[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)

Core Insights - Insight Enterprises (NSIT) is positioned to potentially continue its earnings-beat streak in upcoming reports, particularly within the Zacks Retail - Mail Order industry [1] - The company has a history of beating earnings estimates, with an average surprise of 3.31% over the last two quarters [1] Earnings Performance - For the most recent quarter, Insight Enterprises reported earnings of $2.03 per share, slightly below the expected $2.06, resulting in a surprise of 1.48% [2] - In the previous quarter, the company exceeded expectations by reporting $2.66 per share against a consensus estimate of $2.53, achieving a surprise of 5.14% [2] Earnings Estimates and Predictions - Estimates for Insight Enterprises have been trending higher, influenced by its history of earnings surprises [5] - The company currently has a positive Earnings ESP of +0.27%, indicating bullish sentiment among analysts regarding its near-term earnings potential [8] - The combination of a positive Earnings ESP and a Zacks Rank of 2 (Buy) suggests a strong likelihood of another earnings beat [8] Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7] Future Outlook - The next earnings report for Insight Enterprises is anticipated to be released on July 31, 2025 [8]

Core Viewpoint - Insight Enterprises (NSIT) is anticipated to report a year-over-year increase in earnings driven by higher revenues for the quarter ended June 2025, with a consensus EPS estimate of $2.49, reflecting a +1.2% change [1][3][18] Earnings Expectations - The earnings report is scheduled for July 31, and better-than-expected results could lead to a stock price increase, while disappointing results may cause a decline [2] - Revenues are projected to be $2.16 billion, indicating no growth compared to the previous year [3][18] Estimate Revisions - The consensus EPS estimate has been revised 0.68% higher in the last 30 days, reflecting analysts' reassessment of the company's earnings prospects [4][19] - The Most Accurate Estimate is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +0.27%, suggesting a bullish outlook from analysts [12][19] Historical Performance - In the last reported quarter, Insight Enterprises exceeded the expected EPS of $2.03 by delivering $2.06, resulting in a surprise of +1.48% [13] - Over the past four quarters, the company has beaten consensus EPS estimates two times [14][19] Zacks Rank and Predictive Power - The company currently holds a Zacks Rank of 2 (Buy), which, when combined with a positive Earnings ESP, indicates a high likelihood of beating the consensus EPS estimate [12][19] - Stocks with a positive Earnings ESP and a solid Zacks Rank have historically produced positive surprises nearly 70% of the time [10]

Group 1 - Insight Enterprises (NSIT) closed at $139.88, with a 4.9% gain over the past four weeks, and a mean price target of $188 indicates a 34.4% upside potential [1] - The average price targets range from a low of $164.00 to a high of $235.00, with a standard deviation of $40.71, suggesting a potential increase of 17.2% to 68% from the current price [2] - Analysts show strong agreement in revising earnings estimates higher, which correlates with potential stock price movements [4][11] Group 2 - The Zacks Consensus Estimate for the current year has increased by 0.3% over the past month, indicating positive sentiment among analysts [12] - NSIT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While the consensus price target may not be a reliable indicator of the extent of gains, it does suggest a positive direction for price movement [14]

Core Insights - The article emphasizes the importance of the Zacks Rank in identifying strong stocks through earnings estimates and revisions, while also acknowledging the diverse strategies investors may adopt [1] - Value investing is highlighted as a popular method for identifying undervalued stocks, which can lead to potential profits [2] Company Analysis: Insight Enterprises (NSIT) - Insight Enterprises currently holds a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [4] - The stock has a P/E ratio of 13.48, which is lower than the industry average of 15.13, suggesting it may be undervalued [4] - Over the past 52 weeks, NSIT's Forward P/E has fluctuated between a high of 19.54 and a low of 12.59, with a median of 15.22 [4] - The P/B ratio for NSIT is 2.8, which is favorable compared to the industry average of 3.57, indicating solid valuation metrics [5] - NSIT's P/B has ranged from a high of 4.04 to a low of 2.57 over the past year, with a median of 2.88 [5] - The P/CF ratio for NSIT stands at 16.23, significantly lower than the industry average of 23.44, further supporting the notion of undervaluation [6] - NSIT's P/CF has seen a range from 22.27 to 14.38 in the past year, with a median of 16.42 [6] - Overall, the metrics suggest that Insight Enterprises is likely undervalued, making it a strong candidate for value investors [7]

Group 1 - Momentum investing contrasts with the traditional "buy low and sell high" strategy, focusing instead on "buying high and selling higher" to capitalize on fast-moving stocks [1] - Identifying the right entry point for trending stocks can be challenging, as they may lose momentum if future growth does not justify their high valuations [1] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, with tools like the Zacks Momentum Style Score aiding in identifying such opportunities [2] Group 2 - Insight Enterprises (NSIT) is highlighted as a strong candidate for investment, showing a four-week price change of 4.9% and reflecting growing investor interest [3] - NSIT has gained 0.7% over the past 12 weeks, indicating its ability to deliver positive returns over a longer timeframe, with a beta of 1.2 suggesting it moves 20% more than the market [4] - NSIT's Momentum Score of B indicates a favorable time to invest, supported by an upward trend in earnings estimate revisions, earning it a Zacks Rank 2 (Buy) [5][6] Group 3 - NSIT is trading at a Price-to-Sales ratio of 0.53, suggesting it is undervalued, as investors pay only 53 cents for each dollar of sales [6] - The stock has significant potential for growth, with the current momentum characteristics indicating a fast-paced upward trajectory [7] - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, providing further investment opportunities [7]

Summary of Insight Enterprises Conference Call (June 11, 2025) Company Overview - **Company**: Insight Enterprises (NSIT) - **Role**: Leading solutions integrator focusing on hardware, software, and services to drive customer outcomes [6][7] Core Strategy and Market Focus - **Solutions Integrator**: Defined a new category as a solutions integrator, leveraging strengths in hardware, software, and services [7] - **Market Focus**: Concentrating on high-growth areas such as cloud, data, AI, cyber, and edge computing [7] - **Customer Base**: Over 30,000 customers, including a significant presence in the Fortune 5000 [13] Financial Performance - **Gross Margin Improvement**: Expanded gross margins from approximately 15.7% in 2022 to over 20% on a trailing twelve-month (TTM) basis [24] - **EBITDA Margin Growth**: Increased EBITDA margins from 4.7% in 2022 to over 6% on a TTM basis [26] - **Cash Flow Generation**: Consistently generated cash flow exceeding 100% of net income, with a long-term target of over 90% [10][26] Challenges and Market Dynamics - **Hardware Market**: Experienced a depressed hardware market impacting revenue, with a projected decline of $1 billion from 2023 to 2024 [42] - **Partner Program Changes**: Adjustments from hyperscaler partners (Google and Microsoft) resulted in a $70 million gross impact for fiscal year 2025 [22][23] - **Cloud Business**: Despite a strong historical growth rate of 16-20%, the cloud segment is expected to be flat to slightly down for the year due to partner program changes [38][39] M&A Strategy - **Importance of M&A**: M&A is critical to the company's strategy, with a focus on enhancing digital capabilities and services [12][28] - **Recent Acquisitions**: Notable acquisitions include SADA (2023) and InfoCenter, aimed at expanding cloud and ServiceNow capabilities [30][31][32] - **Future Outlook**: Anticipates being active in the M&A space, particularly in digital capabilities, with no imminent announcements but a likelihood of acquisitions this year [56] Cultural and Operational Insights - **Technical Expertise**: Employs over 6,000 technical resources, providing a competitive edge in the market [14] - **Company Culture**: Emphasized as a key differentiator, aiding in recruitment and operational effectiveness [14] Market Outlook - **Hardware Recovery**: Expected mid-single-digit growth in hardware, driven by a refresh cycle and increasing data center demands [49][50] - **Services Impact**: Services business has been affected by global macroeconomic conditions, but the company maintains a competitive position [51][52] Shareholder Relations - **ValueAct Relationship**: Constructive relationship with ValueAct, which recently exited the board but remains supportive of the company's strategy [58][59] This summary encapsulates the key points discussed during the conference call, highlighting the company's strategic direction, financial performance, challenges, and future outlook.

Summary of Conference Call for Insight Enterprises Company Overview - **Company**: Insight Enterprises - **CFO**: James Mercado Macro Environment - **Recession Concerns**: Initial recession predictions for the second half of the year ranged from 25% to 50%, but recent news has moderated these concerns [4][5] - **Customer Sentiment**: Customers are navigating uncertainty, with spending patterns aligning with expectations, particularly in hardware [6][10] Financial Performance - **Q1 Performance**: Gross profit was slightly below expectations, but SG&A expenses met forecasts [5][6] - **Q2 Outlook**: Customer spending patterns in Q2 are consistent with expectations, with a cautious but positive outlook for the quarter [6][7] Customer Spending Trends - **Commercial Segment**: Experienced four consecutive quarters of growth, recovering faster than corporate and enterprise segments [33][34] - **Enterprise Segment**: Spending remains constrained, with delays in large deals being more widespread than initially thought [38][39] Tariff Impact - **Tariff Navigation**: Insight has strong partner relationships to help customers manage tariff impacts, with historical data suggesting a 10% tariff does not significantly affect demand [12][14] - **Inventory Positioning**: Some inventory positioning was done in anticipation of tariffs, particularly in the commercial space [18][19] Competitive Landscape - **Differentiation**: Insight's full solutions portfolio, strong cloud offerings, and technical capabilities differentiate it from competitors [27][28] - **Market Position**: Insight is focused on building relationships with new partners, especially in the AI space, to drive future growth [30] Infrastructure and Hardware Trends - **Infrastructure Spending**: Sluggish infrastructure spending attributed to a longer digestion period than expected, but increased customer dialogue suggests potential recovery [56][57] - **Networking Lag**: Networking is lagging behind storage and compute, but expected to improve in the second half of the year [58] AI and Technology Trends - **AI Spending**: Enterprises are beginning to shift budgets towards AI, but significant spending is not yet materializing [64][65] - **PC Refresh Cycle**: The impending end of Windows 10 is driving a refresh cycle, with commercial customers in the middle innings of this cycle [45][46] Financial Guidance - **Gross Profit Expectations**: Q1 gross profit was down 8%, but guidance for the rest of the year suggests a return to low single-digit growth [67][69] - **Cloud Growth**: Cloud services are expected to grow in the double digits, despite headwinds from partner program changes [75] SADA Update - **SADA Performance**: The SADA team is pivoting effectively to focus on services, which is seen as a key differentiator for future growth [78][79] Conclusion - **Outlook**: Insight Enterprises is cautiously optimistic about the second half of the year, with a focus on managing macro uncertainties, enhancing customer relationships, and leveraging its diverse portfolio to navigate competitive pressures [7][8][9]

Financial Performance - Total net sales for the three months ended March 31, 2025, were $2,103,556, a decrease of 11.6% compared to $2,379,485 in the same period of 2024[20] - Gross profit for the three months ended March 31, 2025, was $406,477, down 7.7% from $440,928 in the prior year[20] - Net earnings for the three months ended March 31, 2025, were $7,514, a significant decline of 88.8% compared to $67,027 in the same period of 2024[20] - Basic net earnings per share decreased to $0.24 for the three months ended March 31, 2025, from $2.06 in the same period of 2024[20] - Adjusted earnings from operations for Q1 2025 were $102,352,000, down from $121,750,000 in Q1 2024, reflecting a decline of 15.9%[86] - Earnings from operations decreased 40% year-over-year to $60.1 million, primarily due to a decrease in gross profit and increased selling and administrative expenses[98] - Net earnings for the first quarter of 2025 were $7.5 million, a significant decrease from $67.0 million in the first quarter of 2024, resulting in diluted earnings per share of $0.22, down 87% year-over-year[98] Assets and Liabilities - Total current assets increased to $5,390,136 as of March 31, 2025, compared to $4,844,622 as of December 31, 2024, reflecting a growth of 11.3%[18] - Total liabilities increased to $6,331,629 as of March 31, 2025, from $5,677,967 as of December 31, 2024, representing a rise of 11.5%[18] - Long-term debt increased to $961,172,000 as of March 31, 2025, from $531,233,000 at the end of 2024, reflecting a significant rise of approximately 81%[45] - Total current liabilities rose to $4,385,800 as of March 31, 2025, up from $4,122,202 as of December 31, 2024, indicating an increase of 6.4%[18] Cash Flow and Financing - Cash provided by operating activities in Q1 2025 was $78,050 thousand, down from $247,179 thousand in Q1 2024, reflecting a significant decline[27] - Cash, cash equivalents, and restricted cash at the end of Q1 2025 totaled $324,091 thousand, down from $381,141 thousand at the end of Q1 2024[27] - The company reported a net cash used in financing activities of $15,473 thousand in Q1 2025, compared to $125,267 thousand in Q1 2024, showing improved cash management[27] - The company had net borrowings under its ABL facility of $423.8 million in Q1 2025, compared to net repayments of $42.2 million in Q1 2024[144] Revenue Breakdown - Revenue for the three months ended March 31, 2025, totaled $2,103,556,000, with North America contributing $1,700,643,000[81] - Hardware sales accounted for $1,141,516,000 of total revenue, while software and services contributed $566,284,000 and $395,756,000, respectively[81] - Net sales in North America decreased 11% to $1.7 billion, driven by a 33% decrease in software sales and a 7% decrease in services sales, partially offset by a 2% increase in hardware sales[110] - EMEA net sales decreased 17% to $342.8 million, with software sales down 32% and hardware sales down 5%, while services sales increased by 3%[112] - APAC net sales decreased 3% to $60.1 million, with hardware sales down 13% and services sales down 5%, but software sales increased by 2%[113] Operational Expenses - Operating expenses for the three months ended March 31, 2025, were $339,173, slightly up from $337,434 in the same period of 2024[20] - Significant selling and administrative expenses for Q1 2025 were $295,278,000, compared to $311,135,000 in Q1 2024, reflecting a reduction of 5.1%[86] - Total costs of goods sold for Q1 2025 were $1,697,079,000, compared to $1,938,557,000 in Q1 2024, marking a decrease of 12.4%[86] Tax and Compliance - The effective tax rate for the three months ended March 31, 2025, was 60.5%, significantly higher than the federal statutory rate of 21.0%[62] - As of March 31, 2025, the company had approximately $12,029,000 of unrecognized tax benefits, with $1,614,000 related to accrued interest[63] Strategic Initiatives - The company anticipates that gross margin expansion could continue into future periods as it focuses on selling solutions and increasing services net sales[12] - The company expects to incur additional acquisition expenses as part of its acquisition strategy and plans to use excess cash for strategic acquisitions[12] - The acquisition of Infocenter was completed on May 1, 2024, for a total purchase price of $265,000,000, enhancing the company's service offerings[89] Market Conditions - Inflation has contributed to sustained high interest rates, which are expected to remain above historical levels throughout most of 2025[102] - The company is actively monitoring the global macroeconomic environment, including supply chain impacts and demand fluctuations due to tariffs[102]

Core Insights - Insight Enterprises reported $2.1 billion in revenue for the quarter ended March 2025, reflecting a year-over-year decline of 11.6% [1] - The EPS for the same period was $2.06, down from $2.37 a year ago, with an EPS surprise of +1.48% compared to the consensus estimate of $2.03 [1] Revenue and Earnings Performance - The reported revenue was a surprise of -2.52% against the Zacks Consensus Estimate of $2.16 billion [1] - Key metrics indicate that net sales for services were $395.76 million, which is a -4.8% change year-over-year and below the estimated $422.02 million [4] - Net sales for products were $1.71 billion, representing a -13% year-over-year change, slightly above the estimated $1.70 billion [4] Profitability Metrics - Gross profit for products was reported at $175.97 million, exceeding the estimated $174.34 million [4] - Gross profit for services was $230.50 million, which fell short of the estimated $249.54 million [4] Stock Performance - Shares of Insight Enterprises have returned -6.4% over the past month, compared to the Zacks S&P 500 composite's -0.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]