Hernandez, Virginia, November 5th / PRNewswire / -- ePlus Inc. (Nasdaq ticker: PLUS), a leading provider of technical solutions, today announced its financial results for the three and six months ending September 30, 2026, which correspond to the second quarter of its 2027 fiscal year.

Management Commentary

ePlus, President and CEO, Mark Marron stated: "In the second quarter, we achieved strong revenue growth and improved profitability, as well as growth in key indicators. The record-breaking total bill amount surpassed last year's record, demonstrating strong momentum. This reflects our customer-first approach, as we provide our customers with the products and services they need, especially in the areas of artificial intelligence ( AI ) and cybersecurity."

"Overall, our solid performance in the second quarter and from the beginning of this year to date reflects our continued execution capability, as well as the strength and breadth of our diversified business model."

Our strong balance sheet constitutes a competitive advantage, with a cash balance of $381 million at the end of the quarter. In the second quarter, we advanced our merger and acquisition strategy by acquiring certain assets and liabilities of Daymark Solutions. Daymark is a company that provides critical IT solutions and professional services, focusing on implementing and supporting complex hybrid clouds, network security, compliance, and data centers. We maintain discipline in capital allocation, seeking a balance between mergers and acquisitions and other growth investments, and we give back capital to shareholders through stock repurchases and dividends.

Second Quarter Results for Fiscal Year 2027

As of the second quarter of September 2026, compared to the second quarter of September 2025:

• Net sales increased by 9.7% to $667.9 million, compared to $608.8 million in the same period last year, due to an increase in product sales, but this was partially offset by a decline in service revenue. Total billings grew by 4.3% to $1.0668 billion, from $1.0227 billion in the same period last year.
• The sales revenue of the product department increased by 12.8% to $547.1 million, compared to $485.0 million in the same period last year. This growth was mainly due to increases in revenue from cloud, security, collaboration, and other products, however, a decline in revenue from networking products partially offset this increase. The gross margin of the product department was 25.8%, higher than 24.5% in the same period last year, due to changes in the product portfolio, as well as an increase in sales from third-party maintenance, subscriptions, and services recognized on a net basis.
• Professional service department revenue decreased by 11.3% year-on-year to $67.8 million, compared to $76.3 million in the same period last year; gross margin fell to 35.4%, from 38.2% last year, mainly due to delays among retail customers that led to a decline in project-related service revenue and gross profit.
• The revenue of the hosting services department increased by 11.9% to $53.1 million, mainly due to the additional income generated by cloud hosting services. The gross profit of hosting services increased by 9.4% year-on-year, but the gross margin decreased from 29.4% to 28.8%.
• Gross profit increased by 11.2% to $180.3 million, compared to $162.1 million in the same period last year. This increase was due to higher gross profits in the Product Department and Managed Services Department, but it was offset by a decline in the Professional Services Department. The gross margin was 27.0%, up from 26.6% in the same period last year. This was because the Product Department had a higher gross margin, which was partially offset by the lower gross margins of the Managed Services and Professional Services Departments.
• Operating expenses amounted to $123.8 million, a year-on-year increase of 9.2%. In the same period last year, they were $113.3 million. The increase was mainly due to higher variable compensation that matched the growth in gross profit, as well as additional salaries and benefits, general and administrative expenses, and costs related to the acquisition of Daymark Solutions assets.
• Operating profit increased by 15.8% to $56.5 million. Other income (expenses) resulted in a net loss of $500,000, compared to a gain of $5.2 million in the same period last year. The reasons include: a decrease of $3.5 million in the fair value of contingent consideration receivables due to the sale of domestic financing business, a decline in interest income, and foreign exchange transaction losses recognized this quarter, whereas there were foreign exchange gains in the same period last year. Pre-tax profit from continuing operations increased by 3.7% to $56 million.
• The effective tax rate for this quarter is 27.9%, which is lower than the 29.3% of the same period last year, mainly due to lower state and local income taxes as well as fewer deductible expenses.
• Gross profit from continuing operations increased by 5.8% to $40.4 million, compared to $38.2 million in the same period last year. After adjustment, EBITDA grew by 14.3% to $67.1 million, from $58.7 million in the same period last year. The diluted earnings per share from continuing operations were $1.56, higher than $1.45 in the same period last year. Under the non-GAAP metric, the diluted earnings per share from continuing operations were $1.82, compared to $1.53 in the same period last year. As of September 30, 2026, and March 31, 2026, the number of outstanding shares was 26 million and 26.3 million respectively.
• Net profit was $40.4 million, compared to $34.9 million in the same period last year. In the same period last year, within the three months ending September 30, 2025, there was a net loss from discontinued operations of $3.3 million, with a diluted net loss per share from discontinued operations of $0.13. There were no transactions related to discontinued operations within the three months ending September 30, 2026.

Performance for the first half of fiscal year 2027

For the six months ending September 30, 2026, compared to the six months ending September 30, 2025:

• Net sales increased by 5.2% to $1.317 billion, compared to $1.2516 billion in the same period last year, due to an increase in product sales. The total bill amount also increased by 2.5% to $2.0239 billion, from $1.9754 billion in the same period last year.
• The sales revenue of the product department increased by 6.5% to $1.0767 billion, compared to $1.0114 billion in the same period last year. This growth was driven by increased revenue from cloud, security, and collaboration products, however, a decline in revenue from networking products partially offset this increase. The gross margin of the product department was 23.4%, higher than 22.8% in the same period last year, due to changes in the product portfolio, as well as an increase in sales from third-party maintenance and subscriptions.
• Professional service department revenue decreased by 8.3% year-on-year to $135.8 million, compared to $148.1 million in the same period last year; gross margin dropped to 36.2%, from 38.7% last year, mainly due to a decline in project services and additional personnel costs.
• The revenue of the hosting services department increased by 13.4% to $104.4 million, mainly due to an increase in cloud service sales. The gross profit of the hosting services department also increased by 10.3% year-on-year, but the gross margin decreased from 29.9% to 29.1%, primarily driven by increased costs associated with third parties.
• Gross profit increased by 5.0% to $331.6 million, compared to $315.8 million in the same period last year. This increase was due to higher gross profits in the product division and managed services division, but it was offset by a decline in the professional services division. The gross margin remained relatively unchanged from the same period last year, at 25.2%.
• Operating expenses amounted to $236.3 million, a year-on-year increase of 5.5%. In the same period last year, they were $224.0 million. The increase was mainly due to higher variable compensation that matched the growth in gross profit, as well as additional salaries and benefits, general and administrative expenses, and costs related to the acquisition of Daymark assets.
• Operating profit increased by 3.9% to $95.4 million. Other income (expenses) totaled $2.6 million, compared to $5.8 million in the same period last year. This was due to a decrease of $3.5 million in receivables for contingent consideration, which was offset by reduced foreign exchange losses and increased interest income during the period. Pre-tax profit from continuing operations increased by 0.4% to $98 million.
• The effective tax rate for the six-month period ending September 30, 2026, was 27.9%, which is lower than the 28.1% in the same period last year, mainly due to lower state and local taxes as well as non-deductible expenses.
• Growth in net profit from continuing operations was 0.7%, reaching $70.7 million, compared to $70.2 million in the same period last year. After adjustment, EBITDA grew by 3.2% to $114.9 million, from $111.4 million in the same period last year. The diluted net profit per share from continuing operations was $2.72, compared to $2.66 last year. Under the non-GAAP metric, the diluted net profit per share from continuing operations was $3.11, compared to $2.96 last year.
• Net profit was $70.7 million, compared to $77.4 million in the same period last year. In the same period last year, within the six months ending September 30, 2025, the net income from discontinued operations was $7.3 million, and the diluted net income per share from discontinued operations was $0.28. There were no transactions related to discontinued operations within the six months ending September 30, 2026.

Key Points of the Balance Sheet

As of September 30, 2026, cash and cash equivalents amounted to $380.9 million, which is lower than the $410.8 million as of March 31, 2026. Due to several ongoing projects, inventory increased by 35.1% from $200.9 million as of March 31, 2026, to $271.4 million. Accounts receivable – net trade increased by 14.9% from $650.0 million as of March 31, 2026, to $746.9 million. Total shareholders' equity was $1,096.4 million, an increase from $1,069.0 million as of March 31, 2026.

2027 Fiscal Year Guidance

ePlus has raised its guidance for the fiscal year 2027 to: net sales and gross profit are expected to grow by a high single-digit percentage year-on-year, while after adjustment, EBITDA is expected to grow by a low double-digit percentage year-on-year.

This guidance does not take into account a recessionary environment or other unexpected developments. ePlus is unable to predict with reasonable certainty, and without undue effort, the ultimate outcomes of abnormal gains and losses, the occurrence of GAAP tax-related matters, interest expenses or income, as well as fluctuations in equity-based compensation, and the costs associated with mergers and disposals. These items are subject to uncertainty and depend on various factors, and may have a significant impact on ePlus's performance calculated in accordance with GAAP. Therefore, ePlus is unable to provide a reconciliation table between the ongoing operations GAAP net profit for the full year of fiscal year 2027 and the adjusted EBITDA.

ePlus Announces Quarterly Dividends

ePlus also announced today that the board of directors has decided to distribute a quarterly cash dividend of $0.27 per common share, which will be paid to shareholders registered as of the close of business on November 24, 2026, on December 16, 2026.

Summary and Outlook

Marron summarized, "The accelerated adoption of artificial intelligence, the growing demand for advanced data center infrastructure, and the increasing emphasis on cybersecurity and digital transformation continue to reshape the technological landscape, bringing significant long-term growth opportunities for ePlus. As organizations accelerate their investments in modernizing IT networks and strengthening cybersecurity, our strong customer relationships and extensive portfolio of products and services enable us to meet these needs well and support customer growth. These factors, combined with our strong performance since the beginning of the year, have enhanced our confidence in the sustainability of business trends, as well as our revised guidance for the entire fiscal year 2027."

Recent Company Progress/Accreditation

In the second quarter of its fiscal year 2027, ePlus:

• Acquired some of the assets and liabilities of Daymark Solutions.
• Obtain the exclusive ambassador partner status of Everpure
• Awarded as the NetApp North American Flash Memory Partner of the Year

Regarding ePlus and inc.

ePlus is a customer-centric, service-oriented, and result-driven industry leader that provides transformative technical solutions and services to achieve the best outcomes for its clients. The company offers a comprehensive range of solutions including artificial intelligence, security, cloud and data centers, networking and collaboration, as well as hosting, consulting, and professional services. ePlus collaborates closely with organizations from various industries to help them successfully overcome business challenges. With numerous industry-leading partners and over 2,170 employees, the company has accumulated extensive professional experience and knowledge over more than thirty years. ePlus is headquartered in Virginia and has offices in the United States, the United Kingdom, Europe, and the Asia-Pacific region. For more information, please visit www.eplus.com, call 888-482-1122, or send an email to info @ eplus.com. You can also follow ePlus on LinkedIn, Facebook, and Instagram.

ePlus, technology means more®.

ePlus and ePlus products mentioned in this text are registered trademarks or trademarks of ePlus inc in the United States and/or other countries/regions.

Forward-looking Statements

Statements in this press release that are not historical facts may be considered “forward-looking statements,” including but not limited to statements regarding the future financial performance of ePlus.Due to certain risks and uncertainties, there may be significant differences between actual and expected future results, including but not limited to: financial losses caused by political instability at home and abroad leading to global economic uncertainty and volatility, such as changes in interest rates, tariffs, inflation, export requirements applicable to our products, sanctions, and risks of foreign exchange rate fluctuations; supply chain issues, including shortages of information technology components and products, as well as rapid and unpredictable price fluctuations from suppliers, or customers or suppliers canceling orders (for example, but not limited to memory chips), which may increase costs for us and our customers, reduce gross profits, lead to delays or inability to fulfill customer orders, increase working capital needs, delay the completion of professional services, or require the purchase of products or services necessary to support internal infrastructure or operations, thereby having an adverse effect on financial results; significant adverse changes in our relationships with one or more major customer accounts or suppliers, including decreased profitability of accounts, reduced contractual services, or loss of relationships; risks related to artificial intelligence, including the use or capabilities of related technologies, as well as emerging laws, regulations, and supervisions; our ability to manage a diversified portfolio of solution products in a highly competitive market with multiple key suppliers, including related products and services; industry changes and/or rapid changes in product supply, including the proliferation of cloud, infrastructure as a service, software as a service, platform as a service, etc., all of which may affect our financial results; our ability to remain secure in the face of cyberattacks or other disruptions, including interruptions to our systems, data, and audio communication networks by us, suppliers, or third parties; a significant decline in the credit quality of our customer base, or a substantial increase in credit losses; increases in costs, including wages, and our ability to pass on these costs to customers, or adverse financial effects resulting from pricing arrangements with customers;Relying on third parties to fulfill some of our service obligations to customers, as well as on a few key suppliers in the supply chain, for which we do not have long-term supply agreements, price guarantee agreements, or guarantees of inventory availability; the possibility that the compensation provided by these suppliers to us may decrease; our inability to identify potential acquirers, conduct thorough due diligence before completing a merger or acquisition, successfully complete the merger or acquisition (including on favorable terms), successfully integrate the acquired business, identify or successfully dispose of assets, or achieve the operational and financial results we expect after the disposal; whether we can protect our own and our customers' electronic and other confidential information while complying with constantly changing data privacy and cybersecurity laws and regulations, and provide appropriate notifications and disclosures in the event of cybersecurity incidents when necessary; our dependence on key personnel to maintain certain customer relationships, and our ability to recruit, train, and retain sufficient qualified employees with the required supplier certifications through recruitment; insufficient design or maintenance of the IT platform for internal use or provision to customers; our inability to effectively and timely seize the opportunities presented by AI; a lack of sufficient or qualified IT personnel to support our operations; potential cybersecurity attacks during employees' remote work, and our ability to fully train employees to prevent such incidents; our ability to raise capital, maintain or increase our credit lines with suppliers or our inventory financing limits, and the related impact of these matters on the price of our common stock; our ability to meet the expectations of investors and analysts in a predictable manner, including those related to the financial performance guidelines we provide, such as the continuous distribution of regular dividends and share repurchases; our ability to develop and implement comprehensive plans after a merger or acquisition, including sales team integration, cost control, asset optimization, system integration, and other key strategies; and other risks or uncertainties detailed in the reports submitted to the U.S. Securities and Exchange Commission.

The announcement and payment of future dividends are entirely at the discretion of the board of directors.

All information contained in this press release is valid as of the date of issuance. Except as required by U.S. securities laws, ePlus assumes no obligation to update this information due to new information, future events, or other reasons.

The amounts for the three-month and six-month periods ending September 30, 2026, and March 31, 2026, have been revised to reflect corrections to certain misstatements in the previously issued financial statements. The company believes that these corrections are not material, either individually or collectively. For more information, please refer to the Form 10-Q for the quarter ending September 30, 2026, including Note 2 to the consolidated financial statements.

ePlus Inc and its subsidiaries

Non-GAAP Information Adjustment Table

The following adjustment tables for non-GAAP financial indicators are presented: (i) adjusted EBITDA; (ii) net profit from continuing operations under the non-GAAP scope; and (iii) diluted net profit per share from continuing operations under the non-GAAP scope.

We will adjust the subsequent EBITDA to represent the net profit from continuing operations calculated in accordance with U.S. GAAP standards, and make adjustments to the following items: depreciation and amortization, equity-based compensation, merger and acquisition-related expenses, income tax expenses, and other (revenue) expense net amounts.

Non-GAAP口径下的持续经营净利润和非-GAAP口径下的持续经营每股收益摊薄净利润，是以按照美国GAAP计算的持续经营净利润为基准，剔除了其他（收入）费用净额、股权薪酬、并购相关费用、并购相关摊销费用及相关税务影响。

We use the aforementioned non-GAAP financial indicators as supplementary performance measurement tools to better understand operational performance and trends. We believe that by excluding items which management considers do not reflect fundamental operational performance, these financial indicators provide a benchmark for management and investors to compare business and operational results across different periods. Therefore, we consider these non-GAAP financial indicators to offer useful information for investors and others to understand and assess operational results.

We recognize that information that is not marked with GAAP has limitations as an analytical tool and should not be viewed in isolation, nor should it replace the analysis of financial results reported in accordance with US GAAP. Furthermore, other companies within our industry may calculate adjusted EBITDA, non-GAAP earnings per share on a going concern basis, and non-GAAP earnings per share on a going concern basis in different ways, or use indicators with similar names. This may reduce their usefulness as comparable indicators.

The amounts in the following table represent the results of continuing operations (unit: thousand US dollars): (i) Adjusted EBITDA adjustment table; (ii) Continuing operating net profit adjustment table under non-GAAP criteria; (iii) Diluted continuing operating earnings per share adjustment table under non-GAAP criteria.