SCANSOURCE, INC.
For the period ended Jun 30, 2026. Filed Aug 20, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Aug 20, 2026
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-K
Period ended 2025-06-30; filed 2025-08-21.
0000918965-25-000029
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-06-30; filed 2026-08-20.
0000918965-26-000044
Item 7. 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 122 previous paragraphs and 110 current paragraphs.
65 unchanged; 42 reworded; 1 added; 14 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 15 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 (1)
Current report
Intangible amortization expense decreased $2.5 million for the fiscal year ended June 30, 2026 compared to the prior fiscal year. The decrease is a result of fully amortized intangible assets in the prior fiscal year.
Removed paragraphs (14)
Previous report
•Specialty Technology Solutions
Previous report
•Intelisys & Advisory
Previous 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.
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
Cost Reduction and Restructuring Program
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 business. These actions are expected to result in approximately $10.5 million in annualized savings in selling, general and administrative expenses. In January 2025, we executed an additional cost reduction and restructuring plan. These actions resulted in approximately $10.0 millionin annualized savings in selling, general and administrative expenses.
Previous report
Intangible amortization expense increased $3.5 million for the fiscal year ended June 30, 2025 compared to the prior fiscal year. The increase is a result of intangible assets acquired in our acquisitions of Advantix and Resourcive.
Previous report
For the fiscal year ended June 30, 2024 we recognized a$14.2 million gain on sale of our UK-based intY business.
Previous report
In December of 2021, the Organization for Economic Co-operation and Development ("OECD") released Pillar Two Model Rules defining the global minimum tax rules, which contemplate a global minimum tax rate of 15%. Several member countries have enacted Pillar Two provisions that are effective in fiscal year 2025. The Company believes it qualifies for safe harbor exemptions in many of these jurisdictions and any remaining impact to future effective tax rates and corporate tax liability will be minimal.
Previous report
We expect the fiscal year 2026 effective tax rate from continuing operations to be approximately 27.2% to 28.2%. See Note 13 -Income Taxes in the Notes to Consolidated Financial Statements for further discussion including an effective tax rate reconciliation.
Previous report
(b)Reflects gain on the sale of the UK-based intY business. This transaction resulted in a capital loss for tax purposes. The Company did not record a tax provision on the capital loss as there were no offsetting capital gains.
Previous report
We adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC Topic 326)effective July 1, 2020. The adoption did not have a material impact on our consolidated financial statements. Our policy for estimating allowances for doubtful accounts receivable is described below.
Reworded paragraphs (42)
Previous 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, Canada and Brazil.
Current wording
ScanSource is a leading technology distributor uniquely positioned to address complex, converging technologies and to accelerate 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 technology distribution growth strategy. Our segments operate primarily in the United States, Canada and Brazil:
Current wording
We operate our business under a management structure that enhances our technology distribution growth strategy. Our Specialty Technology Solutions segment operates primarily in the United States and Brazil and our Intelisys & Advisory segment operates primarily in the United States.
Previous 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 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
Our key suppliers include AT&T, Avaya, Axis, Cisco, Comcast Business, Dell, Elo, Extreme, Five9, Fortinet, Hanwha, Honeywell, HP Poly, HPE/Aruba, Ingenico, Lumen, Microsoft, NiCE, RingCentral, Ubiquiti, Verifone, Verizon, Zebra Technologies and Zoom.
Current wording
Our key suppliers include AT&T, Avaya, Axis, Cisco, Comcast Business, Dell, Elo, Extreme, Five9, Fortinet, Hanwha, Honeywell, HP Poly, HPE/Aruba, HPE/Juniper, Ingenico, Lumen, Microsoft, NiCE, RingCentral, Ubiquiti, Verifone, Verizon, Zebra Technologies and Zoom.
Previous wording
Impact of the Macroeconomic Environment, Including Forecasted Growth, Inflation and Tariffs
Current wording
Impact of the Macroeconomic Environment, Including Growth Outlook, Inflation and Tariffs
Previous wording
The macroeconomic environment, including the economic impacts of forecasted growth, 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 pauses 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 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 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.
Current wording
The macroeconomic environment, including the economic impacts of growth outlook, inflationary pressures, tariffs and evolving geopolitical conflicts and trade relationships, continues to create significant uncertainty and may adversely affect our financial condition and results of operations. In 2026, the U.S. Supreme Court invalidated the tariffs imposed under the International Emergency Economic Powers Act (IEEPA); however, certain other tariffs remain in effect and the current administration has indicated that it will continue seeking to implement tariffs through other statutory authorities. Further, the ongoing conflict with Iran and geopolitical tensions has resulted in volatility in the global energy and commodity markets and increased uncertainty in the macroeconomic environment. International trade policy and diplomatic dynamics continue to shift, and the full implications remain uncertain. We remain mindful of the potential impact these conditions could have on our channel sales partners, suppliers and end-user demand. 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 through to our channel sales partners any supplier price increases resulting from tariffs or other factors. We are also mitigating related risks through strategic planning and maintaining financial flexibility; however, we cannot predict the effectiveness 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 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 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 customized solutions through our strong understanding of end-user needs.
Current wording
Our strategy is to drive sustainable, profitable growth by orchestrating 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, through 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 customized solutions through our strong understanding of end-user needs.
Previous wording
The Specialty Technology Solutions segment consists of sales to channel sales partners in the United States, Canada and Brazil. During fiscal year 2025, net sales for this segment decreased $224.8 million, or 7.1%, compared to fiscal year 2024. Excluding the impact from foreign exchange fluctuations and the impact of divestitures and acquisitions, adjusted net sales for fiscal year 2025 decreased $212.3 million, or 6.7%, compared to the prior fiscal year. The decrease in net sales and in adjusted net sales is primarily due to a more cautious technology spending environment in the first half of the fiscal year.
Current wording
The Specialty Technology Solutions segment consists of sales to channel sales partners in the United States and Brazil. During fiscal year 2026, net sales for this segment increased $182.2 million, or 6.2%, compared to fiscal year 2025. Excluding the impact from foreign exchange fluctuations and the impact of acquisitions, non-GAAP net sales for fiscal year 2026 increased $154.6 million, or 5.3%, compared to the prior fiscal year. The increase in net sales and in non-GAAP net sales is primarily due to broad-based growth in North America.
Previous wording
The Intelisys & Advisory segment consists of sales and services to both channel sales partners (Intelisys) and end users (Advisory) in the United States. During fiscal year 2025, net sales for this segment increased $5.8 million, or 6.3%, compared to fiscal year 2024. The increase in net sales reflects the addition of an acquisition. Excluding the impact from foreign exchange rate fluctuations and the impact from acquisitions, adjusted net sales decreased $0.2 million, or 0.2%, compared to the prior year primarily due to a more cautious technology spending environment.
Current wording
The Intelisys & Advisory segment consists of sales and services to both channel sales partners (Intelisys) and end users (Advisory) in the United States. During fiscal year 2026, net sales for this segment increased $3.0 million, or 3.1%, compared to fiscal year 2025. The increase in net sales reflects higher Intelisys sales and higher Resourcive sales. Excluding the impact of acquisitions, non-GAAP net sales increased $2.3 million, or 2.3%, compared to the prior year primarily reflects higher Intelisys sales.
Previous wording
For fiscal year 2025, Intelisys net billings, which are amounts billed by suppliers to end users and represents annual recurring revenue, totaled approximately $2.79 billion, an increase of 4.5%. Thefiscal year 2025 Intelisys net billings resulted in Intelisys net sales of approximately $85.6 million. For our Intelisys business, net sales reflect the net commissions received from suppliers after paying channel sales partner commissions.
Current wording
For fiscal year 2026, Intelisys net billings, which are amounts billed by suppliers to end users and represents annual recurring revenue, totaled approximately $2.88 billion, an increase of 3.2% from the prior fiscal year.
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), 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.
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. Gross profit margin in our Intelisys & Advisory segment reflects a higher contribution of recurring revenue which is recorded on a net basis.
Previous wording
For the Specialty Technology Solutions segment, gross profit dollars increased $4.1 million. Gross margin mix positively impacted gross profit by $26.0 million, largely from favorable supplier program recognition and favorable sales mix partially offset by higher freight costs. Lower sales volume, after considering the associated cost of goods sold, impacted gross profit decline by $21.8 million for the current fiscal year. For the fiscal year ended June 30, 2025, the gross profit margin increased 88 basis points over the prior-year to 10.6%.
Current wording
For the Specialty Technology Solutions segment, gross profit dollars increased $26.2 million. Higher sales volumes, after considering cost of goods sold, increased gross profit by $19.2 million. Favorable supplier program recognition, offset by unfavorable sales mix and higher freight cost, impacted gross profit by $7.0 million for the current fiscal year. For the fiscal year ended June 30, 2026, the gross profit margin increased 22 basis points over the prior-year to 10.8%.
Previous wording
For the Intelisys & Advisory segment, gross profit dollars increased $5.4 million. Higher sales volume, largely due to the impact of our Resourcive acquisition increased gross profit dollars by$5.8 million. Gross profit margin decreased 36 basis points over the prior fiscal year to 99.1%, reflecting the addition of professional services to the sales mix.
Current wording
For the Intelisys & Advisory segment, gross profit dollars increased $2.5 million. Higher sales volume, largely due to higher Intelisys sales and the full year impact of our Resourcive acquisition, increased gross profit dollars by$3.0 million. The increase was partially offset by a higher sales mix of professional services of $0.5 million. Gross profit margin decreased 54 basis points over the prior fiscal year to 98.6%.
Previous wording
Selling, general and administr ative expenses (“SG&A”) increased $9.5 million for the fiscal year ended June 30, 2025 compared to the prior year. The increase in SG&A expenses is primarily attributable to increased costs related to acquisitions.
Current wording
Selling, general and administr ative expenses (“SG&A”) increased $26.2 million for the fiscal year ended June 30, 2026 compared to the prior year. The increase in SG&A expenses is primarily attributable to increased costs for employee-related expenses.
Previous wording
Depreciation expense decreased $1.2 million for the fiscal year ended June 30, 2025 compared to the prior fiscal year. The decrease is primarily related to IT assets that became fully depreciated in the current year.
Current wording
Depreciation expense decreased $4.0 million for the fiscal year ended June 30, 2026 compared to the prior fiscal year. The decrease is primarily related to certain IT assets that became fully depreciated.
Previous wording
Restructuring and other charges of $5.4 million for the fiscal year ended June 30, 2025 increased $1.0 million compared to the prior year, which primarily related to employee separation and benefit costs in connection with our expense reduction and restructuring plans implemented during fiscal year 2025.
Current wording
Restructuring and other charges of $1.8 million for the fiscal year ended June 30, 2026 decreased $3.6 million compared to the prior year, which primarily related to employee separation and benefit costs in connection with our expense reduction and restructuring plans.
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 $1.9 million for the fiscal year ended June 30, 2025. The expense from changes in fair value of contingent consideration is largely due to the recurring 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 $1.1 million for the fiscal year ended June 30, 2026. The expense from changes in fair value of contingent consideration is largely due to the recurring amortization of the unrecognized fair value discount.
Previous wording
For the Specialty Technology Solutions segment, operating income decreased $0.6 million, and operating margin increased 14 basis points to 2.2% for the fiscal year ended June 30, 2025, compared to the prior fiscal year. The decrease in operating income is primarily due to higher information technology and consulting related costs as well as higher amortization related to recent acquisitions.
Current wording
For the Specialty Technology Solutions segment, operating income increased $8.1 million, and the operating margin increased 13 basis points to 2.4% for the fiscal year ended June 30, 2026, compared to the prior fiscal year. The increase in operating income is primarily due to higher sales volume for the fiscal year.
Previous wording
For the Intelisys & Advisory segment, operating income decreased $3.4 million with the operating margin decreasing to 27.7% for the fiscal year ended June 30, 2025, compared to the prior fiscal year. The decrease in operating income is largely due to higher costs, including change in fair value expense related to a recent acquisition.
Current wording
For the Intelisys & Advisory segment, operating income increased $1.4 million with the operating margin increasing to 28.3% for the fiscal year ended June 30, 2026, compared to the prior fiscal year. The increase in operating income is largely due to higher sales volume and lower expense for the change in fair value of contingent consideration.
Previous wording
For the fiscal year ended June 30, 2025, Corporate operating loss totaled $8.1 million which represents $5.4 million in restructuring expenses, $1.6 million legal settlement, $0.9 million of acquisition and divestiture costs and $0.2 million in cyberattack restoration charges. During the fiscal year ended June 30, 2024 Corporate incurred a loss of $6.9 million which represents $4.4 million in restructuring expenses, $1.7 million of acquisition and divestiture costs as well as $0.9 million in cyberattack restoration charges.
Current wording
For the fiscal year ended June 30, 2026, Corporate operating loss totaled $4.1 million which represents $1.8 million in restructuring expenses, $0.9 million legal settlement, $1.3 million of acquisition costs and $0.1 million in cyberattack restoration charges. During the fiscal year ended June 30, 2025 Corporate incurred a loss of $8.1 million which represents $5.4 million in restructuring expenses, $1.6 million legal settlement, $0.9 million of acquisition costs, and $0.2 million in cyberattack restoration charges.
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 in fiscal year 2025 as compared to 2024 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 in fiscal year 2026 as compared to 2025 primarily from lower average borrowings on our term loan credit facility and lower interest rates.
Previous wording
Interest income for the fiscal year ended June 30, 2025 increased compared to fiscal year ended June 30, 2024 primarily from interest earned on higher cash balances throughout the fiscal year in the United States.
Current wording
Interest income for the fiscal year ended June 30, 2026 increased compared to the fiscal year ended June 30, 2025 primarily from increased interest income on cash balances and customer receivables.
Previous wording
For the fiscal year ended June 30, 2025 we recognized a gain of $6.7 million as a result of an insurance recovery in connection with the cybersecurity attack in the fourth quarter of fiscal 2023.
Current wording
For the fiscal year ended June 30, 2026 we recognized a gain of $0.8 million primarily as a result of an insurance recovery in connection with the cybersecurity attack in the fourth quarter of fiscal 2023 compared to a larger gain of $5.9 million recognized in the prior fiscal year.
Previous wording
Income tax expense for continuing operations was $22.8 million and $22.8 million for the fiscal years ended June 30, 2025 and 2024, respectively, reflecting effective tax rates of 24.2% and 22.8%, respectively. The increase in the effective tax rate for fiscal 2025 compared to fiscal 2024 is primarily the result of the tax treatment of the intY UK divestiture in the 2024 fiscal year, an increase in non-deductible expenses, and an increase in global intangible low taxed income tax.
Current wording
Income tax expense was $24.9 million and $22.8 million for the fiscal years ended June 30, 2026 and 2025, respectively, reflecting effective tax rates of 24.0% and 24.2%, respectively.
Previous wording
In addition to disclosing results that are determined in accordance with United States generally accepted accounting principles (“US GAAP” or “GAAP”), we also disclose certain non-GAAP financial measures. These measures include non-GAAP operating income; non-GAAP pre-tax income; non-GAAP net income; non-GAAP EPS; adjusted earnings before interest expense, income taxes, depreciation, and amortization (“adjusted EBITDA”); adjusted return on invested capital (“adjusted ROIC”); and constant currency. Constant currency is a measure that excludes the translation exchange impact from changes in foreign currency exchange rates between reporting periods and certain impacts related to acquisitions and divestitures. We use non-GAAP financial measures to better understand and evaluate performance, including comparisons from period to period.
Current wording
In addition to disclosing results that are determined in accordance with United States generally accepted accounting principles (“US GAAP” or “GAAP”), we also disclose certain non-GAAP financial measures. These measures include non-GAAP net sales; non-GAAP operating income; non-GAAP pre-tax income; non-GAAP net income; non-GAAP EPS; adjusted earnings before interest expense, income taxes, depreciation, and amortization (“adjusted EBITDA”); adjusted return on invested capital (“adjusted ROIC”); and constant currency. Constant currency is a measure that excludes the translation exchange impact from changes in foreign currency exchange rates between reporting periods and certain impacts related to acquisitions and divestitures. We use non-GAAP financial measures to better understand and evaluate performance, including comparisons from period to period.
Previous wording
Under ASC 350, if fair value of goodwill fair value is determined to be less than carrying value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the reporting units' fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Additionally, we would consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. We also assess the recoverability of goodwill if facts and circumstances indicate goodwill may be impaired. In our most recent annual test, we estimated the fair value of our reporting units primarily based on the income approach utilizing the discounted cash flow method. As of June 30, 2025, the Specialty Technology Solutions and Intelisys & Advisory reporting units' goodwill balances are $159.8 million and $71.0 million, respectively. The fair value of the reporting units exceeded its carrying value by 2% and 100%, respectively, as of the annual goodwill impairment testing date. We also utilized fair value estimates derived from the market approach utilizing the public company market multiple method to validate the results of the discounted cash flow method, which required us to make assumptions about the applicability of those multiples to our reporting units. The discounted cash flow method requires us to estimate future cash flows and discount those amounts to present value. The key assumptions utilized in determining fair value included:
Current wording
Under ASC 350, if fair value of goodwill is determined to be less than carrying value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the reporting units' fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Additionally, we would consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. We also assess the recoverability of goodwill if facts and circumstances indicate goodwill may be impaired. In our most recent annual test, we estimated the fair value of our reporting units primarily based on the income approach utilizing the discounted cash flow method. As of June 30, 2026, the Specialty Technology Solutions and Intelisys & Advisory reporting units' goodwill balances are $173.9 million and $71.0 million, respectively. The fair value of the reporting units exceeded its carrying value by 2% and more than 100%, respectively, as of the annual goodwill impairment testing date. We also utilized fair value estimates derived from the market approach utilizing the public company market multiple method to validate the results of the discounted cash flow method, which required us to make assumptions about the applicability of those multiples to our reporting units. The discounted cash flow method requires us to estimate future cash flows and discount those amounts to present value. The key assumptions utilized in determining fair value included:
Previous wording
Our primary sources of liquidity are cash flows from operations and borrowings under the $350 million revolving credit facility. Our business requires significant investment in working capital, particularly accounts receivable and inventory, partially financed through our accounts payable to suppliers. In general, as our sales volumes increase, our net investment in working capital typically increases, which typically results in decreased cash flow from operating activities. Conversely, when sales volumes decrease, our net investment in working capital typically decreases, which typically results in increased cash flow from operating activities.
Current wording
Our primary sources of liquidity are cash flows from operations and borrowings under the $400 million revolving credit facility. Our business requires significant investment in working capital, particularly accounts receivable and inventory, partially financed through our accounts payable to vendors, cash generated from operations and revolving lines of credit. In general, as our sales volume increases, our net investment in working capital increases, which typically results in decreased cash flow from operating activities. Conversely, when sales volume decreases, our net investment in working capital typically decreases, which typically results in increased cash flow from operating activities.
Previous wording
Cash and cash equivalents totaled $126.2 million and $185.5 million at June 30, 2025 and 2024, respectively, of which $46.3 million and $20.0 million was held outside of the United States as of June 30, 2025 and 2024, respectively. Checks released but not yet cleared from these accounts in the amounts of $0.1 million and $5.9 million are classified as accounts payable as of June 30, 2025 and 2024, respectively.
Current wording
Cash and cash equivalents totaled $88.4 million and $126.2 million at June 30, 2026 and 2025, respectively, of which $35.4 million and $46.3 million was held outside of the United States as of June 30, 2026 and 2025, respectively. Checks released but not yet cleared from these accounts in the amounts of $0.1 million are classified as accounts payable as of June 30, 2026 and 2025.
Previous wording
Our net investment in working capital, defined as accounts receivable plus inventories less accounts payable, increased $14.6 million to $520.7 million at June 30, 2025 from $506.2 million at June 30, 2024, primarily as a result of an increase in accounts receivable. 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 suppliers.
Current wording
Our net investment in working capital, defined as accounts receivable plus inventories less accounts payable, increased $18.1 million to $538.8 million at June 30, 2026 from $520.7 million at June 30, 2025, primarily as a result of an increase in accounts receivable and inventory offset by an increase in accounts payable. 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 suppliers.
Previous wording
Net cash provided by operating activities was $112.3 million for the fiscal year ended June 30, 2025 and $371.6 million for the fiscal years ended June 30, 2024. The decrease in cash provided by operating activities for the fiscal year ended June 30, 2025 is primarily due to cash flows related to working capital, which decreased $22.5 million for the fiscal year ended June 30, 2025 versus a significant increase of $299.3 million for the prior year period. The prior-year period reflected lower net investment in working capital from lower sales volumes and a multi-quarter working capital improvement plan.
Current wording
Net cash provided by operating activities was $123.1 million for the fiscal year ended June 30, 2026 and $112.3 million for the fiscal year ended June 30, 2025. The increase in cash provided by operating activities for the fiscal year ended June 30, 2026 is primarily due to an increase in net income and an increase in cash provided by changes in working capital for the fiscal year ended June 30, 2026.
Previous wording
The number of days sales outstanding ("DSO") was 70 at June 30, 2025 unchanged from June 30, 2024. Throughout fiscal year 2025, DSO ranged from 66 to 72. Inventory turnover was 5.9 times during the fourth quarter fiscal year 2025, compared to 5.0 times in the fourth quarter of fiscal year 2024. Throughout fiscal year 2025, inventory turnover ranged from 5.0 to 5.9 times.
Current wording
The number of days sales outstanding ("DSO") was 73 at June 30, 2026 compared to 70 at June 30, 2025. Throughout fiscal year 2026, DSO ranged from 68 to 74. Inventory turnover was 6.6 times during the fourth quarter fiscal year 2026, compared to 5.9 times in the fourth quarter of fiscal year 2025. Throughout fiscal year 2026, inventory turnover ranged from 5.1 to 6.6 times.
Previous wording
Cash used in investing activities was $62.4 million for the fiscal year ended June 30, 2025 compared to cash provided of $9.0 million for the fiscal year ended June 30, 2024. Cash used in investing activities for fiscal year 2025 is largely due to cash paid for acquisitions and capital expenditures. Cash provided by investing activities for the fiscal year 2024 represents proceeds from the the sale of our discontinued operations, partially offset by capital expenditures.
Current wording
Cash used in investing activities was $27.5 million for the fiscal year ended June 30, 2026 compared to $62.4 million for the fiscal year ended June 30, 2025. Cash used in investing activities for fiscal years 2026 and 2025 is due to cash paid for acquisitions and capital expenditures.
Previous 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.
Current wording
Management expects capital expenditures for fiscal year 2027 to range from $8.0 million to $12.0 million, primarily for IT and warehouse investments.
Previous wording
Cash used in financing activities totaled $110.9 million for the fiscal year ended June 30, 2025 primarily due to the repurchase of common stock. Cash used in financing activities of $227.8 million for the fiscal year ended June 30, 2024 was primarily due to repayments on the revolving line of credit and the repurchase of common stock.
Current wording
Cash used in financing activities totaled $134.5 million for the fiscal year ended June 30, 2026 primarily due to the repurchase of common stock and repayments on long-term debt. Cash used in financing activities of $110.9 million for the fiscal year ended June 30, 2025 was primarily due to repayments on the revolving line of credit and the repurchase of common stock.
Previous wording
In April 2025, our Board approved an additional $200 million share repurchase authorization, which supplements the existing the $100 million repurchase program authorized in May 2024. The share repurchase authorizations do not have any time limits. In fiscal year 2025, we repurchased 2,483,299 shares totaling $106.5 million. As of June 30, 2025, the Company had approximately $217.1 million available for repurchases under Board approved authorizations.
Current wording
In April 2025, our Board approved an additional $200 million share repurchase authorization, which supplemented the existing $100 million repurchase program authorized in May 2024. The share repurchase authorizations do not have any time limits. In fiscal year 2026, we repurchased 2,420,668 shares totaling $97.5 million. As of June 30, 2026, the Company had approximately $120.8 million available for repurchases under Board approved authorizations.
Previous wording
We have a multi-currency senior secured credit facility with JPMorgan Chase Bank N.A., as administrative agent, and a syndicate of banks (as amended, the “Amended Credit Agreement”). On September 28, 2022, we amended and restated our Amended Credit Agreement, which includes (i) a five-year, $350 million multicurrency senior secured revolving credit facility and (ii) a five-year $150 million senior secured term loan facility. The amendment extended the revolving credit facility maturity date to September 28, 2027. In addition, pursuant to an “accordion feature,” we may increase our borrowings up to an additional $250 million, subject to obtaining additional credit commitments from the lenders participating in the increase. The Amended Credit Agreement allows for the issuance of up to $50 million for letters of credit. Borrowings under the Amended Credit Agreement are guaranteed by substantially all of our domestic assets and our domestic subsidiaries. Under the terms of the revolving credit facility, the payment of cash dividends is restricted. We incurred debt issuance costs of $1.4 million in connection with the amendment and restatement of the Amended Credit Agreement. These costs were capitalized to other non-current assets on the Condensed Consolidated Balance Sheets and added to the unamortized debt issuance costs from the previous credit facility.
Current wording
On December 18, 2025, the Company entered into a credit agreement, (the “New Credit Agreement”) with PNC Bank, National Association, as administrative agent (“PNC”), and the other lenders party thereto (the “Lenders”), providing for (i) a five-year, $400 million multicurrency senior secured revolving credit facility and (ii) a five-year $100 million senior secured term loan facility (the “New Credit Facilities”). In addition, pursuant to an “accordion feature,” the Company may increase its borrowings by up to the greater of $250 million or 150% of the Company's EBITDA calculated on a Pro Forma Basis (each as defined in the New Credit Agreement), subject to obtaining additional credit commitments from the Lenders participating in the increase. The New Credit Agreement allows for the issuance of up to $50 million for letters of credit. Borrowings under the New Credit Agreement are secured by substantially all of the assets of the Company and its domestic subsidiaries. Under the terms of the revolving credit facility, the payment of cash dividends is restricted. The Company incurred debt issuance costs of $1.4 million in connection with the New Credit Agreement. These costs were capitalized to other non-current assets on the Consolidated Balance Sheets and added to the unamortized debt issuance costs from the previous credit facility.
Previous wording
Loans denominated in U.S. dollars, other than swingline loans, bear interest at a rate per annum equal to, at our option, (i) the adjusted term Secured Overnight Financing Rate (“SOFR”) or adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon our ratio of (A) total consolidated debt less up to $30 million of unrestricted domestic cash (“Credit Facility Net Debt”) to (B) trailing four-quarter consolidated EBITDA measured as of the end of the most recent year or quarter, as applicable (Credit Facility EBITDA”), for which financial statements have been delivered to the Lenders (the “leverage ratio”); or (ii) the alternate base rate plus an additional margin ranging from 0% to 0.75%, depending upon our leverage ratio, plus, if applicable, certain mandatory costs. All swingline loans denominated in U.S. dollars bear interest based upon the adjusted daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon our leverage ratio, or such other rate as agreed upon with the applicable swingline lender. The adjusted term SOFR and adjusted daily simple SOFR include a fixed credit adjustment of 0.10% over the applicable SOFR reference rate. Loans denominated in foreign currencies bear interest at a rate per annum equal to the applicable benchmark rate set forth in the Amended Credit Agreement plus an additional margin ranging from 1.00% to 1.75%, depending upon our leverage ratio plus, if applicable, certain mandatory costs.
Current wording
Loans denominated in U.S. dollars, other than swingline loans, bear interest at a rate per annum equal to, at the Company’s option, (i) the Term Secured Overnight Financing Rate ("SOFR") or daily simple SOFR plus an additional margin ranging from 1.00% to 1.75% depending upon the Company’s ratio of (A) total consolidated debt less its unrestricted domestic cash to (B) trailing four-quarter consolidated EBITDA measured as of the end of the most recent year or quarter, as applicable, for which financial statements have been delivered to the Lenders (the “leverage ratio”); or (ii) the base rate plus an additional margin ranging from 0% to 0.75%, depending upon the Company’s leverage ratio.
Previous wording
During the fiscal year ended June 30, 2025, our borrowings under the credit facility were U.S. dollar loans. The spread in effect as of June 30, 2025 was 1.00%, plus a 0.10% credit spread adjustment for SOFR-based loans and 0.00% for alternate base rate loans. The commitment fee rate in effect as of June 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 as of 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 Amended Credit Agreement as of June 30, 2025.
Current wording
During the fiscal year ended June 30, 2026, the Company's borrowings under New Credit Agreement and Prior Credit Agreement were U.S. dollar loans. The spread in effect as of June 30, 2026 was 1.00% for SOFR-based loans and 0.00% for alternate base rate loans. The commitment fee rate in effect as of June 30, 2026 was 0.15%. The effective interest rates for the term loan were 4.65% and 5.43% as of June 30, 2026 and June 30, 2025, respectively. The New Credit Agreement includes customary representations, warranties and affirmative and negative covenants, including financial covenants. Specifically, the Company’s leverage ratio must be less than or equal to 3.50 to 1.00. In addition, the Company’s Interest Coverage Ratio (as such term is defined in the New Credit Agreement) must be at least 3.00 to 1.00 as of 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. The Company was in compliance with all covenants under the New Credit Agreement as of June 30, 2026.
Previous wording
The average daily balance on the revolving credit facility, excluding the term loan facility, was $0.3 million and $71.1 million during the fiscal years ended June 30, 2025 and June 30, 2024, respectively. There was $350.0 million and $349.9 million available for additional borrowings as of June 30, 2025 and June 30, 2024, respectively. There were no letters of credit issued under the multi-currency revolving credit facility as of June 30, 2025 and June 30, 2024.
Current wording
The average daily balance outstanding on the revolving credit facility, excluding the term loan facility, was $1.6 million and $0.3 million during the fiscal year ended June 30, 2026 and 2025, respectively. There was $400.0 million and $350.0 million available for additional borrowings as of June 30, 2026 and 2025, respectively. The effective interest rates for the revolving line of credit were 4.62% and 5.46% as of June 30, 2026 and June 30, 2025, respectively. There were no letters of credit issued under the multi-currency revolving credit facility as of June 30, 2026 and 2025.
Previous wording
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. At June 30, 2025, based upon the calculation of our Credit Facility Net Debt relative to our Credit Facility EBITDA, there was $350.0 million available for borrowing. While we were in compliance with the financial covenants contained in the Credit Facility as of June 30, 2025, and currently expect to continue to maintain such compliance, should we encounter difficulties, our historical relationship with our Credit Facility lending group has been strong and we anticipate their continued support of our long-term business.
Current wording
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 EBITDA and (2) Credit Facility EBITDA relative to total interest expense respectively (each as defined in the New Credit Agreement). As a result, our availability will increase if EBITDA increases (subject to the limit of the facility) and decrease if EBITDA decreases. At June 30, 2026, based upon the calculation of our Credit Facility Net Debt relative to our Credit Facility EBITDA, there was $400.0 million available for borrowing. While we were in compliance with the financial covenants contained in the Credit Facility as of June 30, 2026, and currently expect to continue to maintain such compliance, should we encounter difficulties, our historical relationship with our Credit Facility lending group has been strong and we anticipate their continued support of our long-term business.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
All swingline loans denominated in U.S. dollars bear interest based upon the daily simple SOFR, floating daily, plus an additional margin ranging from 1.00% to 1.75% depending upon the Company's leverage ratio, or such other rate as the Company and the applicable swingline lender may agree. Loans denominated in foreign currencies bear interest at a rate per annum equal to the applicable benchmark rate set forth in the New Credit Agreement plus an additional margin ranging from 1.00% to 1.75%, depending upon the Company’s leverage ratio. A commitment fee is payable on the unused amount of commitments under the revolving credit facility. The commitment fee rate in effect as of June 30, 2026 was 0.15%, depending on the Company's leverage ratio.
Current report — wording carried from elsewhere
In connection with entering into the New Credit Agreement, on December 18, 2025, the Company terminated and repaid all indebtedness and other obligations outstanding under its Third Amended and Restated Credit Agreement (the “Prior Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto, which provided for (i) a five-year, $350 million multicurrency senior secured revolving credit facility and (ii) a five-year $150 million senior secured term loan facility.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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 EBITDA and (2) Credit