EPlus (PLUS) came out with quarterly earnings of $1.11 per share, beating the Zacks Consensus Estimate of $0.87 per share. This compares to earnings of $0.93 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 27.59%. A quarter ago, it was expected that this computer products reseller would post earnings of $1.22 per share when it actually produced earnings of $1.06, delivering a surprise of -13.11%.Over the last four quarters, th ...

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]

Financial Performance - Net sales for the year ended March 31, 2025, were $2,068,789, a decrease of 7.1% compared to $2,225,302 in 2024[169]. - Gross profit increased to $569,121 for the year ended March 31, 2025, up from $550,793 in 2024, resulting in a gross margin of 27.5%[169]. - Operating income margin decreased to 6.8% for the year ended March 31, 2025, compared to 7.1% in 2024[169]. - Net earnings for the year ended March 31, 2025, were $107,978, down from $115,776 in 2024, maintaining a net earnings margin of 5.2%[169]. - Non-GAAP net earnings for the year ended March 31, 2025, were $124,475, compared to $131,327 in 2024[169]. - Adjusted EBITDA for the year ended March 31, 2025, was $178,234, a decrease from $190,441 in 2024, with an adjusted EBITDA margin of 8.6%[169]. - Total gross billings for the year ended March 31, 2025, were $3,280,447, slightly down from $3,329,764 in 2024[169]. - For the year ended March 31, 2025, net sales decreased by $156.5 million compared to the prior fiscal year, driven by lower product revenues, although managed services and professional services revenue increased[177]. - Consolidated gross profit increased by $18.3 million year-over-year, with gross margins up by 270 basis points to 27.5%, primarily due to a shift in product mix towards higher-margin services[178]. - Operating income decreased by $16.8 million, with operating margin declining by 30 basis points to 6.8%[180]. - Adjusted EBITDA for the year ended March 31, 2025, decreased by $12.2 million, while the Adjusted EBITDA margin remained flat at 8.6%[181]. - GAAP net earnings per common share—diluted decreased by $0.28 to $4.05, while Non-GAAP net earnings per common share—diluted decreased by $0.25 to $4.67[182]. - Basic earnings per common share for the year ended March 31, 2025, were $4.07, a decrease of 6.4% compared to $4.35 for the year ended March 31, 2024[214]. - Diluted earnings per common share for the year ended March 31, 2025, were $4.05, a decrease of 6.5% compared to $4.33 for the year ended March 31, 2024[214]. - The effective income tax rate for the year ended March 31, 2025, was 27.5%, lower than 28.1% for the year ended March 31, 2024, primarily due to lower state taxes[212]. Business Segments - For the year ended March 31, 2025, technology business segments accounted for 97% of net sales, with 78% from the product segment, 11% from professional services, and 8% from managed services[25]. - The financing business segment accounted for 3% of net sales and 25% of operating income for the year ended March 31, 2025[25]. - The technology business segments include product, professional services, and managed services, with a focus on gross profit and operating expenses[183]. - The financing business segment offers solutions primarily to corporations and government contractors, with a focus on leasing IT and medical equipment[187]. - Net sales for the technology business segments decreased by 7.7% to $2,009,145, compared to $2,175,886 in the previous year[190]. - Product sales declined by 14.6% to $1,608,768, while professional services increased by 48.2% to $229,030, and managed services rose by 24.6% to $171,347[190]. - Gross profit for the technology business segments increased by 1.4% to $515,381, with a gross profit margin of 25.7%, up 230 basis points from the prior year[196]. - Portfolio earnings in the financing business segment increased by 30.8% to $18,229, while transactional gains rose by 51.8% to $28,866[206]. - Total proceeds from sales of financing receivables decreased to $634.9 million from $762.6 million in the previous year[206]. Customer and Market Insights - ePlus serves 4,600 customers, with revenue distribution by end market: 23% telecommunications, media and entertainment, 17% state and local education, 15% technology, 14% healthcare, and 9% financial services[23]. - Sales to Verizon Communications Inc. represented 16%, 19%, and 22% of net sales for the years ended March 31, 2025, 2024, and 2023, respectively[23]. - Approximately 17% of accounts receivable-trade balance was due from Verizon Communications Inc. as of March 31, 2025[58]. - The company is experiencing an increase in federal contract terminations, which may lead to claims and increased costs[125]. - Sales to SLED customers are highly regulated, and funding cuts from the federal government may decrease spending from these customers[127]. Employee and Operational Insights - ePlus employs 714 sales, marketing, and sales support personnel as of March 31, 2025, organized regionally across the US, UK, and India[36]. - As of March 31, 2025, the company employed a total of 2,199 employees, an increase of 299 from 1,900 in the previous year[48]. - The professional and managed services segment saw an increase of 277 employees from the previous year, totaling 1,093 as of March 31, 2025[51]. - The company added 300 employees, bringing the total to 2,166, with a focus on increasing customer-facing personnel[201]. - Operating expenses increased by $35.2 million, largely due to higher salaries, benefits, and acquisition-related expenses from the acquisition of Bailiwick, resulting in a total of 2,199 employees, a 15.7% increase from the previous year[179]. Risk Management and Compliance - The company has a conservative risk management approach, including credit quality analysis and monitoring of customer financial results[46]. - The company relies heavily on the accuracy and reliability of its IT, telecommunication, and cybersecurity platforms for various operational functions, and any inadequacies could materially affect its business and financial condition[98]. - A significant portion of employees working from home increases the risk of data loss and operational disruptions due to potential cybersecurity attacks or failures in information systems[74]. - The company may face challenges in hiring and retaining qualified personnel due to a competitive labor market, which could adversely impact its ability to serve customers and manage costs[79]. - The company is dependent on creditworthy customers to maintain its financial health, and any deterioration in customer credit quality could negatively affect its operating results[84]. - Vendor incentives and funding are crucial for offsetting costs, and any reduction or discontinuation of these incentives could materially impact the company's financial results[86]. - The company may incur significant expenses related to cybersecurity breaches, which could damage its reputation and financial condition[78]. - Advances in technology, particularly in AI and cybersecurity, present both opportunities and risks, and failure to address these could harm the company's competitive position[94]. - The evolving nature of cybersecurity threats makes it increasingly challenging for the company to adequately mitigate risks, potentially leading to significant operational disruptions[73]. - The company maintains cybersecurity insurance coverage deemed appropriate for its business size and complexity[141]. - The company is not aware of any cybersecurity threats that have materially affected its operations as of the report date[143]. - The company relies on the competency of its internal IT personnel, and failure to secure data could significantly interrupt business operations[102]. - The company is subject to numerous US and foreign laws and regulations, which may increase compliance costs and impact business operations[124]. - The company faces risks of claims for intellectual property infringement, which could lead to substantial costs in defending against such claims[128]. Strategic Initiatives - ePlus has invested in engineering and technology resources to stay at the forefront of technology trends, focusing on cloud and managed services[21]. - The company offers a wide portfolio of technology and capital asset financing solutions tailored to customer needs[22]. - The company focuses on automating the IT procurement process to reduce customers' costs and improve efficiency[34]. - Mergers and acquisitions are key to the company's growth strategy, and failure to identify suitable candidates or integrate them effectively could negatively impact earnings[88]. - The company plans to continue expanding by hiring additional staff in targeted market areas and pursuing acquisitions that align with strategic objectives[189]. - The company has a credit facility with an aggregate limit of $500 million, and any loss or reduction in this facility could adversely affect its operational capabilities[92]. Market Trends and Economic Factors - Key business trends indicate a focus on AI, security, and cloud solutions, with increasing customer demand for digital transformation and modernization[168]. - The company may face adverse effects on its business due to general economic weakness, including inflation and rising interest rates[114]. - The company anticipates that supply chain disruptions could adversely impact financial results due to reliance on vendor performance and shipping services[67][71]. - The company is exposed to financial losses due to fluctuations in foreign currency rates, although operations in foreign countries are not material[103]. - The company’s operations could be negatively impacted by natural disasters or adverse events at its configuration centers, warehouses, or data centers[105]. - The company’s ability to monetize financing receivables may be affected by changes in interest rates or the loss of key lenders[120].

Financial Performance - Consolidated net sales for Q4 FY 2025 decreased 10.2% to $498.1 million from $554.5 million, while service revenues increased 33.0% to $104.9 million[5]. - Consolidated gross profit increased 11.8% to $145.8 million, with a gross margin of 29.3%, up from 23.5% in the prior year[5]. - Net earnings for Q4 FY 2025 increased 14.6% to $25.2 million, with diluted earnings per share rising 15.9% to $0.95[5]. - For FY 2025, consolidated net sales decreased 7.0% to $2,068.8 million, while service revenues increased 37.1% to $400.4 million[5]. - Total net sales for the three months ended March 31, 2025, were $498,114, a decrease of 10.4% compared to $554,461 for the same period in 2024[40]. - Product net sales decreased by 17.8% to $382,371 for the three months ended March 31, 2025, compared to $465,228 in the prior year[41]. - Professional services net sales increased by 48.4% to $60,354 for the three months ended March 31, 2025, compared to $40,679 in the prior year[43]. - Operating income for the three months ended March 31, 2025, was $34,715, compared to $29,015 for the same period in 2024, reflecting an increase of 19.0%[40]. - Net earnings for the three months ended March 31, 2025, were $25,196, an increase of 14.0% from $21,983 in the same period of 2024[40]. - Adjusted EBITDA for the consolidated entity was $43,819 for the three months ended March 31, 2025, compared to $36,805 in 2024, reflecting a growth of 19.0%[51]. - Non-GAAP net earnings for the year ended March 31, 2025, were $124,475, a decrease of 5.2% from $131,327 in 2024[52]. - The diluted non-GAAP net earnings per common share for the year ended March 31, 2025, was $4.67, compared to $4.92 in 2024, reflecting a decrease of 5.1%[52]. Revenue Breakdown - Professional service revenues increased 48.4% to $60.4 million, primarily due to the acquisition of Bailiwick Services, LLC[8]. - Managed service revenues increased 24.6% to $171.3 million, driven by growth in Enhanced Maintenance Support and Cloud services[20]. - The Telecom, Media, & Entertainment segment saw a significant decline in sales, dropping 28.9% to $101,268 for the three months ended March 31, 2025, compared to $142,333 in 2024[44]. - The Healthcare segment experienced a 14.8% increase in sales, reaching $74,289 for the three months ended March 31, 2025, compared to $64,711 in 2024[44]. - The Financial Services segment's sales decreased by 36.3% to $44,097 for the three months ended March 31, 2025, down from $69,239 in 2024[44]. - The Financing Business Segment reported a 4.9% increase in net sales to $10,869 for the three months ended March 31, 2025, up from $10,361 in 2024[45]. - The company achieved a gross profit of $9,505 for the Financing Business Segment for the three months ended March 31, 2025, an increase of 8.2% from $8,783 in 2024[45]. Assets and Equity - Cash and cash equivalents as of March 31, 2025, were $389.4 million, up from $253.0 million a year ago[28]. - Total stockholders' equity increased to $977.6 million as of March 31, 2025, compared to $901.8 million a year earlier[28]. - Total assets increased to $1,884,805 as of March 31, 2025, from $1,653,469 as of March 31, 2024, representing a growth of 13.9%[39]. - Total liabilities rose to $907,182 as of March 31, 2025, compared to $751,690 as of March 31, 2024, an increase of 20.7%[39]. - Cash and cash equivalents increased to $389,375 as of March 31, 2025, from $253,021 as of March 31, 2024, a growth of 53.8%[39]. Future Outlook - ePlus is initiating FY 2026 guidance for net sales growth of low single digits and gross profit and adjusted EBITDA in the mid-single digits[29]. - The company remains focused on AI, cloud, security, and networking as key growth areas for the future[30].

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]

Core Viewpoint - ePlus inc. will release its financial results for the three months and fiscal year ended March 31, 2025, on May 22, 2025, followed by a conference call to discuss the results [1] Group 1: Financial Results Announcement - The earnings release will occur after market close on May 22, 2025 [1] - A conference call and audio webcast will be held at 4:30 p.m. ET on the same day [1] - The call will be accessible via a toll-free number for domestic and international participants, with an archived version available for replay [1] Group 2: Company Overview - ePlus is a customer-first, services-led industry leader providing transformative technology solutions and services [2] - The company offers a comprehensive portfolio including artificial intelligence, security, cloud and data center, networking, and managed services [2] - ePlus has over 2,200 employees and a presence in the United States, United Kingdom, Europe, and Asia-Pacific [2]

Core Insights - ePlus inc. has achieved the status of NVIDIA DGX SuperPOD Specialization Partner, enhancing its capabilities in delivering AI infrastructure solutions [1][2] - The company emphasizes its commitment to helping organizations adopt AI technology effectively, addressing the challenges of infrastructure and scalability [2] - NVIDIA DGX SuperPOD is highlighted as a high-performance AI infrastructure platform that integrates various NVIDIA technologies to optimize enterprise AI workloads [2][3] Company Overview - ePlus is recognized as a customer-first, services-led industry leader, providing a wide range of technology solutions including AI, security, cloud, and data center services [5][7] - The company has over 2,200 employees and a strong presence in multiple regions including the United States, United Kingdom, Europe, and Asia-Pacific [5][7] AI Solutions and Services - ePlus offers a comprehensive AI Ignite Portfolio that includes workshops, assessments, and advanced services to support organizations in their AI journey [3][6] - The ePlus Secure GenAI Accelerator is a new offering designed to help organizations explore and test Generative AI use cases securely and efficiently [3] Technical Expertise - The company specializes in the design and deployment of NVIDIA DGX SuperPOD configurations, ensuring optimal performance for AI training and research [6] - ePlus provides advanced support services that include monitoring and ongoing optimization of AI workloads, enhancing operational efficiency [6]

Core Insights - ePlus inc. has been named the 2024 VMware Fastest Growth Partner (Americas) by Broadcom, recognizing its significant year-over-year growth in subscription bookings [1][2]. Company Achievements - ePlus has demonstrated its capability in leveraging advisory services, such as licensing assessments and VMware Optimization Assessments, to assist VMware customers in adapting to changes and understanding the value of new subscription models [2][3]. - The company has been acknowledged for its technical expertise and extensive experience with VMware solutions, contributing to its recognition as a Broadcom Premier Solution Provider [2][3]. Collaborative Efforts - In partnership with Broadcom, ePlus aids customers in building, securing, and managing cloud technology infrastructures, which modernizes operations and fosters innovation [3][4]. - ePlus' consulting approach and technical engineering expertise enable organizations to effectively apply technology for improved business outcomes [3][4]. Leadership Statements - Darren Raiguel, COO of ePlus, expressed pride in the achievement, highlighting the company's role in helping customers assess their environments and needs accurately [4]. - The recognition from Broadcom emphasizes the importance of innovation, market execution, and technical expertise in delivering superior customer outcomes [4]. Company Overview - ePlus is a customer-first, services-led industry leader providing transformative technology solutions across various sectors, including artificial intelligence, security, cloud and data center, networking, and collaboration [5]. - With over 2,200 employees and a presence in multiple regions, ePlus has developed specialized expertise over more than three decades [5].

Core Points - ePlus has been recognized as F5's 2024 North America BeF5 Partner of the Year for its significant contributions to corporate social responsibility, community engagement, and customer success [1][3] - The award was presented at F5's AppWorld 2025 conference, which took place from February 25-27 in Las Vegas, highlighting partners that achieve meaningful business outcomes through innovative solutions and customer engagement [2] - ePlus's commitment to corporate social responsibility includes support for various initiatives such as NMDP, Habitat for Humanity, and the GRIT: Girls Re-Imagining Tomorrow® program, showcasing its role in leveraging technology for community betterment [3][4] Company Overview - ePlus is a customer-first, services-led industry leader providing transformative technology solutions across various sectors, including artificial intelligence, security, cloud, and data center services [5] - The company has over 2,200 employees and operates in multiple regions, including the United States, United Kingdom, Europe, and Asia-Pacific, with a focus on navigating business challenges for its clients [5]

Core Insights - ePlus inc. has been recognized on the 2025 Tech Elite 250 list by CRN, highlighting its commitment to excellence in technology solutions [1][4] - The company holds over 7,000 certifications and accreditations from leading technology providers, showcasing its expertise across various technology domains [2] - ePlus has been featured on the Tech Elite 250 list for 12 consecutive years, reflecting its sustained dedication to high-level certifications and proficiency in critical technologies [4] Company Overview - ePlus is a customer-first, services-led industry leader providing transformative technology solutions, including AI, security, cloud, and data center services [5] - The company has over 2,200 employees and operates in multiple regions, including the United States, United Kingdom, Europe, and Asia-Pacific [5] - ePlus collaborates closely with organizations across various industries to address business challenges effectively [5]