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ePlus Raises Fiscal 2027 Outlook as Quarterly Sales Rise 9.7%
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ePlus raised its fiscal 2027 growth outlook on November 5, 2026, after reporting that net sales for the quarter ended September 30, 2026 increased 9.7% to $667.9 million and gross billings rose 4.3% to a quarterly record of $1.07 billion.
The company now expects upper-single-digit year-over-year growth in net sales and gross profit, and low-double-digit growth in adjusted EBITDA. Its August 4, 2026 forecast targeted mid-single-digit growth for all three measures.
Gross profit increased 11.2% to $180.3 million, outpacing sales growth, and gross margin improved to 27.0% from 26.6%. Adjusted EBITDA rose 14.3% to $67.1 million. ePlus defines that measure as continuing-operations net earnings adjusted for depreciation and amortization, share-based compensation, acquisition-related expenses, provision for income taxes and other income or expense, net.
Cloud Growth Offset Weaker Networking and Professional Services
Product-segment sales rose 12.8% to $547.1 million, while product gross margin increased to 25.8% from 24.5%. ePlus attributed the margin improvement to product mix and increased sales of third-party maintenance, subscriptions and services recognized on a net basis.
Within product net sales, cloud revenue climbed 39.2% to $178.6 million and security revenue increased 10.3% to $72.7 million. Networking moved in the opposite direction, falling 9.2% to $234.4 million. The product segment’s growth was therefore uneven across its categories, despite the double-digit increase overall.
Professional-services revenue fell 11.3% to $67.8 million, and its gross margin declined to 35.4% from 38.2%. ePlus linked lower project-related revenue and gross profit to delays from retail customers. Managed-services revenue increased 11.9% to $53.1 million, primarily on additional cloud-managed-services revenue, although its gross margin slipped to 28.8% from 29.4%.
Non-Operating Items Limited Bottom-Line Growth
Operating expenses rose 9.2% to $123.8 million, reflecting higher variable compensation, salaries and benefits, general and administrative costs, and Daymark acquisition expenses. Operating income nevertheless increased 15.8% to $56.5 million.
Other income swung to a $0.5 million expense from $5.2 million of income. The change reflected a $3.5 million reduction in the fair value of a contingent-consideration receivable from the sale of ePlus’s domestic financing business, lower interest income and foreign-currency losses rather than gains. Consequently, pretax continuing-operations earnings grew only 3.7% to $56.0 million, well below the operating-income growth rate. A decline in the effective tax rate to 27.9% from 29.3% helped net earnings from continuing operations increase 5.8% to $40.4 million.
The second quarter was stronger than the first-half trend. For the six months ended September 30, net sales rose 5.2% to $1.32 billion, while continuing-operations net earnings edged up 0.7% to $70.7 million. Total net earnings matched that continuing-operations figure, compared with $77.4 million a year earlier, when discontinued operations contributed $7.3 million.
Cash Declined as Inventory and Receivables Increased
Cash and cash equivalents were $380.9 million at September 30, down from $410.8 million at March 31, 2026. Inventory increased 35.1% to $271.4 million because of several ongoing projects, and net trade accounts receivable rose 14.9% to $746.9 million.
During the quarter, ePlus (PLUS ) acquired certain Daymark Solutions assets and liabilities. The transaction closed on August 21, 2026, with terms undisclosed. Daymark brought Microsoft Tier 1 Cloud Solution Provider status and expanded ePlus’s presence in New England.
The board declared a $0.27-per-share quarterly dividend payable December 16, 2026, to shareholders of record on November 24, 2026.
The raised outlook has a specific foundation in the reported quarter: cloud expansion, better product margins and managed-services growth. It was not a uniform improvement across the portfolio. Networking and professional services contracted, and the swing in other income limited the conversion of operating growth into pretax earnings. Those offsets, alongside higher inventory and receivables, are the main qualifications to the stronger headline results.
