EPLUS INC

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 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.

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, the audited consolidated financial statements included in our annual report on Form 10-K for the year ended March 31, 2025 (“2025 Annual Report”), and our current report on Form 8-K that we filed with the SEC on January 26, 2026, which recasts prior period financial information and related disclosures in certain portions of our 2025 Annual Report to present the operations of the domestic financing business as discontinued operations separately from our continuing operations. 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 subsequent Quarterly Reports on Form 10-Q and in our other filings with the SEC.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

On June 30, 2025, we completed the sale of 100% of the membership interests of Expo Holdings, LLC, a Delaware limited liability company and our wholly-owned subsidiary (“HoldCo”), to Marlin Leasing Corporation, a Delaware corporation (d/b/a PEAC Solutions) pursuant to the terms of the Membership Interest Purchase Agreement, dated June 20, 2025 (the “Sale Transaction”). By selling HoldCo, together with its U.S. subsidiaries, we sold our domestic financing business that comprised most of our financing business segment, which is a business that finances information technology equipment, software and related services for customers. We continue to own the international entities in the financing business. This divestiture positions us to focus on being a technology solutions provider and represents a strategic shift in our operations. As a result of the Sale Transaction, we determined that the domestic financing business that was sold met the definition of discontinued operations. Consequently, for all periods presented in these financial statements, we are retrospectively presenting the results of our domestic financing business as discontinued operations. In our unaudited consolidated balance sheets for all periods, we present the assets and liabilities of our domestic financing business as assets and liabilities of discontinued operations. In our unaudited consolidated statements of operations for all periods, we present the operating results of our domestic financing business in earnings from discontinued operations. After the sale, our remaining three reportable segments are product, professional services, and managed services, which we formerly referred to collectively as our technology business. Refer to Note 4, “Discontinued Operations” in the notes to the accompanying unaudited consolidated financial statements for further information.

Previous wording

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

Current wording

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

Previous 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.

Current wording

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

Current wording

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

Previous 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.

Current wording

Net sales: Net sales for the three months ended December 31, 2025, increased $121.6 million compared to the three months ended December 31, 2024, due to increased net sales to customers in the telecom, media and entertainment, healthcare, technology, retail, and financial services industries, offset by decreased net sales to customers in the SLED industry. Our increase in demand was primarily driven by midmarket, large enterprise, and healthcare customers. For further information, see the “Segment Results of Operations” below.

Previous wording

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 wording

Net sales for the nine months ended December 31, 2025, increased $338.7 million compared to the nine months ended December 31, 2024, due to increased net sales to customers in the telecom, media and entertainment, healthcare, technology, retail, 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 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.

Current wording

Gross profit: Consolidated gross profit for the three months ended December 31, 2025, increased $33.6 million compared to the prior three-month period due to increases in net sales in our product segment and managed services segment, offset by a decrease in our professional services segment. Overall, gross margin increased 40 basis points year over year to 25.8%, primarily due to higher product margin led by a shift in product mix and higher vendor incentives, partially offset by a lower percentage of sales of third-party maintenance and subscriptions that are recognized on a net basis and lower services margin. For further information, see the “Segment Results of Operations” below.

Previous wording

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 wording

Consolidated gross profit for the nine months ended December 31, 2025, increased $89.7 million compared to the prior nine-month period due to increases in net sales in all three of our operating segments. Overall, gross margin increased 30 basis points year over year to 25.2%, primarily due to higher product margin 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 margin. For further information, see the “Segment Results of Operations” below.

Previous wording

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 wording

Salaries and benefits, including variable compensation and share-based compensation for the nine months ended December 31, 2025, increased $31.1 million, compared to the same nine-month period 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 on August 19, 2024.

Previous wording

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 wording

General and administrative expenses for the nine months ended December 31, 2025, increased $3.9 million as compared to the prior nine-month period, due to the addition of Bailiwick. In total, we had higher professional fees of $1.9 million, higher software, subscription, and maintenance fees of $1.8 million, higher office rent of $0.7 million, and higher travel and entertainment expenses of $0.7 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 nine-month period.

Previous 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.

Current wording

Provision for credit losses for the three and nine months ended December 31, 2025, was $0.4 million and $0.6 million, respectively, as compared to $1.2 million and $1.5 million for the prior three- and nine-month periods, respectively. Our lower provision for credit losses for the three and nine months ended December 31, 2025, was due to favorable changes in our net credit exposure.

Previous 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.

Current wording

Depreciation and amortization for the nine months ended December 31, 2025, increased compared to the nine months ended December 31, 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 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%.

Current wording

Operating income: As a result of the foregoing, operating income for the three months ended December 31, 2025, increased $27.0 million compared to the prior three-month period, and operating margin increased by 380 basis points to 7.1%.

Previous wording

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%.

Current wording

As a result of the foregoing, operating income for the nine months ended December 31, 2025, increased $53.6 million compared to the prior nine-month period, and operating margin increased by 200 basis points to 6.9%.

Previous wording

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 wording

Other income, net: Other income, net for the three months ended December 31, 2025, was $2.1 million, compared to $3.4 million for the three months ended December 31, 2024. Our decrease in other income was primarily due to lower foreign exchange gains in the current three-month period compared to the same period in the prior year and $1.2 million in expense in the current three-month period related to adjustments to our estimate of the fair value of contingent consideration due from PEAC Solutions relating to our sale of HoldCo, offset by higher interest income in the current three-month period compared to the same period in the prior year. We had foreign exchange gains of $0.1 million for the three months ended December 31, 2025, compared to $1.9 million for the same period in the prior year. We had $3.0 million in interest income for the three months ended December 31, 2025, compared to $1.6 million for the same period in the prior year.

Previous 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.

Current wording

Provision for income taxes: Our provision for income tax expense was $12.2 million and $37.7 million for the three and nine months ended December 31, 2025, as compared to $5.4 million and $21.8 million for the same three- and nine-month periods in the prior year. Our effective tax rate for the three and nine months ended December 31, 2025, was 26.7% and 27.6% respectively, compared with 26.9% and 27.2%, respectively, for the same three- and nine-month periods in the prior year. Our effective income tax rate for the three months ended December 31, 2025, was lower compared to the same three-month period in the prior year primarily due to lower state taxes. Our effective income tax rate for the nine months ended December 31, 2025, was higher compared to the same nine-month period in the prior year primarily due a higher tax benefit from restricted stock and state taxes in the prior year.

Previous 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.

Current wording

Net earnings from continuing operations: Net earnings from continuing operations for the three months ended December 31, 2025, were $33.4 million, an increase of $18.8 million, as compared to $14.6 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 an increase in provision for income taxes and decrease in other income.

Previous wording

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 wording

Net earnings from continuing operations for the nine months ended December 31, 2025, were $98.7 million, an increase of $40.1 million, as compared to $58.6 million for the same nine-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 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 wording

Net earnings from discontinued operations, net of tax: Net earnings from discontinued operations, net of tax, for the three months ended December 31, 2025, was $1.7 million consisting of a gain of $2.3 million from settling a legal matter, offset by an income tax expense of $0.6 million. In December 2025, we paid $2.3 million to settle a legal matter related to our discontinued operations, which we had recorded as a contingent liability of $4.6 million during the three months ended September 30, 2025. As a result of this settlement, we recognized a gain of $2.3 million. We had net earnings from discontinued operations, net of tax, of $9.6 million for the same three-month period in the prior year consisting of $12.3 million in earnings before income tax, offset by income tax of $2.7 million.

Previous 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.

Current wording

Net earnings from discontinued operations, net of tax, for the nine months ended December 31, 2025, was $8.9 million consisting of $12.3 million in earnings before tax, offset by $3.4 million in income tax expense. Our earnings from discontinued operations before tax for the nine months ended December 31, 2025 include a $4.4 million gain from the sale of our domestic financing business and a $2.3 million loss to settle a legal matter related to our discontinued operations. We had net earnings from discontinued operations, net of tax, of $24.2 million for the same nine-month period in the prior year consisting of $32.6 million in earnings before income tax, offset by $8.4 million in income tax expense.

Previous 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.

Current wording

Net earnings: Due to the aforementioned reasons, net earnings for the three months ended December 31, 2025, were $35.1 million, an increase of $11.0 million, as compared to $24.1 million for the same three-month period in the prior year.

Previous wording

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 wording

Due to the aforementioned reasons, net earnings for the nine months ended December 31, 2025, were $107.6 million, an increase of $24.8 million, as compared to $82.8 million for the same nine-month period in the prior year.

Previous 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.

Current wording

Product segment sales for the three months ended December 31, 2025, increased compared to the same three-month period in the prior year, due to increases in revenue from networking, cloud, security, and collaboration products. Product segment sales for the nine months ended December 31, 2025, increased compared to the same nine-month period in the prior year, due to increases in revenue from networking, cloud, and security products, offset by a decline in collaboration products. These increases 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. Contributing to the increase, the proportion of our sales that were sales of third-party maintenance and subscriptions that are recognized on a net basis decreased for both the three and nine months ended December 31, 2025, compared to the same periods in the prior year.

Previous 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.

Current wording

Managed services segment sales for the three and nine months ended December 31, 2025, increased compared to the same three- and nine-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 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.

Current wording

Product segment margin for the three and nine months ended December 31, 2025, increased by 170 basis points and 70 basis points, respectively, from the same three- and nine-month periods in the prior year due to a shift in product mix and vendor incentives, offset by a decrease in the proportion of our sales that were 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 nine months ended December 31, 2025 increased by 140 basis points and 50 basis points, respectively, which had a positive effect on gross margin, as compared to the same three- and nine-month periods in the prior year.

Previous 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.

Current wording

Professional services segment margin for the three and nine months ended December 31, 2025, decreased by 90 basis points and 190 basis points, respectively, from the same three- and nine-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 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.

Current wording

Managed services segment margin for the three and nine months ended December 31, 2025, decreased by 80 basis points and 60 basis points, respectively, from the same three- and nine-month periods in the prior year, mainly driven by a decrease in gross margin from our managed services offerings due to increased third party costs.

Previous wording

We finance our operations through funds generated from operations and through borrowings. We use those funds to meet our capital requirements, which primarily consist of working capital for operational needs, capital expenditures, acquisitions, and the repurchase of shares of our common stock.

Current wording

We finance our operations through funds generated from operations and through borrowings. We use those funds to meet our capital requirements, which primarily consist of working capital for operational needs, capital expenditures, mergers and acquisitions, and the repurchase of shares of our common stock.

Previous wording

We believe that cash on hand and funds generated from operations, together with available credit under our credit facility, will be enough to finance our working capital, capital expenditures, and other requirements for at least next year.

Current wording

We believe that cash on hand and funds generated from operations, together with available credit under our credit facility, will be sufficient to finance our working capital, capital expenditures, and other requirements for at least next year.

Previous wording

The following table summarizes our sources and uses of cash for the six months ended September 30, 2025, and 2024 (in thousands):

Current wording

The following table summarizes our sources and uses of cash for the nine months ended December 31, 2025, and 2024 (in thousands):

Previous 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.

Current wording

Cash flows from operating activities: During the nine months ended December 31, 2025, we used $223.4 million through operating activities of continuing operations primarily due to an increase in our accounts receivable and inventories, partially offset by net earnings. During the nine months ended December 31, 2024, we provided $186.6 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

The following table presents the components of the cash conversion cycle for our business segments:

Current wording

The following table presents the components of the cash conversion cycle for our business segments as of December 31, 2025, and December 31, 2024:

Previous wording

Represents the rolling three-month average of the balance of trade accounts receivable-trade, net at the end of the period divided by Gross billings for the same three-month period.

Current wording

Represents the rolling three-month average of the balance of accounts receivable-trade, net at the end of the period divided by gross billings for the same three-month period.

Previous 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.

Current wording

Our cash conversion cycle increased to 41 days as of December 31, 2025, as compared to 32 days as of December 31, 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 increased 1 day to 63 days as of December 31, 2025, compared to 62 days as of December 31, 2024, reflecting higher sales to customers with terms less than or equal to net 60 days. Our DIO increased to 22 days as of December 31, 2025, compared to 13 days as of December 31, 2024, due to longer customer delivery schedules. Our DPO increased by 1 day to 44 days as of December 31, 2025, as compared to December 31, 2024. 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 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.

Current wording

Cash flows related to investing activities: During the nine months ended December 31, 2025, we used $3.2 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 nine months ended December 31, 2024, we used $128.3 million through investing activities of continuing operations consisting of $124.9 million for the acquisition of Bailiwick, and $3.4 million for purchases of property and equipment.

Previous 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.

Current wording

Cash flows from financing activities: During the nine months ended December 31, 2025, we provided $9.8 million through financing activities of continuing operations. We had cash outflows of $24.3 million to repurchase outstanding shares of our common stock and $13.1 million paid for dividends. These cash outflows were partially offset by cash inflows of $43.6 million in net borrowing on our floor plan facility and $3.6 million in proceeds from the issuance of common stock to employees under our employee stock purchase plan.

Previous 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.

Current wording

During the nine months ended December 31, 2024, we used $21.5 million through financing activities of continuing operations. We had cash outflows of $33.5 million to repurchase outstanding shares of our common stock and $2.3 million paid in connection with our purchase of certain assets of Peak Resources, Inc. based on adjustments to the determination of total net assets received from 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 $3.6 million in proceeds from the issuance of common stock to employees under our employee stock purchase plan.

Previous 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.

Current wording

As of December 31, 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 $133.2 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.