HERNDON, Va. – November 05, 2026 -- ePlus inc. (NASDAQ: PLUS) reported record quarterly gross billings of $1,066.8 million for the second quarter of fiscal 2027, up 4.3% from $1,022.7 million, and raised its full-year guidance after net sales climbed 9.7% to $667.9 million.
The company now expects fiscal 2027 net sales and gross profit to grow in the upper single digits year over year. It expects adjusted EBITDA to grow in the low double digits.
Product sales rise 12.8% on cloud and security demand
Product segment sales increased to $547.1 million from $485.0 million, driven by cloud, security and collaboration products. A decline in networking products partly offset the gains. Segment gross margin widened to 25.8% from 24.5% on a shift in product mix and higher sales of third-party maintenance, subscriptions and services recognized on a net basis.
CEO Mark Marron attributed the record billings to a "customer-first approach," citing client demand for products and services in Artificial Intelligence (AI) and Cybersecurity.
Professional services revenue falls 11.3% as retail projects slip
Professional services revenue dropped to $67.8 million from $76.3 million. Gross margin declined to 35.4% from 38.2%. ePlus blamed lower revenue and gross profit from project-related services, citing delays from retail customers.
Managed services moved the other way. Revenue rose 11.9% to $53.1 million on additional cloud managed services. Gross profit grew 9.4%, though gross margin slipped to 28.8% from 29.4%.
Operating income climbs 15.8% to $56.5 million
Gross profit increased 11.2% to $180.3 million, lifting gross margin to 27.0% from 26.6%. Operating expenses rose 9.2% to $123.8 million, reflecting higher variable compensation, additional salaries and benefits, general and administrative costs, and expenses tied to the acquisition of assets of Daymark Solutions.
Adjusted EBITDA grew 14.3% to $67.1 million from $58.7 million. Net earnings from continuing operations rose 5.8% to $40.4 million, or $1.56 per diluted share versus $1.45. Non-GAAP diluted earnings per share from continuing operations reached $1.82, compared with $1.53 a year earlier.
Other income swung to an expense of $0.5 million from income of $5.2 million. The company cited a $3.5 million reduction in the fair value of the contingent consideration receivable from the sale of its domestic financing business, lower interest income and foreign currency transaction losses. The effective tax rate fell to 27.9% from 29.3%. Shares outstanding declined to 26.0 million from 26.3 million at March 31, 2026.
First-half net sales reach $1,317.0 million, but earnings growth stalls
For the six months ended September 30, 2026, net sales rose 5.2% from $1,251.6 million. Gross billings increased 2.5% to $2,023.9 million. Gross margin held at 25.2%, and adjusted EBITDA rose 3.2% to $114.9 million.
Net earnings from continuing operations edged up 0.7% to $70.7 million. Total net earnings fell to $70.7 million from $77.4 million, as the prior-year period included $7.3 million in earnings from discontinued operations. Professional services revenue declined 8.3% to $135.8 million, while managed services revenue rose 13.4% to $104.4 million.
Cash falls to $380.9 million as inventory jumps 35.1%
Cash and cash equivalents stood at $380.9 million on September 30, 2026, down from $410.8 million at March 31. Inventory rose to $271.4 million from $200.9 million due to several ongoing projects. Trade accounts receivable increased 14.9% to $746.9 million. Stockholders' equity reached $1,096.4 million, up from $1,069.0 million.
Marron said ePlus is balancing acquisitions, other growth investments, share repurchases and dividend payments. The Daymark deal brought in a provider of hybrid cloud, cybersecurity, compliance and data center solutions and services.
The raised guidance does not factor in recessionary conditions or other unexpected developments.