Slide 1: Fourth Quarter and Full Year 2022 Earnings Conference Call and Webcast
Insight Enterprises, Inc. Fourth Quarter and Full Year 2022 Earnings Conference Call and Webcast Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2023 Insight Direct USA, Inc. All Rights Reserved. 1
Slide 2: Disclosures
Disclosures ◦ Safe harbor statement This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 related to Insight’s plans and expectations. Statements that are not historical facts, including those related to coronavirus strain
Slide 3: Table of Contents
Table of Contents ◦ Solutions Integrator Strategy ◦ Areas of Expertise ◦ 2027 KPIs for Success ◦ Solutions at Work ◦ Fourth Quarter and Full Year 2022 Highlights and Performance ◦ Liquidity and Debt Covenants ◦ 2023 Outlook ◦ Appendix Insight Proprietary & Confidential. Do Not Copy or Distribute. ©
Slide 4: Our strategy is to become the leading Solutions Integrator
Our strategy is to become THE leading SOLUTIONS INTEGRATOR The pillars of our strategy are: Captivate Sell Deliver Champion Clients Solutions Differentiation our Culture ≠ Systems Integrator Solutions Reseller Integrator Distributor Insight Proprietary & Confidential. Do Not Copy or Distribute. © 20
Slide 5: Well Positioned to Help Organizations
Well Positioned to Help Organizations Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2023 2022 Insight Direct USA, Inc. All Rights Reserved. 5
Slide 6: 2027 KPIs for Success
2027 KPIs for Success KPIs 2027** Existing: Adjusted EBITDA Margin* 6.5% - 7.0% Adjusted ROIC* >25% New Metrics: Core services GP | 5-year CAGR 16% - 20% Cloud GP | 5-year CAGR 16% - 20% Adjusted DEPS* | 5-year CAGR 19% - 22% Adjusted free cash flow as % >90% Adjusted net income* *Adjusted non-GAAP
Slide 7: Q4/Full Year 2022 Performance
Q4/Full Year 2022 Performance (Changes against prior year period) NET SALES GROSS PROFIT Q4 2022 FY 2022 Q4 2022 FY 2022 $2.5B $10.4B $421M $1.6B decrease of 2% increase of 11% increase of 9% increase of 13% 49% services as a % of total gross profit and 21% cloud as a % of total gross profit*** MARG
Slide 8: Q4/Full Year 2022 Performance
Q4/Full Year 2022 Performance (Changes against prior year period) EARNINGS EARNINGS FROM OPERATIONS DILUTED EARNINGS PER SHARE Q4 2022 FY 2022 Q4 2022 FY 2022 $114M $414M $2.13 $7.66 increase of 22% increase of 25% increase of 26% increase of 29% ADJUSTED EARNINGS FROM OPERATIONS* ADJUSTED DILUTED E
Slide 9: How Vivli is Enabling Scientific Discoveries to Benefit Global Health
How Vivli is Enabling Scientific Discoveries to Benefit Global Health The challenge: The solution: The results: • Create a data-sharing platform to • Full complement of Azure services • Clinical data growth of 42% per year provide researchers around the integrated and deployed • More use than ever b
Slide 10: Fortune Insurance and Financial Services Provider Modernizes Security
Fortune 100 Insurance and Financial Services Provider Modernizes Security The challenge: The solution: The results: • Passwords, encryption keys and • Implemented fully automated Vault™ • Consolidated and secured secrets authentication information ("secrets") clusters to help consolidate credentials
Slide 11: Awards
Awards Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2023 2022 Insight Direct USA, Inc. All Rights Reserved. 11
Slide 12: 2022 Industry and Partner Recognitions
2022 Industry and Partner Recognitions Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2023 2022 Insight Direct USA, Inc. All Rights Reserved. 12
Slide 13: Q4/Full Year 2022 Performance
Q4/Full Year 2022 Performance (Changes against prior year period) NET SALES GROSS PROFIT Q4 2022 FY 2022 Q4 2022 FY 2022 $2.5B $10.4B $421M $1.6B decrease of 2% increase of 11% increase of 9% increase of 13% 49% services as a % of total gross profit and 21% cloud as a % of total gross profit*** MARG
Slide 14: Q4/Full Year 2022 Performance
Q4/Full Year 2022 Performance (Changes against prior year period) EARNINGS EARNINGS FROM OPERATIONS DILUTED EARNINGS PER SHARE Q4 2022 FY 2022 Q4 2022 FY 2022 $114M $414M $2.13 $7.66 increase of 22% increase of 25% increase of 26% increase of 29% ADJUSTED EARNINGS FROM OPERATIONS* ADJUSTED DILUTED E
Slide 15: FY 2022 | Year of Two Halves
FY 2022 | Year of Two Halves First Half 2022 (compared to 1H 2021) Second Half 2022 (compared to 2H 2021) • Net sales growth of 22% fueled by • Net sales flat year over year exceptionally strong device growth in • Gross margin expansion of 140 bps high 30% range • Cash provided by operations of $540
Slide 16: 2027 KPIs for Success
2027 KPIs for Success KPIs 2022 2027** Existing: Adjusted EBITDA Margin* 4.7% 6.5% - 7.0% Adjusted ROIC* 15.9% >25% New Metrics: Core services GP | 5-year CAGR 14% 16% - 20% Cloud GP | 5-year CAGR 32% 16% - 20% Adjusted DEPS* | 5-year CAGR 21% 19% - 22% Adjusted free cash flow as % 8% >90% Adjusted
Slide 17: Net Sales and Gross Profit
NET SALES $2.5B decrease of 2% y/y $10.4B* increase of 11% y/y $10.4B $9.4B $8.3B $7.7B $2.7B $7.1B $2.6B $2.7B $2.5B $2.5B Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 2018 2019 2020 2021 2022 GROSS PROFIT $421M increase of 9% y/y $1.6B* increase of 13% y/y 15.6% 15.7% 15.3% 14.7% 14.0% $1.6B $1.4B 15.0% 14.3% 16
Slide 18: Services Net Sales and Gross Profit
SERVICES NET SALES $384M increase of 9% y/y $1.5B* increase of 13% y/y $1,483M $1,316M $1,168M $999M $394M $365M $384M $830M $352M $341M Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 2018 2019 2020 2021 2022 SERVICES GROSS PROFIT $213M increase of 15% y/y $800M* increase of 13% y/y 55% 54% 54% 53% 53% 57% 56% $800M
Slide 19: Insight Core Services and Cloud Gross Profit
INSIGHT CORE SERVICES GROSS PROFIT $65M increase of 11% y/y $253M* increase of 14% y/y 28% 26% 27% 27% 27% 27% 28% 28% 26% 25% $253M Gross Margin $221M $196M $61M $67M $65M $167M $58M $59M $142M Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 2018 2019 2020 2021 2022 CLOUD GROSS PROFIT $91M increase of 44% y/y $340M*
Slide 20: Adjusted Earnings from Operations
ADJUSTED EARNINGS FROM OPERATIONS** $128M $467M* increase of 25% y/y increase of 29% y/y $467M $142M $362M $128M $322M $107M $282M $103M $253M $90M Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 2018 2019 2020 2021 2022 EARNINGS FROM OPERATIONS $114M $414M* increase of 22% y/y increase of 25% y/y $414M $332M $130M $
Slide 21: Adjusted Diluted Earnings Per Share
ADJUSTED DILUTED EARNINGS PER SHARE** $2.53 $9.11* increase of 25% y/y increase of 28% y/y $9.11 $2.78 $7.10 $2.53 $6.19 $2.03 $4.95 $5.42 $1.81 $1.99 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 2018 2019 2020 2021 2022 DILUTED EARNINGS PER SHARE $2.13 $7.66* increase of 26% y/y increase of 29% y/y $7.66 $5.95 $2
Slide 22: Liquidity and Debt Covenants
Liquidity and Debt Covenants Fixed Charge Coverage Twelve Months Ended December 31, $500,000 $444,280 US Dollars in $000s 2022 2021 $450,000 Adjusted Consolidated EBITDA $400,000 Net earnings $ 280,608 $ 219,345 $350,000 $300,000 Interest expense 41,577 41,198 $250,000 3.76x Taxes 93,825 73,212 $200
Slide 23: Full Year 2023 Outlook
Full Year 2023 Outlook Assumptions: As of February 9, 2023 Gross profit growth high single digit Adjusted diluted EPS* $9.90 - $10.10 Interest expense $48 - $52 million Effective tax rate 25% - 26% Capital expenditures $55 - $60 million Average share count 34.3 million Other Exclusions and Assumptio
Slide 24: Appendix
Appendix Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2023 Insight Direct USA, Inc. All Rights Reserved. 24
Slide 25: FY 2022 | Financial Performance
FY 2022 | Financial Performance Twelve Months Ended December 31, US Dollars in $000s, except for per share data 2022 2021 Change Consolidated IEI Net sales $10,431,191 $9,436,113 11% Net sales, constant currency* 13% Product net sales $8,947,787 $8,120,127 10% Services net sales $1,483,404 $1,315,98
Slide 26: Consolidated IEI Financial Metrics
Consolidated IEI Financial Metrics Three Months Ended Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Twelve Months Ended 2018 2019 2020 2021 2022 Net Sales YoY 12% 21% 23% 4% (2)% Net Sales YoY 6% 9% 8% 13% 11% Gross Margin 15.0% 14.3% 16.0% 15.8% 16.8% Gross Margin 14.0% 14.7% 15.6% 15.3% 15.7% GAAP EFO $93.4M $79.
Slide 27: GEO Financial Metrics
GEO Financial Metrics Three Months Ended North America EMEA APAC Twelve Months Ended North America EMEA APAC Net Sales $2.1B $375.2M $54.8M Net Sales $8.5B $1.7B $234.3M Net Sales YoY** (1)% — % 12 % Net Sales YoY** 13 % 12 % 18 % Gross Profit $345.3M $61.2M $14.1M Gross Profit $1.3B $247.3M $61.0M
Slide 28: Services Financial Metrics
Services Financial Metrics Three Months Ended Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Twelve Months Ended 2018 2019 2020 2021 2022 Services Revenue $352M $341M $394M $365M $384M Services Revenue $830M $999M $1,168M $1,316M $1,483M Services Revenue YoY 17% 14% 16% 13% 9% Services Revenue YoY 25% 20% 17% 13% 13
Slide 29: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures* Three Months Ended Twelve Months Ended December 31, December 31, US Dollars in $000s, except per share data 2022 2021 2020 2022 2021 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 114,016 $ 93,417 $ 83,042 413,700 $ 332,
Slide 30: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended Twelve Months Ended December 31, December 31, US Dollars in $000s 2022 2021 2022 2021 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 99,341 $ 76,504 $ 350,436 $ 268,813 Amort
Slide 31: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Twelve Months Ended Six Months Ended Six Months Ended December 31, June 30, December 31, US Dollars in $000s 2022 2022 2022 Adjusted Free Cash Flow: Net cash provided by (used in) operating activities $ 98,106 $ (441,997) $ 540,103 Le
Slide 32: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Twelve Months Ended December 31, US Dollars in $000s 2022 2021 Return on Invested Capital: GAAP consolidated EFO $ 413,700 $ 332,061 Amortization of intangible assets 32,892 32,045 Other 20,018 (1,634) Adjusted non-GAAP consolidated E
Slide 33: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended Three Months Ended Three Months Ended March 31, June 30, September 30, US Dollars in $000s, except per share data 2022 2021 2022 2021 2022 2021 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO
Slide 34: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) US Dollars in $000s, except per share data 2017 2018 2019 2020 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 179,265 $ 233,483 $ 240,594 $ 271,575 Amortization of intangible assets 16,812 15,737 22,985 37,53
Slide 35: Financial Results by Offering Category
Financial Results by Offering Category US Dollars in $000s FY 2020 Q1-21 Q2-21 Q3-21 Q4-21 FY 2021 Q1-22 Q2-22 Q3-22 Q4-22 FY 2022 Consolidated IEI by Offering Category Hardware $ 5,068,073 $ 1,315,025 $ 1,350,944 $ 1,592,495 $ 1,631,046 $ 5,889,510 $ 1,673,588 $ 1,731,116 $ 1,572,275 $ 1,473,916 $
Slide 36: Convertible Senior Notes
Convertible Senior Notes • Insight Convertible Senior Notes - $350 million principal • Required to settle the convertible notes principal/par value in cash • Excess required to be settled in shares resulting in dilution in GAAP reported Diluted Earnings Per Share (“DEPS”). • DEPS incremental shares