ScanSource (NASDAQ:SCSC) Issues Earnings Results, Beats Estimates By $0.03 EPS

Key Points

• ScanSource beat expectations in its latest quarter, reporting EPS of $0.94 versus the $0.91 consensus and revenue of $758.6 million, which was also above estimates. Revenue rose 8.8% year over year.
• On the conference call, management said strong hardware demand helped drive a 9% increase in net sales, while also highlighting improved adjusted EBITDA, free cash flow and ROIC.
• The company remains financially solid, with about $120 million in cash, near-zero net debt leverage and raised full-year FY2026 free cash flow guidance to at least $90 million.

ScanSource (NASDAQ:SCSC - Get Free Report) issued its quarterly earnings data on Thursday. The industrial products company reported $0.94 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.91 by $0.03, FiscalAI reports. ScanSource had a return on equity of 9.35% and a net margin of 2.44%.The business had revenue of $758.59 million during the quarter, compared to analyst estimates of $738.55 million. During the same period in the prior year, the company posted $0.86 EPS. The business's revenue for the quarter was up 8.8% compared to the same quarter last year.

Here are the key takeaways from ScanSource's conference call:

• ScanSource delivered a strong Q3—adjusted EBITDA, EPS, free cash flow and ROIC all increased, with net sales up 9% driven by improved hardware demand (notably networking and security).
• Management launched a new Converged Communications business unit combining Specialty Communications and Intelisys CX to create a unified "One ScanSource" partner experience and dedicated sales resources to drive cross‑sell of cloud recurring revenue and hardware.
• Intelisys & Advisory net sales declined 1% year‑over‑year and executives said new order growth is not accelerating as desired, prompting additional investments and a 6–18 month timeline to see improved results.
• Financial position is strong—$120M cash, net debt leverage roughly 0, $69M free cash flow in the quarter ($119M YTD), $33M of share repurchases this quarter, and raised FY2026 free cash flow guidance to at least $90M.
• Recurring revenue progress continues—approximately 15% of Specialty segment gross profit now comes from recurring offerings (helped by Advantix and DataXoom), supporting the company's multi‑year goal to grow recurring contributions.

ScanSource Stock Performance

SCSC stock traded up $2.61 on Friday, reaching $45.90. The company's stock had a trading volume of 395,896 shares, compared to its average volume of 222,256. The company has a market capitalization of $985.93 million, a P/E ratio of 14.08, a price-to-earnings-growth ratio of 0.69 and a beta of 1.28. The company has a debt-to-equity ratio of 0.11, a current ratio of 1.96 and a quick ratio of 1.22. ScanSource has a 52 week low of $33.76 and a 52 week high of $46.25. The firm has a fifty day moving average of $37.77 and a two-hundred day moving average of $39.47.

Analysts Set New Price Targets

SCSC has been the subject of a number of recent analyst reports. Zacks Research raised ScanSource from a "strong sell" rating to a "hold" rating in a report on Tuesday, April 7th. Wall Street Zen lowered ScanSource from a "buy" rating to a "hold" rating in a report on Saturday, January 17th. Three analysts have rated the stock with a Hold rating, Based on data from MarketBeat, the stock presently has an average rating of "Hold" and an average target price of $43.00.

Insider Buying and Selling

In other news, Director Charles Alexander Mathis bought 6,000 shares of the business's stock in a transaction on Wednesday, February 11th. The stock was purchased at an average cost of $35.20 per share, for a total transaction of $211,200.00. Following the completion of the transaction, the director directly owned 24,793 shares of the company's stock, valued at approximately $872,713.60. This trade represents a 31.93% increase in their position. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CEO Michael L. Baur sold 3,827 shares of the company's stock in a transaction that occurred on Monday, March 16th. The stock was sold at an average price of $35.89, for a total value of $137,351.03. Following the completion of the sale, the chief executive officer owned 157,512 shares of the company's stock, valued at $5,653,105.68. This trade represents a 2.37% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Corporate insiders own 3.18% of the company's stock.

Institutional Investors Weigh In On ScanSource

Institutional investors have recently added to or reduced their stakes in the company. Canada Pension Plan Investment Board acquired a new stake in ScanSource in the second quarter worth approximately $25,000. Royal Bank of Canada lifted its position in ScanSource by 165.0% in the fourth quarter. Royal Bank of Canada now owns 1,876 shares of the industrial products company's stock worth $73,000 after purchasing an additional 1,168 shares during the period. Osaic Holdings Inc. lifted its position in ScanSource by 400.5% in the second quarter. Osaic Holdings Inc. now owns 2,087 shares of the industrial products company's stock worth $87,000 after purchasing an additional 1,670 shares during the period. Tower Research Capital LLC TRC lifted its position in ScanSource by 672.0% in the second quarter. Tower Research Capital LLC TRC now owns 4,632 shares of the industrial products company's stock worth $194,000 after purchasing an additional 4,032 shares during the period. Finally, First Trust Advisors LP acquired a new stake in shares of ScanSource during the 3rd quarter valued at $241,000. 97.91% of the stock is currently owned by institutional investors and hedge funds.

ScanSource Company Profile

ScanSource, Inc is a global provider of technology products and solutions designed to help businesses enhance operational efficiency and customer engagement. The company specializes in the distribution of point-of-sale (POS) systems, barcode and data capture devices, networking and communications equipment, and value-added software and cloud services. By combining hardware, software and professional services, ScanSource supports channel partners in delivering end-to-end solutions across multiple industries, including retail, hospitality, healthcare and logistics.

Founded in 1992 and headquartered in Greenville, South Carolina, ScanSource has built a broad international footprint, serving customers throughout North, Central and South America as well as Europe, the Middle East and Africa.

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