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    PLUS
    Earnings call· Jun 2026(Q1 FY27)

    EPLUS Q1 FY27 earnings call PLUS

    Aug 4, 2026 Source

    Executive summary

    ePlus Q1 FY27 — Solid Start with Strong Bookings and AI Focus

    ePlus delivered a solid first quarter for fiscal 2027, navigating a tough prior-year comparison with strong bookings and open orders, particularly in AI-linked infrastructure. The company is actively investing in AI capabilities, expanding its geographic footprint, and growing its recurring revenue base through managed services. Despite some project delays impacting professional services and a slight margin contraction, ePlus maintains its full-year guidance, confident in its strategic execution and capital allocation flexibility.

    Highlights

    5

    • Open orders up over $650 million year-over-year, totaling above $1.5 billion, indicating healthy demand.

    • Managed services net sales surpassed $50 million, growing over 15% year-over-year, reflecting continued recurring revenue momentum.

    • Security gross billings increased 15.6%, representing 24.2% of gross billings on a trailing 12-month basis.

    • Cash position remains strong at $448.9 million, up from $410.8 million at the end of FY26.

    • Net Promoter Score of 74, above industry average, reflecting strong customer relationships.

    Concerns

    4

    • Consolidated net sales increased only 1% year-over-year to $649.1 million against a difficult prior-year comparison.

    • Professional services net sales declined 5.1% to $68.1 million due to project delays.

    • Gross margin declined to 23.3% from 23.9% in the prior year, driven by product and services mix shifts.

    • Non-GAAP diluted EPS decreased to $1.28 from $1.41 in the prior comparable year.

    Guidance & targets

    1
    CategoryTargetConfidence
    Fiscal 2027 Outlook
    Maintained
    high materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Product
    Led by continued strength in security and networking, benefiting from increased AI adoption.
    		$529.7 million0.6%——
    Services (Total)
    Overall services revenue growth.
    		$119.4 million2.6%——
    Managed Services
    Standout quarter, primarily led by continued strength in managed services related to data center and cloud. Important milestone for recurring revenue.
    		over $50 millionover 15%——
    Professional Services
    Reflecting project delays.
    		$68.1 million-5.1%——
    Customer Verticals
    Sales remain broad-based on a trailing 12-month basis.
    Telecom, media and entertainment: 28% of net salesTechnology: 14% of net salesHealth care: 13% of net salesSLED: 12% of net salesFinancial services: 11% of net salesOther end markets: 22% of net sales
    		————

    Operational metrics

    23
    Non-GAAP net earnings per common share diluted
    $1.28vs $1.41 in prior comparable year
    Q1 FY27
    Adjusted EBITDA
    $47.8 millionvs $52.7 million in prior year
    Q1 FY27
    Cash and investments balance
    $448.9 millionup from $410.8 million at the end of FY26
    Q1 FY27
    Inventory
    $146 milliondecreased $54.9 million sequentially
    Q1 FY27
    Inventory days outstanding
    declined 6 dayssequentially
    Q1 FY27

    Contributed to a 10-day sequential improvement in cash conversion cycle.

    Cash conversion cycle
    41 days10-day sequential improvement vs 51 days at the end of FY26
    Q1 FY27
    Share buyback amount executed
    $20.8 million
    Q1 FY27
    Share buyback authorization (new)
    up to 1.5 million shares
    12-month period commencing August 11, 2026
    Dividend per common share
    $0.27
    Q1 FY27
    Total dividends paid
    $26.7 million
    Past year
    Total share repurchases
    $53.1 million
    Past year
    Net Promoter Score
    74above-industry average
    Recent
    Gross billings
    $957.1 millionup 0.5% year-over-year
    Q1 FY27
    Security gross billings growth
    15.6%
    Q1 FY27
    Security gross billings as % of total
    24.2%
    Trailing 12-month basis
    Gross margin
    23.3%down from 23.9% in the prior year
    Q1 FY27
    Product gross margin
    21%declined 30 basis points
    Q1 FY27
    Managed Services gross margin
    29.4%declined 100 basis points
    Q1 FY27
    Professional Services gross margin
    36.9%declined 230 basis points
    Q1 FY27
    Operating expenses
    $112.5 millionincreased 1.6%
    Q1 FY27
    Headcount increase
    33 employeescompared to the prior year quarter
    Q1 FY27
    Other income net
    $3.1 millioncompared to $0.6 million in the prior year
    Q1 FY27
    Effective tax rate
    27.8%versus 26.5% in the prior year quarter
    Q1 FY27

    Industry KPIs

    9
    MetricValueDetails
    M a contributionRealwave acquisition
    Orders book to billabove $1.5 billionUSD
    Long term agreementsmultiple significant multiyear enterprise software licensing agreements of several million dollars or more in securityUSD
    Segment revenue growthProduct revenue: $529.7 million; Services revenue: $119.4 million; Managed services: >$50 million; Professional services: $68.1 millionUSD
    Design wins product cycle rampsAgentic AI platformproduct
    Order visibility backlog policyOpen orders above $1.5 billionUSD
    Recurring software services mixManaged services net sales surpassed $50 millionUSD
    End market revenue mix organic growthTelecom, media and entertainment: 28%; Technology: 14%; Health care: 13%; SLED: 12%; Financial services: 11%; Other: 22%% of net sales
    Operating margin incremental leverage23.3%%

    Orderbook & backlog

    1
    Open ordersabove $1.5 billionQ1 FY27 end

    up over $650 million higher year-over-year

    Some conversion expected in back half of the year, but will be over time beyond that as well. Vast majority is not ratable subscription type.

    Product announcements

    1
    ProductTypeDetails
    Agentic AI platformlaunch

    Deals & partnerships

    1
    RealwaveAcquisition of Realwave

    Acquisition from last year, enabling custom solutions like the one delivered for FIFA World Cup matches, which included services with AI, cameras, and light detecting and ranging technology layered on the Realwave platform.

    Risks & headwinds

    3
    Worldwide memory chip shortageOngoing

    Not quantified

    Mitigation: Continue to monitor

    Geopolitical issuesOngoing

    Not quantified

    Mitigation: Continue to monitor

    Product delivery delaysQ1 FY27

    Professional services net sales declined 5.1% to $68.1 million, reflecting project delays.

    Mitigation: Actively working with customers on large projects, but they will take time to materialize.

    What to watch in Q2 FY27

    5

    Open orders conversion to revenue

    H2 FY27 and beyond
    CurrentAbove $1.5 billion, up over $650 million YoY
    TargetSome conversion in H2 FY27

    Why it matters

    Indicates future revenue growth and demand strength, especially from AI-linked infrastructure.

    So it was above $1.5 billion in total at the end of the quarter, and it's even higher than that at this point. A portion of that is ratable subscription type thing, but the vast majority of it is not that way, but it will take some time to flush. We're thinking that we're going to see some of that in the back half of the year, but it will be over time⏳ beyond that as well.

    Q&A highlights

    4

    Inquired about the percentage increase of the $650 million open orders and the expected timing for converting this backlog into revenue.

    Darren Raiguel stated that total open orders were above $1.5 billion at quarter-end, with the $650 million representing the year-over-year increase. He expects some conversion in the back half of the year, but it will extend beyond that.

    “So it was above $1.5 billion in total at the end of the quarter, and it's even higher than that at this point. A portion of that is ratable subscription type thing, but the vast majority of it is not that way, but it will take some time to flush. We're thinking that we're going to see some of that in the back half of the year, but it will be over time beyond that as well.”

    asked by Gregory Burns · answered by Darren Raiguel

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Focus on AI and Multi-Architecture Solutions

    ePlus is leveraging its security practice to build secure AI solutions with a data-first strategy, exemplified by the Agentic AI platform built with Cisco and NVIDIA. This platform aims to provide secure AI infrastructure, reduce operational complexity, and accelerate incident response by enabling autonomous operations. The company sees its multi-architecture capabilities as a competitive differentiator as AI, cloud, security, and networking converge.

    02

    Investments in Growth and Efficiency

    The company is actively investing in customer-facing resources and improving internal efficiency through systems and processes to support long-term growth. Internally, AI is being used to enhance sales organization efficiency and customer experience. These investments are aimed at scaling the business and driving greater operating leverage over time⏳.

    03

    Customer Relationships and Recognition

    ePlus achieved an above-industry average Net Promoter Score of 74, which management attributes to built trust and strong customer relationships. This allows them to capture greater share and win new customers. The company also received several industry awards from partners like HPE, Everpure, SentinelOne, and Assured Data Protection, recognizing their capabilities and execution.

    04

    Managed Services Momentum

    Managed services achieved a significant milestone, surpassing $50 million in net sales for the first time, growing over 15% year-over-year. This growth was primarily driven by data center and cloud services, reflecting the company's success in building a larger recurring revenue base. ePlus is expanding its managed service portfolio, including higher-touch U.S.-based support and managed backup/disaster recovery initiatives.

    05

    Capital Allocation Strategy

    ePlus maintains a strong balance sheet with $448.9 million in cash, enabling continued investment in organic growth, strategic M&A, and shareholder returns. Over the past year, the company paid $26.7 million in dividends and repurchased $53.1 million in shares. A new share repurchase plan of up to 1.5 million shares was authorized, and a dividend of $0.27 per common share was declared.

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