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ePlus (PLUS) Tops Q2 EPS by 27c, Revenues Beat

November 4, 2020 5:35 PM EST

ePlus (NASDAQ: PLUS) reported Q2 EPS of $1.48, $0.27 better than the analyst estimate of $1.21. Revenue for the quarter came in at $433.1 million versus the consensus estimate of $371.87 million.

Second Quarter Fiscal Year 2021

  • Net sales increased 5.2% to $433.1 million; technology segment net sales increased 5.4% to $419.4 million; service revenues increased 2.8% to $49.4 million.
  • Adjusted gross billings increased 3.8% to $601.1 million.
  • Consolidated gross profit decreased 3.9% to $99.0 million.
  • Consolidated gross margin was 22.9%, a decrease of 210 basis points.
  • Net earnings decreased 1.3% to $19.8 million.
  • Adjusted EBITDA decreased 5.2% to $33.6 million.
  • Diluted earnings per share decreased 2.0% to $1.48. Non-GAAP diluted earnings per share decreased 7.2% to $1.68.

Management Comment

“ePlus’ base of diverse, middle market and larger customers in stable industries is a key competitive advantage, along with our solutions sets and engineering talent which can readily pivot to address the current needs of our customers,” commented Mark Marron, president and chief executive officer. “In the second quarter, revenue growth was driven by increased spend from our enterprise and state, local government and educational (SLED) customers. Thanks to our long time focus on key areas such as cloud, security and collaboration solutions, and our investments in top-notch technology talent, we have both the scale and depth to serve large enterprise customers, who have been most active during this pandemic period. Additionally, our services business increased in the second quarter, benefitting from our emphasis on managed services which yield consistent annuity quality revenue.

“We had a challenging gross margin comparison due to strength in product sales to enterprise customers this year and a shift in business mix. Even so, we were pleased to report year-on-year growth in operating income as we have continued to identify opportunities to pare our cost structure.

“Our team has managed well in the COVID-19 business environment, and as we approach our 30th anniversary, we especially appreciate their dedication and ability to effectively support our customers by providing the solutions and the flexibility they require.”

Summary and Outlook

“With a broad portfolio of products and services mostly directed to high growth areas and a more streamlined operation, we believe ePlus is well positioned to continue to effectively and efficiently serve our diversified customer base.

“During challenging and uncertain economic periods, our portfolio of Technology and Financing businesses represents a competitive advantage for ePlus, enabling us to provide customers with their technology requirements while assisting them in managing through budgetary constraints. Of late, we are seeing an increase in demand for financing from several customers, and we expect this trend to continue across our customer set, enabling us to further leverage this ePlus market differentiator.

“Additionally, our strong balance sheet provides capital to invest in organic and inorganic growth opportunities and the resources to manage effectively under difficult business conditions. We continue to monitor the landscape for attractive opportunities, while pursuing growth by supporting our customers’ needs and preferred methods of IT consumption,” Mr. Marron concluded.

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



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