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    PLUS
    Earnings call· Mar 2026(Q4 FY26)

    EPLUS Q4 FY26 earnings call PLUS

    May 28, 2026 Source

    Executive summary

    ePlus inc. Q4 FY26 — Strong Double-Digit Growth and AI Momentum

    ePlus concluded a strong fiscal year 2026, driven by robust demand across its IT solutions and services, particularly in AI, cloud, and security. The company achieved significant double-digit growth in key financial metrics, leveraging operational efficiencies and a focused strategy following the divestiture of its financing business. Management expressed confidence in continued profitable growth for the upcoming fiscal year, supported by a healthy balance sheet and strategic capital allocation.

    Highlights

    5

    • Full year diluted EPS from continuing operations increased 64%.

    • Fourth quarter diluted EPS from continuing operations increased 53% year-over-year to $0.78.

    • Full year gross billings reached a record $3.8 billion, up 17%.

    • Consolidated net sales increased 20.6% in Q4 to $576.2 million and 22.1% for the full year to $2.4 billion.

    • Full year adjusted EBITDA grew 49.5% to $204.8 million.

    Concerns

    4

    • Q4 consolidated gross margin declined to 24.6% from 26.5% in the prior year quarter, primarily due to lower product margins.

    • Product segment gross margin was 22.2% in Q4, down from 24.7% in the prior year quarter, reflecting competitive pricing on large enterprise sales.

    • Other expense included a $3 million charge in Q4 related to an adjustment to the fair value of contingent consideration from the financing business sale.

    • Potential headwinds from the worldwide memory chip shortage and geopolitical issues were noted.

    Guidance & targets

    3
    CategoryTargetConfidence
    Net sales growth
    mid-single-digit range
    high materiality
    Medium
    Gross profit growth
    mid-single-digit range
    high materiality
    Medium
    Adjusted EBITDA growth
    mid-single-digit range
    high materiality
    Medium

    Segment performance

    11
    SegmentRevenueYoYQoQMargin
    Products
    Q4 sales increased 25% to $466.2 million, and full year sales advanced 24% to nearly $2 billion, driven by strong customer demand across data center, cloud, networking, and security, with increasing contribution from AI. Q4 gross margin was 22.2%, down from 24.7% in prior year.
    		$466.2 million25%—22.2%
    Services
    Q4 services revenue increased 4.9% to $110 million. Full year services revenue increased 16%. Managed services grew, partially offset by smaller growth and elongation of some professional services projects.
    		$110 million4.9%——
    Managed Services
    Q4 managed services revenue increased approximately 9.3% to $48.7 million. Full year managed services revenue increased approximately 11%. Q4 gross margin was 30.5%, up from 29.1% in prior year.
    		$48.7 million9.3%—30.5%
    Professional Services
    Q4 professional services revenue grew 2% to $61.3 million, reflecting timing delays from select retail customers. Full year professional services revenue increased 19%, supported by the addition of Bailiwick services. Q4 gross margin was 38.3%, up 240 basis points from 35.9% in prior year.
    		$61.3 million2%—38.3%
    Customer Vertical: Telecom, Media & Entertainment
    Represents 30% of net sales on a trailing 12-month basis.
    Percentage of net sales (trailing 12-month): 30%
    		————
    Customer Vertical: Healthcare
    Represents 13% of net sales on a trailing 12-month basis.
    Percentage of net sales (trailing 12-month): 13%
    		————
    Customer Vertical: SLED
    Represents 13% of net sales on a trailing 12-month basis.
    Percentage of net sales (trailing 12-month): 13%
    		————
    Customer Vertical: Technology
    Represents 12% of net sales on a trailing 12-month basis.
    Percentage of net sales (trailing 12-month): 12%
    		————
    Customer Vertical: Financial Services
    Represents 10% of net sales on a trailing 12-month basis.
    Percentage of net sales (trailing 12-month): 10%
    		————
    Customer Vertical: Retail
    Represents 6% of net sales on a trailing 12-month basis.
    Percentage of net sales (trailing 12-month): 6%
    		————
    Customer Vertical: Other End Markets
    Represents 16% of net sales on a trailing 12-month basis.
    Percentage of net sales (trailing 12-month): 16%
    		————

    Operational metrics

    28
    Adjusted EBITDA
    $40.1 million40.2%
    Q4 FY26

    Adjusted EBITDA for the fourth quarter.

    Adjusted EBITDA
    $204.8 million49.5%
    FY26

    Adjusted EBITDA for the full fiscal year.

    Non-GAAP Diluted EPS from continuing operations
    $144.9%
    Q4 FY26

    Non-GAAP diluted EPS for the fourth quarter.

    Non-GAAP Diluted EPS from continuing operations
    $5.39
    FY26

    Non-GAAP diluted EPS for the full fiscal year, up from $3.53 in prior year.

    Cash and cash equivalents
    $410.8 millionUp from $326.3 million at end of Q3 and $389.4 million at end of FY25
    End of FY26

    Balance sheet strength at fiscal year-end.

    Inventory
    $200.9 millionDown from $241 million in prior sequential quarter
    End of FY26

    Inventory at quarter end, reflecting increased shipments to enterprise customers.

    Cash conversion cycle
    51 daysUp from 29 days in prior year quarter; increased 10 days sequentially
    Q4 FY26

    Year-over-year increase driven by timing of large enterprise shipments and increase in projects in progress.

    Shares repurchased
    90,000
    Q4 FY26

    Part of capital allocation plan to return capital to shareholders.

    Quarterly dividend
    $0.278% increase
    Q1 FY27

    Board authorized increase, reinforcing strong financial performance and commitment to returning capital.

    Security gross billings
    $842 million23.1%
    FY26

    Security remains an important growth and investment area, representing a significant portion of total gross billings.

    Net Promoter Score (NPS)
    74
    FY26

    Places ePlus in the top quartile of the technology and IT services industry, indicating strong customer loyalty.

    Operating expenses
    $110.7 million2.4%
    Q4 FY26

    Increase mainly due to higher variable compensation commensurate with the increase in gross profit.

    Operating expenses growth
    9.1%
    FY26

    Against 22.1% net sales growth and 49.5% adjusted EBITDA growth, demonstrating operating leverage.

    Headcount
    Flatyear-over-year
    FY26

    Reflects workforce focus on high-growth areas and creating a scalable operating model.

    Gross profit
    $141.6 million
    Q4 FY26

    Consolidated gross profit for the fourth quarter.

    Gross profit
    $66.1 million20.3%
    FY26

    Consolidated gross profit for the full fiscal year.

    Consolidated gross margin
    24.6%Compared to 26.5% in prior year quarter
    Q4 FY26

    Primarily due to lower product margins.

    Consolidated gross margin
    25.2%Compared to 25.6% in FY25
    FY26

    Year-over-year decline primarily attributable to product mix.

    Operating income
    $30.9 million64.7%
    Q4 FY26

    Operating income for the fourth quarter.

    Operating income growth
    67%
    FY26

    Led by strong top line performance and operating leverage.

    Effective tax rate
    32.2%Higher than 31.4% last year
    Q4 FY26

    Due to higher state income taxes and nondeductible expenses.

    Effective tax rate
    28.4%Compared to 28% last year
    FY26

    Effective tax rate for the full fiscal year.

    Net earnings from continuing operations
    $20.5 million62.4%
    Q4 FY26

    Net earnings from continuing operations for the fourth quarter.

    Net earnings from continuing operations
    $124.1 million62.4%
    FY26

    Net earnings from continuing operations for the full fiscal year.

    Diluted EPS from continuing operations
    $0.7853%
    Q4 FY26

    Diluted EPS from continuing operations for the fourth quarter, up from $0.51 in prior year.

    Diluted EPS from continuing operations
    $4.71
    FY26

    Diluted EPS from continuing operations for the full fiscal year, compared with $2.87 in prior year.

    Net loss from discontinued operations
    $400,000
    Q4 FY26

    Net loss from discontinued operations for the fourth quarter.

    Net earnings from discontinued operations
    $8.5 million
    FY26

    Net earnings from discontinued operations for the full fiscal year, compared to $28.1 million or $1.06 per diluted share in prior year.

    Industry KPIs

    10
    MetricValueDetails
    M a contribution—
    Orders book to bill$3.8 billionUSD
    Long term agreements—
    Segment revenue growth$2 billionUSD
    Ai data center content revenue—
    Order visibility backlog policy—
    Recurring software services mix9.3%%
    Supply demand imbalance lead times—
    End market revenue mix organic growth30%%
    Operating margin incremental leverage9.1%%

    Orderbook & backlog

    3
    Gross Billings$3.8 billionFY26

    17% from prior year

    Record gross billings, highlighting sustained demand across offerings.

    Gross Billings$881 millionQ4 FY26

    11.7%

    Reflecting sustained demand across strategic focus areas of AI, cloud, security and networking.

    Open OrdersUpQ4 FY26

    A good sign for the business, but dictated by lead times.

    Product announcements

    1
    ProductTypeDetails
    AI Experience Centermilestone

    Deals & partnerships

    3
    Domestic financing businessdivestiture

    Completed the divestiture of the domestic financing business earlier in the fiscal year.

    Dell Technologiespartnership

    Recognized as the Dell channel Strategic Impact Partner of the Year at Dell Technology World.

    Digital Realtypartnership

    Announced as Digital Realty's 2025 Americas Partner of the Year, partly due to the AI experience center.

    Risks & headwinds

    5
    Worldwide memory chip shortageOngoing

    Unquantified

    Mitigation: Being conservative in guidance due to impact on lead times.

    Geopolitical issuesOngoing

    Unquantified

    Mitigation: Being conservative in guidance due to external factors.

    Project timing delays in professional servicesQ4 FY26

    Resulted in 2% growth in Q4 professional services revenue

    Mitigation: Expected to normalize in fiscal 2027, with signs of positive progress.

    Lower product margins due to competitive pricingQ4 FY26

    Q4 product segment gross margin was 22.2% compared to 24.7% in the prior year quarter

    Mitigation: Optimistic about expansion opportunities through 'land and expand' and services value over time.

    Charge related to fair value adjustment of contingent considerationQ4 FY26

    $3 million charge

    Q&A highlights

    1

    Asked for more detail on the framework for FY27 guidance, specifically regarding conservatism due to potential headwinds, and inquired about the impact of competitive pricing on large enterprise sales on margins.

    Management stated that the guidance is conservative due to tough comparisons from a strong prior year, the worldwide memory chip shortage, and geopolitical issues. They also expressed optimism about expanding margins at large enterprises over time through 'land and expand' strategies and services value, despite current competitive rates.

    “once again, it really comes down to being conservative with the memory shortage and some of the geopolitical unrest that's going on that we don't control.”

    asked by Margaret Nolan · answered by Mark Marron

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Transformation and Focus

    ePlus completed the divestiture of its domestic financing business earlier in the fiscal year, transforming into a pure-play technology solutions and services provider. This strategic move allowed the company to increase focus and allocate resources to faster-growing IT markets, including AI, cloud, data center, networking, and security, aiming to build IT solutions and capture market share more effectively.

    02

    AI and Digital Transformation Momentum

    The company experienced strong demand across its diverse customer base, particularly for AI-driven technologies and digital transformation strategies. This trend led to increased demand for infrastructure modernization across various product categories. ePlus also established an AI experience center within Digital Realty's Innovation Lab, providing customers with hands-on demonstrations of advanced AI infrastructure.

    03

    Operational Efficiency and Scalability

    ePlus demonstrated significant operating leverage in fiscal year 2026, with operating expenses growing 9.1% against 22.1% net sales growth and 49.5% adjusted EBITDA growth. The company achieved this while maintaining a flat headcount, reflecting a focus on high-growth areas and a scalable operating model. This efficiency contributed to a 67% growth in operating income for the full year.

    04

    Customer Satisfaction and Loyalty

    The company achieved a Net Promoter Score (NPS) of 74, which is considered world-class and places ePlus in the top quartile of the technology and IT services industry. This high score indicates strong customer loyalty and advocacy, reflecting the company's efforts in quick response times, problem-solving, and actively listening to customer needs.

    05

    Capital Allocation Strategy

    ePlus maintains a healthy balance sheet, ending the fiscal year with $410.8 million in cash and cash equivalents. This financial flexibility supports organic investments, strategic M&A opportunities, and returning capital to shareholders. The Board recently authorized an 8% increase in the quarterly dividend to $0.27 per share and the company repurchased 90,000 shares in the quarter.

    06

    Services Portfolio Expansion

    The company continued to broaden its core portfolio offerings by adding professional and managed services. This includes new managed collaboration offerings for Cisco, Zoom, and Microsoft, as well as securing multiyear wins in storage and backup as a service. These longer-term engagements highlight customer confidence in ePlus's ability to deliver tangible business outcomes and strategic value.

    AI-generated summary of the company’s earnings call. Not investment advice.