ePlus Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Gross Billings: Achieved a record of $1.02 billion, up 26.5% year-over-year.

Net Sales: Consolidated net sales totaled $608.8 million, a 23.4% increase year-over-year.

Adjusted EBITDA: Increased 61.6% to $58.7 million, reflecting strong operating leverage.

Net Earnings: From continuing operations, net earnings were $38.2 million ($1.45 per diluted share), compared to $19.8 million ($0.74 per diluted share) in the prior year.

Cash Position: Ended the quarter with $402.2 million in cash, up from $389.4 million at the end of the last fiscal year.

Gross Margin: Consolidated gross margin improved to 26.6%, up 80 basis points year-over-year.

2Strategic Updates and Business Highlights

Growth Drivers: Strong performance in security (up 52% year-over-year), networking, and cloud services, driven by increased AI adoption.

Acquisition: Acquired Realwave, enhancing capabilities in AI-driven insights.

Market Focus: Continued investment in high-growth areas such as AI, security, and cloud solutions.

Customer Segments: Notable growth across mid-market and enterprise segments, with broad-based demand across various industries, except for state and local government due to budget constraints.

3Forward Guidance and Outlook

Fiscal Year 2026 Guidance:

Net sales growth expected in the mid-teens from the prior fiscal year.

Gross profit anticipated to grow at a similar mid-teen rate.

Adjusted EBITDA projected to increase at approximately twice the rate of net sales growth.

Dividend Announcement: A quarterly dividend of $0.25 per share is to be paid on December 17, 2025.

4Bad News, Challenges, or Points of Concern

State and Local Government: Continued budget constraints affecting sales in this vertical.

Discontinued Operations: The company reported a net loss of $3.3 million from discontinued operations, compared to a profit of $11.5 million in the prior year.

Market Uncertainty: Economic uncertainties, including government shutdowns and inflation, may pose risks to future performance.

5Notable Q&A Insights

Security Growth Drivers: The increase in security sales is attributed to AI initiatives and investments in data management and network security.

Pipeline Confidence: Management expressed optimism about the pipeline and future demand, supported by recent large deals and overall market conditions.

Investment Strategy: While operating leverage is expected to continue, the company plans to remain active in pursuing both organic growth and acquisitions to expand its market presence. This summary encapsulates the key aspects of ePlus's Q2 2026 earnings call, highlighting both the strong performance and the challenges faced by the company.