Morning everyone, and welcome to Dicker Data's first half FY 2026 results webinar. My name's Sam Wells from NWR, and joining me from the company today is Executive Director and Chief Operating Officer, Vlad Mitnovetski, as well as Executive Director and Chief Financial Officer, Mary Stojcevski. Following a brief summary of the results released to the ASX this morning, we will have some time for Q&A with the management team. There will be a choice of two options. First, covering research analysts can raise their hands via Teams should they wish to ask a verbal question, and all remaining participants are encouraged to submit a written question via the Q&A function at the bottom of your screen throughout today's presentation. We will endeavor to get to the majority of questions asked, in some cases, combining questions on the same or similar topic. I would kindly ask that the research analysts also please limit yourself to no more than two questions live on today's session. With that, I will pass it over to you, Vlad and Mary. Hi, and good morning everyone. Thank you for joining us on our half year results presentation and update. We are going to go through the results, the business updates, a re-look at our strategy, and the outlook for the rest of the year. To kick it off, just a summary of where we have landed for the half year. It has been an amazing result as a result of significant work by all our teams. We have seen gross revenue increase by 14.2% to AUD 2.1 billion, which was driven by refresh cycles around endpoints at data center, and a significant contribution from growth in our software business. You can see our recurring revenues from software have increased to AUD 600 million, representing a 20.7% increase. It was approximately AUD 100 million gross sales added in our software division, and Vlad is going to go into more details in our segment splits when we provide a further update around the operational aspects of the business. Significant improvement in our EBITDA, increasing by 37.3%, and a very pleasing result on net operating profit before tax, finishing just over 50% growth on the prior year. Earnings per share finalizing at AUD 0.335 per share, up 53.5%. If we have a closer look at the breakdown and our trends over the years, there is an outstanding result for this half, driven by opportunities around inventory purchasing that we were able to take advantage of during the first half of the year, driving some margin improvements and, as you can see, the half year result margin expansion from the prior year. Also resulting in significant uplift in PBT margin. While there was the sales growth contributing to that margin expansion, also pleasingly we were able to have operating leverage and cost control driving that outcome. If we look at the group results, the gross profit margin expanded to 9.8%, benefiting from some strategic stock purchases that we were able to have the opportunity to buy. We invested heavily in working capital. We did outline that with our full year results at the start of the year, that we were investing additionally ahead of price rises and supply constraints. And that strategy has paid off with that contributing margin increasing. But equally, we have been able to control the costs, and overall expenses as a percentage of our gross revenue has declined, showing the operating leverage coming through in that PBT margin. If we break it down a little bit in more detail across our regions, we have had some mixed results between Australia and New Zealand. Very strong results in Australia, driven by the elevated endpoint refresh software growth and our data center refresh demand. The Australian business reflecting very strong gross margins, with a lot of investment in inventory made and strategic purchasing decisions probably starting late last year. And we are seeing the benefit of that coming through. With operating profit before tax in the Australian business increasing by 55.9%, being a significant uplift and very strong PBT margins as a result. Alternatively, in our New Zealand business, we are still pleased with the results in a very difficult market. Unfortunately, there were a lot more supply constraints experienced in our New Zealand business. Across our hardware vendors, particularly around portfolios like HP and Apple, where the opportunity to bring in inventory was limited, which then impacted top line. Even despite that, there was some growth recorded across our gross revenue delivered, with gross margins coming off slightly, particularly driven by pressures within our consumer business. We were able to maintain expenses in line with prior year. But unfortunately, the result was a softer result. When converted in AUD, the NZD results were impacted by the NZD impacts and the translation effects coming through on the consolidated basis. However, we have seen some of those supply constraints ease coming into July and August, and access to inventory. We are seeing that turning around in terms of growth on the top line, and we will continue driving portfolio diversification in New Zealand to limit the impact of supply constraints and other issues with specific vendors. Australia has a much more diversified portfolio, so we were able to leverage anything that impacts a particular vendor. Whereas New Zealand has a slightly more concentrated vendor portfolio and that is continual work. I am sure Vlad will expand on that in his business update. From a balance sheet perspective, we feel there has been a lot of work around managing our working capital despite significant investments in increasing inventory. Inventory increased by over AUD 100 million, and that was very strategic buying ahead of price rises. We have seen elevated levels of receivables as well, driven by a strong June finish. However, pleasingly, we were able to still manage the working capital only slightly elevated in total dollars. At the same time, reduce some gross debt, particularly around slight changes to our dividend policy and more participation in our DRP, allowing some repayment of debt for that period. We will continue investing in our working capital as required and ahead of market changes. So that debt position can vary over time, but having the outcome for the half year come down by about AUD 10 million was a great result. Also wanted to point out a change in accounting policy that we put in place at 30 June this year. We had the valuation of the building done, a formal valuation, and we feel that this change in accounting policy reflecting the current asset, the fixed asset of the building at valuation as opposed to cost, is better information for our investors. Therefore, adopted the change in accounting policy reflecting the building at that valuation, resulting in an uplift of non-current assets of over AUD 107 million. That has been reflected accordingly and obviously flows through to the ratios that our balance sheet ratios represented across our debt and equity pieces. The company continues to pay quarterly dividends. We did announce a slight change to our dividend policy and moving away from 100% payout to a number that is going to be determined at each dividend declaration period, but at least at 80%. We also introduced a DRP discount, and we have seen an increased participation in that, therefore at the cash flow impact of that and resulting in some equity contribution that we were able to utilize against it. The quarterly dividends are continuing to be paid and the second interim dividend for FY 2026 was declared in August at AUD 0.115 to be paid on the 1st of September. I will hand it over now to Vlad, who will give you a little bit more detailed business update and strategy and outlook view for the rest of the year. Excellent. Thank you. Thank you, Mary. 2026, I have called it out at the end of 2025. It would be a year of data center infrastructure modernization, refresh, and AI. This is exactly what we are experiencing through 2026. Later on, I will have a look at the overall pie of where the growth came from. You would see that the biggest growth came from our software division and from our advanced solution division. Advanced solution is all to do with modernizing the data centers. Enterprise networking, enterprise server, and enterprise storage components all packed up with their software solutions. This is where the main growth coming from, and this is where, if I look at the second half of 2026, this is where the main growth is going to continue to come for us. Obviously, with that big focus on areas like power and cooling, server and storage, networking, and all AI-enabled software solutions. We have launched a Solution ConX partner-to-partner marketplace. At the moment, we are operating in an industry and environment where no single vendor or no single partner can deliver an outcome-based result. Some of them can deliver a good technology or perhaps even some solutions, but no one can have a comprehensive, outcome-based conversation with chief executive officer or chief financial officer purely on its own. This is where Dicker Data played such an important role of a glue of a platform, bringing the entire ecosystem together and driving those conversations, and this is where we have a lot of wins because a lot of partners and vendors relying on us to bring it all together. We have launched our AI Accelerate program initiative internally. Again, just driving that AI enablement and AI acceleration. We have transacted just over AUD 50 million of AI-related revenues in 2025. We have exceeded AUD 50 million transaction of AI-related revenues in the first half of 2026, and we are expecting to do at least AUD 50 million, perhaps more, in the second half of 2026. So we are very, very happy with the acceleration of the AI-related revenues. The pipeline is also very, very strong, and also our back orders and open orders that will be fulfilled in the second half of 2026 is also very, very strong. We are putting a lot of effort in that AI Accelerate initiative. We do strongly believe that this is going to empower growth for the organization. The good thing with the whole AI play for us, it is not just a single-faced event. It is the software, it is the hardware, it is networking, it is our relationship with Equinix. We are offering to the market various alternative solutions. Very strong partnership with Microsoft, offering them an experimental AI platforms on the Azure platform. We also sell a lot of Copilot, which is AI-related software solutions. We offer to the market ResetData, sovereign, private, GPU-as-a-service offering for a lot of companies who does not want perhaps going to the hyperscaler, but want to have more localized, sovereign experience and drive and build their models locally. On the other hand, we are offering them the on-prem AI at the edge, where we give a lot of. We will be offering a lot of on-prem solutions with AI factories for the whole organizations or for the departments within this organization, and then move them up the stack. A lot of our technology vendors on the bottom of that slide is supporting that drive. It is an incredibly powerful and strong story, and we are positioning ourselves as absolute ecosystem champions when it comes to bringing it all together and drive those solutions together. Now, let us have a look through a segment. What actually works? If we look at the software and advanced solution segments, it is now over 50% of our business. So over 50% of our business is growing at a very good double-digit growth, and we do anticipate a very similar growth in not only in the second half of this year, but also all the way into 2027. The advanced solution piece with the software stack, it is a long term. It is starting now, and it is going to go through many, many years of evolution because of the AI phenomenon. We're investing a lot, we're bringing expertise, we're driving the ecosystem, we're bringing all the partners together, and we're experiencing a fantastic growth out of those two segments. If I look at the endpoint solutions, endpoint solutions is basically our transactional business. This is where we supply a lot to our SMB community, mid-market community. That transactional business go through the cycles, and it's much driven by the changes in the economic conditions. Last year, we had a lot of tailwinds with a Windows 10 refresh opportunity. We still have Windows 10 refresh opportunity into this year. We actually have now a lot of opportunities with the Windows 11 refresh opportunities. That's going to continue. However, because majority of the business, that end client computing business, is going into our SMB market, the price increases really started to affect our SMB spending. It's actually very simple here. The price is going up everywhere. The prices on enterprise networking, on leading on advanced solutions, on our software business, and on our PCs, all going up. But the budgets are not going up. Even though we're kind of moving away our conversation from the budgets. It's easy to move the conversation away from the budget when you talk to the mid-size and enterprise customers, because that's a very outcome-based conversation. It's not that easy to have that conversation with a small partner, small customer. Small partners and small customers, they're all about their IT budget, their spend, and they're choosing where to spend. So when it comes for them to choose where to spend, a lot of them now are spending in, again, modernizing their data centers because they want to drive some AI activities. They need to buy more software, cybersecurity, and other things. Sometimes it's just what they have budget for, and personal computing sometimes is getting put aside, and we can sweat those assets, and we'll do it later. What I'm trying to say that the price increases in endpoint solutions, it's starting to affect number of units we're transacting. And it is slowly coming down. However, because of the price increase, we're still delivering the growth. I would probably see that the growth in endpoint solutions, which is about 28% of our overall business, is going to continue to decline. We're still going to continue to growth, but probably not at double-digit rate. Whereas software and advanced solutions is going to continue doing really well. Our consumer and retail business had a phenomenal half. We're adding new vendors, both Australia and New Zealand, and we're going to continue to grow maybe even a little bit more than 7.9%. Audio-visual segment is very strong. It's going to be well over AUD 200 million for us this year. It's growing nicely. We're putting a lot more focus there. Again, the price is going up and customers choosing where to invest. And even with that breadth of portfolio and significant investment and expertise driving the growth in this segment. Our DAS business, access and surveillance, have shown a phenomenal 22.9% growth in the first half, and we're expecting a very similar growth rate into the second half of 2026. We've added some really strong vendors in 2025. Hikvision are doing really well, Ajax, Milestone, and a few other very fundamental, strong physical security vendors are starting to do well. We're also starting to take some good market share in this segment. As you can see, most of the segments is performing really well. When that happens, obviously then a very strong result is getting delivered. We are obviously very pleased with that. We continue adding new vendors. ADATA is the memory vendor. We all know there is a shortages and supply constraint on the memory chips, so adding ADATA into the portfolio of our memories is actually helping us to get more memories into our customers. We have added Sharp as our new audio-visual vendor. Very big signing. We have signed Sophos and Huntress as our cybersecurity providers, strengthening that cybersecurity play. I have mentioned about ResetData and the GPU-as-a-service, offering all our partners and customers an alternative to build their AI models on. We have added Switch Connect and Symbio as part of our unified communication, and telco division. We are putting a lot of effort to drive that division within Dicker Data. I think, okay, we always put this slide because it is really good to compare where is the market expected to perform and where Dicker Data is performing. We are very pleased with how we are tracking against the Gartner prediction and forecast. Gartner is saying that in Australia, the spend is going to be, majority main growth is going to come from the data center systems, and that is exactly where Dicker Data is feeling the growth and continue growing. We have every single technology vendor under this roof. We have very strong lineup of software vendors into Dicker Data Group. Combining it together make it a very powerful and a very strong solution and outcome-based kind of offering to our partners. If you look at the devices, Gartner forecasting 6.6% increase. That is exactly where we feel we are going to finish the year at. This is where we think we are going to end up, which is still a growth, but that is sort of a mid-tier single-digit growth. Very much in line with the Gartner forecast. Software, again, in line with the forecast, double-digit growth. We do not do a lot of services, as you guys know. But when it comes to a data center infrastructure solutions, when it comes to our software marketplace and devices, I think we are very much in line with the Gartner forecast. No surprise here. Four major drivers, and four major pillars of focus. Data center refresh, I think I have said enough. That is going to be our strongest performing segment, together with software driving that growth. If I look at our current open orders or back orders as we see, we have at the moment over AUD 400 million in back orders in the system right now waiting for the stock to be fulfilled, and a lot of that in the data center space. That momentum is ongoing. Our new orders are coming in, the back orders are getting fulfilled, and we are going through that motion. If I look at July numbers and August numbers, that momentum is continuing. That data center piece is very solid and very strong. Artificial intelligence, I think I have said enough, I see that as the biggest growth opportunity for our company. Not only now and this year, we are expecting to do well over AUD 100 million of actual invoicing, but the amount of effort we're putting in there, we are expecting a much stronger growth in 2027 and 2028 and beyond. Windows refresh is still an opportunity. I've just mentioned before that there is a Windows 11 refresh opportunity already. Well, we have more than half a million devices that need to be refreshed. Windows 10 is still an opportunity, and our transactional PC business is an ongoing run-rate business as well. It's always going to be there. I cannot not mention cybersecurity. Cybersecurity, it's the gift that keeps giving. AI is accelerating the threat. AI is accelerating the attacks. It's become more intelligent. It's become less resilient for the companies to block it. The cybersecurity is a very big and important area where even with the limited budgets, people will continue to drive their protective mechanisms. We, as you've seen, we've added two new cybersecurity vendors, both Australia and New Zealand. We're going to continue to double down on our practice. The level of offering we have in the cybersecurity space, expertise, and experience is unparalleled and not matched with any other distributor in this region. We're very proud of what we're doing in this area. Now looking at the outlook. I think I've been mentioning through the conversation how we see the 2026. We have a very strong momentum right now. The industry is buoyant, especially in that data center space, AI space, and the software space. We're going to continue to drive a very strong growth and results in this area. I do believe that our end client computing units is going to decline and going to continue to drop simply because the price rises hit that rate of the increase where it's getting really hard for our SMB partners to participate in this. However, the mid-market and enterprise opportunities are still going to be there. We're still going to ship thousands and tens of thousands of computers. Where it's going to land us in terms of growth, like I've said, it's probably going to be single digit, low single to mid single digit growth. We're going to see and understand how is the price increases going to continue in 2027 and how that dynamic is going to change. If the pricing is starting to come down a little bit, we're hoping our SMB customer's going to pick up, the unit is going to pick up, and we're going to balance that. If I look at our July and August results, they continue the momentum. They continue what we've experienced in the H1. That gives, obviously, us a good confidence to give the guidance. The guidance for the whole year results is somewhere between AUD 4.3 billion and AUD 4.4 billion, which is somewhere in around 11%-14% growth, much higher than we expected. When we started 2026, there was a massive degree of uncertainty, supply chain, price increases. How is SMB going to drive it? We knew that AI is going to accelerate, but how much acceleration are we going to see? Is that going to be big deals at low margin, or is it going to be medium sort of size deals at a reasonable margin? There was a lot of uncertainty. We have lived through that six months. We, as an organization, adapted really well. We took the risk. We got the inventory. We are obviously benefiting from that. But also, if I look at the margin composition within the business, margin increased in every single segment. Yes, there was an increase in margin in PCs, especially in taking advantage of the inventory that we got. But we also had a good margin increase in our software business. We are having a pretty stable and slow increase in our margin composition within our advanced solution business because we are driving a lot more complex solutions. That is kind of giving us a good confidence to see that we will be also upgrading our initial guidance on our NPBT margin and regarding the market that we are going to finish somewhere around AUD 162 million to AUD 165 million, which represents around 3.8% NPBT margin percentage. This is where the board is very confident on. Open for questions. Great. Thanks very much, Vlad and Mary. As a reminder, research analysts can raise their hand via Teams and ask a verbal question of the management team while the rest of the audience is encouraged to submit written questions via the Q&A function. For those asking live questions, I would just kindly ask that you please limit yourself to no more than two questions. First question comes from James Wilson at Macquarie. James, please unmute your line and go ahead, please. Good morning, guys, and thanks for taking my questions. I will keep it just to two today, as you asked. First off, just on New Zealand, appreciate it was a bit weak in the first half, given the supply constraints. Can you just talk to us about the underlying level of demand you see there when supply comes back? Also, what is giving you confidence that supply will actually come back in the second half? I think you said August was looking a little better. Okay. I will answer. I think there are two or three questions in this, but I will just quickly unpack it. Our New Zealand business is a lot more concentrated around Apple and HP. It is a weakness, and we are working very hard to diversify the portfolio and scale other vendors. We bring in more vendors, and it is in progress. It is a little bit harder to do in New Zealand because New Zealand on its own is a much smaller market. A lot of vendors are only having one or two distributors. The significance, and I am sorry to say that, but significance of the New Zealand business to the overall global portfolio is very small. Vendors and partners, they do not change as much. They do not drive that change. That is one reason. If HP and Apple do not supply stock, it immediately affects our business, and that is what happened in the first half. When their supply comes in, it immediately bounced the other way around, which we have noticed through July and August. It is the time in momentum. It is not very good for our New Zealand business. We are totally realizing that, and we are doing everything to really diversify that portfolio. Confidence. In the beginning of the year, supply was very constrained. New Zealand did not get the right allocation. Australia never experienced it. When I spoke to my New Zealand guys and they are not getting their stock, and then I look at my Australian business, we were continually getting that stock. Obviously, the global suppliers were preferencing Australian market because it is a much bigger market. Also, New Zealand economy is definitely not at the level of the Australian economy. Even to drive penetrating and building a business with other vendors was quite problematic because the SMB in New Zealand is softer than SMB in Australia. The enterprise business in New Zealand are also a little bit slower to lock in the deals than Australian business. There are a number of factors that gave that. There is a lot of enterprise buying, and you said by government as well, and there is an election coming up. Exactly. We have seen a lot of impact as a result of that. That is actually a very good point. I just came back from New Zealand earlier this week, and when I talk to a lot of partners, they say, "We do feel slight softness because of the election." We are hoping that straight after the election, we are going to have a little bit of outlet. Yeah. Okay, great. Thanks, guys. Just one second question, if possible. Just on data center refresh and AI-related revenues, can you quantify for us how those sit on a gross profit and PBT margin hierarchy relative to the rest of the business, if possible? Sure. AI deals at the moment at the lower margin spectrum. If overall business reports somewhere around 9.8% gross margin, AI deals normally low single-digit margin deals. A couple of large AI deals that can come in can actually drive that gross margin slightly under. If I look at the normal data center piece of enterprise networking, normal server refresh, storage refresh, then it holds higher single-digit margins. That is in line with and this is where a lot of growth is coming for. When you look at the guidance, we tempered our 9.8% gross margin from H1, slightly tempered it down in the second half because we do believe there are two things going to continue happening. One, if we land one or two larger AI deals, that could be slightly lower in a gross margin perspective metrics. But also, a continued decline in our SMB unit numbers in our PC division, also going to result in slightly tempering that margin. However, the data center refresh and software going to continue to drive with a very good margin expectation. So that's why we're thinking it's probably not going to be somewhere at 9.8%, but it's not going to be definitely below 9%. So yeah, somewhere Perfect in between. Yeah. Thanks for the responses, guys. Cheers. Thank you. Great. Thanks, James. Next question comes from Lindsay Bettiol at Goldman Sachs. Lindsay, please unmute your line and go ahead. Thanks. Hey, guys. Hopefully you can hear me. Yeah, we can hear you. Yeah. Very good. Just looking at software, which was obviously the strongest sub-segment, could you just help us understand? If I unpick that, I am just trying to work out how much of the 18% was, let us say, volume versus price and upsell versus new vendors coming on. Because it just feels a little bit stronger than some of your peers. So I am wondering, in particular, how much of a tailwind the new vendors were versus what we should treat as an organic growth rate in software. Okay. 80% organic growth. Every single software vendor, cybersecurity, data management, virtualization, Adobe, VMware, Microsoft, Cisco software- And some of the AI is in that software too because it's fast data as well. Correct. There is a few new software vendors that we brought on board. But if you look at overall growth and the margin composition, it's actually like a nice organic growth. Look, Microsoft leading the way. We had an incredible year so far. Having incredible year with Microsoft, and yeah, we're super excited about our future with Microsoft, not only to the end of this year, but into 2027 and beyond. Okay. Brilliant. Second question from me, just an update maybe on memory supply. I think at the full year result, you weren't seeing any supply issues. You were confident that would continue. Same at the AGM. We're starting, depending on which of your peers or vendors you look at, you're starting to hear some rumblings that supply's tightening up. It's still probably okay through the end of the year. Yeah, starting to get a little bit tighter. Maybe just an update on memory supply, as well, please. I think the actual degree of supply hasn't changed, but I think we're more used to work with that. Also, a lot of vendors is now increasing validity of their quoting. What it means, it means when the vendor provides a quote for a particular device or infrastructure or memory itself, because they couldn't get the right levels of supply and predictability, they're shortening that quoting cycle. What we're starting to see now, the quoting cycle getting longer. What it means, it means vendors are securing more supply and giving them a little bit more predictability so they can pass that predictability to us. That's a positive side. What I can comment on, amount of interest in data center infrastructure products that we've received did not match with their ability to deliver. There's no question it's still a problem. It's still a challenge. My back order at the moment is the biggest that company ever had. You could see that we're continually getting a lot of great momentum, but we can't quite deliver. It's a two to three months lag. Sometimes it's up to five to six months lag. The good news is that I don't see any cancellation, because any cancellation in these orders will result in much higher price in new quotes. I'd just like to comment, again, the price increases are not over yet. I have a very solid visibility in the 1st of September price list from all our vendors and all prices going up. What I also, though, have is a visibility of a next price increase, and that's going to take couple of months, maybe two to three months to increase price again. We've never had this visibility in the beginning of the year. In the beginning of the year, it was a situation of every two to three weeks prices were increasing and we didn't know how long it's going to continue, how much this pricing going to keep increasing. Now it's a lot more predictable, so it gives us, again, better confidence to forecast, to see how we're going to land, what we're going to do. We have a better clarity on ETAs, when the stock is going to come, and when we actually going to supply on those back orders. Okay. Thanks, guys. I will jump back in the queue. Cheers. Great. Thanks, Lindsay. Next question comes from Josh Kannourakis at Barrenjoey. Josh, please unmute your line and go ahead. Hi, Vlad and Mary. Can you hear me okay? Yeah. Yeah. Great. Thank you. Just a question. Obviously, you provide that trading update, and looking at that, we can obviously back work a little bit around the last couple of months of the year. I know it is historically stronger in terms of margins, but it does look like a very significant step up to 4.7% in the last couple of months of the half versus 3.7% for the first four months. I am just trying to understand a little bit about the mix and how much of that was benefited from your more aggressive buying of inventory. Has that gone into a little bit more alignment into this half? Or do you still think you will be able to, given the price, the consistent and the visibility around price increases, do you still think you will be able to capture some of that margin? Thanks. Okay. So good question. The answer is somewhere in the middle. We did produce much better margin in our PC business. But remember, our PC business, it's only 28% of our overall revenue. Yes, margins were uplifted, and we don't see much of that change throughout the second half. Prices keep increasing. We keep doing strategic buy-ins. We're still negotiating. Our market share is very solid. That kind of dynamic going to continue to happen. Is that going to continue to happen in 2027, 2028? I don't think so. I think it's a good momentum. We're taking a good advantage. But remember, it's only 28% of our business. If I look at our software business, our margin have improved, and we're going to continue to drive improvement of those margins. It's the expertise, it's the consultative approach that we're taking, selling these opportunities. It's the vendors that we're bringing on board, and I don't know, we're just really driving those solutions into the right areas of the market where we probably would sustain those margins. So that's giving me a good confidence we're going to continue to grow and at nicely sustained margins. When it comes to data center infrastructure, margins are increasing again in that modernization and refresh cycle. A little bit of being able to drive some of the good purchases, but majority is back-to-back beat orders. So it's not a lot of opportunities to really drive that momentum into increased margins. Margin increasing more organically, more on the complexity of solutions. So that beat going to continue to be good. If I look at the AI deals, now that's going to impact it negatively. AI deals do not represent margin opportunity at the moment, and we're doing more and more of these AI deals. However, it's a long-term strategy. For the 2026, we're going to do AUD 100 million, AUD 150 million of AI at a very low single margin, but we're really driving that platform and really doing that build up, getting ready for the refresh. And when the refresh going to start happening, that's where we're going to make some good margin. Also, the big focus for us is drive that AI adoption from the enterprise customers. When we start receiving orders from enterprise customers and mid-market customers, that's where we're going to make some margin. So, if anything, that piece of AI that we're working on is going to probably put pressure on our margins. Like I've said, we only did AUD 50 million in H1, so it's kind of we didn't feel that pressure as much. I think we will start feeling a bit more pressure in second half. Got it. Thanks, Vlad. Just second question, just with regard to further on the pricing versus demand environment. When you do look at the SMB, I am implying if you are saying mid-single digits for growth, that it is largely second half broadly flat-ish, maybe up a little bit on the second half of 2025 for those endpoint solutions. Is that right? Are you actually seeing, though, in terms of any disconnect between the macro environment where people are, whilst I know you are saying they have got budgets, they are also seeing the pricing go up as well. Do you think there is any pull forward at all in these numbers, or is it still wed to budgets and budget cycles? Okay. I will answer the first question. In our PC business and client computing, I do believe that the second half is going to be close to flat on the second half 2025, which will result in a single-digit growth for the whole year. That is how I see. I do see the unit numbers going to continue. That 28% of our business in second half probably come closer to the flat year-on-year, which the whole thing will result in some single-digit growth. However, to offset that, I do see a faster growth in our software business. I see a faster growth in our data center business that will kind of offset that turning down. This is where our guidance is kind of when we done our modeling, that is how we feel comfortable orchestrating. Because knowing if I look at our backorder report, my open orders, my backorders, there is not a lot of PCs there. All of that is enterprise networking server and storage kind of segments. A lot of mid-market tier two, that sort of solution vendors that are sitting in those back orders, which again, are quite at a good margin point. What was the second question? The pull forward. So e ndpoints, I would say there probably was a bit of pull forward because of the momentum of price rises that were happening. Correct. But data center refresh software, they are on regular subscription models. There is not pull forward in any of those numbers. Because of the diversification of the portfolio, it is not a straight answer on there is pull-forward orders in the numbers that we have represented or booked to the half. The one segment I would say would fall in that category. Yeah, I agree. Hence the 10% growth. I completely agree with Mary. Just on touching on that, data center refresh is a must. You cannot not do it. It's like, I guess a sense of urgency in getting into the deal probably is there. That would have happened anyway. If I look at number of activities and number of what we currently have in the marketplace, in that space through July, through August, it's not slowing down. It's continuing. If anything, it's actually growing. If anything, I'm not putting pressure on supply, so at the end of the year, I actually expecting my backorder book probably going to be even bigger than this. Awesome While we're fulfilling backorders, I think the new backorders is going to continue to drive good momentum. Great. Thanks, Vlad and Mary. Congrats on the results. Thank you. Great. Thanks, Josh. Next question comes from Olivier Coulon at Evans and Partners. Olivier, please unmute your line and go ahead. Thanks for taking my question. You have commented a little bit on inventory profits. Is there a sense that you can give us at all on, I guess, the quantum of the benefit from inventory profits in 2026, given your earlier statement that you expect not much inventory profits into 2027 from end user devices? Because it sounds like your business, certainly in software and advanced solutions, is going from strength to strength. But it does seem like there is probably going to be a step down in those inventory profits in a fairly major way in 2027, if we assume that at some point those price rises stop happening. Look, I personally think it will come down in 2026, but yes. If we will stop seeing the increase in prices for 2027, if we start seeing the price normalizing, I definitely see that those advantages is going to go away. However, what it really means that we will pull all our SMB customers back, and SMB customers will be able to drive the growth. SMB, as a segment, is a very good high margin segment as it is. So we are thinking we are going to balance it nicely. It is very hard to quantify in terms of the actual percentage. Yeah. Again, it is on 28% of the business that there is that opportunity on. There are the price rises across all segments, but things like software are almost non-discretionary spend. It is like a requirement. It is subscription-based and it is recurring, and that is evident in the growth. Advanced solution data center refresh is well underway and the budgets are the budgets from the enterprises that are spending. In terms of endpoints, I think we pointed out that Windows 11 devices are coming up for refresh. With this AI phenomenon and workloads around operating AI models, there is a sense that there will be refresh happening on endpoints coming for devices that were bought several years ago. It is hard to quantify what the incremental profit contribution is, hence why our guidance PBT margin and our gross margin is slightly lower than where we have delivered at June. Yeah. Okay. No, appreciate that. On a longer-term basis, though, should we think that gross profit margin is going to base back closer towards that lower 9%? It is pretty clear that I think consensus expectations for 2027 for gross sales are too light, given your guidance for the second half of 2026. Should we expect that gross profit margin to trend back towards that low 9s, or do you think you can do a bit better than that based on the mix that we are seeing? I think it will be somewhere lower than right now. Yeah. But not too low as like 9.1%. I think it is going to be somewhere in the mid 9s, maybe a little bit, maybe 9.3%, 9.4%. The caveat would be size of AI deals. Exactly. Low margin. I was about to say that. Yeah. But yes, the expectation of the underlying business, where there is that little opportunity of improving the margins of where we were forecasting around that 9% and the expectation that wouldn't be above that. Obviously, we've delivered above that. For the next year, we expect that, like Vlad said, that mid 9s is probably reasonable expectation. And the caveat being size of AI deals and the quantum and the margin that we would do those at. But also if you look at our physical security business, it's not too big. But 22% growth in a segment that is averaging 20% gross margin, so that drives it as well. And we continue to expect that growth. So every little bit helps. We're going to continue to diversify our portfolio in New Zealand. That's going to continue to drive margin up. It's still too much reliance on the lower margin Apple business. So there's a lot of work that is happening. We know what needs to be done. It's just really driving a strong execution. Yeah. Perfect. No, thanks for that. Really appreciate it. Great. Thanks, Olivier. Next question comes from Aryan Norozi at Jarden. Please unmute your line and go ahead. Thanks, Ari. Hi, Mary and Vlad. How are you all? Hi. How are you? Just the first one from me. Because there is a lot of moving parts. Just into 2027, the outlook for your three key divisions being that PC, AI, all the data center, and software. There is a lot of moving parts. For example, you are obviously cycling the PC refresh from last year, but you have got price rises, you have got the data center refresh. How do we think about the magnitude of growth for those three segments in the context of what you are going to be doing in 2026, which is, you said high tens growth for software and advanced solutions and mid-singles in PCs. How do we think that plays out in 2027, please? You are asking me to give you the outlook for 2027? Which is very hard. Well, I will tell you, it is hard. It is hard, but I kind of have that feel and momentum also where the industry is looking and how all the industry analysis are kind of looking. Data center piece is going to go well beyond 2026. I think just sheer of work that is being done, data center build-outs, power requirement, cooling requirement, complete revamping on the networking required to support those data centers. To me, and we are just opening up those opportunities, and some of them are so significant and so good. It is not a week for us where we do not form a new sense of partnership with one of our partners or vendors, or collectively, where we do not project a great forecast and pipeline for 2027. I am very, very buoyant and very excited about that piece, and that is going to continue to grow. That is our data center refresh and AI. Software, good, strong, stable. I do not foresee any moves or changes. We are bringing new vendors. I have another four or five in the pipeline. We will keep working on them. Some of them a bit smaller, some of them a little bit more significant. A lot more of my larger software vendors as well, they are putting a lot more of their direct partners into distribution because they want to take advantage of their diverse platform and MSPs. A lot of our customers is managed service providers who stack their software. If the vendor delivers this solution directly to the MSPs, it just brings that discomfort on the billing cycles. They are putting it right into the marketplace, and they give them that cycle. Microsoft, we have big plans for 2027. Software strong, data center strong. AI, very, very hard to predict. It can be AUD 150 million, it could be AUD 1 billion growth. I just do not know. It is such an exciting area, which we are putting a lot of focus to grow. PCs. Look, end client computing, to me, it is like that transactional machine that works half on half on half. If there is tailwinds, we do more. If there is headwinds, it is tempered down. We are going through the cycles. I think next year is probably going to be, I would probably say flat year-on-year. Could be slight decline. We are having an incredible year this year, prices going up. But it is a transactional machine. Enterprise is still going to buy. If I need a little bit more top line because my margins are very, very strong elsewhere, I can grab more top line from enterprise customers. I just don't have a need for that, nor interest. Mid-market doing really well. All the growth you see this year, first half, second half, going into 2027, is really coming from our sheer strong relationship with our mid-market partners. If I can give you a very rough guesstimate how I see 2027, is going to be probably flat to a small decline in our PC portfolio. Again, very strong growth in our data center infrastructure and software. Continued very good growth in our retail, in our physical security, and our audiovisual. Great. Thanks for that. Then second one, just on the SMB part of your business. I think before the downturn in SMB segment, that was about 20% of your business, and maybe it's much less than that, maybe half that, as a percentage of your business because enterprise has done well. How do we think about whether that revenue opportunity is structurally gone, or is that still an opportunity where you can double the SMB business or grow it significantly, and that gives you even more upside on the gross margin to the 9.5% that you were talking about? The question is it more cyclical or is there something that's happened that the dollar revenues of your SMB businesses isn't there anymore, please? There's always, the answer is right in between. It's not one or the other. Yeah. So- Yeah The market has moved. There's no question. Market has moved. The market and opportunity is within mid-market. So we moved with the market. Data center, refresh, AI, it's all conversation for mid-market and enterprise. Enterprise, very low margin. So we're trying to be very selective. SMB, it's not really conversations by SMB, not yet. So that mid-market is going from 60% of our business into 70%, 75%. I probably say our mid-market rate of our business is somewhere around 75% now. Very strong. So enterprise business, we have a very strategic deal, strategic involvement with them that's probably staying somewhere around 10%-15%, and the same thing around 10%-15% in our SMB. SMB market is still there. 12,000 partners is still there, but 12,000 partners is just struggling to allocate their budgets into the areas where they really need it to. If we will have more opportunities to service that market, we would love to. SMB is very good, lucrative market. We just need to find the ways of how we can serve them better. But for that, we need prices to come down, we need offering to go wider, we need more accessible inventory for the SMB. What we are happening right now and what has been happening in the last 18 months is everything against SMB. We do not have anything transactional of a very good value to stimulate it. Prices just keeps going up. But when price is going to continue come down, when we start doing deals, bundles, going active, we still have those 10,000 partners. You know what? That is going to get us a really good growth. The question is when that is going to happen? We, at the moment, do not know. Great. Thanks so much, guys. Great. Thanks, Aryan. Next question comes from Adam Dellaverde at Blue Ocean. Adam, please unmute your line and go ahead. Thank you. Good afternoon, Vlad and Mary. I tried to ask this in chat, but Sam made me raise my hand, so I do not get to be shy. My sense is, your business has really repositioned, I think. If we were talking about this two years ago, hearing you talk mid-market enterprise, you guys are out there hustling and really going to where the dollars are. Because it is not just the small business channel that is fighting budgets, it is everywhere. But there is this kind of data center channel you are into. So a bit of a well done. I can see you hustling. On that context, headcount, I think roughly 930 - 1,000 employee costs running ahead of revenue growth. I know there is a lot of variable comp in your employee costs, but I am just kind of interested because I think you made this comment in the report where you said, "The company has continued to review headcount to align resources to sales-generating opportunities." That sounds to me like you need more people, not less. I am just trying to put all that all together with revenue growth, sales growth, variable comp, and then what you need to meet the market. Exactly. You have hit the nail on the head. There is a lot of variable comp, and there was obviously very solid results therefore. We have always said we are never going to get full leverage from our salary line. The growth in terms of headcount has been allocated to our business units that are adding vendors, investments in those categories. Equally, with the volumes leaving our warehouse, we have probably seen increase in logistics as well. It is a constant dilemma as well because as a business, we are also looking how to innovate and use AI within our own business. So we are not having to increase headcount overall or have our people be more productive in other areas and see where we can automate some of the more transactional operational parts of our business. So to be able to moderate the amount of headcount growth that would be required in the future. There are definitely projects underway operationally within our business to address that as well. Just to add to this, Adam, as well. Look, we are very conscious, obviously, as any business should be, on our cost. Also, we are very hands-on in terms of understanding where the market moves. Like you have said before, where is the money? Where is the competitive edge? Where is the value we can add? How can we stay relevant? Those sort of questions are very important. What is more important is how do we stay ahead of the curve? How do we utilize our agility in being a local player to be always couple of steps ahead? With that, we clearly see that market moves towards consultative selling, towards value that our people bring to the SMB partners who cannot further grow without our expertise. That is where the margins are. That is what really drives that. Even in the first half, that is what driven the margin upside, whether it is the software or data center infrastructure segment. These things, obviously, we do not need that many people there. If I look at our cost and people who is operating our transactional business, it actually has not changed for a long time. We just have a really good people who is making the right buying decisions. That is what makes money in our transactional PC business. When it comes to the rest of our business, which is now 70%, that is consultative expertise really driving that margin. We are fighting for great people. We are fighting for people with a deep relationship, deep expertise. We constantly in that battle to drive a better fit internally that can deliver growth in both top line, but more importantly in bottom line. Great, thank you. I will probably butcher this question, but in terms of the hyperscalers have done all the construction or a lot of the construction now. As we move into these sort of independent people who are standing up or we have NEOs who are putting hardware into other people's buildings, right? I have noticed the sales motion from the vendors quite often includes a financing and a maintenance kind of component. I am just sort of keen to get your take on, do you go to market with the hardware vendors and do you pitch into that maintenance piece? It feels like there is a fair bit of service opportunity there and also a nice hook when you look for that replenish cycle. Okay. I will comment on main business, and I will probably get Mary to comment on how we deal with the new cloud providers. It is a little bit different. With a normal business, with bigger, like say, for example, data center opportunity, we do the quote comes at AUD 2.5 million. Customer saying, "Okay, we are good to go." We go to the vendor. Vendor said, "Oops, unfortunately it is AUD 4 million now. It is not AUD 2.5 million" Customer is not happy. Customer is saying, "We do not have the budget for AUD 4 million." That is where we go with finance. That is where we are saying, "Look, I know AUD 4 million is not AUD 2.5 million, but if you wait for another six months, it is going to be more. How can we help to reduce that burden? How can we drive some finance mechanisms to actually" We have finance mechanisms from vendors. We have Dicker Data Financial Services. We got other things. What is the critical component of that deal? Let us just drive that and maybe add on to a little bit later. We have those conversations. When it comes to a large scale near cloud provider, I will just get Mary in. Yeah, it's something we're navigating ourselves, to be honest. There's been a lot of discussions around quoting around deals and deal sizes, and the question always comes back to how it's going to be funded. To- date, the transactions we've had have generally been funded through, like you've said, Adam, the vendors, supporting that through their financial services businesses. Hence why the credit risk and the ability to transact has been able to happen. With some of the deal sizes that we've been looking at in terms of quotes, that's still a work in progress on who takes the risk overall for this equipment investment and how these transactions will be funded. We are looking at various options there. Maintenance is just not going to be in your wheelhouse? That's services, isn't it? You mean like actual services for the equipment and stuff? No. No. Thank you. That is the beat for our partners. Our partners doing a lot of that. What we do, we sell our vendor services, our vendor maintenance. A lot of our partners who don't have a solution or service offering themselves, they complement our vendor services. That's a very successful part of the business. All our maintenance packs, services, and vendor services are all part of our software number. Oh, that's great insight. Thank you. Great. Thanks very much, Adam. I think that's all the time we have for questions today. If you do have any follow-ups, please feel free to send them through and we'll endeavor to get back to you. Maybe with that, Vlad and Mary, I'll just pass it back to you if there's any closing comments. Okay. Thank you so much for everyone to join. I know we have a lot of one-on-ones as well, so we more than happy to answer any follow-up questions. As the board of Dicker Data, as the management of Dicker Data, we very, very pleased with our H1 results. We are very optimistic about our second half, as well. The outlook looks very positive, very good. All I can say from us, from myself and Mary, we are incredibly committed to continue to drive the best outcome to all our shareholders. So thank you so much for your support and for joining. Thank you. Thanks for joining. Great. Thank you very much for joining today's Dicker Data first half FY 2026 results call. Enjoy the rest of your day. Thank you and goodbye. Thank you.