ePlus Reports First Quarter Fiscal Year 2026 Financial Results
~ Announces Initial Common Stock Quarterly Dividend of $0.25 Per Share and New Stock Repurchase Program ~
First Quarter Fiscal Year 2026
-- Consolidated net sales increased 19.0% to $637.3 million from last year's first quarter; services revenues increased 48.8% to $116.3 million. -- Gross billings increased 14.3% to $952.8 million. -- Consolidated gross profit increased 16.8% to $148.2 million. -- Consolidated gross margin was 23.3%, compared to 23.7% last year. -- Net earnings from continuing operations increased 12.1% to $27.1 million. -- Adjusted EBITDA increased 19.6% to $46.7 million. -- Diluted earnings from continuing operations per share increased 14.4% to $1.03. Non-GAAP diluted net earnings per common share increased 24.8% to $1.26.
HERNDON, Va., Aug. 7, 2025 /PRNewswire/ -- ePlus inc. (NASDAQ: PLUS), a leading provider of technology solutions, today announced financial results for the three months ended June 30, 2025, or the first quarter of its 2026 fiscal year.
Management Comment
"Fiscal 2026 is off to a strong start both financially and strategically. We reported double digit growth across key financial metrics, including revenue, gross profit, and earnings per share. Our services business continues to be a standout, increasing nearly 50% in the quarter," commented Mark Marron, president and CEO of ePlus. "Overall, we had our strongest gross billings and net sales quarter in our history with growth across all customer sizes and solid contributions from our data center, cloud and security product offerings. Our strong financial performance in the quarter is a testament to our team's disciplined execution in a highly dynamic environment.
"Executing on our long-term plan, we implemented a number of strategic initiatives, including the sale of our domestic financing business. Selling this part of our business has many benefits including making us a pure-play technology company while increasing our capital position, and provides us the flexibility and capability to adjust to evolving market trends and the needs of our customers.
"We continue to take additional steps to drive long-term value and enhanced returns for our shareholders. To that end, our Board of Directors declared a quarterly dividend of $0.25 per common share, the first in the Company's history. The Board also approved a new share buyback program authorizing our repurchase of up to 1.5 million shares of common stock as we optimize our capital allocation strategy while maintaining flexibility for future growth initiatives."
First Quarter Fiscal Year 2026 Results
During the quarter ended June 30, 2025, we completed the sale of our domestic financing business subsidiaries. Consequently, alongside the results of our continuing operations, we are retrospectively presenting the results of our domestic financing business as discontinued operations, for all prior periods as a result of such sale.
For the first quarter ended June 30, 2025, as compared to the first quarter ended June 30, 2024:
Consolidated net sales increased 19.0% to $637.3 million, from $535.7 million due to higher product sales and higher service revenue. Gross billings increased 14.3% to $952.8 million from $833.7 million.
Product segment sales increased 13.9% to $521.0 million from $457.5 million due to higher cloud and security products net sales, offset by decreases in net sales of networking and collaboration products. Product segment margin was 20.4%, down from 21.5% last year due to a lower proportion of third-party maintenance and services sold in the current quarter, which are recorded on a net basis.
Professional services segment revenues increased 92.4% year over year to $71.7 million from $37.3 million, primarily due to the acquisition of Bailiwick Services, LLC. Gross margin declined to 39.2% from 41.5% during the same period last year due to the addition of Bailiwick Services, LLC whose services are generally at a lower margin than our core professional services.
Managed services segment revenue increased 9.0% to $44.6 million primarily due to additional sales of enhanced maintenance support and cloud services. Gross profit from our managed services segment increased 5.5% from last year due to the increase in revenue, offset by a decline in gross margin to 30.4% from 31.4% in the prior year quarter.
Consolidated gross profit increased 16.8% to $148.2 million, from $126.9 million. Consolidated gross margin was 23.3%, compared with last year of 23.7%.
Consolidated operating expenses were $112.0 million, up 17.4% from $95.4 million last year, primarily due to increases in salaries and benefits from additional headcount. Our headcount at the end of the quarter was 2,182, up 275 from a year ago, primarily due to the acquisition of Bailiwick Services, LLC on August 19, 2024. Of this year's 275 additional employees, 249 are customer-facing employees. Additionally, there was an increase in variable compensation due to the increase in gross profit.
Consolidated operating income from continuing operations increased 15.1% to $36.2 million. Other income was $0.6 million compared to $1.7 million last year, due to higher foreign currency transaction losses being recognized in the current quarter. Earnings before tax from continuing operations increased 11.0% to $36.8 million.
Our effective tax rate for the current quarter was 26.3%, slightly lower than the prior year quarter of 27.1%.
Net earnings from continuing operations increased 12.1% to $27.1 million from $24.2 million in the prior year quarter. Adjusted EBITDA increased 19.6% to $46.7 million from $39.1 million in the prior year quarter.
Net earnings from discontinued operations for the three months ended June 30, 2025, were $10.6 million, an increase of $7.5 million, as compared to $3.1 million for the same three-month period in the prior year. The increase was primarily due to the gain on sale of our domestic financing business before income taxes of $4.4 million and an increase in operating income.
Diluted earnings per common share from continuing operations was $1.03, compared with $0.90 in the prior year quarter. Non-GAAP diluted net earnings per common share from continuing operations was $1.26, compared with $1.01 in the prior year quarter. Diluted earnings per share from discontinued operations was $0.40, compared with $0.12 in the prior year quarter.
Balance Sheet Highlights
As of June 30, 2025, cash and cash equivalents were $480.2 million, up from $389.4 million as of March 31, 2025, primarily due to cash proceeds from the sale of our domestic financing business. Inventory decreased 16.1% to $101.1 million compared with $120.4 million as of March 31, 2025. Accounts receivable--trade, net increased 35.6% to $700.9 million from $516.9 million as of March 31, 2025. Total stockholders' equity was $1,020.4 million, compared with $977.6 million as of March 31, 2025. Total shares outstanding were 26.6 million and 26.5 million on June 30, 2025 and March 31, 2025, respectively.
Fiscal Year Guidance
Fiscal year 2026 net sales growth over the prior fiscal year is now expected to be in the upper single digits above fiscal year 2025's $2.01 billion from continuing operations, and gross profit growth in the upper single digit range from fiscal year 2025's $515.5 million from continuing operations. We now forecast adjusted EBITDA growth in the mid-teens over fiscal year 2025's $141 million from continuing operations. This guidance does not factor in recessionary conditions or other unexpected developments. ePlus cannot predict with reasonable certainty and without unreasonable effort, the ultimate outcome of unusual gains and losses, the occurrence of matters creating GAAP tax impacts, fluctuations in interest expense or interest income and share-based compensation, and acquisition-related expenses. These items are uncertain, depend on various factors, and could be material to ePlus' results computed in accordance with GAAP. Accordingly, ePlus is unable to provide a reconciliation of GAAP net earnings to adjusted EBITDA for the full fiscal year 2026 forecast.
Summary and Outlook
"We are very pleased with our solid first-quarter performance and the momentum in our business and are confident in the strength, resilience, and outlook for our company. As a result, reflecting our strong financial results, we have increased our fiscal year 2026 guidance.
"ePlus is in a strong position to further capitalize on strategic opportunities across several key growth areas, namely AI, cloud, security, and related services, as well as geographic expansion. Our healthy balance sheet provides the financial flexibility to support both our growth initiatives and other capital allocation priorities.
"We remain firmly committed to building long-term value for all stakeholders. We will accomplish this by expanding our business organically while exploring new business opportunities that position us for long-term growth. Favorable long-term industry dynamics bode well for us and position us well to achieve sustainable top and bottom-line growth," concluded Mr. Marron.
ePlus Announces Quarterly Dividend
ePlus announced today that its Board of Directors has declared its first quarterly dividend. The initial quarterly cash dividend of $0.25 per common share will be paid on September 17, 2025, to shareholders of record as of the close of business on August 26, 2025.
ePlus Announces New Stock Repurchase Program
ePlus inc. today announced that its Board of Directors has authorized ePlus to repurchase up to 1,500,000 shares of ePlus' outstanding common stock over a 12-month period commencing August 11, 2025. ePlus' previous repurchase plan expired on May 27, 2025.
The purchases under the stock repurchase program may be made from time to time in the open market, or in privately negotiated transactions, subject to availability. Any repurchased shares will have the status of treasury shares and may be used, if and when needed, for general corporate purposes. ePlus has no obligation to repurchase shares under the authorization, and the timing, actual number and value of the shares which are repurchased will be at the discretion of management and will depend on a number of factors, including the price of ePlus' common stock. ePlus may suspend or discontinue repurchases at any time.
Recent Corporate Developments/Recognitions
In the month of July:
-- Announced the closing of the sale of the Financing Business to Marlin Leasing Corporation (dba PEAC Solutions), effective June 30, 2025 -- Named Digital Realty's 2024 Rising Star Partner of the Year
In the month of June:
-- Received Nutanix Portfolio Partner of the Year Award -- Recognized as Lenovo North American Infrastructure Partner of the Year -- Entered into Agreement to sell Financing Business to PEAC Solutions -- Recognized as Innovator Partner of the Year at Pure Storage Annual Pure/Partner Forum
In the month of May:
-- Secured a spot on the CRN Solution Provider List for 14(th) Consecutive Year -- Customer Experience VP, Deanna Davenport, spotlighted on the CRN 2025 Women of the Channel Power 80 Solution Provider List
Conference Call Information
ePlus will hold a conference call and webcast at 4:30 p.m. ET on August 7, 2025:
Date:
August 7, 2025
Time:
4:30 p.m. ET
Audio Webcast (Live & Replay): https://events.q4inc.com/attendee/
688930192
Live Call: (888) 596-4144 (toll-free/
domestic)
(646) 968-2525 (international)
Archived Call: (800) 770-2030 (toll-free/
domestic)
(609) 800-9909 (international)
Conference ID: 5394845 (live call and replay)
A replay of the call will be available approximately two hours after the call through August 14, 2025. A transcript of the call will also be available on the ePlus Investor Relations website at https://www.eplus.com/investors.
About ePlus inc.
ePlus is a customer-first, services-led, and results-driven industry leader offering transformative technology solutions and services to provide the best customer outcomes. Offering a full portfolio of solutions, including artificial intelligence, security, cloud and data center, networking, and collaboration, as well as managed, consultative and professional services, ePlus works closely with organizations across many industries to successfully navigate business challenges. With a long list of industry-leading partners and approximately 2,200 employees, our expertise has been honed over more than three decades, giving us specialized yet broad levels of experience and knowledge. ePlus is headquartered in Virginia, with locations in the United States, United Kingdom, Europe, and Asia?Pacific. For more information, visit www.eplus.com, call 888-482-1122, or email info@eplus.com. Connect with ePlus on LinkedIn, X, Facebook, and Instagram.
ePlus, Where Technology Means More®.
ePlus® and ePlus products referenced herein are either registered trademarks or trademarks of ePlus inc. in the United States and/or other countries.
Forward-looking statements
Statements in this press release that are not historical facts may be deemed to be "forward-looking statements," including, among other things, statements regarding the future financial performance of ePlus. Actual and anticipated future results may vary materially due to certain risks and uncertainties, including, without limitation, financial losses resulting from national and international political instability fostering uncertainty and volatility in the global economy including changes in interest rates, tariffs, inflation, export requirements applicable to products we sell, sanctions and exposure to foreign currency losses; significant adverse changes in our relationship with one or more of our larger customer accounts or vendors, including decreased account profitability, reductions in contracted services, or a loss of such relationships; increases to our costs including wages and our ability to increase our prices to our customers as a result, or experience negative financial impacts due to the pricing arrangements we have with our customers; a material decrease in the credit quality of our customer base, or a material increase in our credit losses; the possibility of a reduction of vendor incentives provided to us; our inability to identify acquisition candidates, perform sufficient due diligence prior to completing an acquisition, successfully integrate a completed acquisition, or identify an opportunity for or successfully completing a business disposition, may affect our earnings; our ability to remain secure during a cybersecurity attack or other information technology ("IT") outage, including disruptions in our, our vendors or a third party's IT systems and data and audio communication networks; our ability to secure our own and our customers' electronic and other confidential information, while maintaining compliance with evolving data privacy and cybersecurity regulatory laws and regulations and appropriately providing required notice and disclosure of cybersecurity incidents when and if necessary; our dependence on key personnel to maintain certain customer relationships, and our ability to hire, train, and retain sufficient qualified personnel by recruiting and retaining highly skilled, competent personnel with needed vendor certifications; risks relating to artificial intelligence ("AI"), including the use or capabilities of AI and emerging laws, rules and regulations related to AI; our ability to manage a diverse product set of solutions, including AI products and services, in highly competitive markets with a number of key vendors; changes in the IT industry and/or rapid changes in product offerings, including the proliferation of the cloud, infrastructure as a service ("IaaS"), software as a service ("SaaS"), platform as a service ("PaaS"), and AI which may affect our financial results; supply chain issues, including a shortage of IT component parts and products, may increase our costs or cause a delay in fulfilling customer orders, or increase our need for working capital, or delay completing professional services, or purchasing IT products or services needed to support our internal infrastructure or operations, resulting in an adverse impact on our financial results; ongoing remote work trends, and the increase in cybersecurity attacks that have occurred while employees work remotely and our ability to adequately train our personnel to prevent a cyber event; our ability to raise capital, maintain or increase as needed our lines of credit with vendors or our floor plan facility, or the effect of those changes on our common stock price; our ability to predictably meet expectations of the investor and analyst community, including relative to our financial performance guidance that we provide; and our ability to implement comprehensive plans for the integration of sales forces, cost containment, asset rationalization, systems integration, and other key strategies following acquisitions; and other risks or uncertainties detailed in our reports filed with the Securities and Exchange Commission.
The declaration and payment of future dividends are subject to the sole discretion of the Board of Directors.
All information set forth in this press release is current as of the date of this release and ePlus undertakes no duty or obligation to update this information either as a result of new information, future events or otherwise, except as required by applicable U.S. securities law.
e
Plus inc. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
June 30, March 31,
2025 2025
ASSETS
Current assets:
Cash and cash equivalents $480,178 $389,375
Accounts receivable-trade, net 700,873 516,925
Accounts receivable-other, net 38,606 19,382
Inventories 101,053 120,440
Deferred costs 66,898 66,769
Other current assets 14,708 28,500
Current assets of discontinued operations 222,399
Total current assets 1,402,316 1,363,790
Deferred tax asset 9,852 3,658
Property, equipment and other assets-net 107,538 98,657
Goodwill 202,979 202,858
Other intangible assets-net 76,450 82,007
Non-current assets of discontinued operations 133,835
TOTAL ASSETS $1,799,135 $1,884,805
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Accounts payable $320,434 $324,580
Accounts payable-floor plan 129,415 89,527
Salaries and commissions payable 45,672 42,219
Deferred revenue 158,759 152,631
Other current liabilities 33,470 22,463
Current liabilities of discontinued operations 166,463
Total current liabilities 687,750 797,883
Deferred tax liability-long-term 1,454
Deferred revenue-long-term 78,404 81,759
Other liabilities 12,550 13,540
Non-current liabilities of discontinued operations 12,546
TOTAL LIABILITIES 778,704 907,182
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 per share par value; 2,000 shares authorized; none outstanding
Common stock, $0.01 per share par value; 50,000 shares authorized; 26,627 outstanding 277 276
at June 30, 2025 and 26,526 outstanding at March 31, 2025
Additional paid-in capital 198,954 193,698
Treasury stock, at cost, 1,103 shares at June 30, 2025 and 1,056 shares at March 31, 2025 (74,052) (70,748)
Retained earnings 888,653 850,956
Accumulated other comprehensive income-foreign currency translation adjustment 6,599 3,441
Total Stockholders' Equity 1,020,431 977,623
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,799,135 $1,884,805
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Plus inc. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended June
30,
2025 2024
Net sales
Product $
521,006 $
457,463
Services 116,309 78,189
Total 637,315 535,652
Cost of sales
Product 414,477 358,878
Services 74,622 49,900
Total 489,099 408,778
Gross profit 148,216 126,874
Selling, general, and administrative 104,947 90,596
Depreciation and amortization 7,069 4,819
Operating expenses 112,016 95,415
Operating income 36,200 31,459
Other income (expense), net 612 1,711
Earnings from continuing operations before tax 36,812 33,170
Provision for income taxes 9,684 8,977
Net earnings from continuing operations 27,128 24,193
Earnings from discontinued operations, net of tax 10,569 3,146
Net earnings $
37,697 $
27,339
Earnings per common share-basic
Continuing operations $
1.03 $
0.91
Discontinued operations 0.40 0.12
Earnings per common share-basic $
1.43 $
1.03
Earnings per common share-diluted
Continuing operations $
1.03 $
0.90
Discontinued operations 0.40 0.12
Earnings per common share-diluted $
1.43 $
1.02
Weighted average common shares outstanding-basic 26,270 26,642
Weighted average common shares outstanding-diluted 26,381 26,801
Segment Results
---
Three Months Ended June
30,
2025 2024 Change
(in thousands)
Net sales
Product segment $520,895 $457,312 13.9 %
Professional services segment 71,729 37,279 92.4 %
Managed services segment 44,580 40,910 9.0 %
Other 111 151 (26.5 %)
Total $637,315 $535,652 19.0 %
Gross profit
Product segment $106,482 $98,505 8.1 %
Professional services segment 28,153 15,455 82.2 %
Managed services segment 13,534 12,834 5.5 %
Other 47 80 (41.3 %)
Total $148,216 $126,874 16.8 %
Gross Billings by Type
---
Cloud $312,017 $241,274 29.3 %
Networking 268,732 281,528 (4.5 %)
Security 190,045 151,883 25.1 %
Collaboration 22,777 32,976 (30.9 %)
Other 51,446 44,592 15.4 %
Product segment 845,017 752,253 12.3 %
Service 107,748 81,455 32.3 %
Total $952,765 $833,708 14.3 %
Net Sales by Type
---
Networking $218,202 $234,740 (7.0 %)
Cloud 206,996 137,231 50.8 %
Security 61,107 48,005 27.3 %
Collaboration 11,757 20,899 (43.7 %)
Other 22,833 16,437 38.9 %
Total products segment 520,895 457,312 13.9 %
Professional services segment 71,729 37,279 92.4 %
Managed services segment 44,580 40,910 9.0 %
Other 111 151 (26.5 %)
Total net sales $637,315 $535,652 19.0 %
Net Sales by Customer End Market
---
Telecom, Media, & Entertainment $184,979 $117,553 57.4 %
SLED 90,562 92,096 (1.7 %)
Technology 82,747 109,106 (24.2 %)
Healthcare 74,291 75,280 (1.3 %)
Financial Services 47,500 49,725 (4.5 %)
All other 157,236 91,892 71.1 %
Total net sales $637,315 $535,652 19.0 %
e Plus inc. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP INFORMATION
We included reconciliations below for the following non-GAAP financial measures: (i) Adjusted EBITDA, (ii) non-GAAP Net Earnings and (iii) non-GAAP Net Earnings per Common Share - Diluted.
We define Adjusted EBITDA as net earnings from continuing operations calculated in accordance with US GAAP, adjusted for the following: interest expense, depreciation and amortization, share-based compensation, acquisition and integration expenses, provision for income taxes, and other income (expense).
Non-GAAP Net Earnings and non-GAAP Net Earnings per Common Share - Diluted are based on net earnings from continuing operations calculated in accordance with US GAAP, adjusted to exclude other income (expense), share based compensation, and acquisition related amortization and acquisition integration expenses, and the related tax effects.
We use the above non-GAAP financial measures as supplemental measures of our performance to gain insight into our operating performance and performance trends. We believe that such non-GAAP financial measures provide management and investors a useful measure for period-to-period comparisons of our business and operating results by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that such non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results.
Our use of non-GAAP information as analytical tools has limitations, and should not be considered in isolation or as substitutes for analysis of our financial results as reported under GAAP. In addition, other companies, including companies in our industry, might calculate adjusted EBITDA, non-GAAP net earnings, and non-GAAP net earnings per common share, or similarly titled measures differently, which may reduce their usefulness as comparative measures.
The amounts in the tables below are results from our continuing operations (in thousands):
(i) Reconciliation of Adjusted EBITDA
Three Months Ended June
30,
2025 2024
Net earnings from continuing operations $27,128 $24,193
Provision for income taxes 9,684 8,977
Depreciation and amortization [1] 7,069 4,819
Share-based compensation 3,440 2,791
Other (income) expense, net [2] (612) (1,711)
Adjusted EBITDA $46,709 $39,069
(ii) Reconciliation of non-GAAP Net Earnings
Three Months Ended June
30,
2025 2024
GAAP: Earnings from continuing operations before taxes $36,812 $33,170
Share based compensation 3,440 2,791
Acquisition related amortization expense [3] 5,548 3,750
Other (income) expense, net [2] (612) (1,711)
Non-GAAP: Earnings from continuing operations before taxes 45,188 38,000
GAAP: Provision for income taxes 9,684 8,977
Share-based compensation 916 781
Acquisition related amortization expense [3] 1,473 1,047
Other (income) expense, net [2] (163) (479)
Tax benefit (expense) on restricted stock 114 308
Non-GAAP: Provision for income taxes 12,024 10,634
Non-GAAP: Net earnings from continuing operations $33,164 $27,366
(iii) Reconciliation of non-GAAP Net Earnings per Common Share - Diluted
Three Months Ended June
30,
2025 2024
GAAP: Net earnings per common share from continuing operations - diluted $1.03 $0.90
Share-based compensation 0.10 0.07
Acquisition related amortization expense [3] 0.15 0.10
Other (income) expense, net [2] (0.02) (0.05)
Tax benefit (expense) on restricted stock - (0.01)
Total non-GAAP adjustments - net of tax 0.23 0.11
Non-GAAP: Net earnings per common share from continuing operations - diluted $1.26 $1.01
[1] Amount consists of depreciation and amortization for assets used internally. [2] Interest income and foreign currency transaction gains and losses. [3] Amount consists of amortization of intangible assets from acquired businesses.
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SOURCE EPLUS INC.
