ePlus (NASDAQ:PLUS) Announces Quarterly Earnings Results, Beats Estimates By $0.09 EPS

Key Points

• ePlus beat quarterly estimates: EPS was $1.28 versus the $1.19 consensus, while revenue reached $649.1 million compared with expectations of $639.95 million.
• Demand prospects improved: Open orders exceeded $1.5 billion, including more than $650 million above the prior year, with AI infrastructure, security and managed services driving growth opportunities.
• Profitability weakened despite higher sales: Gross margin and adjusted EBITDA declined, and non-GAAP EPS fell from $1.41 to $1.28. The company maintained its fiscal 2027 guidance, declared a $0.27 quarterly dividend and authorized a buyback of up to 1.5 million shares.

ePlus (NASDAQ:PLUS - Get Free Report) issued its earnings results on Tuesday. The software maker reported $1.28 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.19 by $0.09, FiscalAI reports. The company had revenue of $649.11 million for the quarter, compared to analysts' expectations of $639.95 million. ePlus had a net margin of 5.24% and a return on equity of 11.36%.

Here are the key takeaways from ePlus' conference call:

• Demand and backlog strengthened: Bookings and open orders increased significantly, with open orders more than $650 million above the prior year and total open orders exceeding $1.5 billion. Management said AI-related infrastructure opportunities are broad-based, although much of the backlog is expected to convert gradually, particularly in the second half of the fiscal year and beyond.
• AI, security and managed services remained growth priorities. Security gross billings rose 15.6%, while managed services revenue surpassed $50 million and grew more than 15%, driven by cloud and data center services. The company also cited multiple large AI infrastructure wins and a growing pipeline of services-rich AI offerings.
• ePlus maintained its fiscal 2027 guidance and highlighted a strong balance sheet, ending the quarter with $448.9 million in cash. It repurchased approximately 251,000 shares for $20.8 million, declared a $0.27 per-share dividend, and authorized a new buyback plan for up to 1.5 million shares.
• Profitability declined despite modest revenue growth: First-quarter net sales rose 1% to $649.1 million, but gross margin fell to 23.3% from 23.9%, adjusted EBITDA declined to $47.8 million from $52.7 million, and non-GAAP diluted EPS decreased to $1.28 from $1.41. Professional services revenue fell 5.1% due to project delays, while management said certain large retail projects would take longer to contribute.

ePlus Stock Performance

Shares of NASDAQ PLUS traded down $2.60 during midday trading on Wednesday, reaching $94.44. 276,615 shares of the company's stock were exchanged, compared to its average volume of 209,178. ePlus has a 52-week low of $62.42 and a 52-week high of $98.14. The business's fifty day moving average price is $85.32 and its two-hundred day moving average price is $83.30. The stock has a market capitalization of $2.47 billion, a PE ratio of 19.54, a price-to-earnings-growth ratio of 1.25 and a beta of 1.00.

ePlus Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Wednesday, September 16th. Investors of record on Tuesday, August 25th will be given a $0.27 dividend. This represents a $1.08 annualized dividend and a dividend yield of 1.1%. The ex-dividend date of this dividend is Tuesday, August 25th. ePlus's dividend payout ratio (DPR) is 22.31%.

Wall Street Analyst Weigh In

Several equities analysts recently commented on PLUS shares. Zacks Research raised shares of ePlus from a "strong sell" rating to a "hold" rating in a report on Friday, July 31st. Weiss Ratings reiterated a "hold (c+)" rating on shares of ePlus in a research note on Friday, July 10th. Two analysts have rated the stock with a Hold rating, According to data from MarketBeat.com, the company currently has an average rating of "Hold".

Insider Buying and Selling

In other ePlus news, COO Darren S. Raiguel sold 1,935 shares of the business's stock in a transaction on Wednesday, July 29th. The shares were sold at an average price of $94.06, for a total transaction of $182,006.10. Following the completion of the sale, the chief operating officer owned 69,236 shares in the company, valued at $6,512,338.16. The trade was a 2.72% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CFO Elaine D. Marion sold 2,818 shares of the stock in a transaction that occurred on Wednesday, July 29th. The stock was sold at an average price of $95.22, for a total value of $268,329.96. The disclosure for this sale is available in the SEC filing. Over the last ninety days, insiders sold 6,102 shares of company stock worth $571,705. 2.20% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On ePlus

Hedge funds have recently made changes to their positions in the company. Osaic Holdings Inc. boosted its stake in ePlus by 361.9% in the second quarter. Osaic Holdings Inc. now owns 448 shares of the software maker's stock worth $32,000 after purchasing an additional 351 shares in the last quarter. Kestra Advisory Services LLC acquired a new position in ePlus during the fourth quarter valued at approximately $108,000. US Bancorp DE raised its holdings in ePlus by 856.4% in the third quarter. US Bancorp DE now owns 1,731 shares of the software maker's stock worth $123,000 after purchasing an additional 1,550 shares during the period. Healthcare of Ontario Pension Plan Trust Fund bought a new position in shares of ePlus during the fourth quarter worth $138,000. Finally, Focus Partners Wealth bought a new stake in shares of ePlus in the 3rd quarter valued at $154,000. Institutional investors and hedge funds own 93.80% of the company's stock.

ePlus Company Profile

ePlus Inc NASDAQ: PLUS is a technology solutions provider that helps enterprises and public-sector organizations maximize the value of their information technology investments. The company specializes in designing, implementing and managing complex IT infrastructures, with a focus on security, cloud computing, data center modernization and unified communications. By combining consulting services with software license management and hardware procurement, ePlus delivers end-to-end solutions that align with its clients' strategic objectives.

The company's offerings include cybersecurity assessments and managed security services, hybrid and public cloud deployments, network architecture and optimization, and collaboration platforms.

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