ScanSource (SCSC) investor relations material

Executive summary

• Achieved strong Q4 and full-year results, with Q4 net sales up 17.3% year-over-year and full-year net sales up 6.1%, reflecting disciplined execution and improved demand across all business segments.

• Announced a definitive agreement to acquire MicroAge, a leading IT solutions integrator, for $220.5 million in cash, expanding TAM, services, and end-user visibility in high-growth areas like cloud, cybersecurity, data center, and AI.

• Leadership changes and renewed focus on market share gains contributed to broad-based demand and improved performance.

Financial highlights

• Q4 net sales: $953.1M (+17.3% YoY); full-year net sales: $3.23B (+6.1% YoY); Q4 gross profit: $119.8M (+14.0% YoY); gross margin 12.6%.

• Q4 GAAP net income: $25.6M (+27.5% YoY); diluted EPS: $1.24 (+40.9% YoY); Q4 non-GAAP EPS: $1.46 (+43% YoY, company record).

• Full-year GAAP net income: $78.9M (+10.2% YoY); diluted EPS: $3.64 (+21.3% YoY); adjusted EBITDA Q4: $46.1M (+19.4% YoY); full-year: $151.5M (+4.8% YoY).

• Free cash flow for FY26: $113.8M; annual free cash flow reached $114 million, with a 124% conversion of non-GAAP net income.

• Recurring revenues up 10.6% year-over-year, contributing 34% of gross profit.

Outlook and guidance

• FY27 organic revenue expected to grow 6%-10%, excluding MicroAge acquisition benefits.

• Adjusted EBITDA projected between $158 million and $165 million, with a margin of 4.6%-4.84%.

• Free cash flow guidance set at a minimum of $85 million; effective tax rate expected between 27.5%-28.5%.

• Stronger percentage growth anticipated in the first half of FY27 due to easier comps.