Slide 1: Second Quarter 2022 Earnings Conference Call and Webcast
Insight Enterprises, Inc. Second Quarter 2022 Earnings Conference Call and Webcast Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 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 • The Insight Way • Areas of Expertise • Solutions at Work • Second Quarter 2022 Highlights and Performance • Liquidity and Debt Covenants • 2022 Outlook • Appendix Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 3
Slide 4: The Insight Way
THE INSIGHT WAY Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 4
Slide 5: Well Positioned to Help Organizations
Well Positioned to Help Organizations Modern Workplace Intelligent Edge Our services Gather and utilize data in the most Create a productive, flexible and efficient way possible to enable Consulting Services secure workplace. real-time decision-making and affect Create competitive advantage pivotal
Slide 6: State-of-the-Art Data Center to Support Expanding Business Needs
State-of-the-Art Data Center to Support Expanding Business Needs The challenge: The solution: The results: • Design and build a new data center • Deployed a team of 30 experts with • ~$3 million in cost savings over 120 different certifications • No disruption during datacenter • Improve business op
Slide 7: Leader in Vocational Education Adopts Cloud to Prepare for Future
Leader in Vocational Education Adopts Cloud to Prepare for Future The challenge: The solution: The results: • Enhance client and student experience • Migrated disparate data sources to the cloud • $10 million of benefits over 2 years across 500,000 students spread over 140 • Leveraged Windows Virtua
Slide 8: Q2 2022 Performance
Record second quarter for revenue, gross profit, Q2 2022 Performance Adjusted earnings from operations and Adjusted diluted earnings per share NET SALES GROSS PROFIT 48% services as a percent EARNINGS of total gross profit* ADJUSTED EARNINGS FROM OPERATIONS (EFO)*** $2.7B $438M 19% cloud as a percen
Slide 9: Net Sales and Gross Profit
NET SALES Trailing twelve months increase of 23% y/y $10.4B* increase of 20% y/y $2.7B constant currency up 26%** $2.7 $10.4 $2.6 $2.7 $9.9 $2.4 $9.4 $2.2 $9.2 $8.4 $8.7 $8.3 $8.3 $8.3 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 $USD in billions $USD in billio
Slide 10: Services Revenue and Services Gross Profit
SERVICES REVENUE Trailing twelve months increase of 16% y/y $1.4B* $394M increase of 16% y/y $394 $1,410 $1,316 $1,357 $340 $352 $341 $1,217 $1,266 $323 $1,130 $1,161 $1,168 $1,173 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 $USD in millions $USD in millions S
Slide 11: Insight Core Services and Cloud Gross Profit
INSIGHT CORE SERVICES GROSS PROFIT Trailing twelve months increase of 12% y/y $203M* increase of 17% y/y $56M $USD in millions $USD in millions CLOUD GROSS PROFIT Trailing twelve months $103M increase of 30% y/y $294M* increase of 19% y/y $USD in millions $USD in millions * For the twelve months end
Slide 12: Earnings
EARNINGS Trailing twelve months ADJUSTED EARNINGS FROM OPERATIONS (EFO)** $428M* increase of 30% y/y $142M increase of 45% y/y $USD in millions $USD in millions ADJUSTED DILUTED EARNINGS PER SHARE (DEPS)** Trailing twelve months $8.49* increase of 34% y/y $2.78 increase of 46% y/y * For the twelve m
Slide 13: Liquidity and Debt Covenants
Liquidity and Debt Covenants Twelve Months Ended June 30, US Dollar in $000s 2022 2021 Adjusted Consolidated EBITDA Net income $ 263,431 $ 194,023 Interest expense 39,366 39,495 Taxes 88,404 64,165 3.77x Depreciation and amortization of property and equipment 21,927 25,913 Amortization of intangible
Slide 14: Full Year 2022 Outlook - Update
Full Year 2022 Outlook - Update Assumptions: As of August 4, 2022 As of May 5, 2022 Full year net sales growth (% over prior year) Low double digit Low double digit Interest expense $30 - $35 million $30 - $35 million Effective tax rate 25% - 26% 24% - 25% Adjusted diluted EPS* $8.55 - $8.75 $7.95 -
Slide 15: Appendix
Appendix Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2022 Insight Direct USA, Inc. All Rights Reserved. 15
Slide 16: Q2 2022 YTD Financial Performance
Q2 2022 YTD | Financial Performance Six Months Ended June 30, US Dollar in $000s, unless highlighted as constant currency* 2022 2021 Change Consolidated IEI Net sales $ 5,394,227 $ 4,422,569 22% Net sales, constant currency 27% Product net sales $ 4,659,529 $ 3,782,198 23% Services net sales $ 734,6
Slide 17: Consolidated IEI Financial Metrics
Consolidated IEI Financial Metrics Three Months Ended Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Trailing Twelve Months Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Net Sales YoY 13% 26% 12% 21% 23% Net Sales YoY 19% 16% 8% 2% 4% 10% 13% 18% 20% Gross margin 16.4% 14.9% 15.0% 14.3% 16.0% Gross margin 15
Slide 18: Services Financial Metrics
Services Financial Metrics Three Months Ended Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Trailing Twelve Months Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Services Revenue $340 $323 $352 $341 $394 Services Revenue $1,130 $1,161 $1,168 $1,173 $1,217 $1,266 $1,316 $1,357 $1,410 Insight Core Services* Re
Slide 19: Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* Three Months Ended Six Months Ended June 30, June 30, US Dollars in $000s, except per share data 2022 2021 2022 2021 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 129,556 $ 88,469 $ 209,405 $ 155,493 Amortiza
Slide 20: Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended June 30, US Dollar in $000s 2022 2021 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 104,273 $ 64,119 Amortization of intangible assets 7,356 7,440 Other 4,027 878
Slide 21: Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Twelve Months Ended June 30, US Dollar in $000s 2022 2021 Return on invested capital: GAAP consolidated EFO $ 385,973 $ 300,017 Amortization of intangible assets 31,765 33,522 Other 9,996 (3,566) Adjusted non-GAAP consolida
Slide 22: Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Six Months Ended June 30, June 30, US Dollar in $000s 2022 2021 2022 2021 Adjusted Consolidated Selling and Administrative Expenses: GAAP selling and administrative expenses $ 306,001 $ 277,087 $ 603,641
Slide 23: Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Six Months Ended June 30, June 30, US Dollar in $000s 2022 2021 2022 2021 Adjusted EMEA Selling and Administrative Expenses: GAAP selling and administrative expenses $ 51,372 $ 53,957 $ 103,698 $ 109,404
Slide 24: Financial Results by Offering Category
Financial Results by Offering Category $ in thousands Consolidated IEI by Offering Category Q1-20 Q2-20 Q3-20 Q4-20 FY 2020 Q1-21 Q2-21 Q3-21 Q4-21 FY 2021 Q1-22 Q2-22 Hardware $ 1,311,202 $ 1,184,059 $ 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
Slide 25: 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
Slide 26: Appendix - Convertible Senior Notes
Appendix - Convertible Senior Notes Insight Convertible Senior Notes - $350 Million Relevant NSIT stock prices: • Price at issuance - $51.56 Triggered potential additional • Conversion ratio price equivalent - $68.32 shares in GAAP DEPS* • Sales price conversion trigger - $88.82 • Bond hedge strike