Thank you for standing by, and welcome to the Dicker Data Limited Half Year Twenty Twenty-Four Results Presentation. All participants are in listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Ms. Mary Stojcevski, CFO. Please go ahead. Hi, good morning, everyone, and thank you for joining us on this call and giving us the opportunity to provide an update around the results that we have released this morning. I will go through the financial results and updates, and Vlad will then provide some more background on the market, industry, and opportunities that we're seeing for the rest of the year and for beyond that. Welcome and just starting off with, if we look at our highlight slide on page four of the presentation, there's just some key takeaways for the half year. Some color around some of the positives and there's of course a bit more color around profitability and what we're seeing in the market. So for the half year, coming off the Q1 result, where there was a subdued market, plus we had a very strong comparative Q1 2023, where we reported a decline in gross sales of about 9.6%. We saw a very strong turnaround in Q2, sales growing about 8.3%, where we've landed for the half year of gross revenue of about AUD 1.6 billion, slightly down on the comparative half, and that was a very strong result for the quarter in terms of sales. In actual fact, there was a lot more invoicing that happened towards the last part of June, but under our revenue recognition principles, where some of that stock didn't get delivered, it couldn't be recognized. So, the takeaway from that was that we're seeing improvement in the market around demand and we've also seen that flow through into July with strong sales growth in July as well. On the profitability side, particularly if we look at EBITDA, that result was down about 2.4% at predominantly around costs. If we go to the next slide, there's a little bit more explanation and color on that. Sorry, that was just in terms of the financial trends. If we could actually go to slide six. The gross profit result was AUD 155 million. It was up 2.9%, and there was an improvement in gross margins, particularly driven by improvement in gross margins in our New Zealand business, which balanced off some of the cost increases, resulting in the EBITDA closing down about AUD 1.7 million. Now, that AUD 1.7 million is predominantly related to increase in some employee costs, which we had forecasted, but what wasn't in our forecast, some additional provisioning for bad debts. That was approximately about AUD 2 million, made up of about AUD 1.6 million in our distribution business and about 400,000 in our DaaS business. Now, those particular provisions haven't crystallized, but under our provisioning requirements, they were picked up in that quarter, which has impacted the profitability. But the positive takeaway from that was the improvement in gross margins and the strong Q2 2024 gross sales growth setting up the momentum for our Q3 Q4, which I think we've always called out, that we were expecting the first half to be relatively flat. Profitability was softer than we expected, particularly driven by this increased provisioning for bad debts. But the general view is that there's positivity for the second half around sales growth and being able to maintain the gross margins. If we go to the next slide, we've got a little bit more breakdown of our profit and loss. As we've reported last year, we've changed the way we recognize revenue from a statutory perspective, where our software and virtual services, being the warranty piece of our business, is recognized on a net basis. So on that basis, the total revenue was down approximately 2.1%. And gross profit margins, if you reflect against the net revenue, finalized at 14.3%, which was up, you know, on the prior period, again, driven by the improvement in our New Zealand business and some higher margin business that we operate in now. In terms of the expenses, apart from the ones I've called out around employee costs and increase in bad debt provisioning, obviously, finance costs were a big part of our profitability, and they increased about AUD 2.7 million for the half, which was a significant impact, especially where in the comparative period, it was only the start of the rate rises last year. And so on a comparative basis, the comps would be more relative in the second half as well in terms of finance costs. But obviously, it has a significant impact on the PBT line, and we've seen PBT decline around that 6%. On the balance sheet side, if we go to slide eight, there's definitely an increase in our receivables balance. This was driven by the amount of invoicing that happened towards the last few weeks of June, plus we are experiencing and seeing in the market a bit of a slower collection coming, you know, as a result of sort of the environment around the economic environment. But it's... We yeah, we don't really expect collections to still be relatively good, and don't see any problem with that other than the ones that we knew about that we've already provisioned. We've also seen an increase in our inventory that's in preparation for the coming education and retail seasons, plus we've taken delivery of all the new generation PCs around the AI opportunity, and there's definitely been even since the balance date a further investment in inventory in preparation for what we're expecting to be a stronger sales half for H2 this year. What that has resulted in is an increase in net working capital investment of about AUD 18 million. The increase in receivables and inventory is balanced by an increase in payables. We've advised before, where there's an opportunity, we do take settlement discount and pay suppliers early. However, there's also the lever that where we're investing ahead in terms of inventory, we may revert back, and we've seen an increase in the payables balance, resulting in a net working capital increase of about AUD 18 million. On the debt side, we have renewed all our finance facilities. The primary facility around our working capital funding being our receivables facility was renewed for three years, and now is represented as a non-current liability. The limit was also increased to AUD 320 million, and we were drawn at AUD 233 million at balance date, giving us capacity for, you know, the future funding of the business, as we're looking to see the growth and this additional investment in working capital. In terms of dividends, the company's had a long-standing policy of paying 100% net profit after tax dividends. There's no change to that for this year. We've already advised on what the interim dividends are going to be for the first three quarters at AUD 0.11, and we've got a dividend, a second interim dividend that was declared in August is to be paid on Monday. With the large final dividends that was paid for the FY 2023 year, the total dividends paid for the half year represented AUD 0.26, and that was up against the comparative period. That's the update in terms of the financials. I'm happy to take questions later, after Vlad's update, if there's any further questions on that, but I will now hand it over to Vlad, to give you a business update. Okay. Thank you, Mary, and good morning, everyone. I'm going to give you a business update on the first half, kind of comparison to the 2023 unpack a couple of things, and definitely probably spend a bit of time on looking at the second half. Okay, in terms of... Okay, so let's move into a slide with a market share. We've held our market share really, really well in Australia. We continue taking market share in New Zealand. Just to split out New Zealand for a second. We had an exceptional H1 for New Zealand, driving driving a good, good strong revenue performance, but most importantly, really turning the things around around profitability. We've pretty much doubled our profitability in New Zealand in the first half. I think merger of Exeed and Dicker Data is totally and completely done now. We work fantastically in New Zealand. We're taking shares from Ingram, and we're taking vendors from Ingram. I think we're going to have a fantastic H2, and it will be our absolute, by far, the best performance in New Zealand this year. We're getting closer and closer to Australian metrics, which is really good. Australia, we're holding our market share good. We're seeing some smaller distributors, like Leader and Westcon, grabbing a few points of market share. Mostly, they're grabbing it not from us, but from some other competitors. In corporate and commercial, we're holding our share really, really well. While we're on this slide, I'd like to make a couple of comments on financials. I think it's very important to deep dive a little bit more on our H1 performance. I just want to point your attention that H1 2023, we did AUD 1.6 billion, give or take, in revenue. AUD 200 million of this AUD 1.6 billion was the backorders that we brought from 2022. If you remember, after the COVID years, we did really well with our end clients and PCs. We couldn't get any stock of advanced solutions, like, you know, data center infrastructure vendors, like server, storage, enterprise networking. So we've been building that backlog. Really, all this should have been invoiced within 2022, but because we couldn't get any stock, we brought. If you remember, we brought AUD 400 million backlog in 2023, and we've invoiced most of it in first half. So if you think of what business was generated in H1 2023, it was about AUD 1.4 billion. We invoiced one point four, and another AUD 200 million of the orders from the backorders from 2022. If you look at 2024, it was AUD 1.6 billion. All AUD 1.6 billion was generated in 2024. We had a very, very small backlog from 2023, like a workable one, like a routine one. The one, the backlog that we're carrying around from quarter into quarter. In fact, it was actually depleted a little bit lower because we were trying to get to the number in Q4 and trying to invoice as much. So when we went into the Q1 2024, the backlog was depleted. Market, I would probably suggest, maybe slightly tougher in Q1, so then Q1 2023. Looking at this, I think it's very important to unpack it a little bit more. Yes, we came to the flat half on half, but we always said it's the instrument of very high invoicing in H1 2023. That's why. If it wasn't for this AUD 200 million, we were up. There were areas of our business who grew incredibly well in H1, despite all the toughness in the business. When I look in H2, it completely reversed because we carried a small amount of backorder, backlogs, invoicing in Q3 2023, and we pretty much completely depleted and went into the slowdown in Q4. What happens right now is complete reverse. January, February, March, three months decline year on year because of what I've just described. We went into April, May, June, July, four months in a row, growth year on year. So we are in the growth mode year on year. Sales are stronger. So when I look at the H2, we could clearly see the pace pattern and where is it going. And I think Q4 is going to be an incredibly strong and determined quarter for Dicker Data's performance in 2024. So just wanted to unpack a little bit on numbers. I'll be happy to take questions later on. Market share holding well, New Zealand growing. So, let's move into next slide. Industry recognition. Look, I'm just gonna pass it through. Very similar. I'll probably just point out that, two weeks ago, we have won Channel Choice Distributor of the Year, voted by all partners, resellers, managed service providers, and system integrators. For the second time in a row, Dicker Data being the best distributor in the region, which is amazing. Otherwise, we continue getting a lot of recognition from the industry. Adding new vendors, that work will continue happening. I would highlight three major ones. Adobe is a giant of a software vendor, which we've added beginning of this year. Again, it took us a good three to four months to form the team, to build the platform, get the IT going. It's an incredible, incredibly big part of the business. For 2025, I would forecast for Adobe somewhere in the vicinity of AUD 100 million revenue. We've just starting to see the uplift in our sales. One of the other vendors we appointed late last year, that's why it's not in this slide, it's NetApp. It took us around six to eight months to get to about 30% market share. Last quarter, we moved into the 40% market share, and we're looking at about 50-55. Once again, it does take time, but it does make an impact. We've just signed up an exclusive distribution agreement with Equinix, one of the biggest and important players in the whole AI ecosystem. I'll talk about AI in a second. AI represents a huge opportunity for us. We are now about twelve months into the whole AI hype. I know now exactly where our distribution is sitting, what the opportunity, and how we're gonna go after this. So I'll probably unpack it a little bit later. Equinix was a very important part of that strategy, and then Hikvision as well. We've rotated Dahua, and we bring Hikvision because it's sitting perfectly aligning to our commercial market, very substantial acquisition, and so forth. So this is the three I wanted to highlight. We're working on plenty more coming in the second half. Long-term vendor relationship diversification strategy continues. Everyone new on the call, if you look at about ten years ago, fifteen years ago, we were very highly reliant on a couple of vendors. That reliance is completely gone. We continue to bring in tier two and other tier one vendors on stack just to get this risk mitigation and also to allow us to be a value-added distributor as a one-stop shop to all our partners. So this is very important strategy. It's a strategy to grow, and it's a strategy to mitigate the risk. We have exactly the same strategy with our customers, and both strategies working perfectly well, and we continue to execute. Now, we go to the next slide of the category performance. Okay, so I'll probably stay here for a little bit longer because that's important to understand, and I think the way we're presenting it now, it's probably more capturing the business in a more simplified way, so 30% of our business is what we call an endpoint solutions. It's still the biggest part of the business. When I say endpoint solution, it's your notebooks, your laptops, desktops, monitors, accessories, peripherals, everything that complements an endpoint solution sale. It could be mobile phones or tablets, everything to do with that, 30% of the business. Our software is about the same, just a little bit under. And then we have advanced solutions, which is our data center infrastructure, server storage, enterprise networking. So three very similar type of businesses. And then we have a growth segment. We have our access and surveillance, our top business. It's a growth opportunity. We have our audiovisual growth opportunity, and we have our retail, which is also growth. Small segments, but giving us the biggest growth opportunities. Okay, let me unpack one by one. I'll spend maybe five, ten minutes on this. So software business. Software business, we had a very, very soft Q1. We had incredible Q2. Q2, all software business went into very good and aggressive growth. Q1, we had this situation when in Q1, twenty twenty-three, we had about 40 million of Autodesk business, which unfortunately no longer was with us. Again, this is a really good example of a large vendor and relies on the vendor, and they changed their go-to-market strategy. They said, "Two large customers, it's a, you know, we're gonna take them direct. We're not gonna go through distribution." It's a one-off thing. It's a very rare thing, but it does happen. It left us a massive gap. My Adobe business hasn't kicked in yet. My VMware business was suffering from, you know, Broadcom acquisition of VMware. It removed all their existing systems in place. We couldn't quote, we couldn't get things out, so it just put a lot of pressure on it. Q1 was very, very soft. Microsoft continued doing well. Microsoft, out of all the software business, is a good, stable, good performer, around 10-11% each quarter on quarter growth. We're doing really well. In Q2, we had Adobe coming in a little bit. We've had VMware started to invoice and quote. But what happened in Q2, we changed our strategies slightly with in our software business. We started to engage a lot more with enterprise type of solutions and deals, and we started to win a lot more cybersecurity deals. Now, unfortunately, it resulted in a slower growth - lower gross margin sales, but it gave us that good volume of orders coming in and gives us a good recurring base, but it did put pressure on our gross margins. Because, because of the toughness of the market and because of small and medium market is not quite firing yet. It is coming, but it's not quite there yet. We have to get involved a little bit more in a higher-end mid-market and enterprise business. We're winning really good, we're getting the net, but it does put the pressure. So if you remember the slides when Mary was looking at the gross margin, how we went from 9.4%- 9.8%, half and half, we really should have been way above 10%, because our high-margin business growing really well. Our Australian retail value business have grown 24% year-on-year, that business at about 12% gross margin. Our DaaS business continue doing well and keep growing. That business is, like, 25% margin, gross margin. And our New Zealand business gross margin have improved by one point. So we really should have seen somewhere about 10.2, 10.3, if it wasn't us engaging in a, like, like a lower scale of profitability, larger deals. We pretty much need to do it because adding just new vendors and pushing it into SMB, it's probably right now wouldn't have worked. Is that gonna work in H2? It'll work a lot better, and it's gonna go so good in 2025 when the SMB and mid-market will come back. At the moment, market is tough. Interest rates are high. All the small businesses not spending, they're selling their assets. My prediction was that in Q2, we would see a little bit of that business started to ramp up. It didn't happen. Q2, our exceptional performance is due to us getting more of the existing vendors into mid-market and maybe just slowly touching the enterprise. We need some really good market share with some other vendors. Q3, we're starting to see a bit of a science coming in, but Q4, my prediction right now, on the thirtieth of August, I think Q4 is going to be an exceptional quarter for us, and I think Q1 and Q2 twenty twenty-five is really gonna cement that growth. So that's where because 80% of my business is in mid-market and SMB, which currently just waking up. It's starting to wake up, and I'll say to you why. However, talking about AI and enterprise, it's still a great, great opportunity there, and we're only starting to kind of getting some signs of some first orders coming in. So, end client computing down 6%, again, driven the softness in SMB. Advanced solution down 3%. Very simple, because if I look at my Cisco business, I'm, like, 20% down year-on-year. You know why? Not because I'm doing less Cisco, it's because I've been invoicing a hundred and twenty million of extra Cisco, H1 in 2023, which when I look at my pure bookings and business that I've generated in H1 2023 versus H1 2024, my Cisco business is actually growing. So what you're seeing here, it's very you need to unpack it a little bit more to really get the flavor and have a forward-looking kind of thing. When we go in twenty twenty-four, so when we went in, in H2 twenty twenty-three, we had very little back orders. We're going in H2 twenty twenty-four with very little back orders, but the business we're generating is stronger. So this is where my optimism is coming from. There's no more competing against the periods where we've been invoicing on the backlog of a previous year. Audio visual, again, every decline and every toughness in the business to do that, my mid-market and SMB is not doing that well. It's a pure reflection on the toughness in the market, high interest rates and just not good. Remember, those type of categories is where Dicker Data is very strong in. We already have a big market share. We already have lots of vendors. There is nothing that I can do to really drive an incredible, like, type of new opportunities within those segments. I just need my markets to function, and then all of a sudden, we start accelerating growth. However, when it comes to retail business and DaaS business and other businesses, that's where I can take a little bit more market share. That's where I can bring more vendors. Like, for example, in my value retail business, you know, a couple of new vendors make a huge difference. So you can see it here, and we're gonna continue doing that more and more. So that's kind of an unpacking the numbers. Again, more than happy to take call, questions and drill a little bit more in those segments. But I thought it's a really nice way of showing you our entire business. Okay, so now going into outlook. I mean, I've mentioned a couple of things. Let's go into the outlining AI opportunity. Look, AI is there, AI is real. We are, as an organization, investing. We leading the way with AI. I am talking to all my data center providers and vendors in order to involve me in those conversations. We are going to be authorized AI distributors for a number of my data center vendors, like Dell Tech and HPE, and a few others. We're working very closely with Microsoft. Lots and lots of things happening. AI is not a simple sale. AI is an ecosystem sale. It requires a data center space, it requires power, it requires NVIDIA GPU enabled servers that we can buy and sell from Dell Tech, Lenovo, or HPE. So it's a very complex thing, but it's happening right now. It is absolutely happening right now. This Monday, I'll just give you a quick overview on this. I think it's relevant. I attended a session with John Byrne. John Byrne is President of Sales, Dell Technologies Worldwide, and a lot of people are asking about AI, and he said it's absolutely revolutionary, it's changing our industry. Dell Tech did $1.2 billion in sales in AI-driven servers in their last financial year. They have done AUD 3.8 billion in sales last quarter. It's real, it's happening. AI, AI-empowered servers is coming here in Dicker Data, and we're selling them. AI PCs are coming in. I've just received my AI PC. It's a much higher ASP, and it's driving the thing. So AI is real, and Copilot is getting more adopted, more liked, and more used, and we're having bigger and bigger sale in that. So it's a little bit fragmented within our business, within Dicker Data business. We're doing lots of really cool things with a lot of different vendors and a lot of different aspects. In the next three months, you would see a strong, consolidated approach by Dicker Data in our AI strategy and moving forward. So look forward. Look, look for this. Device, again, big opportunity. Okay, so we all thought it's going to kick in a little bit earlier. Like I spoke with Lenovo guys yesterday, and they said Japan is already 80% refreshed. The business there is like 100% growth year on year. So, okay, well, it hasn't yet kicked in, but it is going to kick in. The end of support will be in October twenty twenty-five. I think it, I mean, we're starting to see slowly kicking in, but we still have a lot of old inventory. As soon as that goes through, then the new comes in, and then it, it'll start really ramping up. Again, I would probably predict Q4, Q1 at this stage. Let's see what happens. It is definitely happening. Copilot getting adopted, people are getting more and more into the AI PC thing, and the refresh is happening. The problem is that SMB is soft. So when SMB, small business, you know, they're just sweating their assets. They're not like, when I look at my orders and my penetration and quote to order ratios in SMB, it's not strong. What's really doing well now is that high-end mid-market enterprise, big volume, big order, quote, order, and it's happening. So it gives me the optimism as the enterprise, large enterprises, which do have money, spending money, refreshing and doing things, mid-market and SMB will come through. It's just a matter of time. So AI, we've talked about. Cybersecurity, one of the strongest growth from my software division in Q2 we've had is from cybersecurity vendors. Check Point, Cloudflare, Trend, Veeam did really well. We've started to ship a lot of VMware as well, and that's why we actually had a very strong July on the back of a cyber. So we're gonna continue to do more and more cyber. Great market. Also, I don't know if you guys remember, the last company update I did, Cisco awarded Dicker Data as an exclusive Cisco security distributor in this. We've invested in this business. We brought some people and capabilities, and last quarter, we've doubled our Cisco security business bookings. Actually, overall bookings are very strong last quarter. Not only invoicing, but bookings as well, which we hopefully will see a good invoicing pattern within Q3 and Q4 for that particular vendor. It's working really well now. Collaboration, still a great opportunity there. Again, we just need small business to drive a little bit of growth. Everything else is, I think, we've touched base on. Those three areas I continued mentioning, so New Zealand always been a great opportunity. We've always been underrepresented. We're getting there, we're getting more vendors. We've really streamlined our operations and processing, so the profitability started to drive in, going really, really good, so we continue to put more focus in there. DaaS business, okay, DaaS business is a great opportunity, and yes, our market share is still quite small there. The challenge for us as a business is to drive more growth from and move more shares from very fragmented, a big number of other smaller distributors. So it's either we need to acquire a couple, like we did with Connect in New Zealand. Naturally, organically, it's a bit challenging. Look, because they're all about AUD 200- AUD 250 million, there's about four or five of them. They specialize in a particular tech, and they're very good at what they do because they're very specialized and very invested. So in order for us to get that business without aggressive commercials, it's quite difficult. But we don't want to do it with aggressive commercials because we have a capabilities and skill set that we already invested in. So it's a bit of a strategy, what's next with the DaaS business. It is organically growing. I think addition of Exeed was a huge win for us with our acquisition. That will propel the growth probably a little bit more in the H2 and then for 2025 we see what we're going to do with this business. Again, continue to focusing on diversification and convergence. Convergence is happening. We're seeing it everywhere. We're incredibly well-positioned to take a greater deal of advantage of this. If I look at number of vendors I'm representing in data center infrastructure, cooling, racking, AI, operational technology, electrical markets, surveillance markets, I got it all. My software stock, my platforms, is very solid so like I said before we just can't ignore the fact that it is happening, and not to invest and not to go after this business so it is happening. We're turning it around, and we continue building our capabilities to drive more ecosystem sales. We're very, very good in single vendor, single technology sales. We, we're pretty good in a simple solution sale, or what I would call a traditional complex IT sale. What we need to figure out now, how to go beyond that complex traditional IT sale, where we got server storage, networking, software layers, packages together go. We're very good at doing that. We now need to think more AI. We need to think more, how can we really propel our customer business to the next level? So I'm actually creating that capabilities within Dicker Data to go after this business, and it's very, very exciting. All kind of on the back, on the back of the AI opportunities. Okay, and that would be it. So that would be my update, a bit of outlook, a bit of how I feel about H1, 2024. Any questions? I think Michael and Mary would love to take questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Chris Gawler with Goldman Sachs. Good morning, Vlad and Mary. Can you hear me okay? I do. Yeah. Great. Just a couple questions for me. Firstly, on the revenue run rate into the second half, just noting some of the positive commentary in terms of sequential improvements through the second quarter. Just wondering, are you hoping that that year-on-year growth that you delivered in the second quarter, that 8%, can be sustained or accelerated into the second half? Like, what, what are your open orders telling you at the moment, Vlad? Are you talking about 8% overall year-on-year? Correct. Yes. Growth? Okay, so this is what I think. Q1, we were in decline, Q2 in a good growth. Q3, we would looking at delivering a low single-digit growth, because Q3, we still were doing some invoicing. July started really well, August looking okay, but I just... You have to be careful. Q3 is my slowest quarter. Q4, we're gonna deliver a very good growth. Where it's gonna end up, whether we end up in plus 8% for the whole year, don't know, because we already, it, it's... Yeah. First half is flat. Second half, hopefully, I'll get somewhere there. So I'm thinking maybe 3%- 4% year on year. That's where my mind is. Okay, great. That's really helpful. And then second question on the gross margin outlook, just following up on your comments around the impact of chasing some of that enterprise software business had on your gross margin in the half. Where do you see the gross margin trending in the second half? Do you think you can head up closer to that 10% mark where you really think you should be delivering? Not in Q3. In Q3, what I need to do, we need to start seeing uplift in my SMB business. All customers there, I tell you, we're doing a lot of quoting there. The problem is we're not converting quotes into the orders. Customers are less reluctant, or even when we do convert, the orders are quite a bit smaller. So my high margin SMB business that's been propelling that really strong margin is not quite there. And look, it's only about 20%-25% of my business, but... If I put an extra 2%-4% and margin on the bigger growth, scaled revenue on the 25% of my business, all of a sudden it results in an extra point or two, even two points. I'm really focusing on Q4 and how do I drive and stimulate SMB market when it's really start hitting? Because it will come. It'll come. Obviously, there's lots of positive energy around the market, so it's just a timing. Yep, sure. And maybe one for you, Mary, in terms of the OpEx outlook. I'm just curious in terms of OpEx below the GP line in the second half. You added a number of heads in the first half. Just, hopefully, hoping you can provide some more color around the OpEx growth in the second half, and maybe a bit more color on that bad debt provision as well. Absolutely, Chris. So on the employee costs, so there was all those new vendors we've onboarded, there was some investments around that. And on a comparative basis, there's also some in, you know, wage inflation around. In the comparative period, there was lower superannuation, so it's all sort of feeding into higher employee costs. And but largely, we had forecasted for that. The one that I hadn't forecasted for was additional bad debt provisioning. Now, these bad debts haven't crystallized. However, under sort of our provisioning methodologies due to the aging, we've picked up a provision for that, and that was approximately about AUD 2 million. So, if you look at the EBITDA number we delivered, it would have been relatively flat, again, as we did in Q1, had it not been, well, that additional bad debt provisioning. Now, we're working towards collections on those, and it's predominantly two different debt collections on those. So, where that ends up is, I don't know, but, you know, there's a possibility that some of that provisioning could be reversed in the second half. Perfect. Thanks, Vlad. Thanks, Mary. That's all from me. Your next question comes from Bob Chen with JPMorgan. Morning, guys. Just a few questions for me. Just on the working capital investment side, obviously seen a bit of a step up this half. How should we be thinking about that into the second half, and how will that sort of impact your net debt position as well? So Bob, we're definitely seeing increase in working capital right at the moment as we're taking a position on inventory. There's been some, you know, relatively large buy-in. We're actually tracking inventory even a little bit higher than where we delivered the number at June. And we expect that to largely sell through before the next balance sheet reporting period in December. A lot of it's got to do with inventory around these AI PCs, also in preparation for education, and there's the retail uplift that happened for the big sales that happened November, October-November period. So we've upsized our debt facility to cater for the increase in working capital requirements that happen intra-month. But overall, I would say, you know, hopefully by the end of the year where a lot of that sells through, we should see a relatively back to the average levels that we had, other than if we bring on other vendors and there's some net new investments that might need to be made. All right. Perfect. And then just in terms of, on the AI front, some of those relationships signed, that exclusivity agreement with Equinix, like, what does that mean to your business? It's what we're doing right now is we're bringing all the ecosystem partners, which would make us to bring every single AI player into one spot and make it very, very easy to do the deals. So we've done a couple of deals, but ultimately, it's going to be three or four vendors together working on an opportunity. Everything goes and channels through Dicker Data. We will be connecting dots together, and we will be assisting with to you know to the partner on how to bring it all together. So Equinix comes at the point where all those racks, storage, and servers need to be put. Equinix have a fantastic facilities globally and all around Australia as well. We will be promoting the value that Equinix bring into the deal, same as we're promoting, Dell Tech or software stack of VMware or Citrix, and bringing it all together into the deal. So, we have a fully generated strategy. We build this strategy, with some of our vendor experts, and we're going to release a little bit more on that, in the next, four to six weeks. Okay, perfect. And just to confirm, like, when you were talking earlier about an improvement in momentum into Q4, does that include any of sort of the AI sort of related work, or is it more maybe on the retail side that you're sort of more bullish on into Q4? Q4, it's actually a combination of everything. I think it's going to be a perfect storm. Well, that's what we, well, that's what we're gearing for. So education is also, well, just to add to Mary, AUD 50 million of inventory currently sitting, it's all educational, back-to-back. We're just waiting to deploy it, and it all depends on when we're going to give a go ahead, when we need to start deploying it. A lot of that is AI PCs, which we're starting to see some uptake. We went a little bit aggressive on those, so that will be a really good Q4, Q3 to Q4 story. And just generally with the new vendors that we bring on, like we brought Hikvision on board, so we had to invest in some inventories. Like ever, I don't see that as a risk at all, but of course, it puts a little bit of pressure on our cash flow. Great. Thanks, guys. So our next question comes from Apoorv Sehgal with UBS. Good morning, Mary and Vlad. Mary, first question, just to follow up on the operating costs. It was about 5.7% of sales in the first half, probably closer to 6% in the second quarter, which is well above historical levels. If I've interpreted correctly, you know, the big driver is the headcount investment you've made to support some major new vendors that you've taken on board. So as a percentage of sales, would you expect this new higher OpEx level to hold into the second half at that kind of high fives, close to 6% of sales mark? So some of the other expenses that play into that would impact that, which I'll, you know, all things being equal, I wouldn't expect to be provisioning those kind of amounts in the second half. But on the headcount front, we're not looking to increase any headcount specifically other than what's required around new investment. So it's likely to be at around that level. But if we can get top line growth, then as a percentage, you know, it will be improve, it'll improve on that. Yeah, okay. No, that makes sense. And I just want to clarify a sentence in the outlook statement in the annual report. It said that you expect the business to return to growth in the second half. Is that, Vlad, is that specifically a reference to revenue return to growth in the second half, which is what you've already sort of alluded to? Or would that include PBT profit as well, returning to growth in the second half? Our mind is very strongly to return both PBT and revenue. Q2 was returning to growth. In fact, like I've said, four months in a row, we went into the good growth. We will be, absolutely, we will be looking in returning and PBT, into growth as well. Got it. Okay, and just one final question for me on the top line. Obviously, in the first half, both the software and the hardware segment were around flat year-on-year. Would you be able to roughly split that Q1 and Q2? Like, what did both categories do in Q1, and then separately, what did both categories do in Q2? Like, just, like, rough growth rates. Yes, Mary, so correct me if I'm wrong, software was about 20% up, Q2 on Q2. Actually, hold on. Yeah, just- I have that. That's off my- Oh, you got it in front of you? No, I don't. I'm opening it up right now. Okay. Software Q2 2023 on Q2 2024, 25.5% growth. You asked for hardware. Hardware was flat, 0.1% growth. But- So sorry, that was Q2? That's Q2 on Q2. Yep. Yeah, that's Q2 on Q2. Microsoft, about 12% growth. And, yeah, unfortunately, all the data center structure is split a little bit more, so it's hard for me to see. But, Q2 2024 versus Q2 2023, most segments into the growth. And Q1, unfortunately, most segments into the decline. But yeah, fantastic turnaround in Q2. Vlad, if I could just very quickly follow up. So software, I think you said, was over 20% growth in Q2. Now, that's still cycling the Autodesk comp, I guess. So into Q4, I mean, that's a pretty clean comp, right, in Q4. So that software growth number should be well and truly above that 20+% you just did? Yes, absolutely. I'm looking now at my software business, right? Q1 2024 was very, very soft. We nearly doubled our software business between Q1 and Q2. Correct, Q1 was. We just didn't have enough of the growth of the vendors to replace that Autodesk thing, and then Q2, complete turnaround. Yeah, absolutely. I'm looking for at least 20%-25% growth in the software business. Yeah. H1 on software, H1 2023 had about AUD 58 million of Autodesk, incremental, but- How much made it 55? Yeah. Yeah. Okay. Yeah. Great. Thank you. Did I answer your question? Yeah. So Q2 2024 on the Q2 2023, 25.5% growth in software. Yeah. Yep, perfect. Thank you. Your next question comes from Christian Waked with Jarden. Oh, hi, it's Ed Woodgate from Jarden. Thanks for taking the question, guys. Just wanted to maybe just more of a statement initially, just to make sure we're all operating from the same base. But so your start at PBT was AUD 50.8 million. You've got AUD 2.2 million of customer intangibles that you amortize there, plus the AUD 2 million bad debts you called out. So, you know, arguably you could say there's AUD 55 million in underlying earnings if we're happy that's not occurring. So I mean, and that seems to be more or less in line with consensus, so not everyone adjusts for the amortization of customer intangibles. I just wanted to further understand some of those adjustments and mainly the bad debt. You talked it a little bit. Can you provide some color as to, like, the type of customer? Have they gone under? What's the reason for them not paying, and you for making the provision? Sure, absolutely, Ed. So yeah, that's correct in terms of your understanding. There's about over AUD 2 million in amortization of the intangibles and an additional provision, incremental to what we sort of would call average provisioning of about AUD 2 million. One of them, one customer, which there's a slow collection process, which we're working with them on, being able to accelerate collections on that, but because of the aging of the debt, had to provision for it. And about four hundred thou-- That was about AUD 1.6 million and about AUD 400,000 in our DDFS business, on a dispute with a customer, which we're working through both the vendor and the customer. So neither businesses have gone under. They're both. We're working with both of them on some kind of recovery. What that's gonna look like, I don't know. So, under the accounting principles, I still had to provision for the full amount. Okay, that helps. Thank you. And so you talked to it a little bit already, but just on the OpEx and the headcount, this time last year, you just finished taking costs out of the business or mostly taking down the business, and then Q1, your margins were off. So just curious, what's changed for you to invest in the headcount so much? Was it just new vendor adds? And if you could talk to your exit margins, maybe in July or even at the end of June, as far as EBITDA or PBT, that would be helpful. So in terms of the employee costs, it was also a strong Q2, so our comp arrangements mean that you know, achievements within teams increased, so there was increase as a result of that. There's net new headcount reflected as a result of some of the new vendors we've onboarded. So whilst some areas were streamlined and costs were taken out and comp programs were changed the prior year, the employee costs from our point of view still came in within how we had forecasted. So what was your second question, Ed? Just the trajectory in your margins as you exited the quarter in July or June, because just presumably, as you've added, you've onboarded those people, they've started even more revenue-producing. And so it'd just be interesting to understand how you expect things to play out for the remainder of the year. We're still looking at from a PBT margin, you know, somewhere around that, you know, between 3.2 and 3.5%. You know, we're looking at costs across the whole business, not just the employee costs, but obviously, they're a big part of the costs that need to be factored in. But I don't expect that, the PBT margin, to change too much from that. I just wanted to maybe add a little bit more color around, sort of thinking about, our employees and stuff like this. So what happens is, when we look at how we're servicing our market, the SMB partners are still there. The work that we're doing with them is same or even more, because what happened is SMB partners don't easily move into giving us orders. They're counting every dollar. It's, we need to find them a better deals. We need to continue find, better solutions with our vendors. So the Codara guys are working really hard. The problem is, after a lot of work, a lot of re-quoting, reshaping, re-solutioning, redesigning, we then can get an order or may not get an order, but the service we still do. It's incredibly important from our philosophy to continue doing that, because these businesses will grow, and in fact, we're getting a lot net new partners coming to us and working with us, so it's important to understand that this work is a lot of heavy lifting for, at the moment, slightly slower return on investment, but this market will jump into good growth, but I believe somewhere around Q4 and Q1, and that's when we will start to really see our gross margin propelling up, our NPAT improving. has been happening in the last half is we've been deriving the growth from the sources, which is slightly different to our normal sources, which is more enterprise and high-end mid-market business, which still need to be serviced, of course, and so this is where we think we've done so much work in securing that mid-market and SMB small business, years and years and years of building the relationship, building the platforms, building systems and processes. We need to retain all this to, in order to maximize our return when the market will come back into the growth. Hopefully, I made a little, put a bit more color on this. Yeah, no, that's very clear and interesting comment regarding doing all the service, not necessarily getting order. I think there's a few brokers in the call who relate to that. But if I could just follow up with the comment that Mary was saying around the 3.2%-3.5% EBITDA margins. Is that for second half or for the full year? Just want to confirm that. And then I guess it's probably more conservative for us to adopt maybe near the low end of the range, just some as I imagine a bit of that's due to, you know, it's depending on how much- Yeah ... revenue growth you get. Yeah, we're thinking for the full year. Full year, okay. Then there's been some good questions on inventory. I just wanted to follow up on that. Just how much of your inventory is related to old PCs and AI PCs inventory? Can you call out a specific number? And then also, your reasons for the inventory was retail sales. So I was kind of curious, because you would have had those in place this time last year. So, also saying that the retail business is up 25%, is that any of that as a result of winning new work in Australia, or- Yeah. It'd just be helpful to understand those. Sure, sure. Yeah, okay. So basically, the main influx on the inventory is around a particular vendor. Most of the stock, it's about 50/50, old gen and AI. Most of the stock, 90%, what we call a bid stock. What it means, it means if we have AUD 100 million of the stock of that particular vendor, it will be sold under very heavy bids from the vendor, will probably generate us about AUD 50 million-AUD 60 million worth of invoicing, and then we would have to claim the difference back from the vendor. So while if we're holding a lot, it's actually about 60% of that will be translated in the invoicing. We now have an absolute strategy on how to move that inventory in the next 2-3 months. Very similar strategy we have with other vendors as well. A lot of that, like I said, AUD 50 million of those. Big impact is education stock. We just need. We're just waiting for the timelines to start invoicing and deploying as soon as September, October, November. That's where education business happens. In order, it's with this kind of business, it's tricky. We have to have the stock. We need to secure it first in order to secure the and lock in our customer orders. So it's been brought forward slightly. We've normally would get these orders and bring the stock somewhere around, I'd probably say July, August. It was brought forward to about June. Some of our vendors were trying to get to their market share positions, and then we construct a commercial agreement with them, to do it, so that's probably just giving you a bit of color on this. Yeah. The retail piece is definitely growth in brand business, Jabra retail, the new vendor, Nothing, and we've seen growth around that Ecovacs business. Okay, thanks. And then just before I ask my last question, just to confirm, what's the nominal dollars for PC sales as part of inventory? Am I able to call that out? Yeah. Yeah, I can call it out. PCs, Mary, correct me if I'm wrong, but I'll be very, very close to the number. It would be around AUD 150 million. Okay, thanks. And then just, I'm sorry, I'm taking up your time, so I'll jump back after this. But just talking to a few people in the industry, it seemed like there was some positivity in May about June. So I'm just curious whether you've seen any orders from any of larger customers, potentially, or just in general, slipped from June and shifted into July? From which sector? Sorry, Ed. Just have you seen any deals slip from June into July? Yes, we did. We did. Yes. We've had some bigger opportunities slipped from June to July. Some of the big orders we did actually on the last couple of days of June, which we could not account for the H1 through the accounting standards. But also. Okay, so the sales cycle is now getting bigger. So enterprise business sales cycle is always larger and bigger than small business. Small business, if you work with a customer, a week or two, you get an order, a week or two, you ship, everything is done within, you know, three, four weeks. Sometimes even faster. If we have stock, couple of days. Enterprise deals, between quoting a deal to getting an order and delivering it, could be three to six months. So what happened in the first half, because we start doing a lot more of this, the average Dicker Data sales cycle have increased a lot. Not to say that even SMB, small business, from quoting, redesigning, re-quoting, shipping, even small deals, like AUD 20,000 or AUD 30,000 deals, which used to take a couple of days or a week, now takes four to six weeks. So to answer your question, yes, we experiencing delays, we experiencing moving into a next quarter. However, as the business will pick up, small business will pick up, we will start seeing slowly shortening of these cycles. And we will probably start removing ourselves slightly from large enterprise deals, which obviously done on low margins. That's when you're going to see another kick in our gross margin. That's when you're going to see another increase in our NPBT margins. But at the moment, everything is under slight pressure. We are holding, obviously, we're very monitoring it very, very closely, and I did say no to a lot of enterprise business, even in Q2, which was, you know, on break even or. So it's just, it's just the nature of the business. I thought it was a good turnaround, just enough to hold my growth margin up, just to hold my NPBT where I needed to, and I will adjust my strategy as we go through Q3 and Q4. Thanks a lot. Thanks, Mary. Your next question comes from Aryan Norozi with Barrenjoey. Okay, first one from me. Just on the PBT margin, instead of heading into calendar 2025 and calendar 2026, maybe specifically 2025, as you start to bear some of the fruits of your investment, should we still think between that 3.2 to 3.5, maybe going up to the upper end of that range, just in terms of thinking about the profile of margins versus where you are today? Look, we'd be looking to improve on that, Arian, in terms of FY 2025. I think there was still some work around costs that we're looking to implement. So I would expect that to improve, especially as we continue to work on improving our New Zealand growth margins as well. So the New Zealand PBT contribution as a, and their PBT margin should improve, and I expect that to flow through. Great. Thanks. Maybe, just on the dividend, so like you're paying an AUD 0.11 quarterly dividend, which is, and your payout ratio is 100%, so that implies a AUD 0.41 per share dividend and EPS. The market consensus is at AUD 0.47. Can you just sort of reconcile what, where the, what the market's missing between the implied EPS, based on your dividend of AUD 0.41, and where the market sits, if any? So our approach is to have a conservative, you know, three interim dividends for the first three quarters and allow for that to be trued up once the final results are determined for the final dividends. So that's probably where, you know, it's not quite reconciling. Yeah, okay. So, have any of your budgets changed since when you set the first dividend of AUD 0.11? Has anything changed in terms of what your budgeting process is? Um, no. and then last. Oh, yeah, sorry. Sorry, you go. No, no, it's since I know it hasn't. Perfect. And then, maybe one for Vlad. Just in slide, I think slide 15, when you look at the key categories that you're now sort of disclosing, you've given us some great color into the second half 2024, but maybe heading into calendar 2025, just particularly for the bigger categories, how do you expect the growth profile to be in calendar year 2025? For maybe like software, endpoint, advanced solutions, just any rough sort of gauge around growth in calendar year 2025 on calendar year 2024, please. Yes. So from the customer point of view, I think SMB is going, small business is going to drive our growth, and that's fantastic because SMB has been a very soft and sort of a declining market segment for us. From technology point of view, from advanced solutions, AI is going to drive a lot of growth. It's already starting to drive some growth, and it will continue to do so. Enterprise networking, great deal of optimism because we've seen some really good bookings last quarter. We had a very soft H1, and I think I did mention. My Cisco business declined about twenty 20% year on year. But then again, it's not really the business declined, it's invoicing declined because we've shipped a lot of Cisco in backlogs in H1 2023, so nevertheless, the bookings are looking strong. My PC, right? PC is 30% of the business, and when PCs are flat, it feels like the whole business is a bit flattish, so I need PCs to come back, and I need refresh and AI PCs to really drive the growth, and if I drive the growth via SMB, that's going to be a double impact, double positive impact, and that's what I am forecasting for 2025. End of Windows support in October 2025 will absolutely guarantees me this. It's not a question. It will happen. It's just a timing, and I need to be ready for that. It can start booming next month, it's, you know, so I know. We'll see. Is your def- Yeah. Sorry, you go. You guys, I apologize. No, I just wanted to say, software are gonna continue to do well. Advanced solutions will be driven by AI, and New Zealand is going to continue taking share. So my outlook for 2025 is exceptionally positive. And by that, I mean, historically, when you sort of say very strong growth, you sort of mean high single-digit growth rate. Is that a fair way of thinking about calendar year 2025 in terms of how we're forecasting? Yes Numbers in the outlook of the business? I'll be looking at what, where we're heading now, and if we finish 2024 with, say, 3-3.5% year-on-year growth, I'll be looking for, yeah, somewhere between seven and 10% growth for next year. Okay. And is it fair to say, beyond fiscal 2025, 'cause we all love extrapolating numbers, in calendar year 2026, you're gonna have to cycle the PC refresh, and historically, you've seen a dip in revenues beyond calendar year 2020, beyond the refresh cycle. Is that a fair claim, in that the PC business will actually go into decline in calendar 2026 as you cycle the Microsoft refresh? It may. Yeah, yeah, it will. Yeah. It will. I have to say it will, because 2025 is going to be huge growth in PCs, so 2026 is then probably gonna go into the slight decline. Yes. Yeah, perfect. And sorry, last, very last one: just the DaaS business. I think in calendar year 2023, you grew that business, like, 70%. I think you were targeting 30-35% growth or sort of big revenue growth. I think, you know, and it only grew about 5.5%. What's going on there? Yeah. Please. Yeah, yeah, yeah, yeah. So what happened is, it's a very unique situation. We brought in a new vendor, Hikvision. It's a very essential vendor, and it's a really good fit vendor, but unfortunately, we've lost one. So we've lost Dahua, and it was a very, very unique set of circumstances because both organizations came from one head office. It's a very bad history between them. Dahua said globally, they don't have any distributor who have Dahua and Hikvision under one roof. We actually did a fantastic job for Dahua, but... And it's a big business. Like, it was, what? Around 30, 30, maybe 30-35 million dollar business. So, you know, losing that was. But when we knew that we had to choose one or the other, it was a very strategic decision to choose Hikvision because they have a better fit to our customer profile, and higher margins. So we've picked Hik, so we're currently in transition. So we're kind of doing a little bit of Hik. We're not doing Dahua, and that's why you see kind of a very slight growth. As soon as that transition finished, and we get Hik into a full potential growth, Hikvision, when it's fully grown and fully moving, it should be a AUD 45 million-AUD 50 million-dollar business for us. So that's going to drive the growth. Yeah. Okay. And the Dahua, was that - when did that leave the revenue? Like, in the first half of calendar year 2024 that you've reported, how many months of Dahua, do- whatever it is, is in the number, in the numbers, please? If it's- Dahua. Mary? It's been most of the months, but the volume progressively decreased, Ari, but what the problem was in terms of growth, we were forecasting growth with these new vendors, and it was only evident after a lot of negotiations that the possibility of not doing both came about probably late May. Perfect. That's really helpful. Thanks so much, guys, for doing this. Also, I just wanted to give you a little bit of I wanna leave you with a bit of a positivity around DaaS business. Looking at my graph here, Q1 was very tough for DaaS, because of a couple of changes, but also we had construction, big wholesale construction business not kicking in. My DaaS business have grown 40%, Q2 on Q2. Okay? So last quarter was a very strong quarter. Perfect. Thanks. Thanks for the, There's just one quarter. But DaaS business is very interesting. It's like a Q1 and Q3, very soft, and Q2 and Q4 is really good. Yeah. That's perfect. That's normally seasonality, seasonality of that business. Yeah. All right. Great. Thanks, guys. Of course. Your next question comes from Olivier Coulon with E&P Financial. Yeah, thanks, guys, for taking my question. A lot have already been asked. I just wanted to go back to your point, Ari, PC refresh cycle FY twenty-five. Did you say that in Japan, they're seeing... Was that 100% growth? What growth rate did you say they were seeing, like, when they were early in the cycle? 80%. They've seen 80% year-on-year growth. Okay. So I mean, I guess if we see the PC refresh cycle really kicking in and, you know, PCs, peripherals, et cetera, et cetera, like, close to 30% of your business, isn't 7%-10% in FY 2025 quite a conservative estimate? Because- Sorry, let me rephrase it. I said the wrong thing. It's not 80% growth. I mean, I actually don't know what Japan growing. Yeah, they... So 80% through that already. Yeah, okay. Yes. What I meant is 80% refresh happened. Has happened. Okay. Right. We're hardly starting. We're just starting. Yeah. Yeah. Sorry. Yeah. No, that's okay. Yeah, 'cause I was just trying to make those two, you know, square that circle. And then just on gross margins, you mentioned that, you know, I thought you did a pretty good job on gross margin to tickle it up to 9.85, despite having a lot more enterprise clients. If the SMB does kick in, you know, is it realistic that that should go, you know, above 10 on a go-forward basis? Absolutely. Absolutely. It will. It's not assumption. It will happen. If SMB kicks in, and I'll continue to kind of strategize the business, and I don't have to do another AUD 100 million at one point, and I do another AUD 100 million at 15 points, then obviously, yeah. Yeah. Okay. And I presume you'd expect a fair bit of that to flow through to PBT margin if that were to occur? Absolutely. It will. As soon as SMB will start improving the order flow, like we've seen, if you remember, right? When we've seen in the COVID days, SMB was firing, and we were very strong. But at the time, we didn't have DaaS, we didn't have high-margin retail business, but we still, our growth margins have improved a lot. So those other businesses doing what they're supposed to do, I just need to get SMB up and running. That will definitely put a positive spin on both gross margin and PBT. Yeah. The only caveat I'd give to that is, of course, if we balance top-line growth with some higher enterprise deals and do both strategies, that might, you know, moderate some of the average margin. But it, I agree with Vlad, it flow through to the bottom line. We're not forecasting any significant investments around costs and taking another focus on that. Yeah. Okay. All right, no, I appreciate it. Thanks, guys. Your next question comes from James Lennon with Petra Capital. Hi, Mary and Vlad. Just a quick one from me. I'm just curious to know, with the interest received, it more than doubled, based on the PCP. Just curious to know what you've done there. So that's disclosed in relation to David's sell down. The funds were deposited into the company bank account, and the company earned interest, but then equally paid out that interest, so net neutral. Right. Okay, but you've got in here your AUD 1.1 million earned for the year. That's correct. Right. In the expenses, there's a relatively equal am- ... that goes out and that's disclosed in more detail in the cash flow and- Understood. Thank you. related party. Your next question comes from Jack Dunn with Citi. Hi, Mary. Hi, Vlad. Just a quick one from me as well. Just on your inventory, that PC amount of around AUD 150 million, what's that usually at on a normalized basis? So for instance, what was it at the end of the financial year? Normally under a hundred. Okay. So normally, it's about, you know, eighty, ninety, plus about another hundred of something else. So we kind of on that level, we hold about two hundred. Inventory also grown, like what Mary said, which is absolutely correct, is because of our retail business. Our retail business had a substantial growth, and all retail business, 100%, goes to our warehouse. So that's, you know, this is where our inventory starts elevating, and we have to hold more weeks of inventory for the retailers. DaaS business as well, it's not your normal four or six weeks holding. DaaS business, we need to hold for ninety days, sometimes even more, inventory. So it all kind of accumulates, plus a heavier PC holding because of some of the large government deals that we are getting into. We have an obligation to hold stock for those larger government deals and education. So that's where you see a bit of elevation. We will be trying to get the inventory down to more normalized levels before end of our financial year. Okay, perfect. Thank you for that. And then just on some of this AI opportunities, wonder if you can sort of clarify the revenue you're expecting from a partner like NVIDIA. Is this similar to what you're expecting from Adobe? I would love to clarify. Big lumpy deals, big opportunities, but what I did not realize how long is the sales cycle, but it's okay. It's okay. It's there, it's in the works. It feels like millions of people involved in it, everybody's locking the things, but until... Because it's not a simple sale, it's not that easy, understood traditional IT sale, it's a very complex sale. It's a new way of selling, it takes a little bit longer. So life cycle on some of the orders that we currently have is now over six months. You know, these big deals, two big deals we're working on, we're still working on them. The deals are locked in, but they're massive. So if they go through, like two deals go through, between those two deals, it's over AUD 100 million. So- Okay. And we have a couple of more coming, and more work and more partners. So it's super exciting. But for distributors, right, for us, it's new. Like, we work on, especially for a distributor servicing small and medium business, you know, like quarter note, a quarter note of deployment. Like, it's, it was quicker. This is a very new thing for us. So we only done. However, saying that, we have shipped already a lot of servers, Dell servers, HPE servers with GPUs, NVIDIA GPUs inside them, and that's classified as an AI order. So basically, without supporting AI platforms, those orders, those business wouldn't have happened. It's the same thing as Copilot. If it wasn't for AI, we wouldn't sell any Copilot. Copilot is absolutely net new category for us and a growth category. So it's exactly the same thing happening in various businesses. It's just for the big, chunky things that we all refer to as AI. It's a very long cycle. Okay, perfect. So just to clarify one part there, if it's a more complex sales process, even though it's to an enterprise or a larger customer, how does the gross margin profile look on those deals? Gross margin is okay. It's okay. It's in line with our company gross margin. Perfect. Thank you, guys. Your next question comes from Ed Woodgate with Jarden. Hey, guys. I'll probably quick, just 'cause I appreciate we've gone quite long now. Just following up from the question from Ari on PC refresh cycle into twenty-five. So I guess just to confirm, like, your business, it seems like PCs have been operating at a lockstep with, say, the infrastructure hardware part of the business, and if there was a decline in twenty-six, you'd likely be offset by some other part of the business. And then also, is it possible that the refresh cycle might last longer than twenty twenty-five, given, you know, during COVID, you benefit from five halves of strong PC growth, and there's some suggestions that this one might take longer by some other people in the markets? ... Yes. So, to answer your question, yes and yes, possible. I think personally, refresh cycle is going to be accelerated and sharp, somewhere around Q1, Q2 next year. Well, and we, but we will definitely see it in Q2, Q4 this year as well. Is it gonna last into 2026? We'll see. I think AI PCs, that. Because remember, AI PCs and the whole AI part of the business is so new. It's still very new. I mean, I know I've mentioned to you massive numbers that Dell and HPE is doing and stuff, but for us, it's still new. We're still working through it. Those deals that I've mentioned, they're all large enterprise, government, and predominantly not in Australia. In Australia, we're still only starting. So by 2026, the whole AI concept is not going to be new anymore. It's going to be well-drafted areas, strategies, processes. We would know exactly how to work. For distributor, the important thing is to have the access to the right vendors, and that's where we absolutely just, just having a very, very strong competitive advantage. We just need to really now start to monetize it. When that's going to happen? Yeah, we'll see. We're working towards it. Okay, and then I'm gonna combine my follow on with another question. But if the PC refresh cycle is sharp, and then maybe some people miss out on the AI PCs because they haven't, you know, got up to the knowledge curve on them yet, but then that creates a potential refresh catalyst a couple years later. Is that reasonable? And also, you mentioned earlier in the call that you're taking share from Ingram. In particular, you called them out. I was just interested to understand what makes you so confident you're taking share from them. I did mention New Zealand. Yeah, but not Australia. Australia, I'm holding. I think we're both holding, I think. Small, maybe some small distributors take a little bit of share. But in Australia, we're steady. In New Zealand, definitely, because I've seen their numbers last financial, and I know my numbers financial. We are closing the gap significantly between Ingram Micro's revenue in New Zealand and Dicker Data revenue in New Zealand. Yeah. Thanks, Dan. There are no further questions at this time. I'll now hand back to Vlad for closing remarks. Thank you all for your time. Hopefully, we unpacked some numbers and delivered a good comprehensive view. I know that we will probably see most of you on face-to-face meetings in the next four or five days. Thank you for your time and continued support and interest in Dicker Data. Thank you all. That does conclude our conference for today. Thank you for participating. You may now disconnect.