ePlus inc.

Thank you for joining us today. On the call is Mark Maron, CEO and President, Darren Raguel, COO and President of vPlus Technology, Elaine Marion, CFO, 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 most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and other documents that we filed with the SEC, including the Form 8-K we filed on October 6, 2023, recasting certain disclosures in our most recent annual report. Any forward-looking statement speaks only of the date of which the statement is made, and the company undertakes no responsibility to update any of these forward-looking statements in light of new information, future events, or otherwise. In addition, we will be using certain non-GAAP measures during the call. We have included the GAAP financial reconciliation in our earnings release, which is posted on the investor information section of our website at www.eplus.com. I'd now 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 second quarter fiscal 2024 results. I will start with some key takeaways. Eplus generated solid results in our second quarter with consolidated net sales of 19%. This was driven by strong sales growth of 21% in our technology business, which included 9% revenue growth in our services businesses. Diluted earnings per share advanced 14%, Slightly lower than sales growth due to a shift in product mix, a decline in finance segment earnings, given uneven deal flow and a tough compare year over year, as well as increased operating expenses, which included investments in our key growth initiatives. Our second quarter performance benefited from continued market share gains and improved product availability that enabled us to deliver on orders from prior periods. Gross billings improved for the third consecutive quarter, totaling approximately $856 million, representing a 7.4% gain over the same period last year as we continued to drive organic and acquisition growth to capture market share. Our demonstrated ability to drive sales and earnings growth, even in an uncertain economic environment, underscores the strength of our strategic plan, our expertise across the broad technology stack, and diversification across customer types and end markets. Through our comprehensive portfolio of innovative solutions and service offerings, Eplus enables successful and cost-effective outcomes that align with our customers' IT objectives. I was particularly pleased with our sales growth as we experienced increases across nearly all market verticals and customer sizes in the second quarter, led by the strength of our networking, collaboration, and managed services solutions. Networking represented our best performing category as net sales grew approximately 62% year over year. This strong growth reflected three main factors. One, a contribution from our recently acquired network solutions group. Two, a continued improvement in product availability that enabled us to deliver on prior customer orders. And three, organic customer demand. The prevalence of hybrid work, distributed computing, and the emergence of AI are driving growth for advanced networking architectures, and we are capturing share in this space through our innovative solutions and partnerships with leading OEMs. Continued customer investment in network modernization solutions is also contributing to our growth in this space. This includes building out AI-enabled infrastructure solutions, and supporting AI implementation with advisory services around data modeling and governance and risk best practices. Our workspace transformation or collaboration net sales grew 41% year-over-year and has created market-wide recognition of our technology leadership in this space. For example, we were recently recognized as Reimagine Work Partner of the Year for the Americas from Cisco. This award recognizes partners who are excelling at hybrid work, customer experience, leading innovation, and empowering collaboration with WebEx. We were also recognized for the release of our proprietary E-plus collaboration solution called Automated Virtual Assistant, or AVA. E-plus AVA is an in-house developed managed service that leverages automation and artificial intelligence to provide automated testing and reporting on the health of Cisco video devices, conference rooms, and workspaces to ensure effective operations. Security was 18.5% of our technology gross billings in the trailing 12 months. Security net sales increased 7% in the quarter. Customers looked to ePlus to better mitigate the risk sophistication of cyber threats and want us to provide comprehensive risk management solutions. In October, we announced our holistic program called Compromise Nothing. This comprehensive program includes strategic assessment and advisory services and our managed service offerings. Our extensive capabilities distinguish E-Plus in the security solutions market and provide attractive opportunities for us to build and expand relationships with both existing and new customers. Our services segments perform well with net revenue increasing 9% year over year, primarily due to strong growth in our managed services, which grew 21%. Over the past year, we have focused on expanding our solutions and capabilities and managed services, which offer the advantage of recurring and predictable monthly revenue streams. We continue to see our customers shift their IT spend towards SaaS-based solutions, given upfront cost advantages, ease of scalability, and simplified maintenance requirements. The continued growth of our SaaS offerings, such as storage as a service, and AVA remains a key growth driver for Eplus within our managed services business, along with our other annuity services, and helps with visibility and predictability on future revenue streams and profitability. Strong double-digit growth in managed service revenue, coupled with greater operating efficiency, drove a significant improvement in the profitability of this business, with gross margins increasing 460 basis points. Professional services revenue edged higher as growth in project services revenue was largely offset by a decrease in staff augmentation. This performance is consistent with customer IT spending trends, which currently tend to favor shorter-term projects that generate relatively fast return on investments. Additionally, we believe the growing adoption of automation and AI will drive more demand for cloud storage and analytics. To meet these needs, we are leveraging our capabilities in cloud and consulting, along with our partnership with AI leaders such as NVIDIA, Lenovo, and Pure to help our customers design and deploy AI infrastructure solutions that deliver significant value over time. Our financing segment delivered a solid quarter, consistent with our expectation, even as results declined on a year-over-year basis. As I noted in last quarter's call, because this business benefited last year from specific financing deals, we anticipated that quarterly comparisons this year would prove challenging and create a tough compare. While quarterly or even yearly results in this segment can be variable, our financing business provides flexibility for our customers while delivering strong profitability. We remain committed to investing in our team and in our capabilities to capture future growth opportunities. We added a significant number of customer facing employees year over year with a particular emphasis on sales, professional services, and technical support personnel. We have continued to build out our solution and service offerings around managed services, such as storage as a service and AVA. Additionally, we've invested in the construction of our new state of the art customer innovation center, which will enable us to showcase our breadth of innovative offerings and expand our warehouse and logistics capabilities. These investments, higher acquisition-related depreciation and amortization expense and lower financing segment operating income, moderated second quarter growth and consolidated operating income. Despite a tough economic environment, we are pleased that consolidated quarterly net earnings increased 14.7% to $32.7 million. And in our technology business segment, operating income increased 12.5% to $35.9 million and adjusted EBITDA increased 17.1% to $45.5 million. I'd like to express my thanks to the entire Eplus team for delivering another quarter of solid financial performance. I will now turn the call over to Elaine to discuss our financial results in more detail. After Elaine's remarks, I will provide our financial outlook for fiscal 2024. Elaine?

Thank you, Mark, and good afternoon, everyone. I will provide additional details about our financial performance in the second quarter of fiscal 2024. Consolidated net sales increased 19% to $587.6 million. Technology business net sales grew 21.3% to $571.9 million, aided by the fulfillment of open orders and the NSG acquisition. Service revenue increased 9%, reflecting continued strong growth in managed services partially offset by modest growth in professional services. Sales remained broad-based across our customer verticals. On a trailing 12-month basis, our two largest verticals were telecom, media, and entertainment, and technology, representing 25% and 18% of our technology business net sales, respectively. FLED healthcare and financial services accounted for 16, 13, and 10% of our technology business net sales, respectively, with the remaining 18% divided among other end markets. Our financing business segment faced a particularly challenging comparison this quarter, and as such, revenue declined to 15.7 million from the prior year period, primarily due to lower proceeds from sales of equipment, lower transactional gains, and lower month-to-month rents. Consolidated gross profit increased 8.3% to $144.4 million, representing a consolidated gross margin of 24.6%, compared with gross margin in the same quarter last year of 27%. The decrease in gross margin from the same period last year primarily was the result of product mix and lower financing business segment earnings. Within our technology business, gross profit increased 12.4% to $130.7 million. Technology business gross margin was 22.9% compared to 24.7% in the year-ago quarter. This decrease was mainly due to our lower proportion of third-party maintenance and services sales, which are recorded on a net basis. Services gross margin increased significantly, with managed services gross margin improving 460 basis points to 31.1%, and professional services gross margin expanding 270 basis points to 41.3%. The improvement in services profitability primarily reflected enhanced operating efficiency, driven in part by increased scale of our managed services segment. Operating expenses increased 11.6% year-over-year to $99.5 million, reflecting higher salaries and benefits due to additional headcount, depreciation and amortization expense from the NSG acquisition, and increased spend on travel and entertainment and marketing. We ended the September quarter with headcount of 1,877, an increase of 148 employees, of which 118 were customer facing. It should be noted that we onboarded 83 employees with the acquisition of NSG. Technology business operating income rose 12.5% to $35.9 million, while financing business segment operating income declined 26.4% to $9 million. On a consolidated basis, operating income grew 1.7% to $44.9 million. Earnings before tax increased 11.8% to $45 million. as the foreign currency losses from last year did not replicate in the current quarter. The effective tax rate was 27.4% in the second quarter of fiscal 2024, compared to 29.3% in the year-ago quarter. Consolidated net earnings was $32.7 million, or $1.22 per diluted share, reflecting increases of 14.7% and 14% respectively from the year-ago quarter. Non-GAAP diluted earnings per share were $1.40, up 8.5% year-over-year. Our diluted share count at the end of the quarter was $26.7 million, unchanged from the second quarter of fiscal 2023. Adjusted EBITDA in the technology business rose 17.1%, but declined 26.2% in the financing business segment. As a result, consolidated adjusted EBITDA improved 6.5% to 53.6 million. That brings me to our year-to-date review. Consolidated net sales grew 22% to 1.16 billion for the first six months of fiscal 2024, primarily driven by 23.6% net sales growth in the technology business. Technology business growth billings increased 12.2% to 1.7 billion. Consolidated growth profit increased 16.1% to $286.6 million. Consolidated growth margin was 24.7% compared to 25.9% a year ago, primarily due to the mix in the product segment. Consolidated net earnings were $66.5 million, or $2.49 per diluted chair, compared to $50.8 million, or $1.91 per diluted chair. Adjusted EBITDA rose 21.3% to $107.4 million, and non-GAAP diluted earnings per share expanded by 23.2% to $2.81. Shifting to the balance sheet, cash and cash equivalents were $82.5 million at the end of the second quarter compared to $103.1 million at the end of fiscal 2023. As supply chain pressures continued to ease and product availability improved, We were able to deliver on prior customer orders and related services. As a result, inventories declined to $222.1 million from $243.3 million at the end of March 2023. Inventory turns continued to improve to 29 days compared to 32 days in the preceding quarter and 38 days at the end of fiscal 2023. Our cash conversion cycle was 51 days compared to 52 days in the year-ago quarter and 59 days at the end of fiscal 2023. Given this improvement, year-to-date operating cash flows were $10.3 million compared to $119.7 million of cash used in the same period last year. While we expect our customers to be more conservative with their IT spending in the second half of fiscal 2024, as Mark mentioned, ePLUS remains well-positioned given our strategic focus on higher growth and markets. As always, I want to thank our talented Eplus employees for continuing to drive our solid financial performance. With that, I will turn the call back over to Mark. Mark?