Insight Enterprises, Inc. · NASDAQ:NSIT

Insight Enterprises — Q3 2022 Earnings Presentation

31 slides from Insight Enterprises's earnings presentation, Nov 3, 2022

  1. Slide 1: Insight Enterprises, Inc. Third Quarter 2022 Earnings Conference Call and Webcast

    Insight Enterprises, Inc. Third Quarter 2022 Earnings Conference Call and Webcast Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 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 coronavirus strain

  3. Slide 3: Table of Contents

    Table of Contents ◦ Solutions Integrator Strategy ◦ Areas of Expertise ◦ 2027 KPIs for Success ◦ Solutions at Work ◦ Third Quarter 2022 Highlights and Performance ◦ Liquidity and Debt Covenants ◦ 2022 Outlook ◦ Appendix Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Di

  4. Slide 4: 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

  5. Slide 5: Well Positioned to Help Organizations

    Well Positioned to Help Organizations Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 5

  6. Slide 6: 2027 KPIs for Success

    2027 KPIs for Success KPIs 2027 Existing: EBITDA Margin* 6.5% - 7.0% 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% Free cash flow as % Adjusted net >90% income* *Adjusted non-GAAP basis excludes (i) severance

  7. Slide 7: Innovation for Large Grocer Fuels Digital Growth

    Innovation for Large Grocer Fuels Digital Growth The challenge: The solution: The results: • Optimize data so it can be • Develop real time digital pricing • Significant time savings related monetized to respond to changes in supply to price updates and demand • Contribution to digital growth • Alle

  8. Slide 8: Fire Department Cuts Emergency Response Times in Half with Real-Time Data

    Fire Department Cuts Emergency Response Times in Half with Real-Time Data The challenge: The solution: The results: • Shift legacy data system to cloud- • Build solution around modern tools – • Optimize staging of 15,000 vehicles based infrastructure Data Bricks, PowerBI and assets • Solution capabl

  9. Slide 9: Q3 2022 Performance

    Q3 2022 Performance (Changes against prior year period) NET SALES GROSS PROFIT 48% services as a percent EARNINGS of total gross profit*** $2.5B $399M ADJUSTED EARNINGS FROM OPERATIONS (EFO)* $107M 19% cloud as a percent of total gross profit*** increase of 14% GAAP $90M, up 9% increase of 4% increa

  10. Slide 10: Net Sales and Gross Profit

    NET SALES Trailing twelve months $2.5B increase of 4% y/y $10.5B* increase of 15% y/y constant currency up 6%** $10.4B $10.5B $9.4B $9.9B $9.2B $8.3B $2.7B $2.7B $2.4B $2.6B $2.5B Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 2020 Q3-21 2021 Q1-22 Q2-22 Q3-22 GROSS PROFIT Trailing twelve months $399M increase of 10

  11. Slide 11: Services Net Sales and Gross Profit

    SERVICES NET SALES Trailing twelve months $365M increase of 13% y/y $1.5B* increase of 15% y/y $1,410M $1,452M $1,316M $1,357M $1,266M $394M $1,168M $352M $365M $323M $341M Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 2020 Q3-21 2021 Q1-22 Q2-22 Q3-22 SERVICES GROSS PROFIT Trailing twelve months $187M increase of

  12. Slide 12: Insight Core Services and Cloud Gross Profit

    INSIGHT CORE SERVICES GROSS PROFIT Trailing twelve months $59M increase of 9% y/y $246M* increase of 14% y/y 27% 27% 27% 27% 27% 27% 27% 28% 26% 26% 25% $241M $246M Gross Margin $221M $231M $67M $215M $58M $61M $59M $196M $55M Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 2020 Q3-21 2021 Q1-22 Q2-22 Q3-22 CLOUD GRO

  13. Slide 13: Adjusted Earnings from Operations and Diluted EPS

    EARNINGS ADJUSTED EARNINGS FROM OPERATIONS (EFO)** Trailing twelve months $107M increase of 14% y/y $441M* increase of 25% y/y $428M $441M $384M $352M $362M $142M $322M $103M $107M $94M $90M Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 2020 Q3-21 2021 Q1-22 Q2-22 Q3-22 ADJUSTED DILUTED EARNINGS PER SHARE** Trailin

  14. Slide 14: Liquidity and Debt Covenants

    Liquidity and Debt Covenants Fixed Charge Coverage Twelve Months Ended September 30, $450,000 $403,756 US Dollars in $000s 2022 2021 $400,000 Adjusted Consolidated EBITDA $350,000 Net income $ 265,264 $ 210,600 $300,000 Interest expense 41,213 40,838 $250,000 Taxes 88,939 70,930 $200,000 3.7x Deprec

  15. Slide 15: 2027 KPIs for Success

    2027 KPIs for Success KPIs TTM 9.30.2022 2027 Existing: EBITDA Margin* 4.4% 6.5% - 7.0% ROIC* 15.0% >25% New Metrics: Core services GP | 5-year CAGR 14% 16% - 20% Cloud GP | 5-year CAGR 30% 16% - 20% Adjusted DEPS* | 5-year CAGR 20% 19% - 22% Free cash flow as % Adjusted net Not meaningful >90% inco

  16. Slide 16: Full Year 2022 Outlook

    Full Year 2022 Outlook Assumptions: As of November 3, 2022 As of August 4, 2022 Full year net sales growth % change over prior year Low double digit Low double digit Interest expense $35 - $40 million $30 - $35 million Effective tax rate 25% - 26% 25% - 26% Adjusted diluted EPS* $8.65 - $8.75 $8.55

  17. Slide 17: Appendix

    Appendix Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 17

  18. Slide 18: Q3 2022 YTD | Financial Performance

    Q3 2022 YTD | Financial Performance Nine Months Ended September 30, US Dollars in $000s, unless highlighted as constant currency* 2022 2021 Change Consolidated IEI Net sales $7,928,581 $6,870,090 15% Net sales, constant currency 20% Product net sales $6,828,726 $5,906,437 16% Services net sales $1,0

  19. Slide 19: Consolidated IEI Financial Metrics

    Consolidated IEI Financial Metrics Three Months Ended Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Trailing Twelve Months 2020 Q3-21 2021 Q1-22 Q2-22 Q3-22 Net Sales YoY 26% 12% 21% 23% 4% Net Sales YoY 8% 10% 13% 18% 20% 15% Gross margin 14.9% 15.0% 14.3% 16.0% 15.8% Gross margin 15.6% 15.3% 15.3% 15.1% 15.0% 15.

  20. Slide 20: Services Financial Metrics

    Services Financial Metrics Three Months Ended Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Trailing Twelve Months 2020 Q3-21 2021 Q1-22 Q2-22 Q3-22 Services Revenue $323M $352M $341M $394M $365M Services Revenue $1,168M $1,266M $1,316M $1,357M $1,410M $1,452M Services Revenue YoY 18% 17% 14% 16% 13% Services Reven

  21. Slide 21: Reconciliation of GAAP to Non-GAAP Financial Measures

    Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended Nine Months Ended September 30, September 30, US Dollars in $000s, except per share data 2022 2021 2020 2022 2021 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 90,279 $ 83,151 $

  22. Slide 22: Reconciliation of GAAP to Non-GAAP Financial Measures

    Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended September 30, US Dollars in $000s 2022 2021 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 82,262 $ 74,269 Amortization of intangible assets 8,468 7,372 Other 7,79

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

    Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Twelve Months Ended September 30, US Dollars in $000s 2022 2021 Return on invested capital: GAAP consolidated EFO $ 393,101 $ 321,686 Amortization of intangible assets 32,763 32,077 Other 15,429 (2,096) Adjusted non-GAAP co

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

    Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Nine Months Ended September 30, September 30, US Dollars in $000s 2022 2021 2022 2021 Adjusted Consolidated Selling and Administrative Expenses: GAAP selling and administrative expenses $ 308,253 $ 278,99

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

    Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Nine Months Ended September 30, September 30, US Dollars in $000s 2022 2021 2022 2021 Adjusted EMEA Selling and Administrative Expenses: GAAP selling and administrative expenses $ 47,527 $ 50,062 $ 151,22

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

    Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended Three Months Ended Three Months Ended December 31, March 31, June 30, US Dollars in $000s, except per share data 2020 2021 2021 2022 2021 2022 Adjusted Consolidated Earnings from Operations: GAAP consoli

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

    Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) US Dollars in $000s, except per share data 2019 TTM Q3-20 2020 TTM Q1-21 TTM Q2-21 TTM Q3-21 2021 TTM Q1-22 TTM Q2-22 TTM Q3-22 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 240,594 $ 255,549 $ 27

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

    Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* US Dollars in $000s, except per share data 2017 Adjusted Consolidated Net Earnings: GAAP consolidated net earnings $ 90,683 Amortization of intangible assets 16,812 Amortization of debt discount and issuance costs — Other 15,977 Incom

  29. Slide 29: Financial Results by Offering Category

    Financial Results by Offering Category US Dollars in $000s Q3-20 Q4-20 FY 2020 Q1-21 Q2-21 Q3-21 Q4-21 FY 2021 Q1-22 Q2-22 Q3-22 Consolidated IEI by Offering Category Hardware $ 1,173,151 $ 1,399,661 $ 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,

  30. Slide 30: Appendix - Convertible Senior Notes

    Appendix - Convertible Senior Notes Insight is required to settle the convertible notes principal/par value in cash with the excess being settled in shares resulting in dilution in GAAP reported Diluted Earnings Per Share (“DEPS”). The DEPS incremental shares for GAAP reporting purposes are not issu

  31. Slide 31: Appendix - Convertible Senior Notes

    Appendix - Convertible Senior Notes Insight Convertible Senior Notes - $350 Million Relevant NSIT stock prices: • Price at issuance - $51.56 • Conversion ratio price equivalent - $68.32 Triggered potential additional shares in GAAP DEPS* • Sales price conversion trigger - $88.82 • Bond hedge strike

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