Financial Data and Key Metrics Changes - In Q4 fiscal year 2025, consolidated net sales were $498.1 million, down from $554.5 million in Q4 fiscal year 2024, reflecting a 10.2% year-over-year decline [12] - Consolidated adjusted EBITDA increased to $43.8 million from $36.8 million in the prior year, exceeding expectations [12] - Gross profit rose by nearly 12% to $145.8 million, with a gross margin of 29.3%, up from 23.5% in the prior year [14][18] - For the full fiscal year 2025, consolidated net sales were $2.07 billion, down from $2.23 billion in fiscal year 2024, driven by a 13.7% decline in product sales [18][20] Business Line Data and Key Metrics Changes - Services revenue grew 33% in Q4 and 37% for the full year, highlighting a strategic emphasis on services-led solutions [6][12] - Managed services revenue increased by 16.6% in Q4 and 24.6% for the year, providing predictable long-term revenue [6] - Technology business net sales declined 10.4% year-over-year to $487.2 million, primarily due to lower product sales [12] Market Data and Key Metrics Changes - Telecom, Media and Entertainment, and SLED accounted for 23% of technology business net sales on a trailing twelve-month basis, with Technology, Healthcare, and Financial Services contributing 15%, 14%, and 9% respectively [14] - The financing segment saw net sales rise 4.9% to $10.9 million, driven by higher transaction gains [14] Company Strategy and Development Direction - The company is focusing on four key growth areas: AI, cloud, security, and networking, with strategic investments to expand capabilities [7][8] - AI adoption is seen as a significant business driver, with initiatives like AI Ignite workshops and a generative AI Accelerator solution to support customer needs [8][9] - The company aims to maintain a disciplined capital allocation strategy while exploring organic and inorganic growth opportunities [10][22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for fiscal year 2026, anticipating low single-digit net sales growth and mid single-digit growth in gross profit and adjusted EBITDA [23] - The company acknowledged economic uncertainty impacting sales but remains committed to a services and subscription-based model [24] Other Important Information - The company ended fiscal year 2025 with a record cash position of approximately $389 million, up from $253 million at the end of fiscal year 2024 [10][20] - The cash conversion cycle improved to 29 days from 46 days a year ago, indicating a more normalized supply chain [21] Q&A Session Summary Question: Current demand environment and product side performance - Management noted a pickup in the data center, cloud, and security sectors, but networking demand remains weak [28][29] Question: AI opportunity and enterprise investment - Management indicated that while enterprise AI adoption is not accelerating yet, they expect infrastructure spending to pick up over time as customers engage with their AI workshops and services [34]

Core Insights - ePlus inc. reported improved gross profit and gross margin for the fourth quarter and full year of fiscal year 2025, with double-digit growth in earnings per share (EPS) for the fourth quarter [3][4][13] Financial Performance - For the fourth quarter ended March 31, 2025, consolidated net sales decreased by 10.2% to $498.1 million from $554.5 million, while technology business net sales decreased by 10.4% to $487.2 million [5][8] - Consolidated gross profit increased by 11.8% to $145.8 million, with a gross margin of 29.3%, compared to 23.5% in the previous year [10][8] - Net earnings rose by 14.6% to $25.2 million, and diluted EPS increased by 15.9% to $0.95 [13][8] Yearly Overview - For the fiscal year ended March 31, 2025, consolidated net sales decreased by 7.0% to $2,068.8 million from $2,225.3 million, with technology business net sales down by 7.7% to $2,009.1 million [14][19] - Consolidated gross profit for the year increased by 3.3% to $569.1 million, with a gross margin of 27.5%, up from 24.8% in fiscal year 2024 [19][21] - Net earnings for the fiscal year decreased by 6.7% to $108.0 million, with diluted EPS down by 6.5% to $4.05 [21][22] Segment Performance - Professional service revenues increased by 48.4% in the fourth quarter to $60.4 million, primarily due to the acquisition of Bailiwick Services, LLC [7][4] - Managed service revenues grew by 16.6% to $44.5 million, driven by growth in Enhanced Maintenance Support and Cloud services [8][17] - The financing business segment saw net sales increase by 4.9% to $10.9 million, attributed to higher transactional gains and portfolio earnings [9][41] Operational Highlights - Operating expenses increased by 9.6% to $111.0 million, mainly due to higher salaries and benefits from increased headcount [11][20] - The company’s headcount rose to 2,199, up by 299 from the previous year, largely due to the acquisition of Bailiwick Services, LLC [11][20] - Cash and cash equivalents as of March 31, 2025, were $389.4 million, up from $253.0 million a year earlier [23][20] Strategic Outlook - ePlus is initiating fiscal year 2026 guidance for net sales growth in low single digits, with gross profit and adjusted EBITDA expected to grow in the mid-single digits [24][25] - The company remains focused on evolving its service and product offerings, particularly in fast-growing areas such as AI, cloud, security, and networking [25][4]

Q3 FY25 Performance Highlights - Q3 revenue and EPS exceeded guidance, driven by strong cloud demand[8] - Revenue increased by 8% QoQ and 16% YoY, primarily due to hyperscale cloud growth[8] - The company is on track to more than double EML shipments by the end of CY25, relative to the June 2024 baseline[8] Q3 FY25 Financial Results (Non-GAAP) - Revenue was $4252 million[10] - Gross margin reached 352%[10] - Operating income was $461 million, representing 108% of revenue[10] - Diluted EPS stood at $057[10] Segment Performance - Cloud & Networking revenue was $3652 million[11] - Industrial Tech revenue was $600 million[11] - Cloud & Networking segment profit margin was 200%[11] - Industrial Tech segment profit margin was 43%[11] Q4 FY25 Guidance (Non-GAAP) - Revenue is projected to be between $440 million and $470 million[13] - Operating margin is expected to be in the range of 130% to 140%[13] - Diluted EPS is forecasted to be between $070 and $080[13]