ScanSource Inc Reports Fourth Quarter and Fiscal Year 2024 Financial Results
Intellectia.AI Updated: 2024-08-27
ScanSource, Inc. Reports Fourth Quarter and Fiscal Year 2024 Financial Results
Overview: ScanSource, Inc. (NASDAQ:SCSC), a leading hybrid distributor connecting devices to the cloud, announced its financial results for the fourth quarter and fiscal year ended June 30, 2024.
Key Financial Metrics:
| Metric | Q4 FY2024 | Q4 FY2023 | YoY Change | Consensus Estimates |
|---|---|---|---|---|
| Total Revenue | $746.1 million | $946.4 million | -21.2% | $843.14 million |
| GAAP Earnings Per Share (EPS) | $0.64 | $0.68 | -5.9% | $0.93 |
| Non-GAAP Earnings Per Share (EPS) | $0.80 | $0.76 | 5.3% | |
| Gross Profit | $97.3 million | $108.5 million | -10.4% | |
| Operating Income | $21.9 million | $27.3 million | -19.8% | |
| Adjusted EBITDA | $34.2 million | $40.2 million | -15.0% |
ScanSource experienced a notable decrease in its total revenue, falling short of Wall Street expectations. However, despite a decline in revenue, the company managed to increase its non-GAAP earnings per share, reflecting improved efficiency and cost management.
Segment Performance:
| Segment | Q4 FY2024 Revenue | Q4 FY2023 Revenue | YoY Change |
|---|---|---|---|
| Specialty Technology Solutions | $484.7 million | $561.5 million | -13.7% |
| Modern Communications & Cloud | $261.4 million | $385.6 million | -32.2% |
| Intelisys | Not specified | Not specified | 6.2% |
The Specialty Technology Solutions and Modern Communications & Cloud segments both saw significant revenue declines, attributed to a softer demand and cautious spending in the technology sector. Conversely, the Intelisys segment reported positive growth, underscoring its strategic importance within the company’s portfolio.
Operational Highlights: - Acquisitions: - Resourcive: Acquired on August 8, 2024, Resourcive delivers strategic IT sourcing solutions. - Advantix: Acquired on August 15, 2024, Advantix specializes in wireless enablement solutions for hardware VARs. - Cash Flow: Generated $371.6 million in operating cash flow and $363.1 million in free cash flow for fiscal year 2024.
Comments from Officers: Mike Baur, Chair and CEO of ScanSource, Inc., highlighted the soft demand environment but emphasized the company's strong margins and robust cash flow. Baur underscored the company's commitment to strategic acquisitions and share repurchases, expressing enthusiasm for integrating Resourcive and Advantix teams into ScanSource.
Dividends and Share Repurchase Programs: No dividends were announced. Information related to any share repurchase programs was not specified in the provided earnings release.
Forward Guidance: ScanSource provided its annual financial outlook for fiscal year 2025, emphasizing adjusted EBITDA and free cash flow expectations. The guidance did not cover the potential impacts of future business combinations or significant transactions.
Stock Price Movement: Post-earnings release, ScanSource's stock price declined by 7.93%, signaling investor reaction to the revenue shortfall and the overall economic climate.
In summary, while ScanSource faced a challenging demand environment leading to revenue declines, its strategic acquisitions and robust cash flow management showcase the company's resilience and long-term growth focus.
