SCANSOURCE, INC.
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 6, 2025
SCSC$42.78-5.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000918965-25-000018
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0000918965-25-000045
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 93 previous paragraphs and 85 current paragraphs.
45 unchanged; 36 reworded; 3 added; 11 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
On July 4, 2025, the One Big Beautiful Bill Act (the“Act”) was signed into law. The Act permanently extends key provisions of the Tax Cuts and Jobs Act, including 100% bonus depreciation, and introduces changes to the international tax framework. We are currently assessing the impact of the Act on our future effective tax rate, tax liabilities, and cash taxes.
Current report
(b) Countries outside of the United States and Brazil represent less than 5.0% of net sales for the quarters ended September 30, 2025 and 2024.
Current report
The decrease in depreciation expense of$1.3 million during thequarter ended September 30, 2025, islargely due to certain ERP software assets being fully depreciated in the previous fiscal year.
Removed paragraphs (11)
Previous report
Business Acquisitions
Previous report
On August 8, 2024, we completed the acquisition of substantially all of the assets of Secure Path Networks, LLC doing business as Resourcive ("Resourcive"), a leading technology advisor. Resourcive delivers strategic IT sourcing solutions to mid-market and enterprise businesses.
Previous report
On August 15, 2024, we completed the acquisition of substantially all of the assets of Advantix Solutions Group, Inc. ("Advantix"), a managed connectivity experience provider specializing in wireless enablement solutions.
Previous report
Restructuring
Previous report
In September 2024, as part of a strategic review of organizational structure and operations, the Company executed a cost reduction and restructuring program to align our cost structure with demand expectations in our hardware business. These actions are expected to result in approximately$10.5 million in annualized savings in selling, general and administrative expenses.
Previous report
For the nine months ended March 31, 2025, net sales increased $5.5 million, or 8.1%, compared to the prior-year period. Excluding the impact from foreign exchange rate fluctuations and the impact of acquisitions, adjusted net sales increased $0.6 million, or 0.9% for the nine months ended March 31, 2025.
Previous report
(b) Countries outside of Brazil represent $0.1 million, or 0.2% of sales, and $0.3 million, or 0.2% of sales, for the quarter and nine months ended March 31, 2025, respectively. Countries outside of Brazil represent $0.1 million, or 0.2% of sales, and $4.3 million, or 1.7% of sales, for the quarter and nine months ended March 31, 2024, respectively.
Previous report
For the nine months ended March 31, 2025, gross profit dollars decreased$3.5 million, or 1.5%, compared to the prior-year period. Lower sales volume reduced gross profit dollars by $27.8 million. Gross margin mix positively impacted gross profit by $24.3 million largely due to higher vendor program recognition and a more favorable sales mix. Gross profit margin increased 113 basis points year-over-year to 10.7%.
Previous report
For the nine months ended March 31, 2025, gross profit dollars increased $5.3 million, or 7.8%, compared to the prior-year period. Higher sales volume, largely due to the acquisition of Resourcive, increased gross profit for the nine-month period. Gross profit margin decreased 27 basis points compared to the prior-year nine-month period to 99.2%, reflecting the addition of professional services to the sales mix.
Previous report
The increase in amortization expense of $1.2 million and$2.3 million during thequarter and nine months ended March 31, 2025, respectively, is largely due to intangible assets acquired in our acquisitions of Advantix and Resourcive.
Previous report
For the nine months ended March 31, 2025, operating income decreased $1.2 million, or 5.5%, compared to the prior-year period. Operating margin decreased to 28.6% for the nine months ended March 31, 2025. The decrease in operating income for the nine-month period ended March 31, 2025 is primarily driven by expense related to the change in fair value of contingent consideration.
Reworded paragraphs (36)
Previous wording
ScanSource is a leading hybrid distributor connecting devices to the cloud and accelerating growth for customers and channel partners across hardware, software as a service ("SaaS"), and connectivity and cloud services. ScanSource uses multiple sales models to offer hybrid distribution solutions from leading suppliers of specialty technologies and connectivity and cloud services. The Company operates in the United States, Canada and Brazil.
Current wording
ScanSource is a leading technology distributor connecting devices to the cloud and accelerating growth for channel sales partners across hardware, SaaS, connectivity and cloud. We provide technology solutions and services from approximately 500 leading suppliers of mobility and barcode, POS, payment terminals, physical security, networking, communications, connectivity and cloud services to our approximately 25,000 channel sales partners located primarily in the United States and Brazil.
Previous wording
We operate our business under a management structure that enhances our specialty technology focus and hybrid distribution growth strategy. Our segments operate in the United States, Canada and Brazil and are based on sales models:
Current wording
We operate our business under a management structure that enhances our technology distribution growth strategy. Our segments operate primarily in the United States and Brazil:
Previous wording
We offer hardware, SaaS, and connectivity and cloud services from leading technology suppliers to customers and channel partners enabling solutions for users' needs and challenges. We operate distribution facilities that support our United States and Canada business in Mississippi, California and Kentucky. Brazil distribution facilities are located in the Brazilian states of Paraná, Espirito Santo and Santa Catarina. We provide some of our digital products, which include SaaS and subscriptions, through our digital tools and platforms.
Current wording
We sell hardware, SaaS, connectivity and cloud solutions and services to channel sales partners that are designed to solve end users’ challenges. We operate distribution facilities that primarily support our United States business in Mississippi, California and Kentucky. Brazil distribution facilities are located in the Brazilian states of Paraná, Espirito Santo and Santa Catarina. We provide some of our digital products, which include SaaS and subscriptions, through our digital tools and platforms.
Previous wording
The macroeconomic environment, including the economic impacts of growth outlook, inflation, tariffs and shifting relations between the U.S. and other countries, continues to create significant uncertainty and may adversely affect our financial condition and results of operations. In 2025, the U.S. announced a variety of additional tariffs on goods from multiple nations and trading blocks and has been targeted with reciprocal tariffs and other retaliatory actions in response. Although the U.S. has announced a 90-day pause on certain tariffs, negotiations and the state of international trade policy and relations continue to evolve. We are mindful of the potential impact these conditions could have on our customers, suppliers and end-customer demand and we are actively monitoring changes to the global macroeconomic environment and assessing the potential impacts these challenges may have on our financial condition, results of operations and liquidity. We expect to pass any price increases from our suppliers resulting from tariffs to our customers. We are also mitigating risks through strategic planning and maintaining financial flexibility, but we cannot predict the outcome of our mitigation strategies or the ultimate impact of tariffs and the global macroeconomic environment on our financial condition or results of operations.
Current wording
The macroeconomic environment, including the economic impacts of growth outlook, inflation, tariffs and shifting relations between the U.S. and other countries, continues to create significant uncertainty and may adversely affect our financial condition and results of operations. In 2025, the U.S. announced a variety of additional tariffs on goods from multiple nations and trading blocks and has been targeted with reciprocal tariffs and other retaliatory actions in response. Negotiations and the state of international trade policy and relations continue to evolve. We are mindful of the potential impact these conditions could have on our channel sales partners, suppliers and end-user demand and we are actively monitoring changes to the global macroeconomic environment and assessing the potential impacts these challenges may have on our financial condition, results of operations and liquidity. We expect to pass any price increases from our suppliers resulting from tariffs to our channel sales partners. We are also mitigating risks through strategic planning and maintaining financial flexibility, but we cannot predict the outcome of our mitigation strategies or the ultimate impact of tariffs and the global macroeconomic environment on our financial condition or results of operations.
Previous wording
Our strategy is to drive sustainable, profitable growth by orchestrating hybrid technology solutions through a growing ecosystem of partners by leveraging our people, processes and tools. Our goal is to provide exceptional experiences for our customers, suppliers and employees through operational excellence. Our hybrid distribution strategy utilizes multiple sales models to offer hardware, SaaS, and connectivity and cloud services from leading technology suppliers to customers that solve end-users’ challenges. ScanSource enables customers to deliver solutions for their end-users to address changing buying and consumption patterns. Our solutions may include a combination of offerings from multiple suppliers or give our customers access to additional services. As a trusted adviser to our customers, we provide solutions through our strong understanding of end-user needs.
Current wording
Our strategy is to drive sustainable, profitable growth by providing complex, converging technology solutions through a growing ecosystem of channel sales partners leveraging our people, processes and tools. Our goal is to provide exceptional experiences for our channel sales partners, suppliers and employees, and we strive for operational excellence. Our differentiated technology distribution strategy utilizes multiple sales models to offer hardware, SaaS, connectivity and cloud services from leading technology suppliers to channel sales partners that solve end users’ challenges. ScanSource enables channel sales partners to deliver solutions for their end users to address changing buying and consumption patterns. Our solutions may include a combination of offerings from multiple suppliers or give our channel sales partners access to additional services. As a trusted adviser to our channel sales partners, we provide converged solutions through our strong understanding of end-user needs.
Previous wording
We have two reportable segments, which are based on sales channels. The following tables summarize our net sales results by operating segment and by geographic location for the quarters and nine months ended March 31, 2025 and 2024:
Current wording
We have two reportable segments, which are based on sales channels. The following tables summarize our net sales results by operating segment and by geographic location for the quarters ended September 30, 2025 and 2024:
Previous wording
The Specialty Technology Solutions segment consists of sales to channel partners in the United States, Canada and Brazil. For the quarter andnine months ended March 31, 2025, net sales decreased $51.4 million, or 7.0%, and $291.3 million, or 11.9%, respectively, compared to the prior-year periods. Excluding the impact from foreign exchange rate fluctuations and the impact of divestitures and acquisitions, adjusted net sales decreased$49.4 million, or 6.8%, and $276.3 million, or 11.3%, respectively, compared to the prior-year periods. For the quarter ended March 31, 2025, net sales decreased primarily due to lower net sales in Brazil. In North America, most of the technologies in this segment had year-over-year growth. For thenine months ended March 31, 2025, net sales decreased primarily due to soft demand in a more cautious technology spending environment.
Current wording
The Specialty Technology Solutions segment consists of sales to channel partners primarily in the United States and Brazil. For the quarter ended September 30, 2025, net sales decreased $36.9 million, or 4.9%, compared to the prior-year period. Excluding the impact from foreign exchange rate fluctuations and the impact of acquisitions, adjusted net sales decreased$41.6 million, or 5.6%, compared to the prior-year period. For the quarter ended September 30, 2025, net sales decreased primarily due to lower large deals.
Previous wording
The Intelisys & Advisory segment consists of sales and services to both channel partners (Intelisys) and end-users (Advisory) in the United States. For thequarter ended March 31, 2025, net sales increased $3.6 million, or 16.0%, compared to the prior-year period. Excluding the impact from foreign exchange rate fluctuations and the impact of acquisitions, adjusted net sales increased $1.0 million, or 4.3% for the quarter ended March 31, 2025.
Current wording
The Intelisys & Advisory segment consists of sales and services to both channel partners (Intelisys) and end users (Advisory) in the United States. For thequarter ended September 30, 2025, net sales increased $0.9 million, or 4.0%, compared to the prior-year period. The increase in net sales reflects the addition of an acquisition. Excluding the impact from foreign exchange rate fluctuations and the impact of acquisitions, adjusted net sales increased $0.2 million, or 0.7% for the quarter ended September 30, 2025. The increase in net sales for the quarter ended September 30, 2025 reflects Intelisys net sales growth. Quarterly net billings for Intelisys increased 1.7% over the prior-year quarter to bring annualized net billings to approximately$2.78 billion.
Previous wording
The following table summarizes our gross profit for the quarters and nine months ended March 31, 2025 and 2024:
Current wording
The following table summarizes our gross profit for the quarters ended September 30, 2025 and 2024:
Previous wording
Our gross profit is primarily affected by sales volume and gross margin mix. Gross margin mix is impacted by multiple factors, which include sales mix (proportion of sales of higher margin products or services relative to total sales), vendor program recognition (consisting of volume rebates, inventory price changes and purchase discounts) and freight costs. Increases in vendor program recognition decrease cost of goods sold, thereby increasing gross profit. Net sales derived from our Intelisys business contribute 100% to our gross profit dollars and margin as they have no associated cost of goods sold.
Current wording
Our gross profit is primarily affected by sales volume and gross margin mix. Gross margin mix is impacted by multiple factors, which include sales mix (proportion of sales of higher margin products or services relative to total sales), supplier program recognition (consisting of volume rebates, inventory price changes and purchase discounts) and freight costs. Increases in supplier program recognition decrease cost of goods sold, thereby increasing gross profit. Net sales derived from our Intelisys business contribute 100% to our gross profit dollars and margin as they have no associated cost of goods sold.
Previous wording
For the quarter ended March 31, 2025, gross profit dollars for the Specialty Technology Solutions segment increased $2.2 million, or 3.0%, compared to the prior-year quarter. Vendor program recognition positively impacted gross profit by $7.2 million, offsetting the impact of lower sales volumes of $5.0 million. Gross profit margin increased 106 basis points over the prior-year quarter to 10.9%.
Current wording
For the quarter ended September 30, 2025, gross profit dollars for the Specialty Technology Solutions segment increased $5.4 million, or 6.9%, compared to the prior-year quarter. Favorable supplier program recognition and sales mix positively impacted gross profit by $9.2 million. Lower sales volume, after considering cost of goods sold, reduced gross profit by $3.8 million for the quarter. Gross profit margin increased 130 basis points over the prior-year quarter to 11.7%.
Previous wording
For the quarter ended March 31, 2025, gross profit dollars for the Intelisys & Advisory segment increased $3.6 million, or 15.8%, compared to the prior-year quarter. Higher sales volume, largely due to the impact of our Resourcive acquisition, increased gross profit for the quarter. Gross profit margin decreased 24 basis points compared to the prior-year quarter to 99.2%, reflecting the addition of professional services to the sales mix.
Current wording
For the quarter ended September 30, 2025, gross profit dollars for the Intelisys & Advisory segment increased $0.4 million, or 1.8%, compared to the prior-year quarter. Higher sales volume, largely due to the impact of our Resourcive acquisition, increased gross profit for the quarter. Gross profit margin decreased 211 basis points compared to the prior-year quarter to 97.4%, reflecting the addition of professional services to the sales mix.
Previous wording
The following table summarizes our operating expenses for the quarters and nine months ended March 31, 2025 and 2024:
Current wording
The following table summarizes our operating expenses for the quarters ended September 30, 2025 and 2024:
Previous wording
Selling, general and administrative expenses (“SG&A”) increased by $3.1 million, or 4.7%, and $6.4 million, or 3.1% for the quarter and nine months ended March 31, 2025, respectively compared to the prior-year periods. The increase for the quarter is primarily attributable to increased costs related to acquisitions. The increase for the nine-month period is primarily attributable to increased costs related to acquisitions as well as increased customer specific bad debt expense.
Current wording
Selling, general and administrative expenses (“SG&A”) increased by $3.6 million, or 5.0%, for the quarter ended September 30, 2025, compared to the prior-year period. The increase for the quarter is primarily attributable to increased costs for employee-related expenses and costs related to acquisitions.
Previous wording
Restructuring and other charges of $5.4 million were incurred during the nine months ended March 31, 2025 compared to charges of $3.9 million for thequarter andnine months ended March 31, 2024. Restructuring and other charges relate to employee separation and benefit costs in connection with our expense reduction and restructuring plans implemented during the current and prior fiscal year.
Current wording
Restructuring and other charges of $5.1 million were incurred in thequarter ended September 30, 2024. Restructuring and other charges relate to employee separation and benefit costs in connection with our expense reduction and restructuring plans implemented during the current and prior fiscal year.
Previous wording
We present changes in fair value of the contingent consideration owed to the former shareholders of businesses that we acquire as a separate line item in operating expenses. We recorded a fair value adjustment expense of $0.9 million and $2.0 million in thequarter andnine months ended March 31, 2025, respectively. The expense from changes in fair value of contingent consideration for thequarter and nine months is largely due to therecurring amortization of the unrecognized fair value discount.
Current wording
We present changes in fair value of the contingent consideration owed to the former shareholders of businesses that we acquire as a separate line item in operating expenses. We recorded a fair value adjustment expense of $0.3 million in thequarter ended September 30, 2025. The expense from changes in fair value of contingent consideration for thequarter is largely due to the recurring amortization of the unrecognized fair value discount.
Previous wording
The following table summarizes our operating income for the quarters and nine months ended March 31, 2025 and 2024:
Current wording
The following table summarizes our operating income for the quarters ended September 30, 2025 and 2024:
Previous wording
For the Specialty Technology Solutions segment, operating income decreased $0.3 million, or 2.0%, and $6.8 million, or 13.1% for the quarter and nine months ended March 31, 2025, respectively, compared to the prior-year periods. Operating margin was 2.1% for the quarter and nine months ended March 31, 2025. The decrease in operating income for thequarter is primarily due to higher amortization expense related to a recent acquisition. The decrease in operating income for the nine months is primarily due to lower gross profits from lower sales volumes as well as higher bad debt expense.
Current wording
For the Specialty Technology Solutions segment, operating income increased $3.6 million, or 21.7%, for the quarter ended September 30, 2025, compared to the prior-year periods. Operating margin was 2.8% and 2.2%for thequarters ended September 30, 2025 and September 30, 2024, respectively. The increase in operating income for thequarter is primarily due to higher gross profits for the quarter.
Previous wording
For the Intelisys & Advisory segment, operating income increased $0.8 million, or 11.1%, for the quarter ended March 31, 2025. Operating margin decreased to 31.5% for the quarter ended March 31, 2025. The increase in operating income for the quarter ended March 31, 2025 is a result of higher gross profits for the quarter.
Current wording
For the Intelisys & Advisory segment, operating income decreased $0.6 million, or 9.3%, for the quarter ended September 30, 2025. Operating margin decreased to 24.0% for the quarter ended September 30, 2025. The decrease in operating income for the quarter ended September 30, 2025 is primarily driven by higher employee-related expenses during the quarter.
Previous wording
For the quarter and nine months ended March 31, 2025, Corporate operating losses of $0.3 million and $7.9 million, respectively, represent restructuring and acquisition-related costs and a legal settlement incurred during the fiscal year.
Current wording
For the quarter ended September 30, 2025, Corporate operating losses of $0.3 million represents acquisition-related costs.
Previous wording
The following table summarizes our total other (income) expense for the quarters and nine months ended March 31, 2025 and 2024:
Current wording
The following table summarizes our total other (income) expense for the quarters ended September 30, 2025 and 2024:
Previous wording
Interest expense consists primarily of interest incurred on borrowings, non-utilization fees charged on the revolving credit facility and amortization of debt issuance costs. Interest expense decreased for the quarter and nine months ended March 31, 2025 compared to the prior-year periods, primarily from lower average borrowings on our multi-currency revolving credit facility.
Current wording
Interest expense consists primarily of interest incurred on borrowings, non-utilization fees charged on the revolving credit facility and amortization of debt issuance costs. Interest expense decreased for the quarter ended September 30, 2025 compared to the prior-year period, primarily from lower average borrowings on our multi-currency revolving credit facility and lower interest rates.
Previous wording
Interest income increased for the quarter and nine months ended March 31, 2025 primarily from interest earned on higher average cash balances in the United States.
Current wording
Interest income increased for the quarter ended September 30, 2025 primarily from higher interest income in Brazil.
Previous wording
For the quarter and nine months ended March 31, 2025, we recognized a gain of $1.0 million and $6.4 million, respectively, primarily as a result of an insurance recovery in connection with the cybersecurity attack in the fourth quarter of fiscal year 2023.
Current wording
Other net income decreased for the quarter ended September 30, 2025, as we recognized a $5.1 million gain in the prior-year period related to an insurance recovery in connection with the cybersecurity attack in fiscal year 2023.
Previous wording
For the quarter and nine months ended March 31, 2025, income tax expense was $6.8 million and $15.4 million, respectively, reflecting an effective tax rate of 28.0% and 23.1%. In comparison, for the quarter and nine months ended March 31, 2024, income tax expense was $5.1 million and $16.2 million reflecting an effective tax rate of 28.7% and 21.0%, respectively. The decrease in the effective tax rate for the quarter is primarily driven by a change in the geographical mix of earnings. The increase in the effective tax rate for the nine-month period is primarily due to the higher amount of discrete tax benefits recognized in the prior-year period. We expect the effective tax rate, excluding discrete items, for fiscal year 2025 to be approximately 28.2% to 29.2%. See Note 13 - Income Taxes to the Notes to Consolidated Financial Statements for further discussion.
Current wording
For the quarter ended September 30, 2025, income tax expense was $7.1 million reflecting an effective tax rate of 26.4%. In comparison, for the quarter ended September 30, 2024, income tax expense was $6.0 million reflecting an effective tax rate of 26.1%. We expect the effective tax rate, excluding discrete items, for fiscal year 2026 to be approximately 27.2% to 28.2%. See Note 13 - Income Taxes to the Notes to Consolidated Financial Statements for further discussion.
Previous wording
(a)The annualized 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 and 91 days in the prior-year quarter.
Current wording
(a)The annualized EBITDA amount is divided by days in the quarter times 365 days per year, or 366 days for leap year. There were 92 days in the current and in the prior-year quarter.
Previous wording
Our cash and cash equivalents balance totaled $146.3 million at March 31, 2025, compared to $185.5 million at June 30, 2024, including $33.3 million and $20.0 million held outside of the United States at March 31, 2025 and June 30, 2024, respectively. Checks released but not yet cleared in the amount of $0.2 million and $5.9 million are included in accounts payable at March 31, 2025 and June 30, 2024, respectively.
Current wording
Our cash and cash equivalents balance totaled $124.9 million at September 30, 2025, compared to $126.2 million at June 30, 2025, including $43.2 million and $46.3 million held outside of the United States at September 30, 2025 and June 30, 2025, respectively. Checks released but not yet cleared in the amount of $0.1 million are included in accounts payable at September 30, 2025 and June 30, 2025.
Previous wording
We conduct business primarily in the United States, Canada and Brazil where we generate and use cash. We provide for United States income taxes from the earnings of our Canadian and Brazilian subsidiaries. See Note 13 -Income Taxes in the Notes to the Consolidated Financial Statements for further discussion.
Current wording
We conduct business primarily in the United States and Brazil where we generate and use cash. We provide for United States income taxes from the earnings of our Canadian and Brazilian subsidiaries. See Note 13 -Income Taxes in the Notes to the Consolidated Financial Statements for further discussion.
Previous wording
Our net investment in working capital, defined as accounts receivable plus inventories less accounts payable, decreased $7.9 million to $498.3 million at March 31, 2025 from $506.2 million at June 30, 2024, primarily from decreases in inventory and accounts receivable, partially offset by lower accounts payable, as a result of lower sales volume and our focus on working capital efficiency. Our net investment in working capital is affected by several factors such as fluctuations in sales volume, net income, timing of collections from customers, increases and decreases to inventory levels and payments to vendors.
Current wording
Our net investment in working capital, defined as accounts receivable plus inventories less accounts payable, increased $12.1 million to $532.8 million at September 30, 2025 from $520.7 million at June 30, 2025, primarily from decreases in accounts payable and increases in inventories, partially offset by lower accounts receivable as a result of lower sales volume. Our net investment in working capital is affected by several factors such as fluctuations in sales volume, net income, timing of collections from channel sales partners, increases and decreases to inventory levels and payments to vendors.
Previous wording
Operating cash flows are subject to variability period over period as a result of the timing of payments related to accounts receivable, accounts payable, and other working capital items. Net cash provided by operating activities was $104.7 million and $316.9 million for the nine months ended March 31, 2025 and March 31, 2024, respectively. Cash provided by operating activities for the nine months ended March 31, 2025 is primarily attributable to net income adjusted for non-cash items plus reductions in accounts receivable and inventory partially offset by a reduction in accounts payable. Compared to March 31, 2024, accounts receivable and inventory decreased 4.6% and 10.0% respectively, while accounts payable decreased 2.7%.
Current wording
Operating cash flows are subject to variability period over period as a result of the timing of payments related to accounts receivable, accounts payable, and other working capital items. Net cash provided by operating activities was $23.2 million and $44.8 million for the three months ended September 30, 2025 and September 30, 2024, respectively. Cash provided by operating activities for the three months ended September 30, 2025 is primarily attributable to net income and changes in working capital balances. Compared to September 30, 2024, accounts receivable and accounts payable decreased 1.8% and 8.5% respectively, while inventory increased 0.3%.
Previous wording
The number of days sales outstanding ("DSO") was 72 days at March 31, 2025 and 71 days at March 31, 2024. Inventory turned 5.0 times during the quarter ended March 31, 2025, compared to 4.8 times in the prior-year quarter ended March 31, 2024.
Current wording
The number of days sales outstanding ("DSO") was 68 days at September 30, 2025, compared to 70 days at June 30, 2025 and 66 days at September 30, 2024. Inventory turned 5.1 times during the quarter ended September 30, 2025, compared to 5.9 times during the quarter ended June 30, 2025 and 5.3 times in the prior-year quarter ended September 30, 2024.
Previous wording
Cash used in investing activities for the nine months ended March 31, 2025 was $59.9 million, compared to cash provided by investing activities of $10.7 million in the prior-year period. Cash used in investing activities for the nine months ended March 31, 2025 is largely due to cash paid for acquisitions and capital expenditures. Cash provided by investing activities for the nine months ended March 31, 2024 represents the proceeds from the sale of a business offset by capital expenditures.
Current wording
Cash used in investing activities for the three months ended September 30, 2025 was $2.4 million, compared to cash used by investing activities of $59.2 million in the prior-year period. Cash used in investing activities for the three months ended September 30, 2025 is due to capital expenditures. Cash used by investing activities for the three months ended September 30, 2024 represents cash paid for acquisitions and capital expenditures.
Previous wording
Management expects capital expenditures for fiscal year 2025 to range from $7.0 million to $9.0 million, primarily for IT investments.
Current wording
Management expects capital expenditures for fiscal year 2026 to range from $10.0 million to $15.0 million, primarily for IT and warehouse investments.
Previous wording
For the nine months ended March 31, 2025 and March 31, 2024, cash used in financing activities totaled $83.4 million and $203.9 million, respectively. Cash used in financing activities for the nine months ended March 31, 2025 is primarily attributable to common stock repurchases in the nine months. Cash used in financing activities for the nine months ended March 31, 2024 is primarily attributable to repayments of borrowings on the revolving credit facility.
Current wording
For the three months ended September 30, 2025 and September 30, 2024, cash used in financing activities totaled $23.0 million and $26.6 million, respectively. Cash used in financing activities for the three months ended September 30, 2025 and September 30, 2024 is primarily attributable to common stock repurchases.
Previous wording
During the quarter and nine months ended March 31, 2025, our borrowings under the Amended Credit Agreement were U.S. dollar loans. The spread in effect as of March 31, 2025 was 1.00% for SOFR-based loans and 0.00% for alternate base rate loans. The commitment fee rate in effect at March 31, 2025 was 0.15%. The Amended Credit Agreement includes customary representations, warranties and affirmative and negative covenants, including financial covenants. Specifically, our Leverage Ratio must be less than or equal to 3.50 to 1.00 at all times. In addition, our Interest Coverage Ratio (as such term is defined in the Amended Credit Agreement) must be at least 3.00 to 1.00 at the end of each fiscal quarter. In the event of a default, customary remedies are available to the lenders, including acceleration and increased interest rates. We were in compliance with all covenants under the credit facility at March 31, 2025.
Current wording
During the quarter ended September 30, 2025, our borrowings under the Amended Credit Agreement were U.S. dollar loans. The spread in effect as of September 30, 2025 was 1.00% for SOFR-based loans and 0.00% for alternate base rate loans. The commitment fee rate in effect at September 30, 2025 was 0.15%. The Amended Credit Agreement includes customary representations, warranties and affirmative and negative covenants, including financial covenants. Specifically, our Leverage Ratio must be less than or equal to 3.50 to 1.00 at all times. In addition, our Interest Coverage Ratio (as such term is defined in the Amended Credit Agreement) must be at least 3.00 to 1.00 at the end of each fiscal quarter. In the event of a default, customary remedies are available to the lenders, including acceleration and increased interest rates. We were in compliance with all covenants under the credit facility at September 30, 2025.
Previous wording
The average daily outstanding balance on the revolving credit facility, excluding the term loan facility, during the nine month periods ended March 31, 2025 and 2024 was $0.3 millionand $94.6 million, respectively. There was $350.0 million and $349.9 million available for additional borrowings as of March 31, 2025 and June 30, 2024, respectively. The effective interest rates for the revolving line of credit were 5.45% and 6.44% as of March 31, 2025 and June 30, 2024, respectively. There were no letters of credit issued under the multi-currency revolving credit facility at March 31, 2025 or June 30, 2024. Availability to use this borrowing capacity depends upon, among other things, the levels of our Leverage Ratio and Interest Coverage Ratio, which, in turn, will depend upon (1) our Credit Facility Net Debt relative to our Credit Facility EBITDA and (2) Credit Facility EBITDA relative to total interest expense, respectively. As a result, our availability will increase if EBITDA increases (subject to the limit of the facility) and decrease if EBITDA decreases. While we were in compliance with the financial covenants contained in the Amended Credit Agreement as of March 31, 2025, and currently expect to continue to maintain such compliance, should we encounter difficulties, our historical relationship with our Amended Credit Agreement lending group has been strong and we anticipate their continued support of our long-term business.
Current wording
The average daily outstanding balance on the revolving credit facility, excluding the term loan facility, during the three month periods ended September 30, 2025 and 2024 was $1.1 millionand $0.1 million, respectively. There was $350.0 million available for additional borrowings as of September 30, 2025 and June 30, 2025, respectively. The effective interest rates for the revolving line of credit were 5.28% and 5.46% as of September 30, 2025 and June 30, 2025, respectively. There were no letters of credit issued under the multi-currency revolving credit facility at September 30, 2025 or June 30, 2025. Availability to use this borrowing capacity depends upon, among other things, the levels of our Leverage Ratio and Interest Coverage Ratio, which, in turn, will depend upon (1) our Credit Facility Net Debt relative to our Credit Facility EBITDA and (2) Credit Facility EBITDA relative to total interest expense, respectively. As a result, our availability will increase if EBITDA increases (subject to the limit of the facility) and decrease if EBITDA decreases. While we were in compliance with the financial covenants contained in the Amended Credit Agreement as of September 30, 2025, and currently expect to continue to maintain such compliance, should we encounter difficulties, our historical relationship with our Amended Credit Agreement lending group has been strong and we anticipate their continued support of our long-term business.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
(a) Acquisition and divestiture costs are generally non-deductible for tax purposes.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The increase in net sales for the quarter and nine months ended March 31, 2025 reflects the addition of an acquisition and Intelisys net sales growth. Quarterly net billings for Intelisys increased 6.8% over the prior-year quarter to bring annualized net billings to approximately $2.86 billion.