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 like to introduce your host for today's conference, Mr. Clay Parker, SVP. Sir, you may begin.

Thank you for joining us today. On the call is Mark Maron, CEO and President, Elaine Marion, CFO, Darren Raguel, COO and President of E-Plus 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 release we issued this afternoon and our periodic filings with the Securities and Exchange Commission including our Form 10-K for the year ended March 31, 2021, and our Form 10-K for the year ended March 31, 2022, 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 make reference to 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 Marion. Mark?

Thank you, Clay, and thank you, everyone, for participating in today's call to discuss our fourth quarter and fiscal 2022 results. This was a remarkable quarter and fiscal year for ePlus, marked by continued strong financial performance and significant progress in advancing our growth objectives. Once again, our dedicated team delivered exceptional results and effectively supported our customers in an evolving and dynamic market. Our success speaks to the strength of our differentiated business model that couples the advantages and flexibility of providing both technology services and financing, as well as our strategic focus on capturing emerging high growth opportunities in fast-moving markets. In short, our strategy is working and A-plus is gaining market share as evidenced by our results in the fourth quarter and for our fiscal year. Fourth quarter net sales increased 28% to $451.5 million, with solid contributions from both segments, reflecting growth-based strength across our customer base and end markets. Fourth quarter adjusted gross billings increased approximately 21% year over year to $638.5 million, with increases in every vertical market sector. The growth in fourth quarter adjusted gross billings helped drive our fiscal 2022 adjusted gross billings to over $2.6 billion, representing approximately 16% growth from fiscal 2021. We continue to see nice growth in collaboration and networking as hybrid work models have become the de facto operating model for most of our customers. Another highlight of the quarter was further expansion of our annuity quality revenues. as we experience broad gains in managed services, help desk services, and staffing, driven in part by the shortage of IT professionals, as well as customer optimization of their IT spend through utilization of outsourced services to manage day-to-day IT operations. We believe we have the right mix of best-in-class services to capitalize on this favorable long-term trend. In the fourth quarter, we generated robust growth in operating income, adjusted EBITDA, and earnings per share. demonstrating the substantial operating leverage in our model as revenue scales. It is worth noting that our technology segment had a particularly strong fourth quarter with operating income up 88%. Our full year performance also featured solid operating leverage as net sales growth of 16% helped drive a year-over-year gain of more than 38% in operating income and a more than 41% improvement in diluting earnings per share. Over the past several years, we have focused on investing in our teams and in our capabilities to capitalize on long-term trends that are driving IT spending in key high-growth markets. Whether it's private, public, or hybrid cloud, data center, cybersecurity, or managed services, our expanded breadth of integrated services and solutions is resonating with our customers who increasingly seek to partner with a skilled IT service partner to achieve their business objectives and and maximize their return on investment. Customers continue to rely on ePlus to provide the guidance and solutions that enable them to meet the IT challenges they face today and for the future. We continue to experience strong growth trends in our services business, which includes a wide range of professional and managed services, staffing, logistics, and help desk services, and remains an important competitive differentiator for ePlus. In fiscal 2022, for example, Our services business generated sales growth of 19%. Our service mix is trending towards recurring long-term services such as managed help desk and staffing as compared to project-driven services. This is a positive trend as annuity quality services tend to have higher margins and more predictable financial performance. The strong growth in our service business is also reflective of our expanded capabilities encompassing critical IT functions such as cloud-hosted services, security and network monitoring that are often too complex and costly to manage internally. As organizations and enterprises increasingly outsource these and other IT functions, it will favorably impact our financial results by enhancing both our top-line growth and our profitability given the higher margins associated with these services. In terms of capital allocation priorities, we continue to evaluate a range of potential acquisition targets to enhance our growth and expand our geographic presence. Our focus remains primarily on bolt-on acquisition opportunities in high-growth market segments. Our strong balance sheet supports our ongoing M&A efforts, and our newly expanded credit facility provides additional liquidity and flexibility that we can draw on as needed. Last year at this time, we said that as the economy continues to recover and our customers return to a more normalized work environment, we expected to see the pace of IT spending gain momentum. This is exactly what happened in fiscal 2022, and we expect this trend to continue into this year as well, spurred by our customers' digital transformation initiatives and growing need to support more adaptable business models. I am encouraged by the strength of our open orders and backlog. reflect a continued high level of demand for our products, services, and solutions that will drive growth in fiscal 2023. Against this favorable backdrop, we are seeing lead times extend as supply chains remain tight and product availability has become more limited. As a result, while we anticipate solid top-line growth in fiscal 2023, we expect that timelines for IT project implementations will be extended, creating revenue headwinds as we move throughout the year. Our team has done a very effective job navigating supply chain issues over the past year, working closely with our channel partners and distributors to minimize the impact on our customers, and we will continue to draw on the strength of our resources and relationships to deliver for our customers in fiscal 2023 and beyond. Turning to our financing segment, this segment's performance for fiscal 2022 was particularly strong as adjusted EBITDA of $39 million increased 25% from the prior year and benefited in particular from an outsized transaction in the second quarter. As we look forward into fiscal 2023, based on our current visibility, we anticipate financing segment results will revert to a more normalized level as we saw in fiscal 2020 and fiscal 2021. I will now turn the call over to our CFO, Elaine Marion, to provide details on our fourth quarter and full fiscal year 2022 results.