What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-08-20 compared with 2025-08-21 · 423 added, 341 removed, 1136 unchanged (40% of the section changed)

2 unchanged sentences

Financial Statements

Report of Deloitte & Tou ch e LLP Independent Registered Public Accounting Firm (PCAOB ID:

Report of Delo itte & Touche LLP Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting

Report of Grant Thornton LLP Independent Registered Public Accounting Firm (PCAOB ID:

Report of Grant Thornton LLP Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting

Consolidated Balance Sheets

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Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

ScanSource, Inc.:

To the shareholders and Board of Directors of ScanSource, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of ScanSource Inc.

(a South Carolina corporation) and subsidiaries (the “Company”) as of June 30, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended June 30, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of June 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated August 21, 2025 expressed an unqualified opinion.

and subsidiaries (the “Company”) as of June 30, 2026, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the year ended June 30, 2026, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026, and the results of its operations and its cash flows for each of the year ended June 30, 2026, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated August 20, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters

Critical audit matters are matters arising from the current period audit of financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ Grant Thornton, LLP

We have served as the Company’s auditor since 2014.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill – Specialty Technology Solutions Reporting Unit – Refer to Note 7 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value.

The Company uses the discounted cash flow method to estimate the fair value of its reporting units, which requires management to make significant estimates and assumptions related to projected growth and operating margin, working capital requirements and discount rates.

Changes in these assumptions could have a significant impact on either the fair value, the amount of any goodwill impairment charge, or both.

We identified the Company’s impairment evaluation of goodwill for the Specialty Technology Solutions (STS) reporting unit to be a critical audit matter because of the significant judgments made by management to estimate the fair value of the STS

Index to Financial Statements

reporting unit and the difference between the STS reporting unit’s estimated fair value and its carrying value.

Performing audit procedures to evaluate management’s estimate required a high degree of auditor judgment and an increased extent of effort, including the involvement of internal fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the selection of projected growth and operating margin, working capital requirements and the discount rate included the following, among others:

• We tested the design and operating effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair values of the STS reporting unit, such as controls related to management’s forecasts and selection of the discount rate.

• We evaluated the reasonableness of management’s forecasts through consideration of (1) past performance as compared with management’s projected performance of the STS reporting unit, (2) consistency with external peer and industry data, and (3) internal communications to management and the Board of Directors.

• With the assistance of internal fair value specialists, we evaluated the discount rate, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rate selected by management.

/s/ Deloitte & Touche LLP

Charlotte, North Carolina

August 20, 2026

We have served as the Company’s auditor since 2025.

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

ScanSource, Inc.:

To the shareholders and Board of Directors of ScanSource, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of ScanSource, Inc.

(a South Carolina corporation) and subsidiaries (the “Company”) as of June 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

and subsidiaries (the “Company”) as of June 30, 2026, based on criteria established in the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2026, based on criteria established in the Internal Control—Integrated Framework (2013) issued by COSO.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Charlotte, North Carolina

August 20, 2026

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

ScanSource, Inc.:

Opinion on the financial statements

We have audited the accompanying consolidated balance sheet of ScanSource Inc.

(a South Carolina corporation) and subsidiaries (the “Company”) as of June 30, 2025, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the years ended June 30, 2025 and 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 , and the results of its operations and its cash flows for the years ended June 30, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Grant Thornton, LLP

We served as the Company’s auditor from 2014 to 2025.

Charlotte, North Carolina

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Inventories 522,350 483,815

Prepaid income tax expense 10,704 2,821

Prepaid expenses and other current assets 116,816 122,138

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Long-term debt, net of current portion 98,547 128,288

Borrowings under revolving credit facility — 50

Long-term portion of contingent consideration 12,162 17,782

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Provision for income taxes 24,870 22,848 22,781

Net income from continuing operations 71,548 77,060 88,092

Net income from discontinued operations — — 1,717

Net income $ 78,873 $ 71,548 $ 77,060

Per share data:

Net income from continuing operations per common share, basic $ 3.05 $ 3.10 $ 3.50

Net income from discontinued operations per common share, basic — — 0.07

Net income per common share, basic $ 3.69 $ 3.05 $ 3.10

Weighted-average shares outstanding, basic 21,384 23,442 24,868

Net income from continuing operations per common share, diluted $ 3.00 $ 3.06 $ 3.47

Net income from discontinued operations per common share, diluted — — 0.07

Net income per common share, diluted $ 3.64 $ 3.00 $ 3.06

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Net income $ 78,873 $ 71,548 $ 77,060

Unrealized (loss) gain on hedged transaction, net of tax ( 1,523 ) ( 1,482 ) 2,254

Unrealized loss on hedged transaction, net of tax ( 331 ) ( 1,523 ) ( 1,482 )

Foreign currency translation adjustment 7,403 2,952 ( 20,945 )

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Foreign currency translation adjustment — — — ( 20,945 ) ( 20,945 )

Realized foreign currency loss from discontinued operations — — — ( 3,805 ) ( 3,805 )

Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes 380,184 1,937 — — 1,937

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Foreign currency translation adjustment — — — 2,952 2,952

Realized foreign currency loss from sale of a business — — — ( 3,805 ) ( 3,805 )

Exercise of stock options and shares issued under share-based compensation plans, net of shares withheld for employee taxes 456,872 4,616 — — 4,616

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Net income $ 78,873 $ 71,548 $ 77,060

Net income from discontinued operations — — 1,717

Net income from continuing operations 71,548 77,060 88,092

Adjustments to reconcile net income to net cash (used in) provided by operating activities of continuing operations:

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Gain on sale of a business — — ( 14,155 )

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Income taxes payable ( 3,421 ) ( 3,966 ) ( 2,025 )

Net cash provided by (used in) operating activities of continuing operations 112,349 371,647 ( 35,769 )

Cash flows from investing activities of continuing operations:

Net cash provided by operating activities 123,131 112,349 371,647

Cash flows from investing activities:

Capital expenditures ( 9,286 ) ( 8,286 ) ( 8,555 )

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Cash received for business disposal — 2,569 17,600

Net cash (used in) provided by investing activities of continuing operations ( 62,390 ) 9,045 ( 8,262 )

Cash flows from financing activities of continuing operations:

Net cash (used in) provided by investing activities ( 27,506 ) ( 62,390 ) 9,045

Cash flows from financing activities:

Borrowings on revolving credit, net of expenses 293,264 51,954 1,259,728

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Debt issuance costs ( 1,394 ) — —

(Repayments) borrowings on long-term debt ( 7,857 ) ( 6,915 ) 15,590

Borrowings on long-term debt 100,000 — —

Repayments on long-term debt ( 134,736 ) ( 7,857 ) ( 6,915 )

Repayments of finance lease obligations ( 998 ) ( 1,090 ) ( 964 )

Contingent consideration payments ( 1,375 ) — —

Exercise of stock options 4,959 9,511 4,813

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Repurchase of common stock ( 97,900 ) ( 106,524 ) ( 42,895 )

Net cash (used in) provided by financing activities of continuing operations ( 110,905 ) ( 227,767 ) 39,531

Index to Financial Statements

Net cash flows used in by discontinued operations — — —

Net cash (used in) financing activities ( 134,478 ) ( 110,905 ) ( 227,767 )

Effect of exchange rate changes on cash and cash equivalents 1,070 1,643 ( 3,643 )

Index to Financial Statements

ScanSource, Inc.

and Subsidiaries

Consolidated Statements of Cash Flows

Years Ended June 30, 2026, 2025 and 2024

( in thousands)

2026 2025 2024

(Decrease) increase in cash and cash equivalents ( 37,783 ) ( 59,303 ) 149,282

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Cash and cash equivalents at end of period $ 88,374 $ 126,157 $ 185,460

Cash and cash equivalents of discontinued operations — — —

Cash and cash equivalents of continuing operations $ 126,157 $ 185,460 $ 36,178

Supplemental disclosure of consolidated cash flow information:

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ScanSource, Inc.

(together with its subsidiaries referred to as “the Company” or “ScanSource”) 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 uses multiple sales models to offer technology distribution solutions from leading suppliers of specialty technologies and connectivity and cloud services.

The Company operates in the United States, Canada and Brazil.

(together with its subsidiaries referred to as “the Company” or “ScanSource”) is a leading technology distributor uniquely positioned to address complex, converging technologies and to accelerate growth for channel sales partners across hardware, software as a service ("SaaS"), connectivity and cloud services.

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

The Company operates primarily in the United States and Brazil.

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

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Upon detection, the Company took immediate steps to address the incident, engaged third-party experts, and notified law enforcement.

The Company has cyber insurance and is working with its insurance carriers on claims to recover costs incurred.

On May 26, 2023, the Company substantially recovered its operations and completed the restoration of its pertinent IT systems.

The Company has taken actions to strengthen its existing IT security infrastructure and continues to implement additional measures to prevent unauthorized access to, or manipulation of, its systems and data.

During the fiscal year ended June 30, 2025, the Company received $ 5.9 million of insurance proceeds from claims filed related to the cybersecurity attack.

This amount has been recorded in other (income) expense on the Consolidated Income Statement.

The Company took actions to strengthen its IT security infrastructure and continues to implement additional measures to prevent unauthorized access to, or manipulation of, its systems and data.

During the fiscal year ended June 30, 2026 and 2025, the Company received $ 0.8 million and $ 5.9 million, respectively, of insurance proceeds from claims filed related to the cybersecurity attack.

These amounts have been recorded in other (income) expense on the Consolidated Income Statement.

Basis of Presentation

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Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only.

Segment Changes

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 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.

Related Party Transactions

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Use of Estimates

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

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however, management believes that its estimates, including those for the above-described items, are reasonable and that the actual results will not vary significantly from the estimated amounts.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

The following accounting policies relate to the more significant judgments and estimates used in the preparation of the Consolidated Financial Statements:

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(d) Goodwill and Intangible Asset Fair Value

The Company estimates the fair value of its goodwill reporting units, as well as its finite lived intangible assets primarily based on the income approach utilizing the discounted cash flow method.

The Company also utilizes fair value estimates derived from the market approach utilizing the public company market multiple method to validate the results of the discounted cash flow method for fair value of goodwill, which requires it to make assumptions about the applicability of those multiples to its reporting units.

The discounted cash flow method requires the Company to estimate future cash flows, using key assumptions such as the weighted average cost of capital, revenue growth rates, projected gross margin and operating margin percentage growth, expected working capital changes and a related cash flow impact from working capital changes, and then discount those amounts at an appropriate discount rate to present value.

Index to Financial Statements

3 unchanged sentences

June 30, 2026

The Company estimates the fair value of its goodwill reporting units, as well as its finite lived intangible assets primarily based on the income approach utilizing the discounted cash flow method.

(e) Supplier Incentives

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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 in the amounts of $ 0.1 million and $ 5.9 million are classified as accounts payable as of June 30, 2025 and 2024, respectively.

As a result, checks released but not yet cleared from these accounts in the amounts of $ 0.1 million are classified as accounts payable as of June 30, 2026 and 2025.

The Company maintains its cash with various financial institutions globally that are monitored regularly for credit quality, although it may hold amounts in excess of Federal Deposit Insurance Corporation or other insured limits.

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Concentration of Credit Risk

The Company sells to a large base of channel sales partners throughout the United States, Canada, Brazil and the UK.

The Company sells to a large base of channel sales partners primarily in the United States and Brazil.

The Company performs ongoing credit evaluations of its channel sales partners’ financial condition.

In certain cases, the Company will accept tangible assets as collateral to increase the trade credit of its channel sales partners.

Sales to any one channel sales partner were less than 10% of the Company’s net sales for fiscal years 2025, 2024 and 2023.

No channel sales partner represented more than 10% of the Company’s net sales for fiscal years 2026, 2025 or 2024.

In the event that the Company does not collect payment on accounts receivable within the established trade terms for certain channel sales partners, the Company may establish arrangements for longer-term financing.

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The Company does not use derivative financial instruments for trading or speculative purposes.

The Company’s exposure to changes in foreign currency exchange rates results from foreign currency denominated assets and liabilities, purchasing and selling internationally in several foreign currencies and from intercompany loans with foreign

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

subsidiaries.

The Company’s objective is to preserve the economic value of non-functional currency denominated cash flows.

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They are, therefore, marked-to-market with changes in their fair value recorded in the Consolidated Income Statement each period.

Derivative financial instruments related to foreign currency exposure are accounted for on an accrual basis with gains or losses on these contracts recorded in income in the period in which their value changes, with the offsetting entry for unsettled positions reflected in either other assets or other liabilities.

Derivative financial instruments related to foreign

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

currency exposure are accounted for on an accrual basis with gains or losses on these contracts recorded in income in the period in which their value changes, with the offsetting entry for unsettled positions reflected in either other assets or other liabilities.

The Company's earnings are affected by changes in interest rates due to the impact those changes have on interest expense from floating rate debt instruments.

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The deferred compensation obligation is classified either within accrued expenses and other current liabilities or other long-term liabilities as well.

The amounts of these investments classified as current assets with corresponding current liabilities was $ 3.4 million at June 30, 2025 and 2024.

The amounts of these investments classified as current assets with corresponding current liabilities was $ 4.0 million and $ 3.4 million at June 30, 2026 and June 30, 2025, respectively.

Inventories (consisting entirely of finished goods) are stated at the lower of cost (first-in, first-out method) or net realizable value.

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In addition, the Company may receive early payment discounts from certain suppliers.

The Company records early payment discounts received as a reduction of inventory, thereby resulting in a reduction of cost of goods sold when the related

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

inventory is sold.

The Company records early payment discounts received as a reduction of inventory, thereby resulting in a reduction of cost of goods sold when the related inventory is sold.

Management makes certain estimates of the amounts of supplier consideration that will be received.

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however, sales of products supplied by Cisco and Zebra each constituted more than 10 % of the Company's net sales for the years ended June 30, 2026, 2025 and 2024.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

Product Warranty

The Company’s suppliers generally provide a warranty on the products provided by the Company and allow the Company to return defective products, including those that have been returned to the Company by its channel sales partners.

In two of its product lines, the Company offers a self-branded warranty program, in which management has determined that the Company is the primary obligor.

The Company purchases contracts from unrelated third parties, generally the original equipment manufacturers, to fulfill any obligation t o service or replace defective product claimed on these warranty programs.

As a result, the Company has not recorded a provision for estimated service warranty costs.

To maintain channel sales partner relations, the Company facilitates returns of defective products from the Company's channel sales partners by accepting for exchange, with the Company's prior approval, most defective products within 30 days of invoicing.

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Historical financial information, internal plans and projections and industry information are used in making such estimates.

Under Accounting Standards Update ("ASU") 2017-04, if fair value of goodwill is determined to be less than carrying value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the reporting units' fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

Additionally, the Company would consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

loss, if applicable.

Under Accounting Standards Update ("ASU") 2017-04, if the fair value of goodwill is determined to be less than carrying value, an impairment loss is recognized for the amount of the carrying value that exceeds the amount of the reporting units' fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

Additionally, the Company would consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable.

The Company also assesses the recoverability of goodwill if facts and circumstances indicate goodwill may be impaired.

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The WACC is intended to represent a rate of return that would be expected by a marketplace participant in each respective geography.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

• Operating income:

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No intangible asset or other long-lived asset impairment charges were recognized for the fiscal years ended June 30, 2026, 2025 and 2024.

See Note 7 - Goodwill and Other Identifiable Intangible Assets for more information regarding intangible asset impairment charges.

Fair Value of Financial Instruments

4 unchanged sentences

The Company accrues for contingent obligations, including estimated legal costs, when it is probable that a liability is incurred and the amount is reasonably estimable.

As facts concerning contingencies become known, management reassesses its position

As facts concerning contingencies become known, management reassesses its position and makes appropriate adjustments to the financial statements.

Estimates that are particularly sensitive to future changes include tax, legal and other regulatory matters, which are subject to change as events evolve and as additional information becomes available during the administrative and litigation process.

Index to Financial Statements

3 unchanged sentences

June 30, 2026

and makes appropriate adjustments to the financial statements.

Revenue Recognition

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Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

This ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

This ASU is applicable to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and subsequent interim periods, with early application permitted.

The Company adopted the new guidance in fiscal year 2025 with no material impact on its financial position, results of operations or cash flows, but the adoption did result in new and expanded segment disclosures which are included in Note 16 - Segment Information.

In December 2023, the FASB issued ASU No.

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This ASU is effective for annual periods beginning after December 15, 2024 and is applicable to the Company’s fiscal year beginning July 1, 2025, with early application permitted.

The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

The Company adopted the new guidance in fiscal year 2026 on a prospective basis with no material impact on its financial position, results of operations or cash flows, but the adoption did result in new and expanded tax disclosures which are included in Note 13 - Income Taxes.

In November 2024, the FASB issued ASU 2024-03 “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

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The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

The Company has reviewed newly issued accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on its consolidated financial statements as a result of future adoption.

In September 2025, the FASB issued ASU 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.” This standard is intended to improve the operability and application of guidance related to capitalized software development costs.

The ASU is effective for annual reporting periods beginning after December 15, 2027, and subsequent interim periods, with early application permitted.

The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

The Company has reviewed other newly issued accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on its consolidated financial statements as a result of future adoption.

(2) Trade Accounts and Notes Receivable, Net

The Company maintains an allowance for doubtful accounts receivable for estimated future expected credit losses resulting from channel sales partners’ failure to make payments on accounts receivable due to the Company.

The Company has notes receivable with certain channel sales partners, which are included in “Accounts receivable, less allowance” in the Condensed Consolidated Balance Sheets.

The Company has notes receivable with certain channel sales partners, which are included in “Accounts receivable, less allowance” in the Consolidated Balance Sheets.

Management determines the estimate of the allowance for doubtful accounts receivable by considering a number of factors, including:

(i) historical experience, (ii) aging of the accounts receivable, (iii) specific information obtained by the Company on the financial condition and the current creditworthiness of its channel sales partners, (iv) the current economic and country-

Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model.

Receivables that do not share risk characteristics are evaluated on an individual basis.

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

Index to Financial Statements

3 unchanged sentences

June 30, 2026

specific environment and (v) reasonable and supportable forecasts about collectability.

Expected credit losses are estimated on a pool basis when similar risk characteristics exist using an age-based reserve model.

Receivables that do not share risk characteristics are evaluated on an individual basis.

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

The changes in the allowance for doubtful accounts for the fiscal years ended June 30, 2026, 2025 and 2024 are set forth in the tables below.

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(3) Revenue Recognition

The Company provides technology solutions and services from the world's leading suppliers of mobility, barcode, POS, payments, networking, physical security, unified communications, collaboration, telecom and cloud services.

The Company provides technology solutions and services from the world's leading suppliers of mobility and barcode, POS, payment terminals, physical security, networking communications, connectivity and cloud services.

This includes hardware, related accessories and device configuration as well as software licenses, professional services and hardware support programs.

Substantially all of the Company's revenues are derived from products sold at a point-in-time.

In determining the appropriate amount of revenue to recognize, the Company applies the following five-step model in accordance with ASC 606:

(i) identify contracts with customers;

(ii) identify performance obligations in the contracts;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations per the contracts;

and (v) recognize revenue when (or as) the Company satisfies a performance obligation.

The Company recognizes revenue as control of products and services are transferred to customers, which is generally at the point of shipment.

The Company delivers products to customers in several ways, including:

(i) shipment from a Company warehouse, (ii) drop-shipment directly from the supplier, or (iii) electronic delivery for non-physical products.

Significant Judgments:

10 unchanged sentences

For certain transactions, products are sold with a right of return, and the Company may also provide other rebates or incentives, which are accounted for as variable consideration.

The Company estimates the amount of variable consideration for rebates and incentives by using the expected value to be given to the customer and reduces the revenue by those estimated amounts.

These estimates are reviewed and updated as necessary at the end of each reporting period.

The Company estimates returns allowance based on historical experience and reduces revenue accordingly.

The Company estimates a returns allowance based on historical experience and reduces revenue accordingly.

The Company estimates the amount of variable consideration

Index to Financial Statements

3 unchanged sentences

June 30, 2026

for rebates and incentives by using the expected value to be given to the customer and reduces the revenue by those estimated amounts.

These estimates are reviewed and updated as necessary at the end of each reporting period.

Contract Balances

The Company records contract assets and liabilities for payments received from customers in advance of services performed.

The Company records contract assets for services performed in advance of payments received from channel sales partners.

The Company records contract liabilities for payments received from channel sales partners in advance of services performed.

These assets and liabilities are the result of the sales of the Company's self-branded warranty programs and other transactions where control has not yet passed to the customer.

16 unchanged sentences

$ 3,124,932 $ 101,130 $ 3,226,062

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

Fiscal year ended June 30, 2025

6 unchanged sentences

$ 2,942,717 $ 98,093 $ 3,040,810

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

Index to Financial Statements

11 unchanged sentences

$ 3,167,549 $ 92,260 $ 3,259,809

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

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

(4) Earnings per Share

4 unchanged sentences

(in thousands, except per share data)

Net income from continuing operations $ 71,548 $ 77,060 $ 88,092

Net income from discontinued operations — — 1,717

Net income $ 78,873 $ 71,548 $ 77,060

2 unchanged sentences

Weighted-average shares, diluted 21,692 23,839 25,222

Net income from continuing operations per common share, basic $ 3.05 $ 3.10 $ 3.50

Net income from discontinued operations per common share, basic — — 0.07

Net income per common share, basic $ 3.69 $ 3.05 $ 3.10

Net income from continuing operations per common share, diluted $ 3.00 $ 3.06 $ 3.47

Net income from discontinued operations per common share, diluted — — 0.07

Net income per common share, diluted $ 3.64 $ 3.00 $ 3.06

For the years ended June 30, 2026, 2025 and 2024, weighted-average shares outstanding excluded from the computation of diluted earnings per share because their effect would have been antidilutive were 366,717 , 201,879 and 348,604 , respectively.

(5) Property and Equipment

Property and equipment is comprised of the following:

Index to Financial Statements

3 unchanged sentences

June 30, 2026

(5) Property and Equipment

Property and equipment is comprised of the following:

(in thousands)

Land $ 2,366 $ 2,063

Land and land improvements $ 1,628 $ 2,366

Buildings and leasehold improvements 20,341 20,166

Computer software and equipment 80,688 74,649

Computer software and equipment (a)

71,081 80,688

Furniture, fixtures and equipment 16,979 15,886

4 unchanged sentences

$ 34,856 $ 31,169

(a) Included in Computer software and equipment is software under development of $ 12.9 million and $ 10.9 million as of June 30, 2026 and June 30, 2025, respectively.

Depreciation expense recorded as selling, general and administrative costs in the accompanying Consolidated Income Statements was $ 6.0 million, $ 10.0 million and $ 11.2 million for the fiscal years ended June 30, 2026, 2025 and 2024, respectively.

9 unchanged sentences

The table below details accrued expenses and other current liabilities.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

(in thousands)

7 unchanged sentences

Accrued expenses and other current liabilities $ 86,538 $ 71,263

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

The table below details other long-term liabilities.

12 unchanged sentences

During fiscal years ended June 30, 2026, 2025 and 2024, no impairment charges related to goodwill were recorded .

The fair value of the Specialty Technology Solutions and Intelisys & Advisory reporting units exceeded its carrying value by 2 % and 100 % , re spectively, as of the annual goodwill impairment testing date.

The fair value of the Specialty Technology Solutions and Intelisys & Advisory reporting units exceeded its carrying value by 2 % and more than 100 % , re spectively, as of the annual goodwill impairment testing date.

Changes in the carrying amount of goodwill for the years ended June 30, 2026 and 2025, by reportable segment, are set forth in the table below.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

Specialty Technology Solutions Intelisys & Advisory Total

1 unchanged sentence

Balance at June 30, 2024 $ 146,108 $ 60,193 $ 206,301

Disposals ( 8,585 ) — ( 8,585 )

Unrealized loss on foreign currency translation ( 1,793 ) ( 27 ) ( 1,820 )

Balance at June 30, 2024 $ 146,108 $ 60,193 $ 206,301

Additions 13,447 10,693 24,140

1 unchanged sentence

Balance at June 30, 2025 $ 159,779 $ 71,041 $ 230,820

Additions 13,427 — 13,427

Unrealized gain (loss) on foreign currency translation 661 ( 6 ) 655

Balance at June 30, 2026 $ 173,867 $ 71,035 $ 244,902

The following table shows the Company’s identifiable intangible assets as of June 30, 2026 and 2025, respectively.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

June 30, 2026 June 30, 2025

11 unchanged sentences

Total intangibles $ 169,223 $ 104,832 $ 64,391 $ 194,061 $ 131,152 $ 62,909

The weighted-average amortization period for all intangible assets was approximately 9 years for the fiscal year ended June 30, 2025 and approximately 10 years for the fiscal years ended 2024 and 2023.

The weighted-average amortization period for all intangible assets was approximately 11 years, 9 years and 10 years for the fiscal years ended June 30, 2026, 2025 and 2024, respectively.

Amortization expense for continuing operations for the years ended June 30, 2026, 2025 and 2024 was $ 16.7 million, $ 19.2 million and $ 15.7 million, respectively, all of which relates to selling, general and administrative costs, not the cost of selling goods, and has been presented as such in the accompanying Consolidated Income Statements.

7 unchanged sentences

(8) Short Term Borrowings and Long Term Debt

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

The following table shows the Company’s short-term and long-term debt as of June 30, 2026 and 2025, respectively.

3 unchanged sentences

Senior secured term loan facility, net of current portion 96,250 125,625

Borrowings under revolving credit facility — 50

Total debt $ 101,413 $ 136,149

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

Credit Facility

The Company has a multi-currency senior secured credit facility (as amended, the "Amended Credit Agreement") with JPMorgan Chase Bank N.A., as administrative agent, and a syndicate of banks (collectively the "Lenders").

On September 28, 2022, the Company amended and restated the Amended Credit Agreement, which includes (i) a five-year , $ 350 million multicurrency senior secured revolving credit facility and (ii) a five-year $ 150 million senior secured term loan facility.

The Amended Credit Agreement extended the credit facility maturity date to September 28, 2027.

In addition, pursuant to an “accordion feature,” the Company may increase its borrowings up to an additional $ 250 million, subject to obtaining additional credit commitments from the lenders participating in the increase.

The Amended Credit Agreement allows for the issuance of up to $ 50 million for letters of credit.

Borrowings under the Amended Credit Agreement are guaranteed by substantially all of the domestic assets of the Company and its domestic subsidiaries.

On December 18, 2025, the Company entered into a credit agreement, (the “New Credit Agreement”) with PNC Bank, National Association, as administrative agent (“PNC”), and the other lenders party thereto (the “Lenders”), providing for (i) a five-year , $ 400 million multicurrency senior secured revolving credit facility and (ii) a five-year $ 100 million senior secured term loan facility (the “New Credit Facilities”).

In addition, pursuant to an “accordion feature,” the Company may increase its borrowings by up to the greater of $ 250 million or 150 % of the Company's EBITDA calculated on a Pro Forma Basis (each as defined in the New Credit Agreement), subject to obtaining additional credit commitments from the Lenders participating in the increase.

The New Credit Agreement allows for the issuance of up to $ 50 million for letters of credit.

Borrowings under the New Credit Agreement are secured by substantially all of the assets of the Company and its domestic subsidiaries.

Under the terms of the revolving credit facility, the payment of cash dividends is restricted.

The Company incurred debt issuance costs of $ 1.4 million in connection with the amendment and restatement of the Amended Credit Agreement.

These costs were capitalized to other non-current assets on the Condensed Consolidated Balance Sheets and added to the unamortized debt issuance costs from the previous credit facility.

The Company incurred debt issuance costs of $ 1.4 million in connection with the New Credit Agreement.

These costs were capitalized to other non-current assets on the Consolidated Balance Sheets and added to the unamortized debt issuance costs from the previous credit facility.

Loans denominated in U.S.

dollars, other than swingline loans, bear interest at a rate per annum equal to, at the Company’s option, (i) the adjusted term Secured Overnight Financing Rate ("SOFR") or adjusted 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 up to $ 30 million of 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 alternate base rate plus an additional margin ranging from 0 % to 0.75 %, depending upon the Company’s leverage ratio, plus, if applicable, certain mandatory costs.

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.

All swingline loans denominated in U.S.

dollars bear interest based upon the adjusted daily simple SOFR plus an additional margin ranging from 1.00 % to 1.75 % depending upon the Company's leverage ratio, or such other rate as the Company and the applicable swingline lender may agree.

The adjusted term SOFR and adjusted daily simple SOFR include a fixed credit adjustment of 0.10 % over the applicable SOFR reference rate.

Loans denominated in foreign currencies bear interest at a rate per annum equal to the applicable benchmark rate set forth in the Amended Credit Agreement plus an additional margin ranging from 1.00 % to 1.75 %, depending upon the Company’s leverage ratio plus, if applicable, certain mandatory costs.

During the fiscal year ended June 30, 2025, the Company's borrowings under the credit facility were U.S.

dollars bear interest based upon the daily simple SOFR, floating daily, plus an additional margin ranging from 1.00 % to 1.75 % depending upon the Company's leverage ratio, or such other rate as the Company and the applicable swingline lender may agree.

Loans denominated in foreign currencies bear interest at a rate per annum equal to the applicable benchmark rate set forth in the New Credit Agreement plus an additional margin ranging from 1.00 % to 1.75 %, depending upon the Company’s leverage ratio.

A commitment fee is payable on the unused amount of commitments under the revolving credit facility.

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 fiscal year ended June 30, 2026, the Company's borrowings under New Credit Agreement and Prior Credit Agreement were U.S.

dollar loans .

The spread in effect as of June 30, 2025 was 1.00 %, plus a 0.10 % credit spread adjustment for SOFR-based loans and 0.00 % for alternate base rate loans.

The spread in effect as of June 30, 2026 was 1.00 % for SOFR-based loans and 0.00 % for alternate base rate loans.

The commitment fee rate in effect as of June 30, 2026 was 0.15 %.

The effective interest rates for the term loan were 4.65 % and 5.43 % as of June 30, 2026 and June 30, 2025, respectively.

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

Specifically, the Company’s Leverage Ratio must be less than or equal to 3.50 to 1.00 at all times.

In addition, the Company’s Interest Coverage Ratio (as such term is defined in the Amended Credit Agreement) must be at least 3.00 to 1.00 as of the end of each fiscal quarter.

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 Amended Credit Agreement as of June 30, 2025.

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

Specifically, the Company’s Leverage Ratio must be less than or equal to 3.50 to 1.00.

In addition, the Company’s Interest Coverage Ratio (as such term is defined in the New Credit Agreement) must be at least 3.00 to 1.00 as of the end of each fiscal quarter.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

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 as of June 30, 2026.

The average daily balance outstanding on the revolving credit facility, excluding the term loan facility, was $ 1.6 million and $ 0.3 million during the fiscal year ended June 30, 2026 and 2025, respectively.

6 unchanged sentences

The terms of the bond allow for payment of interest only for the first 10 years of the agreement and then, starting on September 1, 2018 through 2032, principal and interest payments are due until the maturity date or the redemption of the bond.

The agreement also provides the bondholder with a put

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

option, exercisable only within 180 days of each 5 th anniversary of the agreement, requiring the Company to pay back the bonds at 100 % of the principal amount outstanding.

The agreement also provides the bondholder with a put option, exercisable only within 180 days of each 5 th anniversary of the agreement, requiring the Company to pay back the bonds at 100 % of the principal amount outstanding.

As of June 30, 2026, the Company was in compliance with all covenants under this bond.

The interest rates at June 30, 2025 and 2024 were 5.28 % and 6.28 %, respectively.

The effective interest rates at June 30, 2026 and 2025 were 4.57 % and 5.28 %, respectively.

Scheduled maturities of the Company’s short-term borrowings, revolving credit facility and long-term debt at June 30, 2026 are as follows:

4 unchanged sentences

2029 — 2,500 375

2030 — 2,500 380

2031 — 88,750 385

Thereafter — — 786

1 unchanged sentence

Debt Issuance Costs

As of June 30, 2025, net debt issuance costs associated with the credit facility and bonds totaled $ 0.9 million and are being amortized on a straight-line basis through the maturity date of each respective debt instrument.

As of June 30, 2026, net debt issuance costs associated with the credit facility, term loan and bond totaled $ 1.6 million and are being amortized on a straight-line basis through the maturity date of each respective debt instrument.

(9) 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.

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

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

S ee Note 1- Business and Summary of Significant Accounting Policies for more information regarding the Company's policy on derivative financial instruments.

The Company had contracts outstanding with notional amounts of $ 26.2 million and $ 27.5 million for the exchange of foreign currencies as of June 30, 2025 and 2024, 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 are as follows:

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

Index to Financial Statements

3 unchanged sentences

June 30, 2026

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.

S ee Note 1- Business and Summary of Significant Accounting Policies for more information regarding the Company's policy on derivative financial instruments.

The Company had contracts outstanding with notional amounts of $ 15.2 million and $ 26.2 million for the exchange of foreign currencies as of June 30, 2026 and 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 Consolidated Income Statements for the fiscal years ended June 30, 2026, 2025 and 2024 are as follows:

Fiscal year ended June 30,

4 unchanged sentences

Net foreign currency losses $ 1,600 $ 755 $ 2,198

Net foreign 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.

Foreign exchange gains and losses are generated as the result of fluctuations in the value of the U.S.

dollar versus the Brazilian real, the U.S.

dollar versus the euro, the British pound versus the euro, and the Canadian dollar versus the U.S.

Interest Rates – The Company’s earnings are also affected by changes in interest rates due to the impact those changes have on interest expense from floating rate debt instruments.

The Company manages its exposure to changes in interest rates by using interest rate swaps to hedge this exposure and to achieve a desired proportion of fixed versus floating rate debt.

On April 30, 2019, the Company entered into an interest rate swap agreement to lock into a fixed LIBOR interest rate, which was amended on September 28, 2022, to change the reference rate from LIBOR to SOFR.

The swap agreement has a notional amount of $ 100.0 million, with a $ 50.0 million tranche that matured on April 30, 2024 and a $ 50.0 million tranche scheduled to mature April 30, 2026.

On March 31, 2023, the Company entered into an interest rate swap agreement to lock into a fixed SOFR interest rate with a notional amount of $ 25 million and a maturity date of March 31, 2028.

These interest rate swap agreements are designated as a cash flow hedge to hedge the variable rate interest payments on the revolving credit facility.

Interest rate differentials paid or received under the swap agreement are recognized as adjustments to interest expense.

To the extent the swap is effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swap 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 fiscal years ended June 30, 2025, 2024 and 2023.

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.

Foreign currency exchange gains and losses are primarily generated as the result of fluctuations in the value of the U.S.

dollar versus the Brazilian real and the Canadian dollar versus the U.S.

Interest Rates – The Company’s earnings are also affected by changes in interest rates due to the impact such changes have on interest expense associated with its floating-rate debt.

To manage this exposure, the Company manages its exposure to changes in interest rates by using interest rate swaps to hedge this exposure and to achieve a desired proportion of fixed versus floating rate debt.

These swaps include a notional amount of $ 50.0 million that matured on April 30, 2026, and a notional amount of $ 25 million maturing on March 31, 2028.

These interest rate swap agreements are designated as cash flow hedges to hedge the variable rate interest payments on the revolving credit facility.

Interest rate differentials paid or received under the swap agreements are recognized as adjustments to interest expense.

To the extent the swap is 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 fiscal years ended June 30, 2026, 2025 and 2024.

The components of the cash flow hedge included in accumulated other comprehensive (loss) income, net of income taxes, in the Consolidated Statements of Shareholders’ Equity, are as follows:

7 unchanged sentences

Net increase (decrease) in accumulated other comprehensive (loss) income, net of tax $ ( 331 ) $ ( 1,523 ) $ ( 1,482 )

The Company has the following derivative instruments for continuing operations located on the Consolidated Balance Sheets as of June 30, 2025, utilized for the risk management purposes detailed above:

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

Index to Financial Statements

10 unchanged sentences

Derivative assets:

Foreign exchange contracts Prepaid expenses and other current assets $ — $ 15

Foreign currency hedge Other current assets $ 11 $ —

Interest rate swap agreement Other current assets $ 239 $ —

Derivative liabilities:

Foreign currency hedge Other current liabilities $ 290 $ —

The Company has the following derivative instruments located on the Consolidated Balance Sheets as of June 30, 2024, utilized for the risk management purposes detailed above:

Foreign exchange contracts Accrued expenses and other current liabilities $ — $ 3

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

June 30, 2025

5 unchanged sentences

Derivative assets:

Foreign currency hedge Other current assets $ 345 $ —

Foreign exchange contracts Prepaid expenses and other current assets $ — $ 15

Interest rate swap agreement Other current assets $ 680 $ —

Derivative liabilities:

Foreign exchange contracts Accrued expenses and other current liabilities $ — $ 12

Foreign currency hedge Other current liabilities $ 290 $ —

(10) Fair Value of Financial Instruments

Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Under this guidance, the Company is required to classify certain assets and liabilities based on the fair value hierarchy, which groups fair value-measured assets and liabilities based upon the following levels of inputs:

Under this guidance, the Company classifies certain assets and liabilities based on the fair value hierarchy, which aggregates fair value-measured assets and liabilities based upon the following levels of inputs:

• Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

2 unchanged sentences

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”) and Secure Path Networks, LLC dba Resourcive (“Resourcive”).

The carrying value of debt listed in Note 8 - Short-Term Borrowings and Long Term 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 criteria).

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").

Index to Financial Statements

8 unchanged sentences

Deferred compensation plan investments, current and non-current portion $ 37,642 $ 37,642 $ — $ —

Forward foreign currency exchange contracts 15 — 15 —

Interest rate swap agreement 239 — 239 —

Foreign currency hedge 11 — 11 —

Total assets at fair value $ 37,892 $ 37,642 $ 250 $ —

Deferred compensation plan investments, current and non-current portion $ 37,642 $ 37,642 $ — $ —

Foreign currency hedge 290 — 290 —

Forward foreign currency exchange contracts 3 — 3 —

Liability for contingent consideration, current and non-current 28,150 — — 28,150

Total liabilities at fair value $ 65,795 $ 37,642 $ 3 $ 28,150

The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, 2024:

The following table summarizes the valuation of the Company's remaining assets and liabilities measured at fair value on a recurring basis as of June 30, 2025:

(Level 1) Significant

2 unchanged sentences

Deferred compensation plan investments, current and non-current portion $ 31,887 $ 31,887 $ — $ —

Forward foreign currency exchange contracts 15 — $ 15

Interest rate swap agreement 680 — 680 —

Foreign currency hedge 345 — $ 345 —

Total assets at fair value $ 32,582 $ 31,887 $ 695 $ —

Deferred compensation plan investments, current and non-current portion $ 31,887 $ 31,887 $ — $ —

Forward foreign currency exchange contracts 12 — 12 —

Foreign currency hedge 290 — 290 —

Liability for contingent consideration, current and non-current 19,100 — — 19,100

Total liabilities at fair value $ 51,277 $ 31,887 $ 290 $ 19,100

The investments in the deferred compensation plan are held in a "rabbi trust" and include mutual funds and cash equivalents for payment of non-qualified benefits for certain retired, terminated or active employees.

These investments are recorded to prepaid and other current assets or other non-current assets depending on their corresponding, anticipated distributions to recipients, which are reported in accrued expenses and other current liabilities or other long-term liabilities, respectively.

Derivative instruments, such as foreign currency forward contracts, are measured using the market approach on a recurring basis considering foreign currency spot rates and forward rates quoted by banks or foreign currency dealers and interest rates

The investments in the deferred compensation plan are held in a "rabbi trust" and include securities and cash equivalents for payment of non-qualified benefits for certain retired, terminated and active employees.

These investments are recorded to prepaid expenses and other current assets or other non-current assets depending on their corresponding, anticipated distribution

Index to Financial Statements

3 unchanged sentences

June 30, 2026

quoted by banks (Level 2).

Fair values of interest rate swaps are measured using standard valuation models with inputs that can be derived from observable market transactions, including LIBOR spot and forward rates (Level 2).

Foreign currency contracts and interest rate swap agreements are classified in the Consolidated Balance Sheet as prepaid expenses and other current assets or accrued expenses and other current liabilities, depending on the respective instruments' favorable or unfavorable positions.

dates to recipients, which are reported in accrued expenses and other current liabilities or other long-term liabilities, respectively.

Fair values of interest rate swaps are measured using standard valuation models with inputs that can be derived from observable market transactions, including SOFR spot and forward rates (Level 2).

Foreign currency contracts and interest rate swap agreements are classified in the Consolidated Balance Sheets as prepaid expenses and other non-current assets or accrued expenses and other long-term liabilities, depending on the respective instruments' favorable or unfavorable positions.

See Note 9 - Derivatives and Hedging Activities .

The Company recorded a contingent consideration liability at the acquisition date of both Advantix and Resourcive.

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

The following tables represent the Company's contingent consideration liabilities at fair value at June 30, 2025:

The Company recorded contingent consideration liabilities for Advantix, Resourcive, and DataXoom.

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 represent the Company's contingent consideration liabilities at June 30, 2026 and 2025:

Fiscal Year Ended June 30, 2026

3 unchanged sentences

Issuance of contingent consideration 9,352 — 9,352

Payments ( 1,375 ) — ( 1,375 )

Change in valuation 1,243 ( 170 ) 1,073

Fair value at end of period $ 15,880 $ 12,270 $ 28,150

The fair values of amounts owed are recorded in current portion of contingent consideration and long-term portion of contingent consideration in the Company’s Condensed Consolidated Balance Sheets.

In accordance with ASC 805, the Company will revalue the contingent consideration liability at each reporting date through the last payment, with changes in the fair value of the contingent consideration reflected in the change in fair value of contingent consideration line item on the Company’s Condensed Consolidated Income Statements that is included in the calculation of operating income.

Fiscal year ended June 30, 2025

Specialty Technology Solutions Intelisys & Advisory Total

(in thousands)

Fair value at beginning of period $ — $ — $ —

Issuance of contingent consideration 7,500 9,700 17,200

Change in valuation ( 840 ) 2,740 1,900

Fair value at end of period $ 6,660 $ 12,440 $ 19,100

The fair values of amounts owed are recorded in current portion of contingent consideration and long-term portion of contingent consideration in the Company’s Consolidated Balance Sheets.

In accordance with ASC 805, the Company will revalue the contingent consideration liability at each reporting date through the last payment, with changes in the fair value of the contingent consideration reflected in the change in fair value of contingent consideration line item on the Company’s Consolidated Income Statements that is included in the calculation of operating income.

The fair value of the contingent consideration liability associated with future earnout payments is based on several factors, including but not limited to:

• 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.

Advantix is part of the Specialty Technology Solutions segment.

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

The fair value of the liability for the contingent consideration related to Advantix recognized at June 30, 2025 was $ 6.7 million, of which $ 1.3 million is classified as current.

The change in fair value for the fiscal year ended June 30, 2025 is primarily due to a reduction in current year results and future forecasts.

Earnout payments to the sellers of Advantix are payable based on results from fiscal year 2025 to fiscal year 2028.

Resourcive is part of the Intelisys & Advisory segment.

The fair value of the contingent consideration for Resourcive is determined using a Monte Carlo simulation.

The fair value of the liability for the contingent consideration related to Resourcive recognized at June 30, 2025 was $ 12.4 million, all of which is classified as non-current and is due to the sellers of Resourcive during fiscal year 2027.

The change in fair value for fiscal year ended June 30, 2025 is primarily due to the recurring amortization of the unrecognized fair value discount.

Valuation techniques and significant observable inputs used in recurring Level 3 fair value measurements for the Company's contingent consideration liabilities related to Advantix and Resourcive at June 30, 2025 were as follows.

Index to Financial Statements

3 unchanged sentences

June 30, 2026

Acquisition Reporting Period Valuation Technique Significant Unobservable Inputs Average Rates

Advantix June 30, 2025 Discounted cash flow Adjusted EBITDA risk premium 15.3 %

Adjusted EBITDA growth rate 31.8 %

Resourcive June 30, 2025 Monte Carlo Adjusted EBITDA risk premium 12.7 %

Simulated commission growth percentage 24.2 %

Specialty Technology Solutions

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

The liability recognized at June 30, 2026 was $ 6.2 million, of which $ 1.7 million is classified as current.

The change in fair value for the fiscal year ended June 30, 2026 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.

Future earnout payments to the sellers of Advantix are payable based on results through fiscal year 2028.

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

The liability recognized at June 30, 2026, was $ 9.7 million, of which $ 2.0 million is classified as current.

The change in fair value for the fiscal year ended June 30, 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 June 30, 2026 was $ 12.3 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 fiscal year ended June 30, 2026 is primarily due to a change in forecasted results, partially offset by 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 June 30, 2026 and June 30, 2025 were as follows.

Significant observable inputs Significant observable inputs

June 30, 2026 June 30, 2025

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

Weighted-average payor credit spread 1.32 % 1.32 % 1.80 % 1.80 %

Weighted-average adjusted EBITDA risk premium 12.30 % 12.50 % 15.30 % 12.70 %

Adjusted EBITDA volatility 60.00 % 50.00 % — 40.00 %

(11) Share-Based Compensation

Share-Based Compensation Plans

The Company has awards outstanding from two share-based compensation plans (the 2013 Long-Term Incentive Plan and the 2021 Long-Term Incentive Plan ).

The Company has awards outstanding from three share-based compensation plans (the 2013 Long-Term Incentive Plan, the 2021 Long-Term Incentive Plan and the 2024 Omnibus Incentive Compensation Plan ).

The 2024 Omnibus Incentive Compensation Plan was approved at the annual meeting of the shareholders on December 10, 2024.

14 unchanged sentences

A PU represents the right to receive shares of common stock in the future contingent on performance against predetermined objectives over a specified performance period.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

The Company accounts for its share-based compensation awards in accordance with ASC 718, Stock Compensation, which requires all share-based compensation to be recognized in the income statement based on fair value and applies to all awards granted, modified, canceled or repurchased after the effective date.

8 unchanged sentences

Stock Options

The Company did not grant stock options during the fiscal year ended June 30, 2025, June 30, 2024 or June 30, 2023.

The Company did not grant stock options during the fiscal years ended June 30, 2026, June 30, 2025 or June 30, 2024.

Stock options granted prior to June 30, 2022 vested annually over 3 years and have a 10-year contractual life.

2 unchanged sentences

Use of this option pricing model requires the input of subjective assumptions.

These assumptions include estimating the length of time employees

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

will retain their vested stock options before exercising them ("expected term"), the estimated volatility of the Company's common stock price over the expected term ("expected volatility") and the number of options that will ultimately not complete their vesting requirements ("forfeitures").

These assumptions include estimating the length of time employees will retain their vested stock options before exercising them ("expected term"), the estimated volatility of the Company's common stock price over the expected term ("expected volatility") and the number of options that will ultimately not complete their vesting requirements ("forfeitures").

Changes in the subjective assumptions can materially affect the estimate of the fair value of share-based compensation and, consequently, the related amount recognized in the Consolidated Income Statements.

15 unchanged sentences

Exercisable, end of year 301,963 $ 30.49 2.86 $ 6,521,546

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

The aggregate intrinsic value was calculated using the market price of the Company's stock on June 30, 2026, and the exercise price for only those options that have an exercise price that is less than the market price of our stock.

This amount will change as the market price per share changes.

The aggregate intrinsic value of options exercised during the fiscal years ended June 30, 2025, 2024 and 2023 was $ 3.0 million, $ 2.1 million and $ 0.2 million, respectively.

As of June 30, 2025 there were no unvested options, nor did any options vest during the fiscal year ended June 30, 2025.

The total fair value of options vested during the fiscal years ended June 30, 2024 and 2023 was $ 1.5 million and $ 1.6 million, respectively.

The aggregate intrinsic value of options exercised during the fiscal year ended June 30, 2026, 2025 and 2024 was $ 0.9 million, $ 3.0 million and $ 2.1 million, respectively.

As of June 30, 2026 there were no unvested options, nor did any options vest during the fiscal years ended June 30, 2026 and 2025.

The total fair value of options vested during the fiscal year ended June 30, 2024 was $ 1.5 million.

The following table summarizes information about stock options outstanding and exercisable as of June 30, 2026:

14 unchanged sentences

The Company issues shares to satisfy the exercise of options.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

Restricted Stock

4 unchanged sentences

fair value Vesting period

Certain employees based on performance 196,356 August 30, 2024 $ 50.94 Annually over 4 years

Certain employees based on performance 80,391 August 30, 2024 $ 55.78 Annually over 3 years

Certain employees based on hire 14,723 September 1, 2024 $ 50.94 Annually over 4 years

Certain employees based on performance 2,976 December 1, 2024 $ 50.41 Annually over 4 years

Certain employees based on performance 284,083 September 1, 2025 $ 43.65 Annually over 4 years

Certain employees based on performance 107,546 September 1, 2025 $ 43.65 Annually over 3 years

Certain employees based on performance 481 November 11, 2025 $ 40.65 Annually over 4 years

Non-Employee Directors

Certain Directors 21,987 August 30, 2024 $ 50.94 12 months

Certain Directors 25,851 September 1, 2025 $ 43.65 12 months

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

A summary of the status of the Company’s outstanding restricted stock is presented below:

16 unchanged sentences

Matching contributions $ 3,461 $ 3,261 $ 3,099

Internationally, the Company contributes to either plans required by local governments or to various employee annuity plans.

Internationally, the Company contributes to either plans mandated by local governments or to employee retirement savings and annuity plans.

Additionally, the Company maintains a non-qualified, unfunded deferred compensation plan that allows eligible members of management to defer a portion of their compensation in addition to receiving discretionary matching contributions from the Company.

Employer contributions are vested over a five-year period.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

(13) Income Taxes

3 unchanged sentences

in whole or in part.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

Income tax expense (benefit) consists of:

11 unchanged sentences

Provision for income taxes $ 24,870 $ 22,848 $ 22,781

A reconciliation is provided below of the U.S.

Federal income tax expense for the fiscal years ended June 30, 2025, June 30, 2024 and June 30, 2023 with the applicable statutory rate of 21%.

The following table presents a reconciliation of the statutory income tax rate, expressed as a percentage of income before income taxes, to the effective income tax rate for the year ended June 30, 2026, following the adoption of ASU 2023-09.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

Fiscal Year Ended June 30, 2026

2025 2024 2023

(in thousands)

Federal income tax at statutory rate $ 21,786 21.0 %

United States

State and Local Income Taxes (1)

Effect of Cross-Border Tax Laws

Global intangible low-taxed income ( 475 ) ( 0.5 ) %

FDII ( 481 ) ( 0.5 ) %

Subpart F Income 1,637 1.6 %

Other ( 136 ) ( 0.1 ) %

Foreign Tax Credit ( 1,380 ) ( 1.3 ) %

Changes in Valuation Allowances ( 6,162 ) ( 5.9 ) %

Nontaxable or Nondeductible Items

Non-deductible compensation 2,310 2.2 %

Capital Loss Expiration 5,330 5.1 %

Other ( 82 ) ( 0.1 ) %

Other Adjustments ( 571 ) ( 0.6 ) %

Non-taxable income ( 1,197 ) ( 1.2 ) %

Pillar-Two 1,188 1.1 %

Payable true-up ( 2,551 ) ( 2.5 ) %

Other ( 336 ) ( 0.3 ) %

Other Foreign Jurisdictions 227 0.2 %

Changes in Unrecognized Tax Benefits 308 0.3 %

Provision for income taxes $ 24,870 24.0 %

(1) The states that contribute the majority (greater than 50.0%) of the tax effect in this category include California, Illinois, Minnesota, New Jersey and New York.

The following table presents a reconciliation of the U.S.

Federal income tax expense for the fiscal years ended June 30, 2025 and June 30, 2024 with the applicable statutory rate of 21.0 %, prior to the adoption of ASU 2023-09.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

Fiscal Year Ended June 30,

(in thousands)

statutory rate 21.0 % 21.0 %

10 unchanged sentences

Global intangible low taxed income tax

475 ( 832 ) 1,551

Nontaxable income ( 136 ) ( 927 )

3 unchanged sentences

Provision for income taxes $ 22,848 $ 22,781

On August 26, 2024, the U.S.

Tax Court issued an opinion in Varian Medical Systems, Inc.

Commissioner .

The opinion related to the U.S.

taxation of deemed foreign dividends in the transition year of the Tax Cuts and Jobs Act (the company’s fiscal year 2018).

While the company was not a party to the case, the opinion resulted in a change to its tax position, and as such recorded a tax benefit of $ 2.1 million as a reduction to the provision for income taxes in the June 30, 2025 fiscal year.

During the June 30, 2024 fiscal year, the Company received a favorable ruling in Brazil regarding an exclusion from taxable income and as a result recognized a $ 1.5 million income tax recovery for prior years.

Subsequent to the 2023 fiscal year-end, the IRS issued Notice 2023-55 which provides taxpayers with Brazilian subsidiaries temporary relief from the final foreign tax credit regulations.

As a result, the company recognized a tax benefit of $ 1.5 million during the 2024 fiscal year for creditable foreign taxes for the 2023 fiscal year.

Index to Financial Statements

3 unchanged sentences

June 30, 2026

The following table presents income taxes paid, net of refunds, for the year ended June 30, 2026, based on the adoption of ASU 2023-09:

Fiscal year ended June 30, 2026

(in thousands)

Federal $ 21,606

Other Foreign 48

Total $ 28,904

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:

15 unchanged sentences

Deferred tax liabilities derived from:

Timing of depreciation and other deductions from building and equipment — ( 724 )

Timing of amortization deduction from goodwill ( 21,748 ) ( 17,659 )

9 unchanged sentences

Worldwide pretax earnings $ 103,743 $ 94,396 $ 99,841

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2026

As of June 30, 2026, there were (i) gross net operating loss carryforwards of approximately $ 0.9 million for U.S.

7 unchanged sentences

The Company recognizes excess tax benefits and tax deficiencies as income tax expense or benefit for stock award settlements in accordance with ASU 2016-09.

The Company recognized net tax benefit of $ 1.2 million for the fiscal year ended June 30, 2025, net tax expense of less than $ 0.1 million for the fiscal year ended June 30, 2024 and net tax benefit of less than $ 0.1 million for the fiscal year ended June 30, 2023.

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

The Company recognized net tax benefit of $ 0.5 million for the fiscal year ended June 30, 2026, net tax benefit of $ 1.2 million for the fiscal year ended June 30, 2025 and net tax benefit of less than $ 0.1 million for the fiscal year ended June 30, 2024.

As of June 30, 2026, the Company had gross unrecognized tax benefits of $ 1.3 million, $ 1.1 million of which, if recognized, would affect the effective tax rate.

This reflects a decrease of $ 0.4 million on a gross basis over the prior fiscal year.

This reflects an increase of $ 0.6 million on a gross basis over the prior fiscal year.

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

7 unchanged sentences

Additions based on tax positions related to the current year 75 86 89

Additions based on tax positions related to prior years 605 — —

Reduction for tax positions of prior years ( 82 ) ( 529 ) ( 120 )

Ending Balance $ 1,296 $ 698 $ 1,141

On August 26, 2024, the U.S.

Tax Court issued an opinion in Varian Medical Systems, Inc.

Commissioner .

The opinion related to the U.S.

taxation of deemed foreign dividends in the transition year of the Tax Cuts and Jobs Act (the company’s fiscal year 2018).

A court ruling in Brazil in June 2023 confirmed that Brazilian state-provided tax benefits are not subject to income tax and the Company recognized a tax benefit of $ 2.2 million during the June 30, 2023 fiscal year.

Subsequent to the 2023 fiscal year-end, the IRS issued Notice 2023-55 which provides taxpayers with Brazilian subsidiaries temporary relief from the final foreign tax credit regulations.

As a result, the company recognized a tax benefit of $ 1.5 million during the 2024 fiscal year for creditable foreign taxes for the 2023 fiscal year.

The Company conducts business internationally and, as a result, one or more of its subsidiaries files income tax returns in the United States federal, various state, local and foreign jurisdictions.

3 unchanged sentences

The Act permanently extends key provisions of the Tax Cuts and Jobs Act, including 100% bonus depreciation, and introduces changes to the international tax framework.

We are currently assessing the impact of the Act on our future effective tax rate, tax liabilities, and cash taxes.

We have evaluated the impact of the Act on our future effective tax rate, tax liabilities, and cash taxes and concluded that its adoption did not have a material impact on our consolidated financial statements.

In accordance with ASC 842, Leases , at contract inception the Company determines if a contract contains a lease by assessing whether the contract contains an identified asset and whether the Company has the ability to control the asset.

1 unchanged sentence

Substantially all of the Company's leases are operating leases for real estate, warehouse and office equipment ranging in duration from 1 year to 10 years.

The Company has elected not to record short-term operating leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets.

Operating leases are recorded as other non-current assets, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets.

The Company has finance leases for information technology equipment expiring through fiscal year 2028.

Finance leases are

The Company has elected not to record short-term operating leases with an initial term of 12

Index to Financial Statements

3 unchanged sentences

June 30, 2026

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

months or less on the Consolidated Balance Sheets.

Operating leases are recorded as other non-current assets, accrued expenses and other current liabilities and other long-term liabilities on the Consolidated Balance Sheets.

The Company has finance leases for information technology equipment expiring through fiscal year 2028.

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

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

5 unchanged sentences

Variable lease payments not based on a rate or index, such as costs for common area maintenance, are expensed as incurred.

Further, the Company has elected the practical expedient 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 Sheet related to operating leases at June 30, 2025 and 2024:

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 Consolidated Balance Sheets related to operating leases at June 30, 2026 and 2025:

Operating leases Balance Sheet location June 30, 2026 June 30, 2025

3 unchanged sentences

Long-term operating lease liabilities Other long-term liabilities 4,927 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 fiscal years ended June 30, 2025, 2024 and 2023.

The following table presents amounts recorded in operating lease expense as part of selling general and administrative expenses on the Consolidated Income Statements during the fiscal years ended June 30, 2026, 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.

11 unchanged sentences

Right-of-use assets obtained in exchange for lease obligations 1,643 5,035 840

The weighted-average remaining lease term and discount rate at June 30, 2025 and 2024 are presented in the table below:

Index to Financial Statements

3 unchanged sentences

June 30, 2026

The weighted-average remaining lease term and discount rate at June 30, 2026 and 2025 are presented in the table below:

June 30, 2026 June 30, 2025

13 unchanged sentences

Although there can be no assurance, based upon information known to the Company, the Company believes that any liability resulting from an adverse determination of such lawsuits would not have a material adverse effect on the Company’s financial condition and results of operations.

Capital Projects

The Company expects total capital expenditures to range from $ 10.0 million to $ 15.0 million during fiscal year 2026 primarily for IT and warehouse investments.

Pre-Acquisition Contingencies

2 unchanged sentences

There were no deposits into the escrow account;

however $ 0.2 million was released from the escrow account during the fiscal year ended June 30, 2025.

There were no deposits, or releases from the escrow account during the fiscal year ended June 30, 2024.

however $ 0.4 million and $ 0.2 million were released from the escrow account during the fiscal years ended June 30, 2026 and 2025, respectively.

The amount available after the impact of foreign currency translation, as of June 30, 2026 and 2025, for future pre-acquisition contingency settlements or to be released to the sellers was $ 3.6 million and $ 3.4 million, respectively.

1 unchanged sentence

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

The amount of reasonably possible

Index to Financial Statements

SCANSOURCE, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

June 30, 2025

undiscounted pre-acquisition contingencies as of June 30, 2025 is estimated to range from $ 3.7 million to $ 14.9 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 June 30, 2026 is estimated to range from $ 3.9 million to $ 15.7 million at this time, of which all exposures are indemnifiable under the share purchase agreement.

Index to Financial Statements

4 unchanged sentences

(16) Segment Information

The Company is a leading distributor of technology solutions and services to customers in specialty technology markets.

The Company is a leading provider of technology solutions and services to channel sales partners in specialty technology markets.

The Company's Chief Executive Officer is our Chief Operating Decision Maker ("CODM") who evaluates how we allocate resources, assess performance and make strategic and operational decisions.

The CODM reviews key financial measures for each reportable segment based on various financial results including net sales, gross profit and operating income.

In connection with that assessment, our CODM may exclude matters, such as charges for impairments, restructuring costs, acquisition and divestiture costs, gains and losses from business acquisitions or dispositions and litigation or tax settlements or recoveries.

These measures are assessed in the annual budget process as well as on an actual-to-budget comparison and an actual-to-forecast comparison when making decisions about the allocation of resources to each segment.

In addition to financial results such as net sales, gross profit, and operating income, the CODM also considers a range of operational and financial metrics, including EBITDA, return on invested capital, customer metrics and other strategic indicators.

These tools support a comprehensive view of performance and inform strategic decisions across our reportable segments.

Corporate primarily includes corporate service costs that are not included in the CODM's assessment of the performance of each of the identified reportable segments.

In connection with that assessment, our CODM may exclude matters, such as charges for impairments, significant, higher-cost restructuring programs, costs associated with separation activities, acquisition costs and other related charges, certain gains and losses from acquisitions or dispositions and certain litigation settlements.

The CODM also reviews certain other measures including total assets and property and equipment by segment and geography.

1 unchanged sentence

Specialty Technology Solutions Segment

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.

The Specialty Technology Solutions segment operates primarily in the United States 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;

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

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

13 unchanged sentences

• Wireless & IoT

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 from VSB (“Very Small Business”) to Enterprise size businesses.

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.

Index to Financial Statements

12 unchanged sentences

Operating income (loss) $ 74,113 $ 28,584 $ ( 4,070 ) $ 98,627

Other Segment Information

Other Segment Items

Depreciation and amortization (c)

10 unchanged sentences

Operating income (loss) $ 66,049 $ 27,214 $ ( 8,063 ) $ 85,200

Other Segment Information

Other Segment Items

Depreciation and amortization (c)

10 unchanged sentences

Operating income (loss) $ 66,678 $ 30,595 $ ( 6,949 ) $ 90,324

Other Segment Information

Other Segment Items

Depreciation and amortization (c)

$ 17,133 $ 7,939 $ 2,937 $ 28,009

Change in fair value of contingent consideration (d)

$ — $ — $ — $ —

Capital expenditures $ ( 8,414 ) $ ( 141 ) $ — $ ( 8,555 )

(a) For the year ended June 30, 2025, the amounts in Other operating expenses shown above include restructuring expenses, legal settlement expenses, acquisition expenses, as well as cyberattack restoration costs.

(a) For the years ended June 30, 2026 and June 30, 2025, the amounts in Other operating expenses shown above include restructuring expenses, legal settlement expenses, acquisition expenses, as well as cyberattack restoration costs.

For the year ended June 30, 2024, the amounts in Other operating expenses shown above include restructuring expenses, acquisition and divestiture expenses as well as cyberattack restoration costs.

For the year ended June 30, 2023, the amounts in Other operating expenses shown above include cyberattack restoration costs

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

10 unchanged sentences

Sales by Geography Category:

United States and Canada $ 2,809,447 $ 2,928,606 $ 3,443,562

United States $ 3,003,061 $ 2,809,447 $ 2,928,606

Brazil 227,404 240,071 338,637

7 unchanged sentences

Property and equipment, net by Geography Category:

United States and Canada $ 15,047 $ 21,613

United States $ 14,398 $ 15,047

Brazil 20,458 16,122

5 unchanged sentences

(in thousands)

Currency translation adjustment $ ( 114,934 ) $ ( 117,885 ) $ ( 93,136 )

Unrealized loss on fair value of interest rate swap, net of tax 510 2,032 3,515

Foreign currency translation adjustment $ ( 107,531 ) $ ( 114,934 ) $ ( 117,885 )

Unrealized gain on hedged transaction, net of tax 179 510 2,032

Accumulated other comprehensive loss $ ( 107,352 ) $ ( 114,424 ) $ ( 115,853 )

15 unchanged sentences

The Advantix acquisition is included in the Specialty Technology Solutions segment, and the Resourcive acquisition is included in the Intelisys & Advisory segment.

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

See Note 10 - Fair Value of Financial Instruments for the related disclosures regarding the contingent consideration liabilities recognized in connection with these acquisitions.

The purchase prices were allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction dates.

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.

During the fiscal year, 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 $ 9.4 million.

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

The allocation of the purchase price to the assets and liabilities acquired, including measuring the value of certain tax 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.

See Note 10 - Fair Value of Financial Instruments for the related disclosures regarding the contingent consideration liabilities recognized in connection with these acquisitions.

Intangible assets acquired include trade names, customer relationships, and developed technology.

See Note 7 - Goodwill and Other Identifiable Intangible Assets for the amounts of goodwill and intangible assets recognized in connection with these acquisitions.

All of the goodwill recognized is expected to be deductible for tax purposes.

Goodwill acquired through the Resourcive and Advantix acquisitions is deductible for tax purposes based on the asset purchase agreements executed.

Goodwill acquired through the DataXoom acquisition is non-deductible for tax purposes based on the stock purchase agreement executed.

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

The Company recognized $ 1.0 million and $ 0.4 million for the fiscal years ended June 30, 2025 and 2024 , respectively, in acquisition-related costs included in selling, general and administrative expenses on the Condensed Consolidated Income Statements.

The Company continues to evaluate acquisitions on an on-going basis and has recognized $ 1.2 million and $ 1.0 million in acquisition costs for the fiscal years ended June 30, 2026 and 2025 , respectively.

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

(19) Business Sale

4 unchanged sentences

The Company received an additional $ 2.6 million related to the sale for cash released from escrow in fiscal year 2025.

During the fiscal year ended June 30, 2023, the Company received a payment related to a tax settlement of $ 1.7 million for its divested businesses in Latin America, outside of Brazil.

The gain on disposal group has been recorded in net income from discontinued operations in the Consolidated Income Statements.

(20) Restructuring

In January 2024 and September 2024, as part of a strategic review of organizational structure and operations, the Company executed cost reduction and restructuring programs to align our cost structure with demand expectations in our business.

The actions taken in January 2024 and September 2024 are expected to result in approximately $ 10.0 million and $ 10.5 million, in annualized savings in selling, general and administrative expenses, most of which was realized during this fiscal year.

As part of a strategic review of organizational structure and operations, the Company executed cost reduction and restructuring programs in fiscal years ended June 30, 2026, 2025 and 2024.

The actions taken in June 2026 are expected to result in approx imately $ 7.0 million in an nualized savings to selling, general and administrative expenses.

The following table presents the restructuring and employee separation costs incurred for the fiscal years ended June 30, 2026, 2025 and 2024:

Fiscal years ended June 30,

(in thousands)

Employee separation and benefit costs $ 5,381 $ 4,358

For the fiscal years ended June 30, 2025 and 2024, all restructuring costs are recognized in the Corporate reporting unit and have not been allocated to the Specialty Technology Solutions or Intelisys & Advisory segments.

Index to Financial Statements

3 unchanged sentences

June 30, 2026

Accrued restructuring costs are included in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets.

The following table represents activity for the fiscal year ended June 30, 2025:

Fiscal years ended June 30,

2026 2025 2024

(in thousands)

Employee separation and benefit costs $ 1,766 $ 5,381 $ 4,358

For the fiscal years ended June 30, 2026, 2025 and 2024, all restructuring costs are recognized in the Corporate reporting unit and have not been allocated to the Specialty Technology Solutions or Intelisys & Advisory segments.

Accrued restructuring costs are included in accrued expenses and other current liabilities on the Consolidated Balance Sheets.

The following table represents activity for the fiscal years ended June 30, 2026 and 2025:

Accrued Expenses

7 unchanged sentences

Balance at June 30, 2026

The remaining balance as of June 30, 2025 of $ 0.6 million is expected to be paid through the third quarter of fiscal year 2026.

The remaining balance as of June 30, 2026 of $ 1.6 million is expected to be paid through the fourth quarter of fiscal year 2028.

(20) Subsequent Events

On August 20, 2026, the Company announced an agreement to acquire MicroAge, a leading IT solutions integrator, managed services provider (MSP), and digital transformation partner, helping businesses design, implement, secure, manage, and optimize their IT environments.

The acquisition is expected to add higher-margin technology solutions capabilities and expand ScanSource’s reach across strategic growth markets, including cloud, cybersecurity, data center and AI.

MicroAge serves a diversified U.S.

client base of approximately 2,400 clients and has more than 200 employees.

Under the agreement, ScanSource will acquire MicroAge in an all-cash transaction for a purchase price of $220.5 million, payable at closing.

ScanSource expects to fund the acquisition through borrowings under its existing credit facility.

The transaction is expected to close in the quarter ending September 30, 2026, subject to regulatory approval and other customary closing conditions.

Index to Financial Statements

2 unchanged sentences

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 8. Financial Statements and Supplementary Data