EPLUS Soars on Strong IT Sales, Exits Financing Business

TL;DR

**PLUS is shedding its financing arm to double down on booming IT solutions, signaling a focused growth trajectory.**

AI Summary

EPLUS INC (PLUS) reported a robust financial performance for the three months ended September 30, 2025, with net sales increasing by 23.4% to $608.8 million from $493.4 million in the prior year. Product sales surged by 24.5% to $485.1 million, and services sales grew by 19.4% to $123.8 million. Operating income saw a significant jump of 80.9% to $48.8 million, up from $27.0 million in the same quarter last year. Net earnings from continuing operations more than doubled, reaching $38.2 million compared to $19.8 million. However, net earnings were impacted by a loss from discontinued operations of $3.3 million, resulting in total net earnings of $34.9 million, a 11.3% increase from $31.3 million in Q3 2024. For the six months ended September 30, 2025, net sales rose 21.1% to $1.25 billion, and net earnings increased 23.7% to $72.6 million. The company completed the sale of its domestic financing business on June 30, 2025, strategically shifting to a pure-play technology solutions provider. Cash and cash equivalents increased to $402.2 million as of September 30, 2025, from $389.4 million at March 31, 2025.

Why It Matters

This strategic divestiture of its financing business positions EPLUS as a focused technology solutions provider, potentially streamlining operations and enhancing investor clarity. The significant growth in product and services sales, particularly the 24.5% increase in product sales, indicates strong demand for its core IT offerings, which is crucial in a competitive market dominated by larger players like CDW and Insight Enterprises. For investors, this focus could lead to more predictable revenue streams and higher margins, while employees may benefit from a clearer company direction. Customers could see enhanced service quality from a more specialized provider, and the broader market gains a more defined competitor in the IT solutions space.

Risk Assessment

Risk Level: medium — While EPLUS shows strong growth in continuing operations, the company faces risks from its reliance on a small number of key vendors in its supply chain without long-term agreements, as stated in the 'Cautionary Language About Forward-Looking Statements'. Additionally, the 'inability to identify merger and acquisition candidates, perform sufficient due diligence prior to completing mergers and acquisitions, successfully integrate a completed merger and/or acquisition' poses a risk, especially as the company focuses on its core IT business and potential future growth through M&A.

Analyst Insight

Investors should consider PLUS's strategic shift to a pure-play technology solutions provider as a positive catalyst for long-term growth and improved operational focus. Monitor the company's ability to maintain its strong sales momentum in products and services, particularly given the competitive IT landscape and potential supply chain vulnerabilities. Evaluate future earnings reports for sustained profitability from continuing operations and effective integration of any new acquisitions.

Financial Highlights

debt To Equity

0.69

revenue

$608.8M

operating Margin

8.0%

total Assets

$1.77B

total Debt

$484.1M

net Income

$34.9M

eps

$1.31

gross Margin

26.6%

cash Position

$402.2M

revenue Growth

+23.4%

Revenue Breakdown

Key Numbers

• $608.8M — Total Net Sales (Q3 2025) (Increased 23.4% from $493.4 million in Q3 2024)
• $485.1M — Product Net Sales (Q3 2025) (Increased 24.5% from $389.7 million in Q3 2024)
• $123.8M — Services Net Sales (Q3 2025) (Increased 19.4% from $103.7 million in Q3 2024)
• $48.8M — Operating Income (Q3 2025) (Increased 80.9% from $27.0 million in Q3 2024)
• $38.2M — Net Earnings from Continuing Operations (Q3 2025) (Increased 92.8% from $19.8 million in Q3 2024)
• $3.3M — Loss from Discontinued Operations (Q3 2025) (Compared to earnings of $11.5 million in Q3 2024)
• $402.2M — Cash and Cash Equivalents (Sept 30, 2025) (Increased from $389.4 million at March 31, 2025)
• 26,438,876 — Common Shares Outstanding (Nov 4, 2025) (Reflects current share count)

Key Players & Entities

• EPLUS INC (company) — registrant
• Marlin Leasing Corporation (company) — acquirer of Expo Holdings, LLC
• PEAC Solutions (company) — d/b/a name for Marlin Leasing Corporation
• Expo Holdings, LLC (company) — divested subsidiary
• NASDAQ Global Select Market (regulator) — exchange where PLUS common stock is registered
• SEC (regulator) — Securities and Exchange Commission
• Delaware (regulator) — state of incorporation
• United States (regulator) — primary market for operations

FAQ

Risk Factors

• Supply Chain Disruptions [medium — operational]: The company relies on a global supply chain for its products. Disruptions due to geopolitical events, natural disasters, or pandemics could impact inventory levels and the ability to meet customer demand, potentially affecting revenue and profitability.
• Intense Competition [medium — market]: The technology solutions market is highly competitive, with numerous players offering similar products and services. EPLUS INC faces competition from both large, established companies and smaller, agile startups, which could lead to pricing pressures and reduced market share.
• Data Privacy and Security Regulations [high — regulatory]: As a technology solutions provider, EPLUS INC handles sensitive customer data. Changes in data privacy laws (e.g., GDPR, CCPA) or breaches of data security could result in significant fines, reputational damage, and loss of customer trust.
• Interest Rate Fluctuations [low — financial]: While the company has a strong cash position, any future reliance on debt financing could be impacted by changes in interest rates. Rising rates would increase borrowing costs, potentially affecting profitability and the ability to fund growth initiatives.

Industry Context

EPLUS INC operates in the competitive technology solutions sector, characterized by rapid innovation and evolving customer demands. The industry is seeing a trend towards integrated hardware, software, and services, with a growing emphasis on cybersecurity and cloud-based solutions. Companies are increasingly focusing on specialized niches to differentiate themselves.

Regulatory Implications

The company must navigate evolving data privacy regulations, such as GDPR and CCPA, which impose strict requirements on handling customer information. Compliance failures can lead to substantial fines and reputational damage. Additionally, adherence to cybersecurity standards is critical to maintain customer trust and prevent breaches.

What Investors Should Do

1. Monitor the integration and performance of the core technology solutions business post-divestiture.
2. Analyze the drivers of gross and operating margin expansion.
3. Evaluate the impact of discontinued operations on overall financial trends.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported strong revenue growth of 23.4% and significant increase in operating income, reflecting successful strategic shift.
• 2025-06-30: Sale of Domestic Financing Business Completed — Marks EPLUS INC's transition to a pure-play technology solutions provider, simplifying operations and focusing resources.
• 2025-03-31: End of Q1 2025 / Beginning of Fiscal Year — Company had $389.4 million in cash and cash equivalents, setting the stage for the year's performance.

Glossary

Discontinued Operations

A segment of a business that a company has sold or plans to sell. Its financial results are reported separately from the company's ongoing operations. (EPLUS INC reported a loss from discontinued operations, impacting total net earnings, highlighting the strategic divestiture of its domestic financing business.)

Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services. (Gross profit increased to $162.1 million from $127.3 million, indicating improved efficiency in cost of sales relative to revenue.)

Operating Income

A company's earnings before interest and taxes (EBIT), representing profit from core business operations. (A significant 80.9% increase in operating income to $48.8 million demonstrates strong operational performance and cost management.)

Treasury Stock

Stock that a company has repurchased from the open market. It is not included in outstanding shares and does not receive dividends. (EPLUS INC holds treasury stock, reducing the number of outstanding shares and potentially increasing earnings per share.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, EPLUS INC has demonstrated substantial growth, with net sales increasing by 23.4% to $608.8 million. This top-line growth is complemented by a significant improvement in profitability, as operating income surged by 80.9% to $48.8 million. The company's strategic decision to divest its domestic financing business has streamlined operations, leading to a focus on its core technology solutions, which is reflected in the robust performance metrics. New risks related to data privacy and cybersecurity are becoming more prominent due to the nature of its business.

Filing Documents

• ef20056859_10q.htm (10-Q) — 1442KB
• ef20056859_ex10-1.htm (EX-10.1) — 60KB
• ef20056859_ex31-1.htm (EX-31.1) — 12KB
• ef20056859_ex31-2.htm (EX-31.2) — 12KB
• ef20056859_ex32.htm (EX-32) — 7KB
• image1.gif (GRAPHIC) — 4KB
• 0001140361-25-040814.txt ( ) — 7299KB
• plus-20250930.xsd (EX-101.SCH) — 45KB
• plus-20250930_def.xml (EX-101.DEF) — 266KB
• plus-20250930_lab.xml (EX-101.LAB) — 489KB
• plus-20250930_pre.xml (EX-101.PRE) — 284KB
• plus-20250930_cal.xml (EX-101.CAL) — 62KB
• ef20056859_10q_htm.xml (XML) — 1106KB

Financial Statements

Financial Statements Unaudited Consolidated Balance Sheets as of September 30, 2025, and March 31, 2025 5 Unaudited Consolidated Statements of Operations for the Three and Six Months Ended September 30, 2025, and 2024 6 Unaudited Consolidated Statements of Comprehensive Income for the Three and Six Months Ended September 30, 2025, and 2024 7 Unaudited Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2025, and 2024 8 Unaudited Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended September 30, 2025, and 2024 10 Notes to Unaudited Consolidated Financial Statements 11 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 24 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 36 Item 4.

Controls and Procedures

Controls and Procedures 36 Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 37 Item 1A.

Risk Factors

Risk Factors 37 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 37 Item 3. Defaults Upon Senior Securities 38 Item 4. Mine Safety Disclosures 38 Item 5. Other Information 38 Item 6. Exhibits 39

Signatures

Signatures 40 2 Table of Contents CAUTIONARY LANGUAGE ABOUT FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains certain statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or "Exchange Act," and are made in reliance upon the protections provided by such acts for forward-looking statements. Such statements are not based on historical fact but are based upon numerous assumptions about future conditions that may not occur. Forward-looking statements are generally identifiable by use of forward-looking words such as "may," "should," "would," "intend," "estimate," "will," "potential," "possible," "could," "believe," "expect," "intend," "plan," "anticipate," "project," and similar expressions. Readers are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf. Forward-looking statements are made based upon information that is currently available or management's current expectations and beliefs concerning future developments and their potential effects upon us, speak only as of the date hereof, and are subject to certain risks and uncertainties. We do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we later become aware. Actual events, transactions and results may materially differ from the anticipated events, transactions, or results described in such statements. Our ability to consummate such transactions and achieve such events or results is subject to certain risks and uncertainties. Such risks and uncertainties include, but are not limited to, the matters set forth below: financial losses resulting from national and international political instability fostering uncertainty and volatility in the global economy including

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements e Plus inc. AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) September 30, 2025 March 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 402,157 $ 389,375 Accounts receivable—trade, net 676,778 516,925 Accounts receivable—other, net 44,335 19,382 Inventories 154,138 120,440 Deferred costs 71,324 66,769 Other current assets 23,990 28,500 Current assets of discontinued operations - 222,399 Total current assets 1,372,722 1,363,790 Deferred tax asset 10,621 3,658 Property, equipment, and other assets—net 109,431 98,657 Goodwill 202,927 202,858 Other intangible assets—net 71,126 82,007 Non-current assets of discontinued operations - 133,835 TOTAL ASSETS $ 1,766,827 $ 1,884,805 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Current liabilities: Accounts payable $ 281,833 $ 324,580 Accounts payable—floor plan 98,533 89,527 Salaries and commissions payable 45,708 42,219 Deferred revenue 163,460 152,631 Other current liabilities 38,586 22,463 Current liabilities of discontinued operations - 166,463 Total current liabilities 628,120 797,883 Deferred tax liability—long-term - 1,454 Deferred revenue—long-term 80,235 81,759 Other liabilities 12,390 13,540 Non-current liabilities of discontinued operations - 12,546 TOTAL LIABILITIES 720,745 907,182 COMMITMENTS AND CONTINGENCIES (Note 9) STOCKHOLDERS' EQUITY Preferred stock, $ 0.01 per share par value; 2,000 shares authorized; none outstanding - - Common stock, $ 0.01 per share par value; 50,000 shares authorized; 26,565 outstanding at September 30, 2025, and 26,526 outstanding at March 31, 2025 277 276 Additional paid-in capital 202,012 193,698 Treasury stock, at cost, 1,163 shares at September 30, 2025, and 1,056 shares at March 31, 2025 ( 78,456 ) ( 70,748 ) Retained earnings 916,852 850,956 Accumulated other

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