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ScanSource Q3 2025 Earnings Report
ScanSource reported its third quarter fiscal year 2025 financial results, with net sales decreasing by 6.3% year-over-year, while gross profit and net income increased by 6.1% and 36.1% respectively.
Key Takeaways
ScanSource, Inc. announced its third quarter fiscal year 2025 results, with net sales of $704.8 million, a 6.3% decrease year-over-year. Despite the decline in sales, the company saw significant improvements in profitability, with gross profit increasing by 6.1% to $100.2 million and GAAP net income rising by 36.1% to $17.4 million. Diluted EPS increased by 48.0% to $0.74.
Net sales for Q3 FY25 were $704.8 million, a 6.3% decrease from Q3 FY24.
Gross profit increased by 6.1% to $100.2 million, with gross profit margin expanding to 14.2% from 12.6% in the prior year.
GAAP net income rose by 36.1% to $17.4 million, and GAAP diluted EPS increased by 48.0% to $0.74.
Adjusted EBITDA increased by 5.9% to $35.1 million, with adjusted EBITDA margin at 4.97%.
ScanSource
ScanSource
ScanSource Revenue by Segment
ScanSource Revenue by Geographic Location
Revenue by Segment
Specialty Tech Solutions Revenue
CapyFin.comIntelisys & Advisory Revenue
CapyFin.comRevenue by Geographic Location
U.S. & Canada Revenue
CapyFin.comBrazil and Intl. Revenue
CapyFin.com Forward Guidance
ScanSource updated its annual financial outlook for fiscal year 2025, narrowing the range for adjusted EBITDA and maintaining the free cash flow guidance, while revising net sales expectations.
Positive Outlook
- Adjusted EBITDA guidance for FY25 is maintained at $140 million to $145 million, indicating continued strong profitability.
- Free cash flow (non-GAAP) guidance for FY25 remains at least $70 million, reflecting healthy cash generation.
- The company announced a new $200 million share repurchase authorization, supplementing the existing $42 million outstanding authorization.
- The share repurchase program demonstrates confidence in the company's financial health and commitment to returning value to shareholders.
- The updated guidance provides a clearer outlook for investors for the remainder of the fiscal year.
Challenges Ahead
- Net sales guidance for FY25 has been revised downwards to approximately $3 billion from the previous range of $3.1 billion to $3.5 billion.
- The revised net sales outlook suggests a more conservative revenue expectation for the full fiscal year.
- The reduction in the upper end of the net sales guidance could indicate ongoing market challenges or a more cautious business environment.
- While adjusted EBITDA guidance is maintained, the lower net sales could imply a greater reliance on margin expansion or cost control to achieve profitability targets.
- The updated guidance replaces previously provided guidance, which may lead to some uncertainty among investors regarding the company's trajectory.
Revenue & Expenses
Visualization of income flow from segment revenue to net income