One of the world’s largest tech resellers and services firms has just defied the general market by posting a 25% jump in quarterly net sales.
NASDAQ-listed Cisco partner ePlus saw net sales hike by a quarter to $574.2m in the three months to 30 June 2023, with two-thirds of the growth from organic means.
The results come after publicly listed peer CDW logged a 8.5%% decline in its Q2 net sales.
On an investor call, CEO Mark Marron said the results benefitted from two acquisitions made last year and the fruition of deals previously delayed by supply chain shortages.
‘We got out of PCs a long time ago’
But he also stressed that ePlus – which operates in the UK through its IGX Global subsidiary – is outpacing the market thanks to its focus on the networking, security and managed security space.
“There have been some layoffs from some of the tech vendors, and you see some of the projections from some of our public peers in terms of declining revenues,” he said.
“I never want to say we’re immune to it, but we are resilient.
“We don’t really play in the commodity space. We made a decision a long time ago to get out of the PC and laptop space. We still do it for some of our bigger customers but we didn’t see some of the headwinds the other saw in that space.”
ePlus’ product revenues shot up 29.2% to $498.2m, led by networking.
Managed services revenues rose 23.2% to $32m, while professional services revenues were down 4.3% to $35.6m.
IGXGlobal bagged Palo Alto Networks Authorized Support Center Certified Partner Status at the end of the quarter, ePlus said.
Midmarket customers are “particularly well suited” to partner with ePlus, Marron said, as their areas of need align with ePlus’ strengths, namely in areas such as workplace transformation, cybersecurity and technology modernisation.
AI ‘in its early innings’
Just like his opposite number on CDW’s earnings call, Marron was quick to single out AI as an emerging growth driver.
Customers are looking to ePlus to help them manage the complexity of designing, deploying, supporting and managing AI, he said.
“This can include building out an AI strategy plan, identifying priority projects, providing resources to help structure and implement AI projects and then ensure proper governance and policies are applied and monitored,” he explained.
ePlus is looking to build headcount in this area, he added.
“[AI] is an area that, right now, I believe is in its early innings,” he said.
“It’s not a big revenue generator for us, but we believe it could be a growth driver, so we will look to invest in that space over time,” he said.
Marron characterised ePlus’ full-year 2024 net sales guidance of between $2.23bn and $2.33bn (compared with $2.068bn in fiscal 2023) as “aggressive” but “conservative”.