ePlus (PLUS -0.52%), a technology solutions provider specializing in IT infrastructure, announced results for Q1 FY2026 on August 7, 2025. The company posted GAAP revenue of $637.3 million, beating analyst estimates of $523.9 million (GAAP), while delivering Non-GAAP earnings per share (EPS) of $1.26, well above the $1.06 non-GAAP expectation. Both revenue (GAAP) and EPS (non-GAAP) marked double-digit percentage growth compared to the prior year's quarter. These results also set all-time quarterly records for gross billings and net sales. In a pivotal move, ePlus initiated its first-ever quarterly dividend and launched a new share repurchase program. Overall, the quarter showed broad-based revenue expansion driven mainly by services and an enhanced capital return profile.
| Metric | Q1 FY26(3 months ended June 30, 2025) | Q1 FY26 Estimate | Q1 FY25(3 months ended June 30, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.26 | $1.06 | $1.01 | 24.8% |
| Revenue (GAAP) | $637.3 million | $523.9 million | $535.7 million | 19.0% |
| Adjusted EBITDA | $46.7 million | $39.1 million | 19.4% | |
| Gross Profit | $148.2 million | $126.9 million | 16.8% | |
| Net Earnings from Continuing Operations | $27.1 million | N/A | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q4 2025 earnings report.
ePlus Inc. Business Model and Key Focuses
ePlus Inc. delivers a range of technology solutions, including consulting, cloud, security, managed services, and IT infrastructure products for commercial, healthcare, education, and government customers. The company forms strategic partnerships with major technology vendors like AWS, Cisco, Microsoft, and VMware, enabling it to provide multi-vendor solutions tailored to diverse customer needs.
Recently, ePlus has focused on expanding and integrating its professional and managed services, with a strong emphasis on emerging technologies like cloud computing, security, and AI (artificial intelligence). The company also completed the sale of its financing business to concentrate fully on higher-growth technology solutions. Key success factors include maintaining strong vendor certifications, a diversified customer base, and adapting to rapid changes in the IT market.
What Drove the Quarter: Financial and Service Results
Revenue set a quarterly record as services growth accelerated, underpinned by the recent Bailiwick Services acquisition and existing core business demand. Services revenue rose 48.8% from a year before, reaching $116.3 million. Within this, professional services nearly doubled with a 92.4% increase, driven mainly by integrating Bailiwick’s operations. Managed services were up 9.0%, showing continued momentum in cloud and enhanced maintenance contracts.
In the product business, net sales (GAAP) rose 13.9%, led by rapid adoption in cloud and security product lines. Cloud-related net sales (GAAP) climbed 50.8% to $206.996 million, and security product sales advanced 27.3% (GAAP). Networking and collaboration products, however, declined by 7.0% and 43.7%, respectively, as customers continued to digest equipment from the prior supply chain surge.
Segment margins and mix continued to evolve. Professional services gross profit increased 82.2% to $28.2 million (GAAP), but the gross margin within this category dipped to 39.2% from 41.5% in the prior year, as the newly acquired lower-margin business blended with existing operations. Managed services margin also slipped to 30.4%. The product segment gross margin softened to 20.4%, due to a lower share of third-party maintenance and services. Overall company gross margin (GAAP) narrowed to 23.3%, compared with 23.7% a year earlier.
Operating expenses grew 17.4%, reflecting a 275-person headcount expansion, primarily in customer-facing roles and related compensation. Operating income from continuing operations (GAAP) was up 15.1%. Adjusted EBITDA increased 19.6% and Non-GAAP EPS increased 24.8% year-over-year. Cash provided by the sale of the financing business bolstered the balance sheet, with cash and equivalents totaling $480.2 million, up from $389.4 million as of Q4 FY2025.
Customer vertical performance was mixed. Telecom, Media, and Entertainment end-market sales surged 57.4% to $184,979,000, and the "All Other" category rose 71.1% year-over-year (GAAP). In contrast, technology, healthcare, and financial services saw declines or near-flat results, indicating shifts in where IT spending occurred this quarter.
Strategic actions featured prominently. The company's exit from its US financing business completed its transition to a pure technology solutions company. In a new move for shareholder returns, management declared a quarterly dividend and announced approval of a 1.5 million share repurchase program. Inventory was reduced by 16.1% compared to Q4 FY2025, while trade receivables (GAAP) increased by 35.6%. The period did not include a previously declared dividend.
On the product side, ePlus’s offerings range from cloud solutions (helping customers move computing workloads onto remote data centers), security products (protecting digital assets from cyber threats), networking equipment (for building large computer networks), and collaboration tools (such as video and messaging platforms). Managed services involve outsourcing IT support and monitoring, while professional services provide technical consulting, project management, and system integration.
Outlook and Investor Considerations
For fiscal 2026, management raised its financial outlook. It now expects net sales and gross profit both to grow in the upper single-digit percentage range over the prior fiscal year, while adjusted EBITDA should rise in the mid-teens. This is an increase from earlier projections. Leadership noted that demand in cloud, security, and data center markets remains strong.
In the period ahead, investors may want to watch for further changes in business mix, especially service margins as recently acquired businesses are integrated. Receivables growth and working capital management will also be important, given the 35.6% jump in trade accounts receivable. The company’s pivot to pure-play technology, enhanced capital return plans, and expanded vendor awards position it to continue benefiting from secular trends in cloud, AI, and security.
PLUS does pay a dividend. The quarterly dividend was introduced at $0.25 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
