INSIGHT ENTERPRISES INC
For the period ended Sep 30, 2024. Filed Oct 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 31, 2024
NSIT$158.25+3.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001628280-24-034041
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0001628280-24-044520
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 166 previous paragraphs and 166 current paragraphs.
49 unchanged; 85 reworded; 31 added; 26 removed; 6 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
Our net sales by operating segment were as follows for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):
Current report
•The decrease in software net sales was primarily due to changes in certain vendor relationships (shifting us from a principal to an agent role) as well as the continued migration of on-premise software to cloud solutions, in each case, reported net in services net sales.
Current report
•The increase in services net sales was primarily due to higher sales of cloud solution offerings including from SADA and an increase in Insight Delivered services from SADA and Infocenter, partially offset by declines in Insight Delivered services from our organic business. Our North America organic business excludes SADA, which we acquired on December 1, 2023 and excludes Infocenter, which we acquired on May 1, 2024.
Current report
•The increase in software net sales was primarily due to a significant multiyear transaction in the first quarter, partially offset by changes in certain vendor relationships (shifting from a principal to agent role) as well as the continued migration of on-premise software to cloud solutions, in each case, reported net in services net sales.
Current report
•The decrease in software net sales was primarily due to lower volume of sales to large enterprise and public sector clients reflecting changes in certain vendor relationships as well as continued migration of on-premise software to cloud solutions, in each case, reported net in services net sales.
Current report
•The decrease in software net sales was primarily due to lower volume of sales to large enterprise and public sector clients reflecting changes in certain vendor relationships as well as the continued migration of on-premise software to cloud solutions, in each case, reported net in services net sales.
Current report
•The decrease in hardware net sales was primarily due to lower volume of sales to large enterprise, corporate and public sector clients.
Current report
Net sales in APAC increased 15%, or $7.7 million, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Excluding the effects of fluctuating foreign currency exchange rates, net sales in APAC increased 13%, year over year. Net sales of software and services increased by 41% and 6%, respectively, year over year. These increases were partially offset by a decrease in hardware net sales of 3%, year to year. The net changes for the three months ended September 30, 2024 were the result of the following:
Current report
•An increase in services margin of 203 basis points and an expansion in product margin of 31 basis points.
Current report
•An increase in services margin of 187 basis points and an expansion in product margin of 4 basis points.
Current report
•The increase in services margin primarily reflects an increase in fees for cloud solutions, including from SADA. The increase also reflects a net increase in margin contribution from Insight Core services from SADA and Infocenter, partially offset by a decline in margin contribution from organic Insight Core services.
Current report
•The net expansion in product margin reflects an increase in margin contribution from software due to selling software at higher margins, partially offset by a decrease in margin contribution from hardware.
Current report
•An increase in services margin of 278 basis points and an expansion in product margin of 160 basis points.
Current report
APAC's gross profit for the nine months ended September 30, 2024 increased 11%, or $5.2 million, year over year (increasing 12% when excluding the effects of fluctuating foreign currency exchange rates), compared to the nine months ended September 30, 2023. As a percentage of net sales, gross margin expanded approximately 190 basis points, year over year. The year over year net expansion in gross margin was primarily attributable to the following:
Current report
•An expansion in services margin of 166 basis points and an expansion in product margin of 27 basis points.
Current report
•The expansion in services margin was primarily driven by increased fees for cloud solutions and higher margin contribution from Insight Core services.
Current report
EMEA's earnings from operations for the three months ended September 30, 2024 increased more than 100%, or $5.0 million (also increasing by more than 100% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended September 30, 2023. As a percentage of net sales, earnings from operations increased by approximately 160 basis points to 2.1%. The increase in earnings from operations was primarily driven by an increase in gross profit and decrease in acquisition and integration related expenses, partially offset by an increase in selling and administrative expenses, when compared to the three months ended September 30, 2023.
Current report
EMEA's earnings from operations for the nine months ended September 30, 2024 increased 38%, or $10.6 million (increasing 35% when excluding the effects of fluctuating foreign currency exchange rates), compared to the nine months ended September 30, 2023. As a percentage of net sales, earnings from operations increased by approximately 120 basis points to 3.6%. The increase in earnings from operations was primarily driven by an increase in gross profit and decrease in acquisition and integration related expenses, partially offset by an increase in selling and administrative expenses, when compared to the nine months ended September 30, 2023.
Current report
APAC's earnings from operations for the three months ended September 30, 2024 increased 31%, or $1.3 million (increasing 28% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended September 30, 2023. As a percentage of net sales, earnings from operations increased by approximately 110 basis points to
Current report
9.1%. The increase in earnings from operations was primarily driven by an increase in gross profit, partially offset by an increase in selling and administrative expenses, when compared to the three months ended September 30, 2023.
Current report
APAC's earnings from operations for the nine months ended September 30, 2024 increased 23%, or $3.4 million (also increasing 23% when excluding the effects of fluctuating foreign currency exchange rates), compared to the nine months ended September 30, 2023. As a percentage of net sales, earnings from operations increased by approximately 160 basis points to 10.2%. The increase in earnings from operations was primarily driven by an increase in gross profit, partially offset by an increase in selling and administrative expenses, when compared to the nine months ended September 30, 2023.
Current report
•Capital expenditures were $32.4 million and $29.1 million for the nine months ended September 30, 2024 and 2023, respectively.
Current report
•We had net borrowings under our inventory financing facilities of $3.1 million during the nine months ended September 30, 2024 compared to net repayments of $32.5 million during the nine months ended September 30, 2023.
Current report
•Cash flow provided by operating activities increased 1% during the first nine months of 2024 compared to the same period in 2023.
Current report
•We acquired Amdaris for approximately $82.9 million, net of cash and cash equivalents acquired and excluding earn outs and hold backs in thenine months ended September 30, 2023.
Current report
•We received proceeds from the sale of assets of $13.8 million in the nine months ended September 30, 2024.
Current report
•We received proceeds from the sale of assets, including our properties held for sale, of $15.5 million in the nine months ended September 30, 2023.
Current report
•Capital expenditures were $32.4 million and $29.1 million for the nine months ended September 30, 2024 and 2023, respectively.
Current report
•We had net borrowings under our inventory financing facilities of $3.1 million during the nine months ended September 30, 2024 compared to net repayments of $32.5 million during the nine months ended September 30, 2023.
Current report
•During the nine months ended September 30, 2023, we paid $10.7 million, the majority of the earnout associated with the Hanu acquisition.
Current report
•During the nine months ended September 30, 2024, we repurchased $200.0 million of our common stock.
Removed paragraphs (26)
Previous report
Our net sales by operating segment were as follows for the three and six months ended June 30, 2024 and 2023 (dollars in thousands):
Previous report
•The decrease in software net sales was primarily due to lower sales to large enterprise clients and continued migration of on-premise software to cloud solutions, reported net in services net sales.
Previous report
•The decrease in software net sales was primarily due to lower sales to large enterprise clients and the continued migration of on-premise software to cloud solutions, reported net in services net sales.
Previous report
Net sales in APAC were relatively flat for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Excluding the effects of fluctuating foreign currency exchange rates, net sales in APAC increased 1%, year over year. Net sales of hardware and software decreased by 22% and 2%, respectively, year to year. This decrease was partially offset by an increase in services net sales of 12%, year over year. The net changes for the three months ended June 30, 2024 were the result of the following:
Previous report
•The increase in services net sales was primarily due to higher volume sales of Insight Delivered services and an increase in fees for cloud solutions.
Previous report
•The increase in services net sales was primarily due to higher volume sales of Insight Delivered services and an increase in fees for cloud solutions.
Previous report
•An increase in services margin of 202 basis points and an expansion in product margin of 33 basis points compared to the same period in the prior year.
Previous report
•A net increase in services margin of 180 basis points compared to the same period in the prior year.
Previous report
•A net increase in product margin of 123 basis points and an increase from services margin of 183 basis points.
Previous report
•A net increase in services margin of 407 basis points, partially offset by a contraction in product margin of 44 basis points.
Previous report
•The expansion in services margin was driven by higher margins from Insight Core services and increased fees for cloud solutions.
Previous report
•The contraction in product margin was driven by lower contribution of margin from hardware due to lower volume of sales of hardware in the current year period.
Previous report
APAC's gross profit for the six months ended June 30, 2024 increased 9%, or $2.9 million, year over year (increasing 11% when excluding the effects of fluctuating foreign currency exchange rates), compared to the six months ended June 30, 2023. As a percentage of net sales, gross margin expanded approximately 270 basis points, year over year. The year over year net expansion in gross margin was primarily attributable to the following:
Previous report
•An expansion in services margin of 234 basis points and an expansion in product margin of 34 basis points.
Previous report
•The expansion in services margin was driven by higher margins from Insight Core services and a higher percentage of cloud solutions recognized on a net basis.
Previous report
EMEA's earnings from operations for the three months ended June 30, 2024 increased $4.7 million, or 29% (increasing 30% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended June 30, 2023. As a percentage of net sales, earnings from operations increased by approximately 150 basis points to 5.7%. The increase in earnings from operations was primarily driven by an increase in gross profit, partially offset by an increase in selling and administrative expenses, when compared to the three months ended June 30, 2023.
Previous report
EMEA's earnings from operations for the six months ended June 30, 2024 increased $5.6 million, or 21% (increasing 20% when excluding the effects of fluctuating foreign currency exchange rates), compared to the six months ended June 30, 2023. As a percentage of net sales, earnings from operations increased by approximately 90 basis points to 4.1%. The increase in earnings from operations was driven by an increase in gross profit, partially offset by an increase in selling and administrative expenses, when compared to the six months ended June 30, 2023.
Previous report
APAC's earnings from operations for the three months ended June 30, 2024 increased $1.3 million, or 19% (increasing 21% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended June 30, 2023. As a percentage of net sales, earnings from operations increased by approximately 230 basis points to 13.7%. The increase in earnings from operations was primarily driven by an increase in gross profit, partially offset by an increase in selling and administrative expenses, when compared to the three months ended June 30, 2023.
Previous report
APAC's earnings from operations for the six months ended June 30, 2024 increased $2.1 million, or 19% (increasing 21% when excluding the effects of fluctuating foreign currency exchange rates), compared to the six months ended June 30, 2023. As a percentage of net sales, earnings from operations increased by approximately 190 basis points to 10.7%. The increase in earnings from operations was driven by an increase in gross profit, partially offset by an increase in selling and administrative expenses, when compared to the six months ended June 30, 2023.
Previous report
June 30, 2024 increased 35%, or $7.0 million, compared to the six months ended June 30, 2023. The increase in the six months ended June 30, 2024 was due to higher interest rates and loan balance under our ABL facility and the issuance of the Senior Notes, partially offset by higher interest income and decreased imputed interest under our inventory financing facilities.
Previous report
•Capital expenditures were $18.6 million and $13.2 million for the six months ended June 30, 2024 and 2023, respectively.
Previous report
•We had net repayments under our inventory financing facilities of $13.0 million during the six months ended June 30, 2024 compared to net borrowings of $30.8 million during the six months ended June 30, 2023.
Previous report
•The increase in cash flow from operating activities was primarily driven by increases in accounts payable, partially offset by increases in accounts receivable.
Previous report
•Capital expenditures were $18.6 million and $13.2 million for the six months ended June 30, 2024 and 2023, respectively.
Previous report
•We had net repayments under our inventory financing facilities of $13.0 million during the six months ended June 30, 2024 compared to net borrowings of $30.8 million during the six months ended June 30, 2023.
Previous report
•During the six months ended June 30, 2024, we repurchased $35.0 million of our common stock.
Reworded paragraphs (85)
Previous wording
•Net sales of $2.2 billion decreased 8% compared to the three months ended June 30, 2023. The decrease in net sales reflects decreases in hardware and software net sales, partially offset by an increase in services net sales. Excluding the effects of fluctuating foreign currency exchange rates, net sales also decreased 8% compared to the second quarter of 2023.
Current wording
•Net sales of $2.1 billion decreased 8% compared to the three months ended September 30, 2023. The decrease in net sales reflects decreases in hardware and software net sales, partially offset by an increase in services net sales. Excluding the effects of fluctuating foreign currency exchange rates, net sales also decreased 8% compared to the third quarter of 2023.
Previous wording
•Gross profit of $453.4 million increased 5% compared to the three months ended June 30, 2023. Excluding the effects of fluctuating foreign currency exchange rates, gross profit also increased 5% compared to the second quarter of 2023.
Current wording
•Gross profit of $432.1 million increased 6% compared to the three months ended September 30, 2023. Excluding the effects of fluctuating foreign currency exchange rates, gross profit increased 5% compared to the third quarter of 2023.
Previous wording
•Compared to the three months ended June 30, 2023, gross margin expanded approximately 260 basis points to 21.0% of net sales in the three months ended June 30, 2024. This expansion primarily reflects an increase in higher margin services net sales compared to the same period in the prior year.
Current wording
•Compared to the three months ended September 30, 2023, gross margin expanded approximately 270 basis points to 20.7% of net sales in the three months ended September 30, 2024. This expansion primarily reflects an increase in higher margin services net sales compared to the same period in the prior year.
Previous wording
•Earnings from operations increased 11%, year over year, to $131.1 million in the second quarter of 2024 compared to $118.6 million in the second quarter of 2023. The increase was primarily due to an increase in gross profit in the current quarter. Excluding the effects of fluctuating foreign currency exchange rates, earnings from operations also increased 11% year over year.
Current wording
•Earnings from operations increased 1%, year over year, to $92.9 million in the third quarter of 2024 compared to $91.9 million in the third quarter of 2023. The increase was primarily due to an increase in gross profit in the current quarter, partially offset by an increase in selling and administrative expenses. Excluding the effects of fluctuating foreign currency exchange rates, earnings from operations also increased 1% year over year.
Previous wording
•Net earnings and diluted earnings per share were $87.4 million and $2.27, respectively, for the second quarter of 2024. This compares to net earnings of $80.5 million and diluted earnings per share of $2.17 for the second quarter of 2023. Diluted earnings per share increased 5% year over year, and excluding the effects of fluctuating foreign currency exchange rates, also increased 5% year over year.
Current wording
•Net earnings and diluted earnings per share were $58.2 million and $1.52, respectively, for the third quarter of 2024. This compares to net earnings of $60.2 million and diluted earnings per share of $1.62 for the third quarter of 2023. Diluted earnings per share decreased 6% year to year, and excluding the effects of fluctuating foreign currency exchange rates, also decreased 6% year to year.
Previous wording
this information excluding the effects of fluctuating foreign currency exchange rates provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. In computing the changes in amounts and percentages, we compare the current period amount as translated into U.S. dollars under the applicable accounting standards to the prior period amount in local currency translated into U.S. dollars utilizing the weighted average translation rate for the current period. The performance measures excluding the effects of fluctuating foreign currency exchange rates should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.
Current wording
Throughout the “Quarterly Overview” and “Results of Operations” sections of this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we refer to changes in net sales, gross profit, selling and administrative expenses and earnings from operations on a consolidated basis and in North America, EMEA and APAC excluding the effects of fluctuating foreign currency exchange rates, which are financial measures that are adjusted from our financial results prepared in accordance with the United States generally accepted accounting principles(“GAAP”). We believe providing this information excluding the effects of fluctuating foreign currency exchange rates provides valuable supplemental information to investors regarding our underlying business and results of operations, consistent with how we, including our management, evaluate our performance. In computing the changes in amounts and percentages, we compare the current period amount as translated into U.S. dollars under the applicable accounting standards to the prior period amount in local currency translated into U.S. dollars utilizing the weighted average translation rate for the current period. The performance measures excluding the effects of fluctuating foreign currency exchange rates should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.
Previous wording
Supply Chain Constraints and Inflation Update
Current wording
Supply Chain Constraints, Demand and Inflation Update
Previous wording
Supply constraints that have had an industry-wide impact since the beginning of 2020 eased in the second half of 2023. We believe that the remaining supply constraints and extended lead times for certain infrastructure, including networking products, have now normalized back to near historic levels. Despite the easing supply constraints, we continue to see a general slowdown in our clients' decision making, which we believe could continue in the short term.
Current wording
Supply constraints that have had an industry-wide impact since the beginning of 2020 eased in the second half of 2023. We believe that any remaining supply constraints and extended lead times for certain infrastructure, including networking products, have now normalized back to near historic levels. Despite the easing supply constraints, we continue to see a general slowdown in our clients' decision making, which we believe will continue in the short term.
Previous wording
Inflation resulted in continued higher interest rates on all of our variable rate facilities and we expect these higher rates may continue into the second half of 2024. We are actively monitoring changes to the global macroeconomic environment, including those impacting our supply chain and interest rates, and assessing the potential impacts these challenges may have on our current results, financial condition and liquidity. We are also mindful of the potential impact these conditions could have on our clients, partners and prospects for the remainder of 2024 and beyond.
Current wording
Inflation contributed to higher interest rates on all of our variable rate facilities. While these interest rates are expected to decrease, we anticipate higher than historical rates for the remainder of 2024. We are actively monitoring changes to the global macroeconomic environment, including those impacting our supply chain and interest rates, and assessing the potential impacts these challenges may have on our current results, financial condition and liquidity. We are also mindful of the potential impact these conditions could have on our clients, partners and prospects for the remainder of 2024 and beyond.
Previous wording
Our consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). For a summary of significant accounting policies, see Note 1 to the Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results, however, may differ from estimates we have made. Members of our senior management have discussed the critical accounting estimates and related disclosures with the Audit Committee of our Board of Directors.
Current wording
Our consolidated financial statements have been prepared in accordance with GAAP. For a summary of significant accounting policies, see Note 1 to the Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results, however, may differ from estimates we have made. Members of our senior management have discussed the critical accounting estimates and related disclosures with the Audit Committee of our Board of Directors.
Previous wording
The following table sets forth certain financial data as a percentage of net sales for the three and six months ended June 30, 2024 and 2023:
Current wording
The following table sets forth certain financial data as a percentage of net sales for the three and nine months ended September 30, 2024 and 2023:
Previous wording
Our gross profit across the business and related to product versus services sales are, and will continue to be, impacted by partner incentives, which can and do change significantly in the amounts made available and in the related product or services sales being incentivized by the partner. Incentives from our largest partners are significant and changes in the amounts and incentive requirements, including those related to cloud transactions, which occur regularly, could impact our results of operations to the extent we are unable to shift our focus and respond to them. For a discussion of risks associated with our reliance on partners, see “Risk Factors – Risks related to Our Business, Operations and Industry – We rely on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can change significantly in the amounts made available and the requirements year over year,” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
Our gross profit across the business and related to product versus services sales are, and will continue to be, impacted by partner incentives, which can and do change significantly in the amounts made available and in the related product or services sales being incentivized by the partner. Incentives from our largest partners are significant and changes in the amounts and incentive requirements, including those related to cloud transactions, which occur regularly, have and could continue to impact our results of operations to the extent we are unable to shift our focus and respond to them. For a discussion of risks associated with our reliance on partners, see “Risk Factors – Risks related to Our Business, Operations and Industry – We rely on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can change significantly in the amounts made available and the requirements year over year,” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
Net Sales. Net sales of $2.2 billion for the three months ended June 30, 2024 decreased 8%, year to year, compared to the three months ended June 30, 2023, reflecting decreases in our North America and EMEA operating segments. Net sales of $4.5 billion for the six months ended June 30, 2024 decreased 3%, year to year, compared to the six months ended June 30, 2023, also reflecting decreases in each of our operating segments.
Current wording
Net Sales. Net sales of $2.1 billion for the three months ended September 30, 2024 decreased 8%, year to year, compared to the three months ended September 30, 2023, reflecting decreases in our North America and EMEA operating segments. Net sales of $6.6 billion for the nine months ended September 30, 2024 decreased 4%, year to year, compared to the nine months ended September 30, 2023, also reflecting decreases in our North America and EMEA operating segments.
Previous wording
Our net sales by offering category for North America for the three and six months ended June 30, 2024 and 2023 were as follows (dollars in thousands):
Current wording
Our net sales by offering category for North America for the three and nine months ended September 30, 2024 and 2023 were as follows (dollars in thousands):
Previous wording
Net sales in North America decreased 9%, or $164.8 million, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, driven by decreases in hardware and software net sales, partially offset by an increase in services net sales. Hardware and software net sales decreased 11% and 12%, year to year, respectively. These decreases were partially offset by an increase in services net sales of 5%. The net changes for the three months ended June 30, 2024 were the result of the following:
Current wording
Net sales in North America decreased 8%, or $144.3 million, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, driven by decreases in hardware and software net sales, partially offset by an increase in services net sales. Hardware and software net sales decreased 13% and 5%, year to year, respectively. These decreases were partially offset by an increase in services net sales of 9%. The net changes for the three months ended September 30, 2024 were the result of the following:
Previous wording
•The decrease in hardware net sales was due to lower volume of sales primarily to large enterprise and corporate clients due to lower demand. This decline was driven by infrastructure sales.
Current wording
•The decrease in hardware net sales was due to lower volume of sales primarily to large enterprise and corporate clients due to lower demand. This decline was driven by infrastructure and device sales.
Previous wording
Net sales in North America decreased 3%, or $94.0 million, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, driven by a decrease in hardware net sales. Hardware net sales decreased by 13%, year to year. This decrease was partially offset by software and services net sales increases of 18% and 8%, respectively, year over year. The net changes for the six months ended June 30, 2024 were the result of the following:
Current wording
Net sales in North America decreased 4%, or $238.2 million, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, driven by a decrease in hardware net sales. Hardware net sales decreased by 13%, year to year. This decrease was partially offset by software and services net sales increases of 11% and 9%, respectively, year over year. The net changes for the nine months ended September 30, 2024 were the result of the following:
Previous wording
•The increase in services net sales was primarily due to higher sales of cloud solution offerings, including from SADA, partially offset by a decline in software maintenance.
Current wording
•The increase in services net sales was primarily due to higher sales of cloud solution offerings, including from SADA, and an increase in Insight Delivered services from SADA and Infocenter, partially offset by declines in Insight Delivered services from our organic business and in software maintenance.
Previous wording
Our net sales by offering category for EMEA for the three and six months ended June 30, 2024 and 2023 were as follows (dollars in thousands):
Current wording
Our net sales by offering category for EMEA for the three and nine months ended September 30, 2024 and 2023 were as follows (dollars in thousands):
Previous wording
Net sales in EMEA decreased 6%, or $22.9 million, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Excluding the effects of fluctuating foreign currency exchange rates, net sales in EMEA also decreased 6%, year to year. Net sales of software and hardware decreased by 15% and 5%, respectively, year to year, partially offset by an increase in services net sales of 21%, year over year. The net changes for the three months ended June 30, 2024 were the result of the following:
Current wording
Net sales in EMEA decreased 12%, or $41.8 million, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Excluding the effects of fluctuating foreign currency exchange rates, net sales in EMEA decreased 13%, year to year. Net sales of software and hardware decreased by 24% and 8%, respectively, year to year, partially offset by an increase in services net sales of 17%, year over year. The net changes for the three months ended September 30, 2024 were the result of the following:
Previous wording
•The increase in services net sales was primarily due to increases in Insight Delivered services net sales, including from Amdaris, which we acquired on August 17, 2023.
Current wording
•The increase in services net sales was primarily due to an increase in Insight Delivered services net sales, including from Amdaris, which we acquired on August 17, 2023.
Previous wording
Net sales in EMEA decreased 5%, or $37.0 million, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Excluding the effects of fluctuating foreign currency exchange rates, net sales in EMEA decreased 6%, year to year. Net sales of software and hardware decreased by 10% and 11%, respectively, year to year, partially offset by an increase in services net sales of 33%, year over year. The net changes for the six months ended June 30, 2024 were the result of the following:
Current wording
Net sales in EMEA decreased 7%, or $78.8 million, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Excluding the effects of fluctuating foreign currency exchange rates, net sales in EMEA decreased 8%, year to year. Net sales of software and hardware decreased by 14% and 10%, respectively, year to year, partially offset by an increase in services net sales of 28%, year over year. The net changes for the nine months ended September 30, 2024 were the result of the following:
Previous wording
•The increase in services net sales was primarily due to increases in Insight Delivered services net sales, including from Amdaris.
Current wording
•The increase in services net sales was primarily due to an increase in Insight Delivered services net sales, including from Amdaris.
Previous wording
Our net sales by offering category for APAC for the three and six months ended June 30, 2024 and 2023 were as follows (dollars in thousands):
Current wording
Our net sales by offering category for APAC for the three and nine months ended September 30, 2024 and 2023 were as follows (dollars in thousands):
Previous wording
•The increase in software net sales was due to higher volume of sales to large enterprise and public sector clients, partially offset by the continued migration of on-premise software to cloud solutions.
Current wording
•The increase in software net sales was due to higher volume of sales to large enterprise and public sector clients, partially offset by the continued migration of on-premise software to cloud solutions, reported net in services net sales.
Previous wording
•The increase in services net sales was primarily due to higher sales of cloud solution offerings, including from SADA, which we acquired on December 1, 2023.
Current wording
•The increase in services net sales was primarily due to an increase in fees for cloud solutions.
Previous wording
Net sales in APAC decreased 1%, or $1.4 million, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Excluding the effects of fluctuating foreign currency exchange rates, net sales in APAC increased 1%, year over year. Net sales of hardware decreased 25%, year to year. This decrease was partially offset by increases in software and services net sales of 1% and 7%, respectively, year over year. The net changes for the six months ended June 30, 2024 were the result of the following:
Current wording
Net sales in APAC increased 4%, or $6.3 million, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Excluding the effects of fluctuating foreign currency exchange rates, net sales in APAC increased 5%, year over year. Net sales of software and services increased by 11% and 7%, respectively, year over year. These increases were partially offset by a decrease in hardware net sales of 18%, year to year. The net changes for the nine months ended September 30, 2024 were the result of the following:
Previous wording
•The increase in software net sales was primarily due to a significant multiyear transaction in the first quarter and higher volume of software licensing, partially offset by the continued migration of on-premise software to cloud solutions, reported net in services net sales.
Current wording
•The increase in software net sales was due to higher volumes of sales to large enterprise and public sector clients, partially offset by the continued migration of on-premise software to cloud solutions, reported net in services net sales.
Previous wording
•The increase in services margin reflects an increase in fees for cloud solutions and an increase in margin contribution from Insight Core services.
Current wording
•The increase in services net sales was primarily due to an increase in fees for cloud solutions and an increase in Insight Delivered services.
Previous wording
The percentage of net sales by category for North America, EMEA and APAC were as follows for the three and six months ended June 30, 2024 and 2023:
Current wording
The percentage of net sales by category for North America, EMEA and APAC were as follows for the three and nine months ended September 30, 2024 and 2023:
Previous wording
Gross Profit. Gross profit increased 5%, or $20.2 million, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, with gross margin expanding approximately 260 basis points to 21.0% for the three months ended June 30, 2024 compared to 18.4% for the three months ended June 30, 2023. Gross profit increased 8%, or $69.8 million, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, with gross margin expanding approximately 210 basis points to 19.7% for the six months ended June 30, 2024 compared to 17.6% for the six months ended June 30, 2023.
Current wording
Gross Profit. Gross profit increased 6%, or $23.2 million, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, with gross margin expanding approximately 270 basis points to 20.7% for the three months ended September 30, 2024 compared to 18.0% for the three months ended September 30, 2023. Gross profit increased 8%, or $93.0 million, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, with gross margin expanding approximately 220 basis points to 20.0% for the nine months ended September 30, 2024 compared to 17.8% for the nine months ended September 30, 2023.
Previous wording
Our gross profit and gross profit as a percentage of net sales by operating segment were as follows for the three and six months ended June 30, 2024 and 2023 (dollars in thousands):
Current wording
Our gross profit and gross profit as a percentage of net sales by operating segment were as follows for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):
Previous wording
North America's gross profit for the three months ended June 30, 2024 increased 3%, or $11.0 million, compared to the three months ended June 30, 2023. As a percentage of net sales, gross margin expanded approximately 230 basis points to 20.4% for the second quarter of 2024. The year over year net expansion in gross margin was primarily attributable to the following:
Current wording
North America's gross profit for the three months ended September 30, 2024 increased 4%, or $14.2 million, compared to the three months ended September 30, 2023. As a percentage of net sales, gross margin expanded approximately 240 basis points to 20.3% for the third quarter of 2024. The year over year net expansion in gross margin was primarily attributable to the following:
Previous wording
•The increase in services margin reflects an increase in fees for cloud solutions, including from SADA, and an increase in margin contribution from Insight Core services (consisting of Insight Delivered and managed services), including from Infocenter, which we acquired on May 1, 2024, partially offset by a decrease in product warranty.
Current wording
•The increase in services margin reflects an increase in fees for cloud solutions, including from SADA. There was also an increase in margin contribution from Insight Core services (consisting of Insight Delivered and managed services) from SADA and Infocenter, partially offset by a decline in margin contribution from organic Insight Core services and a decrease in software maintenance.
Previous wording
•The expansion in product margin reflects an increase in margin contribution from software and hardware net sales due to selling product at higher margins.
Current wording
•The expansion in product margin reflects an increase in margin contribution from software and hardware net sales due to selling product at higher margins than in the prior year period.
Previous wording
North America's gross profit for the six months ended June 30, 2024 increased 7%, or $45.7 million, compared to the six months ended June 30, 2023. As a percentage of net sales, gross margin expanded approximately 180 basis points to 19.4% for the six months ended June 30, 2024. The year over year net expansion in gross margin was primarily attributable to the following:
Current wording
North America's gross profit for the nine months ended September 30, 2024 increased 6%, or $59.9 million, compared to the nine months ended September 30, 2023. As a percentage of net sales, gross margin expanded approximately 190 basis points to 19.6% for the nine months ended September 30, 2024. The year over year net expansion in gross margin was primarily attributable to the following:
Previous wording
EMEA's gross profit for the three months ended June 30, 2024 increased 10%, or $7.1 million, year over year (also increasing 10% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended June 30, 2023. As a percentage of net sales, gross margin expanded 310 basis points, year over year. The year over year net expansion in gross margin was attributable to the following:
Current wording
EMEA's gross profit for the three months ended September 30, 2024 increased 11%, or $6.7 million, year over year (increasing 9% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended September 30, 2023. As a percentage of net sales, gross margin expanded 440 basis points, year over year. The year over year net expansion in gross margin was attributable to the following:
Previous wording
•The increase in product margin is primarily the result of sales of hardware at higher margins than in the same period in the prior year.
Current wording
•The expansion in product margin is primarily the result of sales of hardware at higher margins than in the same period in the prior year.
Previous wording
EMEA's gross profit for the six months ended June 30, 2024 increased 16%, or $21.2 million, year over year (increasing 14% when excluding the effects of fluctuating foreign currency exchange rates), compared to the six months ended June 30, 2023. As a percentage of net sales, gross margin expanded approximately 350 basis points, year over year. The year over year net expansion in gross margin was attributable to the following:
Current wording
EMEA's gross profit for the nine months ended September 30, 2024 increased 14%, or $27.9 million, year over year (increasing 13% when excluding the effects of fluctuating foreign currency exchange rates), compared to the nine months ended September 30, 2023. As a percentage of net sales, gross margin expanded approximately 380 basis points, year over year. The year over year net expansion in gross margin was attributable to the following:
Previous wording
•A net increase in product margin of 67 basis points and an increase from services margin of 282 basis points.
Current wording
•An increase in services margin of 282 basis points and an expansion in product margin of 92 basis points.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•The decrease in hardware net sales was primarily the result of lower volume of sales to corporate and large enterprise clients.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Throughout the “Quarterly Overview” and “Results of Operations” sections of this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we refer to changes in net sales, gross profit, selling and administrative expenses and earnings from operations on a consolidated basis and in North America, EMEA and APAC excluding the effects of fluctuating foreign currency exchange rates, which are non-GAAP measures. We believe providing
Previous report — wording carried elsewhere
•The decrease in software net sales was primarily due to the continued migration of on-premise software to cloud solutions, reported net in services net sales.
Previous report — wording carried elsewhere
•The decrease in hardware net sales was primarily due to lower volume of sales to public sector and corporate clients.
Previous report — wording carried elsewhere
•The decrease in software net sales was due to the continued migration of on-premise software to cloud solutions, reported net in services net sales.
Previous report — wording carried elsewhere
•The decrease in hardware net sales was primarily the result of lower volume of sales to large enterprise and corporate clients.
Previous report — wording carried elsewhere
•Our cash conversion cycle is impacted by netted costs that we apply to our services net sales to appropriately record net sales that we earn as an agent. These netted costs, while excluded from both net sales and cost of goods sold, are processed and applied to accounts receivable and accounts payable in each reporting period.