EPLUS INCPLUS
EPLUS INC Segments Disclosure
17. SEGMENT REPORTING
We manage and report our operating results through four operating segments: product, professional services, managed services, and financing. Our organizational structure is based on how our chief operating decision maker (“CODM”) allocates resources, manages operations, and evaluates performance. Our CODM is our Chief Executive Officer.
We refer to the product segment, professional services segment, and managed services segment collectively as our technology business. Our product segment includes sales of IT products, third-party software, and third-party maintenance, software assurance, and other third-party services. Our professional services segment includes our advanced professional services, staff augmentation, project management services, cloud consulting services and security services. Our managed services segment includes our advanced managed services, service desk, storage-as-a-service, cloud hosted services, cloud managed services and managed security services.
Our financing business segment consists of the financing of IT equipment, software, and related services to commercial enterprises, state and local governments, and government contractors.
Our CODM measures the performance of the segments within our technology business based on gross profit and measures our financing business segment based on operating income. We do not present asset information for our reportable segments as we do not provide asset information to our CODM. Our CODM uses quarterly financial results and forecasts to manage operations. Our CODM also uses our financial results and forecasts in our annual budgeting process.
The following table provides reportable segment information (in thousands):
|
Year Ended March
31,
|
|||||||||||
|
2025
|
2024
|
2023
| |||||||||
|
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 | ||||||||
|
Financing
|
59,644 | 49,416 | 52,473 | ||||||||
|
Total
|
2,068,789 | 2,225,302 | 2,067,718 | ||||||||
|
Cost of sales
|
|||||||||||
|
Product
|
1,235,211 | 1,486,191 | 1,370,061 | ||||||||
|
Professional services
|
138,513 | 86,355 | 90,191 | ||||||||
|
Managed services
|
120,040 | 94,861 | 80,503 | ||||||||
|
Financing
|
5,904 | 7,102 | 9,439 | ||||||||
|
Total
|
1,499,668 | 1,674,509 | 1,550,194 | ||||||||
|
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 | ||||||||
|
Financing
|
53,740 | 42,314 | 43,034 | ||||||||
|
Total
|
569,121 | 550,793 | 517,524 | ||||||||
|
Selling, general,
and administrative
|
|||||||||||
|
Technology business
|
383,335 | 353,540 | 317,885 | ||||||||
|
Financing
|
16,409 | 14,194 | 15,635 | ||||||||
|
Total
|
399,744 | 367,734 | 333,520 | ||||||||
|
Depreciation and
amortization
|
|||||||||||
|
Technology business
|
25,753 | 20,951 | 13,598 | ||||||||
|
Financing
|
- | 74 | 111 | ||||||||
|
Total
|
25,753 | 21,025 | 13,709 | ||||||||
|
Interest and
financing costs
|
|||||||||||
|
Technology business
|
- | 1,428 | 2,897 | ||||||||
|
Financing
|
2,211 | 2,349 | 1,236 | ||||||||
|
Total
|
2,211 | 3,777 | 4,133 | ||||||||
|
Operating income
|
|||||||||||
|
Technology business
|
106,293 | 132,560 | 140,110 | ||||||||
|
Financing
|
35,120 | 25,697 | 26,052 | ||||||||
|
Total
|
141,413 | 158,257 | 166,162 | ||||||||
|
Other income
(expense), net
|
7,426 | 2,836 | (3,188 | ) | |||||||
|
Earnings before tax
|
$ | 148,839 | $ | 161,093 | $ | 162,974 | |||||
|
Selected financial data
- statement of cash flow
|
|||||||||||
|
Purchases of
property, equipment, and operating lease equipment:
|
|||||||||||
|
Technology business
|
$ | 5,216 | $ | 7,454 | $ | 7,693 | |||||
|
Financing
|
1,387 | 1,049 | 1,687 | ||||||||
|
Total
|
$ | 6,603 | $ | 8,503 | $ | 9,380 | |||||
The following tables provide a disaggregation of net sales by source and further disaggregate our revenue recognized from contracts with customers by timing and our position as principal or agent (in thousands):
|
Year ended March 31, 2025
|
|||||||||||||||||||
|
Product
|
Professional
Services
|
Managed
Services
|
Financing
|
Total
|
|||||||||||||||
|
Net Sales:
|
|||||||||||||||||||
|
Contracts with
customers
|
$ | 1,575,097 | $ | 229,030 | $ | 171,347 | $ | 5,560 | $ | 1,981,034 | |||||||||
|
Financing and other
|
33671 | - | - | 54,084 | 87,755 | ||||||||||||||
|
Total
|
$ | 1,608,768 | $ | 229,030 | $ | 171,347 | $ | 59,644 | $ | 2,068,789 | |||||||||
|
Timing and position
as principal or agent:
|
|||||||||||||||||||
|
Transferred at a
point in time as principal
|
$ | 1,390,811 | $ | - | $ | - | $ | 5,560 | $ | 1,396,371 | |||||||||
|
Transferred at a
point in time as agent
|
184,286 | - | - | - | 184,286 | ||||||||||||||
|
Transferred over
time as principal
|
- | 229,030 | 171,347 | - | 400,377 | ||||||||||||||
|
Total revenue from
contracts with customers
|
$ | 1,575,097 | $ | 229,030 | $ | 171,347 | $ | 5,560 | $ | 1,981,034 | |||||||||
|
Year ended March 31, 2024
|
|||||||||||||||||||
|
Product
|
Professional
Services
|
Managed
Services |
Financing
|
Total
|
|||||||||||||||
|
Net Sales:
|
|||||||||||||||||||
|
Contracts with
customers
|
$ | 1,862,231 | $ | 154,549 | $ | 137,528 | $ | 5,926 | $ | 2,160,234 | |||||||||
|
Financing and other
|
21,578 | - | - | 43,490 | 65,068 | ||||||||||||||
|
Total
|
$ | 1,883,809 | $ | 154,549 | $ | 137,528 | $ | 49,416 | $ | 2,225,302 | |||||||||
|
Timing and position
as principal or agent:
|
|||||||||||||||||||
|
Transferred at a
point in time as principal
|
$ | 1,687,639 | $ | - | $ | - | $ | 5,926 | $ | 1,693,565 | |||||||||
|
Transferred at a
point in time as agent
|
174,592 | - | - | - | 174,592 | ||||||||||||||
|
Transferred over
time as principal
|
- | 154,549 | 137,528 | - | 292,077 | ||||||||||||||
|
Total revenue from
contracts with customers
|
$ | 1,862,231 | $ | 154,549 | $ | 137,528 | $ | 5,926 | $ | 2,160,234 | |||||||||
|
Year ended March 31, 2023
|
|||||||||||||||||||
|
Product
|
Professional
Services
|
Managed
Services |
Financing
|
Total
|
|||||||||||||||
|
Net Sales:
|
|||||||||||||||||||
|
Contracts with
customers
|
$ | 1,728,125 | $ | 151,785 | $ | 112,658 | $ | 9,304 | $ | 2,001,872 | |||||||||
|
Financing and other
|
22,677 | - | - | 43,169 | 65,846 | ||||||||||||||
|
Total
|
$ | 1,750,802 | $ | 151,785 | $ | 112,658 | $ | 52,473 | $ | 2,067,718 | |||||||||
|
Timing and position
as principal or agent:
|
|||||||||||||||||||
|
Transferred at a
point in time as principal
|
$ | 1,566,760 | $ | - | $ | - | $ | 9,304 | $ | 1,576,064 | |||||||||
|
Transferred at a
point in time as agent
|
161,365 | - | - | - | 161,365 | ||||||||||||||
|
Transferred over
time as principal
|
- | 151,785 | 112,658 | - | 264,443 | ||||||||||||||
|
Total revenue from
contracts with customers
|
$ | 1,728,125 | $ | 151,785 | $ | 112,658 | $ | 9,304 | $ | 2,001,872 | |||||||||
TECHNOLOGY BUSINESS DISAGGREGATION OF REVENUE
The following table provides a disaggregation of our revenue from contracts with customers for our technology business by customer end market and by type (in thousands):
|
Year Ended March 31,
|
|||||||||||
|
2025
|
2024
|
2023
|
|||||||||
|
Customer end
market:
|
|||||||||||
|
Telecom, media
& entertainment
|
$ | 453,892 | $ | 547,525 | $ | 532,921 | |||||
|
SLED
|
333,371 | 329,617 | 290,624 | ||||||||
|
Technology
|
300,465 | 379,720 | 393,594 | ||||||||
|
Healthcare
|
286,474 | 278,893 | 274,936 | ||||||||
|
Financial services
|
174,798 | 243,630 | 156,257 | ||||||||
|
All others
|
460,145 | 396,501 | 366,913 | ||||||||
|
Net sales
|
2,009,145 | 2,175,886 | 2,015,245 | ||||||||
|
Less: revenue from
financing and other
|
(33,671 | ) | (21,578 | ) | (22,677 | ) | |||||
|
Total revenue from
contracts with customers
|
$ | 1,975,474 | 2,154,308 | 1,992,568 | |||||||
|
Type:
|
|||||||||||
|
Product
|
|||||||||||
|
Networking
|
$ | 781,703 | $ | 1,005,679 | $ | 803,678 | |||||
|
Cloud
|
509,774 | 546,341 | 587,097 | ||||||||
|
Security
|
191,872 | 193,956 | 214,459 | ||||||||
|
Collaboration
|
55,483 | 65,714 | 57,472 | ||||||||
|
Other
|
69,936 | 72,119 | 88,096 | ||||||||
|
Total 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 | ||||||||
|
Net sales
|
2,009,145 | 2,175,886 | 2,015,245 | ||||||||
|
Less: revenue from
financing and other
|
(33,671 | ) | (21,578 | ) | (22,677 | ) | |||||
|
Total revenue from
contracts with customers
|
$ | 1,975,474 | $ | 2,154,308 | $ | 1,992,568 | |||||
We do not disaggregate sales by customer end market beyond the technology business.
FINANCING BUSINESS SEGMENT DISAGGREGATION OF REVENUE
We analyze our revenues within our financing business segment based on the nature of the arrangement. Our financing revenue generally consists of portfolio income, transactional gains, and post-contract earnings including month-to-month rents and the sales of off-lease equipment. All our revenues from contracts with customers within our financing business segment are from the sales of off-lease equipment.
GEOGRAPHIC INFORMATION
The geographic information for the years ended March 31, 2025, 2024, and 2023 was as follows (in thousands):
|
Year Ended March 31,
|
|||||||||||
|
2025
|
2024
|
2023
|
|||||||||
|
Net sales:
|
|||||||||||
|
US
|
$ | 1,983,403 | $ | 2,127,695 | $ | 1,953,465 | |||||
|
Non-US
|
85,386 | 97,607 | 114,253 | ||||||||
|
Total
|
$ | 2,068,789 | $ | 2,225,302 | $ | 2,067,718 | |||||
Our long-lived tangible assets include property and equipment-net, operating leases-net, and equipment that has been returned to us at the termination of the lease.
|
March 31,
|
|||||||
|
2025
|
2024
|
||||||
|
Long-lived tangible
assets:
|
|||||||
|
US
|
$ | 17,162 | $ | 16,258 | |||
|
Non-US
|
321 | 582 | |||||
|
Total
|
$ | 17,483 | $ | 16,840 | |||
Sales to Verizon Communications Inc. represented 16%, 19% and 22% of net sales for the years ended March 31, 2025, March 31, 2024, and March 31, 2023, respectively, all of which related to our technology business segments.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.