We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. ePlus’s recent performance shows its demand has slowed as its revenue was flat over the last two years.As you can see below, ePlus’s sales grew at a solid 7.3% compounded annual growth rate over the last five years. This shows it had high demand, a useful starting point for our analysis.With $2.26 billion in revenue over the past ...

Financial Data and Key Metrics Changes - Revenue for Q2 2025 reached a record high of $151.6 million, representing an increase of approximately 11.3% year-over-year and a sequential growth of 2.8% [5] - Non-GAAP net income attributable to shareholders increased by 8.7% to $12.7 million, or $0.26 per fully diluted share, compared to $11.7 million, or $0.24 per fully diluted share in the same period last year [13] - Non-GAAP gross margin for Q2 2025 was 28.7%, down from 29.4% in Q2 2024, but improved sequentially from 28.5% [11] Business Line Data and Key Metrics Changes - Revenue from Israeli operations totaled $68.7 million, an increase of 18.8% compared to $57.8 million in the same period last year, accounting for 47% of overall quarterly revenue [10] - North American operations saw revenue increase by approximately 6.5% year-over-year, reaching $62.2 million [10] Market Data and Key Metrics Changes - In the U.S., revenue growth was approximately 9% year-over-year, driven by agreements executed in late 2024 and early 2025 [6] - The company is witnessing signs of improvement in the U.S. market, reinforcing positive momentum for continued growth [6] Company Strategy and Development Direction - The company is focused on leveraging its AI low code, no code cloud-based platform to meet the accelerating demand for automation and innovative software solutions [7] - A memorandum of understanding has been signed to negotiate a merger with Matrix, which is expected to create a more diversified and resilient global IT service provider [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive continued growth through sales of their product suite and high-value services, with a strong pipeline supporting sustained growth [16] - The company revised its full-year 2025 revenue guidance to a range of $600 million to $610 million, reflecting an anticipated annual growth rate of approximately 8.6% to 10.4% [17] Other Important Information - Cash flow from operating activities for the first half of 2025 was $21.2 million, down from $41.4 million in the same period of 2024, primarily due to increased investment in working capital [15] - The company declared a semiannual cash dividend of $0.296 per share, totaling approximately $14.5 million, reflecting about 75% of distributable profit for 2025 [14] Q&A Session Summary Question: Can you give us any color on customer behavior in the U.S.? - Management noted increased demand from major clients and signs of recovery in IT spending, contrasting with the previous year [20] Question: Can you talk about some of the drivers that are impacting margins? - Management indicated that margins were impacted by the timing of software license renewals and the revenue mix, with a significant increase in revenues from professional services [21][22] Question: How would you describe the progress of customers transitioning to cloud solutions? - Management observed more adoption of cloud solutions, with new customers jumping directly into the cloud and legacy customers starting to adopt cloud offerings [24] Question: Can you comment on the pipeline and types of deals being seen? - Management highlighted that cloud and AI projects are significant drivers, with hundreds of projects underway and a higher conversion rate than the industry standard [28]