Insight Enterprises (NSIT) 9 Feb 232022 Q4 Earnings call transcript

Ladies and gentlemen, welcome to the Insight Enterprises, Inc. Fourth Quarter Full Year 2022 Earnings Conference Call. My name is Glenn, and I will be the moderator for today's call. [Operator Instructions].

I will now hand you over to your host, James Morgado, SVP Finance and CFO in North America, to begin. ahead. go please James,

December thank Today, joining the we the year results and earnings company's Insight conference for ended full and call. will quarter XXXX. you everyone, the for Enterprises operating XX, Welcome, be discussing

Finance I'm Insight CFO North President of and James Vice Morgado, Senior of America.

and Joining Joyce Officer; and Financial Chief Chief President is Bryan, Officer. me Executive Mullen, Glynis

Exchange posted insight.com If Commission our the accompanying slide the earnings release you or with you X-K, do not Form Investor website filed that on have section. this was will a Securities on and copy and under of the it Relations morning presentation, find the at

archived Today's call, call will of available can Investor website and via will the approximately including live be the limited completion our after on X and question-and-answer for An the Relations call, page being a website of time. copy webcast be remain our the accessed is conference also of hours period, insight.com. at

call as consent time-sensitive This is of conference webcast redistribution, written is Insight any This of call Enterprises form Enterprises. expressed today, strictly retransmission the is in X, of accurate the without call property this Any Insight contain XXXX. that information, rebroadcast February or of and prohibited. the associated only

non-GAAP we discussing to measures, fourth as we we quarter In refer will discuss be today's When non-GAAP will conference them the financial XXXX and call, referring financial adjusted. as results. measures, full to year

and are constant actual release dollar note measures adjusted please issued amounts terms. our and highlighted today. presentation, these GAAP slide the unless included accompanying earlier of reconciliation that all to growth a in find as the in results, discussed You'll both U.S. press rates currency, Also,

are materially. to and update obligation that are statements a call, of events recently all as are except made These filed made reports by no this forward-looking and risks statements All result call, and this forward-looking in with and periodic required press detail filings forward-looking as discussed new differ actual release to statements our this date in could any of uncertainties otherwise. as As risks during today's of in or results call undertake subsequent made future to greater most our information, a SEC. are reminder, the that whether conference on the cause we law, subject

I that, Joyce. slide over With the following if presentation, with on now turn we Slide begin will will the Joyce? to call along X. And you're

you fourth XXXX is record-setting to Thank today. much, thank quarter so you outstanding us everyone, pleasure, very Good with topped for my an that off James. ended we that It morning, joining a and much report year.

For XXXX, and and results, from operations ended diluted macro in volatile net record delivered EPS, EFO of These gross we sales, profit, are adjusted positive with cash adjusted year a we environment. million. the stellar flow gross $XX margin,

about the our have line we For finish there solutions the our our feel delivering on scaling progress where focus we and while our areas race, differentiated technical articulated great, we offerings I made is enhancing this far. in past the value Improving expertise And in no for year, excel. so know we've clients. and

and categories: help our from we them hardware. is This and the in record-setting their all results choose year, they outcomes including us fact, improve IT Software, we the cloud; Our need. transform global clients achieve and evident across market because this businesses and outpaced services;

gross through long-standing year. profit for technical XX% which our is our outcomes of is what of and relationships, services The and deep led Insight to them clients growth successful. We the our deliver understanding services based record this expertise, foundation the to need make upon core has of performance required business in with

leading us forward, solutions the strategy, that integrator. the in as becoming the but long-term of progress the fall. reminder, last our pillars XXXX our pursuit strategy. early X And there we We made are outlined stages a Investor are key We against underpinning strategy propels at still of in Day executing in

clients. in Net exceptional do in pride the our Scores, captivate We delivering and results. by efficiently And First, will self-service. This more our automation outcome-based Promoter is transact with improvement earning drive plan high-quality continued a ourselves in by to We more and outcome-focused even solutions. and right clients people- business. via to e-commerce delivering investments to allow us

on seamless our selling This clients and which our is to teammates frees for experience our creates solutions. second customer a up sales pillar, focus

transforming our to focus our aligning on solutions are sales incentives We capabilities our and portfolio.

and that continue is, really things need propensity match our finite skills doing to to account The with streamline really to here well. and services. number them a doing coverage buy clients' theme is We our focus, about of

and Our need the is data, innovative, Again, our solutions the and is our all that on the most differentiation. talent very exceptional through portfolio. of market scalable our about IP, clients reusable third where pillar fastest-growing the solutions edge. This we with cybersecurity areas focusing strengths help. areas deliver AI, technical and providing Cloud, are align compelling

fourth our advantage the heart us, a of has incredible we This values to for And and culture. hunger, attracting and retaining, will such harmony talent. to is and pillar to culture. our our been continue strategic high-performance critical evolve champion is This to leverage

announce am addition And happy X I of leaders. the of speaking incredible talent, new to

of region. in XX Europe, the and East solutions will Africa, over EMEA various lead pleased Atos held Adrian build services welcome brings He President new to our EMEA. Adrian at years are technology Middle as our experience we of team Adrian continue that as and positions to we capabilities and leadership sector. both in Gregory, HPE, First, our

Additionally, she strategies. was aspects and Solutions joins Capgemini, from operational services our where us is SVP of Kate Executive segment, where our business. all as on driving President, she Kate in operations Savage focused Vice an joined people

and an above. outlined the M&A our is also part pillars supports X important strategy of I

$X.X As we capacity financing XXXX, billion this have to we enter strategy. in fuel nearly

such areas AI cloud, in cyber. growth deliberate, will in key data, support to solutions as be and our We our acquisitions business

acquisition our last is example such One of year. Hanu

company, technical expertise Gartner to in migration our Azure a academy a business. us scale more Hanu build robust development Magic that also and Quadrant EMEA. reminder, Hanu recruiting to cloud allows has a As is

these changes I And across stood manage we the transformation global up a office to the to above, company. initiatives support outlined

mentioned some a will As had performance, and our will I full year record-setting of highlight QX you earlier, now. Glynis our XXXX. we walk through I results

grew Net increase sales margin of an year-on-year. $XXX EPS gross generated EBITDA profit and $XX.X was full of expanded $X.XX XX%. QX, Adjusted points of Insight Cloud million, year-on-year. flows $XXX XX by Gross profit $XXX Adjusted billion, XX basis of grew services up XX%. gross XX% XX% gross expanded by million million. in cash the XX.X%. million, growth profit to margin to $XX points of to XX% of basis share per year taking And we operating and X.X%. core

results These challenging lot to about a solutions And business our leading our solutions share integrator the outcomes that offer for example clients. a recent hardware, our ability ambition the a execute team's environment, and of resilience combining to talked to in We've drive comprehensive our services, demonstrate to become our and of strengths by this. I model. in business software want

to such their trial around an the clinical globe this research the mission is develop non-profit data, a for as and platform is access needed do vast diseases, of with to data. that Alzheimer's, to effectively, secure To sharing clinical of facilitate others. array partners whose diabetes many organization provide they a researchers intuitive and treatments enable to Vivli, would

an We and smooth solution success. worked critical front define Those create X experience is with was determined requirements end were intuitive this user the to patient secure, ensure Vivli a platform new privacy platform with ensure the manageable. and for and critical, was scalable clearly

a developed community. ultimately redundant the team of and significant using drove efficiency, technical services, Azure solution impact, experienced processes complement full eliminated research highly Our a the meet business manual on and which

this is user technology. After pleased about of year. XX% platform XX% power our clinical transformation more unlocking Vivli has of researchers delivering is purpose, and of success and great data all are growth Vivli, adoption. than ever, with For by a example per project, accelerating year-over-year the people with growth This the of this been using

only We helped stories Vivli, example human in in critical our has love potentially aspect this at confidence of has this, but thousands not helped success moments Customer lives. their the reinforce and patients how like of strategy. the solution

encryption needed They or see face Secret a different address sensitive a risk sprawl focus Insight. through a and this Fortune meaningful our insurance XXX want really example of secret capability authentication other financial talk modernize security creates When and needed credentials more of in us, to mentioned, sprawl and for to As and in situation we to keys many provider many a I turn services major I a to to plainly, information as breach. mismatch stored that a they passwords, space is cybersecurity as well. security, when locations. leads challenge organizations called

address To HashiCorp's user Vault challenge, to we this consolidate software implemented credentials.

web authentication API we self-service customizable multiple we with project certificates. developed value to and between applications expiration seamless really direct developed and also done of a the proud We're The automation automated deployed of security system is credential management We work the compliance. on solution this to templates, monitor provided.

deep a have important we see and talent industry. think the differentiator it's I the testament technical we Insight, that to an at in as

tremendous in XXXX. some industry recognitions We also earned

the in the see presentation. can accompanying You details

the as Year So, as partner of I'll Award. Year XXXX recognitions, Canadian highlight Year X the Partner designations, all Solutions Partner a Microsoft's Cisco recognitions just earned of the earned few now. of Microsoft We the XXXX manufacturing, recent achieved of well Partner for

champions female-friendly proud one their of opportunity leadership reach Forbes, to was people, be all world's company as to companies. a potential. as teammates And Additionally, full that top Insight strive we have culture, by recognized and the the of where I'm

call year briefly to the handing over the touch outlook, share will let Glynis, on Before XXXX who me ahead. our

that into clients, it economic navigate we these our now times together. XXXX, we continued is critical And more uncertain than As we uncertainty. ever, we support expect as head

positioned, services for cost-effective on with of and deep software, of AI portfolio our cyber, deliver digital our to in solutions and and our transformation outcomes data, are clients. business We cloud, and technology uniquely hardware expertise combination focused

The $X trillion IT in growing market low the digits. single is

the to and We and to journey. focused on solutions continue as technical edge, our double ambition I AI, are become integrator, which our our grow the look remain in progress plays expected talent. the we to digits, and However, and discussing to our of cloud, strength forward leading portfolio our data cybersecurity

QX XXXX, call turn our the to to operating through as walk our XXXX. well performance outlook and I'll over in Glynis details the Glynis? important as of you for financial that, With

Thank you, Joyce.

mentioned, record to we our the despite Joyce solutions as we results environment. leading macro become integrator, challenging delivered the year for continued journey the As

this like our Every XXXX on halves. like I'd does year start was X some play out but of one, a to year with not comments XXXX performance.

essentially had range performance, XXXX against flat of XX% across million, In exceptionally by positive positive first gross the cash of achieved were the sales half and strong of half, half first growth in of strong flow from to high second flow a very XX%, the operations XXXX, half but XXXX. from better $XX growth operations fueled net The generated weaker net cash In second cash our operations. devices second margin $XXX we sales higher XXXX. of for million flow leading half

discussed sales have previously, significant spin flow. cash we hardware As when we decelerate, off

of Our the second performance is half XXXX this. illustration in excellent of an

easing reflect performance net issues XXXX execution, market the in chain of supply began in that Our volatile our sales conditions XXXX. and

Although our we significant device infrastructure, essentially in we and have flushed XXXX. networking backlog have going still into backlog,

multiyear to optimization, In technical started our building transformation, EBITDA have expansion. accelerate our value we're related and profitability a the margin we the offerings initiatives and As and early journey, stages. gross sales our discussed, proposition talent, assembling in portfolio margin differentiated to we're around on and blocks we XXXX, previously

We is expectations. our performance in date efforts finished these to our but our are with meeting not areas,

on performance regions, consolidated the includes today XXXX the on details and for from our results. our and as will QX geographic consolidated as call. key QX presentation on on performance our our slide I highlights X full The focus well results year this

GAAP the GAAP appendix our slides adjusted equivalents a to in reconciliation results find our in and also amounts, the the to for will slides. the You investor investor

and services XX.X%, of to of and mix QX, of margins. prior products, the Insight which basis points an increase XXX compared year margin reflects gross record was infrastructure cloud, In higher all transacted at a core higher

resulted by points was XXXX. growth record profit this Our up of cloud leverage, driven XX% a XXX services with margin in strong operating gross profit X.X%, XX% basis EBITDA growth. performance and Insight over gross adjusted Combined core our expense

quarter, per fourth earnings and in U.S. dollar share $X.XX, year-over-year. XX% currency constant adjusted For in terms, XX% up was the diluted

market we record illustrates XX% a strategy. earnings year, and the our was Up in in constant diluted For and of dollar XX% solutions business adjusted as per $X.XX, device make share our confidence for us the year-over-year. in terms declining integrator resilience gives U.S. progress model This currency a us. performance on

the generated range million. flow business flow the the fourth XXXX, in $XXX $XXX from we to $XXX from As million we cash we of previously discussed, In in operations operations hardware to cash expect in quarter, in our in with growth generate slower million quarter. the

And to share an update shares stock, of our of total X.X million $XX year at program, XXX,XXX a of repurchase share per our $XX.XX for in for full of of an shares, XXXX, cost you QX, per share a a on total we average In total repurchased at $XX.XX repurchased million. million. we cost price $XXX price average of

million of market we under executing anticipate and we remaining million million our share January, end pending conditions. our share $XXX repurchase, the repurchase have of As $XX $XXX authorization, in planned

holders. and so the convertible fourth quarter, notes the the our of price exceeded $XX.XX, In the of option were at market trigger convertible

was warrant liabilities. settled always In result, will in $XXX include the calculation, in adjusted as million $XXX.XX, of diluted the the price the average for share amount of amount periods, convertible price and exceeds current The throughout shares warrant and the to any price of be future price amount principal our excess cash. the quarter per our share a in average we notes stock the quarter. principal will As reporting reclassified in earnings diluted

find the presentation. investor in of appendix the this You will to an illustration

evaluate notes as alternatives repurchase our dilution notes, our the We to continue strategy. to of the the impact on well relative convertible share as, and convertible

increases assuming share forecast throughout share net current of dilution XXXX anticipated Our XXXX. the and price share our for includes impact repurchases

And our with approximately QX fund of available, $X.X have ABL exited capacity our billion to priorities. capital facility. capacity under $X.X billion we and our ample We business deployment

of an points ended over Further, basis we XX.X%, increase of XXXX. adjusted the year with ROIC XX

shows is at our XXXX we out our presentation October. Our the Investor relative year. performance that baseline Day XXXX in laid to our metrics

to XXXX. Moving on

rates. growth a market we could as also we added the anticipate and communicated higher As elevated we consensus, under modest environment macroeconomic we foreign Consistent remains that given anticipate our inflation year, and create rates across interest anticipate globe, last challenging quarter, the exchange the cost volatility. borrowing with ABL,

flow of focused improving initiatives. face this on are we uncertainty, for preserving critical the capital and In cash

the and fund sales proposition. X outfitting new continue a as initiatives and integration differentiated the We as related value to to will transformation, fulfillment including of digital initiatives client Texas critical center, Joyce outlined, commerce our well advanced critical

all down AI, projecting The the mid- forecast of low In services for XXXX, modern data ambition for This software our confirms, up addition, we to strength strength, business a leading in and the most recent infrastructure and continue our to believe IT and the single-digit to grow in our select and are areas to at integrator. and of forecasted growth the QX to market hardware with and is plays cyber our the high solutions double-digit performance range. be pace. model single-digit cloud,

for guidance about the remain think full our XXXX, we of modest. As our expectations year

range. the deliver gross growth, to high single-digit in expect We profit

assumes adjusted excludes $XX share for the This severance expense year, year interest of XXXX acquisition-related year earnings shares, outlook instruments million change $XX.XX. outlook estimated full This tax debt net $XX assumes expenditures of to assumes of macroeconomic significant effective in an million full intangible transformation completion and and per acquisition-related million, million expect after outlook. and diluted restructuring of current estimated million dilution. for of no expense between $XX XX.X the and of program be our no $X.XX and rate to our million count $XX repurchase or or expenses, approximately the an amortization the capital between share and of $XX average We and to XX% share XX% and full for

the to turn I back Joyce. now will call

Thank thrilled any year macroeconomic And economic we QX significant with was we provide the of record-setting showed a headwinds encouraging portfolio are results. our cycle. There and you, XXXX Glynis. toward to navigate with goal. environment, resiliency are progress our us broad believe our but solutions the by driven

positioned areas the well are market. We of the in fastest-growing

focused leading become solutions momentum building towards We and our are laser ambition execution to the on integrator.

differentiation on passionately culture. pillars our strategic championing selling delivering solutions, against of are captivating clients, delivering and We focused our

supplement with Our plan is M&A to our approach. intentional this strategy,

position strong profitability and our new become results solutions a in propels toward industry. well us to progress this long-term all integrator, the leading category our of Our to XXXX us and towards our growth targets, defining in ambition

I thank want In our other. their our to closing, teammates commitment for to and each clients, partners

Our clients, them journeys. for insight trusting with to help their transformational

innovative to partners, solutions Our continued for delivering and and clients. collaboration support their our

the now line questions. comments, and we'll my your concludes open for This

Instructions]. [Operator

Our first from Sheerin question comes from Stifel. Matt

client My specifically the of of first are down quarters. on for that customers for bottoms? sense been last it's What question, in your your hardware when Joyce, sounds and year-over-year Any general you? It is devices. like just couple outlook telling

Matt. Thanks,

just it quarter down. pretty great pretty quarter we when were So, was awesome devices and year, great a a a had period in a and pretty

So just combination of hardware, us give of cloud our that pretty outlook solid. confidence I course, think, want first I is that services, of all, our and software, to say

pretty outlined -- year see good that. we're regard. numbers. I a as So, reasonably We're confident in the to the that in start We

significant hardware, of infrastructure. still, high terms we In backlog pretty near-record backlog have on

softer in So we're, the rest primarily the year, of from year like back -- of yes, probably going the the view, with And dissipate, to back some half by the industry, and in of the compares. expecting the a until driven that's device or not devices then first the much through half point summer. to be half of down recovery

surprising. basically profit the million, basically, roughly then fourth quarter, your SG&A you're -- your where operating Okay. gross was had seems flat talk up, and your and $XX about quarter-to-quarter, I you And wanted down, to which was revenue

for dollars, those if growth revenues really really, OpEx? guess, significant revenue. look you and corresponding Because, we guidance at low the gross profit relationship year, in you're on, I gross particularly netted profit down at explain looking your the single-digit next could So the between

So I'm OpEx to like out that figure looks that model. trying what underneath

Sure.

Matt. Okay,

correct. exactly You're

QX, strong, in that and and in you saw numbers QX. gross in So margin particular were the in software cloud that we software, reflected posted

do into than and couple single-digit range, gross growth revenue profit you're a high Going correct. also to That's XXXX, things, still. of on is dollar anticipate lower in that. based the We going growth be

margin. to side are infrastructure, a infrastructure the more in hardware hardware smaller contributor devices to transacts at We're that XXXX. from get One, overall more from growth higher market, the going of the

to which going in to software And going also the be expanding core little we into are in our we the are going initiatives regard -- -- XXXX. with to strong XXXX. services in profitability also and have cloud maybe And into strong a be margin. talked addition, going And Investor gross about our Day bit

you anticipate SG&A of our into is gross XXXX. the XXXX. will we is And of in as driver at in look go when So margin our success what have numbers, huge we XXXX. second a controlled That half we continuing, be

technical XXXX. We business. needs will we terms in leverage fund and to low-cost the of locations of continue we will to back admin office in expand And continue to resources, and sales the resources, done how we meet our and have as control

what's driving improvement that the the our gave XXXX. and guidance is That you're in for performance seeing we

$XX variable back last year-on-year, at grow the let's there than slower XX up SG&A expenses with that? say, And hardware the points lower profit went is that basis because didn't would forward, and sales? Okay. XX profits a gross grew gross cutting grow away sequentially, just cost where or SG&A million. margin going or if were to your that pace But your Was quarter,

that overall saw QX, cost we and QX, you the had just we GP. in the around value transformation and we we from place, initiatives benefit sales look I'll two, the the In at that answer one, from control if that had put first. question that So

But did margin, So That didn't expansion much. generated. actually normally we but associated we with you're the on that profit SG&A is grew expand right, have the sales see correct. comp gross was that higher we gross as would

we regard to anticipate we That would XXXX. SG&A margin that getting to gross profit dollars, -- expansion. When commissions, with dynamic. and a answers that see We're similar going XXXX, around would the the to results we're generate that showed generate that you go would for into we higher you gross controlling

And I just to supplement expect we continued that. on do mean leverage SG&A.

SG&A As we we more spend. leverage get of out our grow,

comes from next Raymond question from Tindle Adam Our James.

I XXXX mentioned Okay. wanted after start XXXX, dollars guidance. strong think, grew profit dollar a you profit you're during gross gross strong I just obviously very, very year. XX% to a year Joyce, on finishing in very XXXX and

guidance we dollar As about about think growth XXXX, talking high single-digit gross you're modest. that profit called and

difficult X, and And whether of expecting you XX%, so I level of strong next those single sort that, a disconnect. we're very some calling you try square that of little gives high could maybe at bridge kind modest, digits And at I'm bit expectation but a that as wondering year comparison. year it's there's then to to maybe, that if grow backlog on help confidence a a

Yes.

translation grow in of about growth the first some get in the than XXXX -- gross talking slowly Glynis certainly see help our year. XXXX. So flushing due do so some there's Day, top expect sure. on we more of what gross there. profit to first the and the mix, profit into -- And obviously, That's backlog think has half And infrastructure will to dollar to been now, I all, since line for Investor consistently been the grew in it

I cloud margin. Glynis it's as mentioned, in and versus services, margin business But that gross the of are historical driving overall of our the expansion sort the software, of mean, really mix gross around rate

profit that. Adam, could growth associated of with high quarter gross look sales of part couple lower stats first what would I gave What if presentation hardware will in say you drove of second dollar that, right it. a just was about margin the but you I the Which your to XXXX. leisure, XXXX And that of not first on at is we had deck, half you versus half of add XXXX. see now, if the in gross

because in basis -- by in profit first We that XX half half. gross had actually in half, the of made year. the were growth, the the first margin second that first plus some, half as in that up the the second points half, of not XXXX, on primarily we high we devices they the So strong were as in declined in year

you devices gross less growth we're at in perspective, helps confidence gives margin the seeing and the number, in from us look When overall overall with is growth us which XXXX, -- that that a it regard to the leads around infrastructure, our well that what's software in gross core margin to as happening shown that and with in infrastructure, backlog particular, that expansion we number. have performance as Insight services cloud,

Shame on us for calling it modest.

All right.

there. You got me

a what you is outlined, Given just there way for..

also And Adam, it is organic.

that. that there a way XXXX? kind odd I kind realize seasonality XXXX, these for a about last think how going think given basis us comparisons in of Yes. year of to about of in Is year year-over-year different off on we're seasonality an to and

Yes.

think of mentioned, to last kind year. Glynis I as it's the going inverse think of I be

was the So of year, year last inverse. half be the will and is of half slower I year be the this think first than going the a growth second the to little

around... Primarily

But Last I want one ask on. the Joyce, for me, to transformation and pass initiatives. do sales I'll it on

sales you maybe to accounts do transformation? the with been recap going specifics. geographies? what just could you If with you or do been that? been I systems, investments et more there's a But of moving left around on is bit understand, little a What's think cetera. have And in

Sure.

to how lot going deeper So we yes, trying top about time, think as accounts. about our we focus in really a at talked on Investor have so of to Day, spent

top for And top changes means, account to accounts, reduced our made have just their of that. have books. or -- in in those do sellers coverage that base, we their we accounts, we've size and the So

them our services skills, And who make them putting the most to likely very in so services, in to to with are who them -- that our and increase going for. aligned businesses relevant sell and success what buy a sellers their or can way to most sellers we're the that most who the is deeper that solutions help their propose our sure And to order -- of understanding plan looking business go in customers dramatic highest-propensity are that those to services. is accounts have be the to deliver in they're we out

of all that. done we've So

of course, but done, year. that, never end You're the of of the we've as done

so around and about for we're And changes some will that's pretty that, process. think account our we planning, also be things ongoing us. an and how how like continue. a made minor training sales That big We've will push that execs

to we talking now sales the transformation have moved growing actually business. about So from

believe with the phase, now So into planning and we we're done execution. we're

next Cardoso Our question from comes Joseph Chase. from JPMorgan

that XXXX? Investor the revenue that should outlook outperformance should year models? align a we to Or consider think Day, basis relative level you that we XXX by on about are underlying the of provided to the market there our At factors How points. long-term outperform Is this put still to might benchmark, other pressure should we that?

QX It's composition quarter. it want hard profit makes specifically revenue of big of of composition with the basis on our our we've That dollars I that, cloud that because think, revenue to XXX really and we cloud our occurs the are and to points gross following quarters. XXX always QX when the changed. that said market. follow, in that just especially little you're perform to the each hasn't we netting will revenue, ahead a metric focus

you -- anticipate ahead So grow still that's guidance some profit, yes, why we gross line. market, will but of revenue we on the the gave the around we

around in Appreciate remind generation, can are? I made prepared it. you of comments And M&A, relative to is just the improve Got on just And given like your commentary your guess, which set it. what you remarks. just then Got it. XXXX the heading priorities are coming us kind into based just to cash transaction seeing macro is to in you you cash the seeing we're of more Are kind attractive to valuations and portfolio? this some year? simultaneously what with improve. -- that do given are kind inclined bolster to likely into just seeing your And you more generation going Just down? then backdrop, of particularly,

I appreciate it.

it So it year. be at be would doing M&A. we're buybacks, Paying been in and the which we down invest low. X.Xx. on organic our have because in debt an bottom is we'll is Then as capital, primarily where business, is down first we're Then would over to our past continuing share -- call paying debt now environment debt. levered, then the be X.Xx

What I look is we would say M&A. to at continue that,

of about maybe look can to to to it changed. sizes, continue hasn't you medium We gaps. certain want to business we -- think for the into capability that tuck fill way, small that tuck-ins That existing if

bit. finally that the of smaller the are ends end of think, little nonpublic the I starting market, on the valuations to market, a down come

haven't and As seen and there were getting they XXXX. into companies maybe, the that high out they are XXXX early in prices,

adding continue So that talk of pieces AI, we portfolio about, data, cloud, be we cetera. around the overall opportunistic will to the et in to terms

question next LLC. Company, Sidoti Anthony from Lebiedzinski Our from & comes

nice in the quarter. job A

So services in just quarter. dollars grew the XX% looking gross profit at your

pricing if guidance, And just economy, Just But in choppiness -- I if much the Or you probably any wondering, address volume you I driven? terms pressures. mean topic. that were you're was wondering the could are -- guess, your guess, mostly based seeing just pricing there of benefits? I on that given in not

but of a volume-driven, was profit, in by So obviously start some did and we profit saying by services top combination I services would it outperforms a see that line of the mix improvement and because a -- gross is some bit. of

say a And, whole not would it bunch driven attribute initiatives. I would I of pricing pricing. actually to haven't we

year. increase because primarily and certainly that execution improving. making the say But labor improved our a sure it during potentially is of cost the driven I bit would it's focus on by that little utilization last Some of did

Got you.

your I then lot heard hiring that? are And a companies Okay. How layoffs. do lot And, managing guys thinking of about just plans. of about you tech we've own wonder a

Yes.

to since we said hiring, a point, make market as that. middle for hiring continue to don't been, working any can we're we so And of to any do layoffs. terrific and is processes no major this tighten where plans last This the really mass have sure So hard you at have really, we've specific will and -- sales year, any expertise talent, that opportunities our I plans we do to do acquire opportunities. earlier, technical

have demand than the manage with But aligning our ensure that, continue in any course, other rates, performance. we're And the significant will don't market. we of we We to continue utilization plans. to

hear. that as we a think new to go that? mentioned you how that? as think, Texas for Can CapEx good center. you I over then spending fulfillment about timing And planning That's the Glynis, far Okay. And should you're of

Sure, Anthony.

our that in year. in Texas build-out we're built will very not primarily, be see quarter, the January It fourth late center fulfillment say out in this from of So benefit any I not going be would XXXX. December, maybe operational will in to if XXXX.

to anticipate see So going we January benefit of start XXXX, the we'll that. would into

not consolidation. to is it a net to It addition portfolio, going is our a be

once facility going up our So of is that and be we're some to other facilities. running, closing

X major end this at we end the So facilities up net-net, of with will period.

allows more the that would is specifically. think, say, this data advanced that, I other facility around us I to thing very do center configurations

As opposed et cetera. to lab and integration work,

the driving So reasons this. of that's one for

X from facilities anywhere also almost we to service with with the there. between us X-day don't the regard at the delivery have allows It go that end, through how we North country, -- to U.S., the America

our million. expenditure And million with in under $XX capital to you gave million in $XX that we it's to that, of the guidance million $XX million $XX sorry, just probably $XX -- associated

rate in $XX run CapEx million normal Our the million range. to $XX is

in excited going to thing, and about also to we're -- automation. in improvements Anthony, accuracy. that it's our deliver One the we terms also speed clients more We're are investing some . of really

Winston Our Barrington Colicchio Research. next question comes from from

you color And give if terms any cycles? on seeing particular what Yes. you Joyce, sequentially. areas where some are in overall there's sales changes can of any

in this does it and We QX, continue. Yes. really starting saw so

seeing projects, deliver are how the projects them definitely So are to to services scope to change of longer approvals we us make asking figure for our out more to clients smaller, strengths. results cycles, actually required, sales That our are fast. plays

think, I at particularly we're good that.

earn ROI seeing do bit then deliver we and they're a projects right are a So and next but are those smaller. project, services the take say, longer, definitely bit an to the slightly,

trends the your on sector And in set, the SMB? one you seeing and client public enterprises, you're Could comment more.

Yes.

commercial those. and infrastructure well, our investments pretty I business, as space growth smaller Obviously, some -- we're the focused businesses all piece good. to solid country, the is, the But are seeing it's we're So, K-XX due we're us, so there, that's the pretty growth on and But think, in really, across there. too. public seeing not it's for up sector really of of bills but solid a really our enterprise holding

strength board. we're So, the across seeing

were My answered. other questions

follow-up questions have a We from Matt from Sheerin Stifel.

just a and of on different of question a follow-up I lot here. had which sort Europe, your in software businesses results America North had

business growth also dollars year-on-year. XX% North gross know I in in just was in Whereas, in your X%, you up Europe. grew double-digit America, Europe up profit software but had You

or of So that revenue or in there types of terms offer? software recognition cloud services is you difference a the

in our isn't There the of recognition terms methodology of revenue recognition use We any revenue in in regions. regions. the across same difference all

mix business the that little different, think, can services to EMEA the is with to the in regard attach a bit software. I they

here clients. a here So software to that that. transformation Whereas give sophisticated here more and digital -- sorry, they or we have don't maybe process methodology we our offerings have and cloud-attached EMEA, can in

we influences part growth forward. EMEA. we the for success would that of as of us cloud the versus in So America an actually go That one for have that here our M&A opportunity with be areas North

Anything demand the of else in there? environment different terms

Yes.

environment a demand is the And I costs for cautious, seen a there, more bit sure. yes, we've -- bit are the rates sure. demand think higher. Inflation for higher, are that slower

Thank you.

lovely Have no today's you call. further line. a the will questions thank I for We have now joining on day.

you. Thank

Thank you.