Insight Enterprises, Inc. · NASDAQ:NSIT

Insight Enterprises — Q4 2023 Earnings Presentation

38 slides from Insight Enterprises's earnings presentation, Feb 15, 2024

  1. Slide 1: Fourth Quarter and Full Year 2023 Earnings Conference Call and Webcast

    Insight Enterprises, Inc. Fourth Quarter and Full Year 2023 Earnings Conference Call and Webcast Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2024 Insight Direct USA, Inc. All Rights Reserved. 1

  2. 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 our expectations ab

  3. Slide 3: Table of Contents

    Table of Contents ◦ Solutions Integrator Strategy ◦ Areas of Expertise ◦ Solutions at Work ◦ Awards and Recognitions ◦ Fourth Quarter and Full Year 2023 Highlights and Performance ◦ 2027 KPIs for Success ◦ 2024 Outlook ◦ Appendix Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2024

  4. 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: Put clients first We put our clients first, delivering essential value that contributes to their success and making us the partner they can't live without. DRIVE PROFITABLE Deliver differentiation Our combina

  5. Slide 5: Well Positioned to Help Organizations

    Well Positioned to Help Organizations Intelligent Edge Our services Modern Workplace Gather and utilize data in the most efficient Create a productive, flexible and secure workplace way possible to enable real-time decision- Managed Services making and affect pivotal outcomes Eliminate business disr

  6. Slide 6: 2023 Records

    2023 Records • Gross margin: 18.2% • Cloud gross profit: $429 million • Insight Core Services gross profit: $273 million • Adjusted diluted earnings per share*: $9.69 • Operating cash flow: $620 million • Adjusted EBITDA* margin: 5.7% • Diluted earnings per share**: $7.55 * See Appendix for reconcil

  7. Slide 7: Acquisitions

    Acquisitions Amdaris SADA • Increased our digital and cloud • Expanded our multi-cloud capabilities and enablement capabilities in EMEA services business in North America • A Microsoft Gold certified partner for • Positions us as a leader with two of the >10 years and award-winning Cloud three major

  8. Slide 8: Global Consumer Products Company Overcomes Cyber Attack

    Global Consumer Products Company Overcomes Cyber Attack The challenge: The solution: The results: • This global manufacturer had a cyber breach • The Insight team responded immediately with: • Enhanced security with isolated IT and OT • Resources on site within two days to provide operations • Criti

  9. Slide 9: Efficient, Secured, Scalable and Unified Data Platform for a Large Retailer

    Efficient, Secured, Scalable and Unified Data Platform for a Large Retailer The challenge: The solution: The results: • Disparate technology stack due to multiple • A secure and reliable data warehouse on Google • Streamlined data flow, slashing acquisitions and rapid expansion Cloud with robust sec

  10. Slide 10: Awards

    Awards U.S. Best Places to Work International Best Places to Work No. 1 | Inland Northwest No. 7 | Italy Best Workplaces No. 2 | Singapore Best Workplaces in Tech No. 3 | Phoenix Business Journal No. 11 | UK Best Workplaces No. 11 | Australia Best Workplaces in Tech No. 9 | Phoenix Healthiest Workpl

  11. Slide 11: 2023 Industry and Partner Recognitions

    2023 Industry and Partner Recognitions • Microsoft Azure Expert MSP (4 years in a row) • Achieved all 6 MS Security specializations • Solution Assessments Partner of the Year • Australia Partner of the Year • Western Europe Managed Service Provider Partner of the Year • Hong Kong Partner of the Year

  12. Slide 12: Q4/Full Year 2023 Performance: Gross Profit

    Q4/Full Year 2023 Performance (Changes against prior year period) CLOUD GROSS PROFIT INSIGHT CORE SERVICES GROSS PROFIT Q4 2023 FY 2023 Q4 2023 FY 2023 $130M $429M $69M $273M increase of 43% increase of 26% increase of 7% increase of 8% Insight Proprietary & Confidential. Do Not Copy or Distribute.

  13. Slide 13: Q4/Full Year 2023 Performance: Net Sales and Margins

    Q4/Full Year 2023 Performance (Changes against prior year period) NET SALES GROSS PROFIT Q4 2023 FY 2023 Q4 2023 FY 2023 $2.2B $9.2B $436M $1.7B decrease of 11% decrease of 12% increase of 4% increase of 2% 54% services as a % of total gross profit and 26% cloud as a % of total gross profit*** EARNI

  14. Slide 14: Q4/Full Year 2023 Performance: Earnings and Cash Flow

    Q4/Full Year 2023 Performance (Changes against prior year period) EARNINGS NET EARNINGS DILUTED EARNINGS PER SHARE Q4 2023 FY 2023 Q4 2023 FY 2023 $91M $281M $2.42 $7.55 increase of 17% flat YoY increase of 14% decrease of 1% ADJUSTED EBITDA* ADJUSTED DILUTED EARNINGS PER SHARE* Q4 2023 FY 2023 Q4 2

  15. Slide 15: 2027 KPIs for Success

    2027 KPIs for Success KPIs 2023 2027 Cloud GP Growth** 26% 16% - 20% 5-year CAGR Core services GP Growth** 8% 16% - 20% 5-year CAGR Adjusted EBITDA Margin* 5.7% 6.5% - 7.0% Adjusted DEPS* Growth** 6% 19% - 22% 5-year CAGR Adjusted ROIC* 17.3% >25% Adjusted free cash flow 173% >90% as % of Adjusted n

  16. Slide 16: Net Sales and Gross Profit

    NET SALES Trailing twelve months $2.2B decrease of 11% y/y $9.2B* decrease of 12% y/y $10.4B $9.4B $9.2B $8.3B $2.5B $2.3B $2.3B $7.7B $2.3B $2.2B Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 2019 2020 2021 2022 2023 GROSS PROFIT Trailing twelve months $436M increase of 4% y/y $1.7B* increase of 2% y/y 18.2% 14.7%

  17. Slide 17: Services Net Sales and Gross Profit

    SERVICES NET SALES Trailing twelve months $408M increase of 6% y/y $1.5B* increase of 4% y/y $1,483M $1,544M $1,316M $404M $408M $1,168M $384M $356M $376M $999M Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 2019 2020 2021 2022 2023 SERVICES GROSS PROFIT Trailing twelve months $248M increase of 16% y/y $897M* increa

  18. Slide 18: Insight Core Services and Cloud Gross Profit

    INSIGHT CORE SERVICES GROSS PROFIT Trailing twelve months $69M increase of 7% y/y $273M* increase of 8% y/y 30% 27% 27% 27% 30% 31% 30% 26% 28% 28% Gross Margin $273M $253M $72M $221M $65M $71M $69M $196M $61M $167M Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 2019 2020 2021 2022 2023 CLOUD GROSS PROFIT Trailing t

  19. Slide 19: Earnings from Operations

    EARNINGS FROM OPERATIONS Trailing twelve months $132M increase of 16% y/y $420M* increase of 1% y/y $414M $420M $332M $132M $272M $114M $119M $241M $92M $77M Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 2019 2020 2021 2022 2023 ADJUSTED EARNINGS FROM OPERATIONS** Trailing twelve months $149M increase of 16% y/y $4

  20. Slide 20: Diluted Earnings Per Share

    DILUTED EARNINGS PER SHARE Trailing twelve months $2.42 increase of 14% y/y $7.55* decrease of 1% y/y $7.66 $7.55 $5.95 $2.42 $4.43 $4.87 $2.13 $2.17 $1.62 $1.34 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 2019 2020 2021 2022 2023 ADJUSTED DILUTED EARNINGS PER SHARE** Trailing twelve months $2.98 increase of 18%

  21. Slide 21: SADA 2023 Results, Seasonality and Impact on 2024 Guidance

    SADA 2023 Results, Seasonality and Impact on 2024 Guidance Q4 • Immediately accretive to 2023 results - contributing 110 basis points to our Q4 margin expansion • Performed at top end of our December guidance range Annual Seasonality • The second half of the year typically contributes over 100% of f

  22. Slide 22: Full Year 2024 Outlook

    Full Year 2024 Outlook Assumptions: As of February 15, 2024 1 Gross profit growth mid to high teens Gross margin approximately 19% Adjusted diluted EPS* $10.50 - $10.80 Interest expense $40 - $42 million Effective tax rate 26% Capital expenditures $50 - $55 million Average share count 35.2 million 1

  23. Slide 23: Appendix

    Appendix Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2024 Insight Direct USA, Inc. All Rights Reserved. 23

  24. Slide 24: FY 2023 Financial Performance

    FY 2023 | Financial Performance Twelve Months Ended December 31, US Dollars in $000s, except for per share data 2023 2022 Change Consolidated IEI Net sales $9,175,840 $10,431,191 (12)% Net sales, constant currency* (12)% Product net sales $7,631,388 $8,947,787 (15)% Services net sales $1,544,452 $1,

  25. Slide 25: Consolidated IEI Financial Metrics

    Consolidated IEI Financial Metrics Three Months Ended Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Twelve Months Ended 2019 2020 2021 2022 2023 Net Sales YoY (2)% (12)% (14)% (11)% (11)% Net Sales YoY 9% 8% 13% 11% (12)% Gross Margin 16.8% 16.8% 18.4% 18.0% 19.5% Gross Margin 14.7% 15.6% 15.3% 15.7% 18.2% GAAP EFO

  26. Slide 26: Services Financial Metrics

    Services Financial Metrics Three Months Ended Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Twelve Months Ended 2019 2020 2021 2022 2023 Services Revenue $384M $356M $404M $376M $408M Services Revenue $999M $1,168M $1,316M $1,483M $1,544M Services Revenue YoY 9% 5% 2% 3% 6% Services Revenue YoY 20% 17% 13% 13% 4% S

  27. Slide 27: GEO Financial Metrics

    GEO Financial Metrics Three Months Ended Twelve Months Ended December 31, 2023 December 31, 2023 North America EMEA APAC North America EMEA APAC Net Sales $1.8B $390.5M $55.1M $7.4B $1.6B $229.8M Net Sales YoY** (14%) (1%) 1% (13%) (9%) 1% Gross Profit $353.8M $67.3M $15.0M $1.3B $260.0M $63.6M Gros

  28. Slide 28: Adjusted EBITDA and Debt Covenants

    Adjusted EBITDA and Debt Covenants Twelve Months Ended Fixed Charge Coverage December 31, US Dollars in $000s 2023 2022 $550,000 $514,706 Adjusted Consolidated EBITDA $500,000 $450,000 Net earnings $ 281,309 $ 280,608 $400,000 Interest expense 48,576 41,577 $350,000 Taxes 96,545 93,825 $300,000 $250

  29. 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 2023 2022 2021 2023 2022 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 131,861 $ 114,016 $ 93,417 $ 419,795 $ 413,700 Amortization of

  30. Slide 30: 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 2023 2022 2021 2023 2022 Adjusted Consolidated Net Earnings: GAAP consolidated net earnings $ 90,608 $ 77,477 $ 62,133 $ 281,309 $ 280,60

  31. Slide 31: 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 2023 2022 2023 2022 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 117,377 $ 99,341 $ 362,082 $ 350,436 Amor

  32. Slide 32: 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 2023 2022 2023 2022 Adjusted Consolidated EBITDA GAAP consolidated net earnings $ 90,608 $ 77,477 $ 281,309 $ 280,608 Interest expense 11,958 11,271

  33. Slide 33: 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 2023 2022 Return on Invested Capital: GAAP consolidated EFO $ 419,795 $ 413,700 Amortization of intangible assets 36,231 32,892 5 Other 36,101 20,018 Adjusted non-GAAP consolidated

  34. Slide 34: 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 2023 Adjusted Free Cash Flow: Net cash provided by operating activities $ 619,531 Less: Purchases of property and equipment 39,252 Adjusted non-GAAP free cash flow $ 580,279 Net ca

  35. Slide 35: 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 2023 2022 2023 2022 2023 2022 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO

  36. Slide 36: 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 2018 2019 2020 2021 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 233,483 $ 240,594 $ 271,575 $ 332,061 Amortization of intangible assets 15,737 22,985 37,535 32,04

  37. Slide 37: Financial Results by Offering Category

    Financial Results by Offering Category US Dollars in $000s FY 2021 Q1-22 Q2-22 Q3-22 Q4-22 FY 2022 Q1-23 Q2-23 Q3-23 Q4-23 FY 2023 Consolidated IEI by Offering Category Hardware $ 5,889,510 $ 1,673,588 $ 1,731,116 $ 1,572,275 $ 1,473,916 $ 6,450,895 $ 1,328,845 $ 1,310,273 $ 1,301,155 $ 1,148,664 $

  38. Slide 38: 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 f

Insight Enterprises — Q4 2023 Earnings Presentation on 6ix