# SCSC earnings call intelligence LOPJLB CallCard / temporal rollup · freemium · [stock page](https://www.lopjlb.com/stock/SCSC) · [Earnings tab](https://www.lopjlb.com/stock/SCSC?tab=earnings) Updated: 2026-08-21T07:46:33 Quarters analyzed: 8 ## Cross-quarter narrative Across the six earnings calls, ScanSource moved from a backdrop of soft hardware demand and macro uncertainty toward a more upbeat outlook driven by recurring‑revenue mix, disciplined acquisitions and stronger cash conversion. Early 2025 calls highlighted persistent demand softness, FX headwinds and competitive pricing, yet the company delivered on several acquisitions and segment realignments while maintaining FY25 guidance. By Q3 2025 margins improved as recurring revenue rose and a $200 million share buyback was announced, though concerns about large‑deal timing and Brazil performance surfaced. The Q4 2025 call introduced FY26 strategic goals and a recurring‑revenue gross‑profit target, while noting competitive pressure and macro volatility. In 2026 the tone shifted upward with modest sales growth, new converged communications unit and continued share repurchases, but guidance was lowered due to slower large‑deal invoicing, memory‑chip supply risk and Brazil weakness. Q3 2026 reaffirmed FY26 guidance, raised free‑cash‑flow expectations and launched the Converged Communications unit, yet analysts flagged demand pull‑forward and Intelisys order‑growth risk. The latest Q4 2026 call showed strong YoY sales, a MicroAge acquisition and robust pipeline, while macro, supply‑chain and Brazil challenges remained, and integration risk was highlighted. ## Latest CallCard · Q4 ScanSource delivered strong Q4 with 17% YoY sales growth, 43% non-GAAP EPS growth, announced MicroAge acquisition to expand TAM and services, guided FY27 organic revenue growth 6-10% excluding acquisition. **Guidance:** maintained — FY27 organic revenue growth 6-10%, adjusted EBITDA $158-165M (4.6-4.65% margin), free cash flow at least $85M, excluding MicroAge; will update after acquisition closes in Q1. **Tone:** mgmt 0.7 · Q&A pressure 0.4 · divergence 0.3 CEO highlights strong execution, improving demand across technologies, momentum toward 3-year goals, and excitement about MicroAge acquisition expanding TAM and services capabilities. ### Demand visibility Strong broad-based demand across technologies in second half, large deals returning, pipeline robust, but macro caution and Brazil weakness persist. Q4 sales up 17% YoY, full year up 6%. Strength in physical security, mobility, networking, CX, cloud compute, connectivity. Intelisys segment net sales and gross profits grew 78% YoY. Account management teams very busy, pipeline strong. Management cautious on macro, notes Brazil top-line disappointment. ### Margins / costs Gross profit growth, expanding recurring revenue contribution, improved segment EBITDA margins, strong free cash flow conversion. Consolidated gross profits increased 7% YoY, recurring revenue gross profit contribution 34%. STS segment adjusted EBITDA margin 3.96%, Intelisys segment 36.4%. Full year free cash flow $114M, 124% conversion of non-GAAP net income. FY27 adjusted EBITDA margin expected 4.6-4.65%. ### Capital allocation Acquisition of MicroAge, ongoing share repurchases, maintain leverage 1-2x EBITDA, disciplined deployment. Signed definitive agreement to acquire MicroAge, expected to close by end of Q1 FY27. Share repurchases $27M in Q4, $98M full year, $121M remaining authorization. Capital allocation priorities: maintain strong balance sheet with leverage 1x-2x adjusted EBITDA, disciplined deployment including strategic acquisitions and share repurchases. Adjusted ROIC 18.2% for quarter, 14.7% full year. ### Milestones - **MicroAge acquisition** [new]: Definitive agreement signed, expected to close by end of Q1 FY27, will expand TAM, add services capabilities (cloud migration, cybersecurity, AI data center implementation). - **Converged Communications business unit** [on_track]: Started last quarter, helping partners capture full stack opportunities, sell cloud recurring revenue, attach edge devices. - **Intelisys turnaround** [on_track]: Focus on winning vs defending, investments in faster-growing technologies (cloud compute, connectivity, CX) showing results. - **Juniper networking line card addition** [at_risk]: Supply chain constraints slowing partner fulfillment, expected to ramp in second half of FY27. - **Brazil structural changes** [delayed]: Structural changes with headcount reductions to maintain profitability amid top-line disappointment. ### Fears / risks - **Macro environment**: Management cautious about macro environment, out of their control. - **Supply chain constraints**: Juniper supply chain constraints may delay revenue contribution from new line card. - **Channel conflict**: Potential channel conflict with MicroAge acquisition, though management believes risk low and end users work with multiple partners. - **Brazil market weakness**: Brazil top-line disappointment, structural changes needed, though profitability maintained. - **Integration risk**: MicroAge acquisition integration execution risk, details not yet disclosed. - **Large deal dependency**: Growth driven by return of large deals, which may be lumpy. - **Competitive pressure on Intelisys**: Competitors picking off partners with better commission splits, requiring investment in capabilities. ### Key quotes > “We finished our fiscal year with a strong fourth quarter and I am pleased with the progress our team made throughout the year. Our results reflect disciplined execution, improving demand, across the business and momentum toward our 3-year” — Michael L. Baur > “Our Q4 results reflect strong demand and profitable growth across our technologies and reporting segments. Net sales and gross profits saw strong mid teen year over year growth, while our non GAAP EPS grew 43% to $1.46 per share, a record” — Stephen T. Jones > “We are excited about today's announcement that we signed a definitive agreement to acquire MicroAge. And I want to start with why we believe this is such a strong fit for ScanSource. The acquisition expands ScanSource's TAM, adds new” > “We are providing an annual outlook excluding the benefit from the planned acquisition of MicroAge. On an organic basis, we expect revenues to increase between 6% to 10%, believing we will see continued strong demand across our technologies” ## Quarter one-liners - **2026 Q4:** ScanSource delivered strong Q4 with 17% YoY sales growth, 43% non-GAAP EPS growth, announced MicroAge acquisition to expand TAM and services, guided FY27 organic revenue growth 6-10% excluding acquisition. - **2026 Q3:** ScanSource reports 9% net sales growth in Q3, launches Converged Communications unit to accelerate Intelisys order growth, maintains FY26 revenue/EBITDA guidance, raises FCF outlook to $90M+. - **2026 Q2:** Q2 2026 saw modest sales growth, strong free cash flow and a new converged communications team, but guidance was lowered due to slower large‑deal timing, higher period costs and memory‑supply uncertainty. - **2026 Q1:** — - **2025 Q4:** ScanSource posted Q4 FY2025 revenue growth, improved margins and strong cash conversion while outlining FY26 guidance and new 3‑year strategic goals, but highlighted competitive pressure in Intelisys and macro uncertainty. - **2025 Q3:** ScanSource posted a 6% YoY sales decline but saw gross profit and adjusted EBITDA rise 6%, lifted margins with recurring revenue, and raised FY2025 sales guidance to $3B while emphasizing acquisitions and a new $200M share buyback. - **2025 Q2:** Soft demand and a 4% sales decline hurt top‑line growth, but higher recurring‑revenue mix lifted gross profit margins and the company kept its FY25 guidance despite visibility challenges. - **2025 Q1:** ScanSource delivered strong free cash flow and EPS growth in soft demand, reaffirmed FY25 guidance, closed two acquisitions, and realigned segments to highlight hybrid distribution strategy. ## Theme arcs - **Demand softness** (deteriorating): Soft hardware demand noted in early 2025, persisted through 2026 with reliance on large deals and pull‑forward concerns. - **Recurring‑revenue mix** (improving): Recurring revenue consistently lifted margins from Q2 2025 onward, becoming a core growth lever. - **FX headwinds** (stable): Currency pressure in Brazil repeatedly cited across calls without resolution. - **Competitive pressure** (stable): PE‑backed rivals and Intelisys competition cited in multiple periods, remaining a consistent risk. - **Margin pressure** (deteriorating): Higher freight, mix and large‑deal compression pressured gross margins from Q3 2025 onward. - **Brazil market weakness** (deteriorating): Brazil performance flagged in Q3 2025, Q4 2025, Q2 2026 and Q4 2026, with structural changes still pending. - **Large‑deal timing** (deteriorating): Fragmented invoicing and reliance on $30‑$40 M pull‑ins created guidance volatility. - **Supply‑chain risk** (new): Memory‑chip shortages (Q2 2026) and Juniper line‑card constraints (Q4 2026) introduced new execution uncertainty. - **Macro environment** (stable): Tariff, interest‑rate and broader economic volatility cited from Q4 2025 through Q4 2026. - **Intelisys order growth** (new): Accelerating Intelisys new‑order growth became a focus in Q3‑Q4 2026 with mixed progress. ## Guidance path 2025 Q1:maintained → 2025 Q2:maintained → 2025 Q3:raised → 2025 Q4:maintained → 2026 Q1:vague → 2026 Q2:lowered → 2026 Q3:maintained → 2026 Q4:maintained --- Research context only. Not personalized investment advice. API: `GET /bff/api/bigfive/earnings-intel/SCSC`