Executive Summary
- QQ1 2026 total revenue reached $637.3 million, up 15.5% year over year, reflecting continued demand for ePlus’ IT solutions, software, and related services. Gross profit of $141.1 million yielded a gross margin of 22.15%, while operating income of $36.2 million produced an operating margin of 5.68% and a net income of $37.7 million (net margin ~5.92%), driving EPS of $1.27 (diluted $1.26). YoY gains in profitability outpaced revenue growth, aided by stable services margins and a favorable mix in the quarter.
- However, cash flow from operations was negative in QQ1 2026 due to substantial working capital movements. Net cash used in operating activities was approximately $99 million, with free cash flow of about -$106.8 million. The negative CFO was driven primarily by a sharp rise in accounts receivable (approximately -$181.4 million) and other working capital changes (-$144.6 million), partially offset by smaller capital expenditures (-$0.8 million) and non-cash items such as depreciation and stock-based compensation. Despite this, the company ended the period with a solid cash balance of $480.2 million and a net cash position of roughly -$480.2 million (net debt).
- Management commentary on the call (where disclosed) was limited in the provided data; the company benefits from a strong liquidity runway and a debt-free balance sheet, positioning it to invest in growth initiatives and enterprise IT solutions. The near-term focus appears to be on converting working capital efficiency into cash flow while sustaining high-margin IT services and financing activity. Given the absence of explicit forward guidance in the supplied materials, investors should monitor working capital trends, customer mix, and financing-related contributions to cash flow going forward.
Key Performance Indicators
Key Insights
Revenue: $637.315M, YoY +15.5%, QoQ +24.7% (QQ1 2026). Gross Profit: $141.147M, Gross Margin: 22.15% (YoY +15.28%, QoQ +0.19%). Operating Income: $36.200M, Operating Margin: 5.68% (YoY +33.89%, QoQ +26.97%). Net Income: $37.697M, Net Margin: 5.92% (YoY +71.48%, QoQ +56.21%). EPS: $1.27 (GAAP), Diluted $1.26, Weighted Avg SHs ~26.27M (non-diluted), ~26.38M (diluted). EBITDA: $44.223M (EBITDA Margin ~6.94%)....
Financial Highlights
Revenue: $637.315M, YoY +15.5%, QoQ +24.7% (QQ1 2026). Gross Profit: $141.147M, Gross Margin: 22.15% (YoY +15.28%, QoQ +0.19%). Operating Income: $36.200M, Operating Margin: 5.68% (YoY +33.89%, QoQ +26.97%). Net Income: $37.697M, Net Margin: 5.92% (YoY +71.48%, QoQ +56.21%). EPS: $1.27 (GAAP), Diluted $1.26, Weighted Avg SHs ~26.27M (non-diluted), ~26.38M (diluted). EBITDA: $44.223M (EBITDA Margin ~6.94%).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
637.32M |
15.51% |
24.73% |
| Gross Profit |
141.15M |
15.28% |
0.19% |
| Operating Income |
36.20M |
33.89% |
26.97% |
| Net Income |
37.70M |
71.48% |
56.21% |
| EPS |
1.27 |
53.01% |
39.56% |
Management Commentary
Transcript data not provided in the supplied materials. No management quotes were available to quote directly from an earnings call. Where quotes are needed, placeholders are provided below:
- Quote 1: Not available in the provided transcript data.
- Quote 2: Not available in the provided transcript data.
Management commentary and qualitative guidance should be incorporated once the earnings call transcript is accessible.
Forward Guidance
No formal forward guidance was included in the data set. In the absence of explicit guidance, the QQ1 2026 results suggest a momentum-driven environment for IT solutions and financing services. Investors should monitor: (1) cash flow from operations and working capital dynamics (notably AR and other current assets), (2) segment mix and associated margin trajectory (Technology vs Financing), (3) receivables collection efficiency and days sales outstanding, (4) any management commentary on bookings pipeline, cloud/adoption trends, cybersecurity solutions, and professional services demand, and (5) capital allocation decisions (M&A, share repurchases, or strategic investments). A constructive outlook would hinge on improving CFO while sustaining revenue growth and gross margins, with debt-free balance sheet providing optionality for strategic investments.