Insight Enterprises(US:NSIT)2025-10-30 17:25Financial Performance - Total net sales for Q3 2025 were $2,003,845, a decrease of 4.0% compared to $2,087,886 in Q3 2024[19]. - Net earnings for Q3 2025 were $50,947, down 12.9% from $58,208 in Q3 2024[22]. - Gross profit for the nine months ended September 30, 2025, was $1,282,999, a decrease of 3.3% from $1,326,378 in the same period of 2024[19]. - Earnings from operations for the nine months ended September 30, 2025, were $239,702, down 26.0% from $323,910 in the same period of 2024[19]. - Total comprehensive income for Q3 2025 was $41,188, significantly lower than $75,435 in Q3 2024, reflecting a decline of 45.5%[22]. - Net earnings for the nine months ended September 30, 2025, were $105,393,000, a decrease of 50.5% compared to $212,679,000 in 2024[28]. - Total consolidated net sales for the three months ended September 30, 2025, reached $2,003,845,000, a decrease from $2,087,886,000 in the same period of 2024, representing a decline of approximately 4.0%[92]. - For the nine months ended September 30, 2025, total consolidated net sales were $6,198,883,000, down from $6,629,033,000 in the same period of 2024, a decrease of about 6.5%[88]. Assets and Liabilities - As of September 30, 2025, total current assets increased to $6,504,283, up from $4,844,622 as of December 31, 2024, representing a growth of approximately 34.2%[17]. - Accounts receivable rose to $5,479,567, compared to $4,172,104 in the previous year, indicating an increase of about 31.2%[17]. - Total liabilities increased to $7,321,314 from $5,677,967, reflecting a rise of approximately 28.8%[17]. - Long-term debt surged to $1,392,626, up from $531,233, marking an increase of about 162.5%[17]. - Stockholders' equity decreased to $1,580,733 from $1,770,611, a decline of approximately 10.7%[17]. - Borrowings on the ABL revolving credit facility increased to $4,823,236,000, compared to $3,631,660,000 in the previous year, marking a rise of 32.9%[28]. - The ABL revolving credit facility had an outstanding balance of $899,804,000 as of September 30, 2025, with a maximum borrowing capacity of $1,800,000,000[46]. Cash Flow and Investments - Net cash provided by operating activities was $150,057,000, down from $417,731,000 in the same period last year, reflecting a decline of 64.1%[28]. - The company reported a net cash used in investing activities of $17,551,000, a decrease from $288,868,000 in the prior year[28]. - Cash, cash equivalents, and restricted cash at the end of the period totaled $549,447,000, up from $319,785,000, reflecting a 71.9% increase[28]. - The company repurchased 600,727 shares for approximately $75,000,000 at an average price of $124.85 per share during Q3 2025[69]. - For the nine months ended September 30, 2025, the company repurchased 1,200,727 shares at a total cost of approximately $151,118,000, with 600,000 shares purchased in a private transaction at a negotiated 3.95% discount[71]. Revenue Breakdown - Revenue for Q3 2025 totaled $2,003,845,000, with North America contributing $1,625,302,000, EMEA $319,758,000, and APAC $58,785,000[85]. - Hardware sales in Q3 2025 amounted to $1,144,225,000, while software and services generated $433,547,000 and $426,073,000, respectively[85]. - Software sales decreased to $433,547,000 in Q3 2025 from $536,261,000 in Q3 2024, reflecting a decline of about 19.2%[92]. - Services revenue for Q3 2025 was $426,073,000, down from $414,107,000 in Q3 2024, showing a growth of 2.9%[92]. Operational Efficiency and Future Outlook - The company anticipates that gross margin expansion could continue into future periods as it focuses on selling solutions and increasing services net sales[11]. - The company expects that pricing pressures in the IT industry will persist, impacting future profitability[11]. - Future income is projected to be sufficient to fully recover deferred tax assets, indicating a positive outlook on tax management[11]. - The company plans to utilize excess cash generated in 2025 for strategic acquisitions and to pay down its ABL facility[11]. - The company is committed to evolving its IT systems to enhance operational efficiency and service delivery[11]. Tax and Regulatory Matters - Effective tax rates for Q3 2025 and the first nine months of 2025 were 27.9% and 31.5%, respectively, higher than the federal statutory rate of 21.0% due to state income taxes and foreign earnings[63]. - As of September 30, 2025, the company had approximately $12,782,000 of unrecognized tax benefits, with $1,646,000 related to accrued interest[66]. - The company is currently under audit for tax years 2017 through 2022, with potential adjustments to unrecognized tax benefits expected to be insignificant[67]. Acquisitions - The company acquired Infocenter for a total purchase price of $265 million, enhancing its Solutions Integrator offering framework[96]. - On October 1, 2025, the company acquired Inspire11 for approximately $212 million, aimed at strengthening its AI capabilities[100]. - The company signed an agreement to acquire Sekuro for approximately AUD130 million, expected to enhance its cybersecurity capabilities in APAC[101].