PC Connection, Inc. Q1 FY2026 earnings call

• Solid start to 2026 with business solutions and enterprise solution segments showing strong growth. - Gross billings grew 4.3% to $1 billion, total net sales $721.9 million, up 3% year-over-year. - SG&A declined modestly, operating income increased 39.3% to $20.2 million. - Recognized as Dell Technologies Titanium Black Partner, etc. - Focus on data center modernization, digital workplace transformation, supply chain solutions. - Backlog at highest level since mid-2022.

Business Solutions: Net sales increased 6.6% to $275.6 million, gross profit rose 3.2% to $67.5 million, gross billings grew 9.3% to $446 million, gross margin declined 80 basis points to 24.5% due to customer mix shift; Public Sector Solutions: Net sales were $99.8 million, down 31% year-over-year, gross billings $135.7 million, down 21.2% year-over-year, gross margin expanded 140 basis points to 15%; Enterprise Solutions: Net sales increased 16.3% to $346.5 million, gross profit grew 18.7% to $50.2 million, gross billings increased 10.3% to $439.6 million, gross margin 14.5%, up 30 basis points year-over-year

• Backlog at highest level since mid-2022 providing positive outlook. - Expect to continue outperforming U.S. IT market by 200 basis points this year. - Some uncertainty in back half of year due to pricing dynamics and memory shortage persistence speculation.

• Supply chain constraints including memory shortages and related price increases. - Timing variability due to supply chain uncertainty may impact business.

Q: Adam Tindall asked about backlog being highest since mid-2022, including if there's double ordering and backlog policies.

A: Tim and Tom responded on no evidence of double orders, non-cancellable POs policy, and pull-in of demand in business solutions and enterprise.

Q: Adam Tindall asked about pricing, unit volumes, PC refresh cycle, and back half of year.

A: Tim discussed price increases, unit counts down, PC refresh continuing, and Tom on backlog rolling out with possible softening.

Q: Anthony Levenziski asked about pricing vs unit volumes in first quarter, PC refresh cycle, and SG&A dynamics.

A: Response on pricing up, unit volumes down, PC refresh continuing through 2026, and SG&A dynamics with lower marketing expenses and headcount down offset by variable comp