ScanSource(US:SCSC)2026-02-05 13:31Financial Performance - Net sales for the quarter ended December 31, 2025, were $766.5 million, an increase from $747.5 million in the same quarter of 2024, representing a growth of 1.4%[18] - Gross profit for the quarter was $102.9 million, slightly up from $101.7 million year-over-year, indicating a gross margin of approximately 13.4%[18] - Net income for the quarter was $16.5 million, compared to $17.1 million in the prior year, reflecting a decrease of 3.3%[18] - Total revenue for the quarter ended December 31, 2025, was $766,512 thousand, an increase from $747,497 thousand in the same quarter of 2024, representing a year-over-year growth of approximately 2.0%[48][49] - Recurring revenue for the quarter ended December 31, 2025, was $42,023 thousand, compared to $36,262 thousand for the same quarter in 2024, indicating a growth of about 15.0%[48][49] - Net income for the quarter ended December 31, 2025, was $16,493 thousand, compared to $17,053 thousand for the same quarter in 2024, reflecting a decrease of approximately 3.3%[52] - Basic earnings per share for the quarter ended December 31, 2025, was $0.75, compared to $0.72 for the same quarter in 2024, showing an increase of about 4.2%[52] Assets and Liabilities - The company reported total current assets of $1.3 billion as of December 31, 2025, down from $1.37 billion at June 30, 2025[15] - Total liabilities decreased to $830.8 million from $879.2 million, showing a reduction of approximately 5.5%[15] - The Company recorded total debt of $102,663 thousand as of December 31, 2025, down from $136,149 thousand as of June 30, 2025, representing a reduction of approximately 24.5%[58] - The Company reported accumulated other comprehensive loss of $(116,414) thousand as of December 31, 2025, compared to $(114,424) thousand at June 30, 2025[53] - As of December 31, 2025, total assets were $1,741,671, a decrease from $1,785,606 as of June 30, 2025[98] Cash Flow and Investments - Cash provided by operating activities increased to $54,052,000 for the six months ended December 31, 2025, up from $38,642,000 in 2024, marking a 39.8% increase[27] - The company reported a decrease in cash and cash equivalents, ending the period at $83,466,000, down from $126,157,000 at the beginning of the period, a decline of 33.8%[27] - Total capital expenditures for the six months ended December 31, 2025, were $4,370,000, slightly higher than $4,348,000 in the same period of 2024[27] - The company repurchased common stock totaling $38,687,000 during the six months ended December 31, 2025, compared to $52,342,000 in the same period of 2024, a reduction of 26.2%[27] - The company’s depreciation and amortization expenses for the six months ended December 31, 2025, were $12,138,000, down from $15,603,000 in 2024, a decrease of 22.5%[27] Foreign Currency and Derivatives - The company experienced a foreign currency translation adjustment loss of $5.6 million for the quarter, compared to a loss of $18.7 million in the same quarter of 2024[20] - The company recorded net foreign currency exchange losses of $658,000 for the quarter ended December 31, 2025, compared to gains of $252,000 for the same quarter in 2024[70] - The notional amounts of outstanding foreign currency derivatives were $32.2 million as of December 31, 2025, up from $26.2 million as of June 30, 2025[70] Segment Performance - The Specialty Technology Solutions segment generated net sales of $741.5 million for the quarter ended December 31, 2025, up from $723.3 million in the same quarter of 2024, marking an increase of approximately 2.9%[95] - The Intelisys & Advisory segment reported net sales of $25.0 million for the quarter ended December 31, 2025, compared to $24.2 million in the same quarter of 2024, reflecting a growth of about 3.2%[95] Acquisitions and Goodwill - ScanSource acquired Resourcive for approximately $56.7 million on August 8, 2024, and Advantix for $18.4 million on October 20, 2025, with contingent consideration valued at $13.4 million[14][15][16] - Goodwill increased to $244,178 thousand as of December 31, 2025, from $230,820 thousand at June 30, 2025, due to recent acquisitions[56] Tax and Lease Obligations - The effective tax rate for the quarter ended December 31, 2025, was 15.1%, down from 21.6% for the six months ended December 31, 2024[108] - The weighted-average remaining lease term at December 31, 2025, was 2.87 years, with a weighted-average discount rate of 6.39%[103] - Operating lease costs for the six months ended December 31, 2025, were $3,255, an increase from $2,889 in 2024[103] Future Commitments - The company plans to continue earnout payments to sellers based on performance results through fiscal year 2028 for Advantix and through fiscal years 2026 to 2028 for DataXoom[83][84]