EPLUS INC (PLUS) FY2025 10-K Annual Report

Filed: May 22, 2025

Consumer Discretionary

Wholesale-Computers & Peripheral Equipment & SoftwareSEC EDGAR

EPLUS INC (PLUS) 10-K annual report for fiscal year 2025, filed with SEC EDGAR on May 22, 2025. This page provides AI-powered analysis including business overview, management discussion & analysis (MD&A), risk factors, and key financial data such as revenue, net income, gross margin, operating margin, and return on equity (ROE) extracted from XBRL.

EPLUS INC FY2025 10-K Analysis

Business Overview

• Core business model: IT solutions provider specializing in third-party software sales and related services with revenue recognition at point of software delivery
• New acquisition of Bailiwick Services, LLC in August 2024 adding approx. 8% of total assets and 4% of revenues to consolidated figures
• Strategic emphasis on careful determination of gross vs net revenue recognition for third-party software and support sales reflecting evolving compliance rigor
• Notable metric: Cash and cash equivalents increased to $389.4M from $253.0M YoY as of March 31, 2025
• Unusual fact: Management excluded Bailiwick Services from internal control assessment due to recent acquisition representing material consolidation adjustment

Management Discussion & Analysis

• Revenue $2.07B, down 7.0% YoY ($156.5M decrease), driven by product segment decline offset by professional and managed services growth and financing segment revenue increase
• Gross margin 27.5% vs 24.8% YoY (+270 bps); operating margin 6.8% vs 7.1% YoY (-30 bps); operating income down $16.8M; net earnings $108.0M vs $115.8M
• Best segment: Professional services revenue up 48.2% to $229.0M with 39.5% margin; Worst segment: Product revenue down 14.6% to $1.61B with margin improving to 23.2% but gross profit down
• Operating expenses up $35.2M to $409.1M due to salaries, G&A, acquisition expenses, and depreciation; Adjusted EBITDA $178.2M flat margin at 8.6%; net earnings per share $4.05 vs $4.33; financing segment Adjusted EBITDA up $9.4M to $35.4M
• Management notes economic, geopolitical risks, pricing pressure, project delays, and interest rate impact on financing growth; focus on AI, security, cloud, digital transformation services; acquisition of Bailiwick in fiscal 2025

Risk Factors

• Accounts receivable concentration risk: 17% of trade invoices due from Verizon Communications as of March 31, 2025
• Supply chain dependence on Cisco Systems: 32% of technology segment net sales from Cisco products in fiscal 2025
• Cybersecurity vulnerabilities: rising risk of AI-enabled cyberattacks and ransomware affecting customer data and operations
• Competitive pressure from larger firms and direct vendor sales, including generative AI advancements impacting market share
• Reliance on $500 million WFCDF Credit Facility with $200 million revolving sublimit, subject to covenants and termination risks

EPLUS INC FY2025 Key Financial Metrics
XBRL

Revenue

$2.1B

▼ -7.0% YoY

Net Income

$108M

▼ -6.7% YoY

Gross Margin

27.5%

▲ +276bp YoY

Operating Margin

6.8%

▼ -28bp YoY

Net Margin

5.2%

▲ +2bp YoY

ROE

11.0%

▼ -179bp YoY

Total Assets

$1.9B

▲ +14.0% YoY

EPS (Diluted)

$4.05

▼ -6.5% YoY

Operating Cash Flow

$302M

▲ +21.6% YoY

Source: XBRL data from EPLUS INC FY2025 10-K filing on SEC EDGAR. All figures in USD.

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