SEGMENT REPORTING

3 Months Ended

Jun. 30, 2023

SEGMENT REPORTING [Abstract]

SEGMENT REPORTING

16. SEGMENT REPORTING

Prior to the start of the fiscal year ending March 31, 2024, we had two segments: technology and financing. During the quarter ended June 30, 2023, we split our technology segment into new segments-- product, professional services, and managed services-- to provide our management the ability to better manage and allocate resources among the separate components of our technology business. Our professional services and managed services are a significant component of our growth and long-term strategic initiatives. Subsequently, we manage and report our operating results through four operating segments: product, professional services, managed services, and financing. Our product segment includes sales of IT products, third-party software, and third-party maintenance, software assurance, and other third-party services. Our professional services segment includes our advanced professional services, staff augmentation, project management services, cloud consulting services and security services. Our managed services segment includes our advanced managed services, service desk, storage-as-a-service, cloud hosted services, cloud managed services and managed security services. Our financing segment consists of the financing of IT equipment, software, and related services to commercial enterprises, state and local governments, and government contractors.

We measure the performance of the segments within our technology business based on gross profit, while we measure our financing segment based on operating income. We do not present asset information for our reportable segments as we do not provide asset information to our chief operating decision maker (“CODM”).

The following table provides reportable segment information for the three-month periods ended June 30, 2023, and 2022 (in thousands):

	Three Months Ended June 30,
	2023		2022
Net Sales
Product	$	498,166	$	385,676
Professional Services		35,556		37,168
Managed Services		31,963		25,941
Financing		8,490		9,574
Total		574,175		458,359
Gross Profit
Product		111,391		83,168
Professional Services		14,724		15,055
Managed Services		9,797		7,428
Financing		6,361		7,872
Total		142,273		113,523
Operating income
Technology Business		43,498		29,219
Financing		2,834		3,964
Total		46,332		33,183
Other income (expense), net		190		(2,153	)
Earnings before tax	$	46,522	$	31,030
Depreciation and amortization
Technology Business	$	4,764	$	3,182
Financing		28		28
Total	$	4,792	$	3,210
Interest and financing costs
Technology Business	$	550	$	138
Financing		301		225
Total	$	851	$	363
Selected Financial Data - Statement of Cash Flow
Purchases of property, equipment and operating lease equipment Technology Business	$	2,785	$	1,286
Financing		913		491
Total	$	3,698	$	1,777

The following table provides a disaggregation of net sales by source and further disaggregates our revenue recognized from contracts with customers by timing and our position as principal or agent for the three-month period ended June 30, 2023 (in thousands):

	Three months ended June 30, 2023
	Product		Professional Services		Managed Services		Financing		Total
Net Sales
Contracts with customers	$	490,543	$	35,556	$	31,963	$	1,290	$	559,352
Financing and other		7,623		-		-		7,200		14,823
Total	$	498,166	$	35,556	$	31,963	$	8,490	$	574,175
Timing and position as principal or agent
Transferred at a point in time as principal	$	452,382	$	-	$	-	$	1,290	$	453,672
Transferred at a point in time as agent		38,161		-		-		-		38,161
Transferred over time as principal		-		35,556		31,963		-		67,519
Total revenue from contracts with customers	$	490,543	$	35,556	$	31,963	$	1,290	$	559,352

The following table provides a disaggregation of net sales by source and further disaggregates our revenue recognized from contracts with customers by timing and our position as principal or agent for the three-month period ended June 30, 2022 (in thousands):

	Three months ended June 30, 2022
	Product		Professional Services		Managed Services		Financing		Total
Net Sales
Contracts with customers	$	380,693	$	37,168	$	25,941	$	945	$	444,747
Financing and other		4,983		-		-		8,629		13,612
Total	$	385,676	$	37,168	$	25,941	$	9,574	$	458,359
Timing and position as principal or agent
Transferred at a point in time as principal	$	335,714	$	-	$	-	$	945	$	336,659
Transferred at a point in time as agent		44,979		-		-		-		44,979
Transferred over time as principal		-		37,168		25,941		-		63,109
Total revenue from contracts with customers	$	380,693	$	37,168	$	25,941	$	945	$	444,747

TECHNOLOGY BUSINESS DISAGGREGATION OF REVENUE

The following table provides a disaggregation of our revenue from contracts with customers for our technology business by customer end market and by type (in thousands):

	Three Months Ended June 30,
	2023			2022
Customer end market:
Telecom, media & entertainment	$	141,335		$	128,277
SLED		109,405			64,602
Healthcare		86,656			68,512
Technology		73,403			69,862
Financial services		65,690			33,299
All others		89,196			84,233
Net sales		565,685			448,785
Less: revenue from financing and other		(7,623	)		(4,983	)
Total revenue from contracts with customers	$	558,062		$	443,802
Type:
Product
Networking	$	245,188		$	142,641
Cloud		172,044			164,733
Security		45,796			47,995
Collaboration		12,956			12,980
Other		22,182			17,327
Total product		498,166			385,676
Professional services		35,556			37,168
Managed services		31,963			25,941
Net sales		565,685			448,785
Less: revenue from financing and other		(7,623	)		(4,983	)
Total revenue from contracts with customers	$	558,062		$	443,802

We do not disaggregate sales by customer end market beyond the technology business level.

FINANCING SEGMENT DISAGGREGATION OF REVENUE

We analyze our revenues within our financing segment based on the nature of the arrangement. Our financing revenue generally consists of portfolio income, transactional gains, and post-contract earnings including month-to-month rents and the sales of off-lease equipment. All our revenues from contracts with customers within our financing segment is from the sales of off-lease equipment.