Good day, ladies and gentlemen. Welcome to the ePlus Second Quarter Fiscal Year 2026 Earnings Conference Call. As a reminder, this conference call is being recorded. [Operator Instructions] I would now like to introduce your host for today's conference, Amanda Dupree, Associate General Counsel. You may begin.

Thank you for joining us today. On the call is Mark Marron, CEO and President; Darren Raiguel, COO and President of ePlus Technology; and Elaine Marion, CFO. I want to take a moment to remind you that the statements we make this afternoon that are not historical facts may be deemed to be forward-looking statements and are based on management's current plans, estimates and projections. Actual and anticipated future results may vary materially due to certain risks and uncertainties detailed in the earnings release we issued this afternoon and our periodic filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K, quarterly reports on Form 10-Q and in other documents that we file with the SEC. Any forward-looking statement speaks only as of the date of which the statement is made, and the company undertakes no responsibility to update any of these forward-looking statements in light of new information, future events or otherwise. In addition, we will use certain non-GAAP measures during the call. We have included a GAAP financial reconciliation in our earnings release, which is posted on the Investor Information section of our website at www.eplus.com. I'd now like to turn the call over to Mark Marron. Mark?

Thank you, Amanda. Good afternoon, everyone, and thank you for joining us today for our second quarter fiscal 2026 earnings call. This quarter represents a significant milestone for ePlus as we delivered the first quarter in our history with over $1 billion of gross billings, underscoring the momentum across our business and the strength of our diversified model. Our performance this quarter again reflects our unrelenting focus on delivering the products and services our customers require in today's market. We are seeing this growth not only in the quarter, but in our year-to-date results as well, with revenue up over 20% and total gross billings of almost $2 billion in the 6-month period. I want to highlight 4 key messages. First, as I mentioned, our record $1 billion in gross billings in the quarter underscores strong and broad-based demand across our portfolio, customer segments and verticals. Notably, most of the growth was organic with acquisitions accounting for only 10%. Second, our consolidated net sales for the quarter grew 23.4%, but adjusted EBITDA grew at a rate that is more than twice that of net sales as operating leverage continues to shine through. This was supported by increased demand for our products and services, underscoring the resilience in our strategy and internal automation initiatives. Third, we continue to invest and align our resources in higher-growth areas of AI, security and cloud to deliver value-added products and solutions, enabling us to both grow our customer base and increase sales to existing customers. And fourth, our balance sheet remains strong, closing the quarter with over $400 million in cash, giving us flexibility to continue investing organically and inorganically while returning capital to shareholders. Let me start with a brief overview of the quarter's financial results. As a reminder, we completed the sale of…

Thank you, Mark, and thank you, everyone, for joining us. I will review our financial performance in the second quarter of fiscal 2026. Continued momentum across our business led to another quarter of double-digit increases in our key financial metrics. Consolidated net sales totaled $608.8 million, up 23.4% year-over-year, driven by sustained demand across our focus areas of security, networking and cloud. As Mark mentioned, we continue to see demand across all customer sizes with particular strength in the mid-market and enterprise segments. As you may recall from our last earnings call, enterprise customers resumed purchasing in the first quarter following a period of product digestion, and we saw a continuation of this trend in the second quarter. Gross billings of $1.02 billion in the quarter represented a 26.5% increase in year-over-year with the majority of this growth being organic. This milestone underscores the strength of our diversified business model and our strategic focus on high-growth areas, including offerings that enable AI consumption. Product sales in the quarter totaled $485.1 million, up 24.5% from the prior year, led by robust demand in networking and security solutions, aided by increased AI adoption as well as growth in data center and cloud. Service revenue reached $123.8 million in the quarter, representing growth of 19.4% year-over-year. Professional Services grew 23.3%, led by the addition of Bailiwick in August of 2024, while managed services increased 13.5%, led by the strength in enhanced maintenance support and cloud offerings. Services remain a strategic focal point for ePlus, and we remain committed to add to our capabilities in this segment to build out our strong recurring revenue base over the long term. Taking a look at our customer verticals, Sales remained broad-based. Telecom, Media and Entertainment and SLED, our 2 largest verticals accounted for 27% and 14%,…

Thank you, Elaine. The second quarter and year-to-date growth reflects momentum in the business and is aligned with our focus on high-growth areas. Underlying end market demand is healthy across much of the portfolio, and we continue to be pleased with our current positioning. Reflecting the strong financial performance to date and momentum we expect to continue, we are increasing our fiscal year 2026 net sales, gross profit and adjusted EBITDA guidance. Net sales growth over the prior fiscal year is now expected to grow at a rate in the mid-teens from fiscal year 2025's $2.01 billion from continuing operations. Gross profit is also expected to grow at a rate in the mid-teens from fiscal year 2025's $515.5 million from continuing operations. Adjusted EBITDA is expected to increase from fiscal year 2025's $140 million at approximately twice the rate of net sales growth for fiscal year 2026 as continuing operation results are expected to benefit from operating leverage. We also announced today our quarterly dividend of $0.25 per common share, which will be paid on December 17, 2025, to shareholders of record on November 25, 2025. Our solid cash balance positions us well to allocate capital to growth while returning capital to our shareholders. It was a significant quarter and first half for ePlus with double-digit growth across all key metrics. The sale of our domestic financing business has simplified our business model and allowed us to focus on being a pure technology player. It also gives us the financial flexibility to expand our footprint and customer base, both organically and through acquisitions while continuing to expand and enhance our solutions and service offerings. We are well positioned to build on our momentum, capitalize on new opportunities and deliver value to stakeholders over the long term. Thank you for joining us today. We will now open it up for questions.

[Operator Instructions] Your first question comes from the line of Maggie Nolan with William Blair.

Congratulations on the results. I'm hoping that you can double-click for me on the strength in security. It was a pretty impressive numbers that you shared there. So what is driving the strength in that offering?

Well, a couple of different things, Maggie. So Security was up 56% in terms of gross billings. Overall trailing 12 months, it's up nicely as well. What we're starting to see is a lot of the AI initiatives with customers making investments, looking at data classification, data cleanliness and projects along those lines. And then just the normal network security and all the other things that we've done over time. We are starting to see an uptick in, I'll say, AI-related deals across compute, storage and security. And that's part of the reason we had a nice quarter in those areas. Networking, by the way, I know you didn't ask for it, but Networking was up nicely. So that also contributed nicely to the quarter. And if you remember, a few quarters back, it was actually down due to the supply chain issue with the digesting of product that Elaine talked about. That's actually starting to pick up as customers look to modernize their networks to be ready for AI.

Okay. Great. And maybe to round it out, can you talk a little bit about what you're seeing by customer end market as well? There seem to be some variability in strength and weakness across your different end markets.

Yes. In terms of -- well, let me touch on 2 things, make sure -- as it relates to the verticals, we had a strong quarter across almost every vertical. The only thing that was down was our state and local, which I think had to do with a lot of what's going on in the government and funding and things along those lines. Otherwise, all the verticals were up. And as it relates to our customer size segments, Maggie, the mid, the 500 to 10,000 and the 10,000 and above, which we consider to be enterprise was up real nice. So across, I'd say, all 3 of our segments, product, professional services, managed services, across all the verticals, except for the state and local in the SLED space, and then across all the different product areas, we were up significantly, except for collab -- collaboration, I should say.

Your next question comes from the line of Gregory Burns with Sidoti & Company.

It's good to see the AI starting to now translate into some order flow for you. Could you just talk about maybe how the pipeline looks? What gives you confidence in kind of the raised outlook for the year? Any kind of color you can give on preorder or demand activity and pipeline, how the pipeline is shaping up?

Yes, Greg. So a couple of different things. So as it relates first to the quarter, really proud of the team in terms of the execution, especially in a kind of an uncertain economic market with what's going on with the government shutdown, tariffs and inflation up or down, right? So team really did a nice job in the first half. We also -- as we talked about on previous calls, we do a nice job of tracking the pipeline and opportunities that are in there. We did have a couple of nice large deals that fell in Q2. But as you can see, based on our guidance, we're still very optimistic about the rest of this year. And I think that kind of shows in our guidance.

Okay. And then the leverage, obviously coming through really nicely now. How should we think about leverage versus need to invest. Obviously, there's a lot of growth opportunities out there for you, particularly maybe now with AI becoming more of a meaningful driver. So how should we think about leverage and how much the margins could expand from, I guess, where you're guiding to for this year?

Yes. So 2 things there, Greg. One, I think you can expect operating leverage for a little period of time here. But as we've talked about on previous calls, we're a growth company. We're in -- after selling a finance, we're in a pretty strong, I'll say, cash position that we have a lot of flexibility in terms of how we can go grab market share, expand our footprint, our customer base, and that could be through organic hires, which we will be making to kind of build out our services and AI capabilities and also through acquisitions. So short term, I think you continue to see some operating leverage, but we're still going to be active in looking at where we can build out our footprint and customer base, both organically and inorganically.

That is all the questions that we have. I would like to turn it back over to Mark Marron for closing remarks.

Okay. Thank you, operator. Everybody, thank you for joining us on the call today. Once again, we feel good about what the team put up this quarter and for the first half and want to thank you for joining us on this call. Take care, and have a great holiday season, if you can. Take care.

This concludes today's conference. You may disconnect.