ePlus(PLUS) - 2026 Q3 - Quarterly Report

Financial Performance - Total net sales for the three months ended December 31, 2025, reached $614.8 million, a 24.6% increase from $493.2 million in the same period of 2024[17] - Gross profit for the nine months ended December 31, 2025, was $469.0 million, compared to $379.3 million for the same period in 2024, reflecting a 23.6% increase[17] - Net earnings from continuing operations for the nine months ended December 31, 2025, were $98.7 million, up 68.5% from $58.6 million in 2024[20] - Earnings per common share—basic for continuing operations increased to $3.76 for the nine months ended December 31, 2025, compared to $2.20 in 2024, representing a 70.9% growth[17] - The company reported a total comprehensive income of $35.1 million for the three months ended December 31, 2025, compared to $20.8 million in the same period of 2024, marking a 68.5% increase[18] - Net earnings for the three months ended December 31, 2025, were $35,052,000, compared to $24,133,000 for the same period in 2024, representing a year-over-year increase of approximately 45%[63] - Basic earnings per share for continuing operations increased to $1.28 in Q4 2025 from $0.55 in Q4 2024, while diluted earnings per share rose to $1.33 from $0.91[63] Revenue Growth - Total revenue from contracts with customers for the three months ended December 31, 2025, was $614.67 million, a 24.6% increase from $493.12 million in the same period of 2024[92] - Total revenue for the nine months ended December 31, 2025, was $1.86 billion, compared to $1.52 billion for the same period in 2024, marking a 22.4% growth[92] - Total net sales for the product segment reached $501.8 million for the three months ended December 31, 2025, up from $379.5 million in the prior year, representing a growth of 32.3%[88] - Revenue from the Telecom, Media & Entertainment sector for the three months ended December 31, 2025, reached $176.41 million, up 40% from $126.20 million in 2024[92] - The Technology sector generated $89.37 million in revenue for the three months ended December 31, 2025, representing a 25.4% increase from $71.29 million in 2024[92] - Cloud revenue for the three months ended December 31, 2025, was $175.35 million, up 50% from $116.86 million in 2024[92] - The Networking product segment achieved $230.89 million in revenue for the three months ended December 31, 2025, a 27.3% increase from $181.37 million in 2024[92] - Managed services segment revenue for the three months ended December 31, 2025, was $48.78 million, a 10.5% increase from $44.15 million in 2024[92] Balance Sheet and Liabilities - Total current liabilities decreased to $682.1 million as of December 31, 2025, from $797.9 million at the end of the previous year, a reduction of 14.5%[15] - Total stockholders' equity increased to $1.063 billion as of December 31, 2025, from $977.6 million in 2024, reflecting an 8.8% growth[16] - The company experienced a decrease in accounts payable from $324.6 million to $291.4 million, a decline of 10.2%[15] - The outstanding balance under the accounts payable floor plan facility was $133.2 million, up from $89.5 million as of March 31, 2025[53] - The company had no outstanding balances under the revolving credit facility as of December 31, 2025[55] Cash Flow and Investments - Cash and cash equivalents at the end of the period were $326.3 million, compared to $253.1 million at the beginning of the period, indicating a significant increase[21] - The company reported a net cash used in operating activities of continuing operations of $(223.4) million for the nine months ended December 31, 2025, compared to $186.6 million in the previous year[20] - The company issued 30,000 shares of common stock, raising $1,850,000 during the quarter ending September 30, 2025[23] - ePlus repurchased 213,000 shares of common stock for $16,607,000 during the quarter ending September 30, 2025[23] - The company paid dividends of $6,599,000 during the quarter ending September 30, 2025[23] - The company repurchased 272,900 shares of common stock at a value of $21.0 million during the nine months ended December 31, 2025[65] Acquisitions and Divestitures - ePlus completed the sale of its domestic financing business on June 30, 2025, which is expected to allow the company to focus more on technology solutions[30] - The company completed the sale of its domestic financing business, HoldCo, for net cash proceeds of $156.7 million on June 30, 2025[42] - The acquisition of Bailiwick Services, LLC was completed for a total consideration of $124.9 million, including $126.2 million in cash paid at closing[82] - Identified intangible assets from the Bailiwick acquisition amounted to $58.0 million, primarily consisting of customer relationships valued at $49.3 million[82] - The total purchase consideration for the Bailiwick acquisition included $41.3 million in goodwill, attributed to expected synergies and the acquired workforce[83] Tax and Regulatory Matters - The provision for income tax expense was $12.2 million for the three months ended December 31, 2025, compared to $5.4 million for the same period in the prior year, reflecting a significant increase[12] - The effective tax rate for the three months ended December 31, 2025, was 26.7%, slightly lower than 26.9% for the same period in the prior year[12] - The company is evaluating the impact of recently issued accounting pronouncements on its financial statement disclosures, including ASU 2023-09, effective for annual periods beginning March 31, 2026[34] Other Financial Metrics - The total remaining performance obligations expected to be recognized in the future amount to $172.634 million, with $32.490 million expected in the remainder of the fiscal year ending March 31, 2026[41] - The company recognized a contingent receivable of $12.4 million as of December 31, 2025, adjusted from an initial estimate of $13.5 million due to performance towards achieving targets[80] - The allowance for credit losses decreased from $3,667,000 in 2024 to $3,199,000 in 2025, with a provision for credit losses of $595,000 in 2025 compared to $1,483,000 in 2024[50] - Total amortization expense for other intangible assets was $15.9 million for the nine months ended December 31, 2025, compared to $14.2 million for the same period in 2024[49] - Goodwill as of December 31, 2025, totaled $202.927 million, reflecting only foreign currency translation adjustments during the nine months[44] - The company recognized a gain of $2.3 million in the three months ended December 31, 2025, from the settlement of a legal matter related to discontinued operations[42] - Foreign currency exposure has not significantly impacted the company's operations, although fluctuations in exchange rates may affect financial results[165]