What happened
Shares of ePlus (PLUS -1.06%) trounced the market on Tuesday. The technology-solutions provider's stock jumped 18% by 12:45 p.m. ET, even as the wider market fell 1%. That increase added to big gains for shareholders as the stock is up over 50% so far in 2023, compared to a 17% rally in the S&P 500.
Tuesday's jump can be traced to ePlus' positive earnings announcement, along with management's encouraging comments about the rest of the fiscal year ahead.
So what
Executives said before the market opened that ePlus achieved $574 million in Q1, translating into a 25% gain year over year. That increase was powered by both its organic cloud and networking businesses and recent acquisitions.
Demand was strong in several of its major market tech support niches, too, giving executives more confidence in their growth strategy. "Our first quarter technology business sales were diverse across end markets and we were pleased to see demand broaden," CEO Mark Marron said in a press release.
Gross profit margin held steady, compared to last year, but ePlus managed slower growth in its operating expenses. As a result, operating income jumped 40% to $46 million. Non-GAAP earnings improved 41% to $54 million.
Now what
Investors were pleased with the company's first official outlook for fiscal 2024. The company predicts sales should land between $2.23 billion and $2.33 billion, marking significant growth, compared to last year's $2 billion haul. That positive outlook came with a caution, though, that IT spending trends are being impacted by uncertainty around wider global economic growth trends. A shift lower in these trends would likely threaten this growth outlook.
Yet today, there's no sign of a sharp pullback impacting ePlus' tech clients. That's why it makes sense that the stock would react positively after management issued an aggressive growth outlook for the year ahead.