Earnings Release Date: May 7, 2025
Quarter Ended: March 31, 2025

Revenue Breakdown by Sector

Segment	Revenue ($M)	Year-over-Year Growth	ADS Growth
Corporate	2,236.0	+4.7%	+6.3%
Small Business	404.6	+6.2%	+7.9%
Government	537.8	-1.0%	+0.6%
Education	652.4	+9.3%	+11.1%
Healthcare	687.9	+17.7%	+19.5%
Other	680.4	+7.8%	+9.5%
Total Public	1,878.1	+8.9%	+10.6%
Total Net Sales	5,199.1	+6.7%	+8.4%

ADS: Average Daily Sales, adjusted for different number of selling days YoY.

Financial Highlights

• Net Sales: $5.20 billion (up 6.7%)
• Gross Profit: $1.12 billion (up 5.5%)
• Gross Margin: 21.6% (down 20 bps)
• Operating Income (GAAP): $361.4 million (up 10.2%)
• Operating Margin: 7.0%
• Non-GAAP Operating Income: $444.0 million (up 10.0%)
• Non-GAAP Operating Margin: 8.5%
• Net Income (GAAP): $224.9 million (up 4.1%)
• Non-GAAP Net Income: $286.5 million (up 9.9%)
• EPS (GAAP): $1.69 (up 6.1%)
• EPS (Non-GAAP): $2.15 (up 11.9%)

Sector Commentary

• Healthcare led all segments with 17.7% year-over-year growth, reflecting robust demand for IT infrastructure in the sector.
• Education also posted strong growth of 9.3%, indicating continued investment in digital learning environments.
• The Public sector overall (which includes Government, Education, and Healthcare) grew 8.9%, showing resilience and broad-based demand.
• Government was the only segment to decline slightly (-1.0%), possibly due to fiscal timing or project delays.
• Corporate and Small Business showed steady but slower growth, suggesting a stable commercial IT environment.

Note: The earnings presentation does not specifically break out performance by product category such as cybersecurity, cloud, or software. No mention of cybersecurity solutions or trends was made in the company’s prepared remarks or slide content.

Balance Sheet & Liquidity

• Cash & Equivalents: $471.4 million
• Short-term Investments: $216.7 million
• Total Debt: $5.85 billion
• Net Debt: $5.16 billion
• Revolver Availability: $1.27 billion
• Total Liquidity (Cash + Revolver): $1.74 billion

Cash Flow

• Operating Cash Flow: $287.2 million
• Capital Expenditures: $26.9 million
• Free Cash Flow: $260.3 million (down from $410.5 million YoY)
• Adjusted Free Cash Flow: $248.8 million

Operating Metrics

• Days Sales Outstanding: 86
• Days of Inventory: 13
• Days Payables Outstanding: 84
• Cash Conversion Cycle: 15 days

2025 Full-Year Outlook

• Customer Spend: Targeting 200–300 bps above U.S. IT market growth
• Gross Profit: Expected low single-digit YoY growth
• Non-GAAP EPS: Expected low single-digit YoY growth
• CapEx: Estimated $120–130 million
• Interest Expense: Estimated $230–235 million
• Non-GAAP Effective Tax Rate: 25.5%–26.5%
• Adjusted Free Cash Flow: 80%–90% of Non-GAAP Net Income
• Cash Conversion Cycle: High teens to low 20s

Capital Allocation

• Dividend: Raised to $2.50 per share annually as of November 2024
• Target Net Leverage Ratio: 2.0x–3.0x (currently 2.5x)
• Total Capital Returned to Shareholders YTD: $283 million (via dividends and repurchases)
• M&A: 11 acquisitions over the past six years to support strategic growth