ePlus (PLUS) Tops Q3 EPS by 28c, Revenues Beat

ePlus (NASDAQ: PLUS) reported Q3 EPS of $1.64, $0.28 better than the analyst estimate of $1.36. Revenue for the quarter came in at $429 million versus the consensus estimate of $382.71 million.

Third Quarter Fiscal Year 2020

• Net sales increased 24.1% to $429.0 million; technology segment net sales increased 22.7% to $410.6 million; service revenues increased 43.2% to $50.4 million; financing segment net sales increased 67.7% to $18.4 million.
• Adjusted gross billings increased 22.5% to $586.3 million.
• Consolidated gross profit increased 25.1% to $103.7 million.
• Consolidated gross margin was 24.2%, an increase of 20 basis points.
• Net earnings increased 31.5% to $19.6 million.
• Adjusted EBITDA increased 24.7% to $31.9 million.
• Diluted earnings per share increased 32.7% to $1.46. Non-GAAP diluted earnings per share increased 27.1% to $1.64.

Management Comment

“ePlus achieved strong double-digit growth across key financial metrics in both the third quarter and first nine months of fiscal 2020, demonstrating the competitive advantages of our portfolio of technology products and services, complemented by our financing capabilities. We continued to gain market share in the third quarter, underscored by 20.3% growth in technology product sales and 43.2% growth in technology services revenue, which combined with strong performance from our financing segment, drove a 31.5% increase in net earnings,” commented Mark Marron, CEO and President of ePlus.

“Growth in gross profit and earnings per share outpaced revenue growth in the third quarter, and consolidated gross margin expanded by 20 basis points to 24.2%. Our continuing investment in customer-facing professionals supports growth in the high demand areas of cloud, security and digital infrastructure.”

Summary and Outlook

“Year-to-date results set the stage for fiscal 2020 to be a year of significant growth for ePlus, driven by our ability to capture demand from our growing base of mid-market and enterprise customers for complex solutions that optimize and protect their IT initiatives. In addition to our organic growth, we have successfully integrated the August, 2019 ABS Technology acquisition, and we continue to evaluate additional acquisition opportunities that would expand our technology capabilities and our geographic reach,” Mr. Marron concluded.

For earnings history and earnings-related data on ePlus (PLUS) click here.

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