Q2 2025 Scansource Inc Earnings Call Transcript
Key Points
- ScanSource Inc (SCSC) delivered strong gross profit growth and maintained a robust gross profit margin despite a challenging demand environment.
- The company is executing a hybrid distribution strategy, offering flexibility and choice with multiple sales models for hardware, SaaS, connectivity, and cloud.
- Recent acquisitions have expanded recurring revenue opportunities for channel partners, enhancing the company's technology offerings.
- The Advantix solution represents a high-margin recurring revenue opportunity, combining devices and recurring revenue to add value in the barcode and mobility market.
- ScanSource Inc (SCSC) generated $34 million in free cash flow year-to-date, demonstrating a focus on building a cash culture and improving working capital efficiency.
- Net sales declined 4% sequentially and 15.5% year-over-year, missing expectations due to a soft demand environment and challenges with large deals.
- The specialty technology solutions segment experienced a 16% year-over-year decline in net sales, with significant FX headwinds in the Brazil business.
- Non-GAAP net income decreased by 4%, and the company faced a flat year-over-year non-GAAP diluted EPS.
- The company used $8 million of free cash flow in the quarter due to late quarter timing for sales and vendor payments.
- The demand environment remains uncertain, with cautious tech spending and limited visibility on top-line growth due to the lack of backlog.
Welcome to the ScanSource quarterly earnings conference call. (Operator Instructions) Today's call is being recorded. (Operator Instructions)
I would now like to turn the call over to Mary Gentry, Senior Vice President, Finance and Treasurer. Madam, you may begin.
Good morning, and thank you for joining us. Our call will include prepared remarks from Mike Baur, our Chair and CEO; and Steve Jones, Chief Financial Officer. We will review our results -- operating results for the quarter and then take your questions. We posted an earnings infographic that accompanies our comments and webcast in the Investor Relations section of our website.
As you know, certain statements in our press release, infographic and on this call are forward-looking statements and subject to risks and uncertainties that could cause actual results to differ materially from expectations. These risks and uncertainties include the factors identified in our earnings release and in our form 10-K for
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