ScanSource (SCSC) Investor presentation summary

Business transformation and growth strategy

• Shifted business model to increase recurring revenue, now representing 33% of gross profit, with a goal to reach 50% in three years.

• Expanded gross margin to 13.4% in FY25, up from 10% in FY16, driven by recurring revenue and higher-margin segments.

• Embedded a cash flow culture, targeting 80%+ free cash flow conversion of non-GAAP net income annually.

• Strategic acquisitions added new capabilities and recurring revenue, supporting ROIC and capital efficiency.

• Launched a converged communications business unit to accelerate recurring revenue growth and partner engagement.

Market positioning and competitive advantages

• Positioned as a differentiated technology distribution leader with $3B+ net sales and 25,000+ partners.

• Delivers complex solutions and advanced expertise, enabling faster partner activation and broader market reach.

• Offers flexible go-to-market models, deep specialization, and scalable operational execution for suppliers.

• Agency model is asset-light and capital-efficient, with 98% recurring revenue gross profit in this segment.

• Value proposition includes technical expertise, custom configuration, and innovative financial solutions for partners and suppliers.

Segment performance and growth drivers

• Two segments: Specialty Technology Solutions (76% of gross profit, hardware-centric) and Intelisys & Advisory (24%, agency model, high-margin recurring revenue).

• Specialty Technology Solutions focuses on mobility, networking, communications, security, and POS, with mid-single-digit market growth.

• Intelisys & Advisory targets connectivity, cloud, security, and wireless, with ~10%+ market growth and strong demand for cloud and AI solutions.

• Recurring revenue gross profit grew 22% year-over-year to $134.1M in FY25.

• Case studies highlight value creation through converged solutions and high-touch support, driving significant contract wins.