EPLUS INC 10-K

ITEM 9A. CONTROLS AND PROCEDURES 43 Table of Contents EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES The Company’s management, with the participation of the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), has evaluated the effectiveness of the Company’s disclosure controls and procedures, or “disclosure controls”, as of the end of the period covered by this report as defined in Exchange Act Rule 13a-15(e). Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this Annual Report on Form 10-K, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls include some, but not all, components of our internal control over financial reporting. Based on the evaluation described above, the CEO and CFO concluded that disclosure controls and procedures as of March 31, 2025, were effective in ensuring information required to be disclosed in our SEC reports was recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information was accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f). This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements. Our management performed an assessment of the effectiveness of our internal control over financial reporting as of March 31, 2025, utilizing the criteria described in the “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The objective of this assessment was to determine whether our internal control over financial reporting was effective as of March 31, 2025. Management’s assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment. On August 19, 2024, our subsidiary, e Plus Technology, inc., acquired 100% of the membership interests of Bailiwick. We excluded Bailiwick from our evaluation of the effectiveness of our internal control over financial reporting for the year ended March 31, 2025. We are in the process of integrating Bailiwick into our system of internal control over financial reporting. Other than the foregoing, management determined that, as of March 31, 2025, e Plus maintained effective internal control over financial reporting. Deloitte & Touche LLP, an independent registered public accounting firm, who audited the consolidated financial statements of the Company included in this Annual Report on Form 10-K, has also audited the effectiveness of the Company’s internal control over financial reporting as stated in its report appearing on page F-5. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2025, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 44 Table of Contents LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS Our management, including our CEO and CFO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system cannot provide absolute assurance due to its inherent limitations; it is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. A control system also can be circumvented by collusion or improper management override. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of such limitations, disclosure controls and internal control over financial reporting cannot prevent or detect all misstatements, whether unintentional errors or fraud. However, these inherent limitations are known features of the financial reporting process; therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. ITEM 9B.- OTHER INFORMATION Insider Trading Arrangements During the three months ended March 31, 2025, no director or executive officer of e Plus inc. adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. Certain of our executive officers may participate in employee stock purchase plans that have been designed to comply with Rule 10b5-1(c) under the Exchange Act. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. PART III Except as set forth below, the information required by Items 10, 11, 12, 13 and 14 is incorporated by reference from our definitive 2025 Proxy Statement to be filed with the SEC pursuant to Regulation 14A not later than 120 days after the close of our fiscal year. ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE Information about our directors may be found under the caption “Proposal 1 – Election of Directors” in our Proxy Statement for the 2025 Annual Meeting of Stockholders (the “Proxy Statement”). The information in the 2025 Proxy Statement set forth under the captions of “Corporate Governance – Code of Conduct” and “Board Committees” is incorporated herein by reference. The information under the heading “Executive Officers” in Item 1 of this report is incorporated in this section by reference. Code of ethics We have a code of ethics that applies to all our employees, including our principal executive officer, principal financial officer, principal accounting officer and our Board. The Code of Conduct is available on our website at www.eplus.com/investors/corporate-governance-legal/code-of-conduct . We will disclose on our website any amendments to or waivers from any provision of the Code of Conduct that applies to any of the directors or executive officers. Insider trading policies We have a policy on insider trading governing the purchase, sale, and dispositions of our securities by our directors, officers, and employees that is designed to promote compliance with federal securities laws, rules and regulations, as well as the rules and regulations of the NASDAQ Stock Market. A copy of our Insider Trading Policy is filed as Exhibit 19 to this Annual Report. 45 Table of Contents ITEM 11. EXECUTIVE COMPENSATION The information in the 2025 Proxy Statement set forth under the captions “Director Compensation,” “Compensation Discussion and Analysis,” “2025 Executive Compensation,” and “Corporate Governance – Compensation Committee Interlocks and Insider Participation” is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information in the 2025 Proxy Statement set forth under the captions “Equity Compensation Plan Information” and “Stock Ownership” is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information in the 2025 Proxy Statement set forth under the caption “Corporate Governance - Related Person Transactions” and “Independence of Our Board of Directors” is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information in the 2025 Proxy Statement set forth under the caption “Proposal 3 – Ratification of the Selection of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm for our Fiscal Year Ending March 31, 2025” is incorporated herein by reference. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a)(1) FINANCIAL STATEMENTS The consolidated financial statements listed in the accompanying Index to Financial Statements and Schedules are filed as a part of this report and incorporated herein by reference. (a)(2) FINANCIAL STATEMENT SCHEDULE See “ Financial Statement Schedule II - Valuation and Qualifying Accounts ” on page S-1. (a)(3) EXHIBIT LIST Exhibits 10.2 through 10.18, exhibits 10.25 through 10.27, and exhibit 97.1 are management contracts or compensatory plans or arrangements. Exhibit No. Exhibit Description 3.1 e Plus inc. Amended and Restated Certificate of Incorporation, as last amended September 18, 2023 (Incorporated herein by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for the period ended September 30, 2023). 3.2 Amended and Restated Bylaws of e Plus inc., as of March 26, 2024. (Incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on March 28, 2024). 4.1 Specimen Certificate of Common Stock (Incorporated herein by reference to Exhibit 4.1 to our Registration Statement on Form S-1 (File No. 333-11737) originally filed on September 11, 1996). 4.2 Description of e Plus inc.’s securities registered under Section 12 of the Securities Exchange Act of 1934 (Incorporated herein by reference to Exhibit 4.2 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2022). 46 Table of Contents 10.1 Form of Indemnification Agreement entered into by and between e Plus and its directors and officers (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 23, 2016). 10.2 Amended and Restated Employment Agreement effective September 6, 2017, by and between e Plus inc. and Mark P. Marron (Incorporated herein by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended December 31, 2017). 10.3 Amendment #1, effective July 16, 2018, to Amended and Restated Employment Agreement effective September 6, 2017, by and between e Plus inc. and Mark P. Marron (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on July 18, 2018). 10.4 Amendment #2, effective November 14, 2019, to Amended and Restated Employment Agreement effective September 6, 2017, by and between e Plus inc. and Mark P. Marron (Incorporated herein by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the period ended December 31, 2019). 10.5 Amended and Restated Employment Agreement effective September 6, 2017, by and between e Plus inc. and Elaine D. Marion (Incorporated herein by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the period ended December 31, 2017). 10.6 Amendment #1, effective November 14, 2019, to Amended and Restated Employment Agreement, effective September 6, 2017, by and between e Plus inc. and Elaine D. Marion (Incorporated herein by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended December 31, 2019). 10.7 Employment Agreement, effective May 7, 2018, by and between e Plus inc. and Darren S. Raiguel (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 9, 2018). 10.8 Amendment No. 1, effective November 14, 2019, to Amended and Restated Employment Agreement, effective May 7, 2018, by and between e Plus inc. and Darren S Raiguel (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 10-Q filed on February 6, 2020). 10.9 e Plus inc. 2017 Non-Employee Director Long-Term Incentive Plan (updated to reflect the stock split effected December 13, 2021) as amended (Incorporated herein by reference to Exhibit 10.6 to our Current Report on Form 10-Q for the period ended December 31, 2021). 10.10 e Plus inc. 2024 Non-Employee Director Long-Term Incentive Plan. (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on September 16, 2024). 10.11 Amended and Restated e Plus inc. Cash Incentive Plan, effective April 1, 2025 (filed herewith). 10.12 e Plus 2021 Employee Long-Term Incentive Plan (updated to reflect the stock split effected December 13, 2021) as amended (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 10-Q for the period ended December 31, 2021). 10.13 e Plus inc. 2022 Employee Stock Purchase Plan (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on September 20, 2022). 10.14 Form of Restricted Stock Award Agreement (for awards granted to US employees under and subject to the provisions of the e Plus inc. 2021 Employee Long-Term Incentive Plan) (Incorporated herein by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended June 30, 2023). 10.15 Form of Restricted Stock Award Agreement (for awards granted to U.K. employees under and subject to the provisions of the e Plus inc. 2021 Employee Long-Term Incentive Plan) (Incorporated herein by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the period ended June 30, 2023). 47 Table of Contents 10.16 Form of Stock Agreement (for awards of stock in lieu of cash compensation granted to non-employee directors under and subject to the provisions of the e Plus inc. 2017 Non-Employee Director Long-Term Incentive Plan) (Incorporated herein by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the period ended June 30, 2023). 10.17 Form of Cash Performance Award Agreement (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 22, 2023). 10.18 Form of Performance Stock Unit Award Notice and Award Agreement (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 22, 2023). 10.19 First Amended and Restated Credit Agreement, dated as of October 13, 2021, by and among e Plus Technology, inc., e Plus Technology Services, inc., SLAIT Consulting, LLC, certain of e Plus inc. subsidiaries as guarantors, Wells Fargo Commercial Distribution Finance, LLC as administrative agent and the Lenders party thereto (Incorporated herein by reference to Exhibit 10.1 to our Current Report in Form 8-K filed on October 19, 2021). * 10.20 Guaranty and Security Agreement, dated as of October 13, 2021, by and among e Plus Technology, inc., e Plus Technology Services, inc., SLAIT Consulting, LLC, certain future subsidiaries of e Plus inc., as guarantors, Wells Fargo Commercial Distribution Finance, LLC as administrative agent for the benefit of Secured Parties (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on October 19, 2021). * 10.21 First Amended and Restated Collateralized Guaranty, dated as of October 13, 2021, by and among e Plus Group, inc. and Wells Fargo Commercial Distribution Finance, LLC as agent for the benefit of Secured Parties (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on October 19, 2021). * 10.22 First Amended and Restated Limited Guaranty, dated as of October 13, 2021, by and between e Plus inc. and Wells Fargo Commercial Distribution Finance, LLC as agent for the benefit of Secured Parties (Incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on October 19, 2021). * 10.23 First Amendment to First Amended and Restated Credit Agreement, dated as of October 31, 2022, by and among e Plus Technology, inc., e Plus Technology Services inc., SLAIT Consulting, LLC, certain of e Plus inc. subsidiaries as guarantors, Wells Fargo Commercial Distribution Finance, LLC as administrative agent and the Lenders party thereto (Incorporated herein by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 3, 2022). * 10.24 Second Amendment to First Amended and Restated Credit Agreement, dated as of March 10, 2023, by and among e Plus Technology, inc., e Plus Technology Services inc., SLAIT Consulting, LLC, certain of e Plus inc. subsidiaries as guarantors, Wells Fargo Commercial Distribution Finance, LLC as administrative agent and the Lenders party thereto (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on March 14, 2023). * 10.25 Form of Restricted Stock Award Agreement (for awards of restricted stock granted to non-employee directors under and subject to the provisions of the e Plus inc. 2017 Non-Employee Director Long-Term Incentive Plan) (Incorporated herein by reference to Exhibit 10.25 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2024). 48 Table of Contents 10.26 Form of Stock Agreement (for awards of stock in lieu of cash compensation granted to non-employee directors under and subject to the provisions of the e Plus inc. 2024 Non-Employee Director Long-Term Incentive Plan) ( Incorporated herein by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed on November 12, 2024 ). 10.27 Form of Restricted Stock Award Agreement (for awards of restricted stock granted to non-employee directors under and subject to the provisions of the e Plus inc. 2024 Non-Employee Director Long-Term Incentive Plan) ( Incorporated herein by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed on November 12, 2024 ). 19 Insider Trading Policy (Incorporated herein by reference to Exhibit 19 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2024). 21 Subsidiaries of e Plus inc. (filed herewith). 23 Consent of Independent Registered Public Accounting Firm (filed herewith). 31.1 Certification of the Chief Executive Officer of e Plus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a) (filed herewith). 31.2 Certification of the Chief Financial Officer of e Plus inc. pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a) (filed herewith). 32 Certification of the Chief Executive Officer and Chief Financial Officer of e Plus inc. pursuant to 18 U.S.C. § 1350 (furnished herewith). 97.1 Policy for Recoupment of Incentive Compensation, effective as of November 17, 2023 (Incorporated herein by reference to Exhibit 97.1 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2024). 101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Exhibit 101 Inline XBRL document) * Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish a copy of any omitted schedule or exhibit to the SEC upon request; provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished. ITEM 16. FORM 10-K SUMMARY None. 49 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. e Plus inc. /s/ MARK P. MARRON By: Mark P. Marron Chief Executive Officer and President Date: May 22, 2025 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ MARK P. MARRON By: Mark P. Marron Chief Executive Officer, President, and Director (Principal Executive Officer) Date: May 22, 2025 /s/ ELAINE D. MARION By: Elaine D. Marion, Chief Financial Officer (Principal Financial and Accounting Officer) Date: May 22, 2025 /s/ MELISSA J. BALLENGER By: Melissa J. Ballenger, Director Date: May 22, 2025 /s/ RENEE BERGERON By: Renée Bergeron, Director Date: May 22, 2025 /s/ BRUCE M. BOWEN By: Bruce M. Bowen, Director Date: May 22, 2025 /s/ JOHN E. CALLIES By: John E. Callies, Director Date: May 22, 2025 /s/ IRA A. HUNT III By: Ira A. Hunt III, Director Date: May 22, 2025 /s/ MAUREEN F. MORRISON By: Maureen F. Morrison, Director Date: May 22, 2025 /s/ BEN XIANG By: Ben Xiang, Director Date: May 22, 2025 50 Table of Contents e Plus inc. AND SUBSIDIARIES INDEX TO FINANCIAL STATEMENTS AND SCHEDULES PAGE Report of Independent Registered Public Accounting Firm Deloitte & Touche LLP (PCAOB ID 34 ) F-2 Consolidated Balance Sheets as of March 31, 2025, and 2024 F-7 Consolidated Statements of Operations for the years ended March 31, 2025, 2024 and 2023 F-8 Consolidated Statements of Comprehensive Income for the years ended March 31, 2025, 2024 and 2023 F-9 Consolidated Statements of Cash Flows for the years ended March 31, 2025, 2024 and 2023 F-10 Consolidated Statements of Stockholders’ Equity for the years ended March 31, 2025, 2024 and 2023 F-12 Notes to Consolidated Financial Statements F-13 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of e Plus inc. Herndon, Virginia Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of e Plus inc. and subsidiaries (the “Company”) as of March 31, 2025, and 2024, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended March 31, 2025, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025, and 2024, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated May 22, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Revenue Recognition – Gross Versus Net Recognition of Sales of Third-Party Software – Refer to Note 1 to the financial statements Critical Audit Matter Description The Company is typically the principal in sales of third-party software. Sales are recognized on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recognized as cost of sales. The Company recognizes revenue from these sales at the point in time that control passes to the customer, which is typically upon delivery of the software to the customer. The Company is also the agent in sales of third-party maintenance, software support, and services as the third-party controls the service until it is transferred to the customer. Similarly, the Company is the agent in sales of third-party software and accompanying third-party support when the third-party software benefits the customer only in conjunction with the accompanying support. In these sales, the Company considers the third-party software and support as inputs to a single performance obligation. In all these sales where the Company is the agent, the Company recognizes sales on a net basis at the point that its customer and vendor accept the terms and conditions of the arrangement. F-2 Table of Contents Auditing the Company’s determination of gross or net recognition of third-party software and support sales involved a high degree of subjectivity as it required the evaluation of whether the third-party software benefits the customer only in conjunction with the accompanying support. When the support is determined to be critical or essential to the software, the transaction is viewed as one combined performance obligation, and revenue is recognized net of related costs. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to management’s conclusion related to the recognition of sales of third-party software included the following, among others: ▪ We tested the design and operating effectiveness of management’s controls over the determination of gross or net recognition of third-party software and support sales. ▪ For a selection of contracts, we performed the following procedures: – Inspected the customer invoice and purchase order to determine whether the sale represented a valid transaction with a customer. – Compared the cost per the Company’s records to the cost per the vendor invoice. – Evaluated the sale to determine whether it constituted a single or multiple performance obligation(s) through inspection of the customer invoice, purchase order, and information on vendor websites accessed through third-party search engines. – Evaluated the sale to determine whether there was accompanying third-party support related to the software, and whether the support was separately identifiable or essential to the functionality of the software through inspection of customer invoices, purchase orders, information on vendor websites accessed through third-party search engines and inquiries with management, as necessary. – Determined whether the sale treatment as principal or agent is appropriate and consistent with the Company’s conclusion. Transfers of Financial Assets – Refer to Note 4 to the financial statements Critical Audit Matter Description The Company enters into arrangements to transfer the contractual payments due under financing receivables and operating lease agreements, which are accounted for in accordance with Codification Topic 860. These transfers are accounted for as either a sale or as a pledge of collateral in a secured borrowing. For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. For transfers accounted for as sales, the Company derecognizes the carrying value of the asset transferred plus any liability and recognizes a net gain or loss on the sale, which are presented within net sales in the consolidated statement of operations. Auditing the Company’s determination of whether the transfer should be accounted for as a secured borrowing or a sale involved a high degree of subjectivity. This subjectivity stems from management’s assessment of whether the transferred assets have been isolated from the transferor. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to management’s conclusion related to the transfer of financial assets included the following, among others: ▪ We tested the design and operating effectiveness of management’s controls over the transfer of financial assets, including management’s controls over the evaluation of the terms of loan documents and accompanying investor data, assignment agreements, and the calculation of the gain or loss. F-3 Table of Contents ▪ For a selection of transactions, we evaluated the Company’s determination of sale or secured borrowing, by evaluating, among other factors, if the transferred assets have been isolated from the Company. Specifically, we performed the following procedures: – Obtained the executed transfer agreement and evaluated whether the Company: ▪ Assigned its rights, titles, interests, estates, claims, and demands to the third-party assignee. ▪ Retained any rights with respect to the payments assigned to the third-party assignee or had been appropriately isolated from the assets. We evaluated opinions from outside legal counsel, when applicable. – Obtained and inspected the cash proceeds support from the transfer and compared the cash received to the selling price. – Tested the mathematical accuracy of management’s calculation of the gain or loss based on the cash proceeds and the receivable balance as of date of sale. /s/ DELOITTE & TOUCHE LLP McLean, Virginia May 22, 2025 We have served as the Company’s auditor since 1990. F-4 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of e Plus inc. Herndon, Virginia Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of ePlus inc. and subsidiaries (the “Company”) as of March 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended March 31, 2025, of the Company and our report dated May 22, 2025, expressed an unqualified opinion on those financial statements. As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Bailiwick Services, LLC, which was acquired on August 19, 2024, and whose financial statements constitute approximately 8% of total assets and 4% of revenues of the consolidated financial statement amounts as of and for the year ended March 31, 2025. Accordingly, our audit did not include the internal control over financial reporting at Bailiwick Services, LLC. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. F-5 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE LLP McLean, Virginia May 22, 2025 F-6 Table of Contents e Plus inc. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) March 31, 2025 March 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 389,375 $ 253,021 Accounts receivable—trade, net 517,114 644,616 Accounts receivable—other, net 53,803 46,884 Inventories 120,440 139,690 Financing receivables—net, current 169,025 102,600 Deferred costs 66,769 59,449 Other current assets 47,264 27,269 Total current assets 1,363,790 1,273,529 Financing receivables and operating leases—net 127,518 79,435 Deferred tax asset 3,658 5,620 Property, equipment, and other assets—net 104,974 89,289 Goodwill 202,858 161,503 Other intangible assets—net 82,007 44,093 TOTAL ASSETS $ 1,884,805 $ 1,653,469 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES Current liabilities: Accounts payable $ 451,734 $ 315,676 Accounts payable—floor plan 89,527 105,104 Salaries and commissions payable 45,031 43,696 Deferred revenue 152,780 134,596 Non-recourse notes payable—current 27,456 23,288 Other current liabilities 31,355 34,630 Total current liabilities 797,883 656,990 Non-recourse notes payable—long-term 11,317 12,901 Deferred tax liability—long-term 1,454 - Other liabilities 96,528 81,799 TOTAL LIABILITIES 907,182 751,690 COMMITMENTS AND CONTINGENCIES ( Note 10 ) STOCKHOLDERS’ EQUITY Preferred stock, $ 0.01 per share par value; 2,000 shares authorized; none outstanding - - Common stock, $ 0.01 per share par value; 50,000 shares authorized; 26,526 outstanding at March 31, 2025 and 26,952 outstanding at March 31, 2024 276 274 Additional paid-in capital 193,698 180,058 Treasury stock, at cost, 1,056 shares at March 31, 2025 and 447 shares at March 31, 2024 ( 70,748 ) ( 23,811 ) Retained earnings 850,956 742,978 Accumulated other comprehensive income—foreign currency translation adjustment 3,441 2,280 Total Stockholders’ Equity 977,623 901,779 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,884,805 $ 1,653,469 See Notes to Consolidated Financial Statements. F-7 Table of Contents e Plus inc. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Year Ended March 31, 2025 2024 2023 Net sales Product $ 1,668,412 $ 1,933,225 $ 1,803,275 Services 400,377 292,077 264,443 Total 2,068,789 2,225,302 2,067,718 Cost of sales Product 1,241,115 1,493,293 1,379,500 Services 258,553 181,216 170,694 Total 1,499,668 1,674,509 1,550,194 Gross profit 569,121 550,793 517,524 Selling, general, and administrative 399,744 367,734 333,520 Depreciation and amortization 25,753 21,025 13,709 Interest and financing costs 2,211 3,777 4,133 Operating expenses 427,708 392,536 351,362 Operating income 141,413 158,257 166,162 Other income (expense), net 7,426 2,836 ( 3,188 ) Earnings before tax 148,839 161,093 162,974 Provision for income taxes 40,861 45,317 43,618 Net earnings $ 107,978 $ 115,776 $ 119,356 Net earnings per common share—basic $ 4.07 $ 4.35 $ 4.49 Net earnings per common share—diluted $ 4.05 $ 4.33 $ 4.48 Weighted average common shares outstanding—basic 26,503 26,610 26,569 Weighted average common shares outstanding—diluted 26,666 26,717 26,654 See Notes to Consolidated Financial Statements. F-8 Table of Contents e Plus inc. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) Year Ended March 31, 2025 2024 2023 NET EARNINGS $ 107,978 $ 115,776 $ 119,356 OTHER COMPREHENSIVE INCOME, NET OF TAX: Foreign currency translation adjustments 1,161 712 1,692 Other comprehensive income 1,161 712 1,692 TOTAL COMPREHENSIVE INCOME $ 109,139 $ 116,488 $ 121,048 See Notes to Consolidated Financial Statements. F-9 Table of Contents e Plus inc. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended March 31, 2025 2024 2023 Cash flows from operating activities: Net earnings $ 107,978 $ 115,776 $ 119,356 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization 29,596 25,928 18,589 Provision for credit losses 2,981 1,204 666 Share-based compensation expense 9,996 9,731 7,825 Deferred taxes 3,413 ( 2,656 ) 2,083 Net gain on disposal of property, equipment, and operating lease equipment ( 1,474 ) ( 491 ) ( 3,479 ) Changes in: Accounts receivable 168,996 ( 104,039 ) ( 78,679 ) Inventories 29,364 104,781 ( 88,097 ) Financing receivables—net ( 138,863 ) ( 32,054 ) ( 41,015 ) Deferred costs and other assets ( 34,445 ) ( 4,982 ) ( 73,980 ) Accounts payable 112,082 82,911 75,270 Salaries and commissions payable, deferred revenue, and other liabilities 12,521 52,340 46,036 Net cash provided by (used in) operating activities 302,145 248,449 ( 15,425 ) Cash flows from investing activities: Proceeds from sale of property, equipment, and operating lease equipment 2,662 721 3,742 Purchases of property, equipment, and operating lease equipment ( 6,603 ) ( 8,503 ) ( 9,380 ) Cash used in acquisitions, net of cash acquired ( 124,926 ) ( 54,182 ) ( 13,288 ) Net cash used in investing activities ( 128,867 ) ( 61,964 ) ( 18,926 ) Cash flows from financing activities: Borrowings of non-recourse and recourse notes payable 42,820 297,305 193,051 Repayments of non-recourse and recourse notes payable ( 19,210 ) ( 279,649 ) ( 196,069 ) Proceeds from issuance of common stock 3,635 3,019 - Repurchase of common stock ( 46,937 ) ( 9,853 ) ( 7,224 ) Payments to settle liabilities for acquisitions ( 2,307 ) - - Net repayments on floor plan facility ( 15,577 ) ( 47,441 ) ( 10,708 ) Net cash used in financing activities ( 37,576 ) ( 36,619 ) ( 20,950 ) Effect of exchange rate changes on cash 652 62 3,016 Net increase (decrease) in cash and cash equivalents 136,354 149,928 ( 52,285 ) Cash and cash equivalents, beginning of period 253,021 103,093 155,378 Cash and cash equivalents, end of period $ 389,375 $ 253,021 $ 103,093 F-10 Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS - continued (in thousands) Year Ended March 31, 2025 2024 2023 Supplemental disclosures of cash flow information: Cash paid for interest $ 2,300 $ 3,768 $ 4,065 Cash paid for income taxes $ 48,732 $ 41,526 $ 51,984 Cash paid for amounts included in the measurement of lease liabilities $ 5,821 $ 4,071 $ 4,610 Schedule of non-cash investing and financing activities: Proceeds from sale of property, equipment, and leased equipment $ 1 $ 78 $ 21 Purchases of property, equipment, and operating lease equipment $ ( 219 ) $ ( 283 ) $ ( 1,453 ) Consideration for acquisitions $ - ( 2,307 ) - Borrowing of non-recourse and recourse notes payable $ 16,210 $ 30,329 $ 39,558 Debt derecognized due to sales of financial assets $ ( 37,236 ) $ ( 52,133 ) $ ( 30,487 ) Vesting of share-based compensation $ 11,893 $ 9,477 $ 9,897 Repurchase of common stock $ - $ - $ ( 122 ) New operating lease assets obtained in exchange for lease obligations $ 7,146 $ 4,883 $ 11,886 See Notes to Consolidated Financial Statements. F-11 Table of Contents e Plus inc. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) Accumulated Additional Other Common Stock Paid-In Treasury Retained Comprehensive Shares Par Value Capital Stock Earnings Income Total Balance, March 31, 2022 26,886 $ 270 $ 159,480 $ ( 6,734 ) $ 507,846 $ ( 124 ) $ 660,738 Issuance of restricted stock awards 150 2 - - - - 2 Share-based compensation - - 7,823 - - - 7,823 Repurchase of common stock ( 131 ) - - ( 7,346 ) - - ( 7,346 ) Net earnings - - - - 119,356 - 119,356 Foreign currency translation adjustment - - - - - 1,692 1,692 Balance, March 31, 2023 26,905 $ 272 $ 167,303 $ ( 14,080 ) $ 627,202 $ 1,568 $ 782,265 Issuance of restricted stock awards 162 2 ( 2 ) - - - - Issuance of common stock 71 - 3,019 - - - 3,019 Share-based compensation - - 9,738 - - - 9,738 Repurchase of common stock ( 186 ) - - ( 9,731 ) - - ( 9,731 ) Net earnings - - - - 115,776 - 115,776 Foreign currency translation adjustment - - - - - 712 712 Balance, March 31, 2024 26,952 $ 274 $ 180,058 $ ( 23,811 ) $ 742,978 $ 2,280 $ 901,779 Issuance of restricted stock awards 125 1 ( 1 ) - - - - Issuance of common stock 58 1 3,634 - - - 3,635 Share-based compensation - - 10,007 - - - 10,007 Repurchase of common stock ( 609 ) - - ( 46,937 ) - - ( 46,937 ) Net earnings - - - - 107,978 - 107,978 Foreign currency translation adjustment - - - - - 1,161 1,161 Balance, March 31, 2025 26,526 $ 276 $ 193,698 $ ( 70,748 ) $ 850,956 $ 3,441 $ 977,623 See Notes to Consolidated Financial Statements. F-12 Table of Contents e Plus inc. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of and for the Years ended March 31, 2024, 2023, and 2022 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF BUSINESS — Our company was founded in 1990 and is a Delaware corporation. e Plus inc. is sometimes referred to in this Annual Report on Form 10-K as “we,” “our,” “us,” “ourselves,” or “ e Plus.” e Plus inc. is a holding company that through its subsidiaries provides information technology (“IT”) solutions which enable organizations to optimize their IT environment and supply chain processes. We also provide consulting, professional, and managed services and complete lifecycle management services including flexible financing solutions. We focus on selling to medium and large enterprises and state and local government and educational institutions (“SLED”) in the United States (“US”) and select international markets including the United Kingdom (“UK”), the European Union (“EU”), India, and Singapore. BASIS OF PRESENTATION — The consolidated financial statements include the accounts of e Plus inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accounts of acquired businesses are included in the consolidated financial statements from the dates of acquisition. USE OF ESTIMATES — The preparation of financial statements in conformity with accounting principles generally accepted in the US requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Estimates are used when accounting for items and matters including, but not limited to, revenue recognition, residual asset values, vendor consideration, lease classification, goodwill and intangible assets, allowance for credit losses, inventory obsolescence, and the recognition and measurement of income tax assets and other provisions and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. ALLOWANCE FOR CREDIT LOSSES — We maintain an allowance for credit losses related to our accounts receivable and financing receivables. We record an expense in the amount necessary to adjust the allowance for credit losses to our current estimate of expected credit losses on financial assets. We estimate expected credit losses based on our internal rating of the customer’s credit quality, our historical credit losses, current economic conditions, and other relevant factors. Prior to providing credit, we assign an internal rating for each customer’s credit quality based on the customer’s financial status, rating agency reports and other financial information. We review our internal ratings for each customer at least annually or when there is an indicator of a change in credit quality, such as a delinquency or bankruptcy. We write off financing receivables when we deem them to be uncollectable. BUSINESS COMBINATIONS — We account for business combinations using the acquisition method, which requires that the total purchase price for the acquired entity be allocated to the assets acquired and liabilities assumed. With limited exceptions, we measure most assets acquired and liabilities assumed based on their fair values at the acquisition date. We apply Accounting Standards Codification (“Codification”) Topic 606, Contracts with customers (“Codification Topic 606”), to recognize and measure contract assets and contract liabilities from contracts with customers. Our allocation process requires an analysis of intangible assets, such as customer relationships, trade names, acquired contractual rights and legal contingencies to identify and record all assets acquired and liabilities assumed. We record any premium paid over the fair value of the acquired net assets as goodwill. Our initial purchase price allocations are subject to revision within the measurement period, not to exceed one year from the date of acquisition. We include the results of operations for the acquired company in our financial statements from the acquisition date. CASH AND CASH EQUIVALENTS — Cash and cash equivalents consist primarily of interest-bearing accounts and money market funds that consist of short-term US treasury securities. We consider all highly liquid investments, including those with an original maturity of three months or less at the date of acquisition, to be cash equivalents. As of March 31, 2025, and March 31, 2024, there were no restrictions on the withdrawal of funds from our money market funds. F-13 Table of Contents CONCENTRATIONS OF RISK — Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, short-term investments, accounts receivable, and financing receivables. Cash and cash equivalents may include short-term investments that are maintained principally with financial institutions in the US. Our accounts receivable-trade balance on both March 31, 2025, and March 31, 2024 included approximately 17 % concentration of invoices due from Verizon Communications Inc. Our risk on our accounts receivable and financing receivables is reduced by having a broad customer base in a diverse range of industries and through the ongoing evaluation of collectability of our portfolio. Our credit risk is further mitigated by transferring certain of our financing receivables to financial institutions on a non-recourse basis and, for our lease receivables, by owning the underlying asset. A substantial portion of our sales are products from Cisco Systems, which represented approximately 32 %, 44 %, and 40 %, of our technology business segments net sales for the years ended March 31, 2025, 2024, and 2023, respectively. CONTRACT ASSETS — We recognize contract assets when we recognize revenue and our right to consideration is conditioned on our future performance. CONTRACT LIABILITIES — We recognize contract liabilities when cash payments are received or due in advance of our performance. DEFERRED COSTS — When a contract is within the scope of Codification Topic 606, we defer costs of fulfilling the contract when they generate or enhance resources that will be used by us in satisfying performance obligations in the future. Additionally, we capitalize costs that are incremental to obtaining the contracts, predominately sales commissions, and expense them in proportion to each completed contract performance obligation. Our long-term deferred costs are included in our consolidated balance sheets as part of property, equipment, and other assets —net . EARNINGS PER SHARE — Basic earnings per share is calculated by dividing net earnings attributable to common stockholders by the basic weighted average number of shares of common stock outstanding during each period. Diluted earnings per share reflects the potential dilution of securities that could participate in our earnings, including restricted stock awards during each period. FAIR VALUE MEASUREMENT — We follow the guidance in Codification Topic 820 Fair Value Measurements (“Codification Topic 820”) which governs how to measure fair value for financial reporting. This topic defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. This topic also establishes a fair value hierarchy that categorizes into three levels the inputs to valuation techniques used to measure fair value: • Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. • Level 2 – Inputs other than quoted prices included within Level 1, such as quoted prices for similar assets or liabilities in active markets, that are observable for the asset or liability, either directly or indirectly. • Level 3 – Unobservable inputs for the asset or liability. The fair values are determined based on model-based techniques such as discounted cash flow models using inputs that we could not corroborate with market data. FINANCIAL INSTRUMENTS — For financial instruments such as cash, short-term investments, accounts receivables, accounts payable and other current liabilities, we consider the recorded value of the financial instruments to approximate the fair value due to their short maturities. On March 31, 2025, the carrying amounts of our notes receivable and non-recourse payables were $ 221.7 million and $ 38.8 million, respectively, and their fair values were $ 223.7 million and $ 38.8 million, respectively. On March 31, 2024, the carrying amounts of our notes receivable and non-recourse payables were $ 108.2 million and $ 36.2 million, respectively, and their fair values were $ 106.3 million and $ 36.1 million, respectively. FINANCING RECEIVABLES AND OPERATING LEASES — Financing receivables and operating leases consist of the financing receivables from notes receivable and sales-type leases and the carrying value of assets that we are leasing to our customers on leases that are classified as operating leases. When we lease equipment under an operating lease, we recognize the underlying asset at cost and depreciate it on a straight-line bases over its estimated useful life. We estimate that the useful life for most IT equipment under lease is 4 years. F-14 Table of Contents FOREIGN CURRENCY MATTERS — Our functional currency is the US dollar. Our international subsidiaries typically use their local currency as their functional currency. We translate the assets and liabilities of our international subsidiaries into US dollars at the spot rate in effect at the applicable reporting date. We translate the revenues and expenses of our international subsidiaries into US dollars at the average exchange rates in effect during the applicable period. We report the resulting foreign currency translation adjustment as accumulated other comprehensive income (loss), which is reflected as a separate component of stockholders’ equity. We report all foreign currency transaction gains or losses in other income (expense), net on our consolidated statement of operations. For the years ended March 31, 2025, 2024, and 2023, we recognized losses of $ 1.2 million, $ 0.1 million, and $ 5.4 million, respectively, due to foreign currency transactions. GOODWILL — We test goodwill for impairment on an annual basis, as of October 1, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount. In a qualitative assessment, we assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary. If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform the quantitative goodwill impairment test. We may also elect the unconditional option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test. In the quantitative impairment test, we compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. Conversely, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. IMPLEMENTATION COSTS OF A HOSTING ARRANGEMENT- We capitalize implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. We classify these capitalized costs in the same balance sheet line item as the amounts prepaid for the related hosting arrangement and we present the amortization of these capitalized costs in the same income statement line item as the service fees for the related hosting arrangement. Our long-term prepaids are included in our consolidated balance sheets as part of property, equipment, and other assets —net . We amortize the capitalized implementation costs over the term of the hosting arrangement. INCOME TAXES — Deferred income taxes are accounted for in accordance with Codification Topic 740 Income Taxes (“Codification Topic 740”). Under this method, deferred income tax assets and liabilities are determined based on the temporary differences between the financial statement reporting and tax bases of assets and liabilities, using tax rates currently in effect. Future tax benefits, such as net operating loss carry-forwards, are recognized to the extent that realization of these benefits is considered to be more likely than not. We review our deferred tax assets at least annually and make necessary valuation adjustments. In addition, we account for uncertain tax positions in accordance with Codification Topic 740. Specifically, the Topic prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on the related de-recognition, classification, interest and penalties, accounting for interim periods, disclosure, and transition of uncertain tax positions. In accordance with our accounting policy, we recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. INVENTORIES — Inventories are stated at the lower of cost and net realizable value. Cost is determined using a weighted average cost method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Our determination of the net realizable value for inventories is based on the terms of underlying purchase commitments from our customers, current economic conditions, and other relevant factors. F-15 Table of Contents LESSEE ACCOUNTING — We lease office space for periods up to six years and lease warehouse space for periods of up to 10 years, and we have some lease options that can be exercised to extend beyond those lease term limits. At the lease commencement date, we recognize operating lease liabilities based on the present value of the future minimum lease payments. In determining the present value of future minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date. When the future minimum payments encompass non-lease components, we account for the lease and non-lease components as a single lease component. We elected not to recognize right-of-use assets and lease liabilities for leases with an initial term of 12 months or less. We recognize lease expense on a straight-line basis over the lease term beginning on the commencement date. PROPERTY AND EQUIPMENT — Property and equipment are stated at cost, net of accumulated depreciation and amortization. We recognize property and equipment obtained through a business combination at its fair market value as of the acquisition date. We compute depreciation and amortization using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years . We typically depreciate internal use IT equipment over three years , perpetual software licenses over five years, and furniture and fixtures over five years . RESIDUAL ASSETS — Our estimate for the residual asset in a lease is the amount we expect to derive from the underlying asset following the end of the lease term. In a sales-type lease, we recognize the unguaranteed residual asset, measured on a discounted basis, upon lease commencement. In our subsequent accounting for the lease, we increase the unguaranteed residual asset using the effective interest method. We evaluate residual values for impairment on a quarterly basis. We recognize impairments as incurred. We do not recognize upward adjustments due to changes in estimates of residual values. REVENUE RECOGNITION — We recognize most of our revenues from the sales of third-party products, third-party software, third-party maintenance, software support, and services, e Plus professional and managed services, and hosting e Plus proprietary software. We recognize revenue from these sales under the guidance in Codification Topic 606. The core principle of Codification Topic 606 is that an entity should recognize revenue for the transfer of goods and services equal to an amount it expects to be entitled to receive for those goods and services. We account for a contract under Codification Topic 606 when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance, and collectability of consideration is probable. Revenues are reported net of sales refunds, including an estimate of future returns based on an evaluation of historical sales returns, current economic conditions, volume, and other relevant factors. Our contracts with customers may include multiple promises that are distinct performance obligations. For such arrangements, we allocate the transaction price to each performance obligation based on its relative standalone selling price. We determine standalone selling prices using expected cost-plus margin. We recognize revenue when (or as) we satisfy a performance obligation by transferring a promised good or service to a customer. A good or service is transferred when (or as) the customer obtains control of that good or service. Depending on the nature of each performance obligation, this may be at a point in time or over time, as further described below. We typically invoice our customers for third-party products upon shipment, unless our customers lease the equipment through our financing segment, in which case the arrangement is accounted for as a lease in accordance with Codification Topic 842, Leases (“Codification Topic 842”). We typically invoice our customers for third-party software upon delivery and third-party services at the point of sale, unless our customers finance these products through our financing segment, in which case we record a financing receivable based on the terms of the arrangement. Product revenue Sales of third-party products We are the principal in sales of third-party products. As such, we recognize sales on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recognized as cost of sales. We recognize revenue from these sales at the point in time that control passes to the customer, which is typically upon delivery of the product to the customer. F-16 Table of Contents In some instances, our customers may request that we bill them for a product but retain physical possession of the product until later delivery, commonly known as “bill-and-hold” arrangements. We have warehousing agreements with select customers wherein title to products ordered through the agreements transfers to our customer at the point we invoice the customer and after the product arrives at our warehouse. In these “bill-and-hold” arrangements, we recognize revenue when the customer has ordered the product through their warehousing agreement with us or signed a bill-and-hold agreement with us, the customer has legal title, the product is identified separately as belonging to the customer, and the product is ready for delivery to the customer. We recognize sales of off-lease equipment within our financing segment when control passes to the customer, which is typically the date that title to the equipment is transferred per the sales agreement. Sales of third-party software We are typically the principal in sales of third-party software. Sales are recognized on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recognized as cost of sales. We recognize revenue from these sales at the point in time that control passes to the customer, which is typically upon delivery of the software to the customer. Sales of third-party maintenance, software support, services, and software that benefits the customer only in conjunction with accompanying support We are the agent in sales of third-party maintenance, software support, and services as the third-party controls the service until it is transferred to the customer. Similarly, we are the agent in sales of third-party software and accompanying third-party support when the third-party software benefits the customer only in conjunction with the accompanying support. In these sales, we consider the third-party software and support as inputs to a single performance obligation. In all these sales where we are the agent, we recognize sales on a net basis at the point that our customer and vendor accept the terms and conditions of the arrangement. Freight and sales tax We present freight billed to our customers within sales and the related freight charged to us within cost of sales. We present sales tax collected from customers and remittances to governmental authorities on a net basis. Financing revenue and other We account for leases to customers in accordance with Codification Topic 842. We utilize a portfolio approach by grouping together many similar assets being leased to a single customer. We classify our leases as either sales-type leases or operating leases. We classify leases as sales-type leases if any one of five criteria are met, each of which indicate that the lease transfers control of the underlying asset to the lessee. We classify our other leases as operating leases. For sales-type leases, upon lease commencement, we recognize the present value of the lease payments, and the residual asset discounted using the rate implicit in the lease. When we are financing equipment provided by another dealer, we typically do not have any selling profit or loss arising from the lease. When we are the dealer of the equipment being leased, we typically recognize revenue in the amount of the lease receivable and cost of sales in the amount of the carrying value of the underlying asset minus the unguaranteed residual asset. After the commencement date, we recognize interest income as part of net sales using the effective interest method. For operating leases, we recognize the underlying asset as an operating lease asset. We depreciate the asset on a straight-line basis to its estimated residual value over its estimated useful life. We recognize the lease payments over the lease term on a straight-line basis as part of net sales. F-17 Table of Contents In all our leases, we recognize variable lease payments, primarily reimbursement for property taxes associated with the leased asset, as part of net sales in the period in which the changes in facts and circumstances on which the variable lease payments are based occur. We exclude from revenues and expenses any sales taxes reimbursed by the lessee. We also finance third-party software and third-party services for our customers, which we classify as notes-receivable. We recognize interest income on our notes-receivable using the effective interest method. We account for transfers of contractual payments due under financing receivables, under Codification Topic 860 Transfers and Servicing (“Codification Topic 860”). When a transfer meets all the requirements for sale accounting, we derecognize the financial asset and record a net gain or loss that is included in net sales. Service revenue Sales of ePlus professional services and managed services Our professional services offerings include consulting, architecture, deployment, and configuration services, software adoption services, training services, assessments, logistics, and staffing. Our managed service offerings range from monitoring and notification to fully outsourced network management and service desk solutions. In all these arrangements, we satisfy our performance obligation and recognize revenue over time. In arrangements for e Plus professional services, we provide services under both time and materials and fixed price contracts. When services are provided on a time and materials basis, we recognize sales at agreed-upon billing rates as services are performed. When services are provided on a fixed fee basis, we recognize sales over time in proportion to our progress toward complete satisfaction of the performance obligation. We utilize output and input methods to measure progress. Our input methods that we utilize include measuring costs incurred in proportion to total estimated costs, commonly referred to as the “cost-to-cost” method, and measuring service hours in proportion to total estimated service hours. Our professional services offerings include projects where products and services are delivered together to satisfy one performance obligation. In these arrangements, we recognize the entire arrangement in professional services and include the cost of the products as part of cost of sales for professional services. In arrangements for e Plus managed services, our arrangement is typically a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). We typically recognize sales from these services on a straight-line basis over the period services are provided. SHARE-BASED COMPENSATION — We account for share-based compensation in accordance with Codification Topic 718 Compensation—Stock Compensation . We account for forfeitures when they occur. We recognize compensation cost for awards of restricted stock with graded vesting on a straight-line basis over the requisite service period. We recognize compensation cost for our employee stock purchase plan on a straight-line basis over the offering period, which is six months . We measure the award on the grant date at fair value using the Black-Scholes option pricing model. SOFTWARE DEVELOPMENT COSTS — We capitalize costs for the development of internal use software under the Codification Topic 350-40 Intangibles—Goodwill and Other Intangibles, Subtopic Internal-Use Software . We did no t have significant capitalized development costs for internal use software for either of the years ended March 31, 2025, or March 31, 2024. TREASURY STOCK — We account for treasury stock under the cost method and include treasury stock as a component of stockholders’ equity in the accompanying consolidated balance sheets. VENDOR CONSIDERATION — We receive payments and credits from vendors pursuant to volume incentive programs and shared marketing expense programs. Many of these programs extend over one or more quarters’ sales activities. Different programs have different vendor/program specific milestones to achieve. Amounts due from vendors as of March 31, 2025, and 2024 were $ 15.5 million and $ 28.1 million, respectively, which were included within accounts receivable-other, net in the accompanying balance sheets. F-18 Table of Contents We recognize rebates pursuant to volume incentive programs as a reduction of costs to purchase the vendor’s products based on a systematic and rational allocation of the cash consideration offered to the underlying transactions that result in our progress toward earning the rebate provided the amounts are probable and can be reasonably estimated. When a rebate is not probable or not reasonably estimable, we recognized the rebate as the milestones are achieved or as cash is received. We recognize rebates pursuant to shared marketing expense programs as a reduction of the related selling and administrative expenses in the period the program occurs when the consideration represents a reimbursement of specific, incremental, identifiable costs. We recognize consideration that exceeds the specific, incremental, identifiable costs as a reduction of costs to purchase the vendor’s products. 2. RECENT ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. We adopted this update in our annual period ending March 31, 2025 with comparative periods updated to reflect additional disclosures. This standard did not have a material effect on our consolidated financial statements or disclosures. See Note 17 , “Segment Reporting” for our inclusion of the new disclosures. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. This update is effective for annual periods beginning in our fiscal year ending March 31, 2026. Early adoption is permitted. We are currently evaluating the impact that this update will have on our financial statement disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard requires public business entities to disclose detailed information about specific types of expenses that are relevant to certain line items on the income statement. This update is effective for annual periods beginning in our fiscal year ending March 31, 2028 and interim periods beginning in the first quarter of our fiscal year ending March 31, 2029. Early adoption is permitted. We are currently evaluating the impact that this update will have on our financial statement disclosures. 3. REVENUES ACCOUNTS RECEIVABLE AND CONTRACT ASSETS Our balance in accounts receivable—trade, net includes our accounts receivable recognized from contracts with customers and contract assets. Contract assets represent our right to consideration in exchange for goods or services that we transferred to a customer when that right is conditioned on something other than the passage of time. The following table provides a disaggregation of our balance in accounts receivable—trade, net (in thousands): March 31, 2025 March 31, 2024 Accounts receivable $ 507,241 $ 635,370 Contract assets 13775 11,795 Allowance for credit losses ( 3,902 ) ( 2,549 ) Total accounts receivable—trade, net $ 517,114 $ 644,616 In addition, we had $ 66.3 million and $ 44.6 million of receivables from contracts with customers included within financing receivables as of March 31, 2025 and 2024, respectively. F-19 Table of Contents CONTRACT LIABILITIES Contract liabilities represent our obligation to transfer goods or services to a customer for which we received consideration, or the amount is due from the customer. The following table provides our total balance of contract liabilities from contracts with customers (in thousands): March 31, 2025 March 31, 2024 Current (included in deferred revenue) $ 152,619 $ 134,110 Non-current (included in other liabilities) $ 81,605 $ 68,174 Revenue recognized from the beginning contract liability balance was $ 112.5 million and $ 86.0 million for the fiscal years ended March 31, 2025, and 2024, respectively. PERFORMANCE OBLIGATIONS The following table includes revenue expected to be recognized in the future related to performance obligations, primarily non-cancelable contracts for e Plus managed services, that are unsatisfied or partially unsatisfied at the end of the reporting period (in thousands): Year ending March 31, 2026 $ 93,331 2027 44,262 2028 22,093 2029 12,142 2030 and thereafter 3,108 Total remaining performance obligations $ 174,936 The table does not include the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts where we recognize revenue at the amount that we have the right to invoice for services performed. 4. FINANCING RECEIVABLES AND OPERATING LEASES Our financing receivables and operating leases consist of our financing receivables from notes receivable and sales-type leases and the carrying value of our assets that we are leasing to our customers on leases that are classified as operating leases. We generally lease IT, communication, and medical equipment. Our lease terms generally range from 2 to 6 years, with most terms ranging between 3 to 4 years. Our leases often provide the lessee the option to purchase the underlying asset at the end of the lease term. Occasionally, our leases provide the lessee a bargain purchase option. We classify our leases as either sales-type leases or operating leases. Additionally, we finance purchases of third-party software and third-party services for our customers, which we classify as notes receivable. The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a net basis, for the years ended March 31, 2025, 2024, and 2023 (in thousands): Year Ended March 31, March 31, 2025 March 31, 2024 March 31, 2023 Net sales $ 33,671 $ 21,578 $ 22,677 Cost of sales 29,512 19,557 19,009 Gross profit $ 4,159 $ 2,021 $ 3,668 F-20 Table of Contents The following table provides interest income in aggregate on our sales-type leases and lease income on our operating leases for the years ended March 31, 2025, 2024, and 2023 (in thousands): Year Ended March 31, March 31, 2025 March 31, 2024 March 31, 2023 Interest income on sales-type leases $ 9,148 $ 6,769 $ 3,943 Lease income on operating leases $ 7,969 $ 10,886 $ 17,421 FINANCING RECEIVABLES—NET The following tables provide a disaggregation of our financing receivables—net (in thousands): Notes Sales-Type Lease Financing March 31, 2025 Receivable Receivables Receivables Gross receivables $ 229,923 $ 90,913 $ 320,836 Unguaranteed residual value (1) - 13,350 13,350 Unearned income ( 8,254 ) ( 27,342 ) ( 35,596 ) Allowance for credit losses (2) ( 1,739 ) ( 1,945 ) ( 3,684 ) Total, net $ 219,930 $ 74,976 $ 294,906 Reported as: Current $ 122,975 $ 46,050 $ 169,025 Long-term 96,955 28,926 125,881 Total, net $ 219,930 $ 74,976 $ 294,906 (1) Includes unguaranteed residual values of $ 5,929 thousand that we retained after selling the related lease receivable. (2) Refer to Note 7 , “Allowance for Credit Losses” for details. Notes Sales-Type Lease Financing March 31, 2024 Receivable Receivables Receivables Gross receivables $ 114,713 $ 75,658 $ 190,371 Unguaranteed residual value (1) - 9,078 9,078 Unearned income ( 6,503 ) ( 12,036 ) ( 18,539 ) Allowance for credit losses (2) ( 1,056 ) ( 1,435 ) ( 2,491 ) Total, net $ 107,154 $ 71,265 $ 178,419 Reported as: Current $ 61,830 $ 40,770 $ 102,600 Long-term 45,324 30,495 75,819 Total, net $ 107,154 $ 71,265 $ 178,419 (3) Includes unguaranteed residual values of $ 3,718 thousand that we retained after selling the related lease receivable. (4) Refer to Note 7 , “Allowance for Credit Losses” for details. Notes Sales-Type Lease Financing March 31, 2023 Receivable Receivables Receivables Gross receivables $ 117,008 $ 60,157 $ 177,165 Unguaranteed residual value (1) - 8,161 8,161 Unearned income ( 5,950 ) ( 8,050 ) ( 14,000 ) Allowance for credit losses (2) ( 801 ) ( 981 ) ( 1,782 ) Total, net $ 110,257 $ 59,287 $ 169,544 Reported as: Current $ 65,738 $ 24,091 $ 89,829 Long-term 44,519 35,196 79,715 Total, net $ 110,257 $ 59,287 $ 169,544 (1) Includes unguaranteed residual values of $ 4,222 thousand that we retained after selling the related lease receivable. (2) Refer to Note 7 , “Allowance for Credit Losses” for details. F-21 Table of Contents The following table provides the future scheduled minimum lease payments to be received from our sales-type leases as of March 31, 2025 (in thousands): Year ending March 31, 2026 $ 46,735 2027 23,708 2028 15,083 2029 4,835 2030 552 Total $ 90,913 OPERATING LEASES—NET Operating leases—net represents the carrying value of assets that we are leasing to our customers on leases that are classified as operating leases. The components of operating leases—net are as follows (in thousands): March 31, 2025 March 31, 2024 Cost of equipment under operating leases $ 4,774 $ 10,744 Accumulated depreciation ( 3,137 ) ( 7,128 ) Operating leases—net (1) $ 1,637 $ 3,616 (1) Amounts include estimated unguaranteed residual values of $ 932 thousand and $ 1,346 thousand as of March 31, 2025, and 2024 respectively. The following table provides the future scheduled minimum lease rental payments to be received from our operating leases as of March 31, 2025 (in thousands): Year ending March 31, 2026 $ 823 2027 292 2028 85 2029 23 Total $ 1,223 TRANSFERS OF FINANCIAL ASSETS We enter into arrangements to transfer the contractual payments due under financing receivables and operating lease agreements. For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of March 31, 2025, and March 31, 2024, we had financing receivables of $ 42.9 million and $ 45.8 million, respectively, and operating leases of $ 0.6 million and $ 2.8 million, respectively which were collateral for non-recourse notes payable. See Note 9 , “Notes Payable and Credit Facility.” For transfers accounted for as sales, we derecognize the carrying value of the financial asset transferred plus any liability and recognize a net gain or loss on the sale, which are presented within net sales in the consolidated statement of operations. For the years ended March 31, 2025, 2024, and 2023, we recognized net gains of $ 28.9 million, $ 19.0 million, and $ 16.1 million, respectively, and total proceeds from these sales were $ 634.9 million, $ 762.6 million, and $ 706.0 million, respectively. F-22 Table of Contents When we retain servicing obligations in transfers accounted for as sales, we allocate a portion of the proceeds to deferred revenues, which is recognized as we perform the services. As of March 31, 2025, and March 31, 2024, we had deferred revenue of $ 0.3 million and $ 0.4 million, respectively, for servicing obligations. In a limited number of transfers accounted for as sales, we indemnified the assignee if the lessee elects to early terminate the lease. As of March 31, 2025, and March 31, 2024, the total potential payments that could result from these indemnities was immaterial. 5. LESSEE ACCOUNTING We lease office space for periods up to six years and lease warehouse space for periods of up to ten years , and we have some lease options that can be exercised to extend beyond those lease term limits. We recognize our right-of-use assets as part of property, equipment, and other assets—net . As of March 31, 2025, and 2024, we had right-of-use assets of $ 17.9 million and $ 15.4 million, respectively. We recognize the current and long-term portions of our lease liability as part of other current liabilities and other liabilities , respectively. As of March 31, 2025, and 2024, we had current lease liabilities of $ 5.6 million and $ 4.2 million, respectively, and long-term lease liabilities of $ 13.6 million and $ 12.7 million, respectively. We recognized operating lease cost of $ 5.7 million, $ 5.8 million, and $ 5.2 million as part of selling, general, and administrative expenses during the years ended March 31, 2025, 2024, and 2023, respectively. Supplemental information about the remaining lease terms and discount rates applied as of March 31, 2025, and March 31, 2024, are as follows: Year Ended March 31, Lease term and Discount Rate 2025 2024 Weighted average remaining lease term (months) 60 75 Weighted average discount rate 5.5 % 5.3 % The following table provides our future lease payments under our operating leases as of March 31, 2025 (in thousands): Year ending March 31, 2026 $ 5,719 2027 5,163 2028 3,451 2029 2,184 2030 and thereafter 5,601 Total lease payments 22,118 Less: interest ( 2,924 ) Present value of lease liabilities $ 19,194 As of March 31, 2025, we were committed to one office lease that had not yet commenced with a total commitment of $ 480 thousand dollars. 6. GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL F-23 Table of Contents The following table summarizes the changes in the carrying amount of goodwill for the years ended March 31, 2025, and March 31, 2024, respectively (in thousands): Product Professional Services Managed Services Total Balance, March 31, 2023 (1) 106497 $ 19,712 $ 9,896 $ 136,105 Acquisitions 22,586 2,780 - 25,366 Foreign currency translations 25 5 2 32 Balance, March 31, 2024 (1) $ 129,108 $ 22,497 $ 9,898 $ 161,503 Acquisitions 30 41,275 - 41,305 Foreign currency translations 39 7 4 50 Balance, March 31, 2025 (1) $ 129,177 $ 63,779 $ 9,902 $ 202,858 (1) Balance is net of $ 8,673 thousand in accumulated impairments that were recorded in segments that preceded our current segment organization. Goodwill represents the premium paid over the fair value of the net tangible and intangible assets that are individually identified and separately recognized in business combinations. Our goodwill balance increased by $ 41.3 million for the year ended March 31, 2025, due to our acquisition of Bailiwick Services, LLC (“Bailiwick”) that closed on August 19, 2024. Please refer to Note 16 , “Business Combinations” for details of our acquisitions. We test goodwill for impairment on an annual basis, as of the first day of our third fiscal quarter, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying value. In our annual test as of October 1, 2024, we performed a qualitative assessment of goodwill and concluded that, more likely than not, the fair value of our product, professional services, and managed services reporting units continued to exceed their carrying value. OTHER INTANGIBLE ASSETS Our other intangible assets consist of purchased intangible assets and capitalized software development. The following table provides the composition of our purchased intangible assets as of March 31, 2025, and March 31, 2024 (in thousands): March 31, 2025 March 31, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 167,093 $ ( 93,085 ) $ 74,008 $ 117,682 $ ( 73,870 ) $ 43,812 Trade names and other 11,459 ( 3,500 ) 7,959 2,798 ( 2,725 ) 73 Total $ 178,552 $ ( 96,585 ) $ 81,967 $ 120,480 $ ( 76,595 ) $ 43,885 Our customer relationships, trade names, and other purchased intangibles are generally amortized between 5 to 10 years. Total amortization expense for purchased intangibles was $ 19.9 million, $ 15.2 million, and $ 9.3 million for the years ended March 31, 2025, 2024 and 2023, respectively. Our capitalized software development had no carrying value as of March 31, 2025 and $ 0.2 million as of March 31, 2024. F-24 Table of Contents The following table provides the future amortization expense for purchased intangibles as of March 31, 2025 (in thousands): Year ending March 31, 2026 $ 20,623 2027 16,909 2028 13,537 2029 10,379 2030 7,774 2031 and thereafter 12,745 Total $ 81,967 7. ALLOWANCE FOR CREDIT LOSSES The following table provides the activity in our allowance for credit losses for the years ended March 31, 2025, 2024, and 2023 (in thousands): Accounts Receivable Notes Receivable Lease Receivables Total Balance as of March 31, 2022 $ 2,411 $ 708 $ 681 $ 3,800 Provision for credit losses 273 93 300 666 Write-offs and other ( 112 ) - - ( 112 ) Balance as of March 31, 2023 2,572 801 981 4,354 Provision for credit losses 477 255 472 1,204 Write-offs and other ( 362 ) - ( 18 ) ( 380 ) Balance as of March 31, 2024 2,687 1,056 1,435 5,178 Provision for credit losses 1,805 682 494 2,981 Write-offs and other ( 418 ) 1 16 ( 401 ) Balance as of March 31, 2025 $ 4,074 $ 1,739 $ 1,945 $ 7,758 We evaluate our customers using an internally assigned credit quality rating “CQR.” The CQR categories of our financing receivables are: ● High CQR: This rating includes accounts with excellent to good business credit, asset quality and capacity to meet financial obligations. Loss rates in this category are generally less than 1 %. ● Average CQR: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. Loss rates in this category are in the range of 1 % to 8 %. ● Low CQR: This rating includes accounts that are impaired or may become impaired due to marginal credit and other events or risks that may impact collection. The loss rates in this category in the normal course are greater than 8 % and up to 100 %. F-25 Table of Contents The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2025 (in thousands): Amortized cost basis by origination year ending March 31, 2025 2024 2023 2022 2021 2020 and prior Total Transfers (2) Net credit exposure Notes receivable: High CQR $ 158,257 $ 11,929 $ 4,821 $ 887 $ 1,116 $ - $ 177,010 $ ( 19,512 ) $ 157,498 Average CQR 38,647 3,450 1,556 37 2 - 43,692 ( 3,809 ) 39,883 Low CQR - 58 909 - - - 967 - 967 Total $ 196,904 $ 15,437 $ 7,286 $ 924 $ 1,118 $ - $ 221,669 $ ( 23,321 ) $ 198,348 Lease receivables: High CQR $ 18,095 $ 9,683 $ 4,926 $ 549 $ 189 $ 201 $ 33,643 $ ( 8,682 ) $ 24,961 Average CQR 21,304 9,829 4,343 598 17 - 36,091 ( 6,308 ) 29,783 Low CQR - 354 579 325 - 1,258 - 1,258 Total $ 39,399 $ 19,866 $ 9,848 $ 1,147 $ 531 $ 201 $ 70,992 $ ( 14,990 ) $ 56,002 Total amortized cost (1) $ 236,303 $ 35,303 $ 17,134 $ 2,071 $ 1,649 $ 201 $ 292,661 $ ( 38,311 ) $ 254,350 (1) Excludes unguaranteed residual values of $ 5,929 thousand that we retained after selling the related lease receivable. (2) Transfers consist of receivables that have been transferred to third-party financial institutions on a non-recourse basis. The following table provides the amortized cost basis of our financing receivables by CQR and by credit origination year as of March 31, 2024 (in thousands): Amortized cost basis by origination year ending March 31, 2024 2023 2022 2021 2020 2019 and prior Total Transfers (2) Net credit exposure Notes receivable: High CQR $ 63,934 $ 15,821 $ 3,440 $ 2,656 $ 30 $ - $ 85,881 $ ( 25,683 ) $ 60,198 Average CQR 18,715 3,260 302 52 - - 22,329 ( 3,476 ) 18,853 Low CQR - - - - - - - - - Total $ 82,649 $ 19,081 $ 3,742 $ 2,708 $ 30 $ - $ 108,210 $ ( 29,159 ) $ 79,051 Lease receivables: High CQR $ 22,123 $ 9,457 $ 1,341 $ 1,151 $ 100 $ 7 $ 34,179 $ ( 1,128 ) $ 33,051 Average CQR 22,861 9,548 2,133 259 2 - 34,803 ( 5,436 ) 29,367 Low CQR - - - - - - - - - Total $ 44,984 $ 19,005 $ 3,474 $ 1,410 $ 102 $ 7 $ 68,982 $ ( 6,564 ) $ 62,418 Total amortized cost (1) $ 127,633 $ 38,086 $ 7,216 $ 4,118 $ 132 $ 7 $ 177,192 $ ( 35,723 ) $ 141,469 (1) Excludes unguaranteed residual values of $ 3,718 thousand that we retained after selling the related lease receivable. (2) Transfers consist of receivables that have been transferred to third-party financial institutions on a non-recourse basis. The following table provides an aging analysis of our financing receivables as of March 31, 2025 (in thousands): 31-60 Days Past Due 61-90 Days Past Due > 90 Days Past Due Total Past Due Current Total Billed Unbilled Amortized Cost Notes receivable 3888 $ 419 $ 1,369 $ 5,676 $ 15,946 $ 21,622 $ 200,047 $ 221,669 Lease receivables 1,191 579 1,610 3,380 5,421 8,801 62,191 70,992 Total $ 5,079 $ 998 $ 2,979 $ 9,056 $ 21,367 $ 30,423 $ 262,238 $ 292,661 F-26 Table of Contents The following table provides an aging analysis of our financing receivables as of March 31, 2024 (in thousands): 31-60 Days Past Due 61-90 Days Past Due > 90 Days Past Due Total Past Due Current Total Billed Unbilled Amortized Cost Notes receivable $ 1,251 $ 334 $ 2,484 $ 4,069 $ 9,337 $ 13,406 $ 94,804 $ 108,210 Lease receivables 1,174 284 2,213 3671 4,691 8,362 60,620 68,982 Total $ 2,425 $ 618 $ 4,697 $ 7,740 $ 14,028 $ 21,768 $ 155,424 $ 177,192 Our financial assets on nonaccrual status were not significant as of March 31, 2025, and March 31, 2024. 8. PROPERTY, EQUIPMENT, AND OTHER ASSETS—NET Our property, equipment, and other assets—net consists of the following components (in thousands): March 31, 2025 March 31, 2024 Deferred costs—long-term $ 55,790 $ 47,812 Right-of-use asset 17,857 15,407 Property and equipment—net 15,551 12,935 Prepaid expenses—long-term 15,627 12,846 Other 149 289 Total other assets—long-term $ 104,974 $ 89,289 Our property and equipment—net consists of the following (in thousands): March 31, 2025 March 31, 2024 Furniture, fixtures, and equipment $ 26,463 $ 26,507 Leasehold improvements 13,343 11,776 Capitalized software 2,608 1,685 Vehicles 558 396 Total assets 42,972 40,364 Accumulated depreciation and amortization ( 27,421 ) ( 27,429 ) Property and equipment – net $ 15,551 $ 12,935 Depreciation and amortization expense on property and equipment, including amounts recognized in cost of sales, was $ 7.0 million, $ 6.7 million, and $ 5.5 million for the years ended March 31, 2025, 2024, and 2023, respectively. 9. NOTES PAYABLE AND CREDIT FACILITY CREDIT FACILITY We finance the operations of our subsidiaries e Plus Technology, inc. and e Plus Technology Services, inc. (collectively, the “Borrowers”) in our technology business through a credit facility with Wells Fargo Commercial Distribution Finance, LLC (“WFCDF”). The WFCDF credit facility (the “WFCDF Credit Facility”) has a floor plan facility and a revolving credit facility. Our credit facility is provided by a syndicate of banks for which WFCDF acts as administrative agent and consists of a discretionary senior secured floor plan facility in favor of the Borrowers in the aggregate principal amount of up to $ 500.0 million, together with a sublimit for a revolving credit facility for up to $ 200.0 million. We use the floor plan facility to facilitate the purchase of inventory from designated suppliers. WFCDF pays our suppliers and provides us extended payment terms. We pay down the floor plan facility on three specified dates each month, generally 45 - 60 days from the invoice date. We normally do not incur any interest for balances under the floor plan facility. We pay an unused commitment fee in months that our floor plan utilization is below certain thresholds. We are not involved in establishing the terms or conditions of the arrangements between our suppliers and WFCDF. F-27 Table of Contents The following table provides roll forwards of our outstanding obligations confirmed as valid under the floor plan facility for the years ended March 31, 2025, and 2024 (in thousands): Year ended March 31, 2025 2024 Confirmed obligations at the beginning of the year $ 105,104 $ 134,615 Invoices assumed from acquisitions - 17,930 Invoices confirmed during the year 692,349 791,511 Confirmed invoices paid during the year ( 707,926 ) ( 838,952 ) Confirmed obligations at the end of the year $ 89,527 $ 105,104 Our liability under the accounts payable floor plan facility is presented as accounts payable – floor plan on our balance sheet. We may use the revolving credit facility for our borrowing needs. We did no t have any outstanding balances under the revolving credit facility as of March 31, 2025, and March 31, 2024. The amount of principal available is subject to a borrowing base determined by, among other things, the Borrowers’ accounts receivable and inventory, each pursuant to a formula and subject to certain reserves. Loans accrue interest at a rate per annum equal to Term SOFR Rate plus a Term SOFR Adjustment of 0.10 % plus an Applicable Margin of 1.75 %. We did not have any outstanding debt on the accounts receivable component of our WFCDF Credit Facility during the year ended March 31, 2025. We had an average borrowing balance of $ 18.4 million and a weighted average interest rate on the accounts receivable component of our WFCDF Credit Facility of 7.07 % during our year ended March 31, 2024. Our borrowings under the WFCDF Credit Facility are secured by the assets of the Borrowers. Additionally, the WFCDF Credit Facility requires a guaranty of $ 10.5 million by e Plus inc. Under the WFCDF Credit Facility, the Borrowers are restricted in their ability to pay dividends to e Plus inc. unless their available borrowing meets or met certain thresholds. As of March 31, 2025, and March 31, 2024, their available borrowing met the thresholds such that there were no restrictions on their ability to pay dividends. The WFCDF Credit Facility has an initial one-year term, which automatically renews for successive one -year terms thereafter. However, either the Borrowers or WFCDF may terminate the WFCDF Credit Facility at any time by providing a written termination notice to the other party no less than 90 days prior to such termination. The loss of the WFCDF Credit Facility could have a material adverse effect on our future results as we currently rely on this facility and its components for daily working capital and liquidity for our technology business and as an operational function of our accounts payable process. NON-RECOURSE NOTES PAYABLE Non-recourse notes payable consist of borrowings that, in the event of a default by the customer, the lender generally only has recourse against the customer, and the assets serving as collateral, but not against us. As of March 31, 2025, and March 31, 2024, we had $ 38.8 million and $ 36.2 million, respectively, of non-recourse borrowings that were collateralized by investments in notes and leases. Principal and interest payments are generally due periodically in amounts that are approximately equal to the total payments due from the customer under the leases or notes receivable that collateralize the notes payable. The weighted average interest rate for our non-recourse notes payable was 6.47 % and 6.49 %, as of March 31, 2025, and March 31, 2024, respectively. F-28 Table of Contents Our non-recourse notes payable as of March 31, 2025, mature as follows (in thousands): Year ending March 31, 2026 $ 27,456 2027 8,169 2028 2,639 2029 509 Total maturities $ 38,773 10. COMMITMENTS AND CONTINGENCIES LEGAL PROCEEDINGS We are subject to various legal proceedings, as well as demands, claims and threatened litigation, that arise in the normal course of our business and have not been fully resolved. The ultimate outcome of any litigation or other legal dispute is uncertain. When a loss related to a legal proceeding or claim is probable and reasonably estimable, we accrue our best estimate for the ultimate resolution of the matter. If one or more legal matters are resolved against us in a reporting period for amounts above our expectations, our financial condition and operating results for that period may be adversely affected. As of March 31, 2025, we do not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. Any outcome, whether favorable or unfavorable, may materially and adversely affect us due to legal costs and expenses, diversion of management attention and other factors. We expense legal costs in the period incurred. We cannot assure that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against us in the future, and these matters could relate to prior, current, or future transactions or events. 11. EARNINGS PER SHARE Basic earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is calculated by dividing net earnings available to common shareholders by the basic weighted average number of shares of common stock outstanding plus common stock equivalents during each period. The following table provides a reconciliation of the numerators and denominators used to calculate basic and diluted net earnings per common share as disclosed in our consolidated statements of operations for the fiscal years ended March 31, 2025, 2024 and 2023 (in thousands, except per share data): 2025 2024 2023 Net earnings attributable to common shareholders – basic and diluted $ 107,978 $ 115,776 $ 119,356 Basic and diluted common shares outstanding: Weighted average common shares outstanding – basic 26,503 26,610 26,569 Effect of dilutive shares 163 107 85 Weighted average shares common outstanding – diluted 26,666 26,717 26,654 Earnings per common share – basic $ 4.07 $ 4.35 $ 4.49 Earnings per common share – diluted $ 4.05 $ 4.33 $ 4.48 12. STOCKHOLDERS’ EQUITY SHARE REPURCHASE PLAN On May 18, 2024, our Board of Directors (“Board”) authorized the repurchase of up to 1,250,000 shares of our outstanding common stock, over a 12-month period beginning May 28, 2024. On March 22, 2023, our Board authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, over a 12-month period beginning May 28, 2023. On March 24, 2022, our Board authorized the repurchase of up to 1,000,000 shares of our outstanding common stock, over a 12-month period beginning May 28, 2022. These plans authorized purchases to be made from time to time in the open market, or in privately negotiated transactions, subject to availability. Any repurchased shares will have the status of treasury shares and may be used, when needed, for general corporate purposes. F-29 Table of Contents During the year ended March 31, 2025, we purchased 557,009 shares of our outstanding common stock at a value of $ 43.1 million under the share repurchase plan; we also purchased 52,450 shares of common stock at a value of $ 3.8 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock. During the year ended March 31, 2024, we purchased 131,837 shares of our outstanding common stock at a value of $ 6.7 million under the share repurchase plan; we also purchased 53,945 shares of common stock at a value of $ 3.0 million to satisfy tax withholding obligations relating to the vesting of employees’ restricted stock. 13. SHARE-BASED COMPENSATION SHARE-BASED PLANS As of March 31, 2025, we had share-based awards outstanding under the following plans: (1) the 2017 Non-Employee Director Long-Term Incentive Plan (“2017 Director LTIP”), (2) the 2024 Non-Employee Director Long-Term Incentive Plan (“2024 Director LTIP”) and (3) the 2021 Employee Long-Term Incentive Plan (“2021 Employee LTIP”). These share-based plans define fair market value as the closing sales price of a share of common stock as quoted on any established stock exchange for such date or the most recent trading day preceding such date if there were no trades on such date. 2021 Employee LTIP The 2021 Employee LTIP was approved by our stockholders on September 16, 2021, and became effective October 1, 2021. Under the 2021 Employee LTIP, 3,000,000 shares were authorized for grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, or other share-based awards to e Plus employees. The purpose of the 2021 Employee LTIP is to encourage our employees to acquire a proprietary interest in the growth and performance of e Plus, thus enhancing the value of e Plus for the benefit of its stockholders, and to enhance our ability to attract and retain exceptionally qualified individuals. These plans are administered by the Compensation Committee. Shares issuable under these plans may consist of authorized but unissued shares or shares held in our treasury. Under these plans, the Compensation Committee will determine the time and method of exercise or vesting of the awards. Shares under these plans will not be used to compensate our outside directors, who may be compensated under the separate 2024 Director LTIP, as discussed below. 2017 Director LTIP and 2024 Director LTIP On September 12, 2024, our shareholders approved the 2024 Director LTIP. The 2024 Director LTIP replaces the 2017 Director LTIP. Beginning September 12, 2024, we permanently ceased issuing any additional shares under the 2017 Director LTIP. The maximum aggregate number of shares that may be issued as restricted shares under the 2024 Director LTIP is 300,000 shares. The purpose of the 2024 Director LTIP is to align the economic interests of the directors with the interests of stockholders by including equity as a component of pay and to attract, motivate and retain experienced and knowledgeable directors. Each director receives an annual grant of restricted stock having a grant-date fair value equal to the cash compensation earned by an outside director during our fiscal year ended immediately before the respective annual grant-date. These restricted shares are prohibited from being sold, transferred, assigned, pledged, or otherwise encumbered or disposed of. The shares vest on the one -year anniversary from the date of the grant. In addition, each director may also elect to receive stock in lieu of their cash compensation. Stock received in lieu of cash is issued under the 2024 Director LTIP and vests immediately. F-30 Table of Contents RESTRICTED STOCK ACTIVITY During the year ended March 31, 2025, we granted 729 restricted shares under the 2017 Director LTIP, 7,966 restricted shares under the 2024 LTIP, and 121,097 restricted shares under the 2021 Employee LTIP. Cumulatively, as of March 31, 2025, we have granted a total of 115,665 restricted shares under the 2017 Director LTIP, 7,966 shares under the 2024 Director LTIP, and 412,605 restricted shares under the 2021 Employee LTIP. The following table provides a summary of the non-vested restricted shares for the year ended March 31, 2025: Number of Shares Weighted Average Grant-Date Fair Value Nonvested April 1, 2024 308,411 $ 55.02 Granted 129,792 $ 74.02 Vested ( 158,512 ) $ 53.55 Forfeited ( 3,918 ) $ 61.08 Non-vested March 31, 2025 275,773 $ 64.80 In each of the years ended March 31, 2025, 2024, and 2023, we used the closing stock price on the grant date or, if the grant date fell on a date the stock was not traded, the previous day’s closing stock price for the fair value of the award. The weighted-average grant date fair value of restricted shares granted during the years ended March 31, 2025, 2024, and 2023 was $ 74.02 , $ 56.50 , and $ 56.50 , respectively. The aggregated fair value of restricted shares that vested during the years ended March 31, 2025, 2024, and 2023 was $ 8.5 million, $ 7.8 million, and $ 7.1 million, respectively. Upon each vesting period of the restricted stock awards to employees, participants are subject to minimum tax withholding obligations. Each of the 2021 Employee LTIP, the 2017 Director LTIP, and the 2024 Director LTIP allow us to withhold enough shares due to the participant to satisfy their minimum tax withholding obligations. For the year ended March 31, 2025, we withheld 52,450 shares of common stock at a value of $ 3.8 million, which was included in treasury stock. For the year ended March 31, 2024, we withheld 53,945 shares of common stock at a value of $ 3.0 million, which was included in treasury stock. PERFORMANCE STOCK UNITS Beginning with the fiscal year ended March 31, 2024, we granted Performance Stock Units (“PSUs”) to our executive officers under our 2021 Employee LTIP. The PSUs will vest based on the achievement of certain performance goals at the end of a three -year performance period. The PSUs represent the right to receive shares of our common stock at the time of vesting. The total number of PSUs that vest range from 0 % to 200 % of the target number of PSUs based on our achievement of certain performance targets. The following table provides a summary of the nonvested PSUs for the fiscal year ended March 31, 2025: Number of units Weighted Average Grant-date Fair Value Nonvested April 1, 2024 15,120 $ 61.17 Granted 19,415 $ 78.54 Vested - $ - Forfeited - $ - Nonvested March 31, 2025 34,535 $ 70.94 F-31 Table of Contents EMPLOYEE STOCK PURCHASE PLAN We provide eligible employees the opportunity to purchase shares of our stock through the 2022 Employee Stock Purchase Plan (“ESPP”). Under this plan, eligible employees may purchase up to an aggregate of 2.50 million shares of our stock. Employees in this plan contribute part of their earnings over a six-month offering period. At the end of each offering period, employees purchase our shares using their contributions at a discount off the lesser of the closing market price on the first or the last trading day of each offering period. During the year ended March 31, 2025, and March 31, 2024, we issued 58,064 shares at a weighted average price of $ 62.61 per share and 70,715 shares at a weighted average price of $ 42.69 per share, respectively, under the ESPP. As of March 31, 2025, there were 2.37 million shares remaining under the ESPP. COMPENSATION EXPENSE The following table provides a summary of our total share-based compensation expense, including for restricted stock awards, PSUs, our ESPP, and the related income tax benefit for the years ended March 31, 2025, 2024 and 2023, respectively (in thousands): Year Ended March 31, 2025 2024 2023 Equity-based compensation expense $ 9,996 $ 9,731 $ 7,825 Income tax benefit $ ( 2,749 ) $ ( 2,735 ) $ ( 2,097 ) We recognized the income tax benefit as a reduction to our provision for income taxes. As of March 31, 2025, the total unrecognized compensation expense related to non-vested restricted stock was $ 10.7 million, which is expected to be recognized over a weighted-average period of 27 months. We also provide our employees with a contributory 401(k) profit sharing plan. We may make contributions, which are fully vested when they are made, to the plan. These contributions are not required, and the amount of our contributions are entirely within our discretion. For the years ended March 31, 2025, 2024, and 2023, we recognized expense for employer contributions to the plan of $ 5.7 million, $ 4.7 million, and $ 4.2 million, respectively. 14. INCOME TAXES We account for our tax positions in accordance with Codification Topic 740. Under the guidance, we evaluate uncertain tax positions based on the two-step approach. The first step is to evaluate each uncertain tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained in an audit, including resolution of related appeals or litigation processes, if any. For tax positions that are not likely of being sustained upon audit, the second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. As of March 31, 2025, and 2024, we do no t have any unrecognized tax benefits for uncertain tax positions. We recognize accrued interest and penalties related to unrecognized tax benefits as part of income tax expense. We file income tax returns, including returns for our subsidiaries, with federal, state, local, and foreign jurisdictions. The tax years ended March 31, 2024, March 31, 2023, and March 31, 2022, are subject to examination by federal and state taxing authorities. F-32 Table of Contents A reconciliation of income taxes computed at the statutory federal income tax rate of 21.0 % to the provision for income taxes included in the consolidated statements of operations is as follows (in thousands, except percentages): Year Ended March 31, 2025 2024 2023 Income tax expense computed at the US statutory federal rate $ 31,256 $ 33,830 $ 34,224 State income tax expense—net of federal benefit 7,722 9,624 8,754 Non-deductible executive compensation 2,020 1,718 1,708 Other ( 137 ) 145 ( 1,068 ) Provision for income taxes $ 40,861 $ 45,317 $ 43,618 Effective income tax rate 27.5 % 28.1 % 26.8 % The components of the provision for income taxes are as follows (in thousands): Year Ended March 31, 2025 2024 2023 Current: Federal $ 26,708 $ 34,232 $ 30,928 State 9,648 12,371 10,110 Foreign 1,092 1,370 499 Total current expense 37,448 47,973 41,537 Deferred: Federal 3,141 ( 2,419 ) 1,301 State 127 ( 188 ) 970 Foreign 145 ( 49 ) ( 190 ) Total deferred expense (benefit) 3,413 ( 2,656 ) 2,081 Provision for income taxes $ 40,861 $ 45,317 $ 43,618 F-33 Table of Contents Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were as follows (in thousands): March 31, 2025 2024 Deferred tax assets: Accrued vacation $ 2,744 $ 2,666 Deferred revenue 7,108 6,934 Allowance for credit losses 1,745 1,278 Restricted stock 301 738 Other deferred tax assets 841 689 Inventory reserve 1,313 546 Capitalized research expenditures 1,666 502 Accrued bonus 2,708 2,641 Lease liabilities 5,067 4,503 Other credits and carryforwards 101 251 Gross deferred tax assets 23,594 20,748 Less: valuation allowance ( 63 ) ( 70 ) Net deferred tax assets 23,531 20,678 Deferred tax liabilities: Property and equipment ( 2,516 ) ( 2,724 ) Operating leases ( 7,804 ) ( 3,889 ) Prepaid expenses ( 4,095 ) ( 1,807 ) Right-of-use assets ( 4,714 ) ( 4,113 ) Tax deductible goodwill ( 2,198 ) ( 2,525 ) Total deferred tax liabilities ( 21,327 ) ( 15,058 ) Net deferred tax asset $ 2,204 $ 5,620 Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. Based on this evaluation as of March 31, 2025, we are recognizing a valuation allowance to offset gross deferred tax assets primarily attributable to net operating losses at certain of the foreign subsidiaries and foreign tax credit carry forwards. We believe that it is more likely than not that we will realize the remaining gross deferred tax assets through generating taxable income or the reversal of existing temporary differences attributable to the gross deferred tax liabilities. F-34 Table of Contents 15. FAIR VALUE MEASUREMENTS We account for the fair values of our assets and liabilities utilizing a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. The following table provides the fair value of our assets and liabilities measured at fair value as categorized within the fair value hierarchy as of March 31, 2025, and March 31, 2024 (in thousands): Fair Value Measurement Using Recorded Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) March 31, 2025 Assets: Money market funds $ 280,067 $ 280,067 $ - $ - March 31, 2024 Assets: Money market funds $ 179,709 $ 179,709 $ - $ - 16. BUSINESS COMBINATIONS BAILIWICK SERVICES, LLC On August 19, 2024, our subsidiary, e Plus Technology, inc., acquired 100 % of the membership interests of Bailiwick. Based near Minneapolis, Minnesota, Bailiwick is a provider of professional and managed services with nearly 30 years in the business. Bailiwick specializes in serving enterprise customers that operate large store, branch, and campus footprints predominantly in the retail, financial services, restaurant, and hospitality markets. Our preliminary sum for consideration transferred is $ 124.9 million, which consists of $ 126.2 million paid in cash at closing, less $ 1.5 million cash acquired, plus $ 0.2 million paid in December 2024 to the sellers based on adjustments to a determination of the total net assets delivered. Our preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands): Acquisition Date Amount Accounts receivable $ 41,719 Contract assets 7,712 Other assets 20,669 Identified intangible assets 58,010 Accounts payable and other liabilities ( 38,273 ) Contract liabilities ( 6,216 ) Total identifiable net assets 83,621 Goodwill 41,305 Total purchase consideration $ 124,926 The identified intangible assets of $ 58.0 million consists of customer relationships of $ 49.3 million with an estimated useful life of ten years and trade name of $ 8.7 million with a preliminary useful life of seven years . We recognized goodwill related to this transaction of $ 41.3 million, which was assigned to our professional services and product segments. The goodwill recognized in the Bailiwick acquisition is attributable to the acquired assembled workforce and expected synergies, none of which qualify for recognition as a separate intangible asset. The total amount of goodwill expected to be deductible for tax purposes is $ 44.4 million. F-35 Table of Contents The amount of revenues and earnings of the acquiree since the acquisition date are not material. Likewise, the impact to the revenue and earnings of the combined entity for the current reporting period as though the acquisition date had been April 1, 2024, is not material. PEAK RESOURCES, INC. (“PEAK”) On January 26, 2024, our subsidiary, e Plus Technology, inc., acquired certain assets and liabilities of PEAK. Based in Denver, CO, PEAK is an established provider of modern data center, networking, and security products and services. The acquisition will help drive additional growth with enhanced engineering, sales, and services delivery capabilities in the mountain west region. Our sum for consideration transferred is $ 7.9 million consisting of $ 5.6 million paid in cash at closing plus an additional $ 2.3 million that was paid in April 2024 to the sellers based on adjustments to a determination of the total net assets delivered. Our allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands): Acquisition Date Amount Accounts receivable $ 8,569 Other assets 133 Identified intangible asset 5,030 Accounts payable and other liabilities ( 9,084 ) Total identifiable net assets 4,648 Goodwill 3,238 Total purchase consideration $ 7,886 The identified intangible asset of $ 5.0 million consists of customer relationships with an estimated useful life of seven years . The fair value of acquired receivables equals the gross contractual amounts receivable. We expect to collect all acquired receivables. We recognized goodwill related to this transaction of $ 3.2 million, of which $ 2.9 million and $ 0.3 million were assigned to our product and professional services reporting segments, respectively. The goodwill recognized in the acquisition is attributable to the acquired assembled workforce and expected synergies, none of which qualify for recognition as a separate intangible asset. The total amount of goodwill is expected to be deductible for tax purposes. The amount of revenues and earnings of the acquiree since the acquisition date are not material. Likewise, the impact to the revenue and earnings of the combined entity for the prior reporting period as though the acquisition date had been April 1, 2023, is not material. NETWORK SOLUTIONS GROUP (“NSG”) On April 30, 2023, our subsidiary, e Plus Technology, inc., acquired certain assets and liabilities of NSG, formerly a business unit of CCI Systems, Inc., a Michigan-based provider of networking services and solutions. This acquisition is helping to drive additional growth for us in the service provider end-markets with enhanced engineering, sales, and services delivery capabilities specific to the industry. F-36 Table of Contents Our sum for consideration transferred is $ 48.6 million consisting of $ 59.6 million paid in cash at closing minus $ 11.0 million that was paid back to us during the quarter ended September 30, 2023, by the sellers based on adjustments to a determination of the total net assets delivered. Our allocation of the purchase consideration to the assets acquired and liabilities assumed is presented below (in thousands): Acquisition Date Amount Accounts receivable $ 20,419 Other assets 1,940 Identified intangible asset 29,960 Accounts payable and other liabilities ( 24,758 ) Contract liabilities ( 1,086 ) Total identifiable net assets 26,475 Goodwill 22,128 Total purchase consideration $ 48,603 The identified intangible asset of $ 30.0 million consists of customer relationships with an estimated useful life of seven years . The fair value of acquired receivables equals the gross contractual amounts receivable. We expect to collect all acquired receivables. We recognized goodwill related to this transaction of $ 22.1 million, of which $ 19.7 million and $ 2.4 million were assigned to our product and professional services reporting segments, respectively. The goodwill recognized in the acquisition is attributable to the acquired assembled workforce and expected synergies, none of which qualify for recognition as a separate intangible asset. The total amount of goodwill is expected to be deductible for tax purposes. The amount of revenues and earnings of the acquiree since the acquisition date are not material. Likewise, the impact to the revenue and earnings of the combined entity for the prior reporting period as though the acquisition date had been April 1, 2023, is not material. 17. SEGMENT REPORTING We manage and report our operating results through four operating segments: product, professional services, managed services, and financing. Our organizational structure is based on how our chief operating decision maker (“CODM”) allocates resources, manages operations, and evaluates performance. Our CODM is our Chief Executive Officer. We refer to the product segment, professional services segment, and managed services segment collectively as our technology business. Our product segment includes sales of IT products, third-party software, and third-party maintenance, software assurance, and other third-party services. Our professional services segment includes our advanced professional services, staff augmentation, project management services, cloud consulting services and security services. Our managed services segment includes our advanced managed services, service desk, storage-as-a-service, cloud hosted services, cloud managed services and managed security services. Our financing business segment consists of the financing of IT equipment, software, and related services to commercial enterprises, state and local governments, and government contractors. Our CODM measures the performance of the segments within our technology business based on gross profit and measures our financing business segment based on operating income. We do not present asset information for our reportable segments as we do not provide asset information to our CODM. Our CODM uses quarterly financial results and forecasts to manage operations. Our CODM also uses our financial results and forecasts in our annual budgeting process. F-37 Table of Contents The following table provides reportable segment information (in thousands): Year Ended March 31, 2025 2024 2023 Net sales Product $ 1,608,768 $ 1,883,809 $ 1,750,802 Professional services 229,030 154,549 151,785 Managed services 171,347 137,528 112,658 Financing 59,644 49,416 52,473 Total 2,068,789 2,225,302 2,067,718 Cost of sales Product 1,235,211 1,486,191 1,370,061 Professional services 138,513 86,355 90,191 Managed services 120,040 94,861 80,503 Financing 5,904 7,102 9,439 Total 1,499,668 1,674,509 1,550,194 Gross profit Product 373,557 397,618 380,741 Professional services 90,517 68,194 61,594 Managed services 51,307 42,667 32,155 Financing 53,740 42,314 43,034 Total 569,121 550,793 517,524 Selling, general, and administrative Technology business 383,335 353,540 317,885 Financing 16,409 14,194 15,635 Total 399,744 367,734 333,520 Depreciation and amortization Technology business 25,753 20,951 13,598 Financing - 74 111 Total 25,753 21,025 13,709 Interest and financing costs Technology business - 1,428 2,897 Financing 2,211 2,349 1,236 Total 2,211 3,777 4,133 Operating income Technology business 106,293 132,560 140,110 Financing 35,120 25,697 26,052 Total 141,413 158,257 166,162 Other income (expense), net 7,426 2,836 ( 3,188 ) Earnings before tax $ 148,839 $ 161,093 $ 162,974 Selected financial data - statement of cash flow Purchases of property, equipment, and operating lease equipment: Technology business $ 5,216 $ 7,454 $ 7,693 Financing 1,387 1,049 1,687 Total $ 6,603 $ 8,503 $ 9,380 F-38 Table of Contents The following tables provide a disaggregation of net sales by source and further disaggregate our revenue recognized from contracts with customers by timing and our position as principal or agent (in thousands): Year ended March 31, 2025 Product Professional Services Managed Services Financing Total Net Sales: Contracts with customers $ 1,575,097 $ 229,030 $ 171,347 $ 5,560 $ 1,981,034 Financing and other 33671 - - 54,084 87,755 Total $ 1,608,768 $ 229,030 $ 171,347 $ 59,644 $ 2,068,789 Timing and position as principal or agent: Transferred at a point in time as principal $ 1,390,811 $ - $ - $ 5,560 $ 1,396,371 Transferred at a point in time as agent 184,286 - - - 184,286 Transferred over time as principal - 229,030 171,347 - 400,377 Total revenue from contracts with customers $ 1,575,097 $ 229,030 $ 171,347 $ 5,560 $ 1,981,034 Year ended March 31, 2024 Product Professional Services Managed Services Financing Total Net Sales: Contracts with customers $ 1,862,231 $ 154,549 $ 137,528 $ 5,926 $ 2,160,234 Financing and other 21,578 - - 43,490 65,068 Total $ 1,883,809 $ 154,549 $ 137,528 $ 49,416 $ 2,225,302 Timing and position as principal or agent: Transferred at a point in time as principal $ 1,687,639 $ - $ - $ 5,926 $ 1,693,565 Transferred at a point in time as agent 174,592 - - - 174,592 Transferred over time as principal - 154,549 137,528 - 292,077 Total revenue from contracts with customers $ 1,862,231 $ 154,549 $ 137,528 $ 5,926 $ 2,160,234 Year ended March 31, 2023 Product Professional Services Managed Services Financing Total Net Sales: Contracts with customers $ 1,728,125 $ 151,785 $ 112,658 $ 9,304 $ 2,001,872 Financing and other 22,677 - - 43,169 65,846 Total $ 1,750,802 $ 151,785 $ 112,658 $ 52,473 $ 2,067,718 Timing and position as principal or agent: Transferred at a point in time as principal $ 1,566,760 $ - $ - $ 9,304 $ 1,576,064 Transferred at a point in time as agent 161,365 - - - 161,365 Transferred over time as principal - 151,785 112,658 - 264,443 Total revenue from contracts with customers $ 1,728,125 $ 151,785 $ 112,658 $ 9,304 $ 2,001,872 F-39 Table of Contents TECHNOLOGY BUSINESS DISAGGREGATION OF REVENUE The following table provides a disaggregation of our revenue from contracts with customers for our technology business by customer end market and by type (in thousands): Year Ended March 31, 2025 2024 2023 Customer end market: Telecom, media & entertainment $ 453,892 $ 547,525 $ 532,921 SLED 333,371 329,617 290,624 Technology 300,465 379,720 393,594 Healthcare 286,474 278,893 274,936 Financial services 174,798 243,630 156,257 All others 460,145 396,501 366,913 Net sales 2,009,145 2,175,886 2,015,245 Less: revenue from financing and other ( 33,671 ) ( 21,578 ) ( 22,677 ) Total revenue from contracts with customers $ 1,975,474 2,154,308 1,992,568 Type: Product Networking $ 781,703 $ 1,005,679 $ 803,678 Cloud 509,774 546,341 587,097 Security 191,872 193,956 214,459 Collaboration 55,483 65,714 57,472 Other 69,936 72,119 88,096 Total product 1,608,768 1,883,809 1,750,802 Professional services 229,030 154,549 151,785 Managed services 171,347 137,528 112,658 Net sales 2,009,145 2,175,886 2,015,245 Less: revenue from financing and other ( 33,671 ) ( 21,578 ) ( 22,677 ) Total revenue from contracts with customers $ 1,975,474 $ 2,154,308 $ 1,992,568 We do not disaggregate sales by customer end market beyond the technology business. FINANCING BUSINESS SEGMENT DISAGGREGATION OF REVENUE We analyze our revenues within our financing business segment based on the nature of the arrangement. Our financing revenue generally consists of portfolio income, transactional gains, and post-contract earnings including month-to-month rents and the sales of off-lease equipment. All our revenues from contracts with customers within our financing business segment are from the sales of off-lease equipment. GEOGRAPHIC INFORMATION The geographic information for the years ended March 31, 2025, 2024, and 2023 was as follows (in thousands): Year Ended March 31, 2025 2024 2023 Net sales: US $ 1,983,403 $ 2,127,695 $ 1,953,465 Non-US 85,386 97,607 114,253 Total $ 2,068,789 $ 2,225,302 $ 2,067,718 F-40 Table of Contents Our long-lived tangible assets include property and equipment-net, operating leases-net, and equipment that has been returned to us at the termination of the lease. March 31, 2025 2024 Long-lived tangible assets: US $ 17,162 $ 16,258 Non-US 321 582 Total $ 17,483 $ 16,840 Sales to Verizon Communications Inc. represented 16 %, 19 % and 22 % of net sales for the years ended March 31, 2025, March 31, 2024, and March 31, 2023, respectively, all of which related to our technology business segments. F-41 Table of Contents e Plus inc. AND SUBSIDIARIES Schedule II - Valuation and Qualifying Accounts (Dollars in thousands) Balance at Beginning of Period Charged to Costs and Expenses Deductions/ Write-Offs Balance at End of Period Allowance for sales returns: (1) Year ended March 31, 2023 $ 1,246 $ 3,991 $ ( 3,973 ) $ 1,264 Year ended March 31, 2024 $ 1,264 $ 4,647 $ ( 4,296 ) $ 1,615 Year ended March 31, 2025 $ 1,615 $ 7,043 $ ( 5,969 ) $ 2,689 Allowance for credit losses: Year ended March 31, 2023 $ 3,800 $ 666 $ ( 112 ) $ 4,354 Year ended March 31, 2024 $ 4,354 $ 1,204 $ ( 380 ) $ 5,178 Year ended March 31, 2025 $ 5,178 $ 2,981 $ ( 401 ) $ 7,758 Valuation for deferred taxes: Year ended March 31, 2023 $ 250 $ ( 138 ) $ - $ 112 Year ended March 31, 2024 $ 112 $ ( 42 ) $ - $ 70 Year ended March 31, 2025 $ 70 $ ( 7 ) $ - $ 63 (1) These amounts represent the gross profit effect of sales returns during the respective years. Expected merchandise returns after year-end for sales made before year-end were $ 16.6 million, $ 10.1 million, and $ 7.9 million as of March 31, 2025, 2024, and 2023, respectively. S-1