ScanSource Stock

ScanSource, Inc. and its subsidiaries (ScanSource) operate as a hybrid distributor connecting devices to the cloud and accelerating growth for customers across hardware, Software as a Service (SaaS), connectivity and cloud.

ScanSource enables customers to deliver solutions for their end users to address changing buying and consumption patterns. ScanSource sells through multiple, specialized routes-to-market with hardware, SaaS, connectivity and cloud service offerings from the world's leading technology suppliers. The company provides technology solutions and services from more than 500 leading suppliers of mobility, barcode, point-of-sale (‘POS’), payments, physical security, networking, unified communications, collaboration (UCaaS and CCaaS), connectivity and cloud services.

ScanSource serves approximately 30,000 customers. The company’s customers are businesses of all sizes that sell to end-customers across many industries. The company’s customer channels include value-added resellers (‘VARs’), customers or agents, independent sales organizations (‘ISOs’) and independent software vendors (‘ISVs’). These customer channels provide the company with multiple routes-to-market. The company aligns its teams, tools and processes around all of the company’s customers to help them grow through reducing their costs, creating efficiencies and generating end-customer demand for business solutions. The company enables its customers to create, deliver and grow hybrid technology offerings for end-customers across almost every vertical market in the United States, Canada, Brazil and the United Kingdom (‘U.K.’).

Strategy

The company’s strategy is to drive sustainable, profitable growth by orchestrating hybrid technology solutions through a growing ecosystem of partners leveraging the company’s people, processes, and tools.

The company’s hybrid distribution strategy relies on a channel sales model to offer hardware, SaaS, connectivity and cloud services from leading technology suppliers to customers that solve end users’ challenges. ScanSource enables customers to deliver solutions for their end users to address changing buying and consumption patterns. The company’s solutions may include a combination of offerings from multiple suppliers or give the company’s customers access to additional services. As a trusted adviser to the company’s customers, the company provides customized solutions through the company’s strong understanding of end user needs.

Business Segments

The company’s segments operate in the United States, Canada, Brazil and the U.K.; and consist of the following: Specialty Technology Solutions and Modern Communications & Cloud.

Specialty Technology Solutions segment

The Specialty Technology Solutions portfolio includes enterprise mobile computing, data capture, barcode printing, POS, payments, networking, electronic physical security, cybersecurity and other technologies. There are adjacencies among these technologies to develop and deliver solutions for the company’s customers. These solutions include data capture and POS solutions that interface with computer systems to automate the collection, processing and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management and health care applications. Electronic physical security products include identification, access control, video surveillance and intrusion-related devices. The company’s networking products include wireless and networking infrastructure products. This segment also includes recurring revenue from hardware rentals and other SaaS offerings.

Modern Communications & Cloud segment

The Modern Communications & Cloud portfolio of solutions includes communications technologies and services for voice, video conferencing, wireless, data networking, cybersecurity, cable, unified communications and collaboration, cloud and technology services. As these solutions come together on IP networks, new opportunities are created to move into adjacent solutions for all vertical markets, such as education, healthcare and government. This segment includes recurring revenue from the company’s Intelisys and intY businesses.

Customers

The company’s customers, or sales partners, are businesses of all sizes that sell to end users across industries ranging from manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, among others. The company’s customers provide it with multiple, specialized routes-to-market through various channels, including: VARs, agents, ISOs and ISVs.

VARs

Within VARs, the company’s customers include specialty technology VARs, direct marketers, IT system integrators, network integrators, service providers, managed service providers and cloud service providers. Specialty technology VARs focus on one or more technologies, providing specialized knowledge and expertise for technology solutions, such as tailored software or integrated hardware. Direct marketers provide a very broad range of technology brands to business, government, education and healthcare markets. IT system integrators and network integrators develop computer and networking solutions for end-customers’ IT needs. Service providers, managed service providers and cloud service providers deliver advanced multi-discipline services with customized solutions that bundle data, collaboration, cloud, network and digital telecommunication services for end-customers' needs.

Agents

Agents focus on selling telecommunications and cloud services to end-customers, advising about various services, technologies and cost alternatives to help them make informed choices.

Independent Sales Organizations

ISOs focus on selling credit card processing and finding new merchant customers for credit card member banks. They offer on-going customer service and support and look to bundle hardware, software and processing services.

Independent Software Vendors

ISVs develop software, apps and integrated solutions. They generally focus on cloud solutions and sell or certify bundled hardware, software and service solutions.

Suppliers

The company provides products and services from approximately 500 suppliers, including 8x8, AT&T, Aruba/HPE, Avaya, Axis, Cisco, Comcast Business, Datalogic, Dell, Elo, Epson, Equinix, Extreme, F5, Five9, Fortinet, Genesys, Granite, GTT, Hanwha, Honeywell, Ingenico, Jabra, Logitech, Lumen, Microsoft, MetTel, Mitel, NCR, NICE CXone, Poly HP, RingCentral, Spectrum, Toshiba Global Commerce Solutions, Trend Micro, Ubiquiti, Verifone, Verizon, VMWare, Windstream, Zebra Technologies and Zoom.

The company provides products and services from many of its key suppliers in all of the company’s geographic markets. Products from two suppliers, Cisco and Zebra, each constituted more than 10% of the company’s net sales for the year ended June 30, 2023.

Offerings and Markets

The company markets over 65,000 products from approximately 500 hardware, software and service suppliers to approximately 30,000 customers. The company sells products and services to the United States and Canada from the company’s facilities located in Mississippi, California and Kentucky; into Brazil from facilities located within the Brazilian states of Paraná, Espírito Santo and Santa Catarina. The company provides some of its digital products, which include SaaS and subscriptions, through the company’s digital tools and platforms.

The company’s offerings to its customers include hardware, software, services and connectivity across premise, hybrid and cloud environments. The company aligns its people, processes and tools to help the company’s sales partners grow by providing more hybrid solutions through a better understanding of end-customer needs. The company is able to provide a combination of offerings from multiple suppliers or give the company’s sales partners access to additional services, including configuration, key injection, integration support and others to deliver solutions.

The company provides its customers and suppliers with an array of pre-sale business tools and value-added services, including market and technology solution expertise, education and training, product configuration tools, technical support, logistics and channel financial services.

The company offers technology solutions and services that include the following:

Mobility and Barcode: The company offers automatic identification and data capture (‘AIDC’) technology that incorporates the capabilities for electronic identification and data processing without the need for manual input. These solutions consist of a wide range of products that include portable data collection terminals, wireless products, barcode label printers and scanners. As AIDC technology has become more pervasive, applications have evolved from traditional uses, such as inventory control, materials handling, distribution, shipping and warehouse management, to more advanced applications, such as healthcare.

POS: The company provides POS solutions for retail, grocery and hospitality environments to efficiently manage in-store sales and operations. POS solutions include computer-based terminals, tablets, monitors, payment processing solutions, receipt printers, pole displays, cash drawers, keyboards, peripheral equipment and fully integrated processing units. These solutions may include self-service checkout, kiosks and products that attach to the POS network in the store, including network access points, routers and digital signage.

Payments: The company offers payment terminals, comprehensive key injection services, reseller partner branding, extensive key libraries, ability to provide point-to-point encryption, and redundant key injection facilities. The company has the resources to deliver secure payment devices that are preconfigured and ready for use. In addition, the company partners with ISVs to deliver to merchants integrated tablet POS solution hardware that a merchant may purchase outright or ‘as a service,’ and which includes merchant hardware support and next-day replacement of tablets, terminals and peripherals.

Physical Security and Networking: The company provides electronic physical security solutions that include identification, access control, video surveillance and intrusion-related products. Physical security products are used every day across every vertical market to protect lives, property and information. These technology solutions require specialized knowledge to deploy effectively, and the company offers in-depth training and education to the company’s sales partners to enable them to maintain the appropriate skill levels. The company’s networking products include wireless and networking infrastructure products.

Communications and Collaboration: The company offers communications and collaboration solutions, delivered in the cloud, on-premise or hybrid, such as voice, video, integration of communication platforms and contact center solutions. These offerings combine voice, video and data with computers, telecommunications and the internet to deliver communications solutions on-premise. Software and hardware products include IP-based telephony platforms, Voice over Internet Protocol systems, private branch exchanges, call center applications, video conferencing, desk phones, headsets and cloud-enabled endpoints. Cloud-delivered services, such as unified communications, contact center and video conferencing, enable end-customers to consume and pay for communications services typically on a monthly subscription basis.

Connectivity and Cloud Services: The company offers business communications services, including voice, data, access, cable collaboration, wireless and cloud. The company focuses on empowering and educating sales partners so they can advise end-customers in making informed choices about services and technology. Through the company’s digital tools and platforms, the company offers sales partners another way to grow their recurring revenue practices, and take the friction out of acquiring, provisioning and managing SaaS offerings. The company has contracts with more than 200 of the world’s leading telecom carriers and cloud services providers.

Sales

The company’s sales organization consists of inside and field sales representatives located in the United States, Canada, the U.K., and Brazil. The majority of the company’s sales partners are assigned to a dedicated sales representative or team whose main focus is developing customer relationships and providing the company’s customers with solutions to meet their end-customer’s needs. The company’s sales teams are advocates for and trusted advisers to the company’s customers. The company’s sales representatives receive comprehensive training with respect to the technical characteristics of suppliers’ products, supplemented by frequent product and service seminars conducted by supplier representatives and bi-weekly meetings among product, marketing and sales managers.

The company’s sales teams also provide customers with online ordering, API, EDI and other information systems, allowing customers to easily gain access to product specifications, availability and customized pricing, as well as the ability to place and follow the status of orders.

Marketing

The company markets its technology solutions and services through a range of digital and print channels, including online product catalogs customized for the company’s North American and Brazilian markets; social media; search engine optimization and marketing; content marketing; content automation; e-commerce; email direct marketing; and others. The company’s marketing practices are tailored to fit the specific needs of its customers and suppliers - ensuring the company help its partners create, deliver and manage solutions for end users across the company’s vertical markets. The company’s comprehensive marketing efforts include sales promotions, advertisements, management of sales leads, trade show design and event management, advertorials, content creation, partner events and training and certification courses with leading suppliers in an effort to recruit prospective sales partners.

Trade and Service Marks

The company conducts its business under the trade names ‘ScanSource POS and Barcode,’ ‘ScanSource Catalyst,’ ‘ScanSource Communications,’ ‘ScanSource Services,’ ‘ScanSource Networking and Security,’ ‘ScanSource KBZ,’ ‘ScanSource Brasil,’ ‘Network1, a ScanSource company,’ ‘Intelisys,’ ‘POS Portal,’ ‘RPM Software, a ScanSource company’ and ‘intY, a ScanSource company.’

The company has been issued registrations for many of its marks, including among others, ‘ScanSource,’ ‘Catalyst Telecom,’ and ‘Network1’ in countries in the company’s principal markets.

Competition

In the company’s Specialty Technology Solutions segment, the company competes with broad-line distributors, such as Ingram Micro and TD Synnex, in most geographic areas; and more specialized security distributors, such as ADI and Wesco. The company also competes against other smaller, more specialized AIDC and POS distributors, such as BlueStar.

In the company’s Modern Communications & Cloud segment, the company competes against broad-line distributors, such as Ingram Micro and TD Synnex; and more specialized distributors, such as Jenne. Additionally, for Intelisys' technology services, the company competes against other smaller, technology services distributors, such as Avant and Telarus. For the company’s intY business, the company competes against other developers of cloud software and services platforms, such as CloudBlue and Pax8.

History

ScanSource, Inc. was founded in 1992. The company was incorporated in South Carolina in 1992.