ScanSource (SCSC) lifts FY26 free cash flow outlook on Q3 revenue gain
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
ScanSource, Inc. reported higher third-quarter fiscal 2026 revenue and solid cash generation while raising its full-year free cash flow outlook. Net sales for the quarter ended March 31, 2026 rose 8.8% year-over-year to $766.8 million, driven mainly by 9.2% growth in the Specialty Technology Solutions segment. Gross profit increased 6.9% to $107.1 million, with a 14.0% margin.
GAAP net income was $16.9 million and diluted EPS was $0.78, up from $0.74 a year earlier. Non-GAAP diluted EPS increased to $0.94. Adjusted EBITDA was $35.6 million, or 4.65% of net sales. Year-to-date operating cash flow reached $125.4 million and free cash flow $118.6 million. The company reaffirmed fiscal 2026 net sales guidance of $3.0–$3.1 billion and adjusted EBITDA of $140–$150 million, and raised its non-GAAP free cash flow outlook from at least $80 million to at least $90 million. As of March 31, 2026, ScanSource held $120.3 million in cash and cash equivalents and $102.0 million of total debt, resulting in net cash and a trailing twelve-month adjusted EBITDA of $144.0 million.
Positive
- Raised free cash flow outlook: Fiscal 2026 non-GAAP free cash flow expectation increased from at least $80 million to at least $90 million, signaling stronger anticipated cash generation.
- Solid top-line growth: Q3 FY26 net sales grew 8.8% year-over-year to $766.8 million, led by 9.2% growth in Specialty Technology Solutions.
- Strong cash and low net debt: As of March 31, 2026, ScanSource held $120.3 million in cash and $102.0 million in total debt, resulting in net cash and a trailing adjusted EBITDA of $144.0 million.
- Improving returns: Adjusted return on invested capital was 14.3% for Q3 FY26, up from 13.6% in the prior-year quarter.
Negative
- None.
Insights
ScanSource delivers modest growth, strong cash flow and a higher free cash flow outlook.
ScanSource posted Q3 FY26 net sales of $766.8M, up 8.8% year-over-year, with Specialty Technology Solutions growing 9.2%. GAAP diluted EPS rose to $0.78 and non-GAAP diluted EPS to $0.94, while adjusted EBITDA reached $35.6M, a 4.65% margin.
Cash generation was a standout: nine-month operating cash flow was $125.4M and free cash flow $118.6M. Net debt was negative, with cash of $120.3M and debt of $102.0M, and trailing twelve-month adjusted EBITDA of $144.0M supporting balance-sheet strength.
The company reaffirmed FY26 net sales guidance of $3.0–$3.1B and adjusted EBITDA of $140–$150M, and raised its free cash flow outlook from at least $80M to at least $90M. This higher cash flow expectation, alongside stable earnings, indicates management confidence in execution for the fiscal year ending June 30, 2026.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q3 FY26 Net Sales: $766.8M
Q3 FY26 GAAP diluted EPS: $0.78
Q3 FY26 Adjusted EBITDA: $35.6M
+5 more
8 metrics
Q3 FY26 Net Sales
$766.8M
Quarter ended March 31, 2026; up 8.8% year-over-year
Q3 FY26 GAAP diluted EPS
$0.78
Quarter ended March 31, 2026; up from $0.74 in Q3 FY25
Q3 FY26 Adjusted EBITDA
$35.6M
Non-GAAP; 4.65% of net sales
FY26 Net Sales Outlook
$3.0B–$3.1B
Annual outlook reaffirmed for fiscal year ending June 30, 2026
FY26 Adjusted EBITDA Outlook
$140M–$150M
Non-GAAP annual adjusted EBITDA outlook reaffirmed
FY26 Free Cash Flow Outlook
At least $90M
Non-GAAP; raised from at least $80M
Nine-month FY26 Free Cash Flow
$118.6M
Non-GAAP free cash flow for nine months ended March 31, 2026
Adjusted ROIC
14.3%
Annualized adjusted return on invested capital for Q3 FY26
Key Terms
Adjusted EBITDA, free cash flow, Adjusted ROIC, recurring revenue, +2 more
6 terms
Adjusted EBITDA financial
"Adjusted EBITDA (non-GAAP) | $ | 35,621 | | | $ | 35,053 | | | 1.6%"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
free cash flow financial
"For fiscal year 2026, ScanSource has generated $125.4 million of operating cash flow and $118.6 million of free cash flow (non-GAAP)."
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
Adjusted ROIC financial
"Adjusted return on invested capital ratio (Adjusted ROIC), annualized (c) | 14.3 | %"
Adjusted ROIC measures how effectively a company turns the money it has invested in its business into profit, but after removing one-time items and accounting tweaks so the result shows the recurring operating performance. Think of it like checking a car’s fuel efficiency after unloading temporary extra weight: it gives investors a clearer view of the business’s true efficiency and helps compare companies or track whether management is improving returns on the capital used to run and grow the business.
recurring revenue financial
"recurring revenue increased 3.6% year-over-year including acquisitions."
Revenue that a company expects to receive on a regular, predictable basis from ongoing sources such as subscriptions, service contracts, or repeat customer purchases. It matters to investors because it provides steadier cash flow and makes future earnings easier to forecast—like a landlord collecting monthly rent instead of one-off sales—supporting higher valuations and lower risk when those payments are reliable and customers tend to stay.
non-GAAP diluted EPS financial
"Third quarter fiscal year 2026 non-GAAP net income increased to $20.4 million, or $0.94 per diluted share"
Non-GAAP diluted EPS (Earnings Per Share) is a measure of a company's profit allocated to each share of stock, calculated using adjusted earnings that exclude certain items like one-time expenses or gains. It provides a view of ongoing performance by removing irregular or non-recurring factors. Investors use it to better understand the company's core profitability and compare performance across different periods or companies.
contingent consideration financial
"Change in fair value of contingent consideration | 440 | | | 904"
Contingent consideration is an additional payment agreed when one company buys another that will be paid later only if specific future targets are met, such as revenue, profit, or regulatory milestones. It matters to investors because it shifts risk between buyer and seller and affects the acquiring company's future cash flow and reported value — like promising a bonus after results are proven.
Earnings Snapshot
Net sales: $766.8M · Guidance included
Q3 FY2026
Net sales
$766.8M
+8.8% YoY
GAAP diluted EPS
$0.78
+5.4% YoY
Non-GAAP diluted EPS
$0.94
+9.3% YoY
Adjusted EBITDA
$35.6M
+1.6% YoY
Gross profit
$107.1M
+6.9% YoY
Guidance
For FY26, ScanSource expects net sales of $3.0–$3.1 billion, adjusted EBITDA of $140–$150 million, and at least $90 million of non-GAAP free cash flow.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
| Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On May 7, 2026, ScanSource, Inc. (the "Company") issued a press release announcing its financial results for its third quarter ended March 31, 2026. A copy of the press release and accompanying Earnings Infographic are attached as Exhibits 99.1 and 99.2 hereto, incorporated herein by reference and also made available through the Company’s website at www.scansource.com. An updated investor presentation will be made available on the Company's website within approximately two weeks.
The information in Item 2.02 of this Report, including the Exhibits 99.1 and 99.2 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any other filing under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
99.1 – Press release issued by ScanSource, Inc. on May 7, 2026. The information contained in the attached exhibit is unaudited and should be read in conjunction with the Company’s annual and quarterly reports filed with the Securities and Exchange Commission.
99.2 – Earnings Infographic for the financial results conference call held on May 7, 2026. The information contained in the attached exhibit is unaudited and should be read in conjunction with the Company’s annual and quarterly reports filed with the Securities and Exchange Commission.
| Exhibit Number | Description | ||||
| 99.1 | Press release | ||||
| 99.2 | Earnings Infographic | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ScanSource, Inc. | |||||||||||||||||||||||
| Date: | May 7, 2026 | /s/ STEVE JONES | |||||||||||||||||||||
| Steve Jones | |||||||||||||||||||||||
| Senior Executive Vice President and Chief Financial Officer | |||||||||||||||||||||||
Exhibit 99.1
FOR IMMEDIATE RELEASE
| Contact: | ||||||||
| Steve Jones | Mary M. Gentry | |||||||
| Senior EVP, Chief Financial Officer | SVP, Finance and Treasurer | |||||||
| ScanSource, Inc. | ScanSource, Inc. | |||||||
| (864) 286-4302 | (864) 286-4892 | |||||||
SCANSOURCE DELIVERS STRONG THIRD QUARTER RESULTS
Reaffirms Outlook for Net Sales and Adjusted EBITDA; Raises Free Cash Flow Outlook
GREENVILLE, SC -- May 7, 2026 -- ScanSource, Inc. (NASDAQ: SCSC), a leading technology distributor uniquely positioned to address complex, converging technologies, today announced financial results for the third quarter ended March 31, 2026.
| Third Quarter Summary | ||||||||||||||||||||
| Q3 FY26 | Q3 FY25 | Change | ||||||||||||||||||
| (in thousands, except percentages and per share data) | ||||||||||||||||||||
Select reported measures: | ||||||||||||||||||||
| Net sales | $ | 766,790 | $ | 704,847 | 8.8% | |||||||||||||||
| Gross profit | $ | 107,124 | $ | 100,202 | 6.9% | |||||||||||||||
| Gross profit margin % | 14.0 | % | 14.2 | % | -25bp | |||||||||||||||
| Operating income | $ | 23,120 | $ | 22,339 | 3.5% | |||||||||||||||
| GAAP net income | $ | 16,885 | $ | 17,431 | -3.1% | |||||||||||||||
| GAAP diluted EPS | $ | 0.78 | $ | 0.74 | 5.4% | |||||||||||||||
Select Non-GAAP measures*: | ||||||||||||||||||||
| Adjusted EBITDA | $ | 35,621 | $ | 35,053 | 1.6% | |||||||||||||||
| Adjusted EBITDA margin % | 4.65 | % | 4.97 | % | -32bp | |||||||||||||||
| Non-GAAP net income | $ | 20,372 | $ | 20,298 | 0.4% | |||||||||||||||
| Non-GAAP diluted EPS | $ | 0.94 | $ | 0.86 | 9.3% | |||||||||||||||
| Note: Margin % reflects measure as a percentage of sales. | ||||||||||||||||||||
* Represents non-GAAP financial measures. For more information and a reconciliation to the most directly comparable GAAP financial measure, see "Non-GAAP Financial Information" below as well as the accompanying Supplementary Information. | ||||||||||||||||||||
“The ScanSource team delivered strong third quarter results,” said Mike Baur, Chair and CEO, ScanSource, Inc. “Our results give us confidence in our annual outlook and three-year strategic goals.”
Quarterly Results
Net sales for the third quarter of fiscal year 2026 totaled $766.8 million, an increase of 8.8% year-over-year, or an increase of 7.6% on a non-GAAP basis. Net sales for products and services increased 9.1% year-over-year, and recurring revenue increased 3.6% year-over-year including acquisitions. For Specialty Technology Solutions, third quarter net sales of $740.8 million increased 9.2% year-over-year, driven by growth across most technologies in North America. Intelisys & Advisory net sales for the third quarter decreased 1.5% year-over-year to $26.0 million primarily from lower Resourcive sales.
Gross profit for the third quarter of fiscal year 2026 increased 6.9% year-over-year to $107.1 million, with a gross profit margin of 14.0% versus 14.2% in the prior-year quarter. For the third quarter of fiscal year 2026, the percentage of gross profit from recurring revenue totaled 34.7% compared to 35.5% for the prior-year period.
For the third quarter of fiscal year 2026, operating income increased to $23.1 million from $22.3 million in the prior-year quarter. Third quarter fiscal year 2026 non-GAAP operating income increased to $27.7 million from $26.6 million in the prior-year quarter.
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On a GAAP basis, net income for the third quarter of fiscal year 2026 totaled $16.9 million, or $0.78 per diluted share, compared to net income of $17.4 million, or $0.74 per diluted share, for the prior-year quarter. Third quarter fiscal year 2026 non-GAAP net income increased to $20.4 million, or $0.94 per diluted share, from $20.3 million, or $0.86 per diluted share, for the prior-year quarter. On a non-GAAP basis, adjusted EBITDA for the third quarter of fiscal year 2026 totaled $35.6 million, or 4.65% of net sales, compared to $35.1 million, or 4.97% of net sales, for the prior-year quarter.
Balance Sheet and Cash Flow
As of March 31, 2026, ScanSource had cash and cash equivalents of $120.3 million and total debt of $102.0 million.
For fiscal year 2026, ScanSource has generated $125.4 million of operating cash flow and $118.6 million of free cash flow (non-GAAP). ScanSource also had share repurchases of $71.4 million for the first nine months of fiscal 2026.
Annual Financial Outlook for Fiscal Year 2026
ScanSource raises its expectation for free cash flow for the full fiscal year ended June 30, 2026 and replaces previously provided guidance.
| FY26 Annual Outlook | FY26 Prior Annual Outlook | ||||||||||
| Net sales | $3.0 billion to $3.1 billion | $3.0 billion to $3.1 billion | |||||||||
| Adjusted EBITDA (non-GAAP) | $140 million to $150 million | $140 million to $150 million | |||||||||
| Free cash flow (non-GAAP) | At least $90 million | At least $80 million | |||||||||
Adjusted EBITDA is a non-GAAP measure, which excludes estimates for amortization of intangible assets, depreciation expense, and non-cash shared-based compensation expense. Free cash flow is a non-GAAP measure, which excludes the effect of estimated capital expenditures from estimated operating cash flow. These measures are forward-looking, and actual results may differ materially.
ScanSource believes that a quantitative reconciliation of such forward-looking information to the most directly comparable GAAP financial measures cannot be made without unreasonable efforts, because a reconciliation of these non-GAAP financial measures would require an estimate of future non-operating items such as acquisitions and divestitures, restructuring costs, impairment charges and other unusual or non-recurring items. Neither the timing nor likelihood of these events, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, a reconciliation of such forward-looking information to the most directly comparable GAAP financial measures is not provided.
Webcast Details and Earnings Infographic
At approximately 8:45 a.m. ET today, an Earnings Infographic, as a supplement to this press release and the earnings conference call, will be available on ScanSource's website, www.scansource.com (Investor Relations section). ScanSource will present additional information about its financial results and business in a conference call today, May 7, 2026, at 10:30 a.m. ET. A webcast of the call will be available for all interested parties and can be accessed at www.scansource.com (Investor Relations section). The webcast will be available for replay for 60 days.
Safe Harbor Statement
This press release contains “forward-looking” statements, including ScanSource's FY26 annual outlook, which involve risks and uncertainties, many of which are beyond ScanSource's control. No undue reliance should be placed on such statements, as any number of factors could cause actual results to differ materially from anticipated or forecasted results, including, but not limited to, the following factors, which are neither presented in order of importance nor weighted: macroeconomic conditions, including potential prolonged economic weakness, inflation, tariffs and changes in trade policy, the failure to manage and implement ScanSource's growth strategy, the ability for ScanSource to realize the synergies or other benefits from acquisitions, credit risks involving ScanSource's larger channel sales partners and suppliers, changes in interest and exchange rates and regulatory regimes impacting ScanSource's international operations, including new or increased tariffs, risk to the business from a cyberattack, a failure of IT systems, failure to hire and retain quality employees, loss of ScanSource's major channel sales partners, relationships with key suppliers and channel sales partners or a termination or a modification of the terms under which it operates with these key suppliers and channel sales partners, changes in ScanSource's operating strategy, and other factors set forth in the "Risk Factors" contained in ScanSource's annual report on Form 10-K for the year ended June 30, 2025. Except as
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may be required by law, ScanSource expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release or otherwise.
Non-GAAP Financial Information
In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles ("GAAP"), ScanSource also discloses certain non-GAAP financial measures, which are summarized below. Non-GAAP financial measures are used to understand and evaluate performance, including comparisons from period to period. Non-GAAP results exclude items such as amortization of intangible assets related to acquisitions, acquisition and divestiture costs, gain/loss on sale of business, and restructuring costs and include other non-GAAP adjustments.
Net sales on a constant currency basis excluding acquisitions and divestitures to calculate organic growth ("non-GAAP net sales"): ScanSource discloses the percentage change in net sales excluding the translation impact from changes in foreign currency exchange rates between reporting periods and excluding the net sales from acquisitions and divestitures prior to the first full year from the transaction date. This measure enhances the comparability between periods to help analyze underlying trends on an organic basis.
Adjusted earnings before interest expense, income taxes, depreciation, and amortization (“Adjusted EBITDA”): Adjusted EBITDA starts with net income and adds back interest expense, income tax expense, depreciation expense, amortization of intangible assets, change in fair value of contingent consideration, and other non-GAAP adjustments, including acquisition and divestiture costs, restructuring costs, cyberattack restoration costs, tax recovery, and non-cash share-based compensation expense. Since Adjusted EBITDA excludes some non-cash costs of investing in ScanSource’s business and people, management believes that Adjusted EBITDA shows the profitability from the business operations more clearly. The Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of net sales.
Adjusted return on invested capital ("Adjusted ROIC"): Adjusted ROIC assists management in comparing ScanSource's performance over various reporting periods on a consistent basis because it removes from operating results the impact of items that do not reflect core operating performance. Management believes the calculation of Adjusted ROIC provides useful information to investors and is an additional relevant comparison of its performance. Adjusted ROIC is calculated as Adjusted EBITDA over invested capital. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period. Management believes the calculation of Adjusted ROIC provides useful information to investors and is an additional relevant comparison of ScanSource's performance during the year.
Free cash flow: ScanSource presents free cash flow as it is a measure used by management to measure our business. ScanSource believes this measure provides more information regarding liquidity and capital resources. Free cash flow is defined as net cash provided by operating activities less capital expenditures.
Net debt: Net debt includes total balance sheet debt less cash and cash equivalents. ScanSource believes this measure is useful in assessing its borrowing capacity.
Additional Non-GAAP Metrics: To evaluate current period performance on a more consistent basis with prior periods, ScanSource discloses non-GAAP SG&A expenses, non-GAAP operating income, non-GAAP pre-tax income, non-GAAP net income, and non-GAAP diluted earnings per share (non-GAAP diluted EPS). These non-GAAP results exclude amortization of intangible assets related to acquisitions, change in fair value of contingent consideration, acquisition and divestiture costs, restructuring costs, and other non-GAAP adjustments. These metrics include the translation impact of changes in foreign currency exchange rates. Non-GAAP metrics are useful in assessing and understanding ScanSource's performance especially when comparing results with previous periods or forecasting performance for future periods.
These non-GAAP financial measures have limitations as analytical tools, and the non-GAAP financial measures that ScanSource reports may not be comparable to similarly titled amounts reported by other companies. Analysis of results and outlook on a non-GAAP basis should be considered in addition to, and not in substitution for or as superior to, measurements of financial performance prepared in accordance with GAAP. A reconciliation of ScanSource's non-GAAP financial information to GAAP is set forth in the Supplementary Information (Unaudited) below.
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About ScanSource, Inc.
ScanSource, Inc. (NASDAQ: SCSC) is a leading technology distributor uniquely positioned to address complex, converging technologies and to accelerate growth for channel sales partners across hardware, software as a service (SaaS), connectivity and cloud services. ScanSource enables channel sales partners to deliver converging solutions for their end users. ScanSource uses multiple sales models to offer technology solutions from leading suppliers of specialty technologies, connectivity and cloud services. Founded in 1992 and headquartered in Greenville, South Carolina, ScanSource was named one of the 2025 Best Places to Work in South Carolina and on the Fortune World’s Most Admired Companies 2026 list. ScanSource ranks #875 on the Fortune 1000. For more information, visit www.scansource.com.
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SCANSOURCE DELIVERS STRONG THIRD QUARTER RESULTS
| ScanSource, Inc. and Subsidiaries | |||||||||||
| Condensed Consolidated Balance Sheets (Unaudited) | |||||||||||
| (in thousands, except share data) | |||||||||||
| March 31, 2026 | June 30, 2025* | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 120,295 | $ | 126,157 | |||||||
Accounts receivable, less allowance of $28,931 at March 31, 2026 and $27,821 at June 30, 2025 | 628,442 | 635,521 | |||||||||
| Inventories | 486,628 | 483,815 | |||||||||
| Prepaid income tax expense | 10,083 | 2,821 | |||||||||
| Prepaid expenses and other current assets | 126,384 | 122,138 | |||||||||
| Total current assets | 1,371,832 | 1,370,452 | |||||||||
| Property and equipment, net | 33,771 | 31,169 | |||||||||
| Goodwill | 244,928 | 230,820 | |||||||||
| Identifiable intangible assets, net | 68,422 | 62,909 | |||||||||
| Deferred income taxes | 15,911 | 18,769 | |||||||||
| Other non-current assets | 70,892 | 71,487 | |||||||||
| Total assets | $ | 1,805,756 | $ | 1,785,606 | |||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 646,650 | $ | 598,595 | |||||||
| Accrued expenses and other current liabilities | 70,649 | 71,263 | |||||||||
| Current portion of contingent consideration | 16,374 | 1,318 | |||||||||
| Income taxes payable | 275 | 3,927 | |||||||||
| Current portion of long-term debt | 2,866 | 7,861 | |||||||||
| Total current liabilities | 736,814 | 682,964 | |||||||||
| Long-term debt, net of current portion | 99,172 | 128,288 | |||||||||
| Long-term portion of contingent consideration | 12,666 | 17,782 | |||||||||
| Other long-term liabilities | 50,843 | 50,163 | |||||||||
| Total liabilities | 899,495 | 879,197 | |||||||||
| Commitments and contingencies | |||||||||||
| Shareholders’ equity: | |||||||||||
Preferred stock, no par value; 3,000,000 shares authorized, none issued | — | — | |||||||||
Common stock, no par value; 45,000,000 shares authorized, 20,781,041 and 22,217,421 shares issued and outstanding at March 31, 2026 and June 30, 2025, respectively | — | — | |||||||||
| Retained earnings | 1,014,902 | 1,020,833 | |||||||||
| Accumulated other comprehensive loss | (108,641) | (114,424) | |||||||||
| Total shareholders’ equity | 906,261 | 906,409 | |||||||||
| Total liabilities and shareholders’ equity | $ | 1,805,756 | $ | 1,785,606 | |||||||
| *Derived from audited financial statements. | |||||||||||
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SCANSOURCE DELIVERS STRONG THIRD QUARTER RESULTS
| ScanSource, Inc. and Subsidiaries | |||||||||||||||||||||||
| Condensed Consolidated Income Statements (Unaudited) | |||||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||||
| Quarter ended March 31, | Nine months ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net sales | $ | 766,790 | $ | 704,847 | $ | 2,272,953 | $ | 2,227,924 | |||||||||||||||
| Cost of goods sold | 659,666 | 604,645 | 1,955,446 | 1,924,380 | |||||||||||||||||||
| Gross profit | 107,124 | 100,202 | 317,507 | 303,544 | |||||||||||||||||||
| Selling, general and administrative expenses | 78,066 | 69,698 | 231,455 | 215,324 | |||||||||||||||||||
| Depreciation expense | 1,497 | 2,320 | 4,508 | 8,079 | |||||||||||||||||||
| Intangible amortization expense | 4,001 | 4,941 | 12,690 | 14,300 | |||||||||||||||||||
| Restructuring and other charges | — | — | — | 5,381 | |||||||||||||||||||
| Change in fair value of contingent consideration | 440 | 904 | 1,963 | 2,047 | |||||||||||||||||||
| Operating income | 23,120 | 22,339 | 66,891 | 58,413 | |||||||||||||||||||
| Interest expense | 1,303 | 1,836 | 5,163 | 5,914 | |||||||||||||||||||
| Interest income | (2,451) | (2,841) | (8,994) | (8,193) | |||||||||||||||||||
| Other expense (income), net | 216 | (882) | 253 | (6,206) | |||||||||||||||||||
| Income before income taxes | 24,052 | 24,226 | 70,469 | 66,898 | |||||||||||||||||||
| Provision for income taxes | 7,167 | 6,795 | 17,214 | 15,440 | |||||||||||||||||||
| Net income | $ | 16,885 | $ | 17,431 | $ | 53,255 | $ | 51,458 | |||||||||||||||
| Per share data: | |||||||||||||||||||||||
| Net income per common share, basic | $ | 0.79 | $ | 0.75 | $ | 2.45 | $ | 2.17 | |||||||||||||||
| Weighted-average shares outstanding, basic | 21,305 | 23,275 | 21,732 | 23,746 | |||||||||||||||||||
| Net income per common share, diluted | $ | 0.78 | $ | 0.74 | $ | 2.42 | $ | 2.13 | |||||||||||||||
| Weighted-average shares outstanding, diluted | 21,578 | 23,604 | 22,013 | 24,165 | |||||||||||||||||||
6
SCANSOURCE DELIVERS STRONG THIRD QUARTER RESULTS
| ScanSource, Inc. and Subsidiaries | |||||||||||
| Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||||||
| (in thousands) | |||||||||||
| Nine months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 53,255 | $ | 51,458 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 17,851 | 23,095 | |||||||||
| Amortization of debt issue costs | 525 | 289 | |||||||||
| Provision for doubtful accounts | 5,376 | 7,699 | |||||||||
| Share-based compensation | 10,491 | 8,388 | |||||||||
| Deferred income taxes | (1,609) | 1,938 | |||||||||
| Change in fair value of contingent consideration | 1,963 | 2,047 | |||||||||
| Finance lease interest | 42 | 69 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | 7,334 | 13,441 | |||||||||
| Inventories | (1,272) | 34,576 | |||||||||
| Prepaid expenses and other assets | (10,978) | 8,013 | |||||||||
| Other non-current assets | 2,037 | 4,344 | |||||||||
| Accounts payable | 44,928 | (50,359) | |||||||||
| Accrued expenses and other liabilities | (886) | (5,632) | |||||||||
| Income taxes payable | (3,654) | 5,338 | |||||||||
| Net cash provided by operating activities | 125,403 | 104,704 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | (6,769) | (5,769) | |||||||||
| Cash paid for business acquisitions, net of cash acquired | (18,220) | (56,673) | |||||||||
| Proceeds from sale of business, net of cash transferred | — | 2,569 | |||||||||
| Net cash used in investing activities | (24,989) | (59,873) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Borrowings on revolving credit | 189,385 | 38,336 | |||||||||
| Repayments on revolving credit | (189,385) | (38,386) | |||||||||
| Borrowings on long-term debt | 100,000 | — | |||||||||
| Repayments on long-term debt | (134,111) | (5,982) | |||||||||
| Repayments on finance lease obligation | (763) | (818) | |||||||||
| Debt issuance costs | (1,394) | — | |||||||||
| Contingent consideration payments | (1,375) | — | |||||||||
| Exercise of stock options | 4,856 | 9,504 | |||||||||
| Taxes paid on settlement of equity awards | (2,855) | (4,819) | |||||||||
| Common stock repurchased, including excise tax | (71,385) | (81,259) | |||||||||
| Net cash used in financing activities | (107,027) | (83,424) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 751 | (580) | |||||||||
| Decrease in cash and cash equivalents | (5,862) | (39,173) | |||||||||
| Cash and cash equivalents at beginning of period | 126,157 | 185,460 | |||||||||
| Cash and cash equivalents at period end | $ | 120,295 | $ | 146,287 | |||||||
7
SCANSOURCE DELIVERS STRONG THIRD QUARTER RESULTS
| ScanSource, Inc. and Subsidiaries | |||||||||||
| Supplementary Information (Unaudited) | |||||||||||
| (in thousands, except percentages) | |||||||||||
| Non-GAAP Financial Information: | |||||||||||
| Quarter ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Reconciliation of Net Income to Adjusted EBITDA: | |||||||||||
| Net income (GAAP) | $ | 16,885 | $ | 17,431 | |||||||
| Plus: Interest expense | 1,303 | 1,836 | |||||||||
| Plus: Income taxes | 7,167 | 6,795 | |||||||||
| Plus: Depreciation and amortization | 5,713 | 7,492 | |||||||||
| EBITDA (non-GAAP) | 31,068 | 33,554 | |||||||||
| Plus: Change in fair value of contingent consideration | 440 | 904 | |||||||||
| Plus: Share-based compensation | 3,955 | 2,896 | |||||||||
Plus: Acquisition costs (a) | 142 | 204 | |||||||||
| Plus: Cyberattack restoration costs | 16 | 71 | |||||||||
| Plus: Tax recovery | — | (1,820) | |||||||||
| Plus: Insurance recovery, net of payments | — | (756) | |||||||||
| Adjusted EBITDA (numerator for Adjusted ROIC) (non-GAAP) | $ | 35,621 | $ | 35,053 | |||||||
| Invested Capital Calculations: | |||||||||||
| Equity – beginning of the period | $ | 910,886 | $ | 900,662 | |||||||
| Equity – end of the period | 906,261 | 901,746 | |||||||||
| Plus: Change in fair value of contingent consideration, net | 330 | 681 | |||||||||
| Plus: Share-based compensation, net | 2,963 | 2,176 | |||||||||
Plus: Acquisition costs (a) | 141 | 204 | |||||||||
| Plus: Cyberattack restoration costs, net | 12 | 54 | |||||||||
| Plus: Tax recovery, net | — | (1,201) | |||||||||
| Plus: Insurance recovery, net | — | (570) | |||||||||
| Average equity | 910,297 | 901,876 | |||||||||
Average funded debt (b) | 103,210 | 140,207 | |||||||||
| Invested capital (denominator for Adjusted ROIC) (non-GAAP) | $ | 1,013,507 | $ | 1,042,083 | |||||||
Adjusted return on invested capital ratio (Adjusted ROIC), annualized (c) | 14.3 | % | 13.6 | % | |||||||
| (a) Acquisition costs are generally non-deductible for tax purposes. | |||||||||||
(b) Average funded debt is calculated as the average daily amounts outstanding on short-term and long-term interest-bearing debt. | |||||||||||
(c) The annualized adjusted EBITDA amount is divided by days in the quarter times 365 days per year, or 366 days for leap year. There were 90 days in the current quarter and prior-year quarter. | |||||||||||
8
SCANSOURCE DELIVERS STRONG THIRD QUARTER RESULTS
| ScanSource, Inc. and Subsidiaries | |||||||||||||||||
| Supplementary Information (Unaudited) | |||||||||||||||||
| Net Sales by Segment: | |||||||||||||||||
| Quarter ended March 31, | |||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||
| Specialty Technology Solutions: | (in thousands) | ||||||||||||||||
| Net sales, reported | $ | 740,765 | $ | 678,433 | 9.2 | % | |||||||||||
Foreign exchange impact (a) | (5,679) | — | |||||||||||||||
| Less: Acquisitions | (2,519) | — | |||||||||||||||
| Non-GAAP net sales | $ | 732,567 | $ | 678,433 | 8.0 | % | |||||||||||
| Intelisys & Advisory: | |||||||||||||||||
| Net sales, reported | $ | 26,025 | $ | 26,414 | (1.5) | % | |||||||||||
| Consolidated: | |||||||||||||||||
| Net sales, reported | $ | 766,790 | $ | 704,847 | 8.8 | % | |||||||||||
Foreign exchange impact (a) | (5,679) | — | |||||||||||||||
| Less: Acquisitions | (2,519) | — | |||||||||||||||
| Non-GAAP net sales | $ | 758,592 | $ | 704,847 | 7.6 | % | |||||||||||
(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended March 31, 2026 into U.S. dollars using the average foreign exchange rates for the quarter ended March 31, 2025. | |||||||||||||||||
| Net Sales by Revenue Type: | ||||||||||||||||||||
| Quarter ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | % Change | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Net sales by product/service: | ||||||||||||||||||||
| Products and services | $ | 725,739 | $ | 665,229 | 9.1 | % | ||||||||||||||
Recurring revenue(a) | 41,051 | 39,618 | 3.6 | % | ||||||||||||||||
| $ | 766,790 | $ | 704,847 | 8.8 | % | |||||||||||||||
(a) Recurring revenue represents revenue primarily from agency commissions, managed connectivity, SaaS, subscriptions, and hardware rentals. | ||||||||||||||||||||
9
SCANSOURCE DELIVERS STRONG THIRD QUARTER RESULTS
| ScanSource, Inc. and Subsidiaries | |||||||||||||||||
| Supplementary Information (Unaudited) | |||||||||||||||||
| Net Sales by Geography: | |||||||||||||||||
| Quarter ended March 31, | |||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||
| United States: | (in thousands) | ||||||||||||||||
Net sales, reported (a) | $ | 710,281 | $ | 656,964 | 8.1 | % | |||||||||||
| Less: Acquisitions | (2,519) | — | |||||||||||||||
| Non-GAAP net sales | $ | 707,762 | $ | 656,964 | 7.7 | % | |||||||||||
| Brazil: | |||||||||||||||||
Net sales, reported (b) | $ | 56,509 | $ | 47,883 | 18.0 | % | |||||||||||
Foreign exchange impact (c) | (5,679) | — | |||||||||||||||
| Non-GAAP net sales | $ | 50,830 | $ | 47,883 | 6.2 | % | |||||||||||
| Consolidated: | |||||||||||||||||
| Net sales, reported | $ | 766,790 | $ | 704,847 | 8.8 | % | |||||||||||
Foreign exchange impact (c) | (5,679) | — | |||||||||||||||
| Less: Acquisitions | (2,519) | — | |||||||||||||||
| Non-GAAP net sales | $ | 758,592 | $ | 704,847 | 7.6 | % | |||||||||||
(a) Includes net sales in Canada that are supported by U.S. operations and represent less than 5% of United States net sales for the quarters ended March 31, 2026 and 2025. | |||||||||||||||||
(b) Includes net sales from outside of the United States, Canada and Brazil, which represent less than 0.1% of Brazil net sales for the quarters ended March 31, 2026 and 2025. | |||||||||||||||||
(c) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended March 31, 2026 into U.S. dollars using the average foreign exchange rates for the quarter ended March 31, 2025. | |||||||||||||||||
| Free Cash Flow: | |||||||||||||||||||||||
| Quarter ended March 31, | Nine months ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| GAAP operating cash flow | $ | 71,353 | $ | 66,058 | $ | 125,403 | $ | 104,704 | |||||||||||||||
| Less: Capital expenditures | (2,399) | (1,420) | (6,769) | (5,769) | |||||||||||||||||||
| Free cash flow (non-GAAP) | $ | 68,954 | $ | 64,638 | $ | 118,634 | $ | 98,935 | |||||||||||||||
10
SCANSOURCE DELIVERS STRONG THIRD QUARTER RESULTS
| ScanSource, Inc. and Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Supplementary Information (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Other Non-GAAP Financial Information: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP Measure | Intangible amortization expense | Change in fair value of contingent consideration | Acquisition costs (a) | Insurance Recovery | Tax recovery | Cyberattack restoration costs | Non-GAAP measure | |||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| SG&A expenses | $ | 78,066 | $ | — | $ | — | $ | (142) | $ | — | $ | — | $ | (16) | $ | 77,908 | ||||||||||||||||||||||||||||||||||
| Operating income | 23,120 | 4,001 | 440 | 142 | — | — | 16 | 27,719 | ||||||||||||||||||||||||||||||||||||||||||
| Pre-tax income | 24,052 | 4,001 | 440 | 142 | — | — | 16 | 28,651 | ||||||||||||||||||||||||||||||||||||||||||
| Net income | 16,885 | 3,003 | 330 | 142 | — | — | 12 | 20,372 | ||||||||||||||||||||||||||||||||||||||||||
| Diluted EPS | $ | 0.78 | $ | 0.14 | $ | 0.02 | $ | 0.01 | $ | — | $ | — | $ | — | $ | 0.94 | ||||||||||||||||||||||||||||||||||
| Quarter ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP Measure | Intangible amortization expense | Change in fair value of contingent consideration | Acquisition costs (a) | Insurance Recovery | Tax recovery | Cyberattack restoration costs | Non-GAAP measure | |||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| SG&A expense | $ | 69,698 | $ | — | $ | — | $ | (204) | $ | — | $ | 1,820 | $ | (71) | $ | 71,243 | ||||||||||||||||||||||||||||||||||
| Operating income | 22,339 | 4,941 | 904 | 204 | — | (1,820) | 71 | 26,639 | ||||||||||||||||||||||||||||||||||||||||||
| Pre-tax income | 24,226 | 4,941 | 904 | 204 | (756) | (1,820) | 71 | 27,770 | ||||||||||||||||||||||||||||||||||||||||||
| Net income | 17,431 | 3,699 | 681 | 204 | (570) | (1,201) | 54 | 20,298 | ||||||||||||||||||||||||||||||||||||||||||
| Diluted EPS | $ | 0.74 | $ | 0.16 | $ | 0.03 | $ | 0.01 | $ | (0.02) | $ | (0.05) | $ | — | $ | 0.86 | ||||||||||||||||||||||||||||||||||
(a) Acquisition costs for the quarters ended March 31, 2026 and March 31, 2025 are generally nondeductible for tax purposes.
11
Fiscal Third Quarter 2026 Earnings Key Highlights © ScanSource 2026 Consolidated The ScanSource team delivered strong third quarter results. Our results give us confidence in our annual outlook and three-year strategic goals.” Mike Baur Chair and CEO, ScanSource, Inc. Improved Hardware Demand Driving Profitable Growth Strong Free Cash Flow Conversion; Raising FCF Outlook Progress Across 3-Year Strategic Goals Hardware Demand Drove 9% Sales Growth Specialty Technology Solutions Segment Intelisys & Advisory Segment Q3 Net Sales +9% Y/Y $767M Q3 Gross Profit +7% Y/Y $107M, 14.0% margin STS, Net Sales +9% Y/Y $741M STS, Gross Profit +10% Y/Y $81M, 11.0% margin I&A, Net Sales -1.5% Y/Y $26M I&A, Gross Profit -2% Y/Y $26M, 98.8% margin
* Non-GAAP measure For further financial data, non-GAAP financial disclosures and cautionary language regarding forward-looking statements, please refer to the following pages and ScanSource’s third quarter fiscal year 2026 news release issued on May 7, 2026, which accompanies this presentation and is available at www.scansource.com in the Investor Relations section [click here]. Third Quarter Operating Metrics 3-Year Strategic Goals Fiscal Year 2026 Annual Outlook updated May 7, 2026 © ScanSource 2026 2 Net Sales $3.0 billion to $3.1 billion Adjusted EBITDA* $140 million to $150 million Free Cash Flow* At least $90 million Gross Profit Growth CAGR Recurring Revenue GP as % Gross Profit Adjusted EBITDA Margin* Free Cash Flow Conversion as % Non-GAAP Net Income* Adjusted ROIC* 5%-7% Build to 50% ~6% Consistent 80%+ annual basis Mid-Teens $0.78 per share GAAP Diluted EPS +5% Y/Y $35.6M, +2% Y/Y Adjusted EBITDA* 4.65% Adjusted EBITDA Margin* $125M YTD Operating Cash Flow $119M YTD Free Cash Flow* $0.94 per share Non-GAAP Diluted EPS* +9% Y/Y (0.1)x Net Debt* to TTM Adjusted EBITDA* 14.3% Adjusted ROIC* $33M in Q3 share repurchases
Forward-Looking Statements This Earnings Infographic and supporting materials contain “forward-looking” statements, including ScanSource's FY26 annual outlook and mid-term goals, which involve risks and uncertainties, many of which are beyond ScanSource’s control. No undue reliance should be placed on such statements, as any number of factors could cause actual results to differ materially from anticipated or forecasted results, including, but not limited to, the following factors, which are neither presented in order of importance nor weighted: macroeconomic conditions, including potential prolonged economic weakness, inflation, tariffs and changes in trade policy, the failure to manage and implement ScanSource's growth strategy, the ability for ScanSource to realize the synergies or other benefits from acquisitions, credit risks involving ScanSource's larger channel sales partners and suppliers, changes in interest and exchange rates and regulatory regimes impacting ScanSource's international operations, including new or increased tariffs, risk to the business from a cyberattack, a failure of IT systems, failure to hire and retain quality employees, loss of ScanSource's major channel sales partners, relationships with key suppliers and channel sales partners or a termination or a modification of the terms under which it operates with these key suppliers and channel sales partners, changes in ScanSource's operating strategy, and other factors set forth in the "Risk Factors" contained in ScanSource's annual report on Form 10-K for the year ended June 30, 2025, and subsequent reports on Form 10-Q, filed with the Securities and Exchange Commission. Except as may be required by law, ScanSource expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this Earnings Infographic or otherwise. Non-GAAP Financial Information In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”), ScanSource also discloses certain non-GAAP measures, including non-GAAP SG&A expenses, non-GAAP operating income, non-GAAP operating income margin, non-GAAP pre-tax income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, adjusted EBITDA margin, net debt, adjusted ROIC, free cash flow and net sales in constant currency excluding acquisitions (organic growth). A reconciliation of the Company's non-GAAP financial information to GAAP financial information is provided in the following supporting materials and in the Company’s Form 8-K, filed with the SEC, with the quarterly earnings press release for the period indicated. Please see the “Non-GAAP Financial Information” section in the quarterly earnings press release for additional description of ScanSource’s non-GAAP measures. ScanSource discloses forward-looking information that is not presented in accordance with GAAP with respect to adjusted EBITDA, adjusted EBITDA margin, adjusted ROIC, and free cash flow. ScanSource believes that a quantitative reconciliation of such forward-looking information to the most directly comparable GAAP financial measure cannot be made without unreasonable efforts, because a reconciliation of these non-GAAP financial measures would require an estimate of future non-operating items such as acquisitions and divestitures, restructuring costs, impairment charges and other unusual or non-recurring items. Neither the timing nor likelihood of these events, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, a reconciliation of such forward- looking information to the most directly comparable GAAP financial measure is not provided. 3
Consolidated, 5-Quarter Financial Summary ($ in thousands, except per share data) Q3 FY26 Q2 FY26 Q1 FY26 Q4 FY25 Q3 FY25 Q/Q Y/Y Select reported GAAP measures: Net sales $ 766,790 $ 766,512 $ 739,650 $ 812,886 $ 704,847 —% 9% Gross profit $ 107,124 $ 102,910 $ 107,473 $ 105,102 $ 100,202 4% 7% Gross profit margin % 14.0 % 13.4 % 14.5 % 12.9 % 14.2 % 54 bp (25) bp SG&A expenses $ 78,066 $ 78,114 $ 75,275 $ 71,610 $ 69,698 —% 12% Operating income $ 23,120 $ 17,868 $ 25,903 $ 26,787 $ 22,339 29% 3% Operating income margin % 3.02 % 2.33 % 3.50 % 3.30 % 3.17 % 68 bp (15) bp Net income $ 16,885 $ 16,493 $ 19,878 $ 20,089 $ 17,431 2% (3)% Diluted EPS $ 0.78 $ 0.75 $ 0.89 $ 0.88 $ 0.74 4% 5% Select reported non-GAAP measures: Non-GAAP operating income $ 27,719 $ 23,219 $ 30,911 $ 31,288 $ 26,639 19% 4% Non-GAAP operating income margin % 3.61 % 3.03 % 4.18 % 3.85 % 3.78 % 59 bp (16) bp Non-GAAP net income $ 20,372 $ 17,611 $ 23,685 $ 23,322 $ 20,298 16% —% Non-GAAP diluted EPS $ 0.94 $ 0.80 $ 1.06 $ 1.02 $ 0.86 18% 9% Adjusted EBITDA (non-GAAP) $ 35,621 $ 31,193 $ 38,590 $ 38,639 $ 35,053 14% 2% Adjusted EBITDA margin % (non-GAAP) 4.65 % 4.07 % 5.22 % 4.75 % 4.97 % 58 bp (33) bp Adjusted ROIC (non-GAAP) 14.3 % 11.9 % 14.6 % 14.9 % 13.6 % 240 bp 70 bp Operating cash flow (QTR) $ 71,353 $ 30,838 $ 23,211 $ 7,644 $ 66,058 Less: Capital expenditures (QTR) $ (2,399) $ (1,975) $ (2,395) $ (2,517) $ (1,420) Free cash flow (QTR) (Non-GAAP) $ 68,954 $ 28,863 $ 20,816 $ 5,127 $ 64,638 Operating cash flow (TTM) $ 133,046 $ 127,751 $ 90,723 $ 112,342 $ 159,436 Less: Capital expenditures (TTM) $ (9,286) $ (8,307) $ (8,306) $ (8,286) $ (7,039) Free cash flow (TTM) (Non-GAAP) $ 123,760 $ 119,444 $ 82,417 $ 104,056 $ 152,397 Note: Margin % reflects measure as a percentage of net sales. ScanSource, Inc. Earnings Infographic Q3 FY2026 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 4 May 7, 2026
Specialty Technology Solutions, 5-Quarter Financial Summary ($ in thousands) Q3 FY26 Q2 FY26 Q1 FY26 Q4 FY25 Q3 FY25 Q/Q Y/Y Net sales $ 740,765 $ 741,540 $ 715,447 $ 788,708 $ 678,433 —% 9% Gross profit $ 81,421 $ 78,228 $ 83,903 $ 81,187 $ 73,994 4% 10% Gross profit margin % 11.0 % 10.5 % 11.7 % 10.3 % 10.9 % 44 bp 8 bp GAAP operating income $ 15,133 $ 11,001 $ 20,375 $ 20,937 $ 14,294 38% 6% GAAP operating income margin % 2.04 % 1.48 % 2.85 % 2.65 % 2.11 % 56 bp (6) bp Add: Intangible amortization expense $ 1,812 $ 2,097 $ 2,216 $ 2,739 $ 2,753 Add: Change in fair value $ 410 $ 1,128 $ 145 $ (1,407) $ 94 Add: Tax recovery(a) $ — $ (789) $ — $ (470) $ (1,820) Non-GAAP operating income $ 17,355 $ 13,437 $ 22,736 $ 21,799 $ 15,321 29% 13% Non-GAAP operating income margin % 2.34 % 1.81 % 3.18 % 2.76 % 2.26 % 53 bp 9 bp Reconciliation of Operating Income to Adjusted EBITDA GAAP operating income $ 15,133 $ 11,001 $ 20,375 $ 20,937 $ 14,294 38% 6% Plus: Depreciation expense 1,658 1,606 1,753 2,134 2,511 Intangible amortization expense 1,812 2,097 2,216 2,739 2,753 Interest income 2,246 3,132 2,926 2,744 2,598 Other (expense)/income, net (216) (650) (186) (491) 124 EBITDA (non-GAAP) 20,633 17,186 27,084 28,063 22,280 20% (7)% Adjustments: Share-based compensation expense 3,641 3,347 2,551 2,419 2,664 9% 37% Change in fair value 410 1,128 145 (1,407) 94 Tax recovery(a) — (789) — (470) (1,820) Adjusted EBITDA (non-GAAP) $ 24,684 $ 20,872 $ 29,780 $ 28,605 $ 23,218 18% 6% Adjusted EBITDA margin % (non-GAAP) 3.33 % 2.81 % 4.16 % 3.63 % 3.42 % 52 bp (9) bp (a) Recovery of prior period indirect taxes in Brazil ScanSource, Inc. Earnings Infographic Q3 FY2026 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 5 May 7, 2026
Intelisys & Advisory, 5-Quarter Financial Summary ($ in thousands) Q3 FY26 Q2 FY26 Q1 FY26 Q4 FY25 Q3 FY25 Q/Q Y/Y Net sales $ 26,025 $ 24,972 $ 24,203 $ 24,178 $ 26,414 4% (1)% Gross profit $ 25,703 $ 24,682 $ 23,570 $ 23,915 $ 26,208 4% (2)% Gross profit margin % 98.8 % 98.8 % 97.4 % 98.9 % 99.2 % — bp (40) bp GAAP operating income $ 8,145 $ 7,513 $ 5,818 $ 6,041 $ 8,320 8% (2)% GAAP operating income margin % 31.30 % 30.09 % 24.04 % 24.99 % 31.50 % 121 bp (20) bp Add: Intangible amortization expense $ 2,188 $ 2,188 $ 2,188 $ 2,188 $ 2,188 Add: Change in fair value $ 30 $ 81 $ 169 $ 1,260 $ 810 Non-GAAP operating income $ 10,363 $ 9,782 $ 8,175 $ 9,489 $ 11,318 6% (8)% Non-GAAP operating income margin % 39.82 % 39.17 % 33.78 % 39.25 % 42.85 % 65 bp (303) bp Reconciliation of Operating Income to Adjusted EBITDA GAAP operating income $ 8,145 $ 7,513 $ 5,818 $ 6,041 $ 8,320 8% (2)% Plus: Depreciation expense 55 47 42 40 39 Intangible amortization expense 2,188 2,188 2,188 2,188 2,188 Interest income 206 231 255 310 244 Other income/(expense), net 6 (51) 13 (59) 1 EBITDA (non-GAAP) 10,600 9,928 8,316 8,520 10,792 7% (2)% Adjustments: Share-based compensation expense 314 312 325 254 233 Change in fair value 30 81 169 1,260 810 Adjusted EBITDA (non-GAAP) $ 10,944 $ 10,321 $ 8,810 $ 10,034 $ 11,835 6% (8)% Adjusted EBITDA margin % (non-GAAP) 42.05 % 41.33 % 36.40 % 41.50 % 44.81 % 72 bp (275) bp ScanSource, Inc. Earnings Infographic Q3 FY2026 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 6 May 7, 2026
Net Sales, Constant Currency Excluding Acquisitions (Organic Growth) - QTR ($ in thousands) Net Sales by Segment: Q3 FY26 Q3 FY25 % Change Specialty Technology Solutions: Net sales, reported $ 740,765 $ 678,433 9.2 % Foreign exchange impact (a) (5,679) — Less: Acquisitions (2,519) — Non-GAAP net sales $ 732,567 $ 678,433 8.0 % Intelisys & Advisory: Net sales, reported $ 26,025 $ 26,414 (1.5) % Consolidated: Net sales, reported $ 766,790 $ 704,847 8.8 % Foreign exchange impact (a) (5,679) — Less: Acquisitions (2,519) — Non-GAAP net sales $ 758,592 $ 704,847 7.6 % Net Sales by Geography: Q3 FY26 Q3 FY25 % Change United States: Net sales, reported (b) $ 710,281 $ 656,964 8.1 % Less: Acquisitions (2,519) — Non-GAAP net sales $ 707,762 $ 656,964 7.7 % Brazil: Net sales, reported (c) $ 56,509 $ 47,883 18.0 % Foreign exchange impact (a) (5,679) — Non-GAAP net sales $ 50,830 $ 47,883 6.2 % Consolidated: Net sales, reported $ 766,790 $ 704,847 8.8 % Foreign exchange impact (a) (5,679) — Less: Acquisitions (2,519) — Non-GAAP net sales $ 758,592 $ 704,847 7.6 % (a) Year-over-year sales growth excluding the translation impact of changes in foreign currency rates. Calculated by translating net sales for the quarter ended March 31, 2026 into U.S. dollars using the weighted-average foreign exchange rates for the quarter ended March 31, 2025. (b) Includes net sales in Canada that are supported by U.S. operations and represent less than 5% of United States net sales for the quarters ended March 31, 2026 and 2025. (c) Includes net sales from outside of the United States, Canada and Brazil, which represent less than 0.1% of Brazil net sales for the quarters ended March 31, 2026 and 2025. ScanSource, Inc. Earnings Infographic Q3 FY2026 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 7 May 7, 2026
Recurring Revenue Gross Profit as a % of Gross Profit - QTR ($ in thousands) Q3 FY26 Q2 FY26 Q1 FY26 Q4 FY25 Q3 FY25 Q/Q Y/Y Net sales by product/services: Products and services $ 725,739 $ 724,489 $ 702,984 $ 776,349 $ 665,229 0.2 % 9.1 % Recurring revenue (a) 41,051 42,023 36,666 36,537 39,618 (2.3) % 3.6 % Consolidated $ 766,790 $ 766,512 $ 739,650 $ 812,886 $ 704,847 — % 8.8 % Recurring revenue by segment: Specialty Technology Solutions $ 16,018 $ 18,152 $ 13,816 $ 12,341 $ 14,608 (11.8) % 9.7 % Intelisys & Advisory 25,033 23,871 22,850 24,196 25,010 4.9 % 0.1 % Consolidated $ 41,051 $ 42,023 $ 36,666 $ 36,537 $ 39,618 (2.3) % 3.6 % Recurring revenue gross profit by segment: Specialty Technology Solutions $ 12,146 $ 14,373 $ 11,232 $ 8,979 $ 10,598 (15.5) % 14.6 % Intelisys & Advisory 25,033 23,871 22,850 24,196 25,010 4.9 % 0.1 % Consolidated $ 37,179 $ 38,244 $ 34,082 $ 33,175 $ 35,608 (2.8) % 4.4 % Gross profit by segment: Specialty Technology Solutions $ 81,421 $ 78,228 $ 83,903 $ 81,187 $ 73,994 4.1 % 10.0 % Intelisys & Advisory 25,703 24,682 23,570 23,915 26,208 4.1 % (1.9) % Consolidated $ 107,124 $ 102,910 $ 107,473 $ 105,102 $ 100,202 4.1 % 6.9 % Recurring revenue gross profit as % of gross profit: Specialty Technology Solutions 14.9 % 18.4 % 13.4 % 11.1 % 14.3 % Intelisys & Advisory 97.4 % 96.7 % 96.9 % 101.2 % 95.4 % Consolidated 34.7 % 37.2 % 31.7 % 31.6 % 35.5 % (a) Recurring revenue represents revenue primarily from agency commissions, managed connectivity, SaaS, subscription, and hardware rentals. ScanSource, Inc. Earnings Infographic Q3 FY2026 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 8 May 7, 2026
Average Adjusted Return on Invested Capital - QTR ($ in thousands) Q3 FY26 Q2 FY26 Q1 FY26 Q4 FY25 Q3 FY25 Reconciliation of Net Income to Adjusted EBITDA Net income - GAAP $ 16,885 $ 16,493 $ 19,878 $ 20,089 $ 17,431 Plus: Interest expense 1,303 1,946 1,914 2,099 1,836 Income taxes 7,167 2,928 7,118 7,408 6,795 Depreciation and amortization 5,713 5,938 6,200 7,101 7,492 EBITDA (non-GAAP) 31,068 27,305 35,110 36,697 33,554 Adjustments: Change in fair value of contingent consideration 440 1,209 314 (147) 904 Share-based compensation 3,955 3,660 2,876 2,673 2,896 Tax recovery (a) — (789) — (470) (1,820) Acquisition costs 142 593 261 191 204 Cyberattack restoration costs 16 53 29 — 71 Insurance recovery, net of payments — (838) — (305) (756) Adjusted EBITDA (numerator for Adjusted ROIC) (non-GAAP) $ 35,621 $ 31,193 $ 38,590 $ 38,639 $ 35,053 Invested Capital Calculation Equity - beginning of quarter $ 910,886 $ 914,032 $ 906,393 $ 901,746 $ 900,662 Equity - end of quarter 906,261 910,886 914,032 906,393 901,746 Adjustments: Change in fair value of contingent consideration, net 330 907 236 (110) 681 Share-based compensation, net 2,963 2,741 2,152 2,007 2,176 Tax recovery, net — (2,991) — (310) (1,201) Acquisition costs 141 593 261 191 204 Cyberattack restoration costs, net 12 39 21 — 54 Insurance recovery, net — (629) — (229) (570) Average equity 910,297 912,789 911,548 904,844 901,876 Average funded debt (b) 103,210 131,470 137,113 138,270 140,207 Invested capital (denominator for Adjusted ROIC) (non-GAAP) $ 1,013,507 $ 1,044,259 $ 1,048,661 $ 1,043,114 $ 1,042,083 Adjusted return on invested capital (ROIC), annualized (c) 14.3 % 11.9 % 14.6 % 14.9 % 13.6 % (a) Recovery of prior period indirect taxes in Brazil (b) Average funded debt is calculated as the daily average amounts outstanding on our short-term and long-term interest-bearing debt. (c) Calculated as net income plus interest expense, income taxes, depreciation and amortization (EBITDA) with other non-GAAP adjustments (Adjusted EBITDA), annualized, divided by invested capital for the period. The annualized Adjusted EBITDA amount is divided by days in the quarter times 365 days per year, or 366 days for a leap year. ScanSource, Inc. Earnings Infographic Q3 FY2026 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 9 May 7, 2026
Net Debt and Adjusted EBITDA Metrics ($ in thousands) Q3 FY26 Q2 FY26 Q1 FY26 Q4 FY25 Q3 FY25 Consolidated debt (Q/E) $ 102,038 $ 102,663 $ 133,913 $ 136,149 $ 138,024 Less: Cash and cash equivalents of continuing operations (Q/E) (120,295) (83,466) (124,924) (126,157) (146,287) Net debt (Q/E) (non-GAAP) $ (18,257) $ 19,197 $ 8,989 $ 9,992 $ (8,263) Reconciliation of Net Income to Adjusted EBITDA Net income - GAAP $ 16,885 $ 16,493 $ 19,878 $ 20,089 $ 17,431 Plus: Interest expense 1,303 1,946 1,914 2,099 1,836 Income taxes 7,167 2,928 7,118 7,408 6,795 Depreciation and amortization 5,713 5,938 6,200 7,101 7,492 EBITDA (non-GAAP) 31,068 27,305 35,110 36,697 33,554 Adjustments: Share-based compensation 3,955 3,660 2,876 2,673 2,896 Change in fair value of contingent consideration 440 1,209 314 (147) 904 Tax recovery (a) — (789) — (470) (1,820) Acquisition costs 142 593 261 191 204 Cyberattack restoration costs 16 53 29 — 71 Insurance recovery, net of payments — (838) — (305) (756) Adjusted EBITDA (non-GAAP) $ 35,621 $ 31,193 $ 38,590 $ 38,639 $ 35,053 Adjusted EBITDA, TTM (non-GAAP) (b) $ 144,043 Net Debt / Adjusted EBITDA, TTM (non-GAAP) (0.1) x (a) Recovery of prior period indirect taxes in Brazil (b) Adjusted EBITDA for the trailing 12-month period ScanSource, Inc. Earnings Infographic Q3 FY2026 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 10 May 7, 2026
Working Capital, 5-Quarter Summary ($ in thousands) Q3 FY26 Q2 FY26 Q1 FY26 Q4 FY25 Q3 FY25 Accounts receivable (Q/E) $ 628,442 $ 605,411 $ 557,071 $ 635,521 $ 562,820 Days sales outstanding in receivables 74 71 68 70 72 Inventory (Q/E) $ 486,628 $ 490,259 $ 505,339 $ 483,815 $ 476,206 Inventory turns 5.4 5.3 5.1 5.9 5.0 Accounts payable (Q/E) $ 646,650 $ 576,662 $ 529,578 $ 598,595 $ 540,765 Paid for inventory days* (6.6) 3.1 12.4 (1.1) 7.6 Working capital (Q/E) (AR+INV-AP) $ 468,420 $ 519,008 $ 532,832 $ 520,741 $ 498,261 Cash conversion cycle 67 74 80 69 80 *Paid for inventory days represent Q/E inventory days less Q/E accounts payable days. ScanSource, Inc. Earnings Infographic Q3 FY2026 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 11 May 7, 2026
Operating Income, Net Income, EPS & Other - QTR ($ in thousands, except for share data) Quarter ended March 31, 2026 Reported GAAP measure Intangible amortization expense Acquisition costs(a) Change in fair value of contingent consideration Tax recovery Cyberattack restoration costs Insurance recovery, net Non-GAAP measure SG&A expenses $ 78,066 $ — $ (142) $ — $ — $ (16) $ — $ 77,908 Operating income 23,120 4,001 142 440 — 16 — 27,719 Pre-tax income 24,052 4,001 142 440 — 16 — 28,651 Net income 16,885 3,003 142 330 — 12 — 20,372 Diluted EPS $ 0.78 $ 0.14 $ 0.01 $ 0.02 $ — $ — $ — $ 0.94 ($ in thousands, except for share data) Quarter ended December 31, 2025 Reported GAAP measure Intangible amortization expense Acquisition costs(a) Change in fair value of contingent consideration Tax recovery Cyberattack restoration costs Insurance recovery, net Non-GAAP measure SG&A expenses $ 78,114 $ — $ (593) $ — $ 789 $ (53) $ — $ 78,257 Operating income 17,868 4,285 593 1,209 (789) 53 — 23,219 Pre-tax income 19,421 4,285 593 1,209 (789) 53 (838) 23,934 Net income 16,493 3,199 593 907 (2,991) 39 (629) 17,611 Diluted EPS $ 0.75 $ 0.14 $ 0.03 $ 0.04 $ (0.14) $ — $ (0.03) $ 0.80 (a) Acquisition costs are generally nondeductible for tax purposes. ScanSource, Inc. Earnings Infographic Q3 FY2026 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 12 May 7, 2026
Operating Income, Net Income, EPS & Other - QTR, continued ($ in thousands, except for share data) Quarter ended September 30, 2025 Reported GAAP measure Intangible amortization expense Acquisition costs(a) Change in fair value of contingent consideration Tax recovery Cyberattack restoration costs Insurance recovery, net Non-GAAP measure SG&A expenses $ 75,275 $ — $ (261) $ — $ — $ (29) $ — $ 74,985 Operating income 25,903 4,404 261 314 — 29 — 30,911 Pre-tax income 26,996 4,404 261 314 — 29 — 32,004 Net income 19,878 3,289 261 236 — 21 — 23,685 Diluted EPS $ 0.89 $ 0.15 $ 0.01 $ 0.01 $ — $ — $ — $ 1.06 ($ in thousands, except for share data) Quarter ended June 30, 2025 Reported GAAP measure Intangible amortization expense Acquisition costs(a) Change in fair value of contingent consideration Tax recovery Cyberattack restoration costs Insurance recovery, net Non-GAAP measure SG&A expenses $ 71,610 $ — $ (191) $ — $ 470 $ — $ — $ 71,889 Operating income 26,787 4,927 191 (147) (470) — — 31,288 Pre-tax income 27,497 4,927 191 (147) (470) — (305) 31,693 Net income 20,089 3,691 191 (110) (310) — (229) 23,322 Diluted EPS $ 0.88 $ 0.16 $ 0.01 $ — $ (0.01) $ — $ (0.01) $ 1.02 (a) Acquisition costs are generally nondeductible for tax purposes. ScanSource, Inc. Earnings Infographic Q3 FY2026 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 13 May 7, 2026
Operating Income, Net Income, EPS & Other - QTR, continued ($ in thousands, except for share data) Quarter ended March 31, 2025 Reported GAAP measure Intangible amortization expense Acquisition costs(a) Change in fair value of contingent consideration Tax recovery Cyberattack restoration costs Insurance recovery, net Non-GAAP measure SG&A expenses $ 69,698 $ — $ (204) $ — $ 1,820 $ (71) $ — $ 71,243 Operating income 22,339 4,941 204 904 (1,820) 71 — 26,639 Pre-tax income 24,226 4,941 204 904 (1,820) 71 (756) 27,770 Net income 17,431 3,699 204 681 (1,201) 54 (570) 20,298 Diluted EPS $ 0.74 $ 0.16 $ 0.01 $ 0.03 $ (0.05) $ — $ (0.02) $ 0.86 (a) Acquisition costs are generally nondeductible for tax purposes. ScanSource, Inc. Earnings Infographic Q3 FY2026 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 14 May 7, 2026
FAQ
How did ScanSource (SCSC) perform in Q3 fiscal 2026?
ScanSource delivered higher revenue and steady earnings in Q3 FY26. Net sales rose 8.8% year-over-year to $766.8 million, while GAAP diluted EPS increased to $0.78. Non-GAAP diluted EPS reached $0.94, and adjusted EBITDA was $35.6 million, or 4.65% of net sales.
What guidance did ScanSource (SCSC) provide for fiscal year 2026?
ScanSource reaffirmed its revenue and EBITDA outlook and raised free cash flow expectations. It continues to target net sales of $3.0–$3.1 billion and adjusted EBITDA of $140–$150 million, and now expects non-GAAP free cash flow of at least $90 million for the year ending June 30, 2026.
How strong was ScanSource’s cash flow in Q3 and year-to-date FY26?
Cash generation was robust in Q3 and year-to-date FY26. Operating cash flow for the nine months ended March 31, 2026 totaled $125.4 million, with non-GAAP free cash flow of $118.6 million. Q3 alone produced $71.4 million of operating cash flow and $69.0 million of free cash flow.
What is ScanSource’s profitability and margin profile in Q3 FY26?
ScanSource maintained moderate profitability with stable margins. Q3 FY26 gross profit was $107.1 million with a 14.0% gross margin. Adjusted EBITDA was $35.6 million, representing a 4.65% adjusted EBITDA margin, and GAAP operating income was $23.1 million, a 3.02% operating margin.
How did ScanSource’s business segments perform in Q3 FY26?
Specialty Technology Solutions drove most of ScanSource’s growth. That segment’s net sales rose 9.2% year-over-year to $740.8 million, while Intelisys & Advisory net sales declined 1.5% to $26.0 million. Consolidated recurring revenue increased 3.6% to $41.1 million, supporting a diversified revenue mix.
What is ScanSource’s balance sheet position as of March 31, 2026?
ScanSource reported a net cash position and steady equity base. Cash and cash equivalents were $120.3 million and total debt was $102.0 million. Total assets were $1.81 billion, shareholders’ equity stood at $906.3 million, and net debt to trailing adjusted EBITDA was approximately (0.1)x.