Oct 28, 2026 earnings call — Record quarter driven by AI-related demand
Net sales were $874.3 million, a 23.3% increase year-over-year.
Revenue $0.9B (est $0.8B) · EPS $1.24 (est $1.04)
Key quotes
"Our team delivered outstanding results in the third quarter, highlighted by record net sales, record gross billings and record gross profit."
"AI is driving a new wave of enterprise investment that extends well beyond software."
Analyst Q&A 2
Q3 results and 2027 demand
Q (Anthony Lebiedzinski · Sidoti): He asked why Q3 was stronger than the prior expectation of being lower than Q2 and for more color on Q4 momentum. He also asked about public sector differences (federal versus SLED) and how sustainable these trends are into 2027.
A: Management said Q3 beat expectations because device sales—especially AI-driven devices—plus server, storage, networking and another good Microsoft quarter were very strong. They said July and August were okay, September was stronger in enterprise, and historically Q3 to Q4 is down 3% or 4% so they expect a similar Q4 and SG&A to track. For public sector, SLED outperformed while federal is being rebuilt and returned to growth; they said the endpoint upgrade cycle is mostly behind us so endpoint demand might be down slightly in 2027 but demand for on-prem, Agentic server, networking, security and software should stay pretty solid.
"But we also think that the demand for on-prem, for Agentic server, for networking, security and software will continue to be pretty solid." — Timothy McGrath (CEO)
Pricing, margins, competition, and budgets
Q (Logan Katzman · Raymond James): He asked for an update on the competitive environment and pricing trends and how those trends are affecting gross margins now and into 2027. He also asked about partner program changes in the channel and whether they expect a budget flush in Q4.
A: They said year-over-year margins were down a little. About half of that margin decline was due to software accounting and the other half was customer or product mix, noting notebooks and laptops revenue was up over 30% while unit count was down about 5%. They said the IT environment is strong across suppliers and competitors, they do not see any major partner program changes, and they have a strong backlog and funnel but are not hearing any specific budget flush for Q4.
"About half of that margin decline was just due to the software accounting." — Thomas Baker (CFO)