EPLUS INC
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
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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
PLUS$92.11+11.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001140361-25-029644
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.
0001140361-25-040814
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 104 previous paragraphs and 110 current paragraphs.
60 unchanged; 38 reworded; 10 added; 2 removed; 4 previous and 2 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 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 (10)
Current report
Net sales for the six months ended September 30, 2025, increased $217.1 million compared to the six months ended September 30, 2024, due to increased net sales to customers in the telecom, media and entertainment, healthcare, and financial services industries, offset by decreased net sales to customers in the technology, and SLED industries. Our increase in demand was primarily driven by large enterprise customers. For further information, see the “Segment Results of Operations” below.
Current report
Salaries and benefits, including variable compensation and share-based compensation for the three and six months ended September 30, 2025, increased $11.2 million and $23.0 million, respectively, compared to the same three- and six-month periods in the prior year, primarily due to increases in variable compensation commensurate with the increase in our gross profit and secondarily due to additional salaries and benefits due to our acquisition of Bailiwick.
Current report
General and administrative expenses for the six months ended September 30, 2025, increased $3.3 million as compared to the prior six-month period, due to the addition of Bailiwick. In total, we had higher software, subscription, and maintenance fees of $1.9 million, higher professional fees of $1.0 million, higher office rent of $0.7 million, and higher travel and entertainment expenses of $0.6 million. These increases were offset by a decrease in acquisition-related expenses of $1.0 million, due to the addition of Bailiwick in the prior six-month period.
Current report
Provision for credit losses for the six months ended September 30, 2025 and September 30, 2024, were both $0.2 million.
Current report
Other income (expense), net: Other income for the three months ended September 30, 2025, was $5.2 million, compared to $0.3 million for the three months ended September 30, 2024. Higher other income was driven by foreign exchange gains recognized in the current three-month period compared to foreign exchange losses recognized in the prior three-month period. Additionally, there was an increase in interest income. We had foreign exchange gains of $0.7 million for the three months ended September 30, 2025, compared to losses of $1.8 million for the same three-month period in the prior year. We had $3.9 million in interest income for the three months ended September 30, 2025, compared to $2.1 million for the three months ended September 30, 2024.
Current report
Net earnings from continuing operations for the six months ended September 30, 2025, were $65.3 million, an increase of $21.3 million, as compared to $44.0 million for the same six-month period in the prior year. The net earnings increase was due to the increase in operating profits, and an increase other income, offset by an increase in provision for income taxes.
Current report
Net earnings from discontinued operations, net of tax: Net earnings from discontinued operations, net of tax, for the three months ended September 30, 2025, was a loss of $3.3 million consisting of an accrual for a contingent liability related to a legal matter of our discontinued operations of $4.6 million for which we remain responsible under the terms of the HoldCo sale, offset by an income tax benefit of $1.3 million. We had earnings from discontinued operations, net of tax, of $11.5 million for the same three-month period in the prior year consisting of earnings before income taxes of $16.0 million, offset by income tax of $4.5 million.
Current report
Due to the aforementioned reasons, net earnings for the six months ended September 30, 2025, were $72.6 million, an increase of $13.9 million, as compared to $58.7 million for the same six-month period in the prior year.
Current report
The three and six months ended September 30, 2025, compared to the three and six months ended September 30, 2024
Current report
A summary of fiscal year to date dividend activity for our common stock is as follows:
Removed paragraphs (2)
Previous report
Within our enterprise accounts, we are experiencing pricing pressure impacting our gross profit and increased sales.
Previous report
Salaries and benefits, including variable compensation and share-based compensation for the three months ended June 30, 2025, increased $11.8 million compared to the same three-month period in the prior year, mainly driven by increased headcount. Our business had a total of 2,182 employees as of June 30, 2025, an increase of 275 from 1,907 employees as of June 30, 2024. Our increase in headcount is primarily due to adding 441 employees on August 19, 2024, from our acquisition of Bailiwick. Our higher headcount as of June 30, 2025, compared to June 30, 2024, was comprised of 249 customer-facing employees and 26 non-customer-facing employees. On July 1, 2025, we reduced our headcount by 45 employees that were transferred with our sale of HoldCo. Variable compensation increased $5.4 million, which was a result of the corresponding increase in gross profit.
Reworded paragraphs (38)
Previous wording
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.
Current wording
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 those described in Part II, Item 1A. “Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 and in our other filings with the SEC.
Previous wording
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.
Current wording
We are a leading solutions provider in the areas of security, cloud, networking, collaboration, artificial intelligence (“AI”), and emerging technologies. AI continues to be a transformative force and demand driver particularly for our core products: Compute, Cloud, security, networking and our consultative services. Across industries, customers are using AI to enhance decision making, automate tasks, and drive both growth and efficiency. Through assessments, bespoke workshops and labs and consulting engagements, we deliver actionable outcomes for organizations by using information technology (“IT”) and consulting solutions to enhance decision making, automate tasks and 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.
Previous wording
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.
Current wording
General economic concerns including changes in law and policy by the 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.
Previous wording
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.
Current wording
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 from continuing operations and Non-GAAP: Net earnings from continuing operations per common share - diluted.
Previous wording
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.
Current wording
We use Adjusted EBITDA, Adjusted EBITDA margin, 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 insight into our operating performance and performance trends. We believe that these measures provide 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. Accordingly, we believe that such non-GAAP financial 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.
Previous wording
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.
Current wording
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 related amortization and integration expenses, and the related tax effects.
Previous wording
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.
Current wording
We believe that the exclusion of other income and acquisition-related amortization expense in calculating Non-GAAP: Net earnings from continuing operations and Non-GAAP: Net earnings from continuing operations 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 from continuing operations and Non-GAAP: Net earnings from continuing operations per common share – diluted, or similarly titled measures differently, which may reduce their usefulness as comparative measures.
Previous wording
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):
Current wording
The following table provides our calculation of Non-GAAP: Net earnings from continuing operations and Non-GAAP: Net earnings from continuing operations per common share – diluted (in thousands, except per share amounts):
Previous wording
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.
Current wording
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) expense. 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.
Previous wording
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.
Current wording
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.
Previous wording
Net sales: Net sales for the three months ended June 30, 2025, increased $101.7 million compared to the three months ended June 30, 2024, due to increased net sales to customers in the telecom, media, and entertainment industries, offset by decreased net sales to customers in the technology, SLED, financial services, and healthcare industries. For further information, see the “Segment Results of Operations” below.
Current wording
Net sales: Net sales for the three months ended September 30, 2025, increased $115.4 million compared to the three months ended September 30, 2024, due to increased net sales to customers in the telecom, media and entertainment, healthcare, technology, and financial services industries, offset by decreased net sales to customers in the SLED industry. Our increase in demand was primarily driven by large enterprise customers. For further information, see the “Segment Results of Operations” below.
Previous wording
Gross profit: Consolidated gross profit for the three months ended June 30, 2025, increased $21.3 million compared to the prior three-month period due to increases in net sales in all three of our operating segments. Overall, gross margins were down by 40 basis points year over year to 23.3%, primarily due to lower product margins led by a shift in product mix as we sold less third-party maintenance and subscriptions that are recognized on a net basis, and lower services margins. For further information, see the “Segment Results of Operations” below.
Current wording
Gross profit: Consolidated gross profit for the three months ended September 30, 2025, increased $34.8 million compared to the prior three-month period due to increases in net sales in all three of our operating segments. Overall, gross margins were up by 80 basis points year over year to 26.6%, primarily due to higher product margins led by a shift in product mix as we sold more third-party maintenance and subscriptions that are recognized on a net basis, offset by lower services margins. For further information, see the “Segment Results of Operations” below.
Previous wording
Selling, general, and administrative: Selling, general, and administrative expenses for the three months ended June 30, 2025, increased $14.4 million compared to the three months ended June 30, 2024, mainly due to increases in salaries and benefits and general and administrative costs due to our acquisition of Bailiwick Services, LLC (“Bailiwick”) on August 19, 2024 that impacted the three months ended June 30, 2025 but not the corresponding 2024 period.
Current wording
Selling, general, and administrative: Selling, general, and administrative expenses for the three and six months ended September 30, 2025, increased $11.9 million and $26.3 million, respectively, compared to the three and six months ended September 30, 2024, primarily due to increases in variable compensation commensurate with the increase in our gross profit and secondarily due to additional salaries and benefits and general and administrative costs due to our acquisition of Bailiwick Services, LLC (“Bailiwick”) on August 19, 2024 that fully impacted the three and six months ended September 30, 2025, but only partially impacted the corresponding 2024 periods due to the transaction’s occurring part way through the quarter ending September 30, 2024.
Previous wording
General and administrative expenses for the three months ended June 30, 2025, increased $2.0 million as compared to the same three-month period in the prior year, due to the addition of Bailiwick. In total, including Bailiwick, we had higher software, subscription, and maintenance fees of $0.8 million, higher professional fees of $0.5 million, and higher office rent of $0.4 million.
Current wording
General and administrative expenses for the three months ended September 30, 2025, increased $1.3 million as compared to the prior three-month period, due to the addition of Bailiwick. In total, we had higher software, subscription, and maintenance fees of $1.1 million, higher professional fees of $0.6 million, and higher travel and entertainment expenses of $0.4 million. These increases were offset by a decrease in acquisition-related expenses of $1.0 million, due to the addition of Bailiwick in the prior year quarter.
Previous wording
Provision for credit losses for the three months ended June 30, 2025, was $0.6 million, as compared to $0.1 million for the same three-month period in the prior year. Our higher provision for credit losses for the three months ended June 30, 2025, was due to an increase in exposure to accounts with higher credit risk.
Current wording
Provision for credit losses for the three months ended September 30, 2025, was a benefit of $0.4 million as compared to an expense of $0.2 million for the prior three-month period. Our lower provision for credit losses for the three months ended September 30, 2025, was due to changes in our net credit exposure.
Previous wording
Depreciation and amortization: Depreciation and amortization for the three months ended June 30, 2025, increased compared to the three months ended June 30, 2024, primarily due to amortization from intangible assets acquired in the Bailiwick acquisition.
Current wording
Depreciation and amortization: Depreciation and amortization for the three and six months ended September 30, 2025, increased compared to the three and six months ended September 30, 2024, primarily due to amortization from intangible assets acquired in the Bailiwick acquisition.
Previous wording
Operating income: As a result of the foregoing, operating income for the three months ended June 30, 2025, increased $4.7 million compared to the prior three-month period, and operating margin decreased by 20 basis points to 5.7%.
Current wording
Operating income: As a result of the foregoing, operating income for the three months ended September 30, 2025, increased $21.8 million compared to the prior three-month period, and operating margin increased by 250 basis points to 8.0%.
Previous wording
Other income (expense), net: Other income for the three months ended June 30, 2025, was $0.6 million, compared to $1.7 million for the three months ended June 30, 2024. Lower other income was driven by increased foreign exchange losses and decreased interest income. We had foreign exchange losses of $1.5 million for the three months ended June 30, 2025, compared to losses of $0.5 million for the same three-month period in the prior year. We had $2.1 million in interest income for the three months ended June 30, 2025, compared to $2.2 million for the three months ended June 30, 2024.
Current wording
Other income for the six months ended September 30, 2025, was $5.8 million, compared to $2.0 million for the six months ended September 30, 2024. Higher other income was driven by decreased foreign exchange losses and increased interest income. We had foreign exchange losses of $0.8 million for the six months ended September 30, 2025, compared to losses of $2.3 million for the same six-month period in the prior year. We had $6.0 million in interest income for the six months ended September 30, 2025, compared to $4.4 million for the six months ended September 30, 2024.
Previous wording
Provision for income taxes: Our provision for income tax expense for the three months ended June 30, 2025, was $9.7 million, 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. Our effective income tax rate was lower for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to lower state taxes.
Current wording
Provision for income taxes: Our provision for income tax expense was $15.8 million and $25.5 million for the three and six months ended September 30, 2025, as compared to $7.5 million and $16.5 million for the same three-and six-month periods in the prior year. Our effective tax rate for the three and six months ended September 30, 2025, was 29.3% and 28.1% respectively, compared with 27.5% and 27.3%, respectively, for the same three- and six-month periods in the prior year. Our effective income tax rate for the three and six months ended September 30, 2025, was higher compared to the same three- and six-month periods in the prior year primarily due to a higher tax benefit from restricted stock in the prior year.
Previous wording
Net earnings from continuing operations: Net earnings from continuing operations for the three months ended June 30, 2025, were $27.1 million, an increase of $2.9 million, as compared to $24.2 million for the same three-month period in the prior year. The net earnings increase was due to the increase in operating profits, offset by a decrease in other income, driven by increased foreign exchange losses, and an increase in provision for income taxes.
Current wording
Net earnings from continuing operations: Net earnings from continuing operations for the three months ended September 30, 2025, were $38.2 million, an increase of $18.4 million, as compared to $19.8 million for the same three-month period in the prior year. The net earnings increase was due to the increase in operating profits and an increase other income, offset by an increase in provision for income taxes.
Previous wording
Net earnings from discontinued operations, net of tax: Net earnings from discontinued operations, net of tax for the three months ended June 30, 2025, were $10.6 million, an increase of $7.5 million, as compared to $3.1 million for the same three-month period in the prior year. The increase was due to the increase in operating profits of the domestic financing business and the gain on sale of our domestic financing business, net of transactions costs and before income taxes, of $4.4 million.
Current wording
Net earnings from discontinued operations, net of tax, for the six months ended September 30, 2025, was $7.3 million consisting of earnings before gain from sale and income taxes of $5.6 million and gain from the sale of our domestic financing business of $4.4 million, less income tax of $2.7 million. We had earnings from discontinued operations, net of tax, of $14.7 million for the same six-month period in the prior year consisting of earnings before income taxes of $20.3 million, less income tax of $5.7 million.
Previous wording
Net earnings: Due to the aforementioned reasons, net earnings for the three months ended June 30, 2025, were $37.7 million, an increase of $10.4 million, as compared to $27.3 million for the same three-month period in the prior year.
Current wording
Net earnings: Due to the aforementioned reasons, net earnings for the three months ended September 30, 2025, were $34.9 million, an increase of $3.6 million, as compared to $31.3 million for the same three-month period in the prior year.
Previous wording
Product segment sales for the three months ended June 30, 2025, increased compared to the same three-month period in the prior year, due to increases in demand and a shift in product mix, as we sold less third-party maintenance and subscriptions that are recognized on a net basis. These changes were driven by the timing of purchases by existing customers, which are determined by their buying cycles, and the timing of specific IT-related initiatives.
Current wording
Product segment sales for the three months ended September 30, 2025, increased compared to the same three-month period in the prior year, due to increases in demand for networking and security products. Product segment sales for the six months ended September 30, 2025, increased compared to the same six-month period in the prior year, due to increases in demand for cloud, networking and security products. These increases in demand were driven by the timing of purchases by existing customers, which are determined by their buying cycles and the timing of specific IT-related initiatives. Offsetting the increase in demand was a shift in product mix, as sales of third-party maintenance and subscriptions that are recognized on a net basis were a higher proportion of our sales for both the three and six months ended September 30, 2025, compared to the same periods in the prior year.
Previous wording
Professional services segment sales for the three months ended June 30, 2025, increased compared to the same three-month period in the prior year, primarily due to increases in revenues from the acquisition of Bailiwick.
Current wording
Professional services segment sales for the three and six months ended September 30, 2025, increased compared to the same three- and six-month periods in the prior year, primarily due to increases in revenues from the acquisition of Bailiwick.
Previous wording
Managed services segment sales for the three months ended June 30, 2025, increased compared to the same three-month period in the prior year, due to ongoing expansion of these service offerings, primarily related to ongoing growth in enhanced maintenance support and cloud services.
Current wording
Managed services segment sales for the three and six months ended September 30, 2025, increased compared to the same three- and six-month periods in the prior year, due to ongoing expansion of these service offerings, primarily related to ongoing growth in enhanced maintenance support and cloud services.
Previous wording
Product segment margin for the three months ended June 30, 2025, decreased by 110 basis points from the same three-month period in the prior year due to a shift in product mix resulting in a lower proportion of sales of third-party maintenance and subscriptions which are recorded on a net basis. Vendor incentives earned as a percentage of sales for the three months ended June 30, 2025 were flat compared to the same three-month period in the prior year.
Current wording
Product segment margin for the three and six months ended September 30, 2025, increased by 160 basis points and 20 basis points, respectively, from the same three- and six-month periods in the prior year due to a shift in product mix and from a higher proportion of sales of third-party maintenance and subscriptions which are recorded on a net basis. Vendor incentives earned as a percentage of sales for the three and six months ended September 30, 2025 increased by 20 basis points and 10 basis points, respectively, which had a positive effect on gross margin, as compared to the same three- and six-month periods in the prior year.
Previous wording
Professional services segment margin for the three months ended June 30, 2025, decreased by 230 basis points from the same three-month period in the prior year primarily due to our acquisition of Bailiwick whose services have a lower gross margin due to the use of a higher proportion of third parties for delivery than our organic professional services.
Current wording
Professional services segment margin for the three and six months ended September 30, 2025, decreased by 310 basis points and 270 basis points, respectively, from the same three- and six-month periods in the prior year primarily due to our acquisition of Bailiwick whose services have a lower gross margin due to the use of a higher proportion of third parties for delivery than our organic professional services.
Previous wording
Managed services segment margin for the three months ended June 30, 2025, decreased by 100 basis points from the same three-month period in the prior year, due to a decline in revenue from our service desk offering that resulted in a decrease in gross margin for that service line.
Current wording
Managed services segment margin for the three and six months ended September 30, 2025, decreased by 10 basis points and 50 basis points, respectively, from the same three- and six-month periods in the prior year, due to a decline in revenue from our service desk offering that resulted in a decrease in gross margin for that service line.
Previous wording
The following table summarizes our sources and uses of cash for the three months ended June 30, 2025, and 2024 (in thousands):
Current wording
The following table summarizes our sources and uses of cash for the six months ended September 30, 2025, and 2024 (in thousands):
Previous wording
Cash flows from operating activities: During the three months ended June 30, 2025, we used $106.0 million through operating activities of continuing operations primarily due an increase in our accounts receivable, partially offset by net earnings and a decrease in our inventories.
Current wording
Cash flows from operating activities: During the six months ended September 30, 2025, we used $137.6 million through operating activities of continuing operations primarily due to an increase in our accounts receivable and inventories and a decrease in our accounts payable, partially offset by net earnings. During the six months ended September 30, 2024, we provided $117.8 million through operating activities of continuing operations primarily due to net earnings and decreases in our accounts receivable and inventories, partially offset by a decrease in our accounts payable.
Previous wording
Our cash conversion cycle decreased to 26 days as of June 30, 2025, as compared to 37 days as of June 30, 2024. Our standard payment term for customers is between 30-60 days; however, certain customer orders may be approved for extended payment terms. Our DSO decreased 10 days to 58 days as of June 30, 2025, compared to 68 days as of June 30, 2024, reflecting higher sales to customers with terms less than or equal to net 60 days. Our DIO remained flat at 14 days as of June 30, 2025, compared to June 30, 2024. Our DPO increased 1 day as of June 30, 2025. Invoices processed through our WFCDF Credit Facility, or the A/P-floor plan balance, are typically paid within 45 to 60 days from the invoice date, while A/P trade invoices are typically paid around 45 days from the invoice date.
Current wording
Our cash conversion cycle decreased to 30 days as of September 30, 2025, as compared to 32 days as of September 30, 2024. Our standard payment term for customers is between 30-60 days; however, certain customer orders may be approved for extended payment terms. Our DSO decreased 3 days to 63 days as of September 30, 2025, compared to 66 days as of September 30, 2024, reflecting higher sales to customers with terms less than or equal to net 60 days. Our DIO increased to 15 days as of September 30, 2025, compared to 12 days as of September 30, 2024 due to longer customer delivery schedules. Our DPO increased 2 days as of September 30, 2025. We pay invoices, processed through our WFCDF Credit Facility from our accounts payable-floor plan balance or paid directly from our accounts payable-trade balances typically within 45 to 60 days from the invoice date.
Previous wording
Cash flows related to investing activities: During the three months ended June 30, 2025, we used $0.8 million through investing activities of continuing operations consisting primarily of purchases of property and equipment. We also provided $156.7 million through investing activities of discontinued operations, consisting of cash proceeds from our sale of HoldCo of $180.1 million less cash transferred with the HoldCo entities of $23.4 million.
Current wording
Cash flows related to investing activities: During the six months ended September 30, 2025, we used $1.8 million through investing activities of continuing operations consisting primarily of purchases of property and equipment. We also provided $156.7 million through investing activities of discontinued operations, consisting primarily of cash proceeds from our sale of HoldCo of $180.1 million less cash transferred with the HoldCo entities of $23.4 million. During the six months ended September 30, 2024, we used $126.6 million through investing activities of continuing operations consisting of $124.6 million for the acquisition of Bailiwick, and $1.9 million for purchases of property, equipment and operating lease equipment.
Previous wording
Cash flows from financing activities: During the three months ended June 30, 2025, we provided $38.3 million from financing activities consisting of $1.8 million in proceeds from the issuance of common stock to employees under an employee stock purchase plan, and $39.9 million in net borrowings on the floor plan component of our credit facility, partially offset by $3.3 million in cash used to repurchase outstanding shares of our common stock.
Current wording
Cash flows from financing activities: During the six months ended September 30, 2025, we used $3.2 million through financing activities of continuing operations. We had cash outflows of $7.4 million to repurchase outstanding shares of our common stock and $6.6 million paid in dividends. These cash outflows were partially offset by cash inflows of $9.0 million in net borrowing on our floor plan facility and $1.8 million in proceeds from the issuance of common stock to employees under an employee stock purchase plan.
Previous wording
During the three months ended June 30, 2024, we provided $2.3 million from financing activities consisting of $1.8 million in proceeds from the issuance of common stock to employees under an employee stock purchase plan and $14.4 million in net borrowings on the floor plan component of our credit facility, partially offset by $11.6 million in cash used to repurchase outstanding shares of our common stock, and $2.3 million paid to the sellers of Peak Resources, Inc. based on adjustments to total net assets delivered in our acquisition.
Current wording
During the six months ended September 30, 2024, we used $13.5 million through financing activities of continuing operations. We had cash outflows of $23.6 million to repurchase outstanding shares of our common stock and $2.3 million paid to the sellers of Peak Resources, Inc. based on adjustments to the determination of total net assets received in our January 2024 acquisition of that company. These cash outflows were partially offset by cash inflows of $10.6 million in net borrowings on the floor plan component of our credit facility and $1.8 million in proceeds from the issuance of common stock to employees under an employee stock purchase plan.
Previous wording
As of June 30, 2025, and March 31, 2025, we had a maximum credit limit of $500.0 million, and an outstanding balance on the floor plan facility of $129.4 million and $89.5 million, respectively. On our balance sheet, our liability under the floor plan facility is presented as part of accounts payable – floor plan.
Current wording
As of September 30, 2025, and March 31, 2025, we had a maximum credit limit of $500.0 million, and an outstanding balance on the floor plan facility of $98.5 million and $89.5 million, respectively. On our balance sheet, our liability under the floor plan facility is presented as part of accounts payable – floor plan.
Previous wording
On August 7, 2025, we announced that our Board of Directors declared a quarterly dividend. The initial quarterly cash dividend of $0.25 per common share will be paid on September 17, 2025, to shareholders of record as of the close of business on August 26, 2025.
Current wording
On November 6, 2025, we announced that our Board of Directors declared a quarterly dividend. The quarterly cash dividend of $0.25 per common share will be paid on December 17, 2025, to shareholders of record as of the close of business on November 25, 2025.
Previous wording
In the normal course of business, we may provide certain customers with performance guarantees, which are generally backed by surety bonds. In general, we would only be liable for these guarantees in the event of default in the performance of our obligations. We are in compliance with the performance obligations under all service contracts for which there is a performance guarantee, and we believe that any liability incurred in connection with these guarantees would not have a material adverse effect on our consolidated statements of operations.
Current wording
In the normal course of business, we may provide certain customers with performance guarantees, which are generally backed by surety bonds. In general, we would only be liable for these guarantees in the event of default in the performance of our obligations. We believe we comply with the performance obligations under all service contracts for which there is a performance guarantee, and we believe that any liability incurred in connection with these guarantees would not have a material adverse effect on our consolidated statements of operations.
Previous wording
Our critical accounting estimates have not changed from those reported in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report.
Current wording
Our critical accounting estimates have not changed from those reported Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Consolidated gross profit for the six months ended September 30, 2025, increased $56.2 million compared to the prior six-month period due to increases in net sales in all three of our operating segments. Overall, gross margins were up by 20 basis points year over year to 24.9%, primarily due to higher product margins led by a shift in product mix as we sold more third-party maintenance and subscriptions that are recognized on a net basis, offset by lower services margins. For further information, see the “Segment Results of Operations” below.
Current report — wording carried from elsewhere
As a result of the foregoing, operating income for the six months ended September 30, 2025, increased $26.6 million compared to the prior six-month period, and operating margin increased by 110 basis points to 6.8%.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
The three months ended June 30, 2025, compared to the three months ended June 30, 2024
Previous report — wording carried elsewhere
During the three months ended June 30, 2024, we provided $110.1 million primarily from operating activities of continuing operations primarily due to net earnings and decreases in our accounts receivable and inventories, partially offset by decreases in our accounts payable - trade.
Previous report — wording carried elsewhere
During the three months ended June 30, 2024, we used $0.6 million through investing activities of continuing operations consisting of purchases of property, equipment, and operating lease equipment.