{"id":809391,"date":"2025-02-05T16:24:16","date_gmt":"2025-02-05T21:24:16","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/eplus-reports-third-quarter-and-first-nine-months-results\/"},"modified":"2025-02-05T16:24:16","modified_gmt":"2025-02-05T21:24:16","slug":"eplus-reports-third-quarter-and-first-nine-months-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/eplus-reports-third-quarter-and-first-nine-months-results\/","title":{"rendered":"ePlus Reports Third Quarter and First Nine Months Results"},"content":{"rendered":"
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PR Newswire<\/p>\n<\/p><\/div>\n

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\n Third Quarter Gross Profit Increased 5.3% And Gross Margin Expanded Year Over Year<\/b>\u00a0<\/p>\n

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\n Third Quarter Fiscal Year 2025<\/b>
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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Net sales increased 0.4% to $511.0 million; technology business net sales declined 0.2% to $493.1 million; service revenues increased 52.2% to $113.6 million.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Technology business gross billings increased 6.6% to $849.5 million.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Consolidated gross profit increased 5.3% to $140.9 million.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Consolidated gross margin was 27.6%, compared with 26.3% last year.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Net earnings decreased 11.5% to $24.1 million.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Adjusted EBITDA decreased 15.2% to $39.1 million.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Diluted earnings per share decreased 10.8% to $0.91. Non-GAAP diluted earnings per share decreased 10.2% to $1.06.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n First Nine Months of Fiscal Year 2025<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n<\/tr>\n
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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Net sales decreased 6.0% to $1,570.7 million; technology business net sales decreased 6.7% to $1,521.9 million; service revenues increased 38.6% to $295.5 million.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Technology business gross billings decreased 0.2% to $2,491.5 million.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Consolidated gross profit increased 0.7% to $423.4 million.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Consolidated gross margin was 27.0%, compared with 25.2% last year.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

\n

\n Net earnings decreased 11.7% to $82.8 million.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Adjusted EBITDA decreased 12.5% to $134.4 million.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

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\n \u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/span>\n <\/p>\n<\/td>\n

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\n Diluted earnings per share decreased 11.9% to $3.10. Non-GAAP diluted earnings per share decreased 10.8% to $3.56.<\/span>\n <\/p>\n<\/td>\n<\/tr>\n<\/table><\/div>\n

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\n HERNDON, Va.<\/span>
\n <\/span>, Feb. 5, 2025<\/span><\/span> \/PRNewswire\/ — ePlus inc. (NASDAQ:\u00a0 PLUS), a leading provider of technology and financing solutions, today announced financial results for the three months and nine months ended December 31, 2024<\/span>.<\/p>\n

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\n \"ePlus
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\n Management Comment<\/b>\n <\/p>\n

“Our third quarter results reflect the benefit of our investment in services and the continuing industry shift toward ratable, subscription and ‘as a service’ revenue recognition,” said Mark Marron<\/span>, president and CEO of ePlus. “Our services business, driven by organic and inorganic growth, increased 52% in the third quarter, across both managed and professional services.\u00a0 We are also benefitting from acquisitions completed over the past two years which have enhanced our suite of service offerings.\u00a0 This strong services performance in our technology business, however, was offset by lower product sales and a higher proportion of netted down product revenues given the acceleration of the industry shift underway.\u00a0<\/p>\n

“Technology business gross billings increased 6.6% underscoring solid customer demand for our suite of solutions offerings.\u00a0 Consolidated gross profit increased 5.3% and consolidated gross margin expanded 130 basis points, on a lower revenue base as we benefitted from higher proportion of netted down revenues, and increased contribution from higher margin services.\u00a0 We continue to maintain our strong positioning in the fast-growing categories that our customers require and our strong balance sheet positions us well to advance our organic and inorganic growth strategy over time.”<\/p>\n

\n Third Quarter Fiscal Year 2025 Results <\/b>\n <\/p>\n

For the third quarter ended December 31, 2024<\/span>, as compared to the third quarter ended December 31, 2023<\/span>:<\/p>\n

Consolidated net sales increased 0.4% to $511.0 million<\/span>, from $509.1 million<\/span>.<\/p>\n

Technology business net sales declined slightly to $493.1 million<\/span>, from $494.2 million<\/span>, as lower product sales were offset by higher service revenues. Technology business gross billings increased 6.6% to $849.5 million<\/span>, from $797.0 million<\/span>.<\/p>\n

Product sales declined 9.5% to $379.5 million<\/span>, from $419.5 million<\/span> and, product margin was 22.1%, up from 21.9% last year, both due to a higher proportion of third-party maintenance, software subscriptions, and services sold in the current quarter, which are recorded on a net basis. Product sales to certain enterprise customers at lower overall margins decreased product margins but was offset by contribution from the netted down revenues.<\/span><\/p>\n

Professional service revenues increased 73.6% from last year to $69.5 million<\/span>, from $40.0 million<\/span>, primarily due to the acquisition of Bailiwick Services, LLC. Gross margins declined to 40.1%, from 43.3% due to a shift in the mix of services provided.<\/p>\n

Managed service revenues increased 27.5% to $44.2 million<\/span> due to ongoing growth in these offerings, including Enhanced Maintenance Support and Cloud services. Gross profit from managed services increased 19.5% from last year due to the increase in revenues. Managed service margins declined to 29.8%, from 31.8%.<\/p>\n

Financing business segment net sales increased 19.8% to $17.8 million<\/span> primarily due to increased proceeds from sales of equipment. Gross profit in the financing business segment increased $2.3 million<\/span>, from $13.5 million<\/span> last year to $15.8 million<\/span> this year, due to the increase in net sales.<\/p>\n

Consolidated gross profit increased 5.3% to $140.9 million<\/span>, from $133.8 million<\/span>.\u00a0 Technology business gross profit increased 4.0% to $125.0 million<\/span> due to increased gross profit from the professional and managed services segments offset by a decline in gross profit from the product segment. The financing business segment gross profit increased 16.9% to $15.8 million<\/span>. \u00a0Consolidated gross margin was 27.6%, compared with 26.3% last year.<\/p>\n

Operating expenses were $112.4 million<\/span>, up 17.3% from $95.8 million<\/span> last year, primarily due to increases in salaries and benefits from additional headcount. Our headcount at the end of the third quarter of 2025 was 2,291, up 394 from a year ago, due to the acquisition of Bailiwick Services, LLC on August 19, 2024<\/span>, and Peak Resources on January 27, 2024<\/span>. Of the 394 additional employees, 355 were customer facing employees.<\/p>\n

Consolidated operating income decreased 25.1% to $28.5 million<\/span> and earnings before tax decreased 16.3% to $32.2 million<\/span>. \u00a0Other income was $3.7 million<\/span> compared to $0.4 million<\/span> last year due to higher interest income and foreign currency transaction gains.<\/p>\n

Our effective tax rate for the current quarter was 25.0%, lower than the prior year quarter of 29.0%, primarily due to lower state taxes.<\/p>\n

Net earnings decreased 11.5% to $24.1 million<\/span>.<\/p>\n

Adjusted EBITDA in the technology business declined 25.1% and increased 23.1% in the financing business segment, and when combined, resulted in a consolidated decrease of 15.2% to $39.1 million<\/span>.<\/p>\n

Diluted earnings per share was $0.91<\/span>, compared with $1.02<\/span> in the prior year quarter. Non-GAAP diluted earnings per share was $1.06<\/span>, compared with $1.18<\/span> in the prior year quarter.<\/p>\n

\n First Nine Months of Fiscal Year 2025 Results <\/b>\n <\/p>\n

For the nine months ended December 31, 2024<\/span>, as compared to the nine months ended December 31, 2023<\/span>:<\/p>\n

Consolidated net sales decreased 6.0% to $1,570.7 million<\/span>, from $1,670.8 million<\/span>.<\/p>\n

Technology business net sales decreased 6.7% to $1,521.9 million<\/span>, from $1,631.8 million<\/span>, due to lower product sales, offset by higher service revenues. Technology business gross billings decreased 0.2% to $2,491.5 million<\/span>, from $2,495.5 million<\/span>.<\/p>\n

Product sales decreased 13.5% to $1,226.4 million<\/span>, from $1,418.6 million<\/span>, due to declines in customer demand, as well as a shift in mix. Gross profit from product segment sales decreased 11.7% to $271.9 million<\/span>, from $308.1 million<\/span>, due to lower sales combined with a shift in mix towards third-party maintenance and services, which are recorded on a net basis.<\/p>\n

Professional service revenues increased 48.1% primarily due to the acquisition of Bailiwick Services, LLC. Gross margins declined slightly to 40.8% from 42.0% for the same period in the prior year.<\/p>\n

Managed service revenues increased 27.7% to $126.8 million<\/span>, from $99.3 million<\/span>, due to ongoing growth in these offerings, including Enhanced Maintenance Support, Cloud and Service Desk services. Gross profit from managed services increased 23.6% to $38.3 million<\/span>, from $31.0 million<\/span>, due to the increase in revenues. Gross margins declined slightly to 30.2% from 31.2% last year.<\/p>\n

Financing business segment net sales increased 24.9% to $48.8 million<\/span>, from $39.1 million<\/span>, due to higher transactional gains and portfolio earnings offset by lower post-contract earnings. Gross profit in the financing business segment increased $10.7 million<\/span> primarily due to the increase in sales.<\/p>\n

Consolidated gross profit increased to $423.4 million<\/span>, from $420.4 million<\/span>. Consolidated gross margin was 27.0%, compared with last year’s gross margin of 25.2%, due to higher product margins.<\/p>\n

Operating expenses were $316.7 million<\/span>, up 8.7% from $291.2 million<\/span> last year, primarily due to increases in salaries and benefits and general and administrative costs, both of which were due to increases in personnel.\u00a0 The increase in depreciation and amortization was due to the acquisition of Bailiwick Services, LLC.<\/p>\n

Consolidated operating income decreased 17.4% to $106.7 million<\/span>. Earnings before tax decreased 13.0% to $113.0 million<\/span>. Other income was $6.3 million<\/span> compared to $0.7 million<\/span> last year, primarily due to higher interest income.<\/p>\n

Our effective tax rate for the current year period was 26.7%, slightly lower than last year’s 27.8%.<\/p>\n

Net earnings decreased 11.7% to $82.8 million<\/span>.<\/p>\n

Adjusted EBITDA decreased 12.5% to $134.4 million<\/span>.<\/p>\n

Diluted earnings per common share was $3.10<\/span> for the nine months ended December 31, 2024<\/span>, compared with $3.52<\/span> in the prior year. Non-GAAP diluted earnings per common share was $3.56<\/span>, compared with $3.99<\/span> in the prior year.<\/p>\n

\n Balance Sheet Highlights<\/b>\n <\/p>\n

As of December 31, 2024<\/span>, cash and cash equivalents increased slightly to $253.1 million<\/span>, from $253.0 million<\/span> as of March 31, 2024<\/span>, as cash generated from operations was used for working capital needs, the acquisition of Bailiwick Services, LLC and repurchases of our common stock. Inventory decreased 29.1% to $99.0 million<\/span> compared with $139.7 million<\/span> as of March 31, 2024<\/span>. Total stockholders’ equity as of December 31, 2024<\/span> was $962.3 million<\/span>, compared with $901.8 million<\/span> as of March 31, 2024<\/span>. Total shares outstanding were 26.7 million as of December 31, 2024<\/span>, and 27.0 million as of March 31, 2024<\/span>.<\/p>\n

\n Fiscal Year 2025 Guidance <\/b>\n <\/p>\n

Fiscal year 2025 net sales are now expected to be in the range of $2.07 billion<\/span> to $2.11 billion<\/span>, and the adjusted EBITDA range is now expected to be $165.0 million<\/span> to $171.0 million<\/span>.\u00a0ePlus cannot predict with reasonable certainty and without unreasonable effort, the ultimate outcome of unusual gains and losses, the occurrence of matters creating GAAP tax impacts, fluctuations in interest expense or interest income and share-based compensation, and acquisition-related expenses. These items are uncertain, depend on various factors, and could be material to the ePlus’ results computed in accordance with GAAP. \u00a0Accordingly, ePlus is unable to provide a reconciliation of GAAP net earnings to adjusted EBITDA for the full year 2025 forecast.<\/p>\n

\n Summary and Outlook <\/b>\n <\/p>\n

“Looking ahead, we are excited about the opportunities we see in areas including AI, cybersecurity and cloud, and are confident in our strategy of investing in these faster growth offerings.\u00a0 We will continue to prioritize investments in these areas as we build upon our broad suite of solutions.\u00a0 Importantly, our cash position is strong and our balance sheet is healthy which provides flexibility to support our growth initiatives, including organic growth in customer facing headcount and acquisitions,” concluded Mr. Marron.<\/p>\n

\n Recent Corporate Developments\/Recognitions<\/b>\n <\/p>\n

In the third quarter, ePlus:<\/p>\n