Financial Data and Key Metrics Changes - The company reported a consolidated net sales increase of 25.3% to $574.2 million, with technology business net sales growing 26% to $565.7 million [78][46] - Adjusted EBITDA rose 41% to $53.9 million, and diluted EPS improved 51% to $1.27 per share compared to the same period last year [56][68] - Gross profit increased 25.3% to $142.3 million, with a consolidated gross margin of 24.8% [66] Business Line Data and Key Metrics Changes - In the product segment, revenues increased by 29.2% to $498.2 million, driven by strong sales of networking products [3] - Managed services segment revenue grew 23.2% to $32 million, supported by enhanced maintenance support and security operation center services [3][61] - Professional services segment revenue declined 4.3% to $35.6 million due to reduced demand for staff augmentation services [80] Market Data and Key Metrics Changes - The technology business saw broad-based demand across key end markets, with telecom, media, and entertainment, and technology being the largest markets, representing 26% and 19% of net sales, respectively [81] - Networking gross billings increased 67%, while security product gross billings rose 24% year-over-year [59][60] - Managed services revenues increased 23.2% year-over-year, with a CAGR of 24.1% over the last five years [63] Company Strategy and Development Direction - The company remains focused on building long-term shareholder value through a growth strategy and efficient capital allocation, with acquisitions being a fundamental component of this strategy [7][65] - The company plans to invest in areas such as artificial intelligence, which is seen as an emerging growth driver [22][48] - The introduction of new operating segments aims to provide better granularity for modeling and understanding growth rates and margins [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver sales growth in fiscal 2024 that exceeds projected growth in the IT spending market, despite economic uncertainties [70][100] - The company noted that while there are longer deal cycles due to economic uncertainty, they believe they will continue to pace the IT spend market [100] - Management highlighted the importance of supply chain improvements and the successful execution of their land and expand strategy as key drivers of growth [39][56] Other Important Information - The company’s cash conversion cycle improved to 48 days from 59 days at the end of March 2023 [69] - The effective tax rate was 27.2% in the first quarter of fiscal 2024, slightly down from 28% in the previous year [52] Q&A Session Summary Question: Can you provide insights on your pipeline and backlog? - Management indicated that the backlog is still elevated compared to pre-COVID levels, although it decreased by $60 million sequentially [94] Question: What are the assumptions behind your guidance? - The guidance reflects a conservative approach due to tough comparisons from the previous year and the impact of supply chain easing [102][84] Question: Are you seeing any signs of caution in customer spending? - Management noted that while there is some economic uncertainty, they believe demand for their products and services remains strong [100]

Part I. Financial Information [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for the three months ended June 30, 2023, show significant growth in revenue and net earnings, with total assets increasing to **$1.68 billion** and a strategic reorganization of the technology segment Consolidated Statements of Operations Highlights (Three Months Ended June 30) | Metric | 2023 (in thousands) | 2022 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Net Sales** | $574,175 | $458,359 | +25.3% | | Gross Profit | $142,273 | $113,523 | +25.3% | | Operating Income | $46,332 | $33,183 | +39.6% | | **Net Earnings** | $33,847 | $22,339 | +51.5% | | Diluted EPS | $1.27 | $0.84 | +51.2% | Consolidated Balance Sheet Highlights | Metric | June 30, 2023 (in thousands) | March 31, 2023 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Total Current Assets | $1,276,133 | $1,095,130 | +16.5% | | Goodwill | $158,280 | $136,105 | +16.3% | | **Total Assets** | **$1,680,806** | **$1,414,826** | **+18.8%** | | Total Current Liabilities | $800,786 | $561,326 | +42.7% | | **Total Liabilities** | **$867,515** | **$632,561** | **+37.1%** | | Total Stockholders' Equity | $813,291 | $782,265 | +4.0% | - The company strategically split its technology segment into product, professional services, and managed services to better manage and allocate resources, effective June 30, 2023[29](index=29&type=chunk)[102](index=102&type=chunk) - ePlus acquired Network Solutions Group (NSG) for **$48.6 million** on April 30, 2023, recognizing **$22.1 million** in goodwill and **$30.0 million** in intangible assets[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Strong first-quarter fiscal 2024 performance, driven by increased customer demand and acquisitions, resulted in **25.3%** net sales growth to **$574.2 million** and a **51.5%** increase in net earnings to **$33.8 million**, despite ongoing economic and supply chain challenges Consolidated Results of Operations (Three Months Ended June 30) | Metric | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $574.2M | $458.4M | +25.3% | | Gross Profit | $142.3M | $113.5M | +25.3% | | Operating Income | $46.3M | $33.2M | +39.6% | | Adjusted EBITDA | $53.9M | $38.3M | +40.7% | - Key business trends include general economic concerns, IT product shortages, and a customer focus on security, cloud solutions, and legacy application modernization[116](index=116&type=chunk) Technology Business Net Sales by Type (Three Months Ended June 30) | Type | 2023 (in thousands) | 2022 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Networking | $245,188 | $142,641 | +71.9% | | Cloud | $172,044 | $164,733 | +4.4% | | Security | $45,796 | $47,995 | -4.6% | | Professional Services | $35,556 | $37,168 | -4.3% | | Managed Services | $31,963 | $25,941 | +23.2% | - The Technology business's cash conversion cycle increased to **48 days** from **44 days**, primarily due to increases in Days Sales Outstanding (DSO) and Days Inventory Outstanding (DIO)[179](index=179&type=chunk)[180](index=180&type=chunk) Cash Flow Summary (Three Months Ended June 30) | Cash Flow Activity | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(20,900) | $(102,943) | | Net cash used in investing activities | $(63,097) | $(1,692) | | Net cash provided by financing activities | $82,605 | $31,111 | [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks primarily from fluctuations in short-term interest rates on its variable-rate credit facility and foreign currency exchange rates from international operations, though the latter has not been significant to date - The company's primary market risks stem from interest rate fluctuations on its variable-rate WFCDF Credit Facility and foreign currency exposure from international operations[203](index=203&type=chunk)[204](index=204&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded the company's disclosure controls and procedures were effective as of June 30, 2023[205](index=205&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter[206](index=206&type=chunk) Part II. Other Information [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings arising from normal business operations but does not anticipate material losses beyond amounts already recognized as of June 30, 2023 - The company is involved in various legal proceedings from normal business operations but does not expect material losses beyond what has been accrued as of June 30, 2023[79](index=79&type=chunk)[209](index=209&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2023, were reported - No material changes to the company's risk factors were reported for the quarter[210](index=210&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the three months ended June 30, 2023, the company repurchased **147,486** shares of common stock, including **93,541** shares under publicly announced plans and **53,945** shares for tax withholding obligations Common Stock Purchases (Three Months Ended June 30, 2023) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Plan | | :--- | :--- | :--- | :--- | | April 2023 | 40,180 | $48.14 | 40,180 | | May 2023 | 47,685 | $44.43 | 47,685 | | June 2023 | 59,621 | $55.64 | 5,676 | | **Total** | **147,486** | **-** | **93,541** | - A new share repurchase plan authorizing the repurchase of up to **1,000,000** shares became effective on May 28, 2023, for a 12-month period[83](index=83&type=chunk)[212](index=212&type=chunk) [Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2023 - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading plans during the quarter[215](index=215&type=chunk)

ePlus inc. (NASDAQ:PLUS) Q4 2023 Results Conference Call May 24, 2023 4:30 PM ET Company Participants Kley Parkhurst - Senior Vice President Mark Marron - Chief Executive Officer & President Elaine Marion - Chief Financial Officer Erica Stoecker - General Counsel Conference Call Participants Jesse Wilson - William Blair Greg Burns - Sidoti Matt Sheerin - Stifel Operator Good day, ladies and gentlemen, and welcome to the ePlus Earnings Results Conference Call. As a reminder, this conference is being recorded ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___to___. Commission file number: 1-34167 ePlus inc. (Exact name of registrant as specified in its charter) Delaware 54-1817218 (State or other jurisdiction of incorporation or ...

Financial Data and Key Metrics Changes - Consolidated net sales increased by 26% year-over-year to $623.5 million, with adjusted gross billings rising by 29.7% to $888.6 million [13][37] - Non-GAAP diluted earnings per share were $1.38, up from $1.10 in the same quarter last year, while adjusted EBITDA increased by 27.6% to $53.3 million [16][34] - Consolidated gross profit rose by 18.1% to $138.4 million, with a gross margin of 22.2%, down from 23.7% in the previous year [38] Business Line Data and Key Metrics Changes - Technology segment net sales grew by 28.3% to $611.8 million, driven by a 31% increase in product revenue and a 7.9% increase in services revenue [13][24] - Managed services revenue increased by 7.9% in the quarter and over 9% year-to-date, contributing to higher-margin annuity quality revenue [7][8] - Financing segment revenue decreased to $11.7 million from $17.9 million year-over-year, primarily due to lower proceeds from sales of leased equipment [9][14] Market Data and Key Metrics Changes - The healthcare, SLED, and financial services markets accounted for 14%, 13%, and 9% of net sales, respectively, with the remaining 18% from other end markets [14] - The two largest markets, telecom, media and entertainment, and technology represented 28% and 18% of technology segment net sales [31] Company Strategy and Development Direction - The company is focused on digital transformation, hybrid workforce plans, security, and cloud solutions, positioning itself to capture growth opportunities in these areas [4][10] - ePlus aims to leverage its capabilities in managed services and specialized IT expertise to broaden market opportunities, particularly in cloud and security advisory services [26][28] - The company is actively monitoring the labor market for tech workers to optimize solutions delivery and staffing levels [28] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about future growth despite an uncertain economic environment, noting that IT spending is expected to grow at a low single-digit rate [10][89] - There is recognition of budget tightening and longer sales cycles among larger customers due to economic uncertainties [56][74] - The company remains well-positioned for long-term growth, supported by a strong balance sheet and strategic partnerships [29][89] Other Important Information - SG&A expenses increased by 12.8% year-over-year, reflecting strategic investments in the team to meet growing IT needs [15] - The effective tax rate for the quarter was 27.7%, compared to 26.4% in the previous year [33] Q&A Session Summary Question: What types of projects or solutions were fulfilled for large enterprise customers? - Management indicated that several large projects were fulfilled, contributing positively to financial results, with a strong focus on getting products out quickly [90] Question: How does the company view the impact of supply chain constraints on future performance? - Management acknowledged ongoing supply chain issues but noted some easing, particularly in networking, which has the longest lead times [60][68] Question: What is the outlook for operational expenses moving forward? - Management is closely monitoring operational expenses and will adjust based on market conditions and economic uncertainties [72] Question: How is the company addressing the recent tech layoffs in the industry? - Management sees potential opportunities arising from tech layoffs, suggesting that the company could benefit from the demand for its solutions and skill sets [55][74]

```markdown Part I. Financial Information [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents ePlus inc.'s unaudited consolidated financial statements as of December 31, 2022, and for the three and nine-month periods then ended [Unaudited Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) The balance sheet shows a significant increase in total assets to **$1.60 billion** as of December 31, 2022, from **$1.17 billion** as of March 31, 2022, driven by substantial growth in accounts receivable, inventories, and financing receivables, while total liabilities also rose to **$851.4 million** from **$505.5 million**, primarily due to increases in accounts payable and recourse notes payable Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Dec 31, 2022 | Mar 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $1,293,443 | $897,482 | | **Total Assets** | **$1,597,865** | **$1,166,203** | | **Total Current Liabilities** | $793,577 | $460,036 | | **Total Liabilities** | **$851,445** | **$505,465** | | **Total Stockholders' Equity** | $746,420 | $660,738 | [Unaudited Consolidated Statements of Operations](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) For the third quarter ended December 31, 2022, net sales grew **26.0%** year-over-year to **$623.5 million**, and net earnings increased **35.1%** to **$35.7 million**, while for the nine-month period, net sales rose **15.0%** to **$1.58 billion**, with net earnings up **6.3%** to **$86.5 million**, primarily driven by strong product sales Key Performance Indicators (Q3 FY23 vs Q3 FY22, in thousands, except EPS) | Metric | Q3 2022 | Q3 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Total Net Sales | $623,476 | $494,834 | +26.0% | | Gross Profit | $138,372 | $117,117 | +18.1% | | Operating Income | $46,458 | $36,085 | +28.7% | | Net Earnings | $35,694 | $26,424 | +35.1% | | Diluted EPS | $1.34 | $0.98 | +36.7% | Key Performance Indicators (Nine Months Ended Dec 31, in thousands, except EPS) | Metric | 9M 2022 | 9M 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Total Net Sales | $1,575,541 | $1,369,500 | +15.0% | | Gross Profit | $385,199 | $345,631 | +11.4% | | Operating Income | $123,748 | $112,840 | +9.7% | | Net Earnings | $86,502 | $81,355 | +6.3% | | Diluted EPS | $3.24 | $3.03 | +6.9% | [Unaudited Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended December 31, 2022, net cash used in operating activities was **$147.0 million**, an increase from **$121.5 million** in the prior-year period, primarily due to significant increases in accounts receivable and inventories, while net cash provided by financing activities was **$103.6 million**, resulting in an overall decrease of **$56.0 million** in cash and cash equivalents Cash Flow Summary (Nine Months Ended Dec 31, in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(147,038) | $(121,542) | | Net cash used in investing activities | $(15,624) | $(18,448) | | Net cash provided by financing activities | $103,555 | $115,996 | | **Net decrease in cash and cash equivalents** | **$(55,983)** | **$(23,996)** | [Notes to Unaudited Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on significant accounting policies, revenue recognition, financing receivables, goodwill, business combinations, and segment reporting, including the acquisition of Future Com, Ltd., substantial sales from Cisco Systems, and breakdowns of revenue and operating income by segment - A substantial portion of technology segment net sales are from Cisco Systems, accounting for **39%** in Q3 2022 and **38%** in Q3 2021[31](index=31&type=chunk) - On July 15, 2022, ePlus acquired Future Com, Ltd., a cybersecurity solutions provider, for a total consideration of **$13.3 million**, resulting in **$9.7 million** of goodwill[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) Remaining Performance Obligations (in thousands) | Period | Expected Revenue | | :--- | :--- | | Remainder of FY2023 | $24,466 | | FY2024 | $45,891 | | FY2025 | $21,815 | | FY2026 | $8,191 | | FY2027 and thereafter | $4,741 | | **Total** | **$105,104** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting strong revenue growth driven by the technology segment despite supply chain constraints and economic uncertainties, covering consolidated and segment-level results, key business trends, and the company's liquidity position and capital resources [Consolidated Results of Operations](index=34&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated net sales for Q3 2022 increased **26.0%** YoY to **$623.5 million**, driven by a **28.6%** rise in product sales, while gross profit grew **18.1%**, though gross margin declined to **22.2%** from **23.7%** due to lower service margins, and operating expenses rose **13.4%**, primarily from increased salaries and benefits, leading to a **35.1%** increase in net earnings to **$35.7 million** - Q3 net sales increased **26.0%** YoY, primarily due to increased demand and higher prices for some products in the technology segment[112](index=112&type=chunk) - Q3 gross margin decreased by **150 basis points** to **22.2%**, mainly due to lower service margins and a lower volume of sales of third-party maintenance and software assurance[117](index=117&type=chunk) - Q3 operating expenses increased **13.4%** YoY, driven by a **$6.8 million** increase in salaries and benefits due to a **12.3%** increase in headcount to **1,745 employees**[119](index=119&type=chunk) [Segment Results of Operations](index=37&type=section&id=Segment%20Results%20of%20Operations) The Technology segment drove overall growth, with Q3 net sales up **28.3%** YoY to **$611.8 million** and operating income surging **51.3%** to **$41.1 million**, while the Financing segment's Q3 net sales decreased **34.5%** to **$11.7 million**, and its operating income fell to **$5.4 million** from **$8.9 million** in the prior year, attributed to lower post-contract and portfolio earnings Segment Performance (Q3 2022 vs Q3 2021, in thousands) | Segment | Metric | Q3 2022 | Q3 2021 | YoY Change | | :--- | :--- | :--- | :--- | :--- | | **Technology** | Net Sales | $611,774 | $476,975 | +28.3% | | | Operating Income | $41,090 | $27,166 | +51.3% | | **Financing** | Net Sales | $11,702 | $17,859 | -34.5% | | | Operating Income | $5,368 | $8,919 | -39.8% | - Technology segment's Adjusted Gross Billings, a key volume metric, increased **29.7%** YoY to **$888.6 million** in Q3 2022[114](index=114&type=chunk)[140](index=140&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) The company finances operations through cash flow and borrowings, primarily the WFCDF Credit Facility, with operating activities using **$147.0 million** in cash for the nine months ended December 31, 2022, largely due to increased working capital needs, and the cash conversion cycle for the technology segment increasing to **51 days** from **47 days** a year prior, driven by higher inventory levels (DIO up to **30 days** from **21 days**), though the company believes it has adequate liquidity for the next year - The company relies on the WFCDF Credit Facility, which has a floor plan facility of up to **$425.0 million** and a revolving credit facility of up to **$150.0 million**[61](index=61&type=chunk)[173](index=173&type=chunk) Technology Segment Cash Conversion Cycle (in days) | Metric | As of Dec 31, 2022 | As of Dec 31, 2021 | | :--- | :--- | :--- | | Days Sales Outstanding (DSO) | 62 | 67 | | Days Inventory Outstanding (DIO) | 30 | 21 | | Days Payable Outstanding (DPO) | (41) | (41) | | **Cash Conversion Cycle** | **51** | **47** | - Inventory increased **57.9%** to **$244.8 million** as of December 31, 2022, from March 31, 2022, due to ongoing projects and supply constraints[182](index=182&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, primarily from interest rate fluctuations on its variable-rate borrowings under the WFCDF Credit Facility and foreign currency exchange rates arising from international transactions - The company's primary market risks are interest rate fluctuations on its WFCDF Credit Facility and foreign currency exposure from international operations[208](index=208&type=chunk)[209](index=209&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2022, with a notable change being the implementation of a new ERP system within the Financing segment in August 2022 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[210](index=210&type=chunk) - In August 2022, a new ERP system was implemented in the Financing segment, leading to modifications in certain internal controls over financial reporting[211](index=211&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) A putative class action complaint filed in February 2022 regarding a company bylaw was voluntarily dismissed by the plaintiff after the company amended the bylaw, with the company subsequently agreeing to pay **$150,000** to the plaintiff's counsel for attorneys' fees and expenses to fully resolve the matter - A stockholder class action lawsuit concerning a bylaw provision was dismissed after the company amended its bylaws, with ePlus agreeing to pay **$150,000** for the plaintiff's counsel's attorneys' fees and expenses[214](index=214&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2022 - No material changes in risk factors were reported since the Annual Report on Form 10-K for the fiscal year ended March 31, 2022[215](index=215&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the nine months ended December 31, 2022, the company repurchased a total of **128,553 shares**, with **70,473 shares** purchased under its publicly announced share repurchase program, and as of December 31, 2022, **1,000,000 shares** remained authorized for repurchase under the current plan - For the nine months ended December 31, 2022, the company purchased **70,473 shares** under its share repurchase plan and an additional **58,080 shares** to satisfy tax withholding obligations from vested restricted stock[216](index=216&type=chunk)[223](index=223&type=chunk) - As of December 31, 2022, **1,000,000 shares** remained available for repurchase under the plan authorized on March 24, 2022, which runs through May 27, 2023[217](index=217&type=chunk)[223](index=223&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to bylaws, credit agreements, and certifications by the CEO and CFO ```

ePlus inc. (NASDAQ:PLUS) Q2 2023 Results Conference Call November 3, 2023 4:30 PM ET Company Participants Kley Parkhurst - SVP Mark Marron - CEO and President Elaine Marion - CFO Erica Stoecker - General Counsel Conference Call Participants Matt Sheerin - Stifel Jesse Wilson - William Blair Operator Good day, ladies and gentlemen. Welcome to the ePlus Earnings Results Conference Call. As a reminder, this conference call is being recorded. I would like to introduce your host for today's conference, Mr. Kley ...

Financial Data and Key Metrics Changes - First quarter consolidated net sales increased by 10% year-over-year to $458.4 million, driven by a 12.1% growth in the technology segment [23][7] - Adjusted gross billings rose by 10.9% to nearly $702 million, with a 14.4% increase over the past 12 months [8][24] - Net earnings declined by 5% year-over-year to $22.3 million, primarily due to lower results in the financing segment and higher SG&A expenses [30][18] - Consolidated gross profit increased by 7.6% to $113.5 million, but gross margin decreased by 50 basis points to 24.8% [27][28] Business Line Data and Key Metrics Changes - Technology segment net sales grew by 12.1% to $448.8 million, with product revenues increasing by 11.9% and services revenue rising by 13.5% [23][10] - Financing segment revenue decreased to $9.6 million from $16.3 million in the previous year, reflecting variability in large transactions [16][26] - Security business accounted for 22.1% of adjusted gross billings, up from 19.4% in the same period last year [9] Market Data and Key Metrics Changes - Telecom, media and entertainment, and healthcare were the largest markets, accounting for 29% and 16% of segment net sales, respectively [25] - The company reported a 59.2% increase in inventory due to supply chain issues, contributing to a cash conversion cycle increase to 46 days [32][33] Company Strategy and Development Direction - The company is focused on expanding its capabilities in the enterprise security market through the acquisition of Future Com, enhancing its security solutions [18][19] - Continued investment in personnel, particularly in customer-facing roles, is aimed at strengthening competitive positioning and long-term growth opportunities [15][14] - The company is adapting to IT challenges by offering comprehensive capabilities and solutions aligned with customer technology roadmaps [12] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive view of the IT market, citing continued customer investments in essential areas for growth and efficiency [20][35] - Despite challenges from global supply chain issues, the company is confident in its ability to navigate the environment and maintain market share gains [21][35] Other Important Information - The company’s balance sheet remains solid with cash and cash equivalents of $83.5 million, down from $155.4 million at the end of fiscal 2022 [32] - The effective tax rate was 28%, similar to the previous year [31] Q&A Session Summary Question: Impact of change in reserve for credit losses and updated thoughts on credit risk - The change in reserve was about $1 million, with no change in the customer base or credit methodology [40][42] Question: Discussion on services gross margin trends - Management indicated that current lower margins are influenced by supply chain trends and increased compensation, but expects margins to trend back up [43][44] Question: Enhancements from Future Com acquisition - Future Com brings cloud security offerings and network monitoring capabilities, enhancing the company's security portfolio and regional presence [45][50] Question: Confidence in continued headcount growth amid tech industry pullbacks - The company believes it can capture market share, with a focus on adding resources in services, particularly in security and cloud areas [51][53]

Washington, D.C.20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from____ to ____. Commission file number: 1-34167 ePlus inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organizatio ...

Financial Data and Key Metrics Changes - Fourth quarter net sales increased 28% to $451.5 million compared to $352.6 million in the same quarter of fiscal 2021 [24] - Adjusted gross billings for the fourth quarter rose approximately 21% year-over-year to $638.5 million [8] - Fiscal 2022 adjusted gross billings reached over $2.6 billion, representing a 16% growth from fiscal 2021 [9] - Consolidated net earnings for the fourth quarter were $24.2 million or $0.91 per diluted share, up 55.9% and 56.9% respectively from the previous year [29] - Non-GAAP diluted earnings per share increased 42.3% to $1.01 [30] Business Line Data and Key Metrics Changes - Technology segment net sales increased 26.4% to $419.4 million, with product revenue up 28.3% to $357.8 million and services revenue up 16.6% to $61.6 million [24] - Financing segment revenue grew 54.4% to $32.1 million, primarily due to higher proceeds from sales of off-lease equipment [26] - Services business generated sales growth of 19% for fiscal 2022, reflecting a shift towards recurring long-term services [14] Market Data and Key Metrics Changes - Telecom, Media & Entertainment and healthcare were the largest markets, representing 29% and 16% of segment net sales respectively [32] - The technology segment's gross margin expanded 60 basis points to 23.6% [34] Company Strategy and Development Direction - The company focuses on capturing emerging high-growth opportunities in fast-moving markets, leveraging a differentiated business model that combines technology services and financing [7] - Capital allocation priorities include evaluating potential acquisition targets to enhance growth and expand geographic presence [17] - The company aims to capitalize on long-term trends driving IT spending in key high-growth markets such as cloud, cybersecurity, and managed services [13] Management's Comments on Operating Environment and Future Outlook - Management noted that demand continues to outpace supply, with expectations for solid top-line growth in fiscal 2023 despite extended timelines for IT project implementations due to supply chain constraints [19][20] - The company is encouraged by the strength of open orders and backlog, which reflect high demand for products and services [18] - Management expressed confidence in the ability to outpace industry growth, supported by a favorable outlook for IT spending [38] Other Important Information - Consolidated gross profit increased 17.1% to $461 million, with gross profit in the technology segment up 17.9% to $408.2 million [33] - Cash and cash equivalents at the end of fiscal 2022 were $155.4 million, up 19.9% from the previous year [36] - Inventories increased 121.6% to $155.1 million, reflecting ongoing customer projects not yet completed due to supply chain constraints [37] Q&A Session Summary Question: Insights on client timelines for IT projects and budget factors - Management indicated that demand continues to outpace supply, with customers inquiring about lead times for solutions [42][44] Question: Impact of talent shortages on service offerings - Demand for services has increased, with service revenue up 16.6% for the quarter and 19% for the year, although margins were slightly affected by the talent shortage [45][46] Question: Growth in open order book and backlog - Management reported that open orders are over 100% up compared to last year, indicating strong demand [50] Question: Comparison of outlook with other technology vendors - Management believes their diversified offerings and ability to sell multiple OEM solutions contribute to a stronger outlook compared to peers [53][55] Question: Supply-demand environment and product constraints - Management noted that networking and wireless products have longer lead times, while storage and servers are relatively stable [61][63] Question: Expectations for leasing segment revenue normalization - Management expects leasing segment results to revert to more normalized levels, influenced by rising interest rates [68] Question: M&A pipeline opportunities - Management confirmed a strong pipeline of M&A opportunities across various markets [70]