ScanSource Inc., a technology distributor that supplies specialty technology solutions, communications, and cloud services to resellers and IT providers, reported stronger fourth-quarter results but a year-long sales decline as technology spending remained uneven.
For the quarter ending June 30, net sales rose 8.9% to $812.9 million, compared with $746.1 million in the same period last year. Net income climbed 24.8% to $20.1 million, up from $16.1 million a year earlier.
By business line, Specialty Technology Solutions generated $788.7 million in fourth-quarter sales, up 9.2% year-over-year, driven by broad-based growth in North America. Intelisys & Advisory, which includes the company’s cloud and connectivity business, posted sales of $24.2 million, a modest 1.3% increase from last year, aided by acquisitions.
For the full fiscal year, net sales fell 6.7% to $3.04 billion, down from $3.26 billion in 2024. Annual net income decreased 7.2% to $71.5 million, compared with $77.1 million the prior year.
On an annual basis, Specialty Technology Solutions contributed $2.94 billion in sales, a 7.1% decline from the prior year, as customers pulled back on technology spending in the first half of the year. Intelisys & Advisory, meanwhile, grew 6.3% to $98.1 million, boosted by the addition of an acquisition.
Recurring revenue was a bright spot, rising 30% in the fourth quarter and 31.8% for the year. Gross profit for fiscal 2025 increased 2.4% to $408.6 million, with margins improving to 13.4% from 12.2% a year earlier.
“We delivered strong free cash flow for our fiscal year and achieved excellent profitability growth across the board,” said Mike Baur, chair, and CEO of ScanSource. “As we enter fiscal 2026, we plan to make strategic investments in our business to accelerate growth and expand margins.”
Looking ahead, ScanSource said it expects fiscal 2026 sales between $3.1 billion and $3.3 billion and adjusted earnings before interest, taxes, depreciation, and amortization of $150 million to $160 million.
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