EPLUS (PLUS)·Q3 2026 Earnings Summary
ePlus Crushes Q3 as AI Demand Drives 25% Revenue Surge, Raises Guidance
February 4, 2026 · by Fintool AI Agent
ePlus inc. (NASDAQ: PLUS) delivered a blowout Q3 FY2026, with revenue surging 24.6% year-over-year to $614.8 million and Non-GAAP EPS more than doubling to $1.45 . The technology solutions provider crushed analyst expectations across the board, with revenue beating consensus by 16% and EPS topping estimates by 44%. Shares jumped approximately 8% in after-hours trading following the release .
The standout driver? AI infrastructure demand. CEO Mark Marron highlighted that "demand for AI is fueling spend across all of our solution sets including cloud, compute, storage and networking," with large enterprise customers modernizing infrastructure to support AI initiatives .
Did ePlus Beat Earnings?
ePlus delivered one of its strongest quarters in recent memory, crushing estimates on every key metric:
This marks ePlus's fourth consecutive quarter of beating revenue estimates . The company has a history of exceeding Wall Street expectations, beating revenue estimates on average by 23.3% since going public .
Ask Fintool AI AgentWhat Did Management Say About AI?
The most significant takeaway from management commentary was the explicit connection between AI adoption and ePlus's accelerating growth. CEO Mark Marron stated:
"Our solid revenue growth reflects, in part, demand for AI that is fueling spend across all of our solution sets including cloud, compute, storage and networking. We continued to see strong revenue growth from our largest enterprise customers, who are modernizing their infrastructure to support their AI initiatives."
This AI tailwind is not limited to large enterprises. Marron also noted "strong demand from our mid-market customer base where we have continued to evolve and expand our product and services solutions to meet our customers' needs in today's market."
What Changed From Last Quarter?
The acceleration from Q2 FY2026 is notable:
While Q3 showed slightly lower sequential EPS (due to seasonality and product mix), the year-over-year momentum remains exceptional. Revenue growth accelerated from +22.6% in Q2 to +24.6% in Q3, and the EPS beat versus consensus expanded from +61% in Q2 to +44% in Q3 — both massive outperformances.
How Did Segments Perform?
Product Segment: The Growth Engine
The Product segment was the standout performer, with revenue surging 32.2% YoY to $501.8 million . Growth was driven by:
- Networking: $230.9M (+27.3% YoY)
- Cloud: $175.4M (+50.0% YoY)
- Security: $61.1M (+13.2% YoY)
- Collaboration: $13.4M (+59.9% YoY)
Product segment margin improved to 23.8% from 22.1% last year due to favorable product mix .
Professional Services: Project Delays Hit Results
Professional services revenue declined 7.8% to $64.1 million, primarily due to project delays by certain retail and consumer customers . However, consulting revenue partially offset this decline. Gross margin decreased to 39.2% from 40.1% due to services mix shift .
Managed Services: Cloud Services Expansion
Managed services grew 10.5% to $48.8 million, driven by cloud services revenue . Gross margin declined slightly to 29.0% from 29.8% in the prior year quarter .
Ask Fintool AI AgentDid ePlus Raise Guidance?
Yes, significantly. Based on strong year-to-date performance and momentum, ePlus raised its FY2026 guidance across all key metrics :
The implied FY26 targets are now:
- Net Sales: $2.41-2.45 billion
- Gross Profit: $613-624 million
- Adjusted EBITDA: $199-202 million
This guidance raise represents meaningful upward revisions of approximately 500-700 basis points on revenue and gross profit growth expectations.
How Did the Stock React?
PLUS shares jumped approximately 8% in after-hours trading, rising to $93 from a regular session close of $86.09 . This follows a pattern of strong post-earnings moves for ePlus:
The stock trades at approximately 19x trailing earnings and 22x forward estimates, with analysts maintaining a $92 average price target heading into the report .
Balance Sheet Highlights
The significant inventory build (+100% to $241M) reflects projects in process, positioning the company for continued growth .
Capital Allocation
ePlus announced a quarterly dividend of $0.25 per share, payable March 18, 2026 to shareholders of record as of February 24, 2026 . This represents a $1.00 annual dividend and approximately 1.2% yield at current prices.
CEO Marron reiterated the company's balanced capital allocation approach: "We will continue to take a disciplined approach to capital deployment, prioritizing investments in our core business, strengthening our capabilities, and focusing on areas where we can achieve sustainable competitive advantages, all while preserving a healthy balance sheet."
Key Customer End Markets
Revenue by customer end market showed broad-based strength :
Notable strength in Telecom/Media (+40%), Healthcare (+39%), and Financial Services (+43%) offset weakness in SLED (-16%).
What Did Analysts Ask on the Call?
The Q&A session surfaced several key insights:
On Enterprise Project Normalization: Analyst Maggie Nolan (William Blair) asked about the "outsized projects from enterprise customers" mentioned in prepared remarks. CEO Mark Marron clarified:
"We had a few of our large enterprise customers that had fairly large quarters in Q3. We don't think that'll be a major slowdown in Q4, but we don't think we'll be able to replicate that, and that kinda shows in our guidance that we gave for the year."
Importantly, mid-market was actually the biggest growth area this quarter — ePlus's strategic sweet spot .
On Professional Services Delays: The retail/consumer project delays are expected to push into fiscal 2027, not Q4 . Marron noted it was "just a few customers" and that managed services continues to grow, so "we feel like we're in a pretty good spot overall" .
On AI's Evolving Impact: When analyst Greg Burns (Sidoti) asked about quantifying AI's impact, Marron made a notable comment:
"What was interesting this quarter versus some of the prior quarters, AI was somewhat of a headwind. We now see it as a tailwind... What's happening now is everybody's starting to define their use cases and figure out how to take advantage of these AI capabilities."
The AI tailwind is driving demand across data centers, networking (customers "AI-enabling their networking"), and security (governance, risk, compliance, data governance, threat protection) .
On Integrated Solutions: Marron highlighted the company's ability to bring AI, cloud, networking, and security together as a key differentiator:
"I think a lot of customers are looking to just lock down a few key partners or strategic vendors to kind of deal with. I'd almost liken it to, if you remember, back in the day with converged infrastructure... that's what kind of put us on the map."
On Inventory Build: CFO Elaine Marion explained the $85 million sequential inventory increase is "in concert with what we're seeing with the increase in just demand" and expects inventory to be "a little more inflated in the next several quarters" .
What Risks Did Management Flag?
CEO Marron flagged an industry-wide memory shortage as a potential near-term risk:
"The global memory chip market is experiencing a notable supply squeeze and rapid, unexpected price increases. Demand for advanced memory components, especially those used in large AI systems and data centers, is outpacing the industry's ability to produce them."
While this could "impact certain customer deployments or timing," management believes ePlus is "well positioned to manage through it, given our diversified supplier relationships and close coordination with customers" .
Looking Ahead
Key catalysts and considerations for Q4 and beyond:
- Memory shortage management: Can ePlus navigate supply constraints without impacting customer deployments?
- Enterprise normalization: Q4 unlikely to replicate Q3's outsized enterprise projects — mid-market remains the key growth engine
- Professional services recovery: Retail/consumer project delays expected to push into FY2027
- AI tailwind durability: AI-driven infrastructure modernization now a clear tailwind after being a headwind previously
- M&A activity: Management continues to "evaluate acquisitions and investments that enhance our position in higher growth areas"
Ask Fintool AI AgentePlus inc. is a Delaware corporation headquartered in Herndon, Virginia, providing technology solutions including AI, security, cloud and data center, networking, and collaboration, as well as managed, consultative, and professional services. The company serves approximately 2,160 employees across the US, UK, Europe, and Asia-Pacific.
Related Links: