Key Highlights
- The technology distributor delivered adjusted EPS of $1.46 for Q4, surpassing analyst predictions of $1.14 by $0.32
- Quarterly sales reached $953.1 million, significantly exceeding the $821.95 million forecast, representing a 17% annual increase
- ScanSource unveiled plans to acquire MicroAge through a $220.5 million all-cash transaction
- Shares of SCSC climbed approximately 19% during Thursday’s premarket session
- The company projects fiscal 2027 net sales expansion of 6% to 10%, not factoring in the MicroAge transaction
Shares of ScanSource (SCSC) experienced a dramatic surge of roughly 19% in Thursday’s premarket hours following the company’s impressive fourth-quarter financial performance and the announcement of a strategic $220.5 million acquisition of IT solutions provider MicroAge.
The technology distributor reported adjusted earnings per share of $1.46 for the quarter, handily beating Wall Street’s consensus estimate of $1.14. Quarterly sales reached $953.1 million, substantially outperforming the anticipated $821.95 million and marking a 17% increase from the $812.9 million recorded in the comparable period last year.
Strong hardware sales drove the quarterly performance. The company’s Specialty Technology Solutions division generated net sales of $927.2 million, representing a 17.6% year-over-year expansion, fueled by widespread growth throughout North American markets.
The Intelisys and Advisory segment delivered net sales of $25.9 million, a 7.2% annual increase, primarily attributed to stronger Resourcive performance.
Gross profit expanded 14% to reach $119.8 million, while the gross margin declined modestly to 12.6% from the previous year’s 12.9%.
Operating income advanced 19% to $31.7 million. Under GAAP accounting standards, fourth-quarter net income totaled $25.6 million, equivalent to $1.24 per diluted share, compared to $20.1 million, or $0.88 per diluted share, in the year-ago period.
Strategic MicroAge Acquisition
The company confirmed its intention to purchase MicroAge for $220.5 million in an all-cash transaction. Chief Executive Officer Mike Baur stated the deal “will accelerate growth, expand margins, and adds new services capabilities.”
The acquisition is anticipated to finalize during the quarter concluding September 30, 2026, subject to regulatory clearance.
Annual Performance Overview
Throughout fiscal year 2026, ScanSource generated total net sales of $3.23 billion, reflecting a 6.1% year-over-year gain. Annual gross profit increased 7% to $437.4 million, with the gross margin edging up to 13.6% from 13.4%.
Operating income for the full year climbed to $98.6 million from the prior year’s $85.2 million. Net income on a GAAP basis totaled $78.9 million, or $3.64 per diluted share, versus $71.5 million, or $3.00 per diluted share, in fiscal 2025.
The company’s adjusted EBITDA for the full year expanded 4.8% to $151.5 million.
At fiscal year-end, ScanSource held $88.4 million in cash against $101.4 million in total debt. The technology distributor produced $123.1 million in operating cash flow and $113.8 million in free cash flow throughout fiscal 2026.
During the year, the company executed $97.9 million in stock buybacks.
For the upcoming fiscal 2027, ScanSource issued guidance calling for net sales growth between 6% and 10%, with adjusted EBITDA projected at $158 million to $165 million, excluding any impact from the proposed MicroAge transaction.
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