Welcome to the CDW First Quarter 2022 Earnings Call. At this time all participants are in a listen-only mode. After the speakers presentation there will be a question and answer session. Please be advised that today’s conference is being recorded. I would now like to hand over the conference to your speaker today Steven O’Brien who is VP, Investor Relations. Thank you and please go ahead. Steven O’Brien: Thank you, Daniel. Good morning, everyone. Joining me today to review our first quarter results are Chris Leahy, our President and Chief Executive Officer, and Al Miralles, our Chief Financial Officer. Our first quarter earnings release was distributed this morning and is available on our website, investor.cdw.com, along with supplemental slides that you can use to follow along with this call. I’d like to remind you that certain comments made in this presentation are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Those statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. Additional information concerning these risks and uncertainties is contained in the earnings release and the Form 8-K we furnished to the SEC today and in company’s other filings with the SEC. CDW assumes no obligation to update the information presented during this webcast. Our presentation also includes certain non-GAAP financial measures, including non-GAAP operating income, non-GAAP operating income margin, non-GAAP net income, and non-GAAP earnings per share. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules. You’ll find reconciliation charts in the slides for today’s webcast and in our earnings release and Form 8-K we furnished to the SEC today. Please note that our financial results today include the results from our acquisition of Sirius Computer Solutions, which closed on December 1, 2021. All references to growth rates on dollar amount changes in our remarks today are versus the comparable period in 2020 unless otherwise indicated. References to growth rates for hardware, software, and services today represent US net sales only and include Sirius. They do not include results from CDW UK or Canada. References to growth rates for specific products and solutions including cloud and security today represent U.S. net sales only and exclude Sirius. The historic combined information of CDW and Sirius discussed herein is for illustrative purposes only and is not necessarily indicative of results that would have been achieved had the acquisition occurred at the beginning of the period presented. Replay of this webcast will be posted to our website later today. I also want to remind you that this conference call is property of CDW and may not be recorded or rebroadcast without specific written permission from the company. With that, let me turn the call over to Chris.

Thank you, Steve. Good morning, everyone. I will begin today’s call with a brief overview of our results, strategic progress and outlook and Al will run through the financials and our capital allocation priorities. And then we’ll move right to your questions. We had an outstanding start to the year. The team’s continued to execute well in a challenging supply environment and delivered exceptional top line growth and profitability. For the first quarter net sales were $5.9 billion, 23% higher than last year. Non-GAAP operating income was $462 million up 26% and non-GAAP net income per share was $2.20 up 26% on a reported basis. These exceptional results reflect our ability to address customer priorities with solutions across the full spectrum of IT and the inclusion of Sirius. Customers continue to evolve as we move ahead into the new normal. Digital transformation, agility and security remained top concerns with return to office driving collaboration, networking and endpoint solutions. Customers want to manage costs while meeting or exceeding coworker and customer service level requirements. At the same time, customers across our diverse and markets are seeking ways to supplement technology resources in today’s war for talent environment. Our ability to meet all these needs led to a broad based and balanced performance. There were three drivers of our performance during the quarter. The first driver with our broad and diverse portfolio of customer end markets, as you know we have five U.S. sales channels; corporate small business, health care, government and education. Each of these channels is a meaningful business on its own, with 2021 annual sales ranging from $1.8 billion to over $6 billion. Within each channel teams are further segmented to focus on customer end markets, including geography and verticals. We also have our UK and Canadian operations, which…

Thank you, Chris. And good morning, everyone. I’ll start my prepared remarks with more detail on the first quarter, move to capital allocation priorities and finish up with their 2022 outlook. Turning to our first quarter P&L on slide 8 consolidated net sales are $5.9 billion up 23% on a reported and average daily sales basis in constant currency. On an average daily sales basis sequential sales increased 7.4% versus the fourth quarter which is well above historical average sequential decline of 5%. This reflected two primary factors; first demand for return to work and remote enablement solutions remain strong and drove sequential growth in our commercial channels, and international. As Chris mentioned, corporate and small business had broad based and balanced growth across both transactions and solutions. Second, Q1 reported results reflected three months of contribution from Sirius versus one month in Q4. Notwithstanding that Sirius is first quarter has historically been the lowest quarter of absolute sales and gross profit dollars for the business. On the supply side, our overall backlog increased in Q1 at a similar level to the fourth quarter remain elevated year-over-year in both transactional and solution categories. We continue to make strategic investments and inventory to support our customers through this constrained supply environment and the team once again did a great job leveraging CDW’s competitive advantage to ensure strong returns on working capital. Gross profit for the quarter was $1.1 million a year-over-year increase of 38.8%. Netted down revenues grew faster than the underlying business represented nearly 31% of total gross profit more than three points over the last year. A higher mix of net service contract revenue, primarily within Software as a Service, favorable product mix and rate and increase net sales and margin on professional services combined to deliver a record…

Thank you. [Operator Instructions] The first question we will take is from Matthew Sheerin from Stifel. Matt your line is now open. Please go ahead with your question.

Yes, thank you and good morning. My first question is just regarding the strength you’re seeing across corporate and SMB customers in terms of the remote enablement as it seems like there is a second wave of work from home trends and can you elaborate on that and also, just in terms of the back to office trends. How long do you see that playing out and due to the backlog and the supply constraints do you see this playing out through the year?

Yes. Good morning Matt. It’s Chris. Yes what we are seeing is customers across our commercial segments, kind of as we mentioned last time getting on with it meaning living within the current environment and making decisions about their back to work strategy, which means they’re bolstering their capabilities in offices. They are bolstering their capability in home environments, because they’re really focused on their co-workers ability to be productive, and deliver seamlessly moving from remote to in office. And as we expected, we continue to see very strong endpoint solution performance this quarter. And we’re also seeing what usually, typically follows that and what was delayed a bit over the last couple of years which is an investment in the hybrid infrastructure to support all the needs of the coworkers and the expectations both at the workload and application level and everything required to create a stronger and more robust infrastructure for those devices. So we will continue to see those two dynamics play out through the course of the year would be our views. It’s different in different segments, but in the current commercial segment, for sure, we’ll continue to see that.

Okay, thank you for that. And the education market seems to be holding up better than most expect. You talked about some of the dynamics there, higher ed spending, offset by weakness in K through 12. Although it seems like that next round of or the extended funding period at least helps that market near term. Should we expect a fall off there? You’re following that funding period, or just general expectations for the K through 12 market?

Yes, Matt so I think about it, the extension in the new, the little bit of an added round of funding for ECF just is timing. So it gave the schools a little bit of a breather to reflect on their planning and not be rushed to buy. So that’s just an extension. So we’ll see that play out over the next 18 months. At the same time schools are working very hard on ensuring that they don’t lose ground in what they’re trying to do which is teach students and learn. And so when you think about the dynamics of the classroom and the infrastructure needs to support the classroom including audio, visual, interactive monitors, and kind of the new generation of the classroom, we’re starting to already help our customers with that. So look, we look at this as a kind of steady ed long term growth opportunity for CDW at every time there’s been an inflection point in K through 12, in the classroom learning space, CDW has been at the absolute tip of the spear and helping customers get there. And we’ve seen growth as a result.

Okay, great. Thank you.

Thank you very much. Our next question comes from Erik Woodring from Morgan Stanley. Erik, your line is now open, please proceed with your question.

Great, thank you very much. Good morning, guys. Congrats on the results. Maybe as we sit here 90 days, since you last reported or roughly 90 days, maybe can you just help us understand where some of the supply challenges you’ve been facing? How have you either worsened or where some have improved? And then I have a follow up from there?

Yes, I guess, what word would I use? I think I’d say kind of unchanged. Meaning we’re not seeing a lot of change in the challenges that we’re all facing. When we think about the supply chain environment, I’d say two things. Number one, it’s an opportunity. But it’s also frustrating. It’s an opportunity for CDW because we know what’s happening, we have more visibility with our partners, I think, than anybody. When you think about our competitive advantages, our ability to take on inventory to support our customers with our balance sheet, having the distribution logistics capabilities, that’s put us in a great position to manage the supply chain issues, I think, again, better than anybody in the market. But it’s frustrating for customers. And we’re helping customers get through that, because we can help them choose alternatives, which they’re a little more open minded now to which we have a pretty good path to get to. But the short answer is supply chain is what it is. And it’s not getting better. It’s not getting worse, some pockets are getting better, some pockets are getting more difficult. But net-net, we’re going to be living with this through 2022 if not into 2023. And again, it’s a matter of who manages it the best and I think we’re doing a really good job of that.

Great, super helpful and then maybe my follow up would just be you’d beat the first quarter by a healthy amount, call it 280 million, 290 million, you raise the full year guide by 400 million. And then your guide implies 2Q needs to come up by let’s call it $115 million. So most of the raise comes from 1Q and 2Q, is that just you guys taking the view here that perhaps visibility into the back half might not be as clear as perhaps any other year given the supply challenges and what’s going on the market? Or is there anything else that we should be thinking about just as we think about the second half mixing netted down revenue those types of factors?

Yes, no, Erik, it’s a fair question. Look, its CDW’s typical approach, which is we’ll call it when we’re ready to call it and when we think we have a good visibility. And it’s just too early to call that in the back half of the year right now. But that said outstanding start to the year as you know, and we see absolutely excellent momentum going into Q2 and expect what a robust 20% profit growth in the second half of 2022. So we look at this and see a really aggressive but achievable goal in front of us. So we’re feeling very optimistic about the year and what we’ll call the back half of the year when we get a little closer in the back half of the year.

Great. Thank you so much. Congrats again.

Thanks very much. I appreciate it.

Thank you very much. Our next question is from Samik Chatterjee from J.P. Morgan. Samik your line is now open. Please go ahead.

Hi, yes, this is Joe on for Samik Chatterjee. So my first question is a follow up on the full year guide. Question prior can we dissect that a little bit particularly as it relates to the rate outlook for the underlying it market and CDW has outperformance to it? What are you seeing as the main drivers or contributors to the rate outlook for both? And then I guess how much of that rate outlook is being driven by recent acquisitions like Sirius tracking better than expected, as opposed to kind of the traditional CDW business? And then I have a follow up.

Yes, so let me start with the last past part first, which is our premium to market. And we when we look at the areas that we’ve outperformed in Q1 let’s take notebook overall solutions. Several areas where we just our view is look, we’re really outperforming the market, it’s pretty clear. So that goes into the premium. In terms of whether or not Sirius is contributing, here’s how I think about it on a combined basis we’re responding to customer needs in the current environment and seeing healthy business across both the underlying and Sirius segments. In terms of the underlying IT industry, yes, we brought that up, because we’re starting to feel real momentum in the business, the demand is there, the writings there. So it just feels to us, like the market is growing a little faster than we would have thought at the beginning of the year. So the IT market generally is kind of the written in demand that we’re seeing. The premium is the categories that we’re delivering in and looking at what we triangulate the growth rates to be in the market, we just think we’re outperforming by a wide margin.

Got it. And then just quickly for my follow up, can you help me understand what you guys are seeing from a pricing perspective versus 90 days goes, and whether that’s translating into a tailwind or headwind for CDW?

Yes we are, look, pricing continues to be fairly dynamic and fluid, I guess I’d say. And we are continuing to see pricing increases, given what’s happening out in the macro environment that said we are a cost plus model, as you know, and we are not seeing constraints in IT budgets, our customers are still buying, they’re not cutting it budgets because of pricing. And as I think I mentioned our prepared remarks, we’re seeing some of the growth kind of split between unit increases and ASP increases. So they’re both contributing to growth across the board, really.

Two things I would just add in and I am more, one thing we see in the supply environment is more creativity and agility, both ourselves and with our partners in terms of where do we pivot to different products, where do we pivot to different solutions and finding customers are accommodating that working with us to try to get to their solutions sooner than later. So that certainly had a bit of an impact from a mix and rate perspective. So just I would note that.

Got it. Thanks. Appreciate the colors.

Thank you very much. Our next question comes from Ruplu Bhattacharya from Bank of America. Ruplu your line is now open. Please go ahead.

Thank you for taking my questions and congrats on the strong quarter. Chris, for my first question, I’d like to add something which is a high level question. Some investors are concerned that we may be going into a recession in the U.S. because the rates are going up or we might see a slowdown in Europe because of the war there. So can you maybe talk to us about how CDW as a company is different from what it was in the 08, 09 timeframe? And do you think the company is better prepared now to face a downturn and in the same way, and you raise your guidance for the full year. Can you talk about what are some of the things that are giving you confidence to do that, given all of the macro and supply chain headwinds that are continuing? Thanks.

Yes, good morning Ruplu and thanks for the comment. Let me start with the second part first with raising our, with feeding our confidence is what we’re seeing with our customers. It’s the demand. It’s the momentum. It’s the criticality of IT in every walk of every industry to drive competitive advantage, experience, etc. So we just see technology as absolutely central. And really it’s an investment in innovation. It’s no longer viewed as a cost to the business as much as an asset of innovation. And we’re seeing that and feel very confident that that will continue, possibly at the expense of some other investments that organizations make. But technology is top of the list. As far as the macro environment, what might happen here’s what I would tell you. First of all, we have our broad and deep portfolio is the best it’s ever been at any point in time. Secondly, our flexible business model has allowed us, in any challenging time has allowed us to outperform the market and deliver results. And if you look actually at the Great Recession, we did outperform the market. And if you think about the last three years, significant delivery of great performance versus the market. So and in those cases, we also emerge stronger. So you’ve got our portfolio which is better than it’s ever been. You’ve got our flexible business model which has a track record of working and having us deliver performance in downtime. And when you think about our value propositions the third thing, I would say the value proposition for our customers and our partners becomes even more important to them. They become even more reliant on our stability, on our scale on all the things that we deliver. And at the end of the day, that allows us to be opportunistic and helping them and gaining share in the market. So I point you to our track record and our model and our portfolio and our value proposition which has over 35 years, reflected the fact that CDW is a different company performs in tough times and in good times. And typically in tough times, we come out even stronger than when we enter them.

Okay, thanks for all the details there Chris. Maybe for my follow up. If you can talk a little bit about the government segment. It was good to see revenues grow 5% year-on-year after several you’ve been facing tough comps and several quarters of year-on declines. Last year, you talked about some projects that were delayed. You think those come back in the first half and you think government revenues can continue to grow year-on-year over the next couple of quarters? Thank you.

Yes. No problem on the government side, the federal side we’ve been saying now for a couple of quarters that we expect growth to see growth in the second half of the year and that expectation has not changed. So the projects, we’ve talked about the green shoots we’ve talked about, we expect to be taking hold in the second half of this year as expected. As far as state and local that’s playing out as we thought it would as well, if you remember, the funding was coming in a multiyear fashion. The federal funding and that was extending customer’s buying patterns a bit. And we’ve been really helping them on the planning phase of spending that those that funding federal funding and we’re starting to see that come to fruition. And you see that in the results this quarter which is those projects starting to flow out now which is a very positive thing and reflective of what we expected to happen.

Congrats again on the quarter and on the strong guide. Thank you.

Our next question comes from Adam Tindle from Raymond James. Adam your line is now open. Please go ahead with your question.

Okay, thanks. Good morning. I thought I would just maybe start with a question on margins. If I remember right, when you close the Sirius acquisition, you talked about it adding just over 100 basis points to gross margin and about 20 basis points to operating margin based on 2020 numbers with no synergy assumption. We look at this quarter gross margin was up over 200 basis points. So double of that. But operating margin still up just about 20 basis points year-over-year. Maybe you could give it some color on the better mix on gross margin, the growth metrics being healthy overall, but seeing minimal leverage on the operating line. And I imagine you’re going to talk about investments. So more specifics on the nature of those investments and expectation for return would be helpful? Thank you.

Sure, Adam and good morning. This is Al. So on gross margins for the quarter I would comment on two things certainly you had the impact from Sirius for the quarter and I would say that benefit was as expected. We had a couple of the things that benefited our gross margin for the quarter. Number one stronger netted down revenues actually grew two times the level of our sales, product margin mix and rate were strong. And so they were important components on the gross margin front. So down to your NGOI margin question. So yes, NGOI margin 20 basis points better than prior year and basis points better than prior quarter certainly had the benefit of Sirius. Just the one call out I would give you in terms of the accrued and benefits there for Sirius is that, given the seasonality of their business, Q1 is typically lower on the scale of the full year. And therefore some of the fixed cost leverage we get from Sirius is more on the latter half of the year. So that has a bit of a dilute effect for the quarter. But still we were able to turn in really strong 7.8 for the quarter.

Understood and maybe as a follow up for Chris on backlog. You’ve previously talked about feathering in over multiple quarters versus a big bang and one quarter. Just wondering if you could maybe revisit this since we saw such a strong quarter here on growth metrics. I think you did say remaining orders built in the quarter. So I just wanted to clarify that. And certainly any color on the size and composition of backlog today versus 90 days ago would be super helpful. Thank you.

Yes, morning, Adam. I’d say look in terms of backlog building it was in line with what we saw in Q4. So that would give you kind of characterizes the size. In terms of what we’re seeing is a feathering out. So I think I said we were seeing pockets of improvement yet new pockets of pressure. So we’ve seen notebooks free up a little bit. Chrome books free up a little bit over the course of time, but solutions, products really more constrained now than they were before in particular Netcom. And I’m sure you’re hearing that a lot. So look, we’re in it. We still expect it feathering out. We’re not seeing anything in our results, frankly, or in our conversations with partners that suggest anything than the way we’ve already described it to you.

Understood, thank you.

Thank you very much. Our next question comes from Amit Daryanani from Evercore ISI. Amit your line is now open. Please ask your question.

Thanks. It’s Amit Daryanani, just to be clear. Chris, I’m hoping you could talk about the increased complexity of IT operation that especially with return to work. And this seems to be a sustained and acute labor shortage, especially in the skilled worker side. I’m wondering if that combination of those two practices is resulting in fewer than seen that can stand expand and you suddenly see that you’re engaging with more mid and even larger enterprises switching typically would in your industry as the AI using this enabled the PAM expansion? And what could that do to your growth rate is your forward?

Yes, good morning Amit. In terms of the tech now, I want to make sure I could having trouble hearing you a little bit. But you were asking about PAM expansion due to servicing enterprise size customers and in particular technology talent supply shortages. Did I get that right?

Yes. Essentially, yes. Given the labor shortages, IT is getting more complex. Are you getting pulled in by bigger enterprises that you typically wouldn’t and does that span your time? Does that alter your growth rate?

Yes, okay. I got. Fair question. Yes. Well, when you look at the couple of things you look at Sirius’s customer segment. And it’s heavily enterprise oriented. So yes, we are focusing on the enterprise. If you look at CDW’s customers well, we have typically said our sweet spot is customers up to 5000 end users, we have a very large number of enterprise customers that we service and that service extremely well in the past five years, given the increase in complexity. So yes, we are in the enterprise space. We’re continuing to grow in the enterprise space. We have not done the calculation regarding the TAM. But we certainly expect to be able to continue to be successful in that space now more than ever. It used to be you think about enterprise and one of the reasons they might not have turned to CDW was because they would have and could afford the technology talent within their organization to handle everything that they needed. But now given the speed and complexity, even the larger organizations can’t keep up with the changing nature of technology and our ability to supplement and address that problem is really become a very interesting value proposition for those organizations. And boy, did we see it play out in the during the pandemic.

Thank you. And then Al you talked about gross margins and some of the levers that lead to better performance in March. Can you start with the durability of these gross margins? Because I think you talked about mix getting better in the back of the year with more cloud and security. So could you run in the mid 18% to 19% gross margins for the remainder of the year, or what are the puts and takes moving forward?

Sure Amit. First, let’s just start with our expectation or outlook of low 8% on NGOI margin. So that is what we guide on in that regard. But just back to your comment, your question on gross margin. Look, if we look at our strategy and the execution, I think that that has played out over time, in terms of expansion of our gross margin. I think this quarter is a great example of that really bring the power, all of that; strong net it down revenues, product margin was a factor, Sirius coming online. So a lot of those variables are playing out. We would anticipate that that would continue and particularly talked about the second half, we expect higher level of netted down revenues which certainly is the theme. So if you get back to that NGOI margin, we believe that execution of the strategy and follow through on that will deliver the outcomes we’re expecting.

Our next question comes from Jim Suva from Citigroup. Jim, your line is now open. Please go ahead with your question.

Thank you. And congratulations, Chris earlier in the call, you had mentioned that the supply situation largely hasn’t changed from say 90 days ago when the investors last spoke to you on such a call. I wanted to ask though, if you dissect the end markets though, or I’m sorry, not end markets, but end products, whether it be PCs or servers or computer devices. Have you seen some shifts there? Because there’s been indications of things like Chrome books seeing actually a big deterioration, while maybe others seen higher demand? So I’m wondering if you take it to the device level? Have you seen some material puts and takes and shifts?

Yes Jim here is what I would say. I would characterize the supply environment as pockets of improvement and pockets of pressure. The pockets of improvement over the past several months has been in the notebook and Chrome book. The transactional side of our business. And the pockets of pressure have really showed up in the solution side. So we did see a shift, if you will. So we saw some feathering out on the client devices. And but we’ve seen by backlog grow in the solution side of the business. And it’s complex because the solution side what happens is if you’re using an integrated solution, if you’re missing one part of that, you can’t get the software out if you don’t have the hardware. So it gets pretty complex. So that’s what we’re seeing. And I think I mentioned also netcom was a particular networking is a particular area, a pressure area, I guess I would say within the solutions categories.

Okay, that makes a lot of sense. And then as my follow up probably more appropriate for Al. Al when we think about cash flow and uses am I correct to kind of 2022 should be kind of a debt pay down here? Or is there sufficient cash flow, because component costs are going higher and high growth, that inventory will need to be cash flow consumed to support the inventory, or you guys looking at actually strategically adding in more software services, security skill sets to your portfolio. Thank you.

Sure. Thanks, Jim. So first, just on the quarter free cash flow, we had a strong free cash flow quarter and above our rule of thumb. You’ll recall prior quarter we were somewhat below that rule of thumb. And so I would just note to you, we’re seeing some variability in environment. And some of that Jim is a function of us making those investments and really leveraging our working capital. For the full year we still expect to be within our rule of thumb for free cash flow, albeit there may be some variability quarter-to-quarter. All of that intended really to go to number one, our capital priority of dividend payment and then two debt repayment. And I will note that for the quarter, we had pretty meaningful repayment of our debt. And we got our net leverage down from 3.4 to 3.1. And our expectation is we’ll continue to make that a priority. And our goal is to get back in our net leverage range for the full year by the end of the year.

Thank you so much for the details Chris and Al.

Our next question comes from Keith Housum from Northcoast Research. Keith your line is now open. Please go ahead.

Good morning, guys. Al hopefully, we’ll have more color on the 23% growth, I understand was a good, very good quarter for demand. But can you provide a bit more breakdown between the three different elements, which I think I’m hearing is this Sirius growth in the volume and growth in price increases. Can you provide a context about the contributions of each?

Yes. Sure, Keith. Happy to weigh in, Chris may have something on the back end of that. So 23% is the all in as we mentioned, prior quarter focuses on integrating the companies and just the nature of integrating our sales. We’re looking at it on combined basis, so that 23% is inclusive of Sirius. And I would just note, notwithstanding my comment about seasonality of Sirius business is operating as expected, and things are moving a pace on the integration. Otherwise, I would just point back to our comments about in channels and contribution as well as product portfolio. And I’d say, for the quarter, we fired on all cylinders, and really contributions came from many of the key spots in the investment areas that we’ve been focused on.

Hi Keith, and its Chris just to add on to what Al said I think he really coined it with hitting on all cylinders. So the business is hitting on all cylinders, the customer end markets, the portfolio and the integration. I know you have to question about integration. I guess, what I would say is number one, serious, the integration is going outstanding. I could not be more pleased with the pace and with the results. And also with the execution in the marketplace. As we said last quarter, we’re really, really focused on integrating the businesses and bringing them together and going to market as one CDW and not really parsing out dollars and assigning creditors, as we’d like to say. So I would just tell you that it’s going great. Our focus, this first quarter has been all about our customers and our partners and our coworkers in particular, and creating the roadmaps and the support and the tools they need to be successful. And at the end of the day I think we said a couple quarters ago, we expect one plus one equal more than two, and there’s absolutely nothing that is making us doubt that. We’re very excited about what we’re bringing to the market, and in particular excited about how our customers are responding to the value add in the combined entity.

Okay. I appreciate that. It is a follow up to that in terms of like the turnover of the coworkers and I guess the inflationary environment. Can you guys provide a little bit of color in terms of how is the turnover of the coworker right now and in terms of compared to prior years? And then in terms of what you guys are forced to do in terms of salary adjustments perhaps the impact that will have on operating expenses?

Yes. Keith a great question. And we’re facing the same tight labor market that everybody does. The good news is we’ve been an employer of choice for a very long time. And we’ve focused on investing in our coworkers since our founding, and so the unique environment, the unique culture is a real draw for coworkers, the ability to grow one’s career, the interesting work we do, that all is important, as important as compensation to coworkers staying with CDW. We’ve seen some tick up a little bit of a hiccup in attrition in certain pockets of the CDW, but nothing that I would say is kind of worth noting. We’re working harder to bring in the talent. It takes a little longer to get new talent in. But we’re, of course very focused on keeping our talent and that potential for attrition. In terms of the costs and adjustments to our compensation. Look, again, we think about total rewards to coworkers and that includes the work. the people, the benefits, everything combined, and not just the compensation, per se. So we haven’t had to make major adjustments. And then don’t forget that the largest section of our organization is variable comp. And so it’s all about driving growth and the more growth they drive the more they make, and as you can see from our results, we should have a pretty happy team.

Got it. Thanks.

Thank you very much. We have no further questions. [Operator Instructions] Yes. And there’s no further question. So I’d like to hand back to Chris, the CEO for closing remarks.

Thank you, Daniel. I appreciate it and appreciate your time today. I just want to emphasize that CDW has never been more well positioned to support our customers in a fast paced and changing technology environment. We’re very excited about the future. So I want to close by recognizing the incredible dedication and hard work of our more than 14,000 coworkers around the globe. It is their ongoing dedication to serving our customers, which is key and will continue to be key to profitably outperforming the IT market going forward. Thank you to our customers for the privilege and opportunity to help you achieve your goals. And thank you to those listening for the time and continued interest in CDW. Al and I look forward to talking to you all next quarter. Thank you.

Thank you. You may now disconnect your lines.