INSIGHT ENTERPRISES INC
For the period ended Mar 31, 2025. Filed May 1, 2025.
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.
Mar 31, 2025 · Filed May 1, 2025
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 2024-09-30; filed 2024-10-31.
0001628280-24-044520
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0001628280-25-021416
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 124 current paragraphs.
33 unchanged; 62 reworded; 28 added; 64 removed; 7 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 13 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 (28)
Current report
•The increase in hardware net sales was primarily due to higher volume of sales to commercial clients due to slightly higher demand. This increase was driven by an increase in device sales.
Current report
•The increase in services net sales was primarily due to an increase in agency net sales, partially offset by a net decrease in fees from cloud solution offerings as a result of partner program changes.
Current report
Net sales in APAC decreased 3%, or $1.7 million, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Excluding the effects of fluctuating foreign currency exchange rates, net sales in APAC increased 1%, year over year. Net sales of hardware and services decreased by 13% and 5%, respectively, year to year. These decreases were partially offset by an increase in software net sales of 2%, year over year. The net changes for the three months ended March 31, 2025 were the result of the following:
Current report
•The decrease in services net sales was primarily due to a decrease in fees from cloud solution offerings.
Current report
•An expansion in product margin of 36 basis points and a slight increase in services margin of 5 basis points.
Current report
•An increase in services margin of 290 basis points and a slight contraction in product margin of 9 basis points.
Current report
APAC's earnings from operations for the three months ended March 31, 2025 decreased 10%, or $0.5 million (decreasing 7% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended March 31, 2024. As a percentage of net sales, earnings from operations decreased by approximately 50 basis points to 7.2%. The decrease in earnings from operations was primarily driven by a decrease in gross profit, partially offset by a decrease in selling and administrative expenses, when compared to the three months ended March 31, 2024.
Current report
Adjusted Earnings from Operations. Adjusted earnings from operations decreased 16%, or $19.4 million, year to year, in three months ended March 31, 2025 compared to three months ended March 31, 2024. Our Adjusted earnings from operations and Adjusted earnings from operations as a percentage of net sales by operating segment were as follows for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Current report
North America’s Adjusted earnings from operations for the three months ended March 31, 2025 decreased 15%, or $15.8 million, compared to the three months ended March 31, 2024. As a percentage of net sales, Adjusted earnings from operations decreased by approximately 30 basis points to 5.1%. The decrease in Adjusted earnings from operations was primarily driven by a decrease in gross profit, partially offset by a decrease in selling and administrative expenses.
Current report
EMEA’s Adjusted earnings from operations for the three months ended March 31, 2025 decreased 21% (decreasing 20% excluding the effects of fluctuating foreign currency exchange rates), or $3.0 million, compared to the three months ended March 31, 2024. As a percentage of net sales, Adjusted earnings from operations decreased by approximately 20 basis points to 3.2%. The decrease in Adjusted earnings from operations was primarily driven by a decrease in gross profit.
Current report
APAC’s Adjusted earnings from operations for the three months ended March 31, 2025 decreased 12% (decreasing 9% excluding the effects of fluctuating foreign currency exchange rates), or $0.6 million, compared to the three months ended March 31, 2024. As a percentage of net sales, Adjusted earnings from operations decreased by approximately 70 basis points to 7.3%. The decrease in Adjusted earnings from operations was primarily driven by a decrease in gross profit.
Current report
Other Expense (Income), Net. Other expense (income), net primarily reflects a net loss on the revaluation of warrant settlement liabilities of $25.1 million recorded in the three months ended March 31, 2025 in connection with the cash settlement of a portion of the outstanding Warrants, with no comparable activity in the three months ended March 31, 2024. For additional information regarding the Warrants, see Note 4 to our Consolidated Financial Statements in Part I, Item 1 of this report.
Current report
Use of Non-GAAP Financial Measures
Current report
Adjusted non-GAAP earnings from operations exclude (i) severance and restructuring expenses, net, (ii) certain executive recruitment and hiring related expenses, (iii) amortization of intangible assets, (iv) transformation costs, (v) certain acquisition and integration related expenses, and (vi) gains and losses from revaluation of acquisition related earnout liabilities, as applicable. Adjusted non-GAAP earnings from operations is used by the Company and its management to evaluate financial performance against budgeted amounts, to calculate incentive compensation, to assist in forecasting future performance and to compare the Company’s results to those of the Company’s competitors. We believe that this non-GAAP financial measure is useful to investors because it allows for greater transparency, facilitates comparisons to prior periods and to the Company’s competitors’ results, and assists in forecasting performance for future periods. The non-GAAP financial measure is not prepared in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
Current report
•Capital expenditures were $7.1 million and $6.5 million for the three months ended March 31, 2025 and 2024, respectively.
Current report
•We had net borrowings under our inventory financing facilities of $42.7 million during the three months ended March 31, 2025 compared to net repayments of $4.5 million during the three months ended March 31, 2024.
Current report
•We repaid approximately $333.1 million for the remaining principal balance upon maturity of the Convertible Notes in the three months ended March 31, 2025.
Current report
•We paid $138.9 million to settle a portion of the Warrants relating to the Call Spread Transactions associated with the Convertible Notes.
Current report
•We have an inverted cash cycle resulting from typically paying partners on shorter terms than we provide to our clients. This generally means in periods of declining hardware sales, we typically generate increased cash from operations.
Current report
•The decrease in cash provided by operating activities period over period is primarily due to lower net earnings, combined with the impact of higher hardware net sales compared to the same period in the prior year. In the first quarter of 2024 our cash generated from operations was also positively impacted by timing of receipts compared to partner payments as well as deferral of certain operating payments at March 31, 2024.
Current report
•Capital expenditures were $7.1 million and $6.5 million for the three months ended March 31, 2025 and 2024, respectively.
Current report
•During the three months ended March 31, 2025, we had net borrowings under our ABL facility of $423.8 million, which were primarily used to fund the repayment of the remaining principal balance upon maturity of the Convertible Notes.
Current report
•We had net borrowings under our inventory financing facilities of $42.7 million during the three months ended March 31, 2025 compared to net repayments of $4.5 million during the three months ended March 31, 2024.
Current report
•We repaid approximately $333.1 million for the remaining principal balance upon maturity of the Convertible Notes in the three months ended March 31, 2025.
Current report
•We paid $138.9 million to settle a portion of the Warrants relating to the Call Spread Transactions associated with the Convertible Notes in cash in the three months ended March 31, 2025.
Current report
•During thethree months ended March 31, 2025, we did not make any earnout and acquisition related payments.
Current report
•During the three months ended March 31, 2025, we did not repurchase any shares of our common stock.
Current report
•During the three months ended March 31, 2024, we repurchased $35.0 million of our common stock.
Removed paragraphs (64)
Previous report
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 report
•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 report
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 report
•The decrease in hardware net sales was primarily due to lower volume of sales to large enterprise and corporate clients due to lower demand. This decline was driven by infrastructure sales.
Previous 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.
Previous 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 and in software maintenance.
Previous report
•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 report
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 report
•The decrease in hardware net sales was primarily due to lower volume of sales to large enterprise, corporate and public sector clients.
Previous report
•The increase in services net sales was primarily due to an increase in Insight Delivered services net sales, including from Amdaris.
Previous 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:
Previous report
•The increase in services net sales was primarily due to an increase in fees for cloud solutions.
Previous report
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 report
•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 report
•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 report
•An increase in services margin of 203 basis points and an expansion in product margin of 31 basis points.
Previous report
•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 report
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 report
•An increase in services margin of 187 basis points and an expansion in product margin of 4 basis points.
Previous 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.
Previous report
•An increase in services margin of 278 basis points and an expansion in product margin of 160 basis points.
Previous report
•An increase in services margin of 282 basis points and an expansion in product margin of 92 basis points.
Previous report
•The increase in services margin is primarily the result of increased fees for cloud solutions and increased margin contribution from Insight Core services, including from Amdaris.
Previous report
APAC's gross profit for the three months ended September 30, 2024 increased 15%, or $2.3 million, year over year (increasing 13% 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 approximately 10 basis points, year over year. The year over year net expansion in gross margin was primarily attributable to an expansion in product margin driven by sales of hardware at higher margins in connection with an infrastructure transaction in the current year period.
Previous 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:
Previous report
•An expansion in services margin of 166 basis points and an expansion in product margin of 27 basis points.
Previous report
•The expansion in services margin was primarily driven by increased fees for cloud solutions and higher margin contribution from Insight Core services.
Previous report
•The expansion in product margin was driven by higher volume of sales of software at higher margins than in the prior year period.
Previous report
During the nine months ended September 30, 2024, we recorded acquisition and integration related expenses of approximately $2.2 million. During the nine months ended September 30, 2023, we recorded acquisition and integration related expenses of approximately $4.4 million. The expenses in the current year period related primarily to the acquisitions of SADA in December 2023 and Infocenter in May 2024.
Previous report
North America's earnings from operations for the nine months ended September 30, 2024 increased 9%, or $22.0 million, compared to the nine months ended September 30, 2023. As a percentage of net sales, earnings from operations increased by approximately 60 basis points to 5.0%. The increase in earnings from operations was primarily driven by the increase in gross profit, partially offset by an increase in selling and administrative expenses and an increase in severance and restructuring expenses, net, when compared to the nine months ended September 30, 2023.
Previous 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.
Previous 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
Previous 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.
Previous 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.
Previous report
Our effective tax rate of 24.2% for the nine months ended September 30, 2024 was lower than our effective tax rate of 25.4% for the nine months ended September 30, 2023. The decrease in the effective tax rate for the nine months ended September 30, 2024 was primarily due to tax benefits related to the revaluation of certain acquisition earnout liabilities and higher excess tax benefits on the settlement of employee share-based compensation in the current year period.
Previous report
The Organization for Economic Cooperation and Development’s (OECD) Pillar II Initiative introduced a 15% global minimum tax for certain multinational groups exceeding minimum annual global revenue thresholds. Several countries in which Insight operates have enacted legislation adopting the minimum tax effective January 1, 2024. The minimum tax did not have a material impact on our effective tax rate as of September 30, 2024, nor do we expect it to have a material impact on our 2024 annual effective tax rate. We will continue to monitor any future impact as additional countries enact legislation to adopt this tax.
Previous report
•Capital expenditures were $32.4 million and $29.1 million for the nine months ended September 30, 2024 and 2023, respectively.
Previous report
•During the nine months ended September 30, 2024, we paid approximately $265.0 million, to acquire Infocenter, net of cash and cash equivalents acquired of $5.1 million.
Previous report
•We issued $500.0 million in aggregate principal amount of Senior Notes, which we used to pay down a portion of our borrowings under our ABL facility.
Previous 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.
Showing the first 40 of 64 passages. Open the source sections for the rest.
Reworded paragraphs (62)
Previous wording
Today, every business is a technology business. We help our clients accelerate their digital journey to modernize their businesses and maximize the value of technology. We serve these clients in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). As a Fortune 500-ranked solutions integrator, we enable secure, end-to-end digital transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 36 years of broad IT expertise. We amplify our solutions and services with global scale, local expertise and our e-commerce experience, enabling our clients to realize their digital ambitions in multiple ways. Our offerings in North America and certain countries in EMEA and APAC include hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments consist largely of software and certain software-related services and cloud solutions.
Current wording
Today, every business is a technology business. We help our clients accelerate their digital journey to modernize their businesses and maximize the value of technology. We serve these clients in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). As a Fortune 500-ranked solutions integrator, we enable secure, end-to-end digital transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 37 years of broad IT expertise. We amplify our solutions and services with global scale, local expertise and our e-commerce experience, enabling our clients to realize their digital ambitions in multiple ways. Our offerings in North America and certain countries in EMEA and APAC include hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments consist largely of software and certain software-related services and cloud solutions.
Previous 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.
Current wording
•Net sales of $2.1 billion decreased 12% compared to the three months ended March 31, 2024. The decrease in net sales reflects decreases in software and services net sales, partially offset by an increase in hardware net sales. Excluding the effects of fluctuating foreign currency exchange rates, net sales decreased 11% compared to the first quarter of 2024.
Previous 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.
Current wording
•Gross profit of $406.5 million decreased 8% compared to the three months ended March 31, 2024. Excluding the effects of fluctuating foreign currency exchange rates, gross profit decreased 7% compared to the first quarter of 2024.
Previous 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.
Current wording
•Compared to the three months ended March 31, 2024, gross margin expanded approximately 80 basis points to 19.3% of net sales in the three months ended March 31, 2025. This expansion primarily reflects higher margin contributed by hardware and services net sales compared to the same period in the prior year.
Previous 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.
Current wording
•Earnings from operations decreased 40%, year to year, to $60.1 million in the first quarter of 2025 compared to $100.0 million in the first quarter of 2024. The decrease was primarily due to a decrease in gross profit in the current quarter, combined with an increase in selling and administrative expenses and severance and restructuring expenses, net. Excluding the effects of fluctuating foreign currency exchange rates, earnings from operations decreased 39% year to year.
Previous 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.
Current wording
•Net earnings and diluted earnings per share were $7.5 million and $0.22, respectively, for the first quarter of 2025. This compares to net earnings of $67.0 million and diluted earnings per share of $1.74 for the first quarter of 2024. The decrease in net earnings was due in part to a net loss of $15.2 million from the revaluation of the Infocenter earnout liability and a net loss of $25.1 million recorded to reflect the revaluation of warrant settlement liabilities in the current year period. Diluted earnings per share decreased 87% year to year, and excluding the effects of fluctuating foreign currency exchange rates, also decreased 87% year to year.
Previous wording
Supply Chain Constraints, Demand and Inflation Update
Current wording
Supply Chain, Demand and Inflation Update
Previous 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.
Current wording
Inflation contributed to sustained high interest rates on all of our variable rate facilities in the first quarter of 2025 consistent with the prior year period. While these interest rates are expected to decrease, we continue to anticipate higher than historical rates throughout most of 2025. We are actively monitoring changes to the global macroeconomic environment, including those impacting our supply chain, demand for our products whether due to tariffs or otherwise 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 in 2025 and beyond.
Previous 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:
Current wording
The following table sets forth certain financial data as a percentage of net sales for the three months ended March 31, 2025 and 2024:
Previous wording
We generally experience some seasonal trends in our sales of IT hardware, software and services. Software and certain cloud net sales are typically seasonally higher in our second and fourth quarters. Business clients, particularly larger enterprise businesses in the United States, tend to spend more, particularly on product, in our fourth quarter. Sales to the federal government in the United States are often stronger in our third quarter, while sales in the state and local government and education markets are also often stronger in our second quarter. Sales to public sector clients in the United Kingdom are often stronger in our first quarter. These trends create overall variability in our consolidated results.
Current wording
We generally experience some seasonal trends in our net sales. Software and certain cloud net sales are typically seasonally higher in our second and fourth quarters. Business clients, particularly larger enterprise businesses in the United States, tend to spend more, particularly on product, in our fourth quarter. Sales to the federal government in the United States are often stronger in our third quarter, while sales in the state and local government and education markets are also often stronger in our second quarter. Sales to public sector clients in the United Kingdom are often stronger in our first quarter. These trends create overall variability in our consolidated results.
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, 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.
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 the related product or services sales being incentivized by the partner. Incentives from our largest partners are significant and changes in the incentive requirements, which occur regularly, could impact our results of operations to the extent we are unable to effectively shift our focus and efficiently 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 and do 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, 2024.
Previous 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.
Current wording
Net Sales. Net sales of $2.1 billion for the three months ended March 31, 2025 decreased 12%, year to year, compared to the three months ended March 31, 2024, reflecting decreases in all of our operating segments.
Previous wording
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 wording
Our net sales by operating segment were as follows for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Previous 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):
Current wording
Our net sales by offering category for North America for the three months ended March 31, 2025 and 2024 were as follows (dollars in thousands):
Previous 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:
Current wording
Net sales in North America decreased 11%, or $204.2 million, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, driven by decreases in software and services net sales, partially offset by an increase in hardware net sales. Software and services net sales decreased 33% and 7%, year to year, respectively. These decreases were partially offset by an increase in hardware net sales of 2%, year over year. The net changes for the three months ended March 31, 2025 were the result of the following:
Previous wording
•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 wording
•The decrease in software net sales was primarily due to a significant multi year transaction in the prior year period with no comparable transaction in the current year period. 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 also contributed to the year to year decrease in software net sales.
Previous 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. 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 wording
•The decrease in services net sales was primarily due to declines in sales of Insight Delivered services from our organic business, partially offset by net sales from Infocenter. Our North America organic business excludes Infocenter, which we acquired on May 1, 2024. A decrease in fees from cloud solution offerings and a decrease in warranty net sales also contributed to the year to year decrease in services net sales.
Previous 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):
Current wording
Our net sales by offering category for EMEA for the three months ended March 31, 2025 and 2024 were as follows (dollars in thousands):
Previous 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:
Current wording
Net sales in EMEA decreased 17%, or $70.0 million, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Excluding the effects of fluctuating foreign currency exchange rates, net sales in EMEA decreased 15%, year to year. Net sales of software and hardware decreased by 32% and 5%, respectively, year to year, partially offset by an increase in services net sales of 3%, year over year. The net changes for the three months ended March 31, 2025 were the result of the following:
Previous 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):
Current wording
Our net sales by offering category for APAC for the three months ended March 31, 2025 and 2024 were as follows (dollars in thousands):
Previous wording
•The decrease in hardware net sales was primarily the result of lower volume of sales to corporate and large enterprise clients.
Current wording
•The decrease in hardware net sales was primarily the result of lower volume of sales to corporate and public sector clients.
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, reported net in services net sales.
Current wording
•The increase in software net sales was due to higher volume of sales to commercial clients.
Previous 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:
Current wording
The percentage of net sales by category for North America, EMEA and APAC were as follows for the three months ended March 31, 2025 and 2024:
Previous 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.
Current wording
Gross Profit. Gross profit decreased 8%, or $34.5 million, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, with gross margin expanding approximately 80 basis points to 19.3% for the three months ended March 31, 2025 compared to 18.5% for the three months ended March 31, 2024.
Previous 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):
Current wording
Our gross profit and gross profit as a percentage of net sales by operating segment were as follows for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Previous 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:
Current wording
North America's gross profit for the three months ended March 31, 2025 decreased 9%, or $30.4 million, compared to the three months ended March 31, 2024. As a percentage of net sales, gross margin expanded approximately 40 basis points to 18.8%, year over year. The year over year net expansion in gross margin was primarily attributable to the following:
Previous wording
•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 wording
•The expansion in product margin reflects an increase in margin contribution from hardware net sales due to changes in product mix towards higher margin products, partially offset by a decrease in margin from software net sales.
Previous 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.
Current wording
•The slight increase in services margin reflects an increase in margin contribution from Insight Core services (consisting of Insight Delivered and managed services) from Infocenter.
Previous 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:
Current wording
EMEA's gross profit for the three months ended March 31, 2025 decreased 4%, or $3.1 million, year to year (decreasing 2% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended March 31, 2024. As a percentage of net sales, gross margin expanded 280 basis points, year over year. The year over year net expansion in gross margin was attributable to the following:
Previous wording
•The increase in services margin is primarily the result of increased fees for cloud solutions and increased margin contribution from Insight Core services, including from Amdaris.
Current wording
•The increase in services margin is primarily the result of increased margin contribution from Insight Core services and an increase in agency net sales, partially offset by fees for cloud solution offerings.
Previous 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.
Current wording
•The contraction in product margin is primarily the result of sales of software at lower margins than in the prior year period, partially offset by sales of hardware at higher margins than in the same period in the prior year.
Previous 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:
Current wording
APAC's gross profit for the three months ended March 31, 2025 decreased 6%, or $1.0 million, year to year (decreasing 2% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended March 31, 2024. As a percentage of net sales, gross margin contracted approximately 90 basis points, year to year. The year to year net contraction in gross margin was attributable to a net contraction in services margin of 71 basis points and a net contraction in product margin of 12 basis points driven by the decrease in fees from cloud solution offerings in the current year period.
Previous wording
Selling and Administrative Expenses. Selling and administrative expenses for the three months ended September 30, 2024 increased 7%, or $20.2 million, compared to the three months ended September 30, 2023 (increasing 6% when excluding fluctuating foreign currency exchange rates). Selling and administrative expenses increased 5%, or $46.6 million (also increasing 5% when excluding fluctuating foreign currency exchange rates), for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Current wording
Selling and Administrative Expenses. Selling and administrative expenses for the three months ended March 31, 2025 increased 1%, or $1.7 million, compared to the three months ended March 31, 2024 (also increasing 1% when excluding the effects of fluctuating foreign currency exchange rates).
Previous wording
Selling and administrative expenses increased approximately 140 basis points as a percentage of net sales in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The overall net increase in selling and administrative expenses primarily reflects increases in personnel costs, including teammate benefits and depreciation and amortization expenses of $38.3 million and $28.2 million, respectively, year over year. The increase in personnel costs reflects an increase in overall teammate headcount from our acquisitions and the impact of merit increases. The increase in depreciation and amortization expenses reflects higher amortization of intangible assets associated with the SADA, Infocenter and Amdaris acquisitions. These increases were partially offset by a net decrease in other expenses. The net decrease in other expenses primarily reflects net gains of $30.6 million recognized on the revaluation of the SADA, Amdaris and Infocenter acquisition earnout liabilities and the resulting decreases in the fair values of the potential earnout payments, as well as recoveries associated with certain third-party data center outages of $3.4 million in the nine months ended September 30, 2024 compared to costs incurred of $8.0 million in the nine months ended September 30, 2023. We also incurred transformation costs in the current and prior year periods of $13.0 million and $14.0 million, respectively, however, these costs are unique in nature and are not expected to recur in the longer term.
Current wording
Selling and administrative expenses increased approximately 190 basis points as a percentage of net sales in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The overall net increase in selling and administrative expenses primarily reflects increases in other expenses and depreciation and amortization expenses of $18.7 million and $3.9 million, respectively, year over year. The net increase in other expenses primarily reflects a loss of $15.2 million recognized on the revaluation of the Infocenter acquisition earnout liability and an increase in fees for service agreements. We also incurred transformation costs in the current and prior year periods of $1.3 million and $2.3 million, respectively, however, these costs are unique in nature and are not expected to recur in the longer term. The increase in depreciation and amortization expenses primarily reflects higher amortization of intangible assets associated with the Infocenter acquisition. These increases were partially offset by a net decrease in personnel costs, including teammate benefits of $16.8 million. The decrease in personnel costs reflects a decrease in overall teammate headcount as well as a reduction in variable compensation compared to the prior year period.
Previous wording
Severance and Restructuring Expenses. During the three months ended September 30, 2024, we recorded severance and restructuring expenses, net of adjustments, of approximately $8.5 million. This includes approximately $4.3 million, net restructuring charges associated with costs to exit properties. Comparatively, during the three months ended September 30, 2023, we recorded severance and restructuring expenses of approximately $2.9 million. The severance charges in both periods primarily related to a realignment of certain roles and responsibilities and reductions in workforce.
Current wording
Severance and Restructuring Expenses, net. During the three months ended March 31, 2025, we recorded severance and restructuring expenses, net of adjustments, of approximately $7.0 million. Comparatively, during the three months ended March 31, 2024, we recorded severance and restructuring expenses, net of adjustments, of approximately $2.2 million. The severance charges in both periods primarily related to a realignment of certain roles and responsibilities and reductions in workforce.
Previous wording
Acquisition and Integration Related Expenses. During the three months ended September 30, 2024, we recorded acquisition and integration related expenses of approximately $0.7 million. During the three months ended September 30, 2023, we recorded acquisition and integration related expenses of approximately $4.3 million. As the Company executes its acquisition strategy, we expect to incur additional acquisition and integration related expenses.
Current wording
Acquisition and Integration Related Expenses. During the three months ended March 31, 2024, we recorded acquisition and integration related expenses of approximately $1.3 million. During the three months ended March 31, 2025, we had no significant comparable activity. As the Company executes its acquisition strategy, we expect to incur additional acquisition and integration related expenses.
Previous wording
Earnings from Operations. Earnings from operations increased 1%, or $1.0 million, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Earnings from operations increased 12%, or $36.0 million, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Our earnings from operations and earnings from operations 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):
Current wording
Earnings from Operations. Earnings from operations decreased 40%, or $39.9 million, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Our earnings from operations and earnings from operations as a percentage of net sales by operating segment were as follows for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Previous wording
North America's earnings from operations for the three months ended September 30, 2024 decreased 6%, or $5.2 million, compared to the three months ended September 30, 2023. As a percentage of net sales, earnings from operations increased by approximately 10 basis points to 4.7%. The decrease in earnings from operations was primarily driven by the increase in selling and administrative expenses and severance and restructuring expenses, net, partially offset by an increase in gross profit and a decrease in acquisition and integration related expenses, when compared to the three months ended September 30, 2023.
Current wording
North America's earnings from operations for the three months ended March 31, 2025 decreased 40%, or $33.2 million, compared to the three months ended March 31, 2024. As a percentage of net sales, earnings from operations decreased by approximately 140 basis points to 3.0%. The decrease in earnings from operations was primarily driven by a decrease in gross profit combined with an increase in selling and administrative expenses and severance and restructuring expenses, net, partially offset by a decrease in acquisition and integration related expenses, when compared to the three months ended March 31, 2024.
Previous wording
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 wording
EMEA's earnings from operations for the three months ended March 31, 2025 decreased 55%, or $6.2 million (decreasing 54% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended March 31, 2024. As a percentage of net sales, earnings from operations decreased by approximately 120 basis points to 1.5%. The decrease in earnings from operations was primarily driven by a decrease in gross profit combined with an increase in severance and restructuring expenses, net, when compared to the three months ended March 31, 2024.
Previous wording
Interest Expense, Net. Interest expense, net primarily relates to borrowings under our ABL facility, the 6.625% Senior Notes due 2032 (the "Senior Notes"), the Convertible Notes and imputed interest under our inventory financing facilities, partially offset by interest income generated from interest earned on cash and cash equivalent bank balances. Interest expense, net for the three months ended September 30, 2024 increased 38%, or $4.6 million, compared to the three months ended September 30, 2023. This was primarily due to the issuance of the Senior Notes in May 2024 partially offset by lower loan balances under our ABL facility, increased interest income and decreased imputed interest under our inventory financing facilities. Interest expense, net for the nine months ended September 30, 2024 increased 37%, or $11.6 million, compared to the nine months ended September 30, 2023. The increase in the nine months ended September 30, 2024 was due to the issuance of the Senior Notes and higher loan balances under our ABL facility, partially offset by decreased imputed interest under our inventory financing facilities and higher interest income.
Current wording
Interest Expense, Net. Interest expense, net primarily relates to borrowings under our financing facilities and imputed interest under our inventory financing facilities, the Convertible Notes and the Senior Notes, partially offset by interest income generated from interest earned on cash and cash equivalent bank balances. Interest expense, net for the three months ended March 31, 2025 increased 24%, or $3.1 million, compared to the three months ended March 31, 2024. This was primarily due to the issuance of the Senior Notes in May 2024, the maturity of the Convertible Notes in February 2025 and decreased interest income partially offset by lower interest rates and lower loan balances under our ABL facility and decreased imputed interest under our inventory financing facilities.
Showing the first 40 of 62 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•The decrease in hardware net sales was primarily due to lower volume of sales to large enterprise and public sector clients.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
•The decrease in hardware net sales was primarily due to lower volume of sales to public sector and commercial clients.
Previous report — wording carried elsewhere
•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.
Previous report — wording carried elsewhere
•The decrease in hardware net sales was primarily the result of lower volume of sales to corporate and large enterprise clients.
Previous report — wording carried elsewhere
•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 report — wording carried elsewhere
Selling and administrative expenses increased approximately 210 basis points as a percentage of net sales in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The overall net increase in selling and administrative expenses primarily reflects increases in personnel costs, including teammate benefits and in depreciation and amortization expenses of $12.0 million and $10.6 million, respectively, year over year. The increase in personnel costs reflects an increase in overall teammate headcount resulting from our acquisitions and the impact of merit increases. The increase in depreciation and amortization expenses primarily reflects higher amortization of intangible assets associated with the SADA, Infocenter and Amdaris acquisitions. These increases were partially offset by a net decrease in other expenses. The net decrease in other expenses primarily reflects net gains of $6.4 million recognized on the revaluation of the Amdaris and Infocenter acquisition earnout liabilities and the resulting decreases in the fair values of the potential earnout payments combined with costs associated with certain third-party data center outages of $8.0 million incurred in the three months ended September 30, 2023 with no comparable costs in the three months ended September 30, 2024. We also incurred transformation costs in the current and prior year periods of $5.1 million and $3.7 million, respectively, however, these costs are unique in nature and are not expected to recur in the longer term.
Previous report — wording carried elsewhere
During the nine months ended September 30, 2024, we recorded severance and restructuring expenses, net of adjustments, of approximately $15.6 million. This includes approximately $4.3 million, net restructuring charges associated with costs to exit properties. Comparatively, during the nine months ended September 30, 2023, we recorded severance and restructuring expense, net of adjustments, of approximately $3.0 million, reflecting a net gain on sale of property due to restructuring of $6.8 million. The severance charges in both periods primarily related to a realignment of certain roles and responsibilities and reductions in workforce.
Previous report — wording carried elsewhere
•The Convertible Notes are subject to certain events of default and certain acceleration clauses. As of September 30, 2024, no such events have occurred.