ScanSource Refines Annual Outlook Amid Strategic Shift

ScanSource US8060371072

ScanSource has provided updated guidance for its full fiscal year 2026 following its second-quarter results, which showed modest growth. The company is progressing in its transition toward more stable, recurring revenue streams, but management has revised its sales forecast in response to current market conditions. The increased emphasis on service offerings is now seen as a key factor in supporting these adjusted targets.

For the quarter, ScanSource reported a net sales figure of $766.5 million, representing a 2.5% year-over-year increase. Gross profit reached $102.9 million, up 1.2% from the prior year. A notable highlight was the contribution of recurring revenue, which accounted for 37.2% of gross profit, a significant rise from 32.5% a year ago. The company also generated $49.7 million in free cash flow during the first half of the fiscal year.

Based on these results, the firm has clarified its expectations for the fiscal year ending June 30. It now anticipates annual net sales to land between $3.0 billion and $3.1 billion. Adjusted EBITDA is projected to be in the range of $140 million to $150 million. The target for annual free cash flow remains unchanged at a minimum of $80 million.

Segment Performance and Strategic Initiatives

The quarter's moderate revenue increase was primarily driven by the Specialty Technology Solutions segment, which grew 2.5%, supported by steady North American operations. The Intelisys & Advisory division also posted gains, with revenue advancing 3.1% to $25 million.

Strategically, ScanSource is taking steps to consolidate its market position. The company recently announced the launch of a new sales team named "Converge." This initiative aims to create tighter integration between hardware, SaaS solutions, and cloud services. The move underscores a strategic priority to offer partners a comprehensive, integrated portfolio and to better leverage synergies across different business units.

The company's financial foundation remains robust. ScanSource ended the period with $83.5 million in cash and cash equivalents, against total debt of $102.7 million. Furthermore, the company allocated $18 million toward repurchasing its own shares during the second quarter.

Focus for the Remainder of the Fiscal Year

Looking ahead to the second half, management's focus will be on executing the new sales strategy and integrating recent acquisitions, including Advantix and DataZoom. Executives anticipate growth momentum to accelerate in the coming months. This expected dynamism will be crucial for achieving the newly refined annual targets, particularly at the higher end of the projected ranges.

@ boerse-global.de | US8060371072 SCANSOURCE