ScanSource (SCSC) 2026財年第四季法說會：EPS 創新高，2027財年成長展望

核心要點

• ScanSource 公布 2026 財年第四季淨銷售額年增 17%，非 GAAP 每股盈餘 (EPS) 上升 43% 至 1.46 美元，創公司歷史新高。
• 全年銷售額成長 6%。產品營收成長 5.9%，經常性營收成長 10.6%，合併毛利成長 7%。
• 2026 財年自由現金流達 1.14 億美元，相當於非 GAAP 純益 124% 的轉換率。公司在財年末擁有 8,800 萬美元現金，淨債務槓桿率接近於零。
• 管理層預計 2027 財年有機營收成長 6% 至 10%，調整後 EBITDA 為 1.58 億至 1.65 億美元，自由現金流至少為 8,500 萬美元。此展望不包含對 MicroAge 的預計收購。
• ScanSource 預計將於 2027 財年第一季末前完成收購 MicroAge。管理層表示，此交易將擴大其在雲端、網路安全、資料中心及 AI 技術領域的總可服務市場 (TAM)。
• 在大額訂單回升的支撐下，下半年需求在實體安全、行動通訊、網路、客戶體驗、雲端運算及連線能力等領域普遍轉強。

重要財務數據

業務與營運表現

專業科技解決方案 (Specialty Technology Solutions) 部門在北美廣泛硬體需求的帶動下，第四季淨銷售額成長 18%。毛利增加 16% 至 9,400 萬美元，調整後 EBITDA 上升 28% 至 3,670 萬美元。該部門的調整後 EBITDA 利潤率為 3.96%。

全年來看，專業科技解決方案部門營收成長 6% 至 31.2 億美元。毛利成長 8.4% 至 3.38 億美元，其中經常性營收約占該部門毛利的 15%。

在 Intellisys 與顧問 (Advisory) 部門，第四季淨銷售額成長 7%，毛利成長 8%。調整後 EBITDA 為 940 萬美元，利潤率為 36.4%。全年部門營收成長 3.1% 至 1.01 億美元，而 Intellisys 的淨帳單金額約達 28.8 億美元。

管理層將第四季的成長描述為主要由需求驅動，儘管供應商普遍調漲價格也對營收帶來支撐。ScanSource 超過 80% 的銷售額受制於供應商控制的特殊定價協議，使得難以精確拆分價格與數量的影響。

實體安全業務全年表現強勁。下半年成長拓展至行動通訊、網路、客戶體驗、雲端運算及連線能力等領域。管理層亦將表現改善歸因於更加專注於爭取市場份額，而非守住現有陣地。

巴西業務在營收層面表現依然疲軟。ScanSource 進行了結構性的人力調整以維持獲利能力，管理層表示該業務持續保持獲利。

管理層業績展望

ScanSource 的 2027 財年展望未納入來自計畫中 MicroAge 收購案的任何貢獻。

管理層預計上半年的年增率將更為強勁，主因下半年的基期比較變得更加困難，特別是相較於強勁的 2026 財年第四季業績。

公司計畫在公布 2027 財年第一季財報時更新其年度展望，將 MicroAge 納入其中。ScanSource 繼續以調整後 EBITDA 的 1 至 2 倍作為資產負債表槓桿率目標，同時將資金配置於戰略性收購與股票回購。

風險與關注焦點

• 2027 財年展望假設需求持續強勁、交貨期正常且無重大供應中斷。管理層承認總體經濟狀況仍超出公司的控制範圍。
• Juniper 的供應限制預計將延後 ScanSource 與惠普企業 (Hewlett Packard Enterprise) 擴大網路合作帶來的貢獻。管理層預計上半年將逐漸提升，下半年將具備更完整的銷售與交付能力。
• 在 2026 財年下半年強勁的需求與大額交易活動後，2027 財年下半年的成長面臨更具挑戰性的基期比較。
• 法說會召開時，MicroAge 交易尚未完成。財務貢獻將在交易完成後納入業績展望。
• 管理層認為來自 MicroAge 的通路衝突風險較低，但表示當出現客戶重疊時，將優先考慮 ScanSource 現有的通路夥伴。

分析師問答亮點

管理層表示，第四季的強勁表現是廣泛性的，而非集中在單一產品類別。大額交易在下半年回升，而實體安全業務全年表現尤為強勁。

關於 MicroAge，管理層強調了服務而非近期財務細節。該收購將增加雲端遷移與管理、網路安全服務、下一代 AI 資料中心部署及 AI 解決方案開發能力。ScanSource 打算將這些能力提供給現有解決方案提供商與 Intellisys 的可信賴顧問。

管理層表示，MicroAge 服務約 2,500 家終端用戶，並指出企業客戶通常會與多家技術夥伴合作。因此，ScanSource 看到了與 MicroAge 聯合銷售的機會，同時也承認需要謹慎管理客戶重疊問題。

關於資本配置，管理層表示收購 MicroAge 符合多年來發展的戰略，即從硬體分銷擴展至託管與專業服務領域。公司拒絕在交易完成前提供 MicroAge 的 EBITDA 估算值。

完整財報電話會議記錄

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完整財報電話會議逐字稿

管理層陳述

Operator

Thank you. Welcome to the ScanSource Quarterly Earnings Conference Call. All lines have been placed in a listen-only mode until the question and answer session. Today's call is being recorded. If anyone has any objections, you may disconnect at this time. I would now like to turn the call over to Mary Gentry, Senior Vice President, Finance, and Treasurer. Please go ahead.

Mary Gentry

Good morning, and thank you for joining us. Our call will include prepared remarks from Mike Bauer, our chair and CEO, and Steve Jones, our chief financial officer. We'll review our operating results for the quarter and the year, and then open the line for your questions. We posted an earnings infographic that accompanies our comments and webcasts in the Investor section of our website. As you know, certain statements in our press release, infographic, and on this call are forward-looking and subject to risks and uncertainties that cause actual results to differ materially from expectations. These risks and uncertainties include the factors identified in our earnings release and in our Form 10-K for the year-ended June 30, 2026. Forward-looking statements represent our views only as of today, and ScanSource disclaims any duty to update these statements except as required by law.

During our call, we'll discuss both GAAP and non-GAAP results. We've provided reconciliations on our website and in the press release included in our Form earlier today. I'll now turn the call over to Mike. Thanks, Mary, and good morning, everyone.

Mike Baur

I appreciate you joining us today. We finished our fiscal year with a strong fourth quarter, and I'm pleased with the progress our team made throughout the year. Our results reflect disciplined execution, improving demand across the business, and momentum toward our three-year strategic goals. Sales were up 17% year-over-year in the fourth quarter and 6% for the full year. This growth reflects outstanding performance by our account management teams, including sales, engineering, financial services, and operations, and the deep relationships that we've maintained over decades with our partners. we were able to respond successfully to the increased demand for our technologies from our channel partners. For the second half of our year, we saw renewed growth for key technologies, including physical security, mobility, networking, CX, cloud compute, and connectivity. return to growth, and we believe we're at the beginning of a stronger growth trajectory. We're excited about today's announcement that we signed a definitive agreement to acquire MicroAge.

And I want to start with why we believe this is such a strong fit for ScanSource. The acquisition expands ScanSource's TAM, adds new services capabilities, and provides greater visibility into end user needs. First, my courageous technologies. Many of them are new to ScanSource. Expand our TAM in high growth technologies like cloud, cyber security, data center, and AI. And second, MicroAge brings additional services offerings to enable ScanSource channel partners to partner and co-sell new technologies, capabilities including cloud migration and management, cybersecurity services, next generation AI data center implementation, and AI solutions development. We see great opportunities ahead to help our trusted advisors and our solution providers take advantage of these new services that will become available from MicroRage. We built ScanSource over the years by identifying technologies that are transitioning to the channel. and require specialized expertise to deliver value to the end user.

That's the driving force behind our Converge Communication Business Unit we started last quarter. As we all know, the communications market has been moving from on-prem to cloud for many years, in a market where everything is connected. That's where our Converge communications team comes in, helping our partners capture the full stack of opportunities. The idea is simple, help solution providers sell more cloud recurring revenue, help Intellisys trusted advisors attach more edge devices, and build on these successes to accelerate growth. We are proud to have three long-standing brands in one channel company. ScanSource has been serving the channel for 34 years, Intellisys also for 34 years, and MicroAge is celebrating its 50th anniversary this year. All three companies have built decades-long relationships with channel partners and end users across most industries.

GanttSource's differentiation is building specialized expertise while developing deep relationships with channel partners and end users founded on trust. I'll now turn the call over to Steve to take you through our financial results and outlook for fiscal year 2027.

Stephen Jones

Thanks, Mike. Our Q4 results reflect strong demand and profitable growth across our technologies and reporting segments. Net sales and gross profits saw strong mid-teen year-over-year growth, while our non-GAAP EPS grew 43% to $1.46 a share, a record for the company. Our full-year results reflect strengthening second-half demand and the return of large deals. Our FY26 full-year results align well with our three-year goals, with net sales for products growing 5.9% year-over-year, while recurring revenues increased 10.6% year-over-year. Consolidated gross profits increased 7% year-over-year, the higher end of our range. with the gross profit contribution from recurring revenues increasing to 34% of the consolidated results. We grew our business and delivered annual free cash flow of $114 million, with cash conversion of non-GAAP net income of 124%. Turning to our segments, I'll start with specialty technology solutions.

Net sales for the quarter increased 18% year-over-year, led by broad-based North America hardware sales growth across our technologies. Gross profits increased 16% year-over-year to $94 million. Adjusted EBITDA increased 28% year-over-year to $36.7 million, with an adjusted EBITDA margin of 3.96%. For the full year, segment revenues increased 6% to $3.12 billion, while gross profits increased 8.4% to $338 million, with approximately 15% of segment gross profits coming from recurring revenues. In our Intellisys and advisory segment, Q4 net sales and gross profits grew 7 and 8% year over year respectively. Adjusted EBITDA for the segment was $9.4 million with an adjusted EBITDA margin of 36.4%. For the full year, segment revenues grew 3.1% to $101 million.

Intellisys FY26 net billings increased to approximately $2.88 billion. Going a bit deeper on our balance sheet and cash flow, we ended Q4 with $88 million in cash and a net debt leverage ratio of approximately zero on a trailing 12-month adjusted EBITDA basis. For the full year, we generated $114 million in free cash flow, 124% conversion of our non-GAAP net income. Share repurchases total $27 million for the quarter, taking our full-year share repurchases to $98 million. As of June 30, 2026, we had approximately $121 million remaining under our share repurchase authorization. Adjusted ROIC was 18.2% for the quarter and 14.7% for the full year, reflecting our disciplined approach to both working capital and capital allocation priorities. As Mike discussed, we signed a definitive agreement to acquire MicroAge, which is expected to close by the end of Q1.

Planned acquisition is an exciting opportunity to advance our three-year goals and aligns with our capital allocation priorities, expanding our total addressable market, our technology stack, our capabilities, and our channel reach with a creative margins and positive free cash generation. Our capital allocation priorities remain the same. Maintain a strong balance sheet with leverage of one to two times adjusted EBITDA and be disciplined in capital deployment including strategic acquisitions and share repurchases. We are providing an annual outlook excluding the benefit from the planned acquisition of Micro-H. On an organic basis, we expect revenues to increase between 6 and 10 percent, believing we will see continued strong demand across our technologies and with normal lead times. We expect adjusted EBITDA to be between 158 million and 165 million, reflecting an expected 4.6 to 4.65% adjusted EBITDA margin. Free cash flow, we expect to generate at least $85 million in free cash flow.

We expect the FY27 effective income tax rate to range from 27.5% to 28.5%. We plan to update our annual outlook, including the microwage acquisition during our FY27 Q1 earnings call.

Operator

We'll now open up for questions. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. standby while we compile the Q&A roster. Our first question comes from Greg Burns with Sidoti. Your line is open.

分析師問答

Gregory Burns

Morning. Can we just talk a little bit about the outperformance for the fourth quarter and the full year relative to your guide? What came in stronger than you were expecting and what's the impact? And it doesn't seem like it, but are you seeing, I think last quarter there was a little caution around macro risks and maybe supply shortages around memory, but it doesn't seem like that's impacting your business. What's the risk of that? going forward as we head into fiscal 27. Greg, good morning, this is Steve.

Stephen Jones

So I would say what we saw this year, when we think about the full year, was really what we thought was going to happen coming into the year. We believed we were going to have a stronger second half growth performance. As we saw the second half unfold, what we saw was actually a very strong demand environment and the return of those large deals that we continue to talk about being in our pipe. as the fourth quarter unfolded. So we were very pleased, like many other organizations, technologies that we saw this strong demand. When we think about the macro environment, of course, we're always cautious about what's going on in the macro environment because it's out of our control. And we believe that in our guide that we're not expecting to see – any kind of supply disruption, and we still believe we're going to see continued strong demand.

Gregory Burns

Okay, could you just maybe give us a little insight into product segment categories, you know, where you were seeing particular strength or whether or not it sounds like it was across the board but is there any particular areas of strength that worth highlighting.

Stephen Jones

No, Greg, again, it's Steve. I think it was across the board. You know, we saw all year long that physical security has been a great performer for us. But as we saw the second half, it's been very broad-based.

Gregory Burns

Okay. Okay. And then just flipping over to MicroAge, could you give us a little better understanding of their revenue mix? How much is it product versus maybe services?.

Mike Baur

Hey Greg, it's Mike. Yes I think we're going to wait to talk more about the details of micro-age after Q1 once we get it closed. There'll be some revenue in the quarter, so stand by for that. But just in general, what we were looking for, frankly, for the last year was a company that had a services strategy that we could not only buy into from their perspective, meaning selling their services business growing into their business, customer base, but also a services business that we could scale and have some of those services work with our existing channel partners. We've found MicroAge as a company that had a services business but also comes out of a traditional reseller business for 50 years and so this company for sure comes out of the legacy hardware model moved into services and now have been very successful at the blend of selling hardware and providing services, whether they're some managed services, professional services, So we really like the composition, and we'll talk more about that after our Q1 call.

Gregory Burns

Okay, and then just lastly, is there any risk of channel conflict here for you?.

Mike Baur

We think the risk is very low, but we're also, as we said when we acquired Resourcib a couple years ago, if any of our partners feel like there's some channel conflict with their customers, we're going to do our best to make sure we prefer our existing channel partner if they're already in an account and MicroAge shows up. But here's what the research really is showing across the IT landscape is, and this is from third-party research experts, that most end users today at mid-market and enterprise companies are working with six or more partners all the time. So we believe that MicroAge has a motion into their community. By the way, they're really only selling to about 2,500 or so end users, which is a very small number. But where MicroAge's lane is, it's very clear. We might today have someone else in there selling products. For example, we could have... have a security bar in their selling security and not even know MicroAge is there.

And we might have an agent in their selling connectivity. And today, all three could be in the same account and not even know each other's there because the end users today, again, from what the research shows, the IT end user today is comfortable working with a small set of partners as a team, not having one partner do it all. And so we really believe that just offers more opportunity for our channel partners today to actually go to market alongside MicroAge and vice versa. And that's really the model that we're talking about. And we'll do everything we can to make sure no one feels like they've gotten disenfranchised. And we think our longstanding relationships with our partners have given us permission to be able to do this.

Operator

All right, great. Thank you. You bet. Thank you. Our next question comes from Keith Halsom with North Coast Research. Your line is open.

Unknown Speaker

Good morning, guys, and congratulations on a great quarter. Great to see the leverage from the model coming through. Hey, Steve, as we look at the guidance and we kind of think about the tougher comps that you're going to have in the second half of the year, is it fair to say that you expect a stronger, I guess, percentage growth in the first half of the year compared to the second half of the year?.

Stephen Jones

Yes, Keith, good morning. Thanks for the question. Yes, I believe that is the way, if you look at a percentage year-over-year growth, that it's going to lay out. I think our first half has easier comps. The second half, especially with this fourth quarter, is going to be a tougher comp. But that is all captured in our 6% to 10%.

Unknown Speaker

Yep, and based on your guidance, I'm assuming the pipeline coming out of the corridor and the conversations you have at the corridor end was just as strong as the prior corridor, if not even better.

Stephen Jones

Yes, I would say that our account management teams were very busy going through the end of June.

Unknown Speaker

Great, great. And then you guys had a press release with Hewlett Packard Enterprise adding Juniper to your line card for networking. Can you perhaps talk about your expectations for when that might start to kick in and benefit you guys and how you're thinking the addition of one vendor? I know one vendor doesn't always make the numbers, but Juniper you guys used to carry and Aru of course, you were there first, so it's important to you guys. Maybe help us understand how you're thinking about that benefit.

Mike Baur

Thank you, Mike. I'll comment on that. I would say right now one of the challenges that we've already faced is Juniper has some supply chain constraints. They've had such a big year already that by adding us, our partner opportunities are going to be a little slower to be fulfilled. And so they've just got some incredible pipelines of deals and opportunities. And so I think it will be slower than we would have wanted it to be and what we thought even a quarter ago. So it's going to develop throughout, I would say, slowly through the first half of our year. And then by the time we get to the second half, we should be in full swing with Juniper from not only being able to sell, but also to deliver.

So there's going to be a little bit of a backlog from us being able to get product to sell until we get to the second half.

Unknown Speaker

Do you think the second half of the year there can be a noticeable contributor to growth? I think let us talk about that as the year unfolds, because again, some of the things.

Mike Baur

Some of these constraints are not anything we have control over. Right, right. Appreciate it.

Unknown Speaker

Hey, you know, your quarter was so strong this quarter. Did you guys have any new customer wins to help to drive that or was it true just broad demand across the board?.

Mike Baur

Well, I would say this. As everybody on the call knows, we made some changes in our leadership and sales structure, and we've got a different mindset right now about winning instead of defending. And I think that's a reflection on the emphasis. we have put on, we need to take market share and not just defend market share. And I think that spirit is something that is coming through and all across the business, especially under Mark Morgan's leadership, there's a sense of people are excited and our partners are, because again, we probably had a little bit of complacency about being able to grow our market share. So that's a new trend that we expect to continue through 2027.

Unknown Speaker

Great, appreciate it. And then, Mike, can you talk about the Intellisys turnaround? I know it's been a work in progress now for several quarters, but if you could talk about the progress of that and then what Intellisys bookings were for the quarter.

Mike Baur

Yes, you know what we've done, again, under Ken's leadership, is we've gotten our teams more focused on how do we win instead of just defend. And when you're the largest TSD, as Centellas has been in its history, it's It's easier for competitors just to pick off partners with better commission splits, better margins, if you will, for them. So what we've done is focus more on some of the technologies that are growing faster than others, put more resources behind it. And some of that, I think, is evident in our results for the year where we... when you look at that segment, we have some investments that are showing up in the additional SDNA spend because we're adding some capabilities with resources. And some of the results we talked about earlier on the call, like in cloud compute and connectivity, and even CX, we had very strong results that we haven't had in a while. And frankly, the connectivity is one that we were talking to Ken about it some more, and some of that's coming from some of the new data center connections back to enterprises, and they need more bandwidth and more connectivity, and so that's improved. our opportunity in that space. So I think the whole space, Keith, is seeing a growth surge and acceleration.

And of course, as you know, we don't see all that right away. But the early days are very positive. So how are bookings in this quarter for those guys? Well, as you know, we're not reporting on bookings. these days. Alright. Final question for you.

Unknown Speaker

Brazil seemed to have another tough quarter, which I guess was a surprise to us. Anything happening in that business structurally that we should be thinking about? No.

Mike Baur

Well, I think the main thing is we have got such great operators there that no matter how the marketplace treats us from a market demand for our products and technologies, we're always managing to a profitability. And this is a business that's been consistently profitable, nicely profitable since we got into Brazil. And so unfortunately, it means we have to take some actions. We had to make some structural changes with headcount. And so that team understands that in their environment, they have to be responsive so that we don't lose leverage on the revenue that does come in key. So again, disappointed at the top line, pleased with the profitability.

Operator

Great. Thanks, guys. Good luck. Thank you. Thank you. Our next question comes from Guy Hardwick with Barclays. Your line is open.

Guy Drummond Hardwick

Hi, good morning. Congrats on the excellent results. Appreciate it. Thanks, Guy. Steve, I think I heard you say when you gave the guidance for 2027, it's organic 6 to 10. So maybe if you comments about first half versus second half. It's a question of what visibility do you have on that 6 to 10? To what extent are you factoring in large deals.

Stephen Jones

new business prospects or the impact of some of the changes that you said to kind of re-energize the business? Yes Guy, thanks for the question. So when we think about that six to ten, that's our business, our organic business and we want to be really clear in our guidance that it did not include the acquisition, the benefits of the acquisition. We'll update that when we do our Q1 results. But what we're seeing is that's the way this business should operate as large deals continue to roll out, the technologies that we're in. One of the things that I go back to for this year even is in our specialty technology segment, you look at the hardware versus the recurring revenues, and you see the 6% to 10%. So that's a mixed statement. And so we believe things will operate more normally.

Guy Drummond Hardwick

for FY27. And just maybe in Q4, is it possible to give a kind of a split between, you know, price and volume in STS, how much of a tail went to revenues or billings was.

Stephen Jones

was inflation in the period on a year-on-year basis? Yes, let me double click on that. Great question. So we definitely benefited year over year from broad-based price increases across our technologies, like most other distributors and those in the technology did. Remember that 80% plus of our sales are under special pricing agreements controlled by the supplier. So isolating the difference with custom configuration, the mix, isolating that price difference is really difficult for us. What I would say, though, is the majority is demand-driven.

Operator

Okay, thank you. Thank you. As a reminder, to ask a question, please press star 11 on your telephone. Again, that is star 11 to ask a question. Our next question comes from Adam Tindall with Raymond James. Your line is open.

Unknown Speaker

Okay, thanks. Good afternoon and congrats on a strong Q4 finish. Mike, I want to start on micro-age. Just given the sheer magnitude of this, I think it's like more than 20% of your market cap. a big bet on this acquisition. And I wonder if we just take a step back and have, you know, kind of walk investors through the decision on capital allocation here. you mentioned your core business is returning to growth obviously returns in the core business are very strong your stock trading at six or seven times EBITDA right now so doing this acquisition versus perhaps more share repurchase you know why this was you know sort of the decision that you made.

Mike Baur

Well, there's probably two different ways I'd go at this. One is we've been planning this for a long time. When I go back to looking at the literally 2016 when we bought Intellisys. We've been talking about how the business, the IT business is going to change in the channel over 10 years and the The idea for why we believe an acquisition of a company like this is important to the future growth of our business because our channel partners need access to more services and capabilities, not just selling hardware. We predicted this. We forecast. We have slides back to 2016 where we we were trying to locate managed services capabilities to add over time. And as we went through those 10 years, at different times we made big bets. We made a big bet back then, if you recall.

That at the time was the largest transaction we'd ever done. Of course, it was an earn out, so that made it a little more palatable from a cash perspective. But that was a bet on adjacencies. And again, what we believe this is not only adjacent, but it also is going to help not only micro-age growth. This is a growth company. This is a company that we believe if we do nothing to it from a synergy with our existing channel partners where our channel partners can bring them in. On their own, this company is growing fantastically and very profitable because they're in the sweet spots of technology growth, and they have long-standing relationships. The average tenure... of their employees is way up there compared to other companies we've seen.

So if the core business that they're in is going to grow and give strong returns, why would we not want to invest in that with our balance sheet? So this became almost an easy decision from, is this as good or better return than share repurchases? Absolutely it is. And it fits our long-term plan.

Unknown Speaker

That's why we did it. Okay. And any kind of color you can give on that. If I was to back into, you know, this versus share repurchase, this acquisition should bring 30 million or so of EBITDA. Is that a reasonable ballpark? I know we're going to get more details, but just, you know, so we can sort of think about, you know, what kind of.

Stephen Jones

could be coming after a close? Yes, Adam, I would say we're still not closed, and so right now, probably not appropriate for us to project on what that might look like. Stay tuned to Q1, we'll give you a lot of color, because we'll update our annual guidance to include it.

Unknown Speaker

Okay. And then, Mike, you know, as I kind of think about, you know, microwage under scan sources care, if and when that does happen. I'd be curious your view on both the vendor and customer reaction to this. On one hand, the vendors sometimes, when a bigger entity acquires, they may be excited about this and potentially consolidate more share to the company. So I imagine, obviously, conversations may have been limited given it was just announced. But just as you kind of did your diligence, how you think vendors might react, especially given some of them are new to ScanSource. And then customers, you know, it was mentioned earlier that there's, you know, potential for channel conflict here, which is obvious. But there's also potential for synergy and empowering your existing partners.

So how you're thinking about the reaction from vendors and customers is part of the question. Thanks.

Mike Baur

Sure. And I'll go back just a little bit, too. When we met the management team, not that long ago and the first question they had for us as we went in to ask them question was Mike what's your thesis for this And again, this is a management team that's been at MicroAge a long time, some of them 30 years. And when we talked about one of the things that scan source channel partners need, both our solution providers and our trusted advisors under Telesys, they're always asking us, how can we grow and what can you do? you do, ScanSource, to help us grow. And one of the things we keep seeing is they're not most of our partners, and we have a subset that are very large and have a lot of capability to add skills. But for example, if you're trying to sell cybersecurity today as a solution provider or an agent, trusted advisor, they don't have the have the resources to follow a sale of security, cybersecurity products with implementation, deployment, and then follow-on support. None of our partners, except the very largest, have their own NOC or SOC. And so this is something we've been trying to figure out.

How can we provide that service from ScanSource on a wholesale model, if you will, to our channel, and by buying a company that's already doing that for their own customers, and then us adding scale to that, because we can now, MicroEdge can now add people they weren't able to do under a private equity ownership. They can add add more scale and provide services that, frankly, none of our competitors can offer our channel. So we believe that this is going to allow our partners and, by the way, so I had a call in anticipation, of course, of the announcement with four of our longtime barcode mobility partners, not to tell them the name, but to tell them the idea. And they were enthusiastic because they trust that we're not going to bring a partner in that will compete with them, whereas today, if they want to go to a partner to say, help us with cybersecurity or help us with data center, if they don't know them really well, they don't know if that entity might not compete with them, but they trust that we will manage the competition and they trust us to do it. So we had this call, Mark Morgan and I did a couple of days ago with four partners and said, if we do this, what will your reaction be? And they were enthusiastic. And I did talk to a couple of vendors. and told them what we're doing and they were thrilled because frankly we've got a lot more financial ability to expand the MicroAge business than they could without it. So the vendors are delighted because MicroAge is doing a fantastic job with those key vendors and they see giving them access to ScanSource balance sheet is nothing but positive.

Operator

That's helpful. Thank you. You bet. Thank you. I'm showing no further questions at this time. I would now like to turn it back to Steve Jones for closing remarks.

Stephen Jones

Thank you for joining us today. We expect to hold our next conference call to discuss our September 30th quarterly results on Thursday, November 5th at approximately 10.30 a.m.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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