Document

Exhibit 99.1

FOR IMMEDIATE RELEASE



Contact:
Gerald Lyons		Mary M. Gentry
Executive Vice President, Chief Financial Officer	- or -	Vice President, Treasurer and Investor Relations
ScanSource, Inc.		ScanSource, Inc.
(864) 286-4854		(864) 286-4892

SCANSOURCE ANNOUNCES SECOND QUARTER RESULTS

GREENVILLE, SC -- February 4, 2020 -- ScanSource, Inc. (NASDAQ: SCSC), a leading provider of technology products and solutions, today announced financial results for the second quarter ended December 31, 2019.



	Quarter ended December 31,
	2019		2018		Change
	(in millions, except per share data)
Net sales	$	989.5	$	1,046.0	(5	)%
Non-GAAP net sales, excluding Planned Divestitures⁽¹⁾	833.7		872.4		(4	)%
Operating income	18.5		29.7		(38	)%
Non-GAAP operating income^{(1) (2)}	28.6		34.6		(17	)%
Net income	11.4		20.0		(43	)%
Non-GAAP net income^{(1) (2)}	19.5		24.7		(21	)%
Diluted EPS	$	0.45	$	0.78	(42	)%
Non-GAAP diluted EPS^{(1) (2)}	$	0.77	$	0.96	(20	)%

⁽¹⁾ A reconciliation of non-GAAP financial information to GAAP financial information is presented in the Supplementary Information (Unaudited) below.
⁽²⁾ Non-GAAP results exclude amortization of intangible assets related to acquisitions, change in fair value of contingent consideration, the impact of Planned Divestitures and other non-GAAP items. A reconciliation of non-GAAP to GAAP financial information is presented below.

"The second quarter's financial results were below our expectations, as we reorganized our North American VAR sales teams and lost sales from a group of customers," said Mike Baur, Chairman and CEO, ScanSource, Inc. "We are committed to our One ScanSource strategy to drive higher value and recurring revenue growth for our customers."

Quarterly Results

Net sales were $990 million for the second quarter of fiscal year 2020, 5% lower than the second quarter of fiscal year 2019, principally from lower sales volumes in North America. This decrease was partially offset by increases for the Intelisys recurring revenue business and the addition of SaaS sales with the acquisition of intY. Operating income for the second quarter decreased to $18.5 million year-over-year, and non-GAAP operating income decreased to $28.6 million from the prior-year quarter, primarily from investments for our recurring revenue and services-based businesses.

On a GAAP basis, net income for the second quarter of fiscal year 2020 totaled $11.4 million, or $0.45 per diluted share, compared with net income of $20.0 million, or $0.78 per diluted share, for the prior-year quarter. GAAP diluted EPS included a higher than expected expense for the change in fair value of contingent consideration for Intelisys as a result of better than expected actual results. Non-GAAP net income totaled $19.5 million, or $0.77 per diluted share, compared to $24.7 million, or $0.96 per diluted share, for the prior-year quarter.

Exhibit 99.1

Plan to Divest Certain Businesses Outside of US, Canada and Brazil

On August 20, 2019, ScanSource announced plans to divest its physical products distribution businesses outside of the United States, Canada and Brazil. ScanSource will continue to operate and invest in its digital distribution business in these geographies. These plans are part of a strategic portfolio repositioning to align investments with higher-growth, higher-margin businesses. The Company has begun the process to market and sell the Planned Divestitures. There can be no assurance that this sale process will result in a transaction or regarding the timing of any transaction. The Planned Divestitures, comprised of physical product businesses in Europe, UK, Mexico, Colombia, Chile, Peru and the Miami-based export operations, had net sales of $156 million for the second quarter fiscal year 2020 and at December 31, 2019 had working capital of $167 million.

Forecast for Next Quarter

For the third quarter of fiscal year 2020, ScanSource expects GAAP net sales to range from $865 million to $915 million and non-GAAP net sales excluding the Planned Divestitures to range from $725 million to $775 million. For the third quarter of fiscal year 2020, ScanSource expects diluted earnings per share to range from $0.16 to $0.26 and non-GAAP diluted earnings per share to range from $0.44 to $0.54. Non-GAAP diluted earnings per share exclude amortization of intangible assets related to acquisitions, change in fair value of contingent consideration, the impact of Planned Divestitures and other non-GAAP items.

Webcast Details and CFO Commentary

At approximately 4:15 p.m. ET today, a CFO commentary, as a supplement to this press release and the Company's conference call, will be available on ScanSource's website, www.scansource.com (Investor Relations section). ScanSource will present additional information about its financial results and outlook in a conference call today, February 4, 2020, at 5:00 p.m. ET. A webcast of the call will be available for all interested parties and can be accessed at www.scansource.com (Investor Relations section). The webcast will be available for replay for 60 days.

Safe Harbor Statement

This press release contains “forward-looking” statements, including the forecast of sales and earnings per share for next quarter and regarding the Planned Divestitures, that involve risks and uncertainties. Any number of factors could cause actual results to differ materially from anticipated or forecasted results, including, but not limited to, changes in interest and exchange rates and regulatory regimes impacting the Company's international operations, the impact of tax reform laws, the failure of acquisitions to meet the Company's expectations, the failure to manage and implement the Company's organic growth strategy, credit risks involving the Company's larger customers and suppliers, termination of the Company's relationship with key suppliers or a significant modification of the terms under which it operates with a key supplier, the decline in demand for the products and services that the Company provides, reduced prices for the products and services that the Company provides due both to competitor and customer action, the Company's ability to complete the Planned Divestitures on acceptable terms or to otherwise dispose of the operations, changes in the Company's operating strategy and other factors set forth in the "Risk Factors" contained in the Company's annual report on Form 10-K for the year ended June 30, 2019, filed with the Securities and Exchange Commission. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Information

In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the Company also discloses certain non-GAAP financial measures, which are summarized below. Non-GAAP financial measures are used to understand and evaluate performance, including comparisons from period to period. Non-GAAP results exclude amortization of intangible assets related to acquisitions, change in fair value of contingent consideration, acquisition costs, restructuring costs and other non-GAAP adjustments.

Net sales on a constant currency basis, excluding Planned Divestitures and acquisitions: The Company discloses the percentage change in net sales excluding the translation impact from changes in foreign currency exchange rates between reporting periods and excluding the net sales from Planned Divestitures, as well as acquisitions prior to the first full year from the acquisition date. This measure enhances the comparability between periods to help analyze underlying trends on an organic basis.

Income Statement Non-GAAP Metrics: To evaluate current period performance on a more consistent basis with prior periods, the Company discloses non-GAAP net sales, non-GAAP gross profit, non-GAAP operating income, non-GAAP other expense, net, non-GAAP pre-tax income, non-GAAP net income and non-GAAP diluted earnings per share (non-GAAP diluted "EPS"). Non-GAAP results exclude amortization of intangible assets related to acquisitions, changes in fair value of contingent consideration, acquisition and divestiture costs, impact of Planned Divestitures and other non-GAAP adjustments. Non-GAAP metrics are useful

in assessing and understanding the Company's operating performance, especially when comparing results with previous periods or forecasting performance for future periods.

Return on invested capital ("ROIC"): Management uses ROIC as a performance measurement to assess efficiency in allocating capital under the Company's control to generate returns. Management believes this metric balances the Company's operating results with asset and liability management, is not impacted by capitalization decisions and correlates with shareholder value creation. In addition, it is easily computed, communicated and understood. ROIC also provides management a measure of the Company's profitability on a basis more comparable to historical or future periods.

ROIC assists management in comparing the Company's performance over various reporting periods on a consistent basis because it removes from operating results the impact of items that do not reflect core operating performance. ROIC is calculated as adjusted EBITDA over invested capital. Adjusted earnings before interest expense, income taxes, depreciation and amortization ("Adjusted EBITDA") excludes the change in fair value of contingent consideration, in addition to other non-GAAP adjustments. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period. Management believes the calculation of ROIC provides useful information to investors and is an additional relevant comparison of the Company's performance during the year.

These non-GAAP financial measures have limitations as analytical tools, and the non-GAAP financial measures that the Company reports may not be comparable to similarly titled amounts reported by other companies. Analysis of results and outlook on a non-GAAP basis should be considered in addition to, and not in substitution for or as superior to, measurements of financial performance prepared in accordance with GAAP. A reconciliation of the Company's non-GAAP financial information to GAAP is set forth in the Supplementary Information (Unaudited) below.

About ScanSource, Inc.

ScanSource, Inc. (NASDAQ: SCSC) is at the center of the technology solution delivery channel, connecting businesses and providing solutions for their complex needs. ScanSource sells through multiple, specialized routes-to-market with digital, physical and services offerings from the world’s leading suppliers of point-of-sale (POS), payments, barcode, physical security, unified communications and collaboration, telecom and cloud services. ScanSource enables its sales partners to create, deliver and manage solutions for end-customers across almost every vertical market. Founded in 1992 and headquartered in Greenville, South Carolina, ScanSource was named one of the Best Places to Work in South Carolina and on FORTUNE magazine’s 2020 List of World’s Most Admired Companies. ScanSource ranks #643 on the Fortune 1000. For more information, visit www.scansource.com.

ScanSource Announces Second Quarter Results



ScanSource, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
	December 31, 2019			June 30, 2019*
Assets
Current assets:
Cash and cash equivalents	$	42,005		$	23,818
Accounts receivable, less allowance of $37,672 at December 31, 2019 and $38,849 at June 30, 2019	645,270			654,983
Inventories	742,979			697,343
Prepaid expenses and other current assets	109,075			101,171
Total current assets	1,539,329			1,477,315
Property and equipment, net	61,625			63,363
Goodwill	369,537			319,538
Identifiable intangible assets, net	117,981			127,939
Deferred income taxes	24,498			24,724
Other non-current assets	97,160			54,382
Total assets	$	2,210,130		$	2,067,261
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	672,906		$	558,101
Accrued expenses and other current liabilities	105,649			91,407
Current portion of contingent consideration	45,043			38,393
Income taxes payable	627			4,310
Short-term borrowings	2,098			4,590
Current portion of long-term debt	5,964			4,085
Total current liabilities	832,287			700,886
Deferred income taxes	1,248			1,395
Long-term debt, net of current portion	146,925			151,014
Borrowings under revolving credit facility	202,758			200,817
Long-term portion of contingent consideration	—			39,532
Other long-term liabilities	99,332			59,488
Total liabilities	1,282,550			1,153,132
Shareholders' equity:
Common stock	61,095			64,287
Retained earnings	962,825			939,930
Accumulated other comprehensive income (loss)	(96,340		)	(90,088		)
Total shareholders' equity	927,580			914,129
Total liabilities and shareholders' equity	$	2,210,130		$	2,067,261




*	Derived from audited financial statements.

ScanSource Announces Second Quarter Results



ScanSource, Inc. and Subsidiaries
Condensed Consolidated Income Statements (Unaudited)
(in thousands, except per share data)

	Quarter ended December 31,						Six months ended December 31,
	2019			2018			2019			2018
Net sales	$	989,503		$	1,046,021		$	1,996,430		$	2,018,921
Cost of goods sold	875,619			925,543			1,770,447			1,786,229
Gross profit	113,884			120,478			225,983			232,692
Selling, general and administrative expenses	83,121			80,950			165,632			158,880
Depreciation expense	3,459			3,272			7,008			6,538
Intangible amortization expense	5,631			4,700			10,593			9,703
Change in fair value of contingent consideration	3,176			1,850			5,649			6,434
Operating income	18,497			29,706			37,101			51,137
Interest expense	3,751			3,119			7,543			5,746
Interest income	(749		)	(264		)	(1,548		)	(715		)
Other expense, net	(225		)	201			(195		)	233
Income before income taxes	15,720			26,650			31,301			45,873
Provision for income taxes	4,354			6,668			8,405			11,570
Net income	$	11,366		$	19,982		$	22,896		$	34,303
Per share data:
Net income per common share, basic	$	0.45		$	0.78		$	0.90		$	1.34
Weighted-average shares outstanding, basic	25,274			25,640			25,407			25,619

Net income per common share, diluted	$	0.45		$	0.78		$	0.90		$	1.33
Weighted-average shares outstanding, diluted	25,358			25,750			25,488			25,752

ScanSource Announces Second Quarter Results



ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)

Net Sales by Segment:
	Quarter ended December 31,
	2019			2018			% Change
Worldwide Barcode, Networking & Security:	(in thousands)
Net sales, reported	$	686,237		$	701,639		(2.2	)%
Planned Divestitures	(111,237		)	(122,326		)
Non-GAAP net sales, excluding Planned Divestitures	575,000			579,313			(0.7	)%
Foreign exchange impact^(a)	1,799			—
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions	$	576,799		$	579,313		(0.4	)%

Worldwide Communications & Services:
Net sales, reported	$	303,266		$	344,382		(11.9	)%
Planned Divestitures	(44,530		)	(51,285		)
Non-GAAP net sales, excluding Planned Divestitures	258,736			293,097			(11.7	)%
Foreign exchange impact^(a)	5,187			—
Less: Acquisitions	(12,036		)	(98		)
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions	$	251,887		$	292,999		(14.0	)%

Consolidated:
Net sales, reported	$	989,503		$	1,046,021		(5.4	)%
Planned Divestitures	(155,767		)	(173,611		)
Non-GAAP net sales, excluding Planned Divestitures	833,736			872,410			(4.4	)%
Foreign exchange impact^(a)	6,986			—
Less: Acquisitions	(12,036		)	(98		)
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions	$	828,686		$	872,312		(5.0	)%

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended December 31, 2019 into U.S. dollars using the average foreign exchange rates for the quarter ended December 31, 2018.

ScanSource Announces Second Quarter Results




ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)

Net Sales by Segment:
	Six months ended December 31,
	2019			2018			% Change
Worldwide Barcode, Networking & Security:	(in thousands)
Net sales, as reported	$	1,384,028		$	1,356,752		2.0	%
Planned Divestitures	(227,840		)	(240,693		)
Non-GAAP net sales, excluding Planned Divestitures	1,156,188			1,116,059			3.6	%
Foreign exchange impact (a)	1,894			—
Less: Acquisitions	—			—
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions	$	1,158,082		$	1,116,059		3.8	%

Worldwide Communications & Services:
Net sales, as reported	$	612,402		$	662,169		(7.5	)%
Planned Divestitures	(83,442		)	(92,564		)
Non-GAAP net sales, excluding Planned Divestitures	528,960			569,605			(7.1	)%
Foreign exchange impact (a)	5,431			—
Less: Acquisitions	(24,193		)	(1,062		)
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions	$	510,198		$	568,543		(10.3	)%

Consolidated:
Net sales, as reported	$	1,996,430		$	2,018,921		(1.1	)%
Planned Divestitures	(311,282		)	(333,257		)
Non-GAAP net sales, excluding Planned Divestitures	1,685,148			1,685,664			—	%
Foreign exchange impact (a)	7,325			—
Less: Acquisitions	(24,193		)	(1,062		)
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions	$	1,668,280		$	1,684,602		(1.0	)%

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the six months ended December 31, 2019 into U.S. dollars using the average foreign exchange rates for the six months ended December 31, 2018.

ScanSource Announces Second Quarter Results



ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)

Net Sales by Geography:
	Quarter ended December 31,
	2019			2018			% Change
United States and Canada:	(in thousands)
Net sales, as reported	$	736,129		$	779,455		(5.6	)%
Less: Acquisitions	(2,312		)	(98		)
Non-GAAP net sales, excluding acquisitions	$	733,817		$	779,357		(5.8	)%

International:
Net sales, as reported	$	253,374		$	266,566		(4.9	)%
Planned Divestitures	(155,767		)	(173,611		)
Non-GAAP net sales, excluding Planned Divestitures	97,607			92,955			5.0	%
Foreign exchange impact^(a)	6,986			—
Less: Acquisitions	(9,724		)	—
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions	$	94,869		$	92,955		2.1	%

Consolidated:
Net sales, as reported	$	989,503		$	1,046,021		(5.4	)%
Planned Divestitures	(155,767		)	(173,611		)
Non-GAAP net sales, excluding Planned Divestitures	833,736			872,410			(4.4	)%
Foreign exchange impact^(a)	6,986			—
Less: Acquisitions	(12,036		)	(98		)
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions	$	828,686		$	872,312		(5.0	)%

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the quarter ended December 31, 2019 into U.S. dollars using the average foreign exchange rates for the quarter ended December 31, 2018.

ScanSource Announces Second Quarter Results




ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)

Net Sales by Geography:
	Six months ended December 31,
	2019			2018			% Change
United States and Canada:	(in thousands)
Net sales, as reported	$	1,505,766		$	1,517,412		(0.8	)%
Less: Acquisitions	(5,907		)	(1,062		)
Net sales, excluding acquisitions	$	1,499,859		$	1,516,350		(1.1	)%

International:
Net sales, as reported	$	490,664		$	501,509		(2.2	)%
Planned Divestitures	(311,282		)	(333,257		)
Non-GAAP net sales, excluding Planned Divestitures	179,382			168,252			6.6	%
Foreign exchange impact (a)	7,325			—
Less: Acquisitions	(18,286		)	—
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions	$	168,421		$	168,252		2.1	%

Consolidated:
Net sales, as reported	$	1,996,430		$	2,018,921		(5.4	)%
Planned Divestitures	(311,282		)	(333,257		)
Non-GAAP net sales, excluding Planned Divestitures	1,685,148			1,685,664			(4.4	)%
Foreign exchange impact (a)	7,325			—
Less: Acquisitions	(24,193		)	(1,062		)
Non-GAAP net sales, constant currency excluding Planned Divestitures and acquisitions	$	1,668,280		$	1,684,602		(5.0	)%

(a) Year-over-year net sales growth rate excluding the translation impact of changes in foreign currency exchange rates. Calculated by translating the net sales for the six months ended December 31, 2019 into U.S. dollars using the average foreign exchange rates for the six months ended December 31, 2018.

ScanSource Announces Second Quarter Results



ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)


Non-GAAP Financial Information:
	Quarter ended December 31, 2019
	Reported GAAP measure		Intangible amortization expense		Change in fair value of contingent consideration		Acquisition and Divestiture costs^(a)		Restructuring costs		Impact of Planned Divestitures			Non-GAAP measure
	in thousands, except per share data
Net sales	$	989,503	$	—	$	—	$	—	$	—	$	(155,767	)	$	833,736
Gross profit	113,884		—		—		—		—		(15,471		)	98,413
Operating income	18,497		5,631		3,176		1,151		490		(371		)	28,574
Other expense, net	2,777		—		—		—		—		(238		)	2,539
Pre-tax income	15,720		5,631		3,176		1,151		490		(133		)	26,035
Net income	11,366		4,289		2,401		1,151		378		(121		)	19,464
Diluted EPS	$	0.45	$	0.17	$	0.09	$	0.05	$	0.01	$	—		$	0.77

	Quarter ended December 31, 2018
	Reported GAAP measure		Intangible amortization expense		Change in fair value of contingent consideration		Acquisition costs ^(a)		Restructuring costs		Impact of Planned Divestitures			Non-GAAP measure
	in thousands, except per share data
Net sales	$	1,046,021	$	—	$	—	$	—	$	—	$	(173,611	)	$	872,410
Gross profit	120,478		—		—		—		—		(16,998		)	103,480
Operating income	29,706		4,700		1,850		414		—		(2,102		)	34,568
Other expense, net	3,056		—		—		—		—		(513		)	2,543
Pre-tax income	26,650		4,700		1,850		414		—		(1,588		)	32,026
Net income	19,982		3,567		1,408		414		—		(650		)	24,721
Diluted EPS	$	0.78	$	0.14	$	0.05	$	0.02	$	—	$	(0.03	)	$	0.96

^(a) Acquisition and divestiture costs are generally non-deductible for tax purposes.

ScanSource Announces Second Quarter Results



	Six months ended December 31, 2019
	Reported GAAP measure		Intangible amortization expense		Change in fair value of contingent consideration		Acquisition and divestiture costs(a)		Restructuring costs		Impact of Planned Divestitures			Non-GAAP measure
	(in thousands, except per share data)
Net sales	$	1,996,430	$	—	$	—	$	—	$	—	$	(311,282	)	$	1,685,148
Gross profit	225,983		—		—		—		—		(28,867		)	197,116
Operating income	37,101		10,593		5,649		1,909		659		136			56,047
Other expense, net	5,800		—		—		—		—		(378		)	5,422
Pre-tax income	31,301		10,593		5,649		1,909		659		514			50,625
Net income	22,896		8,035		4,270		1,909		505		323			37,938
Diluted EPS	$	0.90	$	0.32	$	0.17	$	0.07	$	0.02	$	0.01		$	1.49

	Six months ended December 31, 2018
	Reported GAAP measure		Intangible amortization expense		Change in fair value of contingent consideration		Acquisition and divestiture costs(a)		Restructuring costs		Impact of Planned Divestitures			Non-GAAP measure
	(in thousands, except per share data)
Net sales	$	2,018,921	$	—	$	—	$	—	$	—	$	(333,257	)	$	1,685,664
Gross profit	232,692		—		—		—		—		(32,196		)	200,496
Operating income	51,137		9,703		6,434		769		1,328		(2,150		)	67,221
Other expense, net	5,264		—		—		—		—		(346		)	4,918
Pre-tax income	45,873		9,703		6,434		769		1,328		(1,804		)	62,303
Net income	34,303		7,365		4,895		769		955		(697		)	47,590
Diluted EPS	$	1.33	$	0.29	$	0.19	$	0.03	$	0.04	$	(0.03	)	$	1.85

ScanSource Announces Second Quarter Results



ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands, except percentages)

Non-GAAP Financial Information:
	Quarter ended December 31,
	2019			2018
Return on invested capital ratio (ROIC), annualized ^(a)	9.9		%	12.7		%

Reconciliation of net income to EBITDA:
Net income (GAAP)	$	11,366		$	19,982
Plus: Interest expense	3,751			3,119
Plus: Income taxes	4,354			6,668
Plus: Depreciation and amortization	9,700			8,935
EBITDA (non-GAAP)	29,171			38,704
Plus: Change in fair value of contingent consideration	3,176			1,850
Plus: Acquisition and divestiture costs	1,151			414
Plus: Restructuring costs	490			—
Plus: Impact of Planned Divestitures	(870		)	(1,864		)
Adjusted EBITDA (numerator for ROIC) (non-GAAP)	$	33,118		$	39,104


Invested Capital Calculation
Equity – beginning of the quarter	$	905,751		$	877,897
Equity – end of the quarter	927,580			899,503
Plus: Change in fair value of contingent consideration, net of tax	2,401			1,408
Plus: Acquisition and divestiture costs	1,151			414
Plus: Restructuring, net of tax	378			—
Plus: Impact of Planned Divestitures, net of tax	(121		)	(650		)
Average equity	918,570			889,286
Average funded debt^(b)	411,614			333,138
Invested capital (denominator for ROIC) (non-GAAP)	$	1,330,184		$	1,222,424



(a) Calculated as earnings before interest expense, income taxes, depreciation and amortization (EBITDA), plus change in fair value of contingent consideration and other adjustments, annualized and divided by invested capital for the period. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period.
(b) Average funded debt is calculated as the average daily amounts outstanding on short-term and long-term interest-bearing debt.

ScanSource Announces Second Quarter Results



ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)
(in thousands, except per share data)

Non-GAAP Financial Information:
	Forecast for Quarter ending March 31, 2020
	Range Low			Range High
GAAP net sales, reported	$	865,000		$	915,000
Adjustments:
Net sales for Planned Divestitures	(140,000		)	(140,000		)
Non-GAAP net sales, excluding Planned Divestitures	$	725,000		$	775,000



GAAP diluted EPS	$	0.16		$	0.26
Adjustments:
Amortization of intangible assets	0.16			0.16
Change in fair value of contingent consideration	0.06			0.06
Impact of Planned Divestitures^(a)	0.03			0.03
Other (restructuring costs and divestiture costs)	0.03			0.03
Non-GAAP diluted EPS	$	0.44		$	0.54

(a) Reflects operating results for Planned Divestitures and does not include any non-cash charges from write-downs or costs associated with a sale or liquidation of the businesses and their assets.

Exhibit 99.2 ScanSource, Inc. CFO COMMENTARY Q2 FY2020 CFO COMMENTARY Q2 FY 2020 FINANCIAL INFORMATION AND CONFERENCE CALL Q2 FY20 Results: Please see the accompanying earnings press release available at www.scansource.com in the Investor Relations section. The information NET SALES included in this CFO commentary is unaudited and should be read in conjunction with the Company’s SEC filings on Form 10-Q for the quarter ended December 31, 2019. ScanSource will present additional information $989.5 million about its financial results and outlook in a conference call on Tuesday, Forecast: February 4, 2020 at 5:00 pm ET. A webcast of the call is available and can $1.03 billion to be accessed at www.scansource.com (Investor Relations section). The $1.09 billion webcast will be available for replay for 60 days. NON-GAAP NET SALES SECOND QUARTER SUMMARY Excluding Planned Divestitures For the quarter, we missed our sales forecast, primarily from lost sales as $833.7 million we reorganized our North American VAR sales team. In addition, we had Forecast: higher-than-expected declines in our premise-based communications $880 million to $940 million business. Net sales declined 5% Y/Y, primarily from lower sales volumes in North America. This decrease was partially offset by increases for the GAAP DILUTED EPS Intelisys recurring revenue business and the addition of SaaS sales with $0.45 the acquisition of intY. GAAP diluted EPS of $0.45 includes a higher- than-expected expense for the change in fair value of contingent Forecast: $0.54 to $0.59 consideration for Intelisys as a result of better-than-expected actual results. NON-GAAP DILUTED EPS Excluding Planned Divestitures For the trailing 12-months ending December 31, 2019, we generated strong operating cash flow of $143 million, up from $60 million for the $0.77 prior-year period. Forecast: $0.80 to $0.85 Please see Appendix for calculation of non-GAAP measures and reconciliations to GAAP measures. In August 2019, ScanSource announced plans to divest its physical product businesses outside of the United States, Canada and Brazil (“Planned Divestitures”). scansource.com 1 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 QUARTERLY HIGHLIGHTS Y/Y Q2 FY20 Q1 FY20 Q2 FY19 $ in millions, except EPS Change Net sales $989.5 $1,006.9 $1,046.0 -5% Non-GAAP net sales $833.7 $851.4 $872.4 -4% Gross profit $113.9 $112.1 $120.5 -5% Gross profit margin % 11.5% 11.1% 11.5% -1 bps Non-GAAP gross profit $98.4 $98.7 $103.5 -5% Non-GAAP gross profit margin %, 11.8% 11.6% 11.9% -6 bps Operating income $18.5 $18.6 $29.7 -38% Operating income % 1.9% 1.8% 2.8% -97 bps Non-GAAP operating income $28.6 $27.5 $34.6 -17% Non-GAAP operating income % 3.4% 3.2% 4.0% -54 bps GAAP net income $11.4 $11.5 $20.0 -43% Non-GAAP net income $19.5 $18.5 $24.7 -21% GAAP diluted EPS $0.45 $0.45 $0.78 -42% Non-GAAP diluted EPS $0.77 $0.72 $0.96 -20% • Net sales of $989.5 million (-5% Y/Y) • Operating income margin of 1.9% and non-GAAP operating income margin of - Non-GAAP net sales, which exclude 3.4% Planned Divestitures, of $833.7 million (-4% Y/Y) - SG&A includes investments for our recurring revenue and services-based - Organic growth down 5% Y/Y, businesses principally from lower sales volumes in North America • GAAP diluted EPS of $0.45 and non- GAAP diluted EPS of $0.77 • Gross profit margin of 11.5% (down 1 bp Y/Y) and non-GAAP gross profit margin of 11.8% (down 6 bps Y/Y) Organic growth, a non-GAAP measure, reflects reported sales growth, excluding Planned Divestitures less impacts from foreign currency translation and acquisitions. Non-GAAP net sales and non-GAAP gross profit exclude Planned Divestitures. Non-GAAP operating income, non-GAAP net income, and non-GAAP diluted EPS exclude amortization of intangibles, change in fair value of contingent consideration, acquisition/divestiture costs, impact of Planned Divestitures, and other non-GAAP items. scansource.com 2 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 WORLDWIDE BARCODE, NETWORKING & SECURITY Q2 FY20 Q1 FY20 Q2 FY19 $ in millions Net sales $686.2 $697.8 $701.6 Non-GAAP net sales $575.0 $581.2 $579.3 Gross profit $60.1 $58.3 $64.8 Gross profit margin % 8.8% 8.4% 9.2% Non-GAAP gross profit $51.1 $50.3 $54.8 Non-GAAP gross profit margin % 8.9% 8.7% 9.5% Operating income $14.1 $12.0 $18.6 Operating income % 2.1% 1.7% 2.7% Non-GAAP operating income $15.3 $13.1 $18.1 Non-GAAP operating income % 2.7% 2.3% 3.1% 1 Net Sales, $ in millions • Net sales of $686.2 million, down 2.2% Y/Y Y/Y Growth -2.2% - Organic growth down 0.4% Y/Y Y/Y Organic Growth -0.4% - Lower sales volumes in North America $800 - Growth in mobile computing and in $700 payments $122 $117 $111 • Gross profit margin of 8.8% (down 48 bps) $600 $107 and non-GAAP gross profit margin of 8.9% $100 (down 57 bps) $500 - Higher vendor program recognition in $580 $581 $575 $400 $497 $529 prior year quarter • Operating income margin of 2.1% (down 60 $300 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 bps) and non-GAAP operating income margin of 2.7% (down 47 bps) Planned Divestitures Continuing Operations Organic growth, a non-GAAP measure, reflects reported sales growth, excluding Planned Divestitures less impacts from foreign currency translation and acquisitions. Non-GAAP net sales and non-GAAP gross margin exclude Planned Divestitures. Non-GAAP operating income excludes amortization of intangibles, impact of Planned Divestitures, and restructuring costs. scansource.com 3 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 WORLDWIDE COMMUNICATIONS & SERVICES Q2 FY20 Q1 FY20 Q2 FY19 $ in millions Net sales $303.3 $309.1 $344.4 Non-GAAP net sales $258.7 $270.2 $293.1 Gross profit $53.7 $53.8 $55.7 Gross profit margin 17.7% 17.4% 16.2% Non-GAAP gross profit $47.3 $48.4 $48.7 Non-GAAP gross profit margin % 18.3% 17.9% 16.6% Operating income $5.6 $7.4 $11.5 Operating income % 1.8% 2.4% 3.4% Non-GAAP operating income $13.3 $14.2 $16.4 Non-GAAP operating income % 5.1% 5.3% 5.6% Net Sales, $ in millions • Net sales of $303.3 million, down 11.9% Y/Y - Lower sales in the premise-based Y/Y Growth -11.9% communications business in North America Y/Y Organic Growth -14% - Intelisys net sales increased 19% Y/Y $400 - Addition of $11 million of SaaS sales from the $51 intY acquisition $300 $43 $40 $39 $45 • Gross profit margin of 17.7% (up 156 bps) and $200 non-GAAP gross margin of 18.3% (up 165 bps) $293 - More favorable mix from Intelisys recurring $256 $282 $270 $259 $100 revenue • Operating income margin of 1.8% (down 151 $- bps); non-GAAP operating income margin of Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 5.1% (down 47 bps) Planned Divestitures - Investments for our recurring revenue and Continuing Operations services-based businesses Organic growth, a non-GAAP measure, reflects reported sales growth, excluding Planned Divestitures less impacts from foreign currency translation and acquisitions. Non-GAAP net sales and non-GAAP gross margin exclude Planned Divestitures. Non-GAAP operating income excludes amortization of intangibles, change in fair value of contingent consideration, impact of Planned Divestitures, and restructuring costs. scansource.com 4 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 WORKING CAPITAL Q2 FY20 Q1 FY20 Q2 FY19 $ in millions Accounts receivable (Q/E) $645.3 $706.4 $673.6 Days sales outstanding in receivables* 59 63 58 Inventory (Q/E) $743.0 $715.2 $704.4 Inventory turns 4.8 5.1 5.4 Accounts payable (Q/E) $672.9 $656.2 $604.6 Paid for inventory days* 13.8 11.8 13.2 Working capital (Q/E) (AR+INV–AP) $715.3 $765.5 $773.4 * Excludes the impact of Intelisys for all periods; paid for inventory days represent Q/E inventory days less Q/E accounts payable days • Working capital of $715.3 million, down • Days sales outstanding in receivables of 7% Q/Q and down 8% Y/Y 59 days - Lower level of working capital • Inventory turns of 4.8x; slower-than- investment expected range - Working capital at 12/31/19 for the - Inventory up 4% Q/Q and 5% Y/Y Planned Divestitures decreased to $167.4 million, down $37.5 million from • Paid for inventory days of 13.8 reflect $204.9 million at 6/30/19 timing of accounts payable scansource.com 5 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 CASH FLOW AND BALANCE SHEET HIGHLIGHTS Q2 FY20 Q1 FY20 Q2 FY19 $ in millions Adjusted EBITDA (QTR)* $33.1 $31.9 $39.1 Adjusted ROIC (QTR)* 9.9% 9.6% 12.7% Operating cash flow (QTR) $71.1 $47.0 ($57.5) Operating cash flow, trailing 12 months $142.7 $14.2 $60.3 Cash and cash equivalents (Q/E) $42.0 $25.9 $22.7 Debt (Q/E) $357.7 $370.3 $372.4 Net debt to adjusted EBITDA, trailing 12 months* 2.3x 2.4x 2.4x Shares repurchased – # of shares (QTR) -- 168,094 9,387 Shares repurchased – dollars (QTR) -- $5.4 $0.3 Remaining share repurchase authorization -- -- $99.4 (as of Q/E) * Excludes non-GAAP adjustments and change in fair value of contingent consideration • Adjusted EBITDA of $33.1 million, down • Cash and cash equivalent balances of 15% Y/Y, primarily from lower sales $42 million at 12/31/19, including $28 volumes and our acquisition investments million held outside of the U.S. • Adjusted return on invested capital of • Net debt to trailing 12-month adjusted 9.9% for the quarter EBITDA is 2.3x (target range: 1.5x to 2.5x) • Operating cash flow of $71.1 million for the quarter and $142.7 million for the trailing 12 months - Earnings from our business and lower working capital Q/Q scansource.com 6 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 Q3 FY20 OUTLOOK For the quarter ending March 31, 2020: GAAP NET SALES GAAP DILUTED EPS Forecast Range: Forecast Range: $865 million to $0.16 to $0.26 $915 million per share Q3 FY19: Net sales $893 million Q3 FY19: GAAP diluted EPS $0.45 NON-GAAP NET SALES NON-GAAP DILUTED EPS Excluding Planned Divestitures Excluding Planned Divestitures Forecast Range: Forecast: Range $725 million to $0.44 to $0.54 $775 million per share Q3 FY19: Net sales excluding Q3 FY19: Non-GAAP diluted EPS Planned Divestitures $753 million excluding Planned Divestitures $0.80 • Outlook as of February 4, 2020 • Excludes operating results for Planned Divestitures (physical product distribution businesses in Europe, UK, Mexico, Colombia, Chile, Peru and Miami-based export operations) • Non-GAAP diluted EPS exclude amortization of intangible assets, change in fair value of contingent consideration, impact of Planned Divestitures, restructuring costs, and divestiture costs • Forecast midpoint reflects a 10% quarter-over-quarter decline, in line with our seasonal historical trends, and a 1% year-over-year organic sales decline • Reflects a FX rate of $0.24 to R$1.00 for the Brazilian real (R$4.17 to $1) • Expects foreign currency translation to negatively impact non-GAAP net sales by approximately $8 million • Assumes interest expense will be approximately $3.3 million for Q3 FY20 • Assumes an effective tax rate excluding Planned Divestitures of 25% to 26% for Q3 FY20, excluding discrete items scansource.com 7 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 FORWARD-LOOKING STATEMENTS Although ScanSource believes the expectations in its forward-looking statements This CFO Commentary contains certain are reasonable, it cannot guarantee future comments that are “forward-looking” results, levels of activity, performance or statements, including statements about achievement. ScanSource disclaims any expected sales, Planned Divestitures, GAAP obligation to update or revise any forward- diluted earnings per share (“EPS”), non-GAAP looking statements, whether as a result of new diluted EPS, operating cash flow, foreign information, future events, or otherwise, currency rates, tax rates and interest expense except as may be required by law. that involve plans, strategies, economic performance and trends, projections, expectations, costs or beliefs about future NON-GAAP FINANCIAL INFORMATION events and other statements that are not In addition to disclosing results that are descriptions of historical facts. Forward- determined in accordance with United States looking information is inherently subject to Generally Accepted Accounting Principles risks and uncertainties. (“GAAP”), the Company also discloses certain non-GAAP measures, including non-GAAP Any number of factors could cause actual operating income, non-GAAP operating results to differ materially from anticipated or income margin, non-GAAP net income, non- forecasted results, including but not limited to, GAAP diluted EPS, non-GAAP net sales, non- our ability to complete the Planned GAAP gross profit, non-GAAP gross margin, Divestitures on acceptable terms or at all, adjusted EBITDA, ROIC and net sales changes in our operating strategy, changes in excluding the Planned Divestitures less interest and exchange rates and regulatory impacts from foreign currency translation and regimes impacting our international acquisitions (organic growth). A reconciliation operations, the impact of tax reform laws, the of the Company's non-GAAP financial failure of acquisitions to meet our information to GAAP financial information is expectations, the failure to manage and provided in the Appendix and in the implement our organic growth strategy, credit Company’s Form 8-K, filed with the SEC, with risks involving our larger customers and the quarterly earnings press release for the vendors, termination of our relationship with period indicated. key vendors or a significant modification of the terms under which we operate with a key vendor, the decline in demand for the products and services that we provide, reduced prices for the products and services that we provide due both to competitor and customer actions, and other factors set forth in the “Risk Factors” contained in our annual report on Form 10-K for the year ended June 30, 2019, filed with the Securities and Exchange Commission (“SEC”). scansource.com 8 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 APPENDIX: RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION Operating Income, Pre-Tax Income, Net Income & EPS - QTR ($ in thousands) Quarter ended December 31, 2019 Change in fair Reported Intangible value of Acquisition Tax Impact of GAAP amortization contingent & divestiture Restructuring recovery, Planned Non-GAAP measure expense consideration costs (a) costs net Divestitures measure Net sales $ 989,503 $ — $ — $ — $ — $ — $ (155,767) $ 833,736 Gross profit 113,884 — — — — — (15,471) 98,413 Operating income 18,497 5,631 3,176 1,151 490 — (371) 28,574 Other expense, net 2,777 — — — — — (238) 2,539 Pre-tax income 15,720 5,631 3,176 1,151 490 — (133) 26,035 Net income 11,366 4,289 2,401 1,151 378 — (121) 19,464 Diluted EPS $ 0.45 $ 0.17 $ 0.09 $ 0.05 $ 0.01 $ — $ — $ 0.77 ($ in thousands) Quarter ended September 30, 2019 Change in fair Reported Intangible value of Acquisition Tax Impact of GAAP amortization contingent & divestiture Restructuring recovery, Planned Non-GAAP measure expense consideration costs (a) costs net (b) Divestitures measure Net sales $ 1,006,927 $ — $ — $ — $ — $ — $ (155,516) $ 851,411 Gross profit 112,099 — — — — — (13,397) 98,702 Operating income 18,605 4,962 2,472 757 169 — 507 27,472 Other expense, net 3,024 — — — — — (140) 2,884 Pre-tax income 15,581 4,962 2,472 757 169 — 647 24,588 Net income 11,530 3,746 1,869 757 128 — 444 18,474 Diluted EPS $ 0.45 $ 0.15 $ 0.07 $ 0.03 $ — $ — $ 0.02 $ 0.72 ($ in thousands) Quarter ended December 31, 2018 Change in fair Reported Intangible value of Acquisition Tax Impact of GAAP amortization contingent & divestiture Restructuring recovery, Planned Non-GAAP measure expense consideration costs (a) costs net Divestitures measure Net sales $ 1,046,021 $ — $ — $ — $ — $ — $ (173,611) $ 872,410 Gross profit 120,478 — — — — — (16,998) 103,480 Operating income 29,706 4,700 1,850 414 — — (2,102) 34,568 Other expense, net 3,056 — — — — — (513) 2,543 Pre-tax income 26,650 4,700 1,850 414 — — (1,588) 32,026 Net income 19,982 3,567 1,408 414 — — (650) 24,721 Diluted EPS $ 0.78 $ 0.14 $ 0.05 $ 0.02 $ — $ — $ (0.03) $ 0.96 (a) Acquisition costs are generally nondeductible for tax purposes (b) Reflects adjustments to the one-time charge from the estimated impact of the inclusion of foreign earnings and revaluations of deferred tax assets and liabilities, as a result of tax reform laws enacted in the United States and Belgium in December 2017 scansource.com 9 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 APPENDIX: RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION Net Sales, Constant Currency and Excluding Acquisitions (Organic Growth) - QTR WW Barcode, WW Comms. ($ in thousands) NW & Security & Services Consolidated For the quarter ended December 31, 2019: Q2 FY20 net sales, as reported $ 686,237 $ 303,266 $ 989,503 Planned Divestitures (111,237) (44,530) (155,767) Q2 FY20 net sales, excluding Planned Divestitures $ 575,000 $ 258,736 $ 833,736 Foreign exchange impact (a) 1,799 5,187 6,986 Less: Acquisitions — (12,036) (12,036) Q2 FY20 net sales, constant currency excluding Planned Divestitures and acquisitions (non-GAAP) $ 576,799 $ 251,887 $ 828,686 Q2 FY19 net sales, as reported $ 701,639 $ 344,382 $ 1,046,021 Planned Divestitures (122,326) (51,285) (173,611) Q2 FY19 net sales, excluding Planned Divestitures $ 579,313 $ 293,097 $ 872,410 Less: Acquisitions — (98) (98) Q2 FY19 net sales, excluding Planned Divestitures and acquisitions (non-GAAP) $ 579,313 $ 292,999 $ 872,312 Y/Y % Change: As reported (2.20)% (11.94)% (5.40)% Excluding Planned Divestitures (0.74)% (11.72)% (4.43)% Constant currency, excluding Planned Divestitures and acquisitions (organic growth) (0.43)% (14.03)% (5.00)% (a) Yea-over-year sales growth excluding the translation impact of changes in foreign currency rates. Calculated by translating net sales for the quarter ended December 31, 2019 into U.S. dollars using the weighted-average foreign exchange rates for the quarter ended December 31, 2018 scansource.com 10 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 APPENDIX: RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION Highlights by Segment - QTR ($ in thousands) Quarter Ended December 31, 2019 Change in fair Reported Intangible value of Impact of GAAP amortization contingent Restructuring Planned Non-GAAP measure expense consideration costs Divestitures measure Worldwide Barcode, NW & Security: Net sales $ 686,237 — — — (111,237) $ 575,000 Gross Profit $ 60,136 — — — (9,003) $ 51,133 Gross profit margin % 8.76% — — — 8.09 % 8.89% Operating income $ 14,076 1,968 — — (735) $ 15,309 Operating income margin % 2.05% — — — 0.66 % 2.66% Worldwide Communications & Services: Net sales $ 303,266 — — — (44,530) $ 258,736 Gross Profit $ 53,748 — — — (6,467) $ 47,281 Gross profit margin % 17.72% — — — 14.52 % 18.27% Operating income $ 5,572 3,664 3,176 490 364 $ 13,266 Operating income margin % 1.84% — — — (0.82)% 5.13% FY20 YTD Consolidated: Net sales $ 1,996,430 — — — (311,282) $ 1,685,148 Gross Profit $ 225,983 — — — (28,867) $ 197,116 Gross profit margin % 11.32% — — — 9.27 % 11.70% Operating income $ 37,101 10,593 5,649 2,568 136 $ 56,047 Operating income margin % 1.86% — — — (0.04)% 3.33% ($ in thousands) Quarter Ended September 30, 2019 Change in fair Reported Intangible value of Impact of GAAP amortization contingent Restructuring Planned Non-GAAP measure expense consideration costs Divestitures measure Worldwide Barcode, NW & Security: Net sales $ 697,791 — — — (116,603) $ 581,188 Gross Profit $ 58,271 — — — (7,982) $ 50,289 Gross profit margin % 8.35% — — — 6.85 % 8.65% Operating income $ 11,992 1,968 — — (899) $ 13,061 Operating income margin % 1.72% — — — 0.77 % 2.25% Worldwide Communications & Services: Net sales $ 309,136 — — — (38,913) $ 270,223 Gross Profit $ 53,828 — — — (5,415) $ 48,413 Gross profit margin % 17.41% — — — 13.92 % 17.92% Operating income $ 7,370 2,994 2,472 — 1,406 $ 14,242 Operating income margin % 2.38% — — — (3.61)% 5.27% scansource.com 11 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 APPENDIX: RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION Highlights by Segment - QTR, continued ($ in thousands) Quarter Ended December 31, 2018 Change in fair Reported Intangible value of Impact of GAAP amortization contingent Restructuring Planned Non-GAAP measure expense consideration costs Divestitures measure Worldwide Barcode, NW & Security: Net sales $ 701,639 — — — (122,326) $ 579,313 Gross Profit $ 64,825 — — — (10,047) $ 54,778 Gross profit margin % 9.24% — — — 8.21 % 9.46% Operating income $ 18,581 1,854 — — (2,292) $ 18,143 Operating income margin % 2.65% — — — 1.87 % 3.13% Worldwide Communications & Services: Net sales $ 344,382 — — — (51,285) $ 293,097 Gross Profit $ 55,653 — — — (6,951) $ 48,702 Gross profit margin % 16.16% — — — 13.55 % 16.62% Operating income $ 11,539 2,846 1,850 — 190 $ 16,425 Operating income margin % 3.35% — — — (0.37)% 5.60% scansource.com 12 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 APPENDIX: RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION Average Return on Invested Capital - QTR ($ in thousands) Q2 FY20 Q1 FY20 Q4 FY19 Q3 FY19 Q2 FY19 Adjusted return on invested capital (ROIC), annualized (a) 9.9% 9.6% 11.1% 11.4% 12.7% Reconciliation of Net Income to Adjusted EBITDA Net income - GAAP $ 11,366 $ 11,530 $ 11,578 $ 11,715 $ 19,982 Plus: Interest expense 3,751 3,792 3,966 3,670 3,119 Income taxes 4,354 4,051 4,660 4,080 6,668 Depreciation and amortization 9,700 9,189 9,053 9,363 8,935 EBITDA 29,171 28,562 29,257 28,828 38,704 Adjustments: Change in fair value of contingent consideration 3,176 2,472 3,665 5,101 1,850 Acquisition and divestiture costs 1,151 757 230 222 414 Restructuring costs 490 169 483 456 — Impact of Planned Divestitures (870) (76) 1,449 854 (1,864) Adjusted EBITDA (numerator for ROIC) (non-GAAP) $ 33,118 $ 31,884 $ 35,084 $ 35,461 $ 39,104 Invested Capital Calculation Equity - beginning of the quarter $ 905,751 $ 914,129 $ 911,063 $ 899,503 $ 877,897 Equity - end of quarter 927,580 905,751 914,129 911,063 899,503 Adjustments: Change in fair value of contingent consideration, net of tax 2,401 1,869 2,780 3,619 1,408 Acquisition and divestiture costs 1,151 757 230 222 414 Restructuring costs, net of tax 378 128 342 334 — Tax recovery, net and related interest income, net of tax — — (387) — — Impact of Planned Divestitures, net of tax (121) 444 3,918 1,181 (650) Average equity 918,570 911,539 916,040 907,961 889,286 Average funded debt (b) 411,614 407,306 355,932 357,443 333,138 Invested capital (denominator for ROIC) (non-GAAP) $ 1,330,184 $ 1,318,845 $ 1,271,972 $ 1,265,404 $ 1,222,424 (a) calculated as net income plus interest expense, income taxes, depreciation and amortization (EBITDA), annualized divided by invested capital for the period. Adjusted EBITDA reflects other adjustments for non-GAAP measures. (b) Average daily amounts outstanding on short-term and long-term interest-bearing debt scansource.com 13 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 APPENDIX: RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION Net Debt and EBITDA Metrics ($ in thousands) Q2 FY20 Q1 FY20 Q4 FY19 Q3 FY19 Q2 FY19 Debt (Q/E) $ 357,745 $ 370,330 $ 360,506 $ 347,672 $ 372,410 Less: Cash and cash equivalents (Q/E) (42,005) (25,877) (23,818) (20,400) (22,749) Net debt (Q/E) $ 315,740 $ 344,453 $ 336,688 $ 327,272 $ 349,661 Reconciliation of Net Income to Adjusted EBITDA Net income - GAAP $ 11,366 $ 11,530 $ 11,578 $ 11,715 $ 19,982 Plus: Interest expense 3,751 3,792 3,966 3,670 3,119 Income taxes 4,354 4,051 4,660 4,080 6,668 Depreciation and amortization 9,700 9,189 9,053 9,363 8,935 EBITDA 29,171 28,562 29,257 28,828 38,704 Adjustments: Change in fair value of contingent consideration 3,176 2,472 3,665 5,101 1,850 Acquisition and divestiture costs 1,151 757 230 222 414 Restructuring costs 490 169 483 456 — Impact of Planned Divestitures (870) (76) 1,449 854 (1,864) Adjusted EBITDA (non-GAAP) $ 33,118 $ 31,884 $ 35,084 $ 35,461 $ 39,104 Adjusted EBITDA, TTM (a) $ 135,548 $ 141,533 $ 146,549 $ 149,660 $ 147,970 Net Debt / Adjusted EBITDA, TTM (a) 2.3x 2.4x 2.3x 2.2x 2.4x (a) Adjusted EBITDA for the trailing 12-month period scansource.com 14 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 APPENDIX: RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION Impact of Planned Divestitures ($ in thousands) Q2 FY20 Q1 FY20 Q4 FY19 Q3 FY19 Q2 FY19 Net sales, reported (GAAP) $ 989,503 $ 1,006,927 $ 960,833 $ 893,357 $ 1,046,021 Less: Planned Divestitures (155,767) (155,516) (149,336) (140,510) (173,611) Non-GAAP net sales, excl. Planned Divestitures 833,736 851,411 811,497 752,847 872,410 Gross profit, reported (GAAP) 113,884 112,099 109,864 110,016 120,478 Less: Planned Divestitures (15,741) (13,397) (13,157) (14,208) (16,998) Non-GAAP gross profit 98,143 98,702 96,707 95,808 103,480 Gross profit margin % 11.51% 11.13% 11.43% 12.31% 11.52% Non-GAAP gross profit margin % 11.77% 11.59% 11.92% 12.73% 11.86% Operating income, reported (GAAP) 18,497 18,605 20,022 18,804 29,706 Adjustments: Intangible amortization expense 5,631 4,962 5,024 5,005 4,700 Change in fair value of contingent consideration 3,176 2,472 3,665 5,101 1,850 Acquisition costs 11 403 230 222 414 Divestiture costs 1,140 354 — — — Restructuring costs 490 169 483 592 — Impact of Planned Divestitures, loss (income) (371) 507 1,456 898 (2,102) Non-GAAP operating income $ 28,574 $ 27,472 $ 30,880 $ 30,622 $ 34,568 Operating income margin % 1.87% 1.85% 2.08% 2.10% 2.84% Non-GAAP operating income margin % 3.43% 3.23% 3.81% 4.07% 3.96% Working capital Accounts receivable, reported (GAAP) $ 645,270 $ 706,428 $ 654,983 $ 597,349 $ 673,631 Less: Planned Divestitures (131,513) (138,372) (131,446) (114,187) (134,137) Accounts receivable, excluding Planned Divestitures 513,757 568,056 523,539 483,162 539,494 Inventory, reported (GAAP) 742,979 715,224 697,343 760,711 704,444 Less: Planned Divestitures (121,833) (115,580) (143,263) (145,413) (124,852) Inventory, excluding Planned Divestitures 621,146 599,644 554,080 615,298 579,592 Accounts payable, reported (GAAP) 672,906 656,150 558,101 585,121 604,630 Less: Planned Divestitures (85,949) (74,407) (69,810) (92,057) (79,704) Accounts payable, excluding Planned Divestitures 586,957 581,743 488,291 493,064 524,926 Working capital, reported GAAP 715,343 765,502 794,225 772,939 773,445 Less: Planned Divestitures (167,397) (179,545) (204,897) (167,543) (179,285) Working capital, excluding Planned Divestitures $ 547,946 $ 585,957 $ 589,328 $ 605,396 $ 594,160 scansource.com 15 February 4, 2020

ScanSource, Inc. CFO COMMENTARY Q2 FY2020 APPENDIX: RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION Forecasted Range for Q3 FY20 Outlook Excluding Planned Divestitures Forecast for Quarter ending ($ in thousands) March 31, 2020 Range Low Range High Net sales, reported $ 865,000 $ 915,000 Adjustments: Net sales for Planned Divestitures (140,000) (140,000) Non-GAAP net sales, excluding Planned Divestitures $ 725,000 $ 775,000 GAAP diluted EPS $ 0.16 $ 0.26 Adjustments: Amortization of intangible assets 0.16 0.16 Change in fair value of contingent consideration 0.06 0.06 Impact of Planned Divestitures (a) 0.03 0.03 Other (restructuring costs and divestiture costs) 0.03 0.03 Non-GAAP diluted EPS $ 0.44 $ 0.54 (a) reflects operating results for Planned Divestitures and does not include any non-cash charges from write-downs or losses associated with a sale or liquidation of the businesses and their assets scansource.com 16 February 4, 2020



SC	00-26926	57-0965380
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)



Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, no par value	SCSC	NASDAQ Global Select Market



		ScanSource, Inc.

Date:	February 4, 2020	By:	/s/ Gerald Lyons
		Name:	Gerald Lyons
		Its:	Senior Executive Vice President and Chief Financial Officer



☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



Exhibit Number	Description

99.1	Press release
99.2	CFO commentary
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)



Emerging growth company	☐