ePlus(US:PLUS)2025-09-17 18:17Summary of ePlus Conference Call Company Overview - ePlus has been in business for over 30 years, initially starting as a finance company focused on IT assets, and has transitioned to a technology segment [2][3] - The company sold its finance segment in June 2025 for $180 million, which provides financial flexibility to focus on technology growth [2][17] Financial Performance - Revenues for the last fiscal year were over $2 billion, with gross billings at $3.2 billion [3] - The company has over 4,600 customers and 2,100 employees [3] - The net sales CAGR over the last five years was 7%, while gross billings CAGR was 10% [17] - Service revenue has grown at a CAGR of 19% over the last five years, now representing nearly 20% of net sales [19][20] - Consolidated gross profit has grown at a CAGR of 10%, with gross margins increasing from 23% in fiscal 2021 to 26% in fiscal 2025 [20][21] - Net earnings and EPS CAGR over the last five years was 12% [21] Strategic Focus - ePlus is focusing on areas such as data center, cloud, artificial intelligence, networking, security, and collaboration [5][8] - The company aims to leverage its cash reserves (approximately $480 million) for acquisitions and growth opportunities [14][24] - A quarterly dividend has been initiated, marking a return of value to shareholders [3][24] Market Position and Competitive Advantage - ePlus differentiates itself by maintaining higher gross margins (400 to 600 basis points higher than competitors) due to its focus on services rather than commodity sales [13][29] - The company is positioned well in the market, focusing on mid-market customers (500 to 10,000 employees) while also serving Fortune 100 clients [15][16] Artificial Intelligence and Infrastructure - The company is in the early stages of AI adoption, conducting envisioning sessions to help customers identify use cases [31] - There is a growing demand for AI-enabled technology infrastructure, with customers upgrading their compute, storage, and networking capabilities [32] Market Demand and Economic Outlook - The supply chain has eased, leading to normalized IT spending, with no significant slowdown observed in the market [33][34] - The company remains optimistic about future growth, driven by ongoing investments in technology and services [38] Conclusion - ePlus is strategically positioned as a pure technology play, focusing on growth in services and technology solutions, with a strong financial foundation to support its initiatives [38]