ePlus’ first quarter results came in above Wall Street’s revenue and profit expectations, but the market reacted negatively, likely due to margin pressure and cautious commentary around future headwinds. Management attributed the strong top-line growth to broad-based demand across sectors—particularly for AI, cloud, data center, and security solutions. CEO Mark Marron noted that the company’s transition to a pure play technology solutions provider and the divestiture of its financing business helped focus resources on these high-growth areas. However, as COO Darren Raiguel highlighted, larger enterprise sales came at more competitive margins, and certain professional services projects experienced timing delays, impacting overall profitability.
Is now the time to buy PLUS? Find out in our full research report (it’s free for active Edge members).
ePlus (PLUS) Q1 CY2026 Highlights:
- Revenue: $581.6 million vs analyst estimates of $569.3 million (21.7% year-on-year growth, 2.2% beat)
- Adjusted EPS: $1 vs analyst estimates of $0.98 (2% beat)
- Adjusted EBITDA: $40.06 million vs analyst estimates of $41.85 million (6.9% margin, 4.3% miss)
- Operating Margin: 6.5%, up from 5.2% in the same quarter last year
- Market Capitalization: $2.08 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From ePlus’s Q1 Earnings Call
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Maggie Nolan (William Blair) asked how ePlus balanced conservatism and ambition in its guidance given current headwinds. CEO Mark Marron explained guidance reflects both strong open orders and caution due to supply chain risks and global uncertainty.
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Maggie Nolan (William Blair) pressed about margin pressure from large enterprise deals and whether this is a structural change. COO Darren Raiguel responded that opportunities remain for margin expansion through service cross-selling and deeper relationships with large clients.
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Maggie Nolan (William Blair) inquired whether professional services revenue delays are temporary or indicative of broader demand softness. Management answered that most delays are project-specific and expects normalization as retail projects progress.
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Maggie Nolan (William Blair) sought clarification on how the company plans to offset ongoing margin pressure. Management emphasized increased focus on managed and professional services and leveraging AI internally for efficiency.
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Maggie Nolan (William Blair) asked about capital allocation priorities. CEO Mark Marron reiterated the importance of organic investment, selective M&A, and shareholder returns through dividends and buybacks.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will focus on (1) trends in AI and cloud project bookings and whether delayed professional services projects materialize, (2) evidence of margin stabilization or recovery as service cross-selling ramps up, and (3) updates on how supply chain risks, such as the memory chip shortage, influence backlog conversion. Updates on capital allocation and new service offerings will also be indicators of execution.
ePlus currently trades at $80.37, down from $88.65 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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