UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from____ to ____.

Commission file number: 1-34167

ePlus inc.

(Exact name of registrant as specified in its charter)


Delaware		54-1817218
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

13595 Dulles Technology Drive, Herndon, VA 20171-3413

(Address, including zip code, of principal executive offices)

Registrant’s telephone number, including area code: (703) 984-8400

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	PLUS	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares of common stock outstanding as of February 2, 2026, was 26,392,561.


TABLE OF CONTENTS

ePlus inc. AND SUBSIDIARIES

Part I.	Financial Information

Item 1.	Financial Statements

	Unaudited Consolidated Balance Sheets as of December 31, 2025, and March 31, 2025	4

	Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2025, and 2024	5

	Unaudited Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended December 31, 2025, and 2024	6

	Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2025, and 2024	7

	Unaudited Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended December 31, 2025, and 2024	9

	Notes to Unaudited Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37

Item 4.	Controls and Procedures	37

Part II.	Other Information

Item 1.	Legal Proceedings	38

Item 1A.	Risk Factors	38

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	38

Item 3.	Defaults Upon Senior Securities	39

Item 4.	Mine Safety Disclosures	39

Item 5.	Other Information	39

Item 6.	Exhibits	40

Signatures		41

CAUTIONARY LANGUAGE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are made in reliance upon the protections provided by such acts for forward-looking statements. Such forward-looking statements are not based on historical fact but are based upon numerous assumptions about future conditions that may not occur. Given their forward-looking nature, these statements involve substantial risks, uncertainties and potentially inaccurate assumptions. Forward-looking statements are generally identifiable by use of forward-looking words such as “may,” “should,” “would,” “intend,” “estimate,” “will,” “potential,” “possible,” “could,” “believe,” “expect,” “intend,” “plan,” “anticipate,” “project,” and similar expressions or by using future dates. Readers are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf. Forward-looking statements are made based upon information that is currently available or management’s current expectations and beliefs concerning future developments and their potential effects upon us, speak only as of the date hereof, and are subject to certain risks and uncertainties. We do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur, or of which we later become aware. Actual events, transactions and results may materially differ from the anticipated events, transactions, or results described in such statements. Our ability to consummate such transactions and achieve such events or results is subject to certain risks and uncertainties. Such risks and uncertainties include, but are not limited to, the matters set forth below:

●

financial losses resulting from national and international political instability fostering uncertainty and volatility in the global economy including changes in interest rates, tariffs, inflation, export requirements applicable to products we sell, sanctions and exposure to foreign currency rate changes;

●

supply chain issues, including a shortage of IT component parts and products, and our vendors’ rapid and unpredictable price fluctuations relating thereto, or a customer’s or vendor’s cancellation of orders such as for, but not limited to, memory chips. These issues may increase our and the customer’s costs, decrease gross profit, cause a delay in fulfilling or inability to fulfill customer orders, increase our need for working capital, delay completing professional services, or purchase IT products or services needed to support our internal infrastructure or operations, resulting in an adverse impact on our financial results;

●

significant adverse changes in our relationship with one or more of our larger customer accounts or vendors, including decreased account profitability, reductions in contracted services, or a loss of such relationships;

●

increases to our costs including wages and our ability to increase our prices to our customers as a result, or we experience negative financial impacts due to the pricing arrangements we have with our customers;

●

a material decrease in the credit quality of our customer base, or a material increase in our credit losses;

●

reliance on third parties to perform some of our service obligations to our customers, and the reliance on a small number of key vendors in our supply chain with whom we do not have long-term supply agreements, guaranteed price agreements, or assurance of stock availability;

●

the possibility of a reduction of vendor incentives provided to us;

●

our inability to identify merger and acquisition candidates, perform sufficient due diligence prior to completing mergers and acquisitions, successfully integrate a completed merger and/or acquisition, successfully complete merger and acquisition transactions, including on favorable terms, or identify an opportunity for or successfully completing a business disposition;

●

our ability to remain secure during a cybersecurity attack or other information technology (“IT”) outage, including disruptions in our, our vendors or a third party’s IT systems and data and audio communication networks;

●

ability to secure our own and our customers’ electronic and other confidential information, while maintaining compliance with evolving data privacy and cybersecurity laws and regulations and appropriately providing required notice and disclosure of cybersecurity incidents when and if necessary;

●

our dependence on key personnel to maintain certain customer relationships, and our ability to hire, train, and retain sufficient qualified personnel by recruiting and retaining highly skilled, competent personnel with needed vendor certifications;

●

risks relating to artificial intelligence (“AI”), including the use or capabilities of AI and emerging laws, rules and regulations related to AI;

●

our ability to manage a diverse product set of solutions, including AI products and services, in highly competitive markets with a number of key vendors;

●

changes in the IT industry and/or rapid changes in product offerings, including the proliferation of the cloud, infrastructure as a service (“IaaS”), software as a service (“SaaS”), platform as a service (“PaaS”), and AI which may affect our financial results;

●

our ability to increase our total number of customers and our ability to increase our total number of customers who use our managed services and professional services while we continuously enhance our managed services offerings to remain competitive in the marketplace;

●

ongoing remote work trends, and the increase in cybersecurity attacks that have occurred while employees work remotely and our ability to adequately train our personnel to prevent a cyber event;

●

exposure to changes in, interpretations of, or enforcement trends in, and customer and vendor actions in anticipation of or response to, legislation and regulatory matters;

●

our service agreements may require external audits and deficiencies identified in any such audit reports could negatively affect our client engagements, and our professional and liability insurance policies coverage may be insufficient to cover a claim;

●

a natural disaster or other adverse event at one of our primary configuration centers, data centers, or a third-party provider or vendor location could negatively impact our business;

●

failure to comply with public sector contracts, or related applicable laws or regulations;

●

our ability to raise capital, maintain or increase, as needed, our lines of credit with vendors or our floor plan facility, or the effect of those matters on our common stock price;

●

our ability to predictably meet expectations of the investor and analyst community, including relative to our financial performance guidance that we provide;

●

our ability to implement comprehensive plans for the integration of sales forces, cost containment, asset rationalization, systems integration, and other key strategies following mergers and acquisitions; and

●

our ability to protect our intellectual property rights and successfully defend any challenges to the validity of our patents or allegations that we are infringing upon any third-party patents, and the costs associated with those actions, and, when appropriate, the costs associated with licensing required technology.

We cannot be certain that our business strategy will be successful or that we will successfully address these and other challenges, risks, and uncertainties. For a further list and description of various risks, relevant factors, and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see Part II, Item 1A, “Risk Factors” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained elsewhere in this report, as well as other reports that we file with the Securities and Exchange Commission (“SEC”).

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)


	December 31, 2025			March 31, 2025
ASSETS

Current assets:
Cash and cash equivalents	$	326,291		$	389,375
Accounts receivable—trade, net		697,989			516,925
Accounts receivable—other, net		43,521			19,382
Inventories		240,979			120,440
Deferred costs		76,533			66,769
Other current assets		68,902			28,500
Current assets of discontinued operations		-			222,399
Total current assets		1,454,215			1,363,790

Deferred tax asset		9,048			3,658
Property, equipment, and other assets—net		99,381			98,657
Goodwill		202,927			202,858
Other intangible assets—net		66,113			82,007
Non-current assets of discontinued operations		-			133,835
TOTAL ASSETS	$	1,831,684		$	1,884,805

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Current liabilities:
Accounts payable	$	291,378		$	324,580
Accounts payable—floor plan		133,150			89,527
Salaries and commissions payable		53,405			42,219
Deferred revenue		168,282			152,631
Other current liabilities		35,875			22,463
Current liabilities of discontinued operations		-			166,463
Total current liabilities		682,090			797,883

Deferred tax liability—long-term		-			1,454
Deferred revenue—long-term		74,721			81,759
Other liabilities		11,575			13,540
Non-current liabilities of discontinued operations		-			12,546
TOTAL LIABILITIES		768,386			907,182

COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS' EQUITY

Preferred stock, $0.01 per share par value; 2,000 shares authorized; none outstanding		-			-

Common stock, $0.01 per share par value; 50,000 shares authorized; 26,391 outstanding at December 31, 2025, and 26,526 outstanding at March 31, 2025		278			276
Additional paid-in capital		207,285			193,698
Treasury stock, at cost, 1,376 shares at December 31, 2025, and 1,056 shares at March 31, 2025		(95,063	)		(70,748	)
Retained earnings		945,305			850,956
Accumulated other comprehensive income—foreign currency translation adjustment		5,493			3,441
Total Stockholders' Equity		1,063,298			977,623
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,831,684		$	1,884,805

See Notes to Unaudited Consolidated Financial Statements.

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)


		Three months ended December 31,				Nine months ended December 31,
		2025		2024		2025		2024
Net sales
Product	$	501,931	$	379,574	$	1,508,002	$	1,226,742
Services		112,843		113,647		352,913		295,503
Total		614,774		493,221		1,860,915		1,522,245
Cost of sales
Product		382,549		295,497		1,163,092		954,700
Services		73,571		72,646		228,829		188,291
Total		456,120		368,143		1,391,921		1,142,991

Gross profit		158,654		125,078		468,994		379,254

Selling, general, and administrative		108,695		100,932		320,121		286,069
Depreciation and amortization		6,493		7,676		20,372		18,260
Operating expenses		115,188		108,608		340,493		304,329

Operating income		43,466		16,470		128,501		74,925

Other income, net		2,123		3,447		7,898		5,474

Earnings from continuing operations before tax		45,589		19,917		136,399		80,399

Provision for income taxes		12,189		5,351		37,711		21,841

Net earnings from continuing operations		33,400		14,566		98,688		58,558

Earnings from discontinued operations, net of tax (Note 4)		1,652		9,567		8,916		24,224

Net earnings	$	35,052	$	24,133	$	107,604	$	82,782

Earnings per common share—basic
Continuing operations	$	1.28	$	0.55	$	3.76	$	2.20
Discontinued operations		0.06		0.36		0.34		0.92
Earnings per common share—basic	$	1.34	$	0.91	$	4.10	$	3.12

Earnings per common share—diluted
Continuing operations	$	1.27	$	0.55	$	3.74	$	2.19
Discontinued operations		0.06		0.36		0.34		0.91
Earnings per common share—diluted	$	1.33	$	0.91	$	4.08	$	3.10

Weighted average common shares outstanding—basic		26,174		26,495		26,269		26,568
Weighted average common shares outstanding—diluted		26,288		26,620		26,388		26,727

See Notes to Unaudited Consolidated Financial Statements.

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


		Three months ended December 31,					Nine months ended December 31,
		2025		2024			2025		2024
NET EARNINGS	$	35,052	$	24,133		$	107,604	$	82,782

OTHER COMPREHENSIVE INCOME, NET OF TAX:

Foreign currency translation adjustments		96		(3,369	)		2,052		(424	)

Other comprehensive income (loss)		96		(3,369	)		2,052		(424	)

TOTAL COMPREHENSIVE INCOME	$	35,148	$	20,764		$	109,656	$	82,358

See Notes to Unaudited Consolidated Financial Statements.

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


		Nine months ended December 31,
		2025			2024
Cash flows from operating activities:
Net earnings	$	107,604		$	82,782
Less: Earnings from discontinued operations, net of tax		8,916			24,224
Net earnings from continuing operations		98,688			58,558

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities of continuing operations:
Depreciation and amortization		21,192			19,346
Provision for credit losses		595			1,483
Share-based compensation expense		9,922			8,184
Deferred taxes		803			(472	)
Loss on disposal of property and equipment		72			207
Changes in:
Accounts receivable		(183,689	)		107,614
Inventories		(120,300	)		50,660
Deferred costs and other assets		(47,567	)		(17,587	)
Accounts payable		(34,071	)		(61,202	)
Salaries and commissions payable, deferred revenue, and other liabilities		30,941			19,854
Net cash provided by (used in) operating activities of continuing operations		(223,414	)		186,645
Net cash provided by (used in) operating activities of discontinued operations		2,229			(45,447	)
Net cash provided by (used in) operating activities		(221,185	)		141,198

Cash flows from investing activities:
Proceeds from sale of property and equipment		50			1
Purchases of property and equipment		(3,250	)		(3,413	)
Cash used in acquisitions, net of cash acquired		-			(124,926	)
Net cash used in investing activities of continuing operations		(3,200	)		(128,338	)
Net cash provided by investing activities of discontinued operations		156,681			1,024
Net cash provided by (used in) investing activities		153,481			(127,314	)

Cash flows from financing activities:
Proceeds from issuance of common stock		3,606			3,635
Repurchase of common stock		(24,315	)		(33,459	)
Dividend payments		(13,130	)		-
Payments to settle liabilities for acquisitions		-			(2,307	)
Net borrowings on floor plan facility		43,623			10,640
Net cash provided by (used in) financing activities of continuing operations		9,784			(21,491	)
Net cash provided by (used in) financing activities of discontinued operations		(6,417	)		8,065
Net cash provided by (used in) financing activities		3,367			(13,426	)

Effect of exchange rate changes on cash		1,253			(405	)

Net increase (decrease) in cash and cash equivalents		(63,084	)		53

Cash and cash equivalents, beginning of period		389,375			253,021

Cash and cash equivalents, end of period	$	326,291		$	253,074

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued

(in thousands)


		Nine months ended December 31,
		2025			2024
Supplemental disclosures of cash flow information:
Cash paid for interest	$	98		$	98
Cash paid for income taxes	$	31,622		$	44,505
Cash paid for amounts included in the measurement of lease liabilities	$	4,908		$	4,331

Schedule of non-cash investing and financing activities:
Purchases of property and equipment	$	(732	)	$	(431	)
Vesting of share-based compensation	$	10,260		$	11,872
Repurchase of common stock	$	-		$	(369	)
New operating lease assets obtained in exchange for lease obligations	$	2,263		$	6,329

See Notes to Unaudited Consolidated Financial Statements.

ePlus inc. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)





	Nine months ended December 31, 2025
															Accumulated Other Comprehensive Income
						Additional Paid-In Capital
	Common Stock								Treasury Stock			Retained Earnings
	Shares			Par Value					Treasury Stock			Retained Earnings						Total

Balance, March 31, 2025	26,526		$	276	$	193,698		$	(70,748	)	$	850,956		$	3,441		$	977,623
Issuance of restricted stock awards	119			1		(1	)		-			-			-			-
Issuance of common stock	29			-		1,757			-			-			-			1,757
Share-based compensation	-			-		3,500			-			-			-			3,500
Repurchase of common stock	(47	)		-		-			(3,304	)		-			-			(3,304	)
Net earnings	-			-		-			-			37,697			-			37,697
Foreign currency translation adjustment	-			-		-			-			-			3,158			3,158

Balance, June 30, 2025	26,627		$	277	$	198,954		$	(74,052	)	$	888,653		$	6,599		$	1,020,431
Issuance of restricted stock awards	(2	)		-		-			-			-			-			-
Share-based compensation	-			-		3,058			-			-			-			3,058
Repurchase of common stock	(60	)		-		-			(4,404	)		-			-			(4,404	)
Dividends paid and accrued	-			-		-			-			(6,656	)		-			(6,656	)
Net earnings	-			-		-			-			34,855			-			34,855
Foreign currency translation adjustment	-			-		-			-			-			(1,202	)		(1,202	)

Balance, September 30, 2025	26,565		$	277	$	202,012		$	(78,456	)	$	916,852		$	5,397		$	1,046,082
Issuance of restricted stock awards	9			-		-			-			-			-			-
Issuance of common stock	30			1		1,849			-			-			-			1,850
Share-based compensation	-			-		3,424			-			-			-			3,424
Repurchase of common stock	(213	)		-		-			(16,607	)		-			-			(16,607	)
Dividends paid and accrued	-			-		-			-			(6,599	)		-			(6,599	)
Net earnings	-			-		-			-			35,052			-			35,052
Foreign currency translation adjustment	-			-		-			-			-			96			96

Balance, December 31, 2025	26,391		$	278	$	207,285		$	(95,063	)	$	945,305		$	5,493		$	1,063,298







	Nine months ended December 31, 2024
						Additional Paid-In Capital								Accumulated Other Comprehensive Income
	Common Stock								Treasury Stock			Retained Earnings
	Shares			Par Value					Treasury Stock			Retained Earnings					Total

Balance, March 31, 2024	26,952		$	274	$	180,058		$	(23,811	)	$	742,978	$	2,280		$	901,779
Issuance of restricted stock awards	121			1		(1	)		-			-		-			-
Issuance of common stock	29			1		1,810			-			-		-			1,811
Share-based compensation	-			-		2,866			-			-		-			2,866
Repurchase of common stock	(162	)		-		-			(11,935	)		-		-			(11,935	)
Net earnings	-			-		-			-			27,339		-			27,339
Foreign currency translation adjustment	-			-		-			-			-		68			68

Balance, June 30, 2024	26,940		$	276	$	184,733		$	(35,746	)	$	770,317	$	2,348		$	921,928
Issuance of restricted stock awards	(1	)		-		-			-			-		-			-
Share-based compensation	-			-		2,597			-			-		-			2,597
Repurchase of common stock	(141	)		-		-			(11,715	)		-		-			(11,715	)
Net earnings	-			-		-			-			31,310		-			31,310
Foreign currency translation adjustment	-			-		-			-			-		2,877			2,877

Balance, September 30, 2024	26,798		$	276	$	187,330		$	(47,461	)	$	801,627	$	5,225		$	946,997
Issuance of restricted stock awards	6			-		-			-			-		-			-
Issuance of common stock	29			-		1,824			-			-		-			1,824
Share-based compensation	-			-		2,933			-			-		-			2,933
Repurchase of common stock	(130	)		-		-			(10,178	)		-		-			(10,178	)
Net earnings	-			-		-			-			24,133		-			24,133
Foreign currency translation adjustment	-			-		-			-			-		(3,369	)		(3,369	)

Balance, December 31, 2024	26,703		$	276	$	192,087		$	(57,639	)	$	825,760	$	1,856		$	962,340

See Notes to Unaudited Consolidated Financial Statements.

ePlus inc. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS — Our company was founded in 1990 and is a Delaware corporation. ePlus inc. is sometimes referred to in this Quarterly Report on Form 10-Q as “we,” “our,” “us,” or “ePlus.” ePlus inc. is a holding company that through its subsidiaries provides information technology (“IT”) solutions which enable organizations to optimize their IT environment and supply chain processes. We also provide consulting, professional, and managed services and complete lifecycle management services. We focus on selling to medium and large enterprises and state and local government and educational institutions (“SLED”) in the United States (“US”) and select international markets including the United Kingdom (“UK”), the European Union (“EU”), India, and Singapore.

BASIS OF PRESENTATION — The unaudited consolidated financial statements include the accounts of ePlus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accounts of businesses acquired are included in the unaudited consolidated financial statements from the dates of acquisition.

SALE OF OUR FINANCING BUSINESS — On June 30, 2025, we completed the sale of 100% of the membership interests of Expo Holdings, LLC, a Delaware limited liability company and our wholly-owned subsidiary (“HoldCo”), to Marlin Leasing Corporation, a Delaware corporation (d/b/a PEAC Solutions) pursuant to the terms of the Membership Interest Purchase Agreement, dated June 20, 2025 (the “Sale Transaction”). By selling HoldCo, together with its U.S. subsidiaries, we sold our domestic financing business that comprised most of our financing business segment, which is a business that finances information technology equipment, software and related services for customers. We continue to own the international entities in the financing business. This divestiture positions us to focus on being a technology solutions provider and represents a strategic shift in our operations. As a result of the Sale Transaction, we determined that the domestic financing business that was sold met the definition of discontinued operations. Consequently, for all periods presented in these financial statements, we are retrospectively presenting the results of our domestic financing business as discontinued operations. In our unaudited consolidated balance sheets for all periods, we present the assets and liabilities of our domestic financing business as assets and liabilities of discontinued operations. In our unaudited consolidated statements of operations for all periods, we present the operating results of our domestic financing business in earnings from discontinued operations. After the sale, our remaining three reportable segments are product, professional services, and managed services, which we formerly referred to collectively as our technology business. Refer to Note 4, “Discontinued Operations” for additional information on the transaction and its effect on our financial statements.

INTERIM FINANCIAL STATEMENTS — The unaudited consolidated financial statements for the three and nine months ended December 31, 2025, and 2024, were prepared by us and include all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations, changes in comprehensive income, and cash flows for such periods. Operating results for the three and nine months ended December 31, 2025, and 2024, are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending March 31, 2026, or any other future period. These unaudited consolidated financial statements do not include all disclosures required by the accounting principles generally accepted in the United States (“US GAAP”) for annual financial statements. Our audited consolidated financial statements are contained in our annual report on Form 10-K for the year ended March 31, 2025 (“2025 Annual Report”). On January 26, 2026, we filed with the SEC a current report on Form 8-K, which recasts prior period financial information and related disclosures in certain portions of our 2025 Annual Report to present the operations of the domestic financing business as discontinued operations separately from our continuing operations (the “Recast Financial Statements”). The 2025 Annual Report and the Recast Financial Statements should be read in conjunction with these interim consolidated financial statements.

USE OF ESTIMATES — The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual values, vendor consideration, goodwill and intangible assets, allowance for credit losses, inventory obsolescence, and the recognition and measurement of income tax assets and other provisions and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

CONCENTRATIONS OF RISK — A substantial portion of our sales are products from Cisco Systems, which represented approximately 29% and 27% of our net sales for the three months ended December 31, 2025, and 2024, respectively, and 29% and 34% of our net sales for the nine months ended December 31, 2025, and 2024, respectively.

SIGNIFICANT ACCOUNTING POLICIES — The significant accounting policies used in preparing these Consolidated Financial Statements were applied on a basis consistent with those reflected in our Consolidated Financial Statements for the year ended March 31, 2025, except for the changes provided in Note 2, “Recent Accounting Pronouncements.”

2. RECENT ACCOUNTING PRONOUNCEMENTS

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. This update is effective for us for annual periods beginning with our fiscal year ending March 31, 2026. Early adoption is permitted. The amendments in this update are required to be applied on a prospective basis and retrospective adoption is permitted. This update will impact our income tax disclosures and will not affect our financial position, results of operations, and cash flows.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard requires public business entities to disclose detailed information about specific types of expenses that are relevant to certain line items on the income statement. This update is effective for us for annual periods beginning in our fiscal year ending March 31, 2028, and interim periods beginning in the first quarter of our fiscal year ending March 31, 2029. Early adoption is permitted. We are currently evaluating the impact that this update will have on our financial statement disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This standard is intended to improve the operability and application of guidance related to capitalized software development costs. This update is effective for us beginning in the first quarter of our fiscal year ending March 31, 2029. Early adoption is permitted. We may adopt the guidance using prospective application, retrospective application, or a modified transition approach. We are currently evaluating the impact that this update will have on our consolidated financial statements upon adoption.

3. REVENUES

ACCOUNTS RECEIVABLE AND CONTRACT ASSETS

Our balance in accounts receivable—trade, net includes our accounts receivable recognized from contracts with customers and contract assets. Contract assets represent our right to consideration in exchange for goods or services that we transferred to a customer when that right is conditioned on something other than the passage of time.

The following table provides a disaggregation of our balance in accounts receivable—trade, net (in thousands):


	December 31, 2025			March 31, 2025
Accounts receivable	$	684,917		$	507,052
Contract assets		16,271			13,775
Allowance for credit losses		(3,199	)		(3,902	)
Total accounts receivable—trade, net	$	697,989		$	516,925

As of December 31, 2025, our accounts receivable includes $0.2 million that is due from a financing partner in payment for our sale of customer receivables to them. Additionally, within other current assets in our consolidated balance sheet, we have $45.9 million in receivables recognized from contracts with customers that we intend to sell to this financing partner.

CONTRACT LIABILITIES

Contract liabilities represent our obligation to transfer goods or services to a customer for which we have received consideration, or the amount is due from the customer. Our contract liabilities consist of our deferred revenue and deferred revenue—long-term in our consolidated balance sheets. Revenues recognized from the beginning contract liability balance were $26.2 million and $102.4 million for the three and nine months ended December 31, 2025, respectively, and $24.8 million and $97.3 million for the three and nine months ended December 31, 2024, respectively.

PERFORMANCE OBLIGATIONS

The following table includes revenue expected to be recognized in the future related to performance obligations, primarily non-cancelable contracts for ePlus managed services, that are unsatisfied or partially unsatisfied at the end of the reporting period (in thousands):


Remainder of the year ending March 31, 2026	$	32,490
Year ending March 31, 2027		77,636
Year ending March 31, 2028		34,957
Year ending March 31, 2029		19,326
Year ending March 31, 2030, and thereafter		8,225
Total remaining performance obligations	$	172,634

The table does not include the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, and (ii) contracts where we recognize revenue at the amount that we have the right to invoice for services performed.

4. DISCONTINUED OPERATIONS

On June 30, 2025, we completed the sale of HoldCo, thereby selling our domestic financing business. In the Sale Transaction, we received net cash proceeds of $156.7 million, consisting of cash proceeds of $180.1 million less cash transferred of $23.4 million, recognized a receivable of $7.8 million related to a post-closing adjustment process based on the book value of the assets associated with HoldCo and other adjustments, and recognized a receivable for contingent consideration of $13.5 million. See Note 13, “Fair Value of Financial Instruments” for a discussion of our contingent consideration asset. We incurred approximately $4.0 million in transaction costs during our quarter ended June 30, 2025, which is netted against the gain on sale of HoldCo before income taxes. In connection with the sale, we entered into a transition services agreement, pursuant to which ePlus and PEAC Solutions will provide certain transition services to each other after the sale. In December 2025, we paid $2.3 million to settle a legal matter related to our discontinued operations. As a result of this settlement, we recognized a gain of $2.3 million in the three months ended December 31, 2025 due to releasing a contingent liability of $4.6 million for this matter that we had originally recognized in our results for the three months ended September 30, 2025. We recognized the original charge and the benefit from the settlement in our results from discontinued operations.

The following table provides our operating results of discontinued operations for the three and nine months ended December 31, 2025, and 2024 (in thousands):


	Three months ended December 31,				Nine months ended December 31,
	2025		2024		2025			2024
Net sales	$	-	$	17,744	$	15,811		$	48,430
Cost of sales		-		1,937		1,734			4,327
Gross profit		-		15,807		14,077			44,103

Selling, general, and administrative		-		3,249		3,599			10,691
Interest and financing costs		-		517		450			1,639
Operating expenses		-		3,766		4,049			12,330

Operating income		-		12,041		10,028			31,773

Other income (expense)—net		2,300		203		(2,089	)		828

Earnings before gain from sale and income taxes		2,300		12,244		7,939			32,601
Gain from sale of HoldCo before income taxes		-		-		4,368			-
Earnings before income taxes		2,300		12,244		12,307			32,601

Provision for income taxes		648		2,677		3,391			8,377

Earnings (loss) from discontinued operations, net of tax	$	1,652	$	9,567	$	8,916		$	24,224

The following table provides the major classes of assets and liabilities that are classified as discontinued operations as of March 31, 2025 (in thousands):


	March 31, 2025
ASSETS

Accounts receivable	$	34,610
Financing receivables—net, current		168,392
Other current assets		19,397
Current assets of discontinued operations	$	222,399

Financing receivables and operating leases—net	$	126,408
Other assets—long-term		7,427
Non-current assets of discontinued operations	$	133,835

LIABILITIES

Accounts payable	$	127,154
Salaries and commissions payable		2,812
Non-recourse notes payable—current		27,456
Other current liabilities		9,041
Current liabilities of discontinued operations	$	166,463

Non-recourse notes payable—long-term		11,317
Other liabilities—long-term		1,229
Non-current liabilities of discontinued operations	$	12,546

5. GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL

The following table summarizes the changes in the carrying amount of goodwill for the nine months ended December 31, 2025 (in thousands):


	Product		Professional Services		Managed Services		Total
Balance, March 31, 2025 (1)	$	129,177	$	63,779	$	9,902	$	202,858
Foreign currency translations		54		10		5		69
Balance, December 31, 2025 (1)	$	129,231	$	63,789	$	9,907	$	202,927

(1)

Balance is net of $4,644 thousand in accumulated impairments that were recorded in a segment that preceded our current segment organization.

Goodwill represents the premium paid over the fair value of the net tangible and intangible assets that are individually identified and separately recognized in business combinations.

The only activity in our goodwill balance over the nine months ended December 31, 2025, was foreign currency translation adjustments.

We test goodwill for impairment on an annual basis, as of the first day of our third fiscal quarter, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying value.

In our annual test as of October 1, 2025, we performed a qualitative assessment of goodwill and concluded that, more likely than not, the fair value of our product, professional services, and managed services reporting units continued to exceed their carrying value.

OTHER INTANGIBLE ASSETS

Our other intangible assets consist of purchased intangible assets and capitalized software development.

The following table provides the composition of our purchased intangible assets as of December 31, 2025, and March 31, 2025 (in thousands):


	December 31, 2025							March 31, 2025
	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Customer relationships	$	167,166	$	(108,066	)	$	59,100	$	167,093	$	(93,085	)	$	74,008
Trade names and other		11,476		(4,474	)		7,002		11,459		(3,500	)		7,959
Total purchased intangible assets	$	178,642	$	(112,540	)	$	66,102	$	178,552	$	(96,585	)	$	81,967

Our customer relationships, trade names, and other purchased intangibles are generally amortized between 5 to 10 years.

Total amortization expense for other intangible assets was $5.0 million and $15.9 million for the three and nine months ended December 31, 2025, respectively, and $6.0 million and $14.2 million for the three and nine months ended December 31, 2024, respectively.

6. ALLOWANCE FOR CREDIT LOSSES

The following table provides the activity in our allowance for credit losses within accounts receivable—trade for the nine months ended December 31, 2025, and 2024 (in thousands):


	Nine months ended December 31,
		2025			2024
Beginning	$	3,902		$	2,549
Provision for credit losses		595			1,483
Write-offs and other		(1,298	)		(365	)
Ending	$	3,199		$	3,667

7. CREDIT FACILITY

We finance the operations of our subsidiaries ePlus Technology, inc. and ePlus Technology Services, inc. (collectively, the “Borrowers”) through a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). The WFCDF credit facility (the “WFCDF Credit Facility”) has a floor plan facility and a revolving credit facility.

Our credit facility is provided by a syndicate of banks for which WFCDF acts as administrative agent and consists of a discretionary senior secured floor plan facility in favor of the Borrowers in the aggregate principal amount of up to $500.0 million, together with a sublimit for a revolving credit facility for up to $200.0 million. On June 20, 2025, the WFCDF Credit Facility was amended in anticipation of the sale of the financing business. The substantive terms of the WFCDF Credit Facility were not materially changed by such amendment.

Under the accounts payable floor plan facility, we had an outstanding balance of $133.2 million and $89.5 million as of December 31, 2025, and March 31, 2025, respectively. On our balance sheet, our liability under the accounts payable floor plan facility is presented as accounts payable – floor plan.

We use the floor plan to facilitate the purchase of inventory from designated suppliers. WFCDF pays our suppliers and provides us with extended payment terms. We pay down the floor plan facility on three specified dates each month, generally 45 to 60 days from the invoice date. Other than unused line fees, if applicable, we do not incur any interest or other incremental expenses for the floor plan facility. We are not involved in establishing the terms or conditions of the arrangements between our suppliers and WFCDF.

We may use the revolving credit facility for our borrowing needs. We did not have any outstanding balances under the revolving credit facility as of December 31, 2025, or March 31, 2025.

The amount of principal available is subject to a borrowing base determined by, among other things, the Borrowers’ accounts receivable and inventory, each pursuant to a formula and subject to certain reserves. Loans accrue interest at a rate per annum equal to Term SOFR Rate plus a Term SOFR Adjustment of 0.10% plus an Applicable Margin of 1.75%.

Our borrowings under the WFCDF Credit Facility are secured by the assets of the Borrowers. Additionally, the WFCDF Credit Facility requires a guaranty of $10.5 million by ePlus inc.

Under the WFCDF Credit Facility, the Borrowers are restricted in their ability to pay dividends to ePlus inc. unless their available borrowing meets certain thresholds. As of December 31, 2025, and March 31, 2025, their available borrowing met the thresholds such that there were no restrictions on their ability to pay dividends.

The WFCDF Credit Facility has an initial one-year term, which automatically renews for successive one-year terms thereafter. However, either the Borrowers or WFCDF may terminate the WFCDF Credit Facility at any time by providing a written termination notice to the other party no less than 90 days prior to such termination.

The loss of the WFCDF Credit Facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our business and as an operational function of our accounts payable process.

8. COMMITMENTS AND CONTINGENCIES

LEGAL PROCEEDINGS

We are subject to various legal proceedings, as well as demands, claims and threatened litigation, that arise in the normal course of our business and have not been fully resolved. The ultimate outcome of any litigation or other legal dispute is uncertain. When a loss related to a legal proceeding or claim is probable and reasonably estimable, we accrue our best estimate for the ultimate resolution of the matter. If one or more legal matters are resolved against us in a reporting period for amounts above our expectations, our financial condition and operating results for that period may be adversely affected. As of December 31, 2025, we do not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. Any outcome, whether favorable or unfavorable, may materially and adversely affect us due to legal costs and expenses, diversion of management attention and other factors. We expense legal costs in the period incurred. We cannot assure that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against us in the future, and these matters could relate to prior, current, or future transactions or events.

9. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding plus common stock equivalents during each period.

The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net income per common share as disclosed on our unaudited consolidated statements of operations for the three and nine months ended December, 2025, and 2024, respectively (in thousands, except per share data).


	Three months ended December 31,				Nine months ended December 31,
	2025		2024		2025		2024
Net earnings attributable to common shareholders — basic and diluted
Continuing operations	$	33,400	$	14,566	$	98,688	$	58,558
Discontinued operations		1,652		9,567		8,916		24,224
Net earnings	$	35,052	$	24,133	$	107,604	$	82,782

Basic and diluted common shares outstanding:
Weighted average common shares outstanding — basic		26,174		26,495		26,269		26,568
Effect of dilutive shares		114		125		119		159
Weighted average common shares outstanding — diluted		26,288		26,620		26,388		26,727

Earnings per common share — basic
Continuing operations	$	1.28	$	0.55	$	3.76	$	2.20
Discontinued operations		0.06		0.36		0.34		0.92
Earnings per common share—basic	$	1.34	$	0.91	$	4.10	$	3.12

Earnings per common share — diluted
Continuing operations	$	1.27	$	0.55	$	3.74	$	2.19
Discontinued operations		0.06		0.36		0.34		0.91
Earnings per common share—diluted	$	1.33	$	0.91	$	4.08	$	3.10

10. STOCKHOLDERS’ EQUITY

SHARE REPURCHASE PLAN

On August 7, 2025, our Board of Directors authorized the repurchase of up to 1,500,000 shares of our outstanding common stock, over a 12-month period beginning August 11, 2025. Previously, on May 18, 2024, our board of directors authorized the repurchase of up to 1,250,000 shares of our outstanding common stock over a 12-month period that began on May 28, 2024 and terminated on May 27, 2025. Under each authorized share repurchase program, when such program is in place, we may make purchases from time to time in the open market, or in privately negotiated transactions, subject to availability and the plan terms. Any repurchased shares have the status of treasury shares and may be used, when needed, for general corporate purposes.

During the nine months ended December 31, 2025, we purchased 272,900 shares of our outstanding common stock at a value of $21.0 million under the share repurchase plan; we also purchased 47,488 shares of common stock at a value of $3.3 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

During the nine months ended December 31, 2024, we purchased 380,522 shares of our outstanding common stock at a value of $30.0 million under the share repurchase plan; we also purchased 52,450 shares of common stock at a value of $3.8 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock.

11. SHARE-BASED COMPENSATION

SHARE-BASED PLANS

During the nine months ended December 31, 2025, we had share-based awards outstanding under the following plans: (1) the 2017 Non-Employee Director Long-Term Incentive Plan (“2017 Director LTIP”), (2) the 2024 Non-Employee Director Long-Term Incentive Plan (“2024 Director LTIP”) and (3) the 2021 Employee Long-Term Incentive Plan (“2021 Employee LTIP”).

These share-based plans define fair market value as the closing sales price of a share of common stock as quoted on any established stock exchange for such date or the most recent trading day preceding such date if there were no trades on such date.

RESTRICTED STOCK ACTIVITY

For the nine months ended December 31, 2025, we granted 9,820 restricted shares under the 2024 Director LTIP and 121,844 restricted shares under the 2021 Employee LTIP. For the nine months ended December 31, 2024, we granted 729 restricted shares of our stock under the 2017 Director LTIP, 6,628 restricted shares of our stock under the 2024 Director LTIP, and 121,097 restricted shares of our stock under the 2021 Employee LTIP. A summary of our restricted stock activity is as follows:


	Number of shares			Weighted average grant-date fair value
Unvested April 1, 2025		275,773		$	64.80
Granted		131,664		$	72.64
Vested		(146,660	)	$	63.55
Forfeited		(5,397	)	$	66.77
Unvested December 31, 2025		255,380		$	69.52

PERFORMANCE STOCK UNITS

Beginning with the fiscal year ended March 31, 2024, we granted Performance Stock Units (“PSUs”) to certain executive officers under our 2021 Employee LTIP. The PSUs will vest based on the achievement of certain performance goals at the end of a three-year performance period. The PSUs represent the right to receive shares of our common stock at the time of vesting. The total number of PSUs that vest range from 0% to 200% of the target number of PSUs based on our achievement of certain performance targets.

The following table provides a summary of the unvested PSUs for the nine months ended December 31, 2025:


	Number of units		Weighted average grant-date fair value
Unvested April 1, 2025		34,535	$	70.94
Granted		38,094	$	76.08
Unvested December 31, 2025		72,629	$	73.63

EMPLOYEE STOCK PURCHASE PLAN

We provide eligible employees the opportunity to purchase shares of our stock through the 2022 Employee Stock Purchase Plan (the “ESPP”). Under the ESPP, eligible employees may collectively purchase up to an aggregate of 2.50 million shares of our stock. Employees in the ESPP contribute part of their earnings over a six-month offering period. At the end of each offering period, employees purchase our shares using their contributions at a discount off the lesser of the closing market price on the first or the last trading day of each offering period. During the nine months ended December 31, 2025, and 2024, we issued 59,108 shares at a weighted average price of $61.00 per share and 58,064 shares at a weighted average price of $62.61 per share, respectively, under the ESPP. As of December 31, 2025, there were 2.31 million shares remaining under the ESPP.

COMPENSATION EXPENSE

The following table provides a summary of our total share-based compensation expense for continuing operations, including for restricted stock awards, PSUs, our ESPP, and the related income tax benefit for the three and nine months ended December 31, 2025, and 2024, respectively (in thousands):


	Three months ended December 31,						Nine months ended December 31,
	2025			2024			2025			2024
Equity-based compensation expense	$	3,424		$	2,863		$	9,922		$	8,184
Income tax benefit		(914	)		(770	)		(2,738	)		(2,226	)

We recognized the income tax benefit as a reduction to our provision for income taxes. As of December 31, 2025, the total unrecognized compensation expense related to unvested restricted stock was $12.9 million, which is expected to be recognized over a weighted-average period of 30 months.

We also provide our employees with a contributory 401(k) profit sharing plan (the “401(k) plan”), to which we may contribute from time to time at our sole discretion. Employer contributions to the 401(k) plan are always fully vested. Our estimated contribution expense to the 401(k) plan for the three months ended December 31, 2025, and 2024, were $1.5 million and $1.4 million, respectively. For the nine months ended December 31, 2025, and 2024, our estimated contribution expense for the plan was $4.4 million and $4.1 million, respectively.

12. INCOME TAXES

Our provision for income tax expense was $12.2 million and $37.7 million for the three and nine months ended December 31, 2025, as compared to $5.4 million and $21.8 million for the same three- and nine-month periods in the prior year. Our effective tax rate for the three and nine months ended December 31, 2025, was 26.7% and 27.6% respectively, compared with 26.9% and 27.2%, respectively, for the same three- and nine-month periods in the prior year. Our effective income tax rate for the three months ended December 31, 2025, was lower compared to the same three-month period in the prior year primarily due to lower state taxes. Our effective income tax rate for the nine months ended December 31, 2025, was higher compared to the same nine-month period in the prior year primarily due to a higher tax benefit from restricted stock and state taxes in the prior year. The effective tax rate for the three and nine months ended December 31, 2025, and December 31, 2024, differed from the US federal statutory rate of 21.0% primarily due to state and local income taxes.

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was enacted into law, resulting in significant changes to the US tax code. The OBBBA permanently extends many of the tax provisions of the Tax Cuts and Jobs Act of 2017, which were scheduled to expire on December 31, 2025. The OBBBA introduces modifications to various US corporate tax provisions, with staggered effective dates ranging from 2025 to 2027. We recognized the impact of the OBBBA in our consolidated financial statements as of and for the periods ended December 31, 2025. The OBBBA did not have a material impact on our income statement or effective tax rate. We are continuing to assess the impact of the OBBBA on our consolidated financial statements, which will depend on our facts in each year, and future rules expected to be issued by the Internal Revenue Service.

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table summarizes the fair value hierarchy of our financial instruments as of December 31, 2025, and March 31, 2025 (in thousands):


			Fair value measurement using
	Recorded amount		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
December 31, 2025
Assets:
Money market funds	$	223,910	$	223,910	$	-	$	-
Contingent receivable	$	12,448	$	-	$	-	$	12,448
Receivables held for sale	$	45,883	$	45,883	$	-	$	-

March 31, 2025
Assets:
Money market funds	$	280,067	$	280,067	$	-	$	-

Through the agreement for the sale of HoldCo, we may earn and receive Holdback Premium (as defined below) payments and two different types of Earn-Outs (as defined below, and together with the Holdback Premium the “Contingent Consideration”) based on the post-Closing performance of the HoldCo Group (as defined below), as operated by PEAC Solutions. We estimated the fair value of each element of the Contingent Consideration using a Monte Carlo simulation model. We recognize the short-term and long-term portions of the receivable for the Contingent Consideration as part of other current assets and property, equipment, and other assets—net, respectively, in our consolidated balance sheet.

We may receive aggregate post-Closing cash payments of up to $3.0 million (the “Holdback Premium”) based on the achievement of customer lease receivable originations targets by HoldCo (i) from the Closing Date to the 18-month anniversary of the Closing Date and (ii) from the 18-month anniversary of the Closing Date to the 30-month anniversary of the Closing Date.

The two types of earn-out payments that are potentially payable to us are based on (i) the volume of originations of certain types of lease receivables (the “Lease Originations Earn-Out”) and (ii) the profitability of certain lease receivables originated either to US federal governmental entities or for which a prime contractor acting on behalf of a government entity is the obligor (the “Transaction Gains Earn-Out,” and together with the Lease Originations Earn-Out, the “Earn-Outs”). Each of the Earn-Outs will be measured for each of the first three consecutive twelve-month periods following the Closing. The Lease Originations Earn-Out is capped at $10.0 million in aggregate for all three post-Closing years. The Transaction Gains Earn-Out does not have a maximum cap.

In our initial accounting for the sale of HoldCo as of June 30, 2025, we recognized a receivable for the Contingent Consideration of $13.5 million. We subsequently adjusted our estimate of the fair value of the contingent receivable to $12.4 million as of December 31, 2025, based on progress towards achieving the Contingent Consideration targets. We recognized this adjustment of $1.1 million as a loss in other income, net in our statement of operations for the nine months ended December 31, 2025.

14. BUSINESS COMBINATIONS

BAILIWICK SERVICES, LLC

On August 19, 2024, our subsidiary, ePlus Technology, inc., acquired 100% of the membership interests of Bailiwick Services, LLC (“Bailiwick”). Based near Minneapolis, Minnesota, Bailiwick is a provider of professional and managed services with nearly 30 years in the business. Bailiwick specializes in serving enterprise customers that operate large store, branch, and campus footprints predominantly in the retail, financial services, restaurant, and hospitality markets.

Our sum for consideration transferred is $124.9 million, which consists of $126.2 million paid in cash at closing, less $1.5 million cash acquired, plus $0.2 million paid in December 2024 to the sellers based on adjustments to a determination of the total net assets delivered. Our allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands):


	Acquisition date amount
Accounts receivable	$	41,719
Contract assets		7,712
Other assets		20,669
Identified intangible assets		58,010
Accounts payable and other liabilities		(38,273	)
Contract liabilities		(6,216	)
Total identifiable net assets		83,621
Goodwill		41,305
Total purchase consideration	$	124,926

The identified intangible assets of $58.0 million consists of customer relationships of $49.3 million with an estimated useful life of ten years and trade name of $8.7 million with a useful life of seven years.

We recognized goodwill related to this transaction of $41.3 million, which was assigned to our professional services and product segments. The goodwill recognized in the Bailiwick acquisition is attributable to the acquired assembled workforce and expected synergies, none of which qualify for recognition as a separate intangible asset. The total amount of goodwill expected to be deductible for tax purposes is $44.4 million.

The amount of revenues and earnings of the acquiree since the acquisition date are not material. Likewise, the impact to the revenue and earnings of the combined entity for the current reporting period as though the acquisition date had been April 1, 2024, is not material.

15. SEGMENT REPORTING

We manage and report our operating results through three operating segments: product, professional services, and managed services. 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.

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 other category consists of the international entities of our financing business that we retained after selling our domestic financing business.

Our CODM measures the performance of the segments based on gross profit. We do not present asset information for our reportable segments as we do not provide asset information to our CODM. Our CODM reviews financial results and forecasts quarterly to manage operations and evaluate performance. Our CODM also uses our financial results and forecasts to make investment decisions as part of our annual budgeting process.

The following table provides reportable segment information (in thousands):

		Three months ended				Nine months ended
		December 31,				December 31,
		2025		2024		2025		2024
Net sales
Product	$	501,827	$	379,472	$	1,507,736	$	1,226,397
Professional services		64,065		69,497		212,138		168,676
Managed services		48,778		44,150		140,775		126,827
Total reportable segments		614,670		493,119		1,860,649		1,521,900
Other		104		102		266		345
Total		614,774		493,221		1,860,915		1,522,245

Cost of sales
Product		382,506		295,426		1,162,920		954,487
Professional services		38,944		41,656		129,692		99,797
Managed services		34,627		30,990		99,137		88,494
Total reportable segments		456,077		368,072		1,391,749		1,142,778
Other		43		71		172		213
Total		456,120		368,143		1,391,921		1,142,991

Gross profit
Product		119,321		84,046		344,816		271,910
Professional services		25,121		27,841		82,446		68,879
Managed services		14,151		13,160		41,638		38,333
Total reportable segments		158,593		125,047		468,900		379,122
Other		61		31		94		132
Total	$	158,654	$	125,078	$	468,994	$	379,254

DISAGGREGATION OF REVENUE

We recognize revenue in our product, professional services, and managed services segments from contracts with customers. We recognize revenue in the other category under guidance for financing and leases.

The following tables provide a disaggregation of revenue recognized from contracts with customers by timing and our position as principal or agent (in thousands):


		Three months ended December 31, 2025
		Product		Professional Services		Managed Services		Total
Timing and position as principal or agent:
Transferred at a point in time as principal	$	442,245	$	-	$	-	$	442,245
Transferred at a point in time as agent		59,582		-		-		59,582
Transferred over time as principal		-		64,065		48,778		112,843
Total revenue from contracts with customers	$	501,827	$	64,065	$	48,778	$	614,670


		Nine months ended December 31, 2025
		Product		Professional Services		Managed Services		Total
Timing and position as principal or agent:
Transferred at a point in time as principal	$	1,338,093	$	-	$	-	$	1,338,093
Transferred at a point in time as agent		169,643		-		-		169,643
Transferred over time as principal		-		212,138		140,775		352,913
Total revenue from contracts with customers	$	1,507,736	$	212,138	$	140,775	$	1,860,649


		Three months ended December 31, 2024
		Product		Professional Services		Managed Services		Total
Timing and position as principal or agent:
Transferred at a point in time as principal	$	331,956	$	-	$	-	$	331,956
Transferred at a point in time as agent		47,516		-		-		47,516
Transferred over time as principal		-		69,497		44,150		113,647
Total revenue from contracts with customers	$	379,472	$	69,497	$	44,150	$	493,119


		Nine months ended December 31, 2024
		Product		Professional Services		Managed Services		Total
Timing and position as principal or agent:
Transferred at a point in time as principal	$	1,092,495	$	-	$	-	$	1,092,495
Transferred at a point in time as agent		133,902		-		-		133,902
Transferred over time as principal		-		168,676		126,827		295,503
Total revenue from contracts with customers	$	1,226,397	$	168,676	$	126,827	$	1,521,900

The following table provides a disaggregation of our revenue from contracts with customers by customer end market and by type (in thousands):


		Three months ended December 31,				Nine months ended December 31,
		2025		2024		2025		2024
Customer end market:
Telecom, Media & Entertainment	$	176,405	$	126,201	$	538,156	$	352,624
Technology		89,368		71,293		241,664		235,387
Healthcare		81,460		58,670		238,036		212,185
Financial Services		66,104		46,217		176,683		130,701
SLED		59,946		71,412		237,754		261,195
Retail		34,394		33,785		106,427		67,754
All others		106,993		85,541		321,929		262,054
Total revenue from contracts with customers	$	614,670	$	493,119	$	1,860,649	$	1,521,900

Type:
Product segment:
Networking	$	230,886	$	181,367	$	707,244	$	602,883
Cloud		175,352		116,864		510,618		375,431
Security		61,055		53,919		188,051		143,133
Collaboration		13,418		8,391		41,733		47,278
Other		21,116		18,931		60,090		57,672
Total product segment		501,827		379,472		1,507,736		1,226,397
Professional services segment		64,065		69,497		212,138		168,676
Managed services segment		48,778		44,150		140,775		126,827
Total revenue from contracts with customers	$	614,670	$	493,119	$	1,860,649	$	1,521,900

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The below is intended to provide context to our consolidated financial condition and results of continuing operations. It should be read in conjunction with the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q, the audited consolidated financial statements included in our annual report on Form 10-K for the year ended March 31, 2025 (“2025 Annual Report”), and our current report on Form 8-K that we filed with the SEC on January 26, 2026, which recasts prior period financial information and related disclosures in certain portions of our 2025 Annual Report to present the operations of the domestic financing business as discontinued operations separately from our continuing operations. These historical financial statements may not be indicative of our future performance. This Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described in Part I, Item 1A, “Risk Factors,” in our 2025 Annual Report, as well as those described in Part II, Item 1A. “Risk Factors” of our subsequent Quarterly Reports on Form 10-Q and in our other filings with the SEC.

EXECUTIVE OVERVIEW

BUSINESS DESCRIPTION

We are a leading solutions provider in the areas of security, cloud, networking, collaboration, artificial intelligence (“AI”), and emerging technologies. AI continues to be a transformative force and demand driver particularly for our core products: Compute, Cloud, security, networking and our consultative services. Across industries, customers are using AI to enhance decision making, automate tasks, and drive both growth and efficiency. Through assessments, bespoke workshops and labs and consulting engagements, we deliver actionable outcomes for organizations by using information technology (“IT”) and consulting solutions to enhance decision making, automate tasks and drive business agility and innovation. Leveraging our engineering talent, we assess, plan, deliver, and secure solutions comprised of leading technologies and consumption models aligned with our customers’ needs. Our expertise and experience enable us to craft optimized solutions that take advantage of the cost, scale, and efficiency of private, public and hybrid cloud services in an evolving market.

As part of our solutions, we provide consulting, professional services, managed services, IT staff augmentation, and complete lifecycle management services in the areas of security, cloud, networking, collaboration, and emerging technologies. Further, we offer professional services in the spaces of digital signage, electric vehicle (“EV”) charging solutions, loss prevention and security, store openings, remodels, and store closings.

We deliver integrated solutions that address our customers’ business needs, leveraging the appropriate technologies, both on-premises and in the cloud. Our approach is to lead with advisory consulting to understand our customers’ needs, and then design, deploy, and manage solutions aligned to their objectives. Underpinning the broader areas of cloud, security, networking, and collaboration are specific skills in orchestration and automation, application modernization, DevSecOps, zero-trust architectures, data management, data visualization, analytics, network modernization, edge computing and other advanced and emerging technologies. These solutions are comprised of class-leading technologies from our commercial partners.

We are a reseller for thousands of manufacturers, which enables 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.

We serve primarily middle market to large enterprises across diverse markets including telecom, media and entertainment, technology, state and local government and educational institutions (“SLED”), healthcare, and financial services. We 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.

On June 30, 2025, we completed the sale of 100% of the membership interests of Expo Holdings, LLC, a Delaware limited liability company and our wholly-owned subsidiary (“HoldCo”), to Marlin Leasing Corporation, a Delaware corporation (d/b/a PEAC Solutions) pursuant to the terms of the Membership Interest Purchase Agreement, dated June 20, 2025 (the “Sale Transaction”). By selling HoldCo, together with its U.S. subsidiaries, we sold our domestic financing business that comprised most of our financing business segment, which is a business that finances information technology equipment, software and related services for customers. We continue to own the international entities in the financing business. This divestiture positions us to focus on being a technology solutions provider and represents a strategic shift in our operations. As a result of the Sale Transaction, we determined that the domestic financing business that was sold met the definition of discontinued operations. Consequently, for all periods presented in these financial statements, we are retrospectively presenting the results of our domestic financing business as discontinued operations. In our unaudited consolidated balance sheets for all periods, we present the assets and liabilities of our domestic financing business as assets and liabilities of discontinued operations. In our unaudited consolidated statements of operations for all periods, we present the operating results of our domestic financing business in earnings from discontinued operations. After the sale, our remaining three reportable segments are product, professional services, and managed services, which we formerly referred to collectively as our technology business. Refer to Note 4, “Discontinued Operations” in the notes to the accompanying unaudited consolidated financial statements for further information.

BUSINESS TRENDS

We believe the following key factors may impact our business performance and our ability to achieve business results:

●

General economic conditions including changes in law and policy by the US government, inflation, tariffs, export requirements, 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 and services.

●

There is a worldwide shortage of memory chips due to the demand for AI-ready products, which is also causing rapid price increases across many IT products. Like others, we may experience ongoing supply constraints for memory chips that may affect lead times for delivery of products, our having to carry more inventory for longer periods, our and the customer’s costs of products, vendor return and cancellation policies, and our ability to meet customer demands. We continue to work closely with our suppliers and manufacturers to mitigate disruptions outside our control. Despite these actions, we believe extended lead times and price increases will likely persist for at least the next few quarters.

●

Our customers’ top focus areas include AI, security, cloud solutions, as well as digital transformation and modernization. We have developed advisory services, assessments, solutions, and professional and managed services to meet these priorities and help our customers attain and maintain their desired outcomes.

●

Modernizing legacy applications, data modernization, reducing operational complexity, securing workloads, the cost and performance of IT operations, and agility are changing the way companies are purchasing and consuming technology. 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. These challenges are consistent across all industries and business sizes. We have developed a Cloud Managed Services portfolio to address these needs, allowing our clients to focus on driving business outcomes via optimized and secure cloud platforms.

KEY BUSINESS METRICS

Our management monitors several financial and non-financial measures and ratios on a regular basis to track the progress of our business. 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 from continuing operations and Non-GAAP: Net earnings from continuing operations per common share - diluted.

We also use a variety of operating and other information to evaluate the operating performance of our business, develop financial forecasts, make strategic decisions, and prepare and approve annual budgets. We use gross billings as an operational metric to assess the volume of transactions or market share for our product, professional services, and managed services segments as well as to understand changes in our accounts receivable and accounts payable balances and our statement of cash flows. We believe our gross billings metric 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. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance or financial position that either excludes or includes amounts that are correspondingly not normally excluded or included in the most directly comparable measure calculated and presented in accordance with US GAAP. Our use of non-GAAP information as analytical tools has limitations and should not be considered in isolation or as substitutes for analysis of our financial results reported under GAAP, as these measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

We use Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP: net earnings from continuing operations and Non-GAAP: net earnings from continuing operations per common share - diluted as supplemental measures of our performance to gain insight into our operating performance and performance trends. We believe that these measures provide management and investors with a useful measure for period-to-period comparisons of our business and operating results by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that such non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results. Please see footnotes (1) and (2) of the below tables for more information.

The following tables provide our key business metrics for our consolidated entity (in thousands, except per share amounts):


		Three months ended December 31,						Nine months ended December 31,
		2025			2024			2025			2024
Financial metrics
Net sales	$	614,774		$	493,221		$	1,860,915		$	1,522,245

Gross profit	$	158,654		$	125,078		$	468,994		$	379,254
Gross profit margin		25.8	%		25.4	%		25.2	%		24.9	%

Operating income	$	43,466		$	16,470		$	128,501		$	74,925
Operating income margin		7.1	%		3.3	%		6.9	%		4.9	%

Net earnings from continuing operations	$	33,400		$	14,566		$	98,688		$	58,558
Net earnings from continuing operations margin		5.4	%		3.0	%		5.3	%		3.8	%
Net earnings from continuing operations per common share —diluted	$	1.27		$	0.55		$	3.74		$	2.19

Non-GAAP financial metrics
Non-GAAP: Net earnings from continuing operations (1)	$	38,009		$	18,629		$	111,630		$	71,151
Non-GAAP: Net earnings from continuing operations per common share—diluted (1)	$	1.45		$	0.71		$	4.23		$	2.66

Adjusted EBITDA (2)	$	53,383		$	27,038		$	158,795		$	102,441
Adjusted EBITDA margin (2)		8.7	%		5.5	%		8.5	%		6.7	%

Operational metrics
Gross billings (3)
Networking	$	300,075		$	214,762		$	883,996		$	716,087
Cloud		257,848			207,762			772,693			644,888
Security		221,971			190,808			667,174			506,256
Collaboration		22,606			22,381			86,669			102,074
Other		72,358			76,513			200,721			193,650
Product segment		874,858			712,226			2,611,253			2,162,955
Services		107,223			137,320			346,248			328,527
Total	$	982,081		$	849,546		$	2,957,501		$	2,491,482

(1)

Non-GAAP: Net earnings from continuing operations and Non-GAAP: Net earnings from continuing operations per common share – diluted are based on net earnings from continuing operations calculated in accordance with US GAAP, adjusted to exclude other (income) expense, share-based compensation, and acquisition related amortization and integration expenses, and the related tax effects.

We believe that the exclusion of other income and acquisition-related amortization expense in calculating Non-GAAP: Net earnings from continuing operations and Non-GAAP: Net earnings from continuing operations per common share – diluted provides management and investors a useful measure for period-to-period comparisons of our business and operating results by excluding items that management believes are not reflective of our underlying operating performance, which helps in understanding and the evaluation of our operating results. We use Non-GAAP: Net earnings from continuing operations and Non-GAAP: Net earnings from continuing operations per common share – diluted as supplemental measures of our performance to gain and provide insight into our operating performance and performance trends. However, our use of non-GAAP information as analytical tools has limitations and should not be considered in isolation or as substitutes for analysis of our financial results as reported under US GAAP. In addition, other companies, including companies in our industry, might calculate similar Non-GAAP: Net earnings from continuing operations and Non-GAAP: Net earnings from continuing operations per common share – diluted, or similarly titled measures differently, which may reduce their usefulness as comparative measures.

The following table provides our calculation of Non-GAAP: Net earnings from continuing operations and Non-GAAP: Net earnings from continuing operations per common share – diluted (in thousands, except per share amounts):


		Three months ended December 31,						Nine months ended December 31,
		2025			2024			2025			2024
GAAP: Earnings from continuing operations before tax	$	45,589		$	19,917		$	136,399		$	80,399
Share-based compensation		3,424			2,863			9,922			8,184
Acquisition related expenses		-			29			-			1,072
Acquisition related amortization expense		5,006			5,983			15,867			14,180
Other (income) expense, net		(2,123	)		(3,447	)		(7,898	)		(5,474	)
Non-GAAP: Earnings from continuing operations before tax		51,896			25,345			154,290			98,361

GAAP: Provision for income taxes		12,189			5,351			37,711			21,841
Share-based compensation		916			772			2,728			2,266
Acquisition related expenses		-			7			-			300
Acquisition related amortization expense		1,338			1,495			4,363			3,788
Other (income) expense, net		(568	)		(930	)		(2,243	)		(1,498	)
Tax benefit (expense) on restricted stock		12			21			101			513
Non-GAAP: Provision for income taxes		13,887			6,716			42,660			27,210

Non-GAAP: Net earnings from continuing operations	$	38,009		$	18,629		$	111,630		$	71,151



		Three months ended December 31,						Nine months ended December 31,
		2025			2024			2025			2024
GAAP: Net earnings from continuing operations per common share - diluted	$	1.27		$	0.55		$	3.74		$	2.19

Share-based compensation		0.10			0.08			0.27			0.22
Acquisition related expenses		-			-			-			0.03
Acquisition related amortization expense		0.14			0.17			0.43			0.39
Other (income) expense, net		(0.06	)		(0.09	)		(0.21	)		(0.15	)
Tax benefit (expense) on restricted stock		-			-			-			(0.02	)
Total non-GAAP adjustments - net of tax		0.18			0.16			0.49			0.47

Non-GAAP: Net earnings from continuing operations per common share - diluted	$	1.45		$	0.71		$	4.23		$	2.66

(2)

We define Adjusted EBITDA as net earnings from continuing operations 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. In the table below, we provide a reconciliation of Adjusted EBITDA to net earnings from continuing operations, 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 believe that the exclusion of other income in calculating Adjusted EBITDA and Adjusted EBITDA margin provides management and investors with a useful measure for period-to-period comparisons of our business and operating results by excluding items that management believes are not reflective of our underlying operating performance, which helps in the understanding and evaluation of our operating results. We use Adjusted EBITDA as a supplemental measure of our performance to gain and provide insight into our operating performance and performance trends. However, our use of Adjusted EBITDA and Adjusted EBITDA margin as analytical tools has limitations and should not be considered in isolation or as substitutes for analysis of our financial results as reported under US GAAP. 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.

The following table provides our calculations of Adjusted EBITDA (in thousands):



		Three months ended December 31,						Nine months ended December 31,
		2025			2024			2025			2024
GAAP: Net earnings from continuing operations	$	33,400		$	14,566		$	98,688		$	58,558
Provision for income taxes		12,189			5,351			37,711			21,841
Share-based compensation		3,424			2,863			9,922			8,184
Acquisition related expenses		-			29			-			1,072
Depreciation and amortization		6,493			7,676			20,372			18,260
Other (income) expense, net		(2,123	)		(3,447	)		(7,898	)		(5,474	)
Non-GAAP: Adjusted EBITDA	$	53,383		$	27,038		$	158,795		$	102,441

(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 from our product, professional services, and managed services segments. 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.

RESULTS OF OPERATIONS

Net sales: Net sales for the three months ended December 31, 2025, increased $121.6 million compared to the three months ended December 31, 2024, due to increased net sales to customers in the telecom, media and entertainment, healthcare, technology, retail, and financial services industries, offset by decreased net sales to customers in the SLED industry. Our increase in demand was primarily driven by midmarket, large enterprise, and healthcare customers. For further information, see the “Segment Results of Operations” below.

Net sales for the nine months ended December 31, 2025, increased $338.7 million compared to the nine months ended December 31, 2024, due to increased net sales to customers in the telecom, media and entertainment, healthcare, technology, retail, and financial services industries, offset by decreased net sales to customers in the SLED industry. Our increase in demand was primarily driven by large enterprise customers. For further information, see the “Segment Results of Operations” below.

Gross profit: Consolidated gross profit for the three months ended December 31, 2025, increased $33.6 million compared to the prior three-month period due to increases in net sales in our product segment and managed services segment, offset by a decrease in our professional services segment. Overall, gross margin increased 40 basis points year over year to 25.8%, primarily due to higher product margin led by a shift in product mix and higher vendor incentives, partially offset by a lower percentage of sales of third-party maintenance and subscriptions that are recognized on a net basis and lower services margin. For further information, see the “Segment Results of Operations” below.

Consolidated gross profit for the nine months ended December 31, 2025, increased $89.7 million compared to the prior nine-month period due to increases in net sales in all three of our operating segments. Overall, gross margin increased 30 basis points year over year to 25.2%, primarily due to higher product margin led by a shift in product mix as we sold more third-party maintenance and subscriptions that are recognized on a net basis, offset by lower services margin. For further information, see the “Segment Results of Operations” below.

Selling, general, and administrative: Selling, general, and administrative expenses for the three and nine months ended December 31, 2025, increased $7.8 million and $34.1 million, compared to the three and nine months ended December 31, 2024, respectively.

Salaries and benefits, including variable compensation and share-based compensation for the three months ended December 31, 2025, increased $8.1 million, compared to the same three-month period in the prior year, primarily due to increases in variable compensation commensurate with the increase in our gross profit.

Salaries and benefits, including variable compensation and share-based compensation for the nine months ended December 31, 2025, increased $31.1 million, compared to the same nine-month period in the prior year, primarily due to increases in variable compensation commensurate with the increase in our gross profit and secondarily due to additional salaries and benefits due to our acquisition of Bailiwick on August 19, 2024.

General and administrative expenses for the three months ended December 31, 2025, increased $0.5 million as compared to the prior three-month period, mainly driven by higher legal fees.

General and administrative expenses for the nine months ended December 31, 2025, increased $3.9 million as compared to the prior nine-month period, due to the addition of Bailiwick. In total, we had higher professional fees of $1.9 million, higher software, subscription, and maintenance fees of $1.8 million, higher office rent of $0.7 million, and higher travel and entertainment expenses of $0.7 million. These increases were offset by a decrease in acquisition-related expenses of $1.0 million, due to the addition of Bailiwick in the prior nine-month period.

Provision for credit losses for the three and nine months ended December 31, 2025, was $0.4 million and $0.6 million, respectively, as compared to $1.2 million and $1.5 million for the prior three- and nine-month periods, respectively. Our lower provision for credit losses for the three and nine months ended December 31, 2025, was due to favorable changes in our net credit exposure.

Depreciation and amortization: Depreciation and amortization for the three months ended December 31, 2025, decreased compared to the three months ended December 31, 2024, primarily due to decreased acquisition amortization expense.

Depreciation and amortization for the nine months ended December 31, 2025, increased compared to the nine months ended December 31, 2024, primarily due to amortization from intangible assets acquired in the Bailiwick acquisition.

Operating income: As a result of the foregoing, operating income for the three months ended December 31, 2025, increased $27.0 million compared to the prior three-month period, and operating margin increased by 380 basis points to 7.1%.

As a result of the foregoing, operating income for the nine months ended December 31, 2025, increased $53.6 million compared to the prior nine-month period, and operating margin increased by 200 basis points to 6.9%.

Other income, net: Other income, net for the three months ended December 31, 2025, was $2.1 million, compared to $3.4 million for the three months ended December 31, 2024. Our decrease in other income was primarily due to lower foreign exchange gains in the current three-month period compared to the same period in the prior year and $1.2 million in expense in the current three-month period related to adjustments to our estimate of the fair value of contingent consideration due from PEAC Solutions relating to our sale of HoldCo, offset by higher interest income in the current three-month period compared to the same period in the prior year. We had foreign exchange gains of $0.1 million for the three months ended December 31, 2025, compared to $1.9 million for the same period in the prior year. We had $3.0 million in interest income for the three months ended December 31, 2025, compared to $1.6 million for the same period in the prior year.

Other income for the nine months ended December 31, 2025, was $7.9 million, compared to $5.5 million for the nine months ended December 31, 2024. Our increase in other income was primarily due to higher interest income in the current nine-month period compared to the same period in the prior year and earnings from our transition services agreement with PEAC offset by higher foreign exchange losses in the current nine-month period compared to the same period in the prior year and $1.1 million in expense in the current nine-month period related to adjustments to our estimate of the fair value of contingent consideration due from PEAC Solutions relating to our sale of HoldCo. We had $9.0 million in interest income for the nine months ended December 31, 2025, compared to $5.9 million for the same period in the prior year. We had foreign exchange losses of $0.6 million for the nine months ended December 31, 2025, compared to losses of $0.4 million for the same period in the prior year.

Provision for income taxes: Our provision for income tax expense was $12.2 million and $37.7 million for the three and nine months ended December 31, 2025, as compared to $5.4 million and $21.8 million for the same three- and nine-month periods in the prior year. Our effective tax rate for the three and nine months ended December 31, 2025, was 26.7% and 27.6% respectively, compared with 26.9% and 27.2%, respectively, for the same three- and nine-month periods in the prior year. Our effective income tax rate for the three months ended December 31, 2025, was lower compared to the same three-month period in the prior year primarily due to lower state taxes. Our effective income tax rate for the nine months ended December 31, 2025, was higher compared to the same nine-month period in the prior year primarily due a higher tax benefit from restricted stock and state taxes in the prior year.

Net earnings from continuing operations: Net earnings from continuing operations for the three months ended December 31, 2025, were $33.4 million, an increase of $18.8 million, as compared to $14.6 million for the same three-month period in the prior year. The net earnings increase was due to the increase in operating profits, offset by an increase in provision for income taxes and decrease in other income.

Net earnings from continuing operations for the nine months ended December 31, 2025, were $98.7 million, an increase of $40.1 million, as compared to $58.6 million for the same nine-month period in the prior year. The net earnings increase was due to the increase in operating profits, and an increase other income, offset by an increase in provision for income taxes.

Net earnings from discontinued operations, net of tax: Net earnings from discontinued operations, net of tax, for the three months ended December 31, 2025, was $1.7 million consisting of a gain of $2.3 million from settling a legal matter, offset by an income tax expense of $0.6 million. In December 2025, we paid $2.3 million to settle a legal matter related to our discontinued operations, which we had recorded as a contingent liability of $4.6 million during the three months ended September 30, 2025. As a result of this settlement, we recognized a gain of $2.3 million. We had net earnings from discontinued operations, net of tax, of $9.6 million for the same three-month period in the prior year consisting of $12.3 million in earnings before income tax, offset by income tax of $2.7 million.

Net earnings from discontinued operations, net of tax, for the nine months ended December 31, 2025, was $8.9 million consisting of $12.3 million in earnings before tax, offset by $3.4 million in income tax expense. Our earnings from discontinued operations before tax for the nine months ended December 31, 2025 include a $4.4 million gain from the sale of our domestic financing business and a $2.3 million loss to settle a legal matter related to our discontinued operations. We had net earnings from discontinued operations, net of tax, of $24.2 million for the same nine-month period in the prior year consisting of $32.6 million in earnings before income tax, offset by $8.4 million in income tax expense.

Net earnings: Due to the aforementioned reasons, net earnings for the three months ended December 31, 2025, were $35.1 million, an increase of $11.0 million, as compared to $24.1 million for the same three-month period in the prior year.

Due to the aforementioned reasons, net earnings for the nine months ended December 31, 2025, were $107.6 million, an increase of $24.8 million, as compared to $82.8 million for the same nine-month period in the prior year.

SEGMENT OVERVIEW

Following the divestiture of our domestic financing business, we organize our business into three reportable segments (which we formerly referred to collectively as the technology business):

●

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. The product segment also includes internet-based business-to-business supply chain management solutions for IT products. We endeavor to minimize the cost of sales in our product segment through incentive programs provided by vendors and distributors.

●

Professional services segment: Our professional services segment includes our advanced professional services to our customers that are performed under time and materials, fixed fee, or milestone contracts. Professional services include consulting, assessments, architecture, deployment, and configuration, logistic services, training, staff augmentation services, and project management services. 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. Managed services also include security solutions, storage-as-a-service, cloud hosted services, cloud managed services, and service desk.

Our other category consists of the international entities of our financing business that we retained after selling our domestic financing business.

SEGMENT RESULTS OF OPERATIONS

The three and nine months ended December 31, 2025, compared to the three and nine months ended December 31, 2024

The results of operations for our segments were as follows (dollars in thousands):


		Three months ended December 31,						Nine months ended December 31,
		2025			2024			2025			2024
Financial metrics
Net sales:
Product segment	$	501,827		$	379,472		$	1,507,736		$	1,226,397
Professional services segment		64,065			69,497			212,138			168,676
Managed services segment		48,778			44,150			140,775			126,827
Total reportable segments		614,670			493,119			1,860,649			1,521,900
Other		104			102			266			345
Total	$	614,774		$	493,221		$	1,860,915		$	1,522,245

Gross Profit:
Product segment	$	119,321		$	84,046		$	344,816		$	271,910
Professional services segment		25,121			27,841			82,446			68,879
Managed services segment		14,151			13,160			41,638			38,333
Total reportable segments		158,593			125,047			468,900			379,122
Other		61			31			94			132
Total	$	158,654		$	125,078		$	468,994		$	379,254

Gross margin:
Product segment		23.8	%		22.1	%		22.9	%		22.2	%
Professional services segment		39.2	%		40.1	%		38.9	%		40.8	%
Managed services segment		29.0	%		29.8	%		29.6	%		30.2	%
Total		25.8	%		25.4	%		25.2	%		24.9	%

Net sales by customer end market:
Telecom, media & entertainment	$	176,405		$	126,201		$	538,156		$	352,624
Technology		89,368			71,293			241,664			235,387
Healthcare		81,460			58,670			238,036			212,185
Financial services		66,104			46,217			176,683			130,701
SLED		59,946			71,412			237,754			261,195
Retail		34,394			33,785			106,427			67,754
All others		106,993			85,541			321,929			262,054
Total reportable segments	$	614,670		$	493,119		$	1,860,649		$	1,521,900

Net sales by type:
Networking		230,886			181,367			707,244			602,883
Cloud		175,352			116,864			510,618			375,431
Security		61,055			53,919			188,051			143,133
Collaboration		13,418			8,391			41,733			47,278
Other		21,116			18,931			60,090			57,672
Total products segment	$	501,827		$	379,472		$	1,507,736		$	1,226,397
Professional services segment		64,065			69,497			212,138			168,676
Managed services segment		48,778			44,150			140,775			126,827
Total reportable segments	$	614,670		$	493,119		$	1,860,649		$	1,521,900

Net sales:

Product segment sales for the three months ended December 31, 2025, increased compared to the same three-month period in the prior year, due to increases in revenue from networking, cloud, security, and collaboration products. Product segment sales for the nine months ended December 31, 2025, increased compared to the same nine-month period in the prior year, due to increases in revenue from networking, cloud, and security products, offset by a decline in collaboration products. These increases were driven by the timing of purchases by existing customers, which are determined by their buying cycles and the timing of specific IT-related initiatives. Contributing to the increase, the proportion of our sales that were sales of third-party maintenance and subscriptions that are recognized on a net basis decreased for both the three and nine months ended December 31, 2025, compared to the same periods in the prior year.

Professional services segment sales for the three months ended December 31, 2025, decreased compared to the same three-month period in the prior year, primarily due to decreases in revenues from project services and staff augmentation, offset by increases in consulting revenue. Professional services segment sales for the nine months ended December 31, 2025, increased compared to the same nine-month period in the prior year, primarily due to increases in revenues attributable to the acquisition of Bailiwick.

Managed services segment sales for the three and nine months ended December 31, 2025, increased compared to the same three- and nine-month periods in the prior year, due to ongoing expansion of these service offerings, primarily related to ongoing growth in enhanced maintenance support and cloud services.

Gross profit margin:

Product segment margin for the three and nine months ended December 31, 2025, increased by 170 basis points and 70 basis points, respectively, from the same three- and nine-month periods in the prior year due to a shift in product mix and vendor incentives, offset by a decrease in the proportion of our sales that were sales of third-party maintenance and subscriptions which are recorded on a net basis. Vendor incentives earned as a percentage of sales for the three and nine months ended December 31, 2025 increased by 140 basis points and 50 basis points, respectively, which had a positive effect on gross margin, as compared to the same three- and nine-month periods in the prior year.

Professional services segment margin for the three and nine months ended December 31, 2025, decreased by 90 basis points and 190 basis points, respectively, from the same three- and nine-month periods in the prior year primarily due to our acquisition of Bailiwick whose services have a lower gross margin due to the use of a higher proportion of third parties for delivery than our organic professional services.

Managed services segment margin for the three and nine months ended December 31, 2025, decreased by 80 basis points and 60 basis points, respectively, from the same three- and nine-month periods in the prior year, mainly driven by a decrease in gross margin from our managed services offerings due to increased third party costs.

LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY OVERVIEW

We finance our operations through funds generated from operations and through borrowings. We use those funds to meet our capital requirements, which primarily consist of working capital for operational needs, capital expenditures, mergers and acquisitions, and the repurchase of shares of our common stock.

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 next year.

Our ability to continue to expand, both organically and through acquisitions, is dependent upon our ability to generate enough cash flow from operations or from borrowing or other sources of financing as may be required. While at this time we do not anticipate requiring any additional sources of financing to fund operations, if demand for IT products declines, or if our supply of products is delayed or interrupted, our cash flows from operations may be substantially affected.

CASH FLOWS

The following table summarizes our sources and uses of cash for the nine months ended December 31, 2025, and 2024 (in thousands):


		Nine months ended December 31,
		2025			2024
Net cash provided by (used in) operating activities of continuing operations	$	(223,414	)	$	186,645
Net cash provided by (used in) operating activities of discontinued operations		2,229			(45,447	)
Net cash provided by (used in) operating activities		(221,185	)		141,198

Net cash used in investing activities of continuing operations		(3,200	)		(128,338	)
Net cash provided by investing activities of discontinued operations		156,681			1,024
Net cash provided by (used in) investing activities		153,481			(127,314	)

Net cash provided by (used in) financing activities of continuing operations		9,784			(21,491	)
Net cash provided by (used in) financing activities of discontinued operations		(6,417	)		8,065
Net cash provided by (used in) financing activities		3,367			(13,426	)

Effect of exchange rate changes on cash		1,253			(405	)

Net increase (decrease) in cash and cash equivalents	$	(63,084	)	$	53

Cash flows from operating activities: During the nine months ended December 31, 2025, we used $223.4 million through operating activities of continuing operations primarily due to an increase in our accounts receivable and inventories, partially offset by net earnings. During the nine months ended December 31, 2024, we provided $186.6 million through operating activities of continuing operations primarily due to net earnings and decreases in our accounts receivable and inventories, partially offset by a decrease in our accounts payable.

To manage our working capital, we monitor our cash conversion cycle for our 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”).

The following table presents the components of the cash conversion cycle for our business segments as of December 31, 2025, and December 31, 2024:

	December 31, 2025		December 31, 2024
(DSO) Days sales outstanding (1)	63		62
(DIO) Days inventory outstanding (2)	22		13
(DPO) Days payable outstanding (3)	(44	)	(43	)
Cash conversion cycle	41		32

(1)

Represents the rolling three-month average of the balance of accounts receivable-trade, net at the end of the period divided by gross billings for the same three-month period.

(2)

Represents the rolling three-month average of the balance of inventory, net 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.

(3)

Represents the rolling three-month average of the combined balance of accounts payable-trade and accounts payable-floor plan 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.

Our cash conversion cycle increased to 41 days as of December 31, 2025, as compared to 32 days as of December 31, 2024. Our standard payment term for customers is between 30-60 days; however, certain customer orders may be approved for extended payment terms. Our DSO increased 1 day to 63 days as of December 31, 2025, compared to 62 days as of December 31, 2024, reflecting higher sales to customers with terms less than or equal to net 60 days. Our DIO increased to 22 days as of December 31, 2025, compared to 13 days as of December 31, 2024, due to longer customer delivery schedules. Our DPO increased by 1 day to 44 days as of December 31, 2025, as compared to December 31, 2024. We pay invoices, processed through our WFCDF Credit Facility from our accounts payable-floor plan balance or paid directly from our accounts payable-trade balances typically within 45 to 60 days from the invoice date.

Cash flows related to investing activities: During the nine months ended December 31, 2025, we used $3.2 million through investing activities of continuing operations consisting primarily of purchases of property and equipment. We also provided $156.7 million through investing activities of discontinued operations, consisting primarily of cash proceeds from our sale of HoldCo of $180.1 million less cash transferred with the HoldCo entities of $23.4 million. During the nine months ended December 31, 2024, we used $128.3 million through investing activities of continuing operations consisting of $124.9 million for the acquisition of Bailiwick, and $3.4 million for purchases of property and equipment.

Cash flows from financing activities: During the nine months ended December 31, 2025, we provided $9.8 million through financing activities of continuing operations. We had cash outflows of $24.3 million to repurchase outstanding shares of our common stock and $13.1 million paid for dividends. These cash outflows were partially offset by cash inflows of $43.6 million in net borrowing on our floor plan facility and $3.6 million in proceeds from the issuance of common stock to employees under our employee stock purchase plan.

During the nine months ended December 31, 2024, we used $21.5 million through financing activities of continuing operations. We had cash outflows of $33.5 million to repurchase outstanding shares of our common stock and $2.3 million paid in connection with our purchase of certain assets of Peak Resources, Inc. based on adjustments to the determination of total net assets received from our January 2024 acquisition of that company. These cash outflows were partially offset by cash inflows of $10.6 million in net borrowings on the floor plan component of our credit facility and $3.6 million in proceeds from the issuance of common stock to employees under our employee stock purchase plan.

CREDIT FACILITY

We finance the operations of our subsidiaries ePlus Technology, inc. and ePlus Technology Services, inc. (collectively, the “Borrowers”) through a credit facility with WFCDF. The WFCDF Credit Facility has a floor plan facility and a revolving credit facility.

Please refer to Note 7, “Credit Facility” to the accompanying Consolidated Financial Statements included in "Part I, Item 1. Financial Statements" for additional information concerning our WFCDF Credit Facility.

The loss of the WFCDF Credit Facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity and as an operational function of our accounts payable process.

Floor plan facility: We finance certain 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. Our vendors are generally paid by the floor plan facility and our liability is reflected in “accounts payable—floor plan” in our consolidated balance sheets.

Most customer payments to us are remitted to our lockbox accounts. Once payments are cleared, the monies in the lockbox accounts are automatically and daily transferred to our operating account. We pay down the floor plan facility on three specified dates each month, generally 45 to 60 days from the invoice date. Our borrowings and repayments under the floor plan component are included in “net borrowings (repayments) on floor plan facility” within cash flows from the financing activities in our consolidated statements of cash flows.

As of December 31, 2025, and March 31, 2025, we had a maximum credit limit of $500.0 million, and an outstanding balance on the floor plan facility of $133.2 million and $89.5 million, respectively. On our balance sheet, our liability under the floor plan facility is presented as part of accounts payable – floor plan.

Revolving credit facility: We did not have any activity on our revolving credit facility during the three months ended December 31, 2025, and 2024. As of December 31, 2025, and March 31, 2025, 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 December 31, 2025, and March 31, 2025.

DIVIDENDS

A summary of fiscal year-to-date dividend activity for our common stock is as follows:


	Dividend amount	Declaration date	Record date	Payment date
$	0.25	August 7, 2025	August 26, 2025	September 17, 2025
$	0.25	November 6, 2025	November 25, 2025	December 17, 2025

On February 4, 2026, we announced that our Board of Directors declared a quarterly dividend. The quarterly cash dividend of $0.25 per common share will be paid on March 18, 2026, to shareholders of record as of the close of business on February 24, 2026.

The payment of any future dividends will be at the discretion of our Board of Directors and 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, tax considerations and other factors that our Board of Directors deems relevant.

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. We believe we comply with the performance obligations under all service contracts for which there is a performance guarantee, and we believe that any liability incurred in connection with these guarantees would not have a material adverse effect on our consolidated statements of operations.

OFF-BALANCE SHEET ARRANGEMENTS

As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements, or other contractually narrow or limited purposes. As of December 31, 2025, 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 enter into merger and acquisition transactions with other companies that have attractive customer relationships, skilled sales and/or engineering forces, and/or other attributes that may be complementary to our business or are aligned with our long-term strategy. 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. These actions may result in increased working capital needs as the business expands. As a result, we may require additional financing to fund our strategy, implementation, potential future mergers and 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.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

Our future quarterly operating results and the market price of our common stock may fluctuate. In the event our revenues or earnings for any quarter are less than the level expected by securities analysts or the market in general, such shortfall could have an immediate and significant adverse impact on the market price of our common stock. Any such adverse impact could be greater if any such shortfall occurs near the time of any material decrease in any widely followed stock index or in the market price of the stock of one or more competitors, IT resellers, major customers, or vendors of ours.

Our quarterly results of operations are susceptible to fluctuations for a number of reasons, including, but not limited to currency fluctuations, reduction in IT spending, shortages of product from our vendors due to material shortages, the timing and mix of specific transactions, the reduction of manufacturer incentive programs, and other factors. See Part I, Item 1A, “Risk Factors,” in our 2025 Annual Report, as supplemented in subsequently filed reports, and in Part II, Item 1A. “Risk Factors” in this Quarterly Report.

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.

CRITICAL ACCOUNTING ESTIMATES

Our critical accounting estimates have not changed from those reported in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report.

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

FOREIGN CURRENCY RISK

We have foreign currency exposure when transactions are not denominated in our subsidiaries’ functional currency, which include purchases and sales of the products and services we provide, as well as loans with other ePlus entities. To date, foreign currency exposure associated with purchases and sales of the products and services we provide has not been significant. We have incurred foreign currency transaction gains and losses in certain foreign subsidiaries on US dollar denominated loans. Fluctuations in currency exchange rates may impact our results of operations and financial position.

Item 4.

CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, or “disclosure controls,” as defined in the Exchange Act Rule 13a-15(e). Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized, and reported within the periods specified in the SEC’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls include some, but not all, components of our internal control over financial reporting. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2025.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have not been any changes in our internal control over financial reporting during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

LIMITATIONS AND EFFECTIVENESS OF CONTROLS

Our management, including our CEO and CFO, do not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system cannot provide absolute assurance due to its inherent limitations; it is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. A control system also can be circumvented by collusion or improper management override. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of such limitations, disclosure controls and internal control over financial reporting cannot prevent or detect all misstatements, whether unintentional errors or fraud. However, these inherent limitations are known features of the financial reporting process; therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

PART II. OTHER INFORMATION

Item 1.

LEGAL PROCEEDINGS

Please refer to Note 8, “Commitment and Contingencies” to the accompanying Consolidated Financial Statements included in "Part I, Item 1. Financial Statements."

Item 1A.

RISK FACTORS

Other than as disclosed in “Part II, Item 1A. “Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, there has not been any material change in the risk factors disclosed in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.

Item 2.

UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

The following table provides information regarding our purchases of common stock during the three months ended December 31, 2025.

Period	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)
October 1, 2025 through October 31, 2025	125,000	$	72.65	125,000	1,315,000
November 1, 2025 through November 30, 2025	59,900	$	83.80	59,900	1,255,100
December 1, 2025 through December 31, 2025	28,000	$	89.51	28,000	1,227,100
Total	212,900			212,900

(1)

All shares were acquired in open-market purchases.

(2)

The amounts presented in this column are the remaining number of shares that may be repurchased after repurchases during the month. As of May 27, 2025, the authorization under the then-existing share repurchase plan expired. On August 7, 2025, our Board of Directors authorized the repurchase of up to 1,500,000 shares of our outstanding common stock, over a 12-month period beginning August 11, 2025.

The timing and expiration date of the current stock repurchase authorizations are included in Note 10, “Stockholders’ Equity” to our unaudited consolidated financial statements included elsewhere in this report.

Item 3.

DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

Item 4.

MINE SAFETY DISCLOSURES

Not Applicable.

Item 5.

OTHER INFORMATION

Insider Trading Arrangements

During the three months ended December 31, 2025, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as those terms are defined in Item 408 of Regulation S-K), except the following Rule 10b5-1 trading arrangements adopted that are intended to satisfy the affirmative defense of Rule 10b5-1(c):


Name	Title	Adoption date	Duration (1)	Aggregate number of common shares to be sold
Elaine Marion	Chief Financial Officer	November 18, 2025	February 17, 2026-December 31, 2026	20,000
Darren Raiguel	Chief Operating Officer	November 10, 2025	February 9, 2026-December 31, 2026	20,000
Erica Stoecker	Corporate Secretary, General Counsel, & Chief Compliance Officer	November 16, 2025	February 15, 2026-August 28, 2026	1,000

Subject to compliance with Rule 10b5-1, duration could cease earlier than the final date shown above to the extent that the aggregate number of shares to be sold under the trading arrangement have been sold and trading may not begin on the first date of the duration.

Additionally, certain of our executive officers may participate in employee stock purchase plans that have been designed to comply with Rule 10b5-1(c) under the Exchange Act.

Item 6.

EXHIBITS

Exhibit 10.1 is a management contract or compensatory plan or arrangement.


Exhibit Number		Exhibit Description

3.1		ePlus inc. Amended and Restated Certificate of Incorporation, as last amended September 18, 2023. (Incorporated herein by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for the period ended September 30, 2023).

3.2		Amended and Restated Bylaws of ePlus inc., as of March 26, 2024. (Incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on March 28, 2024).

10.1		Form of Management Employment Agreement, effective as of November 24, 2025.

31.1		Certification of the Chief Executive Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).

31.2		Certification of the Chief Financial Officer of ePlus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a).

32		Certification of the Chief Executive Officer and Chief Financial Officer of ePlus inc. pursuant to 18 U.S.C. § 1350.

101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Exhibit 101 Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	ePlus inc.

Date: February 4, 2026	/s/ MARK P. MARRON
	By: Mark P. Marron
	Chief Executive Officer and President
	(Principal Executive Officer)

Date: February 4, 2026	/s/ ELAINE D. MARION
	By: Elaine D. Marion
	Chief Financial Officer
	(Principal Financial Officer)

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