Insight Enterprises(US:NSIT)2024-10-31 18:03Financial Performance - Total net sales for Q3 2024 were $2,087,886, a decrease of 7.9% compared to $2,266,286 in Q3 2023[12] - Gross profit increased to $432,085 in Q3 2024, up from $408,870 in Q3 2023, reflecting a gross margin improvement[12] - Net earnings for Q3 2024 were $58,208, a slight decrease from $60,247 in Q3 2023, resulting in a diluted earnings per share of $1.52[12] - Total comprehensive income for Q3 2024 was $75,435, significantly higher than $47,921 in Q3 2023, driven by foreign currency translation adjustments[14] - Operating expenses rose to $329,996 in Q3 2024 from $309,793 in Q3 2023, primarily due to increased selling and administrative expenses[12] - The company reported a net interest expense of $16,629 in Q3 2024, compared to $12,013 in Q3 2023, indicating higher borrowing costs[12] - The company’s earnings before income taxes were $75,118 in Q3 2024, down from $80,052 in Q3 2023, reflecting a challenging operating environment[12] - Net earnings for Q3 2024 reached $212,679,000, a 11.5% increase from $190,701,000 in Q3 2023[18] Assets and Liabilities - As of September 30, 2024, total current assets increased to $4,660,508, up from $4,331,301 as of December 31, 2023, representing a growth of approximately 7.6%[10] - Accounts receivable rose to $3,897,481, compared to $3,568,290 at the end of 2023, reflecting an increase of about 9.2%[10] - Goodwill increased significantly to $888,808 from $684,345, marking a rise of approximately 29.9%[10] - Total liabilities grew to $5,520,143, up from $4,550,617, indicating an increase of around 21.3%[10] - The current portion of long-term debt decreased slightly to $332,439 from $348,004, a reduction of about 4.5%[10] - Long-term debt increased to $754,377 from $592,517, reflecting a strategic decision to finance growth initiatives[10] - The total stockholders' equity increased to $1,766,300 as of September 30, 2024, compared to $1,735,733 at the end of 2023, reflecting retained earnings growth[10] Cash Flow and Investments - Net cash provided by operating activities was $417,731,000, slightly up from $413,742,000 in the previous year[18] - The company reported a net cash used in investing activities of $(288,868,000), compared to $(96,430,000) in the previous year[18] - The company completed the sale of properties in Montreal and Sheffield for total net proceeds of approximately $15,476,000, recognizing a net gain of approximately $6,813,000[35] - The company paid approximately $265.0 million to acquire Infocenter during the nine months ended September 30, 2024[181] - The company repurchased $200.0 million of its common stock during the nine months ended September 30, 2024, compared to $217.1 million in the same period of 2023[183] Strategic Focus and Market Conditions - The company expects gross margins to improve as the mix of services and solutions increases, indicating a strategic focus on higher-margin offerings[7] - The company anticipates continued inflationary pressures and higher interest rates for the remainder of 2024, which may impact operational costs[7] - The company is focused on expanding its global cloud business and developing scalable solutions to meet increasing demand for big data solutions[7] - Supply chain constraints have eased, but a general slowdown in client decision-making is expected to continue in the short term[123] - Inflation has led to higher interest rates on variable rate facilities, which are anticipated to remain above historical levels for the remainder of 2024[124] Acquisitions - The acquisition of Infocenter.io Corporation was completed for a cash purchase price of $265,000,000, enhancing the company's Solutions Integrator offerings[93] - The acquisition of SADA Systems, LLC was finalized for a cash purchase price of $399,762,000, aimed at strengthening the company's multicloud solutions[97] - The company acquired SADA on December 1, 2023, and Infocenter on May 1, 2024, which contributed to the increase in services net sales[133] Revenue Breakdown - Revenue for the three months ended September 30, 2024, totaled $2,087,886,000, with North America contributing $1,716,583,000[78] - Hardware revenue for the three months ended September 30, 2024, was $1,137,518,000, while software and services revenues were $536,261,000 and $414,107,000, respectively[78] - For the nine months ended September 30, 2024, total revenue reached $6,939,829, with North America at $5,592,002, EMEA at $1,173,126, and APAC at $174,701[83] - Net sales in North America decreased 8%, or $144.3 million, for the three months ended September 30, 2024, driven by decreases in hardware and software net sales[132] - In EMEA, net sales decreased 12%, or $41.8 million, for the three months ended September 30, 2024, with software and hardware net sales decreasing by 24% and 8%, respectively[135] - APAC net sales increased 15%, or $7.7 million, for the three months ended September 30, 2024, driven by a 41% increase in software net sales[138] Operational Efficiency - The cash conversion cycle improved to 18 days in the third quarter of 2024, down from 35 days in the third quarter of 2023[179] - The company continues to focus on expanding its market presence and enhancing its product offerings to drive future growth[84] - The company recognized net gains of $4,000,000 in selling and administrative expenses due to a decrease in the estimated fair value of earnout payments for the three and nine months ended September 30, 2024[97]