Latest news with #ePlusInc
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
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.
