ePlus(US:PLUS)2025-11-06 22:01Financial Performance - Total net sales for the three months ended September 30, 2025, reached $608.8 million, a 23.4% increase from $493.4 million in the same period of 2024[17] - Gross profit for the six months ended September 30, 2025, was $310.3 million, compared to $254.2 million for the same period in 2024, reflecting a 22.1% increase[17] - Net earnings from continuing operations for the six months ended September 30, 2025, were $65.3 million, up 48.5% from $44.0 million in the prior year[20] - Earnings per share for continuing operations increased to $2.48 for the six months ended September 30, 2025, compared to $1.65 for the same period in 2024[17] - Net earnings for the three months ended September 30, 2025, were $34.855 million, compared to $31.310 million for the same period in 2024, representing an increase of 8.3%[62] - Basic earnings per share for continuing operations increased to $1.45 for the three months ended September 30, 2025, from $0.75 in the same period of 2024, reflecting a growth of 93.3%[62] - For the six months ended September 30, 2025, net earnings were $72,552,000, compared to $54,678,000 for the same period in 2024, indicating a growth of approximately 32.7%[23] Balance Sheet Highlights - Total liabilities decreased to $720.7 million as of September 30, 2025, down from $907.2 million at the end of the previous fiscal year[14] - Cash and cash equivalents at the end of the period were $402.2 million, an increase from $187.5 million at the end of September 2024[20] - Total stockholders' equity increased to $1,046.1 million as of September 30, 2025, compared to $977.6 million at the end of the previous fiscal year[15] - As of September 30, 2025, ePlus reported total stockholders' equity of $1,046,082,000, an increase from $901,779,000 as of September 30, 2024, representing a year-over-year growth of approximately 15.9%[23] - ePlus's retained earnings reached $916,852,000 as of September 30, 2025, up from $742,978,000 as of September 30, 2024, marking a significant increase of approximately 23.4%[23] Operational Changes - The company completed the sale of its financing business on June 30, 2025, which positions ePlus as a pure-play technology solutions provider, impacting its operational focus moving forward[28] - Cisco Systems accounted for approximately 27% of ePlus's net sales for the six months ended September 30, 2025, down from 37% in the same period of 2024, reflecting a diversification in product sales[31] Cash Flow and Capital Management - The company reported a net cash used in operating activities of continuing operations of $(137.6) million for the six months ended September 30, 2025[20] - ePlus repurchased 60,000 shares of common stock for $4,404,000 during the six months ended September 30, 2025, as part of its capital management strategy[23] - The company repurchased 60,000 shares at a value of $4.4 million during the six months ended September 30, 2025, compared to 250,234 shares at a value of $19.8 million in the same period of 2024[64][65] Foreign Currency and Adjustments - The company experienced a foreign currency translation adjustment loss of $1.2 million for the three months ended September 30, 2025[18] - The company reported a foreign currency translation adjustment of $5,397,000 for the six months ended September 30, 2025, compared to $2,280,000 for the same period in 2024, indicating increased exposure to foreign currency fluctuations[23] - Foreign currency exposure related to transactions has not been significant, although fluctuations in exchange rates may impact financial results[162] Future Outlook and Strategic Initiatives - The company plans to continue focusing on market expansion and new product development to drive future growth[12] - Future revenue expected to be recognized from unsatisfied performance obligations totals $177.7 million, with $59.0 million expected in the remainder of the fiscal year ending March 31, 2026[38] Acquisitions and Intangible Assets - The company acquired Bailiwick Services, LLC for a total consideration of $124.9 million, including $126.2 million in cash at closing[80] - Identified intangible assets from the acquisition include customer relationships valued at $49.3 million and a trade name valued at $8.7 million[81] - Goodwill recognized from the Bailiwick acquisition amounts to $41.3 million, primarily due to expected synergies and an assembled workforce[82] Tax and Compensation - The provision for income tax expense for the three months ended September 30, 2025, was $15.8 million, compared to $7.5 million for the same period in 2024, showing a significant increase of 110.7%[73] - The effective tax rate for the three months ended September 30, 2025, was 29.3%, up from 27.5% in the same period of 2024[73] - Share-based compensation for the six months ended September 30, 2025, amounted to $6,558,000, compared to $5,463,000 for the same period in 2024, showing an increase of approximately 20%[23] - The total share-based compensation expense for the six months ended September 30, 2025, was $6.498 million, up from $5.321 million in the same period of 2024, indicating a year-over-year increase of 22.1%[71] Revenue Segmentation - The product segment generated $485.0 million in revenue for the three months ended September 30, 2025, up from $389.6 million in 2024, reflecting a 24.5% growth[90] - Revenue from the Telecom, Media & Entertainment sector increased to $176.8 million in Q3 2025, compared to $108.9 million in Q3 2024, marking a 62.4% increase[90]