ScanSource (SCSC) 7 Nov 242025 Q1 Earnings call transcript

Welcome to the ScanSource Quarterly Earnings Conference Call [Operator Instructions]. Today's call is being recorded. If anyone has any objections, you may disconnect at this time. I would now like to turn the call over to Mary Gentry, Senior Vice President, Treasurer and Investor Relations. Ma'am, you may begin.

Good morning, and thank you for joining us.

prepared Steve Mike Officer. Jones, include and our will and CEO; our call remarks Baur, from Chair Our Chief Financial

will our posted results take operating webcast in accompanies review quarter Relations and We then section Investor and of our for comments your earnings an the We the infographic website. that questions. our

to to in and the differ the cause are forward-looking call XX, As certain in statements this These could XXXX. expectations. you from factors XX-K June release that our and materially on in risks subject risks know, actual include for uncertainties our Form ended results press our release, infographic uncertainties and and statements year and earnings identified

duty to by these as our required except update statements today, as Forward-looking represent any views statements, law. only disclaims of and ScanSource

will we in website our both call over discuss reconciliations non-GAAP to now the GAAP and provided have results turn call, Mike. our During and on our X-K. I'll Form and

first today. and thanks, in demand Mary, Thanks, and environment. EPS cash a the everyone, delivered growth soft joining us strong free flow In quarter, for we

with our results success focus on and Our distribution Intelisys & revenue. hybrid technologies specialty Advisory demonstrate recurring our

trust their to the this technology of to channel meet in us increasingly end offerings customers world. Our demand digital partners broaden

to distribution strategy and enables customers' more Our software hybrid technology our sell including end the requirements. devices, partners stack, of services meet to

partners to result a build channel opportunity successful recurring the business. give more a in will our profitable revenue of In that addition, and we stream sustainable

recurring we use, both on different we the our and As based you include sales do saw realigned our results, segments reporting in segments models revenue.

market ScanSource the a XXXX, first agents, with we started cloud our distributor the are leading journey traditional up today. With route we X distribution our hardware years, have of acquisition the to built into new starting Intelisys a revenue last opened and we recurring through Intelisys, hybrid stream. distributor in from transformed Over

technology August former stream connectivity. of hardware have which our included business. enables Specialty in XX, with Advisory recurring Solutions Intelisys reporting Specialty models, our Advantix the different hardware, the The working capital sales. On with of deliver technology are theme share we specialty a high-margin that segments revenue VARs and the with for the August, M&A future, creating channel Our provider to solutions requirements. The XG of their advisor includes acquisitions, that our of Advantix, the developing Intelisys reflect Advisory we Group. we Solutions launched is our Advisory technology These them group in sales keeping recurring Solutions new the different Also exception Technology providing VARs, segments, acquired focused partner in businesses. In combines margin segment closed on practices segment. Starting mobility Technology sell light. leading Intelisys in and our we closed are Resourcive with and Specialty Technology our & & included profiles realigned our acquisitions revenue On acquiring Intelisys Advantix. capital and segment advisors Resourcive, August X, Intelisys working & Intelisys segment. a businesses X is with combined Resourcive, value model of acquisition August, from the to with Integrated best new connectivity advisory more we can ScanSource mobility data solutions, with This the community. Solutions

turn year Steve to outlook invest supports businesses. I'll in XXXX. now how high-margin the QX over for is call to and take through you financial working results working capital-light demonstrate strategy our culture Our fiscal allocation capital and results cash our our reaffirmed to

Mike. Thanks,

our in are results QX line expectations. Our with

to Our well experiencing demand. soft while teams continue execute

a lower mix down higher Our recurring grew consolidated sales adjusted our and netted declined revenue while EBITDA year-over-year, expenses. reflecting SG&A XX.X% of X%,

and flow of diluted quarter, XX.X%, year. EPS EBITDA and strong net with income overall, adjusted our of margins on and respectively. focused XX% the free million. our And pleased delivered of flow delivering free margins X.X% cash year-over-year profit We are profitability the for performance. QX business increased full and cash XX%, For Non-GAAP gross remain strong $XX we

laid QX remarks, align our results in we out business distribution reporting sales strategy. segments our we that his new in Mike under different models executing hybrid are with As use the

our from reflecting have As Gross of quarter-over-quarter, our Net better sales grew our revenues a demand mix a environment. XX% a basis. less and net reminder, Solutions on both declined segments X% profits realigned X% recurring Specialty year-over-year, year-over-year. signaling Technology revenues. In segment, better net sales segment than decline, more reported a sales declined the

SG&A increased the of end-user in of we Intelisys segment. our reduced benefited items. ending $X.XX one-time revenue EBITDA to investment margins as for timing of gross net. segment profit approximately profit balance, QX XX.X% flow year-over-year, most year-over-year quarter cash from net are sales X% X.X%. In and Advisory with XX.X% both increased to expanded net margins the segment, cash of gross Segment continued our million for reported sales line Gross expectations revenues some margins percent XXX% XX%. profit increased exceeded to in our quarter X% of Adjusted & this increased to in billings gross our our this to billings the expectations. segment, are EBITDA billion. Free accounts approximately margin the nearly adjusted profits from recurring For $XX bring receivable and annualized and in reflects as the Intelisys

to improvement continue key capital our metrics, cycle. conversion efficiency in our by our improve We cash working demonstrated

on deeper bit and sheet balance a cash our flow. going Now

our with be on to pleased working making efficiency. continue progress capital we're We the

supporting balance our with to leverage plan bring $XXX strategic EBITDA. Share X debt share adjusted EBITDA while net Xx with modest sheet Our what about on improving to of allocation meet QX credit to cash trailing plans. a demonstrates trade demand totaled sales months maintaining strong for capital XX our our our QX and ended adjusted with offerings. We balance in X to on million and levels at capabilities and ratio and a efficiency a million QX, we're team's focus appropriate leverage while acquisitions our repurchases excited basis. our net and $XX partner inventory maintaining target Xx a repurchases acquisition channel channel our

of 'XX, staying an acquisition have pipeline our to do room continue to active we repurchases and within ratio. For FY leverage targeted while net share targets

For a improve, investments remainder to are 'XX, FY that base tech market adjust our demand based profitability. expectations spending environment. slowly market and and cautious align resource In in we our our still believe continually but our adjusted improve will the to of to opportunities. we environment the better We SG&A on the quarter, review

and of $X.X million. We'll at are ranging $XXX EBITDA it now billion, up $X.X least cash For we reconfirming FY for billion our between guidance free open 'XX, flow and $XX of million adjusted and between million net sales annual questions. $XXX

Sidoti. Our come going question first Instructions] Burns Greg to [Operator of line the is from with

a us little showing are relative strength, any could into you If bit just more quarterly within specifics give that you underlying of there product some categories insight dig the Specialty Technology? the Could into maybe lagging? are maybe that any results? Are the

we segments that decided new those What really that Mike. to were the with and do is combine from technologies to that of it's X segmentation in the modern of comms. we've hearing specialty us all to you're selling Greg, used been

now of all we about all that used And segment. are those in separately talk the one so, to

technologies our that segments like. going indicative the various the trying more one our than think around sometimes indicative always of changes by the we those themselves that and going if And business plan segments year forward. of not will it's believe another, we business faster of includes specific because the we're in of is technologies. And is all that the forward, there's about are technologies ahead about And we opportunity so are what to look technologies our growing whether -- talk but less

there particular we U.S. on be that going looked Okay. to Brazil in region should it underperformer like relative of? anything a aware And relative that was in the Is

depressed the is Greg, has fluctuation story. really, can of that sales Year-over-year, impact dollar currency, FX, inside the the even the growth Brazil, Brazil And their with FX story strengthening that motion. in rate. really an

looks growing profit. with And Intelisys is in the revenue like side, lastly, it great. Okay, line on gross then

Or less, maybe? X maybe months environment the guess, becoming competitive seen pricing? over in Are the So, XX is has you've any environment to there? competitive last more in competitive there the of you change what been I terms to relative seeing the rational market

Mike again. Greg, Yes.

any seen haven't We change.

we annual sure we in make on there So, that quarter. when that quarter's hired really this call we no margin that believe better in put as space. partner Ken our that -- challenged some And our opportunities news strategy partners and together we're new to into to we opportunities there's Mills, President, cases, you grow aware some the margins with that's our the this going know, find pressure. And there around trying regarding help we took we on account wanted over growth those is very because And And new But guidance, have in past, nothing can for the And the we was of time. we that when growth. last margin business. new segmentation us, expanding fact and we believe, of were also in our our now right of said the that to pressure.

Housum question Northcoast from Research. going line next of Keith is the with to Our come

profitability. Good on the job

of going -- kind of might terms now forward? obviously, change environment in terms the thoughts the Any how In demand are elections elections completed. of been

impact, a play reflecting that from it year our half in by joining that How think, the half always the kind into impacted that's our and Steve. guided we're still of Keith, going when first guidance our thought growth perspective. softer what would have and to gave guess going for election. uncertainty stronger that's why point. this That's reconfirmed out guidance. we is at anybody's We we and a is this second it's Thanks us. what a We've business still to the in was we an thought

a you or lower I everybody resellers environment, the Okay. that VAR pricing is out above to that from When what perspective, competitive guys heard really some We demand being you hope for. is stay well has from than would large competitive there that? pricing guys impacting competitive are able it's as as been think

supplier partners Yes. partner and VAR that about, a a will, we margins over deals for know to years, the not to VAR, they project, good working with the it's the what's that on as a that's Keith, work it's reasonably ensure we And if the actually happened you the working help is, value and they're Mike. gets try that but deal have VAR Historically, a just if our you paid a it's the we on. know, we specific deliver. transaction, secure partner,

And a amount price. end with having of do. over pricing significant the the special are this projects a XX% of arrangement, up deals special Almost registered we our we There's on special so, supplier.

user. based frankly, that are margins to end determined, the value the provide provides so and by And VAR we supplier on the the the

any don't there's think don't pricing new itself, I necessarily we growing is with pressure, market channel the that either. itself, So, the partners and think new

that do we I a who in play to kind and of suppliers. So, think the partners know are the are deal going so all

so, a by us a us for on And job they of be the do should margin received happens. today managing for that VARs our the good expectations and when transaction

So, I unusual discussions are think There's that margin no today. rational it's very happening.

Appreciate it.

You that provide think, yourself, can made been the any made demand script adjustments mentioned, the for Steve, on to you end SG&A? have you've adjustments there, the that of guess, I those the I in I in response some at you the think, to quarter guys SG&A color it environment. might

investment. annualized look about a adjusted really at of America in at and we Yes, headcount savings get take North in in proactive that looking we the our And in Keith, expect approach quarter, an we mainly our and XX-Q, the million sections, and $XX.X do out of reflected to SG&A that's our action. it worth as we spend,

to concluded Got there those actions still you. have And all go? more been or are

No.

one, For that concluded. particular it's

I'm ask probably that right, Okay, question, I my got you. sorry, bad. didn't

savings the in savings, of start quarter the already here terms think second they the In or will do have started? you

in So, quarter. we did this earlier the

be is of in building our our quarter results, quarter. quarter And in that's savings So, we if well. really took the the QX entire our part of and over We expense a full that -- you reflected forward. get GAAP as at as taken in look going will entire --

I I there. Great. guess myself. appreciate color question last for the

primary you you're metrics key understand say, the at but terms to one In results I some get of that is I to are question still some guess scale, acquisitions of and the want you the the that made, in looking expect? performance there. you've order delivering what that's guys

Yes.

all, margins add we that this capital-light -- think we grow, what of to got go we've portfolio, recurring higher I trying do working investments, and that's higher-margin first it to with M&A, through starts thematic are grow to our really our approach businesses to with to revenue. and

the things longer it's we of on more at we kind growth ROIC acquire together. we're work from strategic comes brings. expect looking after what to of those look and top And of targets, when that, a Then that look of lot the and ROIC all we scale So term, really it. on a that get

comes question the Latimore of Northland from next Our Securities. Michael with line

for curious, you the do CCaaS? within there growth separately rates UCaaS Just Intelisys have business, the and

was give ones our a this want to strategy year color segmentation, technologies Michael, gave decided, find going earlier, We because not through go down find great talking we as particular that slow they didn't new really of I representation replace to or on that new the for we're that the the always to away. really can technologies.

think will longer-term about more in our of all partners want of it's to the grow. We why the key playing we Intelisys need sell we're user. sure do think end so, technologies And a to that I make to question

our idea we growing well. thinking well, do technologies or of more, in technology So, we still sell want about stack. we help if how to want to the is grow UCaaS we more our going as referenced new to says do even earlier result, the that we're be help CCaaS partners that as help partners a more And partners

have about think know we've going And do the out course, them in because technology growth. decided to And of how plays they areas to start talking do of something we our to -- that if our that of year it's with have the opportunity? this want So help see to specifically specialists we not partners they each just that. we're granularity

business? AI because have just I work you of And focused prospects do the AI Got qualitative potentially some any on? a doing sense. CCaaS CCaaS. view And it. Makes then for slow some within on there's of cases technology does is one are what the lot maybe you're There's new around here And deals different that color -- maybe are and the more analysis? even there? on guess, areas use it people

Well, we hear our X, because maybe I it a at lot. the think we AI do call, last last referenced

until our products that at the that's times of AI going sell Of suppliers not some territory. it's is technologies already early users. large new of can our CCaaS actually to definitely about talking in of we the that's to think or the We believe A it. some the think end that not there course, and do some technologies a everybody some with grow channel. to that that, technologies see exist. whether your And new channel to of that drive tends on to OEMs our of are other really We real that's adoption profit. They're technologies we they opportunities blaze for doing lot that be the like positive we accelerate direct the as business. But example, the a

AI providing what partners make new to to be with sure going direction asking us. our are like any we're So, aligned we're

we the they're be country. But we our conferences That's with So, talking partners that asking where around technologies for as sessions about particular educational and the have stay more. us focus really tuned on for. we'll

it. last Intelisys. then Got just on And

I think a run you that quarters? the of to like growth, net said something that. kind couple bookings think next X% rate of about Is good

just don't our that there, see the in just rest I demand know, the like with like And have soft we there's we will there end-user what change, is seeing softness Well, business. think our billings we're hardware in but business. we when of is there certainly obviously,

it's our total going basically for company, midpoint And to -- to I at also that year X% low-single-digits a growth think to something Intelisys that. of be the going year. And -- billings the going grower year-over-year. the to a guidance think we're a close end-user be guidance the for flat to indicated were so, our we reflect might probably We

Raymond Logan James. And line Instructions] Katzman [Operator of question with the come from is going our next to

This is Logan Adam. on for

the businesses? just the question, So, acquired you the SG&A year? to on recurring expect how you line full assume sequential gross if as revenue margin throughout if take we gross guys' and -- a margin have the back think fair helpful, it wanted do was line, for about the my but thoughts first guys step I how you commentary Is throughout year year to to that get you guys to play more you increases out. the

Logan, Yes. Steve. this is

our look gross So, you're them I into is dig hardware think a you, the thinking what to have is on tell you to the on probably can you our because profit really like. impact the have half what in mix have would segments what between if to a do at first the I consolidated we're half. look segment second level, margins going material at margins than lighter

of if on out on a will in are hardware pretty I So we'll of pushes quarterly versus look as in margin we're think margin be trending the because Technology just mix consolidated bit. little representative that up for the of profiles, blend a last the Specialty those segments, high the seeing a start you're the the view. But because over year about we where couple recurring quarters infographic probably sequentially, kind that if pressure had, you our some we maybe in bit thinking year, the -- of overall, what in revenue again, quarter

But a that our that have so, segment throughout you we And to from get down to and at think up perspective a probably then as look bit. aggregate look trends the I it year, consolidated.

That's super helpful.

what or goes is an process you kind and talked and guys some you repurchases into guys pipe, was of that? about do decision would how there color you seen the we've the go forward acquisition I be around do about talk with versus I just have expect guys you how second you question active weighing curious, But and M&A guys The share acquisitions to color guys internally helpful. was helpful. for Any M&A

really think to and expanding our I back and ROIC. margins long-term it Logan, comes growth Yes, the strategy,

larger about look I the the think how it. way about of we that's think I'm if at talking it, we framework

I think those principles when are kind a our make decision. of guiding we

And like closing over would you. to hand to Jones conference I for the Thank any Steve now back remarks.

like for today. we'd thank you Well, to joining us Yes.

conference hold quarterly Thursday, a.m. XX on expect at call We our results to next XX:XX discuss January XX, to approximately December

participating, and Thank Everyone, This for great concludes today's disconnect. all conference call. you may have day. you a