SCANSOURCE, INC. recently released its 10-K report. ScanSource distributes technology products and solutions in the United States and internationally through two operating segments: Specialty Technology Solutions and Intelisys & Advisory. Its Specialty Technology Solutions unit sells mobility and barcode products, point-of-sale systems, payment terminals, physical security, networking, communications, and managed connectivity tools, while Intelisys & Advisory focuses on connectivity, software-defined networking, cloud, security, managed AI, wireless and IoT services for channel partners serving businesses of various sizes. The company was incorporated in 1992 and is headquartered in Greenville, South Carolina.
In Item 7, management said ScanSource is built around a distribution model that combines hardware, SaaS, connectivity and cloud offerings from about 500 suppliers for roughly 25,000 channel sales partners, mainly in the U.S. and Brazil. The company said its distribution facilities are in Mississippi, California and Kentucky for the U.S. business, and in Paraná, Espírito Santo and Santa Catarina in Brazil, with some digital products delivered through its own tools and platforms. Management also named major suppliers including AT&T, Avaya, Axis, Cisco, Comcast Business, Dell, Elo, Extreme, Five9, Fortinet, Hanwha, Honeywell, HP Poly, HPE/Aruba, HPE/Juniper, Ingenico, Lumen, Microsoft, NiCE, RingCentral, Ubiquiti, Verifone, Verizon, Zebra Technologies and Zoom.
For fiscal 2026, net sales rose 6.1% to $3.226 billion from $3.041 billion. Specialty Technology Solutions generated $3.125 billion in sales, up 6.2%, while Intelisys & Advisory posted $101.1 million, up 3.1%; on a constant-currency basis, Specialty Technology Solutions rose 5.3% and Intelisys & Advisory rose 2.3%. By geography, U.S. sales increased 7.1% to $2.999 billion, while international sales fell 5.6% to $226.6 million.
Gross profit increased 7.0% to $437.4 million from $408.6 million, lifting gross margin to 13.6% from 13.4%. Specialty Technology Solutions gross profit climbed to $337.6 million from $311.4 million, with margin improving to 10.8% from 10.6%; Intelisys & Advisory gross profit rose to $99.7 million from $97.2 million, though margin edged down to 98.6% from 99.1%.
Operating expenses increased 4.7% to $338.7 million, led by SG&A of $313.2 million, up $26.2 million, mainly from employee-related costs. Depreciation fell to $6.0 million from $10.0 million, intangible amortization declined to $16.7 million from $19.2 million, and restructuring and other charges dropped to $1.8 million from $5.4 million. Operating income rose 15.8% to $98.6 million, with Specialty Technology Solutions contributing $74.1 million, Intelisys & Advisory $28.6 million, and Corporate posting a $4.1 million loss.
Other income and expense improved to a net gain of $5.1 million from $9.2 million, as interest expense fell to $6.6 million from $8.0 million and interest income increased to $12.3 million from $11.2 million. Net foreign exchange losses widened to $1.6 million from $0.8 million, and other net income narrowed to $1.0 million from $6.7 million. Income tax expense was $24.9 million, up from $22.8 million, with an effective tax rate of 24.0% versus 24.2%.
Management said the macroeconomic backdrop remains uncertain because of inflation, tariffs and geopolitical tensions, and noted that the company expects to pass through supplier price increases tied to tariffs or similar factors. It also said fiscal 2026 Intelisys net billings reached about $2.88 billion, up 3.2% from the prior year. Following these announcements, the company's shares moved 11.77%, and are now trading at a price of $57.47. Check out the company's full 10-K submission here.
