ePlus (PLUS) Q3 2025 earnings summary

Executive summary

• Net sales for the quarter ended December 31, 2024, were $511.0 million, up 0.4% year-over-year, with service revenues up 52.2% and technology business net sales down 0.2%, driven by higher service and financing revenues and offset by lower product sales.

• Gross profit increased 5.3% to $140.9 million, with gross margin rising to 27.6% from 26.3% last year due to a favorable product mix.

• Net earnings for the quarter were $24.1 million, down 11.5% year-over-year, with diluted EPS of $0.91, a decrease of 10.8%.

• The Bailiwick and PEAK Resources acquisitions expanded professional services, increased headcount, and contributed to vertical and geographic diversification.

• Five-year CAGRs: net sales 9%, services revenue 11%, gross profit 9%, and diluted EPS 14%.

Financial highlights

• Q3 FY25 net sales were $511 million, flat year-over-year; gross billings up 6.6% to $849.5 million.

• Gross profit rose 5.3% to $140.9 million; gross margin expanded to 27.6% (up 130 bps year-over-year).

• Operating income was $28.5 million, down 25.1% year-over-year; net earnings were $24.1 million ($0.91/share), down from $27.3 million ($1.02/share).

• Adjusted EBITDA for the quarter was $39.1 million (7.7% margin), down 15.2% year-over-year.

• For the nine months ended Dec 31, 2024, net sales were $1.57 billion (down 6%), gross profit $423.4 million (+0.7%), and gross margin 27% (+180 bps).

Outlook and guidance

• Fiscal 2025 net sales guidance is $2.07–$2.11 billion; adjusted EBITDA guidance is $165–$171 million.

• Guidance reflects higher gross-to-net adjustments, potential tariff impacts, and continued soft product demand in Q4, with improvement anticipated in Q1.

• Management prioritizes investments in AI, cybersecurity, and cloud, leveraging a strong balance sheet for growth.