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What changed in EPLUS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of EPLUS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+316 added−371 removedSource: 10-K (2025-05-22) vs 10-K (2024-05-23)

Top changes in EPLUS INC's 2025 10-K

316 paragraphs added · 371 removed · 262 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeSales to Verizon Communications Inc. represented 19%, 22%, and 24% of our net sales for the years ended March 31, 2024, 2023, and 2022, respectively. 3 Table of Contents We sell to customers in the United States (“US”), which accounts for most of our sales, and to customers in select international markets including the United Kingdom (“UK”), the European Union (“EU”), India, Singapore, and Israel.
Biggest changeWe sell to customers in the United States (“US”), which account for most of our sales, and to customers in select international markets including the United Kingdom (“UK”), the European Union (“EU”), India, and Singapore. 3 Table of Contents Our technology business segments accounted for 97% of our net sales—78% from the product segment, 11% from the professional services segment, and 8% from the managed services segment—and 75% of our operating income for the year ended March 31, 2025.
Our technology solutions leverage third-party hardware, software, and maintenance and other services with our own advanced professional and managed services. Our financing business segment primarily provides financing of IT equipment, software, and related services. Across both businesses, we sell to commercial entities, state and local governments, government contractors, and educational institutions.
Our technology solutions leverage third-party hardware, software, maintenance and other services with our own advanced professional and managed services. Our financing business segment primarily provides financing of IT equipment, software, and related services. Across both businesses, we sell to commercial entities, state and local governments, government contractors, and educational institutions.
Since 2017, we have sponsored GRIT: Girls Re-Imagining Tomorrow® in partnership with Cisco Systems, Inc. GRIT introduces diverse groups of middle school girls to technology-focused career possibilities, with an emphasis on cybersecurity and artificial intelligence. Students have opportunities to learn about the many possibilities in technology-focused companies and participate in hands-on technology-focused learning with top industry representatives and community mentors.
Since 2017, we have sponsored GRIT: Girls Re-Imagining Tomorrow® in partnership with Cisco Systems. GRIT introduces diverse groups of middle school girls to technology-focused career possibilities, with an emphasis on cybersecurity and artificial intelligence. Students have opportunities to learn about the many possibilities in technology-focused companies and participate in hands-on technology-focused learning with top industry representatives and community mentors.
OUR SOLUTIONS We are a leading provider of technology solutions across the spectrum spanning security, cloud, data center, networking, collaboration, AI, service provider and critical infrastructure, and emerging solutions, to domestic and foreign organizations across all industry segments.
OUR SOLUTIONS We are a leading provider of technology solutions across the IT spectrum spanning security, cloud, data center, networking, collaboration, AI, service provider and critical infrastructure, and emerging solutions, to domestic and foreign organizations across all industry segments.
For the year ended March 31, 2024, our three largest distributors, Ingram Micro, Arrow Electronics, and TD SYNNEX, collectively accounted for over 25% of our purchases related to our product segment net sales.
For the year ended March 31, 2025, our three largest distributors, Ingram Micro, Arrow Electronics, and TD SYNNEX, collectively accounted for over 25% of our purchases related to our product segment net sales.
Our systems automatically decrease trade credit lines based on assigned risk ratings. 11 Table of Contents In our financing business segment, we manage our risk in assets we finance by assigning the contractual payments due under the financing arrangement to third-parties and the continued monitoring of our customers’ credit profile.
Our systems automatically decrease trade credit lines based on assigned risk ratings. In our financing business segment, we manage our risk in assets we finance by assigning the contractual payments due under the financing arrangement to third parties and the continued monitoring of our customers’ credit profile.
OUR CULTURE We are an equal opportunity employer, dedicated to fostering, cultivating, and preserving a culture that represents diversity, enables inclusion, and makes our employees feel comfortable bringing their full, unique selves to work. This includes providing an inclusive, safe, and supportive workplace, free of unlawful harassment or discrimination.
OUR CULTURE We are an equal opportunity employer, dedicated to fostering, cultivating, and preserving a culture that represents diversity, enables inclusion, and makes our employees feel comfortable bringing their full, unique selves to work. This includes providing a workplace that is free of unlawful harassment or discrimination.
Various OEM solutions are e-Bonded or Smart-Bonded, providing bi-directional ticket synchronization to facilitate expedient resolution and a custom executive dashboard provides related lifecycle data to the customer for all contracted assets. • Service desk provides outsourced functions including, but not limited to, server and desktop and account management support to respond to our customers’ business demands while minimizing overhead. • Storage-as-a-Service is a solution powered by Pure Storage Evergreen//One that provides customers with on-premises storage in a consumption-based model with on-demand burst capacity, backed by Service Level Agreements (SLAs), and e Plus expert Enhanced Maintenance Support (EMS).
Various OEM solutions are e-Bonded or Smart-Bonded, providing bi-directional ticket synchronization to facilitate expedient resolution and a custom executive dashboard provides related lifecycle data to the customer for all contracted assets. ● Service desk provides outsourced functions including, but not limited to, server and desktop account management, Microsoft Office support, and IT Service Management (ITSM) integration of tailored knowledgebase articles to respond to our varying customers’ business demands while minimizing overhead. ● Storage-as-a-Service is a solution powered by Pure Storage Evergreen/One and NetApp Keystone that provides customers with on-premises storage in a consumption-based model with on-demand burst capacity, backed by Service Level Agreements (SLAs), and e Plus expert Enhanced Maintenance Support (EMS).
We also use agency purchase orders to procure equipment for lease to our customers and otherwise take measures to minimize our inventory of financed assets. When our technology business segments are the supplier of the assets being financed, we retain certain procurement risks. Our financing arrangements with our customers are generally fixed rate.
We also use agency purchase orders to procure equipment for lease to our customers and otherwise take measures to minimize our inventory of financed assets. When our technology business segments are the supplier of the assets being financed, we retain certain procurement risks.
We target middle-market and large commercial entities and SLED institutions. We undertake direct marketing and leverage digital marketing and social media campaigns to target certain markets in conjunction with our primary vendor partners, who may provide financial reimbursement, outsourced services, and personnel to assist us in these efforts.
We undertake direct marketing and leverage digital marketing and social media campaigns to target certain markets in conjunction with our primary vendor partners, who may provide financial reimbursement, outsourced services, and personnel to assist us in these efforts.
We cannot provide assurance that any patents, as issued, will prevent the development of competitive products or that our patents will not be successfully challenged by others or invalidated through the administrative process or litigation. Additionally, we have registered and common-law trademarks.
We cannot provide assurance that any patents, as issued, will prevent the development of competitive products or that our patents will not be successfully challenged by others or invalidated through the administrative process or litigation. Additionally, we have trademarks in the US, the UK and the EU.
Staff augmentation allows customers to access talent, fill specific technology skill gaps, or provide short-term or long-term IT professional help, which also includes services, such as Virtual Chief Information Officer (vCIO) and Virtual Chief Information Security Officer (vCISO), used to complement existing personnel and build three-to-five-year IT roadmaps. • Project management services enhance productivity and collaboration management and enable successful implementations and adoption of solutions for our customers. • Cloud Consulting Services is a global team of architects and consultants focused on assessing customer workloads for cloud, assisting with the selection of the appropriate cloud solution, design and build of cloud platforms, application modernization and migration, automation, and ongoing management and optimization of cloud platforms. • Consulting Services helps customers strategize ways to ensure their business has maximum agility.
Staff augmentation allows customers to access talent, fill specific technology skill gaps, or provide short-term or long-term IT professional help, which also includes services, such as Virtual Chief Information Officer (vCIO) and Virtual Chief Information Security Officer (vCISO) used to complement existing personnel and build three-to-five-year IT roadmaps. 5 Table of Contents ● Project management services enhance productivity and collaboration management and enable successful implementations and adoption of solutions for our customers. ● Cloud consulting services is a global team of architects and consultants focused on assessing customer workloads for the cloud, assisting with the selection of the appropriate cloud solution, design and build of cloud platforms, application modernization and migration, automation, and ongoing management and optimization of cloud platforms. ● AI advisory services support our clients on their journey from AI Curious to AI Ready, and eventually AI Mature.
As our employees are an important resource to us, we invest in their ongoing professional development. Our education program provides financial support for employees who want to participate in undergraduate and graduate studies, continuing education, skill building including technical certifications, and other professional enrichment related to their position with e Plus.
Our education program provides financial support for employees who want to participate in undergraduate and graduate studies, continuing education, skill building including technical certifications, and other professional enrichment related to their position with e Plus.
For the year ended March 31, 2024, the percentage of revenue by customer end market within our technology business includes 25% for the telecommunications, media and entertainment industry, 17% for the technology industry, 15% for SLED, 13% for healthcare, and 11% for financial services.
For the year ended March 31, 2025, the percentage of revenue by customer end market within our technology business includes 23% for the telecommunications, media and entertainment, 17% for SLED, 15% for technology, 14% for healthcare, and 9% for financial services.
FUNCTIONAL AREAS OF OUR EMPLOYEE BASE The functional areas of our employees are as follows: As of March 31, 2024 2023 Change Sales and marketing 719 644 75 Professional services 816 750 66 Administration 359 354 5 Executive management 6 6 - Total 1,900 1,754 146 ATTRACTING TALENT While we operate in a competitive labor environment, we believe that that our culture, policies and labor practices, and our competitive performance-based compensation contribute to strong relations with our employees.
FUNCTIONAL AREAS OF OUR EMPLOYEE BASE The functional areas of our employees are as follows: As of March 31, 2025 2024 Change Sales and marketing 714 719 (5 ) Professional and managed services 1,093 816 277 Administration 386 359 27 Executive management 6 6 - Total 2,199 1,900 299 ATTRACTING TALENT While we operate in a competitive labor environment, we believe that our culture, policies and labor practices, and our competitive performance-based compensation contribute to strong relations with our employees.
These data protection offerings, delivered under SOC 2 Type 2 and HIPAA attestations, are focused on delivering confidence to our customers in their ability to rapidly recover when incidents such as ransomware occur. • Cloud Managed Services are focused on helping our customers consume public cloud in a way that reduces time-to-market for new applications, lowers their ongoing cloud costs, and increases security.
This offering focuses on delivering confidence to our customers in their ability to rapidly recover when incidents such as ransomware occur. ● Cloud Managed Services are focused on helping our customers consume public cloud in a way that reduces time-to-market for new applications, lowers their ongoing cloud costs, and increases security.
For example, we recognize AI as a potentially transformational force and anticipate that AI will significantly impact our product offerings and the business operations of our clientele in the long run. OUR FINANCIAL AND RISK MANAGEMENT ACTIVITIES Inventory Management : We do not purchase inventory as stock.
For example, we recognize AI as a potentially transformational force and anticipate that AI will significantly impact our product offerings and the business operations of our clientele in the long run. OUR FINANCIAL AND RISK MANAGEMENT ACTIVITIES Inventory Management : We purchase inventory at our customers’ request to order products, usually from a purchase order from our customer.
We purchase inventory at our customers’ request to order products usually from a purchase order from our customer. In addition, we have drop-shipment arrangements with many of our vendors and distributors, which permit us to offer products to our customers without taking physical delivery of the equipment.
In addition, we have drop-shipment arrangements with many of our vendors and distributors, which permit us to offer products to our customers without taking physical delivery of the equipment.
As a highly technical company with mature collaboration tools, our hybrid model helps us recruit and maintain talent while meeting our customer commitments. 12 Table of Contents TRAINING AND DEVELOPMENT As our employees are a crucial resource to us, we invest in their ongoing professional development.
We offer a range of affordable and flexible benefits options to assist with health and well-being. As a highly technical company with mature collaboration tools, our hybrid in-office model helps us recruit and maintain talent while meeting our customer commitments. TRAINING AND DEVELOPMENT As our employees are a crucial resource to us, we invest in their ongoing professional development.
Our expertise in core and emerging technologies, buttressed by our robust portfolio of professional, services and managed services, has enabled e Plus to remain a trusted advisor for our customers. OUR CUSTOMERS We focus primarily on diverse end-markets for middle market to large enterprises.
Our expertise in core and emerging technologies, buttressed by our robust portfolio of professional, services and managed services, has enabled e Plus to remain a trusted advisor for our customers.
OUR COMPETITION The market for IT solutions is highly competitive, subject to macro-economic cycles, and the entry of new competitors. Additionally, the market is subject to disruption from consolidation of existing market participants that will create larger competitors, by the introduction of disruptive technologies, and by other activities of industry participants.
Additionally, the market is subject to disruption from consolidation of existing market participants that will create larger competitors, by the introduction of disruptive technologies, and by other activities of industry participants.
This allows customers to consume storage in a cloud-like model in their data center addressing planned and/or unforeseen capacity needs resulting from ongoing cloud migrations and other parallel IT projects. • Cloud Hosted Services provide cloud-hosted offerings including Cloud Managed Backup and Cloud Disaster Recovery.
This allows customers to consume storage in a cloud-like model in their data center addressing planned and/or unforeseen capacity needs resulting from ongoing cloud migrations and other parallel IT projects. ● Azure Recover provides Cloud Disaster Recovery with automated monthly recovery testing and annual full failover testing.
By leveraging our extensive portfolio of Consulting Services, customers will gain technology-driven insight and guidance to make smarter decisions, to improve efficiencies, maximize return on technology investments, and provide actionable intelligence. • Security solutions help safeguard our customers’ business and information assets, including: o Governance, Risk, and Compliance (GRC) services help ensure customers are meeting governance and compliance requirements by leveraging regulatory frameworks, industry best practices, and supporting controls, thereby allowing customers to effectively identify, assess, and mitigate risk. o Technology Introduction and Deployment services help customers rapidly adopt and integrate key security controls and embrace efficiencies across technology types like network, endpoint, data, and cloud.
By leveraging our extensive portfolio of Consulting Services, customers will gain technology-driven insight and guidance to make smarter decisions, to improve efficiencies, maximize return on technology investments, and provide actionable intelligence. ● Security solutions help safeguard our customers’ business and information assets, including: o Governance, Risk, and Compliance (GRC) services help ensure customers are meeting governance and compliance requirements by leveraging regulatory frameworks, industry best practices, and supporting controls, thereby allowing customers to effectively identify, assess, and mitigate risk. o Technology Introduction and Deployment services help customers rapidly adopt and integrate key security controls and embrace efficiencies across technology types like network, endpoint, application, data, and cloud. o Security Operations Modernization services assist customers in evolving aged operational processes to take increased advantage of modern detection and response technology platforms leveraging automation and AI which equate to decreased time to detect and respond to emerging threats. ● Collaboration solutions deliver significant value to our customers by enhancing communication, increasing productivity, facilitating remote and hybrid work, and improving customer interactions and engagement.
We may also finance industrial machinery and equipment, office furniture and general office equipment, transportation equipment, and other general business equipment. We offer our solutions both directly and through vendors. We offer enhanced financing solutions, and our business process services approach automates a significant portion of the IT procurement process and reduces our customers’ cost of doing business.
We offer enhanced financing solutions, and our business process services approach automates a significant portion of the IT procurement process and reduces our customers’ cost of doing business.
We believe we have a good relationship with our employees, with twenty percent of our employee base having a tenure of ten or more years. None of our employees are represented by a labor union.
As of March 31, 2025, we employed a total of 2,199 employees, including 2,148 in the US, 26 in India, and 25 in the UK. We believe we have a good relationship with our employees, with twenty percent of our employee base having a tenure of ten or more years. None of our employees are represented by a labor union.
Managed services segment: • Managed services for infrastructure and cloud proactively monitor and manage a broad range of technologies on-premises and in the cloud with services such as Managed Services for Azure, Managed WebEx Calling, Managed WebEx Call Center, network and firewall management and Managed Power Protection to ensure support of a broad cross-section of technologies spanning multiple Original Equipment Manufacturer (OEM) solutions.
Our technology business segments provide the following products and services within their respective segments: Product segment: ● IT sales includes sales of third-party hardware, perpetual and subscription software, maintenance, software assurance, and services. 4 Table of Contents Managed services segment: ● Managed services for infrastructure and cloud proactively monitor and manage a broad range of technologies on-premises and in the cloud with services such as Managed Services for Azure, Managed WebEx Calling, Managed Webex Contact Center, unified communications, video-enabled workspaces, compute, storage, network infrastructure, firewall management and Managed Power Protection to ensure support of a broad cross-section of technologies spanning multiple Original Equipment Manufacturer (OEM) solutions.
In addition, we recognize support staff with our annual Executive Choice Awards, and we recognize employees who perform an exceptional act of community service with our CEO Degrees of Excellence award. In addition, we have developed career paths for most functional areas to illustrate the many career paths within e Plus.
We also promote employee engagement and recognition through our e Plus Recognition platform where employees can announce and/or thank other employees for their efforts and receive awards. In addition, we recognize support staff with our annual Executive Choice Awards, and we recognize employees who perform an exceptional act of community service with our CEO Degrees of Excellence award.
Many current and potential competitors also have greater name recognition and engage in more extensive promotional marketing and advertising activities, offer more attractive terms to customers, and adopt more aggressive pricing policies than we do. 5 Table of Contents OUR OFFERINGS TECHNOLOGY BUSINESS SEGMENTS We provide a range of IT products and advanced professional and managed services to help our customers improve productivity, profitability, and revenue growth while reducing operating costs.
OUR OFFERINGS TECHNOLOGY BUSINESS SEGMENTS We provide a range of IT products and advanced professional and managed services to help our customers improve productivity, profitability, and revenue growth while reducing operating costs.
The solution incorporates value-added services at every step in the process, including: • Front-end processing, such as procurement, order aggregation, order automation, vendor performance measurement, ordering, reconciliation, and payment. • Lifecycle and asset ownership services, including asset management, change management, and property tax filing. • End-of-life services such as equipment audit, removal, and disposal. 7 Table of Contents OUR COMPETITIVE STRENGTHS BROAD SKILL SETS THAT CAN SCALE TO SUPPORT LARGE ADDRESSABLE MARKET We sell IT solutions focusing on the data center, cloud, network, security, virtualization, and mobility segments of the industry, facilitated by our professional and managed service solutions.
The solution incorporates value-added services throughout the process, including: ● Front-end processing, such as procurement, order aggregation, order automation, vendor performance measurement, ordering, reconciliation, and payment. ● Lifecycle and asset ownership services, including asset management, change management, and property tax filing. ● End-of-life services such as equipment audit, removal, and disposal.
OUR INTELLECTUAL PROPERTY RIGHTS Our success depends in part upon proprietary business methodologies and technologies that we have licensed and modified.
As of March 31, 2025, our sales force consisted of 714 sales, marketing and sales support personnel organized regionally across the US, UK, and India. 7 Table of Contents OUR INTELLECTUAL PROPERTY RIGHTS Our success depends in part upon proprietary business methodologies and technologies that we have licensed and modified.
Our sales representatives are compensated by a combination of salary and commission, with commission becoming the primary component of compensation as the sales representatives gain experience. To date, we acquired most of our customers through the efforts of our direct sales force and acquisitions.
Our sales representatives are compensated by a combination of salary and commission, with commission becoming the primary component of compensation as the sales representatives gain experience. We market to different areas within a customer’s organization, including business units as well as the IT department, lines of business, or finance department, depending on the solutions.
OUR HUMAN CAPITAL Our employees are an important resource for us, and their collective dedication and talent enable us to be a trusted advisor to our customers. As of March 31, 2024, we employed a total of 1,900 employees, including 1,847 in the US, 27 in India, 25 in the UK, and 1 in Singapore.
Our financing arrangements with our customers are generally fixed rate. 8 Table of Contents OUR HUMAN CAPITAL Our employees are an important resource for us, and their collective dedication and talent enable us to be a trusted advisor to our customers.
In addition, some of these competitors may be able to respond more quickly to new or changing opportunities, technologies, and customer requirements.
In addition, some of these competitors may be able to respond more quickly to new or changing opportunities, technologies, and customer requirements. Many current and potential competitors also have greater name recognition and engage in more extensive promotional marketing and advertising activities, offer more attractive terms to customers, and adopt more aggressive pricing policies than we do.
Services include Security Operations Center (SOC), Vulnerability Management, Managed Detection and Response (MDR), and Incident Response (IR). 6 Table of Contents Professional services segment: • Professional services focus on cloud infrastructure, unified communications, collaboration, networking, storage, hyper-converged infrastructure, and virtual desktop infrastructure, supported by security and managed services solutions. • Staff augmentation services provide customers with flexible headcount options, which may range from service desk to infrastructure to software developer skills.
Services include Security Operations Center (SOC), Vulnerability Management, Managed Detection and Response (MDR), and Incident Response (IR). Professional services segment: ● Professional services provide services in the spaces of cloud infrastructure, unified communications, collaboration, networking, storage, hyper-converged infrastructure, virtual desktop infrastructure, and AI and emerging technologies. We offer architecture, deployment, and configuration services, software adoption services, training services and assessments.
FINANCING BUSINESS SEGMENT We specialize in financing arrangements, including sales-type and operating leases, loans, and consumption-based financing arrangements, as well as underwriting and management and disposal of IT equipment and assets. Our financing operations include sales, pricing, credit, contracts, accounting, risk management, and asset management. We primarily finance IT equipment, communication-related equipment, and medical equipment.
In addition, the e Plus AI Experience Center allows customers to explore AI technologies in data center facilities purpose-built for AI-optimized infrastructure. FINANCING BUSINESS SEGMENT We specialize in financing arrangements, including sales-type and operating leases, loans, and consumption-based financing arrangements, as well as underwriting and management and disposal of IT equipment and assets.
We recognize our employee successes in many ways. We award top performers in our sales and services departments with awards and gifts, including a “President’s Club” trip. We also promote employee engagement and recognition through our e Plus Recognition platform where employees can announce and/or thank other employees for their efforts and receive awards.
All employees are supported in, and expected to, remain current in the knowledge areas relevant to their position. 9 Table of Contents We recognize our employee successes in many ways. We award top performers in our sales and services departments with awards and gifts, including a “President’s Club” trip.
BROAD AND DIVERSE CUSTOMER BASE ACROSS A WIDE RANGE OF END MARKETS We have a broad and diverse customer base of 4,600 customers across a wide range of end-markets, including education, financial services, healthcare, media and entertainment, state and local government, technology, and telecommunications.
OUR CUSTOMERS We serve 4,600 customers that are primarily middle market to large enterprises and state and local government institutions, including state and local education (“SLED”) institutions, across diverse customer end markets.
In 2023, GRIT kicked off a new program year at eight schools across the country, with more than 90 students participating. Since its inception, GRIT has graduated over 300 participants and continues to grow each year.
Our 2025 GRIT program includes more than 100 students from seven schools across the country. Since its inception, GRIT has graduated nearly 500 participants.
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We serve customers in markets including telecom, media and entertainment, technology, state and local government and educational institutions (“SLED”), healthcare, and financial services.
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Sales to Verizon Communications Inc. represented 16%, 19%, and 22% of our net sales for the years ended March 31, 2025, 2024, and 2023, respectively.
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Our technology business segments accounted for 98% of our net sales—85% from the product segment, 7% from the professional services segment, and 6% from the managed services segment—and 84% of our operating income. Our financing business segment accounted for 2% of our net sales, and 16% of our operating income for the year ended March 31, 2024.
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Our financing business segment accounted for 3% of our net sales, and 25% of our operating income for the year ended March 31, 2025. OUR COMPETITION The market for IT solutions is highly competitive, subject to macro-economic cycles, and the entry of new competitors.
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OUR INDUSTRY BACKGROUND AND MARKET OPPORTUNITY We have identified and focused on several specific trends that we believe will create higher growth in the overall US IT market such as: MULTI-CLOUD STRATEGY Cloud-enabled frameworks have become a core foundation of modern IT.
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Additionally, we offer professional services in the spaces of digital signage, EV charging solutions, loss prevention and security, and retail store openings, remodels, and closings. ● Staff augmentation services provide customers with flexible headcount options, which may range from service desk to infrastructure to software developer skills.
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Our strategy consists of assisting customers in aligning cloud strategy with business objectives, creating an enterprise cloud foundation, enabling multi-cloud capabilities, accelerating cloud migrations, modernizing the datacenter, and optimizing cloud deployments for cost and security.
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Our featured offerings are the AI Envisioning Workshop, AI Use Case Development Workshop, and our e Plus Secure GenAI Accelerator. ● Consulting services helps customers strategize ways to ensure their business fully and efficiently utilizes cutting-edge technology offerings to achieve desired outcomes.
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By understanding our customers’ environment, applications, and business requirements, we deploy solutions that leverage the most appropriate technology on the most appropriate platform with the most appropriate consumption model. For example, we may build a private cloud solution to host mission critical applications, while utilizing a public cloud solution for development, collaboration, or disaster recovery.
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We have three focus areas: o Unified Communications design and implementation services improve employee experiences by consolidating tools like voice, video and messaging into a single, integrated platform.
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As the market matures, we will continue to build and acquire skills that align with DevOps, application refactoring, and analytics. INCREASING SOPHISTICATION AND INCIDENCES OF IT SECURITY BREACHES AND CYBERATTACKS Cyberattacks are becoming more sophisticated, numerous, and invasive. Organizations are finding it increasingly difficult to effectively safeguard their information assets and business operations from a constant stream of advanced threats.
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This streamlines workflows, enhances collaboration among teams and ultimately boosts productivity while reducing costs associated with managing disparate systems. o Contact Center design and implementation services provide our customers with a platform to deliver omni-channel communications, enabling them to interact with their customers through preferred channels like phone, chat, email or social media.
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Cyber threats have shifted from uncoordinated individual efforts to highly coordinated and well-funded attacks by criminal organizations and nation-state actors. Additional concerns include data privacy of both user data and machine data as companies continue to pursue digital transformation via data science, AI and analytics.
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AI and automation offer personalized experiences, faster resolutions and 24/7 availability, ultimately enhancing customer satisfaction resulting in stronger brand loyalty. o Audio/Visual (AV) design and installation services help organizations modernize their workplace to improve collaboration and engagement.
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We believe our customers are focused on maturing all aspects of cybersecurity, including information and physical security, data protection, threat management and compliance requirements related to industry and government regulations.
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Whether for presentations, video conferencing, digital signage, or immersive environments, our services transform workspaces maximizing the effectiveness of communication and information sharing. 6 Table of Contents ● Warehouse, configuration, and logistic services provide a complete, turn-key solution for a customer’s entire IT environments, regardless of complexity or manufacturer. o Configuration and Integration Services delivered from configuration centers strategically distributed throughout the United States consolidate individual components from multiple OEMs into a single SKU in one cabinet, fully functional upon arrival for faster return on investment (ROI) and time to market. o Asset Lifecycle Management Services provides the real-time visibility customers need to manage, measure, and govern their IT assets as well as IT asset disposition/management, data destruction, and end-of-life recycling. o The e Plus Customer Innovation Center incorporates configuration and deployment capabilities, a technology demonstration lab, briefing center, and a vast warehouse providing technology and logistics fulfillment services to customers around the world.
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We believe it is necessary to select and implement security controls and technology solutions that leverage integrated products and services to help monitor, mitigate, and remediate security threats and attacks while ensuring a data-centric security model that is scalable to meet today’s digital demands on premise, at the edge and in the cloud.
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Our financing operations include sales, pricing, credit, contracts, accounting, risk management, and asset management. We primarily finance IT equipment, communication-related equipment, and medical equipment. We may also finance industrial machinery and equipment, office furniture and general office equipment, transportation equipment, and other general business equipment. We offer our solutions both directly and through vendors.
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Our ability to provide value-added and expert services to our customers in these areas helps us to create greater value for the customer via a security posture that extends across all digital technologies within an organization.
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In addition, we have developed career paths for most functional areas to illustrate the many career paths within e Plus.
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The complex nature of security controls and their consumption opens opportunities for e Plus to engage in recurring subscription models with our customers that include both technology and the operational services designed and executed to help mitigate risk and mature an organization’s cybersecurity posture.
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DISRUPTIVE TECHNOLOGIES ARE CREATING COMPLEXITY AND CHALLENGES FOR CUSTOMERS AND VENDORS The rapid evolution of disruptive technologies such as AI, and the speed by which they impact organizations’ IT platforms, has made it difficult for customers to effectively design, procure, implement, and manage their own IT systems.
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Disruption also increases the likelihood of security gaps leaving organizations vulnerable to attacks both internally and externally. Moreover, increased budget pressures, fewer internal resources, a fragmented vendor landscape and faster time-to-value expectations make it challenging for customers to design, implement and manage secure, efficient, and cost-effective IT environments.
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Customers are increasingly turning to IT solutions providers such as e Plus to implement complex IT offerings, including managed services, security architecture, software-defined infrastructure, cloud platforms, converged and hyper-converged infrastructures, big data analytics, and data protection. 4 Table of Contents LACK OF SUFFICIENT INTERNAL IT RESOURCES AT MID-SIZED AND LARGE ENTERPRISES, AND SCARCITY OF IT PERSONNEL IN CERTAIN HIGH-DEMAND DISCIPLINES We believe that IT departments at mid-sized and large enterprises are facing pressure to deliver business outcomes that rely on emerging technologies but lack the professionally trained staff and the ability to hire personnel with high in-demand disciplines such as security, solution architecture and data analytics.
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At the same time the prevalence of security threats, increased use of cloud platforms, AI, software-defined networking, new architectures, rapid software development frameworks, the proliferation of mobile devices, dispersed workforces, employees working from anywhere, bring-your-own-device (BYOD) policies, and complexity of multi-vendor solutions have made it difficult for IT departments to implement high-quality IT solutions.
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REDUCTION IN THE NUMBER OF IT SOLUTIONS PROVIDERS We believe that customers are seeking to reduce the number of solutions providers they do business with to improve supply chain and internal efficiencies, enhance accountability, improve supplier management practices, and reduce costs. As a result, customers are selecting IT solutions providers that can deliver complex multi-vendor IT solutions.
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Vendor and tooling consolidation is also trending whereby solutions providers can bundle and enhance the value of offerings while simplifying technology footprints.
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INCREASING NEED FOR THIRD-PARTY SERVICES We believe that customers are relying on third-party service providers, such as e Plus, to manage significant aspects of their IT environment, from design, implementation, pre- and post-sales support, to maintenance, engineering, cloud management, security operations, and other services.
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Our technology business segments provide the following products and services within their respective segments: Product segment: • IT sales provides hardware, perpetual and subscription software, maintenance, software assurance, and outsourced services.
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We primarily target our sales efforts toward middle-market and large commercial entities, state and local governments, education, and healthcare customers throughout the US and in certain markets in Europe and Asia.
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We believe IT departments in these organizations are facing pressure to deliver higher service levels with fewer resources, increasing their reliance on third parties who can provide complex, multi-vendor technology solutions, such as our company.
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DIFFERENTIATED BUSINESS MODEL SERVING ENTIRE IT LIFECYCLE – PROCUREMENT, SOLUTIONS, SERVICES, SOFTWARE, FINANCING We believe we are a trusted IT advisor to our customers, delivering differentiated products and services to enable our customers to meet increasingly complex IT requirements. We can provide complete, turn-key solutions aligned to the entire IT lifecycle – procurement, products, services, software, and financing.
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We provide upfront assessments, design and configuration capabilities, installation and implementation, and ongoing services to support our customers’ solutions.
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DEEP EXPERTISE IN ADVANCED TECHNOLOGY TO ADDRESS CLOUD, SECURITY, SOFTWARE DEFINED NETWORKING, WIFI/5G, AND OTHER EMERGING IT TRENDS We believe our customers choose us for their complex IT infrastructure needs based on our track record of delivering best-of-breed solutions, value-added services, and close relationships with both established and emerging vendors.
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We focus on obtaining and maintaining top-level engineering certifications and professional services expertise in advanced technologies of strategic vendors that we leverage to help our customers achieve positive business outcomes. Throughout our company, we have more than 850 employees that collectively hold over 7,000 certifications, including over 3,800 technical certifications.
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Our highly skilled, experienced personnel include account executives, pre-sales and inside-sales staff trained on our broad solutions capabilities and category-focused subject-matter experts. We have over 1,950 unique certification titles, with a heavy concentration in our top vendor partners.
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STRATEGIC ABILITY TO DESIGN AND INTEGRATE CLOUD SOLUTIONS ACROSS MULTIPLE VENDORS We believe our expertise across both data center and cloud architectures allows us to provide differentiated offerings in assisting our customers with their journey to the cloud.
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Combined with our established practices in networking and security, we are uniquely poised to help customers adopt a multi-cloud strategy utilizing our cloud cost management and FinOps framework to help overcome the inherent challenges.
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We leverage our strategic partnerships with leading vendors such as Amazon Web Services, Cisco Systems, Dell EMC, Hewlett Packard Enterprise, Microsoft, NetApp, Rubrik, and VMware in conjunction with our professional, managed and lifecycle services to help our customers achieve their desired business outcomes. 8 Table of Contents STRATEGIC INVESTMENTS IN EXPERIENCED CYBERSECURITY PRACTITIONERS TO GUIDE CUSTOMERS RISK MITIGATION STRATEGIES We believe our organizational structure and resources in both security advisory services and technology teams best enable our consulting teams to deliver clear business outcomes for our customers looking to identify and mitigate risk to their organizations.
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While developing threats, new regulations and cyber liability insurance premiums continue to increase, putting pressure on stakeholders and stockholders, we continue to invest in our service delivery capabilities and align with industry leading cybersecurity OEMs to help ensure our customers are accelerating their security programs and leveraging the latest capabilities to harden defenses and ensure preparedness against threats to their business.
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PROVEN TRACK RECORD OF SUCCESSFULLY INTEGRATING ACQUISITIONS AND ACCELERATING GROWTH We view acquisitions as a crucial factor in our strategic growth plan. Since 1997, we have successfully integrated nearly 30 acquisitions. Most recently, we have been active in tuck-in acquisitions to broaden our product offerings, sector reach, and geographic footprint.
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We generally integrate acquired firms into the e Plus platform immediately, which allows us to maintain customer and vendor relationships, retain key employees from acquired firms, and accelerate growth. We continue to review new acquisition opportunities to expand our global footprint and expand our offerings.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

92 edited+14 added−28 removed95 unchanged
Biggest changeThere is no guarantee that we will continue to originate large transaction gains or that customers will drive large post contract earnings in the future. 14 Table of Contents We rely on a small number of key vendors in our supply chain, and do not have long-term supply or guaranteed price agreements or assurance of inventory availability with our vendors.
Biggest changeWe rely on a small number of key vendors and third parties, and do not have long-term supply or guaranteed price agreements or assurance of inventory availability from our vendors. A substantial portion of our revenue within our technology business segments depends on a small number of key vendors.
In addition, the acquisition by our competitors of third-party companies that we are relying upon to perform certain of our customer obligations may impact our revenue. We rely on independent shipping companies to deliver products from us and our vendors to our customers.
In addition, the acquisition by our competitors of third-party companies that we are relying upon to perform certain of our customer obligations may impact our revenue. We rely on independent shipping vendors to deliver products from us and our vendors to our customers.
Costs relative to lawsuits are usually expensed in the periods incurred and there is no certainty in recouping any of the amounts expended regardless of the outcome of any action.
Costs relative to lawsuits are usually expensed in the periods incurred and there is no certainty of recouping any of the amounts expended regardless of the outcome of any action.
We may need to implement new software, or update existing software and processes, to be compliant with rapidly evolving data privacy laws, which may incur costs and impact data integrity. The protections we have in place address a variety of threats to our information technology systems, both internal and external, including human error.
We may need to implement new software, or update existing software and processes, to be compliant with rapidly evolving regulation, including data privacy laws, which may incur costs and impact data integrity. The protections we have in place address a variety of threats to our information technology systems, both internal and external, including human error.
Any determination to repurchase, shares of our common stock in the future will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions (including in current or future agreements governing our indebtedness), restrictions imposed by applicable law, market conditions, tax considerations and other factors our Board of Directors deems relevant.
Any determination to repurchase, shares of our common stock in the future will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions (including in current or future agreements governing our indebtedness), restrictions imposed by applicable law, market conditions, tax considerations and other factors our Board deems relevant.
Illness or insufficient staffing, or improper training, performance, or supervision may negatively affect the services we provide our customers resulting in decreased revenue and the potential for litigation. Products as complex as those used to provide our solutions and services, including our cloud automation solutions, can contain unknown and undetected errors, performance problems, or use open-source code.
Insufficient staffing, or improper training, performance, or supervision may negatively affect the services we provide our customers resulting in decreased revenue and the potential for litigation. Products as complex as those used to provide our solutions and services, including our cloud automation solutions, can contain unknown and undetected errors, performance problems, or use open-source code.
If our information systems are not operational for reasons which may include cybersecurity attacks, data center failures, failures by telecom providers to provide services to our business and to our employees’ homes, as well as the home offices of our vendors’ and customers’ employees, power failures, or failures of cloud application software such as SaaS based software, our business and financial results may be adversely impacted. 15 Table of Contents If third-parties or our employees are able to maliciously penetrate our network security or otherwise misappropriate our customers’ information or employees’ personal information, or other information for which our customers may be responsible and for which we agree to be responsible in connection with service contracts into which we may enter, or if we give third-parties or our employees improper access to certain information, we could be subject to liability.
If our information systems are not operational for reasons which may include cybersecurity attacks, data center failures, failures by telecom providers to provide services to our business and to our employees’ homes, as well as the home offices of our vendors’ and customers’ employees, power failures, or failures of cloud application software such as SaaS based software, our business and financial results may be adversely impacted. 12 Table of Contents If third parties or our employees are able to maliciously penetrate our network security or otherwise misappropriate our customers’ information or employees’ personal information, or other information for which our customers may be responsible and for which we agree to be responsible in connection with service contracts into which we may enter, or if we give third parties or our employees improper access to certain information, we could be subject to liability.
Our technology business, primarily through our subsidiary e Plus Technology, inc., finances its operations with funds generated from operations, and with a credit facility with Wells Fargo Commercial Distribution Finance, LLC, and its agents or (“WFCDF”). This facility provides short-term capital for certain of our technology business entities.
Our technology business, primarily through our subsidiary e Plus Technology, inc., finances its operations with funds generated from operations, and with a credit facility with Wells Fargo Commercial Distribution Finance, LLC, and its agents (“WFCDF”). This facility provides short-term capital for certain of our technology business entities.
The evolving nature of such threats, considering new and sophisticated methods used by criminals and cyberterrorists, including computer viruses, malware, phishing, social engineering, and forgery, are making it increasingly challenging to anticipate and adequately mitigate these risks.
The evolving nature of such threats, considering new and sophisticated methods used by criminals and cyberterrorists, including computer viruses, malware, phishing, social engineering, AI, and forgery, are making it increasingly challenging to anticipate and adequately mitigate these risks.
The vendor of certain products or services we resell may not provide us with indemnification for infringement or indemnification; however, our customers may seek indemnification from us. We could incur substantial costs in defending infringement claims against ourselves and our customers.
The vendor of certain products or services we resell may not provide us with indemnification for infringement or otherwise; however, our customers may seek indemnification from us. We could incur substantial costs in defending infringement claims against ourselves and our customers.
Our stockholders may not be able to resell their shares of common stock at or above the price at which they purchased such shares, due to fluctuations in the market price of our common stock, which may be caused by several factors, many of which we cannot control, including the risk factors described in this Annual Report on Form 10-K and the following: • changes in financial estimates by any securities analysts who follow our common stock, and our failure to meet these estimates or failure of securities; • our failure to obtain our financial guidance estimates; • significant variations in our quarterly results of operations; • analysts to maintain coverage of our common stock; • downgrades by any securities analysts who follow our common stock; • future sales of our common stock by our officers, directors, and significant stockholders; • market conditions or trends in our industry or the economy as a whole including market expectations of changes in interest rates; • investors’ perceptions of our prospects; • announcements by us or our competitors of significant contracts, acquisitions, joint ventures, or capital commitments; and • changes in key personnel.
Our stockholders may not be able to resell their shares of common stock at or above the price at which they purchased such shares, due to fluctuations in the market price of our common stock, which may be caused by several factors, many of which we cannot control, including the risk factors described in this Annual Report on Form 10-K and the following: • changes in financial estimates by any securities analysts who follow our common stock, and our failure to meet these estimates or failure of securities; • our failure to obtain our financial guidance estimates; • significant variations in our quarterly results of operations; • analysts maintaining coverage of our common stock; • downgrades by any securities analysts who follow our common stock; • future sales of our common stock by our officers, directors, and significant stockholders; • market conditions or trends in our industry or the economy as a whole including market expectations of changes in interest rates; • investors’ perceptions of our prospects; • announcements by us or our competitors of significant contracts, acquisitions, divestitures, joint ventures, or capital commitments; and • changes in key personnel.
Social and ethical issues relating to the use of new and evolving technologies such as AI in our hardware, software, and service offerings, as well as in our internal platforms, may result in reputational harm and legal liability.
Legal, social, ethical, and accuracy issues relating to the use of new and evolving technologies such as AI in our hardware, software, and service offerings, as well as in our internal platforms, may result in reputational harm and legal liability.
The laws and regulations may be inconsistent from jurisdiction to jurisdiction and may be repeatedly and unpredictably modified or rescinded by legislative bodies, regulatory agencies, and/or courts, further increasing the cost of compliance and doing business, and the risk of noncompliance.
The laws and regulations may be inconsistent from jurisdiction to jurisdiction and may be repeatedly and unpredictably modified, rescinded, or stayed by legislative bodies, regulatory agencies, and/or courts, further increasing the cost of compliance, and doing business, and the risk of noncompliance.
If we fund such transactions at inception with a third-party lender, we can lock an interest rate spread on the transaction between the customer rate and third-party rate.
If we fund such transactions at inception with a third-party lender, we can lock in an interest rate spread on the transaction between the customer rate and third-party rate.
We have privacy and data security policies in place that are designed to prevent security breaches; however, as newer technologies emerge, and the portfolio of the service providers with whom we share sensitive information grows, we could be exposed to increased risk of breaches in data security and other illegal or fraudulent acts, including ransomware attacks and other types of cyberattacks.
We have privacy and data security policies in place that are designed to prevent security breaches; however, as newer technologies emerge such as AI, and the portfolio of the service providers with whom we share sensitive information grows, we could be exposed to increased risk of breaches in data security and other illegal or fraudulent acts, including ransomware attacks and other types of cyberattacks.
Our credit agreement contains various covenants that must be met each quarter and either party may terminate the agreement for any reason with 90 days’ notice. There can be no assurance that we will continue to meet those covenants and failure to do so may limit availability of, or cause us to lose, such financing.
Our credit agreement contains various covenants that must be met and either party may terminate the agreement for any reason with 90 days’ notice. There can be no assurance that we will continue to meet those covenants and failure to do so may limit availability of, or cause us to lose, such financing.
As a provider of a comprehensive set of technology solutions, which involves the offering of bundled solutions consisting of direct IT sales, advanced professional and managed services, our propriety software, and financing, we expect to encounter some of the challenges, risks, and uncertainties frequently encountered by companies providing bundled solutions in rapidly evolving markets.
As a provider of a comprehensive set of technology solutions, which involves the offering of bundled solutions consisting of direct IT sales, advanced professional and managed services, our proprietary software, and financing, we expect to encounter some of the challenges, risks, and uncertainties frequently encountered by companies providing bundled solutions in rapidly evolving markets.
If these third-parties do not perform these services in accordance with the terms of our agreement and to a professional standard customary for the services, including if their services include an error or omission, or if they cause disruption of, or security weaknesses within, our customers’ businesses, results to our organization could include legal claims and associated costs, monetary damages paid to our customers, and an adverse effect on our customer and other business partner relationships, our brand, our reputation, and our results of operations or cash flows could be affected.
If these vendors do not perform these services in accordance with the terms of our agreement and to a professional standard customary for the services, including if their services include an error or omission, or if they cause disruption of, or security weaknesses within, our customers’ businesses, results to our organization could include legal claims and associated costs, monetary damages paid to our customers, and an adverse effect on our customer and other business partner relationships, our brand, our reputation, and our results of operations or cash flows could be affected.
Additionally, along with our technological safeguards, we rely on our employees’ vigilance and security awareness to protect against cyber-based attacks. Our failure to sufficiently train and supervise our employees to guard against such attacks could result in a significant interruption in our business, and negative impact on our results.
Additionally, along with our technological safeguards, we rely on our employees’ vigilance and security awareness to protect against cyber-based attacks. Our failure to sufficiently train and supervise our employees to guard against such attacks could result in a significant interruption in our business, and negative impact on our results of operations.
Manufacturing interruptions or delays, including as a result of the financial instability or bankruptcy of manufacturers, changes to or the addition of trade laws, duties or tariffs, currency fluctuations, significant labor disputes such as strikes, natural disasters, political or social unrest, international conflicts, pandemics, other public health crises, or other adverse events affecting any aspect of our vendors’ business, could disrupt our supply chain.
Manufacturing interruptions or delays, including as a result of the financial instability or bankruptcy of manufacturers, changes to or the addition of trade laws, duties or tariffs, currency translation losses, significant labor disputes such as strikes, natural disasters, political or social unrest, international conflicts, pandemics, other public health crises, or other adverse events affecting any aspect of our vendors’ business, could disrupt our supply chain.
In addition, the adoption of new or modified procurement regulations and other requirements may increase our compliance costs and reduce our gross margins, which could have a negative effect on our business, results of operations, or cash flows. We face risks of claims from third parties for intellectual property infringement, including counterfeit products, which could harm our business.
In addition, the adoption of new or modified procurement regulations and other requirements may increase our compliance costs and reduce our gross margins, which could have a negative effect on our business, results of operations, or cash flows. 20 Table of Contents We face risks of claims from third parties for intellectual property infringement, including counterfeit products, which could harm our business.
In addition, we face competition from vendors, which may choose to market their products directly to end-users, rather than through channel partners such as our company, and this could adversely affect our future sales.
In addition, we face competition from vendors, which may choose to market their products directly to end-users, rather than through channel partners such as our company which could adversely affect our future sales.
Such harm could include technological or human failure that results in a cyber-related data breach, privacy incident, or other event that adversely impacts our customers’ IT systems and/or business processes. In all our markets, some of our competitors have longer operating histories and greater financial, technical, marketing, and other resources than we do.
Such harm could include technological or human failure that results in a cyber-related data breach, privacy incident, or other event that adversely impacts our customers’ IT systems and/or business processes. 10 Table of Contents In all our markets, some of our competitors have longer operating histories and greater financial, technical, marketing, and other resources than we do.
Attacks may range from random attempts to coordinated and targeted attacks, including sophisticated computer crime and advanced persistent threats. Advances in technology, new discoveries in the field of cryptography, quantum computing, or artificial intelligence, other events or developments may result in a compromise or breach of the security practices we use to protect sensitive customer transaction information and employee information.
Attacks may range from random attempts to coordinated and targeted attacks, including sophisticated computer crime and advanced persistent threats. Advances in technology, new discoveries in the field of cryptography, quantum computing, or AI, other events or developments may result in a compromise or breach of the security practices we use to protect sensitive customer transaction information and employee information.
Products manufactured by NetApp, Hewlett Packard Enterprise, HP Inc., Juniper Networks, Dell/EMC, and Arista Networks, collectively represented approximately 23% - 25% of net sales of our combined technology business segments for the last three years. We may also be adversely affected by consolidation among our vendors, such as Hewlett Packard Enterprise’s proposed acquisition of Juniper Networks.
Products manufactured by NetApp, Hewlett Packard Enterprise, Juniper Networks, Dell EMC, and Arista Networks, collectively represented approximately 23% to 25% of net sales of our combined technology business segments for the last three years. We may also be adversely affected by consolidation among our vendors, such as Hewlett Packard Enterprise’s proposed acquisition of Juniper Networks.
We may identify serious defects following the introduction of new products or enhancements to existing products. Undetected errors or performance problems may be discovered in the future and certain errors we consider to be minor may be serious to our customers.
We may identify serious defects following the introduction of new products or enhancements to existing products. Undetected errors or performance problems may be discovered in the future and certain errors we consider to be minor may be deemed serious by our customers.
If we fail to react in a timely manner to such changes, such as generative artificial intelligence, our results of operations may be adversely affected. Our sales can be dependent on demand for specific product categories, and any change in demand for, or supply of, such products could have a material adverse effect on our results of operations.
If we fail to react in a timely manner to such changes, such as generative AI, our results of operations may be adversely affected. Our sales can be dependent on demand for specific product categories, and any change in demand for, or supply of, such products could have a material adverse effect on our results of operations.
There are two components of the WFCDF credit facility (collectively, the “WFCDF Credit Facility”): (1) a floor plan facility and (2) a revolving credit facility. As of March 31, 2024, the facility agreement had an aggregate limit of the two components of $500 million, together with a sublimit for a revolving credit facility for up to $200 million.
There are two components of the WFCDF credit facility (collectively, the “WFCDF Credit Facility”): (1) a floor plan facility and (2) a revolving credit facility. As of March 31, 2025, the facility agreement had an aggregate limit of the two components of $500 million, together with a sublimit for the revolving credit facility component for up to $200 million.
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies, including companies in our industry. In the past, securities class action litigation has followed periods of market volatility.
In addition, the stock markets have experienced extreme price and volume fluctuations which have affected and continue to affect the market prices of equity securities of many companies, including us and companies in our industry. In the past, securities class action litigation has followed periods of market volatility.
Defense of any lawsuit or failure to obtain any such required license could significantly increase our expenses and/or adversely affect our ability to offer one or more of our services. 24 Table of Contents We may be unable to protect our intellectual property and costs to protect our intellectual property may affect our earnings.
Defense of any lawsuit or failure to obtain any such required license could significantly increase our expenses and/or adversely affect our ability to offer one or more of our services. We may be unable to protect our intellectual property and costs to protect our intellectual property may affect our earnings.
The loss of the WFCDF Credit Facility could have a material adverse effect on our future results as we rely on this facility and its components for daily working capital and the operational function of our accounts payable process.
The loss of or reduction in the WFCDF Credit Facility could have a material adverse effect on our future results as we rely on this facility and its components for daily working capital and the operational function of our accounts payable process.
This could result in lost revenues, business interruption, delays in customer acceptance, security breaches, and unforeseen liabilities that could be detrimental to our reputation and to our business. 18 Table of Contents We rely on the competency of our internal IT personnel.
This could result in lost revenues, business interruption, delays in customer acceptance, security breaches, and unforeseen liabilities that could be detrimental to our reputation and to our business. We rely on the competency of our internal IT personnel.
If we were involved in securities litigation, we could incur substantial costs, and our resources and the attention of management could be diverted from our business. In the future, we may also issue our securities in connection with investments or acquisitions.
If we were involved in securities litigation, we could incur substantial costs, and our resources and the attention of management could be diverted from our business. 21 Table of Contents In the future, we may also issue our securities in connection with investments or acquisitions.
If the credit quality of our customer base materially decreases, or if we experience a material increase in our credit losses, including by the federal government’s actual or attempted termination for convenience or other contract termination, we may find it difficult to continue to obtain the required capital for our business, and our results from operations may be affected.
If the credit quality of our customer base materially decreases, if macroeconomic conditions drive a material tightening of the availability of credit, or if we experience a material increase in our credit losses, including by the federal government’s actual or attempted termination for convenience or other contract termination, we may find it difficult to continue to obtain the required capital for our business, and our results from operations may be affected.
As result of these foreign operations, we have exposure to fluctuations in foreign currency rates resulting primarily from the translation exposure associated with the preparation of our consolidated financial statements.
As result of these foreign operations, we have exposure to financial losses on translation due to fluctuations in foreign currency rates resulting primarily from the translation exposure associated with the preparation of our consolidated financial statements.
The technology industry is characterized by rapid innovation and the frequent introduction of new and enhanced hardware, software, and service offerings, such as generative artificial intelligence, and cloud-based solutions, including IaaS, SaaS, and PaaS.
The technology industry is characterized by rapid innovation and the frequent introduction of new and enhanced hardware, software, and service offerings, such as generative and agentic AI, and cloud-based solutions, including IaaS, SaaS, and PaaS.
We rely on arrangements with third parties to perform certain professional services, staffing services, managed services, maintenance, warranties, configuration services, and other services for our customers.
We rely on arrangements with vendors to perform certain professional services, staffing services, managed services, maintenance, warranties, configuration services, and other services for our customers.
The terms of our Credit Facility or lines of credit with our vendors or loss thereof may restrict our current and future operations, which could adversely affect our ability to respond to changes in our business and to manage our operations.
The terms of our WFCDF Credit Facility or loss thereof may restrict our current and future operations, which could adversely affect our ability to respond to changes in our business and to manage our operations.
As a result, we may be at risk for customers’ cancelling orders due to delays and we may not be able to cancel our corresponding order with the supplier. If we are unable to mitigate these disruptions, our financial results may be adversely impacted.
In addition, we may be at risk for customers’ cancelling orders due to delays and we may not be able to cancel our corresponding order with the supplier. If we are unable to mitigate these disruptions, our financial results may be adversely impacted.
If we use, enable, or offer solutions that draw controversy due to their perceived or actual impact on individuals, entities, or society, we may experience brand or reputational harm, competitive harm, or legal liability.
If we use, enable, or offer AI solutions that cause damage to systems or data or draw controversy due to their perceived or actual impact on individuals, entities, or society, we may experience brand or reputational harm, competitive harm, or legal liability.
Global economic weakness, inflation, rising cost and interest rates, and other economic uncertainties may result in decreased sales, gross margin, earnings and/or growth rates from our US based customers and from customers outside the US.
Global and domestic economic weakness, economic recession, trade wars or trade disruption, inflation, rising cost and interest rates, and other economic uncertainties may result in decreased sales, gross margin, earnings, and/or growth rates from our US-based customers and from customers outside the US.
We may not properly select or implement software which may result in the lack of data integrity within or between systems, increase our costs or impair our control environment or may lead to other negative impacts on our business or results.
We must continually maintain, secure, and improve our systems. We may not properly select or implement software which may result in the lack of data integrity within or between systems, increase our costs or impair our control environment or may lead to other negative impacts on our business or results.
Alleged or actual violations of a contract that results in either the termination of our ability to sell the product or a decrease in our certification level with the vendor could adversely impact our financial results.
The loss of a key vendor or changes in its policies could adversely impact our financial results. Alleged or actual violations of a contract that results in either the termination of our ability to sell the product or a decrease in our certification level with the vendor could adversely impact our financial results.
Actions taken by central banks to counter inflation or weakness in the global banking industry, sustained uncertainty about global political conditions, periods of intense diplomatic or armed conflict, government spending cuts and the impact of new government policies (including the introduction of new or increased taxes, the imposition of minimum taxes or new or increased limitations on deductions, credits or other tax benefits), or a tightening of credit markets, or rising interest rates, could cause our customers and potential customers to postpone or reduce spending on technology products or services which could have an adverse effect on our business, results of operations or cash flows.
Actions taken by central banks to counter inflation or weakness in the global banking industry, sustained uncertainty about global political conditions, the downgrade of the US debt rating, periods of intense diplomatic or armed conflict, government spending cuts including efforts from The Department of Government Efficiency (“DOGE”) and the impact of new laws, regulations, or government policies (including the introduction of new or increased taxes, the imposition of minimum taxes or new or increased limitations on deductions, credits or other tax benefits), or a tightening of credit markets, or rising interest rates, could cause our customers and potential customers to postpone, reduce or stop spending on technology products or services which could have a material adverse effect on our business, results of operations or cash flows.
As a result, fluctuations in the exchange rate of the US dollar relative to the functional currencies of our subsidiaries could cause fluctuations in our results of operations. However, our operations in foreign countries are insignificant.
As a result, fluctuations in the exchange rate of the US dollar relative to the functional currencies of our subsidiaries could cause financial losses in our results of operations. However, our operations in foreign countries are not material.
Sales to SLED customers are highly regulated and SLED customer purchases are subject to availability of funds from taxation, grants, or other sources.
Sales to SLED customers are highly regulated and SLED customer purchases are subject to availability of funds from taxation, grants, or other sources including the federal government.
If we experience significant supply chain disruptions, we may not be able to develop alternate sourcing quickly on favorable terms, if at all, which could result in increased costs, loss of sales and a loss of customers, and adversely impact our financial condition and results of operations.
If we experience significant supply chain disruptions, we may not be able to develop alternate sourcing quickly on favorable terms, if at all, which could result in increased inventory costs, delay the completion of related services, a loss of sales and a loss of customers adversely impacting our financial condition and results of operations.
Mergers and acquisitions are significant factors in our growth strategy. If we fail to identify businesses available for purchase or at an acceptable valuation, our growth strategy may be negatively affected and, as such, may negatively affect our results of operations.
If we fail to identify businesses available for purchase or at an acceptable valuation, our growth strategy may be negatively affected and, as such, may negatively affect our results of operations.
Supply chain constraints and staffing challenges may affect our ability to meet these volume requirements and may affect our and our vendors’ ability to engage in marketing programs. We may not continue to receive such incentives or may not be able to collect outstanding amounts relating to these incentives in a timely manner, or at all.
Supply chain constraints may affect our ability to meet purchase requirements and may affect our and our vendors’ ability to engage in marketing programs. We may not be able to collect outstanding amounts relating to these incentives in a timely manner, or at all.
Operating leases have a higher degree of risk because a smaller percentage of the equipment’s value is covered by contractual cash flows at lease inception. We may be required to take impairment charges for goodwill or other intangible assets related to acquisitions. We have acquired certain portions of our business and assets through acquisitions.
Operating leases have a higher degree of risk because a smaller percentage of the equipment’s value is covered by contractual cash flows at lease inception. We primarily lease equipment to our customers through sales-type leases. We may be required to take impairment charges for goodwill or other intangible assets related to acquisitions.
Historically, our financing business segment is very transaction-based and has had volatility in its results of operations primarily due to large transaction gains derived from significant transactions with system integrators where the federal government is the end user, and customer-driven events such as early buyouts or terminations. These transactions are unpredictable and often outsized.
Historically, our financing business segment is very transaction-based and has had volatility in its results of operations primarily due to large transaction gains derived from significant transactions with system integrators where the federal government is the end user, and customer-driven events such as early buyouts or terminations. We rely on lenders to fund financing transactions we originate with our customers.
Unfavorable economic conditions including inflation and/or an increase in interest rates also could increase our financing segment’s funding costs, limit our access to capital markets or result in a decision by lenders not to extend credit to us.
Unfavorable economic conditions including inflation and/or an increase in interest rates also could increase our financing segment’s funding costs, limit our access to capital markets or result in a decision by lenders not to extend credit to us. These events could prevent us from increasing our financing portfolio and harm our operating results.
We rely on lenders to fund financing transactions we originate with our customers. Loss of any lender or group of lenders may significantly impact our ability to originate financing transactions, which may negatively impact our financial condition.
Loss of any lender or group of lenders may significantly impact our ability to originate financing transactions, which may negatively impact our financial condition.
The realization of the residual value of the equipment we lease, predominantly at the end of the term of a lease, as well as during the life of the lease, is an important element in our financing business segment.
We may not be able to realize our entire investment in the equipment we lease. The realization of the residual value of the equipment we lease, predominantly at the end of the term of a lease, as well as during the life of the lease, is an important element in our financing business segment.
Further, as part of our long-term business strategy, we may continue to pursue acquisitions of other companies or assets.
We have acquired certain portions of our business and assets through acquisitions. Further, as part of our long-term business strategy, we may continue to pursue acquisitions of other companies or assets.
We are subject to such claims and the cost of defending such claims due to the nature of our business. We also are subject to audits by various vendor partners and customers, including government agencies, relating to purchases, sales, data privacy and compliance under various contracts. In addition, we are subject to indemnification claims under various contracts.
We also are subject to audits by various vendor partners and customers, including government agencies, relating to purchases, sales, data privacy and compliance under various contracts. In addition, we are subject to indemnification claims under various contracts.
We may fail to design or execute a service in accordance with our contract which results in an error or omission, or in accordance with professional standards which may bring harm to our customers.
We provide consulting services, project related services, service desk and managed services, and staffing to our customers. We may fail to design or execute a service in accordance with our contract which results in an error or omission, or in accordance with professional standards which may bring harm to our customers.
A material adverse effect on our business, financial position, results of operations and cash flows could result from one or more such customers’ failure to pay amounts due to us, reducing amounts purchased from us, or ceasing to purchase from us.
A material adverse effect on our business, financial position, results of operations and cash flows could result from one or more such customers’ failing to pay amounts due to us, reducing or ceasing to purchase from us, or if we experience a material adverse change in the profitability of sales to our customers.
We could incur additional expenses when new laws or regulations regarding the use, safeguarding, or privacy of information are enacted, or interpreted if governmental agencies require us to substantially modify our privacy or security practices.
Other liability could include claims alleging misrepresentation of our privacy and data security practices. Any such liability could decrease our profitability. We could incur additional expenses when new laws or regulations regarding the use, safeguarding, or privacy of information are enacted or interpreted if governmental agencies require us to substantially modify our privacy or security practices.
As of March 31, 2024, and 2023, our accounts receivable-trade balance included approximately 17% and 13%, respectively, concentration of invoices due from Verizon Communications Inc.
On both March 31, 2025, and March 31, 2024, our accounts receivable-trade balance included a concentration of approximately 17% of invoices due from Verizon Communications Inc.
To the extent that a vendor’s offering that is highly in demand is not available to us for resale in one or more customer channels, and there is not a competitive offering from another vendor that we are authorized to sell in such customer channels, or we are unable to develop relationships with new technology providers or companies that we have not historically represented, or we partner with a vendor that is not in demand or the demand for whose products significantly decreases, our business, results of operations, or cash flows could be adversely impacted. 22 Table of Contents Changes in the IT industry, customers’ usage or procurement of IT, and/or rapid changes in product standards may result in reduced demand for the IT hardware and software solutions and services we sell as well as financing.
To the extent that a vendor’s offering that is highly in demand is not available to us for resale in one or more customer channels, and there is not a competitive offering from another vendor that we are authorized to sell in such customer channels, or we are unable to develop relationships with new technology providers or companies that we have not historically represented, or we partner with a vendor that is not in demand or the demand for whose products significantly decreases, our business, results of operations, or cash flows could be adversely impacted. 18 Table of Contents Cloud offerings may influence our customers to move workloads to cloud providers, which may reduce the procurement of products and services from us.
Many current competitors may have, and potential competitors may have, greater name recognition, greater financial, technical, research and development or other resources, engage in more extensive promotional marketing and advertising activities, offer more attractive terms to customers, broader distribution and established relationships with vendors and end customers, the ability to leverage their sales efforts across a broader portfolio of products, and adopt more aggressive pricing and credit policies than we do.
As compared to us, our current and potential competitors may engage in more extensive promotional marketing and advertising activities, offer more attractive terms to customers, adopt more aggressive pricing and credit policies, have broader distribution and established relationships with vendors and end customers, and have greater ability to leverage their sales efforts across a broader portfolio of products.
We depend on continued innovations in hardware, software, and service offerings by our vendors, as well as the competitiveness of their offerings and our ability to partner with new and emerging technology providers.
We depend on continued competitive innovations in hardware, software, and service offerings by our vendors, and our ability to partner with new and emerging technology providers and adapt to changes in the IT industry.
In addition, our lenders may no longer be willing to provide funding under our current terms and conditions and may demand updated terms and conditions that negatively impact our ability to consummate a financing transaction with our customers.
In addition, our lenders may no longer be willing to provide funding under our current terms and conditions and may demand updated terms and conditions that negatively impact our ability to consummate a financing transaction with our customers. The DOGE is currently reducing federal government spend resulting in early terminations of financing contracts.
Changes in interest rates, the federal government’s early termination of contracts, or other factors may make it more difficult or impossible for us to find or maintain lenders needed for us to profitably finance leasing solutions where the government is the end-user, which may have an adverse effect on our business, results of operations or cash flows.
Changes in interest rates, which may be driven by the downgrade of the US debt rating, the federal government’s early termination of contracts, or other factors may make it more difficult or impossible for us to find or maintain lenders needed for us to profitably finance leasing solutions where the government may be the end-user, which may have an adverse effect on our business, results of operations or cash flows. 19 Table of Contents RISKS RELATED TO LAWS AND REGULATIONS Failure to comply with new laws or changes to existing laws may adversely impact our business.
There can be no assurance that we will continue to repurchase shares of our common stock and, therefore, the future realization of a gain on your investment will depend entirely on the appreciation of the price of our common stock, which may never occur. 25 Table of Contents Future offerings of debt or equity securities, which would rank senior to our common stock, may adversely affect the market price of our common stock.
There can be no assurance that we will continue to repurchase shares of our common stock and, therefore, the future realization of a gain on our shareholders’ investment will depend entirely on the appreciation of the price of our common stock, which may never occur.
Our products and services require a sophisticated sales effort and significant technical engineering talent. For example, our sales and engineering candidates must possess a high degree of technical acumen, including hardware and software knowledge, to create customized solutions for our customers’ business processes. Competition for qualified sales, marketing and engineering personnel fluctuates depending on market conditions.
For example, our sales and engineering candidates must possess consultative experience and a high degree of technical acumen, including hardware and software knowledge, to create customized solutions for our customers’ business processes. Competition for qualified sales, marketing and engineering personnel fluctuates depending on market conditions. We are currently experiencing a competitive labor market for certain sales and technical roles.
Additionally, as our customers and vendors implement policies and processes for their own compliance with current, anticipated, and pending laws and regulations, they may impose requirements on us, which we may not be able to timely and cost-effectively fulfill. 23 Table of Contents We may not adequately protect ourselves through our contract vehicles, or our insurance policies may not be adequate to address potential losses or claims.
Additionally, as our customers and vendors implement policies and processes for their own compliance with current, anticipated, and pending laws and regulations, they may impose requirements on us, which we may not be able to timely and cost-effectively fulfill.
Many of our customers may be susceptible to changes in their industries, challenges to their business models, economic slowdowns or recessions, or other adverse events and may be unable to pay for their purchases or repay the leases or notes receivable or multi-year agreements such as maintenance or software subscription agreements to us or repayment may be extended by our customers or us.
Many of our customers may experience financial losses and may be unable to pay for their purchases or repay the leases or notes receivable or multi-year agreements such as maintenance or software subscription agreements to us or repayment may be extended by our customers or us.
Factors not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, results of operations and cash flows. RISKS SPECIFIC TO OUR BUSINESS If one or more of our large volume customers significantly reduces purchasing from us, our results of operations may be affected.
Factors not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, results of operations and cash flows.
A substantial portion of our revenue within our technology business segments depend on a small number of key vendors. Products manufactured by Cisco Systems represented approximately 44%, 40%, and 39% of net sales of our combined technology business segments for the years ended March 31, 2024, 2023, and 2022, respectively.
Products manufactured by Cisco Systems represented approximately 32%, 44%, and 40% of net sales of our combined technology business segments for the years ended March 31, 2025, 2024, and 2023, respectively.
Vendor funding is used to offset inventory costs, costs of goods sold, marketing costs and other operating expenses. Certain of these funds are based on our volume of purchases, growth rate of purchases, and marketing programs.
These programs are usually of finite terms and may not be renewed or may be discontinued or changed in ways that adversely affect us. Vendor funding is used to offset inventory costs, costs of goods sold, marketing costs and other operating expenses. Certain of these funds are based on our volume of purchases, growth rate of purchases, and marketing programs.
Further, we may provide customized solutions and services that are solely reliant on our own marketing, design, and fulfillment services, and we may lack the skills or personnel to execute.
Further, we may provide customized solutions and services that are solely reliant on our own marketing, design, and fulfillment services, and we may lack the skills or personnel to execute. Our failure to innovate and provide bespoke value to our customers may erode our competitive position, market share and lead to reduced revenue and financial performance.
Supply chain issues, including a shortage of IT products and available services, may increase our costs or cause a delay in purchasing IT products needed to support our internal infrastructure or operations, resulting in an impact on our technology operations and availability of our IT systems, which could result in an adverse effect on our operations and financial results.
As we do not stock inventory that is not related to an order we have received from our customers, we depend upon the supply of products available from our vendors to fulfill orders from our customers on a timely basis. 11 Table of Contents Supply chain issues, including a shortage of IT products and available services, may increase our costs or cause a delay in purchasing IT products needed to support our internal infrastructure or operations, resulting in an impact on our technology operations and availability of our IT systems, which could result in an adverse effect on our operations and financial results.
AI technologies are complex and rapidly evolving, and we face significant competition in the market and from other companies regarding such technologies. 19 Table of Contents If we are unable to identify acquisition candidates, or perform sufficient due diligence prior to completing an acquisition, or fail to successfully integrate a completed acquisition, or identify an opportunity for or successfully complete an asset disposition, our earnings may be affected.
If we are unable to identify acquisition candidates, or perform sufficient due diligence prior to completing an acquisition, or fail to successfully integrate a completed acquisition, or identify an opportunity for or successfully complete an asset disposition, our earnings may be affected. Mergers and acquisitions are significant factors in our growth strategy.
In addition, we operate in facilities which may contain both business-critical data and confidential information of our customers and third parties, such as data center colocation and hosted solution partners.
In addition, we operate in facilities which may contain both business-critical data and confidential information of our customers and third parties, such as data center colocation and hosted solution partners. A natural disaster or other adverse event at locations such as these or third-party provider locations could negatively impact our business, results of operations or cash flows.
If we are unable to pass these increases to our customers, our financial results may be adversely affected. We provide certain professional and managed services under fixed price contracts. If we fail to accurately estimate our costs, including due to wage or other inflation, the profitability of our contracts may be adversely affected.
New laws requiring public posting of compensation information may also contribute to wage increases. If we are unable to pass these increases to our customers, our financial results may be adversely affected. We provide certain professional and managed services under fixed price contracts.
We depend on having creditworthy customers to avoid an adverse impact on our operating results and financial condition. Our financing business segment and our technology business segments require sufficient amounts of debt or equity capital to fund our equipment purchases.
Additionally, in some cases our relationship with a customer may be impacted by turnover in our sales or engineering teams. We depend on having creditworthy customers to avoid an adverse impact on our operating results and financial condition. Our financing business segment and our technology business segments require capital to fund our equipment purchases.
In addition, some of these competitors may be able to respond more quickly to new or changing opportunities, technologies, and customer requirements such as generative artificial intelligence.
In addition, some of these competitors may be able to respond more quickly to new or changing opportunities, technologies, and customer requirements such as generative AI. Many current competitors may have, and potential competitors may have, greater name recognition, greater financial, technical, research and development or other resources that we do.
Issues relating to the use or capabilities of artificial intelligence, including legal, social, and ethical issues, in hardware, software and services offerings may result in reputational harm and liability and increased costs.
There can be no assurance that such financing will continue to be available to us in the future and on acceptable terms. Issues relating to the use or capabilities of AI, including legal, social, ethical, and accuracy issues, in hardware, software and services offerings may result in reputational harm and liability and increased costs.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFurthermore, we believe strongly in a supportive culture of security, whereby all e Plus employees maintain a role in our corporate cybersecurity posture, including but not limited to their participation in periodic training and risk management exercises throughout the year.
Biggest changeFurthermore, we believe strongly in a supportive and collaborative culture of security, whereby all our employees maintain a role in our corporate cybersecurity posture, including but not limited to their participation in periodic training and risk management exercises throughout the year. 22 Table of Contents The processes overseen by our information security team are integrated with our enterprise risk management (“ERM”) program, including routine reporting to our executive team on cyber risk through the different levels of our ERM governance structure including our risk management frameworks and processes.
We maintain cybersecurity insurance coverage that we believe is appropriate for the size and complexity of our business to cover certain costs related to the remediation of cybersecurity incidents. Our Board of Directors has ultimate oversight of our cybersecurity risk, which it oversees as part of our ERM program.
We maintain cybersecurity insurance coverage that we believe is appropriate for the size and complexity of our business to cover certain costs related to the remediation of cybersecurity incidents. Our Board has ultimate oversight of our cybersecurity risk, which it oversees as part of our ERM program.
Depending on the criticality of a cybersecurity incident and in accordance with our incident response plan, certain matters are required to be reported promptly to the Board of Directors, as appropriate.
Depending on the criticality of a cybersecurity incident and in accordance with our incident response plan, certain matters are required to be reported promptly to the Board, as appropriate.
We have a dedicated team of information security professionals (our “information security team”) who lead our enterprise-wide cybersecurity strategy, which includes risk management, cyber defense, software security, security monitoring and other related functions. This team is overseen by our Senior Director of Information Security (“SDIS”) who reports to our Chief Information Officer (“CIO”).
We have a dedicated team of information security professionals (our “information security team”) who lead our enterprise-wide cybersecurity strategy, which includes risk management, cyber defense, systems security, security monitoring and other related functions. This team is overseen by our Senior Director of Information Security (“SDIS”) who reports to our Chief Information Officer (“CIO”).
As a technology services provider, we are faced with a multitude of diverse cybersecurity threats that range from common attacks such as ransomware, denial of service, and social engineering to more advanced attacks from nation state actors that might target our ecosystem through specific industry verticals.
As a technology services provider, we are faced with a multitude of diverse cybersecurity threats that range from common attacks such as ransomware, denial of service, and social engineering to more advanced attacks leveraging sophisticated AI-enabled tools from nation-state actors that might target our ecosystem through specific industry verticals.
As of the date of this report, we are not aware of any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, financial condition, or our brand. However, we cannot provide assurance that such threats will not result in such an impact in the future.
As of the date of this report, we are not aware of any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, financial condition, or our brand.
The CIO and SDIS regularly provide reporting on cybersecurity to both our executive management and our Board of Directors. This reporting includes updates on our information security strategy and organizational structure, key cyber risks and threats, progress related to various initiatives designed to protect us from such risks and threats, assessments of our cybersecurity program and emerging trends.
This reporting includes updates on our information security strategy and organizational structure, key cyber risks and threats, progress related to various initiatives designed to protect us from such risks and threats, assessments of our cybersecurity program and emerging trends, including those related to the use of AI as both a threat and a defense mechanism.
In addition to our policies and procedures designed to manage and identify cybersecurity risks, we maintain an incident response plan designed to contain, analyze, remediate, and communicate cybersecurity matters to help ensure a timely and appropriate response to cybersecurity incidents. 26 Table of Contents Additionally, we engage third-party firms to conduct routine external and internal penetration testing of our information systems to emulate the common tactics and techniques of cyber threat actors and we have developed processes to remediate identified vulnerabilities across a wide range of severities.
Additionally, we engage third-party firms to conduct routine external and internal penetration testing of our information systems to emulate the common tactics and techniques of cyber threat actors, and we have developed processes to remediate identified vulnerabilities across a wide range of severities.
For more information regarding risks relating to information technology and cybersecurity, please refer to Item 1A . “Risk Factors.”
However, we cannot provide assurance that such threats will not be discovered, occur, or result in such an impact in the future. For more information regarding risks relating to information technology and cybersecurity, please refer to Item 1A . “Risk Factors.”
Removed
The processes overseen by our information security team are integrated with our enterprise risk management (“ERM”) program, including routine reporting to our executive team on cyber risk through the different levels of our ERM governance structure including our risk management frameworks and processes.
Added
In addition to our policies and procedures designed to manage and identify cybersecurity risks, we maintain an incident response plan designed to contain, analyze, remediate, and communicate cybersecurity matters to help ensure a timely and appropriate response to cybersecurity incidents.
Added
The CIO and SDIS regularly provide reporting on cybersecurity to both our executive management and our Board.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur leases expire at varying dates over the next 10 years. We have certain employees that work at customer sites, their homes, or other locations. Additionally, we utilize coworking spaces in certain cities. Our largest office space is our headquarters in Herndon, Virginia. Our lease on this space terminates on December 31, 2026.
Biggest changeOur leases expire at varying dates over the next 10 years. We have certain employees that work at customer sites, their homes, or other locations. Additionally, we utilize coworking spaces in certain cities. We anticipate no difficulty in retaining occupancy through lease renewals, month-to-month occupancy, or replacing leased properties with equivalent properties.
ITEM 2. PROPERTIES As of March 31, 2024, we leased a total of 292 thousand square feet of office and warehouse space across 19 properties, primarily in the US, that are used in common by our technology business segments- product, professional services, and managed services- and our financing business segment.
ITEM 2. PROPERTIES As of March 31, 2025, we leased a total of 545 thousand square feet of office and warehouse space across 24 properties, primarily in the US, that are used in common by our technology business segments- product, professional services, and managed services- and our financing business segment.
We anticipate no difficulty in retaining occupancy through lease renewals, month-to-month occupancy, or replacing leased properties with equivalent properties. We believe that suitable additional or substitute leased properties will be available as required.
We believe that suitable additional or substitute leased properties will be available as required.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs (2) January 1, 2024 through January 31, 2024 - $ - - 956,602 February 1, 2024 through February 28, 2024 574 $ 64.89 574 956,028 March 1, 2024 through March 31, 2024 - $ - - 956,028 Total 574 574 (1) All shares were acquired in open-market purchases.
Biggest changePeriod Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs (2) January 1, 2025 through January 31, 2025 87,033 $ 77.89 87,033 782,445 February 1, 2025 through February 28, 2025 89,454 $ 70.76 89,454 692,991 March 1, 2025 through March 31, 2025 - $ - - 692,991 Total 176,487 176,487 (1) All shares were acquired in open-market purchases.
Any future determination concerning the payment of dividends will depend upon our financial condition, results of operations, capital requirements and any other factors deemed relevant by our Board. PURCHASES OF OUR COMMON STOCK The following table provides information regarding our purchases of our common stock during the three months ended March 31, 2024.
Any future determination concerning the payment of dividends will depend upon our financial condition, results of operations, capital requirements and any other factors deemed relevant by our Board. PURCHASES OF OUR COMMON STOCK The following table provides information regarding our purchases of our common stock during the three months ended March 31, 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION On March 31, 2024, our common stock traded on the NASDAQ Global Select Market under the symbol “PLUS.” On May 7, 2024, there were 247 stockholders of record of our common stock, although there is a much larger number of beneficial owners.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION On March 31, 2025, our common stock traded on the NASDAQ Global Select Market under the symbol “PLUS.” On May 7, 2025, there were 257 stockholders of record of our common stock, although there is a much larger number of beneficial owners.
DIVIDEND POLICIES AND RESTRICTIONS We did not pay any cash dividends on our common stock during the fiscal years ended March 31, 2024, and 2023. Holders of our common stock are entitled to dividends if and when declared by our Board of Directors (“Board”), out of funds legally available.
DIVIDEND POLICIES AND RESTRICTIONS We did not pay any cash dividends on our common stock during the fiscal years ended March 31, 2025, and 2024. Holders of our common stock are entitled to dividends if and when declared by our Board, out of funds legally available.
(2) The amounts presented in this column are the remaining number of shares that may be repurchased after repurchases during the month. On March 22, 2023, our Board authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, over a 12-month period beginning May 28, 2023.
(2) The amounts presented in this column are the remaining number of shares that may be repurchased after repurchases during the month. On May 18, 2024, our Board authorized the repurchase of up to 1,250,000 shares of our outstanding common stock, over a 12-month period beginning on May 28, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe expect to continue to expand by hiring additional staff for specific targeted market areas and roles whenever we can find both experienced personnel and desirable geographic areas over the longer term, which may impact our operating results. 34 Table of Contents SEGMENT RESULTS OF OPERATIONS The Year Ended March 31, 2024, Compared to the Year Ended March 31, 2023 TECHNOLOGY BUSINESS SEGMENTS The results of operations for our technology business segments were as follows (in thousands): Year ended March 31, 2024 2023 Change Percent Change Financial metrics Net sales Product $ 1,883,809 $ 1,750,802 $ 133,007 7.6 % Professional services 154,549 151,785 2,764 1.8 % Managed services 137,528 112,658 24,870 22.1 % Total $ 2,175,886 $ 2,015,245 $ 160,641 8.0 % Gross Profit Product 397,618 380,741 16,877 4.4 % Professional services 68,194 61,594 6,600 10.7 % Managed services 42,667 32,155 10,512 32.7 % Total 508,479 474,490 33,989 7.2 % Selling, general, and administrative 353,540 317,885 35,655 11.2 % Depreciation and amortization 20,951 13,598 7,353 54.1 % Interest and financing costs 1,428 2,897 (1,469 ) (50.7 %) Operating expenses 375,919 334,380 41,539 12.4 % Operating income $ 132,560 $ 140,110 $ (7,550 ) (5.4 %) Key metrics & other information Gross billings $ 3,329,764 $ 3,145,888 $ 183,876 5.8 % Adjusted EBITDA $ 164,409 $ 164,184 $ 225 0.1 % Product margin 21.1 % 21.7 % Professional services margin 44.1 % 40.6 % Managed services margin 31.0 % 28.5 % Net sales by customer end market: Telecom, media & entertainment $ 547,525 $ 532,921 $ 14,604 2.7 % Technology 379,720 393,594 (13,874 ) (3.5 %) SLED 329,617 290,624 38,993 13.4 % Healthcare 278,893 274,936 3,957 1.4 % Financial services 243,630 156,257 87,373 55.9 % All others 396,501 366,913 29,588 8.1 % Total $ 2,175,886 2,015,245 160,641 8.0 % Net sales by type: Networking $ 1,005,679 $ 803,678 $ 202,001 25.1 % Cloud 546,341 587,097 (40,756 ) (6.9 %) Security 193,956 214,459 (20,503 ) (9.6 %) Collaboration 65,714 57,472 8,242 14.3 % Other 72,119 88,096 (15,977 ) (18.1 %) Total products 1,883,809 1,750,802 133,007 7.6 % Professional services 154,549 151,785 2,764 1.8 % Managed services 137,528 112,658 24,870 22.1 % Total $ 2,175,886 $ 2,015,245 $ 160,641 8.0 % Net sales : Net sales of the combined technology business segments for the year ended March 31, 2024, increased compared to the year ended March 31, 2023, driven by demand from customers in telecom, media, and entertainment, SLED, financial services, and healthcare industries, offset by decreased volume with customers in the technology industry.
Biggest changeSEGMENT RESULTS OF OPERATIONS The Year Ended March 31, 2025, Compared to the Year Ended March 31, 2024 TECHNOLOGY BUSINESS SEGMENTS The results of operations for our technology business segments were as follows (in thousands): Year ended March 31, 2025 2024 Change Percent Change Financial metrics Net sales Product $ 1,608,768 $ 1,883,809 $ (275,041 ) (14.6 )% Professional services 229,030 154,549 74,481 48.2 % Managed services 171,347 137,528 33,819 24.6 % Total $ 2,009,145 $ 2,175,886 $ (166,741 ) (7.7 )% Gross Profit Product 373,557 397,618 (24,061 ) (6.1 )% Professional services 90,517 68,194 22,323 32.7 % Managed services 51,307 42,667 8,640 20.2 % Total 515,381 508,479 6,902 1.4 % Selling, general, and administrative 383,335 353,540 29,795 8.4 % Depreciation and amortization 25,753 20,951 4,802 22.9 % Interest and financing costs - 1,428 (1,428 ) (100.0 )% Operating expenses 409,088 375,919 33,169 8.8 % Operating income $ 106,293 132,560 $ (26,267 ) (19.8 )% Key metrics & other information Gross billings $ 3,280,447 $ 3,329,764 $ (49,317 ) (1.5 )% Adjusted EBITDA $ 142,843 $ 164,409 $ (21,566 ) (13.1 )% Product margin 23.2 % 21.1 % Professional services margin 39.5 % 44.1 % Managed services margin 29.9 % 31.0 % Net sales by customer end market: Telecom, media & entertainment $ 453,892 $ 547,525 $ (93,633 ) (17.1 )% SLED 333,371 329,617 3,754 1.1 % Technology 300,465 379,720 (79,255 ) (20.9 )% Healthcare 286,474 278,893 7,581 2.7 % Financial services 174,798 243,630 (68,832 ) (28.3 )% All others 460,145 396,501 63,644 16.1 % Total $ 2,009,145 2,175,886 (166,741 ) (7.7 )% Net sales by type: Networking $ 781,703 $ 1,005,679 $ (223,976 ) (22.3 )% Cloud 509,774 546,341 (36,567 ) (6.7 )% Security 191,872 193,956 (2,084 ) (1.1 )% Collaboration 55,483 65,714 (10,231 ) (15.6 )% Other 69,936 72,119 (2,183 ) (3.0 )% Total products 1,608,768 1,883,809 (275,041 ) (14.6 )% Professional services 229,030 154,549 74,481 48.2 % Managed services 171,347 137,528 33,819 24.6 % Total $ 2,009,145 $ 2,175,886 $ (166,741 ) (7.7 )% 32 Table of Contents Net sales : Net sales of the combined technology business segments for the year ended March 31, 2025, decreased compared to the year ended March 31, 2024, due to decreased net sales to customers in telecom, media, and entertainment, technology, and financial service industries, offset by increased net sales to customers in the SLED and healthcare industries.
Our borrowings and repayments under the revolving credit facility are included in “borrowings of non-recourse and recourse notes payable” and “repayments of non-recourse and recourse notes payable,” respectively, within cash flows from the financing activities in our consolidated statements of cash flows.
Revolving credit facility Our borrowings and repayments under the revolving credit facility are included in “borrowings of non-recourse and recourse notes payable” and “repayments of non-recourse and recourse notes payable,” respectively, within cash flows from the financing activities in our consolidated statements of cash flows.
Additionally, while our lending partners in our financing segment continue to be discerning in their approval processes, we currently have funding resources available for our transactions. POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS Our future quarterly operating results and the market price of our common stock may fluctuate.
Additionally, while our lending partners in our financing business segment continue to be discerning in their approval processes, we currently have funding resources available for our transactions. POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS Our future quarterly operating results and the market price of our common stock may fluctuate.
We believe that comparisons of quarterly results of our operations are not necessarily meaningful and that results for one quarter should not be relied upon as an indication of future performance. CONTRACTUAL OBLIGATIONS Our material contractual obligations consist of payments on recourse and non-recourse notes payable and lease liabilities.
We believe that comparisons of quarterly results of our operations are not necessarily meaningful and that results for one quarter should not be relied upon as an indication of future performance. CONTRACTUAL OBLIGATIONS Our material contractual obligations consist of payments non-recourse notes payable and lease liabilities.
Adjusted EBITDA presented for the technology business and the financing business segment is defined as operating income calculated in accordance with US GAAP, adjusted for interest expense, share-based compensation, acquisition and integration expenses, and depreciation and amortization.
Adjusted EBITDA presented for the technology business segments and the financing business segment is defined as operating income calculated in accordance with US GAAP, adjusted for interest expense, share-based compensation, acquisition and integration expenses, and depreciation and amortization.
Cash flows from financing activities During the year ended March 31, 2024, we used $36.6 million in financing activities, consisting of $47.4 million repayments on the floor plan component of our WFCDF Credit Facility, $6.0 million to pay off an installment payment arrangement within our technology business, and $9.9 million to repurchase outstanding shares of our common stock, partially offset by $23.7 million in net borrowings of non-recourse and recourse notes payable in our financing segment, and $3.0 million in proceeds of issuance of common stock to employees under an employee stock purchase plan.
During the year ended March 31, 2024, we used $36.6 million in financing activities, consisting of $47.4 million repayments on the floor plan component of our WFCDF Credit Facility, $6.0 million to pay off an installment payment arrangement within our technology business, and $9.9 million to repurchase outstanding shares of our common stock, partially offset by $23.7 million in net borrowings of non-recourse and recourse notes payable in our financing segment, and $3.0 million in proceeds of issuance of common stock to employees under an employee stock purchase plan.
As a result, we may require additional financing to fund our strategy, implementation, potential future acquisitions, and working capital needs, which may include additional debt and equity financing. While the future is uncertain, we do not believe our WFCDF Credit Facility will be terminated by WFCDF or us.
As a result, we may require additional financing to fund our strategy, implementation, potential future acquisitions, and working capital needs, which may include additional debt and equity financing. While the future is uncertain, we do not expect our WFCDF Credit Facility will be terminated by WFCDF or us.
We believe that cash on hand and funds generated from operations, together with available credit under our credit facility, will be enough to finance our working capital, capital expenditures, and other requirements for at least the next year.
We believe that cash on hand and funds generated from operations, together with available credit under our credit facility, will be sufficient to finance our working capital, capital expenditures, and other requirements for at least the next year.
Our DSOs for the quarters ended March 31, 2024, and 2023 were greater than our standard payment terms primarily due to a significant proportion of sales in those quarters to customers with payment terms greater than or equal to net 60 days.
Our DSOs for the quarters ended March 31, 2025, and 2024 were greater than our standard payment terms primarily due to a significant proportion of sales in those quarters to customers with payment terms greater than or equal to net 60 days.
Floor plan facility We finance most purchases of products for sale to our customers through the floor plan facility. Once our customers place a purchase order with us and we have approved their credit, we place an order for the desired products with one of our vendors.
Floor plan facility We finance most purchases of products for sale to our customers through the floor plan facility. Once our customer places a purchase order with us and we have approved their credit, we place an order for the desired products with one of our vendors.
We utilize qualified attorneys to provide a true-sale-at-law opinion to support the conclusion that transferred financial assets have been legally isolated. 43 Table of Contents RESIDUAL ASSETS — Our estimate for the residual asset in a lease is the amount we expect to derive from the underlying asset following the end of the lease term.
We utilize qualified attorneys to provide a true-sale-at-law opinion to support the conclusion that transferred financial assets have been legally isolated. RESIDUAL ASSETS — Our estimate for the residual asset in a lease is the amount we expect to derive from the underlying asset following the end of the lease term.
Cash flows related to investing activities During the year ended March 31, 2024, we used $62.0 million in investing activities, consisting of $54.2 million to acquire businesses and $8.5 million for purchases of property, equipment, and operating lease equipment, partially offset by $0.7 million of proceeds from the sale of property, equipment, and operating lease equipment.
During the year ended March 31, 2024, we used $62.0 million in investing activities, consisting of $54.2 million to acquire businesses and $8.5 million for purchases of property, equipment, and operating lease equipment, partially offset by $0.7 million of proceeds from the sale of property, equipment, and operating lease equipment.
The increase in net sales was driven by higher revenues from our technology business segments- product, professional services, and managed services, offset by lower revenues from our financing business segment. For additional information, see the “Segment Results of Operations” below.
The decrease in net sales was driven by lower product revenues offset by higher managed services and professional services revenue from our technology business segments, and higher revenues from our financing business segment. For additional information, see the “Segment Results of Operations” below.
To manage our working capital, we monitor our cash conversion cycle for our technology segment, which is defined as days sales outstanding (“DSO”) in accounts receivable plus days of supply in inventory (“DIO”) minus days of purchases outstanding in accounts payable (“DPO”).
To manage our working capital, we monitor our cash conversion cycle for our technology business segments, which is defined as days sales outstanding (“DSO”) in accounts receivable plus days of supply in inventory (“DIO”) minus days of purchases outstanding in accounts payable (“DPO”).
ITEM 7. M ANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of the financial condition and results of operations (the “financial review”) of e Plus is intended to help investors understand our company and our operations.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of the financial condition and results of operations (the “financial review”) of e Plus is intended to help investors understand our company and our operations.
To preserve our expected internal rate of return, we generally quote rates that are indexed. Some of our lenders will not commit to rates for a length of time, resulting in exposure to us if the rates rise and we cannot pass such exposure to the customer.
To preserve our expected internal rate of return, we generally quote rates that are indexed. Some of our lenders will not commit to rates for a length of time, resulting in exposure to us if the interest rates rise and we cannot pass all or part of such increased interest rates to the customer.
Such accounting policies require significant judgments, assumptions, and estimates, and actual results could differ materially from the amounts reported based on these policies. REVENUE RECOGNITION — When we enter into contracts with customers, we are required to identify the performance obligations in the contract.
The accounting policies described below are significantly affected by critical accounting estimates. Such accounting policies require significant judgments, assumptions, and estimates, and actual results could differ materially from the amounts reported based on these policies. REVENUE RECOGNITION — When we enter into contracts with customers, we are required to identify the performance obligations in the contract.
Set forth in footnotes (1) and (2) of the tables that immediately follow the next paragraph, we set forth our reasons for using and presenting Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share-diluted in the tables and discussion that follow.
In footnotes (1) and (2) of the tables that immediately follow the next paragraph are our reasons for using and presenting Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share-diluted.
Selling, general, and administrative expenses : Selling, general, and administrative expenses for the year ended March 31, 2024 , for the technology business, increased compared to the year ended March 31, 2023, mainly due to increases in salaries and benefits.
Selling, general, and administrative expenses : Selling, general, and administrative expenses for the year ended March 31, 2025 , for our technology business segments, increased compared to the year ended March 31, 2024, mainly due to increases in salaries and benefits.
The following table presents the components of the cash conversion cycle for our technology business segments: As of March 31, 2024 2023 (DSO) Days sales outstanding (1) 62 74 (DIO) Days inventory outstanding (2) 23 38 (DPO) Days payable outstanding (3) (39) (53) Cash conversion cycle 46 59 (1) Represents the rolling three-month average of the balance of trade accounts receivable-trade, net for our technology business segments at the end of the period divided by Gross billings for the same three-month period.
The following table presents the components of the cash conversion cycle for our technology business segments: As of March 31, 2025 2024 (DSO) Days sales outstanding (1) 66 62 (DIO) Days inventory outstanding (2) 14 23 (DPO) Days payable outstanding (3) (51 ) (39 ) Cash conversion cycle 29 46 (1) Represents the rolling three-month average of the balance of trade accounts receivable-trade, net for our technology business segments at the end of the period divided by Gross billings for the same three-month period.
The income approach incorporates the use of a discounted cash flow method in which the estimated future cash flows and terminal values for each reporting unit are discounted to a present value using a discount rate.
We estimate the fair value of each reporting unit using a combination of the income approach and market approaches. The income approach incorporates the use of a discounted cash flow method in which the estimated future cash flows and terminal values for each reporting unit are discounted to a present value using a discount rate.
Financing business segment Our financing business segment offers financing solutions to corporations, government contractors, and SLED institutions in the US, which accounts for most of our transactions, and to corporations in select international markets including Canada, the UK, and the EU.
Financing business segment Our financing business segment offers financing solutions to corporations, government contractors in arrangements where the federal government is the end user, and SLED institutions in the US, which accounts for most of our transactions, and to corporations in select international markets including Canada, the UK, and the EU.
We believe that the most important of these measures and ratios include net sales, gross profit and margin, operating income margin, net earnings, and net earnings per common share, in each case based on information prepared in accordance with US GAAP, as well as the non-GAAP financial measures and ratios, including Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share - diluted.
We believe that the most important of these measures and ratios include net sales, gross profit and margin, operating income margin, net earnings, and net earnings per common share, in each case based on information prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”), as well as the non-GAAP financial measures and ratios, including Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share - diluted.
Please refer to Note 9 , “Notes Payable and Credit Facility” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information concerning our WFCDF Credit Facility.
The WFCDF Credit Facility has a floor plan facility and a revolving credit facility. 38 Table of Contents Please refer to Note 9 , “Notes Payable and Credit Facility” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information concerning our WFCDF Credit Facility.
Gross profit : Gross profit of the combined technology business segments for the year ended March 31, 2024 , increased compared to the year ended March 31, 2023, due to the increase in product, professional service, and managed service sales.
Gross profit : Gross profit of the combined technology business segments for the year ended March 31, 2025 , increased compared to the year ended March 31, 2024, due to an increase in professional and managed service sales, offset by decrease in product sales.
Managed services segment sales for the year ended March 31, 2024, increased compared to the year ended March 31, 2023, due to ongoing expansion of these service offerings primarily related to ongoing growth in enhanced maintenance support, service desk, and security operations center revenues.
Managed services segment sales for the year ended March 31, 2025, increased compared to the year ended March 31, 2024, due to ongoing expansion of these service offerings, primarily related to ongoing growth in enhanced maintenance support, cloud services, and service desk services.
Interest and financing costs : Interest and financing costs for the year ended March 31, 2024 , decreased, compared to the year ended March 31, 2023, due to lower average borrowings outstanding during the year under our WFCDF Credit Facility offset by higher interest rates.
Interest and financing costs : Interest and financing costs for the year ended March 31, 2025 , decreased, compared to the year ended March 31, 2024, due to lower average borrowings outstanding during the year under our WFCDF Credit Facility.
In the table below, we provide a reconciliation of Adjusted EBITDA to net earnings, which is the most directly comparable financial measure to this non-GAAP financial measure.
In the table below, we provide a reconciliation of Adjusted EBITDA to net earnings, which is the most directly comparable financial measure to this non-GAAP financial measure. Adjusted EBITDA margin is our calculation of Adjusted EBITDA divided by net sales.
We may also open facilities in new geographic areas, which may require a significant investment of cash. We may also acquire technology companies to expand and enhance our geographic footprint, or the platform of bundled solutions to provide additional functionality and value-added services. We may require additional capital due to increases in inventory to accommodate our customers’ IT installation schedules.
We may also acquire technology companies to expand and enhance our geographic footprint, or the platform of bundled solutions to provide additional functionality and value-added services. We may require additional capital due to increases in inventory to accommodate our customers’ IT installation schedules.
CREDIT FACILITY We finance the operations of our subsidiaries e Plus Technology, inc., e Plus Technology Services, inc. and SLAIT Consulting, LLC (collectively, the “Borrowers”) in our technology business segments through a credit facility with WFCDF. The WFCDF Credit Facility has a floor plan facility and a revolving credit facility.
CREDIT FACILITY We finance the operations of our subsidiaries e Plus Technology, inc. and e Plus Technology Services, inc. (collectively, the “Borrowers”) in our technology business segments through a credit facility with WFCDF.
We use gross billings as an operational metric to assess the volume of transactions or market share for our technology business segments—product, professional services, and managed services—as well as to understand changes in our accounts receivable and accounts payable. We believe gross billings will aid investors in the same manner.
We use gross billings as an operational metric to assess the volume of transactions or market share for our technology business segments—product, professional services, and managed services—as well as to understand changes in our accounts receivable and accounts payable balances and our statement of cash flows.
As of March 31, 2024, our non-recourse notes payable increased to $36.2 million from $34.3 million in the prior year. Our weighted average interest rate for non-recourse notes payable was 6.49% and 5.01% as of March 31, 2024, and 2023, respectively.
As of March 31, 2025, our non-recourse notes payable increased to $38.8 million from $36.2 million in the prior year. Our weighted average interest rate for non-recourse notes payable was 6.47% and 6.49% as of March 31, 2025, and 2024, respectively.
In certain assignment agreements, we may direct the third-party financial institution to pay some of the proceeds from the assignment directly to the vendor or vendors that have supplied the assets being leased or financed.
In certain assignment agreements, we may direct the third-party financial institution to pay some of the proceeds from the assignment directly to the vendor or vendors that have supplied the assets being leased or financed. In these situations, the portion of the proceeds paid directly to our vendors are non-cash transactions.
The programs we qualify for are generally set by our reseller authorization level with the vendor. The authorization level we achieve and maintain governs the types of products we can resell as well as such items as variable discounts applied against the list price, funds provided for the marketing of these products and other special promotions.
The authorization level we achieve and maintain governs the types of products we can resell as well as such items as variable discounts applied against the list price, funds provided for the marketing of these products and other special promotions.
Our significant accounting policies are described in Note 1 , “Organization and Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. The accounting policies described below are significantly affected by critical accounting estimates.
CRITICAL ACCOUNTING ESTIMATES Our consolidated financial statements have been prepared in accordance with US GAAP. Our significant accounting policies are described in Note 1 , “Organization and Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Please refer to Note 5 , “Lessee Accounting” and Note 9 , “Notes Payable and Credit Facility” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding the maturities of these obligations. 42 Table of Contents CRITICAL ACCOUNTING ESTIMATES Our consolidated financial statements have been prepared in accordance with US GAAP.
Please refer to Note 5 , “Lessee Accounting” and Note 9 , “Notes Payable and Credit Facility” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding the maturities of these obligations.
Financing revenue generally falls into the following three categories: • Portfolio income: Interest income from financing receivables and rents due under operating leases. • Transactional gains: Net gains or losses on the sale of financial assets. • Post-contract earnings: Month-to-month rents; early termination, prepayment, make-whole, or buyout fees; and the sale of off-lease (used) equipment.
Additionally, our financing business segment finances purchases of third-party software licenses, software assurance, maintenance, and other services. 31 Table of Contents Financing revenue generally falls into the following three categories: ● Portfolio income: Interest income from financing receivables and rents due under operating leases. ● Transactional gains: Net gains or losses on the sale of financial assets. ● Post-contract earnings: Month-to-month rents; early termination, prepayment, make-whole, or buyout fees; and the sale of off-lease (used) equipment.
Financing business segment: During the year ended March 31, 2024, our financing business segment used $0.5 million from operating activities, primarily due to net earnings and a decrease in accounts receivable, offset by an increase in financing receivables.
During the year ended March 31, 2024, our combined technology business segments provided $249.0 million from operating activities primarily due to net earnings and a decrease in inventory, offset by an increase in accounts receivable.
Such indicators may include: a significant decline in expected future cash flows; a sustained, significant decline in stock price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; the testing for recoverability of a significant asset group within a reporting unit; and reductions in revenue or profitability growth rates.
Such indicators may include: a significant decline in expected future cash flows; a sustained, significant decline in stock price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; the testing for recoverability of a significant asset group within a reporting unit; and reductions in revenue or profitability growth rates. 41 Table of Contents In the quantitative impairment test, we compare the fair value of a reporting unit with its carrying amount, including goodwill.
The following table provides our calculation of Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted (in thousands, except per share amounts): Year Ended March 31, 2024 2023 2022 GAAP: Earnings before tax $ 161,093 $ 162,974 $ 146,884 Share-based compensation 9,731 7,824 7,114 Acquisition related amortization expense 15,180 9,411 10,072 Other (income) expense (2,836 ) 3,188 432 Non-GAAP: Earnings before provision for income taxes 183,168 183,397 164,502 GAAP: Provision for income taxes 45,317 43,618 41,284 Share-based compensation 2,772 2,104 2,014 Acquisition related amortization expense 4,306 2,527 2,803 Other (income) expense (831 ) 950 120 Tax benefit (expense) on restricted stock 277 267 317 Non-GAAP: Provision for income taxes 51,841 49,466 46,538 Non-GAAP: Net earnings $ 131,327 $ 133,931 $ 117,964 Year Ended March 31, 2024 2023 2022 GAAP: Net earnings per common share - diluted $ 4.33 $ 4.48 $ 3.93 Share-based compensation 0.27 0.21 0.20 Acquisition related amortization expense 0.40 0.26 0.26 Other (income) expense (0.07 ) 0.08 0.01 Tax benefit (expense) on restricted stock (0.01 ) (0.01 ) (0.01 ) Total non-GAAP adjustments - net of tax 0.59 0.54 0.46 Non-GAAP: Net earnings per common share - diluted $ 4.92 $ 5.02 $ 4.39 (2) We define Adjusted EBITDA as net earnings calculated in accordance with US GAAP, adjusted for the following: interest expense, depreciation and amortization, share-based compensation, acquisition and integration expenses, provision for income taxes, and other (income) expense.
The following table provides our calculation of Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted (in thousands, except per share amounts): Year Ended March 31, 2025 2024 2023 GAAP: Earnings before tax $ 148,839 $ 161,093 $ 162,974 Share-based compensation 9,996 9,731 7,824 Acquisition related expenses 1,072 - - Acquisition related amortization expense 19,929 15,180 9,411 Other (income) expense—net (7,426 ) (2,836 ) 3,188 Non-GAAP: Earnings before provision for income taxes 172,410 183,168 183,397 GAAP: Provision for income taxes 40,861 45,317 43,618 Share-based compensation 2,742 2,772 2,104 Acquisition related expenses 300 - - Acquisition related amortization expense 5,495 4,306 2,527 Other (income) expense—net (1,990 ) (831 ) 950 Tax benefit (expense) on restricted stock 527 277 267 Non-GAAP: Provision for income taxes 47,935 51,841 49,466 Non-GAAP: Net earnings $ 124,475 $ 131,327 $ 133,931 28 Table of Contents Year Ended March 31, 2025 2024 2023 GAAP: Net earnings per common share - diluted $ 4.05 $ 4.33 $ 4.48 Share-based compensation 0.27 0.27 0.21 Acquisition related expenses 0.03 - - Acquisition related amortization expense 0.54 0.40 0.26 Other (income) expense—net (0.20 ) (0.07 ) 0.08 Tax benefit (expense) on restricted stock (0.02 ) (0.01 ) (0.01 ) Total non-GAAP adjustments - net of tax 0.62 0.59 0.54 Non-GAAP: Net earnings per common share - diluted $ 4.67 $ 4.92 $ 5.02 (2) We define Adjusted EBITDA as net earnings calculated in accordance with US GAAP, adjusted for the following: interest expense, depreciation and amortization, share-based compensation, acquisition and integration expenses, provision for income taxes, and other income.
We possess top-level engineering certifications with a broad range of leading IT vendors that enable us to offer IT solutions that are optimized for each of our customers’ specific requirements.
We are a reseller for thousands of manufacturers, which have enabled us to provide our customers with new and evolving IT solutions. We possess top-level IT engineering certifications with a broad range of leading IT vendors that enable us to offer IT solutions that are optimized for each of our customers’ specific requirements.
Depreciation and amortization expense : Depreciation and amortization of our technology business for the year ended March 31, 2024, increased compared to the year ended March 31, 2023, primarily due to an increase in amortization from intangible assets acquired in the NSG and Peak acquisitions.
Depreciation and amortization expense : Depreciation and amortization of our technology business for the year ended March 31, 2025, increased compared to the year ended March 31, 2024, primarily due to amortization from intangible assets acquired in the Bailiwick acquisition during the year ended March 31, 2025.
Changes in our estimates could significantly impact the value of certain assets and liabilities. RECENT ACCOUNTING PRONOUNCEMENTS Please refer to Note 2 , “Recent Accounting Pronouncements” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS Please refer to Note 2 , “Recent Accounting Pronouncements” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.
Our cash conversion cycle decreased to 46 days for March 31, 2024, compared to 59 days for March 31, 2023, as DSO decreased by 12 days, DIO decreased by 15 days, and DPO decreased by 14 days from March 31, 2023, to March 2024.
Our cash conversion cycle decreased to 29 days for March 31, 2025, compared to 46 days for March 31, 2024, as DSO increased by 4 days, DIO decreased by 9 days, and DPO increased by 12 days from March 31, 2024, to March 31, 2025.
These are fueling deployments of solutions on cloud, managed services and hybrid platforms and licensing models, which may include invoicing over the term of the agreement. • Rapid cloud adoption has led to customer challenges around increasing costs, security concerns, and skillset gaps. These challenges are consistent across all industries and business sizes.
These are fueling deployments of solutions on cloud, managed services and hybrid platforms and licensing models, which may include invoicing over the term of the engagement and may result in additional revenue recognized on a net basis. ● Rapid cloud adoption has led to customer challenges around increasing costs, security concerns, and skillset gaps.
The following tables provide our key business metrics for our consolidated entity, our technology business- consisting of our product, professional services, and managed services segments- and our financing business segment (in thousands, except per share amounts): Year Ended March 31, 2024 2023 2022 Consolidated Financial Metrics Net sales $ 2,225,302 $ 2,067,718 $ 1,821,019 Gross profit $ 550,793 $ 517,524 $ 460,982 Gross margin 24.8 % 25.0 % 25.3 % Operating income margin 7.1 % 8.0 % 8.1 % Net earnings $ 115,776 $ 119,356 $ 105,600 Net earnings margin 5.2 % 5.8 % 5.8 % Net earnings per common share - diluted $ 4.33 $ 4.48 $ 3.93 Non-GAAP Financial Metrics Non-GAAP: Net earnings (1) $ 131,327 $ 133,931 $ 117,964 Non-GAAP: Net earnings per common share - diluted (1) $ 4.92 $ 5.02 $ 4.39 Adjusted EBITDA (2) $ 190,441 $ 190,592 $ 170,004 Adjusted EBITDA margin (2) 8.6 % 9.2 % 9.3 % Technology business segments Financial Metrics Net sales Product $ 1,883,809 $ 1,750,802 $ 1,492,411 Professional services 154,549 151,785 146,747 Managed services 137,528 112,658 93,878 Total $ 2,175,886 $ 2,015,245 $ 1,733,036 Gross profit Product $ 397,618 $ 380,741 $ 316,622 Professional services 68,194 61,594 63,384 Managed services 42,667 32,155 28,147 Total $ 508,479 $ 474,490 $ 408,153 Gross margin Product 21.1 % 21.7 % 21.2 % Professional services 44.1 % 40.6 % 43.2 % Managed services 31.0 % 28.5 % 30.0 % Total 23.4 % 23.5 % 23.6 % Operating income $ 132,560 $ 140,110 $ 109,000 Non-GAAP Financial Metric Adjusted EBITDA (2) $ 164,409 $ 164,184 $ 131,353 Operational Metrics Gross billings (3) Networking $ 1,172,274 $ 927,319 $ 709,687 Cloud 824,128 892,308 828,002 Security 625,392 639,416 476,339 Collaboration 120,960 127,027 131,941 Other 262,439 282,748 240,586 Product gross billings 3,005,193 2,868,818 2,386,555 Service billings 324,571 277,070 239,194 Total gross billings $ 3,329,764 $ 3,145,888 $ 2,625,749 Financing business segment Financial Metrics Net sales $ 49,416 $ 52,473 $ 87,983 Gross profit $ 42,314 $ 43,034 $ 52,829 Operating income $ 25,697 $ 26,052 $ 38,316 Non-GAAP Financial Metric Adjusted EBITDA (2) $ 26,032 $ 26,408 $ 38,651 (1) Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted are based on net earnings calculated in accordance with US GAAP, adjusted to exclude other (income) expense, share-based compensation, and acquisition and integration expenses, and the related tax effects. 30 Table of Contents We use Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted as supplemental measures of our performance to gain insight into our operating performance and performance trends.
The following tables provide our key business metrics for our consolidated entity, our technology business segments- consisting of our product, professional services, and managed services segments- and our financing business segment (in thousands, except per share amounts): 26 Table of Contents Year Ended March 31, 2025 2024 2023 Consolidated Financial Metrics Net sales $ 2,068,789 $ 2,225,302 $ 2,067,718 Gross profit $ 569,121 $ 550,793 $ 517,524 Gross margin 27.5 % 24.8 % 25.0 % Operating income margin 6.8 % 7.1 % 8.0 % Net earnings $ 107,978 $ 115,776 $ 119,356 Net earnings margin 5.2 % 5.2 % 5.8 % Net earnings per common share - diluted $ 4.05 $ 4.33 $ 4.48 Non-GAAP Financial Metrics Non-GAAP: Net earnings (1) $ 124,475 $ 131,327 $ 133,931 Non-GAAP: Net earnings per common share - diluted (1) $ 4.67 $ 4.92 $ 5.02 Adjusted EBITDA (2) $ 178,234 $ 190,441 $ 190,592 Adjusted EBITDA margin (2) 8.6 % 8.6 % 9.2 % Technology business segments Financial Metrics Net sales Product $ 1,608,768 $ 1,883,809 $ 1,750,802 Professional services 229,030 154,549 151,785 Managed services 171,347 137,528 112,658 Total $ 2,009,145 $ 2,175,886 $ 2,015,245 Gross profit Product $ 373,557 $ 397,618 $ 380,741 Professional services 90,517 68,194 61,594 Managed services 51,307 42,667 32,155 Total $ 515,381 $ 508,479 $ 474,490 Gross margin Product 23.2 % 21.1 % 21.7 % Professional services 39.5 % 44.1 % 40.6 % Managed services 29.9 % 31.0 % 28.5 % Total 25.7 % 23.4 % 23.5 % Operating income $ 106,293 $ 132,560 $ 140,110 Non-GAAP Financial Metric Adjusted EBITDA (2) $ 142,843 $ 164,409 $ 164,184 Operational Metrics Gross billings (3) Networking $ 929,708 $ 1,172,274 $ 927,319 Cloud 865,855 824,128 892,308 Security 683,597 625,392 639,416 Collaboration 120,369 120,960 127,027 Other 244,997 262,439 282,748 Product gross billings 2,844,526 3,005,193 2,868,818 Service billings 435,921 324,571 277,070 Total gross billings $ 3,280,447 $ 3,329,764 $ 3,145,888 Financing business segment Financial Metrics Net sales $ 59,644 $ 49,416 $ 52,473 Gross profit $ 53,740 $ 42,314 $ 43,034 Operating income $ 35,120 $ 25,697 $ 26,052 Non-GAAP Financial Metric Adjusted EBITDA (2) $ 35,391 $ 26,032 $ 26,408 (1) Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted are based on net earnings calculated in accordance with US GAAP, adjusted to exclude other (income) expense, share-based compensation, and acquisition and integration expenses, and the related tax effects. 27 Table of Contents We use Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted as supplemental measures of our performance to gain insight into our operating performance and performance trends.
When a contract contains multiple distinct performance obligations, we allocate the transaction price to each performance obligation based on its relative standalone selling price. We determine standalone selling prices using expected cost-plus margin. When we finance sales of third-party software and third-party maintenance, software support, and services, we reduce the transaction price by the financing component.
When a contract contains multiple distinct performance obligations, we allocate the transaction price to each performance obligation based on its relative standalone selling price. We determine standalone selling prices using expected cost-plus margin.
Certain support functions for the financing business segment are shared resources with the technology business and expenses are allocated accordingly. 37 Table of Contents Interest and financing costs : Interest and financing costs for the year ended March 31, 2024, increased compared to the year ended March 31, 2023, due to higher interest rates.
Certain support functions for the financing business segment are shared resources with the technology business and expenses are allocated accordingly. Interest and financing costs : Interest and financing costs for the year ended March 31, 2025, decreased compared to the year ended March 31, 2024, due to lower average outstanding borrowings and slightly lower interest rates.
Fluctuations in operating results Our operating results may fluctuate due to customer demand for our products and services, supplier costs, product availability, changes in vendor incentive programs, interest rate fluctuations, currency fluctuations, the timing of sales of financial assets, general economic conditions, and differences between estimated residual values and actual amounts realized for leased equipment.
Fluctuations in operating results Our operating results may fluctuate due to customer demand for our products and services, supplier costs including due to the imposition and/or increase in tariffs and inflation, product availability due to supply chain volatility, changes in vendor incentive programs, changes by vendors to increased ratable billing for solutions sets and increased sales of products that are recorded on a net basis, interest rate fluctuations, currency fluctuations, the timing of sales of financial assets, general economic conditions, and differences between estimated residual values and actual amounts realized for leased equipment.
We recognize revenue from sales of third-party products and third-party software at the point in time that control passes to the customer, which is typically upon delivery of the product to the customer.
When we finance sales of third-party software and third-party maintenance, software support, and services, we reduce the transaction price by the financing component. 40 Table of Contents We recognize revenue from sales of third-party products and third-party software at the point in time that control passes to the customer, which is typically upon delivery of the product to the customer.
BUSINESS COMBINATIONS — We account for business combinations using the acquisition method. For each acquisition, we recognize most assets acquired, and liabilities assumed at their fair values at the acquisition date. Our valuations of certain assets acquired, including customer relationships and trade names, and certain liabilities assumed, involve significant judgment and estimation.
For each acquisition, we recognize most assets acquired, and liabilities assumed at their fair values at the acquisition date. Our valuations of certain assets acquired, including customer relationships and trade names, and certain liabilities assumed, involve significant judgment and estimation. Additionally, our determination of the purchase price may include an estimate for the fair value of contingent consideration.
These key indicators include financial information that is prepared in accordance with US GAAP and presented in our consolidated financial statements, as well as non-GAAP and operational performance measurement tools.
We believe our gross billings metrics will aid investors in the same manner to evaluate our business. These key indicators include financial information that is prepared in accordance with US GAAP and presented in our consolidated financial statements, as well as non-GAAP and operational performance measurement tools.
In addition, other companies, including companies in our industry, might calculate similar Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted or similarly titled measures differently, which may reduce their usefulness as comparative measures.
In addition, other companies, including companies in our industry, might calculate similar Non-GAAP: Net earnings and Non-GAAP: Net earnings per common share – diluted or similarly titled measures differently, which may reduce their usefulness as comparative measures. Our acquisition related expenses for the year ended March 31, 2025, are related to our acquisition of Bailiwick Services, LLC (“Bailiwick”).
Adjusted EBITDA margin is our calculation of Adjusted EBITDA divided by net sales. 31 Table of Contents We use Adjusted EBITDA as a supplemental measure of our performance to gain insight into our operating performance and performance trends.
We use Adjusted EBITDA as a supplemental measure of our performance to gain insight into our operating performance and performance trends.
As of March 31, 2024, and March 31, 2023, we did not have any outstanding balance under the revolving credit facility.
As of March 31, 2025, and March 31, 2024, we did not have any outstanding balance under the revolving credit facility. The maximum credit limit under this facility was $200.0 million as of both March 31, 2025, and March 31, 2024.
Additionally, our determination of the purchase price may include an estimate for the fair value of contingent consideration. We utilize independent valuation specialists to assist us in determining the fair value of certain assets and liabilities. Our valuations utilize significant estimates, such as forecasted revenues and profits.
We utilize independent valuation specialists to assist us in determining the fair value of certain assets and liabilities. Our valuations utilize significant estimates, such as forecasted revenues and profits. Changes in our estimates could significantly impact the value of certain assets and liabilities.
(3) Represents the rolling three-month average of the combined balance of accounts payable-trade and accounts payable-floor plan for our technology business segments at the end of the period divided by the direct cost of products and services billed to our customers for the same three-month period. 39 Table of Contents Our standard payment term for customers is between 30-60 days; however, certain customers or orders may be approved for extended payment terms.
(3) Represents the rolling three-month average of the combined balance of accounts payable-trade and accounts payable-floor plan for our technology business segments at the end of the period divided by the direct cost of products and services billed to our customers for the same three-month period.
See below for a breakdown of operating cash flows by business (in thousands): Year Ended March 31, 2024 2023 Technology business segments $ 248,967 $ 17,157 Financing business segment (518 ) (32,582 ) Net cash provided by (used in) operating activities $ 248,449 $ (15,425 ) Technology business: During the year ended March 31, 2024, our combined technology business segments provided $249.0 million from operating activities primarily due to net earnings and a decrease in inventory, offset by an increase in accounts receivable.
See below for a breakdown of operating cash flows by business (in thousands): Year Ended March 31, 2025 2024 Technology business segments $ 313,865 $ 248,967 Financing business segment (11,720 ) (518 ) Net cash provided by operating activities $ 302,145 $ 248,449 Technology business: During the year ended March 31, 2025, our combined technology business segments provided $313.9 million from operating activities primarily due to net earnings and decreases in accounts receivable and inventory, partially offset by increases in deferred costs.
Gross billings include the transaction values for certain sales transactions that are recognized on a net basis, and, therefore, include amounts that will not be recognized as revenue.
Gross billings include the transaction values for certain sales transactions that are recognized on a net basis, and, therefore, include amounts that will not be recognized as revenue. FINANCIAL SUMMARY Net sales : Net sales for the year ended March 31, 2025, decreased $156.5 million compared to the prior fiscal year.
The following table provides our calculations of Adjusted EBITDA (in thousands): Year Ended March 31, 2024 2023 2022 Consolidated Net earnings $ 115,776 $ 119,356 $ 105,600 Provision for income taxes 45,317 43,618 41,284 Share-based compensation 9,731 7,824 7,114 Interest and financing costs 1,428 2,897 928 Depreciation and amortization 21,025 13,709 14,646 Other (income) expense (2,836 ) 3,188 432 Adjusted EBITDA $ 190,441 $ 190,592 $ 170,004 Technology business segments Operating income $ 132,560 $ 140,110 $ 109,000 Depreciation and amortization 20,951 13,598 14,535 Share-based compensation 9,470 7,579 6,890 Interest and financing costs 1,428 2,897 928 Adjusted EBITDA $ 164,409 $ 164,184 $ 131,353 Financing business segment Operating income $ 25,697 $ 26,052 $ 38,316 Depreciation and amortization 74 111 111 Share-based compensation 261 245 224 Adjusted EBITDA $ 26,032 $ 26,408 $ 38,651 (3) Gross billings are the total dollar value of customer purchases of goods and services including shipping charges during the period, net of customer returns and credit memos, sales, or other taxes.
In addition, other companies, including companies in our industry, might calculate Adjusted EBITDA and Adjusted EBITDA margin or similarly titled measures differently, which may reduce their usefulness as comparative measures. 29 Table of Contents The following table provides our calculations of Adjusted EBITDA (in thousands): Year Ended March 31, 2025 2024 2023 Consolidated Net earnings $ 107,978 $ 115,776 $ 119,356 Provision for income taxes 40,861 45,317 43,618 Share-based compensation 9,996 9,731 7,824 Depreciation and amortization 25,753 21,025 13,709 Acquisition related expenses 1,072 - - Interest and financing costs - 1,428 2,897 Other (income) expense (7,426 ) (2,836 ) 3,188 Adjusted EBITDA $ 178,234 $ 190,441 $ 190,592 Technology business segments Operating income $ 106,293 $ 132,560 $ 140,110 Share-based compensation 9,725 9,470 7,579 Depreciation and amortization 25,753 20,951 13,598 Acquisition related expenses 1,072 - - Interest and financing costs - 1,428 2,897 Adjusted EBITDA $ 142,843 $ 164,409 $ 164,184 Financing business segment Operating income $ 35,120 $ 25,697 $ 26,052 Share-based compensation 271 261 245 Depreciation and amortization - 74 111 Adjusted EBITDA $ 35,391 $ 26,032 $ 26,408 (3) Gross billings are the total dollar value of customer purchases of goods and services including shipping charges during the period, net of customer returns, credit memos, and sales or other taxes.
As of March 31, 2024, and 2023, we were not involved in any unconsolidated special purpose entity transactions. ADEQUACY OF CAPITAL RESOURCES The continued implementation of our business strategy will require a significant investment in both resources and managerial focus. In addition, we may selectively acquire other companies that have attractive customer relationships and skilled sales and/or engineering forces.
As of March 31, 2025, and 2024, we were not involved in any unconsolidated special purpose entity transactions. 39 Table of Contents ADEQUACY OF CAPITAL RESOURCES The continued implementation of our business strategy will require a significant investment in both resources and managerial focus.
These estimates and judgments occur in the calculation of certain tax assets and liabilities, which principally arise from differences in the timing of recognition of revenue and expense for tax and financial statement reporting purposes. We also must analyze income tax reserves, as well as determine the likelihood of recoverability of deferred tax assets and adjust any valuation allowances accordingly.
INCOME TAXES — We make certain estimates and judgments in determining income tax expense for financial statement reporting purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which principally arise from differences in the timing of recognition of revenue and expense for tax and financial statement reporting purposes.
When we account for the transfer as a secured borrowing, we recognize the proceeds as either recourse or non-recourse notes payable. Our customers are responsible for repaying the debt from a secured borrowing. The lender typically secures a lien on the financed assets at the time the financial assets are transferred and releases it upon collecting all the transferred payments.
Our customers are responsible for repaying the debt from a secured borrowing. The lender typically secures a lien on the financed assets at the time the financial assets are transferred and releases it upon collecting all the transferred payments. We are not liable for the repayment of non-recourse loans unless we breach our representations and warranties in the loan agreements.
Salaries and benefits, including variable compensation for the year ended March 31, 2024, increased $30.7 million, or 11.4% to $300.6 million, as compared to $269.9 million in the prior fiscal year, due to an increase of $23.2 million in salaries and benefits, mainly driven by increased headcount and salary increases.
Salaries and benefits, including variable compensation for the year ended March 31, 2025, increased $21.5 million compared to the prior fiscal year, due to an increase of $24.2 million in salaries and benefits, mainly driven by increased headcount, offset by a decrease of $2.9 million in variable compensation.
Total proceeds from sales of financing receivables were $762.6 million and $706.0 million for the years ended March 31, 2024, and 2023, respectively. Our proceeds from sales of financing receivables for the year ended March 31, 2024, are higher than the prior fiscal year due in part to a few large transactions in the current year period.
Our proceeds from sales of financing receivables for the year ended March 31, 2025, are lower than the prior fiscal year due in part to a few sales of large financial receivables in the prior year period that were not replicated in the current year period.
Weighted average common shares outstanding used in the calculation of basic earnings per common share and diluted earnings per common share were 26.6 million and 26.7 million, respectively, for the years ended March 31, 2024, and 2023. LIQUIDITY AND CAPITAL RESOURCES LIQUIDITY OVERVIEW We finance our operations through funds generated from operations and through borrowings.
Weighted average common shares outstanding used in the calculation of basic earnings per common share and diluted earnings per common share were 26.5 million and 26.7 million, respectively, for the year ended March 31, 2025, compared to 26.6 million and 26.7 million, respectively, for the year ended March 31, 2024.
As of March 31, 2024, we had a maximum credit limit of $500.0 million, and an outstanding balance on the floor plan of $105.1 million. As of March 31, 2023, we had a maximum credit limit of $500.0 million, and the outstanding balance on the floor plan facility was $134.6 million.
As of March 31, 2025, and March 31, 2024, we had a maximum credit limit, including the revolving credit facility, of $500.0 million, and an outstanding balance on the floor plan facility of $89.5 million and $105.1 million, respectively. On our balance sheet, our liability under the floor plan facility is presented as part of accounts payable – floor plan.
Our effective income tax rate was higher for the year ended March 31 , 2024, as compared to the year ended March 31, 2023, primarily due to lower state taxes in the same period in the prior year.
Our effective income tax rates for the years ended March 31, 2025, and 2024 were 27.5% and 28.1%, respectively. Our effective income tax rate was lower for the year ended March 31 , 2025, as compared to the year ended March 31, 2024, primarily due to lower state taxes.
Financing transactions funded with our cash flows, not debt, are subject to interest rate risk. If the market interest rate exceeds our internal rate of return, we may not fund the transaction to obtain the proceeds and lock in our profit on the transaction.
If the market interest rate exceeds our internal rate of return, we may not fund the transaction to obtain the proceeds and lock in our profit on the transaction. Also, we are experiencing constriction of funds available for certain transactions and more stringent assessment of our financing arrangements by our lenders.
We had $2.7 million in interest income in the year ended March 31, 2024, compared to $0.3 million in the prior fiscal year. We had a foreign exchange loss of $0.1 million in the year ended March 31, 2024, compared to a loss of $5.4 million in the prior fiscal year.
We had foreign exchange losses of $1.2 million for the year ended March 31, 2025 , compared to a loss of $0.1 million in the prior fiscal year. Provision for income taxes : Our provision for income tax expense for the years ended March 31 , 2025, and 2024 was $40.9 million and $45.3 million, respectively.
BUSINESS TRENDS We believe the following key factors are impacting our business performance and our ability to achieve business results: • General economic concerns including inflation, rising interest rates, staffing shortages, remote work trends, and geopolitical concerns may impact our customers’ willingness to spend on technology and services. • We are experiencing increases in prices from our suppliers.
BUSINESS TRENDS We believe the following key factors are impacting our business performance and our ability to achieve business results: ● General economic concerns including changes in law by the current US government, inflation, tariffs, sanctions, changing interest rates, staffing shortages, remote work trends, geopolitical concerns and changes in US government spending and contracting practices may impact our customers’ willingness to spend on technology, services and financing. 25 Table of Contents ● We are experiencing pricing pressure and project delays within our enterprise accounts impacting our gross profit.
Gross profit margin decreased by 10 basis points to 23.4% due to lower product margin, offset by higher professional service and managed service margin.
Gross profit margin increased by 230 basis points to 25.7% due to higher product margins, partially offset by lower managed services and professional services margin.
Our weighted average interest rate on the accounts receivable component of our WFCDF Credit Facility was 7.07% during our year ended March 31, 2024, compared to 5.35% over the prior fiscal year. 36 Table of Contents FINANCING BUSINESS SEGMENT The results of operations for our financing business segment were as follows (in thousands): Year ended March 31, 2024 2023 Change Percent Change Financial Metrics Portfolio earnings $ 13,937 $ 11,356 $ 2,581 22.7 % Transactional gains 19,016 16,125 2,891 17.9 % Post-contract earnings 14,301 23,581 (9,280 ) (39.4 %) Other 2,162 1,411 751 53.2 % Net sales $ 49,416 $ 52,473 $ (3,057 ) (5.8 %) Gross profit 42,314 43,034 (720 ) (1.7 %) Selling, general, and administrative 14,194 15,635 (1,441 ) (9.2 %) Depreciation and amortization 74 111 (37 ) (33.3 %) Interest and financing costs 2,349 1,236 1,113 90.0 % Operating expenses 16,617 16,982 (365 ) (2.1 %) Operating income $ 25,697 $ 26,052 $ (355 ) (1.4 %) Key Metrics & Other Information Adjusted EBITDA $ 26,032 $ 26,408 $ (376 ) (1.4 %) Net sales : Net sales for the year ended March 31, 2024, decreased due to lower post-contract earnings offset by higher portfolio earnings and transactional gains.
We had an average borrowing balance of $18.4 million and a weighted average interest rate on the accounts receivable component of our WFCDF Credit Facility of 7.07% during our year ended March 31, 2024. 34 Table of Contents FINANCING BUSINESS SEGMENT The results of operations for our financing business segment were as follows (in thousands): Year ended March 31, 2025 2024 Change Percent Change Financial Metrics Portfolio earnings $ 18,229 $ 13,937 $ 4,292 30.8 % Transactional gains 28,866 19,016 9,850 51.8 % Post-contract earnings 11,295 14,301 (3,006 ) (21.0 )% Other 1,254 2,162 (908 ) (42.0 )% Net sales $ 59,644 $ 49,416 $ 10,228 20.7 % Gross profit 53,740 42,314 11,426 27.0 % Selling, general, and administrative 16,409 14,194 2,215 15.6 % Depreciation and amortization - 74 (74 ) (100.0 )% Interest and financing costs 2,211 2,349 (138 ) (5.9 )% Operating expenses 18,620 16,617 2,003 12.1 % Operating income $ 35,120 $ 25,697 $ 9,423 36.7 % Key Metrics & Other Information Adjusted EBITDA $ 35,391 $ 26,032 $ 9,359 36.0 % Net sales : Net sales for the year ended March 31, 2025, increased due to higher portfolio earnings and transactional gains, offset primarily by lower post-contract earnings.
Provision for credit losses for our technology business for the year ended March 31, 2024, was $0.4 million, as compared to $0.2 million for the year ended March 31, 2023. Our higher provision for credit losses for the year ended March 31, 2024, was due to changes in our net credit exposure.
Additionally, we incurred $1.1 million in acquisition related expenses due to our acquisition of Bailiwick during the year ended March 31, 2025. Provision for credit losses for our technology business for the year ended March 31, 2025, was $1.7 million, as compared to $0.4 million for the year ended March 31, 2024.
Offsetting these decreases was an increase in provision for credit losses as we incurred increased expense due to higher investment exposure. Our financing business segment employed 34 people as of March 31, 2024, compared to 36 people as of March 31, 2023.
Variable compensation increased due to the increase in gross profit. Provision for credit losses increased due to an increase in our exposure to accounts with a higher credit risk. Our financing business segment employed 33 people as of March 31, 2025, compared to 34 people as of March 31, 2024.
Product segment margin for the year ended March 31, 2024 , decreased by 60 basis points compared to the year ended March 31, 2023, due to a shift in product mix as we sold a higher proportion of networking hardware than third party services that are recognized on a net basis.
Product segment sales for the year ended March 31, 2025, decreased compared to the year ended March 31, 2024, due to decreases in demand and a shift in product mix towards sales of third-party maintenance and subscriptions that are recognized on a net basis.
In these situations, the portion of the proceeds paid directly to our vendors are non-cash transactions. 40 Table of Contents SECURED BORROWINGS We may finance all or most of the cost of the assets that we finance for customers by transferring all or part of the contractual payments due to us to third-party financing institutions.
SECURED BORROWINGS We may finance all or most of the cost of the assets that we finance for customers by transferring all or part of the contractual payments due to us to third-party financing institutions. When we account for the transfer as a secured borrowing, we recognize the proceeds as either recourse or non-recourse notes payable.
SEGMENT OVERVIEW Technology business segments Our technology business includes three segments: product, professional services, and managed services as further discussed below. • Product segment: Our product segment consists of the sale of third-party hardware, third-party perpetual and subscription software, and third-party maintenance, software assurance, and other third-party services.
Non-GAAP: Net earnings per common share—diluted for the year ended March 31, 2025, decreased $0.25, to $4.67 per share, as compared to $4.92 per share for the year ended March 31, 2024. 30 Table of Contents SEGMENT OVERVIEW Technology business segments Our technology business includes three segments: product, professional services, and managed services as further discussed below. ● Product segment: Our product segment consists of the sale of third-party hardware, third-party perpetual and subscription software, and third-party maintenance, software assurance, and other third-party services.
Professional services include consulting, assessments, configuration, logistic services, training, staff augmentation services, and project management services. • Managed services segment: Our managed services segment includes our advanced managed services that encompass managing various aspects of our customers’ environments that are billed in regular intervals over a contract term, usually between three to five years.
Additionally, we offer professional services in the spaces of digital signage, EV charging solutions, loss prevention and security, store openings, remodels, and store closings. ● Managed services segment: Our managed services segment includes our advanced managed services that encompass managing various aspects of our customers’ environments that are billed in regular intervals over a contract term, usually between three to five years.
In general, we would only be liable for these guarantees in the event of default in the performance of our obligations.
PERFORMANCE GUARANTEES In the normal course of business, we may provide certain customers with performance guarantees, which are generally backed by surety bonds. In general, we would only be liable for these guarantees in the event of default in the performance of our obligations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+1 added−1 removed3 unchanged
Biggest changeThere is a potential for exposure to fluctuations in foreign currency rates resulting primarily from the translation exposure associated with the preparation of our consolidated financial statements. In addition, we have foreign currency exposure when transactions are not denominated in our subsidiary’s functional currency.
Biggest changeFOREIGN CURRENCY RISK We have transactions in foreign currencies, primarily in British Pounds, Euros, and Indian Rupees. There is a potential for exposure to fluctuations in foreign currency rates resulting primarily from the translation exposure associated with the preparation of our consolidated financial statements.
Certain financing transactions are funded with our cash flows, not debt, and may be subject to interest rate risk. If the market interest rate exceeds our internal rate of return, we may not fund the transaction to obtain the proceeds.
Certain financing transactions are funded with our cash flows, not debt, and may be subject to interest rate risk. If the market interest rate exceeds our internal rate of return, we may not fund the transaction to obtain the proceeds. Borrowings under the WFCDF Credit Facility bear interest at a market-based variable rate.
As a lessor, we lease assets for amounts denominated in British Pounds, Euros, and Canadian dollars. As our foreign operations have been smaller compared to our domestic operations, we believe that potential fluctuations in currency exchange rates will not have a material effect on our financial position.
As our foreign operations have been smaller compared to our domestic operations, we believe that potential fluctuations in currency exchange rates will not have a material effect on our financial position.
To date, our foreign operations are insignificant in relation to total consolidated operations, and we believe that potential fluctuations in currency exchange rates will not have a material effect on our financial position. We lease assets in foreign countries, including Canada, the UK, and several other European countries.
In addition, we have foreign currency exposure when transactions are not denominated in our subsidiary’s functional currency. To date, our foreign operations are insignificant in relation to total consolidated operations, and we believe that potential fluctuations in currency exchange rates will not have a material effect on our financial position.
Removed
Borrowings under the WFCDF Credit Facility bear interest at a market-based variable rate. 45 Table of Contents FOREIGN CURRENCY RISK We have transactions in foreign currencies, primarily in British Pounds, Euros, and Indian Rupees.
Added
We lease assets in foreign countries, including Canada, the UK, and several other European countries. As a lessor, we lease assets for amounts denominated in British Pounds, Euros, and Canadian dollars.

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