Take a moment to get familiar with our safe harbor statement. To begin this afternoon, I'd like to give you just a quick overview on our company, kind of our vital stats. We were founded in 1982, so we're in our 42nd year, of about 2,600 employees. Our net sales for last quarter were $736 million. We have a little under $400 billion in cash on our balance sheet. Our trailing twelve months EBITDA, $125.4 million, and our trailing twelve months earnings per share, $3.35. To begin with, I want to talk a little about our mission, our culture, and our values, because we think it's extremely important to who we are and a big driver of our success.
So our mission is to be a leading global solution provider, connecting our customers with technology that enhances their growth, elevates their productivity, and empowers their innovation. When we think about our culture, our culture statement, and our brand purpose, for us, that means that our purpose is to help calm the confusion of IT, guiding that connection between people and technology. As everyone knows, technology, especially with AI, is more complex.
It's definitely more disruptive, and more than ever before, customers are asking us to manage that end-to-end integration of their IT and supply chain needs. So let's talk a little bit about our go-to-market strategy. We look at the world through three very distinct customer lenses. We specialize, and we think that specialization is relevant. We have a sales subsidiary focused on large Enterprise Solutions. That would be companies with 2,000 employees and above.
We have another subsidiary focused on Business Solutions, which is really our small and medium business subsidiary, focused on 2,000 employees and below, and we have our Public Sector team that is focused on state, local, K-12 , higher ed, and of course, the federal government. In addition to our three selling subsidiaries, we centralize all of our other operations.
We have a vertical markets team that's an overlay team focused on healthcare, manufacturing, retail, and finance. We have a global procurement division, GlobalServe, that enables our customers to work within our OneSource network and do business in 174 countries with partners in country, and we have our end-to-end professional services that would include cyber, network transformation, cloud, managed and professional services, along with data center transformation.
We centralize all that, along with all of our back-end operations, in support of our customer-facing subsidiaries. As a large partner ecosystem, today, we have over 460 ,000 different SKUs from over 1600 manufacturers. That really means that we have all the top tech companies. We buy at the highest level of discount and have the highest level of certification. People often ask, "What does that really mean?" And for us, it simply means that for our customers, we are that end-to-end provider that ranges from design, deployment, integration, and managing their technology. We have an extensive supply chain management. We have a central technical integration and distribution center located centrally in the country, and we have deep expertise that can handle our customers' supply chains needs, managed service needs, and professional service needs.
Along with that, given our 42 years of business, we have a very loyal, a very diverse, and a very targeted customer base. Our company was founded on the principle of offering the best customer service in our industry, and we believe that we do that today. Essentially, we make IT work for our customers. We are getting some recognition for that customer loyalty. Our customer retention is 97.9% for those customers spending over $100K with us.
We're also receiving some recognition. This year alone, in 2024, we received America's Best Midsize Companies from Time Magazine. We received one of America's Most Trustworthy Companies from Newsweek, and we are a multi-year recipient there, and from Forbes Magazine, one of the Best Mid-sized employers, and again, a multi-year recipient there.
Essentially, our culture is based on the best customer service we can give with integrity, with trust, and with a focus on execution. For that, we just completed our Net Promoter Score, and our Net Promoter Score is 79. For the tech industry, that is a great score, and again, we are very proud of that. We spend a lot of effort and a lot of cultural cycles toward customer service. So just to give you kind of a quick review, we have about 2,600 employees, about 755 sales team members. Our average tenure there is eight years, and we have over 710 engineering and technical staff. Our expertise comes from delivering over 60,000 hours of training annually and holding over 5,000 professional certifications.
We believe that our focus on advanced and emerging technologies, along with our cloud and vertical market expertise and the training we give there, really sets us apart. At our technical integration and distribution center, last year alone, we did over 725,000 custom configurations. So to get to our level, you really have to have optimization in every step of our focus areas and of our delivery chain. So we have a full line of professional services around data and AI, and we also have a group focused on AI and applied robotics that we call Helix. Helix is essentially a team of professionals who are certified by NVIDIA and all of the top AI players, offering expertise to our customers for the full line of AI offerings.
In addition, we have our Cloud Center of Excellence, cybersecurity, data center, digital transformation, managed services, network and workplace transformation, along with professional services and supply chain. We believe that our lifecycle practice offers seamless collaboration across all of these areas, and that our lifecycle practice is the glue that holds all of this together for our customer base. So as we think about the balance of the year and beyond, we're really focused on three areas for our customer base. The first is modern infrastructure and multi-cloud. So we help our customers secure hybrid cloud, whether that be cloud or on-prem at the edge, whether that's a data center modernization or just a data center security review, we have a practice focused on that, and that is a high-growth area for our business.
Second high-growth area is that digital workspace, that ability to help our customers upgrade and go through their Windows 11 transformation, upgrade to endpoint AI device, and really make sure that their work groups are collaborative anywhere within their environment, and then finally, supply chain and lifecycle management, and that includes our installation, deinstallation, optimization, of course, cybersecurity, AI, and professional services. So when we think about these drivers of growth, these are where we're getting the majority of our growth in our business today. Tom?
Okay, so what we did here. Put up four years of P&L, starting really with the beginning of you know, this current cycle. And as you can see, over time, we've been able to grow our gross profit by 22% since 2022, and 43% growth in operating income, a 49% growth in net income, and then, you know, 49% growth in EPS. And what you're seeing here is a business where we can. If you look at the top line, you know, the revenue's kind of probably grown at 4% or 5% annually. A big chunk of that is being netted down.
What that means is if we sell software as a service or anything where we're an agent in the transaction, that revenue comes through on a net basis at a 100% gross margin, and that's one of the reasons why we've been able to grow our gross from about 16% to 18%. About 50% of that is due to the netting effect, and about 50% of that is due to an increase in our gross profit. You can go to the next page, Tim, so then you say, "Okay, you know what's going on now?" In Q2 of 2024, we were able to put up the best numbers we've ever had from an EPS standpoint.
As you can see, since Q2 of 2020, we've grown our gross profit by 59%, you know, net income over 242%, and our EPS is up 239%. The EBITDA's really what's driving the company. We put a lot of cash down, you know, relative to the size of the business. Our cash conversion's, like, a 90%-ish. When we talk about cash, we just did this for to illustrate our cash flow from last year. As you can see on the left, we started out with operating income of about $103 million. You know, the business is kind of characterized by not having a tremendous amount of depreciation or amortization, which I added $12.7 million to that.
We were very successful last year in managing our working capital. We brought our inventories down by like $85 million and our receivables down, so we got a really nice pickup in the working capital coming out of you know some of the supply chain issues during the COVID period. You have interest in taxes, and again CapEx isn't that significant in this business, you know $10 million a year mostly IT which is driving about $188 million of free cash flow, and then in terms of returning cash to shareholders we've paid dividends and a share repurchase which I will take a look at on the next page. Okay.
In terms of how the business is split up, what we have here is in the dark blue, our Business Solutions group, which I'll remind you, is kind of 2,000 seats and under. Our Public Sector group is in light blue, which is, you know, the government business, and Enterprise Solutions, which is two thousand seats and above. This kind of breaks out the revenue split over the past five years and the gross profit breakdown for each one of those businesses. Our SMB business, which generated $66.3 million of gross profit last year, has the highest margins in the industry, and followed by our enterprise group of $46 million of gross profit in the quarter.
When we look at the business overall, about 40% of the business is enterprise, about 40% of it is SMB, and about 20% of it is our gov business, and that's kind of been pretty consistent over the past several years. Now, in terms of returning cash to shareholders, you know, we believe we're a very shareholder-friendly company, and since 2020, we've returned $85 million of cash to shareholders in the form of dividends and share repurchases. And as you can see, we broke it out here year by year. In 2023, we've commenced with a quarterly dividend at $0.08 a share.
Our strategy here is to start with something that we could continue to increase over time as we grow the business, because the business in an organic state is 2%-3% above GDP growth, so we should be able to sustain a dividend growth over time. We will. Last year, we increased the dividend by 25% to $0.10 a share. We will revisit that again in the January quarter and see where we go for 2025. In terms of the share repurchase, in 2023, 2024, we're starting to get a little bit more aggressive with the share repurchase because we do have the cash. We try to be very disciplined and a little bit opportunistic, but we're metering out cash in that form over time.
So I wanted to kind of close with just a little discussion about our DEI initiatives. We're very passionate about our commitment to the community. Internally, we call that Connection Cares, and we have a focus on charitable contributions, of course, diversity, equality and inclusion, and employee recognition around culture and sustainability, and work on a circular economy where we can. We are very focused on supporting all of our suppliers' DEI initiatives, and when you think about our business, we're passionate about our values. It absolutely drives our culture, and for us, that's respect, excellence, teamwork, integrity, and of course, corporate citizenship. So in conclusion, you know, we think we're driving into one of the best opportunities in the history of tech as we look at 2025 and beyond, based on AI and the ecosystem around AI.
So we're confident that with our over 40 years in business and our ability to catch those waves of technology, that we're going to continue to do that, and we're pretty excited about where the market's headed next year. You heard me talk about recurring revenue streams and recurring customers. Great opportunity for us to increase our share of customer spend based on the additional services and solutions we're doing as we integrate more of their products together and more of their solutions together. You heard Tom talk about the fact that we're financially stable. We have no debt, a healthy balance sheet with just under $400 million in cash. We continue to look at M&A as an opportunity for tuck-in around solutions and around additional capabilities that will drive future market value.
We're also pleased that on behalf of our large U.S.-based customers, we can offer them a global solution through our GlobalServe and OneSource software. And finally, as I mentioned, we're committed to corporate and social responsibility. And with that, I want to thank you very much, and Anthony, I think we can open it up for questions.
Yes, sir, thank you very much, Tim and Tom, for sharing the Connection story. A terrific overview. As a quick reminder for those in the audience, if you do have a question, you can type that into the Q&A box at the bottom of your Zoom screen, and I'll read the question out loud. So, we already have a couple of questions, so I'll get to those first. So I guess, you know, when you look at your business, the different segments, you know, I know it's a competitive industry for sure, but, you know, which area would you say has the most competition? And then, I guess, is there any particular area you see as a major driver of growth, moving forward?
You want to start?
Yeah. So they're all pretty competitive, and we can just tell by looking at the margins in each of our businesses, kind of the larger the customer gets, the more competitive it is. It's probably like most industries. So I'd say kind of across the board, but we do a really nice job in SMB, and we're working very hard on the others. In terms of opportunities, what we're seeing now, I think our pipeline for, you know, new wins, new logos, big projects, is as large as it's been since I've been here in six years.
So we are getting presented with some opportunities, given some of the changes that we've made over the past few years, in terms of, you know, some management, investment in services. And so we're going to get some pretty good swings and some pretty good deals over the next six months. And you know those do take a little bit of time to implement, so you know there is a little bit of lead time. But we're pretty confident about our what we're doing there.
And I'll just add to that. We've invested in our solutions and our integration capabilities on behalf of our customers. So when we think about our large and loyal customer base, there's a great opportunity to go deeper and wider with them in terms of their IT spend, and they're asking us to do that. It just makes a whole lot of sense for them to consolidate wherever possible, help them standardize, help them simplify, help them reduce, but also to remove that complexity. We'll take on additional lines of business within our existing customer base. For us, that's a very significant opportunity, one that we're really excited about. We now have the solutions, infrastructure, and the solutions personnel to really make all that happen.
Gotcha. Okay, and then, you know, so just to kind of, you know, follow up on that, I mean, yeah, so great to hear that you are, you know, seeing some deal flow, or, but that being said, I mean, in light of the still sort of uncertain macroeconomic or geopolitical election uncertainty, are you finding that to be a factor in terms of, you know, the sales cycles? You know, just wanted to get your thoughts on that.
Yeah, I think it depends on the time horizon we're talking about. I think, you know, certainly in the near term, I think the election political environment is probably putting a little bit of a squeeze on spending. But I think there are some macro things out there that, you know, maybe once we get beyond November, are going to cut loose. And, you know, Tim talked a little bit about AI. I think that's probably going to be a great long-term driver.
But there is a Windows refresh that's coming up, and people just haven't spent in the last two years, really. And so I think we're going to have some pretty significant tailwinds, you know, into 2025 and beyond. Then I think we have some opportunities that are unique to us and some of the things we've put in place that should even amplify, you know, things beyond that.
Yeah, and another thing I'd add is, you know, AI even a driver at the device level, along with the Windows 11 refresh, and don't forget, we've got a really aged installed base of devices out there that also will need to be upgraded. And so I think all that bodes well for our future demand into 2025 and beyond.
Right, and just to follow up on the point about, you know, devices coming back. So, as that happens, I mean, how do we think about the margins and the cash flows, and just working capital?
Yeah. When we ramp up the business, we will consume working capital. Y ou know, we're pretty aggressive about taking any discounts we can. That includes early pay discounts. So we're typically a little bit strung out on the working capital because our customers pay, you know, 45-60 days, you know, depending on the day, and then we're paying a little bit less than that. So there is some working capital. You will also see some a little bit of margin compression because endpoint devices tend to be a little bit lower in margin than some of the more advanced technologies and certainly lower than software.
So we're going to squeeze on both of those, but at the operating margin level, we get the volumes up, we'll be fine. I mean, we're going to You know, we should be shooting for, you know, we're kind of a 4% operating margins. I think we should clearly be in the 4.5% range, when we get out into that, you know, with the volumes, increasing pretty significantly. I think we're going to continue. We're making headway in improving our service business, which is a higher margin business, and that's really just kind of it. It's the beginning stages, and we're starting to see the impact of that too. It's a pretty good outlook for us.
Okay, that sounds good. So we also had a question about the segment margins. So, you know, your Business Solutions, you know, certainly has had the highest, you know, margin, gross margins. Kind of, you know, looking forward, I mean, do you anticipate much variability in terms of, you know, margins going forward, other than we just well, we just talked about it, but just looking at the segment level, do you see much of that changing or h ow do we think about that?
I think, you know, obviously, as I just said, is we roll out a lot of devices, and we'll start with the enterprise group. If the device, endpoint device, become a larger percentage of our sales, we will have some downward pressure there. But it's not going to be huge, I don't think. Our SMB margins tend to hold up pretty well, and I was talking a little earlier about the... You know, most of our software sales now and cloud and all comes through at 100% margin. So over the period, as that migration has happened from selling software to licensing software, that has had a positive impact on the margins. I think that's kind of peaked. So in SMB, we should be able to hold our margins pretty well, I think.
The wild card here is going to be Public Sector, because Public Sector has large chunks of business that come through at once. You know, you're talking tens of millions of dollars, and depending on where those deals fall in the margin profile, we tend to have the most volatility there. And I think some of that will continue, especially as we win some more larger deals.
Understood. Okay, and we had a couple of questions about acquisitions. So Tim, I know you talked about your willingness to do some tuck-in acquisitions. So I guess it's a multi-part question. I guess, first, you know, what type of companies are you looking for? What characteristics would you describe as far as potential M&A? Also, how much cash are you willing to pay for acquisitions, and do you have a targeted payback period for those deals?
So, all good questions, you know, we saw multiples and valuations run up, as you know, and the valuations are starting to normalize a little bit, so that's encouraging. We have looked at a number of opportunities, specifically in the infrastructure and solutions area, including cyber. We think that's going to be a continued high-growth area, so one that we'd be willing to invest in. We're primarily talking about tuck-in acquisitions, and you know, the profile of our balance sheet. So in terms of what we're willing to pay, the answer would be, would have to be an appropriate multiple.
But more than that, we'd want it to be a complementary culture, you know, a revenue stream that gives us high confidence, and of course, strength in personnel and a management team that we think would assimilate well into our business. So we don't have a ceiling there, per se, but are primarily looking at tuck-ins that would only enhance and extend our business going forward.
Gotcha. Okay. And then, you know, so certainly, obviously, you guys have a lot of cash on your balance sheet, and, as far as dividends and share repurchases, how do you guys think about that, going forward here?
I think, look, I mean, the best use of our capital is to go find an appropriate acquisition and do that. So let's put that aside. In terms of the dividend, you know, our business is a pretty steady grower, pretty good cash flow all the way, all the way through the cycle. So what we want to do is probably have a dividend program that kind of mirrors that. So what I would expect is, you know, we'll do an annual evaluation where our dividend is, or I guess, more frequently, if the board decides to, and we'll continue to try to grow that, kind of commensurate with what the business is growing.
In terms of the share repurchase, you know, like I said, we try to be a little bit opportunistic, but, you know, in the past year or so, we've been a little bit more aggressive in terms of stock buyback. I think we will probably continue to operate in that manner and, you know, depending on what the market looks like, you know, opportunities always seem to arise for some reason, usually not of our own doing, and when that happens, we'll be more aggressive.
Got it. Well, we're unfortunately already out of time, but wanted to certainly thank you for presenting the Connection story and sharing that with us, and thank you also, everyone, for participating, asking good questions as well. So, with that, we'll wrap it up, and enjoy the rest of your day. Thank you very much.
Thank you very much. Appreciate your time.
All right, take care. Thank you.