Latest news with #Bailiwick
Yahoo
28-05-2025
- Business
- Yahoo
PLUS Q1 Earnings Call: Services Growth Offsets Product Decline, Management Cautious on Outlook
IT solutions provider ePlus (NASDAQ:PLUS) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 10.2% year on year to $498.1 million. Its non-GAAP EPS of $1.11 per share was 28.3% above analysts' consensus estimates. Is now the time to buy PLUS? Find out in our full research report (it's free). Operating Margin: 6.8%, up from 5.3% in the same quarter last year Market Capitalization: $1.85 billion ePlus' latest quarter reflected a shift in its revenue mix, as a decline in product sales was partially offset by robust growth in services. Management highlighted that demand for security, AI, and cloud offerings drove increased gross profit and margin expansion. CEO Mark Marron noted that the company's services-led approach, supported by strategic investments and acquisitions such as Bailiwick, resulted in higher gross margins and deeper customer relationships. While product sales faced headwinds from industry-wide shifts to subscription models and lingering macroeconomic uncertainty, services revenue—including managed and professional services—continued to grow rapidly. The company's focus on high-margin solution areas contributed to improved profitability, despite a challenging sales environment. Looking ahead, ePlus is positioning itself for further growth by expanding its capabilities in AI, security, and cloud services. Management remains cautious, citing persistent economic uncertainty and the ongoing customer transition to subscription-based revenue models. CEO Mark Marron stated, 'We are cautiously optimistic... but want to be prudent when considering the entire year and the trends we are experiencing with regard to ratable and netted down revenue.' The company expects continued strong demand for services, particularly as enterprise customers explore AI adoption through workshops and proof-of-concept offerings. However, management does not anticipate a significant acceleration in AI-driven infrastructure spending until later in the year or next year, and its forward guidance assumes some ongoing impact from economic headwinds. Management attributed the quarter's performance to the ongoing shift from product to services revenue, a more profitable business mix, and investments in high-growth technology areas. Economic uncertainty and the transition to subscription models also affected top-line results. Services revenue momentum: ePlus' services revenue, including professional and managed services, continued to grow at a rapid pace, with professional services benefiting from the Bailiwick acquisition and managed services bookings remaining strong. This shift is central to the company's strategy of deepening customer engagement and generating more predictable revenue streams. Product sales softness: The decline in product sales was largely attributed to industry-wide shifts toward subscription and ratable revenue models, as well as tough year-over-year comparisons given last year's supply chain-driven product deliveries. Management noted that some customers are still digesting prior networking equipment purchases, delaying new orders. Security and AI demand: Security-related offerings now represent a growing share of gross billings, reflecting heightened enterprise focus on digital risk mitigation. AI-driven workshops and envisioning sessions have received positive customer feedback, positioning ePlus for future growth as enterprise adoption of AI expands. Margin expansion: Gross margin improved significantly due to a higher mix of services revenue and products recognized on a net basis, as well as disciplined expense management. The company's operating margin also increased, helped by the more profitable business mix. Strategic investments and partnerships: ePlus has invested in AI expertise and infrastructure, including achieving NVIDIA DGX Ready SuperPOD and managed service provider specializations. These credentials support the company's capabilities in deploying enterprise-grade AI solutions and managing complex workloads. Management expects trends like services growth and AI adoption to shape revenue and profitability, while macroeconomic uncertainty and slower product spending remain key considerations. Enterprise AI adoption timing: While management sees long-term potential in AI, they believe most investment is currently concentrated with hyperscaler data centers, not enterprises. Broader enterprise spending on AI infrastructure is expected to pick up later this year or next, with current demand focused on workshops and pilot programs. Subscription model transition: ePlus anticipates continued headwinds from the industry shift toward ratable and subscription-based revenue models, which could dampen near-term product sales but support future growth and margin expansion as services become a larger part of the business. Economic and customer demand uncertainty: Management remains cautious due to ongoing macroeconomic uncertainty and slower decision-making among enterprise customers, especially in networking. Guidance assumes some continued impact from these headwinds, without factoring in a full recession scenario. In the coming quarters, the StockStory team will be watching (1) whether services revenue maintains its growth trajectory as enterprises continue to shift spending, (2) signs of recovery in networking product demand as customers complete equipment digestion, and (3) the pace at which enterprise AI adoption translates into infrastructure and consulting revenue. The company's ability to leverage its new AI partnerships and manage economic uncertainty will also be key for future performance. ePlus currently trades at a forward P/E ratio of 15.3×. In the wake of earnings, is it a buy or sell? Find out in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
Yahoo
23-05-2025
- Business
- Yahoo
ePlus Inc (PLUS) Q4 2025 Earnings Call Highlights: Strong Profitability Amid Sales Decline
Q4 Net Sales: $498.1 million, down 10.2% year-over-year. Q4 Gross Profit: $145.8 million, up 11.8% year-over-year. Q4 Gross Margin: 29.3%, up 580 basis points year-over-year. Q4 Adjusted EBITDA: $43.8 million, up 19.1% year-over-year. Q4 Net Earnings: $25.2 million, up 14.6% year-over-year. Q4 Diluted EPS: $0.95, up from $0.82 year-over-year. Q4 Non-GAAP Diluted EPS: $1.11, up 19.4% year-over-year. Full Year Net Sales: $2.07 billion, down from $2.23 billion in fiscal 2024. Full Year Gross Profit: $569.1 million, up 3.3% year-over-year. Full Year Gross Margin: 27.5%, up 270 basis points year-over-year. Full Year Net Earnings: $108 million, down from $115.8 million in fiscal 2024. Full Year Diluted EPS: $4.05, down from $4.33 year-over-year. Full Year Non-GAAP Diluted EPS: $4.67, down from $4.92 year-over-year. Cash Position: $389.4 million at the end of fiscal 2025, up from $253 million in fiscal 2024. Operating Cash Flows: $302.1 million, up from $248.4 million in fiscal 2024. Services Revenue Growth: 33% in Q4 and 37% for the year. Managed Services Growth: 16.6% in Q4 and 24.6% for the year. Headcount: Increased to 2,199 from 1,900 year-over-year. Warning! GuruFocus has detected 2 Warning Sign with PLUS. Release Date: May 22, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. ePlus Inc (NASDAQ:PLUS) achieved higher gross profitability and margin expansion despite lower net sales and gross billings. Gross profit increased by nearly 12% and gross margin expanded by 580 basis points year-over-year to 29.3% in the fourth quarter. Services revenue grew significantly, with a 33% increase in the quarter and 37% for the year, highlighting the success of their services-led approach. Managed services experienced strong growth, up 16.6% for the quarter and 24.6% for the year, providing predictable long-term revenue. The company has a strong balance sheet with a record cash position of approximately $389 million, allowing for strategic investments and acquisitions. Net sales declined by 10.2% year-over-year in Q4, primarily due to a reduction in product sales and economic uncertainty. Technology business net sales decreased by 10.4% year-over-year, reflecting lower product sales impacted by the shift towards subscription-based services. Operating expenses increased by 9.6% from the prior year quarter, partly due to costs related to increased headcount from acquisitions. Professional services gross margin declined from 50% to 35.9% year-over-year, affected by the Bailiwick acquisition's lower margin. Networking sales were down significantly year-over-year, indicating a need for improvement in this area. Q: Where is the demand environment currently? Did you see any improvement throughout the quarter, and are you still seeing soft demand on the product side of the business? A: Mark Marron, CEO and President: We are seeing a pickup in the data center, cloud, and security spaces, driven by AI initiatives and the need for security in governance and risk. However, networking sales were down significantly year-over-year. Overall, we had a tough comparison due to a strong previous year, and some customers are still digesting supply chain issues, particularly in networking. We expect improvement in the coming quarters. Q: Regarding the AI opportunity, most investment has been in the hyperscaler data center environment. Where does enterprise AI adoption stand, and does your guidance for next year include any acceleration in AI demand? A: Mark Marron, CEO and President: Most AI spending is currently directed towards hyperscalers. We are facilitating customer engagement through workshops and envisioning sessions, which we expect to drive service-related growth. Infrastructure spending on AI is anticipated to increase over time, but it will take a while to materialize. Our guidance does not yet factor in significant AI demand acceleration. Q: Can you provide more details on the impact of the industry-wide shift towards ratable and subscription-based revenue models on your financials? A: Elaine Marion, CFO: The shift towards ratable and subscription-based models has led to lower product sales and more netted down revenues, impacting net sales figures. However, this transition has also resulted in increased gross profit and margin expansion due to a more profitable business mix and higher services revenue. Q: How is the company positioned in terms of strategic investments and growth opportunities? A: Mark Marron, CEO and President: We are strategically investing in AI, cloud, security, and networking to expand our capabilities and meet customer needs. Our strong balance sheet, with a record cash position of approximately $389 million, allows us to make both organic and inorganic investments to support growth initiatives. Q: What are the expectations for fiscal year 2026 in terms of financial performance? A: Mark Marron, CEO and President: We are cautiously optimistic and expect net sales growth in the low single digits, with gross profit and adjusted EBITDA growing at mid-single digits. This guidance considers economic uncertainty but does not account for potential recessionary conditions or unexpected developments. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-05-2025
- Business
- Yahoo
States of Guernsey to axe IT provider
The States of Guernsey is set to axe its contract with IT infrastructure company Agilisys by the end of July - half way through its 10-year tenure. It follows a critical report of Agilisys' digital services across a range of government departments, published earlier this year. The move will see IT provided by multiple providers which the States said would improve accountability and the reliability of services for islanders. Agilisys has been approached for comment. The Policy & Resources Committee (P&R) said the decision to terminate the current contract was unanimous and in the "best interests of the States, and the wider community which relies on the many IT systems we have for the effective delivery of public services". Boley Smillie, chief executive and head of the public service, said the move would ensure better value for money for taxpayers. Mr Smillie said switching to a "multi-vendor model" would deliver better specialist services. He said: "We must keep pace with digital solutions that the community not only expects but deserves, solutions that make our services more efficient, and responsive to the needs of the Bailiwick." Agilisys signed a £200m contract for the delivery of the majority of States IT services in 2019 but faced major IT outages and concerns over the number of staff with technical expertise to deliver service. Gé Drossaert, The States' chief digital and information officer, said: "This new model will increase supplier accountability to deliver, unlike the current model where we have been reliant on one provider only, as we will have relationships with a range of providers." The States said it was currently in discussions behind the scenes with a range of providers to take on the work and this would be announced at a later date. Follow BBC Guernsey on X and Facebook. Send your story ideas to 'Serious mistakes' in handling of IT contract Old kit and lack of maintenance behind IT outages Policy & Resources Committee
Yahoo
23-05-2025
- Business
- Yahoo
ePlus Inc (PLUS) Q4 2025 Earnings Call Highlights: Strong Profitability Amid Sales Decline
Q4 Net Sales: $498.1 million, down 10.2% year-over-year. Q4 Gross Profit: $145.8 million, up 11.8% year-over-year. Q4 Gross Margin: 29.3%, up 580 basis points year-over-year. Q4 Adjusted EBITDA: $43.8 million, up 19.1% year-over-year. Q4 Net Earnings: $25.2 million, up 14.6% year-over-year. Q4 Diluted EPS: $0.95, up from $0.82 year-over-year. Q4 Non-GAAP Diluted EPS: $1.11, up 19.4% year-over-year. Full Year Net Sales: $2.07 billion, down from $2.23 billion in fiscal 2024. Full Year Gross Profit: $569.1 million, up 3.3% year-over-year. Full Year Gross Margin: 27.5%, up 270 basis points year-over-year. Full Year Net Earnings: $108 million, down from $115.8 million in fiscal 2024. Full Year Diluted EPS: $4.05, down from $4.33 year-over-year. Full Year Non-GAAP Diluted EPS: $4.67, down from $4.92 year-over-year. Cash Position: $389.4 million at the end of fiscal 2025, up from $253 million in fiscal 2024. Operating Cash Flows: $302.1 million, up from $248.4 million in fiscal 2024. Services Revenue Growth: 33% in Q4 and 37% for the year. Managed Services Growth: 16.6% in Q4 and 24.6% for the year. Headcount: Increased to 2,199 from 1,900 year-over-year. Warning! GuruFocus has detected 2 Warning Sign with PLUS. Release Date: May 22, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. ePlus Inc (NASDAQ:PLUS) achieved higher gross profitability and margin expansion despite lower net sales and gross billings. Gross profit increased by nearly 12% and gross margin expanded by 580 basis points year-over-year to 29.3% in the fourth quarter. Services revenue grew significantly, with a 33% increase in the quarter and 37% for the year, highlighting the success of their services-led approach. Managed services experienced strong growth, up 16.6% for the quarter and 24.6% for the year, providing predictable long-term revenue. The company has a strong balance sheet with a record cash position of approximately $389 million, allowing for strategic investments and acquisitions. Net sales declined by 10.2% year-over-year in Q4, primarily due to a reduction in product sales and economic uncertainty. Technology business net sales decreased by 10.4% year-over-year, reflecting lower product sales impacted by the shift towards subscription-based services. Operating expenses increased by 9.6% from the prior year quarter, partly due to costs related to increased headcount from acquisitions. Professional services gross margin declined from 50% to 35.9% year-over-year, affected by the Bailiwick acquisition's lower margin. Networking sales were down significantly year-over-year, indicating a need for improvement in this area. Q: Where is the demand environment currently? Did you see any improvement throughout the quarter, and are you still seeing soft demand on the product side of the business? A: Mark Marron, CEO and President: We are seeing a pickup in the data center, cloud, and security spaces, driven by AI initiatives and the need for security in governance and risk. However, networking sales were down significantly year-over-year. Overall, we had a tough comparison due to a strong previous year, and some customers are still digesting supply chain issues, particularly in networking. We expect improvement in the coming quarters. Q: Regarding the AI opportunity, most investment has been in the hyperscaler data center environment. Where does enterprise AI adoption stand, and does your guidance for next year include any acceleration in AI demand? A: Mark Marron, CEO and President: Most AI spending is currently directed towards hyperscalers. We are facilitating customer engagement through workshops and envisioning sessions, which we expect to drive service-related growth. Infrastructure spending on AI is anticipated to increase over time, but it will take a while to materialize. Our guidance does not yet factor in significant AI demand acceleration. Q: Can you provide more details on the impact of the industry-wide shift towards ratable and subscription-based revenue models on your financials? A: Elaine Marion, CFO: The shift towards ratable and subscription-based models has led to lower product sales and more netted down revenues, impacting net sales figures. However, this transition has also resulted in increased gross profit and margin expansion due to a more profitable business mix and higher services revenue. Q: How is the company positioned in terms of strategic investments and growth opportunities? A: Mark Marron, CEO and President: We are strategically investing in AI, cloud, security, and networking to expand our capabilities and meet customer needs. Our strong balance sheet, with a record cash position of approximately $389 million, allows us to make both organic and inorganic investments to support growth initiatives. Q: What are the expectations for fiscal year 2026 in terms of financial performance? A: Mark Marron, CEO and President: We are cautiously optimistic and expect net sales growth in the low single digits, with gross profit and adjusted EBITDA growing at mid-single digits. This guidance considers economic uncertainty but does not account for potential recessionary conditions or unexpected developments. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
BBC News
23-05-2025
- Business
- BBC News
States of Guernsey to axe IT provider Agilysis
The States of Guernsey is set to axe its contract with IT infrastructure company Agilisys by the end of July - half way through its 10-year tenure. It follows a critical report of Agilisys' digital services across a range of government departments, published earlier this move will see IT provided by multiple providers which the States said would improve accountability and the reliability of services for has been approached for comment. The Policy & Resources Committee (P&R) said the decision to terminate the current contract was unanimous and in the "best interests of the States, and the wider community which relies on the many IT systems we have for the effective delivery of public services".Boley Smillie, chief executive and head of the public service, said the move would ensure better value for money for taxpayers. Mr Smillie said switching to a "multi-vendor model" would deliver better specialist said: "We must keep pace with digital solutions that the community not only expects but deserves, solutions that make our services more efficient, and responsive to the needs of the Bailiwick." 'Increase supplier accountability' Agilisys signed a £200m contract for the delivery of the majority of States IT services in 2019 but faced major IT outages and concerns over the number of staff with technical expertise to deliver service.Gé Drossaert, The States' chief digital and information officer, said: "This new model will increase supplier accountability to deliver, unlike the current model where we have been reliant on one provider only, as we will have relationships with a range of providers."The States said it was currently in discussions behind the scenes with a range of providers to take on the work and this would be announced at a later date.
