In recent months, the small-cap tech landscape has seen a surge in AI-driven M&A activity, with companies racing to embed machine learning, analytics, and automation into their offerings. Amid this consolidation wave, ePlus (NASDAQ:PLUS) has made a particularly intriguing move: through its subsidiary OneCloud Consulting, it has acquired substantially all operating assets of Realwave, a software firm specializing in cloud-native, AI-powered data integration and analytics. Unlike many peers targeting AI as a buzzword bolt-on, ePlus appears to be embedding it into a deeper, infrastructure-first consultative strategy. With security now comprising 22.8% of trailing 12-month billings and services revenue up 49% year-over-year, the Realwave acquisition could serve as a key accelerator in this pivot. Let us take a closer look at the transaction and analyze all the major synergies ePlus could derive from the deal.
Enhanced AI-Led Consulting & Use Case Development
A central pillar of ePlus’s growth strategy is the buildout of its AI consulting capabilities, especially in helping clients define business-relevant use cases and architect infrastructure accordingly. While ePlus has long possessed the “plumbing” — compute, networking, security, and data center solutions — the Realwave acquisition can fill a critical gap on the front end. Realwave’s platform enables real-time data ingestion from disparate sources and uses AI to surface actionable insights, a functionality that aligns with how enterprises are now embedding AI in workflows. As ePlus CEO Mark Marron noted on the Q1 earnings call, while the company is well-versed in infrastructure, it needs to deepen its consultative resources to support AI planning and execution at the customer level. Realwave’s technology could be used in pre-sales labs and workshops to accelerate proof-of-concept cycles, drive higher attach rates for ePlus hardware and services, and embed ePlus deeper into its clients’ AI strategy formation. This helps ePlus not only expand its value proposition from infrastructure to insight but also to potentially increase deal size and stickiness. Moreover, with customer sectors like telecom, healthcare, and financial services already accounting for nearly 47% of net sales, Realwave’s analytics layer could unlock cross-sell opportunities in high-regulation verticals where AI explainability and data lineage are paramount. In short, the acquisition could enable ePlus to move beyond component delivery and toward consultative co-creation—an area that traditionally commands higher margins and multi-year relationships.
Integration Of Realwave's Analytics Layer With ePlus Cloud & Security Offerings
Realwave’s AI-powered data analysis platform, which can integrate seamlessly with multiple data sources, stands to materially enhance ePlus’s cloud and security offerings. Currently, ePlus is seeing robust growth in both these domains, with cloud and security demand driving a 14% YoY increase in product sales and 24.4% YoY growth in security billings alone. As organizations migrate to hybrid and multi-cloud environments, the ability to correlate signals across cloud workloads, edge networks, and endpoint telemetry becomes critical—especially for proactive threat detection and compliance. Realwave’s data fabric could provide ePlus’s security practice with visibility into lateral movement, identity anomalies, and behavioral patterns, making security more predictive than reactive. Moreover, the AI layer could be harnessed for real-time alert prioritization and false-positive reduction—two key client pain points in today’s alert-fatigued environments. In the cloud context, Realwave’s tools could assist with cost optimization and workload governance by enabling clients to better understand resource utilization and performance trends across cloud providers. This plays directly into the growing enterprise preference for integrated solutions that combine infrastructure provisioning with observability and governance. Additionally, by embedding Realwave's capabilities into its managed services portfolio, ePlus could create a value-added analytics-as-a-service layer—converting one-time sales into subscription revenue. The move also complements ePlus’s ongoing push into the SLED (state, local, and education) and healthcare sectors, where data privacy, compliance, and real-time monitoring are increasingly tied to funding and policy compliance. Thus, Realwave’s integration could elevate ePlus’s platform maturity, positioning it as a partner capable of delivering unified insights from siloed data estates.
Acceleration Of ePlus’s Transition To Subscription & Ratable Models
Realwave’s cloud-native, software-as-a-service platform could serve as a catalyst in ePlus’s strategic shift from transactional sales to recurring, ratable revenue—a trend already visible in the company’s financial performance. In Q1 FY26, services revenue surged 49% YoY, driven in part by the acquisition of Bailiwick and the increasing customer preference for subscription-based engagements. However, a higher mix of low-margin enterprise hardware deals continues to exert pressure on product gross margins, which fell 120 bps year-over-year. By contrast, software solutions like Realwave typically operate at much higher gross margins and support multi-year contracts with built-in renewals. Realwave can also be positioned as a cross-platform analytics engine bundled with managed services or sold as a standalone analytics layer within existing enterprise environments. This could help reduce ePlus’s revenue volatility, especially after the recent divestiture of its finance business, which removed a source of income variability but also eliminated a source of cross-subsidized capital for bundled solutions. With Realwave onboard, ePlus could also accelerate its entry into new pricing models such as usage-based billing and tiered AI analytics offerings, aligning with how enterprises are budgeting for digital transformation. Realwave’s SaaS framework can also enable faster product iteration cycles and reduce delivery friction, thereby improving sales velocity. Importantly, it allows ePlus to offer outcome-based services—tying its revenue to client success metrics such as operational efficiency gains, cost savings, or faster decision-making—making pricing defensible and relationships more strategic.
Strategic Bolt-On To Strengthen Vertical Penetration & M&A Framework
The acquisition of Realwave also illustrates ePlus’s renewed focus on executing strategic, bolt-on M&A that complements its technology stack and enhances domain depth in key customer verticals. The company’s fiscal strategy explicitly prioritizes inorganic growth in high-margin segments such as AI, cloud, data center, and security—all of which Realwave touches. Moreover, with the recent divestiture of the domestic finance arm, ePlus now has over $480 million in cash and zero debt, providing ample firepower for further M&A without diluting its capital return strategy, which includes both dividends and a new 1.5 million share buyback program. Realwave’s solution set could enhance ePlus’s positioning in verticals such as healthcare, financial services, and media—sectors that accounted for a combined 35% of FY25 sales. For instance, in healthcare, Realwave’s ability to unify disparate data and apply AI for real-time diagnostics or resource planning aligns with ongoing digital health mandates. In financial services, AI-led anomaly detection and behavioral analytics are central to anti-fraud, compliance, and customer engagement strategies. Given that ePlus already has strategic vendor relationships and procurement footprints in these verticals, Realwave’s value proposition can be embedded without needing to create new channels. Furthermore, this acquisition could serve as a template for future M&A, wherein ePlus targets IP-rich software companies that add margin accretion, data intelligence, or industry-specific capabilities. If integrated effectively, Realwave could offer not just a product but a framework for how ePlus evaluates, absorbs, and monetizes future AI-native acquisitions.
Final Thoughts
Source: Yahoo Finance
As we can see in the above chart, the acquisition has not materially impacted ePlus’ stock price and the stock is trading at a relatively modest LTM TEV/Revenue multiple of 0.72x and TEV/EBITDA of 8.63x. The valuation remains inexpensive relative to ePlus’ technology services peers. If Realwave delivers even modest synergies, it could support margin expansion and bolster ePlus’s valuation floor. Still, the success of this acquisition hinges on effective productization, sales enablement, and integration with existing services. The deal’s potential should be assessed with tempered expectations, as upside is contingent on operational execution rather than strategic intent alone. Whether Realwave becomes a growth engine or a distraction will depend not on market sentiment, but on how well ePlus translates vision into delivery.