A technology solutions provider that sells hardware and software from makers like Cisco and Microsoft, and handles everything from cloud and security monitoring to consulting and deployment for thousands of customers. Founded in Herndon, Virginia in 1990 as MLC Holdings, it changed its name to ePlus in 1999. It also runs GRIT (Girls Re-Imagining Tomorrow), a program that introduces young women to careers in technology.
Q1 FY2027 operating income fell 9.6% to $38.8M as gross margin contracted to 23.3%.
Profitability slipped this quarter as outran growth. Revenue rose 1.0% to $649.1M and fell 28.0% to $1.16 as contracted 0.6pt to 23.3% and rose, with down 9.6% to $38.8M. ePlus is a pure-play technology provider carrying lower margin and a longer cash cycle after selling its financing unit.
Key takeaways
fell 9.6% to $38.8M as contracted 60 to 23.3% across all three segments from a reduced proportion of , partly offset by higher vendor consideration.
rose 1.0% to $649.1M, driven by product and managed services growth partially offset by a decline in professional services.
expenses rose $3.0M to $106.6M from higher third-party consultant and legal fees, with headcount modestly higher at 2,171.
Section summaries
Management's Discussion and Analysis
Net sales rose 1% to $649M but operating income fell 9% to $39M on lower gross margin and higher SG&A, while operating cash flow swung to a $76M inflow.
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Consolidated increased $6.3M to $649.1M, driven by product and managed services growth, partially offset by a decline in professional services.
from continuing operations swung to a $76.5M inflow from a $106.0M outflow a year ago, driven by reductions and higher .
The lengthened to 41 days from 26 days as DSO rose to 64 days and DIO to 22 days on extended payment terms and longer delivery schedules.
The company repurchased $25.5M in stock and paid $7.1M in dividends, with no balance on its $200M .
What changed
Q1 FY2027 technology product sales and : the FY2026 annual flagged watching if 23.8% product growth and 25.2% consolidated margin hold without financing diversification; Q1 consolidated rose 1.0% and gross margin was 23.3%, down 0.6pt .
FY2027 : the FY2026 flag watched if the $117.4M annual use reverses; Q1 operating cash flow was a $76.5M inflow versus a $106.0M outflow a year earlier.
Contingent Consideration and legal liability: the Q3 FY2026 flag watched the $3.3M contingent legal liability loss; this 10-Q restates no material change in risk factors and notes no new liability.
Cisco concentration: FY2026 was 29% of ; this quarterly filing gives no updated Cisco concentration disclosure.
Sequential vs Q4 FY2026: rose 12.7% to $649.1M from $576.2M, rose 25.7% to $38.8M, and fell 1.3pt to 23.3%.
What to watch
Q2 FY2027 trajectory to see if the 23.3% level recovers as proportion shifts.
Next Cisco concentration disclosure to confirm whether the 29% FY2026 level holds or shifts further.
Q2 FY2027 to see if the $76.5M inflow persists as and normalize.
Contingent Consideration receipts from PEAC Solutions and whether any contingent legal liability recurs.
margin contracted 60 to 23.3% due to lower margins across all three segments and a reduced proportion of net-basis sales, partly offset by higher .
SG&A expenses rose $3.0M to $106.6M, primarily from higher third-party consultant and legal fees, while headcount increased modestly to 2,171.
from continuing operations improved significantly to a $76.5M inflow from a $106.0M outflow a year ago, driven by reductions and higher .
The lengthened to 41 days from 26 days, as DSO increased to 64 days and DIO rose to 22 days, reflecting extended customer payment terms and longer delivery schedules.
The company repurchased $25.5M in common stock and paid $7.1M in dividends during the quarter, while maintaining no outstanding balance on its $200M .
Quantitative and Qualitative Disclosures About Market Risk
Foreign Currency Risk We have foreign currency exposure when transactions are not denominated in our subsidiaries’ functional currency, which include purchases and sales of the products and services we provide, as well as loans with other ePlus entities. To date, foreign currenc…
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Foreign Currency Risk
We have foreign currency exposure when transactions are not denominated in our subsidiaries’ functional currency, which include purchases and sales of the products and services we provide, as well as loans with other ePlus entities. To date, foreign currency exposure associated with purchases and sales of the products and services we provide has not been significant. We have incurred foreign currency transaction gains and losses in certain foreign subsidiaries on US dollar denominated loans. Fluctuations in currency exchange rates may impact our results of operations and financial position.
Please refer to Note 8, “Commitment and Contingencies” in the accompanying Consolidated Financial Statements included in “Part I, Item 1. Financial Statements.”
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Please refer to Note 8, “Commitment and Contingencies” in the accompanying Consolidated Financial Statements included in “Part I, Item 1. Financial Statements.”
There has not been any material change in the risk factors disclosed in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. 34 Table of Contents
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There has not been any material change in the risk factors disclosed in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
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