What changed in this filing

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Item 1. Business

2025-08-21 compared with 2024-08-27 · 159 added, 136 removed, 121 unchanged (71% of the section changed)

ScanSource, Inc.

(together with its subsidiaries referred to as the “Company” or “ScanSource” or “we”) is a leading hybrid distributor connecting devices to the cloud and accelerating growth for customers across hardware, Software as a Service (“SaaS”), connectivity and cloud.

ScanSource enables customers to deliver solutions for their end users to address changing buying and consumption patterns.

ScanSource sells through multiple, specialized routes-to-market with hardware, SaaS, connectivity and cloud service offerings from the world's leading technology suppliers.

We provide technology solutions and services from more than 500 leading suppliers of mobility, barcode, point-of-sale (“POS”), payments, physical security, networking, unified communications, collaboration unified communications as a service (“UCaaS”), Contact Center as a Service (“CCaaS”), connectivity and cloud services.

ScanSource was incorporated in South Carolina in 1992 and serves approximately 25,000 customers.

(together with its subsidiaries referred to as the “Company,” “ScanSource,” “we,” “us,” or “our” ) is a leading technology distributor connecting devices to the cloud and accelerating growth for channel sales partners across hardware, software as a service (“SaaS”), connectivity and cloud services.

ScanSource enables channel sales partners to deliver solutions for their end users to address changing buying and consumption patterns.

ScanSource uses multiple sales models to offer technology solutions from leading suppliers of specialty technologies, connectivity and cloud services.

We provide technology solutions and services from more than 500 leading suppliers of mobility and barcode, point-of-sale (“POS”), payment terminals, physical security, networking, communications, connectivity and cloud services.

The Company's two operating segments, Specialty Technology Solutions and Intelisys & Advisory , represent the different sales models we use in executing our technology distribution growth strategy.

ScanSource was incorporated in South Carolina in 1992 and serves approximately 25,000 channel sales partners.

Net sales for fiscal year ended June 30, 2025 totaled $3.04 billion .

Our common stock trades on the NASDAQ Global Se lect Market under the symbol “SCSC.”

Our customers include businesses of all sizes that sell to end-customers across many industries.

Our customer channels include value-added resellers (“VARs”), customers or agents, independent sales organizations (“ISOs”) and independent software vendors (“ISVs”).

These customer channels provide us with multiple routes-to-market.

We align our teams, tools and processes around all of our customers to help them grow through reducing their costs, creating efficiencies and generating end-customer demand for business solutions.

We enable our customers to create, deliver and grow hybrid technology offerings for end-customers across almost every vertical market in the United States, Canada, and Brazil.

Our strategy is to drive sustainable, profitable growth by orchestrating hybrid technology solutions through a growing ecosystem of partners leveraging our people, processes, and tools.

Our goal is to provide exceptional experiences for our partners, suppliers, and people, and we strive for operational excellence.

Our hybrid distribution strategy relies on a channel sales model to offer hardware, SaaS, connectivity and cloud services from leading technology suppliers to customers that solve end users’ challenges.

Sc anSource enables customers to deliver solutions for their end users to address changing buying and consumption patterns.

Our solutions may include a combination of offerings from multiple suppliers or give our customers access to additional services.

As a trusted adviser to our customers, we provide customized solutions through our strong understanding of end user needs.

Our channel sales partners include businesses of all sizes that sell to end users across many industries.

Our channel sales partners include value-added resellers (“VARs”), advisors, independent sales organizations (“ISOs”), independent software vendors (“ISVs”), and managed service providers (“MSPs”).

These channel sales partners provide us with multiple routes-to-market.

We align our teams, tools and processes around all of our channel sales partners to help them grow through providing specialized expertise, creating efficiencies and generating end-user demand for business solutions.

We enable our channel sales partners to create, deliver and grow technology offerings for end users across almost every vertical market in the United States, Canada, and Brazil.

Our strategy is to drive sustainable, profitable growth by orchestrating complex, converging technology solutions through a growing ecosystem of channel sales partners leveraging our people, processes, and tools.

Our goal is to provide exceptional experiences for our channel sales partners, suppliers, and people through operational excellence.

Our technology distribution strategy utilizes multiple sales models to offer hardware, SaaS, connectivity and cloud services from leading technology suppliers to channel sales partners that solve end users’ challenges.

Sc anSource enables channel sales partners to deliver solutions for their end users to address changing buying and consumption patterns.

Our solutions may include a combination of offerings from multiple suppliers or give our channel sales partners access to additional services.

As a trusted adviser to our channel sales partners, we provide customized solutions through our strong understanding of end-user needs.

Value Proposition

Our customer channels and supplier relationships serve as competitive advantages.

From our pivotal position at the intersection of technology distribution trends, we provide robust value to both our customers and our suppliers.

We make it easier for our sales partners and suppliers to deliver leading technology solutions that drive business outcomes for end users.

Value proposition for our customers/sales partners:

Our channel sales partners and supplier relationships serve as competitive advantages.

From our pivotal position at the intersection of technology distribution trends, we provide robust value to both our channel sales partners and our suppliers.

We make it easier for our channel sales partners and suppliers to deliver leading technology solutions that drive business outcomes for end users.

Value proposition for our channel sales partners:

• Deep specialization and technical expertise;

• Enable end-user consumption preferences;

• Provide pre-sale engineering

• Make it easier to sell the technology stack

• Industry-leading custom configuration services;

• Comprehensive pre- and post-sales solutions engineering and advanced technology support;

• Inventory availability;

• Offer training, education and marketing services

• Provide custom configuration, services, platforms and digital tools

• Offer innovative financial solutions for our customers

Value proposition for our suppliers:

• Expand reach at a variable cost

• Provide access to multiple routes to market

• Lower customer acquisition cost

• Solution selling via the Integrated Solutions Group,

• Flexibility and choice using ScanSource's multiple sales models;

• Offer innovative financial solutions for our channel sales partners.

Index to Financial Statements

• Recruit and train new sales partners

• Manage channel credit

Value proposition for our suppliers:

• Scalable reach with variable cost structure;

• Access to multiple route to market;

• Lower cost of channel sales partner acquisition;

• Channel sales partner recruitment, onboarding and enablement;

• Ongoing support for channel sales partner success;

• Opportunity to increase channel business;

• Offering and managing channel credit.

Financial Strength

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Business Segments

We operate our business under a management structure that enhances our technology focus and hybrid distribution growth strategy.

Our segments operate in the United States, Canada and Brazil and consist of the following:

• Specialty Technology Solutions

• Modern Communications & Cloud

We operate our business under a management structure that enhances our technology distribution growth strategy.

Effective July 1, 2024, the Company realigned its operating segments to represent the different sales models it uses in executing its technology distribution growth strategy.

The two realigned segments are Specialty Technology Solutions and Intelisys & Advisory.

The Specialty Technology Solutions segment combines the Company's former operating segments, with the exception of the Company's Intelisys business.

The Intelisys & Advisory segment includes the Intelisys and technology advisors businesses, including Channel Exchange (formerly known as intY USA), RPM Software and Resourcive.

Both segments include recurring revenue.

The Company has reclassified certain prior-year amounts in the segment results to conform with the current year presentation.

These reclassifications had no effect on the condensed consolidated financial results.

See Note 16 - Segment Information for descriptions of the Company's segments.

Specialty Technology Solutions Segment

The Specialty Technology Solutions portfolio includes enterprise mobile computing, data capture, barcode printing, POS, payments, networking, electronic physical security, cybersecurity and other technologies.

There are adjacencies among these technologies to develop and deliver solutions for our customers.

These solutions include data capture and POS solutions that interface with computer systems to automate the collection, processing and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management and health care applications.

Electronic physical security products include identification, access control, video surveillance and intrusion-related devices.

Our networking products include wireless and networking infrastructure products.

This segment also includes recurring revenue from hardware rentals and other SaaS offerings.

Modern Communications & Cloud Segment

The Modern Communications & Cloud portfolio of solutions includes communications technologies and services for voice, video conferencing, wireless, data networking, cybersecurity, cable, unified communications and collaboration, cloud and technology services.

As these solutions come together on IP networks, new opportunities are created to move into adjacent solutions for all vertical markets, such as education, healthcare and government.

The Intelisys recurring revenue model in the connectivity and cloud marketplace offers telecom, cable, UCaaS, CCaaS, infrastructure as a service, software-defined wide-area network and other cloud services.

This segment also includes recurring revenue from our intY US businesses.

Our customers, include sales partners that are businesses of all sizes that sell to end users across industries ranging from manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, among others.

Our customers provide us with multiple, specialized routes-to-market through various channels, including:

VARs, agents, ISOs and ISVs.

No single customer accounted for more than 5% of our total net sales for the fiscal year ended June 30, 2024.

Within VARs, our customers include specialty technology VARs, direct marketers, IT system integrators, network integrators, service providers, managed service providers and cloud service providers.

The Specialty Technology Solutions segment operates in the United States, Canada and Brazil and includes specialty technology solutions distributed through a wholesale/resale sales model.

This segment includes hardware, SAAS and subscription services.

The specialty technology solutions include the following:

• Mobility and barcode - mobile computing, barcode scanners and imagers, radio frequency identification devices, barcode printing and related services;

• POS - Point of Sale systems, integrated POS software platforms;

• Payment terminals - Self-service kiosks including self-checkout, payment terminals and mobile payment devices;

• Physical security - video surveillance and analytics, video management software and access control;

• Networking - switching, routing and wireless products and software;

• Communications - voice, video, communication platform integration and contact center solutions;

• Connectivity - managed connectivity and wireless enablement solutions.

Intelisys & Advisory Segment

The Intelisys & Advisory segment operates in the United States and consists of sales and services to both channel sales partners (Intelisys) and end users (Advisory).

As a technology services distributor, or TSD, Intelisys distributes connectivity, cloud and next-generation technologies through an agency sales model.

Channel sales partners also have access to SaaS and subscription-based services through the company’s proprietary tools, platforms and flexible routes to market.

In addition to traditional telecom services, key technology areas include:

• Connectivity & SDN (Software-Defined Networking)

• CX (Unified Communications as a Service and Contact Center as a Service)

• Cloud/Data Center

Index to Financial Statements

• Wireless & IoT

By offering flexible routes to market and a robust solutions portfolio, this segment helps channel sales partners service a wide range of end users including businesses of all sizes from VSB (“Very Small Business”) to Enterprise size businesses.

Channel Sales Partners

Our channel sales partners, include businesses of all sizes that sell to end users across industries ranging from manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, among others.

Our channel sales partners provide us with multiple, specialized routes-to-market, including:

VARs, advisors, ISOs, ISVs and MSPs.

No single channel sales partner accounted for more than 10% of our total net sales for the fiscal year ended June 30, 2025.

Within VARs, our channel sales partners include specialty technology VARs, direct marketers, IT system integrators, network integrators, service providers and cloud service providers.

Specialty technology VARs focus on one or more technologies, providing specialized knowledge and expertise for technology solutions, such as tailored software or integrated hardware.

Direct marketers provide a very broad range of technology brands to business, government, education and healthcare markets.

IT system integrators and network integrators develop computer and networking solutions for end-customers’ IT needs.

Service providers, managed service providers and cloud service providers deliver advanced multi-discipline services with customized solutions that bundle data, collaboration, cloud, network and digital telecommunication services for end-customers' needs.

Index to Financial Statements

Agents focus on selling telecommunications and cloud services to end-customers and advise on various services, technologies and cost alternatives to help customers make informed choices.

Agents typically earn monthly commissions on multi-year contract sales as they build their recurring revenue business.

IT system integrators and network integrators develop computer and networking solutions for end users’ IT needs.

Advisors focus on selling traditional and next-generation technology solutions to end users through a consultative approach.

Advisors earn monthly commissions on contracted sales orders as they build, operate, and grow their businesses based on a recurring revenue model.

In addition to the technology solutions, some advisors will offer ancillary services, such as telecom expense management and professional services.

Independent Sales Organizations

ISOs focus on selling credit card processing and finding new merchant customers for credit card member banks.

ISOs focus on selling credit card processing and finding new merchant channel sales partners for credit card member banks.

They offer on-going customer service and support and look to bundle hardware, software and processing services.

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They generally focus on cloud solutions and sell or certify bundled hardware, software and service solutions.

We provide products and services from approximately 500 suppliers, including key suppliers AT&T, Avaya, Axis, Cisco, Comcast Business, Dell, Extreme, Five9, Fortinet, Hanwha, Honeywell, HP Poly, HPE/Aruba, Ingenico, Lumen, Microsoft, PAX Technology, RingCentral, Ubiquiti, Verifone, Verizon, Zebra Technologies and Zoom.

Managed Service Providers

MSPs deliver outsourced IT services, managing end users’ infrastructure, networks, security, and cloud environments.

They provide proactive monitoring, maintenance, and support, enabling businesses to reduce costs, improve efficiency, and focus on core operations.

We provide products and services from approximately 500 suppliers, including key suppliers AT&T, Avaya, Axis, Cisco, Comcast Business, Dell, Elo, Extreme, Five9, Fortinet, Hanwha, Honeywell, HP Poly, HPE/Aruba, Ingenico, Lumen, Microsoft, NiCE, RingCentral, Ubiquiti, Verifone, Verizon, Zebra Technologies and Zoom.

We provide products and services from many of our key suppliers in all of our geographic markets;

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We typically purchase products directly from the supplier and our supplier agreements generally do not restrict us from selling similar or competitive products or services.

We have the flexibility to terminate or curtail sales of one product line in favor of another due to technological change, pricing considerations, product availability, customer demand or supplier distribution policies.

Products from two suppliers, Cisco and Zebra, each constituted more than 10% of our net sales for the fiscal year ended June 30, 2024.

We have the flexibility to

Index to Financial Statements

terminate or curtail sales of one product line in favor of another due to technological change, pricing considerations, product availability, channel sales partner demand or supplier distribution policies.

Products from two suppliers, Cisco and Zebra, constituted more than 10%, of our net sales for the fiscal year ended June 30, 2025.

• We have three non-exclusive agreements with Cisco.

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The second agreement covers the distribution of products in Brazil and has a two-year term.

Each of these agreements must be renewed by written agreement.

Each of these agreements must be renewed by written agreement, which is typically entered into prior to expiration.

Either party may terminate these agreements upon 30 days' notice to the other party.

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• We have three non-exclusive agreements with Zebra.

One agreement covers sales of Zebra Enterprise Visibility & Mobility (“EVM”) products in North America and Brazil, while the other two agreements cover sales of Zebra Asset Intelligence & Tracking (“AIT”) products in North America and Brazil.

The Zebra agreements each have a one-year term that automatically renews for additional one-year terms.

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• Price protection provisions, which enables us to take a credit for declines in inventory value resulting from the supplier's price reductions.

Index to Financial Statements

Along with our inventory management policies and practices, these stock rotation rights and price protection provisions are designed to reduce our risk of loss due to slow-moving inventory, supplier price reductions, product updates and obsolescence.

We participate in various rebate, cash discount and cooperative marketing programs offered by our suppliers to support expenses associated with selling and marketing the suppliers' products and services.

We participate in various rebate, cash discount and market development funds offered by our suppliers to support expenses associated with selling and marketing the suppliers' products and services.

These rebates and purchase discounts are largely influenced by sales volumes and are subject to change.

Our suppliers generally warrant their products that we sell and allow returns of defective products, including those returned to us by our customers.

Our suppliers generally warrant their products that we sell and allow returns of defective products, including those returned to us by our channel sales partners.

For certain of our product offerings, we offer a self-branded warranty program.

We purchase contracts from unrelated third parties, generally the original equipment manufacturers, to fulfill our obligations to service or replace defective products claimed on these warranty programs.

To maintain customer relations, we also facilitate returns of defective products from our customers by accepting for exchange, with our prior approval, most defective products within 30 days of invoicing.

To maintain channel sales partner relations, we also facilitate returns of defective products from our channel sales partners by accepting for exchange, with our prior approval, most defective products within 30 days of invoicing.

In addition, local laws may in some cases impose warranty obligations on the Company.

Offerings and Markets

We currently market over 65,000 products from approximately 500 hardware, software and service suppliers to approximately 25,000 customers.

We currently market over 65,000 products from approximately 500 hardware, software and service suppliers to approximately 25,000 channel sales partners.

We sell products and services to the United States and Canada from our facilities located in Mississippi, California and Kentucky;

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See “Risk Factors” for a discussion of the risks related to our foreign operations.

Our offerings to our customers include hardware, software, services and connectivity across premise, hybrid and cloud environments.

We believe that customers want to offer end users complete technology solutions that solve end-user challenges and deliver positive outcomes.

We align our people, processes and tools to help our sales partners grow by providing more hybrid solutions through a better understanding of end-customer needs.

We are able to provide a combination of offerings from multiple suppliers or give our sales partners access to additional services, including configuration, key injection, integration support and others to deliver solutions.

We provide our customers and suppliers with an array of pre-sale business tools and value-added services, including market and technology solution expertise, education and training, product configuration tools, technical support, logistics and channel financial services.

These services allow our customers to gain knowledge and experience on marketing, negotiation and selling, to improve customer service, to profitably grow their business and be more cost effective.

Our business is enhanced by our ability and willingness to provide the extra level of services that keep both our sales partners and suppliers satisfied.

Index to Financial Statements

Our offerings to our channel sales partners include hardware, software, services and connectivity across premise, hybrid and cloud environments.

We believe that channel sales partners want to offer end users complete technology solutions that solve end-user challenges and deliver positive outcomes.

We align our people, processes and tools to help our channel sales partners grow by providing more complex, converging technology solutions through a better understanding of end-user needs.

We are able to provide a combination of offerings from multiple suppliers or give our channel sales partners access to additional services, including configuration, key injection, integration support and others to deliver solutions.

We provide our channel sales partners and suppliers with an array of pre-sale business tools and value-added services, including market and technology solution expertise, education and training, product configuration tools, technical support, logistics and channel financial services.

These services allow our channel sales partners to gain knowledge and experience on marketing, negotiation and selling, to improve customer service, to profitably grow their business and be more cost effective.

Our business is enhanced by our ability and willingness to provide the extra level of services that keep both our channel sales partners and suppliers satisfied.

We offer technology solutions and services that include the following:

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As AIDC technology has become more pervasive, applications have evolved from traditional uses, such as inventory control, materials handling, distribution, shipping and warehouse management, to more advanced applications, such as healthcare.

• Networking:

Our networking products include wireless and networking infrastructure products.

Networking products are integral to our technology solutions, serving as the backbone that connects devices and applications.

Incorporating advanced networking technologies helps to ensure reliable data flow, seamless mobility, and secure communications, enabling our partners to deliver effective, scalable solutions that meet diverse end-user needs.

• Physical Security :

We provide electronic physical security solutions that include identification, access control, video surveillance and intrusion-related products.

Physical security products are used every day across every vertical market to protect lives, property and information.

These technology solutions require specialized knowledge to deploy effectively, and we offer in-depth training and education to our channel sales partners to enable them to maintain the appropriate skill levels.

We provide POS solutions for retail, grocery and hospitality environments to efficiently manage in-store sales and operations.

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These solutions may include self-service checkout, kiosks and products that attach to the POS network in the store, including network access points, routers and digital signage.

• Payment Terminals :

We offer payment terminals, comprehensive key injection services, reseller partner branding, extensive key libraries, ability to provide point-to-point encryption, and redundant key injection facilities.

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In addition, we partner with ISVs to deliver to merchants integrated tablet POS hardware that a merchant may purchase outright or “as a service,” and offer merchant hardware support and next-day replacement of tablets, terminals and peripherals.

Index to Financial Statements

• Physical Security and Networking :

We provide electronic physical security solutions that include identification, access control, video surveillance and intrusion-related products.

Physical security products are used every day across every vertical market to protect lives, property and information.

These technology solutions require specialized knowledge to deploy effectively, and we offer in-depth training and education to our sales partners to enable them to maintain the appropriate skill levels.

Our networking products include wireless and networking infrastructure products.

• Communications and Collaboration :

We offer communications and collaboration solutions, delivered through the cloud, on-premise or via a hybrid approach, such as voice, video, integration of communication platforms and contact center solutions.

• Communications :

We offer communications solutions, delivered through the cloud, on-premise or via a hybrid approach, such as voice, video, integration of communication platforms and contact center solutions.

These offerings combine voice, video and data with computers, telecommunications and the internet to deliver communications solutions on-premise.

Software and hardware products include IP-based telephony platforms, Voice over Internet Protocol systems, private branch exchanges, call center applications, video conferencing, desk phones, headsets and cloud-enabled endpoints.

Cloud-delivered services, such as unified communications, contact center and video conferencing, enable end-customers to consume and pay for communications services, typically on a monthly subscription basis.

Cloud-delivered services, such as unified communications, contact center and video conferencing, enable end users to consume and pay for communications services, typically on a monthly subscription basis.

Index to Financial Statements

• Connectivity and Cloud Services:

We offer business communications services, including voice, data, access, cable collaboration, wireless and cloud.

We focus on empowering and educating sales partners so they can advise end-customers in making informed choices about services, technology and cost savings.

Through our digital tools and platforms, we offer sales partners another way to grow their recurring revenue practices and take the friction out of acquiring, provisioning and managing SaaS offerings.

We offer business communications services, including voice, data, access, cable collaboration, managed connectivity, wireless enablement solutions and cloud.

We focus on empowering and educating channel sales partners so they can advise end users in making informed choices about services, technology and cost savings.

Through our digital tools and platforms, we offer channel sales partners another way to grow their recurring revenue practices and take the friction out of acquiring, provisioning and managing SaaS offerings.

We have contracts with more than 200 of the world’s leading telecom carriers and cloud services providers.

People and Culture

As a people-first organization, respecting and protecting our people and our partners is among our top priorities.

From ensuring and supporting an inclusive and diverse workforce and partner base;

providing a safe, healthy work environment, and working with suppliers and partners that share the same commitment, we are dedicated to doing what is right for our employees, channel partners and end customers.

Our real competitive advantage is our people, who strive to help our customers and partners grow their businesses.

As a people-first organization, respecting and protecting our people and our channel sales partners is among our top priorities.

From ensuring and supporting an inclusive and diverse workforce and partner base, providing a safe, healthy work environment, and working with suppliers and channel sales partners that share the same commitment, we are dedicated to doing what is right for our employees, channel sales partners and end users.

Our real competitive advantage is our people, who strive to help our channel sales partners grow their businesses.

The foundation of ScanSource has always been based on strong values and a people-first culture and vision.

To meet the needs of a changing work environment, including the rise in popularity of hybrid work models, ScanSource invested in new infrastructure, tools and programs to ensure a “productivity anywhere” outcome.

In 2024, the Company was named one of the Best Places to Work in South Carolina for the eighth consecutive year.

As of June 30, 2024, we have approximately 2,300 employees, of which approximately 1,500 are in the United States and 800 are located internationally in Canada and Brazil and a strong employee remote presence.

In 2025 , the Company was named one of the Best Places to Work in South Carolina for the eleventh consecutive year.

As of June 30, 2025, we have approximately 2,100 employees, of which approximately 1,400 are in the United States and 700 are located internationally in Canada and Brazil.

We have no organized labor or trade unions in the United States.

Professional Development

Professional Development and Employee Engagement

We want to help our employees succeed—both personally and professionally.

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To promote personal and professional growth, we also encourage our employees to pursue ongoing training and career development opportunities, and we provide tuition assistance and reimbursement for certain pre-approved continuing education programs and professional certifications.

We enhanced our learning management system, The Hub, to provide a modernized and engaging user experience for our global employees at all levels.

Our learning management system, The Hub, provides a modernized and engaging user experience for our employees at all levels.

The ScanSource Management Academy is a program custom designed to develop all newly hired and promoted managers of people.

The ScanSource Leadership Institute (“SLI”) is another important program that focuses on identifying and developing the next wave of senior leaders for the Company.

The SLI program brings together twelve hand-selected leaders from our global offices for a two-week program of intensive training and development.

This program promotes individual education and growth and nurtures cross-functional collaboration among colleagues.

Index to Financial Statements

The SLI program brings together twelve hand-selected leaders from across the Company for a two-week program of intensive training and development.

This program promotes individual education and growth and nurtures cross-border and cross-functional collaboration among colleagues.

Employee outreach and engagement remain critical to the continued success and growth of ScanSource.

Inclusion, participation, and appreciation are key components in retaining talent, maintaining our culture, and keeping employees engaged.

In support of that, in 2023, we launched a global digital workplace, The Bridge, as our corporate intranet.

We are excited to enhance global communication, increase employee recognition, and celebrate milestones through this engaging new platform.

We foster opportunities for employee engagement and have multiple avenues for communication, which allows all full-time employees to anonymously give us feedback on our workplace culture, employee programs and more.

We also implement employee engagement surveys globally to gather feedback and build the best environment possible for our employees.

We offer a comprehensive benefits package which includes traditional health insurance, as well as telemedicine alternatives, life insurance, disability insurance and work-life balance resources.

The financial futures of our employees are important to us, which is why we have a 401(k) program with a market-competitive employer match, a performance-based bonus program and employee ownership opportunities for a meaningful portion of our employees through our Employee Stock Purchase Plan, as well as our equity incentive grants.

The financial futures of our employees are important to us, which is why we have a 401(k) program with a market-competitive employer match, a performance-based bonus program and employee ownership opportunities for our employees through our Employee Stock Purchase Plan, as well as our equity incentive grants.

We also partner with Fidelity to provide employees access to knowledge and tools to help manage or plan for student loan debt.

To further expand our financial wellness offerings, we offer workshops and webinars focused on student debt and general debt-counselling services.

Index to Financial Statements

Health and Safety

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That’s why we offer dedicated resources to help foster a healthy work/life balance.

We have implemented a work-from-home policy for all employees across all geographies, except for our distribution centers.

We are pleased with how our employees have adjusted to this new way of doing business and maintained an extremely high level of productivity and performance.

With a largely remote workforce, it is critical that we continue to focus on our employees’ health.

We continue to build our “360you” program, which provides employees with extensive education and training/coaching opportunities, wellness and fitness challenges, and other valuable resources.

Diversity and Inclusion

Inclusion and Belonging

One of our core values is to promote an environment that respects and values the diverse backgrounds, interests and talents of our employees.

ScanSource is committed to a diverse and inclusive workplace with our comprehensive Diversity & Inclusion (D&I) program, led by our Chief Diversity Officer (“CDO”) and an internal D&I Advisory Council.

The Council is an employee-led group focused on sharing insights, ideas, and opinions from our employee base to assist in the implementation of our DEI plan.

To foster an inclusive workplace, our DEI strategic plan focuses on awareness and education, workforce representation, partner diversity and community relations.

Additionally, initiatives including a D&I book and movie club, educational DEI opportunities, and global employee resource groups are allowing interested employees to broaden their knowledge on various topics related to diversity and inclusion.

ScanSource is committed to a diverse and inclusive workplace with our comprehensive Inclusion & Belonging (I&B) program, led by our Vice President, People Development and Inclusion and an internal I&B Work Team.

The Work Team is an employee-led group focused on sharing insights, ideas, and opinions from our employee base to support our goal of fostering a workplace of inclusion and belonging.

Our I&B initiatives focus on awareness and education, employee network groups and community-focused events.

Board Role in People and Culture Management

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We pride ourselves on a culture that respects co-workers and values concern for others.

Our Board provides oversight of the Company's policies and strategies relating to talent including corporate culture, diversity and inclusion and employee development, as well as the Company's compensation principles and practices.

Our Board provides oversight of the Company's policies and strategies relating to talent including corporate culture, inclusion and belonging and employee development, as well as the Company's compensation principles and practices.

Our Board, through the Compensation Committee, evaluates and approves the Company's compensation plans, policies and programs applicable to our senior executives.

Our Board also engages in an active succession planning process.

Employee Engagement

Employee outreach and engagement remain critical to the continued success and growth of ScanSource.

Inclusion, participation, and appreciation are key components in retaining talent, maintaining our culture, and keeping employees engaged.

In support of that, in 2023, we launched a new global digital workplace, The Bridge, as our new corporate intranet.

We are excited to enhance global communication, increase employee recognition, and celebrate milestones through this engaging new platform.

Employee Feedback

We also implement employee engagement surveys globally to gather feedback and build the best environment possible for our employees.

Index to Financial Statements

We believe we are a leader in the specialty technology markets we serve.

The market for technology products and solutions is highly competitive, both in the United States and internationally.

Competitive factors include price, product availability, speed and accuracy of delivery, effectiveness of sales and marketing programs, credit availability, ability to tailor specific solutions to customer needs, quality and breadth of product lines and services and availability of technical and product information.

Competitive factors include price, product availability, speed and accuracy of delivery, effectiveness of sales and marketing programs, credit availability, ability to tailor specific solutions to channel sales partner needs, quality and breadth of product lines and services and availability of technical and product information.

Our competitors include local, regional, national and international distributors, as well as suppliers that sell directly to resellers and to end users.

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In our Specialty Technology Solutions segment, we compete with broad-line distributors, such as Ingram Micro and TD Synnex, in most geographic areas, and more specialized security distributors, such as ADI and Wesco.

We also compete against other smaller, more specialized AIDC and POS distributors, such as BlueStar.

In our Modern Communications & Cloud segment, we compete against broad-line distributors, such as Ingram Micro and TD Synnex, and more specialized distributors, such as Jenne.

Additionally, for Intelisys' technology services, we compete against other smaller, technology services distributors, such as Avant and Telarus.

As we seek to expand our business into other areas closely related to our offerings, we may encounter increased competition from current competitors and/or from new competitors, some of which may be our current customers.

We also compete against other more specialized AIDC and POS distributors, such as BlueStar.

In our Intelisys & Advisory segment, we compete against other technology service distributors including Avant and Telarus.

As we seek to expand our business into other areas closely related to our offerings, we may encounter increased competition from current competitors and/or from new competitors.

Our sales organization consists of inside and field sales representatives located in the United States, Canada and Brazil.

The majority of our sales partners are assigned to a dedicated sales representative or team whose main focus is developing customer relationships and providing our customers with solutions to meet their end-customer’s needs.

Our sales teams are advocates for and trusted advisers to our customers.

Sales teams are responsible for developing technical expertise within broad product markets, recruiting sales partners, creating demand, negotiating pricing and reviewing overall product and service requirements of our customers.

The majority of our channel sales partners are assigned to a dedicated sales representative or team whose main focus is developing relationships and providing our channel sales partners with solutions to meet their end-user’s needs.

Our sales teams are advocates for and trusted advisers to our channel sales partners.

Sales teams are responsible for developing technical expertise within broad product markets, recruiting channel sales partners, creating demand, negotiating pricing and reviewing overall product and service requirements of our channel sales partners.

Our sales representatives receive comprehensive training with respect to the technical characteristics of suppliers’ products, supplemented by frequent product and service seminars conducted by supplier representatives and bi-weekly meetings among product, marketing and sales managers.

Our sales teams also provide customers with online ordering, API, EDI and other information systems, allowing customers to easily gain access to product specifications, availability and customized pricing, as well as the ability to place and follow the status of orders.

Index to Financial Statements

Our sales teams also provide channel sales partners with online ordering, API, EDI and other information systems, allowing channel sales partners to easily gain access to product specifications, availability and customized pricing, as well as the ability to place and follow the status of orders.

We market our technology solutions and services through a range of digital and print channels, including online product catalogs customized for our North American and Brazilian markets;

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e-commerce and email direct marketing, among others.

Our marketing practices are tailored to fit the specific needs of our customers and suppliers - ensuring we help our partners create, deliver and manage solutions for end users across our vertical markets.

Our comprehensive marketing efforts include sales promotions, advertisements, management of sales leads, trade show design and event management, advertorials, content creation, partner events and training and certification courses with leading suppliers in an effort to recruit prospective sales partners.

Our marketing practices are tailored to fit the specific needs of our channel sales partners and suppliers - ensuring we help our channel sales partners create, deliver and manage solutions for end users across our vertical markets.

Information Technology Systems

Our information systems are scalable and capable of supporting numerous operational functions including purchasing, receiving, order processing, shipping, inventory management and accounting.

Our customers and employees rely on our information systems for online, real-time information on pricing, inventory availability and reservation and order status.

Our channel sales partners and employees rely on our information systems for online, real-time information on pricing, inventory availability and reservation and order status.

Our warehouse operations use bar code technology for receiving and shipping and automated systems for freight processing and shipment tracking, each of which is integrated with our multiple information systems.

The customer service and technical support departments employ systems for documentation and faster processing of sales partner inquiries.

The customer service and technical support departments employ systems for documentation and faster processing of channel sales partner inquiries.

To ensure that adequate inventory levels are maintained, our buyers depend on the system’s purchasing and receiving functions to track inventory on a perpetual basis.

Index to Financial Statements

Warehouse and Shipping Strategy

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Our objective is to ship all orders on the same day, using technology to expedite shipments and minimize shipping errors.

We offer reduced freight rates and flexible delivery options to minimize our sales partners’ need for inventory.

We offer reduced freight rates and flexible delivery options to minimize our channel sales partners’ need for inventory.

Financial Services

Our sales terms include trade credit, various third-party financing options, which include leasing, flooring and other secured financing for qualified customers.

Our sales terms include trade credit;

and various third-party financing options, which include leasing, flooring and other secured financing for qualified channel sales partners.

These sales terms allow us to compete within our specific geographic areas to facilitate our growth plans.

We believe these options reduce the customer’s need to establish multiple credit relationships.

We believe these options reduce the channel sales partner’s need to establish multiple credit relationships.

Trade and Service Marks

We conduct our business under the trade names “ScanSource POS and Barcode,” “ScanSource Catalyst,” “ScanSource Communications,” “ScanSource Services,” “ScanSource Networking and Security,” “ScanSource KBZ,” “ScanSource Brasil,” “Network1, a ScanSource company,” “Intelisys,” “POS Portal,” “RPM Software, a ScanSource company” a nd “intY, a ScanSource company.”

We conduct our business under the trade names “ScanSource POS and Barcode,” “ScanSource Catalyst,” “ScanSource Communications,” “ScanSource Services,” “ScanSource Networking and Security,” “ScanSource Brasil,” “Network1, a ScanSource company,” “Intelisys,” “POS Portal,” “RPM Software, a ScanSource company,” “Advantix,” “Resourcive,” “Channel Exchange,” and "SCSC Cascade."

Certain of our tradenames, trademarks and service marks are registered, or are in the process of being registered, in the United States or various other countries.

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We do not believe that our operations are dependent upon any of our marks.

We also sell products and provide services under various third-party tradenames, trademarks and service marks, some of which we reference in this report, and these tradenames, trademarks and service marks are the property of their respective owners.

We also sell products and provide services under various third-party

Index to Financial Statements

tradenames, trademarks and service marks, some of which we reference in this report, and these tradenames, trademarks and service marks are the property of their respective owners.

Additional Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business