Core Insights - The FPA Queens Road Small Cap Value Fund reported a return of -0.36% in Q4 2025, underperforming the Russell 2000 Value Index which gained 3.26% during the same period. However, for the full year 2025, the Fund achieved a return of 13.36%, slightly outperforming the Index's 12.59% [1] Group 1: Fund Performance - The Fund outperformed in the first half of 2025 amidst weak and volatile markets, but underperformed in the second half as markets favored speculative and low-quality stocks [1] - The portfolio aims to protect clients from market drawdowns by focusing on quality and value [1] Group 2: EPlus Inc. (NASDAQ:PLUS) - EPlus Inc. provides IT solutions to optimize IT environments and supply chain processes, with a one-month return of -7.32% and a 52-week gain of 17.89% [2] - As of February 11, 2026, EPlus Inc. shares closed at $83.91, with a market capitalization of $2.148 billion [2] - The Fund added a new position in EPlus Inc. in Q4 2025, considering it well-managed and inexpensive relative to its growth and quality profile, especially after adjusting for its significant cash holdings [3] Group 3: Hedge Fund Interest - EPlus Inc. was held by 19 hedge fund portfolios at the end of Q3 2025, an increase from 17 in the previous quarter [4] - While EPlus Inc. is recognized for its potential, the company is not among the 30 most popular stocks among hedge funds, with certain AI stocks being viewed as having greater upside potential and less downside risk [4]

Core Insights - ePlus reported a strong fiscal third quarter with net sales growth of 24.6% to approximately $615 million, driven by a 32.2% increase in product sales, particularly in data center, cloud, networking, and security sectors [3][7][4] - The company raised its full-year guidance for net sales growth to 20-22%, gross profit growth to 19-21%, and adjusted EBITDA growth to 41-43% [19][7] Financial Performance - Consolidated net sales were $614.8 million, with product revenue at $501.9 million and services revenue at $112.8 million [2] - Gross billings increased by 15.6% in the quarter to $982.1 million, with year-to-date gross billings rising 18.7% to nearly $3 billion [1] - Net earnings from continuing operations surged 129% to $33.4 million, while adjusted EBITDA rose 97% to $53.4 million, resulting in an adjusted EBITDA margin of 8.7% [8][7] Demand Drivers - The demand for AI-driven infrastructure modernization and cybersecurity is accelerating, contributing to growth in data center, cloud, networking, and security products [4][11] - Security gross billings grew 16.4% quarter-over-quarter and 27.6% year-over-year, reflecting heightened customer priorities due to rising threat levels [12][6] Customer Trends - Growth was broad-based across customer sizes and sectors, with notable strength in mid-market and enterprise segments [14] - Telecom, media, and entertainment accounted for 27% of net sales, while technology, SLED, and healthcare each represented 13% [14] Operational Insights - Managed services revenue grew 10.5%, while professional services revenue declined 7.8% due to project delays in the retail sector [2][16] - The company emphasized expense discipline and alignment of workforce towards higher-growth areas, resulting in improved profitability [8] Balance Sheet and Capital Allocation - Cash and cash equivalents totaled $326.3 million, down from $389.4 million, while inventory rose to $241.0 million, attributed to increased projects in process [17] - The board approved a quarterly dividend of $0.25 per share and repurchased over 200,000 shares during the quarter [19] Future Outlook - The company anticipates a potential near-term memory shortage that could impact AI deployment timing, but believes it is well-positioned to manage this through diversified supplier relationships [20]

ePlus (NasdaqGS:PLUS) Q3 2026 Earnings call February 04, 2026 04:30 PM ET Company ParticipantsElaine Marion - CFOKley Parkhurst - Senior VPMark Marron - CEO and PresidentConference Call ParticipantsGreg Burns - AnalystMaggie Nolan - Research AnalystOperatorEarnings results conference call. As a reminder, this conference call is being recorded. All lines have been placed on mute to prevent any background noise, and after the speaker's remarks, there will be a question and answer session. If you would like to ...

Financial Data and Key Metrics Changes - Net sales grew 24.6% to $615 million, with product sales increasing 32.2% year-over-year, driven by strong performance in data center, cloud, networking, and security [5][12] - Net earnings from continuing operations increased 129.3% to $33.4 million, with adjusted EBITDA rising 97% to $53.4 million, reflecting a margin of 8.7%, which is 320 basis points higher than the previous year [9][17] - Year-to-date consolidated net sales increased 22.2% to $1.86 billion, with net earnings from continuing operations totaling $98.7 million, a 68.5% increase from the prior year [18] Business Line Data and Key Metrics Changes - Product revenue grew 32.2% year-over-year to $501.9 million, while service revenue totaled $112.8 million, slightly down from $113.6 million in the prior year [12] - Managed services revenue grew 10.5%, while professional services revenue declined 7.8% due to project delays in the retail sector [12][29] - Security gross billings for products and services grew 16.4% year-over-year, with a 27.6% increase over the trailing 12 months, as customers prioritize cybersecurity investments [8] Market Data and Key Metrics Changes - The company saw growth across all customer size segments, with particularly strong performance in the mid-market and enterprise space [4] - Telecom, media, and entertainment accounted for 27% of net sales, while technology, SLED, and healthcare each accounted for 13%, and financial services at 9% [13] Company Strategy and Development Direction - The company is focused on expanding its solutions portfolio, growing professional and managed services capabilities, and extending geographic reach [10] - The strategy emphasizes AI, cloud, security, and networking, which are seen as key growth areas [4][10] - The company is evaluating acquisitions and investments to enhance its position in higher growth areas and support long-term vision [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth, supported by industry demand trends and financial flexibility [11] - The company raised its full-year guidance for net sales to 20%-22% year-over-year growth, up from mid-teens, and adjusted EBITDA growth to 41%-43% [22][23] - Potential near-term risks include an industry-wide memory shortage, which could impact customer deployments [23] Other Important Information - The company repurchased over 200,000 shares during the quarter and announced a quarterly dividend of $0.25 per common share [5][20] - Cash and cash equivalents at quarter end totaled $326.3 million, down from $389.4 million, primarily due to working capital needs [19] Q&A Session Summary Question: Nature of outsized projects from enterprise customers - Management noted that mid-market customers had the biggest growth, with some large enterprise customers contributing significantly to Q3 performance, but they do not expect to replicate this in Q4 [26][27] Question: Professional services project delays - Management expects project delays from retail customers to materialize in fiscal 2027, attributing the decline in professional services to a few customers and tough comparisons from the previous year [28][29] Question: Inventory build and project timing - Inventory increased due to demand, and management expects levels to remain inflated in the next several quarters [34] Question: Impact of AI on business - AI is now seen as a tailwind, driving growth in data center, cloud, and networking areas, with customers defining use cases and modernizing legacy systems [36][38] Question: Importance of integrated solutions - Integrated solutions across AI, cloud, and networking are becoming a differentiator for the company, as customers prefer to work with fewer strategic vendors [39]

Financial Data and Key Metrics Changes - Net sales grew 24.6% to $615 million, with product sales increasing 32.2% year-over-year, driven by strong performance in data center, cloud, networking, and security [5][12] - Net earnings from continuing operations increased 129.3% to $33.4 million, with adjusted EBITDA rising 97% to $53.4 million, reflecting a margin of 8.7%, which is 320 basis points higher than the same period last year [9][17] - Year-to-date consolidated net sales increased 22.2% to $1.86 billion, with gross profit rising 23.7% to $469 million [18] Business Line Data and Key Metrics Changes - Product revenue grew 32.2% year-over-year to $501.9 million, while service revenue totaled $112.8 million, slightly down from $113.6 million in the prior year [12][16] - Managed services revenue grew 10.5%, while professional services revenue declined 7.8% due to project delays in the retail sector [12][28] - Security gross billings for products and services grew 16.4% year-over-year, with a 27.6% increase for the trailing twelve months [7] Market Data and Key Metrics Changes - Growth was observed across all customer size segments, particularly in the mid-market and enterprise space [4][5] - Telecom, media, and entertainment accounted for 27% of net sales, while technology, SLED, and healthcare each accounted for 13% [13] Company Strategy and Development Direction - The company is focused on expanding its solutions portfolio, enhancing professional and managed services capabilities, and extending geographic reach [10] - There is an emphasis on AI, cloud, security, and networking as key growth areas, with plans to enhance AI envisioning sessions and acceleration offerings [10][21] - The company is evaluating acquisitions and investments to enhance its position in higher growth areas [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth, supported by industry demand trends and financial flexibility [11][21] - The company raised its full-year guidance for net sales to 20%-22% year-over-year growth, up from mid-teens [21] - Potential near-term risks include an industry-wide memory shortage impacting customer deployments [22][23] Other Important Information - The company approved a quarterly dividend of $0.25 per common share and repurchased over 200,000 shares during the quarter [5][20] - Cash and cash equivalents at quarter end totaled $326.3 million, down from $389.4 million at the end of the last fiscal year [19] Q&A Session Summary Question: Nature of outsized projects from enterprise customers - Management noted that mid-market customers had the biggest growth, with some large enterprise customers contributing significantly in Q3, but they do not expect to replicate that in Q4 [26][27] Question: Professional services project delays - Management expects project delays from retail customers to materialize in fiscal 2027, attributing the decline in professional services to a few customers and tough comparisons from the previous year [28] Question: Inventory build and project timing - Management indicated that inventory increased due to demand, and they expect inventory levels to remain inflated in the next several quarters [33] Question: Impact of AI on business - AI is now seen as a tailwind, driving growth in data center, cloud, and networking areas, with customers defining use cases to modernize legacy systems [35][36] Question: Importance of integrated solutions - Management highlighted that offering integrated solutions across AI, cloud, and networking is a key differentiator, as customers prefer to work with fewer strategic vendors [37][38]

Financial Performance - Total net sales for the three months ended December 31, 2025, reached $614.8 million, a 24.6% increase from $493.2 million in the same period of 2024[17] - Gross profit for the nine months ended December 31, 2025, was $469.0 million, compared to $379.3 million for the same period in 2024, reflecting a 23.6% increase[17] - Net earnings from continuing operations for the nine months ended December 31, 2025, were $98.7 million, up 68.5% from $58.6 million in 2024[20] - Earnings per common share—basic for continuing operations increased to $3.76 for the nine months ended December 31, 2025, compared to $2.20 in 2024, representing a 70.9% growth[17] - The company reported a total comprehensive income of $35.1 million for the three months ended December 31, 2025, compared to $20.8 million in the same period of 2024, marking a 68.5% increase[18] - Net earnings for the three months ended December 31, 2025, were $35,052,000, compared to $24,133,000 for the same period in 2024, representing a year-over-year increase of approximately 45%[63] - Basic earnings per share for continuing operations increased to $1.28 in Q4 2025 from $0.55 in Q4 2024, while diluted earnings per share rose to $1.33 from $0.91[63] Revenue Growth - Total revenue from contracts with customers for the three months ended December 31, 2025, was $614.67 million, a 24.6% increase from $493.12 million in the same period of 2024[92] - Total revenue for the nine months ended December 31, 2025, was $1.86 billion, compared to $1.52 billion for the same period in 2024, marking a 22.4% growth[92] - Total net sales for the product segment reached $501.8 million for the three months ended December 31, 2025, up from $379.5 million in the prior year, representing a growth of 32.3%[88] - Revenue from the Telecom, Media & Entertainment sector for the three months ended December 31, 2025, reached $176.41 million, up 40% from $126.20 million in 2024[92] - The Technology sector generated $89.37 million in revenue for the three months ended December 31, 2025, representing a 25.4% increase from $71.29 million in 2024[92] - Cloud revenue for the three months ended December 31, 2025, was $175.35 million, up 50% from $116.86 million in 2024[92] - The Networking product segment achieved $230.89 million in revenue for the three months ended December 31, 2025, a 27.3% increase from $181.37 million in 2024[92] - Managed services segment revenue for the three months ended December 31, 2025, was $48.78 million, a 10.5% increase from $44.15 million in 2024[92] Balance Sheet and Liabilities - Total current liabilities decreased to $682.1 million as of December 31, 2025, from $797.9 million at the end of the previous year, a reduction of 14.5%[15] - Total stockholders' equity increased to $1.063 billion as of December 31, 2025, from $977.6 million in 2024, reflecting an 8.8% growth[16] - The company experienced a decrease in accounts payable from $324.6 million to $291.4 million, a decline of 10.2%[15] - The outstanding balance under the accounts payable floor plan facility was $133.2 million, up from $89.5 million as of March 31, 2025[53] - The company had no outstanding balances under the revolving credit facility as of December 31, 2025[55] Cash Flow and Investments - Cash and cash equivalents at the end of the period were $326.3 million, compared to $253.1 million at the beginning of the period, indicating a significant increase[21] - The company reported a net cash used in operating activities of continuing operations of $(223.4) million for the nine months ended December 31, 2025, compared to $186.6 million in the previous year[20] - The company issued 30,000 shares of common stock, raising $1,850,000 during the quarter ending September 30, 2025[23] - ePlus repurchased 213,000 shares of common stock for $16,607,000 during the quarter ending September 30, 2025[23] - The company paid dividends of $6,599,000 during the quarter ending September 30, 2025[23] - The company repurchased 272,900 shares of common stock at a value of $21.0 million during the nine months ended December 31, 2025[65] Acquisitions and Divestitures - ePlus completed the sale of its domestic financing business on June 30, 2025, which is expected to allow the company to focus more on technology solutions[30] - The company completed the sale of its domestic financing business, HoldCo, for net cash proceeds of $156.7 million on June 30, 2025[42] - The acquisition of Bailiwick Services, LLC was completed for a total consideration of $124.9 million, including $126.2 million in cash paid at closing[82] - Identified intangible assets from the Bailiwick acquisition amounted to $58.0 million, primarily consisting of customer relationships valued at $49.3 million[82] - The total purchase consideration for the Bailiwick acquisition included $41.3 million in goodwill, attributed to expected synergies and the acquired workforce[83] Tax and Regulatory Matters - The provision for income tax expense was $12.2 million for the three months ended December 31, 2025, compared to $5.4 million for the same period in the prior year, reflecting a significant increase[12] - The effective tax rate for the three months ended December 31, 2025, was 26.7%, slightly lower than 26.9% for the same period in the prior year[12] - The company is evaluating the impact of recently issued accounting pronouncements on its financial statement disclosures, including ASU 2023-09, effective for annual periods beginning March 31, 2026[34] Other Financial Metrics - The total remaining performance obligations expected to be recognized in the future amount to $172.634 million, with $32.490 million expected in the remainder of the fiscal year ending March 31, 2026[41] - The company recognized a contingent receivable of $12.4 million as of December 31, 2025, adjusted from an initial estimate of $13.5 million due to performance towards achieving targets[80] - The allowance for credit losses decreased from $3,667,000 in 2024 to $3,199,000 in 2025, with a provision for credit losses of $595,000 in 2025 compared to $1,483,000 in 2024[50] - Total amortization expense for other intangible assets was $15.9 million for the nine months ended December 31, 2025, compared to $14.2 million for the same period in 2024[49] - Goodwill as of December 31, 2025, totaled $202.927 million, reflecting only foreign currency translation adjustments during the nine months[44] - The company recognized a gain of $2.3 million in the three months ended December 31, 2025, from the settlement of a legal matter related to discontinued operations[42] - Foreign currency exposure has not significantly impacted the company's operations, although fluctuations in exchange rates may affect financial results[165]

EXHIBIT 99.1 ePlus Reports Third Quarter and First Nine Months Financial Results of Fiscal Year 2026 Double Digit Growth Year Over Year Across Key Metrics Including Net Sales, Gross Profit and Earnings Per Share ~ Raises Fiscal 2026 Guidance and Announces Common Stock Quarterly Dividend of $0.25 Per Share ~ Third Quarter of Fiscal Year 2026 First Nine Months of Fiscal Year 2026 HERNDON, VA – February 4, 2026 – ePlus inc. (NASDAQ: PLUS), a leading provider of technology solutions, today announced financial r ...

Core Insights - ePlus inc. reported strong financial results for the third quarter of fiscal year 2026, with net sales increasing by 24.6% year-over-year to $614.8 million, driven by higher product sales despite a slight decline in service revenue [5][6][12] - The company has raised its fiscal year 2026 guidance for net sales, gross profit, and Adjusted EBITDA, reflecting strong performance and momentum [23][25] Financial Performance - For the third quarter ended December 31, 2025, consolidated net sales reached $614.8 million, up from $493.2 million in the same quarter last year, while gross billings increased by 15.6% to $982.1 million [5][6] - Consolidated gross profit rose by 26.8% to $158.7 million, with a gross margin of 25.8%, compared to 25.4% in the prior year [6][9] - Net earnings from continuing operations surged by 129.3% to $33.4 million, with diluted earnings per share increasing by 130.9% to $1.27 [12][20] Segment Performance - Product segment sales increased by 32.2% to $501.8 million, driven by growth in networking, cloud, security, and collaboration products [7][15] - Professional services segment revenues decreased by 7.8% to $64.1 million, primarily due to project delays, while managed services segment revenue increased by 10.5% to $48.8 million [8][9] - The overall gross profit for the managed services segment increased by 7.5%, although gross margin declined to 29.0% [9] Balance Sheet Highlights - As of December 31, 2025, cash and cash equivalents were $326.3 million, down from $389.4 million, while inventory increased by 100.1% to $241.0 million [22] - Accounts receivable increased by 35.0% to $698.0 million, indicating growth in sales and projects in process [22] Fiscal Year Guidance - The company now expects net sales to increase by 20% to 22% year-over-year, up from previous guidance of mid-teens growth [23] - Gross profit is projected to grow at a rate of 19% to 21%, and Adjusted EBITDA is expected to increase by 41% to 43% over the previous fiscal year [23] Dividend Announcement - ePlus announced a quarterly cash dividend of $0.25 per common share, payable on March 18, 2026, to shareholders of record as of February 24, 2026 [28]

Core Insights - ePlus inc. has initiated its first quarterly dividend, set at $0.25 per common share, marking a significant shift in its capital return strategy to shareholders [2] - The decision to pay dividends reflects ePlus's commitment to enhancing shareholder value through disciplined capital allocation and confidence in its growth outlook [3] - ePlus plans to maintain its share repurchase program while also considering reinvestment in organic growth and selective mergers and acquisitions to strengthen the company long-term [4] Company Overview - ePlus has expanded its operations since going public in November 1996, utilizing acquisitions to enhance its geographic reach and technology capabilities [5] - The company operates through three subsidiaries organized into two main segments: the Financing Business Unit, which focuses on leasing and business process outsourcing, and the Technology Sales Business Unit, which encompasses IT sales and software services [6] - ePlus provides a range of technology solutions and services aimed at supporting digital transformation, including offerings in artificial intelligence, security, cloud and data center, networking, and collaboration [7]

Group 1: G-III Apparel Group Ltd - G-III Apparel Group Ltd has shown strong performance in the apparel sector, with significant revenue growth reported in the latest quarter [1] - The company is expanding its brand portfolio, which is expected to enhance market presence and drive future sales [1] Group 2: ePlus Inc - ePlus Inc has experienced an increase in demand for its technology solutions, leading to improved financial results [1] - The company is focusing on strategic partnerships to enhance its service offerings and market reach [1] Group 3: Carnival Corporation - Carnival Corporation is recovering from previous operational challenges, with a notable increase in passenger bookings and revenue [1] - The cruise line is implementing new health and safety protocols to attract customers and ensure a safe travel experience [1] Group 4: Tutor Perini Corporation - Tutor Perini Corporation has secured several new contracts, contributing to a positive outlook for future revenue growth [1] - The company is investing in technology to improve project efficiency and reduce costs [1]