UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

^☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from____ to ____.

Commission file number: 1-34167

ePlus inc.

(Exact name of registrant as specified in its charter)


Delaware		54-1817218
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

13595 Dulles Technology Drive, Herndon, VA 20171-3413

(Address, including zip code, of principal executive offices)

Registrant’s telephone number, including area code: (703) 984-8400

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	PLUS	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares of common stock outstanding as of August 4, 2025, was 26,625,574.


TABLE OF CONTENTS

ePlus inc. AND SUBSIDIARIES

Part I.	Financial Information

Item 1.	Financial Statement

	Unaudited Consolidated Balance Sheets as of June 30, 2025, and March 31, 2025	5

	Unaudited Consolidated Statements of Operations for the Three Months Ended June 30, 2025, and 2024	6

	Unaudited Consolidated Statements of Comprehensive Income for the Three Months Ended June 30, 2025, and 2024	7

	Unaudited Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2025, and 2024	8

	Unaudited Consolidated Statements of Stockholders’ Equity for the Three Months Ended June 30, 2025, and 2024	10

	Notes to Unaudited Consolidated Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36

Item 4.	Controls and Procedures	36

Part II.	Other Information

Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3.	Defaults Upon Senior Securities	38

Item 4.	Mine Safety Disclosures	38

Item 5.	Other Information	38

Item 6.	Exhibits	39

Signatures		40

CAUTIONARY LANGUAGE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or “Exchange Act,” and are made in reliance upon the protections provided by such acts for forward-looking statements. Such statements are not based on historical fact but are based upon numerous assumptions about future conditions that may not occur. Forward-looking statements are generally identifiable by use of forward-looking words such as “may,” “should,” “would,” “intend,” “estimate,” “will,” “potential,” “possible,” “could,” “believe,” “expect,” “intend,” “plan,” “anticipate,” “project,” and similar expressions. Readers are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf. Forward-looking statements are made based upon information that is currently available or management’s current expectations and beliefs concerning future developments and their potential effects upon us, speak only as of the date hereof, and are subject to certain risks and uncertainties. We do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we later become aware. Actual events, transactions and results may materially differ from the anticipated events, transactions, or results described in such statements. Our ability to consummate such transactions and achieve such events or results is subject to certain risks and uncertainties. Such risks and uncertainties include, but are not limited to, the matters set forth below:

●

financial losses resulting from national and international political instability fostering uncertainty and volatility in the global economy including changes in interest rates, tariffs, inflation, export requirements applicable to products we sell, sanctions and exposure to foreign currency losses;

●

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;

●

increases to our costs including wages and our ability to increase our prices to our customers as a result, or experience negative financial impacts due to the pricing arrangements we have with our customers;

●

a material decrease in the credit quality of our customer base, or a material increase in our credit losses;

●

reliance on third parties to perform some of our service obligations to our customers, and the reliance on a small number of key vendors in our supply chain with whom we do not have long-term supply agreements, guaranteed price agreements, or assurance of stock availability;

●

the possibility of a reduction of vendor incentives provided to us;

●

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 remain secure during a cybersecurity attack or other information technology (“IT”) outage, including disruptions in our, our vendors or a 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 cybersecurity regulatory laws and regulations and appropriately providing required notice and disclosure of cybersecurity incidents when and if necessary;

●

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 with needed vendor certifications;

●

risks relating to artificial intelligence (“AI”), including the use or capabilities of AI and emerging laws, rules and regulations related to AI;

●

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 which may affect our financial results;

●

our ability to increase our total number of customers and our ability to increase our total number of customers who use our managed services and professional services while we continuously enhance our managed services offerings to remain competitive in the marketplace;

●

supply chain issues, including a shortage of IT component parts and 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;

●

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;

●

exposure to changes in, interpretations of, or enforcement trends in, and customer and vendor actions in anticipation of or response to, legislation and regulatory matters;

●

our service agreements may require external audits and deficiencies in any such reports could negatively affect our client engagements, and our professional and liability insurance policies coverage may be insufficient to cover a claim;

●

a natural disaster or other adverse event at one of our primary configuration centers, data centers, or a third-party provider or vendor location could negatively impact our business;

●

failure to comply with public sector contracts, or related applicable laws or regulations;

●

our ability to raise capital, maintain or increase as needed our lines of credit with vendors or our floor plan facility, or the effect of those changes on our common stock price;

●

our ability to predictably meet expectations of the investor and analyst community, including relative to our financial performance guidance that we provide;

● our ability to implement comprehensive plans for the integration of sales forces, cost containment, asset rationalization, system integration, and other key strategies following acquisitions; and

●

our ability to protect our intellectual property rights and successfully defend any challenges to the validity of our patents or allegations that we are infringing upon any third-party patents, and the costs associated with those actions, and, when appropriate, the costs associated with licensing required technology.

We cannot be certain that our business strategy will be successful or that we will successfully address these and other challenges, risks, and uncertainties. For a further list and description of various risks, relevant factors, and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see Part II, Item 1A, “Risk Factors” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained elsewhere in this report, as well as other reports that we file with the Securities and Exchange Commission (“SEC”).

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)


		June 30, 2025			March 31, 2025
ASSETS

Current assets:
Cash and cash equivalents	$	480,178		$	389,375
Accounts receivable—trade, net		700,873			516,925
Accounts receivable—other, net		38,606			19,382
Inventories		101,053			120,440
Deferred costs		66,898			66,769
Other current assets		14,708			28,500
Current assets of discontinued operations		-			222,399
Total current assets		1,402,316			1,363,790

Deferred tax asset		9,852			3,658
Property, equipment, and other assets—net		107,538			98,657
Goodwill		202,979			202,858
Other intangible assets—net		76,450			82,007
Non-current assets of discontinued operations		-			133,835
TOTAL ASSETS	$	1,799,135		$	1,884,805

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES

Current liabilities:
Accounts payable	$	320,434		$	324,580
Accounts payable—floor plan		129,415			89,527
Salaries and commissions payable		45,672			42,219
Deferred revenue		158,759			152,631
Other current liabilities		33,470			22,463
Current liabilities of discontinued operations		-			166,463
Total current liabilities		687,750			797,883

Deferred tax liability—long-term		-			1,454
Deferred revenue—long-term		78,404			81,759
Other liabilities		12,550			13,540
Non-current liabilities of discontinued operations		-			12,546
TOTAL LIABILITIES		778,704			907,182

COMMITMENTS AND CONTINGENCIES (Note 8)

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; 26,627 outstanding at June 30, 2025 and 26,526 outstanding at March 31, 2025		277			276
Additional paid-in capital		198,954			193,698
Treasury stock, at cost, 1,103 shares at June 30, 2025 and 1,056 shares at March 31, 2025		(74,052	)		(70,748	)
Retained earnings		888,653			850,956
Accumulated other comprehensive income foreign currency translation adjustment		6,599			3,441
Total Stockholders’ Equity		1,020,431			977,623
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,799,135		$	1,884,805

See Notes to Unaudited Consolidated Financial Statements.

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)


	Three Months Ended June 30,
		2025		2024
Net sales
Product	$	521,006	$	457,463
Services		116,309		78,189
Total		637,315		535,652
Cost of sales
Product		414,477		358,878
Services		74,622		49,900
Total		489,099		408,778

Gross profit		148,216		126,874

Selling, general, and administrative		104,947		90,596
Depreciation and amortization		7,069		4,819
Operating expenses		112,016		95,415

Operating income		36,200		31,459

Other income (expense), net		612		1,711

Earnings from continuing operations before tax		36,812		33,170

Provision for income taxes		9,684		8,977

Net earnings from continuing operations		27,128		24,193

Earnings from discontinued operations, net of tax (Note 4)		10,569		3,146

Net earnings	$	37,697	$	27,339

Earnings per common share—basic
Continuing operations	$	1.03	$	0.91
Discontinued operations		0.40		0.12
Earnings per common share—basic	$	1.43	$	1.03

Earnings per common share—diluted
Continuing operations	$	1.03	$	0.90
Discontinued operations		0.40		0.12
Earnings per common share—diluted	$	1.43	$	1.02

Weighted average common shares outstanding—basic		26,270		26,642
Weighted average common shares outstanding—diluted		26,381		26,801

See Notes to Unaudited Consolidated Financial Statements.

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


	Three Months Ended June 30,
		2025		2024

NET EARNINGS	$	37,697	$	27,339

OTHER COMPREHENSIVE INCOME, NET OF TAX:

Foreign currency translation adjustments		3,158		68

Other comprehensive income (loss)		3,158		68

TOTAL COMPREHENSIVE INCOME	$	40,855	$	27,407

See Notes to Unaudited Consolidated Financial Statements.

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



		Three Months Ended June 30,
		2025			2024
Cash flows from operating activities:
Net earnings	$	37,697		$	27,339
Less: Earnings from discontinued operations, net of tax		10,569			3,146
Net earnings from continuing operations		27,128			24,193

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities of continuing operations:
Depreciation and amortization		7,411			5,208
Provision for credit losses		596			65
Share-based compensation expense		3,440			2,791
Loss on disposal of property, equipment, and operating lease equipment		45			46
Changes in:
Accounts receivable		(181,382	)		67,705
Inventories		19,803			50,555
Deferred costs and other assets		8,958			(6,543	)
Accounts payable—trade		(4,844	)		(40,915	)
Salaries and commissions payable, deferred revenue, and other liabilities		12,842			7,040
Net cash provided by (used in) operating activities of continuing operations		(106,003	)		110,145
Net cash provided by (used in) operating activities of discontinued operations		7,036			(13,018	)
Net cash provided by (used in) operating activities		(98,967	)		97,127

Cash flows from investing activities:
Proceeds from sale of property, equipment, and operating lease equipment		11			-
Purchases of property, equipment, and operating lease equipment		(835	)		(635	)
Net cash used in investing activities of continuing operations		(824	)		(635	)
Net cash provided by (used in) investing activities of discontinued operations		156,681			(1,271	)
Net cash provided by (used in) investing activities		155,857			(1,906	)

Cash flows from financing activities:
Proceeds from issuance of common stock		1,757			1,811
Repurchase of common stock		(3,304	)		(11,569	)
Payments to settle liabilities for acquisitions		-			(2,307	)
Net borrowings on floor plan facility		39,888			14,407
Net cash provided by financing activities of continuing operations		38,341			2,342
Net cash used in financing activities of discontinued operations		(6,417	)		(730	)
Net cash provided by financing activities		31,924			1,612

Effect of exchange rate changes on cash		1,989			55

Net increase in cash and cash equivalents		90,803			96,888

Cash and cash equivalents, beginning of period		389,375			253,021

Cash and cash equivalents, end of period	$	480,178		$	349,909

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued

(in thousands)


	Three Months Ended June 30,
		2025			2024

Supplemental disclosures of cash flow information:
Cash paid for interest	$	68		$	69
Cash paid for income taxes	$	3,128		$	10,130
Cash paid for amounts included in the measurement of lease liabilities	$	1,550		$	1,269

Schedule of non-cash investing and financing activities:
Purchases of property, equipment, and operating lease equipment	$	(344	)	$	(269	)
Vesting of share-based compensation	$	9,369		$	10,636
Repurchase of common stock	$	-		$	(366	)
New operating lease assets obtained in exchange for lease obligations	$	-		$	395

See Notes to Unaudited Consolidated Financial Statements.

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)


	Three Months Ended June 30, 2025
															Accumulated
							Additional								Other
	Common Stock						Paid-In			Treasury			Retained		Comprehensive
		Shares			Par Value		Capital			Stock			Earnings		Income		Total
Balance, March 31, 2025		26,526		$	276	$	193,698		$	(70,748	)	$	850,956	$	3,441	$	977,623
Issuance of restricted stock awards		119			1		(1	)		-			-		-		-
Issuance of common stock		29			-		1,757			-			-		-		1,757
Share-based compensation		-			-		3,500			-			-		-		3,500
Repurchase of common stock		(47	)		-		-			(3,304	)		-		-		(3,304	)
Net earnings		-			-		-			-			37,697		-		37,697
Foreign currency translation adjustment		-			-		-			-			-		3,158		3,158

Balance, June 30, 2025		26,627		$	277	$	198,954		$	(74,052	)	$	888,653	$	6,599	$	1,020,431


	Three Months Ended June 30, 2024
															Accumulated
							Additional								Other
	Common Stock						Paid-In			Treasury			Retained		Comprehensive
		Shares			Par Value		Capital			Stock			Earnings		Income		Total
Balance, March 31, 2024		26,952		$	274	$	180,058		$	(23,811	)	$	742,978	$	2,280	$	901,779
Issuance of restricted stock awards		121			1		(1	)		-			-		-		-
Issuance of common stock		29			1		1,810			-			-		-		1,811
Share-based compensation		-			-		2,866			-			-		-		2,866
Repurchase of common stock		(162	)		-		-			(11,935	)		-		-		(11,935	)
Net earnings		-			-		-			-			27,339		-		27,339
Foreign currency translation adjustment		-			-		-			-			-		68		68

Balance, June 30, 2024		26,940		$	276	$	184,733		$	(35,746	)	$	770,317	$	2,348	$	921,928

See Notes to Unaudited Consolidated Financial Statements.

ePlus inc. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS — Our company was founded in 1990 and is a Delaware corporation. ePlus inc. is sometimes referred to in this Quarterly Report on Form 10-Q as “we,” “our,” “us,” “ourselves,” or “ePlus.” ePlus inc. is a holding company that through its subsidiaries provides information technology (“IT”) solutions which enable organizations to optimize their IT environment and supply chain processes. We also provide consulting, professional, and managed services and complete lifecycle management services. We focus on selling to medium and large enterprises and state and local government and educational institutions (“SLED”) in the United States (“US”) and select international markets including the United Kingdom (“UK”), the European Union (“EU”), India, and Singapore.

BASIS OF PRESENTATION — The unaudited consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accounts of businesses acquired are included in the unaudited consolidated financial statements from the dates of acquisition.

SALE OF OUR FINANCING BUSINESS — On June 30, 2025, we completed the sale of Expo Holdings, LLC (“HoldCo”), which was a wholly-owned subsidiary of ePlus, to Marlin Leasing Corporation (d/b/a PEAC Solutions), thereby selling our domestic subsidiaries comprising the majority of our financing business segment. This divestiture positions us going forward as a pure-play technology solutions provider and represents a strategic shift in our operations. Consequently, our financial statements present our financial results for all periods, and we are retrospectively presenting the results of our domestic financing business as discontinued operations. In our unaudited consolidated balance sheets, we present the assets and liabilities of our domestic financing business as assets and liabilities of discontinued operations in all periods presented. In our unaudited consolidated statements of operations, we present the operating results of our domestic financing business in earnings from discontinued operations. Please see Note 4, “Discontinued Operations” for additional information on the transaction and its effect on our financial statements. After the sale, our remaining three reportable segments are Product, Professional Services, and Managed Services, which we formerly referred to collectively as our technology business.

INTERIM FINANCIAL STATEMENTS — The unaudited consolidated financial statements for the three months ended June 30, 2025, and 2024, were prepared by us and include all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in comprehensive income, and cash flows for such periods. Operating results for the three months ended June 30, 2025, and 2024, are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ended March 31, 2026, or any other future period. These unaudited consolidated financial statements do not include all disclosures required by the accounting principles generally accepted in the United States (“US GAAP”) for annual financial statements. Our audited consolidated financial statements are contained in our annual report on Form 10-K for the year ended March 31, 2025 (“2025 Annual Report”), which should be read in conjunction with these interim consolidated financial statements.

USE OF ESTIMATES — The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values, vendor consideration, goodwill and intangible assets, allowance for credit losses, inventory obsolescence, and the recognition and measurement of income tax assets and other provisions and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

CONCENTRATIONS OF RISK — A substantial portion of our sales are products from Cisco Systems, which represented approximately 26% and 36% of our net sales for the three months ended June 30, 2025, and 2024, respectively.

SIGNIFICANT ACCOUNTING POLICIES — The significant accounting policies used in preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in our Consolidated Financial Statements for the year ended March 31, 2025, except for the changes provided in Note 2, “Recent Accounting Pronouncements.”

2. RECENT ACCOUNTING PRONOUNCEMENTS

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. This update is effective for annual periods beginning in our fiscal year ending March 31, 2026. Early adoption is permitted. We are currently evaluating the impact that this update will have on our financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard requires public business entities to disclose detailed information about specific types of expenses that are relevant to certain line items on the income statement. This update is effective for annual periods beginning in our fiscal year ending March 31, 2028, and interim periods beginning in the first quarter of our fiscal year ending March 31, 2029. Early adoption is permitted. We are currently evaluating the impact that this update will have on our financial statement disclosures.

3. REVENUES

ACCOUNTS RECEIVABLE AND CONTRACT ASSETS

Our balance in accounts receivable—trade, net includes our accounts receivable recognized from contracts with customers and contract assets. Contract assets represent our right to consideration in exchange for goods or services that we transferred to a customer when that right is conditioned on something other than the passage of time.

The following table provides a disaggregation of our balance in accounts receivable—trade, net (in thousands):


	June 30, 2025			March 31, 2025
Accounts receivable	$	687,904		$	507,052
Contract assets		16,288			13,775
Allowance for credit losses		(3,319	)		(3,902	)
Total accounts receivable—trade, net	$	700,873		$	516,925

CONTRACT LIABILITIES

Contract liabilities represent our obligation to transfer goods or services to a customer for which we received consideration, or the amount is due from the customer. Our contract liabilities consist of our deferred revenue and deferred revenue—long-term in our consolidated balance sheets. Revenues recognized from the beginning contract liability balance was $42.8 million and $40.5 million for the three months ended June 30, 2025, and 2024, respectively.

PERFORMANCE OBLIGATIONS

The following table includes revenue expected to be recognized in the future related to performance obligations, primarily non-cancelable contracts for ePlus managed services, that are unsatisfied or partially unsatisfied at the end of the reporting period (in thousands):


Remainder of the year ending March 31, 2026	$	74,913
Year ending March 31, 2027		50,250
Year ending March 31, 2028		25,546
Year ending March 31, 2029		13,538
Year ending March 31, 2030 and thereafter		4,369
Total remaining performance obligations	$	168,616

The table does not include the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, and (ii) contracts where we recognize revenue at the amount that we have the right to invoice for services performed.

4. DISCONTINUED OPERATIONS

On June 30, 2025, we completed the sale of HoldCo to Marlin Leasing Corporation pursuant to the Membership Interest Purchase Agreement dated June 20, 2025, thereby selling our domestic financing business. In the transaction, we received net cash proceeds of $156.7 million, consisting of cash proceeds of $180.1 million less cash transferred of $23.4 million, recognized a receivable of $7.8 million related to a post-closing adjustment process based on the book value of the assets associated with HoldCo and other adjustments, and recognized a contingent consideration asset of $13.5 million. See Note 13, “Fair Value of Financial Instruments” for a discussion of our contingent consideration asset. We incurred approximately $4.0 million in transaction costs during our quarter ended June 30, 2025, which are netted against the gain on sale of HoldCo before income taxes. In connection with the sale, we entered into a transition services agreement, pursuant to which ePlus and Marlin Leasing Corporation will provide certain transition services to each other after the sale.

The sale of our domestic financing business positions us going forward as a pure-play technology solutions provider and represents a strategic shift in our operations. Consequently, our financial statements present our financial results for all periods, and we are retrospectively presenting the results of our domestic financing business as discontinued operations.

The following table provides our operating results of discontinued operations for the three months ended June 30, 2025, and 2024 (in thousands):


	Three months ended June 30,
	2025		2024
Net sales	$	15,811	$	8,886
Cost of sales		1,734		1,279
Gross profit		14,077		7,607

Selling, general, and administrative		3,599		3,012
Interest and financing costs		450		585
Operating expenses		4,049		3,597

Operating income		10,028		4,010

Other income—net		211		362

Earnings before gain from sale and income taxes		10,239		4,372
Gain from sale of HoldCo before income taxes		4,368		-
Earnings before income taxes		14,607		4,372

Provision for income taxes		4,038		1,226

Earnings from discontinued operations, net of tax	$	10,569	$	3,146

The following table provides the major classes of assets and liabilities that are classified as discontinued operations as of March 31, 2025 (in thousands):


		March 31, 2025
ASSETS

Accounts receivable	$	34,610
Financing receivables—net, current		168,392
Other current assets		19,397
Current assets of discontinued operations	$	222,399

Financing receivables and operating leases—net	$	126,408
Other assets—long-term		7,427
Non-current assets of discontinued operations	$	133,835

LIABILITIES

Accounts payable	$	127,154
Salaries and commissions payable		2,812
Non-recourse notes payable—current		27,456
Other current liabilities		9,041
Current liabilities of discontinued operations	$	166,463

Non-recourse notes payable—long-term		11,317
Other liabilities—long-term		1,229
Non-current liabilities of discontinued operations	$	12,546

5. GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL

The following table summarizes the changes in the carrying amount of goodwill for the three months ended June 30, 2025 (in thousands):


	Product		Professional Services		Managed Services		Total
Balance, March 31, 2025 (1)	$	129,177	$	63,779	$	9,902	$	202,858
Acquisitions		-		-		-		-
Foreign currency translations		94		18		9		121
Balance, June 30, 2025 (1)	$	129,271	$	63,797	$	9,911	$	202,979

(1)

Balance is net of $4,644 thousand in accumulated impairments that were recorded in a segment that preceded our current segment organization.

Goodwill represents the premium paid over the fair value of the net tangible and intangible assets that are individually identified and separately recognized in business combinations.

The only activity in our goodwill balance over the three months ended June 30, 2025 was foreign currency translation adjustments.

We test goodwill for impairment on an annual basis, as of the first day of our third fiscal quarter, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying value.

In our annual test as of October 1, 2024, we performed a qualitative assessment of goodwill and concluded that, more likely than not, the fair value of our product, professional services, and managed services reporting units continued to exceed their carrying value.

OTHER INTANGIBLE ASSETS

Our other intangible assets consist of purchased intangible assets and capitalized software development.

The following table provides the composition of our purchased intangible assets as of June 30, 2025, and March 31, 2025 (in thousands):


	June 30, 2025							March 31, 2025
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	167,207	$	(98,426	)	$	68,781	$	167,093	$	(93,085	)	$	74,008
Trade names and other		11,486		(3,846	)		7,640		11,459		(3,500	)		7,959
Total purchased intangible assets	$	178,693	$	(102,272	)	$	76,421	$	178,552	$	(96,585	)	$	81,967

Our customer relationships, trade names, and other intangible assets are generally amortized between 5 to 10 years.

Total amortization expense for other intangible assets was $5.5 million and $3.8 million for the three months ended June 30, 2025, and June 30, 2024, respectively.

6. ALLOWANCE FOR CREDIT LOSSES

The following table provides the activity in our allowance for credit losses within accounts receivable—trade for the three months ended June 30, 2025, and 2024 (in thousands):


	Three months ending June 30,
	2025			2024
Beginning	$	3,902		$	2,549
Provision for credit losses		596			75
Write-offs and other		(1,179	)		(12	)
Ending	$	3,319		$	2,612

7. CREDIT FACILITY

We finance the operations of our subsidiaries ePlus Technology, inc. and ePlus Technology Services, inc. (collectively, the “Borrowers”) through a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). The WFCDF credit facility (the “WFCDF Credit Facility”) has a floor plan facility and a revolving credit facility.

Our credit facility is provided by a syndicate of banks for which WFCDF acts as administrative agent and consists of a discretionary senior secured floor plan facility in favor of the Borrowers in the aggregate principal amount of up to $500.0 million, together with a sublimit for a revolving credit facility for up to $200.0 million. On June 20, 2025, the WFCDF Credit Facility was amended in anticipation of the sale of the financing business. The substantive terms of the WFCDF Credit Facility were not materially changed by such amendment.

Under the accounts payable floor plan facility, we had an outstanding balance of $129.4 million and $89.5 million as of June 30, 2025, and March 31, 2025, respectively. On our balance sheet, our liability under the accounts payable floor plan facility is presented as accounts payable – floor plan.

We use the floor plan to facilitate the purchase of inventory from designated suppliers. WFCDF pays our suppliers and provides us with extended payment terms. We pay down the floor plan facility on three specified dates each month, generally 45 to 60 days from the invoice date. Other than unused line fees, if applicable, we do not incur any interest or other incremental expenses for the floor plan facility. We are not involved in establishing the terms or conditions of the arrangements between our suppliers and WFCDF.

We may use the revolving credit facility for our borrowing needs. We did not have any outstanding balances under the revolving credit facility as of June 30, 2025, and March 31, 2025.

The amount of principal available is subject to a borrowing base determined by, among other things, the Borrowers’ accounts receivable and inventory, each pursuant to a formula and subject to certain reserves. Loans accrue interest at a rate per annum equal to Term SOFR Rate plus a Term SOFR Adjustment of 0.10% plus an Applicable Margin of 1.75%.

Our borrowings under the WFCDF Credit Facility are secured by the assets of the Borrowers. Additionally, the WFCDF Credit Facility requires a guaranty of $10.5 million by ePlus inc.

Under the WFCDF Credit Facility, the Borrowers are restricted in their ability to pay dividends to ePlus inc. unless their available borrowing meets certain thresholds. As of June 30, 2025, and March 31, 2025, their available borrowing met the thresholds such that there were no restrictions on their ability to pay dividends.

The WFCDF Credit Facility has an initial one-year term, which automatically renews for successive one-year terms thereafter. However, either the Borrowers or WFCDF may terminate the WFCDF Credit Facility at any time by providing a written termination notice to the other party no less than 90 days prior to such termination.

The loss of the WFCDF Credit Facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our business and as an operational function of our accounts payable process.

8. COMMITMENTS AND CONTINGENCIES

LEGAL PROCEEDINGS

We are subject to various legal proceedings, as well as demands, claims and threatened litigation, that arise in the normal course of our business and have not been fully resolved. The ultimate outcome of any litigation or other legal dispute is uncertain. When a loss related to a legal proceeding or claim is probable and reasonably estimable, we accrue our best estimate for the ultimate resolution of the matter. If one or more legal matters are resolved against us in a reporting period for amounts above our expectations, our financial condition and operating results for that period may be adversely affected. As of June 30, 2025, we do not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. Any outcome, whether favorable or unfavorable, may materially and adversely affect us due to legal costs and expenses, diversion of management attention and other factors. We expense legal costs in the period incurred. We cannot assure that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against us in the future, and these matters could relate to prior, current, or future transactions or events.

9. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding plus common stock equivalents during each period.

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net income per common share as disclosed on our unaudited consolidated statements of operations for the three months ended June 30, 2025, and 2024, respectively (in thousands, except per share data).


	Three Months Ended June 30,
	2025		2024
Net earnings attributable to common shareholders—basic and diluted
Continuing operations	$	27,128	$	24,193
Discontinued operations		10,569		3,146
Net earnings	$	37,697	$	27,339

Basic and diluted common shares outstanding:
Weighted average common shares outstanding—basic		26,270		26,642
Effect of dilutive shares		111		159
Weighted average shares common outstanding—diluted		26,381		26,801

Earnings per common share—basic
Continuing operations	$	1.03	$	0.91
Discontinued operations		0.40		0.12
Earnings per common share—basic	$	1.43	$	1.03

Earnings per common share—diluted
Continuing operations	$	1.03	$	0.90
Discontinued operations		0.40		0.12
Earnings per common share—diluted	$	1.43	$	1.02

10. STOCKHOLDERS’ EQUITY

SHARE REPURCHASE PLAN

On May 18, 2024, our board of directors had authorized the repurchase of up to 1,250,000 shares of our outstanding common stock over a 12-month period that began on May 28, 2024 and terminated on May 27, 2025. On March 22, 2023, our board of directors had authorized the repurchase of up to 1,000,000 shares of our outstanding common stock over a 12-month period that began on May 28, 2023 and terminated on May 27, 2024. Under each authorized program, when such program was in place, we could make purchases from time to time in the open market, or in privately negotiated transactions, subject to availability and the plan terms. Any repurchased shares had the status of treasury shares and may be used, when needed, for general corporate purposes.

During the three months ended June 30, 2025, we repurchased 47,488 shares of common stock at a value of $3.3 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

During the three months ended June 30, 2024, we repurchased 109,869 shares of our outstanding common stock at a value of $8.1 million under the then-current share repurchase plan. We also repurchased 52,450 shares of common stock at a value of $3.8 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

On August 7, 2025, our board of directors authorized the repurchase of up to 1,500,000 shares of our outstanding common stock over a 12-month period commencing on August 11, 2025.

11. SHARE-BASED COMPENSATION

SHARE-BASED PLANS

As of June 30, 2025, we had share-based awards outstanding under the following plans: (1) the 2017 Non-Employee Director Long-Term Incentive Plan (“2017 Director LTIP”), (2) the 2024 Non-Employee Director Long-Term Incentive Plan (“2024 Director LTIP”) and (3) the 2021 Employee Long-Term Incentive Plan (“2021 Employee LTIP”).

These share-based plans define fair market value as the closing sales price of a share of common stock as quoted on any established stock exchange for such date or the most recent trading day preceding such date if there were no trades on such date.

RESTRICTED STOCK ACTIVITY

For the three months ended June 30, 2025, we granted 351 restricted shares under the 2024 Director LTIP and 121,844 restricted shares under the 2021 Employee LTIP. For the three months ended June 30, 2024, we granted 437 restricted shares under the 2017 Director LTIP and 121,097 restricted shares under the 2021 Employee LTIP.

The following table provides a summary of the unvested restricted shares for the three months ended June 30, 2025:


	Number of Shares		Weighted Average Grant-date Fair Value
Nonvested April 1, 2025	275,773		$	64.80
Granted	122,195		$	72.77
Vested	(134,548	)	$	61.77
Forfeited	(3,282	)	$	66.45
Nonvested June 30, 2025	260,138		$	70.09

PERFORMANCE STOCK UNITS

Beginning with the fiscal year ended March 31, 2024, we granted Performance Stock Units (“PSUs”) to our executive officers under our 2021 Employee LTIP. The PSUs will vest based on the achievement of certain performance goals at the end of a three-year performance period. The PSUs represent the right to receive shares of our common stock at the time of vesting. The total number of PSUs that vest range from 0% to 200% of the target number of PSUs based on our achievement of certain performance targets. As of June 30, 2025, and March 31, 2025, we had 34,535 unvested PSUs with a weighted average grant date fair value of $70.94. There were no PSUs granted or vested during the three months ended June 30, 2025.

EMPLOYEE STOCK PURCHASE PLAN

We provide eligible employees the opportunity to purchase shares of our stock through the 2022 Employee Stock Purchase Plan (“ESPP”). Under this plan, eligible employees may purchase up to an aggregate of 2.50 million shares of our stock. Employees in this plan contribute part of their earnings over a six-month offering period. At the end of each offering period, employees purchase our shares using their contributions at a discount off the lesser of the closing market price on the first or the last trading day of each offering period. During the three months ended June 30, 2025, and June 30, 2024, we issued 28,665 shares at a price of $61.29 per share and 28,915 shares at a price of $62.63 per share, respectively, under the ESPP. As of June 30, 2025, there were 2.34 million shares remaining under the ESPP.

COMPENSATION EXPENSE

The following table provides a summary of our total share-based compensation expense, including for restricted stock awards, PSUs, our ESPP, and the related income tax benefit for the three months ended June 30, 2025, and 2024 (in thousands):


	Three Months Ended June 30,
	2025			2024
Equity-based compensation expense	$	3,440		$	2,791
Income tax benefit		(905	)		(756	)

We recognized the income tax benefit as a reduction to our provision for income taxes. As of June 30, 2025, the total unrecognized compensation expense related to unvested restricted stock was $17.1 million, which is expected to be recognized over a weighted-average period of 36 months.

We also provide our employees with a contributory 401(k) profit sharing plan (the “401(k) plan”), to which we may contribute from time to time at our sole discretion. Employer contributions to the 401(k) plan are always fully vested. Our estimated contribution expense to the 401(k) plan for the three months ended June 30, 2025, and 2024, were $1.5 million and $1.4 million, respectively.

12. INCOME TAXES

Our provision for income tax expense was $9.7 million for the three months ended June 30, 2025, as compared to $9.0 million for the same three-month period in the prior year. Our effective income tax rate for the three months ended June 30, 2025, and 2024, were 26.3% and 27.1%, respectively. The effective tax rate for the three months ended June 30, 2025, and June 30, 2024, differed from the US federal statutory rate of 21.0% primarily due to state and local income taxes.

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was enacted into law, resulting in significant changes to the US tax code. OBBBA permanently extends many of the tax provisions of the Tax Cuts and Jobs Act of 2017, which were scheduled to expire on December 31, 2025. OBBBA introduces modifications to various U.S. corporate tax provisions, with staggered effective dates ranging from 2025 to 2027. We are currently assessing its impact on our consolidated financial statements.

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table summarizes the fair value hierarchy of our financial instruments as of June 30, 2025, and March 31, 2025 (in thousands):


			Fair Value Measurement Using
	Recorded Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2025
Assets:
Money market funds	$	392,717	$	392,717	$	-	$	-
Contingent Consideration	$	13,502	$	-	$	-	$	13,502

March 31, 2025
Assets:
Money market funds	$	280,067	$	280,067	$	-	$	-

Through the agreement for the sale of HoldCo, we may earn and receive Holdback Premium (as defined below) payments and two different types of Earn-Outs (as defined below, and together with the Holdback Premium the “Contingent Consideration”) based on the post-Closing performance of the HoldCo Group (as defined below), as operated by PEAC Solutions. We estimated the fair value of each element of the Contingent Consideration using a Monte Carlo simulation model. We include the Contingent Consideration as part of property, equipment, and other assets—net in our consolidated balance sheet.

We may receive aggregate post-Closing cash payments of up to $3.0 million (the “Holdback Premium”) based on the achievement of customer lease receivable originations targets by HoldCo (i) from the Closing Date to the 18-month anniversary of the Closing Date and (ii) from the 18-month anniversary of the Closing Date to the 30-month anniversary of the Closing Date.

The two types of earn-out payments that are potentially payable to us are based on (i) the volume of originations of certain types of lease receivables (the “Lease Originations Earn-Out”) and (ii) the profitability of certain lease receivables originated either to US federal governmental entities or for which a prime contractor acting on behalf of a government entity is the obligor (the “Transaction Gains Earn-Out,” and together with the Lease Originations Earn-Out, the “Earn-Outs”). Each of the Earn-Outs will be measured for each of the first three consecutive twelve-month periods following the Closing. The Lease Originations Earn-Out is capped at $10.0 million in aggregate for all three post-Closing years. The Transaction Gains Earn-Out does not have a maximum cap.

14. BUSINESS COMBINATIONS

BAILIWICK SERVICES, LLC

On August 19, 2024, our subsidiary, ePlus Technology, inc., acquired 100% of the membership interests of Bailiwick Services, LLC (“Bailiwick”). Based near Minneapolis, Minnesota, Bailiwick is a provider of professional and managed services with nearly 30 years in the business. Bailiwick specializes in serving enterprise customers that operate large store, branch, and campus footprints predominantly in the retail, financial services, restaurant, and hospitality markets.

Our preliminary sum for consideration transferred is $124.9 million, which consists of $126.2 million paid in cash at closing, less $1.5 million cash acquired, plus $0.2 million paid in December 2024 to the sellers based on adjustments to a determination of the total net assets delivered. Our preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):


	Acquisition Date Amount
Accounts receivable	$	41,719
Contract assets		7,712
Other assets		20,669
Identified intangible asset		58,010
Accounts payable and other liabilities		(38,273	)
Contract liabilities		(6,216	)
Total identifiable net assets		83,621
Goodwill		41,305
Total purchase consideration	$	124,926

The identified intangible assets of $58.0 million consists of customer relationships of $49.3 million with an estimated useful life of ten years and trade name of $8.7 million with a preliminary useful life of seven years.

We recognized goodwill related to this transaction of $41.3 million, which was assigned to our professional services and product segments. The goodwill recognized in the Bailiwick acquisition is attributable to the acquired assembled workforce and expected synergies, none of which qualify for recognition as a separate intangible asset. The total amount of goodwill expected to be deductible for tax purposes is $44.4 million.

The amount of revenues and earnings of the acquiree since the acquisition date are not material. Likewise, the impact to the revenue and earnings of the combined entity for the current reporting period as though the acquisition date had been April 1, 2024, is not material.

15. SEGMENT REPORTING

We manage and report our operating results through three operating segments: product, professional services, and managed services. Our organizational structure is based on how our chief operating decision maker (“CODM”) allocates resources, manages operations, and evaluates performance. Our CODM is our Chief Executive Officer.

Our product segment includes sales of IT products, third-party software, and third-party maintenance, software assurance, and other third-party services. Our professional services segment includes our advanced professional services, staff augmentation, project management services, cloud consulting services and security services. Our managed services segment includes our advanced managed services, service desk, storage-as-a-service, cloud hosted services, cloud managed services and managed security services. Our other category consists of the international entities of our financing business that we retained after selling our domestic financing business.

Our CODM measures the performance of the segments based on gross profit. We do not present asset information for our reportable segments as we do not provide asset information to our CODM. Our CODM reviews financial results and forecasts quarterly to manage operations and evaluate performance. Our CODM also uses our financial results and forecasts to make investment decisions as part of our annual budgeting process.

The following table provides reportable segment information (in thousands):


	Three Months Ended June 30,
	2025		2024
Net Sales:
Product	$	520,895	$	457,312
Professional services		71,729		37,279
Managed services		44,580		40,910
Total reportable segments		637,204		535,501
Other		111		151
Total		637,315		535,652

Cost of sales:
Product		414,413		358,807
Professional services		43,576		21,824
Managed services		31,046		28,076
Total reportable segments		489,035		408,707
Other		64		71
Total		489,099		408,778

Gross Profit:
Product		106,482		98,505
Professional services		28,153		15,455
Managed services		13,534		12,834
Total reportable segments		148,169		126,794
Other		47		80
Total	$	148,216	$	126,874

DISAGGREGATION OF REVENUE

We recognize revenue in our product, professional services, and managed services segments from contracts with customers. We recognize revenue in the other category under guidance for financing and leases.

The following tables provide a disaggregation of revenue recognized from contracts with customers by timing and our position as principal or agent (in thousands):


	Three months ended June 30, 2025
	Product		Professional Services		Managed Services		Total
Timing and position as principal or agent:
Transferred at a point in time as principal	$	474,505	$	-	$	-	$	474,505
Transferred at a point in time as agent		46,390		-		-		46,390
Transferred over time as principal		-		71,729		44,580		116,309
Total revenue from contracts with customers	$	520,895	$	71,729	$	44,580	$	637,204


	Three months ended June 30, 2024
	Product		Professional Services		Managed Services		Total
Timing and position as principal or agent:
Transferred at a point in time as principal	$	421,884	$	-	$	-	$	421,884
Transferred at a point in time as agent		35,428		-		-		35,428
Transferred over time as principal		-		37,279		40,910		78,189
Total revenue from contracts with customers	$	457,312	$	37,279	$	40,910	$	535,501

The following tables provide a disaggregation of our revenue from contracts with customers by customer end market and by type (in thousands):


	Three Months Ended June 30,
	2025		2024
Customer end market:
Telecom, media & entertainment	$	184,979	$	117,553
SLED		90,562		92,096
Technology		82,747		109,106
Healthcare		74,291		75,280
Financial services		47,500		49,725
All others		157,125		91,741
Total revenue from contracts with customers	$	637,204	$	535,501

Type:
Product segment:
Networking	$	218,202	$	234,740
Cloud		206,996		137,231
Security		61,107		48,005
Collaboration		11,757		20,899
Other		22,833		16,437
Total product segment		520,895		457,312
Professional services segment		71,729		37,279
Managed services segment		44,580		40,910
Total revenue from contracts with customers	$	637,204	$	535,501

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The below is intended to provide context to our consolidated financial condition and results of continuing operations. It should be read in conjunction with the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements included in our annual report on Form 10-K for the year ended March 31, 2025 (“2025 Annual Report”). These historical financial statements may not be indicative of our future performance. This Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described in Part I, Item 1A, “Risk Factors,” in our 2025 Annual Report, as well as in our other filings with the SEC.

EXECUTIVE OVERVIEW

BUSINESS DESCRIPTION

We are a leading solutions provider in the areas of security, cloud, networking, collaboration, artificial intelligence (“AI”), and emerging technologies. We deliver actionable outcomes for organizations by using information technology (“IT”) and consulting solutions to drive business agility and innovation. Leveraging our engineering talent, we assess, plan, deliver, and secure solutions comprised of leading technologies and consumption models aligned with our customers’ needs. Our expertise and experience enable us to craft optimized solutions that take advantage of the cost, scale, and efficiency of private, public and hybrid cloud services in an evolving market.

As part of our solutions, we provide consulting, professional services, managed services, IT staff augmentation, and complete lifecycle management services in the areas of security, cloud, networking, collaboration, and emerging technologies. Further, we offer professional services in the spaces of digital signage, electric vehicle (“EV”) charging solutions, loss prevention and security, store openings, remodels, and store closings.

We deliver integrated solutions that address our customers’ business needs, leveraging the appropriate technologies, both on-premises and in the cloud. Our approach is to lead with advisory consulting to understand our customers’ needs, and then design, deploy, and manage solutions aligned to their objectives. Underpinning the broader areas of cloud, security, networking, and collaboration are specific skills in orchestration and automation, application modernization, DevSecOps, zero-trust architectures, data management, data visualization, analytics, network modernization, edge computing and other advanced and emerging technologies. These solutions are comprised of class-leading technologies from our commercial partners.

We are a reseller for thousands of manufacturers, which have enabled us to provide our customers with new and evolving IT solutions. We possess top-level IT engineering certifications with a broad range of leading IT vendors that enable us to offer IT solutions that are optimized for each of our customers’ specific requirements.

We serve primarily middle market to large enterprises across diverse markets including telecom, media and entertainment, technology, state and local government and educational institutions (“SLED”), healthcare, and financial services. We sell to customers in the United States (“US”), which account for most of our sales, and to customers in select international markets including the United Kingdom (“UK”), the European Union (“EU”), India, and Singapore.

On June 30, 2025, we completed the sale of Expo Holdings, LLC (“HoldCo”), which was a wholly-owned subsidiary of ePlus, to Marlin Leasing Corporation (d/b/a PEAC Solutions), thereby selling ePlus’ domestic subsidiaries comprising the majority of our financing business segment. This divestiture positions us going forward as a pure-play technology solutions provider and represents a strategic shift in our operations. Consequently, our financial statements present our financial results for all periods and we are retrospectively presenting the results of our domestic financing business as discontinued operations. In our unaudited consolidated balance sheets, we present the assets and liabilities of our domestic financing business as assets and liabilities of discontinued operations in all periods presented. In our unaudited consolidated statements of operations, we present the operating results of our domestic financing business in earnings from discontinued operations. After the sale, our remaining three reportable segments are Product, Professional Services, and Managed Services, which we formerly referred to collectively as our technology business.

BUSINESS TRENDS

We believe the following key factors impact our business performance and our ability to achieve business results:

●

General economic concerns including changes in law and policy by the current US government, inflation, tariffs, export requirements, sanctions, changing interest rates, staffing shortages, remote work trends, geopolitical concerns and changes in US government spending and contracting practices may impact our customers’ willingness to spend on technology and services.

●

Within our enterprise accounts, we are experiencing pricing pressure impacting our gross profit and increased sales.

●

Our customers’ top focus areas include AI, security, cloud solutions, as well as digital transformation and modernization. We have developed advisory services, assessments, solutions, and professional and managed services to meet these priorities and help our customers attain and maintain their desired outcome.

●

Modernizing legacy applications, data modernization, reducing operational complexity, securing workloads, the cost and performance of IT operations, and agility are changing the way companies are purchasing and consuming technology. These are fueling deployments of solutions on cloud, managed services and hybrid platforms and licensing models, which may include invoicing over the term of the engagement and may result in additional revenue recognized on a net basis.

●

Rapid cloud adoption has led to customer challenges around increasing costs, security concerns, and skillset gaps. These challenges are consistent across all industries and business sizes. We have developed a Cloud Managed Services portfolio to address these needs, allowing our clients to focus on driving business outcomes via optimized and secure cloud platforms.

KEY BUSINESS METRICS

Our management monitors several financial and non-financial measures and ratios on a regular basis to track the progress of our business. We believe that the most important of these measures and ratios include net sales, gross profit and margin, operating income margin, net earnings, and net earnings per common share, in each case based on information prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”), as well as the non-GAAP financial measures and ratios, including Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share - diluted.

We also use a variety of operating and other information to evaluate the operating performance of our business, develop financial forecasts, make strategic decisions, and prepare and approve annual budgets. We use gross billings as an operational metric to assess the volume of transactions or market share for our product, professional services, and managed services segments as well as to understand changes in our accounts receivable and accounts payable balances and our statement of cash flows. We believe our gross billings metric will aid investors in the same manner to evaluate our business.

These key indicators include financial information that is prepared in accordance with US GAAP and presented in our consolidated financial statements, as well as non-GAAP and operational performance measurement tools. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance or financial position that either excludes or includes amounts that are correspondingly not normally excluded or included in the most directly comparable measure calculated and presented in accordance with US GAAP. Our use of non-GAAP information as analytical tools has limitations, and should not be considered in isolation or as substitutes for analysis of our financial results reported under GAAP, as these measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

We use Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP net earnings and Non-GAAP net earnings per common share - diluted as supplemental measures of our performance to gain and provide insight into our operating performance and performance trends and believe that these measures provide useful information to investors and others in understanding and evaluating our operating results. Please see footnotes (1) and (2) of the below tables for more information.

The following tables provide our key business metrics for our consolidated entity (in thousands, except per share amounts):


	Three Months Ended June 30,
	2025			2024
Financial metrics
Net sales	$	637,315		$	535,652

Gross profit	$	148,216		$	126,874
Gross profit margin		23.3	%		23.7	%

Operating income	$	36,200		$	31,459
Operating income margin		5.7	%		5.9	%

Net earnings from continuing operations	$	27,128		$	24,193
Net earnings from continuing operations margin		4.3	%		4.5	%
Net earnings per common share - diluted	$	1.03		$	0.90

Non-GAAP financial metrics
Non-GAAP: Net earnings from continuing operations (1)	$	33,164		$	27,366
Non-GAAP: Net earnings from continuing operations per common share - diluted (1)	$	1.26		$	1.01

Adjusted EBITDA (2)	$	46,709		$	39,069
Adjusted EBITDA margin (2)		7.3	%		7.3	%

Operational metrics
Gross billings: (3)
Cloud	$	312,017		$	241,274
Networking		268,732			281,528
Security		190,045			151,883
Collaboration		22,777			32,976
Other		51,446			44,592
Product segment		845,017			752,253
Services		107,748			81,455
Total	$	952,765		$	833,708

(1)

Non-GAAP: Net earnings from continuing operations and Non-GAAP: Net earnings from continuing operations per common share – diluted are based on net earnings from continuing operations calculated in accordance with US GAAP, adjusted to exclude other (income) expense, share-based compensation, and acquisition and integration expenses, and the related tax effects.

We believe that the exclusion of other income and acquisition-related amortization expense in calculating Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted provides 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, which helps in understanding and the evaluation of our operating results. We use Non-GAAP: Net earnings from continuing operations and Non-GAAP: Net earnings from continuing operations per common share – diluted as supplemental measures of our performance to gain and provide insight into our operating performance and performance trends. However, our use of non-GAAP information as analytical tools has limitations, and should not be considered in isolation or as substitutes for analysis of our financial results as reported under US GAAP. In addition, other companies, including companies in our industry, might calculate similar Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted or similarly titled measures differently, which may reduce their usefulness as comparative measures.

The following table provides our calculation of Non-GAAP: Net earnings and Non-GAAP: Net earnings from continuing operations per common share – diluted (in thousands, except per share amounts):


	Three Months Ended June 30,
	2025			2024
GAAP: Earnings from continuing operations before tax	$	36,812		$	33,170
Share-based compensation		3,440			2,791
Acquisition related amortization expense		5,548			3,750
Other (income) expense, net		(612	)		(1,711	)
Non-GAAP: Earnings from continuing operations before provision for income taxes		45,188			38,000

GAAP: Provision for income taxes		9,684			8,977
Share-based compensation		916			781
Acquisition related amortization expense		1,473			1,047
Other (income) expense, net		(163	)		(479	)
Tax benefit (expense) on restricted stock		114			308
Non-GAAP: Provision for income taxes		12,024			10,634

Non-GAAP: Net earnings from continuing operations	$	33,164		$	27,366


	Three Months Ended June 30,
	2025			2024
GAAP: Net earnings from continuing operations per common share—diluted	$	1.03		$	0.90

Share-based compensation		0.10			0.07
Acquisition related amortization expense		0.15			0.10
Other (income) expense, net		(0.02	)		(0.05	)
Tax benefit (expense) on restricted stock		-			(0.01	)
Total non-GAAP adjustments—net of tax		0.23			0.11

Non-GAAP: Net earnings from continuing operations per common share—diluted	$	1.26		$	1.01

(2)

We define Adjusted EBITDA as net earnings from continuing operations calculated in accordance with US GAAP, adjusted for the following: interest expense, depreciation and amortization, share-based compensation, acquisition and integration expenses, provision for income taxes, and other income. In the table below, we provide a reconciliation of Adjusted EBITDA to net earnings from continuing operations, which is the most directly comparable financial measure to this non-GAAP financial measure. Adjusted EBITDA margin is our calculation of Adjusted EBITDA divided by net sales.

We believe that the exclusion of other income in calculating Adjusted EBITDA and Adjusted EBITDA margin provides management and investors with 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, which helps in the understanding and evaluation of our operating results.

We use Adjusted EBITDA as a supplemental measure of our performance to gain and provide insight into our operating performance and performance trends. However, our use of Adjusted EBITDA and Adjusted EBITDA margin as analytical tools has limitations, and should not be considered in isolation or as substitutes for analysis of our financial results as reported under US GAAP. In addition, other companies, including companies in our industry, might calculate Adjusted EBITDA and Adjusted EBITDA margin or similarly titled measures differently, which may reduce their usefulness as comparative measures.

The following table provides our calculations of Adjusted EBITDA (in thousands):


	Three Months Ended June 30,
	2025		2024
Net earnings from continuing operations	$	27,128	$	24,193
Provision for income taxes		9,684		8,977
Share-based compensation		3,440		2,791
Interest and financing costs		-		-
Depreciation and amortization		7,069