EPLUS INC Annual Report - How They Did This Year

I’ve put together a plain-English guide to help you understand how ePlus Inc. (ticker: PLUS) performed this year. I’ve broken down the important details so you can decide if this company fits your investment goals.

1. What does this company do?

ePlus provides IT solutions. They act as a consultant and reseller, helping businesses build, secure, and manage their technology. They focus on two areas: selling hardware and software, and providing professional services. They partner with tech giants like Cisco, Microsoft, AWS, and NVIDIA to deliver AI, cloud, and data center tools.

2. Financial Performance: The Big Picture

ePlus had a strong year. Here is how the numbers compare to 2025:

• Revenue (Total Sales): They brought in $2.44 billion, up from $2.00 billion last year.
• Profit: They earned $124.1 million, a jump from $76.4 million in 2025.
• Earnings Per Share (Profit per share): This rose to $4.71, compared to $2.87 last year.
• Profitability: Their operating margin hit 6.8%, up from 5.0% last year. This growth came from higher-margin service sales and better efficiency.

Note: The company sold its financing business in 2025 to focus entirely on IT.

3. Shareholder Returns

ePlus is actively returning value to you:

• Dividends: As of May 2026, the company pays a quarterly cash dividend of $0.27 per share.
• Stock Buybacks: They are buying back shares to increase the value of your remaining stake. In March 2026, they bought 90,000 shares at an average price of $76.45. They have authorization to buy back roughly 1.14 million more shares.

4. Major Wins and Challenges

The company is betting on Artificial Intelligence (AI), but they face real-world hurdles:

• Supply Chain: A global shortage of memory chips and high-end parts is causing price hikes and delays. This forces ePlus to hold more inventory, which ties up their cash.
• Customer Concentration: Sales to Verizon made up 24% of their net sales in 2026, up from 17% in 2025. Relying on one customer is a significant factor to consider.
• Vendor Reliance: They depend heavily on Cisco Systems, which accounted for 29% of their net sales in 2026. Changes to Cisco’s programs could impact ePlus’s ability to fulfill orders.

5. Financial Health and Risks

• Cybersecurity: They maintain an incident response plan and insurance to mitigate the risks of potential attacks on their operations.
• Credit Facility: They use a $500 million credit line with Wells Fargo. This loan includes specific bank requirements that the company must meet to maintain access to these funds.
• Goodwill: They carry $264.2 million in "goodwill," which is the value assigned to past acquisitions. If these acquired businesses underperform, ePlus may have to adjust this value, which would impact reported profit.

6. Strategy: Where are they going?

The IT industry is moving toward subscription-based models. ePlus is growing its "Cloud Managed Services" to create steady, recurring income. They are also moving into a new headquarters in Herndon, Virginia, in 2026, showing a long-term commitment to their business.

7. Future Outlook

Management remains focused on navigating interest rates, export rules, and the labor market. Their success depends on remaining the "go-to" partner for companies modernizing their IT. While supply chain issues may persist, their shift toward recurring revenue is designed to provide more stability.

Investor Takeaway: When deciding if ePlus is right for your portfolio, consider whether you are comfortable with their heavy reliance on a few key partners like Cisco and Verizon. If you believe in the long-term growth of AI and cloud services, their shift toward recurring revenue and strong profit growth may be an attractive signal.