Strong profitability within the scope of the decline in sales

Q: Where is the demand environment currently? Have you seen improvements throughout the quarter and still see a soft demand on the product page of the business? A: Mark Marron, CEO and President: We see a collection in the areas of data center, cloud and security spaces that are driven by AI initiatives and the need for security in relation to governance and risk. However, the networking sales had decreased significantly a year compared to the previous year. Overall, we had a difficult comparison due to a strong previous year in the previous year, and some customers still digest problems with the supply chain, especially in networking. We expect an improvement in the upcoming quarters.

Q: In terms of AI opportunities, most investments were made in the surroundings of the Hyperscaler Center Center. Where is Enterprise AI adoption and contains your instructions for the next year an acceleration of AI demand? A: Mark Marron, CEO and President: Most AI editions are currently aimed at Hyperscalers. We enable the customer's commitment through workshops and introductory meetings that we expect to promote service-related growth. It is expected that the infrastructure expenditure for AI will increase over time, but it will take a while for it to materialize. Our instructions do not take a significant acceleration of AI demand.

Q. A: Elaine Marion, CFO: The postponement in the direction of the ratable and subscription-based models has led to lower product sales and more income achieved that affect net sales figures. However, this transition has also led to an increased gross profit and margin expansion due to a more profitable business mix and higher service income.

Q: How is the company positioned in terms of strategic investments and growth opportunities? A: Mark Marron, CEO and President: We invest strategically in AI, cloud, security and networking to expand our skills and meet customer needs. Our strong balance sheet with a record position of approx. 389 million US dollars enables us to carry out both organic and inorganic investments to support growth initiatives.

Q: What are expectations for the 2026 financial year in relation to financial services? A: Mark Marron, CEO and President: We are carefully optimistic and expect net sales growth in the low individual digits, since the gross gain and adjusted EBITDA grow with medium digits. These guidelines take economic uncertainty into account, but take into account non -potential recessional conditions or unexpected developments.

You can find the complete copy of the earnings call in the complete earnings call.

This article first appeared on Gurufocus.