Thank you, operator. I'm here today with Paul Bay, Ingram Micro's CEO and Mike Silas, our CFO. Before I turn the call over to Paul, let me remind you that today's discussion contains forward-looking statements within the meaning of the federal securities laws including predictions, estimates, projections or other statements about future events statements about our strategy, demand plans and positioning, growth, cash flow, capital allocation and stockholder return as well as our expectations for future fiscal periods. Actual results may differ materially from those mentioned in these forward-looking statements because of risks and uncertainties discussed in today's earnings release and in our filings with the SEC. We do not intend to update any forward-looking statements. During this call, we will reference certain non-GAAP financial information. Reconciliations of non-GAAP results to GAAP results are included in our earnings press release and the related Form 8-Ks available on the SEC website or on our Investor Relations website. With that, I'll turn the call over to Paul. Thank you, Willa.

Good afternoon, and thank you for joining the call today. We are very pleased with our first quarter performance. Net revenue of $12.3 billion was up 11% year over year on an FX neutral basis. And 4% above the high end of the guidance we provided on our Q4 call. Gross profit of $829 million came in more than 2% above the midpoint of our guidance and non-GAAP EPS of $0.61 was at the high end of our guidance. North America and Asia Pacific both saw double-digit net sales growth. EMEA grew 3%, and Latin America was essentially flat year over year, on an FX neutral basis. As expected, the top line growth was driven by strength in the client and endpoint solutions. But we also saw solid growth in our advanced solutions and cloud businesses. While the second quarter and back half of 2025 are harder to forecast, given the volatility resulting from the macroeconomic and trade environment which Mike will discuss. We are optimistic about the future. We believe that Ingram Micro's four and a half decades of experience and global reach in tandem with our investments in our cloud and xVantage platform capabilities position us to manage this cycle with greater resilience further competitive differentiation and positive shareholder return. Just as importantly, we remain deeply committed to supporting our customers, our vendor partners as they navigate the same challenges. Much of our long-term optimism lies in the evolution towards becoming a platform company. During this time, we have invested over $600 million in cloud, the foundation of our xVantage digital platform. Which has been implemented in 20 of the 57 countries we operate in. This will allow us to continue to remove silos and friction across thousands of hardware, software, cloud and service offerings. XVantage connects our…

As I will cover shortly, for the second quarter, we also a similar trend in mix as we saw in Q1, but with continued overall growth as we navigate the uncertainties of the macro and trade environment. Before I turn to the specifics of our results and guidance, let me touch on some detail as to how we see the tariff environment and its impact. As most of you know, we tap through from increases related to tariff thoughts, the rest of our ecosystem we expect that overall demand may be impacted by a uncertainty around these policies. Modeling the impact is challenging. At least to some degree, for the latter part of the last five years. In The US, we are not the importer of record on the vast majority of products that we purchased. And therefore, we do not issue terrorist policies. Terrorist We continue to monitor and assess the fighting behavior of our vendors while we drive our dynamic pricing model around them. The pass through nature of our business still exists. Even where tariffs are indirectly embedded, pricing is obviously purchase. To raise their own tariffs as well as the impact of potential inflation brought as SKU level for more precise decision making. We believe our increased automation and AI capabilities enable us to be even more nimble responding to changes. Sorry for the confusion. At this time, we are going We think there's audio. Audio. Presenters, you are live now. Hey, sorry, we understand there was some audio difficulties at once I picked up from Paul. So I'm just going to pick back up from the start on our prepared remarks and we'll go from there, okay? So I'm gonna start by reiterating Paul's comment that we are very pleased with our performance in the…

Now shifting to our guidance for

Q2. Let me preface this by saying our guidance is based on how we see the market today. But as we all see, this is changing almost daily in some regards. With this in mind, we are guiding to net sales of $11.77 billion to $12.17 billion which represents year over year growth of nearly 4% at the midpoint. We expect second quarter gross profit of $800 million to $850 million which would represent gross margins a bit under 7% as some of the similar geographic product And customer category mix factors continue into Q2. We expect non GAAP diluted EPS to be in the range of $0.53 to $0.63 per diluted share which would be an increase of $04 per share more than 7% growth at the midpoint. This guidance is also reflective of some heightened inventory investment in the interim months of Q2 as a result of buy in opportunities ahead of potential tariffs which in turn drives slightly higher interest expense. Our EPS guidance assumes weighted average shares outstanding of approximately 235.2 million and a non GAAP tax rate of 29.1%. Our Q2 guidance considers our current views on the macro and tariff environment. Including trends in pre and the ninety day respite on tariffs on many countries. We continue to see we continue today to see healthy activity and remaining and we remain particularly enthusiastic about a continued demand environment in advanced solutions. While we are weighing this with the potential for price increases related to tariffs, and some extension in the sales cycle where some customers wait to see how the environment evolves as they consider their overall capital spend decisions. Such extensions are particularly true in the higher profit at SMB space, which is generally more sensitive to potential inflationary factors. This is where we are confident, however, that our investments in innovation are bearing fruit in terms of leverage, efficiency, and top line acceleration through this market. We will continue to engage with our vendor partners and customers to to quickly navigate changes in the demand and pricing environments. As we focus on the success of our partners and our team. With that, we can now open the call to questions. Operator? Once again, if you have a question you'd like to ask at this time, Your first question comes from Samik Chatterjee with JPMorgan. Your line is open. Hi. Thanks for taking my question. Maybe if I can

start off with sort of the macro loaded comments that you had here. And interested to hear. I know you mentioned SMB is a bit weaker and the larger enterprises. If I understood you correctly, you're expecting see maybe a bit more sort of longer cycles, but still more moderate of reaction to the macro. But maybe if you can just flesh that out a bit more and why shouldn't we expect maybe larger enterprises to even follow directionally where SMB weakness is? What are you seeing in terms of maybe large projects and and intent from large enterprises to continue with the large projects rated to IT infrastructure and what's giving you confidence on that front? And I have a follow-up. Thank you.

So I can jump in. This is Paul. Thank you for the question. If we look at it, you may have heard us talk as we're exiting 2024 in our last call with SMB. Had some headwinds and and so there was still it was down for the quarter.

But if you look at it, it was actually improving year over year. So we are seeing

green shoots relative to some pockets where we're seeing improvement on that.

That large enterprise business and conversation with customers

when we look at our pipeline, the demand continues to be strong. And we think that that's gonna continue based off the conversations we've had thus far both with our and with our vendor partners also.

Got it. Got it. And then maybe for the quarter and related to both one q and two q, if you can start by with maybe helping us with you think about the mix between client solutions, data to advanced solutions, How was the how did the mix track between those ready to for one q, and what are you embedding in there embedding on terms of mix for two q in terms of your expectations and much of that client solution strength are you treating as a pull forward from the second half? Thank you.

Yeah. So this is Paul again, and I'll let Mike jump in. Relative to kind of the mix of our client endpoint solutions business performed very well as we talked about. The refresh happening in the desktop and notebook. So that was very strong. Our smartphones was also strong within that. Within that category. Advanced solutions, proud to say, and and we we were pretty accurate coming out of the last call. On networking because we had talked about that we had double digits for fiscal twenty twenty, exiting 2024. And the expectation both that we saw in our pipelines and the key indicators we were seeing in our business that we thought that it was gonna start making a turn. And I know the likes of, like, IDC, so there's gonna be growth on on the networking business. So we did see low single digit Digit growth in Q1. And our server business continues to perform well in in cybersecurity remains healthy also. That said, to what we're putting in our guide for Q2, we don't see a dramatic shift in terms of the product mix

We do think from a a system standpoint, it may not be as heightened as it was in Q1, but we definitely see strong growth

in that category and not a dramatic mix relative to any other topics I just mentioned. Mike, I don't know if you have any other

on that. Yeah. Samik, I think the only thing I would just add, yeah, I I think the big the big factor is we're we're assuming a slightly lower client and endpoint. Piece, you know, not the not the solid double digit we just closed with almost 15% growth in Q1 and our Q2 guide, but we're considering know, still some growth in advanced solutions, certainly growth in cloud. Then I think as Paul touched on, on the client I'm sorry, on the customer side of the spectrum, It has has been the case for the last two quarters. You know, we see the large enterprise customers we're just taking a we're continuing to take a conservative view on where SMB goes. Because as I said in my prepared remarks, we still see quite a bit of know, more mutedness there since that is a group of end user customer base that's gonna be more susceptible to an inflationary or or God help well, God forbid, a a recessionary environment. And therefore, we take a a closer look on that as to how we see the customer end of the spectrum growing and we believe that we will still be more concentrated the lower margin large enterprise customers. Alright. Great. Thank you. Thanks for taking the question. Your next question comes from Eric Woodring with Morgan Stanley. Your line is open. Super. Thank you for taking my questions guys and congrats on the quarter.

I just wanted to follow-up on question there. Just if you could maybe Mike help us kinda size the pull forward that you saw in one q. Like, if if we were think about the upside relative to the midpoint of your 1Q guidance,

Is is that how we should gauge the pull forward? Or

what's the right way to think about that? And and how are you then taking that into account in your two q guide? If I if I just look at it, it looks like you're guiding down about two percentage points sequentially. Shows you're kind of flat to up. And so just just if you could help us understand that dynamic and how it influences your two q guide, that would be super helpful. And then a quick follow-up, please.

Yeah. Eric, I'll start. It's Paul. I'll

So the Q1 pull forwards was regarded with we we did see slight, but I would call it not material. And it was really I wanna be clear about this too. It's really around

the PC refresh.

And not the other products. As we talked about growth in some of the other categories, that wasn't a pull forward. So if there was a pull forward that we'll see, it was in in in really that PC refresh If you look at it from a customer's perspective, it was kind of a mixed bag. There were some pull forwards in Q1 in advance of the tariffs, kind of what we saw in our business. And the customers would also say there was from an RFP, RFQ kinda inbound kinda longer term Those projects were delayed, but they weren't canceled. And the expectation is budgets aren't moving. So all the feedback that we're getting is that it's still they're they're still relevant. And with the pricing uncertainty, it's kind of those longer terms longer term ones. I would say neither of those were enough in Q1 to constitute what I would define as a trend. And the question on Q2 guide, and I'll let Mike jump in. It assumes a continued PC refresh. Mike touched on it. More in the mid single digits. Terms of what we're looking at from a growth rate perspective that we built into the two Q2 guide.

Yeah. So, Eric, you know, you you pointed out about a 2% roughly decline sequentially. That's that's right. And I think it is. Know, that I I don't wanna quantify as Paul just said that that's that's pull forward because there's a lot of other factors as Paul just hit on. But but part of these factors just coupled with, you know, potentially a little bit more overhang as we see especially in that SMB space in Q1 is really leading to that Q1 guide, and and and that growth factor.

Okay. That's really helpful. Thank you for all that context.

And then maybe the second question is just, you know, can you you help us understand what you're seeing from a from a pricing perspective? As we're here and kind of thinking about February more so, but you know, are you seeing vendors raising prices? If so, you know, what end markets is that most prevalent in? And how have customers responded to those to those prices Could there be more to come? Again, all of that just kind of putting the pricing environment in context. Really here as we think about the last maybe five or six weeks, please. Thanks so much.

Yeah. Eric, this is Paul. I'll start. So as it relates to pricing, there's been minimal pricing impact If there has been some changes, it's been more around the peripherals and accessories depending on the impact was. And keep in mind from a from an overall working capital standpoint and inventory that we already had, In our system working through that. So not especially in Q1. Even as we sit here today, in Q2, we haven't seen a lot of price raising and or changes thus far as we kinda work through what the tariffs is gonna look like. I would also say, you know, today's announcement with The UK here recently is encouraging. And just overall from our perspective, as you would expect, certainty and predictability is good for our business. And we've proven to be flexible and and and able to adapt quickly. So we haven't seen this summarize that we haven't seen an impact from a pricing perspective. And a a a lack of tolerance from our customers out to the end users.

Great. Thanks so much, guys. Good luck.

Thanks. Your next question comes from Anand Paruwa with Loop Capital. Your line is open. Yes. Thanks guys. Appreciate you taking the questions. I can get two if I could as well. The first one, I guess, is you know, Paul and Mike, just on on on xVantage,

And what's a good look, you gave a lot of great metrics, so appreciate that. And acknowledge it. And I guess, what I'm what I'm wondering is sort of big picture you know, is there a good way to think about what the progress like, I think, Paul, you said you're in, twenty seven twenty seven to 50 something countries. You know. Is there a useful way to think for us to think about, number one, kinda like ongoing progression and propagation throughout throughout sort of your target map And then you know, I don't know. Number two, a way to think about you know, transaction penetration over time. I guess anything useful there for to see what you're shooting against? And and, like, I don't know what the when I say shooting against, like, maybe what the potential is. You know. And I have a quick follow-up as well, though I know that's not a quick question, that first one.

So the way we look at it, and on the thanks thanks the question. So there's three ways we look at the metric. And there's multiple metrics and our commitment was that we'll continue to give you visibility as we build out during twenty twenty of our 57 countries which we continue to deploy ex Vantage and and on a global basis. And keep in mind, remember, when we do something, it's number one, it's global. And it's the same experience in all 20 countries that it's deployed in. So we look at that as a differentiator, a, from a research and development and how we continue to build out the investment we make as we do something to the code base. Goes to all 20 countries right now and the expectation is we'll continue to roll those to the rest of the rest of the world. From a user,

the three metrics that we really talk about are three different ways. One is user engagement.

I talked about 12 million searches, advanced searches. So we continue to see that. Increase. We look at it from a financial and operational perspective. Triple the self-service orders versus the prior year year. This just continues to demonstrate what we're focused on, which is the customer, ease of use,

taking friction,

and OpEx out of the conversations,

moving to more outbound versus inbound. And then the third one is we look at it from a customer perspective. Again, you heard this last time,

talk about we brought on over a couple of thousand, I think, was the number that I mentioned or was I believe, 8,000 from a full year 2024 is what I probably mentioned, I believe, last time.

And our earnings call now we're seeing a couple of thousand.

So this is a great opportunity for us

to go reengage

with partners that haven't done business with us.

That are what we call dormant customers. We have thousands of also. So those are just a couple of of metrics that we look at. And then we you heard me talk about intelligent digital assistant and what we've done to drive leverage both from an OpEx perspective and a revenue standpoint. Both of both of those which I mentioned in my prepared remarks, were up double digit per head. Think you had a follow on question, too.

Yeah. I guess the follow-up is I'm gonna loop cloud into this also. So it sounds like I mean, these aren't your words, but I think it sounded to me like xVantage was like, maybe a couple hundred million. Of incremental rev gen this quarter. And, you know, sort of correct me if if that's, like, super off base. And then cloud at you know, 15% of gross profit dollars, 1% of net sales. Can you frame for us the opportunity for, like, x managing cloud to really repurpose the business model Right? Like, if cloud's gonna go to 2% of net sales, some point, like, that 15 to 30% of GP dollars? Right? And so anyway, that's really the question. Like, are we are we sitting on the beginnings of a totally repurposed business model and it's it's just not fully evident yet. But you guys just keep doing what you're doing, you know, we're gonna look in, like, eight to twelve quarters, and the business model is gonna be really amplified. So just any thoughts there would be great. Thanks.

Yeah. And I think so. Jump in and we're not gonna disclose the numbers necessarily. What I would think about it in in the future is that our company will be at Vantage. So we'll be talking about metrics of how we're dry driving share differentiation, better margin improvement, lower operating expense, and overall bottom line. Return to the shareholder. And some of the things, if you look at cloud, we spent $600 million in cloud.

Both organically and inorganically. Over the last twelve years. That's the foundation for xVantage. So we did start from the ground zero. And on top of those 30 patents pending, the 30 million lines of code that we put on top of that investment around cloud

that I talked about in my opening comments. About a single experience.

So you're able to come to Ingram Micro and give it it's like all a one stop shopper single pane of glass. We go to our hardware, software, services, cloud.

All in one system. So this, in my opinion, is broader than just cloud over time. This about consumption. And how technology is gonna be delivered in businesses and how do we enable our solution providers used generically. Our customers, a 61,000 customers it will provide a better experience at a lower operating expense.

Effectively

drive more

revenue

and a shorter sales cycle.

Got it. Got it. Okay. Thanks. That's that's very helpful context. Appreciate it.

Your next question comes from

Ruplu Bhattacharya with Bank of America. Your line is open.

Hi, thanks for taking my questions. Mike, if we look at the guide for

2Q at midpoint revenues will be up year on year, but gross margin will be down It's a interesting year because you should have this year both growth in client devices as well as advanced solutions. Based on your current forecast and backlog, as you look into the second half, do you think gross margin can grow year on year or should we assume that it remains pressured from a year on year standpoint And then I'll ask my follow-up now as well. Can you talk about working capital? You said that you might do some pre buys how should we think about inventory and free cash flow as we go through the rest of this year?

Okay. Thanks Ruplu. Good questions. Guess so yes, I think we're as we've said, we're really thinking about margin in the terms of mix but beyond just the client and endpoint mix, which is maybe Not assumed to grow as robustly as it did in Q4. We are still expecting in that model growth of advanced solutions and cloud. Which is higher profit business. But but I think what we do see more consistency with is still some of the, concentrations towards the large customers and SMB being, you know, more muted as a whole. And therefore, we that tends to be lower margin mix. We're still also seeing more growth geographically towards our Asia Pacific region, is lower cost to serve, but also lower margin on the whole. So so there's there's multiple factors that go into that. Now, clearly, when you think about maybe the high end of our range, if we see growth coming in, but it's more concentrated towards advanced solutions. We see SMB bouncing back. Absolutely. There is the potential you could see accretion in gross profit But but I we're seeing, you know, more of the gross margin line stay roughly equivalent to where we were, in Q1 from a historical perspective. I'll answer your second question and then can come back if there's anything I can clarify. But the working capital front, yes, both in in Q1, as well as in Q2, we are doing some pre buys. With a number of different vendors where we see opportunistic you know, opportunities to get ahead of potential price increases. Now the way we usually handle this is a lot of it is bought early in the quarter and it's sold during the quarter. And that was largely true, but you can see a bit…

strategic buys and it's the right return.

Okay. Thanks for all the details. Really appreciate it. Very helpful.

Your next

question comes from Adam Tindle with Raymond James. Your line is open. Okay, thanks. Good afternoon. Paul, I just wanted to start you know, obviously, we're all asking about this concept of pull in and trying to understand some of your customers have been pretty adamant and and open about, the idea that there was maybe some pull in in Q1. I guess the question might be, you know, for you, if you could maybe walk us through the cadence

of the quarter and any early observations from closing the month of April differences in month to month growth, you know, kinda lay out what it looks like

kind of on a monthly basis so we can understand what you're seeing in the numbers, and whether or not there might have been any, aspect of pull in? And then I have a follow-up. Sure.

Yeah.

Thanks, Adam. The what I

so from a geographic perspective, there was no major anomalies in terms of how a normal kind of quarter goes. Exiting Q4 and coming into Q1 with the one exception. If you look at the EMEA region we saw the 3% FX neutral growth and we are very pleased with our cloud growth that we have there.

And they had continued growth in CES.

With the headwinds of Western Europe. But were pleased with the way they finished the the quarter. They had a very strong finish to the quarter.

I would say was a little bit, you know, more accelerated versus the other regions, which was

pretty consistent month after month after month. And as we sit here today, we're seeing very much very similar dynamics in the first, in the first part of this quarter in Q2 also.

Got it.

Maybe a follow-up for Mike. Net debt to EBITDA is, I think, down to two times after the debt repayment in the quarter. Just if you could remind us of how you think about optimal levels of the capital structure and leverage here And then how you're thinking about capital allocation priorities from here? Obviously, saw the dividend move, but maybe lump in share repurchase repurchases, M and A, kind of just revisit that whole concept for us. Thanks.

Yes, absolutely, Adam. I think yes, we're pretty happy with where we've continued to drive that leverage down with with quite a bit of debt repayment, as I said, almost $1.7 billion in repayments over the last three years. So we're always going to be balancing that going forward. As far as optimal level of of leverage, we're not far off, honestly, right now. From where I would be happy for us to be. I think, you know, certainly, we think about investment grade as a opportunity and and, you know, in the future and and that's challenging with the ownership structure right now. But I believe we're at already in that ballpark as far as leverage goes. So we're we're really focused now is where is the best area for us to invest going forward. And if, you know, if we're more tempered in certain including organic investment in Xvantage, as an example, you know, then we'll continue to repay down debt. With with cash flow. And then, you know, as far as return to shareholders, you know, we we do do we Out our first quarterly dividend in Q1. We did a, you know, 2.7% increase to that dividend just announced for Q2. We wanna make sure we're also balancing that with some continued return to shareholders. The share buybacks at some point down the road be another arrow in that quiver, but obviously that's not a a viable option right now. So it's really about balancing that. M and a continues to also be a big factor. And as you know, most of our historical M and A in the last handful of years has been smaller tuck in acquisitions that might be tens of millions of dollars of purchase price. So they're not really breaking bank, so to speak, on that front. But that doesn't mean we couldn't opportunistically look at something bigger. And then we got a different we got a different look as to how we would delever the business after that if we were to to to do something larger and opportunistic.

Makes sense. Thanks.

Your next question comes from Karl Ackerman with BNP Paribas. Your line is open.

Yes, thank you. Hi, Hi. I wanted to go back to the outlook for June. I believe you noted that product mix wouldn't change much despite the stronger growth in client and endpoint solutions. However, I'm I'm

hoping and to hear some commentary with regard to what you're seeing

if you are seeing recovery in server storage and networking applications that are

higher margin for you.

Yeah. So I'll I'll touch on that, and Paul can elaborate. I think you know, I think the biggest differential between Q1 and Q2 is really, you know, a a bit of a breakdown from a client and endpoint, not assuming we're growing at 15%, but as Paul said, growing, you know, mid to upper single digits in our Q2 guide. The mix on the other factors is is somewhat consistent, but actually, I will say servers in particular have been quite strong. Cybersecurity remains strong. Cloud remains strong. And as we also said in our prepared remarks, we're now seeing growth in networking for the first time in, I believe, five quarters. You know, it's modest at 2%, but that's, that's that's certainly a vast improvement from where we were most of last year where we had the really challenging compare year over year on the, on the backlog fulfillment. And cloud, continues to grow very nicely globally. And I would just say from a customer mix standpoint,

you layer on top of that if we start to see momentum come back from an F and D perspective, which I mentioned is proving year over year, but it was still down. Not to the same extent that it was in the prior quarter. That that could that could actually, you know, provide a little bit of uplift also.

Yeah. Got it. Thanks for that, Mike and Paul. If I may just one more. You indicated you are seeing healthy order activity by customers. And so while inventory rose this quarter,

I just wanna

address, should we assume working capital or inventory becomes more stable to cash flow in June? And then beyond June, any thoughts with regard to working capital dynamics? Thank you.

What I the way I would think about working capital, and realizing we don't, you know, specifically guide on that, but I I'll just give you sort of a thought process. We're gonna continue to manage our business or our working capital days. So if we're in a a more consistent growth mode as we were in Q1, you're gonna have that investment. But as as we said, you know, working capital days came down on a on a net basis by four days year over year. So you just have to think about that growth factor. And maintaining, you know, some equivalency in how we invest on a days basis, and and we're gonna continue to invest for growth where we can cap capture the market opportunities in this environment. And that could put a little strain on free cash flow, while we're in higher growth mode, and that's gonna even out over time. Coupled with also the normal seasonality where We usually have a higher investment for instance in inventory when we get into Q3. Lot of that sold through in Q4 where we will close the year with receivables and then we collect that in the new year and the cycle continues. So just think about that seasonality, but also the cyclicality.

Thank you.

Your next question comes from Matt Niknam with

Deutsche Bank. Your line is open.

Hey, guys. Thanks so much for taking my question. I guess first, on client endpoint, not to beat a dead horse, but I I'm curious whether the strength in client and endpoint, you talked about, 15 ish percent growth, Was that mainly PC refresh related? And I guess what I'm trying to figure out is is there a similar dynamic around PC strength, in April? And is it mainly concentrated around larger enterprise relics to SMBs refreshing PCs? And then second question, just on India, if you can give us a little bit more color on the competitive dynamic there and how that's evolved. Year to date? Thank you.

The client endpoint solutions business. So that is part of the refresh that we're that we're that we're seeing. And if you look at kinda early into the quarter, Q2, we're seeing similar growth rates, on the client on the client endpoint solution, but more importantly, on the desktop and notebook. Refresh. So we're seeing similar trends early here as we sit here early in the quarter. So that's what we're seeing around the refresh. As it relates to the customer, when I refer to customers, I refer to our customers. That historically serve those end markets. So a lot of those are going into what we would define as our enterprise and larger customers as opposed to our customers that historically service the small to medium sized businesses. On on your question about India, the the market continues to be competitive, I would say. The the market competitiveness in in India and as we continue to rebuild and hire out our right executives, it's still definitely competitive, but outside of more local large distributors, not as much as multinational that we may have pointed to last quarter. It's more of a local environment from a competitive nature. But it is still competitive. And and I like to always remind the team, myself included, which is we're focused on quality of earnings and the right revenue growth that we wanna make sure even in a competitive environment. So always keeping a keen eye on that as we move forward. Mike, I don't know if you have any thoughts on either. Yeah. Just just real quick on India. You know, we we talked in our call you know, a a back in March about you know, an impact that we were projecting into our guidance that was in cents, not percent, a high single digit cents impact from EPS from India from the competitive factors and uniqueness of that. You know? And then we talked about how Q2 would probably be closer to half of that kind of impact, and that is where we are tracking. We're seeing that's how Q1 landed. And that's how we are seeing Q2 land. As I've said in my prepared remarks, we're seeing things start to improve on some of the competitive factors, but it is still highly competitive And we're gonna go after business that's the right kind of business, and we did a good job of still driving You know, mid single digit growth in India on an FX neutral basis in Q1. But, you know, we're not interested in going after negative margin business. So we're we're gonna make the right decisions there and continue to drive that while we enhance the team as Paul said. And we're pretty pleased with that progress where we expect things in the second half being a little bit more normal. Thank you. We have time for one last question and that question comes from Maggie Nolan with William Blair. Your line is open.

Hi, thank you. I wanted to ask about your comments on OpEx. I heard you say that OpEx as a percentage of revenue would stay above five this year? Can you give us a little more insight though into how to think about this quarterly? Should we still be expecting a decrease in OpEx as a percentage of revenue in each coming quarter this year versus the prior year quarter. Because of the cost actions that you've recently undertaken?

Most of the costs, if you talk sequential, most of the costs that we announced in our most recent actions in December have already taken place, and and we're out largely in the first quarter. There's a little bit of rollover impact into Q2, but not not substantially. So, you know, I would this is what I would think about this. Quarterly. We're probably floating a bit north of 5%. On on a on a fairly consistent basis where you may see a little bit more leverage. It's certainly in Q4 where we usually have the hockey stick of a higher seasonality for sales and therefore you absorb costs in a more meaningful way. Obviously, that's why our costs that's a contributor to why our costs were as good as they were from a leverage perspective. In Q1. We we certainly have taken the cost actions to to to bring leverage to the table and and those are staying out. But you couple that with a client and endpoint solutions business that grows nearly 15% which is very low cost to serve and more automated than it's ever been. Know, that that becomes even far more efficient from an absorption perspective. So if we saw a more robust higher end of the growth spectrum, in Q2 or quarters after that, you may see more of that cost absorbed, of course.

Okay. Thank you. And then once we get past kind of this pull forward in buying, do you have an expectation for how many months it takes for tariff to potentially suppress buyer behavior just based on how your business may have been impacted historically?

It's a really good one. I'll give some initial thoughts. I'll let Paul add. It's a hard one to answer, as you can imagine, because we don't know where tariffs are going to land. If we believe there may be a deal between The UK and The US, what I heard the US administration say 200 more to go or something along those lines. So we'll see where that goes and we need to see where that lands. If it is not you know, as pronounced an increase as we suspect, you may not see you know, a real significant down cycle. But we're we're taking a tempered approach based on what we see today and the fact that come early July, there may be a number of tariffs coming into effect depending on whether deals happen or not. And and again, the fact that that it's not the tariffs as much since they are passed through for us as it is just just a simple impact on the demand environment as a whole that we need to watch. Yeah. And only so the last time we have this, it was absorbed and there was no impact. We've driven through inflationary situations, and we've been fine with that. So I think to Mike's point, it really comes down to, you know, where does the wheel stop and where is manufacturing actually done and what is the impact. And what's the tolerance at that end business to absorb a price increase, whatever that's going to be. For us, one of the benefits are, again, we don't we we don't absorb that. We pass it along. And furthermore, we do business with 1,500 vendors in, you know, close to 60 countries on a global basis. So we're pretty diversified. We have multiple different options. For our customers to provide user solutions. So if there's winners and losers, from a technology perspective, we sit right in the middle of that and get to help participate in that. Thank you. At this time, I'd like to turn the call back to Paul Bay for any further remarks. You, operator, and thank you all for your questions and continued interest in Inger Micro. And as always, to our team members and our customers and our vendor partners as we continue to deliver both short term and execute against the long term vision of transforming IT distribution together We look forward to talking with you in the coming months. So have a great day and a good evening. Bye for now. This concludes today's call. Thank you for attending. Have a wonderful rest of your day.