EPLUS INC

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Basis of Presentation — The unaudited consolidated financial statements include the accounts ofe Plus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accounts of businesses acquired are included in the unaudited consolidated financial statements from the dates of acquisition. We reclassified certain previously reported amounts related to contract assets and contract liabilities in our consolidated balance sheets in this Quarterly Report on Form 10-Q to conform to current period presentation.

Interim Financial Statements — The unaudited consolidated financial statements for the three and six months ended September 30, 2026, and 2025, were prepared by us and include all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in comprehensive income, and cash flows for such periods. Operating results for the three and six months ended September 30, 2026, and 2025, are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2027, or any other future period. These unaudited consolidated financial statements do not include all disclosures required by the accounting principles generally accepted in the United States (“US GAAP”) for annual financial statements. Our audited consolidated financial statements are contained in our annual report on Form 10-K for the year ended March 31, 2026 (“2026 Annual Report”).

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

Concentrations of Risk — A substantial portion of our sales are IT products, including hardware, software, maintenance, and services, from Cisco Systems, which represented approximately 31% of our net sales for each of the three months ended September 30, 2026, and 2025, and 28% of our net sales for each of the six months ended September 30, 2026, and 2025.

Significant Accounting Policies — The significant accounting policies used in preparing these consolidated financial statements were applied on a basis consistent with those reflected in our consolidated financial statements for the year ended March 31, 2026.

2. REVISION OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

In the fourth quarter of our fiscal year ended March 31, 2026, we identified misstatements in our previously issued consolidated financial statements for the fiscal years 2025 and 2024 that related to a misstatement of revenue from our product segment that resulted from a miscalculation of accrued revenue. We assessed the impacts of the misstatements from both quantitative and qualitative perspectives and determined that the related impacts were not material, either individually or in the aggregate, to our previously issued consolidated financial statements.

Notwithstanding the results of the assessment, we are revising our previously issued consolidated financial statements to correct these misstatements. Accordingly, all consolidated financial information contained in these consolidated financial statements and the accompanying notes has been revised to reflect the corrections. Previously reported financial information will be corrected in future filings, as applicable.

The following table details the impact of the misstatements and provides revisions to the impacted financial statement line items in the previously-issued consolidated statements of operations and consolidated statements of comprehensive income for the periods presented (in thousands, except per share data):

The following table details the impact of the misstatements and provides revisions to the impacted financial statement line items in the previously-issued consolidated statements of cash flows for the periods presented (in thousands):

The following table details the impact of the misstatements and provides revisions to the impacted financial statement line items in the previously-issued consolidated statements of stockholders’ equity for the periods presented (in thousands):

3. RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This update is intended to improve the operability of the guidance for determining when to capitalize internal-use software development costs. We early adopted this update in our fiscal year ending March 31, 2027 using the prospective transition method. Accordingly, we are applying the amended guidance to all software costs incurred after the beginning of our current annual reporting period. Our adoption of this update did not have a material impact on our consolidated financial statements. The impact of our adoption of this update in future periods will depend on the nature and extent of our future software development activities.

Recently Issued Accounting Pronouncements Not Yet Adopted

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

4. REVENUES

Accounts Receivable

Our accounts receivable—trade, net consists of accounts receivable recognized from contracts with customers. The following table provides a disaggregation of our balance in accounts receivable—trade, net (in thousands):

As of September 30, 2026, and March 31, 2026, our accounts receivable—trade, net included $1.7 million and $8.6 million, respectively, of receivables due from financing partners in payment for our sale of customer receivables to them.

Additionally, as of September 30, 2026, and March 31, 2026, we had $9.6 million and $6.3 million, respectively, in receivables recognized from contracts with customers that we intend to sell to financing partners as part of other current assets in our consolidated balance sheet.

Contract Assets

Contract assets represent our right to consideration in exchange for goods or services that we transferred to a customer when that right is conditioned on something other than the passage of time. We had short-term contract assets of $28.3 million and $17.8 million as of September 30, 2026, and March 31, 2026, respectively. We had long-term contract assets of $8.1 million as of September 30, 2026. We didnot have any long-term contract assets as of March 31, 2026. We recognize the short-term and long-term portions of our contract asset balance as part of other current assets and property, equipment, and other assets—net, respectively, in our consolidated balance sheet.

Contract Liabilities

Contract liabilities represent our obligation to transfer goods or services to a customer for which we have received consideration, or the amount is due from the customer. Our contract liabilities consist of our contract liabilities and contract liabilities—long-term in our consolidated balance sheets. Revenues recognized from the beginning contract liability balance were $46.1 million and $95.9 million for the three and six months ended September 30, 2026, respectively, and $33.5 million and $76.3 million for the three and six months ended September 30, 2025, respectively.

Performance Obligations

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

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

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table summarizes the changes in the carrying amount of goodwill for the six months ended September 30, 2026 (in thousands):

(1)

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

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

Our goodwill balance increased by $9.2 million for the six months ended September 30, 2026, due to our acquisition of certain assets and assumption of certain liabilities of Daymark Solutions, Inc. (“Daymark”) that closed on August 21, 2026. Please refer to Note 15, “Business Combinations” for details on the acquisition of certain assets and assumption of certain liabilities of Daymark.

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

In our annual test as of October 1, 2025, we performed a qualitative assessment of goodwill and concluded that, more likely than not, the fair value of our product, professional services, and managed services reporting units continued to exceed their carrying value.

Other Intangible Assets

Our other intangible assets consist of intangible assets purchased through business combinations. The following table provides the composition of our other intangible assets as of September 30, 2026, and March 31, 2026 (in thousands):

We generally amortize our customer relationships, trade names, and other purchased intangibles between 5 to 10 years.

Total amortization expense for other intangible assets was $4.4 million and $9.0 million for the three and six months ended September 30, 2026, respectively, and $5.3 million and $10.9 million for the three and six months ended September 30, 2025, respectively.

6. ALLOWANCE FOR CREDIT LOSSES

The following table provides the activity in our allowance for credit losses within accounts receivable—trade for the six months ended September 30, 2026, and 2025 (in thousands):

7. CREDIT FACILITY

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

Our credit facility is provided by a syndicate of banks for which WFCDF acts as administrative agent and consists of a discretionary senior secured floor plan facility in favor of the Borrowers in the aggregate principal amount of up to $500.0 million, together with a sub-limit for a revolving credit facility for up to $200.0 million.

Under the accounts payable floor plan facility, we had an outstanding balance of $139.2 million and $119.7 million as of September 30, 2026, and March 31, 2026, respectively. On our balance sheet, our liability under the accounts payable floor plan facility is presented as accounts payable – floor plan.

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

We may use the revolving credit facility for our borrowing needs. We didnot have any outstanding balances under the revolving credit facility as of September 30, 2026, or March 31, 2026.

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

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

Under the WFCDF Credit Facility, the Borrowers are restricted in their ability to pay dividends toe Plus inc. unless their available borrowing meets certain thresholds. As of September 30, 2026, and March 31, 2026, their available borrowing met the thresholds such that there were no restrictions on their ability to pay dividends.

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

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