Asked if the increased activity and pipeline fill rate were concentrated among larger customers or broad-based, and if lead times were extending.

Darren Raiguel confirmed that activity is broad-based across the customer base, though some large customers are accelerating purchases. He noted that the pipeline of quotes and RFPs for large opportunities is very similar to the prior strong year. “We're seeing it broadly across the customer base. In general, there are some large customers that are accelerating some purchases per se. But it's just -- it's a testament that the strategy is working, all the different conversations we're having, a lot of it is AI related, but it's pretty broad at this point in a good way.”

Inquired about what would drive an acceleration in gross profit or adjusted EBITDA over the year to meet full-year expectations and the greatest risks.

Darren Raiguel stated that top-line revenue growth would drive adjusted EBITDA due to operating leverage, and expanding services would be the easiest way to drive gross profit. “I mean, obviously, growth, the more top line revenue growth we'll see, we'll see some more of that adjusted EBITDA. We'll be able to see more operating leverage with those volumes. And gross profit, as we can expand the services, obviously, that's the easiest way for us to drive the gross profit as well on that.”

Asked about the status of previously discussed retail project delays, whether they are moving forward, and if it's a timing issue or a broader demand signal.

Darren Raiguel indicated that the projects are still taking time, but they are actively working with those large customers. He clarified that these delays are specific to those customers, not a broad demand signal. “It's still going to take a little bit more time. So we are still actively working with those customers, but they're large customers, and it's going to probably take a little while longer before we start to see the fruits of that labor.”

PLUS

ePlus (PLUS) Q1 FY27 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q1 FY27)· Information Technology· Aug 4, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Fiscal 2027 Outlook	Maintained high materiality	FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Product Led by continued strength in security and networking, benefiting from increased AI adoption.	$529.7 million	0.6%	—	—
Services (Total) Overall services revenue growth.	$119.4 million	2.6%	—	—
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 million	over 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	—	—	—	—

Orderbook & backlog

Open orders above $1.5 billion Q1 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

Product	Type	Timeline	Details
Agentic AI platform	launch	built in collaboration with Cisco and NVIDIA

Deals & partnerships

Realwave Acquisition 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

Worldwide memory chip shortage Ongoing

Not quantified

Mitigation:Continue to monitor

Geopolitical issues Ongoing

Not quantified

Mitigation:Continue to monitor

Product delivery delays Q1 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

Open orders conversion to revenue

H2 FY27 and beyond

Current Above $1.5 billion, up over $650 million YoY

Target Some 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.

Find out whether PLUS delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.