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 Parkhurst, Senior Vice President. Sir, you may begin.

Thank you for joining us today. I'm on the call with Mark Marin, CEO and President, Darren Raguel, COO and President of E-plus 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 we may file with the SEC. Any forward-looking statement speaks only as of the date at which the statement was 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've included the GAAP financial reconciliation in our earnings release, which was 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 Merritt. Mark?

Thank you, Clay, and good afternoon, everyone. Thank you for joining us to discuss our fiscal second quarter 2025 results. I will recap our second quarter highlights and provide an update on our business. Then Elaine will discuss our financial results in more detail. I will conclude our prepared remarks with a discussion on our outlook. After that, we'll open the call to your questions. We continue to expand our solution and service offerings with the acquisition of Bailiwick. This, along with our strategic initiatives focusing on AI, cloud, networking, data, and security, has allowed us to build on our strong customer relationships, which was reflected in our year-over-year increases in gross profit and gross margin expansion. As we've noted before, the overall IT market is transforming and we are transitioning with it. More specifically, our revenue in a quarter reflects the ongoing evolution of the industry towards radical revenue models, netted down revenues, and the continued high growth of our services business, along with an overall softening in the demand in the market currently. On a consolidated basis, total net sales were down 12.3% as a decline in product sales offset the strong growth in higher margin services revenues. The decline is attributable to a few things. A tough compare as last year benefited from an easing supply chain, especially in networking. To put this in perspective, product sales in our technology business last year were up 23.3% in our second quarter and up 26.2% in the first half. We also had a higher proportion of netted down revenues in our product sales segment. The gross to net adjustment for product billings was up 940 basis points. As discussed on our last call, we continue to see a shift towards services contracts and more software subscription sales versus prior years. And these are often recognized randomly and can increase the proportion of revenue recognized on a net basis. Gross profit outperform sales, increasing 2.5%, while our gross margins increased 410 basis points, driven by continued strength in services, higher product margins, as well as a solid contribution from the financing segment. SG&A expenses were higher year on year, primarily due to increased headcount from the bailiwick and peak acquisitions, as well as increased acquisition-related costs. In our technology business, reflecting on the tough comp, we saw softer than expected hardware product sales overall and lower demand from certain enterprise customers as they continue to digest purchases from last year's flush. As a result, we have seen a delay or pause in rolling out new technologies for these customers. Our service revenues continue to deliver strong growth, increasing 46% year-on-year and reaching a new high of $104 million in the quarter, which included contribution from Bailiwick. Managed services revenue continue to grow nicely, up 28% year-over-year, all organically, and total managed service bookings are up 48% over the trailing 12 months. This bodes well for Eplus by helping to create predictable, profitable, and more consistent revenue streams. Our finance business delivered a solid quarter with higher transactional gains benefiting from some large deals and portfolio gains. An important accomplishment in the quarter was the acquisition of DailyWik, a provider of outsourced IT integration and deployment services across North America. Bailiwick has expanded our IT integration services to focus on AI, digital signage, and EV charging for clients in retail, finance, and hospitality. Although Bailiwick was a small contributor during the quarter, as the company was acquired at the end of August, it further broadens our portfolio to meet evolving customer demand. Importantly, it also expands our footprint in North America and our customer base, offering enhanced digital transformation capabilities into additional verticals, particularly in the enterprise segment. Bailiwick also has some additional capabilities leveraging AI to streamline operations through intelligent video surveillance with a strong focus on loss prevention solutions in the retail space, as well as digital lock solutions, which uses AI to analyze live video feeds to generate actionable recommendations. We are encouraged by the progress we have made against our artificial intelligence initiatives and the interest we are seeing from customers for our AI Ignite program. While we are excited about the promise of AI, we believe it has elongated some sales cycles. To better position Eplus for the AI market opportunity, we have trained our entire sales teams on our AI solutions and services. We also just launched our AI Experience Center with Digital Realty. This cutting-edge technology center will demonstrate to customers the building and consuming of AI use cases. It is designed to help accelerate an organization's AI journey. In addition to the technology demonstrations, customers can also take advantage of the suite of E-Plus Ignite assessments and workshops. These are designed to help them understand their level of AI maturity and what solutions best match their goals. This can include helping to identify use cases, define success criteria, assess their AI preparedness, and rapidly deploy proof of concepts. to ultimately help our customers make informed decisions on their AI investments and unlock maximum value from their data. We continue to see growth in our security practice. Our security gross billings were up 15.8% for the quarter, and it's now 21.4% of our trailing 12 months gross billings. We would expect customers to continue to invest in data security and governance risk initiatives related to AI. Overall, our balance sheet and cash position provides financial flexibility to support future growth initiatives. Our capital allocation priorities remain funding investments to drive organic and inorganic growth and opportunistically repurchase shares to provide value to our shareholders. I will now turn the call over to Elaine to discuss our financial results in more detail. Elaine?