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

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