ePlus Inc. (NASDAQ: PLUS) has announced its fiscal fourth quarter and full-year 2024 results, revealing a year of strategic growth despite some challenges. The company saw a 12.7% increase in net sales for the quarter, with a notable 13.8% rise in gross billings. Although ePlus experienced lower-than-expected gross margins and operating income, the company concluded the fiscal year with a solid cash position, enabling continued investments and strategic acquisitions.
Key Takeaways
- ePlus's fiscal Q4 net sales rose by 12.7%, with gross billings up by 13.8%.
- Gross margin and operating income fell short of expectations.
- The company ended the year with over $250 million in cash, setting the stage for strategic moves.
- Product sales in the technology sector, especially networking products, jumped by 12.2%.
- Service business revenue, led by managed services, increased by 14.8%.
- The financing segment also saw a healthy revenue increase of 15.5%.
- ePlus expects gross margins to normalize in fiscal 2025 and sees AI as a key growth driver.
- A new share buyback plan for up to 1.25 million shares has been approved.
Company Outlook
- ePlus forecasts net sales growth of 3-6% for fiscal 2025.
- Adjusted EBITDA is projected to be between $200 million and $215 million.
- The focus will be on strategic IT solutions, organic and acquisition-driven growth, and expanding product and service offerings.
Bearish Highlights
- Operating income declined due to investments in headcount and acquisition-related expenses.
- The fourth-quarter tax rate increased to 29.5%, up from 22.4% in the previous year.
- Consolidated net earnings and adjusted EBITDA for the quarter decreased compared to the previous year.
Bullish Highlights
- Consolidated net sales for the full year increased by 7.6%, and gross profit grew by 6.4%.
- The strong cash flow and cash balance allow for flexibility in strategic initiatives.
- Stockholder's equity showed an increase.
- The company gained 300 new customers in the current year, nearly double the usual number.
Misses
- Technology business saw a decline in adjusted EBITDA, primarily affecting consolidated figures.
Q&A Highlights
- CEO Mark Marron discussed the "land and expand" strategy in the enterprise market and the aggressive pricing to win deals.
- ePlus has been investing in services, AI capabilities, and sales to support growth.
- The company is in the early stages of AI implementation, focusing on data strategy and use cases.
- Marron credited the performance to the company's backlog and a close relationship with Cisco (NASDAQ:CSCO), aiding in network modernization for AI.
In summary, ePlus has navigated a challenging economic environment to end fiscal 2024 on a strong note, with a robust balance sheet and strategic plans in place for continued growth. The company's aggressive market strategies and investments in technology, particularly AI, are expected to drive performance in the coming fiscal year. With a significant increase in new customers and a balanced approach to capital allocation, ePlus is poised to capitalize on market opportunities and enhance shareholder value.
InvestingPro Insights
ePlus Inc. (NASDAQ: PLUS) has demonstrated resilience and strategic acumen in its fiscal year 2024 results, underscored by a robust balance sheet and a commitment to growth through investments in technology. As the company leans into the future with a focus on AI and strategic IT solutions, here are some insights based on real-time data and InvestingPro Tips that investors might find valuable.
InvestingPro Data indicates a market capitalization of $2.11 billion, with a P/E ratio of 16.78, reflecting investor confidence in the company's earnings potential. The company's revenue for the last twelve months as of Q3 2024 stood at $2.16 billion, marking a growth of 6.71%. This revenue growth aligns with the company's reported increase in net sales and gross billings. Additionally, ePlus's stock is trading near its 52-week high at 94.84% of the peak price, signaling a strong market position.
Among the InvestingPro Tips, two analysts have revised their earnings upwards for the upcoming period, suggesting an optimistic outlook on the company's financial performance. Moreover, ePlus's valuation implies a strong free cash flow yield, which could be a promising sign for investors looking for companies with the potential to generate healthy cash flows relative to their market value.
Investors seeking comprehensive analysis and further insights can find additional tips on InvestingPro's platform, which lists a total of 16 tips for ePlus Inc. For those interested in a deeper dive into the company's strategic growth and financial health, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at https://www.investing.com/pro/PLUS.
In conclusion, ePlus's strategic initiatives, particularly in AI and managed services, coupled with strong financial metrics and positive analyst revisions, suggest a company that is well-positioned for future growth. These InvestingPro Insights complement the company's own bullish outlook for fiscal 2025, as it continues to expand its product and service offerings and capitalize on new market opportunities.
Full transcript - ePlus Inc (PLUS) Q4 2024:
Operator: Good day, ladies and gentlemen. Welcome to the ePlus Earnings Results Conference Call. As a reminder, this conference call is being recorded. I would like to introduce your host for today's conference, Mr. Kley Parkhurst, General Counsel. Sir, you may begin.
Kleyton Parkhurst: Thank you for joining us today. On the call is Mark Marron, CEO and President; Darren Raiguel, COO and President of ePlus Technology; Elaine Marion, CFO; and Erica Stoecker, General Counsel. I want to take a moment to remind you that the statements we make this afternoon that are not historical facts may be deemed to be forward-looking statements and are based on management's current plans, estimates, and projections. Actual and anticipated future results may vary materially due to certain risks and uncertainties detailed in the earnings release we issued this afternoon in our periodic filings with the Securities and Exchange Commission including our most recent annual report on 10-K, quarterly reports on form 10-Q, and other documents that we may file with the SEC. Any forward-looking statement speaks only as of the date at which the statement is made and the company undertakes no responsibility to update any of these forward-looking statements in light of new information, future events or otherwise. In addition, we will be using certain non-GAAP measures during the call. We have included the GAAP financial reconciliation and our earnings release, which is posted on the Investor information section of our website at www.eplus.com. I'd now like to turn over the call to Mark Marron. Mark?
Mark Marron: Thank you, Kley, and good afternoon, everyone. Thank you for joining us today to discuss our fiscal fourth quarter and full year 2024 results. In the fourth quarter, our top-line and gross billings increased by double-digits with net sales up 12.7% and gross billings up 13.8%. While our gross margin and operating income were below our expectations, we had a strong year overall, and are pleased with how the business has performed in a challenging demand environment. We ended the year with over $250 million in cash on hand, which provides us with the resources to continue to make strategic acquisitions, invest in customer facing personnel, and expand our solutions and services, especially in the fast growing areas such as AI, Cloud, Networking, and Security. During the fourth quarter, product sales in our technology business increased 12.2%. We had a particularly strong quarter in networking product sales, partially driven by deliveries of equipment and inventory. Additionally, we continue to see positive results from our land and expand strategy, winning significant business from new and existing enterprise customers in the quarter. While this impacted our margins in the quarter, we are capturing market share and growing our customer base, which positions us well for long-term growth. In our Services Business revenue increased 14.8% in the quarter and 10.4% for the full year, led by managed services, which increased 22% for both the quarter and year. In addition, margins improved across both Professional and Managed services. Our focus on Services as part of our long-term strategy to meet customer's needs in a fast changing and increasingly complex IT marketplace is enhancing our relationships with both customers and our partners. Managed Services plays an increasingly important role both for our customers operationally as well as for ePlus, building a solid recurring revenue base which creates consistent profitability and predictability. With that in mind, we expanded our storage as a service and enhanced maintenance service offerings, which have been important new business drivers for us. We are pleased that our annuity service backlog is up approximately 50% and giving us line of sight to future annuity service revenue streams. Our Financing segment performed well in the quarter. Our finance offerings enable our customers to have flexible payment options and provide a value-added service to our vendor partners as well. During the fourth quarter, financing segment revenue increased 15.5%, driven by transactional gains and portfolio earnings, partially offset by a decline in month-to-month rents.. For the year, despite revenues declining 5.8% against a tough compare in the prior year, adjusted EBITDA remained flat. Consolidated net income declined in the quarter, primarily due to lower product margins from a higher percentage of sales to enterprise customers and product mix. In addition, we experienced higher operating expenses primarily as a result of higher headcount as we continue to invest in customer-facing sales and engineers, engineering personnel to meet demand for fast-growing areas such as AI and increased acquisition-related amortization expenses. Our headcount was up 146 employees with most customer-facing as we continue to invest for growth. It is important to note that our customer base grew by over 300 customers this year. Our incremental investments position us well to cross-sell and upsell into our accounts as we roll out new solutions such as our AI Ignite program which is focused on helping customers in their AI journey. We believe investments are necessary to continue our positive revenue momentum, capture additional market share, and expand our solution set to meet customer demand. While it remains a challenging economic environment with margins lower than expected for the quarter and operating expenses up, we will continue to manage our cost structure and attain operating leverage over time. Looking forward, we expect gross margins to return to more normalized levels in fiscal year '25. As it relates to AI, we are seeing strong interest in our AI Ignite program, which helps customers in the formative stages of their AI engagements. With envisioning sessions and workshops, we offer a consultative approach to identify use cases around business outcomes, end-user productivity, or IT efficiency that customers can measure. AI Ignite helps the customer understand its data ecosystem with an open dialogue around AI governance and cross-functional involvement with business and IT leaders. We believe that AI has lengthened some decisions as customers evaluate the benefit of AI versus cost. It is early innings for many in their AI journey, but it will be a growth driver for ePlus as it fits in our wheelhouse of infrastructure, security, network modernization, and the services required to implement these solutions. We have maintained a balanced approach to capital allocation, which includes investing for growth and acquisitions and a focus on improving shareholder returns. Our balance sheet and cash generation remains strong. In fact, at year end our cash is over a $0.25 billion which gives us flexibility with our M&A plans along with our growth initiatives. The ePlus board also approved a new share buyback plan of up to 1.25 million shares. Although, Q4 was not what we expected, we believe we are well positioned with our strategy and had a solid year overall as evidenced by our net sales being up 7.6% and gross profit being up 6.4% for the year. I do want to take this time to thank our teammates for their efforts this year and I'm proud of the work they have done in a tough environment. I will now turn the call over to Elaine to discuss our financial results in more detail. Elaine?
Elaine Marion: Thank you, Mark, and good afternoon everyone. I will provide additional details about our financial performance in the fourth quarter of fiscal 2024 and will review our full year fiscal 2024 results. Consolidated net sales increased 12.7% year-over-year to $554.5 million, primarily driven by a 12.6% increase in the Technology business, which reported net sales of $544.1 million for the quarter. The increase in Technology business net sales was a result of double-digit growth in both Product and Service revenue. Product revenue grew 12.2% to $465.2 million due to strong demand for networking equipment and Cloud products, while Service revenue increased 14.8% to $78.9 million, reflecting healthy renewal activity and growth from managed service customers. Within our Technology business, our two largest verticals continue to be telecom, media and entertainment, and technology representing 25% and 17% respectively of our Technology business net sales on a trailing 12-month basis. SLED, healthcare, and financial services accounted for 15%, 13%, and 11%, respectively, with the remaining 19% divided among other end markets. Net sales in our Financing segment were $10.4 million, up 15.5% from $9 million in the prior year due to higher transactional gains and portfolio earnings. Consolidated gross profit was $130.3 million with gross margin of 23.5% compared to gross profit of $132.3 million and gross margin of 26.9% in the last year's fourth quarter, volume from our enterprise customers increased significantly and there was less gross margin contribution from netted down revenues in the quarter, both of which changed the mix and resulted in lower margins, so we view much of this decline as quarter specific. The product margin decline was partially offset by the Services business, which saw a 270 basis point improvement in gross margin to 40.6%. Managed services gross margin grew 30 basis points to 30.5%, driven by revenue growth and scale, while professional services gross margin expanded 580 basis points to 50%, attributable to a shift in mix towards higher margin project and consulting services. Consolidated operating expenses grew 12.7% to $101.3 million, primarily due to increases in salaries and benefits from additional headcount as well as increases in acquisition-related amortization expenses. Our total headcount at the end of March 2024 was 1,900, up 146 from a year ago, including 83 employees from Network Solutions Group acquired in May 2023, and 29 employees from Peak Resources acquired in January 2024, all but five of the total additions were in customer-facing roles. On a consolidated basis, operating income declined from $42.4 million to $29 million. Earnings before taxes were $31.2 million, down from $42.3 million reported in last year's fourth quarter. The decrease was primarily related to lower gross profit from product sales and higher expenses from investments in headcount and acquisition-related expenses. During the quarter, we had other income of $2.2 million, including interest income of $1.6 million and foreign currency transaction gains of $400,000, compared to foreign currency transaction losses of $200,000 in the prior year quarter. The effective tax rate was 29.5% in the fourth quarter of fiscal 2024 compared to 22.4% in the year ago quarter. The lower-than-average tax rate last year was due to lower-than-forecasted non-deductible expenses, increased benefits from foreign sales along with lower state taxes. Consolidated net earnings were $22 million or $0.82 per diluted share. This compares to net earnings of $32.9 million or $1.23 per diluted share last year. Non-GAAP diluted earnings per share were $0.93 compared to $1.36 in the year ago period. Our diluted share count at the end of the quarter was $26.8 million compared to $26.7 million a year ago. Consolidated adjusted EBITDA decreased to %36.8 million compared to $48.7 million in the prior year, primarily due to a 26.8% adjusted EBITDA decline in the Technology business for the reasons I mentioned. Turning to our full-year results, ePlus reported fiscal 2024 net sales of $2.23 billion, reflecting a 7.6% year-over-year increase, aided by 8% revenue growth in the Technology business to $2.18 billion and a 10.4% growth in Service revenue to $292.1 million. Our Financing segment net sales were $49.4 million compared to $52.5 million in the prior year. Gross billings in our Technology business totaled $3.3 billion, 5.8% ahead of fiscal 2023. Consolidated gross profit for the full year grew 6.4% and amounted to $550.8 million. Consolidated gross margin was 24.8%, slightly below the 25% reported in fiscal year 2023 due to the product mix in the Technology business. Gross profit in the Technology business grew 7.2% to $508.5 million, while gross profit in the financing segment was $42.3 million below the $43 million reported in the previous year. Consolidated operating income was $158.3 million compared to $166.2 million as we continued to invest in our customer facing sales force and engineering talent throughout the year, resulting in an 11.7% increase in operating expenses. Our effective tax rate for fiscal 2024 was 28.1% compared to 26.8% for fiscal 2023. Net earnings were $115.8 million or $4.33 per diluted share compared to $119.4 million or $4.48 per diluted share, respectively. Non-GAAP diluted earnings per share was $4.92 compared to $5.02 in the prior year. Adjusted EBITDA was $190.4 million in line with prior year. Our balance sheet remains strong as our cash and cash equivalents totaled $253 million at the end of fiscal 2024, which is a high for ePlus, and which compares favorably to $103.1 million at the end of the prior year. This increase was primarily due to improvements in working capital. Inventories were $139.7 million at the end of fiscal 2024 consistent with recent quarters, we've continued to see improvements in supply chains and product availability, leading to a $78 million sequential decrease in inventories. Compared to the end of fiscal 2023, inventories were down $103.6 million and we believe have now normalized. Inventory turns improved to 23 days compared to 27 days in the prior quarter and 38 days at the end of fiscal 2023. Our cash conversion cycle was 46 days compared to 59 days in the year-ago quarter, reflecting supply chain easing and normalization. As a result, operating cash flow for the full year was $248.4 million compared to $15.4 million of cash used last year. Stockholder's equity was $901.8 million compared with $782.3 million at the end of fiscal 2023. Given our strong cash flow and cash balance, we are pleased to announce that our Board approved a new 1,250,000 share repurchase authorization to begin on May 28, 2024. This replaces our prior authorization, which is set to expire next week. Our strategy of focusing on high growth areas continues to bear fruit as evidenced by growth ahead of our peers in a challenging overall demand environment. Mark will provide our guidance for fiscal 2025, but I want to note, we would expect to see a lesser impact on margins in fiscal 2025 than we saw in the fourth quarter given some quarter specific enterprise sales growth resulting in lower margin product sales mix. With that, I will turn the call back over to Mark. Mark?
Mark Marron: Thank you, Elaine. Despite a challenging industry-wide demand environment, we are pleased with the solid performance we delivered in 2024. We believe ePlus can continue its momentum in fiscal year '25 as we are very focused on providing the strategic IT solutions most in demand by our customers. ePlus is initiating fiscal year 2025 guidance for net sales growth over the prior fiscal year of between 3% and 6% and adjusted EBITDA in the range of $200 million to $215 million. We are focused on driving shareholder value via growth, both organic and through acquisition. We are continually enhancing and broadening our product and service offerings to capture market share, align to market transitions, as well as broaden our relationship with existing customers, and we will continue to seek out expansion opportunities and investments that enhance our positioning in 2025 and beyond. In summary, we are pleased with the progress on our strategic priorities as we continue to successfully expand the business and make important foundational investments to drive growth. Operator., let's open the line for questions. Thank you.
Operator: Ladies and gentlemen. We will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Maggie Nolan with William Blair. Please go ahead.
Maggie Nolan: Hi, Mark. Hi, Elaine.
Mark Marron: Hey, Maggie. How are you?
Maggie Nolan: Good. Thanks. Last quarter you referenced some pushouts from fiscal 3Q into fiscal 4Q that impacted revenue. Did those materialize in the quarter and when you exclude those, how did the fourth quarter compare to your expectations going into the quarter?
Mark Marron: Okay. Hey. Good question, Maggie. So, it's actually a tale of two quarters. So if you think about last quarter, in Q3, we had a volume issue, but we had strong margins. So, our margins were 410 basis points in Q3. In Q4, it was the opposite. We had strong volume where our sales were up 12.7% and gross billings were up 13.8%. So that's some of those deals that moved over. So it's really a timing issue between the quarters. And that's mainly due to a couple of different things. One, some of the size of the deals that we're dealing with now with some of our enterprise customers and some of the enterprise flush, that's kind of tough to predict when we get it out based on the customer's expectations and when they're ready for the product. So it's really kind of a tale of two quarters, if you will. Overall, though, when we looked at the quarter, it's kind of what we expected on net sales, gross margins were a little lower, mainly due to some of our land and expand strategy, where we're in some of these larger accounts at lower margin and then try to build it back up over time, but that's how it played out.
Maggie Nolan: Got it. Thank you. And then, so you mentioned the margins. Obviously, there's variations between the last two quarters of the year. And you said in your prepared remarks an expectation that there would be kind of more normalized levels in fiscal '25. Can you talk through some of the factors that give you confidence in that more normalized level commentary?
Mark Marron: Yeah. Sure, Maggie. So if you look at it, for this quarter, it was mainly our product margins that were down significantly due to some of the larger enterprise deals. Overall, our service margins were up 270 basis points. We also had a gross to net was down 130 basis points. So that's what kind of affected the margins for the quarter. If you look at it for the year, our consolidated gross margins are actually flat. So, in that 25% range. So we expect that to normalize. So, as the inventory has subsided, if you will, we think we're going to get to more normalized or historical levels, if you will, with our gross margins mainly in that 24% to 26% range. And then if you use the 25%, which we've done as an average, which, by the way, I think is industry-leading in our space, that's kind of where we think it is with a potential slight uptick as we move through the year and see more services driven.
Maggie Nolan: Got it. Thanks, Mark.
Mark Marron: Thanks, Maggie. See you soon.
Operator: The next question comes from the line of Matt Sheerin with Stifel. Please go ahead.
Matt Sheerin: Yeah. Thank you. A couple questions for me. Mark, in terms of the revenue outlook for fiscal '25 of roughly 4% top line growth, I know you just came off of a year with some very strong quarters and some weaker quarters. So really not a lot of seasonality. And I know that the March quarter was also better than seasonal, so how should we think about how the cadence of the year plays out in terms of seasonality and how you get to that 4% number?
Mark Marron: Yeah, Matt. I think it's going to be more, as you said, from a seasonality. So Q2 and Q3 will be bigger, just like the historical levels. So, I think that's how it's going to play out. So it'll be a little bit back-ended if you will, but that's kind of how we expect it to play out this year.
Matt Sheerin: So would you expect June then to be like down sequentially after the strong March quarter with those one-off big volume deals that you talked about?
Mark Marron: I would expect it to be in the similar range, Matt. And then I'd expect Q2, which is normally our strongest quarter due to both the state and local business. Cisco is fiscal year-end and a few other things. And then Q3 with year end and then Q4 would traditionally trend down. This year has been different in terms of just when you look at it with the inventory and the timing of deals. The other thing we're starting to see, Matt, based on our size and scale, we're being brought into some bigger deals, which is interesting because they normally take a little bit longer. Originally they're a little bit margin tighter, but then over time, you kind of expand those margins. So, I think you'll see some more normalized revenue and expenses as we move forward.
Matt Sheerin: Okay. And when you talk about land and expand, you're really talking about pricing aggressively to win, basically get a seat at the table, if you will, right. And then you grow the business. Is that what -- and so you're competitive against other competitors, is that what the strategy has been?
Mark Marron: Yeah. That's it, Matt. Exactly. In fact. And that's mainly in the kind of high-end, high-bid market in the enterprise space. What was interesting this year, our customer base actually grew by 300 customers. So, from that end, we're going to continue to be aggressive, try to get into more, I'll say, enterprise-like accounts, and then over time, go back with our full solution set of products and services and try to grow those margins and we've done that for years. So, we've been fairly successful, if you look at our history with our margins. So that would be the intent. This past quarter was a little bit of an aberration, if you will, as it relates to margins.
Matt Sheerin: Got it. Okay. And then your EBITDA guidance for next year implies just modest growth from where you were and below the run rate that you're at, except for last quarter. And -- but you -- but you're also telling us that gross margins will get back to normal. Is that because there's more expenses, more on the operating expense side as you're growing out some of these capabilities?
Mark Marron: Yeah. Very much so, Matt. So, as it relates to adjusted EBITDA, it's actually going to be up 5% to 13% is what we're saying. With our guidance and then OpEx. We've made a decision based on our strategy and growth initiatives, we've made some investments, I'll say, in the services space, because our services have continued to grow and our backlog is growing. We've made some investments as we build out our AI capabilities, which we're hoping over time we'll start to monetize. But it's early innings there and then we've made some investments on the sales side, both from a leadership and from enterprise sales standpoint to go forward. So, based on the 300 new customers and what we believe in, where we fit in the market, we think that'll pay off over time and we'll start to get that operating leverage you'd hope to get.
Matt Sheerin: How many of the active customers do you have -- what's that 300? What is that as a percentage?
Mark Marron: It's about 4,600 -- a little over 4,600 now.
Matt Sheerin: Okay. Great. And just lastly, the inventory work down, which was very impressive, and your cash flow was strong. Does that mean that your backlog is pretty much all worked down at this point? Like there's no elevated backlog and now it's just kind of really visibility is really what the customer demand is looking like?
Mark Marron: Yeah. I would say this is probably the new normal on the inventory. There's still some there, Matt, that due to lead times and a few things -- few other things that are still in play, but I think this is kind of the new normal going forward and it be almost business as usual. You know what -- the one that's interesting, that's really in play here is AI. There's a lot of interest from customers. I actually believe it's delayed some decisions from our customers as they try to analyze and decide what they want to do with AI, try to figure out the infrastructure that they need in place to run these AI models, if you will.
Matt Sheerin: Yeah.
Mark Marron: I think it's actually delayed some decisions, but yeah, I think as it relates to inventory. And then the other thing, you kind of touched on it, which we're kind of, we're feeling good because it gives us a lot of flexibility. Our cash is over $250 million or over a quarter billion. So from that end, it gives us flexibility from an M&A. We increased our stock buyback. So, there are some things that we might be able to do as we move throughout the year.
Matt Sheerin: Okay. And just lastly, just since you brought up AI, that AI Ignite program that you're talking about, is that really more just sort of in the consultative phase where, or are you actually converting processes and actually doing AI implementations for customers, or is that just still in the early stages?
Mark Marron: Early stages, Matt, what's interesting -- we actually did an envisioning session with our team for us internally, and it was eye opening, if you will, with customers are going to have to think through. So as we walk them through these envisioning sessions and workshops and data strategy sessions, what we're seeing is a lot of people have to figure out, they've got data all over the place, they've got to put it into a repository or data lake. They have to make sure that they have good governance in place. And then they really, the big thing that came out of our meeting is they have to decide what use case, meaning where can they monetize it best, because there's so many. We came out with seven different areas we think we could use AI for internally at ePlus. So it's early innings. You're not seeing any of the infrastructure sales per se just yet, but it's starting to build.
Matt Sheerin: Okay. All right. Thanks so much.
Mark Marron: No problem. Take care, Matt.
Operator: Your next question comes from the line of Greg Burns with Sidoti & Company. Please go ahead.
Greg Burns: Good afternoon. The 300 customers this year, how does that compare to other years? How many customers do you typically add in a year?
Mark Marron: I don't know the number, Greg, but it's high. I know when we saw it, I was pleasantly surprised when we went through and did the analysis year-over-year. If I had a guess in the 150 range, it's almost double what we normally did. But I truly don't have the numbers at hand right now.
Greg Burns: Okay. And some of the larger networking OEMs like Cisco have talked about this bottleneck of product that's sitting at customers waiting to get deployed. It's impacted their order patterns. It seems like you've been relatively unscathed compared to maybe what some of the other vendors -- the vendors that you have been talking about. Can you just discuss why that is, why you think you've been able to outperform the market so significantly? And maybe your view going forward on that dynamic in the market kind of getting cleaned up?
Mark Marron: Yeah. Great question, Greg, and a hard one, quite honestly. I think some of it's due to backlog. Second is quite honestly, I think it's an interesting market if you think about the HP (NYSE:HPQ) acquisition of Juniper and how that's going to kind of throw that in flux a little bit with some of the solutions they have versus Cisco. But we've -- our background traditionally, as you know, Cisco has traditionally been almost 50% of our business. This past quarter, I think it was like 39%. So we work pretty closely with Cisco. And if you think about AI, a lot of what's going to have to happen with those models is Network modernization, so that the pipes are wide enough for people to do all the analysis they need to do with AI. So, I think we've stayed ahead of that and we've stayed close with Cisco on the other network vendors and the team has done a really nice job of getting that -- getting in front of customers with the Solutions and Services we could provide. And some of it was just due to the backlog that we had in inventory.
Greg Burns: Okay. Thank you.
Mark Marron: Anything else, Greg, or...
Greg Burns: No, that's all.
Mark Marron: Okay. All right. I don't believe there's any more questions. So from that end, I want to thank everybody for taking the time to listen in today, and we look forward to seeing you or hearing from you at our quarter one quarterly earnings call. Thank you and take care.
Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
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