ePlus inc. (NASDAQ:PLUS) Q1 2021 Earnings Conference Call - Final Transcript
Aug 05, 2020 • 04:30 pm ET
Good day, ladies and gentleman. Welcome to the ePlus Earnings Results Conference Call. As a reminder, this conference call is being recorded.
I would like to introduce your host for today's conference, Mr. Kley Parkhurst, SVP. Sir, you may begin.
Thank you for joining us today. On the call is Mark Marron, CEO and President; Elaine Marion, CFO; Darren Raiguel, COO and President of ePlus Technology; and Erica Stoecker, General Counsel. I want to take a moment to remind you that the statements we make this afternoon that are not historical facts may be deemed to be forward-looking statements and are based on management's current plans, estimates and projections. Actual and anticipated future results may vary materially due to certain risks and uncertainties detailed in the earnings release we issued this afternoon in our periodic filings with the Securities and Exchange Commission, including our Form 10-K for the year ended March 31st, 2020 and our Form 10-Q for the period ending June 30th, 2020 when filed.
The company undertakes no responsibility to update any of these forward-looking statement in light of new information or future events. In addition, during the call, we may make reference to non-GAAP financial measures and we've included a GAAP financial reconciliation in our earnings release, which was posted on the Investor Information section of our website at www.eplus.com.
I'd now like to turn the call over to Mark Marron. Mark?
Thank you, Kley, and thank you, everyone, for participating in today's call to discuss our fiscal 2021 first quarter results. ePlus performed well in a dynamic business environment, our solutions portfolio is positioned to support our customers' needs in critical areas including cloud collaboration software, data center and security. Our strategy to bolster our recurring and annuity-type revenues has continued to gain market share and provides a more consistent baseline of revenue and profitability for ePlus.
We focused on mid-sized to enterprise customers with good credit quality, and we believe we have minimal exposure to the most at-risk industry verticals like retail, hospitality and travel. We believe our 30-plus years of providing leasing through our financing segment has provided us with risk management knowledge and experience to successfully navigate through economic downturns.
We have remained fully operational during the pandemic shifting much of our business to accommodate work-from-home mandates and take it appropriate precautions for health and safety of all of our employees. I want to commend the entire ePlus team for pulling together and showing tremendous dedication to our company and its values. As a result, we were able to expeditiously serve our customers and effectively support their critical IT needs.
The key measure of our success in the quarter was a 6.4% increase in gross profit and a strong consolidated gross margin of 27.8%, driven by a very favorable business mix in the quarter, including a larger component of third-party maintenance services and subscription sales. Services revenue increased 4.4% while we do not expect this quarter's uncharacteristically high margin level to be replicated in