PLUS - Earnings call transcript Q1 2025

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Operator

Good day, ladies and gentlemen. Welcome to the ePlus Earnings Results Conference Call.

As a reminder, this conference call is being recorded. I would like to introduce your host for today's conference, Mr. Kleyton Parkhurst. begin. may you Sir,

Kley Parkhurst

joining for us you today. Thank

as to call Raiguel, COO the CFO; the Erica I statements vary earnings is you release based this to reports XX-Q file and including with Commission, statements speaks undertakes the our Technology; date Mark Darren forward-looking President; filings and want Counsel. otherwise. we certain forward-looking facts these most and that to General and plans, only current we which with Any in responsibility recent the CEO Stoecker, information, new a and estimates and no other of SEC. and on that Marion, moment projections. made, statement company remind periodic Form Marron, documents on events Actual Elaine issued we quarterly On take afternoon historical President deemed future afternoon the in our make annual be in of ePlus may management's may that Securities the XX-K, or the are to forward-looking on Exchange light to future and materially results of the uncertainties detailed and may anticipated is report this be risks any not statements of Form statement due of and are and update

to measures Mark? earnings of call. It the www.eplus.com. the section over Mark financial our at now certain included during Investor in is release, which to In I'd non-GAAP addition, posted using Marron. turn website will we GAAP reconciliation on call our be like Information a the

Mark Marron

joining more business, questions. call our will Elaine an financial we'll fiscal XXXX and a remarks prepared discuss After first highlights with then in outlook. I the to discussion results recap your of good first will afternoon, quarter provide for us conclude detail. discuss will that, to our our our our I open Kley, year on and Thank our quarter results. update everyone. Thank you, you

We and cloud of resulted initiatives our execute decline tough year's quarter, around related XX% the business. in advisory growth, net services. product XX% technology last continue increase had which annuity into last compared quarter a net to on including for a XXXX year the fiscal AI, to year, to sales Last had strategic Coming compare in sales security quarter and a X.X% sales year. first nearly the in our we

which compared portion chains increase our and are Our We net, gross sales quarter and of of to services held A decline are an quarter. billings increases billings down this reflects sales essentially when technology from customers managed in were affected in prior by some were by are offset believe supply our in of professional that differences, product we make by the an focused over the abrupt annual implementing year year. necessary guidance. us to chain Despite are chain chain the timing quarters supply easing digested quarters areas, believe resilient, previously we customers constrained to net prior gross normalizing. the revenues our on their Both We gross supply orders IT the that the last now as believe due margins this in more reflected revenues. netting purchases. year's supply these flat the last stabilizing partially gross

Services Managed with XX% were solid sustained growth revenues overall revenues up continue and to service year-over-year. build service Our up XX.X%.

billings XX% in X% continues up an XX of to over these in that to revenue for are bookings, ePlus up gross growth consistent be our continued us quarter-over-quarter. profitability strength in predictability for future our was months which years. Security as bodes streams see which XX% strong also We of and were trailing area This the over recurring year-over-year. and approximately services was give more us, well managed

performed Finance XX.X% up for in increase segment. with due adjusted in our in resulting Our EBITDA revenue a this an X.X% portfolio to Segment earnings, increase well

strong continue AI and customer our We see interest Ignite for to program discovery assessments.

in an We will storage In how support program. do non-existing rolled immature Azure policies. or rapidly program. their data continue recovery contemplating and have best future. into cases, a our the capitalize through out customers our a the are on of as of evolving our we many well-defined this data our base, to to to cases, AI phase too We well Many leverage also are now have service AI believe believe use these offering the Ignite a customer needs in AI new many customers We opportunity cleanly not have this of journeys, and lack of AI. positioned customers both formative help silos, and

interest are us seeing verticals, which for various and new a presents significant across customer our base for We within opportunity customers. net

the acquisition. some certified had have a managed relating quarter, expenses primarily higher As experienced infrastructure DGX with from Peak organic support solution optimized managing AI both partner, NVIDIA and to wins our In areas hires support we services service we headcount stacks. AI the to SG&A in our new

customer-facing generation. cost revenue will in areas AI, security as demand engineering the personnel in We some we such had services. quarter, and in and between the of highest invest personnel sales the and to continue these lag In higher skills professionals onboarded with

discipline the have we than operating XXX was revenue with headwinds continue Sequentially, our time, SG&A benefit investments Although basis, we will XXX were which as up increased we Over on and to margin XX% margin points. from we our forward points operating made. gross a leverage more income, basis basis to disciplined believe we operating move with of XXXX some quarter contributed expansion first and this costs. experienced sequential of

resulted balance our to program. repurchase chain this strategic able accelerating our deliver and the delayed headcount balance to which sheet. execute we we've a on invest supply projects, in in initiatives, been many cash capital, cycle support With of Turning With conversion million. our easing, to $XXX funds judiciously have share and cash

to confidence in This recent shares. potential. our to growth most XXX,XXX share shareholders repurchase repurchased returning our demonstrates further we quarter, the and program long-term During value commitment

continue will and growth, on financial investment evaluate repurchase to our drive share We market opportunities opportunities conditions. to based position to

long-term continue we identify both inorganic to front, have growth and the we organic healthy opportunities, near-term and On pipeline. a and

provides sheet well strategic initiatives. to we turn now to in call more to of business support are and focus solid, discuss over balance Elaine? The to believe our financial we I financial future top and detail. our line underlying will Our drive is positioned growth. flexibilities results growth profitable sales the Elaine

Elaine Marion

everyone, details performance will in you, XXXX. Thank fiscal joining you, us quarter our first thank Mark, provide financial about of and today. for I additional the

first to lower totaled technology from due product down net sales million, last in the $XXX.X sales quarter consolidated First $XXX.X year's business. million in quarter

faced chains, year-over-year year's networking projects. noted, net previously cloud first inventory products. quarter we last several Mark Product X.X% due revenue allowed benefited to increase customer flush -- complete quarter due decreased comparison XXXX from As easing year-over-year, and supply in the products XX% sales lower XX.X% in networking a a to us which sales of fiscal difficult delayed as were up the primarily sales primarily of first to of in

line in another services million to Our posted $XX.X services XX.X% drove Cloud demand top managed Service business EMS, ongoing of sales XX% up Desk with net sales growth as net growth and for services. quarter double-digit

our X.X% primarily net professional sales We technology to staff were with rising an also due continued saw services business year-over-year, growth Sales in augmentation increase in broad-based. within services.

other respectively, our among trailing and with and business on sales basis. services largest remaining entertainment Our XX% representing end of technology accounted and telecom, care are the XX% media technology verticals divided SLED, and net and XX-month for respectively, XX%, two health XX% financial XX%, a XX%, markets.

million in to Moving financing due million, segment. our increase to prior from the year, primarily sales higher earnings. totaled portfolio $X Net a $X.X X.X%

Although points of gross decline was to margin. decline declined Technology consolidated in offsetting shift customer in last decline in which was XX XX.X%. gross million XX due expansion a was Partially services basis basis to declined point margin mix. result $XXX.X gross from point in gross The $XXX.X a gross the profit first managed this business, in only primarily in to year's a quarter, XX product margin basis margin million the margin

in while versus to continue Professional we scale efforts an efficiencies mainly disciplined driven in as operating X.X%, higher across grew in gross from compensation X.X% primarily increased our profit X.X% quarter, ago, basis the additional a headcount driven headcount. of was through and due We margin increase year-over-year, expense positive peak to employees offerings. mainly XXXX. benefit expenses G&A. end the lower X.X%, remain Consolidated variable expenses by to XX.X% Sequentially, quarter. as gross from product prior in our yielded January business sales XX.X% down rose Our XXXX, At the margin services driving XX.X%. management. expand focused net gross managed sequentially, XX from declined quarter the points to the from These operating offerings acquisition salaries including XX% up services by were XX on year the results benefits and

income increase operating $XX.X respectively, in the operating quarter before million down business were taxes in and prior $XX.X First was from gross in year earnings profit a the million, to $XX.X $XX.X technology and million, lower due and million year-over-year expenses.

tax of we by million. income effective had quarter, rate $X.X at other remained from the XX.X%. in first quarter driven interest The increase unchanged year's During $X.X last an income of primarily million,

ago diluted from period. Consolidated bottom $X.XX per $XX.X $X.XX $XX.X in share the Moving were $X.XX amounted to line. diluted share the in diluted Non-GAAP million or down earnings in the share or year. quarter, reported prior earnings per the year versus to net first $X.XX per million

low. inventories due the in cash $XX.X On quarter equivalents days of earnings fiscal count cash and The to million increased the to normalize. from turns is from days cash We net XX% We in prior at XXXX. XX year capital. days, adjusted million, continue in our the of increase sequential Shifting ago. $XX.X chains the with both continued have working $XX.X million significant our quarter XX The Consolidated to ended ended year. down modestly to up a supply quarter million position in diluted improve earnings diluted was a sequential million, in to $XXX $XX.X aided million improvements end sheet. $XXX sequential basis, compared per million balance totaled XX, a share March the at was a share above consolidated with which quarter $XX.X decline XX EBITDA in the by the growth XX.X%. of XXXX. and and as primarily Our quarter was X-year first the inventory inventory, totaling prior Further, in

the cash XX XX compared conversion prior to was in days year. Our days cycle

Mark? to repurchases. growth, program turn the During shareholders I repurchased the our May costing repurchase shares to acquisitions on out value returning XX,XXX from XXXX. were XXX,XXX the share investing in share remain and organic service in Mark. our announced will geographic Overall, focused over we shares, through call back seeking offerings quarter, that, we expand million, accretive footprint to and With $XX.X

Mark Marron

Thank IT our you, and the positioned in customers, Elaine. portfolio we strategic With our solutions and diverse well marketplace. by the on providing focus are demand

expect positive financial For the reiterating comparisons for year, outlook. earnings sales year we full and and our are

sales year of fiscal Specifically, of guidance to we XXXX over between X% EBITDA million and our are for adjusted $XXX prior growth range maintaining fiscal $XXX X% the million. net and

making While our and in prioritize we to capital long-term to investments the required company continue our review we to us for success. needs, remain position committed

maintaining continue let's In opportunities. take repurchase programs, business attractive line addition us of accretive advantage Operator, balance providing while our to questions. to share invest open shareholders for to sheet in the to value our through our to and allows strong flexibility

Operator

Instructions]. [Operator

Maggie question will first with come William line of Our the Blair. from Nolan

Margaret Nolan

in that a confidence So, far, I in you sequential compare basis progressed about on quarter second and wanted you're in help how full the another about it's the so you But fiscal your year you how the laid year-over-year have with quarter. tough second that fiscal get can about to to Obviously, share guidance second upcoming thinking us you it what quarter. out? ask building to

Mark Marron

Maggie, Great Mark. it's question.

now, in line right is So the QX expectations. with

too being it QX Let little a bit tough in is of QX on compare. me QX because frame terms a based to similar

as know, you up XX%. net So, in sales, was QX,

up product were Our sales almost XX%.

QX. up product XX% for sales were networking -- Our over that's

net a strongly compare we half. X.X of first have through about line, sales preliminary the environment in that where but guidance still first half we similar with first expectations. the challenged tough QX, the IT But through our XX%. believe just line based the it's compare line, quarter, the pipeline Now in were our were up on that and We we're have in back the months

Margaret Nolan

Okay. you benefit the leverage And Elaine, expecting time, to to you or to so? or over you mentioned maybe expect how next then year operating from manifest that do over

Mark Marron

We Maggie. already of things. of different sourced couple that, a Well, some

sequentially quarter QX our to actually from look you XX%. income QX, jumped If at our operating

the over you take happening operating opportunistic Now process. what's that hires, those is quarters. the of A and in base think talked to will. We now of start measured we've in leverage. more get OpEx We're we'll more previous about time. stuff We're some lot the if

New to ramp up. hires take time

in AI that is piece? more side, that will to this get side. we services at much XXX than think revenue as I thing year, fiscal The we're the investments start expense additional excited not know, Our say -- and is And more services we OpEx so added the customers. that when last you last year AI

line, revenues and new new and solution building get customers, expect would we we're and We'd reps offerings to drive sales we'd that personnel leverage. So, into as up. those out service OpEx the we've back operating therefore, our our to expect in our added stay going

Margaret Nolan

you organic guide. one in the quick and embedded if the the growth it, quarter And full in housekeeping, year Okay. have

Mark Marron

it. you what I know the top? Do have don't

Elaine Marion

material the the year-over-year in was business. Yes, of organic the change amount from

Mark Marron

it, That cover Maggie?

Margaret Nolan

material Did Elaine, you. I immaterial, didn't quite you say hear or

Elaine Marion

The quarter-over-quarter majority of the business. organic the change was from from

Operator

the Our Burns will with next line come question Greg Sidoti of Company. & from

Gregory Burns

that think more cadence the feel been in get quarter. product do that backlog? customer sales forward? flow backlog is channel mentioned it's or be order some worked Where normal this the you Do through In the may you is you digesting a regards of and to you base of customer to going back like terms impacting

Mark Marron

Yes.

though in sales on gross I down it a overkill our so I were for -- tough quarter, X%, look billings last were normalized, our our way, X.X%, this don't think the it's gross net talked essentially a we By even Greg. down just this we've compare quarter. already flat When year want at on to billings. about, as

chain gross started supply that we So, has The to have stabilized. think billings normalize. do our

we'll start where and goes seasonality it QX, So, a we'll rate from there. more more normally I see see in to and we're we think normal the that run then QX in do where

Gregory Burns

then you? your opportunity, anything there growth be little And qualitatively, could whether in of anything understanding add there opportunity is give us it for Okay. the bit could to of a you terms better share business, AI quantitative or you pipeline

Mark Marron

can with Greg, that some go sure. it, talking Yes, other thing in the were the the previous. not technology I we to just talked about of back you if of if about customers sure I'm consumption

it. has a And think I So, happened. that lot of see we really

with our If and you we services which advisory services and technology up look numbers, services. were that, services at overall, PS, that XX.X% being means in our is our professional consumed we're implementing it our

if So, your it. should if I'm part not first when I sure do answered question, but the that it answered

here's to that There's As our with won't meeting a to interesting. us It's AI give relates it relates it so as have not listen the or really thing AI. customer us we program. Ignite a -- AI to

curious data silos. are a silos concerns in at customers have in there's will. at space. lot looking thing Their customers. in the, the say, you power an of There's there our biggest And formative cases. then skills with stage, not and seeing probably infrastructure gap. is They've no AI more these data got data everybody all got disparate on-prem or They governance, ready, is all of cloud, So, especially least let's is the and a if that identification security customers. the so we're they thing that privacy cooling use same That's the in

and to data to rolled mentioned copilot real see that training really readiness, Now the is head we've than team had that's of and the programs our starting pipeline build. count and build more the what a for you, but we've I that interest expense tools envisioning have what made some why And revenue, it's to out and space. starting Maggie, in and bunch in sessions, the earlier investment we're and

Now here's about we're the excited other AI. reason

for -- ePlus which If of probably as from does about one AI, the storage, figure. we've compute, the is is it trying that that think you security years, as bigger goes that the go done things well, all that to people that so are everything across well years things pieces over as networking, into

lot then interest is as meetings we'll customers. move revenue. really through we how We getting We're So, it's of customers. in innings. some the turns with that quarters see -- with the services We've done early pipeline our work and nice a into building,

Gregory Burns

the And lastly, issue? or Great. from -- Okay. negatives then benefits CrowdStrike just any

Mark Marron

No early, years. their able were negatives, and a to much up customer agreement did pretty they be honest, have Greg. had with that open CrowdStrike with to We real got involved benefit. had one after us some We we for that, with extended three on service that time. And they problems

our want some see of, with work least not I was came terms I've at say, I some I'd around benefit, helped more. customers, we out did in the then don't that we set point That's customers. I'd CrowdStrike overplay revenue. did much to been revenue only notified say It deal of but benefit that our could to for the too how of we So, it. customer

Operator

come [Operator Matt from next question the line with of will Stifel. Instructions].Your Sheerin

Matthew Sheerin

to I outlook the go Maggie's question wanted Yes. for about back QX. to

in obviously, in but expectations lot I'm is the of sort of said backlog sequentially last in exactly with talked with flattish seasonal about sure the seasonal, been three your because what not seasonality that being have business a line there years, you You because, meant backlog. down,

in that assume is And X% so, be to the going growth half? is back that you're year-over-year down X% to are come that again going this we to all to guiding and to

Mark Marron

fair Yes. statement. I'd that's a Matt, say,

back it were if you half. we it, XX%. at remind look I to [indiscernible] Once first in you, up quarter, the will think be just again,

we were XX%. quarter, Second

our I'd ended, about if QX way and positive positive we it. more compares. second strategy say to will. are plans. those So a still you it'd be quarter growth feel back is say some tough pretty half But do our

Matthew Sheerin

quarter, meaning, meant? A what not I'm positive that sure

Mark Marron

I last line mean, year. in with

Matthew Sheerin

So Got flat it. year-over-year.

Okay.

terms So resources cost, to leverage volumes going about then to get professional that -- means return. adding Understood. Okay. And you you it. you Got as you're think going cetera, you're in to OpEx et that but then talked but five on be said of that resources,

is So, XXs quarters? what's the low over next right number right OpEx -- around this the different? use of the Or in few terms is the to it

Mark Marron

I'll SNS of it say, where I with line fair realize rate, would call in That's but think that. within terms it, that would But got looking the what is. run a assumption if a yes, I I Matt. at, probably from stay you've G&A salaries, were

I QX alluding our XX%. I'm also think what income to jumped QX, is to operating

that's Now account so expense just an But some also made. as are executives well things a expense reps standpoint both service from improvements some from done quarter, get trend that we'd yet. our not and a a that training standpoint it's to some from as expect savings and that there we've we've

as So, year. will not quarter-to-quarter, the year know, I'd you throughout operating Matt, expect or? into the and jump, going from throughout the leverage year. else, following to but It's grow Anything

Matthew Sheerin

that's Thanks. No, it.

Mark Marron

Okay. All right.

Operator

And call Mark the session. I conclude remarks. for turn that will to back question-and-answer closing now Marron our any will over

Mark Marron

the for just there. the everybody I safe us and to call for you. a Day though a Thank want care, jumping for joining day Okay. and quarter wish holiday thank have happy long even bit our weekend little and day. and a first Labor Take I'm good a gun earnings you

ePlus (PLUS) 6 Aug 242025 Q1 Earnings call transcript