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 demand 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 ($1.27 per diluted share), compared to $14.6 million ($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%, adjusted EBITDA up 55%.

2. Strategic Updates and Business Highlights

• ePlus is focusing on high-growth areas: AI, cloud, networking, and security, which are driving market share gains.
• The company is investing in integrated solutions to meet customer needs, particularly in AI use cases.
• A quarterly dividend of $0.25 was approved, and over 200,000 shares were repurchased during the quarter.
• The company reported strong performance in mid-market and enterprise segments, with a notable emphasis on managed services.

3. Forward Guidance and Outlook

• Net Sales Guidance: Increased to 20%-22% year-over-year growth, up from mid-teens.
• Gross Profit Guidance: Expected to grow 19%-21%.
• Adjusted EBITDA Guidance: Anticipated to increase by 41%-43%.
• The company remains optimistic about continued growth driven by strong demand trends and operational execution.

4. Bad News, Challenges, or Points of Concern

• Project Delays: Notable delays in professional services, particularly from retail customers, may impact future revenue recognition, pushing some projects into fiscal 2027.
• Inventory Build-Up: Inventory increased significantly, raising concerns about the timing of project deliveries and cash conversion cycles, which lengthened to 41 days.
• Supply Chain Risks: The global memory chip market is experiencing a supply squeeze, which could affect customer deployments and timing.

5. Notable Q&A Insights

• Enterprise Projects: Mark Marron noted that while there were outsized projects from enterprise customers, they do not expect to replicate this in the next quarter.
• Professional Services Delays: Delays are primarily from a few retail customers and are not expected to be widespread.
• AI Impact: AI is now seen as a tailwind rather than a headwind, with significant growth in related product areas.
• Integrated Solutions: The ability to offer integrated solutions across various technology areas is viewed as a key differentiator for ePlus, helping to secure long-term partnerships with customers.

Overall, ePlus reported a strong quarter with significant growth across key metrics, although challenges related to project delays and supply chain issues were acknowledged. The company is optimistic about future growth, particularly in AI and integrated solutions.