PLUS — ePlus inc.

ePlus Q3 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Net Sales: Increased by 24.6% year-over-year to $615 million.
• Product Sales: Grew 32.2%, driven by strong performance in data center, cloud, networking, and security sectors.
• Service Revenue: Remained flat at $112.8 million, with managed services up 10.5% but professional services down 7.8% due to project delays.
• Net Earnings: Rose 129.3% to $33.4 million, or $1.27 per diluted share, compared to $14.6 million, or $0.55 per diluted share, in the prior year.
• Adjusted EBITDA: Increased 97% to $53.4 million, with a margin of 8.7%.
• Year-to-Date Performance: Net sales up 22% and adjusted EBITDA up 55% compared to the previous year.

2. Strategic Updates and Business Highlights:

• ePlus is focusing on AI, cloud, networking, and security, which are driving growth and market share gains.
• The company is enhancing its service offerings, particularly in managed services, to build a recurring revenue base.
• A quarterly dividend of $0.25 per share was approved, and over 200,000 shares were repurchased during the quarter.
• The company is well-positioned to benefit from ongoing infrastructure modernization driven by AI investments.

3. Forward Guidance and Outlook:

• Full-year net sales guidance increased to 20%-22% growth, up from mid-teens.
• Gross profit is now expected to grow 19%-21%.
• Adjusted EBITDA guidance raised to a 41%-43% increase.
• The company remains optimistic about continued growth but is mindful of potential supply chain challenges.

4. Bad News, Challenges, or Points of Concern:

• Project Delays: Notable delays in professional services, particularly from retail customers, may push revenue into the next fiscal year.
• Inventory Build: Inventory levels increased significantly, raising concerns about cash conversion cycles and project delivery timing.
• Memory Chip Supply Issues: The global memory chip market is experiencing shortages and price increases, which could affect customer deployments and project timelines.

5. Notable Q&A Insights:

• Management indicated that while enterprise customer projects contributed to strong quarterly results, they do not expect to replicate this level of performance in the next quarter.
• The decline in professional services revenue was attributed to specific customer delays rather than a broader trend, with expectations for recovery in fiscal 2027.
• AI is now viewed as a growth driver, with customers increasingly defining use cases and modernizing legacy systems to leverage AI capabilities.
• Integrated solutions across AI, cloud, and networking are seen as a key differentiator for ePlus, enhancing their competitive position in the market.

Overall, ePlus demonstrated strong financial performance in Q3 2026, with significant growth in key areas, but faces challenges related to project delays and supply chain issues that could impact future results.