Insight Enterprises(US:NSIT)2025-05-01 16:27Financial 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]