Ingram Micro Holding Corporation Q3 FY2025 earnings call

• Third quarter was strong with revenues above guidance and non-GAAP diluted EPS at high end of guidance despite ransomware incident in July.
• Gaining market share across most regions and Xvantage digital platform is growing globally.
• Enterprise sales strong, SMB had third straight quarter of sequential growth. Client and endpoint solutions solid, advanced solutions had slight decline but servers/storage up double-digit. Networking modestly growth.
• Accelerating AI transformation, invested in AI ecosystem, Xvantage platform with IDA driving revenue, Enable AI program engaging thousands of customers.
• Announced first enterprise-grade AI agent built with Xvantage AI Factory and Google's Gemini model.

In the third quarter, net sales were $12.6 billion, up 7.2% year-over-year. Client and endpoint solutions grew nearly 13% on an FX-neutral basis. Advanced solutions were down 4.5% year-over-year, but servers and storage posted strong double-digit gains. Cloud net revenues were up low single digits year-over-year excluding the impact of a noncore divestiture. Geographically, Latin America and Asia Pacific regions had FX-neutral growth in the low teens year-over-year, North America grew ~3%, and EMEA had slight growth. Overall mix was more concentrated towards large enterprise customers, but SMB category achieved third straight quarter of sequential growth. Gross profit was $870 million, up from $845 million last year. Gross margins improved sequentially by 34 basis points but were down 29 basis points year-over-year due to product mix.

• Q4 net sales guided $14 billion to $14.35 billion, midpoint growth >6% year-over-year.
• Q4 gross profit guided $935 million to $990 million, midpoint gross margins ~6.8%.
• Non-GAAP diluted EPS guided $0.85 to $0.95 per diluted share.

• July ransomware incident had small impact on results, potential risk of similar incidents in future.

Q: Ruplu Bhattacharya asked about margins going forward, mix of SMB vs large enterprise and impact on margins.

A: Michael Zilis said guidance implies margins in high 6s, still seeing seasonal norms, SMB strength is encouraging. Paul Bay added geography mix factor.

Q: Maya Neuman asked about traditional hardware cycle and memory market.

A: Paul Bay said still in back half of PC refresh cycle, no pull forward or pricing conversations seen in memory market.

Q: David Paige Papadogonas asked about where Xvantage is being felt the most.

A: Paul Bay said Xvantage benefits across board, SMB uses it to manage whole business, enterprise for pricing availability etc.

Q: Logan Katzman asked about potential budget flush exiting 2025.

A: Michael Zilis said sees normal budgeting cycle in Q4, SMB spending growth is encouraging.

Q: Alek Valero asked about biggest catalysts over next 4-6 quarters and macro feedback.

A: Paul Bay said catalysts include services, AI monetization, security, wrapping services around AI. Michael Zilis added SMB strength is encouraging as it's usually sensitive, and inflation/tariff improvements are bullish for SMB.