ScanSource, Inc. ( SCSC )  reported fourth-quarter revenues of $746.1 million, down 21.2% year-on-year. Revenues trailed the street view of $843.1 million.

Adjusted EPS of $0.80 missed the analyst consensus estimate of $0.93. The stock plunged after the disappointing print.

Specialty Technology Solutions’ net sales for the fourth quarter decreased 13.7% year-over-year to $484.7 million due to softer demand.

Modern Communications & Cloud’s net sales for the fourth quarter decreased 32.2% year-over-year to $261.4 million due to lower sales volumes in communications hardware and Cisco products. Intelisys net sales for the fourth quarter increased 6.2% year-over-year.

Gross profit fell 10.4% to $97.3 million. Gross margin improved to 13.04% from 11.47% in the year-ago period, reflecting Intelisys’s higher contribution to the overall revenue mix.

For the fourth quarter, operating income was $21.9 million compared to $27.3 million in the prior year quarter. Adjusted EBITDA for the fourth quarter decreased 15.0% Y/Y to $34.2 million, or 4.58% of net sales.

The company exited the quarter with cash and equivalents worth $185.5 million. It generated $53.5 million in free cash flow.

“Our results for the year reflect a soft demand environment; however, we delivered strong margins and robust cash flow,” said Mike Baur, Chair and CEO of ScanSource ( SCSC ). “We are executing well on our capital allocation plan to invest in strategic acquisitions and share repurchases.”

Outlook: ScanSource ( SCSC ) expects fiscal 2025 net sales growth of $3.10 billion-$3.50 billion versus $3.36 billion estimate. The company projects an adjusted EBITDA of $140 million-$160 million. It expects an adjusted free cash flow of at least $70 million.

Analyst Rating: On August 15, Raymond James analyst Adam Tindle downgraded ScanSource’s rating from Outperform to Market Perform. 

ScanSource ( SCSC ) stock gained 47% in the last 12 months.

Price Action: SCSC stock traded lower by 3.29% to $47.30 at the last check Tuesday.