Slide 1: Second Quarter 2024 Earnings Conference Call and Webcast
Insight Enterprises, Inc. Second Quarter 2024 Earnings Conference Call and Webcast Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2024 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 our expectations ab
Slide 3: Table of Contents
Table of Contents ◦ Solutions Integrator Strategy ◦ Solutions at Work ◦ Awards and Recognitions ◦ Second Quarter 2024 Highlights and Performance ◦ 2027 KPIs for Success ◦ 2024 Outlook ◦ Appendix Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2024 2022 Insight Direct USA, Inc. All R
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 Put Deliver Champion Drive value that contributes to their success and making us the partner they can't live without. Clients first Differentia
Slide 5: Our strategy is to become the leading Solutions Integrator
Our strategy is to become THE leading SOLUTIONS INTEGRATOR 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 combination of innovative and scalable G
Slide 6: Q2 2024 Performance
Q2 2024 Performance (Changes against prior year period) NET SALES GROSS PROFIT CLOUD GROSS PROFIT INSIGHT CORE SERVICES 56% services gross CLOUD GROSS PROFIT $2.2B $453M $139M $81M profit as a % of total gross profit** decrease of 8% increase of 5% increase of 21% increase of 12% MARGINS EARNINGS GR
Slide 7: YTD Q2 2024 Performance
YTD Q2 2024 Performance (Changes against prior year period) NET SALES GROSS PROFIT CLOUD GROSS PROFIT INSIGHT CORE SERVICES CLOUD GROSS PROFIT $4.5B $894M $256M $156M decrease of 3% increase of 8% increase of 26% increase of 18% EARNINGS EARNINGS FROM OPERATIONS ADJUSTED EARNINGS FROM MARGINS EARNIN
Slide 8: Infocenter's ServiceNow Expertise
Infocenter's ServiceNow Expertise The challenge: The solution: The results: • A major payment processing company, Insight's InfoCenter team: • Establishment of new IT infrastructure post-separation from its parent within the required (accelerated) company, faced the challenge of • Conducted speciali
Slide 9: Amdaris Enhances Solutions in EMEA with Stripe Partnership
Amdaris Enhances Solutions in EMEA with Stripe Partnership The challenge: The solution: The results: • Stripe offers a comprehensive suite of • Through our Amdaris acquisition, Insight • Our Stripe partnership enables us to financial and payment products for has become an elite global offer customiz
Slide 10: Awards and Recognitions
Awards and Recognitions • 2024 America’s Best Employers for Diversity 2024 (#298 overall and #23 among IT companies) • 2024 Best Large Employers • 2024 Canada's Best Employers • 2023 Best Employers for Women U.S. Best Places to Work International Best Places to Work No. 1 | Inland Northwest No. 7 |
Slide 11: Q2 2024 Performance
Q2 2024 Performance (Changes against prior year period) NET SALES GROSS PROFIT CLOUD GROSS PROFIT INSIGHT CORE SERVICES 56% services gross CLOUD GROSS PROFIT $2.2B $453M $139M $81M profit as a % of total gross profit** decrease of 8% increase of 5% increase of 21% increase of 12% MARGINS EARNINGS GR
Slide 12: SADA Consumption
SADA Consumption • Consumption of cloud services occurs monthly and flows through operating cash flow • SADA generates strong operating cash flows based on this consumption dynamic ◦ Contract asset value, net at June 30, 2024 - $208.5 million ▪ Short-term and long-term contract asset net balances of
Slide 13: Long-Term Debt
Long-Term Debt • Raised $500 million aggregate principal of senior notes due 2032 • Long-term debt balance at June 30, 2024 - $663 million* • Long-term debt balance at June 30, 2023 - $338 million • YoY increase in long-term debt of $325 million US Dollars in millions Payments for Acquisition acquis
Slide 14: 2027 KPIs for Success
2027 KPIs for Success KPIs TTM Q2 2024 2027 Cloud GP Growth** 28% 16% - 20% 5-year CAGR*** Core services GP Growth** 15% 16% - 20% 5-year CAGR*** Adjusted EBITDA Margin* 6.2% 6.5% - 7.0% Adjusted DEPS* Growth** 15% 19% - 22% 5-year CAGR*** Adjusted ROIC* 17.0% >25% Adjusted free cash flow 192% >90%
Slide 15: Full Year 2024 Outlook
Full Year 2024 Outlook Assumptions: As of August 1, 2024 As of May 2, 2024 Gross profit growth low double digit mid to high teens Gross margin 19% - 20% range approximately 19% Adjusted diluted EPS* $10.60 - $10.90 $10.60 - $10.90 Interest expense $60 - $62 million $52 - $54 million Effective tax ra
Slide 16: Net Sales and Gross Profit
NET SALES Trailing twelve months $2.2B decrease of 8% y/y $9.0B* decrease of 7% y/y $10.1B $9.7B $9.4B $9.2B $9.2B $9.0B $2.3B $2.3B $2.2B $2.4B $2.2B Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q1-23 Q2-23 Q3-23 2023 Q1-24 Q2-24 GROSS PROFIT Trailing twelve months $453M increase of 5% y/y $1.7B* increase of 6% y
Slide 17: Services Net Sales and Gross Profit
SERVICES NET SALES Trailing twelve months $435M increase of 8% y/y $1.6B* increase of 8% y/y $1,544M $1,604M $1,635M $1,499M $1,509M $1,520M $404M $408M $416M $435M $376M Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q1-23 Q2-23 Q3-23 2023 Q1-24 Q2-24 SERVICES GROSS PROFIT Trailing twelve months $263M increase of 1
Slide 18: Insight Core Services and Cloud Gross Profit
INSIGHT CORE SERVICES GROSS PROFIT Trailing twelve months $81M increase of 12% y/y $297M* increase of 15% y/y 27% 28% 29% 30% 31% 31% 31% 31% 32% 30% 30% $297M $269M $273M $288M Gross Margin $252M $257M $76M $81M $72M $71M $69M Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q1-23 Q2-23 Q3-23 2023 Q1-24 Q2-24 CLOUD G
Slide 19: Earnings from Operations
EARNINGS FROM OPERATIONS Trailing twelve months $131M increase of 11% y/y $455M* increase of 14% y/y $442M $455M $411M $400M $402M $420M $132M $131M $119M $92M $100M Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q1-23 Q2-23 Q3-23 2023 Q1-24 Q2-24 ADJUSTED EARNINGS FROM OPERATIONS** Trailing twelve months $131M incr
Slide 20: Diluted Earnings Per Share
DILUTED EARNINGS PER SHARE Trailing twelve months $2.27 increase of 5% y/y $8.05* increase of 11% y/y $7.95 $8.05 $7.47 $7.22 $7.26 $7.55 $2.42 $2.27 $2.17 $1.62 $1.74 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q1-23 Q2-23 Q3-23 2023 Q1-24 Q2-24 ADJUSTED DILUTED EARNINGS PER SHARE** Trailing twelve months $2.46
Slide 21: Appendix
Appendix Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2024 Insight Direct USA, Inc. All Rights Reserved. 21
Slide 22: Q2 2024 YTD Financial Performance
Q2 2024 YTD | Financial Performance Six Months Ended June 30, US Dollars in $000s, except for per share data 2024 2023 Change Consolidated IEI Net sales $4,541,147 $4,673,543 (3)% Net sales, constant currency* (3)% Product net sales $3,690,390 $3,913,254 (6)% Services net sales $850,757 $760,289 12%
Slide 23: Consolidated IEI Financial Metrics
Consolidated IEI Financial Metrics Three Months Ended Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Twelve Months Ended Q1-23 Q2-23 Q3-23 2023 Q1-24 Q2-24 Net Sales YoY (14)% (11)% (11)% 2% (8)% Net Sales YoY 2% (7)% (10)% (12)% (9)% (7)% Gross Margin 18.4% 18.0% 19.5% 18.5% 21.0% Gross Margin 16.3% 16.9% 17.5% 18.
Slide 24: Services Financial Metrics
Services Financial Metrics Three Months Ended Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Twelve Months Ended Q1-23 Q2-23 Q3-23 2023 Q1-24 Q2-24 Services Revenue $404M $376M $408M $416M $435M Services Revenue $1,499M $1,509M $1,520M $1,544M $1,604M $1,635M Services Revenue YoY 2% 3% 6% 17% 8% Services Revenue YoY
Slide 25: GEO Financial Metrics
GEO Financial Metrics Three Months Ended Six Months Ended June 30, 2024 June 30, 2024 North America EMEA APAC North America EMEA APAC Net Sales $1.7B $368.9M $60.4M $3.6B $781.7M $122.3M Net Sales YoY** (9%) (6%) 1% (3%) (6%) 1% Gross Profit $354.1M $79.1M $20.1M $704.0M $154.2M $36.2M Gross Profit
Slide 26: Adjusted EBITDA and Debt Covenants
Adjusted EBITDA and Debt Covenants Twelve Months Ended June 30, Fixed Charge Coverage US Dollars in $000s 2024 2023 $544,608 Adjusted Consolidated EBITDA: $550,000 $500,000 Net earnings $ 305,326 $ 265,247 $450,000 Interest expense 57,960 46,391 $400,000 Taxes 102,445 90,328 $350,000 $300,000 Deprec
Slide 27: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures* Three Months Ended Six Months Ended June 30, June 30, US Dollars in $000s 2024 2023 2022 2024 2023 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 131,073 $ 118,611 $ 129,556 $ 231,059 $ 196,072 Amortization of intangible
Slide 28: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended Six Months Ended June 30, June 30, US Dollars in $000s, except per share data 2024 2023 2022 2024 2023 Adjusted Consolidated Net Earnings: GAAP consolidated net earnings $ 87,444 $ 80,482 $ 89,184 $ 154,471 $ 130,4
Slide 29: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended Six Months Ended June 30, June 30, US Dollars in $000s 2024 2023 2024 2023 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 101,813 $ 95,436 $ 185,836 $ 158,622 Amortization of
Slide 30: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Six Months Ended June 30, June 30, US Dollars in $000s 2024 2023 2024 2023 Adjusted Consolidated EBITDA: GAAP consolidated net earnings $ 87,444 $ 80,482 $ 154,471 $ 130,454 Interest expense 16,859 11,056 32,128 22,
Slide 31: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Twelve Months Ended June 30, US Dollars in $000s 2024 2023 Adjusted Return on Invested Capital: GAAP consolidated EFO $ 454,782 $ 400,367 Amortization of intangible assets 51,918 33,658 Gain on revaluation of earnout liabilities (24,2
Slide 32: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Six Months Ended June 30, June 30, US Dollars in $000s 2024 2023 2024 2023 Adjusted Consolidated Selling and Administrative Expenses: GAAP selling and administrative expenses $ 317,234 $ 318,243 $ 654,668 $ 628,244
Slide 33: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Twelve Months Ended June 30, US Dollars in $000s 2024 Adjusted Free Cash Flow: Net cash provided by operating activities $ 724,535 Less: Purchases of property and equipment 44,694 Adjusted non-GAAP free cash flow $ 679,841 Net cash u
Slide 34: 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 September 30, December 31, March 31, US Dollars in $000s, except per share data 2023 2022 2023 2022 2024 2023 Adjusted Consolidated Earnings from Operations: GAAP consolidated
Slide 35: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) US Dollars in $000s TTM Q1-22 TTM Q2-22 TTM Q3-22 2022 TTM Q1-23 TTM Q2-23 TTM Q3-23 2023 TTM Q1-24 TTM Q2-24 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 344,886 $ 385,973 $ 393,101 $ 413,700 $ 411,312 $ 4
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 TTM Q1-22 TTM Q2-22 TTM Q3-22 2022 TTM Q1-23 TTM Q2-23 TTM Q3-23 2023 TTM Q1-24 TTM Q2-24 Adjusted Consolidated Net Earnings: GAAP consolidated net earnings $ 232,808 $ 263,431 $ 265,264 $ 2
Slide 37: Financial Results by Offering Category
Financial Results by Offering Category US Dollars in $000s Q2-22 Q3-22 Q4-22 FY 2022 Q1-23 Q2-23 Q3-23 Q4-23 FY 2023 Q1-24 Q2-24 Consolidated IEI by Offering Category Hardware $ 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 $ 1,134,727 $ 1,
Slide 38: Cloud Gross Profit Reconciliation
Cloud Gross Profit Reconciliation US Dollars in $000s Q2-22 Q3-22 Q4-22 FY 2022 Q1-23 Q2-23 Q3-23 Q4-23 FY 2023 Q1-24 Q2-24 Cloud Gross Profit Reconciliation Cloud Gross Profit* $ 94,590 $ 75,611 $ 85,651 $ 315,528 $ 84,132 $ 105,210 $ 89,005 $ 121,478 $ 399,825 $ 106,993 $ 129,933 Cloud Services Gr
Slide 39: Convertible Senior Notes (Illustrative example)
Convertible Senior Notes (Illustrative example) • 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”) • DE