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Earnings call · Jun 2026 (Q4 FY26)

SCANSOURCE Q4 FY26 earnings call SCSC

Aug 20, 2026 Source

Executive summary

ScanSource Q4 FY26 — Strong Growth and Strategic Acquisition

ScanSource concluded FY26 with a strong fourth quarter, driven by broad-based demand and disciplined execution, achieving record non-GAAP EPS and robust free cash flow. The strategic acquisition of MicroAge is poised to significantly expand the company's market reach and service offerings, aligning with long-term growth objectives. While the outlook for FY27 is positive with organic growth expected, the company anticipates some near-term headwinds from Juniper's supply chain and continued challenges in the Brazil market.

Highlights

5

  • Sales increased 17% year-over-year in Q4 FY26, reflecting improving demand across the business.

  • Non-GAAP EPS grew 43% year-over-year to a record $1.46 per share in Q4 FY26.

  • Generated $114 million in free cash flow for FY26, representing 124% conversion of non-GAAP net income.

  • Acquisition of MicroAge expands total addressable market, adds new services capabilities, and is expected to be accretive with positive free cash generation.

  • Specialty Technology Solutions segment net sales increased 18% year-over-year in Q4 FY26, with Adjusted EBITDA up 28%.

Concerns

2

  • The Brazil segment experienced a tough quarter, necessitating structural changes and headcount adjustments.

  • Juniper supply chain constraints are expected to slow fulfillment and benefit realization in the first half of FY27.

Guidance & targets

CategoryTargetConfidence
FY27 Organic Revenue Growth
6% to 10% increase
high materiality
High
FY27 Adjusted EBITDA
$158 million to $165 million
high materiality
High
FY27 Adjusted EBITDA Margin
4.6% to 4.65%
medium materiality
High
FY27 Free Cash Flow
at least $85 million
high materiality
High
FY27 Effective Income Tax Rate
27.5% to 28.5%
low materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Specialty Technology Solutions
Net sales increased 18% year-over-year in Q4 FY26, led by broad-based North America hardware sales growth across technologies. Full-year segment revenues increased 6%.
Gross profit: $94 million (Q4 FY26)Gross profit: $338 million (FY26)Adjusted EBITDA margin: 3.96% (Q4 FY26)Recurring revenues as % of segment gross profit: 15% (FY26)
$3.12 billion18%—$36.7 million
Intelisys & Advisory
Q4 net sales and gross profits grew 7% and 8% year-over-year, respectively. Full-year segment revenues grew 3.1%. Strong results in cloud compute, connectivity, and CX.
Gross profit growth: 8% (Q4 FY26)Adjusted EBITDA margin: 36.4% (Q4 FY26)Net billings: ~$2.88 billion (FY26)
$101 million7%—$9.4 million

Orderbook & backlog

Intelisys Net Billings ~$2.88 billion FY26

increased

Represents full year net billings for the Intelisys & Advisory segment.

Deals & partnerships

MicroAge Acquisition to expand TAM, add new services capabilities (cloud, cybersecurity, data center, AI), and provide greater visibility into end-user needs.

MicroAge has a 50-year history, strong growth, profitability, and long-standing relationships. It will help ScanSource channel partners access implementation, deployment, and support services, particularly for cybersecurity and data center solutions.

Risks & headwinds

Macroeconomic environment uncertainty FY27

Not quantified

Mitigation:Company is cautious but expects continued strong demand.

Juniper supply chain constraints First half of FY27

Will slow fulfillment of partner opportunities.

Mitigation:Expects to be in full swing with Juniper sales and delivery by the second half of FY27.

Brazil segment demand weakness Q4 FY26

Led to structural changes with headcount.

Mitigation:Managing to profitability and being responsive to market conditions.

What to watch in Q1 FY27

MicroAge acquisition impact on FY27 outlook

Q1 FY27 earnings call
Current Organic guidance provided (6-10% revenue growth, $158M-$165M Adjusted EBITDA)
Target Updated annual outlook including MicroAge acquisition benefits

Why it matters

The MicroAge acquisition is a significant strategic move expected to expand TAM, add services, and be accretive, and its full financial impact will be clarified.

We plan to update our annual outlook, including with -- including the MicroAge acquisition during our FY '27 Q1 earnings call.

Q&A highlights

What drove the Q4 outperformance relative to guidance, and are there any macro risks or supply shortages impacting the business going into FY27?

The outperformance was due to strong demand and the return of large deals, aligning with expectations for a stronger second half. The company is always cautious about macro risks but does not anticipate supply disruptions or a slowdown in demand for FY27.

“As we saw the second half unfold, what we saw was actually a very strong demand environment and the return of those large deals that we continue to talk about being in our pipe as the fourth quarter unfolded.”

asked by Gregory Burns · answered by Stephen Jones

2 min read 6 chapters

Detailed narrative

Q4 FY26 Performance and Demand Trends

ScanSource concluded its fiscal year with a strong fourth quarter, reporting a 17% year-over-year sales increase. This growth was attributed to disciplined execution, improving demand across the business, and the return of large deals, particularly in the second half of the year. Key technologies showing renewed growth included physical security, mobility, networking, CX, cloud compute, and connectivity, indicating a broad-based recovery.

Strategic Rationale for MicroAge Acquisition

The acquisition of MicroAge is a significant strategic move, expanding ScanSource's total addressable market into high-growth areas like cloud, cybersecurity, data center, and AI. MicroAge also brings additional services capabilities, including cloud migration, cybersecurity services, and AI solutions development, which ScanSource aims to scale and offer to its existing channel partners. This acquisition is seen as accretive with positive free cash generation and aligns with ScanSource's long-term vision of providing comprehensive solutions beyond just hardware.

Converged Communications Business Unit

ScanSource launched a converged communications business unit to help partners capture the full stack of opportunities in a market transitioning from on-premise to cloud. The strategy focuses on assisting solution providers in selling more cloud recurring revenue and enabling Intelisys trusted advisers to attach more edge devices, thereby accelerating growth across the ecosystem. This initiative leverages the company's specialized expertise and deep channel relationships.

Intelisys & Advisory Segment Progress

The Intelisys & Advisory segment demonstrated progress, with Q4 net sales and gross profits growing 7% and 8% year-over-year, respectively. Full-year segment revenues grew 3.1% to $101 million, and net billings increased to approximately $2.88 billion. The segment's focus on faster-growing technologies and increased resources led to strong results in cloud compute, connectivity, and CX, with new data center connections contributing to improved opportunities.

Capital Allocation and Balance Sheet Strength

ScanSource maintains a disciplined approach to capital allocation, prioritizing a strong balance sheet with a target net debt leverage ratio of 1 to 2x adjusted EBITDA. The company generated $114 million in free cash flow for FY26, converting 124% of non-GAAP net income. Share repurchases totaled $98 million for the full year, with $121 million remaining under authorization, reflecting a commitment to shareholder returns alongside strategic investments like the MicroAge acquisition.

Juniper Integration and Supply Chain

The addition of Juniper to ScanSource's line card for networking is a positive development, but its immediate impact will be tempered by existing supply chain constraints at Juniper. Management expects fulfillment to be slower in the first half of FY27, with full operational swing anticipated by the second half. This highlights the ongoing challenges in managing supply chain dynamics even with strong vendor partnerships.

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