Q1 2027 ePlus inc Earnings Call Transcript
Key Points
- Bookings and open orders are up significantly, with open orders exceeding $1.5 billion, indicating strong future revenue potential.
- Managed services revenue surpassed $50 million for the first time, growing over 15% year-over-year, highlighting a growing recurring revenue base.
- Security gross billings increased 15.6% during the quarter, driven by strong customer demand and multiple multi-year enterprise software licensing agreements.
- The company is capitalizing on robust AI-related demand, with large wins in AI-linked network infrastructure and data center projects across multiple industries.
- ePlus maintains a strong balance sheet with $448.9 million in cash, enabling continued investment in organic growth, strategic M&A, and shareholder returns through dividends and share repurchases.
- Net sales growth was modest at 1% year-over-year, impacted by a difficult comparison from the prior year's large enterprise orders.
- Professional services net sales declined 5.1% due to project delays, partly caused by product delivery delays.
- Gross margin decreased to 23.3% from 23.9%, with declines in product, managed services, and professional services margins due to mix shifts.
- Operating income and adjusted EBITDA declined year-over-year, reflecting higher operating expenses from investments in customer-facing roles and professional fees.
- The company faces potential headwinds from the worldwide memory chip shortage and geopolitical issues, which could impact product availability and costs.
Good day, ladies and gentlemen. Welcome to the ePlus first quarter fiscal year 2027 earnings results conference call. As a reminder, this conference call is being recorded. (Operator Instructions) I would now like to introduce your host for today's conference, Mr. Kley Parkhurst, Senior Vice President. Sir, you may be.
Thank you for joining us today. On the call is Mark Maron, CEO and President Darren Raguel, COO and President of ePlus Technology Elaine Marion, CFO and Amanda Dupree, Deputy General Counsel. I want to take a moment to remind you that the statements we make this afternoon that are not historical facts may be deemed to be forward-looking statements and are based on management's current plans, estimates and projections.
Actual and anticipated future results may vary materially due to certain risks and uncertainties, detailed on the earnings press release we issued this afternoon and our periodic filings with the Securities Exchange Commission, including our most recent annual report on Form
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