The following is a summary of the Converge Technology Solutions Corp. (CTSDF) Q1 2024 Earnings Call Transcript:
Financial Performance:
Converge Technology Solutions Corp. reported gross sales of $1 billion for Q1 2024, marking a 4.2% organic growth.
The company's gross profit saw an increase of 2.1%, reaching $175.3 million.
An improved adjusted EBITDA was reported at $42.2 million with a 2.9% YoY growth.
Converge exhibited strong cash generation, with $110.9 million from operating activities, a stunning 286% YoY growth.
They managed to cut down their net debt by $190 million YoY, reaching a net debt-to-EBITDA ratio of an impressive 0.8.
They announced a 50% dividend increase to $0.15 per share per quarter, or $0.06 per share annually.
Converge repurchased approximately 4.9 million shares this year, returning approximately $29 million of capital back to shareholders.
For Q2 2024, estimated gross profit will range from $175 million to $182 million with an expected adjusted EBITDA between $43 million to $46 million.
Business Progress:
Converge shifted focus towards streamlining operations, pausing acquisitions until the launch of a new ERP system later this year.
They continue to hire experienced sellers and invest in AI capabilities.
They were recognized for their focus on AI and industry partnerships with multiple awards.
Growth in high-performance computing, analytics solutions, cybersecurity solutions and multi-year software licenses drove Converge's gross sales.
They are working on transforming into a high-margin business, with emphasis on professional services, managed services and AI solutions.
They secured 103 net new logos, diversifying their client base due to their commitment to cross-selling and hiring new sellers.
The company is working on deconsolidating Portage.
Converge is building relationships with key hardware clients and hyperscalers like Nvidia, AMD, IBM, HP, and more for AI solutions opportunities.
The company sees positive growth potential in their software business and the partner program changes from VMware and Broadcom.
More details: CONVERGE TECHNOLOGY SOLUTIONS CORP IR
Tips: For more comprehensive details, please refer to the IR website. The article is only for investors' reference without any guidance or recommendation suggestions.