DISCONTINUED OPERATIONS

6 Months Ended

Sep. 30, 2025

DISCONTINUED OPERATIONS [Abstract]

DISCONTINUED OPERATIONS

4. DISCONTINUED OPERATIONS

On June 30, 2025, we completed the sale of HoldCo to Marlin Leasing Corporation pursuant to the Membership Interest Purchase Agreement dated June 20, 2025, thereby selling our domestic financing business. In the transaction, we received net cash proceeds of $156.7 million, consisting of cash proceeds of $180.1 million less cash transferred of $23.4 million, recognized a receivable of $7.8 million related to a post-closing adjustment process based on the book value of the assets associated with HoldCo and other adjustments, and recognized a contingent consideration asset of $13.5 million. See Note 13, “Fair Value of Financial Instruments” for a discussion of our contingent consideration asset. We incurred approximately $4.0 million in transaction costs during our quarter ended June 30, 2025, which are netted against the gain on sale of HoldCo before income taxes. In connection with the sale, we entered into a transition services agreement, pursuant to which ePlus and Marlin Leasing Corporation will provide certain transition services to each other after the sale. In our quarter ended September 30, 2025, we recognized a contingent liability related to a legal matter of our discontinued operations of $4.6 million for which we remain responsible under the terms of the HoldCo sale.

The sale of our domestic financing business positions us going forward as a pure-play technology solutions provider and represents a strategic shift in our operations. Consequently, for all periods presented in these financial statements, we are retrospectively presenting the results of our domestic financing business as discontinued operations.

The following table provides our operating results of discontinued operations for the three and six months ended September 30, 2025, and 2024 (in thousands):

	Three months ended September 30,					Six months ended September 30,
		2025			2024			2025			2024
Net sales	$	-		$	21,800		$	15,811		$	30,686
Cost of sales		-			1,111			1,734			2,390
Gross profit		-			20,689			14,077			28,296
Selling, general, and administrative		-			4,430			3,599			7,442
Interest and financing costs		-			537			450			1,122
Operating expenses		-			4,967			4,049			8,564
Operating income		-			15,722			10,028			19,732
Other income—net		(4,600	)		263			(4,389	)		625
Earnings (loss) before gain from sale and income taxes		(4,600	)		15,985			5,639			20,357
Gain from sale of HoldCo before income taxes		-			-			4,368			-
Earnings (loss) before income taxes		(4,600	)		15,985			10,007			20,357
Provision for income taxes		(1,295	)		4,474			2,743			5,700
Earnings (loss) from discontinued operations, net of tax	$	(3,305	)	$	11,511		$	7,264		$	14,657

The following table provides the major classes of assets and liabilities that are classified as discontinued operations as of March 31, 2025 (in thousands):

		March 31, 2025
ASSETS
Accounts receivable	$	34,610
Financing receivables—net, current		168,392
Other current assets		19,397
Current assets of discontinued operations	$	222,399
Financing receivables and operating leases—net	$	126,408
Other assets—long-term		7,427
Non-current assets of discontinued operations	$	133,835
LIABILITIES
Accounts payable	$	127,154
Salaries and commissions payable		2,812
Non-recourse notes payable—current		27,456
Other current liabilities		9,041
Current liabilities of discontinued operations	$	166,463
Non-recourse notes payable—long-term		11,317
Other liabilities—long-term		1,229
Non-current liabilities of discontinued operations	$	12,546