Keith Housum

Burns said T&L cycled a tough prior-year compare but still saw solid growth across third-party logistics and warehousing. A robust multiyear pipeline of large deployments is building for 2027, focused on last-mile delivery, with differentiation from new mobile devices that add RFID and AI capabilities. RFID deployment continues across T&L as customers invest in worker productivity, operational efficiency, and parcel visibility, and refresh conversations give management confidence in the 2027 ramp.

Burns tied machine vision outperformance to manufacturing strength in electronics and pharmaceuticals and the drive for supply-chain visibility. Business-unit and go-to-market alignment on specific manufacturing opportunities is resonating with partners and customers. He cited AI use cases such as optical character recognition in logistics and food and beverage, and noted the Photoneo acquisition enhancing the portfolio organically and inorganically, with the team diversifying the business and driving growth.

Burns confirmed this is the inflection point in machine vision. Recent logistics wins in US and Europe. Growing opportunities in manufacturing and e-commerce. Expects double-digit growth for the full year. Value proposition around ease of use, unified software platform, and AI/deep learning simplifying deployment. Fotoneo acquisition adding high-end capabilities.

Winters said the team is shaping demand by getting early visibility on customer SKU needs. Working with supply base to direct memory to the right products. Transitioning to higher density memory with new supply coming online mid-year. Burns added strong supplier relationships are critical, with early samples of new memory already in testing.

Winters confirmed memory impact concentrated in mobile devices and Elo POS/kiosk products. Teams coordinating supply chain strategies across both portfolios. Leveraging combined Zebra and Elo purchasing relationships for supply access.

Burns said e-commerce growth sustains demand. Each vertical and customer is on its own refresh cycle rather than a handoff from one to another. T&L at normalized growth levels, manufacturing flat, healthcare facing tough compares. Would like all verticals and geographies growing simultaneously.

Burns confirmed AI drives premium device demand with faster processors and more memory. Wearable technology (body cam, watch-like) paired with mobile devices. Refresh cycle will be multiyear and sustainable, not a compressed pandemic-like cycle. AI is one of several refresh drivers alongside cybersecurity and device health.

Burns noted Elo's revenue is predominantly hardware but has meaningful software value around OS and Android platform for touchscreens, displays, and point-of-sale compute. Similar to Zebra's mix.

Burns cited Elo's 50-year track record, 400+ patents in touchscreen technology, strong customer relationships, and commitment to the market while others have exited. Leading position in North America with opportunity to expand globally.

Winters noted consistent historical realization with upside possible. Burns explained EMEA's 18% growth was partly driven by favorable prior-year compare, not a structural shift.

Burns noted ASPs have been stable due to portfolio tiering across premium, mid, and value tiers, preventing high-end cannibalization when competing at lower price points.

Winters attributed wider guidance range to higher uncertainty from trade policy, not deteriorating demand. Expects steady mid-single-digit organic growth outside Q1.

Chris described broad spectrum of savings from sales effectiveness to AI-embedded end-to-end process efficiency. Savings from both increased productivity and cost optimization. Focused on coworker empowerment and customer value, not framed as layoffs.

Al said supply constraints are not a material factor in H2 caution. Lead times extending but becoming more orderly. Not seeing significant roadblocks on supply chain. Expect H2 to be more normalized.

Al said memory price changes vary greatly by partner and product generation, fluid week to week. No significant supply roadblocks yet but could emerge in second half. Strong Q1-Q2 visibility but second half more modest due to supply risk.

Al said price increases vary greatly by partner and product, from small single digits to higher. Situation is fluid with potential for escalation. CDW excels in helping customers navigate partner ecosystem and optimize configurations.

Chris characterized client device refresh as sixth inning, rounding to seventh inning stretch. Expects healthy demand for next few quarters. AI PC conversion picking up as additional tailwind beyond Win10 end-of-life.

Chris explained K-12 funded primarily by state/local, COVID subsidies were atypical. Higher ed investing in tech to win student competition. Healthcare watching Medicare policy changes that could impact up to 30% of provider cash flow.

Al said large enterprise deals were more significant this quarter but not factored as outsized going forward. Expects more balanced end market contribution for remainder of year.

Chris confirmed CDW is maintaining market-competitive services pricing rather than raising prices in the current environment.

Al noted price increases varied by OEM and product category but market was orderly. Over 50% of gross profit from software/services is unaffected by tariffs.

Chris said Mission Cloud is profitable and fast-growing but will not materially add to bottom line in 2025 due to foregone interest. Al expects significant upside after full integration.

Al characterized Q4 product margin compression as not material, most notable in clients. Made space for some compression in 2025 but does not expect it to be outsized.

Jason stated Software and Services is their proxy for recurring revenue. Cautioned 18% growth includes some Tier 1 city activations with recurring true-ups that won't fully repeat. Also confirmed double-digit order growth expectation for the full year.

Mahesh cited 33 million assisted 911 calls in 2025. AI connects applications across workflows: 911 to CAD incident creation, 911 data to first responders. Greg emphasized Responder Suite at $99/month is about half the competing alternative with more comprehensive capabilities including CAD and records. FedRAMP approval widens addressable market.

Jason cited APX NEXT applications exceeding expectations, additional strength in 911 and control room internationally, and continued cloud adoption. Greg confirmed 16% reinforces 12% full year expectation and sets up strong 2026.

Jack confirmed majority international. Opportunities in international defense, US DoD, federal police, and border security. State and local limited by FCC spectrum restrictions. Greg noted special events like Super Bowl and FIFA World Cup allow FCC exemptions for Silvus use.

Jack confirmed ~12 years since last new base station. D-Series brings better capacity, coverage, less energy, LEO capability. Wins in Ohio, Michigan, Chicago. Multi-year refresh cycle ahead.

LMR is the power hitter in S&S backlog due to long-term contract nature. Quick turn business accelerating with record Q2 orders and 10% product growth.

Jack not concerned, Q1 orders were record at $1.9B ex-Home Office, up 5%. Prior years' Q1 backlog growth was atypical due to supply chain dynamics. Product backlog expected mid-threes by year-end.

Federal operating on CR through 9/30, which is typical. Demand strong. House and Senate budget bills expected to increase border security, video, and body-worn spending. FedRAMP High achieved for APX NEXT.

Jason said small revenue contribution, recorded in command center. Mahesh highlighted AI voice-powered solution for frontline workers. Strong in retail with expansion potential.

Jason said flexible EMS footprint provides optionality. Would need time and investment to reposition. Guide reflects only tariffs currently in effect.

Josh Isner quantified Outpost/Lightpost at roughly $100 million in trailing-12-month bookings, up from single-digit millions, crediting responsible design.

CFO explained Q1 software seasonality is typical, pointed to phenomenal ARR growth as the leading indicator. Software pickup expected next quarter.

CSO declined to name the customer but hinted it's a top-tier telecom. Use case spans retail locations, physical assets, and unified video management via Fusus.

Josh said the lead product varies, ABW Mini, Fusus, Outpost/Lightpost, DFR, or counter-drone can all be the entry point. The beauty is getting in with one product and then cross-selling synergistically. Declined to announce enterprise customer logos for competitive reasons.

Josh declined to share the enterprise customer name, saying they're evaluating whether announcing logos serves them competitively. Hopes analysts will see Axon products being used in the wild over time.

Josh noted excitement about breadth of enterprise product interest across body cams, Evidence.com, Fusus, drones, and counter-drone.

Brittany said enterprise pricing is not materially different from public safety, still DEMS licenses, Fusus, and body cameras. Nuances exist but nothing highly different at this point.

Brittany emphasized supply chain flexibility and diversification built over several years of tariff management. No material impact expected based on current proposed tariffs.

Jagdfeld sees Europe, Australia, India and Latin America as competitive given local plants, ruled out domestic China, and noted no engine exclusivity outside the U.S.

Aaron described telecom as multiyear build-out cycle (new 5G sites + network hardening). Generac is primary supplier to all Tier 1 carriers. Rental is refleeting (1-2 years on, 12-18 months off); current upturn supported by data center construction activity and energy production.

Aaron argued batteries not cost-competitive for long-duration backup vs generators. Batteries serve arbitrage/self-generation use case. Hybrid approach (1 battery + generator) most cost-effective for bottomless coverage. Rising utility costs ($40% up in 5 years, expected to double again) underpin both markets.

Aaron quantified ASPs at $1.5-2M per unit. Domestic gross margins similar to C&I, maybe slightly below. International somewhat lower. EBITDA margins accretive due to operating leverage. Product line expanding to 3.5-4 MW in 2026.

Aaron quantified Generac capacity at $500M+ for 2026 based on 9 facilities plus Beaver Dam commissioning. That represents one-third of entire current C&I business. Supply chain can keep up at that level.

Aaron declined product-level detail. Pointed to $125M unmitigated figure. Noted entire industries don't exist in U.S. and reshoring takes time.

York provided $280M comparative for 2024. Aaron acknowledged policy risk but noted program is separate from IRA/BIL. Wider $300-400M range reflects uncertainty.

Brian said biggest factor was $9.7M contract loss reserve creating negative license bookings. Also by design: not growing low-margin professional services at same rate as overall business, actively limiting custom development work. Positive revenue mix shift reflected in lower services bookings.

Brian explained transaction/payment revenues don't appear in bookings until recognized, understating software bookings. Lynn cited Florida ERP deal with $370K SaaS but $330K transactions ARR.

Brian explained reduction is from restructured sales comp being capitalized under GAAP over 5 years, partially offset by expansion of dedicated state sales team.