Hello, everybody, and welcome to CDW Third Quarter 2023 Earnings Call. My name is Sam, and I'll be coordinating your call. [Operator Instructions] I'll now hand you over to your host Steve O'Brien with CDW, Investor Relations to begin. So, Steve, over to you.

Thank you, Sam. Good morning, everyone. Joining me today to review our third quarter 2023 results are Chris Leahy, our Chair and Chief Executive Officer; and Al Miralles, our Chief Financial Officer. Our third quarter earnings release was distributed this morning and is available on our website, investor.cdw.com, along with the supplemental slides that you can use to follow along during the 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 Form 8-K we furnished to the SEC today and in the 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. Please note, all references to growth rates or dollar amount changes in our remarks today are versus the comparable period in 2022 unless otherwise indicated. Replay of this webcast will be posted to our website later today. I also want to remind you that, this conference call is the 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'll begin today's call with a brief overview of our performance, strategic progress and view for the balance of the year. Al will provide additional details on our results, our capital allocation priorities and our outlook. We'll move quickly through our prepared remarks to ensure we have plenty of time for questions. The team continued to execute extremely well under persistently challenged conditions. Commercial markets remained cautious and conditions in international markets worsened, public markets held firm. For the quarter, the team delivered net sales of $5.6 billion, 8% lower than last year, record non-GAAP operating income of $556 million, up 1% year-over-year. And record non-GAAP net income per share of $2.72, up 4% year-over-year. Record profitability that underscores the power of our strategy when underpinned by our resilient business model and financial rigor. Profitability driven by relentless execution and profitability that is a clear demonstration of the value we deliver to our customers. Customers maintain their laser focus on mission-critical priorities and optimizing costs and once again, our deep and broad portfolio enabled the team to pivot to solutions that address our customers' priorities. Solutions that provide operating efficiency and expense elasticity like burstable performance in modern, hybrid and multi-cloud environments or solutions that are usage-based like SaaS and private cloud. Solutions, we are well-positioned to deliver. In today's environment, where customers are closely scrutinizing their IT spend. Our value as a trusted adviser is greater than ever before, an adviser who helps customers cut through complexity and evaluate options. An adviser, who designs, deploys, integrates and many times manages the solution. Capabilities made possible by the investments we have made in our three-part strategy for growth. Investments that enable us to serve customers across the full stack and full life cycle. Investments…

Thank you, Chris, and good morning, everyone. I'll start my prepared remarks with detail on the third quarter performance, move to capital allocation priorities and then finish up with our 2023 outlook. This quarter, our continued execution and financial discipline delivered three notable records: record gross margin, record operating margin and record earnings per share on a diluted basis. We achieved these records on consolidated net sales of $5.6 billion, which were 9.4% in 2022 on a reported basis and down 8% on an average daily sales basis. Third quarter net sales performance reflected both the impact of uneven market conditions and our continued success providing cloud and SaaS-based solutions that drive meaningful customer spend. On a sequential basis, third quarter net sales increased 1.6% on an average daily sales basis, slightly lower than our outlook, reflecting a higher-than-anticipated mix in the cloud and SaaS-based solutions that are netted down, in our top line results as well as economic conditions that adversely impacted our international business. Gross profit was $1.2 billion, essentially flat versus prior year as a record gross margin, which increased 200 basis points year-over-year, offset the impact of lower net sales. Our gross margin of 21.8% was driven by two factors. First, the impact of higher mix in the complex solutions, which have higher product margins; second, a higher mix into netted down revenues, which while dampening net sales growth also enhanced gross profit margin. These cloud and SaaS-based revenue streams once again outpaced net sales growth. For this quarter, this category represented a record 32.6% and our gross profit compared 31% in a prior year third quarter. While we expect this mix shift to continue to be an important durable trend within our business, eventually, we anticipate a greater mix back in transactional products, which will…

Thank you. [Operator Instructions] Our first question today comes from Samik Chatterjee from JPMorgan. Samik, your line is now open. Please go ahead.

Hi, thank you and thanks for taking my question. I'll just have two quick ones, and I'll ask both together, if that's okay. Chris, I think a broad investor concern here has been that most of the resilience we've seen in total spending from customers has been held by the public sector. And beyond that, when you look at the broader customers beyond the public sector, there hasn't been as much momentum. And in fact, momentum in spending is probably deteriorating on the commercial side. Can you dive into what you're seeing from a pipeline perspective going just beyond the public sector? And is there sustainability of demand from the commercial accounts. And for my second one, I mean, obviously, we're getting close to the end of the year here and maybe any insights you have into how you're thinking about next year spending. We haven't seen two consecutive years of significant declines in a while in enterprise spending. So any thoughts if we are at least looking at a year where you should be expecting higher spending from a lower level base, or are we looking for another year of declines from customers? Thank you.

Okay. Good morning, Mr. Samik. Let me get to the first question first on the commercial side. Look, I'll just say again that the environment this year, all year, frankly, has been cautious. It's been uneven -- has been challenging. All that said, I would say one thing that has held true is investments in technology continue to be a priority for all of our customers. What that's looked like in terms of their spending has been pretty consistent throughout the year as well. Commercial customers have remained focused on cost optimization throughout the year on operating efficiency, on experience, both employee and customer experience. And they have been more focused on consumption based and ratable solutions like cloud, much more hesitant to make significant upfront capital investments and very much focused on managing their costs throughout the year, given the fact that we continue to not have the clarity, I'd say, in the business environment that would give them the confidence to invest more heavily. Now remember, what we're seeing from where our customers are investing and how they're investing across cloud, security in some of these areas that I call mission-critical has been very strong. Clouds up double digits, securities up double digits, software is up significantly. And this is the customer reflecting the need for technology to drive their missions forward. In terms of the real impact to commercial, I would look at hardware and in particular clients. We saw some budgets loosening up a little bit in the second quarter, and we anticipated that, that would lead to a modest recovery, I'd say, in the back half of the year in hardware, in particular, in the client device. That's not proved to be true. Our customers in -- across corporate and small business are not seeing…

Thank you. Our next question comes from Erik Woodring from Morgan Stanley. Erik, your line is now open. Please go ahead.

Awesome. Thank you very much for taking my questions. I have two as well. Chris, maybe can we just start out. Can you just give us a bit more detail on linearity in the quarter? And specifically how the trends progressed from July through September and into October and how that has influenced your updated expectations for the full year? And then I have a follow-up. Thank you.

Yes, sure, Erik. Here's -- I'd just say, it was pretty stable throughout the whole quarter. You'll remember, in Q2, we talked about an uptick as we went through the quarter, and that gave us some level of confidence that there might be some more clarity in the business climate. In Q3, we just kind of saw the same level of activity across the three months.

Okay. Super. Thank you very much for that, Chris. And then, Al, I just wanted to dig into your gross margin comments a bit. We've heard for several quarters now about a mix shift to these more complex solutions that are obviously higher margin, when we eventually see a mix shift towards more transactional sales, as you've kind of cautioned us as we look forward. Do you expect that this will drive a mix away from these complex solutions? Or can kind of both of these trends coexist together because I think it does have an important influence on what -- how we think about gross margins in the future. So if you could just kind of help us understand if this is a zero-sum game or if you can see strong transactional alongside strength in complex solutions and what that would do for gross margins, that would be helpful. Thank you

Yeah. Thanks, and good morning, Erik. I think they definitely can coexist. I think what we've seen in the environment Erik, it's essentially, I'll say, commercial customers kind of fixing on their spend and choosing to weight that towards more of these netted down revenue streams, if you will and holding back on some of these other spend items in IT hardware and particularly in clients. But our expectation and our expectation was that with less uncertainty in the economic environment, we would see an incremental pickup on the hardware side, in particular clients. And so the expectation would be that the durable trend of our netted down revenues would persist and likely outpace net sales, but we also would see pickup in some other categories. So I do believe that, that would co-exist, we're not seeing in the current environment in a more cautious environment, but that's what hopefully the future will hold.

Our next question comes from David Vogt of UBS. David, your line is now open. Please go ahead.

Great. Thanks guys for taking my question. So two, if I may. So can you maybe just touch on the demand signals that you're seeing out there, a little bit more robustly in terms of maybe what you're hearing from customers versus the backlog signals that you're hearing? How much of the weakness is macro related, do you think, versus some continued normalization of backlog? I know you mentioned net comp sounds like it's back at normal historical levels with public as well. But I just want a little bit more color there. And then when you think about calendar 2024, and maybe go back to Sam's point, it certainly sounds like some of your related companies in your ecosystem are talking a little bit more robustly about demand, particularly in, let's say, PC clients. I'm just trying to get a sense for maybe what the disconnect is from a timing perspective, maybe a Windows 11 refresh perspective. Just any more color there would be incredibly helpful. Thank you.

Yeah, sure. Good morning David, it's Al. I'll start. Overall, I'll just break it down a bit by segment. So look, as Chris suggested in Q2 what we were seeing from customers might have suggested that with a bit more clarity in the economic environment that things would pick up. And again, we noted that we would have anticipated that would be more IT hardware and PC. That has not played out, and we have seen this really sentiment-driven environment has driven buying behavior. So on the commercial side, corporate and small business, we would say stable but not showing a pickup. With respect to our public business, first, they've executed exceptionally well, but I would say pretty much in line with expected seasonality. And then maybe lastly, I would just note in the international markets, we anticipated that you would see some moderation on the demand side in Q3 and our expectations for Q4 I would say that's worse than expected. And we would call it as maybe a few quarters behind what we've seen in the demand market in the US. So there are a couple of the puts and takes in terms of the demand environment, what we saw in Q3 as well as Q4. And then, David, just to your point on backlog, as Chris suggested in her prepared remarks, our backlog is nearing normalization. Maybe the lagging piece would be more networking, but we're getting close to what we'd call normalization. So no significant impact as we sit here now.

On the PC side, the question you asked about a potential “discipline” and I'd say a couple of things. I mentioned earlier that we have not seen picking up in activity around client devices. And as we know, that's the last place that our customers start to spend again once they're feeling better about the business market. But what I would say is, we are certainly closer to the end of a downside than we are to the beginning. So that's quite clear. The other point I would make is that consumer tends to react earlier to market changes than the commercial business. So when you see a bit of a lag in terms of what we are suggesting versus what you might see from OEMs, et cetera, Part of that is who is doing the buying. The second is the timing of the market in terms of the kind of flush of inventory into the channel from the OEMs and distributors and then us to the end market. So that will account for a quarter or two of differences.

Our next question comes from Amit Daryanani from Evercore ISI. Amit, your line is now open. Please go ahead.

Good morning, everyone. I have two as well. You suppose to -- Chris, there's been some degree of chaos at the federal level from a budget perspective. It sounds like September quarter went relatively fine for you folks. But there's a Spotify day extension that I believe, expires in a couple of weeks. How are you thinking about federal spending in the December quarter and just the with from this extended shutdown potentially?

Yeah. Amit, look, I guess I'd say it this way, we've been here so many times before. The team knows how to manage through both the uncertainty. And if we do have a shutdown, have to manage through that, we're past the year-end, which is good. I would say that, projects that are in-flight already will stay in flight. There might be some projects that are in flight that might be on hold. I'd say that's really we're looking at 2024. But the good news is we have a team that has executed in and out of these -- these environments, I guess, sadly, in some regards, but in these environments many, many times, and I have great confidence they'll do a terrific job this time as well.

Fair enough. And then if I could just maybe follow-up. If I think about the operating margin performance of the company in calendar based on the midpoint of your guys in December, it's going to be up like, I don't know, 80, 90 basis points year-over-year on the operating margin side. And there's obviously a bunch of levers over here. Some of it is cyclical client devices not being well some of it is secular. But how do you think about what's the durability of these operating margins as you go forward? And if you reflect on the tailwinds in calendar 2023, how would you say is cyclical that perhaps is not sustained into the out years? Thank you.

Sure, Amit. Thanks for the question. So a couple of things I would note. I think if I kind of parse the pickup we've had in our operating margins, a few things. Number one is we benefited from -- obviously, really strong gross profit margins up 200 basis points year-over-year. And that is a function of a few things, but I'd say most notably a mix of business. And so a lot of that gross profit margin pickup is dropping down into our operating margins. The other piece, Amit, would be really just our efforts to align our expenses with what we're seeing in the business and demand vectors and that is our efforts Q1, Q2 along those lines certainly helped. We have kind of a targeted range, and I've talked about this before of high 54s into the 55 of expenses relative to GP, and that's kind of our sweet spot in this environment. That's where we're operating. Now, I'll just say that is notwithstanding, we continue to invest behind our strategy, but at the same time, we have significant efforts to drive productivity, efficiency, kind of, managing our expenses commensurate with where we stand in. So they are the major components that are driving our operating margins. So Amit, I would just maybe just say that in terms of durability, you can expect we're going to continue on the efficiency front while we invest the impacts or influence of gross margin. Certainly, the netted down growth is going to continue to help that in that regard. But as we mix more into transactional products and PC start to come back, you could have some dilution effect there. So we certainly have moved quickly on the operating margin. Some of that ultimately could see giving back, but you're going to see different geography in our income statement as it plays out.

Our next question comes from Matt Sheerin of Stifel. Matt, your line is now open. Please go ahead.

Yes, thanks and good morning. I'm hoping, Chris, that you can elaborate on the comments about the weakness in the international markets. You're not the first one calling out that specifically in Europe. So is that something that you saw throughout the quarter? And Al, you did mention that you expect that softness to continue over the next couple of quarters. So anything more you can add would be great.

Yeah. Good morning Matt. On the international front, we did start to see a downtick in Q2, which we mentioned on our last call. And I would just say, it continues with a steepness we hadn't anticipated in the third quarter. And that is across the business, very, very similar to what we've seen in the US throughout the year. And our expectation is, as Al mentioned, is we're probably a couple of quarters behind on the international front. That's both the UK and Canada in terms of performance and demand and the certainty in the market there. So that's what we're seeing.

Okay, great. Thank you. And just regarding PCs, there's been buzz recently about AI enabled PCs down the line and potentially being another catalyst for upgrade cycle, are you curing that at all from customers and suppliers? And is that something that folks will get excited about at some point?

Yeah. Matt, it's a great question. AI is on everybody's mind. And I think the short answer to your question is, yes, we do expect customers to get excited about AI enabled client devices. And if we just take a step back, and I mentioned in my prepared remarks that we're at the front end of commercialization and development, but obviously, it's going very quickly. And the way we think about it is we're building what I would call our end-to-end full stack capabilities. AI is going to be integrated into all technology products across the full stack. It's going to need the infrastructure optimized to support AI. It's going to need services to be able to move from arrival to adoption. And so we are very much aligned with all of our partners, in fact, building practices with our partners around AI enabled technology. And so yes, we think customers will be excited. And again, CDW is well-positioned to help them make across the full stack and in particular, client devices. It's just there's more choice in complexity in the market. And thinking years back, Matt, where customers had to think about the technology choice, the brand choice, then we had consumption, then we have CapEx versus OpEx models. Now we've got intelligence across all of the full stack, it's getting more complicated. That said, there's a very high expectation within all of our customers that their CTOs and CIOs and their line of business leaders are thinking about how artificial intelligence can help drive their efficiency and their experiences for their customers. So look, we see it as an accelerant I think from a timing perspective, it will move fairly quickly, but we are still at the very front end stages.

And our next question comes from George Wang from Barclays. George, your line is now open. Please go ahead.

Well, hey, guys. Thanks for taking my questions. I have two quick ones. Firstly, can you just maybe talk about share gains, especially by geo you guys talked about kind of weaker international UK, Canada. Just curious if the fit industry weakness or maybe some share shifts? Maybe you can kind of double collect on the share gains, both in the US and also in the overseas markets?

Yeah, I think the question was on share gains. Hi, George, good morning. Look, here's what I'd say. We hold ourselves accountable over the long term to outperforming the market by 200 to 300 basis points. And we feel very confident that we're continuing to do that. When I think about other periods when we had weaker hardware environment 2016 comes to mind. And in that environment, we had hardware declines, but we noted that our netted down solutions, which in those -- back in 2016 would have been software and software assurance and things like that. We're growing at a faster base, fast forward to now. And when we look at the customer spend, what customers are investing through CDW, we're seeing a delta of more than 5%. So it's a fairly big delta, and we feel very confident that we continue to take share across our markets, and we'll do so in 2023 and over the long run.

Okay. Great. Just a quick one, if I can, just as a follow-up. Just in terms of any tuck-in kind of bolt-on deals, given just netted down kind of margin accretion and the kind of bad guidance. Just curious, any thoughts and color you can share just on so they continue to sort of roll up kind of tuck-in deals seeing any segments do you want to cut off?

Yeah. I would say on the M&A side, I think about that as a vehicle for investing behind our strategy. And you've seen us invest both organically and through acquisitions very successfully. And again, kudos to the team for on companies that we've joined with on both sides for both moving quickly and creating more value for our customers as a result of those investments. And those have been primarily, as you know, along capabilities there are advanced solutions related, cloud, security, digital things that you are now seeing really strength in the market and strength in our business. So we'll continue to look at M&A opportunistically. And if it's the right fit, we certainly would consider moving forward is always on the docket. We're never out of the market. But I'll have Al chat a little bit about cash position.

Yeah, George, I would just add. Obviously, M& A is always front and center for us. And as we think about our capital priorities, we're going to balance strategically where are the opportunities that are going to add value to us as well as the tactic where our valuations and where can we kind of best deploy our money. So stay tuned on that. You can see that kind of we do have a -- a cash position in place, and it is a volatile and variable environment. So we certainly value optionality with respect to our capital in this environment. George, to your comment about where can we expect we're going to look across and we'll continue to look across the ecosystem of opportunities. Our last acquisition was Enquizit that was in the cloud space, mostly focused in federal. So you can imagine some of those revenue streams would have a higher concentration than netted down. But I wouldn't per se that's part of our strategy. It's going to be more about the capabilities. So more to come on that front.

And our next question comes from Ruplu Bhattacharya from Bank of America. Ruplu, your line is now open.

Hi. Thank you for taking my questions. I have two of them, one for Al, one for Chris. Al, is there a way to quantify the impact of netted down items on year-on-year sales growth in 2023? And is there anything unique about this year, or as we look into 2024-2025, should we expect a similar level of year-on-year impact or even higher? Because I mean, it looks like it makes sense for you guys to mix shift more into these items. So just your thoughts on that

Sure, Ruplu. So a few things. Number one, we've said before and we continue to say we would expect, as we look forward, that netted down revenues would outpace our overall net sales, if you will. So I'd say, give you that one data point. I will note that the mix into netted down this year has been more extreme and a couple of metrics that I'll just note; number one, netted down for the quarter of $400 million was 7% of our net sales, but 32.6% of our GP and you can go back sequentially and look at what that looked like. But it's notable both sequentially and I'd say, versus prior year. If you try to put those dollars on a more even basis with net sales that grows up, you'd get a sense for the impact. And I think, and Chris alluded to this, it would suggest that our decline in net sales is pretty considerably less than if you looked at it on this customer spend basis. So there are a couple of things you could look at from a math perspective that would show the pretty notable growth and outsized impact even down has had this year.

Okay. Thanks for the details there. Chris, let me ask you this. On the prepared remarks, you talked about device refreshes remaining on the back burner. As you look out over the next couple of quarters and 2024, given fundamentals like the age of PCs in the market, I mean, do you expect to see any device refreshes either in the client side or in the data center side. And I think you've said that typically, when that happens, CDW's outperformance to the US IT spend is at the higher end of the 200 to 300 basis points range. So I guess what I'm getting at is even though the macro is weaker today, should we expect that when the macro improves and you get this added benefit of device refreshes that your outperformance can actually be at the higher end of the normal range. So can you give us your thoughts on that, please?

Yeah, Ruplu good morning, and I would say you've got it right, our track record of outperformance we were seeing refreshing hardware is strong. And part of that is our ability to gain share. And part of that is the fact that those are recognized on the top line net basis. And so we tend to outperform our premium as a result of those two things. In terms of looking forward, I just repeat a little of what I said, Ruplu, which is we do feel that clients, the downswing is kind of we're at the back end of that cycle, if you will, as opposed to the start of that cycle. That said, as Al mentioned, it's really a sentiment-driven market right now driving demand. And until our larger commercial customers had a level of confidence in the business climate, we think that client device and even data center refresh will be kind of the last point where they start to invest more dollars. Now, you're right, we're -- we've got a refresh cycle. We've got 40-year-old Tove devices, et cetera. We've got Win 11 coming. So there are a lot of things in the market that will certainly be a tailwind for client devices. AI, as we mentioned, embedded in client devices, those are all going to be positive. And I would also add that our teams are definitely having conversations with customers about refresh in terms of planning, we're just not seeing that convert. And again, we'll be ready when they're ready to convert, but it's just not to converting yet.

And our last question today comes from Adam Tindle from Raymond James. Adam, your line is now open. Please go ahead.

All right. Save the best for last. Al, I wanted to maybe start by reflecting on 2023, the silver lining this year, I think it's been cost management. You've been protecting earnings all year despite very volatile revenue. And I think you mentioned that OpEx to GP is your metric, which makes sense, but it's now optimal. So the question would be, as we look forward, correct me if I'm wrong, but it sounds like the outlook for 2024, based on what you're seeing is a little bit more muted. I see you're not really investing in headcount, it's up modestly sequentially. Inventory days are very low, so you're not carrying up for revenue growth. You've got mix shifting on -- as a headwind for GP dollars. So the question would be how to think about protecting earnings in a more muted environment moving forward? Would it be fair for us to anticipate more negative operating leverage moving forward? Why or why not? Thanks.

Sure. Thanks, Adam. Great question. A couple of things I would call out. First, like I gave you the range how we think about expenses. Just understand kind of underneath the engine there, there are puts and takes in terms of the -- where are we driving productivity, where we're driving efficiency. Not only to kind of keep within that range, but also to make sure that we can appropriately fund investment opportunities. I think what you can expect is those efficiency efforts will continue, but we will continue to invest. And you noted that our headcount was slightly up, but it was up. If you look at the gross effect of the those -- that headcount would look at more significant, if you will, from a gross basis. So look, I think it's a balancing act. I think, Adam, as we start to see the demand cycle start to turn in some of the areas we've talked about we would certainly accelerate and continue to ramp-up on the investment side. But I would call the efficiency efforts somewhat evergreen. And so therefore, when you add that up, we're still going to try to remain within a range. I would not be able to tell you definitively every quarter, if we show operating leverage, there could be some quarters where we say there was a great opportunity. And therefore, we have less operating leverage or de-lever but it's going to be a big quarter-to-quarter with kind of that strategic balance that I mentioned on top of that.

Got it. Maybe a quick follow-up on gross margin. I understand that net revenue is benefiting or mix. But we can exclude that, give it a 100% gross margin and strip it out and look at just traditional hardware gross margin. And at current levels, I'd love for you to maybe unpack some of the items that might be more cyclical versus structural and help us to gauge the outcomes, because that analysis can get some pretty scary outcomes of returning back to historical levels. I think you can get over $1 of EPS coming out from reverting that back to the mean. So if you could unpack the ex-net revenue gross margin and what's cyclical versus structural, that would be helpful. Thank you.

Yeah, absolutely, Adam. So I've talked about in the past, obviously, mix matters, and we've had a pretty extreme mix movement particularly this year on these netted down revenues in lieu of hardware, PCs, et cetera. Certainly, we would expect that to balance out over time. And so that is a variable that would dilute gross margins. The other piece, Adam, would be that in general, product margins have held very firm. And if you look back over the last two years, they've actually moved up quite a bit. So there's been resiliency there. I would also note that though in that, there is this component of more upmarket premium spend on higher level, higher value product that is persisting, and we're seeing that continue to hold up. And there may be an element there that what you bought in the way of premium product. Now you're in it and you're going to continue to invest in that same way. And then the last component, Adam, I would note, and we know this, that over time, you could see commoditization. We've not seen that, but it's conceivable that some of that could come back over time. So we are at pretty significant levels in terms of gross margin when you add those components up. Certainly, components that I referenced that are durable and in some areas, some components that could be somewhat transitory and we could see at a bit over time.

And with no further questions, I'd like to hand the call back to the CDW team for closing remarks.

Thank you very much. And let me close by recognizing the incredible dedication and hard work of our nearly 15,000 coworkers around the globe. Their ongoing commitment to serving our customers is what makes us successful. Thank you to our customers for the privilege and opportunity to help you achieve your goals, and thank you to those listening for your time and continued interest in CDW. Al and I look forward to talking to you next quarter.

This concludes today's call. Thank you, everyone for joining. You may now disconnect.