Joseph Cardoso

Joseph Cardoso sought clarification on Insight Enterprises' cloud gross profit growth in Q4, specifically asking about its performance excluding partner headwinds and whether the double-digit guidance implies an acceleration.

Answer

James Morgado, SVP of Finance, stated that Q4 cloud performance, excluding partner headwinds, was in the mid-teens range, consistent with the rest of the year. He expects first-half cloud growth to be slightly above the full-year guidance, with the second half slightly below, resulting in low double-digit growth for the full year. He reiterated that the financial impact from partner program changes is expected to conclude by the end of FY2026.

Joseph Cardoso sought clarification on Insight Enterprises' cloud gross profit growth for the quarter, specifically what growth would have been without partner headwinds, and if the double-digit guidance implies acceleration.

Answer

James Morgado, SVP of Finance, Insight Enterprises, stated that underlying cloud performance in Q4 was similar to the rest of the year, in the mid-teens range, even with partner headwinds. He expects first-half cloud growth to be slightly above the full-year guidance, with the second half slightly below, ultimately averaging out to low double digits for the year. He reiterated that the financial tail impact from partner program changes is expected to be fully resolved by the end of FY 2026.

Joseph Cardoso asked for an update on the drivers behind service project delays with large enterprises, questioning if factors beyond the macro, like AI investment shifts, were at play. He also requested the underlying cloud growth rate for Q2, excluding partner program changes, and an update on the SADA integration initiatives.

Answer

CEO Joyce Mullen attributed project delays less to macro factors and more to clients pausing traditional spending to preserve capital for AI readiness, creating an opportunity for Insight's advisory services. CFO James Morgado confirmed the underlying cloud growth was similar to Q1's 17% rate. Joyce Mullen added that the SADA team exceeded expectations in Q2, successfully pivoting to services and consumption, and noted all recent acquisitions are performing well and driving cross-sell opportunities.

Joseph Cardoso asked about the confidence behind reiterating full-year guidance given the tougher macroeconomic backdrop, and inquired about hardware demand trends, particularly any demand pull-in related to tariffs.

Answer

CEO Joyce Mullen and CFO James Morgado expressed confidence, noting that Q1 results were in line with expectations, especially regarding the navigated partner program changes. Mullen added that underlying hardware demand drivers like Windows 11 and an aging installed base remain strong, with AI infrastructure needs providing a tailwind. She acknowledged minimal, non-impactful tariff-related pull-in for devices in Q1 and early Q2 but emphasized that fundamental demand is the primary driver.

Joseph Cardoso asked for details on the cloud program changes with Microsoft and Google, the expected headwinds for 2025, and the company's mitigation strategies. He also questioned the 2025 outlook, asking if operating expenses were expected to outpace gross profit growth and about the status of cost-saving initiatives.

Answer

President and CEO Joyce Mullen explained the $70 million cloud headwind is primarily from enterprise agreements, and mitigation involves transitioning clients to CSP agreements with Microsoft's support. CFO James Morgado clarified that OpEx is expected to grow slightly slower than gross profit, supported by $25 million in annualized cost reductions, a lower starting headcount, and normalized expenses from recent acquisitions.

Joseph Cardoso of JPMorgan Chase & Co. asked about spending trends between large enterprise and smaller clients, portfolio bright spots, and the performance of the SADA acquisition relative to initial expectations, including its run-rate and seasonality.

Answer

President and CEO Joyce Mullen highlighted strong Cloud and Core Services gross profit growth as key bright spots, noting that two consecutive quarters of growth in the commercial sector typically precede a broader market recovery. Regarding SADA, she stated that while its cash flow met expectations, resale expansion did not, due to a strategic pivot away from enterprise resale to align with Google's focus on corporate and mid-market clients. CFO Glynis Bryan added that SADA's expected Q4 miss is a primary driver of the revised guidance, as large enterprise deals are not anticipated, and quantified that the SADA-related changes account for about one-third of the guidance reduction.

Joseph Cardoso asked about Credo's entry into the optical transceiver market beyond just DSPs, inquiring about the margin opportunity given current industry margins, and whether the focus is on selling full modules or building blocks like DSPs and pilot software. He also sought clarification on the fifth customer's ramp, specifically if they are tracking ahead of expectations and if there's an opportunity for them to reach 10% of revenue on a quarterly basis in the back half of the fiscal year.

Answer

President and CEO Bill Brennan stated that Credo approaches the optical transceiver market similarly to other system-level products, taking full ownership and accountability for the solution. He emphasized that Credo is not competing in the commodity market but offering a system-level solution for a step function in reliability, which includes DSPs and software, and confirmed no change to the long-term gross margin model. Regarding the fifth customer, Bill Brennan clarified that while initial revenue is expected this year, they will not reach 10% of revenue this fiscal year, but have the potential to do so quarterly and then annually over time.

Joseph Cardoso inquired about the downward revision to the Outdoor segment's guidance, seeking additional color on the main drivers and any portfolio sluggishness. He also asked for clarification on the implied Q4 gross margin guide, specifically regarding the less seasonal decline drivers, and assumptions for FX headwinds and tariffs.

Answer

President and CEO Cliff Pemble attributed the Outdoor segment's revision to the late Q3 launch of the Phoenix 8 Pro and the exceptionally strong comparison from the Phoenix 8 release last year, suggesting initial expectations might have been too high, while emphasizing long-term segment strength. CFO and Treasurer Doug Boessen explained the Q3 gross margin decrease was due to higher product costs (tariffs, Taiwan dollar strengthening, warranty accruals), partially offset by favorable FX. He noted Q4's gross margin reflects similar cost trends and promotional activity, with current tariff rates and Q3 FX trends factored into guidance.

Joseph Cardoso asked about the downward revision to the outdoor segment's guidance, seeking additional color on the main drivers and any other areas of portfolio sluggishness. He also inquired about the implied gross margin guide for Q4, specifically the drivers behind a less seasonal decline, and assumptions regarding FX headwinds and tariffs.

Answer

Cliff Pemble, President and CEO, explained that the fēnix 8 Pro launched late in Q3, and the previous fēnix 8 release was incredibly strong, suggesting initial expectations might have been too high. He emphasized the long-term double-digit growth of the watch category. Doug Boessen, CFO and Treasurer, attributed the Q3 gross margin decrease to higher product costs (tariffs, strengthening Taiwan dollar, warranty accruals), partially offset by favorable FX. He noted Q4 would see similar cost trends and promotional activity, with current tariff rates factored in and mitigated by inventory, and similar FX trends as Q3.

Joseph Cardoso inquired about the drivers of the Fitness segment's outperformance, questioning the impact of channel fill or demand pull-forward from new products. He also asked for clarification on the full-year outlook, specifically the operating profit leverage and the assumptions for tariffs and foreign exchange rates.

Answer

President and CEO Clifton Pemble stated that channel fill was not a significant factor and that the company sees no signs of demand pull-forward or inventory stockpiling. CFO and Treasurer Douglas Boessen explained that full-year operating expenses are expected to increase due to headcount, infrastructure growth, the MyLabs acquisition, and performance-based compensation. He noted that lower tariff estimates are being offset by unfavorable currency impacts from the Taiwan dollar.

Joseph Cardoso asked if Garmin is observing any demand pull-forward from customers building inventory due to tariff volatility and questioned the timing and initial reception of the new Garmin Connect+ premium service.

Answer

CEO Cliff Pemble stated there are no indications of demand weakness or channel overstocking, noting that real-time product registrations show strong sell-through. Regarding Connect+, he explained that the development of AI-based insights made it the right time to launch a premium offering. Pemble emphasized this is a long-term strategy and that initial user response has been positive, though the company is not measuring short-term success.

Joseph Cardoso of JPMorgan Chase & Co. inquired about the mix of new versus existing customers, particularly in wearables, and questioned the 2025 operating margin guidance, which implies lower leverage than Garmin has historically demonstrated.

Answer

CEO Clifton Pemble confirmed that Garmin is attracting many new customers and gaining market share, a trend expected to continue. CFO Douglas Boessen addressed the margin question, explaining that while gross margin is guided to be consistent, operating margin reflects a 30 basis point increase in operating expenses as a percentage of sales, driven by strategic R&D investments for future product innovation and growth.

Joseph Cardoso of JPMorgan Chase & Co. asked about Motorola's confidence in its year-end product backlog target, the drivers behind strong Q2 product orders, and the impact of the Silvis acquisition. He also inquired about the potential influence of recent US and European government funding initiatives on future orders and their timing.

Answer

Chairman & CEO Greg Brown stated he feels even better about the mid-$3 billion product backlog target, which excludes Silvis, citing strong Q2 orders in LMR and fixed video. EVP & COO Jack Molloy explained that the 'one big beautiful bill' provides a four-year funding horizon for key customers like the DOD and Customs and Border Protection, with funds expected to materialize in Q4 2025.

Joseph Cardoso asked about demand trends, questioning if the full-year guidance implied softness after adjusting for FX, and sought differentiation between public safety and enterprise demand. He also asked for details on the Mexico manufacturing footprint and tariff mitigation plans.

Answer

Chairman and CEO Gregory Brown clarified that holding the guidance was a prudent measure in a volatile environment and does not signal softening demand, pointing to record Q1 orders in North America. He also confirmed the company is overwhelmingly USMCA compliant in Mexico. EVP and CFO Jason Winkler reiterated that mitigation plans fully cover the tariff impact, allowing them to reaffirm EPS guidance and still achieve operating margin expansion for the year.

Joseph Cardoso sought clarification on management's positive commentary regarding the post-election operating environment, asking how tangibly this translates to potential spending upside and whether it is reflected in current orders. He also asked for quantification of the tariff headwind embedded in the guidance.

Answer

CEO Gregory Brown stated that the company's outlook is stronger now than in November, even after absorbing a $120 million FX headwind, citing a growing pipeline and favorable alignment with the administration's focus on public safety. CFO Jason Winkler clarified that the guidance reflects current tariff rates and highlighted the company's flexible manufacturing footprint. Gregory Brown added that a $25 million PPV benefit is expected in the current year.

Joseph Cardoso of JPMorgan Chase & Co. asked for an updated year-end backlog forecast and for more color on the contributions from the products and services segments.

Answer

Jason Winkler, EVP and CFO, upgraded the company's forecast, stating that total year-end backlog is now expected to be up compared to last year's record levels, an improvement from the prior guidance of 'comparable to slightly up.' He attributed this to record Q3 orders across all technologies and noted that the Software and Services backlog is at a record high, while the product backlog remains healthy at over $4 billion.

Joseph Cardoso of JPMorgan Chase & Co. asked for clarification on any demand pull-forward in North American hardware and questioned the potential impact of recent federal legislation on customer discussions.

Answer

CEO Paul Bay stated there was no material demand pull-forward in North America, apart from minor activity related to the ongoing desktop and notebook refresh cycle. He also noted that the primary impact of the legislation would be on the public sector, which is not a material part of Ingram Micro's business. EVP & CFO Mike Zilis added that the company is positioned to capture any demand resulting from favorable CapEx treatment for larger companies.

Joseph Cardoso of JPMorgan Chase & Co. asked about technology spending programs in Europe, the timing of these opportunities, and whether they are included in the second-half bookings outlook.

Answer

Founder, CEO & Director Rick Smith described a significant rise in demand across Europe, driven by immigration and security challenges, leading to high-level discussions for large deals involving TASER 10 and real-time translation. President Josh Isner confirmed that this strong international pipeline is factored into the exciting bookings expectations for Q3 and Q4.

Joseph Cardoso inquired whether Axon is observing any macroeconomic headwinds in customer conversations and asked about the strategic rationale for developing its own fixed ALPR hardware (Light Post and Outpost) following the Fusus acquisition.

Answer

President Joshua Isner stated there are 'virtually no headwinds' from macro factors in the U.S. state and local, enterprise, or international markets, though the federal sector is awaiting budget clarity. CEO Patrick Smith explained that developing first-party fixed cameras is a natural extension of Axon's imaging and mobile ALPR expertise. The goal is to provide a best-in-class, integrated experience within the Fusus ecosystem to more effectively deter criminal activity.

Joseph Cardoso asked about the expected timing for the drone opportunity to become more material for Axon and requested more detail on where investment dollars are being targeted to maintain the 25% adjusted EBITDA margin.

Answer

CEO Patrick Smith described the drone opportunity as being at a 'tipping point.' CFO Brittany Bagley noted the drone TAM is now $20 billion but it will take time for bookings to flow to the P&L. Bagley and President Joshua Isner specified that investments are focused on R&D for drones, robotics, and Fusus, as well as scaling the enterprise go-to-market team.

Joseph Cardoso inquired about the timing for the drone opportunity to become a more material part of Axon's business. He also asked for more detail on where investment dollars are being targeted to support the 25% EBITDA margin guidance.

Answer

Patrick Smith, CEO, described the drone opportunity as being at a 'tipping point.' Brittany Bagley, CFO, noted the TAM is now $20 billion and momentum is strong, though it will take time to fully reflect in the P&L. Bagley and Joshua Isner, President, specified that investments are focused on R&D for drones and robotics, and scaling the enterprise go-to-market team.

Joseph Cardoso requested clarification on whether Axon is on track to meet its previously stated goal of achieving bookings in the back half of 2024 comparable to the full year of 2023, and asked about the primary drivers.

Answer

EVP Joshua Isner directly confirmed they are on track to meet the bookings goal. He explained that Q4's strength is the result of 6-12 month sales cycles and seasonal budget flushes. He noted the primary drivers are officer safety plan execution and large deals across international, federal, and enterprise segments, with the new AI bundle not being a major contributor to Q4.

Joseph Cardoso asked about the drivers behind the sequential margin improvement in the Endpoint Solutions (ES) business over the past few quarters, especially given margin pressures at OEMs, and questioned the sustainability of this trend.

Answer

CFO Marshall Witt attributed the margin strength to a stronger pricing environment that typically accompanies a demand refresh cycle. CEO Patrick Zammit added that a favorable product mix was also a key driver, with strong growth in higher-margin PCs and components, while the lower-margin mobile category grew more slowly.

Joseph Cardoso from JPMorgan Chase & Co. sought clarification on whether factors beyond Hyve were contributing to the sequential decline into Q2 and asked for an updated view on the relative contributions of the Endpoint Solutions (ES) and Advanced Solutions (AS) portfolios for the full year.

Answer

CEO Patrick Zammit confirmed the traditional distribution business outlook for Q2 is solid, with growth driven by PC refresh, cloud, and security. CFO Marshall Witt added that within the AS portfolio, the strategic technologies sub-segment (cloud, security, data analytics) grew over 20% in Q1, and this strength is expected to help offset the temporary softness in Hyve for the full year.

Joseph Cardoso asked for details on TD SYNNEX's investments and footprint in the Hyve space, specifically in areas like liquid cooling and power, how it compares to peers, and whether expansion would be organic or through M&A.

Answer

CFO Marshall Witt confirmed ongoing investments to expand Hyve's manufacturing capacity, engineering skills, and design capabilities. He positioned Hyve against ODM competitors, stating they are performing well in their served markets and expanding their customer base. He clarified that the current expansion plan is primarily organic.

Joseph Cardoso questioned the source of management's confidence in the IT spending recovery, noting it seems more optimistic than commentary from some VAR partners, and asked for specifics by product or geography.

Answer

CEO Patrick Zammit detailed his outlook by geography and technology. He noted that Europe is recovering faster, driven by the B2C market, while North America is currently flatter but expected to rebound. He pointed to the normalization of networking compares after a period of backlog fulfillment and an expected acceleration in the PC market as key drivers for future growth. He believes these factors will lead to an acceleration of growth next year.

Joseph Cardoso from JPMorgan Chase & Co. asked for details on Cisco's participation in Middle East AI initiatives and for an update on momentum in the enterprise campus networking segment.

Answer

CEO Chuck Robbins described the Middle East opportunity as a multi-billion dollar, rapid build-out where Cisco will provide networking, compute, security, and observability. Regarding the enterprise campus, he highlighted strong orders in campus switching, triple-digit sequential growth for WiFi 7, and robust enterprise routing demand as customers modernize their infrastructure for AI.

Joseph Cardoso, on behalf of Samik Chatterjee at JPMorgan Chase & Co., requested more details on the Middle East sovereign cloud announcements, including portfolio involvement and potential timing, and also asked about momentum in the enterprise campus vertical.

Answer

CEO Chuck Robbins described the Middle East opportunity as a multi-hundred-billion-dollar investment where Cisco is discussing networking, compute, security, and observability solutions. On the enterprise campus front, he highlighted strong orders for campus switching, triple-digit sequential growth for WiFi 7, and robust enterprise routing demand, driven by customers preparing their networks for agentic AI.

Joseph Cardoso of JPMorgan Chase & Co. asked about Lumentum's confidence in achieving its $500 million quarterly revenue target by the end of the calendar year and inquired about the performance of the datacom chip business, including volume, ASP trends, and the expected contribution from new CW lasers.

Answer

CEO Michael Hurlston confirmed the company remains on track for its $500 million quarterly revenue target. He and Wupen Yuen, President of Cloud and Networking, noted that datacom chip demand, particularly for EMLs, outstrips supply, and capacity is ramping. The introduction of CW lasers is a strategic move to expand their serviceable market, though EMLs remain the primary focus due to strong pricing power and differentiation.

Joseph Cardoso from JPMorgan Chase & Co. asked about the customer vertical composition of the updated full-year revenue outlook and requested an update on the pluggables opportunity, including the mix between WaveLogic 5 and 6.

Answer

CEO Gary Smith stated that while service provider recovery provides confidence, the upside to the high end of the revenue range is "largely all cloud." He also noted record orders for pluggables, which are on track to double revenue for the year. Executive Adviser Scott McFeely added that WaveLogic 5 will be the dominant volume contributor in 2025, while WaveLogic 6 is crucial for winning new business.

Joseph Cardoso asked about the drivers behind the significant increase in Remaining Performance Obligations (RPOs) and whether it was due to another large deal. He also inquired about the perceived risks from potential changes to government broadband funding programs.

Answer

CEO Michael Weening attributed the RPO growth to broad-based momentum following the company's ConneXions event, where more customers embraced the need to become experience providers. CFO Cory Sindelar added that Q4 is typically a strong contracting quarter and the growth reflects customers adopting the platform model. Regarding government funding, Weening stated there is "a lot of noise and no news" and the company operates on facts, thus having no comment on speculation.

Joseph Cardoso, on for Samik Chatterjee, asked for an update on the competitive environment and the potential implications of the new U.S. administration.

Answer

CEO George Kurian described the competitive environment as rational and fundamentally unchanged, with specialist vendors like NetApp being advantaged. Regarding the new administration, he stated that NetApp's supply chain is well-protected from potential tariffs on China and that the company will wait for more clarity on other policies.

Joseph Cardoso, on for Samik Chatterjee, asked for details on the revenue ramp-down of the Durham 150mm fab, its impact on the top line, and customer appetite for transitioning to the Mohawk Valley fab.

Answer

CEO Gregg Lowe explained that the transition is from a manual fab to a highly automated one with superior quality, and the vast majority of revenue is expected to transfer. He noted all powertrain customers are already qualified on and shipping from Mohawk Valley. CFO Neill Reynolds added that as Durham's revenue declines over the next 9-12 months, Mohawk Valley's revenue is expected to increase, with the transition already underway.

Joseph Cardoso, on behalf of Samik Chatterjee, asked for the strategic rationale behind the potential closure of the Durham device fab and the implications for the company's long-term model and existing footprint.

Answer

CEO Gregg Lowe explained the decision is driven by superior progress and productivity across the 200mm platform, including higher yields and more compelling economics at Mohawk Valley. CFO Neill Reynolds added that improved capital efficiency means the FY26 CapEx of $200M-$600M could support 50-60% utilization at Mohawk Valley, which has the capacity to absorb much of Durham's revenue.