ScanSource Q4 Earnings Beat Estimates, Plans Working Capital Optimization To Reach Margin Expectations

ScanSource, Inc. SCSC reported Q4 revenues of $947.15 million, down 1.6% Y/Y. Revenues beat the street view of $897.20 million.

Non-GAAP EPS of $0.76 beat the consensus of $0.75.

Specialty Technology Solutions net sales for the fourth quarter decreased 3.3% year-over-year to $561.5 million.

Modern Communications & Cloud net sales for the fourth quarter increased 1% year-over-year to $385.6 million.

Gross profit fell 1.9% to $108.66 million. Gross margin contracted to 11.47% from 11.51% in the year-ago period.

For Q4, operating income was $27.3 million compared to $27.4 million in the prior-year quarter.

Adjusted EBITDA for Q4 increased 3.9% Y/Y to $40.2 million, or 4.24% of net sales.

The company exited the quarter with cash and equivalents worth $36.17 million.

"As we enter our new fiscal year, strong free cash flow and focus on Intelisys are keys to our success," said Mike Baur, Chairman and CEO, ScanSource. "Now that the supply chain challenges are behind us, we are normalizing our working capital to meet our margin expectations and market demand."

Outlook: SCSC sees FY24 GAAP operating income to be at least $134 million and Adjusted EBITDA (non-GAAP) in FY24 to be at least $180 million.

The company expects FY24 net sales growth of at least 3%.

Price Action: SCSC shares are trading higher by 0.21% to $28.46 on the last checked Tuesday.