What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2026-02-05 · 147 added, 134 removed, 627 unchanged (31% of the section changed)

4 unchanged sentences

(In thousands, except share information)

December 31, 2025 June 30, 2025

March 31, 2026 June 30, 2025

Current assets:

Cash and cash equivalents $ 120,295 $ 126,157

Accounts receivable, less allowance of $ 31,534 at December 31, 2025

Accounts receivable, less allowance of $ 28,931 at March 31, 2026

and $ 27,821 at June 30, 2025

27 unchanged sentences

Common stock, no par value;

45,000,000 shares authorized, 21,645,381 and 22,217,421 shares issued and outstanding at December 31, 2025 and June 30, 2025, respectively

45,000,000 shares authorized, 20,781,041 and 22,217,421 shares issued and outstanding at March 31, 2026 and June 30, 2025, respectively

Retained earnings 1,014,902 1,020,833

8 unchanged sentences

(In thousands, except per share data)

Quarter ended Six months ended

December 31, December 31,

Quarter ended Nine months ended

March 31, March 31,

2026 2025 2026 2025

10 unchanged sentences

Interest income ( 2,451 ) ( 2,841 ) ( 8,994 ) ( 8,193 )

Other (income) expense, net ( 136 ) ( 543 ) 37 ( 5,325 )

Other expense (income), net 216 ( 882 ) 253 ( 6,206 )

Income before income taxes 24,052 24,226 70,469 66,898

11 unchanged sentences

(In thousands)

Quarter ended Six months ended

December 31, December 31,

Quarter ended Nine months ended

March 31, March 31,

2026 2025 2026 2025

Net income $ 16,885 $ 17,431 $ 53,255 $ 51,458

Unrealized (loss) gain on hedged transaction, net of tax ( 161 ) 266 ( 390 ) ( 784 )

Unrealized loss on hedged transaction, net of tax ( 4 ) ( 462 ) ( 395 ) ( 1,245 )

Foreign currency translation adjustment 7,777 10,081 6,178 ( 4,555 )

24 unchanged sentences

Balance at December 31, 2025 21,645,381 $ — $ 1,027,300 $ ( 116,414 ) $ 910,886

Net income — $ — $ 16,885 $ — $ 16,885

Unrealized loss on hedged transaction, net of tax — — — ( 4 ) ( 4 )

Foreign currency translation adjustment — — — 7,777 7,777

Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes 13,144 ( 218 ) — — ( 218 )

Common stock repurchased, including excise tax ( 877,484 ) ( 3,740 ) ( 29,283 ) — ( 33,023 )

Share-based compensation — 3,958 — — 3,958

Balance at March 31, 2026 20,781,041 $ — $ 1,014,902 $ ( 108,641 ) $ 906,261

See accompanying notes to these condensed consolidated financial statements.

22 unchanged sentences

Balance at December 31, 2024 23,612,543 $ — $ 1,031,934 $ ( 131,272 ) $ 900,662

Net income — $ — $ 17,431 $ — $ 17,431

Unrealized loss on hedged transaction, net of tax — — — ( 462 ) ( 462 )

Foreign currency translation adjustment — — — 10,081 10,081

Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes 1,063 — — — —

Common stock repurchased, including excise tax ( 719,193 ) ( 2,899 ) ( 25,966 ) — ( 28,865 )

Share-based compensation — 2,899 — — 2,899

Balance at March 31, 2025 22,894,413 $ — $ 1,023,399 $ ( 121,653 ) $ 901,746

See accompanying notes to these condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

Six months ended

Nine months ended

Cash flows from operating activities:

54 unchanged sentences

GAAP for annual financial statements.

The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring and non-recurring adjustments) that are, in the opinion of management, necessary to present fairly the financial position at December 31, 2025 and June 30, 2025, the results of operations for the quarters and six months ended December 31, 2025 and 2024, the condensed consolidated statements of comprehensive income for the quarters and six months ended December 31, 2025 and 2024, the condensed consolidated statements of shareholders' equity for the quarters and six months ended December 31, 2025 and 2024 and the condensed consolidated statements of cash flows for the six months ended December 31, 2025 and 2024.

The results of operations for the quarters and six months ended December 31, 2025 are not necessarily indicative of the results to be expected for a full year.

The unaudited condensed consolidated financial statements included herein contain all adjustments (consisting of normal recurring and non-recurring adjustments) that are, in the opinion of management, necessary to present fairly the financial position at March 31, 2026 and June 30, 2025, the results of operations for the quarters and nine months ended March 31, 2026 and 2025, the condensed consolidated statements of comprehensive income for the quarters and nine months ended March 31, 2026 and 2025, the condensed consolidated statements of shareholders' equity for the quarters and nine months ended March 31, 2026 and 2025 and the condensed consolidated statements of cash flows for the nine months ended March 31, 2026 and 2025.

The results of operations for the quarters and nine months ended March 31, 2026 are not necessarily indicative of the results to be expected for a full year.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

Summary of Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies for the six months ended December 31, 2025 from the policies described in the notes to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

There have been no material changes to the Company’s significant accounting policies for the nine months ended March 31, 2026 from the policies described in the notes to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

For a discussion of the Company’s significant accounting policies, please see the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

3 unchanged sentences

Due to the terms of the agreements governing these accounts, the Company generally does not have the right to offset outstanding checks written from these accounts against cash on hand, and the respective institutions are not legally obligated to honor the checks until sufficient funds are transferred to fund the checks.

As a result, checks released but not yet cleared from these accounts were approximately $ 0.2 million and $ 0.1 million and are included in accounts payable on the condensed consolidated balance sheets at December 31, 2025 and June 30, 2025, respectively.

Long-lived Assets

The Company presents depreciation expense and intangible amortization expense on the condensed consolidated income statements.

The Company's depreciation expense related to selling, general and administrative costs totaled $ 1.4 million and $ 3.0 million for the quarter and six months ended December 31, 2025, respectively, and $ 2.9 million and $ 5.8 million for the quarter and six months ended December 31, 2024, respectively.

Depreciation expense reported as part of cost of goods sold on the condensed consolidated income statements totaled $ 0.2 million and $ 0.4 million for the quarter and six months ended December 31, 2025, respectively, and $ 0.2 million and $ 0.5 million for the quarter and six months ended December 31, 2024, respectively.

The Company's depreciation expense related to selling, general and administrative costs totaled $ 1.5 million and $ 4.5 million for the quarter and nine months ended March 31, 2026, respectively, and $ 2.3 million and $ 8.1 million for the quarter and nine months ended March 31, 2025, respectively.

Depreciation expense reported as part of cost of goods sold on the condensed consolidated income statements totaled $ 0.2 million and $ 0.7 million for the quarter and nine months ended March 31, 2026 and March 31, 2025.

The Company's intangible amortization expense reported on the condensed consolidated income statements relates to selling, general and administrative costs, not the cost of selling goods.

Intangible amortization expense totaled $ 4.3 million and $ 8.7 million for the quarter and six months ended December 31, 2025, respectively, and $ 5.0 million and $ 9.4 million for the quarter and six months ended December 31, 2024, respectively.

Intangible amortization expense totaled $ 4.0 million and $ 12.7 million for the quarter and nine months ended March 31, 2026, respectively, and $ 4.9 million and $ 14.3 million for the quarter and nine months ended March 31, 2025, respectively.

Recent Accounting Pronouncements

22 unchanged sentences

Estimates of expected credit losses on trade receivables over the contractual life are recorded at inception and adjusted over the contractual life.

The changes in the allowance for doubtful accounts for the six months ended December 31, 2025 are set forth in the table below.

The changes in the allowance for doubtful accounts for the nine months ended March 31, 2026 are set forth in the table below.

June 30, 2025 Amounts Charged to Expense Write-offs Other (1)

December 31, 2025

March 31, 2026

(in thousands)

Trade accounts and current notes receivable allowance $ 27,821 $ 5,376 $ ( 3,887 ) $ ( 379 ) $ 28,931

(1) "Other" amounts include recoveries and the effect of foreign currency fluctuations for the six months ended December 31, 2025.

(1) "Other" amounts include recoveries and the effect of foreign currency fluctuations for the nine months ended March 31, 2026.

(3) Revenue Recognition

32 unchanged sentences

The following tables represent the Company's disaggregation of revenue:

Quarter ended December 31, 2025

Quarter ended March 31, 2026

Specialty Technology Solutions Intelisys & Advisory Total

5 unchanged sentences

$ 740,765 $ 26,025 $ 766,790

Six months ended December 31, 2025

Nine months ended March 31, 2026

Specialty Technology Solutions Intelisys & Advisory Total

5 unchanged sentences

$ 2,197,752 $ 75,201 $ 2,272,953

(a) Recurring revenue represents revenue primarily from agency commissions, managed connectivity, SaaS, subscriptions, and hardware rentals.

Quarter ended December 31, 2024

Quarter ended March 31, 2025

Specialty Technology Solutions Intelisys & Advisory Total

5 unchanged sentences

$ 678,433 $ 26,414 $ 704,847

Six months ended December 31, 2024

Nine months ended March 31, 2025

Specialty Technology Solutions Intelisys & Advisory Total

9 unchanged sentences

Diluted earnings per share are computed by dividing net income by the weighted-average number of common and potential common shares outstanding.

Quarter ended Six months ended

December 31, December 31,

Quarter ended Nine months ended

March 31, March 31,

2026 2025 2026 2025

6 unchanged sentences

Net income per common share, diluted $ 0.78 $ 0.74 $ 2.42 $ 2.13

For the quarter and six months ended December 31, 2025, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 320,233 and 435,768 , respectively.

For the quarter and six months ended December 31, 2024, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 197,803 and 210,206 , respectively.

For the quarter and nine months ended March 31, 2026, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 315,898 and 358,406 , respectively.

For the quarter and nine months ended March 31, 2025, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would be anti-dilutive were 241,641 and 245,303 , respectively.

(5) Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of tax are as follows:

December 31, 2025 June 30, 2025

March 31, 2026 June 30, 2025

(in thousands)

2 unchanged sentences

Accumulated other comprehensive loss $ ( 108,641 ) $ ( 114,424 )

The tax effect of amounts in comprehensive loss reflect a tax (benefit) expense as follows:

Quarter ended December 31, Six months ended December 31,

The tax effect of amounts in comprehensive loss reflect a tax benefit as follows:

Quarter ended March 31, Nine months ended March 31,

2026 2025 2026 2025

(in thousands)

Tax (benefit) expense $ ( 89 ) $ 157 $ ( 134 ) $ ( 206 )

Tax benefit $ ( 91 ) $ ( 146 ) $ ( 225 ) $ ( 352 )

(6) Goodwill and Other Identifiable Intangible Assets

The changes in the carrying amount of goodwill for the six months ended December 31, 2025, by reporting segment, are set forth in the table below.

The changes in the carrying amount of goodwill for the nine months ended March 31, 2026, by reporting segment, are set forth in the table below.

Specialty Technology Solutions Intelisys & Advisory Total

3 unchanged sentences

Foreign currency translation adjustment 556 ( 6 ) 550

Balance at December 31, 2025 $ 173,143 $ 71,035 $ 244,178

The following table shows changes in the amount recognized for net identifiable intangible assets for the six months ended December 31, 2025.

Balance at March 31, 2026 $ 173,893 $ 71,035 $ 244,928

The following table shows changes in the amount recognized for net identifiable intangible assets for the nine months ended March 31, 2026.

Net Identifiable Intangible Assets

4 unchanged sentences

Foreign currency translation adjustment 3

Balance at December 31, 2025 $ 72,423

Additions to goodwill and intangible assets are due to the recent DataXoom acquisition.

Balance at March 31, 2026 $ 68,422

Additions to goodwill and intangible assets are due to the acquisition of DataXoom Corp.

(“DataXoom”) in October 2025.

Intangible assets include trade name, developed technology and customer relationships.

(7) Short-Term Borrowings and Long-Term Debt

The following table presents the Company’s debt at December 31, 2025 and June 30, 2025.

December 31, 2025 June 30, 2025

The following table presents the Company’s debt at March 31, 2026 and June 30, 2025.

March 31, 2026 June 30, 2025

(in thousands)

13 unchanged sentences

dollars, other than swingline loans, bear interest at a rate per annum equal to, at the Company’s option, (i) the Term Secured Overnight Financing Rate ("SOFR") or daily simple SOFR plus an additional margin ranging from 1.00 % to 1.75 % depending upon the Company’s ratio of (A) total consolidated debt less its unrestricted domestic cash to (B) trailing four-quarter consolidated EBITDA measured as of the end of the most recent year or quarter, as applicable, for which financial statements have been delivered to the Lenders (the “leverage ratio”);

or (ii) the base rate plus an additional margin

ranging from 0 % to 0.75 %, depending upon the Company’s leverage ratio.

or (ii) the base rate plus an additional margin ranging from 0 % to 0.75 %, depending upon the Company’s leverage ratio.

All swingline loans denominated in U.S.

3 unchanged sentences

The commitment fee ranges from 0.15 % to 0.30 %, depending on the Company’s leverage ratio.

In connection with entering into the New Credit Agreement, on December 18, 2025, the Company terminated and repaid all indebtedness and other obligations outstanding under its Third Amended and Restated Credit Agreement (the “Prior Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto, which provided for (i) a five-year , $ 350 million multicurrency senior secured revolving credit facility and (ii) a five-year $ 150 million senior secured term loan facility.

During the quarter and six months ended December 31, 2025, all of the Company's borrowings under New Credit Agreement and Prior Credit Agreement were U.S.

(i) a five-year , $ 350 million multicurrency senior secured revolving credit facility and (ii) a five-year $ 150 million senior secured term loan facility.

During the quarter and nine months ended March 31, 2026, all of the Company's borrowings under New Credit Agreement and Prior Credit Agreement were U.S.

dollar loans.

The spread in effect as of December 31, 2025 was 1.00 % for SOFR-based loans and 0.00 % for alternate base rate loans.

The commitment fee rate in effect at December 31, 2025 was 0.15 %.

The effective interest rates for the term loan were 4.72 % and 5.43 % as of December 31, 2025 and June 30, 2025, respectively.

The spread in effect as of March 31, 2026 was 1.00 % for SOFR-based loans and 0.00 % for alternate base rate loans.

The commitment fee rate in effect at March 31, 2026 was 0.15 %.

The effective interest rates for the term loan were 4.67 % and 5.43 % as of March 31, 2026 and June 30, 2025, respectively.

The New Credit Agreement includes customary representations, warranties and affirmative and negative covenants, including financial covenants.

2 unchanged sentences

In the event of a default, customary remedies are available to the lenders, including acceleration and increased interest rates.

The Company was in compliance with all covenants under the New Credit Agreement at December 31, 2025.

The average daily outstanding balance on the revolving credit facility, excluding the term loan facility, was $ 1.7 million an d $ 0.3 million during the six month periods ended December 31, 2025 and 2024, respectively.

There was $ 400.0 million and $ 350.0 million available for additional borrowings as of December 31, 2025 and June 30, 2025, respectively.

The effective interest rates for the revolving line of credit were 4.76 % and 5.46 % as of December 31, 2025 and June 30, 2025, respectively.

There were no letters of credit issued under the multi-currency revolving credit facility as of December 31, 2025 and June 30, 2025.

The Company was in compliance with all covenants under the New Credit Agreement at March 31, 2026.

The average daily outstanding balance on the revolving credit facility, excluding the term loan facility, was $ 1.2 million an d $ 0.3 million during the nine month periods ended March 31, 2026 and 2025, respectively.

There was $ 400.0 million and $ 350.0 million available for additional borrowings as of March 31, 2026 and June 30, 2025, respectively.

The effective interest rates for the revolving line of credit were 4.65 % and 5.46 % as of March 31, 2026 and June 30, 2025, respectively.

There were no letters of credit issued under the multi-currency revolving credit facility as of March 31, 2026 and June 30, 2025.

Mississippi Revenue Bond

3 unchanged sentences

The agreement also provides the bondholder with a put option, exercisable only within 180 days of each fifth anniversary of the agreement, requiring the Company to pay back the bonds at 100 % of the principal amount outstanding.

At December 31, 2025, the Company was in compliance with all covenants under this bond.

The interest rates at December 31, 2025 and June 30, 2025 wer e 4.82 % and 5.28 %, respectively.

At March 31, 2026, the Company was in compliance with all covenants under this bond.

The interest rates at March 31, 2026 and June 30, 2025 wer e 4.62 % and 5.28 %, respectively.

Debt Issuance Costs

At December 31, 2025, net debt issuance costs associated with the credit facilities, term loan and bond totaled $ 1.8 million and are being amortized on a straight-line basis through the maturity date of each respective debt instrument.

At March 31, 2026, net debt issuance costs associated with the credit facilities, term loan and bond totaled $ 1.7 million and are being amortized on a straight-line basis through the maturity date of each respective debt instrument.

(8) Derivatives and Hedging Activities

5 unchanged sentences

Foreign Currency Derivatives – The Company conducts a portion of its business internationally in a variety of foreign currencies and is exposed to market risk for changes in foreign currency exchange rates.

The Company attempts to hedge transaction exposures with natural offsets to the fullest extent possible and once these opportunities have been exhausted the

Company uses currency options and forward contracts or other hedging instruments with third parties.

The Company attempts to hedge transaction exposures with natural offsets to the fullest extent possible and once these opportunities have been exhausted the Company uses currency options and forward contracts or other hedging instruments with third parties.

These contracts will periodically hedge the exchange of various currencies, including the U.S.

dollar, Brazilian real, euro, British pound and Canadian dollar.

The Company had contracts outstanding for purposes of managing cash flows with notional amounts of $ 32.2 million and $ 26.2 million for the exchange of foreign currencies at December 31, 2025 and June 30, 2025, respectively.

The Company had contracts outstanding for purposes of managing cash flows with notional amounts of $ 19.3 million and $ 26.2 million for the exchange of foreign currencies at March 31, 2026 and June 30, 2025, respectively.

To date, the Company has chosen not to designate these derivatives as hedging instruments, and accordingly, these instruments are adjusted to fair value through earnings in other income and expense.

Summarized financial information related to these derivative contracts and changes in the underlying value of the foreign currency exposures included in the Condensed Consolidated Income Statements for the quarters and six months ended December 31, 2025 and 2024 are as follows:

Quarter ended Six months ended

December 31, December 31,

Summarized financial information related to these derivative contracts and changes in the underlying value of the foreign currency exposures included in the Condensed Consolidated Income Statements for the quarters and nine months ended March 31, 2026 and 2025 are as follows:

Quarter ended Nine months ended

March 31, March 31,

2026 2025 2026 2025

(in thousands)

Net foreign exchange derivative contract (gains) losses $ ( 215 ) $ ( 2,418 ) $ 439 $ ( 1,477 )

Net foreign currency transactional and re-measurement losses 873 2,166 567 1,560

Net foreign currency exchange losses (gains) $ 658 $ ( 252 ) $ 1,006 $ 83

Net foreign exchange derivative contract losses (gains) $ 1,751 $ 1,446 $ 2,190 $ ( 31 )

Net foreign currency transactional and re-measurement (gains) losses ( 1,352 ) ( 1,316 ) ( 785 ) 243

Net foreign currency exchange losses $ 399 $ 130 $ 1,405 $ 212

Net foreign currency exchange gains and losses consist of foreign currency transactional and functional currency re-measurements, offset by net foreign currency exchange contract gains and losses and are included in other income and expense.

3 unchanged sentences

To manage this exposure, the Company entered into separate interest rate swap agreements with a swap counterparty.

These swaps include a notional amount of $ 50.0 million maturing on April 30, 2026, and a notional amount of $ 25.0 million maturing on March 31, 2028.

These swaps include a notional amount of $ 50.0 million that matured on April 30, 2026, and a notional amount of $ 25.0 million maturing on March 31, 2028.

The agreements are intended to mitigate interest risk by effectively converting a portion of the Company's borrowings from floating-rate to fixed-rate.

2 unchanged sentences

To the extent the swaps are effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swaps are not included in current earnings, but are reported as other comprehensive income (loss).

There was no ineffective portion to be recorded as an adjustment to earnings for the quarters ended December 31, 2025 and 2024.

The components of the cash flow hedge included in the Condensed Consolidated Statement of Comprehensive Income for the quarters and six months ended December 31, 2025 and 2024, are as follows:

Quarter ended Six months ended

December 31, December 31,

There was no ineffective portion to be recorded as an adjustment to earnings for the quarters ended March 31, 2026 and 2025.

The components of the cash flow hedge included in the Condensed Consolidated Statement of Comprehensive Income for the quarters and nine months ended March 31, 2026 and 2025, are as follows:

Quarter ended Nine months ended

March 31, March 31,

2026 2025 2026 2025

2 unchanged sentences

Unrealized gain (loss) in fair value of interest rate swap 189 ( 298 ) 248 ( 438 )

Net (decrease) increase in accumulated other comprehensive income ( 214 ) 354 ( 521 ) ( 1,039 )

Income tax effect ( 53 ) 87 ( 131 ) ( 256 )

Net (decrease) increase in accumulated other comprehensive income, net of tax $ ( 161 ) $ 267 $ ( 390 ) $ ( 783 )

The Company used the following derivative instruments at December 31, 2025 and June 30, 2025, reflected in its Condensed Consolidated Balance Sheets, for the risk management purposes detailed above:

December 31, 2025 June 30, 2025

Net decrease in accumulated other comprehensive income ( 5 ) ( 613 ) ( 527 ) ( 1,652 )

Income tax benefit ( 1 ) ( 151 ) ( 132 ) ( 407 )

Net decrease in accumulated other comprehensive income, net of tax $ ( 4 ) $ ( 462 ) $ ( 395 ) $ ( 1,245 )

The Company used the following derivative instruments at March 31, 2026 and June 30, 2025, reflected in its Condensed Consolidated Balance Sheets, for the risk management purposes detailed above:

March 31, 2026 June 30, 2025

Balance Sheet Location Fair Value of

15 unchanged sentences

• Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The assets and liabilities maintained by the Company that are required to be measured at fair value on a recurring basis include deferred compensation plan investments, forward foreign currency exchange contracts, foreign currency hedge agreements, interest rate swap agreements and contingent consideration owed to the sellers of Advantix Solutions Group, Inc ("Advantix"), Secure Path Networks, LLC dba Resourcive ("Resourcive") and DataXoom Corp.

("DataXoom").

The carrying value of debt is considered to approximate fair value, as the Company’s debt instruments are indexed to a variable rate using the market approach (Level 2).

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at December 31, 2025:

The following table summarizes the valuation of the Company’s remaining assets and liabilities measured at fair value on a recurring basis at March 31, 2026:

(Level 1) Significant

2 unchanged sentences

Deferred compensation plan investments, current and non-current $ 33,981 $ 33,981 $ — $ —

Forward foreign currency exchange contracts 13 — 13 —

Interest rate swap agreement 153 — 153 —

24 unchanged sentences

These liabilities represent the amounts payable to sellers, as outlined under the terms of the individual purchase agreements, based upon the achievement of projected earnings before interest expense, taxes, depreciation and amortization, net of specific pro forma adjustments.

The following tables summarizes the fair value of the Company's contingent consideration liabilities at December 31, 2025 and December 31, 2024:

Contingent consideration for the quarter ended Contingent consideration for the six months ended

December 31, 2025

The following tables summarize the fair value of the Company's contingent consideration liabilities at March 31, 2026 and March 31, 2025:

Contingent consideration for the quarter ended Contingent consideration for the nine months ended

March 31, 2026

Specialty Technology Solutions Intelisys & Advisory Total Specialty Technology Solutions Intelisys & Advisory Total

5 unchanged sentences

Fair value at end of period $ 16,320 $ 12,720 $ 29,040 $ 16,320 $ 12,720 $ 29,040

Contingent consideration for the quarter ended Contingent consideration for the six months ended

December 31, 2024 December 31, 2024

Contingent consideration for the quarter ended Contingent consideration for the nine months ended

March 31, 2025 March 31, 2025

Specialty Technology Solutions Intelisys & Advisory Total Specialty Technology Solutions Intelisys & Advisory Total

8 unchanged sentences

• estimated future results, net of pro forma adjustments set forth in the purchase agreements;

• the probability of achieving these results;

• a risk premium reflective of the Company’s creditworthiness and market risk premium associated with the United States markets.

1 unchanged sentence

The fair value of the contingent consideration related to Advantix is determined using a static discounted cash flow model.

The liability recognized at December 31, 2025 was $ 6.4 million, of which $ 1.8 million is classified as current.

The change in fair value for the quarter and six months ended December 31, 2025 is primarily due to the recurring amortization of the unrecognized fair value discount and an increase in forecasts.

The liability recognized at March 31, 2026 was $ 6.4 million, of which $ 1.7 million is classified as current.

The change in fair value for the quarter and nine months ended March 31, 2026 and March 31, 2025 is primarily due to the recurring amortization of the unrecognized fair value discount.

The first earnout payment totaling $ 1.4 million was paid to the sellers of Advantix during the quarter ended September 30, 2025.

1 unchanged sentence

The fair value of the contingent consideration related to DataXoom is determined using the Monte Carlo method.

The liability recognized at December 31, 2025 was $ 9.4 million, of which $ 1.9 million is classified as current.

The change in fair value for the quarter ended December 31, 2025 is primarily due to the recurring amortization of the unrecognized fair value discount.

Earnout payments to the sellers of DataXoom are payable based on results from fiscal years 2026 through 2028.

The liability recognized at March 31, 2026 was $ 9.9 million, of which $ 2.0 million is classified as current.

The change in fair value for the quarter and nine months ended March 31, 2026 is primarily due to the recurring amortization of the unrecognized fair value discount, partially offset by a change in forecasted results.

Earnout payments to the sellers of DataXoom are payable based on results from fiscal year 2026 and fiscal year 2028.

Intelisys & Advisory

The fair value of the contingent consideration related to Resourcive is determined using the Monte Carlo method.

The liability recognized at December 31, 2025 was $ 12.7 million, all of which is classified as current and is due to the sellers of Resourcive during fiscal year 2027.

The change in fair value for the quarter and six months ended December 31, 2025 is primarily due to the recurring amortization of the unrecognized fair value discount.

Significant observable inputs used in recurring Level 3 fair value measurements for the Company's contingent consideration liabilities by segment related to acquisitions at December 31, 2025 and December 31, 2024 were as follows.

The liability recognized at March 31, 2026 was $ 12.7 million, all of which is classified as current and is due to the sellers of Resourcive during fiscal year 2027.

The change in fair value for the quarter and nine months ended March 31, 2026 and March 31, 2025 is primarily due to the recurring amortization of the unrecognized fair value discount.

Significant observable inputs Significant observable inputs

December 31, 2025 December 31, 2024

March 31, 2026 March 31, 2025

Acquisition Specialty Technology Solutions Intelisys & Advisory Specialty Technology Solutions Intelisys & Advisory

35 unchanged sentences

By offering flexible routes to market and a robust solutions portfolio, this segment helps advisors service a wide range of end users including businesses of all sizes.

Selected financial information about the Company's segments for the quarters and six months ended December 31, 2025 and 2024 are presented below:

Selected financial information about the Company's segments for the quarters and nine months ended March 31, 2026 and 2025 are presented below:

Specialty Technology Solutions Intelisys & Advisory Corporate (a)

Quarter ended December 31, 2025:

Quarter ended March 31, 2026:

Net sales $ 740,765 $ 26,025 $ — $ 766,790

10 unchanged sentences

Capital expenditures $ ( 2,217 ) $ ( 182 ) $ — $ ( 2,399 )

Quarter ended December 31, 2024:

Quarter ended March 31, 2025:

Net sales $ 678,433 $ 26,414 $ — $ 704,847

10 unchanged sentences

Capital expenditures $ ( 1,329 ) $ ( 91 ) $ — $ ( 1,420 )

(a) For the quarter ended December 31, 2025, the amount in Other operating expenses unallocated to the segments include acquisition costs, cyberattack restoration costs.

For the quarter ended December 31, 2024, the amount in Other operating expenses unallocated to the segments includes acquisition costs, cyberattack restoration costs, restructuring costs, and a legal settlement.

(a) For the quarters ended March 31, 2026 and 2025, the amount in Other operating expenses unallocated to the segments include acquisition costs and cyberattack restoration costs.

(b) Primarily includes payroll and other employee expenses and other selling and general administrative expenses

2 unchanged sentences

Specialty Technology Solutions Intelisys & Advisory Corporate (a)

Six months ended December 31, 2025:

Nine months ended March 31, 2026:

Net sales $ 2,197,752 $ 75,201 $ — $ 2,272,953

10 unchanged sentences

Capital expenditures $ ( 6,155 ) $ ( 614 ) $ — $ ( 6,769 )

Six months ended December 31, 2024:

Nine months ended March 31, 2025:

Net sales $ 2,154,009 $ 73,915 $ — $ 2,227,924

10 unchanged sentences

Capital expenditures $ ( 5,423 ) $ ( 346 ) $ — $ ( 5,769 )

(a) For the six months ended December 31, 2025, the amounts in Other operating expenses shown above include acquisition costs and cyberattack restoration costs.

For the six months ended December 31, 2024, the amounts in Other operating expenses above include acquisition costs, cyberattack restoration costs, restructuring costs, and a legal settlement.

(a) For the nine months ended March 31, 2026, the amounts in Other operating expenses shown above include acquisition costs and cyberattack restoration costs.

For the nine months ended March 31, 2025, the amounts in Other operating expenses above include acquisition costs, cyberattack restoration costs, restructuring costs, and a legal settlement.

(b) Primarily includes payroll and other employee expenses and other selling and general administrative expenses.

1 unchanged sentence

(d) Change in fair value of contingent consideration is included within Other operating expenses.

Quarter ended Six months ended

December 31, December 31,

Quarter ended Nine months ended

March 31, March 31,

2026 2025 2026 2025

6 unchanged sentences

$ 766,790 $ 704,847 $ 2,272,953 $ 2,227,924

(a) Countries outside of the United States and Brazil represent less than 5.0% of net sales for the quarters ended December 31, 2025 and 2024.

December 31, 2025 June 30, 2025

(a) Countries outside of the United States and Brazil represent less than 5.0% of net sales for the quarters and nine months ended March 31, 2026 and 2025.

March 31, 2026 June 30, 2025

(in thousands)

13 unchanged sentences

Finance leases are recorded as property and equipment, net, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets.

The gross amount of the balances recorded related to finance leases is immaterial to the condensed consolidated financial statements at December 31, 2025 and the consolidated financial statements at June 30, 2025.

The gross amount of the balances recorded related to finance leases is immaterial to the condensed consolidated financial statements at March 31, 2026 and the consolidated financial statements at June 30, 2025.

Operating lease right-of-use assets and lease liabilities are recognized at the commencement date based on the net present value of future minimum lease payments over the lease term.

5 unchanged sentences

Further, the Company has elected the practical expedient under ASC 842 to recognize all lease and non-lease components as a single lease component, where applicable.

The following table presents amounts recorded on the Condensed Consolidated Balance Sheets related to operating leases at December 31, 2025 and June 30, 2025:

December 31, 2025 June 30, 2025

The following table presents amounts recorded on the Condensed Consolidated Balance Sheets related to operating leases at March 31, 2026 and June 30, 2025:

March 31, 2026 June 30, 2025

Operating leases Balance Sheet location (in thousands)

2 unchanged sentences

Long-term operating lease liabilities Other long-term liabilities $ 6,019 $ 6,972

The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Condensed Consolidated Income Statements during the quarters ended December 31, 2025 and 2024.

Operating lease costs contain immaterial amounts of short-term lease costs for leases with an initial term of 12 months or less.

Quarter ended December 31, Six months ended December 31,

Quarter ended March 31, Nine months ended March 31,

2026 2025 2026 2025

3 unchanged sentences

$ 1,697 $ 1,511 $ 4,952 $ 4,401

Supplemental cash flow information related to the Company's operating leases for the six months ended December 31, 2025 and 2024 are presented in the table below:

Six months ended December 31,

Supplemental cash flow information related to the Company's operating leases for the nine months ended March 31, 2026 and 2025 are presented in the table below:

Nine months ended March 31,

(in thousands)

1 unchanged sentence

Right-of-use assets obtained in exchange for lease obligations 1,637 5,035

The weighted-average remaining lease term and discount rate at December 31, 2025 are presented in the table below:

December 31, 2025

The weighted-average remaining lease term and discount rate at March 31, 2026 are presented in the table below:

March 31, 2026

Weighted-average remaining lease term 2.71 years

Weighted-average discount rate 6.54 %

The following table presents the maturities of the Company's operating lease liabilities at December 31, 2025:

The following table presents the maturities of the Company's operating lease liabilities at March 31, 2026:

Operating leases

(in thousands)

Thereafter 82

Total future payments 11,762

6 unchanged sentences

The Company recorded indemnification receivables that are reported gross of the pre-acquisition contingency liabilities as the funds were escrowed as part of the acquisition.

There were no deposits into the escrow account;

however, $ 0.4 million was released from the escrow account during the quarter ended December 31, 2025.

There were no deposits or releases from the escrow account during the quarter ended March 31, 2026.

During the fiscal year ended June 30, 2025, there were no deposits into the escrow account;

however, $ 0.2 million was released from the escrow account.

The amount available after the impact of foreign currency translation, as of December 31, 2025 and June 30, 2025, for future pre-acquisition contingency settlements or to be released to the sellers was $ 3.2 million and $ 3.4 million, respectively.

The Company has recorded pre-acquisition contingencies and corresponding indemnification receivables related to Network1 of $ 3.6 million and $ 3.7 million at December 31, 2025 and June 30, 2025 , respectively.

The amount available after the impact of foreign currency translation, as of March 31, 2026 and June 30, 2025, for future pre-acquisition contingency settlements or to be released to the sellers was $ 3.5 million and $ 3.4 million, respectively.

The Company has recorded pre-acquisition contingencies and corresponding indemnification receivables related to Network1 of $ 3.8 million and $ 3.7 million at March 31, 2026 and June 30, 2025 , respectively.

These balances are presented as other non-current liabilities and other non-current assets in the Consolidated Balance Sheets.

The amount of reasonably possible undiscounted pre-acquisition contingencies as of December 31, 2025 is estimated to range from $ 3.6 million to $ 14.8 million at this time, of which all exposures are indemnifiable under the share purchase agreement.

The amount of reasonably possible undiscounted pre-acquisition contingencies as of March 31, 2026 is estimated to range from $ 3.8 million to $ 15.6 million at this time, of which all exposures are indemnifiable under the share purchase agreement.

(13) Income Taxes

Income taxes for the quarters ended December 31, 2025 and 2024 have been included in the accompanying condensed consolidated financial statements using an estimated annual effective tax rate.

Income taxes for the quarters ended March 31, 2026 and 2025 have been included in the accompanying condensed consolidated financial statements using an estimated annual effective tax rate.

In addition to applying the estimated annual effective tax rate to pre-tax income, the Company includes certain items treated as discrete events to arrive at an estimated overall tax provision.

During the quarter ended December 31, 2025, a discrete net tax benefit of $ 2.4 million was recorded, which is attributable to a prior period provision to return adjustment in Brazil.

During the quarter ended December 31, 2024, a discrete net tax benefit of $ 3.0 million was recorded, which is attributable to a reduction in the Company's prior year transition tax liability, a notional interest deduction on the net equity of the Company's Brazilian subsidiary, and stock compensation.

The Company’s effective tax rate of 15.1 % for the quarter ended December 31, 2025 differs from the current federal statutory rate of 21% primarily as a result of discrete items recognized during the quarter.

The Company’s effective tax rate of 21.6 % for the six months ended December 31, 2025 differs from the current federal statutory rate primarily as a result income derived from tax jurisdictions with varying income tax rates, nondeductible expenses, and state income taxes.

The Company's effective tax rate was 13.5 % and 20.3 % for the quarter and six months ended December 31, 2024.

As of December 31, 2025, the Company is not permanently reinvested with respect to all earnings generated by foreign operations.

There were no material discrete items recognized during the quarters ended March 31, 2026 and March 31, 2025.

The Company’s effective tax rate of 29.8 % and 24.4 % for the quarter and nine months ended March 31, 2026, respectively, differs from the current federal statutory rate of 21% primarily as a result of income derived from tax jurisdictions with varying income tax rates, nondeductible expenses, and state income taxes.

The Company's effective tax rate was 28.0 % and 23.1 % for the quarter and nine months ended March 31, 2025, respectively.

As of March 31, 2026, the Company is not permanently reinvested with respect to all earnings generated by foreign operations.

The Company has determined that there is no material deferred tax liability for federal, state and withholding tax related to undistributed earnings.

During the quarter ended December 31, 2025, foreign subsidiaries repatriated cash of $ 13.4 million to the United States.

During the quarter ended March 31, 2026, foreign subsidiaries did not repatriate cash to the United States.

There is no certainty to the timing of any future distributions of such earnings to the U.S.

in whole or in part.

The Company had approximately $ 0.7 million of total gross unrecognized tax benefits at December 31, 2025 and June 30, 2025, respectively.

At December 31, 2025, approximately $ 0.6 million of this total represents the amount of unrecognized tax benefits that are permanent in nature and, if recognized, would affect the annual effective tax rate.

The Company had approximately $ 0.7 million of total gross unrecognized tax benefits at March 31, 2026 and June 30, 2025, respectively.

At March 31, 2026, approximately $ 0.6 million of this total represents the amount of unrecognized tax benefits that are permanent in nature and, if recognized, would affect the annual effective tax rate.

The Company does not believe that the total amount of unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date.

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense.

At December 31, 2025 and June 30, 2025, the Company had approximately $ 1.0 million accrued for interest and penalties.

At March 31, 2026 and June 30, 2025, the Company had approximately $ 1.0 million accrued for interest and penalties.

The Company conducts business internationally and one or more of its subsidiaries files income tax returns in the U.S.

11 unchanged sentences

On October 20, 2025, ScanSource completed the acquisition of DataXoom, a connectivity provider dedicated to supporting purpose-built mobile deployments across our current supplier line card and beyond.

The initial cash purchase price totaled $ 18.4 million, in addition, the initial contingent consideration is valued at $ 13.4 million.

The initial cash purchase price totaled $ 18.4 million.

During the quarter ended March 31, 2026, the Company received $ 0.1 million due to working capital adjustments in accordance with the share purchase agreement.

In addition, the initial contingent consideration is valued at $ 13.4 million.

DataXoom complements our Advantix investment and is included in the Specialty Technology Solutions segment.

The allocation of the purchase prices to the assets and liabilities acquired, including the final valuation of the identifiable intangible assets and associated tax adjustments, have not been concluded as of the reporting date.

The allocation of the purchase prices to the assets and liabilities acquired, including measuring the fair value of certain assets and liabilities, have not been concluded as of the reporting date.

All acquisitions include future earnout payments, and the Company recorded contingent consideration liabilities at the acquisition dates representing the fair value of estimated amounts payable to sellers.

5 unchanged sentences

The impact of these acquisitions was not material to the consolidated financial statements.

The Company continues to evaluate acquisitions on an on-going basis and has recognized $ 0.5 million and $ 0.8 million in acquisition-related costs for the quarter and six months ended December 31, 2025, respectively, and $ 0.2 million and $ 0.6 million for the quarter and six months ended December 31, 2024, respectively.

The Company continues to evaluate acquisitions on an on-going basis and has recognized $ 0.1 million and $ 0.9 million in acquisition-related costs for the quarter and nine months ended March 31, 2026, respectively, and $ 0.2 million and $ 0.8 million for the quarter and nine months ended March 31, 2025, respectively.

Acquisition-related costs are included in selling, general and administrative expenses on the Condensed Consolidated Income Statements.

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-Q

Item 1. Financial Statements