Financial Analysis

Business Acquisitions On August 8, 2024, ScanSource acquired substantially all of the assets of Resourcive, a leading technology advisor, through its subsidiary ScanSource Agency, Inc. Resourcive delivers strategic IT sourcing solutions to mid-market and enterprise businesses. On August 15, 2024, ScanSource acquired, through its subsidiary Advantix ScanSource, LLC, substantially all of the assets of Advantix, a managed connectivity experience provider specializing in wireless enablement solutions. The combined initial purchase price of these acquisitions, net of cash acquired, was approximately $56.7 million. The Advantix acquisition is included in the Specialty Technology Solutions segment, and the Resourcive acquisition is included in the Intelisys & Advisory segment. The purchase prices were allocated to the assets acquired and liabilities assumed based on their estimated fair values on the transaction dates. On October 20, 2025, ScanSource completed the acquisition of DataXoom, a connectivity provider dedicated to supporting purpose-built mobile deployments across our current supplier line card and beyond. The initial cash purchase price totaled $18.4 million, in addition, the initial contingent consideration is valued at $13.4 million. DataXoom complements our Advantix investment and is included in the Specialty Technology Solutions segment. The allocation of the purchase prices to the assets and liabilities acquired, including the final valuation of the identifiable …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Commitments and Contingencies The Company is, from time to time, party to lawsuits arising out of operations. Although there can be no assurance, based upon information known to the Company, the Company believes that any liability resulting from an adverse determination of such lawsuits would not have a material adverse effect on the Companys financial condition, results of operations or cash flows. During the Company's due diligence for the Network1 acquisition, several pre-acquisition contingencies were identified regarding various Brazilian federal and state tax exposures. The Company recorded indemnification receivables that are reported gross of the pre-acquisition contingency liabilities as the funds were escrowed as part of the acquisition. There were no deposits into the escrow account; however, $0.4 million was released from the escrow account during the quarter ended December 31, 2025. During the fiscal year ended June 30, 2025, there were no deposits into the escrow account; however, $0.2 million was released from the escrow account. The amount available after the impact of foreign currency translation, as of December 31, 2025 and June 30, 2025, for future pre-acquisition contingency settlements or to be released to the sellers was $3.2 million and $3.4 million, respectively. The Company has recorded pre-acquisition contingencies and corresponding indemnification receivables related to Network1 of $3.6 million and $3.7 million at December 31, 2025 and June 30, 2025 …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Short-Term Borrowings and Long-Term Debt The following table presents the Companys debt at December 31, 2025 and June 30, 2025. December 31, 2025 June 30, 2025 (in thousands) Current portion of long-term debt $ 2,866 $ 7,861 Mississippi revenue bond, net of current portion 2,297 2,663 Senior secured term loan facility, net of current portion 97,500 125,625 Total debt $ 102,663 $ 136,149 Credit Facility On December 18, 2025, the Company entered into a credit agreement (the New Credit Agreement) with PNC Bank, National Association, as administrative agent (PNC), and the other lenders party thereto (the Lenders), providing for (i) a five-year, $400 million multicurrency senior secured revolving credit facility and (ii) a five-year $100 million senior secured term loan facility (the New Credit Facilities). In addition, pursuant to an accordion feature, the Company may increase its borrowings by up to the greater of $250 million or 150% of the Companys EBITDA calculated on a Pro Forma Basis (each as defined in the New Credit Agreement), subject to obtaining additional credit commitments from the Lenders participating in the increase. The New Credit Agreement allows for issuance of up to $50 million for letters of credit. Borrowings under the New Credit Agreement are secured by substantially all of the assets of the Company and its domestic subsidiaries. Under the terms of the revolving credit facility, the payment of cash dividends is restricted. The Company incurred debt issuanc …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following tables represent the Company's disaggregation of revenue: Quarter ended December 31, 2025 Specialty Technology Solutions Intelisys & Advisory Total (in thousands) Revenue by product/service Products and services $ 723,387 $ 1,102 $ 724,489 Recurring revenue (a) 18,153 23,870 42,023 $ 741,540 $ 24,972 $ 766,512 Six months ended December 31, 2025 Specialty Technology Solutions Intelisys & Advisory Total (in thousands) Revenue by product/service: Products and services $ 1,425,018 $ 2,455 $ 1,427,473 Recurring revenue (a) 31,969 46,720 78,689 $ 1,456,987 $ 49,175 $ 1,506,162 (a) Recurring revenue represents revenue primarily from agency commissions, managed connectivity, SaaS, subscriptions, and hardware rentals. Quarter ended December 31, 2024 Specialty Technology Solutions Intelisys & Advisory Total (in thousands) Revenue by product/service Products and services $ 710,858 $ 377 $ 711,235 Recurring revenue (a) 12,419 23,843 36,262 $ 723,277 $ 24,220 $ 747,497 Six months ended December 31, 2024 Specialty Technology Solutions Intelisys & Advisory Total (in thousands) Revenue by product/service: Products and services $ 1,451,592 $ 1,210 $ 1,452,802 Recurring revenue (a) 23,984 46,291 70,275 $ 1,475,576 $ 47,501 $ 1,523,077 (a) Recurring revenue represents revenue primarily from agency commissions, managed connectivity, SaaS, subscriptions, and hardware rentals.

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"Fair Value of Financial Instruments Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company classifies certain assets and liabilities based on the fair value hierarchy, which aggregates fair value measured assets and liabilities based upon the following levels of inputs: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The assets and liabilities maintained by the Company that are required to be measured at fair value on a recurring basis include deferred compensation plan investments, forward foreign currency exchange contracts, foreign currency hedge agreements, interest rate swap agreements and contingent consideration owed to the sellers of Advantix Solutions Group, Inc (""Advantix""), Secure Path Networks, LLC dba Resourcive (""Resourcive"") and DataXoom Corp. (""DataXoom""). The carrying value of debt is considered to approximate fair value, …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Goodwill and Other Identifiable Intangible Assets The changes in the carrying amount of goodwill for the six months ended December 31, 2025, by reporting segment, are set forth in the table below. Specialty Technology Solutions Intelisys & Advisory Total (in thousands) Balance at June 30, 2025 $ 159,779 $ 71,041 $ 230,820 Additions 13,465 13,465 Foreign currency translation adjustment (101) (6) (107) Balance at December 31, 2025 $ 173,143 $ 71,035 $ 244,178 The following table shows changes in the amount recognized for net identifiable intangible assets for the six months ended December 31, 2025. Net Identifiable Intangible Assets (in thousands) Balance at June 30, 2025 $ 62,909 Additions 18,200 Amortization expense (8,689) Foreign currency translation adjustment 3 Balance at December 31, 2025 $ 72,423 Additions to goodwill and intangible assets are due to the recent DataXoom acquisition. Intangible assets include trade name, developed technology and customer relationships. …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Income Taxes Income taxes for the quarters ended December 31, 2025 and 2024 have been included in the accompanying condensed consolidated financial statements using an estimated annual effective tax rate. In addition to applying the estimated annual effective tax rate to pre-tax income, the Company includes certain items treated as discrete events to arrive at an estimated overall tax provision. During the quarter ended December 31, 2025, a discrete net tax benefit of $2.4 million was recorded, which is attributable to a prior period provision to return adjustment in Brazil. During the quarter ended December 31, 2024, a discrete net tax benefit of $3.0 million was recorded, which is attributable to a reduction in the Company's prior year transition tax liability, a notional interest deduction on the net equity of the Company's Brazilian subsidiary, and stock compensation. The Companys effective tax rate of 15.1% for the quarter ended December 31, 2025 differs from the current federal statutory rate of 21% primarily as a result of discrete items recognized during the quarter. The Companys effective tax rate of 21.6% for the six months ended December 31, 2025 differs from the current federal statutory rate primarily as a result income derived from tax jurisdictions with varying income tax rates, nondeductible expenses, and state income taxes. The Company's effective tax rate was 13.5% and 20.3% for the quarter and six months ended December 31, 2024. As of December 31, 2025, the …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"Leases In accordance with Accounting Standards Codification (""ASC"") 842, at contract inception the Company determines if a contract contains a lease by assessing whether the contract contains an identified asset and whether the Company has the ability to control the asset. The Company also determines if the lease meets the classification criteria for an operating lease versus a finance lease under ASC 842. Substantially all of the Company's leases are operating leases for real estate, warehouse and office equipment ranging in duration from 1 year to 10 years. The Company has elected not to record short-term operating leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets. Operating leases are recorded as other non-current assets, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The Company has finance leases for information technology equipment expiring through fiscal year 2028. Finance leases are recorded as property and equipment, net, accrued expenses and other current liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The gross amount of the balances recorded related to finance leases is immaterial to the condensed consolidated financial statements at December 31, 2025 and the consolidated financial statements at June 30, 2025. Operating lease right-of-use assets and lease liabilities are recognized at the commencemen …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

In December 2023, the FASB issued ASU No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU updates income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 and is applicable to the Companys fiscal year beginning July 1, 2025, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures. In November 2024, the FASB issued ASU 2024-03 Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires public entities to disclose specified information about certain costs and expenses. The ASU is effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. This ASU is applicable to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2028, and subsequent interim periods, with early application permitted. The Company is currently evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures. In September 2025, the FASB issued ASU 2025-06 IntangiblesGoodwill and OtherInternal-Use Software (S …

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Revenue Recognition The Company provides technology solutions and services from the world's leading suppliers of mobility and barcode, POS, payment terminals, physical security, networking communications, connectivity and cloud services. This includes hardware, related accessories and device configuration as well as software licenses, professional services and hardware support programs. Substantially all of the Company's revenues are derived from products sold at a point-in-time. In determining the appropriate amount of revenue to recognize, the Company applies the following five-step model in accordance with ASC 606: (i) identify contracts with customers; (ii) identify performance obligations in the contracts; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations per the contracts; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company recognizes revenue as control of products and services are transferred to customers, which is generally at the point of shipment. The Company delivers products to customers in several ways, including: (i) shipment from a Company warehouse, (ii) drop-shipment directly from the supplier, or (iii) electronic delivery for non-physical products. Principal versus Agent Considerations The Company is the principal for sales of all hardware and certain software and services. The Company considers itself the principal in those transactions where it has contro …

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"Segment Information The Company is a leading provider of technology solutions and services to channel sales partners in specialty technology markets. The Company's Chief Executive Officer is our Chief Operating Decision Maker (""CODM"") who evaluates how we allocate resources, assess performance and make strategic and operational decisions. The CODM reviews key financial measures for each reportable segment based on various financial results including net sales, gross profit and operating income. These measures are assessed in the annual budget process as well as on an actual-to-budget comparison and an actual-to-forecast comparison when making decisions about the allocation of resources to each segment. In addition to financial results such as net sales, gross profit, and operating income, the CODM also considers a range of operational and financial metrics, including EBITDA, return on invested capital, customer metrics and other strategic indicators. These tools support a comprehensive view of performance and inform strategic decisions across our reportable segments. Corporate primarily includes corporate service costs that are not included in the CODM's assessment of the performance of each of the identified reportable segments. In connection with that assessment, our CODM may exclude matters, such as charges for impairments, significant, higher-cost restructuring programs, costs associated with separation activities, acquisition costs and other related charges, certain g …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing