ePlus Q2 net sales rise on AI-driven demand; lifts FY outlook

Overview

• US technology solutions provider's fiscal Q2 net sales rose 9.7% year-over-year

• Adjusted EPS for fiscal Q2 rose 19% to $1.82

• Company raised fiscal 2027 guidance for net sales, gross profit, and adjusted EBITDA

Outlook

• ePlus raises FY27 guidance to upper single-digit growth for net sales and gross profit

• Company expects FY27 adjusted EBITDA growth in the low double digits

• Company cites AI adoption, data center demand, and cybersecurity as drivers for long-term growth

Result Drivers

• PRODUCT SEGMENT GROWTH - Higher product sales, particularly in cloud, security, collaboration and other products, drove net sales increase, per company

• PROFESSIONAL SERVICES DECLINE - Lower professional services revenue and margin due to project delays from retail customers, per company

• CLOUD MANAGED SERVICES - Managed services revenue rose 11.9% mainly from increased cloud managed services, per company

Company press release:

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "strong buy"

• The average consensus recommendation for the it services & consulting peer group is "buy."

• Wall Street's median 12-month price target for ePlus inc. is $111.00, about 22.7% above its November 4 closing price of $90.47

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 16 three months ago

Reuters Recommended Reads

• Nov 4 - Tech solutions firm Unisys' Q3 revenue beats on strong new business signings

• Nov 5 - Insight Enterprises Q3 sales beat estimates, lifts gross profit growth outlook

• Nov 5 - Epam beats Q3 profit estimates; hikes buyback plan

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)