ePlus inc.

Good day, ladies and gentlemen. Welcome to the E-Plus Earnings Results Conference Call. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Clay Parkhurst, Senior Vice President. Sir, you may begin.

Thank you for joining us today. On the call is Mark Marin, CEO and President, Elaine Moran, CFO, Darren Raguel, COO and President of ePLUS Technology, and Erica Stoker, General Counsel. I want to take a moment to remind you that the statements we make this afternoon that are not historical facts may be deemed to be forward-looking statements and are based on management's current plans, estimates, and projections. Actual and anticipated future results may vary materially, due to certain risks and uncertainties detailed in the earnings and liabilities ratio this afternoon, and our periodic filings with the Securities and Exchange Commission, including our Form 10-K for the year ended March 31st, 2021, and our Form 10-Q for the quarter ended June 30th, 2021, when filed. The company undertakes no responsibility to update any of these forward-looking statements in light of new information or future events. In addition, during the call, we may make reference to certain non-GAAP financial measures, and we've included a GAAP financial reconciliation in our earnings release, which is posted on the investor information section of our website at www.eplus.com. And now I'd like to turn the call over to Mark Maron. Mark?

Thank you, Clay, and thank you, everyone, for participating in today's call to discuss our results for the first quarter of fiscal 2022. We had a great start to our fiscal year as net sales and adjusted gross billings growth underscore robust customer demand for our technology and finance solutions. More importantly, this quarter continued to show the scalability and efficiency of our operating model as strong top-line growth fueled healthy operating income and net earnings growth. Our first quarter consolidated net sales increased 17.4% from the prior year period, with operating income growing 29.8% and net earnings growing 35.5%. In addition, adjusted gross billings rose 15.9% year-over-year to $633 million. These results reflect demand for our solutions, a substantial rebound in the IT markets, and our continued focus on expense management and investments that enhance our operating efficiency. Our strong first quarter financial performance benefited from balanced revenue growth for product sales and services. In our technology segment, sales were up 17.3%, driven in part by strong growth in the enterprise market and additional land and expand contract wins with high-volume customers. Although our technology segment gross margins decreased from last year due to product and customer mix, along with a lower gross to net adjustment, our overall results highlight the positive operating leverage in our model, as segment operating income was up 43.9%. Services revenue grew 16.3% the first quarter, with gross margins of 39%, up 140 basis points from last year's first quarter. During the first quarter, we experienced solid growth in both professional and managed services, driven in part by continued strong demand for secure and flexible hybrid work models to accommodate remote workforces. This increased growth in the remote workforce is positive for E+, accelerating customer cloud adoption and the provision of cloud services. We had several key cloud and security-related contract wins during the quarter, underscoring market demand for our capabilities in these areas. One innovative example of this is where we work with a healthcare provider who leveraged our cloud-hosted infrastructure to use a solution that analyzes and detects if a digital medical image of a mole is cancerous. We also saw a solid uptick in annuity service bookings in Q1 versus last year and continue to add to our annuity quality revenues. In addition, the recurring annuity type revenue generated by our services business will enhance both the predictability and visibility of our revenue stream. Security remains a critical area of customer focus and investment. Our consultative approach to designing and implementing comprehensive security solutions help safeguard our customer's data and mitigate ever-present security risks. Security represents 20.8% of our trailing 12-month adjusted gross billings and almost $500 million on a standalone basis, reflecting its significance within the total solutions approach we bring to customers. The pandemic has shifted applications and users beyond their traditional environments. We continue to innovate, invest, and help our customers go beyond their traditional cybersecurity methodologies to optimize environments and introduce new technologies that are purpose-built for securing the remote workforce and applications deployed across multiple clouds. As the global economy moves beyond 2020 and into a post-pandemic environment, businesses are quickly adapting to the new normal, a process that involves reassessing previously implemented remote workforce solutions and network infrastructure to ensure that current IT systems and technology roadmaps can adapt with agility to both present and future IT challenges. To help our customers succeed in this new environment, ePlus developed an innovative suite of services and solutions called Navigate the Next. Our solutions specifically address and help solve the three most pressing IT challenges now faced by our customers. First, as employees return to the office, even on a part-time basis, their health and safety remain a paramount concern. Through our partnerships with leading technology vendors, our innovative return-to-the-workplace solutions assist enterprises in monitoring physical distancing and providing safe working conditions. Second, enterprises and organizations seek more efficient management of current IT project expenses coupled with a longer-term strategy for funding future technology products. Our expense management offerings solve these needs through cloud cost optimization services, carrier expense management, and strategic financing programs. And third, as remote and hybrid work has become commonplace, businesses now more than ever require a robust and scalable platform to maintain business continuity with the dispersed workforce. To address this challenge, we developed an approach based on a hybrid cloud virtual desktop infrastructure that offers significant cost, performance, and security advantages over existing solutions. We've been pleased by the positive market response to our Navigate the Next suite of solutions, which represents just one example of how our investments in technology and resources enable Eplus to stay at the forefront of dynamic market trends and further strengthen our position as a trusted partner to our more than 3,500 customers. Turning now to our financing segment, net sales grew 18% the first quarter compared to the prior year period, primarily due to increased sales of off-lease equipment. Although the financing segment's results can be lumpy from quarter to quarter due to the timing and size of transactions, this business provides a unique point of differentiation for Eplus as our lease and financing options offer our customers flexibility in managing their IT budgets. With an acceleration in IT spend that expected this year, our financing segment is seeing strong interest from a variety of customers. From a capital allocation standpoint, the strength of our balance sheet enables us to pursue strategic acquisitions and fund organic growth initiatives. As we move forward, we will continue to identify and evaluate potential acquisition candidates that not only broaden our geographic presence, but also enhance our capabilities and participation in high-growth markets. Looking ahead to the balance of our fiscal year, we are encouraged by the fundamental health of our markets and the strength of customer demand for our services and solutions. With the global economy reopening and IT spending accelerating, the outlook for E-plus remains positive, particularly in our areas of focus of security, data center, cloud, and digital infrastructure. As I noted last quarter, disruptions in the electronic supply chain continue to cause component shortages. And while this did not materially affect our first quarter results, we recognize the potential for some revenue headwinds as we move through our fiscal year. In addition, the emerging COVID variants and the possibility of a delayed return to work and or government mandates could adversely affect our future performance. We remain well positioned for continued growth in fiscal 2022, supported by the strength and breadth of our customer relationships, our strategic partnerships with leading vendors across the IT ecosystem, and our comprehensive portfolio of transformative technology solutions. I will now turn the call over to Elaine Marion, our CFO, to walk you through our financial results in more detail. Elaine?