Insight Enterprises (NSIT) 31 Oct 242024 Q3 Earnings call transcript

Hello, everyone, and welcome to today's Insight Enterprises Third Quarter 2024 Operating Results Call. My name is Seb, and I'll be the operator for your call today. [Operator Instructions]. I will now hand you over to James Morgado, Senior Vice President of Finance and CFO of Insight North America.

Welcome, everyone, and thank you for joining the Insight Enterprises earnings conference call. Today, we will be discussing the company's operating results for the quarter ended September 30, 2024. Senior America. of Morgado, of and James North Insight I'm Vice Finance President CFO The

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

XX, and earnings is that was on will can this not copy section. have and Relations If the be of filed a and website website find as webcast accurate at copy call being our call, on our time. remain limited contain the is call Any strictly and the conference posted the the Form available Investor Exchange you time-sensitive October webcast consent presentation today, after of be form it question-and-answer will Commission morning the the for XXXX. without will Insight only do of conference approximately live our on property This expressed is or the the insight.com. the insight.com slide call call any via X this accompanying that is Enterprises Today's period, associated information retransmission of release with website also a of of completion Securities of and hours or redistribution, Insight including in you accessed Investor call Enterprises. prohibited. written the page An under Relations This of at archived rebroadcast X-K,

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

press release presentation accompanying GAAP adjusted to actual the included reconciliation issued results in slide these a both the of measures find earlier today. You'll and our

discussed Also, call otherwise in we to U.S. terms. comparisons growth of corresponding highlighted all growth constant relate dollar all today currency, noted. as last rates and the year, amounts that make on are period note the unless unless Please

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

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

you James. everyone, joining much, us thank very today. morning, Good for and you Thank

long-term health, the While environment we're in remain the about optimistic cautious near spending anticipate and expectations, the our business's term. will QX meet IT didn't we

earnings result, adjusted As our we share guidance are a XXXX. gross for per reducing and profit

our execute on solutions our we continue As strategy, market solid growth we services strong challenges, these to well cloud IT integrator fueled and by acquisitions. Core delivering Insight navigate results

X key drivers outlook for are the There revised of our year.

Gen a hardware a by that growth The this AI the drive industry-wide American anticipated to be broader are the X delayed same a half recovery materialized. pronounced until which largest traditionally hardware refresh result market the North Hardware most is has previously in corporate quarters XX expect across we will our commercial is and recovery discussed row improvement, and client group. of our clients, which We aged namely base, the year. end-of-life have factors a our of of not enterprise will we year in demand clients demand. now broader drivers First, with and precedes recovery. Windows improve, the delayed encouraged and installed market next that We second

and us we are and ready for for expertise technical capacity well in it. rebound, position investments Our integration this

and offset These is SADA exacerbated was scale. benefits to focus changes guidance XXXX the now the our quarter. is the half flow growth Google of valuation is cloud area in by retail XXXX. are impact has impact in met the will with is pivot the in of market. alignment in mid-market but in Cash SADA on The enterprise second from of for consumption and because reductions yet SADA's The progress growth and accelerated seasonality second with associated services our and of weighted expectations. the at SADA. our corporate The in of heavily customers basis these not to business, ramping our This the reflected which year of our is fourth

to perspective, identified Amdaris we through acquisitions. improve expectations. and and on From performing are impact enhanced have cost and actions services the overall we mitigate further our structure. performance, our recent our our meeting InfoCenter growth To well global capabilities drive growth have a services

We in including launched gains the Eastern drive a opportunities accelerating focus to our edge, areas and cross-sell access are program solutions. we North are and of in data pools relevance talent and share pleased and our our to India, hybrid security with Workspace In clients. cloud, to by encouraged America, Europe we key increased AI, and

the of the the implemented we profitability which XX We services over in program, effort confident past this efficacy to improvement. months successful are after is drive modeled

delivering accelerate sales partner talent our expanding elevate program improved go-to-market technology outcomes. solutions ramps. with alignment as solution This ecosystem We tighter our to sales expanding and will our market are specialists, we growth and and the recovers our adoption and believe team Specifically, higher aligned to our this effectiveness go-to-market drive leaders include and practices. will technical

near-term a East. challenges, are the we of A we this execution a become strategy sites our realized a and our which a will in we operating fully in built solutions be range expense to Despite for solution From of of the is XXXX. these to $XX are annualized reductions structure. example perfect and cost in strategy $XX confident in million, deliver of hybrid integrator. recently accelerating leading anticipate the We client perspective, Middle the recent leveraging million and selectively cost lower acquisitions offshore efficacy nearshore integration our to

vision EMEA. with drive value of AROYA to their hardware, project, partners city. By transform Insight market every economic in services. Kingdom their chose numerous a because a we strategy we've cruises. and solution. into to integration centers inaugural to the entire luxury saturated software demonstrated integrated transformative a create our client tapping for secure the We Arabia manage our ship diversification, designed for cruise managing orchestrating into long-term fulfillment creating of to of by AROYA AROYA solutions that deliver fragmented activating implemented IT and and floating and and aspect across world-class this extensive with procurement scalable our Insight smart a Royal services line cloud ability is partner seamless and an process private XXXX part ecosystem As Saudi partnered

giant care XXX turn our hospitals Insight with was infrastructure gift client focus cloud and month U.K. time instantly Cloud U.S. the their almost tools the the new new to sector. We We house patient lagging to effectively to infrastructure, to from architect their also to to their repositories the them freeing Google to and enabling XX underlying U.S. guided care X in a that create cloud across manage Azure on in for cloud time, care. the reduced environment. approach infrastructure up minutes, innovative for provisioning adoption, They using We deploy and clients challenge a health over the our build help a health provisioning expertise. common and environment technologies and

a of under offering as and Along and networking speaking expertise, deep And our technology single service. compute, we a are with combine we infrastructure, data requirements storage on umbrella. now infrastructure to best-in-class AI our rely AI partnerships as-a-service

a solution model as consumption managed provides for offering the services as infrastructure. they clients by as well Our flexibility in AI to operate our invest

Insight numerous In several quarter, granted Cisco in and Awards, Quadrant Best was Partner XXXX premier AWS included including we've Partner to Gartner recognitions. for among World's also the Partner the and Lenovo Partner XXXX workplace and Partner the recognition India certification. Year; has of Dell last Place a been been the workplaces service Insight important from XXXX, Management partner, recognized XXXX of several the the services. NetApp's Software in of Forbes U.S. managed of Employers for has Asset Great XXXX received greatest perspective, America's Acquisition Year, Insight Keystone Newsweek tier And culture Work Year Year, Magic

Glynis earlier retirement, her announced to decades to her commitment for of insight. you year, upcoming thank and almost this I want X As know,

teammates, We in CFO are grateful and clients. dedication Morgado our we're to partners And as for will delighted that James her company, the leadership role and the January. assume

James, I'll turn you. it back over to

next Joyce, everyone. and you, CFO. to selected deeply morning, Insight's as honored Thank be I'm good

drive closely the the I'm efficiencies. operational in our ability last market worked team our and our particularly business model X profitable drive strategy to years, growth, with the I've During and confident as recovers. to leadership

And the the cash us of opportunity expanding capabilities attack technical and to the areas balance fastest-growing of market. the to future. sheet us flow Our well solutions solutions the our our position provides capabilities in with continue and strength

journey be coming to of to realize months. part to with our ambition in forward us excited the all become the leading you to look integrator. solutions I'm continuing I the Insight's of help dialogue and

details the XXXX. our I'll Glynis our call turn as to now operating Glynis? as in financial performance for over to outlook of key share and QX well

On our high level, expanded profit significantly. are gross disappointing. decline, and QX grew in mid-single high digits a results single-digit At James. revenue you, Thank margin gross

However, flat year-to-year. and per declined earnings share diluted adjusted EBITDA was

prior our expectations foundation not QX. need that not did as Our achieve meet our in we the XXXX guidance. performed acquisitions to expected QX did and provide also

I'll clients XX% decrease a revenue was X%. in in you in currency. also Within product and of Hardware related decline and The corporate and billion, is was software in and America. decline, QX, through now by $X.X the weakness in shifted decline from on-prem of to large primarily revenue U.S. was products. services. walk X% software the XX% for to our decrease a an QX was down This by consolidation In [indiscernible] dollars decline details partner down and subsequent North net change driven enterprise product constant that driven was primarily QX. in program on-prem this The in

of down QX, a digits. legacy $XX earlier. as services Hardware was the high low reflecting gross XX% Core was an Infrastructure million, Getting were profit increase increase in growth, consolidation double partially digits Core results also decline increased higher I gross and mentioned partner Insight profit enterprise reflects strong Cloud Infrastructure by and million Gross digits were acquisitions. the program X%, Service reflecting declines. deeper in Services single and growth down single of was are year-to-year. flat the a by Insight devices agreements. as and and offset little in change product Infrastructure Service in declined XX% devices of offset of Sequentially, a the cloud and benefit $XXX and benefits The Software Cloud our an profit partially

grew services, primarily an a was to we we SG&A acquisitions. operating higher environment. reflects points of to higher increase drive gross Adjusted and the margin continue Core acquisitions the the and actions down year, related as that the basis is successfully Gross services XX.X%, on adjusted took last of X% Organic Insight completed mix based cloud we due current have manage SG&A in margin. prudently spending to year-to-year XXX expense

to higher XX were gross that $X.XX, margin with quarter, our the performance resulted increase is dollar to debt growth. expanded environment. The in current philosophy currency. U.S. steps from This And adjusted earnings recent year-over-year, in adjusted taking related in share interest expense our and we're as basis our mentioned, terms further with And due should buybacks. Our points X% and also share of outpace primarily flat while in an X.X%. per structure acquisitions profit to was $XXX this and million, align Joyce EBITDA to decline growth constant SG&A the cost diluted down

million in to flow operations, Through from operations. of In cash essentially XXXX, year-over-year. quarters on generated have X cash cash flow. of from the quarter, $XXX $XXX million we the Moving we flat generated first flow

Board over expect the above we In end shares. approximately to cash flow be $XXX typical QX, from Year-to-date year our $XXX this $XXX shares we which to compared the the million all remains spent We a of our of repurchase QX, million top of $XXX million last million through in spent range. repurchased year. will $XXX that period In to same authorized million $XXX program, September, operations new repurchase of share end outstanding. million million $XXX

capital QX to total compared We year invested months XX on billion XX, September $X.X was exited ago. a of return trailing XX.X% a year compared million XX.X% adjusted ended the XXXX, to with $XXX ago. Our debt for

per and debt. approximately of year, share $XXX funded expense Over the last from spent cash acquisitions share. interest operations we is of through flow earnings partially million The the impacting with diluted associated $XXX adversely remainder buybacks adjusted million in

the to which of As the end we had billion of was access facility, QX, $X.X available. full of ABL billion the capacity under $X.X

ample [indiscernible]. liquidity We to have

our through we QX XX-month in shows described our that to October the metrics Day trailing presentation XXXX. in XXXX relative Our performance Investor

Services EBITDA year-to-date status. gross of growth would profit adjusted market of EPS free is diluted Here gross margin X% XXX%. flow and income of the as Cloud growth the cash percentage ROIC X.X%, XX%; adjusted of Core and growth profit difficult. characterize of net adjusted of of adjusted XX%, adjusted I as a XX.X%

the had large and start we to to year, growth. clients have an encouraging our While corporate not enterprise returned

Our to in investment clients exercise and heightened caution continue spending decisions their priorities.

demand duration pattern ongoing first could XXXX. momentum, the of the half this of we continue Given believe and uncertainty, lack of into

Corporate in in year-end, our pivot away enterprise year, Group. considered guidance. dilutive the not on of to cloud as corporate As we from large Client mid-market continue solutions hardware factors enterprise flush clients resale. in particularly and selling typical at we remainder We're QX about the will the we following think expecting have the SADA and the budget to and

$XX netted effect, reflected our the moderate will the and reduce deliver XXXX. revenues SADA but program gross has revenue will to full by $XX the profit now in Note, impact million in and XXXX expenses should and new Given in in cloud annualized savings. the We million in consolidation services. benefit to we plan On-prem and be growth partner been affected QX. see operating software minimal,

margin macroeconomic be includes tax in million be the Concerning XX% XX.X% approximately that for average of to to effective $XX million year, the will guidance for the million anticipate full and and expenditures full of $X.XX will our to per we year profit acquisition-related of restructuring shares. no This share $X.XX. or $XX of assume XX.X million as adjusted $XX guidance in gross full This the range deliver XX% acquisition-related an rate between the still assumes expect $XX our diluted gross capital mid-single-digit the expenses meaningful and instruments follows: excludes these share no outlook. range factors between to and expense approximately debt year, our count outlook for amortization million expense now and intangible and transformation change growth is million in severance earnings interest and or $XX we and

make Before thrilled journey and call I'm tremendous and will candidate. to he an years to solutions partner the you He's become our was I solutions be to team [indiscernible] I'm for also X and the again I under like be grateful honored over that and congratulate her clients for the to as a James leading teammates Joyce last Joyce, pass our journey been Insight integrator. without leadership and who on big investment the truly thank a community vision you. support over confident her part would Insight past your I'm bold leadership would for positioned the well CFO years. excellent a Insight. the leadership, will exceptional. dedicated to become impact company executive have partnership we to also not the her years. integrator. back to for And successful our Joyce the over thank be partners, continue of a leading the that once successful business XX We to our had our and I'm

call you. the back will Joyce. turn Thank I to now

Glynis. you, Thank

that leadership, your each over miss advice have personally and Insight many and for to really I are to one going you years. counsel, We grateful of am and all so us wise contributed

and in Cloud gross mix areas margin and integrator our adjusted we from Services digits. in grew our of and To Insight of expanded. recap, margin When have We're to focused and have pricing developed benefits of us the address Cloud remain value not are a industry would Gross positioned. reflecting delivering the confident Those capabilities we and are We well have cyber need them. initiatives delivered laser profitability areas and most, environment. plan exceptional and in double these help taking edge. expanded we we a pressures. offset We've and profit on past year-to-date, Services challenging solutions some favorable experienced the and knew changed, those Core expanded, strategic business AI, the to clients appropriate action positive there ongoing a our results along way. strategy, areas strong turns EBITDA Insight year we where over data be launched and cloud, and challenges our Core twists

In costs. technology addition, we leveraging offshoring to our structurally improve options are and

and our in to commitment Insight for clients the the trillion their I'd environment, that partners for clients, like be ready are in confident unwavering transformational resume partners solutions with help market, support their actively are on thank teammates We focused delivering our $X continued difficult upturn. their in for to collaboration trusting innovative for growth improving our will execution our eventual them to other, clients. our we to and our especially and and each this journeys to

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

ahead. from JPMorgan. [Operator first question today Instructions] Joseph Cardoso from Please comes go Our

services better if then going tracking recovery around have follow-up. that Just guess first previously? trends or of you're if surprising particularly gives there's anticipated that that out And trends And you're spots reporting me. that relative one from the Curious, that you're peers versus following is out Not seeing large just portfolio worse next your one customers yesterday. the can than smaller confidence you I curious product any a you can [indiscernible], ones? I just enterprise into you for or any seeing bright areas a then the super year? between flesh to seeing flesh

Yes. Thanks, Joe.

Core our and which both we you as critical GP strategy, Services Cloud really and happy are highly we're our know. growth, with as strategic with happy to we're our noted, growth, cloud yes, So GP growth,

with acquisitions course, overall. previous by of many our us we're us with if in you those capabilities helpful, been their growing growing their out for are pleased, growing cases, round us, way, performance. really So and kind helped the new because services organically they're and also compare of our and They've really really have but really, they're they're -- performance our to

all of So really that is good. seems

From we're EMEA with very earlier generally, customer commercial And for in we see we're before growth, that's happy sector corporate. commercial enterprise row that's quarter. translate because see and a we the -- of quarters the sector into view, in a also so good and performance, X that's we improvements APAC strong of and important seeing some those very that. are and performers were point

And on up it. just it Got Like acquired does maybe you is following then seem at like expectations profit that commentary. of the underperforming somewhat when of least in terms some SADA projections. and first revenue your the acquisition

this some earnings the of call. that on some may priorities you highlighted And strategic tied be to and ship last of the

I'm from the historically, curious, rate there of there? guys strategic help of of like priorities about has you you any business any can us is business? there second strategic seasonality run been baseline And you that think the with shift just doing what our the of is, number, are the in given I you structural the priorities, SADA was that a like is change way that maybe acquisition what there can in shift any question us then way in XX% of that XX that that part today, the gross think XX, help talked a revenue XXX was of kind that margin about like number,

Yes. Okay.

back let around and we all, are how for me happy especially services and talk I'll of up Google. the second that capability, just one first So have we about

today strong our is really obviously because we a in many becoming a We're clients. is have our and platform really Google saw increasingly to to Google we relationship. good that So We a important of that capability actually we have a relationship portfolio. highlighted capabilities cross-selling where that customer happy it have to

with market where we customers it does multi-cloud of and the invest our it areas need for So fastest-growing love our what to the the is consistent strategy strategy, most and in areas the help. our

based cash acquisition valued that on also flow. We

right. And expectations. from that it's I performing thought you a are flow absolutely perspective, But cash to

Google's we last driving and are are which expansion, see seeing. in we that is seeing, in And primarily but to now earnings call really the expected that resale we our made getting services growth that and quarter, alignment both more that -- SADA pivot also priorities, through expansion, with we've We pivot. was talked which not about

large customer resale. The impact is really on Enterprise,

on now view a We business from of corporate ramping. still mid-market. -- focused and have in that is point retail It's solely still the

we about of So different we're different decline We're about very happy with year. in cash seasonality very in QX And the resale. -- services. [indiscernible] sad delivered because associated Enterprise happy the a of flow. a because fact, The

think turns significant the you we've early was if associated with because process structure OpEx have to have and that that's late going QX, year. and improvements and about make change, help that QX we next contributes that business I Now to corner the some guess in made now us taken we that starting to sure adjust of working and QX. the -- been through SADA so positively it

have answer missed Joe. I might of all that, I elements something. the

being Maybe the acquired seasonality on part priorities in it of seasonality, of XQ terms the the that you just that in when was any the in from guys change of it whether the on loaded? was does strategic terms the focus last mid-market, assumed first Google shift just

seasonality to QX. it we'd try to a in flatten just look QX And different It like thing. having at don't a working should. such We that. we've but way to gap than been flatten in Obviously, large

to And is that view a their SADA miss guidance part related specifically will QX. ranges Joe

see those the And in going We're said to enterprise, QX have large be my large to deals they that think this to in enterprise ultimately. that I not having related typically QX. large, section, is I expecting QX. is not the dilutive

you to Is triangulate way of there that headwind question. contribute number acquisition gave when first about any not that my I you of you the and much there kind terms to at in the being talked was is sorry, much historically, large that enterprise to that like $XXX of guess kind million the business the how in gave used of that relative -- range. to the to how least any the root metrics revenue of is -- And first of

think triangulate that at. we is say I I it can't What can the revised of about to is X/X side guidance.

Sort items. changing the of

next is Stifel. at Our Matt Sheerin question from

to Glynis. just question, and for Yes. James first regarding Congratulations the year. both My guidance the

gross sort EPS into line the and line. you and the margin, last sequentially looks top And on down will and of profit year, to slightly. were backing think gross like it top you guided You I grow

like of So looks it a of be again seasonality maybe and like SADA is you the will be Or that issue client it a weak? looks may like number, you little you talk about? XX%. could gross margin, talked bit issues gross that there's margin seeing is below it infrastructure to then backing that where on and And that. mostly are into mix there that that and devices is where up And a because looks

of gross be believe Hi, gross XX%. We be to will margin Matt. will we below but the bold not range think I here, XX%. to do don't want that XX% margin in be

I think So that.

Well, your the guide [indiscernible]. I'm year. talking I was about was of for the backing December into number -- kind that

XX%. number correct. will Yes, That's the QX lower be than Yes.

Sorry, full QX year. talking will I thought the for I about you're misunderstood. be...

figure product because in to of it trying is was of or the I mix? -- dynamics. was Yes. that year, Last Yes. because up SADA

mix. product and It's SADA

but margin Both SADA SADA last And gross XXX% on because then in the [indiscernible]. year primarily they're QX. [indiscernible]

Okay.

then revenue? terms sequentially grow of in you And so expect do to

-- little low Sequentially, single-digit bit. growth. little Very very a

tough the with software, you you regarding about many exactly question, that? down have the on-prem And of seeing Great. and bit just vendors quarters with there, you're agreements. the Could second will issues impact enterprise talked what the then comps more how consolidation you dig little and a Okay.

some it affected and us -- moved was netted to consolidation basically software, environment. partner a from the So on-prem

software services. from So to

reclassification a a benefit that's So and onetime it QX. was in

trends I that and definitely would away we enterprise agreements. and models say more more are from towards consumption seeing So

to the expect provide generally we like customers continue. to us. We consumption agreements -- and that our more value generally By way, and stickier to that consumption because trend are

that expect would trend we continue. So to

Okay. why sales And that down in year-over-year quarter-on-quarter? EMEA is and the much so were software

why. is is, That that

used as the partner So the who growth COGS, revenue we the with same consolidation, partner the you that -- GP. had consolidation by to know is we record it probably to going

the if a business, been new and as fee the that's -- enterprise business occurred, direct. is that on driver of is it, in consolidation own doing partner new most and recorded our now decline has now revenue and agent that relationship, services. As taken We're the in for software. the But we the mid-market the structured EMEA's

Understood.

as yes. well Ours

Our Adam James. is from Raymond next question Tindle of

where to -- this seeing what a about North America Okay. delayed comparisons. issue. from quarter, impact categories wonder the just start, to a are you year. in that lot recovery it trying describing or networking, deviation with you entering or for were we significant Joyce, the this from are I categories wanted We hardware square was which on expectations. example, you hear that deviations difficult the But particular was expectations. theoretically, click when double would most that, I seeing I'm known if most can have

XXXX. would there. first And are this that seeing question be I you similar into at the the What And that a to 'XX? most of And the second part of described of half kind looking are the first continue pressure? have half to of draw what categories conclusion you expecting into

Yes.

of forecast. and not did a predict the in So enterprise a obviously, normally That's market really concentration is of really really, in to of me materialize. saw more acute July. revenue. higher The us We Hardware groups. patterns where We the quarter hardware That well has Hardware, how off customer quarter difficult for challenging. is grown in very the been say, we have corporate the started throughout the has our but just much the [indiscernible] sort let strong the month, and

category it in I and improved more momentum, there it's overall. QX QX in made of that, a expected -- note made be hardware the would even obvious to So QX momentum the that had momentum then and way, And gap. important for expected QX lack in momentum of we think by the that we sort --

are enterprise in frankly, really devices we've Again, of and falling And significantly and that corporate on our missed infrastructure expectations. short both corporate -- large it's both both segment. client

figure I more about to would So just how been to our a and pragmatic just we're -- bit predict. say, to because difficult trying out be, it's for expectations hardware

of why into improvement And of the so to continue part that expecting sort momentum we're XXXX. sluggish slower or early that's

had The as of QX James. I other it's XXXX, just to remind a thinking thing we is you start would that I -- XXXX, add only that I quarter. about would XXXX, would Adam, very you in strong

next challenging as compares be us as well. the for start will year we So

to but see We said, And the improvement some see from to those seeing booking see I'm we're that indicates We We of quarter more out used as quarters in hope improvement one add to going in commercial exited results. to row. view this we're X to in patterns that hardware a for improvement on thing. point on we hardware excited started -- sorry, longer we're hardware, overall it a going we're that guidance. our see in no banking I

my an try here Don't be kind and spirit to the suggests gross got guidance data currently single in the want this Yes. to QX call low prepared moving spot. like at here joist, point. down on of guide year, pragmatic, going more perspective doing it be not about that point on you're year-over-year. from I digits helpful. look with we parts to analyst dollars as the of you a put profit next dovetails James, second In guys question. that right? that are us this We've think know into your are to That's XXXX trying doesn't XXXX. But to

point, and stuff on make we that. starting our can like our own assumptions As market

you called out. impact specific more growth SADA accelerated One in XXXX. factors would reduction in two there's that resale cloud be will But

prepared growth, headwind in that about Microsoft your think all And to said models about as of thinking the we profit XXXX us is from gross two, wondering, thing SADA as there way is profit try gross to dollars? publicly think And resale. our second software a dollar calibrate and to in changes about maybe resale for XXXX I'm between very remarks. the those You we reducing is the one we're partner largest

we pivoting priorities resale SADA business, are year. of we and we our Well, a not we next are customers, -- not talked point to a we Google you're of expect improvement enterprise SADA resales from point see for and about, growing see to and are going expect to with contributor -- as focus right, the positive view services any our consistent -- mid-market a do be get from we in But will not will corporate we view. SADA

like. from also many you're aware talking of -- very of not And are I of all think Microsoft. exactly those we changes are see we -- our certainly, it that a look Those happens partners, clear and We what time. well about changes persistent the the our from very, XXX% are we

to focus adjust. those want they a so the concerned of add and Our And just because while where adjust some changes strategy us usually about to our us quarters job we're most of takes value. Microsoft to is that Microsoft the with working certainly it early we're

XXXX. when more we guided know we'll So

the with will million kind on a and that reduction. at some quarter offset when be think of to full run Can that the to going you you're do decision's of timing OpEx growth? just guess expected maybe $XX to I million impact the rate Well, that, you in speak $XX then

fully we a and will XXXX. that mentioned that Glynis will So small QX, realize we on benefit benefit in see

Thank you.

no the further call. on We have questions

for back So concluding I'll hand to Joyce remarks. the floor

of for interest. for and very questions, Thank your you all your thanks much

I leading While the remain -- we journey operator. now and to on this sharing demand our excited period. the a close progress us, can We look our ahead We our you opportunities very navigate solutions much, Thank through very confident about can become integrator. call. choppy and forward in of to continued

today's joining call. for all you Thank

disconnect. You may now