ePlus Reports Third Quarter and First Nine Months Results

Rhea-AI Summary

ePlus (NASDAQ: PLUS) reported mixed Q3 FY2025 results with modest growth in some areas but declines in others. Net sales slightly increased 0.4% to $511.0 million, while consolidated gross profit grew 5.3% to $140.9 million. The company saw significant growth in service revenues, up 52.2% to $113.6 million, driven by both organic growth and acquisitions.

However, net earnings decreased 11.5% to $24.1 million, and adjusted EBITDA fell 15.2% to $39.1 million. Diluted EPS decreased 10.8% to $0.91. The technology business segment showed mixed performance with gross billings up 6.6% to $849.5 million, but net sales slightly declining 0.2% to $493.1 million.

For FY2025, ePlus provided guidance expecting net sales between $2.07-2.11 billion and adjusted EBITDA of $165.0-171.0 million. The company maintains a strong balance sheet with $253.1 million in cash and cash equivalents as of December 31, 2024.

Positive

• Service revenues increased 52.2% to $113.6 million
• Technology business gross billings up 6.6% to $849.5 million
• Consolidated gross profit increased 5.3% to $140.9 million
• Gross margin improved to 27.6% from 26.3% year-over-year
• Strong cash position at $253.1 million

Negative

• Net earnings decreased 11.5% to $24.1 million
• Adjusted EBITDA declined 15.2% to $39.1 million
• Diluted EPS decreased 10.8% to $0.91
• Operating expenses increased 17.3% to $112.4 million
• Product sales declined 9.5% to $379.5 million

Third Quarter Gross Profit Increased 5.3% And Gross Margin Expanded Year Over Year 

Third Quarter Fiscal Year 2025
•	Net sales increased 0.4% to $511.0 million; technology business net sales declined 0.2% to $493.1 million; service revenues increased 52.2% to $113.6 million.
•	Technology business gross billings increased 6.6% to $849.5 million.
•	Consolidated gross profit increased 5.3% to $140.9 million.
•	Consolidated gross margin was 27.6%, compared with 26.3% last year.
•	Net earnings decreased 11.5% to $24.1 million.
•	Adjusted EBITDA decreased 15.2% to $39.1 million.
•	Diluted earnings per share decreased 10.8% to $0.91. Non-GAAP diluted earnings per share decreased 10.2% to $1.06.
First Nine Months of Fiscal Year 2025
•	Net sales decreased 6.0% to $1,570.7 million; technology business net sales decreased 6.7% to $1,521.9 million; service revenues increased 38.6% to $295.5 million.
•	Technology business gross billings decreased 0.2% to $2,491.5 million.
•	Consolidated gross profit increased 0.7% to $423.4 million.
•	Consolidated gross margin was 27.0%, compared with 25.2% last year.
•	Net earnings decreased 11.7% to $82.8 million.
•	Adjusted EBITDA decreased 12.5% to $134.4 million.
•	Diluted earnings per share decreased 11.9% to $3.10. Non-GAAP diluted earnings per share decreased 10.8% to $3.56.

HERNDON, Va., Feb. 5, 2025 /PRNewswire/ -- ePlus inc. (NASDAQ:  PLUS), a leading provider of technology and financing solutions, today announced financial results for the three months and nine months ended December 31, 2024.

Management Comment

"Our third quarter results reflect the benefit of our investment in services and the continuing industry shift toward ratable, subscription and 'as a service' revenue recognition," said Mark Marron, president and CEO of ePlus. "Our services business, driven by organic and inorganic growth, increased 52% in the third quarter, across both managed and professional services.  We are also benefitting from acquisitions completed over the past two years which have enhanced our suite of service offerings.  This strong services performance in our technology business, however, was offset by lower product sales and a higher proportion of netted down product revenues given the acceleration of the industry shift underway. 

"Technology business gross billings increased 6.6% underscoring solid customer demand for our suite of solutions offerings.  Consolidated gross profit increased 5.3% and consolidated gross margin expanded 130 basis points, on a lower revenue base as we benefitted from higher proportion of netted down revenues, and increased contribution from higher margin services.  We continue to maintain our strong positioning in the fast-growing categories that our customers require and our strong balance sheet positions us well to advance our organic and inorganic growth strategy over time."

Third Quarter Fiscal Year 2025 Results

For the third quarter ended December 31, 2024, as compared to the third quarter ended December 31, 2023:

Consolidated net sales increased 0.4% to $511.0 million, from $509.1 million.

Technology business net sales declined slightly to $493.1 million, from $494.2 million, as lower product sales were offset by higher service revenues. Technology business gross billings increased 6.6% to $849.5 million, from $797.0 million.

Product sales declined 9.5% to $379.5 million, from $419.5 million and, product margin was 22.1%, up from 21.9% last year, both due to a higher proportion of third-party maintenance, software subscriptions, and services sold in the current quarter, which are recorded on a net basis. Product sales to certain enterprise customers at lower overall margins decreased product margins but was offset by contribution from the netted down revenues.

Professional service revenues increased 73.6% from last year to $69.5 million, from $40.0 million, primarily due to the acquisition of Bailiwick Services, LLC. Gross margins declined to 40.1%, from 43.3% due to a shift in the mix of services provided.

Managed service revenues increased 27.5% to $44.2 million due to ongoing growth in these offerings, including Enhanced Maintenance Support and Cloud services. Gross profit from managed services increased 19.5% from last year due to the increase in revenues. Managed service margins declined to 29.8%, from 31.8%.

Financing business segment net sales increased 19.8% to $17.8 million primarily due to increased proceeds from sales of equipment. Gross profit in the financing business segment increased $2.3 million, from $13.5 million last year to $15.8 million this year, due to the increase in net sales.

Consolidated gross profit increased 5.3% to $140.9 million, from $133.8 million.  Technology business gross profit increased 4.0% to $125.0 million due to increased gross profit from the professional and managed services segments offset by a decline in gross profit from the product segment. The financing business segment gross profit increased 16.9% to $15.8 million.  Consolidated gross margin was 27.6%, compared with 26.3% last year.

Operating expenses were $112.4 million, up 17.3% from $95.8 million last year, primarily due to increases in salaries and benefits from additional headcount. Our headcount at the end of the third quarter of 2025 was 2,291, up 394 from a year ago, due to the acquisition of Bailiwick Services, LLC on August 19, 2024, and Peak Resources on January 27, 2024. Of the 394 additional employees, 355 were customer facing employees.

Consolidated operating income decreased 25.1% to $28.5 million and earnings before tax decreased 16.3% to $32.2 million.  Other income was $3.7 million compared to $0.4 million last year due to higher interest income and foreign currency transaction gains.

Our effective tax rate for the current quarter was 25.0%, lower than the prior year quarter of 29.0%, primarily due to lower state taxes.

Net earnings decreased 11.5% to $24.1 million.

Adjusted EBITDA in the technology business declined 25.1% and increased 23.1% in the financing business segment, and when combined, resulted in a consolidated decrease of 15.2% to $39.1 million.

Diluted earnings per share was $0.91, compared with $1.02 in the prior year quarter. Non-GAAP diluted earnings per share was $1.06, compared with $1.18 in the prior year quarter.

First Nine Months of Fiscal Year 2025 Results

For the nine months ended December 31, 2024, as compared to the nine months ended December 31, 2023:

Consolidated net sales decreased 6.0% to $1,570.7 million, from $1,670.8 million.

Technology business net sales decreased 6.7% to $1,521.9 million, from $1,631.8 million, due to lower product sales, offset by higher service revenues. Technology business gross billings decreased 0.2% to $2,491.5 million, from $2,495.5 million.

Product sales decreased 13.5% to $1,226.4 million, from $1,418.6 million, due to declines in customer demand, as well as a shift in mix. Gross profit from product segment sales decreased 11.7% to $271.9 million, from $308.1 million, due to lower sales combined with a shift in mix towards third-party maintenance and services, which are recorded on a net basis.

Professional service revenues increased 48.1% primarily due to the acquisition of Bailiwick Services, LLC. Gross margins declined slightly to 40.8% from 42.0% for the same period in the prior year.

Managed service revenues increased 27.7% to $126.8 million, from $99.3 million, due to ongoing growth in these offerings, including Enhanced Maintenance Support, Cloud and Service Desk services. Gross profit from managed services increased 23.6% to $38.3 million, from $31.0 million, due to the increase in revenues. Gross margins declined slightly to 30.2% from 31.2% last year.

Financing business segment net sales increased 24.9% to $48.8 million, from $39.1 million, due to higher transactional gains and portfolio earnings offset by lower post-contract earnings. Gross profit in the financing business segment increased $10.7 million primarily due to the increase in sales.

Consolidated gross profit increased to $423.4 million, from $420.4 million. Consolidated gross margin was 27.0%, compared with last year's gross margin of 25.2%, due to higher product margins.

Operating expenses were $316.7 million, up 8.7% from $291.2 million last year, primarily due to increases in salaries and benefits and general and administrative costs, both of which were due to increases in personnel.  The increase in depreciation and amortization was due to the acquisition of Bailiwick Services, LLC.

Consolidated operating income decreased 17.4% to $106.7 million. Earnings before tax decreased 13.0% to $113.0 million. Other income was $6.3 million compared to $0.7 million last year, primarily due to higher interest income.

Our effective tax rate for the current year period was 26.7%, slightly lower than last year's 27.8%.

Net earnings decreased 11.7% to $82.8 million.

Adjusted EBITDA decreased 12.5% to $134.4 million.

Diluted earnings per common share was $3.10 for the nine months ended December 31, 2024, compared with $3.52 in the prior year. Non-GAAP diluted earnings per common share was $3.56, compared with $3.99 in the prior year.

Balance Sheet Highlights

As of December 31, 2024, cash and cash equivalents increased slightly to $253.1 million, from $253.0 million as of March 31, 2024, as cash generated from operations was used for working capital needs, the acquisition of Bailiwick Services, LLC and repurchases of our common stock. Inventory decreased 29.1% to $99.0 million compared with $139.7 million as of March 31, 2024. Total stockholders' equity as of December 31, 2024 was $962.3 million, compared with $901.8 million as of March 31, 2024. Total shares outstanding were 26.7 million as of December 31, 2024, and 27.0 million as of March 31, 2024.

Fiscal Year 2025 Guidance

Fiscal year 2025 net sales are now expected to be in the range of $2.07 billion to $2.11 billion, and the adjusted EBITDA range is now expected to be $165.0 million to $171.0 million. ePlus cannot predict with reasonable certainty and without unreasonable effort, the ultimate outcome of unusual gains and losses, the occurrence of matters creating GAAP tax impacts, fluctuations in interest expense or interest income and share-based compensation, and acquisition-related expenses. These items are uncertain, depend on various factors, and could be material to the ePlus' results computed in accordance with GAAP.  Accordingly, ePlus is unable to provide a reconciliation of GAAP net earnings to adjusted EBITDA for the full year 2025 forecast.

Summary and Outlook

"Looking ahead, we are excited about the opportunities we see in areas including AI, cybersecurity and cloud, and are confident in our strategy of investing in these faster growth offerings.  We will continue to prioritize investments in these areas as we build upon our broad suite of solutions.  Importantly, our cash position is strong and our balance sheet is healthy which provides flexibility to support our growth initiatives, including organic growth in customer facing headcount and acquisitions," concluded Mr. Marron.

Recent Corporate Developments/Recognitions

In the third quarter, ePlus:

• Achieved ISO 9001 Certification
• Launched Secure GenAI Accelerator
• Additionally, effective January 3, 2025, ePlus welcomed Melissa Ballenger as a new member of the Board of Directors.

Conference Call Information

ePlus will hold a conference call and webcast at 4:30 p.m. ET on February 5, 2025:

Date:	February 5, 2025
Time:	4:30 p.m. ET
Audio Webcast (Live & Replay):	https://events.q4inc.com/attendee/412924671
Live Call:	(888) 596-4144 (toll-free/domestic)
	(646) 968-2525 (international)
Archived Call:	(800) 770-2030 (toll-free/domestic)
	(609) 800-9909 (international)
Conference ID:	5394845# (live call and replay)

A replay of the call will be available approximately two hours after the call through February 12, 2025. A transcript of the call will also be available on the ePlus Investor Relations website at https://www.eplus.com/investors.

About ePlus inc.

ePlus is a customer-first, services-led, and results-driven industry leader offering transformative technology solutions and services to provide the best customer outcomes. Offering a full portfolio of solutions, including artificial intelligence, security, cloud and data center, networking, and collaboration, as well as managed, consultative and professional services, ePlus works closely with organizations across many industries to successfully navigate business challenges. With a long list of industry-leading partners and more than 2,200 employees, our expertise has been honed over more than three decades, giving us specialized yet broad levels of experience and knowledge. ePlus is headquartered in Virginia, with locations in the United States, United Kingdom, Europe, and Asia‐Pacific. For more information, visit www.eplus.com, call 888-482-1122, or email info@eplus.com. Connect with ePlus on LinkedIn, X, Facebook, and Instagram.

ePlus, Where Technology Means More®.

ePlus® and ePlus products referenced herein are either registered trademarks or trademarks of ePlus inc. in the United States and/or other countries. The names of other companies and products mentioned herein may be the trademarks of their respective owners.

Forward-looking statements

Statements in this press release that are not historical facts may be deemed to be "forward-looking statements," including, among other things, statements regarding the future financial performance of ePlus. Actual and anticipated future results may vary materially due to certain risks and uncertainties, including, without limitation, exposure to fluctuation in foreign currency rates, interest rates, and inflation, including as a result of national and international political instability fostering uncertainty and volatility in the global economy, which may cause increases in our costs and wages and our ability to increase prices to our customers, negative impacts to the arrangements that have pricing commitments over the term of an agreement and/or the loss of key lenders or constricting credit markets as a result of changing interest rates, which may result in adverse changes in our results of operations and financial position; significant adverse changes in our relationship with one or more of our larger customer accounts or vendors, including decreased account profitability, reductions in contracted services, or a loss of such relationships; a material decrease in the credit quality of our customer base, or a material increase in our credit losses, including by the federal government's actual or attempted termination for convenience, other contract termination or non-performance; our ability to remain secure during a cybersecurity attack or other information technology ("IT") outage, including disruptions in our, our vendors or other third party's IT systems and data and audio communication networks; our ability to secure our own and our customers' electronic and other confidential information, while maintaining compliance with evolving data privacy and regulatory laws and regulations and appropriately providing required notice and disclosure of cybersecurity incidents when and if necessary; ongoing remote work trends, and the increase in cybersecurity attacks that have occurred while employees work remotely and our ability to adequately train our personnel to prevent a cyber event; the possibility of a reduction of vendor incentives provided to us; our dependence on key personnel to maintain certain customer relationships, and our ability to hire, train, and retain sufficient qualified personnel by recruiting and retaining highly skilled, competent personnel, and vendor certifications; risks relating to use or capabilities of artificial intelligence ("AI") including social and ethical risks; our ability to manage a diverse product set of solutions, including AI products and services, in highly competitive markets with a number of key vendors; changes in the IT industry and/or rapid changes in product offerings, including the proliferation of the cloud, infrastructure as a service ("IaaS"), software as a service ("SaaS"), platform as a service ("PaaS"), and AI; supply chain issues, including a shortage of IT products, may increase our costs or cause a delay in fulfilling customer orders, or increase our need for working capital, or delay completing professional services, or purchasing IT products or services needed to support our internal infrastructure or operations, resulting in an adverse impact on our financial results; our inability to identify acquisition candidates, perform sufficient due diligence prior to completing an acquisition, successfully integrate a completed acquisition, or identify an opportunity for or successfully completing a business disposition, may affect our earnings; our ability to raise capital, maintain or increase as needed our lines of credit with vendors or our floor plan facility, obtain debt for our financing transactions, or the effect of those changes on our common stock price; our ability to implement comprehensive plans for the integration of sales forces, cost containment, asset rationalization, systems integration, and other key strategies; and other risks or uncertainties detailed in our reports filed with the Securities and Exchange Commission. All information set forth in this press release is current as of the date of this release and ePlus undertakes no duty or obligation to update this information either as a result of new information, future events or otherwise, except as required by applicable U.S. securities law.

ePlus inc. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
		December 31, 2024		March 31, 2024
ASSETS
Current assets:
Cash and cash equivalents		$253,074		$253,021
Accounts receivable—trade, net		594,175		644,616
Accounts receivable—other, net		62,280		46,884
Inventories		99,021		139,690
Financing receivables—net, current		148,758		102,600
Deferred costs		67,945		59,449
Other current assets		51,445		27,269
Total current assets		1,276,698		1,273,529
Financing receivables and operating leases—net		87,636		79,435
Deferred tax asset		6,087		5,620
Property, equipment and other assets--net		104,778		89,289
Goodwill		202,794		161,503
Other intangible assets—net		87,783		44,093
TOTAL ASSETS		$1,765,776		$1,653,469
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Accounts payable		$313,046		$315,676
Accounts payable—floor plan		115,744		105,104
Salaries and commissions payable		52,727		43,696
Deferred revenue		154,273		134,596
Non-recourse notes payable—current		24,173		23,288
Other current liabilities		36,848		34,630
Total current liabilities		696,811		656,990
Non-recourse notes payable—long-term		9,622		12,901
Other liabilities		97,003		81,799
TOTAL LIABILITIES		803,436		751,690
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 per share par value; 2,000 shares authorized; none outstanding		-		-
Common stock, $0.01 per share par value; 50,000 shares authorized; 26,703          outstanding at December 31, 2024 and 26,952 outstanding at March 31, 2024		276		274
Additional paid-in capital		192,087		180,058
Treasury stock, at cost, 880 shares at December 31, 2024 and
447 shares at March 31, 2024		(57,639)		(23,811)
Retained earnings		825,760		742,978
Accumulated other comprehensive income—foreign currency
translation adjustment		1,856		2,280
Total Stockholders' Equity		962,340		901,779
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$1,765,776		$1,653,469

 

ePlus inc. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2023		2024		2023
Net sales
Product	$397,318		$434,371		$1,275,172		$1,457,636
Services	113,647		74,684		295,503		213,205
Total	510,965		509,055		1,570,675		1,670,841
Cost of sales
Product	297,434		328,908		959,027		1,116,046
Services	72,646		46,337		188,291		134,347
Total	370,080		375,245		1,147,318		1,250,393
Gross profit	140,885		133,810		423,357		420,448
Selling, general, and administrative	104,181		89,381		296,760		272,331
Depreciation and amortization	7,676		5,399		18,260		15,821
Interest and financing costs	517		983		1,639		3,054
Operating expenses	112,374		95,763		316,659		291,206
Operating income	28,511		38,047		106,698		129,242
Other income (expense), net	3,650		366		6,302		673
Earnings before taxes	32,161		38,413		113,000		129,915
Provision for income taxes	8,028		11,131		30,218		36,122
Net earnings	$24,133		$27,282		$82,782		$93,793
Net earnings per common share—basic	$0.91		$1.02		$3.12		$3.53
Net earnings per common share—diluted	$0.91		$1.02		$3.10		$3.52
Weighted average common shares outstanding—basic	26,495		26,618		26,568		26,598
Weighted average common shares outstanding—diluted	26,620		26,697		26,727		26,665

 

Technology Business
	Three Months Ended December 31,						Nine Months Ended December 31,
	2024		2023		Change		2024		2023		Change
	(in thousands)						(in thousands)
Net sales
Product	$379,472		$419,478		(9.5 %)		$1,226,397		$1,418,581		(13.5 %)
Professional services	69,497		40,044		73.6 %		168,676		113,870		48.1 %
Managed services	44,150		34,640		27.5 %		126,827		99,335		27.7 %
Total	493,119		494,162		(0.2 %)		1,521,900		1,631,786		(6.7 %)
Gross profit
Product	84,046		91,919		(8.6 %)		271,910		308,059		(11.7 %)
Professional services	27,841		17,332		60.6 %		68,879		47,852		43.9 %
Managed services	13,160		11,015		19.5 %		38,333		31,006		23.6 %
Total	125,047		120,266		4.0 %		379,122		386,917		(2.0 %)
Selling, general, and administrative	100,441		86,001		16.8 %		284,575		261,694		8.7 %
Depreciation and amortization	7,676		5,381		42.7 %		18,260		15,747		16.0 %
Interest and financing costs	-		217		(100.0 %)		-		1,428		(100.0 %)
Operating expenses	108,117		91,599		18.0 %		302,835		278,869		8.6 %
Operating income	$16,930		$28,667		(40.9 %)		$76,287		$108,048		(29.4 %)
Gross billings	$849,546		$796,986		6.6 %		$2,491,482		$2,495,451		(0.2) %
Adjusted EBITDA	$27,498		$36,725		(25.1 %)		$103,803		$132,170		(21.5) %

 

Technology Business Gross Billings by Type
	Three Months Ended December 31,						Nine Months Ended December 31,
	2024		2023		Change		2024		2023		Change
	(in thousands)						(in thousands)
Networking	$214,762		$251,322		(14.5 %)		$716,087		$839,638		(14.7 %)
Cloud	207,762		181,559		14.4 %		644,888		641,120		0.6 %
Security	190,808		189,476		0.7 %		506,256		480,159		5.4 %
Collaboration	22,381		23,180		(3.4 %)		102,074		97,111		5.1 %
Other	76,513		55,473		37.9 %		193,650		203,805		(5.0 %)
Product gross billings	712,226		701,010		1.6 %		2,162,955		2,261,833		(4.4 %)
Service gross billings	137,320		95,976		43.1 %		328,527		233,618		40.6 %
Total gross billings	$849,546		$796,986		6.6 %		$2,491,482		$2,495,451		(0.2 %)
Technology Business Net Sales by Type
	Three Months Ended December 31,						Nine Months Ended December 31,
	2024		2023		Change		2024		2023		Change
	(in thousands)						(in thousands)
Networking	$181,367		$209,936		(13.6 %)		$602,883		$723,760		(16.7 %)
Cloud	116,864		120,253		(2.8 %)		375,431		427,365		(12.2 %)
Security	53,919		58,822		(8.3 %)		143,133		156,504		(8.5 %)
Collaboration	8,391		13,608		(38.3 %)		47,278		53,647		(11.9 %)
Other	18,931		16,859		12.3 %		57,672		57,305		0.6 %
Total product	379,472		419,478		(9.5 %)		1,226,397		1,418,581		(13.5 %)
Professional services	69,497		40,044		73.6 %		168,676		113,870		48.1 %
Managed services	44,150		34,640		27.5 %		126,827		99,335		27.7 %
Total net sales	$493,119		$494,162		(0.2 %)		$1,521,900		$1,631,786		(6.7 %)
Technology Business Net Sales by Customer End Market
	Three Months Ended December 31,						Nine Months Ended December 31,
	2024		2023		Change		2024		2023		Change
	(in thousands)						(in thousands)
Telecom, Media, & Entertainment	$126,201		$139,551		(9.6 %)		$352,624		$405,192		(13.0 %)
SLED	71,412		60,108		18.8 %		261,195		264,419		(1.2 %)
Technology	71,293		83,951		(15.1 %)		235,387		268,302		(12.3 %)
Healthcare	58,670		55,504		5.7 %		212,185		214,182		(0.9 %)
Financial Services	46,217		38,816		19.1 %		130,701		174,391		(25.1 %)
All other	119,326		116,232		2.7 %		329,808		305,300		8.0 %
Total net sales	$493,119		$494,162		(0.2 %)		$1,521,900		$1,631,786		(6.7 %)

 

Financing Business Segment
	Three Months Ended December 31,						Nine Months Ended December 31,
	2024		2023		Change		2024		2023		Change
	(in thousands)						(in thousands)
Portfolio earnings	$4,466		$3,701		20.7 %		$13,491		$10,113		33.4 %
Transactional gains	8,477		8,107		4.6 %		24,272		16,335		48.6 %
Post-contract earnings	4,743		2,685		76.6 %		10,163		11,357		(10.5 %)
Other	160		400		(60.0 %)		849		1,250		(32.1 %)
Net sales	17,846		14,893		19.8 %		48,775		39,055		24.9 %
Gross profit	15,838		13,544		16.9 %		44,235		33,531		31.9 %
Selling, general, and administrative	3,740		3,380		10.7 %		12,185		10,637		14.6 %
Depreciation and amortization	-		18		(100.0 %)		-		74		(100.0 %)
Interest and financing costs	517		766		(32.5 %)		1,639		1,626		0.8 %
Operating expenses	4,257		4,164		2.2 %		13,824		12,337		12.1 %
Operating income	$11,581		$9,380		23.5 %		$30,411		$21,194		43.5 %
Adjusted EBITDA	$11,651		$9,464		23.1 %		$30,612		$21,466		42.6 %

 

ePlus inc. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP INFORMATION

We included reconciliations below for the following non-GAAP financial measures: (i) Adjusted EBITDA, (ii) Adjusted EBITDA for business segments, (iii) non-GAAP Net Earnings and (iv) non-GAAP Net Earnings per Common Share - Diluted.

We define Adjusted EBITDA as net earnings calculated in accordance with US GAAP, adjusted for the following: interest and financing costs, depreciation and amortization, share-based compensation, acquisition related expenses, provision for income taxes, and other income (expense). Adjusted EBITDA presented for the technology business segments and the financing business segment is defined as operating income calculated in accordance with US GAAP, adjusted for interest and financing costs, share-based compensation, acquisition related expenses, and depreciation and amortization. We consider the interest on notes payable from our financing business segment and depreciation expense presented within cost of sales, which includes depreciation on assets financed as operating leases, to be operating expenses. As such, they are not included in the amounts added back to net earnings in the Adjusted EBITDA calculation.

Non-GAAP net earnings and non-GAAP net earnings per common share – diluted are based on net earnings calculated in accordance with GAAP, adjusted to exclude other (income) expense, share based compensation, acquisition related expenses, and acquisition related amortization expenses, and the related tax effects.

We use the above non-GAAP financial measures as supplemental measures of our performance to gain insight into our operating performance and performance trends. We believe that such non-GAAP financial measures provide management and investors a useful measure for period-to-period comparisons of our business and operating results by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that such non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results.

Our use of non-GAAP information as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results as reported under GAAP. In addition, other companies, including companies in our industry, might calculate adjusted EBITDA, non-GAAP net earnings and non-GAAP net earnings per common share or similarly titled measures differently, which may reduce their usefulness as comparative measures.

	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2023		2024		2023
	(in thousands)
Consolidated
Net earnings	$24,133		$27,282		$82,782		$93,793
Provision for income taxes	8,028		11,131		30,218		36,122
Share based compensation	2,933		2,526		8,385		7,145
Acquisition related expenses	29		-		1,072		-
Interest and financing costs	-		217		-		1,428
Depreciation and amortization [1]	7,676		5,399		18,260		15,821
Other (income) expense, net [2]	(3,650)		(366)		(6,302)		(673)
Adjusted EBITDA	$39,149		$46,189		$134,415		$153,636
Technology Business Segments
Operating income	$16,930		$28,667		$76,287		$108,048
Share based compensation	2,863		2,460		8,184		6,947
Depreciation and amortization [1]	7,676		5,381		18,260		15,747
Acquisition related expenses	29		-		1,072		-
Interest and financing costs	-		217		-		1,428
Adjusted EBITDA	$27,498		$36,725		$103,803		$132,170
Financing Business Segment
Operating income	$11,581		$9,380		$30,411		$21,194
Share based compensation	70		66		201		198
Depreciation and amortization [1]	-		18		-		74
Adjusted EBITDA	$11,651		$9,464		$30,612		$21,466

 

	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2023		2024		2023
	(in thousands)
GAAP: Earnings before taxes	$32,161		$38,413		$113,000		$129,915
Share based compensation	2,933		2,526		8,385		7,145
Acquisition related expenses	29		-		1,072		-
Acquisition related amortization expense [3]	5,983		3,856		14,180		11,348
Other (income) expense [2]	(3,650)		(366)		(6,302)		(673)
Non-GAAP: Earnings before provision for income taxes	37,456		44,429		130,335		147,735
GAAP: Provision for income taxes	8,028		11,131		30,218		36,122
Share based compensation	734		733		2,263		2,005
Acquisition related expenses	7		-		300		-
Acquisition related amortization expense [3]	1,495		1,115		3,788		3,173
Other (income) expense, net [2]	(913)		(106)		(1,656)		(190)
Tax benefit (expense) on restricted stock	21		10		513		226
Non-GAAP: Provision for income taxes	9,372		12,883		35,426		41,336
Non-GAAP: Net earnings	$28,084		$31,546		$94,909		$106,399

 

	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2023		2024		2023
GAAP: Net earnings per common share – diluted	$0.91		$1.02		$3.10		$3.52
Share based compensation	0.08		0.07		0.23		0.19
Acquisition related expenses	-		-		0.03		-
Acquisition related amortization expense [3]	0.17		0.10		0.39		0.30
Other (income) expense, net [2]	(0.10)		-		(0.17)		(0.01)
Tax benefit (expense) on restricted stock	-		(0.00)		(0.02)		(0.01)
Total non-GAAP adjustments – net of tax	0.15		0.16		0.46		0.47
Non-GAAP: Net earnings per common share – diluted	$1.06		$1.18		$3.56		$3.99

[1] Amount consists of depreciation and amortization for assets used internally.

[2] Interest income and foreign currency transaction gains and losses.

[3] Amount consists of amortization of intangible assets from acquired businesses.

 

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SOURCE EPLUS INC.

FAQ

What were ePlus (PLUS) Q3 FY2025 earnings per share?

ePlus reported diluted earnings per share of $0.91 in Q3 FY2025, down 10.8% from $1.02 in the same quarter last year.

How much did ePlus (PLUS) service revenues grow in Q3 2025?

ePlus service revenues increased 52.2% to $113.6 million in Q3 FY2025.

What is ePlus (PLUS) revenue guidance for fiscal year 2025?

ePlus expects FY2025 net sales to be in the range of $2.07 billion to $2.11 billion.

How much cash does ePlus (PLUS) have as of December 31, 2024?

ePlus reported cash and cash equivalents of $253.1 million as of December 31, 2024.

What was ePlus (PLUS) gross margin in Q3 FY2025?

ePlus reported a consolidated gross margin of 27.6% in Q3 FY2025, up from 26.3% in the previous year.