ePlus (PLUS) Tops Q2 EPS by 42c, Revenues Beat

ePlus (NASDAQ: PLUS) reported Q2 EPS of $1.81, $0.42 better than the analyst estimate of $1.39. Revenue for the quarter came in at $411.6 million versus the consensus estimate of $369.02 million.

Second Quarter Fiscal Year 2020

• Net sales increased 19.3% to $411.6 million; technology segment net sales increased 18.8% to $397.7 million; service revenues increased 35.1% to $48.1 million; financing segment net sales increased 34.8% to $13.8 million.
• Adjusted gross billings increased 19.2% to $579.1 million.
• Consolidated gross profit increased 20.5% to $103.0 million.
• Consolidated gross margin was 25.0%, an increase of 20 basis points.
• Net earnings increased 11.6% to $20.1 million.
• Adjusted EBITDA increased 18.5% to $35.4 million.
• Diluted earnings per share increased 13.5% to $1.51. Non-GAAP diluted earnings per share increased 18.3% to $1.81.

“Second quarter results demonstrated the continuing benefits of our strategic focus on high growth areas of IT spending and the investments we have made to deliver complex solutions. Revenue growth of 19.3% for the quarter resulted primarily from capturing market share within our middle-market, enterprise, and international customer base, and new logo acquisition. Services revenue increased 35.1% and accounted for 11.7% of net sales. Sales of security products and services accounted for 20.1% of trailing twelve months adjusted gross billings, up 110 basis points year-on-year, and continue to represent a critical need for our entire customer base,” said Mark Marron, CEO and President of ePlus.

“Higher sales and a 20 basis point increase in gross margin helped drive a 20.5% increase in gross profit, and an 18.3% increase in non-GAAP diluted EPS.”

Summary and Outlook

“Strong first half results affirm ePlus’ strategy of investing in solution areas most in-demand by our customers, and providing industry-leading consultative, advisory, and managed services. Our ability to provide transformative solutions such as cloud migration strategies, integrated cyber security programs and digital business transformation initiatives, along with our core cloud, security and digital infrastructure offerings, is resonating with our middle market, enterprise, and multi-national customers and allowing us to capture market-share.

“We continue to expand our footprint and service offerings by seeking acquisitions to complement our organic growth. In August we acquired ABS Technology, which expanded our position in the mid-Atlantic region, especially in the state, local, and education (SLED) market. With a strong balance sheet and proven track record, we expect to continue to invest organically and through acquisitions to support our future growth,” Mr. Marron concluded.

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

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