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SEGMENT REPORTING | 6 Months Ended
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Sep. 30, 2024
SEGMENT REPORTING [Abstract] |
SEGMENT REPORTING |
16. | SEGMENT REPORTING
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. With our acquisition of Bailiwick, our professional services segment also include projects supporting digital signage, EV charging solutions, loss prevention and security, store openings, and store closings. 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. We refer to the product segment, professional services segment, and managed services segment collectively as our technology business. Our financing business segment leases IT equipment, medical equipment, and other equipment, and sells the off-lease equipment at the end of the lease. Additionally, our financing business segment finances purchases of third-party software licenses, software assurance, maintenance, and other services. We measure the performance of the segments within our technology business based on gross profit, while we measure our financing business 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. The following table provides reportable segment information (in thousands):
|  | Three Months Ended |  |  | Six Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Net sales |  |  |  |  |  |  |  |  |  |  |  |
Product |  | $ | 389,613 |  |  | $ | 500,937 |  |  | $ | 846,925 |  |  | $ | 999,103 |
Professional services |  |  | 61,900 |  |  |  | 38,270 |  |  |  | 99,179 |  |  |  | 73,826 |
Managed services |  |  | 41,767 |  |  |  | 32,732 |  |  |  | 82,677 |  |  |  | 64,695 |
Financing |  |  | 21,892 |  |  |  | 15,672 |  |  |  | 30,929 |  |  |  | 24,162 |
Total |  |  | 515,172 |  |  |  | 587,611 |  |  |  | 1,059,710 |  |  |  | 1,161,786 |
Gross profit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Product |  |  | 89,359 |  |  |  | 104,749 |  |  |  | 187,864 |  |  |  | 216,140 |
Professional services |  |  | 25,583 |  |  |  | 15,796 |  |  |  | 41,038 |  |  |  | 30,520 |
Managed services |  |  | 12,339 |  |  |  | 10,194 |  |  |  | 25,173 |  |  |  | 19,991 |
Financing |  |  | 20,710 |  |  |  | 13,626 |  |  |  | 28,397 |  |  |  | 19,987 |
Total |  |  | 147,991 |  |  |  | 144,365 |  |  |  | 282,472 |  |  |  | 286,638 |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Technology business |  |  | 99,815 |  |  |  | 94,856 |  |  |  | 194,718 |  |  |  | 187,270 |
Financing |  |  | 5,458 |  |  |  | 4,646 |  |  |  | 9,567 |  |  |  | 8,173 |
Total |  |  | 105,273 |  |  |  | 99,502 |  |  |  | 204,285 |  |  |  | 195,443 |
Operating income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Technology business |  |  | 27,466 |  |  |  | 35,883 |  |  |  | 59,357 |  |  |  | 79,381 |
Financing |  |  | 15,252 |  |  |  | 8,980 |  |  |  | 18,830 |  |  |  | 11,814 |
Total |  |  | 42,718 |  |  |  | 44,863 |  |  |  | 78,187 |  |  |  | 91,195 |
Other income (expense), net |  |  | 579 |  |  |  | 117 |  |  |  | 2,652 |  |  |  | 307 |
Earnings before tax |  | $ | 43,297 |  |  | $ | 44,980 |  |  | $ | 80,839 |  |  | $ | 91,502 |
Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Technology business |  | $ | 5,765 |  |  | $ | 5,602 |  |  | $ | 10,584 |  |  | $ | 10,366 |
Financing |  |  | - |  |  |  | 28 |  |  |  | - |  |  |  | 56 |
Total |  | $ | 5,765 |  |  | $ | 5,630 |  |  | $ | 10,584 |  |  | $ | 10,422 |
Interest and financing costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Technology business |  | $ | - |  |  | $ | 661 |  |  | $ | - |  |  | $ | 1,211 |
Financing |  |  | 537 |  |  |  | 559 |  |  |  | 1,122 |  |  |  | 860 |
Total |  | $ | 537 |  |  | $ | 1,220 |  |  | $ | 1,122 |  |  | $ | 2,071 |
Selected Financial Data - Statement of Cash Flow |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purchases of property, equipment, and operating lease equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Technology business |  | $ | 1,291 |  |  | $ | 1,904 |  |  | $ | 1,871 |  |  | $ | 4,689 |
Financing |  |  | - |  |  |  | 6 |  |  |  | 1,387 |  |  |  | 919 |
Total |  | $ | 1,291 |  |  | $ | 1,910 |  |  | $ | 3,258 |  |  | $ | 5,608 |
The following tables provide 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 (in thousands):
|  | Three months ended September 30, 2024 |
|  | Product |  |  | Professional Services |  |  | Managed Services |  |  | Financing |  |  | Total |
Net Sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contracts with customers |  | $ | 381,758 |  |  | $ | 61,900 |  |  | $ | 41,767 |  |  | $ | 652 |  |  | $ | 486,077 |
Financing and other |  |  | 7,855 |  |  |  | - |  |  |  | - |  |  |  | 21,240 |  |  |  | 29,095 |
Total |  | $ | 389,613 |  |  | $ | 61,900 |  |  | $ | 41,767 |  |  | $ | 21,892 |  |  | $ | 515,172 |
Timing and position as principal or agent: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Transferred at a point in time as principal |  | $ | 330,800 |  |  | $ | - |  |  | $ | - |  |  | $ | 652 |  |  | $ | 331,452 |
Transferred at a point in time as agent |  |  | 50,958 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 50,958 |
Transferred over time as principal |  |  | - |  |  |  | 61,900 |  |  |  | 41,767 |  |  |  | - |  |  |  | 103,667 |
Total revenue from contracts with customers |  | $ | 381,758 |  |  | $ | 61,900 |  |  | $ | 41,767 |  |  | $ | 652 |  |  | $ | 486,077 |
|  | Six months ended September 30, 2024 |
|  | Product |  |  | Professional Services |  |  | Managed Services |  |  | Financing |  |  | Total |
Net Sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contracts with customers |  | $ | 835,560 |  |  | $ | 99,179 |  |  | $ | 82,677 |  |  | $ | 1,757 |  |  | $ | 1,019,173 |
Financing and other |  |  | 11,365 |  |  |  | - |  |  |  | - |  |  |  | 29,172 |  |  |  | 40,537 |
Total |  | $ | 846,925 |  |  | $ | 99,179 |  |  | $ | 82,677 |  |  | $ | 30,929 |  |  | $ | 1,059,710 |
Timing and position as principal or agent: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Transferred at a point in time as principal |  | $ | 749,174 |  |  | $ | - |  |  | $ | - |  |  | $ | 1,757 |  |  | $ | 750,931 |
Transferred at a point in time as agent |  |  | 86,386 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 86,386 |
Transferred over time as principal |  |  | - |  |  |  | 99,179 |  |  |  | 82,677 |  |  |  | - |  |  |  | 181,856 |
Total revenue from contracts with customers |  | $ | 835,560 |  |  | $ | 99,179 |  |  | $ | 82,677 |  |  | $ | 1,757 |  |  | $ | 1,019,173 |
|  | Three months ended September 30, 2023 |
|  | Product |  |  | Professional Services |  |  | Managed Services |  |  | Financing |  |  | Total |
Net Sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contracts with customers |  | $ | 496,065 |  |  | $ | 38,270 |  |  | $ | 32,732 |  |  | $ | 2,835 |  |  | $ | 569,902 |
Financing and other |  |  | 4,872 |  |  |  | - |  |  |  | - |  |  |  | 12,837 |  |  |  | 17,709 |
Total |  | $ | 500,937 |  |  | $ | 38,270 |  |  | $ | 32,732 |  |  | $ | 15,672 |  |  | $ | 587,611 |
Timing and position as principal or agent: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Transferred at a point in time as principal |  | $ | 442,278 |  |  | $ | - |  |  | $ | - |  |  | $ | 2,835 |  |  | $ | 445,113 |
Transferred at a point in time as agent |  |  | 53,787 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 53,787 |
Transferred over time as principal |  |  | - |  |  |  | 38,270 |  |  |  | 32,732 |  |  |  | - |  |  |  | 71,002 |
Total revenue from contracts with customers |  | $ | 496,065 |  |  | $ | 38,270 |  |  | $ | 32,732 |  |  | $ | 2,835 |  |  | $ | 569,902 |
|  | Six months ended September 30, 2023 |
|  | Product |  |  | Professional Services |  |  | Managed Services |  |  | Financing |  |  | Total |
Net Sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contracts with customers |  | $ | 986,608 |  |  | $ | 73,826 |  |  | $ | 64,695 |  |  | $ | 4,125 |  |  | $ | 1,129,254 |
Financing and other |  |  | 12,495 |  |  |  | - |  |  |  | - |  |  |  | 20,037 |  |  |  | 32,532 |
Total |  | $ | 999,103 |  |  | $ | 73,826 |  |  | $ | 64,695 |  |  | $ | 24,162 |  |  | $ | 1,161,786 |
Timing and position as principal or agent: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Transferred at a point in time as principal |  | $ | 894,660 |  |  | $ | - |  |  | $ | - |  |  | $ | 4,125 |  |  | $ | 898,785 |
Transferred at a point in time as agent |  |  | 91,948 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 91,948 |
Transferred over time as principal |  |  | - |  |  |  | 73,826 |  |  |  | 64,695 |  |  |  | - |  |  |  | 138,521 |
Total revenue from contracts with customers |  | $ | 986,608 |  |  | $ | 73,826 |  |  | $ | 64,695 |  |  | $ | 4,125 |  |  | $ | 1,129,254 |
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 September 30, |  |  | Six Months Ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Customer end market: |  |  |  |  |  |  |  |  |  |  |  |
Telecom, Media & Entertainment |  | $ | 108,870 |  |  | $ | 124,306 |  |  | $ | 226,423 |  |  | $ | 265,641 |
State and local government and educational institutions |  |  | 97,687 |  |  |  | 94,906 |  |  |  | 189,783 |  |  |  | 204,311 |
Healthcare |  |  | 78,235 |  |  |  | 72,022 |  |  |  | 153,515 |  |  |  | 158,678 |
Technology |  |  | 54,988 |  |  |  | 110,948 |  |  |  | 164,094 |  |  |  | 184,351 |
Financial Services |  |  | 34,759 |  |  |  | 69,885 |  |  |  | 84,484 |  |  |  | 135,575 |
All others |  |  | 118,741 |  |  |  | 99,872 |  |  |  | 210,482 |  |  |  | 189,068 |
Net sales |  |  | 493,280 |  |  |  | 571,939 |  |  |  | 1,028,781 |  |  |  | 1,137,624 |
Less: Revenue from financing and other |  |  | (7,855 | ) |  |  | (4,872 | ) |  |  | (11,365 | ) |  |  | (12,495 | )
Revenue from contracts with customers |  | $ | 485,425 |  |  | $ | 567,067 |  |  | $ | 1,017,416 |  |  | $ | 1,125,129 |
Type: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Product |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Networking |  | $ | 186,776 |  |  | $ | 268,636 |  |  | $ | 421,516 |  |  | $ | 513,824 |
Cloud |  |  | 121,336 |  |  |  | 135,068 |  |  |  | 258,567 |  |  |  | 307,112 |
Security |  |  | 41,209 |  |  |  | 51,886 |  |  |  | 89,214 |  |  |  | 97,682 |
Collaboration |  |  | 17,988 |  |  |  | 27,083 |  |  |  | 38,887 |  |  |  | 40,039 |
Other |  |  | 22,304 |  |  |  | 18,264 |  |  |  | 38,741 |  |  |  | 40,446 |
Total product |  |  | 389,613 |  |  |  | 500,937 |  |  |  | 846,925 |  |  |  | 999,103 |
Professional services |  |  | 61,900 |  |  |  | 38,270 |  |  |  | 99,179 |  |  |  | 73,826 |
Managed services |  |  | 41,767 |  |  |  | 32,732 |  |  |  | 82,677 |  |  |  | 64,695 |
Net sales |  |  | 493,280 |  |  |  | 571,939 |  |  |  | 1,028,781 |  |  |  | 1,137,624 |
Less: Revenue from financing and other |  |  | (7,855 | ) |  |  | (4,872 | ) |  |  | (11,365 | ) |  |  | (12,495 | )
Revenue from contracts with customers |  | $ | 485,425 |  |  | $ | 567,067 |  |  | $ | 1,017,416 |  |  | $ | 1,125,129 |
We do not disaggregate sales by customer end market beyond the technology business. FINANCING BUSINESS SEGMENT DISAGGREGATION OF REVENUE We analyze our revenues within our financing business 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 business segment are from the sales of off-lease equipment.

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- Definition The entire disclosure for reporting segments including data and tables. 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