ScanSource, Inc. (SCSC): Business Model Canvas [Dec-2025 Updated]

You're trying to figure out how a traditional distributor stays relevant when everything is moving to the cloud, and frankly, that's the million-dollar question for the channel today. Well, looking at the numbers for ScanSource, Inc. (SCSC) shows a deliberate, defintely smart pivot: they are successfully engineering a future built on sticky revenue streams. For Fiscal Year 2025, while their Total Net Sales reached $3.04 billion, the real juice is that recurring revenue-from SaaS, cloud, and connectivity-now accounts for 32.8% of their gross profit. That's the whole game right there. This Business Model Canvas lays out precisely how they marry that old-school hardware muscle with new-age advisory services, so you can see the full engine driving their current valuation.

ScanSource, Inc. (SCSC) - Canvas Business Model: Key Partnerships

You're looking at the hard numbers defining ScanSource, Inc.'s partner ecosystem as of late 2025. It's all about the channel and the shift to recurring revenue streams.

Major technology suppliers (e.g., hardware, software, cloud)

ScanSource, Inc. sells technology solutions from leading suppliers across hardware, SaaS, connectivity, and cloud services. For the fiscal year ended June 30, 2025, total net sales were $3,040.8 million. The Specialty Technology Solutions segment, which covers mobility, barcode, POS, payments, security, and networking, accounted for net sales of $2.94 billion for fiscal year 2025.

The company serves approximately 25,000 channel sales partners, including VARs, advisors, ISOs, ISVs, and MSPs.

Strategic vendor relationships like the Zoom resale agreement

The company actively expands its offerings through key vendor agreements. ScanSource, Inc. announced an expansion of its collaboration portfolio with a new Zoom relationship on September 9, 2025, providing partners greater flexibility for cloud-based collaboration technology solutions.

The shift in focus is clear in the recurring revenue metrics:

• Recurring revenue as a percentage of gross profit was 27.5% for fiscal year 2024.
• Recurring revenue as a percentage of gross profit increased to 32.8% for fiscal year 2025.
• The projection for recurring revenue as a percentage of gross profit is 50% by 2028.

Technology Services Distributors (TSDs) and Master Agents (Intelisys model)

The Intelisys & Advisory Segment is a key route-to-market focusing on connectivity, cloud, and next-generation technologies. For the fiscal year ended June 30, 2025, this segment generated net sales of $98.1 million, reflecting a 6.3% increase year-over-year, partly due to an acquisition.

Here's a quick look at the segment performance:

Metric (FY Ended June 30, 2025)	Specialty Technology Solutions	Intelisys & Advisory Segment
Net Sales (in thousands)	$2,940,000	$98,100
Net Sales Change YoY	-7.1%	+6.3%
Q4 FY25 Net Sales (in thousands)	$788,700	$24,200

The Q4 FY25 net sales for the Intelisys & Advisory segment showed a 1.3% increase year-over-year.

Financial institutions for innovative financial solutions and credit services

ScanSource Financial Services is part of the operational structure. As of June 30, 2025, ScanSource, Inc. reported total debt of $136.1 million and cash and cash equivalents of $126.2 million. The company maintains a target net debt leverage ratio of 1 to 2x adjusted EBITDA.

For the first quarter of fiscal year 2026 (period ended September 30, 2025), share repurchases totaled $21 million.

Independent Software Vendors (ISVs) for specialized solutions

ISVs are a critical component of the partner base, which also includes VARs and MSPs. The company launched Launch Point, an accelerator program designed to scale innovative solutions offerings that might not fit traditional channels. At the 2025 Partner First event, 10 ISVs exhibited, more than any previous ScanSource event. The company also completed the acquisition of DataXoom in October 2025, adding B2B mobile data connectivity capabilities to strengthen carrier relationships.

The focus on solutions wrapping value-added services around hardware is reflected in the gross profit mix. The company's non-GAAP operating income for fiscal year 2025 was $111.3 million.

Finance: draft 13-week cash view by Friday.

ScanSource, Inc. (SCSC) - Canvas Business Model: Key Activities

You're looking at the core engine of ScanSource, Inc. (SCSC) as of late 2025, which is all about enabling channel partners to deliver complex, converging technology solutions. This isn't just moving boxes; it's about orchestrating a stack of hardware, software, and services.

Hybrid distribution of hardware, SaaS, connectivity, and cloud services

ScanSource, Inc. operates as a leading hybrid distributor, uniquely positioned to accelerate growth for channel sales partners across a diverse technology portfolio. This means they are actively engaged in the distribution of hardware alongside software as a service (SaaS), connectivity, and cloud services. They sell through multiple, specialized routes-to-market to address changing buying and consumption patterns for their partners. This strategy is formalized through segments like Specialty Technology Solutions and the Intelisys & Advisory group, which includes the newer Channel Exchange platform. The company markets over 65,000 products from its extensive network of trusted suppliers, ranging from industry giants to niche innovators. The overall strategy is to orchestrate these hybrid solutions by working closely with both partners and suppliers.

Here's a look at the financial impact of this shift toward higher-value offerings in Fiscal Year 2025:

Metric	FY2025 Amount/Percentage	Context
Net Sales (FY2025)	$3.04 billion	Total net sales for the fiscal year ended June 30, 2025.
Gross Profit (FY2025)	$408.6 million	Increased 2.4% year-over-year.
Recurring Revenue Contribution to Gross Profit (FY2025)	32.8%	Up from 27.5% in the prior year, showing margin mix improvement.
Recurring Revenue Growth (FY2025, including acquisitions)	31.8%	Year-over-year growth in the high-margin component of the business.

Providing pre- and post-sales solutions engineering and advanced support

A critical activity is the provision of deep technical and advisory support, which is bundled through their Services+ offering. This extends the portfolio available to partners and helps them retain a higher level of account control. You'll find expert teams of solutions architects and technical personnel dedicated to helping partners grow their services offerings. This support covers the entire product lifecycle, from initial planning to operating support.

The specific services executed by these teams include:

• Wi-Fi assessments
• VoIP readiness assessments
• Design engineering
• Custom-configuration services
• Post-sale technical services
• UC help desk

For example, the Technical Services team offers free pre-sales support on Avaya solutions, with staff available from 8:30 am until 8:00 pm ET, Monday through Friday. For general post-order or support-related issues, Customer Service can be reached at 800.944.2439 x4049. Honestly, having that level of support available is what lets partners move beyond simple transactional sales.

Managing a complex, global supply chain and inventory availability

ScanSource, Inc. is at the center of the technology solution delivery channel, which inherently involves managing significant complexity. They enable customers to create, deliver, and grow hybrid technology offerings across almost every vertical market in the United States, Canada, Latin America, and Europe. This global footprint means managing logistics across different countries and time zones, which is a principal source of complexity. The company manages an extensive network of suppliers, marketing over 65,000 products. While top suppliers are primarily based in the United States, the globalization of the supply chain means they have limited visibility into second-tier suppliers and below, which is a constant risk factor to monitor.

Driving recurring revenue growth, which hit 32.8% of gross profit in FY2025

The strategic focus on recurring revenue is a primary key activity, as it directly impacts margin quality. For the full fiscal year 2025, the percentage of gross profit derived from this stream hit 32.8%. This focus is clearly paying off, as the recurring revenue component grew by 31.8% year-over-year for FY2025, even while total net sales decreased by 6.7% to $3.04 billion. To be fair, the growth rate fluctuates; for instance, in the third quarter of FY2025, recurring revenue growth, including acquisitions, was as high as 41.0% year-over-year.

Executing strategic acquisitions to expand advisory and next-gen technology offerings

ScanSource, Inc. actively executes strategic acquisitions to build out its advisory capabilities and next-generation technology stack. A very recent example is the completion of the acquisition of DataXoom on October 20, 2025. DataXoom, an LTE/5G API-enablement specialist, is being integrated with the existing Advantix business to form a complete data connectivity platform, adding 17 employees to the team. This is a clear move to enhance the connectivity platform for mobile data business users. Furthermore, the company is building out its Channel Advisory business, which was established following the acquisition of the technology advisor Resourcive in August 2024. The Intelisys & Advisory segment, which reflects these advisory additions, showed growth, with net sales increasing 4.0% in the first quarter of fiscal year 2026.

ScanSource ranks #875 on the Fortune 1000 as of late 2025, and the company was recognized on FORTUNE magazine's 2025 List of World's Most Admired Companies.

ScanSource, Inc. (SCSC) - Canvas Business Model: Key Resources

You're looking at the core assets ScanSource, Inc. (SCSC) relies on to execute its hybrid distribution model. These aren't just abstract concepts; they are measurable components of their operational strength as of late 2025.

Specialized technical expertise and deep market knowledge

ScanSource, Inc. deploys its expertise across converging technologies, which is reflected in the growing importance of recurring revenue streams. The percentage of gross profit derived from recurring revenue increased to 32.8% for the fiscal year ended June 30, 2025, up from 27.5% in the prior year. This shift suggests deep knowledge is required to sell and support these higher-margin, subscription-based offerings. Furthermore, Physical security is noted as its fastest-growing technology segment.

Intelisys platform and network of technology advisors

The Intelisys platform is a significant resource, representing a substantial portion of a key segment. For the fiscal year 2025, Intelisys & Advisory segment net sales reached $98.1 million. Within that segment, Intelisys itself represents approximately 87% of the Intelisys & Advisory segment's fiscal year 2025 net billings. The platform supports a network of partners, including VARs, MSPs, and integrators, leveraging the power of recurring revenue.

Working capital to manage inventory and extend credit to partners

Managing inventory and extending credit requires significant liquidity. As of June 30, 2025, ScanSource, Inc. maintained cash and cash equivalents of $126.2 million. This liquidity supports operations against total debt of $136.1 million on the same date. For the full fiscal year 2025, the company generated $112.3 million in operating cash flow and $104.1 million in free cash flow (non-GAAP).

Here's a quick look at the key financial position metrics as of the end of fiscal year 2025:

Metric	Amount (as of June 30, 2025)
Cash and Cash Equivalents	$126.2 million
Total Debt	$136.1 million
Fiscal Year 2025 Net Sales	$3.040 billion
Fiscal Year 2025 Gross Profit	$408.6 million
Fiscal Year 2025 Gross Profit Margin	13.4%

Proprietary business data for AI and channel enablement

ScanSource, Inc. recognizes the value of its internal data in the context of artificial intelligence adoption. Insights shared suggest that proprietary business data makes AI models more precise. The company is actively involved in the AI discussion, with its executives moderating panels on the topic at events like the 2025 Partner First Conference, which hosted nearly 1,000 attendees.

Global distribution infrastructure and custom configuration centers

The physical and logistical backbone supports the entire distribution effort. ScanSource, Inc. employs approximately 2,600 individuals as of late 2025. The company is recognized on FORTUNE magazine's 2025 List of World's Most Admired Companies and ranks #875 on the Fortune 1000 list. The infrastructure supports multiple sales models, including hybrid distribution solutions for specialty technologies, connectivity, and cloud services.

• HQ Location: Greenville, SC, USA.
• Employees: Approximately 2,600.
• Fortune 1000 Rank (2025): #875.
• Recurring Revenue as % of Gross Profit (FY25): 32.8%.

ScanSource, Inc. (SCSC) - Canvas Business Model: Value Propositions

You're looking at how ScanSource, Inc. helps its partners win in a market that's constantly shifting to services and the cloud. The value they deliver isn't just moving boxes; it's about making complex technology deployments simple for the channel.

Flexibility and choice via multiple sales models (wholesale/agency)

ScanSource, Inc. operates using different routes-to-market, which gives partners options based on their needs. The Specialty Technology Solutions (STS) segment, which handles the bulk of the distribution, brought in net sales of approximately $2.94 billion for the fiscal year ended June 30, 2025. Contrast that with the Intelisys & Advisory Segment, which often operates on a more agency-like model for connectivity and cloud, reporting net sales of $98.1 million in FY2025, a 6.3% increase year-over-year.

Enabling channel partners to deliver complex, converging technology solutions

The core value here is the shift away from pure hardware sales toward recurring services, which partners prefer for stable revenue. For the fiscal year 2025, the contribution of recurring revenue to gross profit jumped to 32.8%, a clear increase from 27.5% the prior year. This focus is paying off in margin; the Q1 fiscal year 2026 gross profit margin hit 14.5%, up 143 basis points year-over-year, showing the stickiness of these service contracts.

Industry-leading custom configuration and integration services

The Custom Configuration Center (CCC) is where ScanSource, Inc. takes on the heavy lifting of pre-deployment work. They maintain a 99.88% external quality rate for these integrations, meaning your product arrives ready to install with minimal partner intervention. The team has the capacity to ship 4,500 configured devices in the US per day, supported by over 400 ESD workbenches.

Access to a broad portfolio of specialty technologies and cloud services

This value proposition is quantified by the growth in the services portion of the business, which includes cloud and SaaS offerings. For the full fiscal year 2025, net sales from recurring revenue grew by 31.8% year-over-year, including acquisitions. Even in the slower Q1 of fiscal year 2026, recurring revenue still managed 8.0% year-over-year growth.

Offering innovative financial solutions to ease end-user consumption

ScanSource, Inc. supports partner cash flow and end-user adoption through its financial offerings. The company generated $104.1 million in non-GAAP free cash flow for fiscal year 2025, which underpins their ability to support partner financing programs. Furthermore, they returned capital to shareholders via $106.5 million in share repurchases in FY2025.

Here's a quick look at the key financial metrics underpinning these value drivers for the fiscal year ended June 30, 2025, and the most recent quarter:

Metric	Fiscal Year 2025 (Ended 6/30/2025)	Q1 Fiscal Year 2026 (Ended 9/30/2025)
Total Net Sales	$3.04 billion	$739.7 million
Gross Profit Margin	13.4%	14.5%
Recurring Revenue Gross Profit Contribution	32.8%	Not explicitly stated as % of Gross Profit for Q1 FY26
Recurring Revenue Net Sales Growth (YoY, incl. acquisitions)	31.8%	8.0%
Operating Cash Flow	$112.3 million	Not explicitly stated for Q1 FY26
Non-GAAP Free Cash Flow	$104.1 million	Not explicitly stated for Q1 FY26
Custom Integration Accuracy Rate	99% (System Integrations)	99.88% (External Quality Rate)

Finance: draft 13-week cash view by Friday.

ScanSource, Inc. (SCSC) - Canvas Business Model: Customer Relationships

The customer relationship model for ScanSource, Inc. (SCSC) centers on deep engagement with its channel partners, moving beyond simple transaction fulfillment to value creation and enablement.

Dedicated account management and sales support for channel partners is a core function, particularly evident within the Intelisys & Advisory segment, which reflects a high-touch approach necessary for complex solution selling. This segment, which includes the acquired Resourcive business, is key to the strategy of accelerating growth for channel sales partners across hardware, SaaS, connectivity, and cloud services.

The success of this relationship-centric model is reflected in the increasing importance of recurring revenue within the gross profit mix across the company.

Metric	Fiscal Year 2024 (FY24)	Fiscal Year 2025 (FY25)	Q1 Fiscal Year 2026 (Q1 FY26)
Total Net Sales (in thousands)	$3,259,809	$3,040,810	$739,650
Gross Profit Margin (%)	12.2 %	13.4 %	14.5 %
Recurring Revenue as % of Gross Profit	27.5 %	32.8 %	Not explicitly stated for total GP
Recurring Revenue YoY Growth (Includes Acquisitions)	Not stated	Not stated	8.0 %
Intelisys & Advisory Net Sales (Q4) (in millions)	Not stated	$24.2	Not stated

Partner enablement programs are structured to build partner capability and loyalty. ScanSource, Inc. (SCSC) hosts major events like the Partner First Conference 2025, held September 8 to September 9, which featured more than 10 ISVs exhibiting, a record for the event. Furthermore, the company supports its telecom agents, consultants, VARs, MSPs, and IT solution providers through specialized training platforms.

• ScanSource University: An on-demand library of videos, podcasts, webinars, whitepapers, and case studies.
• Intelisys University: An online training platform focused on shifting to cloud services, offering certifications in areas like Contact-Center-as-a-Service and wireless/IoT.
• Partner Marketing: Resources to help partners promote their businesses and drive measurable results.
• New Initiatives: The AI Center of Excellence, an internal group designed to become an external knowledge hub for solution providers.

Self-service tools and e-commerce platforms for order management streamline the transactional side of the relationship. Partners use the CORE partner portal as their single source for placing new orders and accessing order history. This is supported by a full suite of EDI and API integrations to ensure smooth order processing.

The Advisory services (Resourcive) for end-customer needs and next-gen tech are integrated into the Intelisys & Advisory segment, following the acquisition in August 2024. Resourcive delivers strategic IT sourcing solutions to the mid-market and enterprise. This advisory group serves more than 300 customers across technologies including cloud, IoT, communications, and contact center.

The overall model supports a high-touch, relationship-based model for complex solution selling, evidenced by the strategic focus on growing the Intelisys & Advisory segment, which saw net sales increase 6.3% year-over-year for fiscal year 2025, reaching $98.1 million.

ScanSource, Inc. (SCSC) - Canvas Business Model: Channels

You're looking at how ScanSource, Inc. moves its technology solutions to market as of late 2025. The core is a hybrid distribution model, balancing traditional wholesale with agency services, all aimed at accelerating growth for their channel partners.

Two-Tier Distribution Model (Wholesale/Resale) to Channel Sales Partners

This is the bulk of the business, primarily housed within the Specialty Technology Solutions (STS) segment. This model relies on a massive network of resellers to move hardware, software, and connectivity products. For the fiscal year ended June 30, 2025, the STS segment generated net sales of approximately $2.94 billion out of total net sales of $3.04 billion. The company's overall strategy is to expand the technology stack sold through these partners, including looking at areas like servers and data center infrastructure. The channel community supporting this is extensive.

• Total channel sales partners across the ecosystem are stated as exceeding 25,000+.
• The company had approximately 2,600 employees as of early 2025.

Agency Sales Model (Intelisys) to Technology Advisors

The Intelisys & Advisory (I&A) segment operates on an agency model, focusing on connectivity and cloud services where revenue is often recurring. This model is key to ScanSource, Inc.'s margin profile. For fiscal year 2025, the I&A segment recorded net sales of $98.1 million. The Intelisys brand itself represents approximately 87% of the I&A segment's fiscal year 2025 net sales. This recurring revenue focus is a strategic differentiator; for the full fiscal year 2025, the percentage of gross profit derived from recurring revenue across the company increased to 32.8%, up from 27.5% the prior year.

Direct sales teams for large accounts and strategic initiatives

While the primary focus is on the channel, ScanSource, Inc. uses direct sales capabilities, particularly within the STS segment, to manage large accounts and drive adoption of new, complex technologies. This direct engagement helps secure foundational business that can then be supported and expanded by the broader channel network. This approach supports the goal of selling more of the technology stack, which requires direct technical alignment with key customers.

E-commerce platforms and digital tools for partner transactions

Digital enablement is critical for servicing the large partner base efficiently. ScanSource, Inc. emphasizes providing tools to accelerate partner activation and streamline transactions, which is essential for managing the high volume of wholesale business. The focus on increasing recurring revenue, which is netted-down revenue, inherently relies on robust digital systems for accurate billing and management of long-term contracts. The company held its Partner First 2025 event to focus specifically on partner needs and tools for growth.

Integrated Solutions Group for complex, multi-vendor projects

The Integrated Solutions Group (ISG) is a specific initiative, launched using the Advantix acquisition as a starting point, focused on wrapping additional value and services around hardware offerings. This group helps partners deliver complex, multi-vendor solutions, moving beyond simple product resale into solution integration. This effort directly contributes to the company's goal of increasing the recurring revenue portion within the Specialty Technology Solutions business.

Here's a quick look at the financial scale of the primary channels for the fiscal year ended June 30, 2025:

Channel/Segment	FY 2025 Net Sales (Approximate)	Key Metric Context
Specialty Technology Solutions (STS)	$2.94 billion	Wholesale/Resale Channel Core
Intelisys & Advisory (I&A)	$98.1 million	Agency Model for Technology Advisors
Total Company Net Sales	$3.04 billion	Overall Top Line
Recurring Revenue Gross Profit Contribution	32.8%	Percentage of Total Gross Profit

Finance: draft 13-week cash view by Friday.

ScanSource, Inc. (SCSC) - Canvas Business Model: Customer Segments

You're looking at how ScanSource, Inc. structures its routes to market, which is really about who buys from them and how they are grouped. The core idea is enabling channel partners to deliver solutions to end customers, using multiple sales models for hybrid distribution.

The customer base is primarily segmented into two major groups based on their operational model, which clearly maps to the structure reported in their fiscal year 2025 results. These groups represent the VARs/MSPs and the Technology Advisors/Agents, though the lines blur as ScanSource accelerates recurring revenue offerings across the board.

Value-Added Resellers (VARs) and Managed Service Providers (MSPs)

This group falls largely under the Specialty Technology Solutions segment. These partners are focused on hardware, mobility and barcode, POS, payments, and physical security technologies. They are the traditional distribution channel partners. While overall net sales for fiscal year 2025 decreased by 6.7% to $3.04 billion, this segment still represents the vast majority of the top line.

• They drive the product and services revenue, which saw a decrease of 8.1% year-over-year for FY2025.
• These partners are increasingly adopting recurring revenue models, as the overall recurring revenue component increased 31.8% year-over-year for FY2025, including acquisitions.

Technology Advisors and Agents (Intelisys channel)

This is the Intelisys & Advisory segment, which operates more on an agency model. These customers are focused on connectivity and cloud services, often involving Software as a Service (SaaS) billings. This channel showed resilience, with net sales increasing 6.3% year-over-year for fiscal year 2025, reaching $98.1 million.

• This segment is characterized by a higher concentration of recurring revenue, which is recorded on a net basis.
• For the full fiscal year 2025, the percentage of gross profit derived from recurring revenue across the company increased to 32.8% from 27.5% the prior year, heavily influenced by this channel.
• The Intelisys channel specifically generates approximately 90% of its segment gross profit from recurring revenue streams, often from multi-year contracts.

Independent Sales Organizations (ISOs) and Independent Software Vendors (ISVs)

While not explicitly broken out as a standalone segment in the latest reports, ISOs and ISVs are served through the hybrid distribution model, often within the Specialty Technology Solutions group or as part of the growing SaaS/Cloud focus that benefits the Intelisys channel. Partners needing to bundle hardware with specialized software or payment processing fall here. The focus on CX and SaaS billings growth in the Intelisys segment suggests ISVs are a key target for that channel.

End-users across various verticals (served indirectly)

ScanSource, Inc. does not sell directly to the end-user; they enable their channel partners to reach these customers. The verticals served by these partners are diverse, reflecting the technology portfolio. The company's market resource center highlights specific areas of focus for its partners.

Here is a look at the reported segments and key financial metrics for fiscal year ended June 30, 2025:

Segment Name	FY2025 Net Sales (in thousands)	FY2025 Gross Profit Margin (%)	Key Focus Area
Specialty Technology Solutions	$2,942,710 (Calculated)	Implied lower than consolidated 13.4%	Hardware, POS, Barcode, Security
Intelisys & Advisory	$98,100	Implied higher than consolidated 13.4%	Cloud Services, SaaS, Agency Model

Partners segmented by need for value-added services

The segmentation by service need is evident in the company's margin profile. Partners requiring high-touch, value-added services like pre-sale engineering, custom configuration, and expertise in converging technologies are likely driving the higher margins seen in the overall business. The consolidated gross profit margin for FY2025 was 13.4%, up 120 basis points from the prior year, driven by the higher mix of recurring revenue.

• Partners focused on pure hardware transactions are served through the traditional distribution model.
• Partners focused on recurring revenue streams (like managed services or subscription reselling) are served via the agency model, which carries lower working capital requirements.
• The overall recurring revenue component accounted for 32% of consolidated gross profits in Q2 FY2025.

The company's ranking as #875 on the Fortune 1000 as of August 2025 shows the scale at which these partner segments operate.

ScanSource, Inc. (SCSC) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive ScanSource, Inc.'s operations for the fiscal year ended June 30, 2025. For a hybrid distributor like ScanSource, Inc., the cost of the products they move is the single biggest drain, but operational overhead, especially around sales and logistics, is what really determines margin health.

The Cost Structure is heavily weighted toward the direct cost of the technology ScanSource, Inc. moves through its channel partners. We can back into the Cost of Goods Sold (COGS) using the reported Net Sales and Gross Profit for the full fiscal year 2025. The total cost of the hardware and software products sold was substantial, reflecting the nature of a distribution business.

Cost Component (FY Ended 6/30/2025)	Financial Amount (in millions USD)	Basis
Total Net Sales	$3,040.0	Reported FY2025 Revenue
Gross Profit	$408.6	Reported FY2025 Gross Profit
Implied Cost of Goods Sold (COGS)	$2,631.4	Calculated ($3,040.0 - $408.6)
Gross Profit Margin	13.4%	Reported FY2025 Margin

The Selling, General, and Administrative (SG&A) expenses, combined with other operating costs, are the next major area. These costs cover the teams selling the products, running the offices, and managing the back-end systems. We can see the resulting profitability before interest and taxes, which gives us a view of core operational efficiency.

Here's the quick math on the combined operating expenses:

• Implied Operating Expenses (SG&A plus other OpEx) for FY2025 totaled approximately $323.4 million (calculated as $408.6 million Gross Profit minus $85.2 million GAAP Operating Income).
• GAAP Operating Income for the full fiscal year 2025 was $85.2 million.
• Non-GAAP Operating Income, which management often uses to assess core performance, was $111.3 million for fiscal year 2025.

Inventory holding and logistics costs are embedded within COGS and SG&A, but the focus on hybrid distribution suggests significant spend here to manage global distribution across North America, Brazil, and other countries. The shift in revenue mix is a cost indicator; recurring revenue, which is netted-down revenue, contributed 32.8% of gross profit in FY2025, up from 27.5% the prior year, which generally implies lower relative inventory carrying costs for that portion of the business.

Financing costs are a fixed element of the capital structure. The prompt specifies a key figure related to debt servicing:

• Interest expense on debt was stated as totaling $136.1 million as of June 30, 2025.
• The reported total debt on the balance sheet as of June 30, 2025, was also $136.1 million.

Finally, ScanSource, Inc. is actively investing in future capabilities, which shows up as an operating expense or capital expenditure. This is a strategic cost to maintain relevance in the channel. You defintely see this investment in their focus areas:

• ScanSource, Inc. recently launched an internal initiative, the AI Center of Excellence.
• This group is designed to pilot internally first, with the goal of becoming an external knowledge hub for ScanSource, Inc. solution providers.
• The strategy is to ensure AI is embedded in all the technologies ScanSource, Inc. sells.

Finance: draft 13-week cash view by Friday.

ScanSource, Inc. (SCSC) - Canvas Business Model: Revenue Streams

You're looking at the hard numbers for how ScanSource, Inc. brought in money for the fiscal year ending June 30, 2025. It's all about the mix now, shifting away from pure product sales.

Total Net Sales for FY2025 were $3.04 billion. This represented a decrease of 6.7% year-over-year.

The revenue streams break down across the two main segments, showing the ongoing strategic shift toward more predictable income:

Revenue Stream Component	FY2025 Net Sales Amount	FY2025 YoY Change
Specialty Technology Solutions (STS) Net Sales	$2.94 billion	Decreased 7.1%
Intelisys & Advisory (I&A) Net Sales	$98.1 million	Increased 6.3%

Product Sales (Hardware/Software) from the Specialty Technology Solutions segment made up the vast majority of the top line, totaling $2.94 billion for the full fiscal year 2025. Still, the growth story is elsewhere.

Recurring Revenue from SaaS, cloud, and connectivity commissions/subscriptions is a key focus area. For the full fiscal year 2025, recurring revenue increased 31.8% year-over-year, including acquisitions. This type of revenue is clearly impacting profitability, as Recurring Revenue Gross Profit (RR GP) powered 33% of the total Gross Profit in FY25, up from 27% in FY24. In the fourth quarter of fiscal year 2025, recurring revenue accounted for 31.6% of consolidated gross profit.

Commission Revenue from the Agency Sales Model (Intelisys & Advisory) saw net sales reach $98.1 million for fiscal year 2025. This segment grew 6.3% year-over-year, helped by an acquisition. For the fourth quarter, I&A net sales were $24.2 million. Intelisys itself is estimated to represent approximately 87% of the Intelisys & Advisory segment's FY25 net sales.

Value-added services fees are embedded within the margin expansion story, which saw the overall gross profit margin rise to 13.4% in FY2025, up from 12.2% the prior year. This improvement reflects a higher contribution of recurring revenue and higher vendor program recognition. The company is actively building capabilities like an enhanced cloud marketplace, which implies revenue from services bundled with product sales.

• FY2025 Gross Profit: $408.6 million.
• FY2025 Gross Profit Margin: 13.4%.
• Q4 FY2025 Gross Profit Margin: 12.9%.

Finance: draft 13-week cash view by Friday.