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Get filing alertsePlus Q1 earnings fall 5.4% on margin compression despite 1% revenue growth
Filed August 4, 2026 · Period ending August 4, 2026 · ~1 min read
Key Changes
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high
Net earnings from continuing operations declined 5.4% to $30.3M and adjusted EBITDA fell 9.2% to $47.8M as gross margin compressed to 23.3% from 23.9% due to product mix shifts and lower-margin sales.
Exhibit 99.1 view on EDGAR → -
high
Memory chip shortage caused product shipment delays and extended lead times during the quarter, constraining product availability and contributing to margin pressure.
Exhibit 99.1 view on EDGAR → -
high
Managed services revenue crossed $50M for the first time, growing 15.1% to $51.3M driven by cloud managed services, supporting the company's recurring revenue strategy.
Exhibit 99.1 view on EDGAR → -
high
Board reaffirmed full-year FY2027 guidance for mid-single-digit growth in net sales, gross profit, and adjusted EBITDA despite Q1 earnings decline.
Exhibit 99.1 view on EDGAR → -
medium
Board declared quarterly dividend of $0.27 per share payable September 16, 2026 and authorized new 12-month repurchase program for up to 1.5M shares starting August 11, 2026.
Item 8.01 verify on EDGAR →
Summary
ePlus reported first-quarter fiscal 2027 results showing a challenging mix of modest revenue growth and meaningful earnings decline. Net sales rose 1% to $649.1 million, but net earnings from continuing operations fell 5.4% to $30.3 million as gross margin compressed 60 basis points to 23.3%.
Management attributed the margin pressure to product mix shifts, lower-margin sales, and operational disruption from an ongoing memory chip shortage that caused product shipment delays and extended lead times during the quarter. The bright spot was managed services, which crossed $50 million in quarterly revenue for the first time, growing 15.1% to $51.3 million driven by cloud managed services.
This milestone supports the company's strategic shift toward recurring revenue streams. Despite the first-quarter shortfall, management reaffirmed full-year guidance for mid-single-digit growth in net sales, gross profit, and adjusted EBITDA, citing strong execution, record sales, and a significant increase in booked and open orders that give confidence in a stronger second half. The Board also declared a $0.27 quarterly dividend and authorized a new 12-month repurchase program for up to 1.5 million shares, signaling continued capital return to shareholders. Investors should watch whether the memory chip shortage persists into Q2 and whether the managed services momentum can offset product margin headwinds as the year progresses.
Section-by-Section Diff
Event · Item 8.01 — Other Events
Item 8.01 — Other Events filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
the Company announced that its Board of Directors declared a quarterly cash dividend of $0.27 per common share to be paid on September 16, 2026, to all shareholders of record as of the close of business on August 25, 2026.
ePlus's Board declared a quarterly cash dividend of $0.27 per common share. The dividend will be paid on September 16, 2026 to shareholders of record as of August 25, 2026. This represents a routine capital return to shareholders.
Event · Exhibit 99.1
ePlus reported Q1 FY2027 results with 1% revenue growth, 5.4% decline in continuing-ops earnings, and reaffirmed FY2027 guidance.
Added in current filing · view on EDGAR →
Net sales increased 1.0% to $649.1 million; services revenues increased 2.6% to $119.4 million. ... Gross billings increased 0.5% to $957.1 million. ... Gross profit decreased 1.5% to $151.3 million. ... Gross profit margin was 23.3%, compared to 23.9% for last fiscal year’s first quarter. ... Net earnings from continuing operations decreased 5.4% to $30.3 million. ... Adjusted EBITDA decreased 9.2% to $47.8 million. ... Net earnings from continuing operations per common share- diluted decreased 4.1% to $1.16. Non-GAAP: net earnings from continuing operations per common share - diluted decreased 9.2% to $1.28.
ePlus reported first-quarter fiscal 2027 results showing modest top-line growth but margin compression and earnings decline. Net sales rose 1% to $649.1 million, driven by higher product and services revenue, while gross billings increased 0.5% to $957.1 million. However, gross profit fell 1.5% to $151.3 million and gross margin contracted to 23.3% from 23.9% due to product mix shifts and lower-margin sales. Net earnings from continuing operations declined 5.4% to $30.3 million, and adjusted EBITDA fell 9.2% to $47.8 million. Diluted EPS from continuing operations decreased 4.1% to $1.16 (non-GAAP $1.28, down 9.2%).
Added in current filing · view on EDGAR →
ePlus is reiterating its fiscal year 2027 guidance of year over year growth in the mid-single digits for net sales, gross profit and adjusted EBITDA.
Despite the first-quarter earnings decline and margin compression, ePlus reaffirmed its full fiscal year 2027 guidance for mid-single-digit year-over-year growth in net sales, gross profit, and adjusted EBITDA. Management cited strong execution, record sales, a significant increase in booked and open orders, and confidence in a strong second half as reasons for maintaining the outlook.
Show 1 minor / wording change
Added in current filing · view on EDGAR →
Appointed John Lutz to Board of Directors
ePlus appointed John Lutz to its Board of Directors during the first quarter of fiscal 2027. No additional details about Mr. Lutz's background or the circumstances of the appointment were disclosed in this filing.
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Figures/quotes linked to EDGAR · Narrative written by AI · Aug 5, 2026 · How we verify