ScanSource (SCSC) investor relations material

Executive summary

• Delivered strong quarterly results with adjusted EBITDA, EPS, free cash flow, and ROIC all increasing year-over-year, driven by improved hardware demand and 9% net sales growth, especially in networking and security.

• Net sales for the quarter ended March 31, 2026, were $766.8 million, up 8.8% year-over-year; nine-month sales reached $2.27 billion, up 2.0% year-over-year.

• Launched a new converged communications business unit to unify specialty communications and cloud-based solutions, aiming to accelerate partner growth and AI adoption in CX solutions.

• Specialty Technology Solutions segment drove most of the growth, while Intelisys & Advisory saw a slight quarterly decline but modest nine-month growth.

• Highlighted recent AI-driven wins in automation and augmentation, demonstrating value for partners and end users.

Financial highlights

• Consolidated net sales and non-GAAP EPS grew 9% year-over-year in Q3; quarterly net sales were $766.8 million, up 8.8% year-over-year.

• Gross profit increased 10% year-over-year to $81 million in Q3; quarterly gross profit was $107.1 million (14.0% margin); free cash flow for the quarter was $69 million, with $119 million year-to-date.

• Adjusted EBITDA for the quarter was $35.6 million; annualized adjusted ROIC was 14.3%.

• Ended Q3 with $120 million in cash and a net debt leverage ratio of approximately zero.

• Cash flow from operations for the nine months was $125.4 million, up from $104.7 million year-over-year.

Outlook and guidance

• Maintaining full-year projections for both revenue and adjusted EBITDA; FY26 annual outlook reaffirmed: net sales $3.1B–$3.3B, adjusted EBITDA $150M–$160M, free cash flow at least $80M.

• Raised FY 2026 free cash flow expectations to at least $90 million.

• Management expects the effective tax rate for fiscal 2026 to be approximately 27.9% to 28.2%.

• Capital expenditures for fiscal 2026 are projected to range from $8.0 million to $10.0 million.

• The company believes existing liquidity and credit facilities are sufficient for at least the next twelve months.