The quarter came in well above the standing estimate. Published expectations were roughly $1.14 of adjusted EPS and $814 million of revenue; ScanSource delivered $1.46 and $953.1 million, respectively — a substantial beat on both profit and sales.
| Metric | Q4 FY26 | Q4 FY25 | Change | Market expectation |
|---|---|---|---|---|
| Revenue | $953.1M | $812.9M | +17.3% | ~$814M |
| Non-GAAP diluted EPS | $1.46 | $1.02 | +43.1% | ~$1.14 |
| GAAP diluted EPS | $1.24 | $0.88 | +40.9% | — |
| Adjusted EBITDA | $46.1M | $38.6M | +19.4% | — |
| Free cash flow | $(4.8)M | $5.1M | — | — |
| FY26 free cash flow | $113.8M | $104.1M | +9.4% | FY27 guide: at least $85M |
The beat was operational, not just an accounting artifact. Specialty Technology Solutions revenue rose 16.5% excluding foreign exchange and acquisitions, while adjusted EBITDA margin expanded to 4.84% from 4.75%. The quarterly gross margin did slip 35 basis points, but operating income still rose 18.5%, showing that scale and expense leverage more than offset the mix pressure. (Financial Highlights; Net Sales by Segment; Income Statement)
The full-year outcome also exceeded the company’s prior profitability framework. FY26 adjusted EBITDA reached $151.5 million, compared with the prior disclosed target range of $158 million to $165 million in the supplied guidance table; that indicates the annual target was not achieved despite the strong finish. By contrast, FY26 free cash flow of $113.8 million comfortably exceeded the prior minimum of $85 million. (Financial Highlights; Free Cash Flow)
FY27 guidance points to continued growth but not an acceleration before MicroAge. Management’s new framework calls for 6% to 10% sales growth, $158 million to $165 million of adjusted EBITDA, and at least $85 million of free cash flow, explicitly excluding MicroAge. Against FY26, that implies only modest EBITDA growth from $151.5 million, while the cash-flow floor is below the $113.8 million just delivered. (FY27 Guidance) 〔0〕
The MicroAge agreement adds a meaningful strategic catalyst, but also a sizable cash commitment. ScanSource agreed to pay $220.5 million in cash for an IT solutions integrator and managed-services provider, with closing targeted for the quarter ending September 30, 2026. The deal expands exposure to cloud, cybersecurity, data center, and AI services, but its earnings contribution is not included in FY27 guidance, leaving the near-term payoff unquantified. (MicroAge Acquisition Announcement)
Net: this is a clear earnings beat, with the acquisition becoming the next test. The surprise is broad — revenue, adjusted EPS, operating income, and quarterly adjusted EBITDA all outperformed the market’s apparent baseline — while the main qualification is that FY27 standalone guidance is measured rather than aggressive and the all-cash MicroAge purchase will materially reshape the balance sheet once completed.
Read the original 8-K on SEC EDGAR ↗