Insight Enterprises, Inc. Q4 FY2025 earnings call

• Strong execution in Cloud and Core services led to record gross profit, gross margin, and adjusted earnings from operations margin. - Revenue was impacted by on-prem to cloud migration, but other areas showed growth. - Success with acquisitions like Inspire11 and Sekuro enhanced advisory and technical capabilities. - Launched Prism AI platform to help clients simplify AI adoption. - Strong partnerships with major tech companies and recognition from analysts and partners. - Cultivate a culture of collaboration and innovation, recognized as an employer of choice.

In the fourth quarter, overall revenue was down 1% due to on-prem software migrating to cloud. Total gross profit grew 9%. EMEA had strong growth, driven by UAE and Saudi Arabia demand. Cloud gross profit increased 11% in the quarter, with SaaS and Infrastructure as a Service driving double-digit growth. Core services gross profit grew 16% in the quarter, driven by acquisitions and organic growth. For the full year 2025, net revenue was $8.2 billion, down 5%. Gross profit was flat, but gross margin expanded to 21.4%. Cloud gross profit was $495 million, up 2%, and Core services gross profit was $320 million with a margin over 32%.

For 2026, expected gross profit growth in the low single digits and gross margin ~21%. Adjusted diluted EPS expected $10.10-$10.60 including stock-based compensation, $11-$11.50 excluding. Cash flow from operations expected $300-$400 million. First half of 2026 expected to have stronger EPS growth than second half. Hardware gross profit flat, Core services gross profit high single digits growth, cloud gross profit low double digits growth.

• Subdued corporate and large enterprise spending. - Memory pricing and supply chain dynamics impacting hardware demand. - Remaining impact from partner program changes, particularly in Google solution line.

Q: Adam Tindle from Raymond James asked about 2026 guidance process, IT budgets, and year start momentum.

A: James Morgado discussed guidance considering market uncertainties and past performance; Joyce Mullen talked about IT budgets in different segments and year start momentum.

Q: Lucas Morison of Canaccord Genuity asked about AI data center engagement repeatability and memory supply chain impact.

A: Joyce Mullen discussed AI data center engagement and memory price impacts on customers and business.

Q: Joseph Cardoso from JPMorgan asked about full year guidance weighting and cloud gross profit growth.

A: James Morgado explained guidance weighting and cloud growth dynamics.

Q: Vincent Colicchio from Barrington Research asked about market share in North America and AI resource access.

A: Joyce Mullen talked about market share parity and AI resource efforts.