Insight Enterprises, Inc. · NASDAQ:NSIT

Insight Enterprises — Q1 2024 Earnings Presentation

35 slides from Insight Enterprises's earnings presentation, May 2, 2024

  1. Slide 1: First Quarter 2024 Earnings Conference Call and Webcast

    Insight Enterprises, Inc. First Quarter 2024 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 ◦ First Quarter 2024 Highlights and Performance ◦ 2027 KPIs for Success ◦ 2024 Outlook ◦ Appendix Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2024 2022 Insight Di

  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: Multi-National Conglomerate Frees Up Capital by Moving to the Cloud

    Multi-National Conglomerate Frees Up Capital by Moving to the Cloud The challenge: The solution: The results: • Behind schedule on plans to migrate • Storage-as-a-service with surge • Addressed end of life storage while on-prem data centers to the cloud capacity allows refresh of on-prem avoiding ca

  7. Slide 7: Leading Manufacturer Invests in Innovation

    Leading Manufacturer Invests in Innovation The challenge: The solution: The results: • Being able to turn off dependency on an • A modern framework that enables easy • Successfully migrated all the antiquated compute and storage platform expansion and growth for future integrations to a cloud based,

  8. Slide 8: Awards and Recognitions

    Awards and Recognitions Notable Awards • North America Cybersecurity Partner of the 2024 Americas Software Year Partner of the Year • North America Endpoint Cybersecurity Partner of the Year • North America Cybersecurity Accelerator Partner of the Year • North America Cybersecurity Marketing Excelle

  9. Slide 9: Q1 2024 Performance

    Q1 2024 Performance (Changes against prior year period) NET SALES GROSS PROFIT CLOUD GROSS PROFIT INSIGHT CORE SERVICES 55% services gross CLOUD GROSS PROFIT $2.4B $441M $117M $76M profit as a % of total gross profit** increase of 2% increase of 13% increase of 33% increase of 24% MARGINS EARNINGS G

  10. Slide 10: 2027 KPIs for Success

    2027 KPIs for Success KPIs TTM Q1 2024 2027 Cloud GP Growth** 26% 16% - 20% 5-year CAGR*** Core services GP Growth** 14% 16% - 20% 5-year CAGR*** Adjusted EBITDA Margin* 6.0% 6.5% - 7.0% Adjusted DEPS* Growth** 13% 19% - 22% 5-year CAGR*** Adjusted ROIC* 18.0% >25% Adjusted free cash flow 188% >90%

  11. Slide 11: Net Sales and Gross Profit

    NET SALES Trailing twelve months $2.4B increase of 2% y/y $9.2B* decrease of 9% y/y $10.4B $10.1B $9.7B $9.4B $9.2B $9.2B $2.3B $2.3B $2.3B $2.2B $2.4B Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 2022 Q1-23 Q2-23 Q3-23 2023 Q1-24 GROSS PROFIT Trailing twelve months $441M increase of 13% y/y $1.7B* increase of 4%

  12. Slide 12: Services Net Sales and Gross Profit

    SERVICES NET SALES Trailing twelve months $416M increase of 17% y/y $1.6B* increase of 7% y/y $1,509M $1,520M $1,544M $1,604M $1,483M $1,499M $404M $408M $416M $356M $376M Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 2022 Q1-23 Q2-23 Q3-23 2023 Q1-24 SERVICES GROSS PROFIT Trailing twelve months $249M increase of 2

  13. Slide 13: Insight Core Services and Cloud Gross Profit

    INSIGHT CORE SERVICES GROSS PROFIT Trailing twelve months $76M increase of 24% y/y $288M* increase of 14% y/y 27% 27% 28% 29% 30% 31% 30% 31% 30% 31% 28% $288M $257M $269M $273M Gross Margin $253M $252M $72M $71M $69M $76M $61M Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 2022 Q1-23 Q2-23 Q3-23 2023 Q1-24 CLOUD GR

  14. Slide 14: Earnings from Operations

    EARNINGS FROM OPERATIONS Trailing twelve months $100M increase of 29% y/y $442M* increase of 8% y/y $420M $442M $414M $411M $400M $402M $132M $119M $92M $100M $77M Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 2022 Q1-23 Q2-23 Q3-23 2023 Q1-24 ADJUSTED EARNINGS FROM OPERATIONS** Trailing twelve months $122M increas

  15. Slide 15: Diluted Earnings Per Share

    DILUTED EARNINGS PER SHARE Trailing twelve months $1.74 increase of 30% y/y $7.95* increase of 6% y/y $7.66 $7.55 $7.95 $7.47 $7.22 $7.26 $2.42 $2.17 $1.62 $1.74 $1.34 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 2022 Q1-23 Q2-23 Q3-23 2023 Q1-24 ADJUSTED DILUTED EARNINGS PER SHARE** Trailing twelve months $2.37 i

  16. Slide 16: Full Year 2024 Outlook

    Full Year 2024 Outlook Assumptions: As of May 2, 2024 As of February 15, 2024 Gross profit growth mid to high teens mid to high teens Gross margin approximately 19% approximately 19% Adjusted diluted EPS* $10.60 - $10.90 $10.50 - $10.80 Interest expense $52 - $54 million $40 - $42 million Effective

  17. Slide 17: Appendix

    Appendix Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2024 Insight Direct USA, Inc. All Rights Reserved. 17

  18. Slide 18: Q1 2024 Financial Performance

    Q1 2024 | Financial Performance Three Months Ended March 31, US Dollars in $000s, except for per share data 2024 2023 Change Consolidated IEI Net sales $2,379,485 $2,323,947 2% Net sales, constant currency* 2% Product net sales $1,963,955 $1,967,645 —% Services net sales $415,530 $356,302 17% Gross

  19. Slide 19: Consolidated IEI Financial Metrics

    Consolidated IEI Financial Metrics Three Months Ended Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Twelve Months Ended 2022 Q1-23 Q2-23 Q3-23 2023 Q1-24 Net Sales YoY (12)% (14)% (11)% (11)% 2% Net Sales YoY 11% 2% (7)% (10)% (12)% (9)% Gross Margin 16.8% 18.4% 18.0% 19.5% 18.5% Gross Margin 15.7% 16.3% 16.9% 17.5

  20. Slide 20: Services Financial Metrics

    Services Financial Metrics Three Months Ended Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Twelve Months Ended 2022 Q1-23 Q2-23 Q3-23 2023 Q1-24 Services Revenue $356M $404M $376M $408M $416M Services Revenue $1,483M $1,499M $1,509M $1,520M $1,544M $1,604M Services Revenue YoY 5% 2% 3% 6% 17% Services Revenue YoY

  21. Slide 21: GEO Financial Metrics

    GEO Financial Metrics Three Months Ended March 31, 2024 North America EMEA APAC Net Sales $1.9B $412.8M $61.8M Net Sales YoY** 4% (6%) 1% Gross Profit $349.8M $75.0M $16.1M Gross Profit YoY** 11% 20% 8% Gross Margin 18.4% 18.2% 26.0% Gross Margin YoY 120 bps 390 bps 170 bps GAAP EFO $84.0M $11.2M $4

  22. Slide 22: Adjusted EBITDA and Debt Covenants

    Adjusted EBITDA and Debt Covenants Twelve Months Ended Fixed Charge Coverage March 31, $549,765 US Dollars in $000s 2024 2023 $550,000 Adjusted Consolidated EBITDA $500,000 $450,000 Net earnings $ 298,364 $ 273,949 $400,000 Interest expense 52,157 44,917 $350,000 Taxes 101,321 92,221 $300,000 $250,0

  23. Slide 23: Reconciliation of GAAP to Non-GAAP Financial Measures

    Reconciliation of GAAP to Non-GAAP Financial Measures* Three Months Ended March 31, US Dollars in $000s 2024 2023 2022 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 99,986 $ 77,461 $ 79,849 Amortization of intangible assets 14,925 8,310 7,925 Other** 6,839 8,186 1,783 Adjus

  24. Slide 24: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

    Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended March 31, US Dollars in $000s, except per share data 2024 2023 2022 Adjusted Consolidated Net Earnings: GAAP consolidated net earnings $ 67,027 $ 49,972 $ 56,631 Amortization of intangible assets 14,925 8,310 7,925

  25. Slide 25: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

    Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended March 31, US Dollars in $000s 2024 2023 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 84,023 $ 63,186 Amortization of intangible assets 13,146 7,785 Other** 5,615 7,337 Adju

  26. Slide 26: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

    Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended March 31, US Dollars in $000s 2024 2023 Adjusted Consolidated EBITDA GAAP consolidated net earnings $ 67,027 $ 49,972 Interest expense 15,269 11,688 Income tax expense 21,165 16,389 Depreciation and amortization of

  27. Slide 27: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

    Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Twelve Months Ended March 31, US Dollars in $000s 2024 2023 Return on Invested Capital: GAAP consolidated EFO $ 442,320 $ 411,312 Amortization of intangible assets 42,846 33,277 5 Other 34,754 26,421 Adjusted non-GAAP consolidated EFO

  28. Slide 28: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

    Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended March 31, US Dollars in $000s 2024 2023 Adjusted Consolidated Selling and Administrative Expenses: GAAP selling and administrative expenses $ 337,434 $ 310,001 Less: Other* 18,256 12,643 Adjusted non-GAAP selling an

  29. Slide 29: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

    Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended March 31, US Dollars in $000s 2024 2023 Adjusted EMEA Selling and Administrative Expenses: GAAP selling and administrative expenses $ 63,305 $ 49,905 Less: Other* 2,286 546 Adjusted non-GAAP selling and administrati

  30. Slide 30: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

    Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Twelve Months Ended March 31, US Dollars in $000s 2024 Adjusted Free Cash Flow: Net cash provided by operating activities $ 706,550 Less: Purchases of property and equipment 36,628 Adjusted non-GAAP free cash flow $ 669,922 Net cash

  31. Slide 31: 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 June 30, September 30, December 31, US Dollars in $000s, except per share data 2023 2022 2023 2022 2023 2022 Adjusted Consolidated Earnings from Operations: GAAP consolidated E

  32. Slide 32: 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 2021 TTM Q1-22 TTM Q2-22 TTM Q3-22 2022 TTM Q1-23 TTM Q2-23 TTM Q3-23 2023 TTM Q1-24 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 332,061 $ 344,886 $ 385,973 $ 393

  33. Slide 33: Financial Results by Offering Category

    Financial Results by Offering Category US Dollars in $000s Q1-22 Q2-22 Q3-22 Q4-22 FY 2022 Q1-23 Q2-23 Q3-23 Q4-23 FY 2023 Q1-24 Consolidated IEI by Offering Category Hardware $ 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 $ 5,088,937 $ 1,

  34. Slide 34: Cloud Gross Profit Reconciliation

    Cloud Gross Profit Reconciliation US Dollars in $000s Q1-22 Q2-22 Q3-22 Q4-22 FY 2022 Q1-23 Q2-23 Q3-23 Q4-23 FY 2023 Q1-24 Cloud Gross Profit* $ 59,676 $ 94,590 $ 75,611 $ 85,651 $ 315,528 $ 84,132 $ 105,210 $ 89,005 $ 121,478 $ 399,825 $ 106,993 Cloud Services Gross Profit** 4,079 8,321 6,827 5,23

  35. Slide 35: 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

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