Data center News
ScanSource: Our Focus Is On ‘Mission-Critical Technologies Versus A Nice-To-Have’
Joseph F. Kovar
‘[This quarter] was driven in large part by the technologies that you’ve heard us talk about on the call: automation, worker productivity, customer experience, digital transformation, remote work and return-to-the-office collaboration—all these technologies gave us a strong quarter,’ says ScanSource President and CRO John Eldh about the distributor’s strong second fiscal quarter.
Thriving During Trying Macroeconomic Times
IT and telecom distributor ScanSource Tuesday reported a strong second fiscal quarter 2023. The Greenville, S.C.-based company Tuesday reported revenue for the quarter of $1.0 billion, up 17 percent over last year. It also reported GAAP net income of $25.4 million, or $1.01 per share, and non-GAAP net income of $26.9 million, or $1.06 per share, both up over last year.
ScanSource Chairman and CEO Mike Baur, President and CRO John Eldh and Senior Executive Vice President and CFO Steve Jones, in an exclusive interview with CRN, said that ScanSource is increasing its guidance for the next quarter and full fiscal year despite macroeconomic issues arising from a potential recession, inflation and tech layoffs.
The first half of fiscal 2023 gave ScanSource the confidence to raise its guidance, Jones said.
“As we got through the first half of the year, and we had such an outstanding first-half performance, we got more confident in two things,” he said. “One, we have better visibility to our fiscal third quarter. And we feel that even if there are macro pressures, we can still deliver a higher number than we thought when we gave our first guidance at the beginning of the year.”
That confidence comes despite the looming threat of a recession or tech layoffs, Baur said.
“Historically, when our suppliers go through layoffs to reduce their costs, they actually push more of their business to distribution,” he said. “So we typically see our business grow because we’re a variable cost for the suppliers. They would rather have variable costs in distribution than fixed costs with their own people.”
The IT world may be in for a rocky calendar 2023, but the impact on distribution, and on ScanSource, may be the opposite of what the rest of the industry could face. Here is what the executives had to say.