PC Connection, Inc. (NASDAQ:CNXN) Q3 2023 Earnings Call Transcript

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Anthony Lebiedzinski: Well, thank you very much and best of luck.

Timothy McGrath: Thank you.

Thomas Baker: Thanks Anthony.

Timothy McGrath: Appreciate the color.

Operator: Thank you for standing by. Once again, our next question comes from Jake Norrison from Raymond James.

Jake Norrison: Hello?

Timothy McGrath: How you doing Jake?

Jake Norrison: How you guys doing?

Timothy McGrath: Good.

Jake Norrison: So can you guys just touch on the health of the pipeline and sentiment from your sales force currently as December is typically the big corporate budget flush month. What are you anticipating there? And further, can you just touch on the real-time update on SMB and Enterprise? Are you seeing any other green shoots there other than sort of on the quoting and inquiry side of the business, as you just touched on? Thanks.

Timothy McGrath: Yes. So I’ll start and then Tom, maybe you can join in. So when we think about the traditional Q4 budget flush — right now, we’re forecasting Q4 to be perhaps slightly down from Q3 to look a lot like Q3, but perhaps some low single-digit declines. So we continue to see our customers under pressure with this economic backdrop and all the reasons that you’re aware of from inflation to interest rates to some geopolitical instability, all that affecting customers. So they are very cautious in the near term. That said, they’re very optimistic over the long-term. As I said and discussed in my prepared remarks, the promise of technology is very significant in terms of what it can do for our customers’ productivity and efficiencies. Tom?

Thomas Baker: Yes. I mean I think Tim hit the nail on the head in terms of how Q4 is going to look. We are seeing spot where — it looks like customers are exploring perhaps doing a little bit more next year, but it hasn’t gotten to the point where we’re going to be highly, highly confident that we’re going to have a double-digit growth rate in next year.

Timothy McGrath: Then in conclusion, on the green shoots part of the question. We are seeing many of our customers evaluate new software operating systems and the potential of layering AI on top of that. Certainly, with Windows 11 and customers piloting co-pilots it is an encouraging part of the business. And there is activity and real movement there, but nothing that we can point to as an absolute driver of demand at this point.

Jake Norrison: Perfect. Thank you.

Thomas Baker: Thank you, Jake.

Operator: I’m showing no further questions at this time. I would now like to turn it back to Tim McGrath for closing remarks.

Timothy McGrath: Thanks, James. I’d like to thank all of our customers, vendor partners and shareholders for their continued support. And, once again, our coworkers for their efforts and for their extraordinary dedication. I’d also like to thank those of you listening to the call this afternoon. Your time and interest in Connection are appreciated. Have a great evening.

Operator: Thank you for participation in today’s conference. This does conclude the program. You may now disconnect.

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