Core Viewpoint - Insight Enterprises (NSIT) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - For Insight Enterprises, the Zacks Consensus Estimate for earnings per share (EPS) for the fiscal year ending December 2025 is projected to be $9.88, showing no year-over-year change, but estimates have increased by 0.6% over the past three months [8]. Institutional Investor Influence - Institutional investors utilize earnings estimates to determine the fair value of stocks, and their buying or selling actions based on these estimates can lead to significant price movements [4]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Insight Enterprises to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Summary of Insight Enterprises Conference Call Company Overview - **Company**: Insight Enterprises - **Industry**: Technology Solutions and Services Core Strategy and Financial Performance - Insight Enterprises positions itself as a **solutions integrator**, combining hardware, software, cloud, and services expertise to deliver business outcomes for customers, particularly in the context of AI [4][5] - The company aims for **above-market profitable growth**, focusing on high-growth areas such as cloud, data, AI, and cybersecurity [6] - Gross margins improved from **14.7% in 2022** to **over 20%** in the most recent quarter, driven by a favorable mix of higher-margin cloud and services business [7][8] - Cash flow generation has been strong, exceeding **$600 million** in the last two years, with a target of **greater than 90% of net income** [11][34] Market Positioning - Insight differentiates itself from traditional systems integrators (SIs) by targeting the **corporate and mid-market space**, which is often underserved [18][20] - The company has a large existing customer base, including relationships with **most Fortune 5,000 companies** [14] - Insight has built a strong technical portfolio with over **6,000 technical resources** and more than **100 patents** [9][14] Challenges and Adjustments - The company faces a **$70 million gross profit headwind** due to changes in partner programs from Google and Microsoft, which have shifted focus away from enterprise resale to corporate and mid-market segments [27][43] - Despite this, the underlying growth of the cloud business remains strong, with a **17% year-over-year growth** in the first half of the year [30] M&A Strategy - M&A is a critical part of Insight's strategy, with several key acquisitions over the years to enhance capabilities in areas like application development and data center transformation [35][36][39] - Recent acquisitions include **SADA**, a significant partner in the Google ecosystem, and **InfoCenter**, a ServicesNow-focused company, which bolster Insight's service offerings [40][41] Future Outlook - For FY 2025, gross profit is expected to be approximately flat due to the aforementioned headwinds and a challenging hardware market [42][43] - The company maintains a focus on **operating expense leverage** and cash flow generation, with guidance for **EPS between $9.70 and $10.10** [48] AI Integration - Insight is leveraging AI to enhance service delivery and operational efficiency, allowing for scaling in the corporate and mid-market space without proportional increases in labor costs [56][60] - The company is focused on three areas regarding AI: customer offerings, service delivery, and internal operations [61] Conclusion - Insight Enterprises is strategically positioned as a solutions integrator with a strong focus on profitable growth, leveraging partnerships and M&A to enhance its service capabilities while navigating challenges in the cloud and hardware markets. The integration of AI is seen as a key driver for future scalability and efficiency.

Core Viewpoint - The article emphasizes the importance of value investing and highlights Insight Enterprises (NSIT) as a strong value stock based on various valuation metrics [2][7]. Valuation Metrics - NSIT has a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential for value investors [4]. - The stock's P/E ratio is 11.36, which is lower than the industry average of 13.00, suggesting it may be undervalued [4]. - NSIT's P/B ratio stands at 2.32, compared to the industry's average P/B of 3.07, further indicating attractiveness in valuation [5]. - The P/CF ratio for NSIT is 14.71, significantly lower than the industry average of 20.18, reinforcing the notion of undervaluation based on cash flow [6]. Investment Outlook - The combination of these metrics suggests that NSIT is likely undervalued, making it one of the strongest value stocks in the market currently [7].

Core Viewpoint - Insight Enterprises (NSIT) is experiencing significant selling pressure, having declined 17.6% over the past four weeks, but is now positioned for a potential trend reversal as it is in oversold territory with strong analyst consensus for better-than-expected earnings [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements, with a reading below 30 indicating that a stock is considered oversold [2] - NSIT's RSI reading is currently at 28.43, suggesting that the heavy selling may be exhausting itself and a trend reversal could be imminent [5] Group 2: Fundamental Analysis - Over the last 30 days, the consensus EPS estimate for NSIT has increased by 0.3%, indicating a positive trend in earnings estimate revisions which typically leads to price appreciation [7] - NSIT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [8]

[PART I - Financial Information](index=6&type=section&id=PART%20I%20-%20Financial%20Information) This section presents the unaudited consolidated financial statements and management's discussion and analysis of Insight Enterprises, Inc.'s financial condition and results of operations [Item 1 – Financial Statements](index=6&type=section&id=Item%201%20%E2%80%93%20Financial%20Statements) This section presents Insight Enterprises, Inc.'s unaudited consolidated financial statements, including balance sheets, income, equity, and cash flow statements, with notes on accounting policies and key financial activities [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific points in time | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $309,135 | $259,234 | | Accounts receivable, net | $5,479,172 | $4,172,104 | | Inventories | $147,489 | $122,581 | | Total current assets | $6,300,014 | $4,844,622 | | Goodwill | $905,218 | $893,516 | | Total Assets | $8,728,766 | $7,448,578 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------ | :------------ | :---------------- | | Accounts payable—trade | $4,167,396 | $3,059,667 | | Current portion of long-term debt | $13 | $332,879 | | Total current liabilities | $4,895,404 | $4,122,202 | | Long-term debt | $1,324,992 | $531,233 | | Total Stockholders' Equity | $1,605,483 | $1,770,611 | | Total Liabilities and Stockholders' Equity | $8,728,766 | $7,448,578 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net earnings over specific reporting periods | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $2,091,482 | $2,161,662 | $4,195,038 | $4,541,147 | | Gross profit | $442,327 | $453,365 | $848,804 | $894,293 | | Earnings from operations | $86,532 | $131,073 | $146,635 | $231,059 | | Net earnings | $46,932 | $87,444 | $54,446 | $154,471 | | Diluted EPS | $1.46 | $2.27 | $1.63 | $4.01 | [Consolidated Statements of Comprehensive Income](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This statement presents net earnings and other comprehensive income items, reflecting total changes in equity from non-owner sources | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net earnings | $46,932 | $87,444 | $54,446 | $154,471 | | Foreign currency translation adjustments | $35,319 | $(3,425) | $46,089 | $(15,516) | | Total comprehensive income | $82,251 | $84,019 | $100,535 | $138,955 | [Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) This statement outlines changes in the company's equity accounts, including net earnings, share repurchases, and foreign currency adjustments - Total stockholders' equity decreased from **$1,770,611 thousand** at December 31, 2024, to **$1,605,483 thousand** at June 30, 2025, primarily due to repurchases of common stock and settlement upon exercise of Warrants, partially offset by net earnings and foreign currency translation adjustments[24](index=24&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows from operating, investing, and financing activities | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(99,001) | $292,964 | | Net cash used in investing activities | $(11,978) | $(279,048) | | Net cash provided by (used in) financing activities | $139,118 | $(20,623) | | Increase (decrease) in cash, cash equivalents and restricted cash | $50,098 | $(12,435) | | Cash, cash equivalents and restricted cash at end of period | $311,565 | $258,350 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and additional information supporting the consolidated financial statements [1. Basis of Presentation and Recently Issued Accounting Standards](index=11&type=section&id=1.%20Basis%20of%20Presentation%20and%20Recently%20Issued%20Accounting%20Standards) This section describes the financial statement preparation basis, segment operations, and impact of new accounting standards - The company operates in three segments: North America, EMEA, and APAC, offering hardware, software, and services, including cloud solutions[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - The FASB issued ASU No. 2024-03 (Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures) effective after December 15, 2026, requiring detailed expense disclosures, with the company evaluating its impact[33](index=33&type=chunk)[34](index=34&type=chunk) - The company adopted ASU No. 2023-07 (Segment Reporting) effective January 1, 2024 (annual) and January 1, 2025 (interim), which did not materially impact financial statements or disclosures[36](index=36&type=chunk) [2. Receivables, Contract Liabilities and Performance Obligations](index=13&type=section&id=2.%20Receivables%2C%20Contract%20Liabilities%20and%20Performance%20Obligations) This section details the company's receivables, contract assets, liabilities, and future revenue from performance obligations | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Current receivables, net | $5,479,172 | $4,172,104 | | Contract assets, net | $63,909 | $81,980 | | Long-term accounts receivable | $748,105 | $845,943 | | Long-term contract assets, net | $64,872 | $86,953 | | Contract liabilities | $110,053 | $109,615 | - Contract assets, net of allowances, totaled **$128,781,000** as of June 30, 2025, primarily from the resale of third-party consumption-based services[38](index=38&type=chunk) Estimated Net Sales from Remaining Performance Obligations (in thousands) | Estimated Net Sales from Remaining Performance Obligations (in thousands) | Services | | :-------------------------------------------------------- | :------- | | Remainder of 2025 | $75,780 | | 2026 | $74,983 | | 2027 | $46,484 | | 2028 and thereafter | $51,158 | | Total remaining performance obligations | $248,405 | [3. Assets Held for Sale](index=14&type=section&id=3.%20Assets%20Held%20for%20Sale) This section reports assets classified as held for sale and any associated impairment losses - During the six months ended June 30, 2025, the company classified its Santa Monica property as held for sale and recorded an impairment loss of **$12,588,000** due to its carrying value exceeding fair value less costs to sell[42](index=42&type=chunk) [4. Net Earnings Per Share](index=15&type=section&id=4.%20Net%20Earnings%20Per%20Share) This section presents basic and diluted earnings per share, reflecting profitability on a per-share basis | Net Earnings Per Share | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $1.48 | $2.69 | $1.71 | $4.74 | | Diluted EPS | $1.46 | $2.27 | $1.63 | $4.01 | - Diluted EPS for the three months ended June 30, 2025, was **$1.46**, a decrease from **$2.27** in the prior year, reflecting lower net earnings and changes in dilutive potential common shares[43](index=43&type=chunk) [5. Debt, Inventory Financing Facilities, Finance Leases and Other Financing Obligations](index=16&type=section&id=5.%20Debt%2C%20Inventory%20Financing%20Facilities%2C%20Finance%20Leases%20and%20Other%20Financing%20Obligations) This section details the company's debt structure, financing facilities, and other financial commitments Long-Term Debt (in thousands) | Long-Term Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | ABL revolving credit facility | $832,442 | $39,000 | | Senior unsecured notes due 2032 | $492,550 | $492,222 | | Convertible senior notes due 2025 | $— | $332,867 | | Total | $1,325,005 | $864,112 | | Long-term debt | $1,324,992 | $531,233 | - The ABL facility was amended on June 16, 2025, maintaining a maximum borrowing amount of **$1.8 billion** and maturing on July 22, 2027, with **$832.4 million** outstanding as of June 30, 2025[44](index=44&type=chunk) - The **$350 million** Convertible Senior Notes due 2025 matured on February 15, 2025, with the majority settled in cash (**$333.1 million**) and the remainder in common stock (**2,832,627 shares**)[50](index=50&type=chunk) - The company settled **2,049,264 Warrants** for **$138.9 million** cash on February 27, 2025, and an additional **1,536,948 Warrants** for **$83.1 million** cash on April 2, 2025, with approximately **297,000 Warrants** settled in shares during Q2 2025, and **1,239,825 Warrants** remaining outstanding to be settled in shares[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) - Total maximum capacity under inventory financing facilities is **$705 million**, with **$220.8 million** outstanding as of June 30, 2025[58](index=58&type=chunk) [6. Income Taxes](index=19&type=section&id=6.%20Income%20Taxes) This section outlines the company's effective tax rates and the factors influencing them for the reporting periods Effective Tax Rate | Effective Tax Rate | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Effective Tax Rate | 26.9% | 25.5% | 34.5% | 24.8% | - The effective tax rate for the three months ended June 30, 2025, was **26.9%**, higher than the U.S. federal statutory rate of **21.0%** due to state income taxes and higher foreign earnings taxes, partially offset by R&D tax benefits[60](index=60&type=chunk) - The effective tax rate for the six months ended June 30, 2025, was **34.5%**, significantly higher than the prior year, primarily due to the non-deductibility of losses from warrant fair value adjustments and revaluation of earnout liabilities, partially offset by a reduction in foreign tax credit valuation allowance[60](index=60&type=chunk) [7. Share Repurchase Program](index=19&type=section&id=7.%20Share%20Repurchase%20Program) This section details the company's share repurchase activities and the remaining authorization under its plan - As of June 30, 2025, approximately **$223.9 million** remained available for repurchases under the **$300 million** share repurchase plan authorized on September 11, 2024[64](index=64&type=chunk) - During the three months ended June 30, 2025, the company repurchased **600,000 shares** for **$76.1 million** (average price **$126.86**) in a private transaction from ValueAct Capital[65](index=65&type=chunk) - For the six months ended June 30, 2025, total repurchases were **600,000 shares** for **$76.1 million**, compared to **187,357 shares** for **$35.0 million** in the same period of 2024[66](index=66&type=chunk) [8. Commitments and Contingencies](index=20&type=section&id=8.%20Commitments%20and%20Contingencies) This section discloses the company's outstanding performance bonds, purchase commitments, and contingent liabilities - As of June 30, 2025, the company had approximately **$37.1 million** in performance bonds outstanding[67](index=67&type=chunk) - Remaining purchase commitments include **$67.5 million** for cloud services (5-year period ending Sept 2028) and **$13.1 million** for software as a service (4-year period ending Nov 2026)[69](index=69&type=chunk)[70](index=70&type=chunk) - A contingent liability of approximately **$24.6 million** is recorded, payable to a partner for contractual commitments to resell cloud services[71](index=71&type=chunk) [9. Segment Information](index=22&type=section&id=9.%20Segment%20Information) This section provides financial data broken down by the company's North America, EMEA, and APAC operating segments - The company operates in three reportable geographic segments: North America, EMEA, and APAC, with offerings including IT hardware, software, and services[78](index=78&type=chunk) Net Sales by Segment (in thousands) | Net Sales by Segment (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | North America | $1,684,304 | $1,732,357 | $3,384,947 | $3,637,179 | | EMEA | $348,614 | $368,873 | $691,442 | $781,714 | | APAC | $58,564 | $60,432 | $118,649 | $122,254 | | Consolidated | $2,091,482 | $2,161,662 | $4,195,038 | $4,541,147 | Gross Profit by Segment (in thousands) | Gross Profit by Segment (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | North America | $341,692 | $354,107 | $661,144 | $703,950 | | EMEA | $82,434 | $79,142 | $154,361 | $154,175 | | APAC | $18,201 | $20,116 | $33,299 | $36,168 | | Consolidated | $442,327 | $453,365 | $848,804 | $894,293 | Adjusted Earnings from Operations by Segment (in thousands) | Adjusted Earnings from Operations by Segment (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | North America | $102,911 | $103,429 | $189,876 | $206,213 | | EMEA | $19,350 | $19,216 | $30,368 | $33,230 | | APAC | $6,702 | $8,447 | $11,071 | $13,399 | | Consolidated | $128,963 | $131,092 | $231,315 | $252,842 | [10. Acquisition (Infocenter)](index=27&type=section&id=10.%20Acquisition%20%28Infocenter%29) This section details the acquisition of Infocenter, including purchase price, goodwill, intangible assets, and earnout adjustments - Effective May 1, 2024, Insight acquired Infocenter.io for a cash purchase price of **$265 million**, net of cash acquired, including an estimated fair value of earnout payments of **$24.2 million**[89](index=89&type=chunk) - The acquisition resulted in **$191.1 million** in goodwill and **$123.9 million** in identifiable intangible assets (primarily customer relationships amortized over ten years), recorded in the North America segment[90](index=90&type=chunk) - The company recognized a gain of **$3.3 million** and a loss of **$11.9 million** from changes in the estimated fair value of earnout payments for the three and six months ended June 30, 2025, respectively[92](index=92&type=chunk) [11. Subsequent Event](index=29&type=section&id=11.%20Subsequent%20Event) This section reports on the One Big Beautiful Bill Act (OBBBA) signed into law and its potential tax implications - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, enacting significant changes to U.S. federal tax law, with the company currently evaluating its impact but not expecting a material effect on its effective tax rate[94](index=94&type=chunk) [Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202%20%E2%80%93%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, condition, and results of operations, covering sales, profits, expenses, and liquidity [Quarterly Overview](index=30&type=section&id=Quarterly%20Overview) This overview summarizes the company's consolidated financial highlights and key drivers of performance changes for the quarter - Insight Enterprises, Inc. is a Fortune 500 solutions integrator, enabling secure, end-to-end digital transformation for clients in North America, EMEA, and APAC through a comprehensive portfolio of hardware, software, and services, including cloud solutions[97](index=97&type=chunk) Consolidated Financial Highlights (Three Months Ended June 30) | Consolidated Financial Highlights (Three Months Ended June 30) | 2025 | 2024 | Change (YoY) | | :----------------------------------------------------------- | :----------- | :----------- | :----------- | | Net sales | $2.1 billion | $2.16 billion | -3% | | Gross profit | $442.3 million | $453.4 million | -2% | | Gross margin | 21.1% | 21.0% | +10 bps | | Earnings from operations | $86.5 million | $131.1 million | -34% | | Net earnings | $46.9 million | $87.4 million | -46% | | Diluted EPS | $1.46 | $2.27 | -36% | - The decrease in earnings from operations was primarily due to a decrease in gross profit, an increase in selling and administrative expenses (including a **$12.6 million** real estate asset impairment loss in 2025 and a **$25.1 million** gain on earnout revaluation in 2024), and increased interest expense[98](index=98&type=chunk) [Supply Chain, Demand and Inflation Update](index=31&type=section&id=Supply%20Chain%2C%20Demand%20and%20Inflation%20Update) This section discusses the impact of inflation on interest rates and the company's monitoring of macroeconomic changes - Inflation contributed to sustained high interest rates on variable rate borrowing facilities in the first half of 2025, with expectations for higher-than-historical rates throughout most of 2025, despite anticipated decreases[102](index=102&type=chunk) - The company is actively monitoring macroeconomic changes, including impacts on supply chain, demand, and interest rates, and assessing potential effects on current results, financial condition, and liquidity[102](index=102&type=chunk) [Critical Accounting Estimates](index=32&type=section&id=Critical%20Accounting%20Estimates) This section highlights management's significant judgments and assumptions used in preparing the financial statements - The preparation of consolidated financial statements requires management to make estimates and assumptions affecting reported amounts, which are based on historical experience and reasonable assumptions[104](index=104&type=chunk) - There have been no changes to the critical accounting estimates disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[105](index=105&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including net sales, gross profit, and operating expenses [Net Sales](index=33&type=section&id=Net%20Sales) This section details net sales performance across geographic segments and product categories, highlighting key drivers of change Net Sales by Segment (in thousands) | Net Sales by Segment (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------- | :----------------------------- | :----------------------------- | :----------- | | North America | $1,684,304 | $1,732,357 | (3)% | $3,384,947 | $3,637,179 | (7)% | | EMEA | $348,614 | $368,873 | (5)% | $691,442 | $781,714 | (12)% | | APAC | $58,564 | $60,432 | (3)% | $118,649 | $122,254 | (3)% | | Consolidated | $2,091,482 | $2,161,662 | (3)% | $4,195,038 | $4,541,147 | (8)% | - North America net sales decreased **3%** (QoQ) and **7%** (YoY), primarily due to decreases in software (**18%** QoQ, **27%** YoY) and services (**6%** QoQ, **6%** YoY) net sales, partially offset by hardware growth (**4%** QoQ, **3%** YoY), with software decline driven by vendor relationship changes and migration to cloud solutions[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - EMEA net sales decreased **5%** (QoQ) and **12%** (YoY), with hardware down **13%** (QoQ) and **9%** (YoY), and software down **9%** (QoQ) and **22%** (YoY), while services net sales increased **15%** (QoQ) and **9%** (YoY), with software decline due to vendor relationship changes and cloud migration[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - APAC net sales decreased **3%** (QoQ) and **3%** (YoY), with hardware down **14%** (QoQ) and **14%** (YoY), and services down **3%** (QoQ) and **4%** (YoY), while software net sales increased **1%** (QoQ) and **2%** (YoY)[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) [Gross Profit](index=36&type=section&id=Gross%20Profit) This section analyzes gross profit and gross margin trends by segment, identifying factors influencing profitability Gross Profit (in thousands) | Gross Profit (in thousands) | Three Months Ended June 30, 2025 | Gross Margin 2025 | Three Months Ended June 30, 2024 | Gross Margin 2024 | Six Months Ended June 30, 2025 | Gross Margin 2025 | Six Months Ended June 30, 2024 | Gross Margin 2024 | | :-------------------------- | :------------------------------- | :---------------- | :------------------------------- | :---------------- | :----------------------------- | :---------------- | :----------------------------- | :---------------- | | North America | $341,692 | 20.3% | $354,107 | 20.4% | $661,144 | 19.5% | $703,950 | 19.4% | | EMEA | $82,434 | 23.6% | $79,142 | 21.5% | $154,361 | 22.3% | $154,175 | 19.7% | | APAC | $18,201 | 31.1% | $20,116 | 33.3% | $33,299 | 28.1% | $36,168 | 29.6% | | Consolidated | $442,327 | 21.1% | $453,365 | 21.0% | $848,804 | 20.2% | $894,293 | 19.7% | - Consolidated gross profit decreased **2%** (QoQ) and **5%** (YoY), while gross margin expanded by **10 basis points** (QoQ) to **21.1%** and **50 basis points** (YoY) to **20.2%**[119](index=119&type=chunk) - North America's gross profit decreased **4%** (QoQ) and **6%** (YoY), with gross margin contracting **10 basis points** (QoQ) due to a services margin contraction, partially offset by product margin expansion from higher-margin hardware[120](index=120&type=chunk)[121](index=121&type=chunk) - EMEA's gross profit increased **4%** (QoQ) and was flat (YoY), with gross margin expanding **210 basis points** (QoQ) and **260 basis points** (YoY), driven by increased services margin from Insight Core services and agency net sales[122](index=122&type=chunk)[124](index=124&type=chunk) - APAC's gross profit decreased **10%** (QoQ) and **8%** (YoY), with gross margin contracting **220 basis points** (QoQ) and **150 basis points** (YoY), primarily due to a decrease in fees from cloud solution offerings[123](index=123&type=chunk)[125](index=125&type=chunk) [Operating Expenses](index=38&type=section&id=Operating%20Expenses) This section examines changes in selling and administrative expenses, severance, restructuring, and acquisition-related costs - Selling and administrative expenses increased **11%** (QoQ) and **6%** (YoY), primarily due to a **$46.0 million** increase in other expenses (including a **$12.6 million** real estate impairment loss and transformation costs), partially offset by a **$9.3 million** decrease in personnel costs due to reduced headcount[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - Severance and restructuring expenses, net, were **$3.4 million** (QoQ) and **$10.4 million** (YoY), primarily related to workforce realignments[129](index=129&type=chunk)[130](index=130&type=chunk) - Acquisition and integration related expenses were **$0.1 million** (QoQ) and **$0.3 million** (YoY), significantly lower than the prior year's **$1.5 million** which included SADA and Infocenter acquisitions[131](index=131&type=chunk)[132](index=132&type=chunk) [Earnings from Operations](index=39&type=section&id=Earnings%20from%20Operations) This section analyzes earnings from operations and operating margins across segments, explaining performance drivers Earnings from Operations (in thousands) | Earnings from Operations (in thousands) | Three Months Ended June 30, 2025 | % of Net Sales 2025 | Three Months Ended June 30, 2024 | % of Net Sales 2024 | Six Months Ended June 30, 2025 | % of Net Sales 2025 | Six Months Ended June 30, 2024 | % of Net Sales 2024 | | :------------------------------------ | :------------------------------- | :------------------ | :------------------------------- | :------------------ | :----------------------------- | :------------------ | :----------------------------- | :------------------ | | North America | $68,722 | 4.1% | $101,813 | 5.9% | $119,512 | 3.5% | $185,836 | 5.1% |\ | EMEA | $11,156 | 3.2% | $21,007 | 5.7% | $16,167 | 2.3% | $32,197 | 4.1% | | APAC | $6,654 | 11.4% | $8,253 | 13.7% | $10,956 | 9.2% | $13,026 | 10.7% | | Consolidated | $86,532 | 4.1% | $131,073 | 6.1% | $146,635 | 3.5% | $231,059 | 5.1% | - Consolidated earnings from operations decreased **34%** (QoQ) and **37%** (YoY), primarily due to decreased gross profit and increased selling and administrative expenses[133](index=133&type=chunk) - North America's earnings from operations decreased **33%** (QoQ) and **36%** (YoY), with margins contracting by **180 basis points** (QoQ) and **160 basis points** (YoY)[133](index=133&type=chunk)[134](index=134&type=chunk) - EMEA's earnings from operations decreased **47%** (QoQ) and **50%** (YoY), with margins contracting by **250 basis points** (QoQ) and **180 basis points** (YoY), mainly due to increased selling and administrative expenses[135](index=135&type=chunk)[136](index=136&type=chunk) - APAC's earnings from operations decreased **19%** (QoQ) and **16%** (YoY), with margins contracting by **230 basis points** (QoQ) and **150 basis points** (YoY), driven by decreased gross profit[137](index=137&type=chunk)[138](index=138&type=chunk) [Adjusted Earnings from Operations](index=40&type=section&id=Adjusted%20Earnings%20from%20Operations) This section presents non-GAAP adjusted earnings from operations and margins, providing an alternative view of core performance Adjusted Earnings from Operations (in thousands) | Adjusted Earnings from Operations (in thousands) | Three Months Ended June 30, 2025 | % of Net Sales 2025 | Three Months Ended June 30, 2024 | % of Net Sales 2024 | Six Months Ended June 30, 2025 | % of Net Sales 2025 | Six Months Ended June 30, 2024 | % of Net Sales 2024 | | :----------------------------------------------- | :------------------------------- | :------------------ | :------------------------------- | :------------------ | :----------------------------- | :------------------ | :----------------------------- | :------------------ | | North America | $102,911 | 6.1% | $103,429 | 6.0% | $189,876 | 5.6% | $206,213 | 5.7% | | EMEA | $19,350 | 5.6% | $19,216 | 5.2% | $30,368 | 4.4% | $33,230 | 4.3% | | APAC | $6,702 | 11.4% | $8,447 | 14.0% | $11,071 | 9.3% | $13,399 | 11.0% | | Consolidated | $128,963 | 6.2% | $131,092 | 6.1% | $231,315 | 5.5% | $252,842 | 5.6% | - Consolidated Adjusted earnings from operations decreased **2%** (QoQ) and **9%** (YoY)[139](index=139&type=chunk) - North America's Adjusted earnings from operations decreased **1%** (QoQ) and **8%** (YoY), with margins increasing **10 basis points** (QoQ) but decreasing **10 basis points** (YoY)[140](index=140&type=chunk) - EMEA's Adjusted earnings from operations increased **1%** (QoQ) but decreased **9%** (YoY), with margins increasing **40 basis points** (QoQ) and **10 basis points** (YoY)[141](index=141&type=chunk)[142](index=142&type=chunk) - APAC's Adjusted earnings from operations decreased **21%** (QoQ) and **17%** (YoY), with margins contracting **260 basis points** (QoQ) and **170 basis points** (YoY)[143](index=143&type=chunk)[144](index=144&type=chunk) [Non-Operating Expense (Income)](index=41&type=section&id=Non-Operating%20Expense%20%28Income%29) This section details changes in interest expense and other non-operating income or expenses, including warrant revaluation - Interest expense, net, increased **58%** (QoQ) and **42%** (YoY), primarily due to the issuance of Senior Notes in May 2024, the maturity of Convertible Notes in February 2025, higher ABL facility loan balances, and decreased interest income[145](index=145&type=chunk) - Other expense (income), net, primarily reflects a **$25.1 million** net loss on the revaluation of warrant settlement liabilities in the six months ended June 30, 2025, with no comparable activity in the prior year[147](index=147&type=chunk) [Income Tax Expense](index=41&type=section&id=Income%20Tax%20Expense) This section explains the effective tax rate fluctuations, driven by various tax benefits, non-deductible items, and foreign taxes - The effective tax rate for the three months ended June 30, 2025, was **26.9%**, up from **25.5%** in the prior year, due to greater tax benefits from earnout adjustments and higher excess tax benefits on employee share-based compensation in the prior year[148](index=148&type=chunk) - The effective tax rate for the six months ended June 30, 2025, was **34.5%**, up from **24.8%** in the prior year, primarily due to the non-deductibility of net losses from warrant settlement liabilities and earnout revaluation, partially offset by a reduction in foreign tax credit valuation allowance[149](index=149&type=chunk)[150](index=150&type=chunk) [Use of Non-GAAP Financial Measures](index=42&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section defines non-GAAP adjusted earnings from operations and explains its purpose for management and investors - Adjusted non-GAAP earnings from operations exclude severance and restructuring, executive recruitment, amortization of intangibles, transformation costs, acquisition/integration expenses, earnout revaluation gains/losses, data center outage costs, and impairment losses on assets held for sale[151](index=151&type=chunk) - This non-GAAP measure is used by management to evaluate financial performance, calculate incentive compensation, forecast future performance, and compare results to competitors, providing greater transparency to investors[151](index=151&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet short-term and long-term obligations, including cash flow, debt, and financing [Cash and Cash Flow](index=44&type=section&id=Cash%20and%20Cash%20Flow) This section analyzes cash flow from operating, investing, and financing activities, highlighting key uses and sources of cash Cash Flow Information (in thousands) | Cash Flow Information (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(99,001) | $292,964 | | Net cash used in investing activities | $(11,978) | $(279,048) | | Net cash provided by (used in) financing activities | $139,118 | $(20,623) | | Increase (decrease) in cash, cash equivalents and restricted cash | $50,098 | $(12,435) | | Cash, cash equivalents and restricted cash at end of period | $311,565 | $258,350 | - Operating activities used **$99.0 million** in cash during the first half of 2025, a significant decrease from **$293.0 million** provided in the prior year, primarily due to lower net earnings and the impact of higher hardware net sales[158](index=158&type=chunk)[161](index=161&type=chunk) - Primary uses of cash in H1 2025 included funding operations, cash settlement of Warrants (**$222.0 million**), common stock repurchases (**$76.1 million**), and repayment of Convertible Notes (**$333.1 million**)[158](index=158&type=chunk)[161](index=161&type=chunk) - Net borrowings under the ABL facility were **$780.4 million** in H1 2025, compared to net repayments of **$420.4 million** in H1 2024, while net borrowings under inventory financing facilities were **$2.1 million** in H1 2025, compared to net repayments of **$13.0 million** in H1 2024[158](index=158&type=chunk)[161](index=161&type=chunk) - Capital expenditures were **$12.0 million** in H1 2025, with full-year 2025 capital expenditures expected to be in the range of **$30.0 million** to **$35.0 million**[158](index=158&type=chunk)[161](index=161&type=chunk) [Financing Facilities](index=46&type=section&id=Financing%20Facilities) This section outlines the company's debt balances, compliance with covenants, and available inventory financing capacity - The company's debt balance as of June 30, 2025, was **$1.3 billion**, with the objective to pay down debt while maintaining adequate cash balances[167](index=167&type=chunk) - The ABL facility and Senior Notes contain customary covenants, and the company was in compliance with all covenants as of June 30, 2025[167](index=167&type=chunk) - Inventory financing facilities have an aggregate availability of **$705.0 million**, with **$220.8 million** outstanding at June 30, 2025[167](index=167&type=chunk) [Undistributed Foreign Earnings](index=46&type=section&id=Undistributed%20Foreign%20Earnings) This section reports on cash and cash equivalents held by foreign subsidiaries and potential repatriation tax implications - As of June 30, 2025, approximately **$260.4 million** in cash and cash equivalents were held by foreign subsidiaries, primarily in Canada and Australia, subject to U.S. income taxation upon repatriation[165](index=165&type=chunk) [Off-Balance Sheet Arrangements](index=46&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses off-balance sheet arrangements, including indemnifications, and their potential financial impact - Off-balance sheet arrangements include indemnifications, which management believes are not probable to result in material payments as of June 30, 2025[166](index=166&type=chunk) [Recently Issued Accounting Standards](index=46&type=section&id=Recently%20Issued%20Accounting%20Standards) This section refers to Note 1 for details on recently issued accounting standards and their potential impact - Information regarding recently issued accounting standards and their potential impact is incorporated by reference from Note 1 to the Consolidated Financial Statements[168](index=168&type=chunk) [Contractual Obligations](index=47&type=section&id=Contractual%20Obligations) This section confirms no material changes to contractual obligations since the last annual report, except as noted - There have been no material changes to reported contractual obligations since the Annual Report on Form 10-K for the year ended December 31, 2024, other than those described in Note 8 to the Consolidated Financial Statements[169](index=169&type=chunk) [Item 3 – Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily interest rate risk on fixed-rate Senior Notes - No material changes in reported market risks were identified, except for potential impacts of interest rate changes on the fair market value of fixed-rate Senior Notes[172](index=172&type=chunk) - As of June 30, 2025, the fair market value of the company's Senior Notes was **$516.1 million**[173](index=173&type=chunk) [Item 4 – Controls and Procedures](index=48&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer evaluated and determined that disclosure controls and procedures were effective as of June 30, 2025[174](index=174&type=chunk) - There were no material changes in the company's internal control over financial reporting during the three months ended June 30, 2025[175](index=175&type=chunk) - Internal control over financial reporting has inherent limitations and may not prevent or detect all misstatements[176](index=176&type=chunk) [PART II - Other Information](index=49&type=section&id=PART%20II%20-%20Other%20Information) This section provides additional information not covered in Part I, including legal proceedings, risk factors, equity sales, and exhibits [Item 1 – Legal Proceedings](index=49&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) This section confirms no material pending legal proceedings and refers to Note 8 for routine legal matters - There are no material pending legal proceedings to which the company is a party[178](index=178&type=chunk) - The company is involved in various routine legal proceedings incidental to its business, as detailed in Note 8 of the Consolidated Financial Statements[178](index=178&type=chunk) [Item 1A – Risk Factors](index=49&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) This section directs readers to the Annual Report on Form 10-K for a comprehensive discussion of potential business risks - Readers should carefully consider the risk factors outlined in the Annual Report on Form 10-K for the year ended December 31, 2024[179](index=179&type=chunk) - Additional risks and uncertainties not currently known or deemed immaterial could materially and adversely affect the business[179](index=179&type=chunk) [Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no unregistered equity sales and details the company's share repurchase program and remaining authorization - No unregistered sales of equity securities occurred during the three months ended June 30, 2025[180](index=180&type=chunk) - The company does not intend to pay cash dividends in the foreseeable future, with the ABL facility containing covenants that restrict dividend payments if not met[180](index=180&type=chunk) Issuer Purchases of Equity Securities (May 1, 2025 - May 31, 2025) | Issuer Purchases of Equity Securities (May 1, 2025 - May 31, 2025) | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | :----------------------------------------------------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------------- | :----------------------------------------------------------------------------- | | May 1, 2025 through May 31, 2025 | 600,000 | $126.86 | 600,000 | $223,882,772 | - As of June 30, 2025, approximately **$223.9 million** remained available under the **$300 million** share repurchase plan authorized on September 11, 2024[181](index=181&type=chunk) [Item 3 – Defaults Upon Senior Securities](index=49&type=section&id=Item%203%20%E2%80%93%20Defaults%20Upon%20Senior%20Securities) This item is not applicable, indicating no defaults on senior securities [Item 4 – Mine Safety Disclosures](index=50&type=section&id=Item%204%20%E2%80%93%20Mine%20Safety%20Disclosures) This item is not applicable, indicating no mine safety disclosures are required [Item 5 – Other Information](index=50&type=section&id=Item%205%20%E2%80%93%20Other%20Information) This section confirms no Rule 10b5-1 trading arrangement changes by directors or executive officers during the quarter - No directors or executive officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[185](index=185&type=chunk) [Item 6 – Exhibits](index=51&type=section&id=Item%206%20%E2%80%93%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, agreements, and certifications - The exhibits include the Fifth Amendment to Credit Agreement, CEO and CFO certifications (Rule 13a-14), and various Inline XBRL documents[187](index=187&type=chunk)

Core Insights - Insight Enterprises reported quarterly earnings of $2.45 per share, missing the Zacks Consensus Estimate of $2.49 per share, and showing a slight decrease from $2.46 per share a year ago, resulting in an earnings surprise of -1.61% [1] - The company posted revenues of $2.09 billion for the quarter ended June 2025, which was 3.26% below the Zacks Consensus Estimate and a decline from $2.16 billion in the same quarter last year [2] - Insight Enterprises has underperformed the market, with shares down approximately 4.9% year-to-date compared to the S&P 500's gain of 8.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.47 on revenues of $2.25 billion, and for the current fiscal year, it is $9.86 on revenues of $8.84 billion [7] - The estimate revisions trend for Insight Enterprises was favorable prior to the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Retail - Mail Order industry, to which Insight Enterprises belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting that companies in the top half tend to outperform those in the bottom half by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - Net revenue for Q2 2025 was $2.1 billion, a decrease of 3% in U.S. dollars and 4% in constant currency [24] - Adjusted diluted earnings per share were $2.45, flat year over year in U.S. dollars and down 1% in constant currency [27] - Gross margin was 21.1%, an increase of 10 basis points from the previous year [27] - Adjusted SG&A expenses declined by 3%, contributing to strong operating expense management [27] Business Line Data and Key Metrics Changes - Hardware revenue grew by 2%, marking the second consecutive quarter of growth, with North America hardware revenue increasing by 4% [8][25] - Insight core services revenue decreased by 2%, primarily due to delays in initiating new service projects with large enterprise clients [9][25] - Cloud gross profit was $123 million, a decrease of 5% due to partner program changes [26] Market Data and Key Metrics Changes - Revenue from commercial clients grew by 8%, representing the fifth consecutive quarter of growth [8] - The underlying SaaS and infrastructure as a service business grew in double digits, offset by partner program changes [8] - The public sector business showed momentum in services and hardware, despite overall revenue being down [82] Company Strategy and Development Direction - The company aims to become the leading AI-first solutions integrator, adapting its services portfolio to support clients in deploying AI solutions [10][19] - The strategy includes focusing on simplifying complex technology for clients and leveraging partnerships with major companies like NVIDIA, Google, and Microsoft [17][20] - The company is actively pursuing M&A opportunities to enhance capabilities in AI, data security, and cloud services [95] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second half of the year, anticipating improved purchasing from corporate and large enterprise clients [20][31] - The company expects hardware demand to continue to build throughout the year, driven by device refresh needs and infrastructure spending [21] - Management acknowledged macroeconomic factors affecting client investment decisions, including tariffs and legislative policies [9] Other Important Information - The company repurchased approximately $76 million of shares in Q2, with $224 million remaining for the share repurchase program [28] - The adjusted return on invested capital for the trailing twelve months was 14.4%, down from 17% a year ago [29] - The company has ample liquidity with access to $1.8 billion under its ABL facility [29] Q&A Session Summary Question: Guidance on gross profit dollars for the second half - Management indicated that gross profit dollars are expected to improve in the second half, driven by hardware growth and cloud performance [50][51] Question: Trends in cost-cutting across the industry - Management noted that productivity improvements through AI are allowing the company to hold headcount flat while increasing service capabilities [62] Question: Drivers behind delays in services projects with large enterprises - Management attributed delays to macroeconomic uncertainty and clients focusing on AI investments, leading to a cautious approach in traditional spending [70][71] Question: Update on cloud growth excluding program changes - Management confirmed that underlying cloud growth remained around 17% year over year, with expectations for similar performance in the second half [74] Question: Labor strategy to meet AI opportunities - Management highlighted a dual approach of acquiring new talent and upskilling existing employees to meet the demands of AI integration [95][96]

Financial Data and Key Metrics Changes - In Q2 2025, net revenue was $2.1 billion, a decrease of 3% in U.S. dollars and 4% in constant currency [24] - Adjusted diluted earnings per share were $2.45, flat year over year in U.S. dollars and down 1% in constant currency [27] - Gross margin was 21.1%, an increase of 10 basis points [27] - Adjusted SG&A expenses declined by 3%, contributing to strong operating expense management [27] Business Line Data and Key Metrics Changes - Hardware revenue grew by 2%, marking the second consecutive quarter of growth, with North America hardware revenue increasing by 4% [7][24] - Insight core services revenue decreased by 2%, primarily due to delays in initiating new service projects with large enterprise clients [8][25] - Cloud gross profit declined by 5%, attributed to partner program changes [8][26] Market Data and Key Metrics Changes - Revenue from commercial clients grew by 8%, representing the fifth consecutive quarter of growth [7] - The underlying SaaS and infrastructure as a service business grew in double digits, offset by partner program changes [7] - The public sector business showed resilience, with some momentum in hardware despite overall revenue being down [83] Company Strategy and Development Direction - The company aims to become the leading AI-first solutions integrator, adapting its services portfolio to support clients in deploying AI solutions [10][19] - The strategy includes focusing on simplifying complex technology for clients and leveraging partnerships with major companies like NVIDIA, Google, and Microsoft [17][20] - M&A remains a key focus, particularly in the fastest-growing areas of the market such as cloud, data, AI, edge, and security [22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second half of the year, anticipating improved purchasing from corporate and large enterprise clients [20][31] - The macroeconomic environment continues to impact client investment decisions, but the company is well-positioned to grow as conditions improve [9][20] - Management expects hardware demand to increase steadily throughout the year, driven by device refresh needs and infrastructure spending [21][31] Other Important Information - The company repurchased approximately $76 million of shares in Q2, with $224 million remaining for the share repurchase program [28] - The adjusted return on invested capital for the trailing twelve months was 14.4%, down from 17% a year ago [30] - The company has ample liquidity, with access to $1.8 billion under its ABL facility [29] Q&A Session Summary Question: Guidance on gross profit dollar growth - Management indicated that gross profit dollars are expected to improve in the second half, driven by hardware growth and cloud performance [50][55] Question: Delays in services projects with large enterprises - Management noted that macroeconomic uncertainty and clients' focus on AI investments are causing delays in project initiation [66][70] Question: Cloud growth excluding program changes - Management confirmed that underlying cloud growth was approximately 17% year over year in Q1 and similar in Q2, with expectations for continued growth in the second half [71][73] Question: Impact of partner program changes on future margins - Management stated that while the $70 million headwind from partner program changes affected margins in 2025, they expect this to normalize by 2026 [88][90]

Financial Performance - Q2 2025 - Net sales decreased by 3% year-over-year to $2.1 billion[36] - Gross profit decreased by 2% year-over-year to $442 million[36] - Cloud gross profit decreased by 5% year-over-year to $123 million[36] - Insight Core Services gross profit decreased by 3% year-over-year to $78 million[36] - Earnings from operations decreased by 34% year-over-year to $87 million[36] - Adjusted earnings from operations decreased by 2% year-over-year to $129 million[36] - Net earnings decreased by 46% year-over-year to $47 million[36] - Adjusted EBITDA decreased by 2% year-over-year to $138 million[36] Financial Position - Total debt balance at June 30, 2025, was $1.3 billion[40] - Year-over-year increase in total debt was $330 million[39, 40] - Total share repurchases and warrant settlement payments amounted to $463 million[39, 40] Full Year 2025 Outlook - Gross profit growth is expected to be approximately flat[41] - Gross margin is expected to be approximately 20%[41] - Adjusted diluted EPS is projected to be in the range of $9.70 - $10.10[41]

[Executive Summary & Q2 2025 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q2%202025%20Highlights) [Q2 2025 Consolidated Financial Performance](index=1&type=section&id=1.1%20Q2%202025%20Consolidated%20Financial%20Performance) Q2 2025 net sales decreased 3% to **$2.1 billion**, with GAAP earnings down, but adjusted metrics stable Q2 2025 Consolidated Financial Performance Summary | Metric | Q2 2025 | Q2 2024 | YoY Change | | :-------------------------------- | :------------- | :------------- | :------- | | Net Sales ($ billion) | $2.1 | $2.16 | -3% | | Gross Profit ($ million) | $442.3 | $453.4 | -2% | | Gross Margin (%) | 21.1% | 21.0% | +10 bps | | Operating Earnings (GAAP) ($ million) | $86.5 | $131.1 | -34% | | Adjusted Operating Earnings ($ million) | $129.0 | $131.1 | -2% | | Consolidated Net Earnings (GAAP) ($ million) | $46.9 | $87.4 | -46% | | Adjusted Consolidated Net Earnings ($ million) | $78.6 | $86.7 | -9.4% | | Diluted EPS (GAAP) ($) | $1.46 | $2.27 | -36% | | Adjusted Diluted EPS ($) | $2.45 | $2.46 | -0.4% | - The decrease in **operating earnings** was primarily due to partner program changes, real estate asset impairment losses, and net gains from earn-out revaluation in the prior year period[2](index=2&type=chunk) [CEO Commentary](index=1&type=section&id=1.2%20CEO%20Commentary) CEO noted Q2 met expectations, with hardware growth and record Q2 gross and adjusted operating margins - The company's Q2 performance met expectations, successfully navigating challenges from partner program changes[3](index=3&type=chunk) - Hardware business achieved its second consecutive quarter of year-over-year growth[3](index=3&type=chunk) - Gross margin reached **21.1%** and adjusted operating earnings margin reached **6.2%**, both Q2 historical highs[3](index=3&type=chunk) [Detailed Q2 2025 Performance by Segment](index=1&type=section&id=1.3%20Detailed%20Q2%202025%20Performance%20by%20Segment) Product and service net sales declined, hardware sales grew, with mixed regional performance across segments [Net Sales by Product and Geography](index=1&type=section&id=1.3.1%20Net%20Sales%20by%20Product%20and%20Geography) Q2 2025 consolidated net sales decreased 3% to **$2.1 billion**, with hardware up 2%, software down 14%, and all regions declining Q2 2025 Net Sales by Category and Geography | Category | Q2 2025 Net Sales | YoY Change | | :------------------------- | :--------------------- | :------- | | Consolidated Net Sales ($ billion) | $2.1 | -3% | | Product Net Sales | - | -4% | | Service Net Sales | - | -2% | | Hardware Product Net Sales | - | +2% | | Software Product Net Sales | - | -14% | | North America Net Sales ($ billion) | $1.7 | -3% | | EMEA Net Sales ($ million) | $348.6 | -5% | | APAC Net Sales ($ million) | $58.6 | -3% | - Excluding the impact of foreign currency fluctuations, consolidated net sales decreased **4%** year-over-year, with North America, EMEA, and APAC declining **3%**, **11%**, and **1%** respectively[8](index=8&type=chunk) [Gross Profit by Segment](index=2&type=section&id=1.3.2%20Gross%20Profit%20by%20Segment) Q2 2025 gross profit decreased 2% to **$442.3 million**, gross margin expanded to **21.1%**, EMEA gross profit grew **4%** YoY Q2 2025 Gross Profit by Segment | Metric | Q2 2025 | YoY Change | | :-------------------------------- | :------------- | :------- | | Consolidated Gross Profit ($ million) | $442.3 | -2% | | Consolidated Gross Margin (%) | 21.1% | +10 bps | | Product Gross Profit | - | -3% | | Service Gross Profit | - | -2% | | Cloud Gross Profit | - | -5% | | Insight Core Services Gross Profit | - | -3% | | North America Gross Profit ($ million) | $341.7 | -4% | | EMEA Gross Profit ($ million) | $82.4 | +4% | | APAC Gross Profit ($ million) | $18.2 | -10% | - Excluding the impact of foreign currency fluctuations, consolidated gross profit decreased **3%** year-over-year, with North America, EMEA, and APAC declining **3%**, **2%**, and **8%** respectively[13](index=13&type=chunk) [Earnings from Operations by Segment (GAAP & Adjusted)](index=2&type=section&id=1.3.3%20Earnings%20from%20Operations%20by%20Segment%20(GAAP%20%26%20Adjusted)) Q2 2025 GAAP operating earnings decreased **34%** to **$86.5 million**, while adjusted operating earnings decreased **2%** to **$129.0 million** Q2 2025 Earnings from Operations by Segment (GAAP & Adjusted) | Metric | Q2 2025 | YoY Change | | :------------------------------------------ | :------------- | :------- | | Consolidated Operating Earnings (GAAP) ($ million) | $86.5 | -34% | | North America Operating Earnings (GAAP) ($ million) | $68.7 | -33% | | EMEA Operating Earnings (GAAP) ($ million) | $11.2 | -47% | | APAC Operating Earnings (GAAP) ($ million) | $6.7 | -19% | | Adjusted Consolidated Operating Earnings ($ million) | $129.0 | -2% | | Adjusted North America Operating Earnings ($ million) | $102.9 | -1% | | Adjusted EMEA Operating Earnings ($ million) | $19.4 | +1% | | Adjusted APAC Operating Earnings ($ million) | $6.7 | -21% | - Excluding the impact of foreign currency fluctuations, adjusted consolidated operating earnings decreased **2%** year-over-year, with EMEA and APAC declining **3%** and **19%** respectively, while North America adjusted operating earnings remained flat[13](index=13&type=chunk) [Net Earnings and EPS (GAAP & Adjusted)](index=2&type=section&id=1.3.4%20Net%20Earnings%20and%20EPS%20(GAAP%20%26%20Adjusted)) Q2 2025 GAAP net earnings **$46.9 million** and diluted EPS **$1.46** were down **46%** and **36%** YoY, while adjusted metrics remained flat Q2 2025 Net Earnings and EPS (GAAP & Adjusted) | Metric | Q2 2025 | YoY Change | | :------------------------------------ | :------------- | :------- | | Consolidated Net Earnings (GAAP) ($ million) | $46.9 | -46% | | Diluted EPS (GAAP) ($) | $1.46 | -36% | | Adjusted Consolidated Net Earnings ($ million) | $78.6 | - | | Adjusted Diluted EPS ($) | $2.45 | Flat | | Effective Tax Rate (%) | 26.9% | - | - Excluding the impact of foreign currency fluctuations, adjusted diluted EPS decreased **1%** year-over-year[13](index=13&type=chunk) [Financial Outlook & Guidance](index=3&type=section&id=Financial%20Outlook%20%26%20Guidance) [Full Year 2025 Guidance](index=3&type=section&id=2.1%20Full%20Year%202025%20Guidance) Full-year 2025 adjusted diluted EPS projected between **$9.70** and **$10.10**, with gross profit flat and gross margin around **20%** Full Year 2025 Financial Guidance | Metric | Full Year 2025 Guidance | | :--------------------- | :--------------- | | Adjusted Diluted EPS ($) | $9.70 - $10.10 | | Gross Profit | Approximately flat compared to 2024 | | Gross Margin (%) | Approximately 20% | [Guidance Assumptions and Exclusions](index=3&type=section&id=2.2%20Guidance%20Assumptions%20and%20Exclusions) Guidance excludes **$74.4 million** intangible asset amortization, assuming no major acquisition/restructuring costs, and stable macroeconomic conditions - Guidance excludes approximately **$74.4 million** in acquisition-related intangible asset amortization expenses[16](index=16&type=chunk) - Guidance assumes no significant acquisition or integration expenses, transformation or severance and restructuring costs, or material changes in the macroeconomic environment[16](index=16&type=chunk) Key Guidance Assumptions | Assumption | Full Year 2025 Guidance | | :-------------------------- | :--------------- | | Interest Expense ($ million) | $75 - $80 | | Effective Tax Rate (%) | Approximately 25% - 26% | | Capital Expenditures ($ million) | $30 - $35 | | Average Shares Outstanding (million) | 32.4 | - The company cannot provide a complete reconciliation of GAAP to non-GAAP diluted EPS due to the unpredictability of certain expenses[16](index=16&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) A conference call and webcast on July 31, 2025, at 9:00 AM ET will discuss Q2 2025 results, details on website - The conference call and webcast will be held on July 31, 2025, at 9:00 AM ET[18](index=18&type=chunk) - Live and archived webcasts are available on the company's website at http://investor.insight.com/[18](index=18&type=chunk) [Use of Non-GAAP Financial Measures](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) [Definition of Adjusted Measures and Exclusions](index=3&type=section&id=4.1%20Definition%20of%20Adjusted%20Measures%20and%20Exclusions) Adjusted non-GAAP metrics exclude non-recurring or non-operating items like severance, intangible asset amortization, and acquisition costs - Adjusted operating earnings, adjusted net earnings, and adjusted diluted EPS exclude: severance and restructuring expenses, executive search fees, intangible asset amortization, transformation costs, acquisition and integration expenses, fair value changes in earn-out revaluation, third-party data center service interruption expenses, impairment losses on real estate assets held for sale, and their tax impacts[20](index=20&type=chunk) - Adjusted EBITDA additionally excludes: interest expense, income tax expense, depreciation and amortization of equipment, and fair value changes in warrant settlement liability[20](index=20&type=chunk) - Adjusted ROIC excludes: severance and restructuring expenses, executive search fees, intangible asset amortization, transformation costs, acquisition and integration expenses, third-party data center service interruption expenses, fair value changes in earn-out revaluation, impairment losses on real estate assets held for sale, and their tax impacts[20](index=20&type=chunk) - Transformation costs refer to business transformation expenses incurred to achieve strategic objectives, including becoming a leading solutions integrator[20](index=20&type=chunk) [Purpose and Limitations of Non-GAAP Measures](index=4&type=section&id=4.2%20Purpose%20and%20Limitations%20of%20Non-GAAP%20Measures) Non-GAAP metrics are used for performance evaluation, compensation, forecasting, and comparison, offering transparency but not replacing GAAP - Non-GAAP metrics are used to evaluate financial performance, calculate incentive compensation, forecast future performance, and compare with competitors[21](index=21&type=chunk) - The company believes non-GAAP metrics are useful to investors as they increase transparency, facilitate comparisons with prior periods and competitors, and aid in forecasting future performance[21](index=21&type=chunk) - Non-GAAP financial measures are not prepared in accordance with GAAP, may differ from non-GAAP measures presented by other companies, and should not be considered substitutes for or superior to GAAP financial results[21](index=21&type=chunk)[23](index=23&type=chunk) - The company sometimes excludes the impact of foreign currency fluctuations when discussing changes in net sales, gross profit, and operating earnings to provide supplemental information about the underlying business[10](index=10&type=chunk) [GAAP Financial Statements](index=5&type=section&id=GAAP%20Financial%20Statements) [Consolidated Statements of Operations](index=9&type=section&id=5.1%20Consolidated%20Statements%20of%20Operations) This statement details GAAP revenue, costs, gross profit, operating expenses, and net earnings for Q2 and H1 2025 and 2024 Consolidated Statements of Operations (GAAP) | Metric (USD thousands) | Q2 2025 | Q2 2024 | First Half 2025 | First Half 2024 | | :----------------------------- | :------------- | :------------- | :----------- | :----------- | | Net Sales | 2,091,482 | 2,161,662 | 4,195,038 | 4,541,147 | | Cost of Sales | 1,649,155 | 1,708,297 | 3,346,234 | 3,646,854 | | Gross Profit | 442,327 | 453,365 | 848,804 | 894,293 | | Operating Expenses | 355,795 | 322,292 | 702,169 | 663,234 | | Operating Earnings | 86,532 | 131,073 | 146,635 | 231,059 | | Earnings Before Income Taxes | 64,167 | 117,352 | 83,176 | 205,544 | | Net Earnings | 46,932 | 87,444 | 54,446 | 154,471 | | Diluted EPS | 1.46 | 2.27 | 1.63 | 4.01 | [Consolidated Balance Sheets](index=10&type=section&id=5.2%20Consolidated%20Balance%20Sheets) This statement presents GAAP assets, liabilities, and equity as of June 30, 2025, and December 31, 2024, showing increases in receivables and long-term debt Consolidated Balance Sheets (GAAP) | Metric (USD thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------- | :------------- | | **Assets** | | | | Cash and Cash Equivalents | 309,135 | 259,234 | | Accounts Receivable, Net | 5,479,172 | 4,172,104 | | Inventory | 147,489 | 122,581 | | Total Assets | 8,728,766 | 7,448,578 | | **Liabilities and Stockholders' Equity** | | | | Accounts Payable – Trade | 4,167,396 | 3,059,667 | | Long-Term Debt | 1,324,992 | 531,233 | | Total Liabilities | 7,123,283 | 5,677,967 | | Total Stockholders' Equity | 1,605,483 | 1,770,611 | - As of June 30, 2025, total assets increased to **$8.729 billion**, total liabilities increased to **$7.123 billion**, and stockholders' equity slightly decreased[38](index=38&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=5.3%20Consolidated%20Statements%20of%20Cash%20Flows) This statement details cash flows for H1 2025 and 2024, showing **$99.0 million** cash used in operations due to receivables, financing shifting to inflow Consolidated Statements of Cash Flows (GAAP) | Metric (USD thousands) | First Half 2025 | First Half 2024 | | :----------------------------- | :----------- | :----------- | | Net Cash from Operating Activities | (99,001) | 292,964 | | Net Cash from Investing Activities | (11,978) | (279,048) | | Net Cash from Financing Activities | 139,118 | (20,623) | | Cash and Cash Equivalents Ending Balance | 311,565 | 258,350 | - Net cash used in operating activities was **$99.0 million** in the first half of 2025, primarily due to a **$1.129 billion** increase in accounts receivable[40](index=40&type=chunk) - Net cash from financing activities shifted from an outflow in the first half of 2024 to an inflow of **$139.0 million** in the first half of 2025, primarily due to increased borrowings under the ABL revolving credit facility[40](index=40&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) [Adjusted Consolidated Earnings from Operations](index=12&type=section&id=6.1%20Adjusted%20Consolidated%20Earnings%20from%20Operations) This section reconciles GAAP to adjusted non-GAAP consolidated operating earnings, adjusting for amortization and earn-out revaluation Adjusted Consolidated Earnings from Operations Reconciliation | Metric (USD thousands) | Q2 2025 | Q2 2024 | First Half 2025 | First Half 2024 | | :------------------------------------ | :------------- | :------------- | :----------- | :----------- | | GAAP Consolidated EFO | 86,532 | 131,073 | 146,635 | 231,059 | | Amortization of Intangible Assets | 18,668 | 17,357 | 37,216 | 32,282 | | Fair Value Changes in Earn-out Revaluation | 164 | (25,148) | 15,364 | (24,207) | | Other* | 23,599 | 7,810 | 32,100 | 13,708 | | Adjusted Non-GAAP Consolidated EFO | 128,963 | 131,092 | 231,315 | 252,842 | | GAAP EFO as % of Net Sales | 4.1% | 6.1% | 3.5% | 5.1% | | Adjusted Non-GAAP EFO as % of Net Sales | 6.2% | 6.1% | 5.5% | 5.6% | [Adjusted Consolidated Net Earnings](index=12&type=section&id=6.2%20Adjusted%20Consolidated%20Net%20Earnings) This section reconciles GAAP to adjusted non-GAAP consolidated net earnings, including operating earnings adjustments and warrant revaluation Adjusted Consolidated Net Earnings Reconciliation | Metric (USD thousands) | Q2 2025 | Q2 2024 | First Half 2025 | First Half 2024 | | :------------------------------------------ | :------------- | :------------- | :----------- | :----------- | | GAAP Consolidated Net Earnings | 46,932 | 87,444 | 54,446 | 154,471 | | Amortization of Intangible Assets | 18,668 | 17,357 | 37,216 | 32,282 | | Fair Value Changes in Earn-out Revaluation | 164 | (25,148) | 15,364 | (24,207) | | Net Loss from Revaluation of Warrant Settlement Liability | — | — | 25,069 | — | | Other* | 23,599 | 7,810 | 32,100 | 13,708 | | Income Tax Impact of Non-GAAP Adjustments | (10,780) | (734) | (17,787) | (6,173) | | Adjusted Non-GAAP Consolidated Net Earnings | 78,583 | 86,729 | 146,408 | 170,081 | | GAAP Net Earnings as % of Net Sales | 2.2% | 4.0% | 1.3% | 3.4% | | Adjusted Non-GAAP Net Earnings as % of Net Sales | 3.8% | 4.0% | 3.5% | 3.7% | [Adjusted Diluted Earnings Per Share](index=12&type=section&id=6.3%20Adjusted%20Diluted%20Earnings%20Per%20Share) This section reconciles GAAP to adjusted non-GAAP diluted EPS, adjusting for amortization, earn-out revaluation, warrant liability, and tax Adjusted Diluted Earnings Per Share Reconciliation | Metric | Q2 2025 | Q2 2024 | First Half 2025 | First Half 2024 | | :------------------------------------------ | :------------- | :------------- | :----------- | :----------- | | GAAP Diluted EPS ($) | $1.46 | $2.27 | $1.63 | $4.01 | | Amortization of Intangible Assets | 0.58 | 0.45 | 1.11 | 0.84 | | Fair Value Changes in Earn-out Revaluation | 0.01 | (0.65) | 0.46 | (0.63) | | Net Loss from Revaluation of Warrant Settlement Liability | — | — | 0.75 | — | | Other* | 0.73 | 0.20 | 0.96 | 0.36 | | Income Tax Impact of Non-GAAP Adjustments | (0.33) | (0.02) | (0.53) | (0.16) | | Impact of Note Hedge Gains | — | 0.21 | 0.12 | 0.41 | | Adjusted Non-GAAP Diluted EPS ($) | $2.45 | $2.46 | $4.50 | $4.83 | | Shares Used in Diluted EPS Calculation (thousands) | 32,121 | 38,567 | 33,402 | 38,501 | | Shares Used in Adjusted Non-GAAP Diluted EPS Calculation (thousands) | 32,121 | 35,245 | 32,537 | 35,226 | [Adjusted Segment Earnings from Operations](index=13&type=section&id=6.4%20Adjusted%20Segment%20Earnings%20from%20Operations) This section reconciles GAAP to adjusted non-GAAP operating earnings for North America, EMEA, and APAC, adjusting for amortization and revaluation [North America Adjusted Earnings from Operations](index=13&type=section&id=6.4.1%20North%20America%20Adjusted%20EFO) North America's GAAP operating earnings were **$68.7 million** in Q2 2025, adjusted non-GAAP operating earnings **$102.9 million**, down **1%** YoY North America Adjusted Earnings from Operations Reconciliation | Metric (USD thousands) | Q2 2025 | Q2 2024 | First Half 2025 | First Half 2024 | | :------------------------------------------ | :------------- | :------------- | :----------- | :----------- | | GAAP North America EFO | 68,722 | 101,813 | 119,512 | 185,836 | | Adjusted Non-GAAP North America EFO | 102,911 | 103,429 | 189,876 | 206,213 | | Adjusted Non-GAAP EFO as % of Net Sales | 6.1% | 6.0% | 5.6% | 5.7% | [EMEA Adjusted Earnings from Operations](index=13&type=section&id=6.4.2%20EMEA%20Adjusted%20EFO) EMEA's GAAP operating earnings were **$11.2 million** in Q2 2025, adjusted non-GAAP operating earnings **$19.4 million**, up **1%** YoY EMEA Adjusted Earnings from Operations Reconciliation | Metric (USD thousands) | Q2 2025 | Q2 2024 | First Half 2025 | First Half 2024 | | :------------------------------------------ | :------------- | :------------- | :----------- | :----------- | | GAAP EMEA EFO | 11,156 | 21,007 | 16,167 | 32,197 | | Adjusted Non-GAAP EMEA EFO | 19,350 | 19,216 | 30,368 | 33,230 | | Adjusted Non-GAAP EFO as % of Net Sales | 5.6% | 5.2% | 4.4% | 4.3% | [APAC Adjusted Earnings from Operations](index=13&type=section&id=6.4.3%20APAC%20Adjusted%20EFO) APAC's GAAP operating earnings were **$6.7 million** in Q2 2025, adjusted non-GAAP operating earnings **$6.7 million**, down **21%** YoY APAC Adjusted Earnings from Operations Reconciliation | Metric (USD thousands) | Q2 2025 | Q2 2024 | First Half 2025 | First Half 2024 | | :------------------------------------------ | :------------- | :------------- | :----------- | :----------- | | GAAP APAC EFO | 6,654 | 8,253 | 10,956 | 13,026 | | Adjusted Non-GAAP APAC EFO | 6,702 | 8,447 | 11,071 | 13,399 | | Adjusted Non-GAAP EFO as % of Net Sales | 11.4% | 14.0% | 9.3% | 11.0% | [Adjusted EBITDA](index=14&type=section&id=6.5%20Adjusted%20EBITDA) This section reconciles GAAP net earnings to adjusted non-GAAP EBITDA, adjusting for interest, taxes, depreciation, amortization, and revaluation Adjusted EBITDA Reconciliation | Metric (USD thousands) | Q2 2025 | Q2 2024 | First Half 2025 | First Half 2024 | | :------------------------------------------ | :------------- | :------------- | :----------- | :----------- | | GAAP Consolidated Net Earnings | 46,932 | 87,444 | 54,446 | 154,471 | | Interest Expense | 24,293 | 16,859 | 42,032 | 32,128 | | Income Tax Expense | 17,235 | 29,908 | 28,730 | 51,073 | | Depreciation and Amortization of Equipment | 7,264 | 7,208 | 14,495 | 14,169 | | Amortization of Intangible Assets | 18,668 | 17,357 | 37,216 | 32,282 | | Fair Value Changes in Earn-out Revaluation | 164 | (25,148) | 15,364 | (24,207) | | Net Loss from Revaluation of Warrant Settlement Liability | — | — | 25,069 | — | | Other* | 23,599 | 7,810 | 32,100 | 13,708 | | Adjusted Non-GAAP EBITDA | 138,155 | 141,438 | 249,452 | 273,624 | | Adjusted Non-GAAP EBITDA as % of Net Sales | 6.6% | 6.5% | 5.9% | 6.0% | [Adjusted Return on Invested Capital (ROIC)](index=15&type=section&id=6.6%20Adjusted%20Return%20on%20Invested%20Capital%20(ROIC)) This section reconciles GAAP operating earnings to adjusted non-GAAP ROIC, adjusting for amortization, revaluation, and tax impacts, with ROIC at **14.41%** Adjusted Return on Invested Capital (ROIC) Reconciliation | Metric (USD thousands) | June 30, 2025 (12 months) | June 30, 2024 (12 months) | | :------------------------------------------ | :--------------------- | :--------------------- | | GAAP Consolidated EFO | 304,160 | 454,782 | | Amortization of Intangible Assets | 74,515 | 51,918 | | Fair Value Changes in Earn-out Revaluation | 31,722 | (24,207) | | Other5 | 70,448 | 38,811 | | Adjusted Non-GAAP Consolidated EFO | 480,845 | 521,304 | | Income Tax Expense | 125,020 | 135,539 | | Adjusted Non-GAAP Consolidated EFO (Tax-Effected) | 355,825 | 385,765 | | Invested Capital | 2,469,820 | 2,272,910 | | Adjusted Non-GAAP ROIC | 14.41% | 16.97% | - Adjusted non-GAAP ROIC decreased from **16.97%** as of June 30, 2024, to **14.41%** as of June 30, 2025[50](index=50&type=chunk) [Forward-Looking Information & Risk Factors](index=7&type=section&id=Forward-Looking%20Information%20%26%20Risk%20Factors) [Forward-Looking Statement Disclaimer](index=7&type=section&id=7.1%20Forward-Looking%20Statement%20Disclaimer) This press release contains 'forward-looking statements' subject to risks and uncertainties, actual results may differ, and the company disclaims any update obligation - Certain statements in this press release are 'forward-looking statements' subject to risks and uncertainties, where actual results may differ materially from expectations[30](index=30&type=chunk) - Forward-looking statements cover inflation, interest rates, future financial performance, gross profit growth, adjusted diluted EPS, gross margin, effective tax rate, capital expenditures, cash flow, supply chain constraints, IT market trends, tariffs and trade policies, and business strategies[30](index=30&type=chunk) - The company undertakes no obligation to update forward-looking statements and does not endorse any third-party projections of future performance[31](index=31&type=chunk)[33](index=33&type=chunk) [Key Risk Factors](index=7&type=section&id=7.2%20Key%20Risk%20Factors) Key risk factors include competitor actions, reliance on partners, technological advancements, macroeconomic conditions, cyberattacks, increased debt, and talent - Competitor actions, reliance on partners, and changes in product availability, marketing funds, and purchasing incentives[32](index=32&type=chunk) - The ability to keep pace with rapidly evolving technological advancements, including generative artificial intelligence, and changing competitive markets[32](index=32&type=chunk) - Changes in general economic conditions, economic uncertainty, and geopolitical conditions, including the possibility of a recession or decline in market activity[32](index=32&type=chunk) - Disruptions to IT systems and data networks, cyberattacks, data privacy breaches, and related government regulatory violations[32](index=32&type=chunk) - Increased debt and interest expense, and the potential for reduced availability of funds under financing facilities[32](index=32&type=chunk) - Reliance on key personnel and the ability to attract, train, and retain skilled team members[32](index=32&type=chunk)