ePlus (PLUS) Tops Q3 EPS by 44c, Revenues Beat

ePlus (NASDAQ: PLUS) reported Q3 EPS of $1.79, $0.44 better than the analyst estimate of $1.35. Revenue for the quarter came in at $427.6 million versus the consensus estimate of $391.37 million.

Third Quarter Fiscal Year 2021

• Net sales decreased 0.3% to $427.6 million; technology segment net sales increased 1.2% to $415.6 million; service revenues increased 3.3% to $52.1 million.
• Adjusted gross billings increased 0.3% to $587.8 million.
• Consolidated gross profit decreased 5.3% to $98.2 million.
• Consolidated gross margin was 23.0%, a decrease of 120 basis points.
• Net earnings increased 10.7% to $21.6 million.
• Adjusted EBITDA increased 8.0% to $34.4 million.
• Diluted earnings per share increased 11.0% to $1.62. Non-GAAP diluted earnings per share increased 9.1% to $1.79.

Management Comment

“We are very pleased with ePlus’ third quarter performance. Our strategic focus on supporting customers’ hybrid work environments with customized cloud, collaboration and security solutions continues to gain relevance. Net earnings increased 10.7% on flat revenues, driven by lower operating expenses and an increase in higher margin services revenues. Security solutions increased to 23.3% of adjusted gross billings, compared to 20.3% the prior quarter, as customers prioritized securing their remote workforce capabilities,” noted Mark Marron, president and chief executive officer.

“The demand for our annuity-type and managed services and security continues to demonstrate that our long-term strategic focus in these areas is delivering the right solutions and value to our customers. Our technology segment’s operating income increased 41%, which more than offset a difficult quarter over quarter comparison in our financing segment. While we expect operating costs will increase post-pandemic, we do anticipate certain sustainable cost savings, especially from real estate and travel and entertainment costs.”

Summary and Outlook

“ePlus continues to execute on our strategy of providing premier technology solutions to our customers while expanding our offerings and our geographic footprint. The recent acquisition of System Management Planning (SMP) increases our presence in Upstate New York and the Northeast and adds to our existing collaboration expertise and staffing solutions, while building on our enterprise and state, local and education customer base.

“We will continue to utilize our strong financial position to add customer facing personnel, gain new customers, and adopt new technology solutions, both through prudent organic investments and acquisitions, to complement our geographic footprint and technology solutions portfolio, in support of long term, sustainable growth,” Mr. Marron concluded.

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

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