margin was 23% compared with 23.5% in the prior year quarter, reflecting a higher mix of endpoint devices and changes in customer mix. Demand remained broad-based across the portfolio with double-digit growth across endpoint devices, Netcom, and storage. Customer purchasing patterns in the business solution segment continued to vary during the quarter as some pulled forward demand in advance of price increases. Despite the pull forward in demand, We have good momentum in the business solutions group as backlog is at its highest level in three years. With public sector solutions, net sales were 140.5 million, consistent with the prior year, while growth buildings increased 1.7% to 197.1 million. Importantly, growth margins expanded 130 basis points to 16.5% reflecting a favorable customer mix. Government agencies continue to prioritize modernization initiatives focused on cybersecurity, cloud adoption, and operational efficiency. As these organizations increasingly evaluate how AI can enhance mission outcomes, they require trusted technology partners capable of integrating infrastructure, software, security, and services within highly regulated environments. Our enterprise solutions segment also delivered an outstanding quarter, reflecting continued customer investment in technology modernization and the growing demand for enterprise AI-ready infrastructure. Net sales increased 13.4% to $369.6 million, driven by strong demand for endpoint devices Software, Servers, and Services. Gross profit grew 15.8% to $55.2 million, while gross billings increased 17% to $477 million. Gross margin expanded 30 basis points to 14.9%, benefiting from favorable product mix and particularly strong growth in services. Enterprise customers experienced the greatest impact from the supply chain dynamics we discussed earlier. Some customers accelerated purchases into the quarter, while others delayed ordering during the second quarter because of fixed IT budget cycles. We also saw customers make strategic inventory commitments to secure supply. While these commitments did not affect our revenue or profitability, They increased inventory and we believe reflect customers' confidence in future deployment schedules. Importantly, Enterprise Solutions ended the quarter with a record backlog. We believe this, combined with continued demand for infrastructure modernization to support enterprise AI adoption, positions us well for continued momentum into the third quarter. Across each of our three sales segments, we continue to see the same underlying trend. Customers are investing in modern infrastructure, modern device, edge computing, cybersecurity, cloud, and AI. Not as isolated technologies, but as integrated enterprise platforms. With that, I'll turn the call over to Tom for a review of our financial results in greater detail. Tom? Thanks, Tim.