Q4 2025 ePlus inc Earnings Call Transcript
Key Points
- ePlus Inc (PLUS) achieved higher gross profitability and margin expansion despite lower net sales and gross billings.
- Gross profit increased by nearly 12% and gross margin expanded by 580 basis points year-over-year to 29.3% in the fourth quarter.
- Services revenue grew significantly, with a 33% increase in the quarter and 37% for the year, highlighting the success of their services-led approach.
- Managed services experienced strong growth, up 16.6% for the quarter and 24.6% for the year, providing predictable long-term revenue.
- The company has a strong balance sheet with a record cash position of approximately $389 million, allowing for strategic investments and acquisitions.
- Net sales declined by 10.2% year-over-year in Q4, primarily due to a reduction in product sales and economic uncertainty.
- Technology business net sales decreased by 10.4% year-over-year, reflecting lower product sales impacted by the shift towards subscription-based services.
- Operating expenses increased by 9.6% from the prior year quarter, partly due to costs related to increased headcount from acquisitions.
- Professional services gross margin declined from 50% to 35.9% year-over-year, affected by the Bailiwick acquisition's lower margin.
- Networking sales were down significantly year-over-year, indicating a need for improvement in this area.
Good day, ladies and gentlemen. Welcome to the ePlus fourth quarter and full year 2025 earnings results conference call. As a reminder, this conference call is being recorded. (Operator Instructions) And I would now like to introduce your host for today's conference, Mr. Kley Parkhurst, Senior Vice President. Sir, you may begin.
Thank you for joining us today. On the call is Mark Marron, CEO and President; Elaine Marion, CFO; and Erica Stoecker, 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 in the earnings release we issued this afternoon and our periodic filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K, quarterly reports
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