SEGMENT REPORTING

6 Months Ended

Sep. 30, 2024

SEGMENT REPORTING [Abstract]

SEGMENT REPORTING

16. SEGMENT REPORTING

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. With our acquisition of Bailiwick, our professional services segment also include projects supporting digital signage, EV charging solutions, loss prevention and security, store openings, and store closings. 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. We refer to the product segment, professional services segment, and managed services segment collectively as our technology business. Our financing business segment leases IT equipment, medical equipment, and other equipment, and sells the off-lease equipment at the end of the lease. Additionally, our financing business segment finances purchases of third-party software licenses, software assurance, maintenance, and other services.

We measure the performance of the segments within our technology business based on gross profit, while we measure our financing business 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.

The following table provides reportable segment information (in thousands):

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net sales
Product	$	389,613	$	500,937	$	846,925	$	999,103
Professional services		61,900		38,270		99,179		73,826
Managed services		41,767		32,732		82,677		64,695
Financing		21,892		15,672		30,929		24,162
Total		515,172		587,611		1,059,710		1,161,786
Gross profit
Product		89,359		104,749		187,864		216,140
Professional services		25,583		15,796		41,038		30,520
Managed services		12,339		10,194		25,173		19,991
Financing		20,710		13,626		28,397		19,987
Total		147,991		144,365		282,472		286,638
Operating expenses
Technology business		99,815		94,856		194,718		187,270
Financing		5,458		4,646		9,567		8,173
Total		105,273		99,502		204,285		195,443
Operating income
Technology business		27,466		35,883		59,357		79,381
Financing		15,252		8,980		18,830		11,814
Total		42,718		44,863		78,187		91,195
Other income (expense), net		579		117		2,652		307
Earnings before tax	$	43,297	$	44,980	$	80,839	$	91,502
Depreciation and amortization
Technology business	$	5,765	$	5,602	$	10,584	$	10,366
Financing		-		28		-		56
Total	$	5,765	$	5,630	$	10,584	$	10,422
Interest and financing costs
Technology business	$	-	$	661	$	-	$	1,211
Financing		537		559		1,122		860
Total	$	537	$	1,220	$	1,122	$	2,071
Selected Financial Data - Statement of Cash Flow
Purchases of property, equipment, and operating lease equipment
Technology business	$	1,291	$	1,904	$	1,871	$	4,689
Financing		-		6		1,387		919
Total	$	1,291	$	1,910	$	3,258	$	5,608

The following tables provide 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 (in thousands):

	Three months ended September 30, 2024
	Product		Professional Services		Managed Services		Financing		Total
Net Sales:
Contracts with customers	$	381,758	$	61,900	$	41,767	$	652	$	486,077
Financing and other		7,855		-		-		21,240		29,095
Total	$	389,613	$	61,900	$	41,767	$	21,892	$	515,172
Timing and position as principal or agent:
Transferred at a point in time as principal	$	330,800	$	-	$	-	$	652	$	331,452
Transferred at a point in time as agent		50,958		-		-		-		50,958
Transferred over time as principal		-		61,900		41,767		-		103,667
Total revenue from contracts with customers	$	381,758	$	61,900	$	41,767	$	652	$	486,077

	Six months ended September 30, 2024
	Product		Professional Services		Managed Services		Financing		Total
Net Sales:
Contracts with customers	$	835,560	$	99,179	$	82,677	$	1,757	$	1,019,173
Financing and other		11,365		-		-		29,172		40,537
Total	$	846,925	$	99,179	$	82,677	$	30,929	$	1,059,710
Timing and position as principal or agent:
Transferred at a point in time as principal	$	749,174	$	-	$	-	$	1,757	$	750,931
Transferred at a point in time as agent		86,386		-		-		-		86,386
Transferred over time as principal		-		99,179		82,677		-		181,856
Total revenue from contracts with customers	$	835,560	$	99,179	$	82,677	$	1,757	$	1,019,173

	Three months ended September 30, 2023
	Product		Professional Services		Managed Services		Financing		Total
Net Sales:
Contracts with customers	$	496,065	$	38,270	$	32,732	$	2,835	$	569,902
Financing and other		4,872		-		-		12,837		17,709
Total	$	500,937	$	38,270	$	32,732	$	15,672	$	587,611
Timing and position as principal or agent:
Transferred at a point in time as principal	$	442,278	$	-	$	-	$	2,835	$	445,113
Transferred at a point in time as agent		53,787		-		-		-		53,787
Transferred over time as principal		-		38,270		32,732		-		71,002
Total revenue from contracts with customers	$	496,065	$	38,270	$	32,732	$	2,835	$	569,902

	Six months ended September 30, 2023
	Product		Professional Services		Managed Services		Financing		Total
Net Sales:
Contracts with customers	$	986,608	$	73,826	$	64,695	$	4,125	$	1,129,254
Financing and other		12,495		-		-		20,037		32,532
Total	$	999,103	$	73,826	$	64,695	$	24,162	$	1,161,786
Timing and position as principal or agent:
Transferred at a point in time as principal	$	894,660	$	-	$	-	$	4,125	$	898,785
Transferred at a point in time as agent		91,948		-		-		-		91,948
Transferred over time as principal		-		73,826		64,695		-		138,521
Total revenue from contracts with customers	$	986,608	$	73,826	$	64,695	$	4,125	$	1,129,254

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 September 30,						Six Months Ended September 30,
	2024			2023			2024			2023
Customer end market:
Telecom, Media & Entertainment	$	108,870		$	124,306		$	226,423		$	265,641
State and local government and educational institutions		97,687			94,906			189,783			204,311
Healthcare		78,235			72,022			153,515			158,678
Technology		54,988			110,948			164,094			184,351
Financial Services		34,759			69,885			84,484			135,575
All others		118,741			99,872			210,482			189,068
Net sales		493,280			571,939			1,028,781			1,137,624
Less: Revenue from financing and other		(7,855	)		(4,872	)		(11,365	)		(12,495	)
Revenue from contracts with customers	$	485,425		$	567,067		$	1,017,416		$	1,125,129
Type:
Product
Networking	$	186,776		$	268,636		$	421,516		$	513,824
Cloud		121,336			135,068			258,567			307,112
Security		41,209			51,886			89,214			97,682
Collaboration		17,988			27,083			38,887			40,039
Other		22,304			18,264			38,741			40,446
Total product		389,613			500,937			846,925			999,103
Professional services		61,900			38,270			99,179			73,826
Managed services		41,767			32,732			82,677			64,695
Net sales		493,280			571,939			1,028,781			1,137,624
Less: Revenue from financing and other		(7,855	)		(4,872	)		(11,365	)		(12,495	)
Revenue from contracts with customers	$	485,425		$	567,067		$	1,017,416		$	1,125,129

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

FINANCING BUSINESS SEGMENT DISAGGREGATION OF REVENUE

We analyze our revenues within our financing business 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 business segment are from the sales of off-lease equipment.