ScanSource(US:SCSC)2025-11-06 13:34Financial Performance - Net sales for Q1 FY26 totaled $739.7 million, a decrease of 4.6% year-over-year[4] - Gross profit increased by 5.8% year-over-year to $107.5 million, with a gross profit margin of 14.5% compared to 13.1% in the prior-year quarter[5] - Operating income for Q1 FY26 was $25.9 million, up 46.9% from $17.6 million in the prior-year quarter[6] - GAAP net income rose to $19.9 million, or $0.89 per diluted share, reflecting a 17.1% increase from $17.0 million, or $0.69 per diluted share, in the prior-year quarter[7] - Non-GAAP net income increased to $23.7 million, or $1.06 per diluted share, up 13.7% from $20.8 million, or $0.84 per diluted share, in the prior-year quarter[7] - Adjusted EBITDA for Q1 FY26 was $38.6 million, an 8.2% increase from $35.7 million in the prior-year quarter, with an adjusted EBITDA margin of 5.22%[7] - Free cash flow for Q1 FY26 was $20.8 million, with operating cash flow of $23.2 million[8] - Net income for the quarter was $19,878,000, representing an increase of 16.5% from $16,974,000 in the prior year[28] - Adjusted EBITDA for the quarter was $38,590,000, compared to $35,666,000 in the same quarter of 2024, indicating a year-over-year growth of 5.4%[32] - Free cash flow for Q3 2025 was $20,816, significantly lower than $42,455 in Q3 2024, indicating a decrease of 51.0%[40] - Operating income for Q3 2025 was reported at $25,903, compared to $27,509 in Q3 2024, showing a decline of 5.8%[42] - Net income for Q3 2025 was $19,878, down from $20,823 in Q3 2024, representing a decrease of 4.5%[42] - Diluted EPS for Q3 2025 was $0.89, compared to $0.84 in Q3 2024, indicating an increase of 6.0%[42] Revenue and Sales - The annual financial outlook for FY26 projects net sales between $3.1 billion and $3.3 billion, with adjusted EBITDA expected to be between $150 million and $160 million[11] - ScanSource reported a recurring revenue increase of 8.0% year-over-year, including contributions from acquisitions[4] - Net sales for the quarter ended September 30, 2025, were $739,650,000, a decrease of 4.6% compared to $775,580,000 in the same quarter of 2024[28] - Recurring revenue increased by 8.0% to $36,666,000 from $33,962,000 year-over-year[37] - Net sales in the United States for Q3 2025 were reported at $682,217, a decrease of 4.2% compared to $712,019 in Q3 2024[39] - Non-GAAP net sales in Brazil for Q3 2025 were $56,345, reflecting an 11.4% decline from $63,561 in Q3 2024[39] - Consolidated net sales for Q3 2025 were $739,650, down 4.6% from $775,580 in Q3 2024[39] Assets and Liabilities - Total current assets decreased to $1,307,335,000 from $1,370,452,000, a decline of 4.6%[25] - Total liabilities decreased to $802,944,000 from $879,197,000, a reduction of 8.7%[25] - Cash and cash equivalents at the end of the period were $124,924,000, down from $145,044,000 in the prior year[30] - The company reported a decrease in accounts receivable to $557,071,000 from $635,521,000, a decline of 12.3%[25] Acquisitions and Investments - ScanSource completed the acquisition of DataXoom on October 20, 2025, adding 17 employees and enhancing its connectivity offerings[9] - Capital expenditures for Q3 2025 were $2,395, slightly higher than $2,375 in Q3 2024[40] Return on Investment - The adjusted return on invested capital (Adjusted ROIC) ratio was 14.6%, up from 13.3% in the previous year[33] Foreign Exchange Impact - The company experienced a foreign exchange impact of $(1,088) on consolidated net sales for Q3 2025[39] Cash Flow - The company reported a decrease in GAAP operating cash flow from $44,830 in Q3 2024 to $23,211 in Q3 2025, a decline of 48.2%[40]