ScanSource (SCSC) Q2 2026 earnings summary

Executive summary

• Q2 FY26 net sales rose 2.5% year-over-year to $766.5 million, with both segments showing growth and strong free cash flow generation.

• Gross profit increased 1.2% year-over-year to $102.9 million, but profitability was impacted by higher period expenses and margin pressure.

• GAAP net income was $16.5 million, with diluted EPS of $0.75; six-month net income was $36.4 million, with diluted EPS of $1.63.

• Adjusted EBITDA for the quarter was $31.2 million, with a margin of 4.07%, and annualized adjusted ROIC was 11.9%.

• A unified converged communication sales team was launched, and governance changes were announced.

Financial highlights

• Gross profit for the six months ended December 31, 2025, was $210.4 million, up 3.5% year-over-year.

• Operating income for Q2 FY26 was $17.9 million, a 3.1% decrease year-over-year; six-month operating income rose 21.3% to $43.8 million.

• Free cash flow for the first six months of FY26 was $49.7 million; cash provided by operating activities was $54.1 million.

• Cash and cash equivalents at quarter-end were $83.5 million, with total debt of $102.7 million.

• Share repurchases totaled $38.7 million in the first half of FY26; $179 million remains authorized.

Outlook and guidance

• FY26 net sales guidance revised to $3.0–$3.1 billion, down from $3.1–$3.3 billion; Adjusted EBITDA guidance lowered to $140–$150 million.

• Free cash flow guidance remains at least $80 million.

• Guidance reduction attributed to timing and slowdown of large deals, not product shortages.

• Effective tax rate for fiscal 2026, excluding discrete items, expected to be 27.2% to 28.2%.

• Modest year-over-year growth expected in the second half, with momentum building into FY 2027.