ePlus inc (PLUS) 2024 Q3 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the ePlus earnings results conference call. As a reminder, this conference call is being recorded. I would like to introduce your host for today's conference, Ms. Erica Stoecker, General Counsel. Ma'am, you may begin.

美好的一天，女士們先生們。歡迎參加 ePlus 收益電話會議。謹此提醒，本次電話會議正在錄音中。我想介紹一下今天會議的主持人，總法律顧問艾麗卡·斯托克女士。女士，您可以開始了。

Thank you for joining us today. On the call is Mark Marron, CEO and President; Darren Raiguel, Chief Operating Officer and President of ePlus Technology; and Elaine Marion, Chief Financial Officer.

感謝您今天加入我們。執行長兼總裁 Mark Marron 參加了電話會議； Darren Raiguel，ePlus Technology 營運長兼總裁；和財務長伊萊恩·馬里昂。

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.

我想花點時間提醒您，我們今天下午做出的非歷史事實的陳述可能被視為前瞻性陳述，並且基於管理層當前的計劃、估計和預測。

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 report 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 statements speaks only as 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.

由於我們今天下午發布的收益報告以及向美國證券交易委員會提交的定期文件（包括我們最新的10-K 表格年度報告、10-K 表格季度報告）中詳述的某些風險和不確定性，實際和預期的未來結果可能會存在重大差異。披露內容。任何前瞻性陳述僅代表截至該陳述作出之日的情況，本公司不承擔根據新資訊、未來事件或其他情況更新任何這些前瞻性陳述的責任。

In addition, we will be using certain non-GAAP measures during the call. We have included a 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 Marron. Mark?

此外，我們將在電話會議期間使用某些非公認會計準則衡量標準。我們在收益發布中納入了 GAAP 財務調節表，該報表發佈在我們網站 www.eplus.com 的投資者資訊部分。我現在想把電話轉給馬克馬龍。標記？

Thank you, Erica, and thank you, everyone, for participating in today's call to discuss our third quarter fiscal 2024 results. Our year-to-date performance has been solid, with net sales growth of 6% outpacing the industry and our peers. Customers' adoption of digital transformation technologies, security solutions, and IT infrastructure to support AI remain strong.

謝謝 Erica，也謝謝大家參加今天的電話會議，討論我們 2024 財年第三季的業績。我們今年迄今的業績表現穩健，淨銷售額成長 6%，超過產業和同業。客戶採用數位轉型技術、安全解決方案和 IT 基礎設施來支援人工智慧的勢頭依然強勁。

Quarter-to-quarter top-line performance has been more variable than in prior years mostly due to supply chain fluctuations, which affected both customer behavior as well as our ability to ship equipment. Over the past few years, large enterprise customers ordered equipment well in advance of expected need in order to safeguard their mission-critical projects. As a result, we built a backlog of booked orders, and as the supply chain eased, we were able to ship this backlog equipment, helping to drive strong 22% sales growth in the first half of the fiscal year.

季度與季度的營收業績比前幾年變化更大，主要是由於供應鏈波動，這影響了客戶行為以及我們運輸設備的能力。在過去幾年中，大型企業客戶提前遠遠超出預期需求訂購設備，以保障其關鍵任務項目的安全。結果，我們累積了積壓的預訂訂單，隨著供應鏈的緩解，我們能夠運送這些積壓的設備，幫助推動本財年上半年 22% 的銷售強勁成長。

Following that wave of shipments, we saw some customers pause new orders in Q3 as they deploy these delivered products. As a result, in our third quarter, net sales were down 18%, but it's important to note that our gross profit held more stable and was down only 3.3%. A contributing factor to the gross profit was our service revenues, which were up 10.7% as we deployed projects for our customers. And our services gross profit increased 21% year over year, driven by double-digit gross profit gains in both professional and managed services.

在這波出貨之後，我們看到一些客戶在第三季暫停新訂單，因為他們部署了這些已交付的產品。因此，我們第三季的淨銷售額下降了 18%，但值得注意的是，我們的毛利保持較為穩定，僅下降了 3.3%。毛利的一個貢獻因素是我們的服務收入，隨著我們為客戶部署項目，服務收入成長了 10.7%。在專業服務和託管服務兩位數毛利成長的推動下，我們的服務毛利年增 21%。

Overall, our services gross margin was up 340 basis points, and we had another strong quarter with our managed services revenue up 22%.

整體而言，我們的服務毛利率成長了 340 個基點，我們的託管服務營收成長了 22%，季度業績又表現強勁。

Given the mission-critical nature of managed services we provide, this business is characterized by recurring and predictable revenue streams. This revenue not only enhances our financial visibility, but also offers new opportunities for growth as we provide existing customers with additional managed service offerings that address their evolving IT needs.

鑑於我們提供的託管服務的任務關鍵型性質，該業務的特點是經常性和可預測的收入流。這項收入不僅提高了我們的財務視覺性，而且還提供了新的成長機會，因為我們為現有客戶提供了額外的託管服務產品，以滿足他們不斷變化的 IT 需求。

The services growth noted above, along with solid product margins and strong contribution from our financing segment, helped our consolidated gross margin increased by 410 basis points. It's also important to note that our year-to-date consolidated gross profit increased 9% on an increase of 6% in net sales.

上述服務成長，加上穩健的產品利潤率和融資部門的強勁貢獻，幫助我們的綜合毛利率成長了 410 個基點。另外值得注意的是，我們年初至今的綜合毛利潤成長了 9%，淨銷售額成長了 6%。

Net income declined 23.6% for the quarter and increased 8.4% year to date. Net earnings were affected by lower product sales, higher acquisition related amortization expenses, and higher personnel costs. We continue to invest strategically in building out our AI sales and consultative resources, AI optimized solutions and lab capabilities, which underscores our confidence in our growth prospects.

本季淨利下降 23.6%，年初至今成長 8.4%。淨利潤受到產品銷售下降、收購相關攤銷費用增加、人員成本增加的影響。我們持續進行策略性投資，建立人工智慧銷售和諮詢資源、人工智慧優化解決方案和實驗室能力，凸顯了我們對成長前景的信心。

While sales cycles have lengthened somewhat, we do not view this quarter's sales decline as a trend, and our annual guidance remains unchanged. It is worth noting again that we faced a tough compare with gross billings up almost 30% last year in this quarter. We believe fundamental demand parameters remain intact and consider the variability in our quarterly sales this year as primarily a timing issue on when and how deals fell between quarters. We expect sales growth in our fourth quarter, enabling us to achieve the lower end of our guidance range.

雖然銷售週期有所延長，但我們並不認為本季的銷售下降是一種趨勢，我們的年度指引保持不變。再次值得注意的是，與去年同期成長近 30% 的總營收相比，本季我們面臨嚴峻的挑戰。我們認為基本需求參數保持不變，並將今年季度銷售額的變化主要視為季度間交易何時以及如何下降的時間問題。我們預計第四季度的銷售成長，使我們能夠達到指導範圍的下限。

While still early in its evolution, generative AI represents a promising long-term growth opportunity for both our product and services business. We have deep credentials in the AI world, and AI is in a new solution set for ePlus. We have been strategizing, building engineering expertise, and aligning with top vendors for years.

雖然生成式人工智慧仍處於發展早期，但它為我們的產品和服務業務提供了一個有前景的長期成長機會。我們在人工智慧領域擁有深厚的資歷，並且人工智慧屬於 ePlus 的新解決方案集。多年來，我們一直在製定策略、建立工程專業知識並與頂級供應商保持一致。

In March of 2018, we were named Elite Level as a deep learning partner for NVIDIA. We were also an early distribution partner for AIRI, the AI-ready infrastructure architected by Pure Storage and NVIDIA, which recognized our vision and integration capabilities.

2018 年 3 月，我們被任命為 NVIDIA 的 Elite Level 深度學習夥伴。我們也是 AIRI 的早期分銷合作夥伴，這是由 Pure Storage 和 NVIDIA 構建的 AI 就緒基礎設施，他們認可了我們的願景和整合能力。

We are excited about the possibilities for AI, and we recently announced our AI Ignite Program that will help customers explore, adopt, and optimize AI. It will help show what is possible with their data and applications, ensure their business and strategy is aligned, and help drive scale, efficiencies, and cost savings. Our AI capabilities, including consulting, managed services, and training, enable our customers to implement complex AI architectures that are cost effective, scalable, and secure.

我們對人工智慧的可能性感到興奮，我們最近宣布了人工智慧點燃計劃，該計劃將幫助客戶探索、採用和優化人工智慧。它將有助於展示他們的數據和應用程式的可能性，確保他們的業務和策略保持一致，並幫助推動規模、效率和成本節約。我們的人工智慧能力，包括諮詢、託管服務和培訓，使我們的客戶能夠實施經濟高效、可擴展且安全的複雜人工智慧架構。

We continue to work closely with our AI partners to develop innovative AI-optimized infrastructure for our customers. That can include working on voice recognition projects, autonomous driving initiatives, scanning physical images to provide a better patient experience, or just help customers embark on their artificial intelligence and machine learning plans.

我們持續與人工智慧合作夥伴密切合作，為客戶開發創新的人工智慧優化基礎設施。這可能包括從事語音辨識專案、自動駕駛計劃、掃描實體影像以提供更好的患者體驗，或只是幫助客戶開始他們的人工智慧和機器學習計劃。

Our financing segment reported solid third-quarter results, fueled primarily by high transactional gains and portfolio earnings. During the quarter, we executed on several large contracts resulting in strong year-on-year volume growth, accompanied by even higher growth in the third-quarter segment adjusted EBITDA.

我們的融資部門報告了穩健的第三季業績，這主要得益於高交易收益和投資組合收益。本季度，我們執行了幾份大型合同，導致銷量同比強勁增長，第三季度調整後 EBITDA 的增長甚至更高。

Financing remains an important competitive differentiator for ePlus, offering flexibility for our customers, particularly in more challenging economic periods. Acquisitions remain a key element of our growth strategy, and we continuously evaluate potential opportunities that would enhance our offerings, strengthen our capabilities, and expand our geographical presence.

融資仍然是 ePlus 的重要競爭優勢，為我們的客戶提供靈活性，特別是在更具挑戰性的經濟時期。收購仍然是我們成長策略的關鍵要素，我們不斷評估潛在機會，以增強我們的產品、增強我們的能力並擴大我們的地域影響力。

We were also pleased to complete the acquisition of PEAK Resources on January 26. PEAK is a solution provider in Denver and the Mountain West, with enterprise customers and a corporate culture that parallels our own. This is another example of a geographic strategic acquisition that provides a platform for us to build out the Mountain West region. We believe we can deploy our broader solutions portfolio to their customer base, which should help drive incremental growth in the future.

我們也很高興於 1 月 26 日完成了對 PEAK Resources 的收購。PEAK 是丹佛和西部山區的解決方案提供商，擁有與我們相似的企業客戶和企業文化。這是地理策略收購的另一個例子，為我們建造西部山區提供了平台。我們相信我們可以向他們的客戶群部署更廣泛的解決方案組合，這將有助於推動未來的增量成長。

Our strong balance sheet, including third-quarter ending cash of $142 million, the highest level in the past seven quarters, provides us with the flexibility to opportunistically pursue acquisitions that both align with our strategic objectives and are financially accretive.

我們強大的資產負債表，包括第三季末現金 1.42 億美元，為過去七個季度的最高水平，使我們能夠靈活地伺機進行收購，這些收購既符合我們的戰略目標，又具有財務增值作用。

I would like to thank the ePlus team for their continued dedication in a challenging operating environment. 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.

我要感謝 ePlus 團隊在充滿挑戰的營運環境中持續的奉獻。我現在將把電話轉給伊萊恩，更詳細地討論我們的財務表現。在伊萊恩演講之後，我將提供我們 2024 財年的財務展望。

Thank you, Mark, and good afternoon, everyone. I will provide additional details about our financial performance in the third quarter of fiscal 2024.

謝謝你，馬克，大家下午好。我將提供有關 2024 財年第三季財務業績的更多詳細資訊。

Consolidated net sales amounted to $509.1 million compared to $623.5 million in the prior-year quarter. Technology business net sales were $494.2 million, down from $611.8 million reported in last year's third quarter. The decline was due to lower product sales as improved product availability in the first half of the fiscal year enabled clients to complete previously delayed projects.

合併淨銷售額達 5.091 億美元，去年同期為 6.235 億美元。科技業務淨銷售額為 4.942 億美元，低於去年第三季的 6.118 億美元。下降的原因是產品銷售下降，因為本財年上半年產品可用性的改善使客戶能夠完成先前推遲的專案。

Service revenue grew 10.7% to $74.7 million, led by double-digit growth in managed services. Within our technology business, sales were broad-based across customer verticals. On a trailing 12-month basis, our two largest verticals continue to be telecom, media, and entertainment and technology, representing 24% and 17% of our technology business net sales, respectively. SLED, healthcare, and financial services accounted for 16%, 13%, and 10% of our technology business net sales, respectively, with the remaining 20% divided among other end markets.

在託管服務兩位數成長的帶動下，服務收入成長了 10.7%，達到 7,470 萬美元。在我們的技術業務中，銷售遍及各個垂直客戶領域。在過去 12 個月的基礎上，我們最大的兩個垂直產業仍然是電信、媒體、娛樂和技術，分別占我們技術業務淨銷售額的 24% 和 17%。SLED、醫療保健和金融服務分別占我們技術業務淨銷售額的 16%、13% 和 10%，其餘 20% 分配給其他終端市場。

Net sales in our financing segment were $14.9 million, up from $11.7 million in the prior year due to higher transactional gains and portfolio earnings. Although consolidated gross profit decreased 3.3% year to year to $133.8 million, consolidated gross margin expanded by 410 basis points to 26.3%.

由於交易收益和投資組合收益增加，我們融資部門的淨銷售額為 1,490 萬美元，高於前一年的 1,170 萬美元。儘管綜合毛利年減 3.3% 至 1.338 億美元，但綜合毛利率卻成長 410 個基點至 26.3%。

All three of our technology segments contributed to the improvement in gross margin, with product gross margin gaining 270 basis points to 21.9%, mainly due to a larger proportion of third-party maintenance and services sold in the current quarter, which are recorded on a net basis. Managed services gross margin showed a 330-basis-point improvement to 31.8% due to scaled growth in these services, while professional services gross margin grew by 420 basis points to 43.3%, benefiting from a shift in mix to higher margin services.

我們的三個技術部門都對毛利率的改善做出了貢獻，產品毛利率增長了270 個基點，達到21.9%，這主要是由於本季度銷售的第三方維護和服務所佔比例較大，這些收入記錄在淨基礎。由於這些服務的規模增長，託管服務的毛利率提高了330 個基點，達到31.8%，而專業服務的毛利率增長了420 個基點，達到43.3%，受益於向利潤率更高的服務的組合轉變。

Consolidated operating expenses of $95.8 million increased 4.2% year over year, reflecting the increases in salary and benefits from additional headcount, as well as increases in acquisition-related depreciation and amortization expenses. Our total headcount at the end of December 2023 was 1,897, up 152 from a year ago, partially due to the acquisition of Network Solutions Group completed in April 2023, which added 83 employees. Of the 152 additional employees, 133 were in customer-facing roles.

綜合營運費用為 9,580 萬美元，年增 4.2%，反映了員工人數增加帶來的工資和福利的增加，以及與收購相關的折舊和攤銷費用的增加。截至 2023 年 12 月底，我們的總員工人數為 1,897 人，比一年前增加 152 人，部分原因是 2023 年 4 月完成的 Network Solutions Group 收購，增加了 83 名員工。在新增的 152 名員工中，有 133 名擔任面向客戶的職位。

On a consolidated basis, operating income declined from $46.5 million to $38 million. Earnings before taxes were $38.4 million, down from $49.4 million reported in last year's third quarter. The decrease was due to lower sales as well as the benefit in last year's third quarter from foreign currency gains and a class action payment, which together, totaled $2.8 million. The effective tax rate was 29% in the third quarter of fiscal 2024 compared to 27.7% in the year-ago quarter.

綜合來看，營業收入從 4,650 萬美元下降至 3,800 萬美元。稅前利潤為 3,840 萬美元，低於去年第三季報告的 4,940 萬美元。下降的原因是銷售額下降以及去年第三季的外匯收益和集體訴訟付款（總計 280 萬美元）。2024 財年第三季的有效稅率為 29%，而去年同期為 27.7%。

Consolidated net earnings were $27.3 million, or $1.02 per diluted share, compared to net earnings of $35.7 million, or $1.34 per diluted share last year, respectively. Non-GAAP diluted earnings per share were $1.18 compared to $1.38 in the year-ago period. Our diluted share count at the end of the quarter was $26.7 million, unchanged from the third quarter of fiscal 2023. Consolidated adjusted EBITDA decreased to $46.2 million versus $53.3 million in the prior year, due primarily to a 23.3% adjusted EBITDA decline in the technology business.

合併淨利潤為 2,730 萬美元，即稀釋後每股收益 1.02 美元，而去年淨利潤為 3,570 萬美元，即稀釋後每股收益 1.34 美元。非 GAAP 稀釋後每股收益為 1.18 美元，去年同期為 1.38 美元。截至本季末，我們的攤薄後股票數量為 2,670 萬美元，與 2023 財年第三季持平。綜合調整後 EBITDA 下降至 4,620 萬美元，而前一年為 5,330 萬美元，主要是由於技術業務調整後 EBITDA 下降 23.3%。

Moving to our consolidated results for the nine months ended December 31, 2023, net sales grew 6% to $1.67 billion, led by 6.5% net sales growth in the technology business. Gross billings in the technology business were $2.5 billion, an improvement of 3.4% versus the prior-year period.

轉向我們截至 2023 年 12 月 31 日的九個月的綜合業績，淨銷售額增長 6%，達到 16.7 億美元，其中技術業務淨銷售額增長 6.5%。科技業務的總營收為 25 億美元，比去年同期成長 3.4%。

Consolidated gross profit rose 9.2% to $420.4 million, and consolidated gross margin expanded 80 basis points to 25.2% due to improved margins for both product and services. Consolidated net earnings were $93.8 million, or $3.52 per diluted share, representing increases of 8.4% and 8.6%, respectively. Adjusted EBITDA grew 8.2% to $153.6 million, and non-GAAP diluted earnings per share expanded by 9% to $3.99.

由於產品和服務利潤率的提高，綜合毛利成長 9.2%，達到 4.204 億美元，綜合毛利率擴大 80 個基點，達到 25.2%。合併淨利潤為 9,380 萬美元，或稀釋後每股收益 3.52 美元，分別成長 8.4% 和 8.6%。調整後 EBITDA 成長 8.2%，達到 1.536 億美元，非 GAAP 攤薄每股收益成長 9%，達到 3.99 美元。

Turning to the balance sheet, we ended the third quarter with cash and cash equivalents of $142.2 million, the highest in two years, as compared to $103.1 million at the end of fiscal 2023. Conversely, inventories declined to $218 million from $243.3 million at the end of March 2023, representing the lowest level in nearly two years. We've seen supply chain pressures continue to ease, enabling us to fulfill prior customer orders and complete related services, which should support further inventory reduction over time.

轉向資產負債表，第三季末我們的現金和現金等價物為 1.422 億美元，為兩年來最高，而 2023 財年末為 1.031 億美元。相反，庫存從 2023 年 3 月底的 2.433 億美元下降至 2.18 億美元，創下近兩年來的最低水準。我們看到供應鏈壓力繼續緩解，使我們能夠履行先前的客戶訂單並完成相關服務，這應該會支持隨著時間的推移進一步減少庫存。

Further, inventory turns continue to improve to 27 days compared to 29 days in the preceding quarter and 38 days at the end of fiscal 2023. Stockholders' equity increased 12.2% to $877.8 million from the end of fiscal 2023. Our cash conversion cycle was 54 days compared to 51 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 $143.5 million compared to $147 million of cash used in the same period last year.

此外，庫存週轉時間持續改善至 27 天，而上一季為 29 天，2023 財年末為 38 天。股東權益較 2023 財年末成長 12.2%，達 8.778 億美元。我們的現金轉換週期為 54 天，去年同期為 51 天，2023 財年末為 59 天。鑑於這項改善，年初至今的營運現金流量為 1.435 億美元，而去年同期使用的現金為 1.47 億美元。

While we expect our customers to be more conservative with their IT spending in the remainder of fiscal 2024, as Mark mentioned, ePlus remains well positioned in the market, given our strategic focus on higher growth end markets, and we remain confident in achieving the low end of our guidance range.

正如Mark 所提到的，雖然我們預期客戶在2024 財年剩餘時間裡對IT 支出會更加保守，但考慮到我們的策略重點是更高成長的終端市場，ePlus 在市場中仍處於有利地位，並且我們仍然有信心實現低成長我們的指導範圍結束。

I want to thank our talented ePlus employees for continuing to drive our solid financial performance for the first nine months of fiscal 2024. With that, I will turn the call back to Mark. Mark?

我要感謝我們才華橫溢的 ePlus 員工在 2024 財年的前 9 個月繼續推動我們穩健的財務表現。這樣，我會將電話轉回馬克。標記？

Thank you, Elaine. Driven by our strategy, targeting higher-growth market segments like cloud, networking, collaboration, and security, ePlus has generated strong financial performance through the first nine months of our fiscal year. Specifically, fiscal year-to-date consolidated net sales are up 6%, adjusted EBITDA is up 8% and diluted earnings per share has increased 9% despite ongoing economic uncertainty and the associated impact on IT spending.

謝謝你，伊萊恩。在我們針對雲端、網路、協作和安全等高成長細分市場的策略性推動下，ePlus 在本財年的前 9 個月創造了強勁的財務表現。具體而言，儘管經濟持續存在不確定性並對IT 支出產生相關影響，但本財年迄今的綜合淨銷售額增長了6%，調整後EBITDA 增長了8%，稀釋每股收益增長了9% 。

Looking forward, we expect our fourth-quarter results will improve sequentially from the third quarter as customer sentiment is positive. As a result, we maintain our 2024 financial guidance with an expectation that we will achieve the lower end of the range, driven by a reacceleration of growth in our technology business and continued positive momentum in services.

展望未來，由於客戶情緒積極，我們預期第四季業績將比第三季連續改善。因此，我們維持 2024 年財務指引不變，預計在技術業務重新加速成長和服務業持續積極勢頭的推動下，我們將實現該範圍的下限。

Even as the overall IT spending environment remains challenging, we remain confident in the strength of our marketing position and in our growth strategy. With our many industry partners, ePlus offers innovative, scalable solutions that cost-effectively address our customers' needs today and for the future. We remain committed to driving profitable growth and building long-term value for our shareholders.

儘管整體 IT 支出環境仍然充滿挑戰，但我們對我們的行銷地位和成長策略的實力仍然充滿信心。ePlus 與眾多產業合作夥伴合作，提供創新、可擴展的解決方案，以經濟高效的方式滿足客戶當前和未來的需求。我們仍然致力於推動獲利成長並為股東創造長期價值。

Operator, let's now open the call for questions. Thank you.

接線員，現在讓我們開始提問。謝謝。

(Operator Instructions) Maggie Nolan, William Blair.

（操作員說明）瑪姬·諾蘭、威廉·布萊爾。

Hi. Thank you. Mark, you mentioned part of this quarter performance was influenced by timing of deals. Have you seen some of those deals closed so far in January? Or how are you feeling about the ability to close those in the coming months?

你好。謝謝。馬克，您提到本季業績的一部分受到交易時間的影響。您是否看到一月份迄今為止完成的一些交易？或者您對在未來幾個月內關閉這些項目的能力有何看法？

Yeah. Hey, Maggie, how are you? So yes, we've seen activity pick up in Q4. We've already seen some of those deals closed.

是的。嘿，瑪吉，你好嗎？所以，是的，我們已經看到第四季的活動有所回升。我們已經看到其中一些交易已經完成。

And just to give you a quick recap on the quarter, Maggie, so first off, it was a volume issue. Our net sales was down 18.4%, but our gross profit was only down 3.3%. And a lot of that had to do with our strong margins, our services uptick. We had a pause with our enterprise customers, but we also saw an uptick in our project services. So that was kind of the offset there. And then we had a nice finance quarter as well.

瑪吉，為了讓您快速回顧一下本季的情況，首先，這是一個數量問題。我們的淨銷售額下降了 18.4%，但毛利僅下降了 3.3%。這在很大程度上與我們強勁的利潤率和服務的提升有關。我們與企業客戶的合作暫停了，但我們的專案服務也有所增加。所以這就是一種抵消。然後我們也度過了一個不錯的財務季度。

But really what we're seeing, Maggie, is what it came down to is timing issues between the quarters. So if you think about it with the supply chain easing, we were up 22% in the first half. What we saw was the pause with some of our bigger enterprise customers. Plus, if you remember, we kind of pointed out, we had a tough compare this quarter where our adjusted gross billings -- sorry, our gross billings were up almost 30% last year in this quarter. But with all of that we expect growth to be back to a little bit normal ranges in Q4 and deliver a solid fiscal year and hit the low end of our guidance range.

但瑪吉，我們真正看到的是，歸根結底是各季度之間的時間安排問題。因此，如果考慮到供應鏈的寬鬆，我們上半年的成長率為 22%。我們看到的是一些較大的企業客戶的暫停。另外，如果你還記得的話，我們有點指出，本季度我們進行了一次艱難的比較，調整後的總賬單——抱歉，去年本季度我們的總賬單增長了近 30%。但儘管如此，我們預計第四季度的成長將回到正常範圍，並實現穩健的財年，並達到我們指導範圍的下限。

That's really helpful, Mark. And then, so one other piece of that was you had talked about maybe there are some lengthening sales cycles and maybe that's some of the enterprise commentary that you were giving, but you felt like that wasn't necessarily indicative of a trend yet. Can you elaborate on why that may not be a trend and what you're seeing out there in the market?

這真的很有幫助，馬克。然後，另一件事是您談到的可能是銷售週期延長，也許這是您給出的一些企業評論，但您覺得這不一定表明一種趨勢。您能否詳細說明為什麼這可能不是一種趨勢以及您在市場上看到的情況？

Yeah, Maggie, you know what's funny? What we saw in the calendar year end, the end of our Q3 was not the normal year-end budget flush that we see. But since the fourth quarter, beginning in January, January has picked up. We've seen orders pipeline all pick up nicely. So some of the enterprise deals have actually -- some of the deals that moved -- pushed from Q3 into Q4 have closed. And some of the timelines people seem to -- whether it's a budgeting issue or not, have started to move forward a little bit quicker in terms of their sales cycle. Still not back to, I'll call it pre-COVID levels, if you will, as it relates to the sales cycle, but definitely improved from Q3.

是的，瑪吉，你知道什麼有趣嗎？我們在日曆年末看到的情況，第三季末並不是我們所看到的正常的年終預算充裕。但從四季開始，一月開始，一月有所回升。我們已經看到訂單管道都在良好地增長。因此，一些企業交易實際上——一些轉移的交易——從第三季推到第四季已經結束。人們似乎認為，無論是否是預算問題，一些時間表在銷售週期方面已經開始向前推進得更快一些。仍然沒有回到，如果你願意的話，我將其稱為新冠疫情前的水平，因為它與銷售週期有關，但肯定比第三季度有所改善。

Thank you.

謝謝。

Hey, Maggie. One other thing to just to point out, it's an interesting time with the supply chain. So what we believe happened at least with us is we had a lot of customers that were deploying technology that we delivered in the first half, especially in this Q3. So it really is a timing issue between the quarters with the supply chain, deploying that technology and then customers starting to invest, whether it's in security or AI or things along those lines.

嘿，瑪姬。需要指出的另一件事是，對於供應鏈來說，這是一個有趣的時期。因此，我們相信至少在我們身上發生的是，我們有很多客戶正在部署我們在上半年交付的技術，尤其是在第三季。因此，這確實是供應鏈各季度之間的時間表問題，部署該技術，然後客戶開始投資，無論是在安全、人工智慧還是類似的領域。

Okay. That's helpful. Thank you.

好的。這很有幫助。謝謝。

Thanks, Maggie.

謝謝，瑪吉。

Matt Sheerin, Stifel.

馬特謝林，史蒂菲爾。

Yes, thank you. Mark, I just wanted to follow up on Maggie's question regarding your outlook. I'm looking at my model here. And going back seven years, you've been down sequentially every March quarter, and it does sound like you didn't see the seasonal trends that you typically expect. So I guess a question other than that, you've seen some pick up here in January. Is your backlog or any other sort of tangible evidence that you can point to this rebound here?

是的，謝謝。馬克，我只是想跟進瑪吉關於你的看法的問題。我正在看我的模型。回顧七年前，每個三月季度的業績都會連續下降，聽起來確實沒有看到您通常預期的季節性趨勢。所以我想除此之外還有一個問題，你在一月已經看到了一些問題。您的積壓訂單或任何其他類型的實際證據是否可以表明這種反彈？

Yeah. Hey, Matt, good question. So what we've seen is some of the deals that we -- I just discussed with Maggie that pushed from Q3 into Q4. The demand parameters have really not changed as it relates. And I got to admit, Matt, this is a little bit different than our normal seasonal Q3 to Q4, and a lot of this is timing.

是的。嘿，馬特，好問題。因此，我們看到的是我剛剛與 Maggie 討論過的一些交易，這些交易從第三季度推到了第四季度。需求參數其實並沒有改變。我必須承認，馬特，這與我們正常的第三季度到第四季度的季節性有所不同，其中許多都是時間安排。

The other thing I'd ask you to keep in mind as you go through your models, if you look at the first half, our net sales were up 22%. I think it was in the first half. And our net sales year to date are up 6%. And our gross profits up 9%. So it's in line with what we were thinking for the quarter. A lot of it just came down to timing issues, and a lot of it is supply chain related, and customers pushing deals out from Q3 to Q4 for whatever reasons.

我要求您在瀏覽模型時記住另一件事，如果您查看上半年，我們的淨銷售額增長了 22%。我認為是在上半場。今年迄今為止，我們的淨銷售額成長了 6%。我們的毛利成長了 9%。因此，這符合我們對本季的想法。其中許多都歸結為時間問題，許多都與供應鏈相關，以及客戶出於某種原因將交易從第三季推遲到第四季。

I got it. But it wouldn't seem that supply chain would be an issue, right? Because everyone's saying that products are readily available. Cisco's talked about that. Your networking sales were down 24% year over year. So I'm trying to figure out, is it supply chain or just customers being more cautious?

我得到了它。但供應鏈似乎不會成為問題，對嗎？因為大家都說產品是現成的。思科已經談到了這一點。您的網路銷售額較去年同期下降了 24%。所以我想弄清楚，是供應鏈還是只是客戶比較謹慎？

Yeah. Hey, Matt. Two things, if you think about it. What I'm saying on the supply chain is that a lot of customers -- in our first half, we were up 22%. And some of our bigger customers were actually installing, implementing, deploying that technology as compared to buying new technology. So some of those bigger customers, as you know, had the wherewithal and the capabilities to order in advance. So that's what we're seeing in the quarter.

是的。嘿，馬特。如果你仔細想想，有兩件事。我在供應鏈上所說的是許多客戶——上半年，我們成長了 22%。與購買新技術相比，我們的一些大客戶實際上正在安裝、實施和部署該技術。如您所知，其中一些較大的客戶擁有資金和提前訂購的能力。這就是我們在本季看到的情況。

And then if you look at it for the year, we're still up 6% on the net sales and 9% on our gross profit. So the other factor that comes into play is if you look at our services, they were up 10.7%, and our project services were up nicely, both from a revenue and from a gross margin standpoint. So some of that ties to what I'm talking about with the projects being deployed as compared to buying new technology.

如果你看看今年，我們的淨銷售額仍然成長了 6%，毛利仍然成長了 9%。因此，另一個起作用的因素是，如果你看看我們的服務，你會發現它們成長了 10.7%，而且我們的專案服務無論從收入還是毛利率的角度來看都成長得很好。因此，其中一些與我所說的與購買新技術相比正在部署的項目有關。

The second part of that is what I had said to Maggie a little bit earlier is that some of these deals, some of these enterprise deals were customers pushed into Q4, and we've seen an early pickup. And we don't think the demand parameters are changing both in terms of our pipeline, our backlog. And what we're hearing from our sales team is related to their forecast for Q4.

第二部分是我早些時候對瑪吉說的，其中一些交易，其中一些企業交易是客戶推到第四季度的，我們已經看到了早期的回升。我們認為需求參數在我們的管道和積壓方面都沒有改變。我們從銷售團隊那裡聽到的消息與他們對第四季的預測有關。

I got it. Okay. And could you remind me the revenue contribution in this quarter from the acquisition that you just completed? Does that have much of an impact?

我得到了它。好的。您能否提醒我您剛完成的收購對本季的營收貢獻？這影響大嗎？

Hey, Matt. It was immaterial to net sales. Maybe 3% to 4% tops of net sales. So it was immaterial for the quarter.

嘿，馬特。這對淨銷售額並不重要。可能佔淨銷售額的 3% 到 4%。因此，這對本季來說並不重要。

Okay. I mean, but for the March quarter. Could you just -- because you just closed the acquisition, right? So you can have a full quarter of revenue.

好的。我的意思是，但對於三月季度。你能——因為你剛剛完成了收購，對吧？這樣你就可以擁有整整一個季​​度的收入。

Yeah. Sorry, that's immaterial too, Matt. That's a small acquisition, roughly 35, 36 employees. What it does for us, it gives us a platform for the Mountain West. And they've got skill sets in the data center cloud security space that we can build upon and then bring all the other things that ePlus brings to the table. So we think it's a nice platform to build on, but it's immaterial for Q4.

是的。抱歉，這也無關緊要，馬特。這是一項小型收購，約有 35、36 名員工。它為我們所做的就是為我們提供了一個通往西部山區的平台。他們擁有資料中心雲端安全領域的技能，我們可以在此基礎上進行構建，然後將 ePlus 帶來的所有其他功能帶到桌面上。因此，我們認為這是一個很好的平台，但對於第四季來說並不重要。

Okay, fair enough. And just relative to your EBITDA guidance for the year at the low end, that would imply that your EBITDA or operating margin for the March quarter would be, or an operating profit would be down year over year despite a revenue growth, because your revenue growth is going to be up double digits year over year. So what's happening there and why is that down?

好吧，很公平。相對於您今年 EBITDA 指引的低端，這意味著您 3 月份季度的 EBITDA 或營業利潤率將是，或者營業利潤將同比下降，儘管收入增長，因為您的收入增長同比將增長兩位數。那麼那裡發生了什麼以及為什麼會下降？

Well, I think if you look at it, Matt, it's probably some of the things that we talk about we're investing for the future. So we believe we're a growth company. So we didn't touch on AI yet, but we've made some big investments as it relates to resources, AI-optimized solutions. We built out a lab, a customer innovation center.

嗯，我想如果你看看它，馬特，這可能是我們談論的一些事情，我們正在為未來投資。所以我們相信我們是一家成長型公司。所以我們還沒有觸及人工智慧，但我們已經在資源、人工智慧優化的解決方案方面進行了一些重大投資。我們建立了一個實驗室，一個客戶創新中心。

So Elaine touched on our head count was up -- I think it was 152 employees. I'd say about 130 to 135 were customer facing. So you'll see our salaries and benefits still up based on the investments we're making there. And then over time, I think you'll start to see operating leverage. But we still believe we'll be in the range on the adjusted EBITDA and the net sales on the low end that we talked about.

Elaine 談到我們的員工人數有所增加——我認為是 152 名員工。我想說大約 130 到 135 是面對客戶的。因此，您會看到我們的工資和福利仍然根據我們在那裡進行的投資而增加。然後隨著時間的推移，我認為你會開始看到營運槓桿。但我們仍然相信，調整後的 EBITDA 和淨銷售額將處於我們談到的低端範圍內。

Okay. Very good. Thank you very much.

好的。非常好。非常感謝。

All right. Thanks, Matt.

好的。謝謝，馬特。

Greg Burns, Sidoti.

格雷格·伯恩斯，西多蒂。

Good afternoon. I just want to follow-up on the product sales and I guess a little bit of a bottleneck you saw this quarter. Cisco implied that maybe there was a couple of quarters like it was going to be longer duration here to work through some of this bottleneck of product that's been shipped, but it seems like you feel that you're going to rebound pretty quickly in the next quarter.

午安.我只想跟進產品銷售情況，我猜你在本季度看到了一些瓶頸。Cisco implied that maybe there was a couple of quarters like it was going to be longer duration here to work through some of this bottleneck of product that's been shipped, but it seems like you feel that you're going to rebound pretty quickly in the next四分之一.

Can you just help us understand what gives you confidence there? I know you touched on a little bit, but Cisco in particular seem to think that it was going to be a little bit of a longer headwind for them to work through this product that's out in the market.

您能幫助我們了解是什麼給了您信心嗎？我知道你提到了一點，但思科似乎特別認為，他們要完成市場上推出的這款產品將面臨更長的阻力。

Yeah. Hey, Greg, how are you? So a couple of different things. So I don't think we have the, I'll say, supply chain issues that Cisco has now. Obviously, it's a portion of what we do, but we've seen our open orders continue to go down on a regular basis overall. So I think some of it is open orders are getting closer.

是的。嘿，格雷格，你好嗎？所以有一些不同的事情。所以我認為我們不存在思科現在所面臨的供應鏈問題。顯然，這是我們所做工作的一部分，但我們發現我們的未平倉訂單總體上持續下降。所以我認為其中一些未完成的訂單越來越近了。

I won't say they're at pre-COVID levels, but they're a little more, I don't know, normalized, but at more natural levels that we think. So we've got a good handle on our open orders/backlog. The supply chain easing really eased up a lot for us. So I can't speak to Cisco, but for us in the first half, if you think about it being up 22%, I don't think there were too many companies out there up 22% in the first half on net sales. So you had that supply chain easing.

我不會說它們處於新冠疫情之前的水平，但我不知道，它們更趨於正常化，但處於我們認為的更自然的水平。因此，我們可以很好地處理未結訂單/積壓訂單。供應鏈的寬鬆確實讓我們放鬆了很多。所以我不能與思科交談，但對於我們上半年來說，如果你考慮一下它增長了 22%，我認為上半年淨銷售額增長 22% 的公司並不多。所以供應鏈放鬆了。

And then the other thing for the quarter is we've seen the activity pickup. We've got the forecast from our sales team, and the demand parameters really haven't changed for us. We feel we're in the right value-added areas with cloud, security, network modernization, AI, and all those services we're predicting. So that would be the reason behind it.

本季的另一件事是我們看到活動有所回升。我們從銷售團隊得到了預測，需求參數對我們來說確實沒有改變。我們認為，我們正處於雲端、安全性、網路現代化、人工智慧以及我們預測的所有這些服務的正確增值領域。這就是背後的原因。

Okay. And then with your AI practice, AI Ignite, is that mainly a services opportunity, like a professional service opportunity? Is there hardware associated with that? And do you feel like you have the capabilities in-house to grow that business? Or is that something that you need to maybe add inorganic expertise to grow that part of your business?

好的。然後，透過您的人工智慧實踐，AI Ignite，這主要是一個服務機會，例如專業服務機會嗎？有與之相關的硬體嗎？您認為您內部有能力發展該業務嗎？或者您需要添加無機專業知識來發展您的這部分業務？

Yeah. So Hey, Greg, a couple of different things there. One is in the early innings, if you think about it, but I think it's going to change how companies operate as they go forward in the future.

是的。嘿，格雷格，有一些不同的事情。如果你仔細想想，其中一個是在早期階段，但我認為這將改變公司未來的運作方式。

The other thing, and it kind of fits right in our wheelhouse. So if you think about converged infrastructure, hyper-converged AI-optimized infrastructure, it's the same thing in terms of compute, networking, storage, and all the things that plays to our strengths. So a lot of that we have resources, but we have invested in additional resources.

另一件事，它正好適合我們的駕駛室。因此，如果你考慮融合基礎設施、超融合人工智慧優化基礎設施，那麼在運算、網路、儲存以及所有發揮我們優勢的方面都是一樣的。我們擁有很多資源，但我們投資了額外的資源。

And I had mentioned the lab and the customer innovation center, but it's not just a services play. So it's actually the services is the first part of it where we help them explore, adopt, and optimize AI. And that means are they ready for AI-envisioning workshops?

我提到了實驗室和客戶創新中心，但這不僅僅是一個服務遊戲。所以實際上服務是我們幫助他們探索、採用和優化人工智慧的第一部分。這意味著他們準備好參加人工智慧構想研討會了嗎？

Really, it's about the data. It's kind of a data strategy. First is you've got all this data that's expanding exponentially, if you will. So then you've got to think through governance and risk. Once you've decided on your AI strategy, then it gets into what I call the AI-optimized infrastructure, which is the hardware play.

確實，這與數據有關。這是一種數據策略。首先，如果你願意的話，你已經獲得了指數級增長的所有數據。因此，您必須考慮治理和風險。一旦你決定了你的人工智慧策略，那麼它就會進入我所說的人工智慧優化基礎設施，即硬體發揮。

And to be honest, Greg, it's a big play, or it's a big opportunity in the market. So I think I'm saying what anybody else would say related to AI. It's early innings, but it's both the services and a product play for us. And the product play kind of fits with our heritage and our history and what we're good.

老實說，格雷格，這是一場大戲，或者說這是市場上的一個巨大機會。所以我想我說的是其他人會說的與人工智慧相關的事情。雖然現在還處於早期階段，但對我們來說，這既是服務也是產品。產品玩法與我們的傳統、我們的歷史以及我們的優勢相契合。

Perfect. Thank you.

完美的。謝謝。

Okay. All right, Greg, thank you. And everybody, thank you for joining us today for our quarterly earnings report. We appreciate that you took the time and have a good night. Take care.

好的。好的，格雷格，謝謝你。感謝大家今天加入我們的季度財報。我們感謝您抽出時間並祝您度過一個美好的夜晚。小心。

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝大家的加入。您現在可以斷開連線。