PC Connection Inc (CNXN) 2024 Q4 法說會逐字稿

Good afternoon and welcome to the fourth quarter, 2024 connection earnings conference call. My name is Josh and I will be the coordinator for today at this time. (Operator Instructions)

下午好，歡迎參加 2024 年第四季連線收益電話會議。我的名字是喬希 (Josh)，我將擔任今天的協調員。（操作員指令）

There will be a question-and-answer session as a reminder, this conference call is the property of connection and may not be recorded for rebroadcast without specific permission from the company on the call. Today are Tim mcgrath, President and Chief Executive Officer and Tom Baker, senior Vice President and Chief Financial Officer. I will now turn the call over to the company.

將會有一個問答環節作為提醒，本次電話會議屬於連接財產，未經通話公司特別許可不得錄音重播。今天在座的是總裁兼執行長 Tim McGrath 和高級副總裁兼財務長湯姆貝克 (Tom Baker)。我現在將把電話轉給公司。

Thanks operator and good afternoon everyone. I will now read our cautionary note regarding forward-looking statements, any statements or references made during the conference call that are not statements of historical fact may be deemed to be forward-looking statements, various remarks that management may make about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1,995.

謝謝接線員，大家下午好。我現在將讀出我們關於前瞻性陳述的警告，電話會議期間所作的任何非歷史事實陳述或引用均可被視為前瞻性陳述，管理層對公司未來預期、計劃和前景所作的各種評論均構成《1995 年私人證券訴訟改革法》安全港條款所指的前瞻性陳述。

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in the risk factor section of the company's annual report on form 10-K for the year ended December 31, 2023 which is on file with the Securities and Exchange commission as well as in other documents that the company files with the commission from time to time.

由於各種重要因素，實際結果可能與這些前瞻性陳述所示的結果有重大差異，包括公司提交給美國證券交易委員會的截至 2023 年 12 月 31 日的 10-K 表年度報告中風險因素部分中討論的因素以及公司不時向委員會提交的其他文件中討論的因素。

In addition, any forward-looking statements represent management's view as of today and should not be relied upon as representing views as of any subsequent date. While the company may elect to update forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so other than as required by law, even if estimates change. And therefore, you should not rely on these forward-looking statements as representing management's views as of any date subsequent to today.

此外，任何前瞻性陳述均代表管理階層截至今天的觀點，不應被視為代表任何後續日期的觀點。儘管公司可能選擇在未來某個時間點更新前瞻性陳述，但公司明確表示不承擔除法律要求以外的任何義務，即使估計發生變化。因此，您不應依賴這些前瞻性陳述來將其視為代表管理階層在今天之後任何日期的觀點。

During this call, nongaap financial measures will be discussed, a reconciliation between any non-GAAP Financial measure discussed and its most directly comparable GAAP measure is available in today's earnings release and on the company's website at www.connection dotcom.

在本次電話會議中，我們將討論非公認會計準則財務指標，所討論的任何非公認會計準則財務指標與其最直接可比的公認會計準則指標之間的對賬表可在今天的收益報告中以及公司網站 www.connection dotcom 上找到。

Please note that unless otherwise stated, all references to full year and fourth quarter, 2024 comparisons are being made against the year ended December 31, 2023, and the fourth quarter thereof.

請注意，除非另有說明，所有對 2024 年全年和第四季度的比較均針對截至 2023 年 12 月 31 日的年度及其第四季度進行。

Today's call is being webcast and will be available on connection's website. The earnings release will be available on the SEC website at www.sec.gov and in the investor relations section of our website, www.ir.connection.com.

今天的電話會議將進行網路直播，並可在 connection 的網站上查看。收益報告將在美國證券交易委員會網站 www.sec.gov 和我們網站 www.ir.connection.com 的投資者關係部分發布。

I would now like to turn the call over to our host, Tim mcgrath, President and CEO Tim.

現在，我想將電話轉給我們的主持人、總裁兼執行長 Tim McGrath。

Thank you, Samantha. Good afternoon, everyone. And thank you for joining us today for Connection's Q4 2024 conference call.

謝謝你，薩曼莎。大家下午好。感謝您今天參加 Connection 2024 年第四季電話會議。

I'll begin this afternoon with an overview of our 2024 performance followed by our fourth quarter results. Tom will then walk us through a more detailed look at our financials for the full year revenue was $2.8 billion. A decrease of 1.7% compared to the prior year. While gross profit was $519.8 million. An increase of 1.6% gross margin was a record 18.6% growing 60 basis points.

今天下午我將首先概述我們的 2024 年業績，然後介紹我們的第四季業績。然後，湯姆將向我們更詳細地介紹我們的財務狀況，全年收入為 28 億美元。較上年下降1.7%。而毛利為5.198億美元。毛利率上漲1.6%，達到創紀錄的18.6%，成長60個基點。

Our SG&A was $422.3 million. An increase of 4% compared to the prior year. This increase was due to our investment in critical areas of our business which we will discuss in detail later in the call net income was 87.1 million. An increase of 4.6% compared to the prior year earnings per diluted share was $3.29 for 2024 compared to $3.15 in the prior year.

我們的銷售、一般及行政開支為 4.223 億美元。比上年增加4%。這一成長是由於我們對業務關鍵領域的投資，我們將在後面的電話會議上詳細討論，淨收入為 8,710 萬。與前一年相比，2024 年每股攤薄收益為 3.29 美元，成長 4.6%，而上年度為 3.15 美元。

Now, let's discuss our Q4 performance consolidated net sales were $708.9 million an increase of 1.8% compared to the last year.

現在，讓我們討論一下我們的第四季業績，綜合淨銷售額為 7.089 億美元，比去年同期成長 1.8%。

Gross profit was flat $129.8 million gross margins were down 30 basis points to 18.3% in Q4 compared to the prior year quarter. Primarily due to a shift in product mix.

第四季毛利持平於 1.298 億美元，毛利率與去年同期相比下降 30 個基點至 18.3%。主要是由於產品結構的轉變。

Operating income in Q4 was $22.6 million. A decrease of 19% compared to Q4, 2023 operating income. As a percent of sales was 3.2% compared to 4% in net sales in the prior year quarter.

第四季營業收入為 2,260 萬美元。與2023年第四季營業收入相比下降了19%。銷售額百分比為 3.2%，而去年同期淨銷售額為 4%。

That income in Q4 was 20.7 million. A decrease of 12.9% compared to $23.8 million in the prior year quarter. In Q4, 2024 our diluted earnings per share was $0.78. A decrease of 12.8% from $0.90 in Q4 2023 last quarter. During our conference call, we noted that the recovery in it spending was taking longer than we anticipated.

第四季的營收為 2,070 萬。與去年同期的 2,380 萬美元相比下降了 12.9%。 2024 年第四季，我們的每股攤薄收益為 0.78 美元。較上季的 2023 年第四季的 0.90 美元下降 12.8%。在我們的電話會議中，我們注意到 IT 支出的恢復時間比我們預期的要長。

This trend continued in Q4 which is reflected in our results. In Q4, we saw some evidence of a recovery year over year in select areas of our business.

這一趨勢在第四季度持續，這反映在我們的業績上。在第四季度，我們看到部分業務領域較去年同期出現復甦的跡象。

We experienced notebook mobility and desktop revenue growth of 14% driven primarily by PC refresh initiatives by our customers revenue for advanced technologies continues to be challenged as customers wrestle with the timing of their AI deployment and data center refresh. Although our results for advanced technologies did not meet our expectations.

我們的筆記型電腦行動和桌上型電腦收入成長了 14%，這主要得益於客戶的 PC 更新計劃，但由於客戶在 AI 部署和資料中心更新時機方面遇到困難，先進技術的收入繼續面臨挑戰。儘管我們在先進技術方面的成果並未達到我們的預期。

In Q4, we are cautiously optimistic about the future. As we've seen a marked increase in our pipeline of opportunities. We'll now look a little deeper into our segment performance in our business Solutions segment. Our Q4 net sales were 262 point 4,000,003 0.7% lower than a year ago as we experienced a 12% decrease in the sale of advanced technology products partially offset by an increase of 2% and endpoint devices.

在第四季度，我們對未來持謹慎樂觀的態度。我們已經看到我們的機會明顯增加了。現在，我們將更深入地了解我們的業務解決方案部門的分部表現。我們第四季的淨銷售額比去年同期下降了 262.4 億 3 千美元，即 0.7%，原因是先進技術產品銷售額下降了 12%，但終端設備的銷售額增長了 2%，部分抵消了這一下降。

Gross profit for the Business Solutions segment was $62.6 million. A decrease of 0.8% gross margin increased 70 basis points compared to the prior year quarter to 23.9%.

商業解決方案部門的毛利為 6,260 萬美元。毛利率下降0.8%，與去年同期相比上升70個基點至23.9%。

Our net sales and gross margins were favorably affected by customer mix and an increase in the mix of software recognized on a net basis in our public sector solutions. Business Q4 net sales were $143.7 million. 42.9% higher than a year ago. Sales to the federal government increased by $41.1 million. While sales to state and local government and educational institutions increased by $2 million.

我們的淨銷售額和毛利率受到客戶結構和公共部門解決方案中淨確認的軟體組合增加的正面影響。第四季業務淨銷售額為 1.437 億美元。比去年同期高出42.9%。對聯邦政府的銷售額增加了 4,110 萬美元。對州和地方政府以及教育機構的銷售額增加了 200 萬美元。

Gross profit for the public sector segment was $22.2 million. An increase of 30.2% compared to Q4, 23 gross margin decreased by 150 basis points to 15.4% for the quarter compared to the prior year.

公共部門部門的毛利為 2,220 萬美元。與第四季相比，23 季毛利率成長 30.2%，與去年同期相比，本季毛利率下降 150 個基點至 15.4%。

The revenue increase and margin decline resulted from a few large project rollouts in Q4, 2024 that were at lower than average margins in our enterprise solutions segment, Q4 net sales were 302 point 7,000,006 0.4% lower than a year ago as we experienced an increase of 3% in device sales offset by a 28% decrease in the sale of advanced technology.

收入增加和利潤率下降是由於 2024 年第四季度推出的幾個大型項目利潤率低於我們企業解決方案部門的平均水平，第四季度淨銷售額為 302.7000,006 元，較去年同期下降 0.4%，因為設備銷售額增長了 3%，但先進技術銷售額下降了 28%。

Gross profit for the enterprise segment was 45,000,009 0.3% lower than the prior year quarter. Gross margin decreased by 50 basis points to 14.9% for the quarter. The margin decrease was a result of lower software license fees and product mix.

企業部門的毛利為 45,000,009 比去年同期下降 0.3%。本季毛利率下降50個基點至14.9%。利潤率下降是由於軟體許可費和產品組合下降造成的。

I'll now turn the call over to Tom to discuss additional financial highlights from our income statement, balance sheet and cash flow statement. Tom.

現在我將把電話轉給湯姆，討論我們的損益表、資產負債表和現金流量表中的更多財務亮點。湯姆。

Thanks Tim in the fourth quarter. G&A increased by 5.2% over the prior year.

感謝第四季的蒂姆。行政及一般開支較上年增加 5.2%。

The increase in G&A was primarily due to investments and resources to strengthen our sales, technical sales and services capabilities on a percentage of sales basis D&A increased 49 basis points to 15.1% of net sales in the quarter. Compared to 14.6% in the prior year.

一般及行政開支的成長主要歸因於投資和資源來加強我們的銷售、技術銷售和服務能力，按銷售額百分比計算，本季度一般及行政開支增加了 49 個基點，達到淨銷售額的 15.1%。相比之下，上年同期為 14.6%。

Interest income for Q4 amounted to $4.8 million compared to $4.1 million last year. An increase of 660,000 and our effective tax rate was 24.1% down from 25.8%.

第四季的利息收入為 480 萬美元，去年同期為 410 萬美元。增加了 660,000，我們的有效稅率從 25.8% 下降到 24.1%。

That income for the quarter was $20.7 million. A decrease of 12.9% from $23.8 million and diluted earnings per share was $0.78. A decrease of 12.8%.

本季營收為 2,070 萬美元。較 2,380 萬美元下降 12.9%，每股攤薄收益為 0.78 美元。下降了12.8%。

Our trailing 12 month adjusted earnings for interest, income taxes, depreciation and amortization or adjusted EBITDA was $118.9 million compared to $125.5 million a year ago. A decrease of 5% in the fourth quarter, we paid a $0.10 per share quarterly dividend and we repurchase shares having a total cost of $4.9 million at an average of $70.39 per share.

我們過去 12 個月的調整後利息、所得稅、折舊和攤提收益或調整後的 EBITDA 為 1.189 億美元，而去年同期為 1.255 億美元。第四季下降了 5%，我們支付了每股 0.10 美元的季度股息，並以平均每股 70.39 美元的價格回購了總成本為 490 萬美元的股票。

At the end of the year, we had $59.7 million remaining for stock repurchases under our existing stock repurchase program. Today, we announced that our board of directors has prepared a 50% increase in our quarterly dividend to $0.15 per share. The dividend is payable to shareholders of record on February 25th and payable on March 14th, 2025.

截至年底，我們根據現有股票回購計畫剩餘 5,970 萬美元可用於股票回購。今天，我們宣布董事會準備將季度股息增加 50% 至每股 0.15 美元。股利將於 2025 年 2 月 25 日支付給登記在冊的股東，並於 2025 年 3 月 14 日支付。

Cash flow generated from operations from year end in 2024 was $173.9 million. Our accounts receivable balance increased $6.5 million for the year ended 2024 and our DSO decreased to 72 days from 73 days for the same period. A year ago, cash from operations benefited from a reduction in inventory of $29.1 million for the year.

2024 年年末經營活動產生的現金流量為 1.739 億美元。截至 2024 年，我們的應收帳款餘額增加了 650 萬美元，同期我們的 DSO 從 73 天減少到 72 天。一年前，經營活動現金受惠於當年 2,910 萬美元的庫存減少。

Our accounts payable balance increased $36.5 million for the year ended 2024. Largely due to timing of payments.

截至 2024 年，我們的應付帳款餘額增加了 3,650 萬美元。主要是由於付款時間。

Cash used in investing activities of $115.3 million was the result of $358.3 million of investment purchases offset by $250.6 million of investment maturities. We use $25.2 million of cash for financing activities during the year, primarily for the payment of $10.5 million of dividends to shareholders and repurchases of $12.4 million of stock.

投資活動所用現金為 1.153 億美元，其中 3.583 億美元的投資購買額減去 2.506 億美元的投資到期額。我們本年度使用 2,520 萬美元的現金用於融資活動，主要用於向股東支付 1,050 萬美元的股利和回購 1,240 萬美元的股票。

We ended Q4 with $442.6 million of cash equivalents and short term investments. When we're thinking about capital allocation, we remain committed to growing the business and have an on growing program focused on investing in organic opportunities in organic growth programs that Tim will expand upon later.

截至第四季度，我們的現金等價物和短期投資為 4.426 億美元。當我們考慮資本配置時，我們仍然致力於發展業務，並製定了一個成長計劃，重點是投資有機成長計劃中的有機機會，蒂姆稍後會對此進行擴展。

Furthermore, as announced above, we have increased our dividend by 50%. We anticipate evaluating our dividend program regularly and target a payout in the range of 15 to 20% of net income. During 2024 we significantly increased our repurchases of stock and we anticipate continuing to do so in a disciplined manner.

此外，正如上文所宣布的，我們已將股息增加了 50%。我們計劃定期評估我們的股利計劃，並將股利派發目標定在淨收入的 15% 至 20% 之間。2024 年，我們大幅增加了股票回購量，並預計將繼續以有紀律的方式進行。

I will now turn the call back over to Tim to discuss current market trends.

現在我將把電話轉回給提姆，討論當前的市場趨勢。

Thanks Tom. During 2024 market conditions remain challenging as customers continue to struggle with the timing and priority of their it investments.

謝謝湯姆。2024 年，市場狀況依然充滿挑戰，因為客戶仍在努力確定 IT 投資的時機和優先順序。

As a result, overall, it spend was lower than expected in Q4 and for all of 2024. While we continue to see year over year growth in the device ecosystem including endpoint and related categories. Many customers have delayed investments in large advanced technology projects.

因此，總體而言，其第四季和全年 2024 年的支出低於預期。同時，我們繼續看到設備生態系統（包括端點和相關類別）的年成長。許多客戶推遲了對大型先進技術項目的投資。

We do believe that budgets will free up to support those initiatives throughout 2025. In 2024 we made significant investments and improvements in our business and we are confident that will position us to be successful in 2025 and beyond, we've invested in a world class CRM system A I enabled workflow tools enhancement to our technical integration and distribution operations.

我們確實相信，在 2025 年，預算將得到釋放，以支持這些計劃。 2024 年，我們對業務進行了重大投資和改進，我們相信這將使我們在 2025 年及以後取得成功，我們投資了世界一流的 CRM 系統 A I 啟用了工作流程工具來增強我們的技術整合和分銷營運。

Perhaps more importantly, we've elevated our investment in key technical resources. These include solution, sales executives, pre and post sales, technical sales experts, engineering, personnel services, personnel, additional resources focused on Helix A I initiatives.

或許更重要的是，我們加大了對關鍵技術資源的投資。這些包括解決方案、銷售主管、售前和售後、技術銷售專家、工程、人事服務、人員、專注於 Helix A I 計劃的額外資源。

In 2025 we expect customers to invest in data center and infrastructure projects driven in part by A I and server consolidation as well as anticipated growth coming from the device refresh these trends in technology advancements are driving growth in a number of opportunities in our pipeline.

2025 年，我們預計客戶將在資料中心和基礎設施專案上進行投資，部分原因是人工智慧和伺服器整合以及設備更新帶來的預期成長，這些技術進步的趨勢正在推動我們管道中的許多機會的成長。

We believe that the strategic investments we have made will allow us to efficiently and effectively take advantage of this expected increase in demand and enable participation in many more larger scale opportunities.

我們相信，我們所做的策略投資將使我們能夠有效利用預期的需求成長，並參與更多更大規模的機會。

Our investments have resulted in higher levels of SG&A and are a key component of our ongoing transformation.

我們的投資帶來了銷售、一般及行政開支的提高，也是我們持續轉型的關鍵組成部分。

There are other catalysts for growth in 2025 and we expect customers to focus on refreshing their networks, data management and security A I automation and hyper personalized marketing solutions will drive deployment at scale in 2025 A I remain the focus of investment. As many of our customers assess their A I strategies. We continue to strengthen our A I capabilities through connections, Helix initiatives.

2025 年還有其他成長催化劑，我們預計客戶將專注於更新他們的網路、資料管理和安全性 AI 自動化和超個人化行銷解決方案，這將推動 2025 年的大規模部署 AI 仍然是投資的重點。正如我們的許多客戶評估他們的 A I 策略。我們透過連結和Helix計劃不斷加強我們的人工智慧能力。

We're excited to report advancements in our connection, Helix capabilities which continue to mature and excel with the A I sector in Q4. We continue to bolster our technical capabilities, developing a mature pipeline of A I opportunities and strengthening our alliances with key partner organizations within the A I ecosystem.

我們很高興地報告，我們的連接、Helix 功能取得了進步，這些功能在第四季度繼續成熟並在人工智慧領域表現出色。我們將繼續增強我們的技術能力，開發成熟的人工智慧機會管道，並加強與人工智慧生態系統中關鍵合作夥伴組織的聯盟。

We are particularly proud to announce that we've been recognized with a first place award in the Naval Information Warfare Center.

我們非常自豪地宣布，我們獲得了海軍資訊戰中心一等獎。

Their challenge for the Atlantic palmetto tech bridges, secure, commercially based artificial intelligent environment was for real world naval applications.

他們針對大西洋棕櫚技術橋樑所面臨的挑戰是，安全、以商業為基礎的人工智慧環境適用於現實世界的海軍應用。

This accolade serves not only as a recognition of connections, innovativeness but also affirms our deep understanding of A I technologies and the specific challenges our clients face.

這項榮譽不僅是對我們聯繫和創新能力的認可，也肯定了我們對人工智慧技術的深刻理解以及客戶面臨的具體挑戰。

As you can tell by the tone of our call, we're optimistic about our prospects in 2025. However, there are a number of macroeconomic events that could impact the timing of customer investment. These include recent developments with the A I landscape and the potential impact of tariffs for 2025. We're confident we can outperform the U SI T market rate of growth by 200 basis points.

從我們電話會議的語氣就可以看出，我們對 2025 年的前景充滿樂觀。然而，許多宏觀經濟事件可能會影響客戶投資的時機。其中包括人工智慧領域的最新發展以及 2025 年關稅的潛在影響。我們有信心能夠超越美國 SI T 市場成長率 200 個基點。

We remain committed to stay at the forefront of the technology curve ensuring that our integrated solutions effectively meet the evolving needs of our customers. We believe that our focus and business strategy remains well aligned with the shifting dynamics of how customers deploy, utilize and consume technology.

我們始終致力於走在技術前沿，確保我們的整合解決方案能夠有效滿足客戶不斷變化的需求。我們相信，我們的重點和業務策略與客戶部署、利用和消費技術的方式的不斷變化的動態保持一致。

We continue to connect our customers with technology that enhances growth, elevate productivity and empower innovation.

我們將持續為客戶提供促進成長、提升生產力和推動創新的技術。

We help our customers expertly navigate through a complex set of choices within the technology landscape.

我們幫助我們的客戶在技術領域中熟練地應對一系列複雜的選擇。

We help calm the confusion of it for our customers. We know that in this complex world of technology change happens and expertise wins.

我們幫助客戶消除這方面的困惑。我們知道，在這個複雜的科技世界中，改變總是會發生，而專業知識則佔上風。

On that note, I'd like to take a moment to thank our extremely dedicated and valued employees for their continued and extraordinary efforts during this rapidly changing environment. We'll now entertain your questions, operator.

在此，我想花點時間感謝我們極其敬業和寶貴的員工，感謝他們在這個快速變化的環境中持續做出的非凡努力。我們現在開始回答您的問題，接線生。

(Operator Instructions)

（操作員指令）

Anthony Lebiedzinski from Sidoti & Company.

Sidoti & Company 的 Anthony Lebiedzinski。

Good afternoon everyone and thank you for taking the questions. So first, just just curious, can you comment on the sales progression that you saw during the quarter? Ju just you again, I just wanted to get a better sense as to how the quarter trended, October through December. And so any early indication about, how Q1 has started? That would be great.

大家下午好，感謝大家回答問題。所以首先，只是好奇，您能否評論一下本季的銷售進度？再次感謝您，我只是想更了解 10 月至 12 月這個季度的趨勢。那麼，有沒有關於第一季開始情況的早期跡象？那太棒了。

Yeah, so I think Anthony, October was probably a little bit better than we've seen in the last three years. November was markedly worse in terms of a percentage of sales that we've seen in the last three years in December was about the same. We didn't really see any budget flush, but, but November was pretty low. And then in terms of, what we're seeing going forward, I think for Q1 flat, maybe up very low, single digits on the top line is kind of what we're expecting and, that's kind of how things are looking right now.

是的，所以我認為安東尼，十月可能比過去三年好一些。從銷售百分比來看，十一月的情況明顯較差，與過去三年十二月份的情況大致相同。我們確實沒有看到任何預算短缺，但是 11 月的預算相當低。就我們對未來的展望而言，我認為第一季的營收將持平，甚至可能上漲很低，營收將出現個位數成長，這符合我們的預期，目前的情況也差不多。

Yeah, thanks Anthony. I add that that, that tells kind of part of the story looking back. But if we continue to look forward, we are seeing a very large number of projects come into the funnel, our customers engaging us in a number of areas. And you know, we're confident that a number of those projects will be significant for us in 2025.

是的，謝謝安東尼。我補充說，這有點像是回顧故事的一部分。但如果我們繼續展望未來，我們會看到大量的專案進入管道，我們的客戶在多個領域與我們合作。你知道，我們相信，其中的許多項目在 2025 年對我們來說都將具有重要意義。

That's very helpful color. And just to follow up in terms of tho those projects, I mean, are you seeing that as far as like w which vertical markets, can you speak of, I guess, you know, maybe just, just as far as talk about the opportunity that you see going forward as for which, which of your vertical markets do you, do you think it will have the most opportunity? And maybe conversely, which ones are you less bullish on?

這是非常有用的顏色。為了跟進這些項目，我的意思是，您是否看到哪些垂直市場，您能否談談您看到的未來​​機遇，您認為哪個垂直市場將擁有最多的機會？或者相反，您對哪些不太看好？

Well, thanks. So let me start with our subsidiaries and then we'll talk about vertical. So currently our large enterprise group has a large number of new projects, new customers in a lot of momentum going into 2025. So we're very optimistic about that. Our, our SMB group, our, our business solutions team, also their funnels are building but probably at a lower rate. And our public sector team, it is very much a large contract, large customer dependent, a few in the federal space and a few in the sled space when we think about the vertical markets that underpin a lot of that growth. Clearly, we're seeing a number of projects in the retail space. So we are looking at good growth there. A number of projects in health care really around the GPO S and the group purchasing organizations and a number of manufacturing projects are coming into play. So those would be kind of the leaders of our vertical market segment.

好吧，謝謝。因此，讓我先從我們的子公司開始，然後再討論垂直業務。因此，目前我們的大型企業集團擁有大量新專案、新客戶，並且預計將邁入 2025 年。因此我們對此非常樂觀。我們的 SMB 集團、我們的業務解決方案團隊也在建設中，但速度可能較低。而我們的公共部門團隊，很大程度上依賴大合同，大客戶，一些在聯邦領域，一些在雪橇領域，當我們考慮支撐大部分增長的垂直市場時。顯然，我們看到零售領域有許多項目。因此，我們期待那裡能實現良好的成長。圍繞著 GPO S 和集團採購組織，醫療保健領域的許多項目以及許多製造項目正在發揮作用。這些人可以說是我們垂直市場領域的領導者。

Thank you for that Tim and then I guess, just to switch gears here as far as the SG&A so, it was up 4% in 2024 versus gross profit growth of 1.6%. So, as we look forward to 2025 you know, how should we think about expected expense growth versus what you think you can do as far as gross profit growth?

謝謝你，提姆，然後我想，就銷售、一般及行政開支而言，2024 年該數字增長了 4%，而毛利潤增長了 1.6%。那麼，當我們展望 2025 年時，我們應該如何看待預期費用成長與您認為在毛利成長方面可以做的事情？

Well, as you know, said throughout the call to Anthony, I think Tim, in his remarks, we've invested a lot of money in people and, and you know, solution sellers and technical people and we're laying the infrastructure, we've invested in a lot of tools because we see this pipeline coming and we think we have to be ready to answer your, your question directly. I think we'll probably see three ish four ish percent SG&A growth over the next couple of quarters, year on year. Obviously, we're doing everything, we can to pull it back. But what you're seeing is just a real reallocation of resources here.

嗯，正如你所知，在與安東尼的整個通話過程中，我想蒂姆在他的演講中說，我們在人才方面投入了大量資金，你知道，解決方案銷售商和技術人員，我們正在鋪設基礎設施，我們已經投資了很多工具，因為我們看到這個管道即將到來，我們認為我們必須準備好直接回答你的問題。我認為未來幾季我們可能會看到銷售、一般及行政費用年增 3% 到 4% 左右。顯然，我們正在竭盡全力將其拉回。但您看到的只是真正的資源重新分配。

And also I would, I would classiFY24 as a building year for Anthony, we invested in somewhat of a down market. So we have now a additional capability, additional capacity and many of the investments have already been made. So when we think about growth in 25 that SG&A growth, a lot of it will come from variable compensation.

而我會將 24 財年歸類為安東尼的建設年，我們投資的市場有些低迷。因此，我們現在擁有了額外的能力和額外的產能，而許多投資已經完成。因此，當我們考慮 25% 的銷售、一般及行政費用成長時，很大一部分將來自可變薪酬。

Yeah. And the other thing I would add on Q4, specifically Anthony because, there, there was a bit of a Miss, there, we had a couple of, I would say 231 time items that probably cost us, $2.5 million to $3 million that will not repeat. And those were just kind of out of the blue.

是的。關於第四季度，我還想補充一點，特別是安東尼，因為他有點失誤，我們有幾個，我想說是 231 個時間項目，可能花費我們 250 萬到 300 萬美元，這些不會重複。這些都有點出乎意料。

Okay. Well, thanks for clarifying that. That's, that's definitely very helpful call I get, I guess, last question for me before I pass on to others as far as can, can you speak to the expected impacts from tariffs that you may have to deal with? Just curious to get your thoughts on that.

好的。好吧，謝謝你澄清這一點。那，那絕對是我接到的非常有幫助的電話，我想，在我把這個問題轉交給其他人之前，我最後一個問題是，您能談談您可能不得不處理的關稅預期影響嗎？只是好奇想知道你對此的想法。

It's a great question. And as you know, our major suppliers have very complex supply chains and so it's really difficult to have any, any accuracy in our predictions.

這是一個很好的問題。如您所知，我們的主要供應商擁有非常複雜的供應鏈，因此我們的預測很難準確。

The sort of the upside is it's a great opportunity to reach out and touch all of our customers. It's a great opportunity to engage them and have meaningful conversations about planning for their contingencies. You know, generally speaking, the majority of our suppliers manufacture their desktops in Mexico. Generally speaking, the majority of our suppliers have the majority of their notebook manufacturing in China and Vietnam and, and standing up a few other locations.

其好處在於，這是一個接觸並聯繫所有客戶的好機會。這是與他們接觸並進行有意義的對話以製定應急計劃的好機會。你知道，一般來說，我們的大多數供應商都在墨西哥生產他們的桌上型電腦。總體來說，我們的大多數供應商的筆記型電腦製造業務都在中國和越南，同時在其他一些地方也有業務。

And then of course, display is a little more spread out, but also a lot of display coming out of China. So when you start to put all that together, it really depends on the specific product from the specific supplier at this specific time. So many of our suppliers are moving quickly to stand up alternatives to some of the tariff countries that said, still not really clear and it's not clear to our customers either, but we will work through this together.

當然，顯示器的分佈更加廣泛，但也有很多顯示器來自中國。因此，當你開始將所有這些放在一起時，它實際上取決於特定時間特定供應商的特定產品。我們的許多供應商都在迅速採取行動，為一些關稅國家提供替代方案，儘管這些國家的情況還不太清楚，我們的客戶也不太清楚，但我們將共同努力解決這個問題。

Yeah. And the only other thing I'd add, the only other thing I'd add to that Anthony, we're going to work with customers to tailor programs to help optimize all of us through this. So I think, I think a lot's going to evolve over the next three to three weeks or so.

是的。我唯一想補充的是，安東尼，我們將與客戶合作，定制計劃，以幫助我們所有人實現優化。所以我認為，未來三到三週左右會發生很多事情。

All right. Well, thank you very much and best of luck. Okay. Thank you.

好的。好吧，非常感謝你，祝你好運。好的。謝謝。

Thank you. I would not like to turn the call back over to Tim mcgrath for any closing remarks.

謝謝。我不想將電話轉回給蒂姆·麥格拉斯並讓他做任何結束語。

Well, thanks.

好吧，謝謝。

Josh. I'd like to thank all of our customers, vendor partners and shareholders for their continued support. And once again, our coworkers for their efforts and extraordinary dedication.

喬希。我要感謝我們所有客戶、供應商夥伴和股東的持續支持。再次感謝我們的同事們的努力和非凡的奉獻。

I'd also like to thank all of you listening to the call this afternoon. Your time and interest in connection are appreciated. Have a great evening.

我還要感謝今天下午聆聽電話會議的所有人。感謝您花費時間和精力進行聯繫。祝您有個愉快的夜晚。

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

謝謝。會議到此結束。感謝您的參與。您現在可以斷開連線。