Dive Brief:
- ScanSource appointed Katherine White to lead its expanded cloud and on-premises unified communications unit, executives announced Thursday, during a Q3 2026 earnings call.
- The distributor enjoyed a 9.2% year-over-year growth in net sales for its hardware resale segment in the three months ended March 31, as a memory chip shortage accelerated infrastructure purchasing globally. ScanSource's Intelisys and Advisory agency segment declined 1.5%, due to "lumpy" revenues, the company said.
- ScanSource executives touted their converged team during a February earnings call, but Chairman and CEO Mike Baur said the scope has dramatically expanded. “This is going to basically combine several thousand of our partners from the communications hardware business…with agents from the Intelisys side,” he said.
Dive Insight:
ScanSource is helping value-added resellers in its Specialty Technology Solutions Segment sell cloud-based UC and customer experience solutions through its Intelisys business. The first step was giving hardware sales reps financial incentives if their partners sold cloud.
Baur said the initiative is more than a specialized sales team. It’s a business unit that includes personnel reporting to White, as well as Intelisys personnel that report to Intelisys SVP of Sales Eddie Acosta.
Baur also told investors that ScanSource wants to accelerate orders at Intelisys. The tech services distributor arm of ScanSource publicly reports net sales and total vendor billings as key metrics, but the Intelisys team also emphasizes order growth internally.
“We would like to see that growth faster,” Baur said. “Our belief is that we are doing everything we said we're going to do, but we want to go faster, and we don't believe it's growing at the rate we would like to see.”
ScanSource executives and their investors are wrestling with revenue recognition nuances between their two segments. Net sales on the TSD side of the business typically reflect deals that were closed half a year prior or earlier, because commissions aren’t collected until the supplier bills the end customer. It’s a predictable business, but Baur and his team must continually remind investors that the numbers are a time capsule.
Unlike the agency side, hardware revenue is recognized at the point of sale, so its growth numbers are current, not a snapshot of deals closed months ago. Therefore, its numbers reflect the chip shortage's impact in real time.
The Intelisys and Advisory segment declined 1.5%, but the dip wasn’t due to Intelisys.
Resourcive, the TA business ScanSource acquired in 2024, was responsible for the dip. It's the only TA whose financials are publicly reported, which means ScanSource has to translate a business that runs nothing like a public company. TAs don't do quarterly quotas. They stack recurring commissions over time, and Resourcive's heavier mix of professional services and midmarket enterprise deals makes the quarterly numbers lumpier than most.
“Those engagements are larger in dollars than maybe a lot of small, small engagements,” Senior EVP and CFO Stephen Jones said. “We will have some of this ebb and flow on the revenues in that segment because of that.”
