scsc-20230207

Exhibit 99.1

FOR IMMEDIATE RELEASE


Contact:
Steve Jones						Mary M. Gentry
Senior EVP, Chief Financial Officer						SVP, Treasurer and Investor Relations
ScanSource, Inc.						ScanSource, Inc.
(864) 286-4302						(864) 286-4892

SCANSOURCE DELIVERS OUTSTANDING SECOND QUARTER PERFORMANCE

17% Net Sales Growth Drove Excellent Profitability; Raises Full Year Outlook

GREENVILLE, SC -- February 7, 2023 -- ScanSource, Inc. (NASDAQ: SCSC), a leading hybrid distributor connecting devices to the cloud, today announced financial results for the second quarter ended December 31, 2022.


	Second Quarter Summary
	Q2 FY23			Q2 FY22			Change
	(in thousands, except per share data)
Select reported measures:
Net sales	$	1,011,241		$	864,079		17.0%
Gross profit	$	115,334		$	107,653		7.1%
Gross profit margin %	11.41		%	12.46		%	-105bp
Operating income	$	39,432		$	31,498		25.2%
GAAP net income	$	25,734		$	23,152		11.2%
GAAP diluted EPS	$	1.01		$	0.89		13.5%
Select Non-GAAP measures:
Adjusted EBITDA	$	48,815		$	42,542		14.7%
Adjusted EBITDA margin %	4.83		%	4.92		%	-9bp
Non-GAAP net income	$	26,941		$	26,446		1.9%
Non-GAAP diluted EPS	$	1.06		$	1.02		3.9%

"The ScanSource team executed exceptionally well, delivering 17% net sales growth and record profitability for the quarter," said Mike Baur, Chairman and CEO, ScanSource, Inc. "This exceptional performance is a result of strong demand and operating leverage in our hardware and Intelisys businesses. With our outstanding second quarter results, we are raising our full year 2023 outlook for both net sales growth and adjusted EBITDA."

Quarterly Results

Net sales for the second quarter of fiscal year 2023 totaled $1.0 billion, up 17.0% year-over-year, or 16.4% year-over-year for organic growth. Specialty Technology Solutions net sales for the second quarter increased 26.3% year-over-year to $627.5 million, driven by broad-based demand across technologies and execution by our people. Modern Communications & Cloud net sales for the second quarter increased 4.5% year-over-year to $383.7 million.

Gross profit for the second quarter of fiscal year 2023 increased 7.1% year-over-year to $115.3 million, due to higher sales volume. Gross profit margin for the second quarter was 11.41% versus 12.46% in the prior-year quarter, reflecting the sales mix and higher mix of big deals.

For the second quarter of fiscal year 2023, operating income increased to $39.4 million from $31.5 million in the prior-year quarter. Second quarter fiscal year 2023 non-GAAP operating income increased to a record $40.7 million for a 4.03% non-GAAP operating income margin, up from $35.9 million for the prior-year quarter.

Exhibit 99.1

On a GAAP basis, net income for the second quarter of fiscal year 2023 totaled $25.7 million, or $1.01 per diluted share, compared to net income of $23.2 million, or $0.89 per diluted share, for the prior-year quarter. Second quarter fiscal year 2023 non-GAAP net income totaled $26.9 million, or $1.06 per diluted share, up from $26.4 million, or $1.02 per diluted share for the prior-year quarter.

Adjusted EBITDA for the second quarter of fiscal year 2023 increased 14.7% to $48.8 million, or 4.83% of net sales, compared to $42.5 million, or 4.92% of net sales, for the prior-year quarter. Adjusted return on invested capital totaled 15.6% for second quarter fiscal year 2023, compared to 17.6% in the prior-year quarter, primarily from increased average invested capital for the current year quarter.

Annual Financial Outlook for Fiscal Year 2023

ScanSource raises its expectations for the full fiscal year ended June 30, 2023 and replaces previously provided guidance.

FY23 Annual Outlook

Prior FY23 Outlook

Net sales growth, year-over-year

At least 6.5%

At least 5.5%

Adjusted EBITDA (non-GAAP)

At least $176 million

At least $174 million

Adjusted EBITDA is a non-GAAP measure, which excludes estimates for amortization of intangible assets, depreciation expense, and non-cash share-based compensation expense. ScanSource’s outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic investments, or other significant transactions that may be completed after the date hereof. These statements are forward-looking, and actual results may differ materially.

Webcast Details and Earnings Infographic

At approximately 8:45 a.m. ET today, an Earnings Infographic, 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 business in a conference call today, February 7, 2023, at 10:30 a.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 Company's FY23 outlook, which involve risks and uncertainties. Any number of factors could cause actual results to differ materially from anticipated results, including, but not limited to, failure to hire and retain quality employees, risk to the Company's business from a cyber-security attack, supply chain challenges, the failure to manage and implement the Company's organic growth strategy, economic weakness and inflation, a failure of the Company's IT systems, a failure to acquire new businesses, changes in interest and exchange rates and regulatory regimes impacting the Company's international operations, credit risks involving the Company's larger customers and suppliers, loss of the Company's major customers, termination of the Company's relationship with key suppliers or a significant modification of the terms under which it operates with a key supplier, 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, 2022, 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 acquisitions (organic growth): 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 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.

Additional Non-GAAP Metrics: To evaluate current period performance on a more consistent basis with prior periods, the Company discloses non-GAAP SG&A expenses, non-GAAP operating 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, impairment charges, restructuring costs, and other non-GAAP adjustments. These year-over-year metrics include the translation impact of changes in foreign currency exchange rates. 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.

Adjusted earnings before interest expense, income taxes, depreciation, and amortization (“Adjusted EBITDA”): Adjusted EBITDA starts with net income and adds back interest expense, income tax expense, depreciation expense, amortization of intangible assets, changes in fair value of contingent considerations, and other non-GAAP adjustments, including acquisition and divestiture costs, impairment charges, restructuring costs and non-cash share-based compensation expense. Since Adjusted EBITDA excludes some non-cash costs of investing in our business and people, management believes that Adjusted EBITDA shows the profitability from our business operations more clearly. The presentation for Adjusted EBITDA for all periods presented has been recast to reflect this change to enhance comparability between periods.

Adjusted return on invested capital ("Adjusted ROIC"): Adjusted ROIC assists management in comparing the Company's performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that do not reflect our core operating performance. We believe the calculation of Adjusted ROIC provides useful information to investors and is an additional relevant comparison of our performance. Adjusted ROIC is calculated as Adjusted EBITDA over invested capital. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period. Management believes the calculation of Adjusted 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 a leading hybrid distributor connecting devices to the cloud and accelerating growth for customers across hardware, 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 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. Founded in 1992 and headquartered in Greenville, South Carolina, ScanSource was named one of the 2022 Best Places to Work in South Carolina and on FORTUNE magazine’s 2023 List of World’s Most Admired Companies. ScanSource ranks #773 on the Fortune 1000. For more information, visit www.scansource.com.

ScanSource Delivers Outstanding Second Quarter Performance


ScanSource, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
	December 31, 2022		June 30, 2022*
Assets
Current assets:
Cash and cash equivalents	$	66,445	$	37,987
Accounts receivable, less allowance of $13,353 at December 31, 2022 and $16,806 at June 30, 2022	779,562		729,442
Inventories	761,936		614,814
Prepaid expenses and other current assets	111,119		141,562
Total current assets	1,719,062		1,523,805
Property and equipment, net	36,593		37,477
Goodwill	214,367		214,435
Identifiable intangible assets, net	75,950		84,427
Deferred income taxes	14,751		15,668
Other non-current assets	69,806		61,616

Total assets	$	2,130,529	$	1,937,428
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	748,662	$	714,177
Accrued expenses and other current liabilities	76,985		88,455

Income taxes payable	6,049		34

Current portion of long-term debt	5,040		11,598

Total current liabilities	836,736		814,264
Deferred income taxes	3,132		3,144
Long-term debt, net of current portion	147,756		123,733
Borrowings under revolving credit facility	230,000		135,839

Other long-term liabilities	50,519		53,920
Total liabilities	1,268,143		1,130,900
Commitments and contingencies
Shareholders’ equity:
Preferred stock, no par value; 3,000,000 shares authorized, none issued	—		—
Common stock, no par value; 45,000,000 shares authorized, 25,343,014 and 25,187,351 shares issued and outstanding at December 31, 2022 and June 30, 2022, respectively	68,313		64,297
Retained earnings	896,645		846,869
Accumulated other comprehensive loss	(102,572)		(104,638)
Total shareholders’ equity	862,386		806,528
Total liabilities and shareholders’ equity	$	2,130,529	$	1,937,428

*Derived from audited financial statements.

ScanSource Delivers Outstanding Second Quarter Performance


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

	Quarter ended December 31,				Six months ended December 31,
	2022		2021		2022		2021
Net sales	$	1,011,241	$	864,079	$	1,955,054	$	1,721,662
Cost of goods sold	895,907		756,426		1,726,236		1,512,437
Gross profit	115,334		107,653		228,818		209,225
Selling, general and administrative expenses	69,074		69,161		140,667		133,016
Depreciation expense	2,678		2,547		5,441		5,427
Intangible amortization expense	4,150		4,447		8,391		8,956



Operating income	39,432		31,498		74,319		61,826
Interest expense	5,060		1,493		8,507		3,153
Interest income	(2,027)		(947)		(3,618)		(1,973)
Other expense, net	207		543		955		807
Income before income taxes	36,192		30,409		68,475		59,839
Provision for income taxes	10,458		7,257		18,699		14,614
Net income from continuing operations	25,734		23,152		49,776		45,225
Net income from discontinued operations	—		100		—		100
Net income	$	25,734	$	23,252	$	49,776	$	45,325

Per share data:
Net income from continuing operations per common share, basic	$	1.02	$	0.91	$	1.97	$	1.77
Net income from discontinued operations per common share, basic	—		—		—		—
Net income per common share, basic	$	1.02	$	0.91	$	1.97	$	1.77
Weighted-average shares outstanding, basic	25,287		25,585		25,244		25,549

Net income from continuing operations per common share, diluted	$	1.01	$	0.89	$	1.96	$	1.75
Net income from discontinued operations per common share, diluted	—		—		—		—
Net income per common share, diluted	$	1.01	$	0.90	$	1.96	$	1.76
Weighted-average shares outstanding, diluted	25,502		25,895		25,454		25,806

ScanSource Delivers Outstanding Second Quarter Performance


ScanSource, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
	Six months ended December 31,
		2022		2021
Cash flows from operating activities:
Net income		$	49,776	$	45,325


Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		14,285		14,879
Amortization of debt issue costs		385		209
Provision for doubtful accounts		33		921
Share-based compensation		5,679		6,032

Deferred income taxes		932		(109)


Finance lease interest		24		26
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(49,541)		(54,370)
Inventories		(146,826)		(95,531)
Prepaid expenses and other assets		30,487		(11,236)
Other non-current assets		(7,168)		(1,561)
Accounts payable		33,820		25,444
Accrued expenses and other liabilities		(13,268)		(5,130)
Income taxes payable		6,036		(177)
Net cash used in operating activities		(75,346)		(75,378)
Cash flows from investing activities:
Capital expenditures		(4,262)		(2,645)

Cash received for business disposal		—		3,125

Net cash (used in) provided by investing activities		(4,262)		480
Cash flows from financing activities:

Borrowings on revolving credit, net of expenses		1,232,058		1,115,161
Repayments on revolving credit, net of expenses		(1,137,897)		(1,057,376)
Borrowings (repayments) on long-term debt, net		17,465		(4,093)
Repayments on finance lease obligation		(492)		(624)
Debt issuance costs		(1,407)		—

Exercise of stock options		634		1,114
Taxes paid on settlement of equity awards		(2,332)		(2,634)
Common stock repurchased		—		(183)

Net cash provided by financing activities		108,029		51,365













Effect of exchange rate changes on cash and cash equivalents		37		(5,062)
Increase (decrease) in cash and cash equivalents		28,458		(28,595)
Cash and cash equivalents at beginning of period		37,987		62,718
Cash and cash equivalents at period end		$	66,445	$	34,123

ScanSource Delivers Outstanding Second Quarter Performance


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

Non-GAAP Financial Information:
	Quarter ended December 31,
	2022			2021
Adjusted return on invested capital ratio (Adjusted ROIC), annualized(a)	15.6		%	17.6		%

Reconciliation of Net Income to Adjusted EBITDA:
Net income (GAAP)	$	25,734		$	23,152
Plus: Interest expense	5,060			1,493
Plus: Income taxes	10,458			7,257
Plus: Depreciation and amortization	7,057			7,229
EBITDA (non-GAAP)	48,309			39,131

Plus: Share-based compensation	3,364			3,464
Plus: Acquisition and divestiture costs(b)	—			(53)


Plus: Tax recovery(c)	(2,858)			—
Adjusted EBITDA (numerator for Adjusted ROIC) (non-GAAP)	$	48,815		$	42,542

Invested Capital Calculations:
Equity – beginning of the quarter	$	827,004		$	746,094
Equity – end of the quarter	862,386			768,525

Plus: Share-based compensation, net	2,496			2,590
Plus: Acquisition and divestiture costs(b)	—			(53)

Plus: Discontinued operations net (income) loss	—			(100)

Plus: Tax recovery, net	(1,886)			—

Average equity	845,000			758,528
Average funded debt (d)	392,853			200,708
Invested capital (denominator for Adjusted ROIC) (non-GAAP)	$	1,237,853		$	959,236

(a) The annualized adjusted EBITDA amount is divided by days in the quarter times 365 days per year, or 366 days for leap year. There were 92 days in the current and prior-year quarter.
(b) Acquisition and divestiture costs are generally nondeductible for tax purposes.
(c) Recovery of prior period withholding taxes in Brazil.
(d) Average funded debt is calculated as the average daily amounts outstanding on short-term and long-term interest-bearing debt.

ScanSource Delivers Outstanding Second Quarter Performance


ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)

Net Sales by Segment:
	Quarter ended December 31,
	2022		2021		% Change
Specialty Technology Solutions:	(in thousands)


Net sales, reported	$	627,548	$	496,920	26.3	%
Foreign exchange impact (a)	(1,120)		—

Non-GAAP net sales, constant currency	$	626,428	$	496,920	26.1	%

Modern Communications & Cloud:


Net sales, reported	$	383,693	$	367,159	4.5	%
Foreign exchange impact (a)	(4,497)		—

Non-GAAP net sales, constant currency	$	379,196	$	367,159	3.3	%

Consolidated:


Net sales, reported	$	1,011,241	$	864,079	17.0	%
Foreign exchange impact (a)	(5,617)		—

Non-GAAP net sales, constant currency	$	1,005,624	$	864,079	16.4	%

(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, 2022 into U.S. dollars using the average foreign exchange rates for the quarter ended December 31, 2021.


ScanSource, Inc. and Subsidiaries
Supplementary Information (Unaudited)

Net Sales by Geography:
	Quarter ended December 31,
	2022		2021		% Change
United States and Canada:	(in thousands)
Net sales, as reported	$	909,221	$	773,660	17.5	%



International:


Net sales, reported	$	102,020	$	90,419	12.8	%
Foreign exchange impact(a)	(5,617)		—

Non-GAAP net sales, constant currency	$	96,403	$	90,419	6.6	%

Consolidated:


Net sales, reported	$	1,011,241	$	864,079	17.0	%
Foreign exchange impact(a)	(5,617)		—

Non-GAAP net sales, constant currency	$	1,005,624	$	864,079	16.4	%

(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, 2022 into U.S. dollars using the average foreign exchange rates for the quarter ended December 31, 2021.

ScanSource Delivers Outstanding Second Quarter Performance


	Quarter ended December 31, 2022
		GAAP Measure	Intangible amortization expense	Acquisition and divestiture costs	Tax recovery (a)	Non-GAAP measure
	(in thousands, except per share data)


SG&A expenses		$69,074	—	—	$2,858	$71,932
Operating income		39,432	4,150	—	(2,858)	40,724


Net income		25,734	3,093	—	(1,886)	26,941
Diluted EPS		$1.01	$0.12	—	$(0.07)	$1.06

	Quarter ended December 31, 2021
		GAAP Measure	Intangible amortization expense	Acquisition and divestiture costs (b)	Tax recovery	Non-GAAP measure
	(in thousands, except per share data)


SG&A expense		$69,161	—	$53	—	$69,214
Operating income		31,498	4,447	(53)	—	35,892


Net income		23,152	3,347	(53)	—	26,446
Diluted EPS		$0.89	$0.13	—	—	$1.02
(a) Recovery of prior period withholding taxes in Brazil.
(b) Acquisition and divestiture costs totaled less than $(0.1) million for the quarter ended December 31, 2021 and are generally nondeductible for tax purposes.

ScanSource Delivers Outstanding Second Quarter Performance

ScanSource, Inc. and Subsidiaries

Supplementary Forward-Looking Information (Unaudited)

Annual Financial Outlook for Fiscal Year 2023:

FY23 Outlook

GAAP, Operating income

At least $135 million

Intangible amortization

$17 million

Depreciation expense

$12 million

Share-based compensation expense

$12 million

Interest income and other income (expense), net

$3 million

Tax recovery

$(3) million

Adjusted EBITDA (non-GAAP)

At least $176 million

Fiscal Second Quarter 2023 Earnings The ScanSource team executed exceptionally well, delivering 17% net sales growth and record profitability for the quarter. This exceptional performance is a result of strong demand and operating leverage in our hardware and Intelisys businesses.” Mike Baur Chairman and CEO, ScanSource, Inc. Key Highlights 17% Net Sales Growth and 7% Gross Profit Growth Winning with our Hybrid Distribution Strategy; Raises Full Year Outlook Gained Operating Leverage on SG&A Expenses Net Sales +17% Y/Y $1.011B Q2 Net Sales Top $1B; Record Sales for Continuing Operations © ScanSource 2022 Consolidated Specialty Technology Solutions Segment Gross Profit +7% Y/Y $115.3M, 11.4% margin Modern Communications & Cloud Segment STS, Net Sales +26% Y/Y $627.5M MC&C, Net Sales +5% Y/Y $383.7M STS, Gross Profit +9% Y/Y $56.7M, 9.0% margin MC&C, Gross Profit +5% Y/Y $58.6M, 15.3% margin Exhibit 99.2

* Non‐GAAP measure; adjusted ROIC represents return on invested capital For further financial data, non‐GAAP financial disclosures and cautionary language regarding forward‐looking statements, please refer to the following pages and ScanSource’s second quarter fiscal year 2023 news release issued on February 7, 2023, which accompanies this presentation and is available at www.scansource.com in the Investor Relations section. Second Quarter Metrics Reflect Operational Excellence Focused Execution of Value Creation Strategy Solid Financial Foundation for Growth Fiscal Year 2023 Outlook updated as of February 7, 2023 (replaces previously provided guidance) $1.01 per share +13% Y/Y GAAP Diluted EPS All-time Company record $1.06 per share +4% Y/Y Non-GAAP Diluted EPS* $48.8M +15% Y/Y Adjusted EBITDA* All-time Company record $(124)M TTM Operating Cash Flow Working capital for growth 15.6% Adjusted ROIC* No Q2 share repurchases 4.83% Adjusted EBITDA Margin* 1.8x net debt to TTM adjusted EBITDA Target range: 1x to 2x 5.0x inventory turns Paid for inventory days of 10.9 69 days sales outstanding A repositioned company – Innovative hybrid distributor Attractive financial profile Delivering long-term sustainable growth Differentiated market position © ScanSource 2022 At Least 6.5% (up from 5.5%) Net Sales Growth At Least $176M (up from $174M) +6% Y/Y Adjusted EBITDA* 2 Building on specialized technologies

Forward-Looking Statements This Earnings Infographic and supporting materials contain certain comments that are “forward- looking” statements, including statements about our FY23 outlook, growth opportunities and our operating strategies that involve plans, strategies, economic performance and trends, projections, expectations, costs or beliefs about future events and other statements that are not descriptions of historical facts. Forward-looking information is inherently subject to risks and uncertainties. Any number of factors could cause actual results to differ materially from anticipated or forecasted results, including but not limited to, the failure to hire and retain quality employees, risk to our business from a cyber-security attack, the failure to manage and implement our organic growth strategy, economic weakness and inflation, a failure of our IT systems, a failure to acquire new businesses, changes in interest and exchange rates and regulatory regimes impacting our international operations, loss of our major customers, termination of our relationship with key suppliers or a significant modification of the terms under which we operate with a key supplier, changes in our operating strategy, and other factors set forth in the “Risk Factors” contained in our annual report on Form 10-K for the year ended June 30, 2022, and subsequent reports on Form 10-Q, filed with the Securities and Exchange Commission (“SEC”). Although ScanSource believes the expectations in its forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement. ScanSource disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by law. 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 measures, including non-GAAP operating income, non-GAAP operating income margin, non-GAAP net income, non-GAAP diluted EPS, non-GAAP net sales, non-GAAP SG&A expenses, adjusted EBITDA, adjusted ROIC and net sales less impacts from foreign currency translation and acquisitions (organic growth). A reconciliation of the Company's non-GAAP financial information to GAAP financial information is provided in the following supporting materials and in the Company’s Form 8-K, filed with the SEC, with the quarterly earnings press release for the period indicated. 3

Consolidated, 5-Quarter Financial Summary - for continuing operations ($ in thousands, except per share data) Q2 FY23 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q/Q Y/Y Select reported GAAP measures: Net sales $ 1,011,241 $ 943,813 $ 962,283 $ 845,990 $ 864,079 7% 17% Gross profit $ 115,334 $ 113,485 $ 110,792 $ 106,508 $ 107,653 2% 7% Gross profit margin % 11.4 % 12.0 % 11.5 % 12.6 % 12.5 % (62) bp (105) bp SG&A expenses $ 69,074 $ 71,593 $ 75,905 $ 66,522 $ 69,161 (4)% —% Operating income $ 39,432 $ 34,888 $ 27,424 $ 32,917 $ 31,498 13% 25% Operating income % 3.90 % 3.70 % 2.85 % 3.89 % 3.65 % 20 bp 25 bp Net income $ 25,734 $ 24,042 $ 19,947 $ 23,526 $ 23,152 7% 11% Diluted EPS $ 1.01 $ 0.94 $ 0.78 $ 0.91 $ 0.89 7% 13% Select reported Non-GAAP measures: (a) Non-GAAP operating income $ 40,724 $ 39,129 $ 31,864 $ 37,374 $ 35,892 4% 13% Non-GAAP operating income % 4.03 % 4.15 % 3.31 % 4.42 % 4.15 % (12) bp (13) bp Non-GAAP net income $ 26,941 $ 27,203 $ 23,266 $ 26,879 $ 26,446 (1)% 2% Non-GAAP diluted EPS $ 1.06 $ 1.07 $ 0.91 $ 1.04 $ 1.02 (1)% 4% Adjusted EBITDA $ 48,815 $ 45,275 $ 38,672 $ 44,115 $ 42,542 8% 15% Adjusted EBITDA % 4.83 % 4.80 % 4.02 % 5.21 % 4.92 % 3 bp (10) bp Adjusted ROIC 15.6 % 15.6 % 14.9 % 18.0 % 17.6 % — bp (200) bp Operating cash flow (QTR) $ (26,885) $ (48,459) $ (78,684) $ 29,707 $ (18,419) *nm *nm Operating cash flow (TTM) $ (124,321) $ (115,855) $ (124,355) $ 15,674 $ (74,285) *nm *nm (a) See pages 11 through 12 for the calculation of non-GAAP measures and reconciliations to GAAP measures. *nm - percentages are not meaningful ScanSource, Inc. Earnings Infographic Q2 FY2023 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 4 February 7, 2023

Specialty Technology Solutions, 5-Quarter Financial Summary ($ in thousands) Q2 FY23 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q/Q Y/Y Net sales $ 627,548 $ 576,329 $ 580,619 $ 503,072 $ 496,920 9% 26% Gross profit $ 56,732 $ 58,404 $ 53,994 $ 54,021 $ 52,048 (3)% 9% Gross profit margin % 9.0 % 10.1 % 9.3 % 10.7 % 10.5 % (109) bp (143) bp GAAP operating income $ 19,682 $ 21,852 $ 15,408 $ 20,623 $ 16,551 (10)% 19% GAAP operating income % 3.14 % 3.79 % 2.65 % 4.10 % 3.33 % (66) bp (20) bp Add: Intangible amortization expense $ 1,266 $ 1,341 $ 1,491 $ 1,491 $ 1,491 (6)% (15)% Non-GAAP operating income $ 20,948 $ 23,193 $ 16,899 $ 22,114 $ 18,042 (10)% 16% Non-GAAP operating income % 3.34 % 4.02 % 2.91 % 4.40 % 3.63 % (69) bp (29) bp Reconciliation of Operating Income to Adjusted EBITDA GAAP operating income $ 19,682 $ 21,852 $ 15,408 $ 20,623 $ 16,551 (10)% 19% Plus: Depreciation expense 1,873 1,941 2,089 1,833 1,867 (4)% —% Intangible amortization expense 1,266 1,341 1,491 1,491 1,491 (6)% (15)% Interest income 194 321 325 265 299 (40)% (35)% Other income/(expense), net 71 (125) (141) 165 (169) *nm *nm EBITDA 23,086 25,330 19,172 24,377 20,039 (9)% 15% Adjustments: Share-based compensation expense 2,203 1,556 1,710 1,659 2,038 42% 8% Adjusted EBITDA (non-GAAP) $ 25,289 $ 26,886 $ 20,882 $ 26,036 $ 22,077 (6)% 15% Adjusted EBITDA (non-GAAP) % 4.03 % 4.67 % 3.60 % 5.18 % 4.44 % (64) bp (41) bp *nm - percentages are not meaningful ScanSource, Inc. Earnings Infographic Q2 FY2023 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 5 February 7, 2023

Modern Communications & Cloud, 5-Quarter Financial Summary ($ in thousands) Q2 FY23 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q/Q Y/Y Net sales $ 383,693 $ 367,484 $ 381,664 $ 342,918 $ 367,159 4% 5% Gross profit $ 58,602 $ 55,081 $ 56,798 $ 52,487 $ 55,605 6% 5% Gross profit margin % 15.3 % 15.0 % 14.9 % 15.3 % 15.1 % 30 bp 20 bp GAAP operating income $ 19,750 $ 13,036 $ 12,016 $ 12,294 $ 14,894 52% 33% GAAP operating income % 5.15 % 3.55 % 3.15 % 3.59 % 4.06 % 160 bp 109 bp Add: Intangible amortization expense $ 2,884 $ 2,900 $ 2,949 $ 2,966 $ 2,956 (1)% (2)% Add: Tax recovery(a) $ (2,858) $ — $ — $ — $ — *nm *nm Non-GAAP operating income $ 19,776 $ 15,936 $ 14,965 $ 15,260 $ 17,850 24% 11% Non-GAAP operating income % 5.15 % 4.34 % 3.92 % 4.45 % 4.86 % 90 bp 30 bp Reconciliation of Operating Income to Adjusted EBITDA GAAP operating income $ 19,750 $ 13,036 $ 12,016 $ 12,294 $ 14,894 52% 33% Plus: Depreciation expense 1,034 1,046 1,172 1,015 916 (1)% 13% Intangible amortization expense 2,884 2,900 2,948 2,966 2,955 (1)% (2)% Interest income 1,834 1,269 1,035 735 648 45% 183% Other income/(expense), net (280) (623) (542) (28) (374) *nm *nm EBITDA 25,222 17,628 16,629 16,982 19,039 43% 32% Adjustments: Share-based compensation expense 1,161 760 1,162 1,098 1,426 53% (19)% Tax recovery(a) (2,858) — — — — *nm *nm Adjusted EBITDA (non-GAAP) $ 23,525 $ 18,388 $ 17,791 $ 18,080 $ 20,465 28% 15% Adjusted EBITDA (non-GAAP) % 6.13 % 5.00 % 4.66 % 5.27 % 5.57 % 113 bp 56 bp (a) Recovery of prior period withholding taxes in Brazil. *nm - percentages are not meaningful ScanSource, Inc. Earnings Infographic Q2 FY2023 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 6 February 7, 2023

Net Sales, Constant Currency (Organic Growth) - QTR ($ in thousands) Net Sales by Segment: Q2 FY23 Q2 FY22 % Change Specialty Technology Solutions: Net sales, as reported $ 627,548 $ 496,920 26.3 % Foreign exchange impact (a) (1,120) — Net sales, constant currency (non-GAAP) $ 626,428 $ 496,920 26.1 % Modern Communications & Cloud: Net sales, as reported $ 383,693 $ 367,159 4.5 % Foreign exchange impact (a) (4,497) — Net sales, constant currency (non-GAAP) $ 379,196 $ 367,159 3.3 % Consolidated: Net sales, as reported $ 1,011,241 $ 864,079 17.0 % Foreign exchange impact (a) (5,617) — Net sales, constant currency (non-GAAP) $ 1,005,624 $ 864,079 16.4 % Net Sales by Geography: Q2 FY23 Q2 FY22 % Change United States and Canada: Net sales, as reported $ 909,221 $ 773,660 17.5 % International: Net sales, as reported $ 102,020 $ 90,419 12.8 % Foreign exchange impact (a) (5,617) — Net sales, constant currency (non-GAAP) $ 96,403 $ 90,419 6.6 % Consolidated: Net sales, as reported $ 1,011,241 $ 864,079 17.0 % Foreign exchange impact (a) (5,617) — Net sales, constant currency (non-GAAP) $ 1,005,624 $ 864,079 16.4 % (a) Year-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, 2022 into U.S. dollars using the weighted-average foreign exchange rates for the quarter ended December 31, 2021. ScanSource, Inc. Earnings Infographic Q2 FY2023 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 7 February 7, 2023

Average Adjusted Return on Invested Capital - QTR ($ in thousands) Q2 FY23 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Adjusted return on invested capital (ROIC), annualized (a) 15.6 % 15.6 % 14.9 % 18.0 % 17.6 % Reconciliation of Net Income to Adjusted EBITDA Net income from continuing operations - GAAP $ 25,734 $ 24,042 $ 19,947 $ 23,526 $ 23,152 Plus: Interest expense 5,060 3,448 1,886 1,483 1,493 Income taxes 10,458 8,241 6,267 9,044 7,257 Depreciation and amortization 7,057 7,228 7,700 7,305 7,229 EBITDA 48,309 42,959 35,800 41,358 39,131 Adjustments: Tax recovery (b) (2,858) — — — — Acquisition and divestiture costs — — — — (53) Share-based compensation 3,364 2,316 2,872 2,757 3,464 Adjusted EBITDA (numerator for Adjusted ROIC) (non-GAAP) $ 48,815 $ 45,275 $ 38,672 $ 44,115 $ 42,542 Invested Capital Calculation Equity - beginning of the quarter $ 827,004 $ 806,528 $ 806,654 $ 768,525 $ 746,094 Equity - end of quarter 862,386 827,004 806,528 806,654 768,525 Adjustments: Tax recovery, net (1,886) — — — — Share-based compensation, net 2,496 1,718 2,134 2,063 2,590 Acquisition and divestiture costs — — — — (53) Discontinued operations net income — — — — (100) Average equity 845,000 817,625 807,658 788,621 758,528 Average funded debt (c) 392,853 336,428 233,445 205,073 200,708 Invested capital (denominator for Adjusted ROIC) (non-GAAP) $ 1,237,853 $ 1,154,053 $ 1,041,103 $ 993,694 $ 959,236 (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) Recovery of prior period withholding taxes in Brazil. (c) Average funded debt is calculated as the daily average amounts outstanding on our short-term and long-term interest-bearing debt. ScanSource, Inc. Earnings Infographic Q2 FY2023 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 8 February 7, 2023

Net Debt and Adjusted EBITDA Metrics ($ in thousands) Q2 FY23 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Consolidated debt (Q/E) $ 382,796 $ 326,435 $ 271,170 $ 181,500 $ 196,866 Less: Consolidated cash and cash equivalents (Q/E) (66,445) (40,472) (37,987) (43,539) (34,123) Net debt (Q/E) $ 316,351 $ 285,963 $ 233,183 $ 137,961 $ 162,743 Reconciliation of Net Income to Adjusted EBITDA Net income from continuing operations - GAAP $ 25,734 $ 24,042 $ 19,947 $ 23,526 $ 23,152 Plus: Interest expense 5,060 3,448 1,886 1,483 1,493 Income taxes 10,458 8,241 6,267 9,044 7,257 Depreciation and amortization 7,057 7,228 7,700 7,305 7,229 EBITDA 48,309 42,959 35,800 41,358 39,131 Adjustments: Tax recovery (a) (2,858) — — — — Acquisition and divestiture costs — — — — (53) Share-based compensation 3,364 2,316 2,872 2,757 3,464 Adjusted EBITDA (non-GAAP) $ 48,815 $ 45,275 $ 38,672 $ 44,115 $ 42,542 Adjusted EBITDA, TTM (b) $ 176,877 $ 170,604 $ 166,723 $ 163,350 $ 151,234 Net Debt / Adjusted EBITDA, TTM (b) 1.8x 1.7x 1.4x 0.8x 1.1x (a) Recovery of prior period withholding taxes in Brazil. (b) Adjusted EBITDA for the trailing 12-month period. ScanSource, Inc. Earnings Infographic Q2 FY2023 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 9 February 7, 2023

Working Capital, 5-Quarter Summary ($ in thousands) Q2 FY23 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Accounts Receivable (Q/E) $ 779,562 $ 744,946 $ 729,442 $ 642,384 $ 613,186 Days sales outstanding in receivables 69 71 68 69 64 Inventory (Q/E) $ 761,936 $ 675,798 $ 614,814 $ 591,396 $ 562,397 Inventory turns 5.0 5.1 5.6 5.1 5.7 Accounts payable (Q/E) $ 748,662 $ 710,919 $ 714,177 $ 706,359 $ 653,190 Paid for inventory days* 10.9 7.2 (0.8) (2.9) (0.5) Working Capital (Q/E) (AR+INV-AP) $ 792,836 $ 709,825 $ 630,079 $ 527,421 $ 522,393 Cash conversion cycle 80 78 67 66 64 *Paid for inventory days represent Q/E inventory days less Q/E accounts payable days ScanSource, Inc. Earnings Infographic Q2 FY2023 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 10 February 7, 2023

Operating Income, Net Income & EPS - QTR ($ in thousands) Quarter ended December 31, 2022 Reported GAAP measure Intangible amortization expense Acquisition, divestiture and restructuring costs Tax recovery, net (a) Non-GAAP measure SG&A expenses $69,074 — — $2,858 $71,932 Operating income 39,432 4,150 — (2,858) 40,724 Net income 25,734 3,093 — (1,886) 26,941 Diluted EPS $1.01 $0.12 — $(0.07) $1.06 (a) Recovery of prior period withholding taxes in Brazil. ($ in thousands) Quarter ended September 30, 2022 Reported GAAP measure Intangible amortization expense Acquisition, divestiture and restructuring cost Tax recovery, net Non-GAAP measure SG&A expenses $71,593 — — — $71,593 Operating income 34,888 4,241 — — 39,129 Net income 24,042 3,161 — — 27,203 Diluted EPS $0.94 $0.12 — — $1.07 ScanSource, Inc. Earnings Infographic Q2 FY2023 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 11 February 7, 2023

Operating Income, Net Income & EPS - QTR, continued ($ in thousands) Quarter ended June 30, 2022 Reported GAAP measure Intangible amortization expense Acquisition, divestiture and restructuring costs Tax recovery, net Non-GAAP measure SG&A expenses $75,905 — — — $75,905 Operating income 27,424 4,440 — — 31,864 Net income 19,947 3,319 — — 23,266 Diluted EPS $0.78 $0.13 — — $0.91 ($ in thousands) Quarter ended March 31, 2022 Reported GAAP measure Intangible amortization expense Acquisition, divestiture and restructuring costs Tax recovery, net Non-GAAP measure SG&A expenses $66,522 — — — $66,522 Operating income 32,917 4,457 — — 37,374 Net income 23,526 3,353 — — 26,879 Diluted EPS $0.91 $0.13 — — $1.04 ($ in thousands) Quarter ended December 31, 2021 Reported GAAP measure Intangible amortization expense Acquisition, divestiture and restructuring costs(a) Tax recovery, net Non-GAAP measure SG&A expenses $69,161 — $53 — $69,214 Operating income 31,498 4,447 (53) — 35,892 Net income 23,152 3,347 (53) — 26,446 Diluted EPS $0.89 $0.13 — — $1.02 (a) Acquisition and divestiture costs totaled less than $(0.1) million for the quarter ended December 31, 2021 and are generally nondeductible for tax purposes. ScanSource, Inc. Earnings Infographic Q2 FY2023 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 12 February 7, 2023

FY23 Annual Financial Outlook Reconciliation FY23 Outlook GAAP, operating income At least $135 million Intangible amortization $17 million Depreciation expense $12 million Share-based compensation expense $12 million Interest income and other income (expense), net $3 million Tax recovery $(3) million Adjusted EBITDA (non-GAAP) At least $176 million ScanSource, Inc. Earnings Infographic Q2 FY2023 SUPPORTING MATERIALS AND RECONCILIATIONS FOR NON-GAAP FINANCIAL INFORMATION scansource.com 13 February 7, 2023


☐			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			Earnings Infographic
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)