IT solutions provider ePlus (NASDAQ: PLUS) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 15.7% year on year to $576.2 million. Its non-GAAP profit of $1 per share was 2% above analysts’ consensus estimates.

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"In the fourth quarter, we achieved double digit growth across both net sales and gross billings, demonstrating expanding market share, and underscoring the durability and resilience of our business, " said Mark Marron, president and CEO of ePlus.

Company Overview

Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ: PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $2.44 billion in revenue over the past 12 months, ePlus is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, ePlus grew its sales at an impressive 9.2% compounded annual growth rate over the last five years. This shows it had high demand, a useful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. ePlus’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 4.7% over the last two years was well below its five-year trend.

This quarter, ePlus reported year-on-year revenue growth of 15.7%, and its $576.2 million of revenue exceeded Wall Street’s estimates by 1.2%.

Looking ahead, sell-side analysts expect revenue to grow 4.1% over the next 12 months, similar to its two-year rate. This projection doesn’t excite us and suggests its newer products and services will not lead to better top-line performance yet.

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Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

ePlus was profitable over the last five years but held back by its large cost base. Its average adjusted operating margin of 7.6% was weak for a business services business.

Looking at the trend in its profitability, ePlus’s adjusted operating margin decreased by 1.3 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. ePlus’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q1, ePlus generated an adjusted operating margin profit margin of 5.9%, down 1.4 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

ePlus’s solid 10.4% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For ePlus, its two-year annual EPS growth of 3.2% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q1, ePlus reported adjusted EPS of $1, down from $1.11 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 2%. Over the next 12 months, Wall Street expects ePlus’s full-year EPS to grow 5.8% from $5.24 to $5.55.

Key Takeaways from ePlus’s Q1 Results

It was good to see ePlus narrowly top analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Overall, this print had some key positives. Investors were likely hoping for more, and shares traded down 8.5% to $81 immediately after reporting.

Is ePlus an attractive investment opportunity at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).