Insight Enterprises(US:NSIT)2024-08-01 18:00Financial Performance - Total net sales for Q2 2024 were $2,161,662, a decrease of 8.0% compared to $2,349,596 in Q2 2023[11] - Gross profit increased to $453,365 in Q2 2024, up 4.6% from $433,190 in Q2 2023[11] - Net earnings for Q2 2024 were $87,444, representing a 4.0% increase from $80,482 in Q2 2023[11] - Earnings from operations rose to $131,073 in Q2 2024, compared to $118,611 in Q2 2023, marking an increase of 10.3%[11] - The company reported a gross margin improvement, with gross profit as a percentage of total net sales increasing to 20.9% in Q2 2024 from 18.4% in Q2 2023[11] - Services net sales increased by 7.7% to $435,227 in Q2 2024, compared to $403,987 in Q2 2023[11] - Net earnings for the quarter ending June 30, 2024, were reported at $87,444, compared to $80,482 for the same period in 2023, representing an increase of 8.4% year-over-year[15] - Net earnings for the second quarter of 2024 reached $154,471,000, an increase from $130,454,000 in the same period of 2023, representing a growth of approximately 18.4%[17] Cash Flow and Liquidity - Net cash provided by operating activities was $292,964,000 for the six months ended June 30, 2024, compared to $187,960,000 for the same period in 2023, indicating a significant increase of about 55.7%[17] - Cash and cash equivalents at the end of the period on June 30, 2024 was $258,350,000, down from $270,785,000 at the beginning of the period[140] - The company reported a decrease in cash, cash equivalents, and restricted cash of $12,435,000 for the period, ending with a total of $258,350,000[17] - Operating activities generated $293.0 million in cash for the six months ended June 30, 2024, up from $188.0 million in the same period of 2023, reflecting a 56% increase[141] Equity and Stock Repurchases - As of June 30, 2024, total stockholders' equity increased to $1,847,545, up from $1,755,491 at March 31, 2024, reflecting a growth of approximately 5.2%[15] - The company repurchased treasury stock worth $99,980 during the quarter, impacting total stockholders' equity[15] - The company repurchased 187,357 shares of common stock for a total cost of $35,000,000 during the six months ended June 30, 2024, at an average price of $186.81 per share[50] - The company repurchased 720,175 shares for $99,980,000 at an average price of $138.83 per share during Q2 2023, while no shares were repurchased in Q2 2024[9][10] Debt and Financing - The company’s long-term debt as of June 30, 2024, totaled $995,072,000, with a long-term debt portion of $663,075,000 after accounting for the current portion[35] - The company issued $500,000,000 of 6.625% Senior Notes due 2032, with net proceeds used to repay a portion of outstanding borrowings under the ABL facility[36] - Borrowings on the ABL revolving credit facility amounted to $2,451,966,000, while repayments totaled $2,872,410,000 during the financing activities[17] - The company has a maximum borrowing amount under the ABL facility of $1,800,000,000, with $171,283,000 outstanding as of June 30, 2024[35] Segment Performance - The company is organized into three operating segments: North America, EMEA, and APAC, focusing on hardware, software, and services including cloud solutions[19] - For the three months ended June 30, 2024, total revenue was $2,161,662,000, with North America contributing $1,732,357,000, EMEA $368,873,000, and APAC $60,432,000[60] - Net sales in North America decreased by 9%, or $164.8 million, for the three months ended June 30, 2024, primarily due to lower hardware and software sales[104] - Net sales in EMEA decreased 6%, or $22.9 million, for the three months ended June 30, 2024, compared to the same period in 2023, with software and hardware sales decreasing by 15% and 5%, respectively[108] - In APAC, net sales were relatively flat for the three months ended June 30, 2024, with a slight increase of 1% year over year, driven by a 12% increase in services net sales[110] Operational Efficiency and Future Outlook - The company expects to continue facing supply constraints but believes they have normalized back to near historic levels[5] - Future capital expenditures are projected to increase as the company continues to evolve its IT systems and expand its cloud business[5] - The company aims to enhance operational efficiency through shared services and infrastructure to realize economies of scale[66] - The company expects continued higher interest rates due to inflation, which may impact financial condition and liquidity into the second half of 2024[97] Tax and Compliance - The effective tax rate is expected to return to more typical levels in the foreseeable future[5] - Effective tax rates for the three and six months ended June 30, 2024 were 25.5% and 24.8%, respectively, compared to 26.3% and 25.7% for the same periods in 2023[6][7] - As of June 30, 2024, the company had approximately $11,720,000 of unrecognized tax benefits, down from $13,947,000 as of December 31, 2023[7] Acquisitions - The acquisition of Infocenter.io Corporation was completed for a cash purchase price of $265,000,000, with an estimated fair value of earnout payments of $24,200,000 based on EBITDA performance through April 2026[75] - The acquisition of SADA Systems, LLC was finalized for a cash purchase price of $399,762,000, with an additional earnout potential of up to $390,000,000 based on performance through 2026[79] - Amdaris Group Limited was acquired for a preliminary cash purchase price of approximately $82,875,000, with an earnout range of $0 to $54,391,000 through 2026[88]