AI Analysis | Feedback

Here are 1-3 brief analogies for ScanSource (SCSC):

• Grainger for business technology.
• A specialized TD SYNNEX, focused on B2B communications, POS, and security tech.
• The wholesale hub for IT resellers, akin to a Costco Business Center for business tech providers.

AI Analysis | Feedback

• Technology Solutions Distribution: ScanSource acts as a wholesale distributor for a broad portfolio of specialized technology hardware and software solutions, including point-of-sale, barcode/AIDC, networking, and physical security products.
• Cloud Services Distribution: The company distributes cloud-based communication, collaboration, and infrastructure services, connecting reseller partners with leading cloud service providers.
• Value-Added Services: ScanSource provides comprehensive support services to its reseller partners, including technical support, pre-configuration, logistics, financing, and marketing assistance.

AI Analysis | Feedback

ScanSource (SCSC) sells primarily to other companies (B2B), operating as a leading global distributor of technology products and solutions.

Its major customers are not end-users, but rather a diversified base of channel partners who then sell to the ultimate end-users. These direct customer categories include:

• Value-Added Resellers (VARs): These companies enhance and resell third-party products and services, often bundling them with their own solutions and support.
• System Integrators: Businesses that specialize in bringing together component subsystems into a whole and ensuring those subsystems function together as a unified system.
• Independent Software Vendors (ISVs): Companies that make and sell software products that run on one or more computer hardware or operating system platforms, often integrating ScanSource's distributed hardware into their solutions.

ScanSource's most recent SEC filings indicate that no single customer accounted for 10% or more of its consolidated net sales during the last three fiscal years. Therefore, specific individual public company customers cannot be identified as "major customers" by name and symbol, as their revenue contribution does not meet the disclosure threshold.

AI Analysis | Feedback

• Zebra Technologies Corporation (ZBRA)
• Cisco Systems, Inc. (CSCO)
• Honeywell International Inc. (HON)
• Ingenico (parent company Worldline SA, WLN.PA)
• Microsoft Corporation (MSFT)

AI Analysis | Feedback

Mike Baur
Chair and Chief Executive Officer

Michael L. Baur co-founded ScanSource in December 1992 and has served as either President or CEO since the Company's inception. He has been a director since December 1995 and Chair of the Board since February 2019. Mr. Baur has over 40 years of experience in the IT industry, including various leadership roles in technology and distribution prior to ScanSource.

Steve Jones
Senior Executive Vice President and Chief Financial Officer

Steve Jones joined ScanSource as Senior Executive Vice President and Chief Financial Officer in December 2020. Before ScanSource, he was the International Chief Financial Officer of Blackbaud, Inc., a cloud software company, from 2016 to 2020. Prior to Blackbaud, Mr. Jones held finance and management positions at Lexmark International from 2000 to 2016. He also served as Assistant Controller at Honeywell earlier in his career.

John Eldh
President

John Eldh was named President of ScanSource in February 2022, after joining the company as Chief Revenue Officer in October 2019. He has extensive global experience in building and leading sales teams across various routes to market for SaaS and consulting companies. Previously, Mr. Eldh was Senior Vice President of Global Partner Organizations at CA Technologies, where he oversaw the global partner business and led its transformation to a scalable, revenue-generating sales model. He also held multiple leadership roles at Symantec Corporation for nearly ten years and spent 14 years at Gartner, Inc.

Tony Sorrentino
President, North America

Tony Sorrentino was promoted to President, North America in August 2021, and is responsible for all aspects of the North America hardware business. He has been with ScanSource since 1999 and was involved with the ScanSource Security business from its inception in 2004. His previous roles at ScanSource include President, North America Sales; Co-president, US and Canada; Co-president, Worldwide Barcode, Networking and Security; and President and Vice President of Sales for ScanSource Networking and Security. He possesses over 16 years of experience in technology distribution.

Alex Conde
Senior Executive Vice President and Chief People Officer

Alex Conde serves as Senior Executive Vice President and Chief People Officer, focusing on talent, recruitment, and culture. He previously served as President of ScanSource Brazil. Mr. Conde joined ScanSource in 2011 through the acquisition of CDC Brasil, a prominent distributor of AIDC and point-of-sale solutions in Brazil. He further led the acquisition of Network1, a communications solutions provider, in 2015.

AI Analysis | Feedback

The most significant risks include:

1. Macroeconomic Conditions: ScanSource's business is highly susceptible to broader macroeconomic conditions, including potential prolonged economic weakness, inflation, and disruptions in supply chains. These factors can significantly impact the company's financial results and operational stability.
2. Reliance on Key Customer and Supplier Relationships: The company's success is heavily dependent on its relationships with major channel sales partners (customers) and key suppliers. The loss of a significant customer or supplier, or a material modification of the terms under which it operates with these partners, could severely impact ScanSource's revenue and profitability.
3. Cybersecurity and IT System Failures: ScanSource faces risks related to cybersecurity attacks and failures of its information technology (IT) systems. Such events can disrupt operations, lead to data breaches, and incur significant costs, as evidenced by a recent gain from an insurance recovery related to a cybersecurity attack.

AI Analysis | Feedback

AI Analysis | Feedback

ScanSource (SCSC) operates as a leading hybrid distributor of technology products and solutions, serving various specialized markets. The addressable market sizes for their main products and services are outlined below:

• Communications and Collaboration Solutions: The global communications and collaboration market was valued at approximately US$ 252.83 billion in 2023 and is projected to grow to US$ 321.68 billion by 2028, with a compound annual growth rate (CAGR) of 4.94%.
• Point-of-Sale (POS) Systems and Payments: The global point of sale (POS) terminal market was valued at USD 110.9 billion in 2023 and is projected to reach USD 208.2 billion by 2032, growing at a CAGR of 7.5%. The broader global point of sale market size was valued at USD 33.41 billion in 2024 and is projected to grow to USD 110.22 billion by 2032, with a CAGR of 16.1%.
• Barcode and Data Capture Solutions: The global automatic identification and data capture (AIDC) market size was valued at USD 79.05 billion in 2024 and is expected to exceed USD 158.60 billion by 2034, growing at a CAGR of 7.21%. North America held approximately 41.20% of the worldwide sales in the AIDC market in 2024.
• Physical Security Solutions: The global physical security market size was valued at USD 121.3 billion in 2023 and is expected to reach USD 197.75 billion in 2031, with a CAGR of 6.3%. Another estimate places the global physical security market at USD 142 billion in 2025, projected to reach USD 275 billion by 2035, growing at a CAGR of 6.79%. In the U.S. specifically, the physical security market was projected to reach USD 405 billion by 2023.

AI Analysis | Feedback

ScanSource (SCSC) is poised for future revenue growth over the next two to three years, driven by several strategic initiatives and market opportunities. These drivers emphasize the company's evolving business model towards higher-margin, recurring revenue streams and expansion into advanced technological solutions.

1. Continued Growth of Intelisys and Recurring Revenue Streams: ScanSource is strategically focused on expanding its Intelisys and Advisory segment, which has consistently demonstrated growth in net sales and end-user billings. For instance, Intelisys net sales grew 6% year-over-year in Q4 2024, with end-user billings increasing by 9% annually. In Q1 2026, Intelisys & Advisory net sales increased 4% year-over-year, and annualized net billings reached approximately $2.78 billion. The company's overall gross profit margin has benefited from a higher concentration of recurring revenues, with the percentage of gross profit from recurring revenue increasing to 32.8% in fiscal year 2025 from 27.5% in the prior year. This shift towards a more recurring revenue mix is expected to enhance profitability and drive top-line growth.

2. Strategic Acquisitions to Expand Capabilities and Market Share: ScanSource has actively pursued and plans to continue making strategic acquisitions of high-margin, recurring revenue businesses. Recent examples include Advantix, a connectivity provider for 5G mobility solutions, and DataXoom, a provider of B2B mobile data connectivity solutions. These acquisitions are designed to complement existing investments, enhance service offerings, and expand the company's total addressable market through specialized solutions, thereby contributing to future revenue growth.

3. Expansion into Advanced Technologies and Integrated Solutions: The company is making significant investments to capitalize on emerging and advanced technologies. This includes a focus on areas such as Contact Center as a Service (CCaaS) and Unified Communications as a Service (UCaaS), which saw Q4 billings growth of 35% and 13% respectively in FY24. ScanSource also established the Integrated Solutions Group to provide specialty technology VARs with new solutions and is expanding its technical capabilities in advanced technologies like AI and private 5G through initiatives such as the AI Masterclass for channel partners. These efforts aim to offer a more comprehensive portfolio and drive demand for innovative solutions.

4. Accelerated Adoption of Hybrid Distribution Strategy and Partner Enablement: ScanSource is emphasizing its hybrid distribution strategy, which is anticipated to drive increased demand. The company actively engages with its sales partners through events like the Partner First Conference, which hosted 800 attendees, to encourage the embrace of new growth opportunities. By segmenting partners and offering customized services, ScanSource aims to enhance value propositions and enable specialty technology VARs to deliver more comprehensive solutions with their hardware, fostering stronger partner relationships and ultimately boosting revenue.

5. Anticipated Recovery and Growth in Specialty Technology Solutions and Modern Communications & Cloud Segments: Despite recent declines in net sales for the Specialty Technology Solutions and Modern Communications & Cloud segments, management expects a return to growth. The company anticipates that the challenging demand environment will improve, particularly in the latter half of fiscal year 2025 and into fiscal year 2026. ScanSource management has indicated that delays and fragmentation of large deals are primarily timing issues, suggesting that these opportunities are not lost but rather deferred, and should contribute to revenue as market conditions improve.

AI Analysis | Feedback

Share Repurchases

• ScanSource announced a new $200 million share repurchase authorization in May 2025, with no specified time limit for purchases.
• The company repurchased $106.5 million in shares during fiscal year 2025.
• ScanSource repurchased $43 million in shares over fiscal year 2024.

Share Issuance

• The number of ScanSource's outstanding shares has decreased by 7.22% in the last year as of November 2025.
• Common shares outstanding were 22,217,421 at June 30, 2025, and 22,067,128 at September 30, 2025, reflecting a net reduction.

Outbound Investments

• ScanSource acquired Resourcive, a technology advisor, in August 2024, aiming to boost high-margin, recurring revenue.
• In October 2025, the company completed the acquisition of DataXoom, a connectivity provider, which complements its Advantix investment.
• In late 2020, ScanSource divested its product distribution businesses in Europe, the UK, Mexico, Colombia, Chile, Peru, and its Miami-based export operations to focus on higher-margin businesses.

Capital Expenditures

• Capital expenditures for fiscal year 2025 were approximately $8.2 million.
• In the 12 months ending November 2025, capital expenditures were -$8.31 million.
• The company invested in new infrastructure, tools, and programs in fiscal year 2024 to support a "productivity anywhere" work environment, adapting to hybrid work models.