Converge Technology Solutions Corp.

Good morning, ladies and gentlemen. Thank you for standing by. My name is Michelle, and I will be your conference operator today. Welcome to the Converge earnings call for the second quarter of 2023. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue at any time, you may press star, then the number one, on your telephone keypad. If you require assistance during the conference call, please press star zero for the operator. I would now like to turn the conference over to Lauren Gorber, Converge Investor Relations. Please go ahead.

Thank you, Michelle, and good morning. Joining me to discuss Converge's Q2 fiscal 2023 results are Sean Main, Group CEO, Greg Berard, President and Global CEO, and Avjit Kamboj, Chief Financial Officer. This call is being recorded live at 8 a.m. Eastern Time on August 9, 2023. The press release we issued earlier this morning is available for download along with our Q2 MD&A, financial statements, and accompanying notes, all of which have been filed with CDAR. Please note that some statements made on the call may be forward-looking. Actual events or results may differ materially from those expressed or implied, and Converge disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. The complete safe harbor statement is available on both our MD&A and press release, as well as on Converge.com. We encourage our investors to read it in its entirety. We are reporting our financial results in accordance with International Financial Reporting Standards, or IFRS. As always, we will also discuss non-GAAP performance measures, which should be viewed as supplemental. The MD&A contains definitions of each one used in our reporting. All of the dollar figures expressed on this call are Canadian, unless otherwise noticed. I'll turn it over to Sean first for opening remarks, then Abhijit will review our Q2 financial performance, after which Greg will offer some operational color, and then we will open it up for questions. So with that, Sean.

Thank you, Lauren. And to those of you attending today's second quarter earnings call, for today's agenda, I'd like to provide a quick overview of our business strategy with particular attention paid towards our solution practice areas, such as advanced analytics, which has developed materially from the foundations built from key historical acquisitions. These advanced services have led to a record quarter of over $175 million of gross profit and great year-on-year services growth of 33%, 16% of that being organic. I will also speak to the demand environment across geography that we are seeing from our large mid-market customer base, touching on the fact that although we see supply chain improving and our backlog invoicing primarily in the following quarter, we still entered Q3 with $447 million in backlog, showing persistent demand for our products and services. Our CFO, Abhijit Kamboj, will provide his perspective on the company's financial position through an update on the Q2 Converged Financials, along with providing forward-looking statements to what we expect in Q3. Our Global President and CEO, Greg Berard, will then expand on and support these narratives by providing an overview of the recent success stories and operational achievements, such as the growth of our managed service practice. We set out in the last five and a half years to develop a leading software-enabled IT and cloud solution provider, delivering global solutions around advanced analytics, application modernization, cloud cybersecurity, digital infrastructure, and digital workplace offerings to clients across various industries. As we've highlighted on previous calls, Our specific mid-market customer matrix paired with our internal expertise has resulted in Converge successfully growing into a dominant IT solution provider in a fragmented IT service landscape with few scale providers. This scale, combined with skill sets rarely seen in mid-market focused IT service companies, has resulted in numerous industry accolades we've attained throughout the years, along with vast and diverse vendor partnerships. Despite the well-documented slowdown in hardware device demand globally, Converge increased first-half gross sales by 37% year-on-year, showing the success of our advise, implement, and manage strategy. Macroeconomic pressures are driving organizations to make more strategic technology investments, which is why we've shifted our priority to driving accelerated time to value for our customers through digital investment and transformation. According to Fortune Business Insights research, the top areas of increased investment from 2023 to 2030 continue to be cyber and information security at 13.8%, business intelligence data Linux at 21.1%, and cloud platforms at 20%. These areas reflect the need to protect and leverage data, as well as enable agility and scalability in a dynamic environment. One third of those surveyed are increasing investments in artificial intelligence, AI, and nearly a quarter, 24%, in hyper-automation. These technologies have the potential to drive innovation and efficiencies, but without a partner like Converge, require significant resources and skills to implement and manage. Collectively, These realities are driving demand in areas which our core practices are well equipped to manage, especially surrounding our cyber and cloud departments, which you've heard me discuss over the last several quarters. But with all things AI at the forefront and rapidly growing demand from customers around the world, particularly in the US, I'd like to take a minute to expand on the unique advanced analytics practice that we have created. In 2018, we launched the start of our advanced analytics practice by acquiring Lighthouse and Essex Tech, both of which had AI and advanced practices in place, with deep expertise around IBM's Watson platform and a top five Snowflake technology partnership. By combining the technical teams and integrating the data analytics skills of Lighthouse with the AI and application developments of Essex, this gave Converge the ability to be an end-to-end analytics partner and enabled us to build application platforms for our clients. These platforms led us to expand in a few years' time with the purchase of LPA and Carpe Datum in 2021, adding further foundations and new partnerships to our advanced analytics practice. The LPA team brought more resources around AI, business intelligence, and data warehousing. Carpe Datum brought us comprehensive skills around financial performance management and strengthened our partnership with IBM and the Altares platform. Most recently in 2022, we introduced new analytics practices to our Canadian region for further developing our skills around AI and data with the addition of NuComp Analytics, while simultaneously growing our existing partnership with Tableau and Microsoft. As a result of building and developing our now thriving analytics practice, we are proud to have obtained over 100 experienced data engineers to help our customers use AI and analytics tools in their business. We've structured our current advanced analytics practice into multiple revenue streams within the company, which Greg will go into further detail on shortly. Overall, Converge understands that each customer has unique requirements and are in different stages of their data journey. But what they all have in common is a need to know more about their data. Most mid-market customers understand they aren't leveraging or protecting their data as well as they could be. Converge has now developed these practices to infuse a culture of data protection and analytics, one that has built our best-in-class guardrails, policies, and governance, making it a comprehensive solution provider with vast potential for growing revenues. Historically, we have framed our backlog as an indicator of the state of our supply chain in some areas while highlighting that the supply chain still has not normalized to pre-pandemic levels. In regards to the recent quarter, we invoiced over 85% of the pre-existing Q1 backlog throughout the second quarter. Based on new orders in Q2, our backlog was $447 million heading into Q3. Given that $192 million of orders received in Q2 also invoiced in Q2, we generated $560 million of new product orders throughout the quarter, highlighting the strength of demand from our mid-market customers. We continue to see improvements in the supply chain as demonstrated through our Q2 performance. Overall, product demand continues to be strong, highlighting the strength of demand from our mid-market customers for our analytics, cybersecurity, cloud, managed services, and digital infrastructure, along with our digital workplace offerings. I would now like to pass the call to our CFO, Ajit Kamboj, to discuss how our business strategy has resulted in the financial results reporting through the second quarter and first half of 2023.