ePlus NASDAQ: PLUS reported a strong finish to fiscal 2026, with management pointing to broad-based demand across artificial intelligence, cloud, data center, networking and security as key drivers of growth.
On the company’s fourth-quarter and full-year earnings call, Chief Executive Officer and President Mark Marron said fiscal 2026 was “defined by the strong execution” of the ePlus team and its ability to meet evolving customer IT needs. He said the company achieved record gross billings of $3.8 billion for the year and ended with record backlog.
Marron said full-year diluted earnings per share from continuing operations increased 64%, while fourth-quarter diluted EPS from continuing operations rose 53% year over year. He attributed the results to continued market share gains and strong demand from customers, particularly as they advance AI-related initiatives.
Fourth-Quarter Sales Rise More Than 20%
Chief Financial Officer Elaine Marion said consolidated net sales in the fourth quarter increased 20.6% to $576.2 million. Gross billings rose 11.7% to $881 million, reflecting demand across ePlus’ strategic focus areas, including AI, cloud, security and networking.
Product revenue increased 25% in the quarter to $466.2 million, while services revenue grew 4.9% to $110 million. Managed services revenue rose 9.3% to $48.7 million, helped by strength in enhanced maintenance support and cloud offerings. Professional services revenue was $61.3 million, with Marion noting timing delays from select retail customers.
Consolidated gross profit for the fourth quarter was $141.6 million, and gross margin was 24.6%, down from 26.5% in the prior-year quarter. Marion said the decline was primarily due to lower product margins, including a lower proportion of revenue recognized on a net basis and more large enterprise sales at competitive gross margins.
Operating income increased 64.7% to $30.9 million. Net earnings from continuing operations were $20.5 million, compared with $13.5 million a year earlier. Diluted EPS from continuing operations was $0.78, up from $0.51. Adjusted EBITDA increased 40.2% to $40.1 million, and non-GAAP diluted EPS from continuing operations was $1.00, compared with $0.69 in the prior-year quarter.
Full-Year Results Reflect Operating Leverage
For fiscal 2026, ePlus reported net sales of $2.4 billion, up 22.1%. Product sales increased 23.7%, while services revenue rose 15.6%. Marion said the growth was broad-based across customer sizes and verticals and was primarily organic.
Full-year consolidated gross profit increased 20.3% to $616.1 million. Gross margin was 25.2%, down slightly from 25.6% in fiscal 2025, due largely to product mix. Operating expenses increased 9.1% for the year, compared with 22.1% net sales growth, while headcount remained essentially flat.
Net earnings from continuing operations rose 62.4% to $124.1 million, and diluted EPS from continuing operations increased to $4.71 from $2.87. Non-GAAP EPS from continuing operations rose to $5.39 from $3.53, and adjusted EBITDA increased 49.5% to $204.8 million.
Marion said the results underscored the operating leverage in ePlus’ business model, with adjusted EBITDA growth of nearly 50% for the year while headcount stayed flat and operating expenses rose at a more modest pace.
AI, Security and Managed Services Drive Demand
Chief Operating Officer Darren Raiguel said product segment sales increased 25% in the fourth quarter and 24% for the full year to nearly $2 billion. He said demand was strong across data center and cloud, networking and security.
Raiguel said ePlus is engaging customers early in their AI journeys to help develop use cases and prioritize investments. He said that trend is driving demand for infrastructure modernization across the company’s focused product categories.
Security remained a major growth area. Raiguel said security gross billings increased 23.1% to $842 million for the full year and represented about 22% of fiscal 2026 gross billings. He said customers continue to prioritize cybersecurity investments because of increasing AI sophistication and ongoing threats across the enterprise.
Managed services revenue increased about 9% in the fourth quarter and about 11% for the full year. Raiguel said ePlus has expanded managed collaboration offerings for Cisco, Zoom and Microsoft, and has seen multiyear wins in storage and backup, including ePlus Storage as a Service and Backup as a Service offerings.
Raiguel also highlighted two partner recognitions: Dell Channel Strategic Impact Partner of the Year at Dell Technologies World and Digital Realty’s 2025 Americas Partner of the Year. He said ePlus’ AI Experience Center inside Digital Realty’s Innovation Lab was a catalyst for the Digital Realty award.
Balance Sheet, Dividend and Capital Returns
ePlus ended the fiscal year with cash and cash equivalents of $410.8 million, up from $326.3 million at the end of the third quarter and above $389.4 million at the end of fiscal 2025. Inventory was $200.9 million at quarter-end, down from $241 million sequentially.
Marion said the company repurchased 90,000 shares during the fourth quarter. The board also raised the quarterly dividend by 8% to $0.27 per common share, payable June 30, 2026, to shareholders of record as of June 17, 2026.
Marron said ePlus’ balance sheet provides flexibility to invest organically, pursue acquisitions and return capital to shareholders through dividends and share repurchases. He also emphasized that the company completed the divestiture of its domestic financing business during fiscal 2026, transforming ePlus into what he described as a pure-play technology solutions and services provider.
Fiscal 2027 Outlook Calls for Mid-Single-Digit Growth
Marron said ePlus expects fiscal 2027 net sales, gross profit and adjusted EBITDA to grow in the mid-single-digit range. In response to a question from William Blair analyst Maggie Nolan, Marron said the guidance reflects a difficult comparison following more than 20% top-line growth and nearly 50% adjusted EBITDA growth in fiscal 2026.
He also cited potential headwinds from the worldwide memory chip shortage, lead times and geopolitical unrest. Marron said open orders are up, which he described as a positive sign, but timing depends partly on lead times outside the company’s control.
Asked about large enterprise sales coming in at competitive margins, Raiguel said ePlus sees opportunities to expand margins over time through a “land and expand” approach, including additional services opportunities.
Marron closed the call by saying ePlus plans to continue expanding its market presence and customer base, driving its AI initiative, enhancing service offerings and focusing on profitability and operating leverage.
About ePlus NASDAQ: PLUS
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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