ScanSource, Inc.

Listen only mode until the question and answer session. Today's call is being recorded. If anyone has any objections, you may now disconnect. I would like to turn the call over to Mary Gentry, Senior Vice President, Treasurer and Investor Relations. Ma'am, you may begin.

Good morning and thank you for joining us. Our call will include prepared remarks from Mike Bauer, our Chair and CEO, and Steve Jones, our Chief Financial Officer. Tony Sorrentino, our President for Specialty Technologies, is also joining us. We will review our operating results for the quarter and then take your questions. We posted an earnings infographic that accompanies our comments and webcast in the investor relations section of our website. As you know, certain statements in our press release infographic and on this call are forward-looking statements and subject to risks and uncertainties that could cause actual results to differ materially from expectations. These risks and uncertainties include the factors identified in our earnings release and in our Form 10-K for the year ended June 30th, 2023. Forward-looking statements represent our views only as of today, and ScanSource disclaims any duty to update these statements except as required by law. During our call, we will discuss both GAAP and non-GAAP results and have provided reconciliations on our website and in our Form 8-K. I'll now turn the call over to Mike.

Thanks Mary, and thanks everyone for joining us today. In the third quarter, our people responded well in a challenging demand environment. However, we were surprised at our lower than expected net sales for our hardware business. Third quarter net sales declined 15% due to lower demand from our channel partners across our portfolio of technologies. Our strong margins and robust free cash flow reflect the strength of our business fundamentals. We operate in highly specialized technology markets with value-added profit margins because of our expertise. ScanSource benefits from this deep knowledge of our sales and supplier services teams, specific value-added tools, and working capital investment that is counter cyclical with sales volumes. With our hybrid distribution strategy, we are committed to helping our channel partners execute on the expanded opportunity to sell devices and recurring revenues. For our fiscal year 2024, we identified strong free cash flow and focus on Intellisys as important to management and our shareholders. Again this quarter, we achieved this aim with free cash flow of $158 million and Intellisys growth of 4% year over year. Q3 end user billings for Intellisys increased 7% year over year and totaled $2.68 billion annualized. This includes Billings Growth and Contact Center as a Service, or CCAS, of 33% growth, and UCAS of 11%. We are expanding our investments in talent, training, and tools to increase our value and drive growth as a technology services distributor. As reported by many channel companies and suppliers, we are experiencing softer demand. Our sales partners tell us that they are seeing a more cautious IT spending environment from end customers accompanied by longer sales cycles. For our third quarter, we expected broad-based declines across our hardware technologies. What surprised us and what caused our revenue shortfall against our plan was the significant decline in revenue from our networking products across the board, including Cisco networking. Our hardware portfolio is comprised of a diverse set of business-critical technologies. Right now, they are at different stages of their end customer demand cycles, following the last two years of supply chain and pandemic disruption. We believe we are on a path to return to growth and have confidence in our team's ability to navigate the demand cycles with the support of our channel partners. In the near term, we see both macro uncertainty and the continuing normalization of supply and demand creating a challenging forecasting environment. We generated another quarter of strong free cash flow and have a disciplined capital allocation plan of share repurchases and M&A. Our preferred use of free cash flow is to fund growth of high margin recurring revenue businesses that are working capital light. I'll now turn the call over to Steve to take you through our financial results for the quarter and our outlook for fiscal year 2024. Yeah, thanks, Mike.