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SEGMENT REPORTING | 3 Months Ended
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Jun. 30, 2023
SEGMENT REPORTING [Abstract] |
SEGMENT REPORTING |
16. | SEGMENT REPORTING
Prior to the start of the fiscal year ending March 31, 2024, we had two segments: technology and financing. During the quarter ended June 30, 2023, we split our technology segment into new segments-- product, professional services, and managed services-- to provide our management the ability to better manage and allocate resources among the separate components of our technology business. Our professional services and managed services are a significant component of our growth and long-term strategic initiatives. Subsequently, we manage and report our operating results through four operating segments: product, professional services, managed services, and financing. Our product segment includes sales of IT products, third-party software, and third-party maintenance, software assurance, and other third-party services. Our professional services segment includes our advanced professional services, staff augmentation, project management services, cloud consulting services and security services. Our managed services segment includes our advanced managed services, service desk, storage-as-a-service, cloud hosted services, cloud managed services and managed security services. Our financing segment consists of the financing of IT equipment, software, and related services to commercial enterprises, state and local governments, and government contractors. We measure the performance of the segments within our technology business based on gross profit, while we measure our financing segment based on operating income. We do not present asset information for our reportable segments as we do not provide asset information to our chief operating decision maker (“CODM”). The following table provides reportable segment information for the three-month periods ended June 30, 2023, and 2022 (in thousands):
|  | Three Months Ended June 30, |
|  | 2023 |  |  | 2022 |
Net Sales |  |  |  |  |  |
Product |  | $ | 498,166 |  |  | $ | 385,676 |
Professional Services |  |  | 35,556 |  |  |  | 37,168 |
Managed Services |  |  | 31,963 |  |  |  | 25,941 |
Financing |  |  | 8,490 |  |  |  | 9,574 |
Total |  |  | 574,175 |  |  |  | 458,359 |
Gross Profit |  |  |  |  |  |  |  |
Product |  |  | 111,391 |  |  |  | 83,168 |
Professional Services |  |  | 14,724 |  |  |  | 15,055 |
Managed Services |  |  | 9,797 |  |  |  | 7,428 |
Financing |  |  | 6,361 |  |  |  | 7,872 |
Total |  |  | 142,273 |  |  |  | 113,523 |
Operating income |  |  |  |  |  |  |  |
Technology Business |  |  | 43,498 |  |  |  | 29,219 |
Financing |  |  | 2,834 |  |  |  | 3,964 |
Total |  |  | 46,332 |  |  |  | 33,183 |
Other income (expense), net |  |  | 190 |  |  |  | (2,153 | )
Earnings before tax |  | $ | 46,522 |  |  | $ | 31,030 |
Depreciation and amortization |  |  |  |  |  |  |  |
Technology Business |  | $ | 4,764 |  |  | $ | 3,182 |
Financing |  |  | 28 |  |  |  | 28 |
Total |  | $ | 4,792 |  |  | $ | 3,210 |
Interest and financing costs |  |  |  |  |  |  |  |
Technology Business |  | $ | 550 |  |  | $ | 138 |
Financing |  |  | 301 |  |  |  | 225 |
Total |  | $ | 851 |  |  | $ | 363 |
Selected Financial Data - Statement of Cash Flow |  |  |  |  |  |  |  |
Purchases of property, equipment and operating lease equipment Technology Business |  | $ | 2,785 |  |  | $ | 1,286 |
Financing |  |  | 913 |  |  |  | 491 |
Total |  | $ | 3,698 |  |  | $ | 1,777 |
The following table provides a disaggregation of net sales by source and further disaggregates our revenue recognized from contracts with customers by timing and our position as principal or agent for the three-month period ended June 30, 2023 (in thousands):
|  | Three months ended June 30, 2023 |
|  | Product |  |  | Professional Services |  |  | Managed Services |  |  | Financing |  |  | Total |
Net Sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contracts with customers |  | $ | 490,543 |  |  | $ | 35,556 |  |  | $ | 31,963 |  |  | $ | 1,290 |  |  | $ | 559,352 |
Financing and other |  |  | 7,623 |  |  |  | - |  |  |  | - |  |  |  | 7,200 |  |  |  | 14,823 |
Total |  | $ | 498,166 |  |  | $ | 35,556 |  |  | $ | 31,963 |  |  | $ | 8,490 |  |  | $ | 574,175 |
Timing and position as principal or agent |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Transferred at a point in time as principal |  | $ | 452,382 |  |  | $ | - |  |  | $ | - |  |  | $ | 1,290 |  |  | $ | 453,672 |
Transferred at a point in time as agent |  |  | 38,161 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 38,161 |
Transferred over time as principal |  |  | - |  |  |  | 35,556 |  |  |  | 31,963 |  |  |  | - |  |  |  | 67,519 |
Total revenue from contracts with customers |  | $ | 490,543 |  |  | $ | 35,556 |  |  | $ | 31,963 |  |  | $ | 1,290 |  |  | $ | 559,352 |
The following table provides a disaggregation of net sales by source and further disaggregates our revenue recognized from contracts with customers by timing and our position as principal or agent for the three-month period ended June 30, 2022 (in thousands):
|  | Three months ended June 30, 2022 |
|  | Product |  |  | Professional Services |  |  | Managed Services |  |  | Financing |  |  | Total |
Net Sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contracts with customers |  | $ | 380,693 |  |  | $ | 37,168 |  |  | $ | 25,941 |  |  | $ | 945 |  |  | $ | 444,747 |
Financing and other |  |  | 4,983 |  |  |  | - |  |  |  | - |  |  |  | 8,629 |  |  |  | 13,612 |
Total |  | $ | 385,676 |  |  | $ | 37,168 |  |  | $ | 25,941 |  |  | $ | 9,574 |  |  | $ | 458,359 |
Timing and position as principal or agent |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Transferred at a point in time as principal |  | $ | 335,714 |  |  | $ | - |  |  | $ | - |  |  | $ | 945 |  |  | $ | 336,659 |
Transferred at a point in time as agent |  |  | 44,979 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 44,979 |
Transferred over time as principal |  |  | - |  |  |  | 37,168 |  |  |  | 25,941 |  |  |  | - |  |  |  | 63,109 |
Total revenue from contracts with customers |  | $ | 380,693 |  |  | $ | 37,168 |  |  | $ | 25,941 |  |  | $ | 945 |  |  | $ | 444,747 |
TECHNOLOGY BUSINESS DISAGGREGATION OF REVENUE The following table provides a disaggregation of our revenue from contracts with customers for our technology business by customer end market and by type (in thousands):
|  | Three Months Ended June 30, |
|  | 2023 |  |  | 2022 |
Customer end market: |  |  |  |  |  |
Telecom, media & entertainment |  | $ | 141,335 |  |  | $ | 128,277 |
SLED |  |  | 109,405 |  |  |  | 64,602 |
Healthcare |  |  | 86,656 |  |  |  | 68,512 |
Technology |  |  | 73,403 |  |  |  | 69,862 |
Financial services |  |  | 65,690 |  |  |  | 33,299 |
All others |  |  | 89,196 |  |  |  | 84,233 |
Net sales |  |  | 565,685 |  |  |  | 448,785 |
Less: revenue from financing and other |  |  | (7,623 | ) |  |  | (4,983 | )
Total revenue from contracts with customers |  | $ | 558,062 |  |  | $ | 443,802 |
Type: |  |  |  |  |  |  |  |
Product |  |  |  |  |  |  |  |
Networking |  | $ | 245,188 |  |  | $ | 142,641 |
Cloud |  |  | 172,044 |  |  |  | 164,733 |
Security |  |  | 45,796 |  |  |  | 47,995 |
Collaboration |  |  | 12,956 |  |  |  | 12,980 |
Other |  |  | 22,182 |  |  |  | 17,327 |
Total product |  |  | 498,166 |  |  |  | 385,676 |
Professional services |  |  | 35,556 |  |  |  | 37,168 |
Managed services |  |  | 31,963 |  |  |  | 25,941 |
Net sales |  |  | 565,685 |  |  |  | 448,785 |
Less: revenue from financing and other |  |  | (7,623 | ) |  |  | (4,983 | )
Total revenue from contracts with customers |  | $ | 558,062 |  |  | $ | 443,802 |
We do not disaggregate sales by customer end market beyond the technology business level. FINANCING SEGMENT DISAGGREGATION OF REVENUE We analyze our revenues within our financing segment based on the nature of the arrangement. Our financing revenue generally consists of portfolio income, transactional gains, and post-contract earnings including month-to-month rents and the sales of off-lease equipment. All our revenues from contracts with customers within our financing segment is from the sales of off-lease equipment.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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