What ePlus inc. told the SEC could break it.

ePlus has a single dominant customer: Verizon Communications was ~24% of net sales in FY2026 (up from 17-19%) and an outsized ~36% of trade accounts receivable at 3/31/2026 (up from 17%). Its largest end market — telecommunications, media & entertainment — is 30% of revenue. The named Verizon relationship is captured as a supply edge; this records the concentration/credit-exposure vulnerability: a Verizon spending pullback, contract loss, or payment problem would have an outsized effect on revenue and working capital.

“On March 31, 2026, and March 31, 2025, our accounts receivable-trade balance included a concentration of approximately 36% and 17% of invoices due from Verizon Communications Inc.”

ePlus resells tariff-exposed IT hardware, and it flags that rapid changes in trade-related laws and Executive Orders — tariffs, import/export regulations and sanctions — are creating supply-chain uncertainty and complexity. It expects these changes to materially impact its costs and to largely result in passing tariffs onto its customers (with compliance itself onerous and expensive, and the rules inconsistent across jurisdictions and repeatedly modified). Even with pass-through, tariff-driven price increases can dampen customer demand and compress margins on a thin-margin reseller model.

“We anticipate that these changes will materially impact our costs and will largely result in our passing tariffs onto our customers.”

A substantial portion of ePlus's revenue depends on a small number of key vendors, with no long-term supply or guaranteed-price agreements or assurance of inventory availability. Cisco products were ~29% of net sales in FY2026 (32%/44% in prior years), and NetApp, HPE, Juniper, Dell and Arista collectively another ~23-28%. On the purchasing side, its three largest distributors — Ingram Micro, Arrow Electronics and TD SYNNEX — were over 30% of product-segment purchases. Loss of, or adverse program/pricing/inventory changes at, a top vendor or distributor (especially Cisco, captured as a supply edge) would materially affect availability, margins and gross billings.

“For the year ended March 31, 2026, our three largest distributors, Ingram Micro, Arrow Electronics, and TD SYNNEX, collectively accounted for over 30% of our purchases related to our product segment”