ScanSource Inc. closed its fiscal year with fourth-quarter sales up 17.3% to $953.1 million, driven by stronger hardware demand and the return of large customer deals. The Greenville, South Carolina-based technology distributor also announced a $220.5 million cash deal to acquire MicroAge, a move that expands its reach into cloud, cybersecurity, data center, and AI services.
Net income for the quarter ending June 30 rose 27.5% to $25.6 million from $20.1 million a year earlier. For the full fiscal year, sales increased 6.1% to $3.23 billion, with net income up 10.2% to $78.9 million.
MicroAge acquisition adds services to ScanSource's portfolio
The MicroAge deal, expected to close during the quarter ending Sept. 30, brings about 2,400 U.S. customers and more than 200 employees into ScanSource's operations. MicroAge adds capabilities including cloud migration and management, cybersecurity services, AI data center implementation, and AI solutions development.
CEO Mike Baur said on the company's earnings call that the acquisition will bring technologies and services ScanSource does not currently offer. The strategy is to make those capabilities available to the resellers, technology advisers, and other channel partners that already buy through ScanSource.
Baur said many of those partners want to sell cybersecurity but lack the staff and technical infrastructure to implement and support it after the sale.
"If you're trying to sell cybersecurity today as a solution provider or an agent trusted advisor, they haven't the resources to follow a sale of cybersecurity products with implementation, deployment, and then follow-on support," Baur said.
ScanSource sees MicroAge as a way to fill that gap without requiring its channel partners to build those capabilities themselves. Baur said the company searched for a year for a firm that had successfully moved from traditional hardware resale into managed and professional services.
"This company for sure comes out of the legacy hardware model, moved into services, and now have been very successful at the blend of selling hardware and providing these services," Baur said.
Hardware demand returns as sales organization shifts strategy
The acquisition comes as ScanSource's core distribution business gains momentum. Baur said demand strengthened during the second half of fiscal 2026 across physical security, mobility, networking, customer experience technology, cloud, computing, and connectivity.
"Our business has returned to growth, and we believe we're at the beginning of a stronger growth path," Baur said.
ScanSource's Specialty Technology Solutions business generated fourth-quarter sales of $927.2 million, up 17.6%. Intelisys & Advisor sales increased 7.2% to $25.9 million. U.S. quarterly sales jumped 20.8% to $899.6 million, while Brazil sales fell 21.6% to $53.5 million.
Chief Financial Officer Steve Jones said the second half brought stronger demand and the return of large deals ScanSource had been tracking. Physical security performed well all year, but the improvement broadened across the distributor's technology portfolio in the second half.
Baur pointed to changes in leadership and sales structure as factors behind the growth. "We've got a different mindset right now about winning instead of defending," he said. "We need to take market share and not just defend market share."
ScanSource has been directing more resources toward cloud, computing, connectivity, and customer experience products. Baur said data center growth is also creating additional connectivity demand as businesses require more bandwidth between data centers and corporate networks.
AI and data centers enter the distribution play
AI is part of the acquisition strategy, but ScanSource is targeting the infrastructure and services around the technology rather than treating AI as a stand-alone product. MicroAge brings AI data center implementation, AI solutions development, security, cloud migration, and managed services.
The company sees a similar opportunity in data centers. Increased data center activity is creating demand for more bandwidth and connectivity back to corporate customers, contributing to stronger results in ScanSource's connectivity business.
ScanSource also added Juniper networking products from Hewlett Packard Enterprise to its line card, although supply constraints are expected to limit availability during the first half of fiscal 2027. Baur said ScanSource expects to be in "full swing" selling and delivering Juniper products in the second half of the fiscal year.
ScanSource expects base sales to increase 6% to 10% in fiscal 2027, excluding the pending MicroAge acquisition. Management has not yet incorporated the deal into its fiscal 2027 sales forecast.
For sales professionals working with distribution channels, the takeaway is that ScanSource is betting its next growth stage comes from pairing hardware with cybersecurity, cloud, and data center expertise - and making those services available to partners who lack the resources to build them internally. That model, if it works, could give resellers a way to sell higher-margin services without hiring implementation teams of their own. For those selling into this channel, understanding how AI services attach to hardware deals is becoming part of the job. AI for Sales training can help sales teams speak the language of these new offerings, and an AI Learning Path for Sales Representatives covers the practical skills needed to sell AI-adjacent products and services credibly.
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