(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~Yes ☒ No ☐~~

Indicatebycheck markwhetherthe ~~registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required~~registrant has submitted electronicallyevery InteractiveDataFilerequired to be ~~submitted and posted pursuant~~submitted pursuant to ~~Rule~~ Rule405 of ~~RegulationS-T~~ (§ Regulation S-T (§232.405 ofthis ~~chapter) during~~chapter)duringthepreceding12months (or forsuch shorterperiod that the ~~preceding 12 months (or for such shorter period that the registrant was required~~ registrant wasrequired to submit ~~and post such files)~~such files). ~~Yes ☒~~

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). ~~Yes ☐~~

The number of shares outstanding of the issuer’s common stock as of ~~November 3, 2017~~October 30, 2020 was ~~35,792,243.~~35,097,785.

References to “the Company,” “Insight,” “we,” “us,” “our” and other similar words refer to Insight Enterprises, Inc. and its consolidated subsidiaries, unless the context suggests otherwise. Certain statements in this Quarterly Report on Form10-Q, including statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 of this report, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include: ~~expectations regarding~~projections of, and matters that affect, net sales, gross profit, gross margin, operating expenses, earnings from operations,non-operating income and expenses, net earnings or cash flows, cash needs and the payment of accrued expenses and ~~liabilities,~~liabilities; our future responses to and the ~~timing~~potential impact of ~~the inventory shipments;~~coronavirus strain COVID-19 (“COVID-19”) on our Company; the expected effects of seasonality on our business; expectations of further consolidation and trends in the Information Technology (“IT”) industry; our business strategy and our strategic initiatives, including our efforts to grow our core business in the current environment, develop and grow our global cloud business and build scalable solutions; expectations regarding partner incentives; our expectations about future benefits of our acquisitions and our plans related thereto, including potential expansion into wider regions; our expectations regarding the PCM integration, including expected synergies; the increasing demand for big data solutions; the availability of competitive sources of products for our purchase and resale; our intentions concerning the payment of dividends; our acquisition strategy; our ability to offset the effects of inflation and manage any increase in interest rates; projections of capital expenditures; our plans to continue to evolve our IT systems, including migration of EMEA’s current system; the sufficiency of our capital resources, the availability of financing and our needs or plans relating thereto; the ~~estimated effect~~effects of new accounting principles and expected dates of adoption; the effect of indemnification obligations; projections about the outcome of ongoing tax audits; our expectations regarding future ~~employee termination benefits; estimates regarding future asset-retirement activities;~~tax rates; adequate provisions for and our positions and strategies with respect to ongoing and threatened ~~litigation;~~litigation and expected outcomes; our ~~intention not~~ability to ~~repatriate certain foreign undistributed earnings where management considers those earnings to be reinvested indefinitely and plans relating thereto;~~expand our client relationships; our expectations ~~regarding~~that pricing pressures in the IT industry will continue; our plans to use of cash flow from operations for working capital, to pay down debt, repurchase shares of our common stock, make capital expenditures, and fund acquisitions; our belief that our office facilities are adequate and that we will be able to extend our current leases or locate substitute facilities on satisfactory terms; our belief that we have adequate provisions for losses; our expectation that we will not incur interest payments under our inventory financing facilities; our expectations ~~regarding stock-based compensation and~~that future income will be sufficient to fully recover deferred tax ~~expense; our compliance with leverage ratio requirements;~~assets; our exposure tooff-balance sheet arrangements; ~~our expectations about Datalink profitability objectives and the future benefits of our acquisitions and our plans related thereto, including potential expansion into wider regions;~~ statements of belief; and statements of assumptions underlying any of the foregoing. Forward-looking statements are identified by such words as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,” “will,” “may” and variations of such words and similar expressions and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. There can be no assurances that results described in forward-looking statements will be achieved, and actual results could differ materially from those suggested by the forward-looking statements. Some of the important factors that could cause our actual results to differ materially from those projected in any forward-looking statements include, but are not limited to, the following, which are discussed in “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form10-K for the year ended December 31, ~~2016:~~2019 and in “Risk Factors” in Part II, Item 1A of this report:

Additionally, there may be other risks that are otherwise described from time to time in the reports that we file with the Securities and Exchange ~~Commission.~~Commission (the “SEC”). Any forward-looking statements in this report are made as of the date of this filing and should be considered in light of various important factors, including the risks and uncertainties listed above, as well as others. We assume no obligation to update, and, except as may be required by law, do not intend to update, any forward-looking statements. We do not endorse any projections regarding future performance that may be made by third parties.

We ~~are a Fortune 500 global IT provider helping businesses~~empower organizations of all sizes ~~– from small and medium sized firms to worldwide enterprises, governments, schools and health care organizations – define, architect, implement and manage~~with Intelligent Technology Solutions^TM and services to maximize the business value of Information Technology (“IT”) in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). ~~We empower our~~As a Fortune 500-ranked global provider of digital innovation, cloud/data center transformation, connected workforce, and supply chain optimization solutions, we help clients ~~to manage their IT environments so they can drive meaningful business outcomes today~~innovate and ~~transform~~optimize their operations ~~for tomorrow.~~to run smarter. Our company is organized in the following ~~three~~3 operating segments, which are primarily defined by their related geographies:

Our offerings in North America and ~~select~~certain countries in EMEA and APAC include hardware, software and services. Our offerings in the remainder of our EMEA and APAC segments ~~are~~consist of largely software and ~~select~~certain software-related services.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly our financial position as of September 30, ~~2017,~~2020 and our results of operations for the three and nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 and ~~our~~ cash flows for the nine months ended September 30, ~~2017~~2020 and ~~2016.~~2019. The consolidated balance sheet as of December 31, ~~2016~~2019 was derived from the audited consolidated balance sheet at such date. The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with the rules and regulations promulgated by the ~~Securities and Exchange Commission~~SEC and consequently do not include all of the disclosures normally required by United States generally accepted accounting principles (“GAAP”).

The results of operations for interim periods are not necessarily indicative of results for the full year, due in part to the seasonal nature of our business. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the related notes thereto, in our Annual Report on Form10-K for the year ended December 31, ~~2016.~~2019. Our results of operations include the results of ~~Caase Group B.V. (doing business as, and referred to herein as, “Caase.com”~~PCM, Inc. (“PCM”) from its acquisition date of ~~September 26, 2017, Datalink Corporation (“Datalink”)~~August 30, 2019 and vNext from its acquisition date of ~~January 6, 2017 and Ignia, Pty Ltd (“Ignia”) from its acquisition date of September 1, 2016. See Note 10 for further discussion of our acquisitions of Caase.com and Datalink.~~February 28, 2020.

The consolidated financial statements include the accounts of Insight Enterprises, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Additionally, these estimates and assumptions affect the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to sales recognition, anticipated achievement levels under partner funding programs, assumptions related to stock-based compensation valuation, allowances for doubtful accounts, valuation of inventories, litigation-related obligations, valuation allowances for deferred tax assets and impairment of long-lived assets, including purchased intangibles and goodwill, if indicators of potential impairment exist.

In ~~March 2016,~~December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting ~~Standards~~Standard Update (“ASU”)No. ~~2016-09,~~ ~~“Improvements to Employee Share-Based Payment Accounting.~~2019-12, “Simplifying the Accounting for Income Taxes.” ~~This~~The new standard ~~simplifies the~~is intended to simplify various aspects of accounting for ~~share-based payment transactions, including the~~ income ~~tax consequences, the calculation of diluted earnings per share, the treatment of forfeitures, the classification of awards as either equity or liabilities~~taxes by removing specific exceptions and ~~the classification on the statement of cash flows. This~~amending certain requirements. The new standard ~~increases volatility in~~is effective for interim and annual periods beginning after December 15, 2020, and early adoption is permitted. We do not expect this new standard to have a material effect on our consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses.” The new standard is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held at each reporting date. In April 2019, the FASB issued ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” The new standard update provides changes for how a company considers expected recoveries and contractual extensions or renewal options when estimating expected credit losses. In November 2019, the FASB issued ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses.” The new standard update provides amendments to the reporting of operations by requiring all excess tax benefits and deficiencies to be recognized as income tax benefit or expense in the statement of operations and treated as discrete items in the period in which they occur.expected recoveries. We adopted ~~the~~these new ~~standard~~standards as of January 1, 2017, and prospectively applied the provisions in this guidance requiring recognition of excess tax benefits and deficits in the statement of operations, which resulted in an income tax benefit of $69,000 and $2,258,000 for the three and nine months ended September 30, 2017, respectively.2020. The corresponding increase in net earnings had no effect on diluted earnings per share during the three months ended September 30, 2017 and equated to $0.06 per diluted share during the nine months ended September 30, 2017. Also, as a result of the adoption of ~~the~~these new standard, we made an accounting policy election to recognize forfeitures as they occur and no longer estimate expected forfeitures. The provisions in this guidance requiring the use of a modified retrospective transition method would have required us to record a cumulative effect adjustment in retained earnings as of January 1, 2017. We elected not to adjust retained earnings and to record such cumulative effect adjustment as stock-based compensation in the first quarter of 2017 on the basis of immateriality. Lastly, we applied the provisions of this guidance relating to classification on the statement of cash flows retrospectively. As a result, excess tax benefits from employee gains on stock-based compensation of $293,000 were reclassified from cash flows from financing activities to cash flows from operating activities for the nine months ended September 30, 2016 to conform to the current period presentation.

~~In July 2015, the FASB issued ASUNo. 2015-11,~~ “Simplifying the Measurement of Inventory.” This standard changes the measurement from lower of cost or market to lower of cost and net realizable value. We adopted the standard in the first quarter of 2017 and applied the provisions prospectively. The standardstandards did not have a material effect on our consolidated financial statements.

~~On May 28, 2014, the FASB issued ASUNo. 2014-09,~~ “Revenue from Contracts with Customers,” which amends the existing accounting standards for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard, as amended, will be effective for the Company beginning in the first quarter of 2018. The standard permits two methods of adoption: retrospectively to each prior reporting period presented (the full retrospective transition method) or retrospectively with the cumulative effect adjustment of initially applying the new standard recognized at the date of initial application (the modified retrospective transition method).

We will adopt the standard on January 1, 2018, and expect to utilize the modified retrospective transition method. While we are still finalizing our accounting policies under the new standard and are in the process of quantifying the cumulative effect adjustment from prior periods that will be recognized in our consolidated balance sheet as of the date of adoption as an adjustment to retained earnings, to date we have concluded:

Our analysis and evaluation of the new standard will continue through its effective date in the first quarter of 2018. A substantial amount of work has been completed, and findings and progress to date have been reported to management and the Audit Committee. Although we do not currently expect the changes resulting from the adoption of the new standard to materially affect our results of operations, our conclusions are still being finalized.

There have been no other material changes in or additions to the recently issued accounting standards as previously reported in Note 1 to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report onForm 10-K for the year ended December 31, ~~2016~~2019 that affect or may affect our current financial statements.

2. In the following table, revenue is disaggregated by our reportable operating segments, which are primarily defined bytheir related geographies, as well as by major product offering, by major client group and by recognition on either a gross basis as a principal in the arrangement, or on a net basis as an agent, for the three and nine months ended September 30, 2020 and 2019 (in thousands):

The following table provides information about receivables and contract liabilities as of September 30, 2020 and December 31, 2019 (in thousands):

Changes in the contract liabilities balances during the nine months ended September 30, 2020 are as follows (in thousands):

The following table includes estimated net sales related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2020 that are expected to be recognized in the future (in thousands):

With the exception of remaining performance obligations associated with our OneCall Support Services contracts which are included in the table above regardless of original duration, remaining performance obligations that have original expected durations of one year or less are not included in the table above. Amounts not included in the table above have an average original expected duration of nine months. Additionally, for our time and material services contracts, whereby we have the right to consideration from a client in an amount that corresponds directly with the value to the client of our performance completed to date, we recognized revenue in the amount to which we have a right to invoice as of September 30, 2020 and do not disclose information about related remaining performance obligations in the table above. Our time and material contracts have an average expected duration of 20 months.

The majority of our backlog historically has been and continues to be open cancelable purchase orders. We do not believe that backlog as of any particular date is predictive of future results, therefore we do not include performance obligations under open cancelable purchase orders, which do not qualify for revenue recognition, in the table above.

During 2019, we completed the purchase of real estate in Chandler, Arizona that we intend to use as our global corporate headquarters. During the fourth quarter of 2019, properties in Tempe, Arizona, El Segundo and Santa Monica, California and Woodbridge, Illinois were classified as held for sale, for approximately $68,916,000, which is included in other current assets in the accompanying consolidated balance sheet as of September 30, 2020, as we look to sell current properties in preparation for our move to Chandler. During the first quarter of 2020, we completed the sale of our property in Irvine, California for approximately $14,218,000.

Basic EPS is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding during each period. Diluted EPS is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding restricted stock units (“RSUs”).

A reconciliation of the denominators of the basic and diluted EPS calculations follows (in thousands, except per share data):

For the three and nine months ended September 30, ~~2017, 36,000~~2020, 3,000 and ~~48,000,~~163,000, respectively, of our RSUs were not included in the diluted EPS calculations because their inclusion would have been anti-dilutive. These share-based awards could be dilutive in the future. There were ~~5,000~~3,000 and ~~48,000~~56,000 anti-dilutive RSUs for the three and nine months ended September 30, ~~2016,~~2019, respectively.

~~3. Debt, Inventory Financing Facility, Capital Leases and Other Financing Obligations~~11

On August 30, 2019, we entered into a credit agreement (the “credit agreement”) providing for a senior secured revolving credit facility ~~(“revolving~~(the “ABL facility”), which has an aggregate U.S. dollar equivalent maximum borrowing amount of ~~$350,000,000,~~$1,200,000,000, including a maximum borrowing capacity that ~~may~~could be used for borrowing in certain foreign currencies of $50,000,000, and matures on June 23, 2021. On January 6, 2017, we amended our revolving facility to expand the facility by $175,000,000 in the form of an incremental Term Loan A (“TLA”). Pricing and all other general terms and conditions of the TLA are governed by the existing revolving facility. The TLA requires amortization payments of 5%, 7.5%, 10%, 12.5% and 15% of the original principal balance in years one through five, respectively, to be paid quarterly through March 31, 2021, with the remaining balance of $107,187,500 due at maturity on June 23, 2021. The revolving facility and TLA are guaranteed by the Company’s material domestic subsidiaries and are secured by a lien on substantially all of the Company’s and each guarantor’s assets. The interest rates applicable to borrowings under the revolving facility and the TLA are based on the leverage ratio of the Company as set forth on a pricing grid in the amended agreement. Amounts outstanding under the revolving

~~facility and TLA bear interest, payable quarterly, at a floating rate equal to the prime rate plus a predetermined spread of 0.00% to 0.75% or, at our option, a LIBOR rate plus apre-determined~~ spread of 1.25% to 2.25%. The floating interest rate applicable at September 30, 2017 was 2.70% per annum for the revolving facility and 2.74% per annum for the TLA. In addition, we pay a quarterly commitment fee on the unused portion of the revolving facility of 0.25% to 0.45%, and our letter of credit participation fee ranges from 1.25% to 2.25%. As of September 30, 2017, we had $216,000,000 outstanding under our revolving facility and approximately $168,438,000 outstanding under the TLA.

Our accounts receivable securitization financing facility (the “ABS facility”) has a maximum aggregate borrowing availability of $250,000,000, and matures on June 23, 2019. Interest is payable monthly, and the floating interest rate applicable at September 30, 2017 was 2.14% per annum, including a 0.85% usage fee on any outstanding balances. In addition, we pay a monthly commitment fee on the unused portion of the facility of 0.375%.$150,000,000. While the ~~ABS~~ABL facility has a stated maximum amount, the actual availability under the ~~ABS~~ABL facility is limited by specified percentages of eligible accounts receivable and certain eligible inventory, in each case as set forth in the quantity and quality of the underlying accounts receivable. As of September 30, 2017, qualified receivables were sufficient to permit access to the full $250,000,000 facility amount, of which $160,000,000 was outstanding.

Our consolidated debt balance that can be outstanding at the end of any fiscal quarter under our revolving facility, our TLA and our ABS facility is limited by certain financial covenants, particularly a maximum leverage ratio. The maximum leverage ratio is calculated as aggregate debt outstanding divided by the sum of our trailing twelve month net earnings (loss) plus (i) interest expense, excluding~~non-cash~~ ~~imputed interest on our inventory financing facility, (ii) income tax expense (benefit), (iii) depreciation and amortization,(iv) non-cash~~ ~~stock-based compensation, (v) extraordinary ornon-recurringnon-cash~~ losses or expenses and (vi) certain cash restructuring and acquisition-related charges and synergies, not to exceed a specified cap (“adjusted earnings”). The maximum leverage ratio permitted under the facilities was increased to 3.50 times our trailing twelve-month adjusted earnings in conjunction with the acquisition of Datalink effective January 6, 2017. A significant drop in our adjusted earnings would limit the amount of indebtedness that could be outstanding at the end of any fiscal quarter to a level that would be below our consolidated maximum facility amount. Based on our maximum leverage ratio as of September 30, 2017, our aggregate debt balance that could have been outstanding under our revolving facility and our ABS facility was the full amount of the maximum borrowing capacity of $768,438,000, of which $216,000,000 was outstanding under our revolving facility, $168,438,000 was outstanding under our TLA and $160,000,000 was outstanding under our ABS facility at September 30, 2017.

Our inventory financing facility has a maximum borrowing capacity of $325,000,000, of which $224,072,000 was outstanding at September 30, 2017, and matures on June 23, 2021. If balances are not paid within stated vendor terms, they will accrue interest at prime plus 1.25%.credit agreement. From time to time and at our option, we may request to increase the aggregate amount available for borrowing under the ~~inventory financing~~ABL facility by up to an aggregate of ~~$25,000,000,~~the U.S. dollar equivalent of $500,000,000, subject to customary ~~conditions. Amounts outstanding under this facility are classified separately as accounts payable - inventory financing facility in~~conditions, including receipt of commitments from lenders. On July 31, 2020, we entered into the ~~accompanying consolidated balance sheets. Interest does not accrue on advances paid within vendor terms.~~First Amendment to Credit Agreement (the “Amendment”) to the ABL facility. The ~~inventory financing~~Amendment, among other things, amends the credit agreement to provide additional flexibility for certain asset sale transactions by the Company and its subsidiaries. The ABL facility is guaranteed by ~~the Company and each~~certain of ~~its~~our material ~~domestic~~ subsidiaries and is secured by a lien on ~~substantially all~~certain of ~~the Company’s~~our assets and certain of each other borrower’s and each guarantor’s assets. The interest rates applicable to borrowings under the ABL facility are based on the average aggregate excess availability under the ABL facility as set forth on a pricing grid in the credit agreement. The ABL facility matures on August 30, 2024. As of September 30, 2020, eligible accounts receivable and inventory were sufficient to permit access to the full $1,200,000,000 facility amount, NaN of which was outstanding.

9The ABL facility contains customary affirmative and negative covenants and events of default. If a default occurs (subject to customary grace periods and materiality thresholds) under the credit agreement, certain actions may be taken, including, but not limited to, possible termination of commitments and required payment of all outstanding principal amounts plus accrued interest and fees payable under the credit agreement.

On August 15, 2019, we issued $300,000,000 aggregate principal amount of convertible senior notes (the “notes”) that mature on February 15, 2025. On August 23, 2019, we issued an additional $50,000,000 aggregate principal amount of the notes pursuant to the exercise in full by the initial purchasers of the notes of their option to purchase additional notes. The notes bear interest at an annual rate of 0.75% payable semiannually, in arrears, on February 15^th and August 15^th of each year. The notes are general unsecured obligations of Insight and are guaranteed on a senior unsecured basis by Insight Direct USA, Inc., a wholly owned subsidiary of Insight.

Holders of the notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding June 15, 2024, under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2019 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any 5 consecutive trading day period (the “measurement period”) in which the trading price of our common stock per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) if we call any or all of the notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after June 15, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, the holders may convert their notes at any time, regardless of the foregoing circumstances.

Upon conversion, we will pay or deliver cash, shares of our common stock or a combination of the two, at our discretion. The conversion rate will initially be 14.6376 shares of common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $68.32 per share of common stock). The conversion rate is subject to change in certain circumstances and will not be adjusted for any accrued and unpaid interest. In addition, following certain events that occur prior to the maturity date or following our issuance of a notice of redemption, the conversion rate is subject to an increase for a holder who elects to convert their notes in connection with those events or during the related redemption period in certain circumstances.

If we undergo a fundamental change, the holders may require us to repurchase for cash all or any portion of their notes at a fundamental change repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of September 30, 2020, none of the criteria for a fundamental change or a conversion rate adjustment had been met.

The maximum number of shares issuable upon conversion, including the effect of a fundamental change and subject to other conversion rate adjustments, would be 6,788,208.

We may redeem for cash all or any portion of the notes, at our option, on or after August 20, 2022 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the then outstanding principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the notes.

The notes are subject to certain customary events of default and acceleration clauses. As of September 30, 2020, no such events have occurred.

~~Capital Lease~~The notes consist of the following balances reported within the consolidated balance sheets (in thousands):

The remaining life of the debt discount and ~~Other Financing Obligations~~issuance cost accretion is approximately 4.375 years. The effective interest rate on the liability component of the notes is 4.325%.

~~In March 2016 and May 2017, we entered into capitalized leases with36-month~~ ~~terms for certain IT equipment. Additionally, in August 2017, we entered into two12-month~~ ~~capital leases for certain IT equipment. The capital leases werenon-cash~~ ~~transactions and, accordingly, have been excluded~~Interest expense resulting from ~~our~~the notes reported within the consolidated statement of ~~cash flows~~operations for the three and nine months ended September 30, ~~2017~~2020 is made up of contractual coupon interest, amortization of debt discount and ~~2016. Our capital lease obligations totaled $3,277,000~~amortization of debt issuance costs.

In connection with the issuance of the notes, we entered into certain convertible note hedge and warrant transactions (the “Call Spread Transactions”) with respect to the Company’s common stock.

The convertible note hedge consists of an option to purchase up to 5,123,160 common stock shares at a price of $68.32 per share. The hedge expires on February 15, 2025 and can only be concurrently executed upon the conversion of the notes. We paid approximately $66,325,000 for the convertible note hedge transaction.

Additionally, we sold warrants to purchase 5,123,160 shares of common stock at a price of $103.12 per share. The warrants expire on May 15, 2025 and can only be exercised at maturity. The Company received aggregate proceeds of approximately $34,440,000 for the sale of the warrants.

The Call Spread Transactions have no effect on the terms of the notes and reduce potential dilution by effectively increasing the initial conversion price of the notes to $103.12 per share of the Company’s common stock.

During 2020, we increased our maximum availability for vendor purchases under our unsecured inventory financing facility with MUFG Bank Ltd (“MUFG”) from $200,000,000 to $250,000,000. On July 6, 2020, we entered into a new unsecured inventory financing facility with a subsidiary of PNC Bank, N.A. (“PNC”), which replaced our previous facility with Wells Fargo Capital Finance, LLC. The aggregate availability for vendor purchases under the PNC facility is $250,000,000.As of September 30, ~~2017 and December 31, 2016, respectively.~~

~~In conjunction with~~2020, our ~~acquisition~~combined inventory financing facilities had a total maximum capacity of ~~Datalink effective January 6, 2017, we acquired certain obligations associated with Datalink’s~~$500,000,000, of which$367,997,000 was outstanding. The inventory financing facilities will remain in effect until they are terminated by any of the ~~equipment that it leased~~parties. If balances are not paid within stated vendor terms, they will accrue interest at prime plus 2.00% and LIBOR plus 4.50% on the MUFG and PNC facilities, respectively.The PNC facility allows for an alternative rate to ~~its clients. These~~be identified if LIBOR is no longer available. Amounts outstanding under these facilities are classified separately as accounts payable – inventory financing ~~obligations totaled $2,950,000 as~~facilities in the accompanying

consolidated balance sheets and within cash flows from financing activities in the accompanying consolidated statements of ~~September 30, 2017.~~cash flows.

From time to time, we enter into finance leases and other financing agreements with financial intermediaries to facilitate the purchase of products from certain vendors.

The current and long-term portions of our ~~capital lease~~finance leases and other financing obligations are included in the current and long-term portions of long-term debt in the table above and in our consolidated balance ~~sheet~~sheets as of September 30, ~~2017.~~2020 and December 31, 2019. See Note 6 for additional information.

~~4. Severance~~We lease office space, distribution centers, land, vehicles and ~~Restructuring Activities~~equipment. Lease agreements with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

Certain lease agreements include one or more options to renew, with renewal terms that can extend the ~~three~~lease term from one to five years or more. The exercise of lease renewal options is at our sole discretion. Some agreements also include options to purchase the leased property. The estimated life of assets and ~~nine months ended September 30, 2017, we recorded severance expense in each~~leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Certain of our ~~operating segments. The North America charges~~lease agreements include rental payments adjusted periodically for the nine months ended September 30, 2017 primarily related to severance actions taken to realign roles and responsibilities subsequent to the acquisition of Datalink. The EMEA charges for the nine months ended September 30, 2017 primarily related to headcount reductions in France, Germany and the Netherlands as part of our cost reduction and restructuring initiatives. The APAC charges for the nine months ended September 30, 2017 primarily related to severance actions taken subsequent to the acquisition of Ignia.inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table ~~details~~provides information about the ~~activity related to these resource actions for~~financial statement classification of our lease balances reported within the ~~nine months ended September 30, 2017 and the outstanding obligations~~consolidated balance sheets as of September 30, ~~2017~~2020 and December 31, 2019 (in thousands):

The remaining outstanding obligations are expected to be paid during the next 12 months and, therefore, are included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.15

The following table provides information about the financial statement classification of our lease expenses reported within the consolidated statement of operations for the three and nine months ended September 30, 2020 (in thousands):

Future minimum lease payments under non-cancelable leases as of September 30, 2020 are as follows (in thousands):

Operating lease payments include $13.4 million related to options to extend lease terms that are reasonably certain of being exercised.

5. The following table provides information about the remaining lease terms and discount rates applied as of September 30, 2020:

The following table provides other information related to leases for the three and nine months ended September 30, 2020 (in thousands):

We recorded the followingpre-tax amounts in selling and administrative expenses for stock-based compensation, by operating segment, in the accompanying consolidated financial statements (in thousands):

As of September 30, ~~2017,~~2020, total compensation cost related to nonvested RSUs not yet recognized is ~~$20,543,000,~~$25,871,000, which is expected to be recognized over the next ~~1.29~~1.33 years on a weighted-average basis.

The following table summarizes our RSU activity during the nine months ended September 30, ~~2017:~~2020:

^(b)

⁽^b⁾

The aggregate fair value of vested RSUs represents the totalpre-tax fair value, based on the closing stock price on the day of vesting, which would have been received by holders of RSUs had all such holders sold their underlying shares on that date.

^(c)

⁽^c⁾

The aggregate fair value of the nonvested RSUs and the RSUs expected to vest represents the totalpre-tax fair value, based on our closing stock price of ~~$45.92~~$56.58 as of September ~~29, 2017 (the last trading day of the quarter),~~30, 2020, which would have been received by holders of RSUs had all such holders sold their underlying shares on that date.

6. 17

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

8.	Income Taxes

Our effective tax rate was 23.8% for the three and nine months ended September 30, 2020. For the three months ended September 30, 2020, our effective tax rate was higher than the United States federal statutory rate of 21.0% due primarily to state income taxes, net of federal benefit, and higher taxes on earnings in foreign jurisdictions, partially offset by the recognition of tax benefits related to research and development activities and the beneficial impact of certain income tax regulations issued during the quarter. For the nine months ended September 30, 2020, our effective tax rate was higher than the United States federal statutory rate of 21.0% due primarily to state income taxes, net of federal benefit, and higher taxes on earnings in foreign jurisdictions, partially offset by the remeasurement of acquired net operating losses under the CARES Act, and the recognition of tax benefits related to research and development activities.

Our effective tax rate for the three and nine months ended September 30, ~~2017~~2019 was ~~36.8%~~27.2% and ~~35.6%~~25.4%, respectively. For the three months ended September 30, ~~2017,~~2019, our effective tax rate was higher than the United States federal statutory rate of ~~35.0%~~21.0% due primarily to state income taxes, net of federal benefit, ~~and the disallowance of the loss on the sale of a foreign entity. Additionally, the effect of lower~~higher taxes on earnings in foreign jurisdictions, ~~was~~and the effect of non-deductible acquisition-related expenses partially offset ~~partially~~ by ~~losses in certain foreign jurisdictions, resulting in an increase in~~ the ~~valuation allowance for deferred~~recognition of tax ~~assets~~benefits related to ~~these foreign operating losses.~~research and development activities. For the nine months ended September 30, 2017, our effective tax rate approximated the United States federal statutory rate of 35.0% due primarily to increases in the rate caused by state income taxes, net of federal benefit, and the disallowance of the loss on the sale of a foreign entity offset by decreases in the rate caused by the recognition of $2,258,000 of tax benefits on the settlement of employee share-based awards during the first nine months of 2017 in accordance with a new accounting standard,

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

which was adopted effective January 1, 2017. See Note 1 for additional information relating to this new accounting standard. Additionally, the effect of lower taxes on earnings in foreign jurisdictions was offset partially by losses in certain foreign jurisdictions, resulting in an increase in the valuation allowance for deferred tax assets related to these foreign operating losses.

Our effective tax rate for the three and nine months ended September 30, 2016 was 35.0% and 36.8%, respectively. For the three months ended September 30, 2016, our effective tax rate was equal to the United States federal statutory rate of 35.0%. The decrease in rates resulting from the recognition of certain tax benefits related to the release of reserves for specific uncertain tax positions during the quarter and lower taxes on earnings in foreign jurisdictions fully offset the increase in rates caused by state income taxes, net of federal benefit. For the nine months ended September 30, 2016,2019, our effective tax rate was higher than the United States federal statutory rate of ~~35.0%~~21.0% due primarily to state income taxes, net of federal benefit, and ~~losses~~higher taxes on earnings in ~~certain~~ foreign jurisdictions ~~resulting in an increase in~~partially offset by tax benefits on the ~~valuation allowance for deferred~~settlement of employee share-based awards and the recognition of tax ~~assets~~benefits related to ~~these foreign operating losses.~~research and development activities.

As of September 30, ~~2017~~2020, and December 31, ~~2016,~~2019, we had approximately ~~$3,877,000~~$10,659,000 and ~~$2,246,000,~~$9,736,000, respectively, of unrecognized tax benefits. Of these amounts, approximately ~~$276,000~~$610,000 and ~~$195,000,~~$442,000, respectively, related to accrued interest. In the future, if recognized, the liability associated with uncertain tax positions would affect our effective tax rate. We do not believe there will be any changes over the next 12 months that would have a material effect on our effective tax rate.

Several of our subsidiaries are currently under audit for tax years ~~2012~~2013 through ~~2015.~~2018. Although the timing of the resolutions and/or closures of audits is highly uncertain, it is reasonably possible that the examination phase of these audits may be concluded within the next 12 months, which could ~~significantly~~ increase or decrease the balance of our gross unrecognized tax benefits. However, based on the status of the various examinations in multiple jurisdictions, an estimate of the range of reasonably possible outcomes cannot be made at this time, but the estimated effect on our income tax expense and net earnings is not expected to be significant.

9.	Share Repurchase Program

~~7. Share Repurchase Programs~~

~~We did not~~On February 26, 2020, our Board of Directors authorized the repurchase ~~shares~~of up to $50,000,000 of our common ~~stock during~~stock. Our share repurchases may be made on the open market, subject to Rule 10b-18 or in privately negotiated transactions, through block trades, through 10b5-1 plans or otherwise, at management’s discretion. The amount of shares purchased and the timing of the purchases will be based on market conditions, working capital requirements, general business conditions and other factors. We intend to retire the repurchased shares.

During the nine months ended September 30, 2017 and no share repurchase programs are currently authorized by the Board of Directors. During the comparative nine months ended September 30, 2016, under previously authorized share repurchase programs,2020, we ~~purchased 1,891,564~~repurchased 444,813 shares of our common stock on the open market at a total cost of approximately ~~$50,000,000~~$24,999,996 (an average price of ~~$26.43~~$56.20 per share). All shares repurchased were retired.During the comparative nine months ended September 30, 2019, we repurchased 541,117 shares of our common stock on the open market at a total cost of approximately $27,899,000 (an average price of $51.56 per share). All shares repurchased were retired.

~~8. Commitments and Contingencies~~18

INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
10.
Commitments and Contingencies

Contractual

In the ordinary course of business, we issue performance bonds to secure our performance under certain contracts or state tax requirements. ~~As of September 30, 2017, we had approximately $2,704,000 of performance bonds outstanding.~~ These bonds are issued on our behalf by a surety company on an unsecured basis; however, if the surety company is ever required to pay out under the bonds, we have contractually agreed to reimburse the surety company.

Management believes that payments, if any, related to these performance bonds are not probable at September 30, ~~2017.~~2020. Accordingly, we have not accrued any liabilities related to such performance bonds in our consolidated financial statements.

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

Employment Contracts and Severance Plans

We have employment contracts with, and severance plans covering, certain officers and management teammates under which severance payments would become payable in the event of specified terminations without cause or terminations under certain circumstances after a change in control. In addition, vesting of outstanding nonvested RSUs would accelerate following a change in control. If severance payments under the current employment agreements or plan payments were to become payable, the severance payments would generally range from three to twenty-four months of salary.

Indemnifications

From time to time, in the ordinary course of business, we enter into contractual arrangements under which we agree to indemnify either our clients or third-party service providers from certain losses incurred relating to services performed on our behalf or for losses arising from defined events, which may include litigation or claims relating to past performance. These arrangements include, but are not limited to, the indemnification of our clients for certain claims arising out of our performance under our sales contracts, the indemnification of our landlords for certain claims arising from our use of leased facilities and the indemnification of the lenders that provide our credit facilities for certain claims arising from their extension of credit to us. Such indemnification obligations may not be subject to maximum loss clauses.

Management believes that payments, if any, related to these indemnifications are not probable at September 30, ~~2017.~~2020. Accordingly, we have not accrued any liabilities related to such indemnifications in our consolidated financial statements.

We have entered into separate indemnification agreements with certain of our executive officers and with each of our directors. These agreements require us, among other requirements, to indemnify such officers and directors against expenses (including attorneys’ fees), judgments and settlements incurred by such individual in connection with any action arising out of such individual’s status or service as our executive officer or director (subject to exceptions such as where the individual failed to act in good faith or in a manner the individual reasonably believed to be in, or not opposed to, the best interests of the Company) and to advance expenses incurred by such individual with respect to which such individual may be entitled to indemnification by us. There are no pending legal proceedings that involve the indemnification of any of the Company’s directors or officers.

INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Contingencies Related to Third-Party Review

From time to time, we are subject to potential claims and assessments from third parties. We are also subject to various governmental, client and partner audits. We continually assess whether or not such claims have merit and warrant accrual. Where appropriate, we accrue estimates of anticipated liabilities in the consolidated financial statements. Such estimates are subject to change and may affect our results of operations and our cash flows.

Legal Proceedings

From time to time, we are party to various legal proceedings ~~arising in~~incidental to the ~~ordinary course of~~ business, including preference payment claims asserted in client bankruptcy proceedings, indemnification claims, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, employment claims, claims of allegednon-compliance with contract provisions and claims related to alleged violations of laws and regulations. We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss, or an additional loss, may have been incurred and determine if accruals are

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

~~appropriate.~~ required. If accruals are not ~~appropriate,~~required, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of possible loss can be ~~made for disclosure.~~made. Although litigation is inherently unpredictable, we believe that we have adequate provisions for any probable and estimable losses. It is possible, nevertheless, that our consolidated financial position, results of operations or liquidity could be materially and adversely affected in any particular period by the work required pursuant to any legal proceedings or the resolution of aany legal ~~proceeding.~~proceedings during such period. Legal expenses related to defense of any legal proceeding or the negotiations, settlements, rulings and advice of outside legal counsel in connection with any legal proceedings are expensed as incurred.

In connection with the acquisition of PCM, the Company has effectively assumed responsibility for PCM litigation matters, including various disputes related to PCM’s acquisition of certain assets of En Pointe Technologies in 2015. The seller of En Pointe Technologies and related entities providing various post-closing support functions to PCM have asserted claims regarding the sufficiency of earnout payments paid by PCM under the asset purchase agreement and the unwinding of the support functions post-closing. PCM has rejected and vigorously responded to those claims and is pursuing various counterclaims. The disputes are being heard by multiple courts and arbitrators in several different jurisdictions including California, Delaware and Pakistan. The Company cannot determine with certainty the costs or outcome of these matters. However, the Company is not involved in any pending or threatened legal proceedings, including the PCM litigation matters, that it believes would reasonably be expected to have a material adverse effect on its business, financial condition or results of operations.

9. 20

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

11.Segment Information

We operate in ~~three~~3 reportable geographic operating segments: North America; EMEA; and ~~APAC.~~APAC with PCM being included in our North America and EMEA segments for the three and nine months ended September 30, 2020. Our offerings in North America and ~~select~~certain countries in EMEA and APAC include IT hardware, software and services. Our offerings in the remainder of our EMEA and APAC segments are largely software and ~~select~~certain software-related services. ~~Net~~

The following table summarizes net sales by offering for North America, EMEA and APAC ~~were as follows~~for the three and nine months ended September 30, 2020 and 2019 (in thousands):


	North America				EMEA				APAC				North America				EMEA				APAC
	Three Months Ended September 30,				Three Months Ended September 30,				Three Months Ended September 30,				Three Months Ended September 30,				Three Months Ended September 30,				Three Months Ended September 30,
Sales Mix	2017		2016		2017		2016		2017		2016		2020		2019		2020		2019		2020		2019

Hardware	$	962,214	$	651,277	$	137,493	$	128,214	$	7,447	$	4,638	$	1,028,045	$	1,020,083	$	138,685	$	137,416	$	6,421	$	9,243
Software		342,601		323,436		163,260		174,180		20,153		22,182		306,925		295,730		165,301		186,839		16,191		19,569
Services		106,264		76,620		11,441		9,338		7,100		2,831		223,198		199,349		37,294		31,453		14,418		12,865
													$	1,558,168	$	1,515,162	$	341,280	$	355,708	$	37,030	$	41,677
	$	1,411,079	$	1,051,333	$	312,194	$	311,732	$	34,700	$	29,651
													North America				EMEA				APAC
													Nine Months Ended September 30,				Nine Months Ended September 30,				Nine Months Ended September 30,
Sales Mix													2020		2019		2020		2019		2020		2019
	North America				EMEA				APAC
	Nine Months Ended September 30,				Nine Months Ended September 30,				Nine Months Ended September 30,
Sales Mix	2017		2016		2017		2016		2017		2016
Hardware	$	2,476,645	$	1,801,941	$	400,362	$	359,597	$	18,449	$	13,728	$	3,180,501	$	2,704,212	$	466,909	$	451,892	$	21,001	$	25,740
Software		1,012,725		898,193		552,800		586,332		91,430		106,435		898,290		907,683		553,164		560,073		62,952		80,287
Services		313,973		214,341		35,447		30,871		17,717		6,494		692,905		551,215		132,110		113,092		41,432		39,840
													$	4,771,696	$	4,163,110	$	1,152,183	$	1,125,057	$	125,385	$	145,867
	$	3,803,343	$	2,914,475	$	988,609	$	976,800	$	127,596	$	126,657

All significant intercompany transactions are eliminated upon consolidation, and there are no differences between the accounting policies used to measure profit and loss for our segments or on a consolidated basis. Net sales are defined as net sales to external clients. None of our clients exceeded ten percent of consolidated net sales for the three orand nine months ended September 30, ~~2017~~2020 or ~~2016.~~2019.

A portion of our operating segments’ selling and administrative expenses arise from shared services and infrastructure that we have historically provided to them in order to realize economies of scale and to use resources efficiently. These expenses, collectively identified as corporate charges, include senior management expenses, internal audit, legal, tax, insurance services, treasury and other corporate infrastructure expenses. Charges are allocated to our operating segments, and the allocations have been determined on a basis that we ~~considered~~consider to be a reasonable reflection of the utilization of services provided to or benefits received by the operating segments.

1421

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following tables present our results of operations by reportable operating segment for the periods indicated (in thousands):

										Three Months Ended September 30, 2020
	Three Months Ended September 30, 2017									North America		EMEA		APAC		Consolidated
	North America		EMEA			APAC		Consolidated
Net sales	$	1,411,079	$	312,194		$	34,700	$	1,757,973
Costs of goods sold		1,235,058		270,576			26,258		1,531,892

Net sales:
Products										$	1,334,970	$	303,986	$	22,612	$	1,661,568
Services											223,198		37,294		14,418		274,910
Total net sales											1,558,168		341,280		37,030		1,936,478
Costs of goods sold:
Products											1,202,743		277,025		20,544		1,500,312
Services											108,257		13,955		6,391		128,603
Total costs of goods sold											1,311,000		290,980		26,935		1,628,915
Gross profit		176,021		41,618			8,442		226,081		247,168		50,300		10,095		307,563
Operating expenses:
Selling and administrative expenses		132,853		39,948			7,589		180,390		192,033		45,438		7,684		245,155
Severance and restructuring expenses		398		53			43		494		773		19		16		808
Loss on sale of foreign entity		—		3,646			—		3,646
Acquisition-related expenses		—		106			—		106

Earnings (loss) from operations	$	42,770	$	(2,135	)	$	810	$	41,445


	Three Months Ended September 30, 2016
	North America		EMEA			APAC		Consolidated
Net sales	$	1,051,333	$	311,732		$	29,651	$	1,392,716
Costs of goods sold		914,515		273,424			22,969		1,210,908

Gross profit		136,818		38,308			6,682		181,808
Operating expenses:
Selling and administrative expenses		99,845		37,893			6,134		143,872
Severance and restructuring expenses		643		145			—		788
Acquisition-related expenses		575		—			166		741

Acquisition and integration related expenses											118		—		—		118
Earnings from operations	$	35,755	$	270		$	382	$	36,407	$	54,244	$	4,843	$	2,395	$	61,482


	Nine Months Ended September 30, 2017
	North America		EMEA			APAC		Consolidated
Net sales	$	3,803,343	$	988,609		$	127,596	$	4,919,548
Costs of goods sold		3,286,235		848,712			98,914		4,233,861

Gross profit		517,108		139,897			28,682		685,687
Operating expenses:
Selling and administrative expenses		395,423		121,863			21,488		538,774
Severance and restructuring expenses		2,045		4,062			104		6,211
Loss on sale of foreign entity		—		3,646			—		3,646
Acquisition-related expenses		3,223		106			—		3,329

Earnings from operations	$	116,417	$	10,220		$	7,090	$	133,727


	Nine Months Ended September 30, 2016
	North America		EMEA			APAC		Consolidated
Net sales	$	2,914,475	$	976,800		$	126,657	$	4,017,932
Costs of goods sold		2,522,546		839,990			103,263		3,465,799

Gross profit		391,929		136,810			23,394		552,133
Operating expenses:
Selling and administrative expenses		301,147		121,663			17,367		440,177
Severance and restructuring expenses		2,451		487			115		3,053
Acquisition-related expenses		575		—			166		741

Earnings from operations	$	87,756	$	14,660		$	5,746	$	108,162

	Three Months Ended September 30, 2019
	North America		EMEA		APAC		Consolidated
Net sales:
Products	$	1,315,813	$	324,255	$	28,812	$	1,668,880
Services		199,349		31,453		12,865		243,667
Total net sales		1,515,162		355,708		41,677		1,912,547
Costs of goods sold:
Products		1,195,020		297,789		26,431		1,519,240
Services		101,498		10,028		5,586		117,112
Total costs of goods sold		1,296,518		307,817		32,017		1,636,352
Gross profit		218,644		47,891		9,660		276,195
Operating expenses:
Selling and administrative expenses		170,993		44,568		7,654		223,215
Severance and restructuring expenses		2,449		213		—		2,662
Acquisition and integration related expenses		5,896		—		—		5,896
Earnings from operations	$	39,306	$	3,110	$	2,006	$	44,422

	Nine Months Ended September 30, 2020
	North America		EMEA		APAC		Consolidated
Net sales:
Products	$	4,078,791	$	1,020,073	$	83,953	$	5,182,817
Services		692,905		132,110		41,432		866,447
Total net sales		4,771,696		1,152,183		125,385		6,049,264
Costs of goods sold:
Products		3,678,118		933,053		77,326		4,688,497
Services		344,586		41,876		17,017		403,479
Total costs of goods sold		4,022,704		974,929		94,343		5,091,976
Gross profit		748,992		177,254		31,042		957,288
Operating expenses:
Selling and administrative expenses		590,549		143,859		22,190		756,598
Severance and restructuring expenses		7,799		2,118		45		9,962
Acquisition and integration related expenses		1,991		204		—		2,195
Earnings from operations	$	148,653	$	31,073	$	8,807	$	188,533

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

	Nine Months Ended September 30, 2019
	North America		EMEA		APAC		Consolidated
Net sales:
Products	$	3,611,895	$	1,011,965	$	106,027	$	4,729,887
Services		551,215		113,092		39,840		704,147
Total net sales		4,163,110		1,125,057		145,867		5,434,034
Costs of goods sold:
Products		3,290,555		926,712		98,197		4,315,464
Services		272,245		29,021		17,188		318,454
Total costs of goods sold		3,562,800		955,733		115,385		4,633,918
Gross profit		600,310		169,324		30,482		800,116
Operating expenses:
Selling and administrative expenses		452,441		139,365		21,961		613,767
Severance and restructuring expenses		3,260		328		124		3,712
Acquisition-related expenses		9,059		—		—		9,059
Earnings from operations	$	135,550	$	29,631	$	8,397	$	173,578

The following is a summary of our total assets by reportable operating segment (in thousands):


	September 30, 2017			December 31, 2016			September 30, 2020			December 31, 2019
North America	$	2,291,321		$	2,204,351		$	4,145,070		$	3,814,408
EMEA		512,284			562,293			627,644			699,856
APAC		96,012			119,778			110,561			123,349
Corporate assets and intercompany eliminations, net		(320,325	)		(667,122	)		(1,055,965	)		(459,434	)

Total assets	$	2,579,292		$	2,219,300		$	3,827,310		$	4,178,179

We recorded the followingpre-tax amounts, by reportable operating segment, for depreciation and amortization in the accompanying consolidated financial statements (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016		2020		2019		2020		2019
Depreciation and amortization of property and equipment:
North America	$	5,276	$	5,411	$	15,380	$	16,691	$	5,907	$	4,371	$	17,559	$	12,114
EMEA		1,287		1,300		3,662		3,753		1,269		1,013		3,846		2,980
APAC		138		111		388		341		143		140		415		412
										7,319		5,524		21,820		15,506
		6,701		6,822		19,430		20,785

Amortization of intangible assets:
North America		4,012		2,112		12,036		7,007		8,730		5,765		27,594		13,037
EMEA		—		527		12		1,926		585		67		1,625		205
APAC		198		174		595		379		118		114		336		348
										9,433		5,946		29,555		13,590
		4,210		2,813		12,643		9,312

Total	$	10,911	$	9,635	$	32,073	$	30,097	$	16,752	$	11,470	$	51,375	$	29,096

~~10. Acquisitions~~

~~Caase.com~~

Effective September 26, 2017, we acquired Caase.com, a Dutch cloud service provider, for a purchase price, net of cash acquired, of approximately $6,038,000, subject to a final working capital adjustment. We believe that this acquisition strengthens our ability to deliver Intelligent Technology Solutions^TM ~~to our clients in the Netherlands, with a view to expand into the wider European region in the near future.~~

The preliminary purchase price was allocated using the information currently available. Further information obtained upon the finalization of the fair value assumptions for identifiable intangible assets acquired and the evaluation of uncertain tax positions could lead to an adjustment of the purchase price allocation. Identified intangible assets and goodwill acquired approximated $2,232,000 and $4,117,000, respectively, which were recorded in our EMEA operating segment. None of the goodwill is tax deductible.

We consolidated the results of operations for Caase.com within our EMEA operating segment beginning on the September 26, 2017 effective date of the acquisition. Our historical results would not have been materially affected by the acquisition of Caase.com and, accordingly, we have not presented pro forma information as if the acquisition had been completed at the beginning of each period presented in our statements of operations.23

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

12.Acquisitions

~~Datalink~~PCM

On ~~January 6, 2017,~~August 30, 2019, we completed our acquisition of ~~Datalink, a leading provider~~PCM, acquiring 100 percent of ~~IT services~~the issued and ~~enterprise data center solutions based in Eden Prairie, Minnesota,~~outstanding shares of PCM for a cash purchase price of ~~$257,456,000,~~$745,562,000, which included cash and cash equivalents acquired of ~~$76,597,000.~~$84,637,000 and the payment of PCM’s outstanding debt. PCM is a provider of multi-vendor technology offerings, including hardware, software and services to small, mid-sized and corporate/enterprise commercial clients, state, local and federal governments and educational institutions across the United States, Canada and the United Kingdom. Based in El Segundo, California, PCM had 40 office locations globally and more than 4,000 teammates. We believe that this acquisition ~~strengthened~~allows us to help existing PCM clients in positioning their businesses for future growth, transforming and securing their data platforms, creating modern and mobile experiences for their workforce and optimizing the procurement of technology. The addition of PCM complements our ~~position as a leading IT solutions provider with deep technical talent delivering data center solutions to~~supply chain optimization solution offering, adding scale and clients ~~on premise or~~ in the ~~cloud.~~mid-market and corporate space primarily in North America.

The following table summarizes the purchase price and the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands):


Total purchase price				$	257,456
Purchase price net of cash and cash equivalents acquired									$	660,925
Fair value of net assets acquired:
Current assets	$	238,577				$	531,941
Identifiable intangible assets – see description below		94,500
Identifiable intangible assets - see description below							191,370
Property and equipment		5,843					91,213
Other assets		17,888					32,699
Current liabilities		(129,071	)				(369,183	)
Long-term liabilities, including deferred taxes		(34,421	)				(71,009	)

Total fair value of net assets acquired					193,316					407,031

Excess purchase price over fair value of net assets acquired (“goodwill”)				$	64,140

Excess purchase price over fair value of net assets acquired ("goodwill")									$	253,894

Under the acquisition method of accounting, the total purchase price as shown in the table above was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over fair value of net assets acquired was recorded as goodwill. In the fourth quarter of 2019, an adjustment of $56,700,000 was recorded to goodwill primarily due to a change in the customer relationships valuation based on updated information received for key inputs as well as an associated change in deferred taxes.

The ~~estimated~~ fair values of current assets and liabilities ~~(other than deferred revenue and related deferred costs) were~~are based upon their historical costs on the date of acquisition due to their short-term nature. The estimated fair values of the majority of property and equipment, ~~were~~excluding acquired real estate, are also ~~estimated~~ based upon historical costs net of depreciation, as they approximated fair value. Certain long-term assets, including ~~Datalink’s~~PCM’s IT ~~system,~~systems, were written down to ~~the~~their estimated fair value based on the economic benefit expected to be realized from the assets following the acquisition. Deferred revenue acquired represents monies collected prior to January 6, 2017 related to unearned revenues associated with support services to be performed in the future. value.

The estimated fair value of ~~deferred revenue~~net assets acquired was approximately $407,031,000, including $191,370,000 of ~~$65,500,000, which is included in current and long-term liabilities in the table above, was calculated using the adjusted fulfillment cost method as the present value~~identified intangible assets, consisting primarily of ~~the costs expected to be incurred by a third party to perform the support services obligations acquired under various~~ customer ~~contracts, plus a reasonable profit associated with the performance effort.~~relationships of $178,900,000. The ~~deferred costs acquired represent monies paid prior to January 6, 2017 to purchase third party customer support contracts from manufacturers. The estimated~~ fair value of the ~~deferred costs of $48,029,000, which is included in current and other assets in the table above, was calculated in conjunction with the valuation of deferred revenue discussed above.~~

~~Identified intangible assets of $94,500,000 consist primarily of~~ customer relationships ~~the trade name andnon-compete~~ ~~agreements, which were valued at $92,200,000, $2,200,000 and $100,000, respectively. These values~~ were determined using the multiple-period excess earnings ~~method, the relief from royalty method and the lost income method, respectively.~~

~~INSIGHT ENTERPRISES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

method. The identifiable ~~intangibles~~intangible assets resulting from the acquisition are amortized using the straight-line method over the following estimated useful lives: customer relationships – 10-12 years; trade names – 1 year; non-compete agreements – 2-3 years.


~~Intangible Assets~~		~~Estimated Economic Life~~
~~Customer relationships~~		~~10 Years~~
~~Trade name~~		~~1 Year~~
~~Non-compete~~ ~~agreements~~		~~1 Year~~

~~Amortization expense recognized for the period from the acquisition date through September 30, 2017 was $8,640,000.~~24

INSIGHT ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Goodwill of ~~$64,140,000,~~$253,894,000, which was recorded in our North America and EMEA operating ~~segment,~~segments, represents the excess of the purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed from ~~Datalink.~~PCM. The goodwill is not amortized and will be tested for impairment annually in the fourth quarter of our fiscal year. The addition of the ~~Datalink~~PCM technical employees to our team and the opportunity to grow our ~~data center solutions~~ business are the primary factors making up the goodwill recognized as part of the transaction. ~~None~~NaNne of the goodwill is tax deductible.

The preliminary purchase price was allocated using information available at the time. During the second quarter of 2017, upon analysis of additional information affecting our estimate of the fair value of net assets acquired, we adjusted the purchase price allocation ~~and reduced the goodwill balance by $945,000. During~~was finalized during the third quarter of 2017, no further adjustments to the purchase price allocation were made. Further information regarding deferred tax amounts could lead to an additional adjustment of the purchase price allocation upon finalization of the fair value assumptions in the fourth quarter of 2017.2020.

We have consolidated the results of operations for ~~Datalink~~PCM since its acquisition on ~~January 6, 2017. Consolidated net sales and gross profit for the three and nine months ended September~~August 30, ~~2017 include $134,495,000 and $29,874,000, and $387,218,000 and $89,124,000, respectively, from Datalink.~~ 2019.

The following table reports pro forma information as if the acquisition of ~~Datalink~~PCM had been completed at the beginning of the earliest period presented (in thousands, except per share amounts):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,		Nine Months Ended September 30,
		2017		2016		2017		2016			2019		2019
Net sales	As reported	$	1,757,973	$	1,392,716	$	4,919,548	$	4,017,932	As reported	$	1,912,547	$	5,434,034
	Proforma	$	1,757,973	$	1,544,175	$	4,923,457	$	4,472,878	Pro forma	$	2,322,828	$	6,910,356

Net earnings	As reported	$	22,412	$	21,635	$	76,515	$	63,590	As reported	$	27,132	$	116,457
	Proforma	$	22,412	$	20,721	$	74,461	$	63,285
										Pro forma	$	24,678	$	115,321
Diluted earnings per share	As reported	$	0.62	$	0.60	$	2.11	$	1.74	As reported	$	0.76	$	3.23
	Proforma	$	0.62	$	0.58	$	2.06	$	1.73	Pro forma	$	0.69	$	3.20

Changes in Goodwill and Intangible Assets

Other than the goodwill and intangible assets recorded in conjunction with the acquisitions of ~~Datalink~~vNext and ~~Caase.com,~~PCM, the only other change in consolidated goodwill and intangible assets as of September 30, ~~2017~~2020 compared to the balance as of December 31, ~~2016~~2019 resulted from foreign currency translation adjustments associated with the ~~goodwill balance~~balances in our North America, EMEA and APAC operating ~~segment.~~segments.

INSIGHT ENTERPRISES, INC.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

~~11. Sale of Foreign Entity~~

~~INSIGHT ENTERPRISES, INC.~~

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form10-Q. We refer to our customers as “clients,” our suppliers as “partners” and our employees as “teammates.” ~~Additionally, any references to our “core” business exclude Datalink’s results subsequent to the Datalink acquisition.~~

Quarterly Overview

Today, every business is a technology business. We ~~are a Fortune 500 global IT provider helping businesses~~empower organizations of all sizes ~~– from small and medium sized firms to worldwide enterprises, governments, schools and health care organizations – define, architect, implement and manage~~with Intelligent Technology Solutions^TM and services to maximize the business value of information technology (“IT”) in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). ~~We empower our~~As a Fortune 500-ranked global provider of digital innovation, cloud/data center transformation, connected workforce, and supply chain optimization solutions, we help clients ~~to manage their IT environments so they can drive meaningful business outcomes today~~innovate and ~~transform~~optimize their operations ~~for tomorrow.~~to run smarter. Our offerings in North America and ~~select~~certain countries in EMEA and APAC include hardware, software and services. Our offerings in the remainder of our EMEA and APAC segments are largely software and ~~select~~certain software-related services.

~~Consolidated net sales of $1.76 billion in~~

On a consolidated basis, for the three months ended September 30, 2017 increased 26% compared to the three months ended September 30, 2016, reflecting growth of 17% in our core business and the addition of Datalink to our results of operations beginning January 6, 2017. Excluding the effects of fluctuating foreign currency exchange rates, consolidated net sales increased 25% in the third quarter of 2017 compared to the third quarter of 2016.

Consolidated gross profit of $226.1 million in the three months ended September 30, 2017 increased 24% compared to the three months ended September 30, 2016. Excluding the effects of fluctuating foreign currency exchange rates, consolidated gross profit also increased 24% in the three months ended September 30, 2017 compared to the three months ended September 30, 2016. Gross margin declined approximately 20 basis points year to year to 12.9%, reflecting lower gross margin generated from our core business, partially offset by the positive contribution of Datalink’s results subsequent to the Datalink acquisition. The lower gross margin in our core business was driven by lower services net sales and lower product margin resulting from a higher mix of sales to large enterprise clients during the three months ended September 30, 2017.

Consolidated selling and administrative expenses for the third quarter of 2017 increased $36.5 million, or 25% year over year (up 24% excluding the effects of fluctuating foreign currency exchange rates). The year over year increase reflects an increase of 7% in selling and administrative expenses in our core business, including investments in teammate expenses, and the addition of Datalink to our business.

On July 19, 2017, we concluded the sale of our operations in Russia, formerly a part of our EMEA operating segment, to one of our global partners that is focused in the region. We recorded a loss on the sale of the foreign entity of approximately $3.6 million during the third quarter of 2017, including a $2.9 million charge upon the release of our cumulative translation adjustment account balance as of the sale date. Our consolidated results of operations for the third quarter of 2017 also include $106,000 in transaction expenses related to the Caase.com acquisition in EMEA and severance expenses, net of adjustments, totaling $494,000. Comparatively, during the third

2020:

•

Net sales of $1.9 billion increased 1% compared to the three months ended September 30, 2019, primarily due to the addition of PCM. Without the addition of PCM, net sales in the core business would have been down compared to the prior year quarter as a result of the negative impact of COVID-19. The overall increase in net sales reflects an increase in hardware and services net sales, which was partially offset by a decrease in software net sales. Excluding the effects of fluctuating foreign currency exchange rates, net sales remained flat compared to the third quarter of 2019.

•

Gross profit of $308 million increased 11% compared to the three months ended September 30, 2019. Excluding the effects of fluctuating foreign currency exchange rates, gross profit increased 12% compared to the third quarter of 2019.

•

Gross margin improved approximately 150 basis points to 15.9% of net sales in the three months ended September 30, 2020. This increase reflects an increase in the mix of higher margin services net sales and an increase in margins on hardware net sales compared to the same period in the prior year.

•

Earnings from operations increased 38%, year over year, to $61.5 million in the third quarter of 2020 compared to $44.4 million in the third quarter of 2019, primarily due to increased gross profit and reduction in acquisition and integration related expenses, incurred in connection with PCM. The increase was partially offset by increased personnel costs, including teammate benefits and variable compensation, and increased amortization of intangible assets, both related to the PCM acquisition. Excluding the effects of fluctuating foreign currency exchange rates, earnings from operations increased 42% year over year.

•

Net earnings and diluted earnings per share were $38.9 million and $1.10, respectively, for the third quarter of 2020. This compares to net earnings of $27.1 million and diluted earnings per share of $0.76 for the third quarter of 2019.

2026

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Recent Developments – Impact of COVID-19 to our Business

~~quarter~~In late 2019, there was an outbreak of ~~2016,~~a new strain of coronavirus (“COVID-19”), which has since spread globally. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. In an effort to protect the health and safety of our teammates, we ~~incurred $741,000 in transaction expenses related~~took proactive action to adopt social distancing policies at our locations globally, including working from home where possible, limiting the ~~acquisitions~~number of ~~Ignia and Datalink and severance expenses, net~~teammates attending in-person meetings, reducing the number of ~~adjustments, of $788,000.~~

~~Solid growth in net sales and gross profit~~people in our ~~core business combined with a significant contribution from~~locations at any one time, and suspending teammate travel. Governments around the ~~Datalink business, led~~world have also enacted various measures, including orders to ~~a 14% year over year improvement~~close all businesses not deemed “essential,” isolate residents to their homes or places of residence, and practice social distancing when engaging in ~~consolidated earnings from operations from $36.4 million~~essential activities. These measures taken by the Company continued to be in effect for the duration of the third quarter of ~~2016~~2020 and remain in place to ~~$41.4 million~~date.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and workforce participation, and initially created significant volatility and disruption of financial markets. We continued to observe a pronounced impact of COVID-19 on our third quarter financial results when compared to internal budgets, and anticipate demand for our products and services will continue to be impacted in the fourth quarter as clients continue to evaluate the impact of COVID-19 on their businesses, their profitability and their liquidity. While we did not experience a decline in bookings in October 2020, we anticipate that the declining trend, which began in April 2020, may continue into the fourth quarter of 2020, when compared to the prior year.

In the short run, we took steps to accelerate and complete our integration with PCM and to reduce discretionary operating expenditures, such as certain teammate benefits and variable compensation and travel related expenditures. We have also utilized various partner and government incentives available to us to help offset some of these business impacts. In the third quarter of ~~2017. Excluding~~2020, we invested in our sales force, adding key technical talent across our solution areas and additional sales coverage to our geographic footprint. We will continue to invest in this area in the fourth quarter to ensure we are positioned well to compete in the marketplace in 2021, when we expect the IT market will start to recover.

We fully paid down all of our debt under our ABL facility during the quarter and believe we have a strong balance sheet and healthy liquidity position. The Company had current capacity of up to $1.2 billion under our ABL facility available as of September 30, 2020.

The ultimate extent of the impact of the COVID-19 pandemic on our business operations, financial performance and results of operations, including our ability to execute our business strategies and initiatives in the expected time frame, is currently unknown and will depend on future developments, which are highly uncertain, continuously evolving and cannot be predicted. This includes, but is not limited to, the duration and spread of the COVID-19 pandemic, its severity, the actions taken to contain the virus or treat its impact, such as restrictions on travel and transportation, and how quickly and to what extent normal economic and operating conditions can resume.

We will continue to actively monitor the situation and anticipate taking further actions as may be required by government authorities or that we determine are in the best interests of our teammates, clients and partners. It is not clear what the potential effects of any such alterations or modifications may have on our business, including the effects ~~of fluctuating foreign currency exchange rates, consolidated earnings from operations also increased 14% year over year. Datalink’s positive contribution to earnings from operations was in line with~~on our ~~expectations in the first nine months of 2017,~~clients, teammates, and ~~we believe Datalink is~~prospects, or on ~~track to meet profitability objectives~~our financial results for the ~~year. On a consolidated basis,~~remainder of 2020.

Accordingly, our current results and financial condition discussed herein may not be indicative of future operating results and trends. See “Risk Factors” in Part II, Item 1A of this report for additional risks we ~~reported net earnings of $22.4 million and diluted earnings per share of $0.62 for~~face due to the ~~third quarter of 2017. This compares to net earnings of $21.6 million and diluted earnings per share of $0.60 for the third quarter of 2016.~~COVID-19 pandemic.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Throughout the “Quarterly Overview” and “Results of Operations” sections of this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we refer to changes in net sales, gross profit, selling and administrative expenses and earnings from operations on a consolidated basis and in North America, EMEA and APAC excluding the effects of fluctuating foreign currency exchange rates. In computing the changes in amounts and percentages, we compare the current period amount as translated into U.S. dollars under the applicable accounting standards to the prior period amount in local currency translated into U.S. dollars utilizing the weighted average translation rate for the current period.

Net of tax amounts referenced above were computed using the statutory tax rate for the taxing jurisdictions in the operating segment in which the related expenses were recorded, adjusted for the effects of valuation allowances on net operating losses in certain jurisdictions.

Details about segment results of operations can be found in Note 911 to the Consolidated Financial Statements in Part I, Item 1 of this report.

Our discussion and analysis of financial condition and results of operations is intended to assist in the understanding of our consolidated financial statements, including the changes in certain key items in those consolidated financial statements from period to period and the primary factors that contributed to those changes, as well as how certain critical accounting estimates affect our consolidated financial statements.

Critical Accounting Estimates

Our consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). For a summary of significant accounting policies, see Note 1 to the Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form10-K for the year ended December 31, ~~2016.~~2019. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results, however, may differ from estimates we have made. Members of our senior management have discussed the critical accounting estimates and related disclosures with the Audit Committee of our Board of Directors.

There have been no changes to the items disclosed as critical accounting estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2019.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

~~Item 7 of our Annual Report onForm 10-K~~ for the year ended December 31, 2016. See Note 10 to the Consolidated Financial Statements in Part I, Item 1 of this report for a discussion of fair value estimates in connection with the acquisition of Datalink.

Results of Operations

The COVID-19 pandemic has negatively impacted the global economy and has disrupted global supply chains and workforce participation. We continued to observe impacts on our third quarter financial results and believe the ultimate extent of the impact of the COVID-19 pandemic on our future business operations, financial performance and results of operations, including our ability to execute our business strategies and initiatives in the expected time frame, is currently unknown and will depend on future developments, which are highly uncertain, continuously evolving and cannot be predicted.

The following table sets forth certain financial data as a percentage of net sales for the three and nine months ended September 30, ~~2017~~2020 and ~~2016:~~2019:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016			2020			2019			2020			2019
Net sales		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Costs of goods sold		87.1			86.9			86.1			86.3			84.1			85.6			84.2			85.3

Gross profit		12.9			13.1			13.9			13.7			15.9			14.4			15.8			14.7
Selling and administrative expenses		10.3			10.3			10.9			11.0			12.7			11.6			12.5			11.3
Severance and restructuring expenses, loss on sale of foreign entity and acquisition-related expenses		0.2			0.2			0.3			0.0

Severance and restructuring expenses and acquisition and integration related expenses														0.1			0.5			0.2			0.3
Earnings from operations		2.4			2.6			2.7			2.7			3.1			2.3			3.1			3.1
Non-operating expense, net		0.4			0.2			0.3			0.2			0.5			0.4			0.5			0.3

Earnings before income taxes		2.0			2.4			2.4			2.5			2.6			1.9			2.6			2.8
Income tax expense		0.7			0.8			0.8			0.9			0.6			0.5			0.6			0.7

Net earnings		1.3	%		1.6	%		1.6	%		1.6	%		2.0	%		1.4	%		2.0	%		2.1	%

We generally experience some seasonal trends in our sales of IT hardware, software and services. Software sales are typically seasonally higher in our ~~second and fourth quarters, particularly the~~ second quarter. Business clients, particularly larger enterprise businesses in the United States, tend to spend more in our fourth quarter and less in our first quarter. Sales to the federal government in the United States are often stronger in our third quarter, while sales in the state and local government and education markets are also stronger in our second quarter. Sales to public sector clients in the United Kingdom are often stronger in our first quarter. These trends create overall seasonality in our consolidated results such that net sales and profitability are expected to be higher in the second and fourth quarters of the year.

Our gross profit across the business is, and will continue to be, impacted by partner incentives, which can change significantly in the amounts made available and in the related product or services sales being incentivized by the partner. Incentives from our largest partners are significant and changes in the incentives, which occur regularly, could impact our results of operations to the extent we are unable to adapt our sales strategies to optimize performance under the revised programs.

INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)

Net Sales. Net sales for the three months ended September 30, ~~2017~~2020 increased ~~26%~~1%, year over year, to $1.9 billion compared to the three months ended September 30, ~~2016~~2019. Without the addition of PCM to ~~$1.76 billion. Excluding the effects of fluctuating foreign currency exchange rates, consolidated~~our core business, net sales ~~increased 25% in~~for the third quarter of ~~2017~~2020 would have been down as a result of the negative impact of COVID-19. We believe this negative trend in net sales may continue into the fourth quarter of 2020, when compared to the ~~third quarter of 2016.~~prior year. Net sales for the nine months ended September 30, ~~2017~~2020 increased ~~22%~~11%, year over year, to $6.0 billion compared to the nine months ended September 30, 2016 to $4.92 billion. Excluding the effects of fluctuating foreign currency exchange rates, consolidated net sales increased 24% in the first nine months of 2017 compared to the first nine months of 2016.2019. Our net sales by operating segment were as follows for the three and nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 (dollars in thousands):

	Three Months Ended September 30,				%			Nine Months Ended September 30,				%
	2020		2019		Change			2020		2019		Change
North America	$	1,558,168	$	1,515,162		3	%	$	4,771,696	$	4,163,110		15	%
EMEA		341,280		355,708		(4	%)		1,152,183		1,125,057		2	%
APAC		37,030		41,677		(11	%)		125,385		145,867		(14	%)
Consolidated	$	1,936,478	$	1,912,547		1	%	$	6,049,264	$	5,434,034		11	%

Our net sales by offering category for North America for the three and nine months ended September 30, 2020 and 2019 were as follows (dollars in thousands):

   Three Months Ended
September 30,    % Nine Months Ended
September 30,    %
   2017    2016    Change 2017    2016    Change
North America
   $ 1,411,079    $ 1,051,333    34 % $ 3,803,343    $ 2,914,475    30 %
EMEA
   312,194    311,732    —   988,609    976,800    1 %
APAC
   34,700    29,651    17 % 127,596    126,657    1 %









Consolidated
   $ 1,757,973    $ 1,392,716    26 % $ 4,919,548    $ 4,017,932    22 %

	Three Months Ended September 30,				%			Nine Months Ended September 30,				%
Sales Mix	2020		2019		Change			2020		2019		Change
Hardware	$	1,028,045	$	1,020,083		1	%	$	3,180,501	$	2,704,212		18	%
Software		306,925		295,730		4	%		898,290		907,683		(1	%)
Services		223,198		199,349		12	%		692,905		551,215		26	%
	$	1,558,168	$	1,515,162		3	%	$	4,771,696	$	4,163,110		15	%

22Net sales in North America increased 3%, or $43.0 million, for the three months ended September 30, 2020 compared to the three months ended September 30, 2019, primarily driven by the addition of PCM, partially offset by the negative impact of COVID-19 on demand for hardware and certain services. Net sales of hardware, software and services increased 1%, 4% and 12%, respectively, year over year. The changes for the three months ended September 30, 2020 were the result of the following:

•

The increase in hardware net sales was due to the addition of PCM, which was partially offset by lower volume of sales to large enterprise and corporate clients. The decrease in volume of sales was largely due to decreased demand associated with client responses to COVID-19.

•

The increase in software net sales was primarily due to the addition of PCM, partially offset by continued migration of software to the cloud, reported net in services net sales.

•

The increase in services net sales was primarily due to an increase in net sales associated with cloud solution offerings and higher sales of Insight delivered services, including the addition of PCM. These increases were partially offset by decreases in demand for certain services due to the impact of COVID-19.

Net sales in North America increased 15%, or $608.6 million, for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019, primarily driven by the addition of PCM, partially offset by the negative impact of COVID-19 on demand for hardware and certain services. Net sales of hardware and services increased 18% and 26%, respectively, year over year. Net sales of software declined 1%, year to year.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

The net changes for the first nine months of 2020 were the result of the following:

•

The increase in hardware net sales was due to the addition of PCM and higher volume of sales to large enterprise and corporate clients. The net increase in volume of sales was largely due to increases in the first quarter of 2020 due to increased demand for work-from-home and collaboration solutions as companies responded to shelter in place mandates, which was partially offset by decreases in volume of sales in the second and third quarters associated with client responses to COVID-19.

•

The decrease in software net sales was due to a significant transaction in the prior year with no comparable activity in the current year and continued migration of software to the cloud, which was partially offset by the addition of PCM.

•

The increase in services net sales was primarily due to higher sales of Insight delivered services, including the addition of PCM and an increase in net sales associated with cloud solution offerings. These increases were partially offset by decreases in demand for certain services due to the impact of COVID-19.

Our net sales by offering category for EMEA for the three and nine months ended September 30, 2020 and 2019 were as follows (dollars in thousands):

	Three Months Ended September 30,				%			Nine Months Ended September 30,				%
Sales Mix	2020		2019		Change			2020		2019		Change
Hardware	$	138,685	$	137,416		1	%	$	466,909	$	451,892		3	%
Software		165,301		186,839		(12	%)		553,164		560,073		(1	%)
Services		37,294		31,453		19	%		132,110		113,092		17	%
	$	341,280	$	355,708		(4	%)	$	1,152,183	$	1,125,057		2	%

Net sales in ~~North America increased 34%~~EMEA decreased 4%, or ~~$359.7~~$14.4 million, for the three months ended September 30, ~~2017~~2020 compared to the three months ended September 30, 2016. Net sales of hardware, software and services increased 48%, 6% and 39%, respectively, year over year. The growth in hardware net sales reflects higher volume of sales to large enterprise clients and the acquisition of Datalink effective January 6, 2017, which accounted for approximately one quarter of the year over year growth. The increase in hardware net sales included large hardware device refresh transactions as well as higher sales of servers and storage. The increase in software net sales resulted from the acquisition of Datalink, which accounted for the majority of the year over year increase, partially offset by a decline in software net sales to public sector clients during the third quarter of 2017 compared to the third quarter of 2016. Services net sales improved year over year due to the acquisition of Datalink, which accounted for the year over year services revenue growth in North America.

Net sales in North America increased 30%, or $888.9 million, for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Net sales of hardware, software and services increased 37%, 13% and 46%, respectively, year over year. The growth in hardware net sales reflects higher volume of sales to large enterprise clients, including the acquisition of Datalink, which accounted for approximately 28% of the year over year growth. The increase in software net sales was also affected by the acquisition of Datalink, which accounted for over three quarters of the year over year increase, as well as increased sales to large enterprise clients during the first nine months of 2017 compared to the first nine months of 2016. Services net sales improved year over year due to the acquisition of Datalink, which accounted for the year over year services revenue growth in North America.

~~Net sales in EMEA remained flat, increasing less than 1% for the three months ended September 30, 2017 compared to the three months ended September 30, 2016.~~2019. Excluding the effects of fluctuating foreign currency exchange rates, net sales in EMEA decreased ~~2% compared~~8%, year to ~~the third quarter of last~~ year. Net sales of hardware and services increased 7%1% and ~~23%~~19%, respectively, ~~while net~~year over year. Net sales of software ~~decreased 6% compared~~declined 12% year to the third quarter of 2016. Excluding the effects of fluctuating foreign currency exchange rates, hardware and services net sales increased 7% and 20%, respectively, while software net sales decreased 9% compared to the third quarter of last year. The ~~increase in hardware~~ net ~~sales was due primarily to higher volume sales~~changes for the three months ended September 30, 2020 were the result of networking solutions to corporate clients. The increase in services net sales was due primarily to increased sales of license consulting services and partner delivered services to new and existing clients across the ~~region. The decrease in software net sales was driven by a single significant transaction during the prior year period affecting the year over year comparison.~~following:

•

The increase in hardware net sales was due primarily to higher volume sales of devices to public sector clients.

•

The decrease in software net sales was due to lower volume of sales to large enterprise clients and continued migration of software to the cloud.

•

The increase in services net sales was due primarily to higher sales of cloud solutions and higher volume sales of Insight delivered services.

Net sales in EMEA increased 1%2%, or ~~$11.8~~$27.1 million, for the first nine months ~~ended September 30, 2017~~of 2020 compared to the first nine months ~~ended September 30, 2016.~~ of 2019. Excluding the effects of fluctuating foreign currency exchange rates, net sales in EMEA increased ~~6% compared~~3%, year to ~~the first nine months of last~~ year. Net sales of hardware and services increased ~~11%~~3% and ~~15%~~17% year over year, respectively. Net sales of software declined 1%, ~~respectively, while software~~year to year. The net ~~sales decreased 6% compared to~~changes for the first nine months of ~~2016. Excluding~~2020 were the ~~effects~~result of ~~fluctuating foreign currency exchange rates, hardware and services net sales increased 19% and 21%, respectively, while software net sales decreased 3% compared to~~ the first nine months of last year. The increase in hardware net sales was due primarily to higher volume sales of client devices, storage and networking solutions to public sector clients. The increase in services net sales was due primarily to increased sales of license consulting services and partner delivered services to new and existing clients across the region. The decrease in software net sales was driven by the negative effect on~~top-line~~ revenues resulting from a higher volume of sales of software maintenance and cloud subscription products that are recorded on a net sales recognition basis, with net sales equal to the gross profit on the transaction, and the single significant transaction in the prior year period noted above.following:

•

The increase in hardware net sales was due primarily to higher volume sales of devices to corporate and public sector clients.

•

The decrease in software net sales was due to lower volume of sales to large enterprise and continued migration of software to the cloud, partially offset by higher volume of sales to corporate and public sector clients.

2331

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

•

The increase in services net sales was due primarily to higher sales of cloud solutions, increased software referral fees and higher volume sales of Insight delivered services.

Our net sales by offering category for APAC for the three and nine months ended September 30, 2020 and 2019 were as follows (dollars in thousands):

	Three Months Ended September 30,				%			Nine Months Ended September 30,				%
Sales Mix	2020		2019		Change			2020		2019		Change
Hardware	$	6,421	$	9,243		(31	%)	$	21,001	$	25,740		(18	%)
Software		16,191		19,569		(17	%)		62,952		80,287		(22	%)
Services		14,418		12,865		12	%		41,432		39,840		4	%
	$	37,030	$	41,677		(11	%)	$	125,385	$	145,867		(14	%)

Net sales in APAC ~~increased 17%~~decreased 11%, or ~~$5.0~~$4.6 million, for the three months ended September 30, ~~2017~~2020 compared to the three months ended September 30, ~~2016.~~ 2019. Excluding the effects of fluctuating foreign currency exchange rates, net sales in APAC decreased 13%, year to year. Net sales of hardware and software decreased by 31% and 17%, respectively, year to year. Net sales of services increased ~~14% compared to the third quarter of last~~by 12%, year over year. The ~~increase was driven by 151% growth in services~~ net ~~sales resulting from Ignia, a business technology consulting and managed services provider acquired in~~changes for the ~~third quarter~~three months ended September 30, 2020 were the result of ~~last year, and 61% growth in hardware net sales year over year.~~the following:

•

The decrease in hardware net sales was primarily the result of lower volume of sales due to decreased demand associated with client responses to COVID-19.

•

The decrease in software net sales was primarily due to lower volume sales to large enterprise clients.

•

The increase in services net sales was primarily due to higher sales of Insight delivered services.

Net sales in APAC ~~increased 1%~~decreased 14%, or ~~$939,000,~~$20.5 million, for the first nine months ~~ended September 30, 2017~~of 2020 compared to the first nine months ~~ended September 30, 2016.~~ of 2019. Excluding the effects of fluctuating foreign currency exchange rates, net sales in APAC decreased ~~1% compared~~11%, year to year. Net sales of hardware and software decreased by 18% and 22%, respectively, year to year. Services net sales increased 4% year over year. The net changes for the first nine months of ~~last year due to~~2020 were the ~~negative effect ontop-line~~ ~~revenues resulting from a higher volume~~result of sales of software maintenance and cloud subscription products that are recorded on a net sales recognition basis. This decline was almost fully offset by 173% growth in services net sales resulting from Ignia and 34% growth in hardware net sales year over year.the following:

•

The decrease in hardware net sales was primarily the result of lower volume of sales due to decreased demand associated with client responses to COVID-19.

•

The decrease in software net sales was primarily due to the loss of a significant public sector client and lower volume sales to large enterprise clients.

•

The increase in services net sales was primarily due to higher sales of Insight delivered services.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

The percentage of net sales by category for North America, EMEA and APAC were as follows for the three and nine months ended September 30, ~~2017~~2020 and ~~2016:~~2019:


	North America						EMEA						APAC						North America						EMEA						APAC
	Three Months Ended September 30,						Three Months Ended September 30,						Three Months Ended September 30,						Three Months Ended September 30,						Three Months Ended September 30,						Three Months Ended September 30,
Sales Mix	2017			2016			2017			2016			2017			2016			2020			2019			2020			2019			2020			2019
Hardware		68	%		62	%		44	%		41	%		21	%		16	%		66	%		67	%		41	%		39	%		17	%		22	%
Software		24	%		31	%		52	%		56	%		58	%		75	%		20	%		20	%		48	%		52	%		44	%		47	%
Services		8	%		7	%		4	%		3	%		21	%		9	%		14	%		13	%		11	%		9	%		39	%		31	%
																				100	%		100	%		100	%		100	%		100	%		100	%
		100	%		100	%		100	%		100	%		100	%		100	%
																			North America						EMEA						APAC
																			Nine Months Ended September 30,						Nine Months Ended September 30,						Nine Months Ended September 30,
	North America						EMEA						APAC
	Nine Months Ended September 30,						Nine Months Ended September 30,						Nine Months Ended September 30,
Sales Mix	2017			2016			2017			2016			2017			2016			2020			2019			2020			2019			2020			2019
Hardware		65	%		62	%		40	%		37	%		14	%		11	%		67	%		65	%		41	%		40	%		17	%		18	%
Software		27	%		31	%		56	%		60	%		72	%		84	%		19	%		22	%		48	%		50	%		50	%		55	%
Services		8	%		7	%		4	%		3	%		14	%		5	%		14	%		13	%		11	%		10	%		33	%		27	%
																				100	%		100	%		100	%		100	%		100	%		100	%
		100	%		100	%		100	%		100	%		100	%		100	%

~~INSIGHT ENTERPRISES, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS (continued)~~

Gross Profit.Gross profit increased 11%, or $31.4 million, for the three months ended September 30, ~~2017 increased 24%, or $44.3 million,~~2020, compared to the three months ended September 30, ~~2016,~~2019, with gross margin ~~decreasing~~increasing approximately 20150 basis points to ~~12.9%~~15.9% for the three months ended September 30, ~~2017~~2020 compared to ~~13.1%~~14.4% for the three months ended September 30, ~~2016. Excluding the effects of fluctuating foreign currency exchange rates, consolidated gross~~ 2019. Gross profit increased ~~24% year over year~~20%, or $157.2 million, in ~~the third quarter of 2017 compared to the third quarter of 2016. Gross profit for~~ the nine months ended September 30, ~~2017 increased 24%, or $133.6 million,~~2020 compared to the nine months ended September 30, ~~2016,~~2019, with gross margin increasing approximately 20110 basis points to ~~13.9%~~15.8% for the nine months ended September 30, 2017 compared to 13.7% for the nine months ended September 30, 2016. Excluding the effects of fluctuating foreign currency exchange rates, consolidated gross profit increased 26% year over year in the first nine months of ~~2017~~2020 compared to 14.7% for the first nine months of ~~2016. We continue to respond to changes in partner funding programs by targeting our sales and marketing activities to maximize our gross profit.~~2019.

Our gross profit and gross profit as a percentage of net sales by operating segment were as follows for the three and nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 (dollars in thousands):


	Three Months Ended September 30,										Nine Months Ended September 30,										Three Months Ended September 30,										Nine Months Ended September 30,
	2017		% of Net Sales			2016		% of Net Sales			2017		% of Net Sales			2016		% of Net Sales			2020		% of Net Sales			2019		% of Net Sales			2020		% of Net Sales			2019		% of Net Sales
North America	$	176,021		12.5	%	$	136,818		13.0	%	$	517,108		13.6	%	$	391,929		13.4	%	$	247,168		15.9	%	$	218,644		14.4	%	$	748,992		15.7	%	$	600,310		14.4	%
EMEA		41,618		13.3	%		38,308		12.3	%		139,897		14.2	%		136,810		14.0	%		50,300		14.7	%		47,891		13.5	%		177,254		15.4	%		169,324		15.1	%
APAC		8,442		24.3	%		6,682		22.5	%		28,682		22.5	%		23,394		18.5	%		10,095		27.3	%		9,660		23.2	%		31,042		24.8	%		30,482		20.9	%

Consolidated	$	226,081		12.9	%	$	181,808		13.1	%	$	685,687		13.9	%	$	552,133		13.7	%	$	307,563		15.9	%	$	276,195		14.4	%	$	957,288		15.8	%	$	800,116		14.7	%

North America’s gross profit for the three months ended September 30, ~~2017~~2020 increased ~~29%~~$28.5 million, or 13%, compared to the three months ended September 30, 2016. As a percentage of net sales, gross margin decreased approximately 50 basis points to 12.5% for the third quarter of 2017 from 13.0% in the third quarter of 2016. The year to year decline in gross margin was primarily attributable to a 35 basis point decline in margin generated by reduced sales of professional and consulting services. Additionally, a net decrease in product margin, which includes partner funding and freight, of 15 basis points and a decrease in margin from lower fees from enterprise software agreements of 13 basis points contributed to the lower gross margin during the quarter ended September 30, 2017 compared to the quarter ended September 30, 2016. The net decrease in product margin was due primarily to higher sales to large enterprise clients, which generally transact at lower margins, during the quarter ended September 30, 2017 compared to the quarter ended September 30, 2016, offset partially by improvements in hardware product margin, including increased sales of higher margin data center products as a result of the acquisition of Datalink. The decline in professional services margin was offset partially by an 18 basis point increase in margin generated by sales of warranty services year over year.

~~North America’s gross profit for the nine months ended September 30, 2017 increased 32% compared to the nine months ended September 30, 2016.~~2019. As a percentage of net sales, gross margin increased approximately 20150 basis points to ~~13.6%~~ 15.9% for the ~~first nine months~~third quarter of ~~2017 from 13.4% in the first nine months of 2016.~~2020. The year over year improvement in gross margin was primarily attributable to a net increase in product margin, which includes partner funding and freight, of 28 basis points year over year. The net increase in product margin was due primarily to improvements in hardware and software product margin during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The product mix included increased sales of higher margin data center products as a result of the acquisition of Datalink. Services margin improved 21 basis points year over year, including an increase in margin generated by sales of warranty services of 15 basis points during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. These increases in margin were partially offset by a decrease in margin from lower fees from enterprise software agreements of 29 basis points during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.following:

•

An increase in product margin, which includes partner funding and freight, of 51 basis points and an increase in margin from services net sales of 92 basis points compared to the same period in the prior year.

•

The increase in product margin is primarily the result of higher volume of hardware sales from the addition of PCM and sales of hardware for the core North America business at higher margins than in the same period in the prior year.

•

The increase in margin from services net sales during the current quarter reflects an expansion in margin from cloud solutions and other services that are recorded net.

2533

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

~~EMEA’s~~North America’s gross profit ~~increased 9%~~ for the ~~three~~nine months ended September 30, ~~2017~~2020 increased $148.7 million, or 25%, compared to the ~~three~~nine months ended September 30, ~~2016. Excluding the effects of fluctuating foreign currency exchange rates, gross profit increased 6% compared to the third quarter of last year.~~2019. As a percentage of net sales, gross margin increased approximately ~~100~~130 basis points to ~~13.3%~~ 15.7% for the ~~third quarter~~first nine months of ~~2017 from 12.3% in the third quarter of 2016.~~2020. The year over year improvement in gross margin was primarily attributable to the following:

•

A net increase in product margin, which includes partner funding and freight, of 68 basis points and an increase in margin from services net sales, which contributed 60 basis points of the margin expansion.

•

The increase in margin from services net sales during the first nine months of 2020 resulted from a higher volume of Insight delivered services at higher margins and a higher volume of cloud solutions that are recorded net.

EMEA’s gross profit for the three months ended September 30, 2020 increased $2.4 million, or 5%, year over year (remaining flat when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended September 30, 2019. As a percentage of net sales, gross margin increased approximately 120 basis points, year over year. The year over year net improvement in gross margin was primarily attributable to an increase in higher margin services net sales, which contributed 82 basis points of the margin expansion, together with a net increase in product margin, which includes partner funding and freight, of 5046 basis points and an increase in higher margin services net sales, which contributed 45 basis points of the margin expansion during the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The improvement in product margin primarily resulted from an increase in hardware product margin due to higher volume and an increase in software product margin due to the mix and size of deals transacted during the quarter ended September 30, 2017 compared to the quarter ended September 30, 2018. The increase in margin from services net sales resulted from a higher volume of higher margin services net sales year over year.points.

EMEA’s gross profit ~~increased 2%~~ for the nine months ended September 30, ~~2017 compared to the nine months ended September 30, 2016. Excluding~~2020 increased $7.9 million, or 5% (also 5% excluding the effects of fluctuating foreign currency exchange ~~rates, gross profit increased 7%~~rates), compared to the first nine months of ~~last year. Gross~~2019. As a percentage of net sales, gross margin ~~improved~~increased approximately 2030 basis points, ~~to 14.2% for the first nine months of 2017 from 14.0% in the first nine months of 2016.~~ year over year. The year over year improvement in gross margin was primarily attributable to a ~~37 basis point~~net increase in ~~gross~~services margin ~~due to higher volume~~ of higher margin services net sales during the first nine months of 2017 compared to the first nine months of 2016. The improvement in gross margin resulting from higher margin services net sales was partially offset by a net decrease in product margin, which includes partner funding and freight, of 3035 basis points during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The decline in product margin primarily resulted from lower margins on large enterprise and public sector deals transacted during the first nine months of 2017.points.

APAC’s gross profit ~~increased 26%~~ for the three months ended September 30, ~~2017~~2020 increased $435,000, or 5%, compared to the three months ended September 30, ~~2016, with gross margin increasing to 24.3% for the three months ended September 30, 2017 compared to 22.5% for the three months ended September 30, 2016. Excluding the effects of~~2019 (increasing 2% when excluding fluctuating foreign currency exchange ~~rates,~~rates). As a percentage of net sales, gross ~~profit~~margin increased ~~23% compared to the third quarter of last~~approximately 410 basis points, year over year. The ~~improvement~~increase in gross margin in the third quarter of ~~2017~~2020 compared to the third quarter of ~~2016~~2019 was due ~~primarily~~ to an increase in ~~the mix of higher~~gross margin on services net sales, during the three months ended September 30, 2017 compared to the three months ended September 30, 2016. Additionally, as we are expanding our offerings across the APAC region, increased hardware sales also contributed to the increase in margin year over year.including cloud solutions and Insight delivered services, of 421 basis points.

APAC’s gross profit ~~increased 23%~~ for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, with gross margin increasing to 22.5% for the nine months ended September 30, 2017 compared to 18.5% for the nine months ended September 30, 2016. Excluding the effects of fluctuating foreign currency exchange rates, gross profit increased 21% compared to the first nine months of ~~last~~2020 increased $560,000, or 2%, compared to the first half of 2019 (increasing 5% excluding fluctuating foreign currency exchange rates). As a percentage of net sales, gross margin increased approximately 390 basis points, year over year. The ~~improvement~~increase in gross margin in the first nine months of ~~2017~~2020 compared to the first nine months of ~~2016~~2019 was due ~~primarily~~ to an increase in ~~the mix of higher~~gross margin on services net sales, ~~the positive effect on margin that results from the higher volume~~including cloud solutions and Insight delivered services, of ~~sales that are recorded on a net sales recognition~~394 basis ~~and the margin contribution from increased hardware net sales during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.~~points.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Operating Expenses.

~~Operating Expenses.~~

Selling and Administrative Expenses.Selling and administrative expenses increased ~~$36.5~~$21.9 million, or ~~25%~~10%, for the three months ended September 30, ~~2017~~2020 compared to the three months ended September 30, ~~2016. Excluding the effects of fluctuating foreign currency exchange rates, consolidated selling~~2019. Selling and ~~administrative~~administration expenses increased ~~24% year over year in the third quarter of 2017 compared to the third quarter of 2016. Selling and administrative expenses increased $98.6~~$142.8 million, or ~~22%~~23%, for the nine months ended September 30, ~~2017~~2020 compared to the nine months ended September 30, 2016. Excluding the effects of fluctuating foreign currency exchange rates, consolidated selling and administrative expenses increased 24% year over year in the first nine months of 2017 compared to the first nine months of 2016.2019. Our selling and administrative expenses ~~as a percent of net sales~~ by ~~operating segment were as follows~~major expense type for the three and nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 were as follows (dollars in thousands):

   Three Months Ended September 30, Nine Months Ended September 30,
   2017    % of
Net Sales 2016    % of
Net Sales 2017    % of
Net Sales 2016    % of
Net Sales
North America
   $ 132,853    9.4 % $ 99,845    9.5 % $ 395,423    10.4 % $ 301,147    10.3 %
EMEA
   39,948    12.8 % 37,893    12.2 % 121,863    12.3 % 121,663    12.5 %
APAC
   7,589    21.9 % 6,134    20.7 % 21,488    16.8 % 17,367    13.7 %










Consolidated
   $ 180,390    10.3 % $ 143,872    10.3 % $ 538,774    10.9 % $ 440,177    11.0 %

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Personnel costs, including teammate benefits	$	190,451	$	174,598	$	576,910	$	483,015
Depreciation and amortization		15,506		10,479		49,422		28,105
Facility expenses		9,378		7,860		29,769		21,042
Legal and professional fees		7,832		4,583		19,665		12,417
Travel and entertainment		1,449		7,379		9,957		20,225
Marketing		1,835		2,507		7,917		7,786
Other		18,704		15,809		62,958		41,177
Total	$	245,155	$	223,215	$	756,598	$	613,767

~~North America’s selling~~

Selling and administrative expenses increased ~~33%, or $33.0 million, for the three months ended September 30, 2017 compared to the three months ended September 30, 2016 and decreased~~ approximately 10100 basis points ~~year to year~~ as a percentage of net sales ~~to 9.4%. The increase~~ in expenses was primarily driven by a $17.4 million increase in salaries and wages, contract labor and teammate benefit expenses and a $7.3 million increase in variable compensation on increased sales and gross profit for the ~~three months ended September 30, 2017~~third quarter of 2020 compared to the ~~three months ended September 30, 2016. These increases~~third quarter of 2019. The overall net increase in teammate expenses primarily resulted from the addition of Datalink to our North America business effective January 6, 2017. Additionally, depreciation and amortization expense, professional services and travel and entertainment each increased by approximately $2.0 million for the three months ended September 30, 2017 compared to the three months ended September 30, 2016, due primarily to the addition of Datalink to our business.

~~North America’s~~ selling and administrative expenses reflects a $15.9 million net increase in personnel costs, including teammate benefits expenses primarily due to increased ~~31%, or $94.3~~headcount, reflecting the acquisition of PCM in August 2019. There was also an increase in depreciation and amortization, legal and professional fees, other and facility expenses of $5.0 million, ~~for the nine months ended September 30, 2017 compared~~$3.2 million, $2.9 million and $1.5 million, respectively, primarily as a result of PCM. These increased costs were partially offset by decreases in travel and entertainment costs of $5.9 million reflecting cost control measures taken in response to ~~the nine months ended September 30, 2016~~COVID-19.

Selling and administrative expenses increased approximately 10120 basis points ~~year over year~~ as a percentage of net sales ~~to 10.4%. The increase~~ in expenses was primarily driven by a $42.4 million increase in salaries and wages, contract labor and teammate benefit expenses and a $24.9 million increase in variable compensation on increased sales and gross profit for the first nine months ~~ended September 30, 2017 compared to the nine months ended September 30, 2016. These increases in teammate expenses primarily resulted from the addition~~ of Datalink to our North America business effective January 6, 2017. Additionally, professional services, travel and entertainment and marketing expenses increased by $8.3 million, $5.4 million and $3.1 million, respectively, for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, due primarily to the addition of Datalink to our business. Depreciation and amortization expense also increased approximately $4.1 million year over year, as amortization expense of $8.6 million, associated with the intangible assets acquired from Datalink, was offset partially by the year over year effect of intangible assets acquired in previous acquisitions being fully amortized in the third quarter of the prior year.

~~INSIGHT ENTERPRISES, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS (continued)~~

EMEA’s selling and administrative expenses increased 5%, or $2.1 million, for the three months ended September 30, 2017 compared to the three months ended September 30, 2016 and increased approximately 60 basis points year over year as a percentage of net sales to 12.8%. Excluding the effects of fluctuating foreign currency exchange rates, selling and administrative expenses increased 3% compared to the third quarter of last year. The increase in expenses was primarily driven by increased salaries and wages and teammate benefits expenses due to increased headcount. This year over year increase in selling and administrative expenses was offset partially by a decline in amortization expense during the three months ended September 30, 2017 compared to the three months ended September 30, 2016, as intangible assets acquired in previous acquisitions were fully amortized in the third quarter of the prior year.

EMEA’s selling and administrative expenses increased less than 1%, or $200,000, for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016 and decreased approximately 20 basis points year to year as a percentage of net sales to 12.3%. Excluding the effects of fluctuating foreign currency exchange rates, selling and administrative expenses increased 5%2020 compared to the first nine months of ~~last year.~~2019. The ~~increase in expenses was primarily driven by increased salaries and wages and teammate benefits expenses due to increased headcount. This year over year~~overall net increase in selling and administrative expenses reflects a $93.9 million increase in personnel costs, including teammate benefits expenses primarily due to increased headcount, including the acquisition of PCM. There was ~~offset partially by a decline~~also an increase in other expenses, depreciation and amortization, expense during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, as intangible assets acquired in previous acquisitions were fully amortized in the third quarterfacility expenses and legal and professional fees of ~~the prior year. The decrease in selling~~$21.8 million, $21.3 million, $8.7 million and ~~administrative expenses as a percentage of net sales year to year was the result of our ability to manage selling and administrative costs while growing ourtop-line~~ ~~revenue during the first nine months of 2017 compared to the first nine months of 2016.~~

~~APAC’s selling and administrative expenses increased 24%, or $1.5~~$7.2 million, for the three months ended September 30, 2017 compared to the three months ended September 30, 2016, and increased approximately 120 basis points year over year as a percentage of net sales to 21.9%. Excluding the effects of fluctuating foreign currency exchange rates, selling and administrative expenses increased 19% compared to the third quarter of last year. The year over year increase wasrespectively, primarily ~~driven by increased selling and administrative expenses~~ as a result of ~~the acquisition~~PCM. These increased costs were partially offset by decreases in travel and entertainment costs of ~~Ignia effective September 1, 2016. Excluding Ignia, selling and administrative expenses were relatively flat year over year.~~$10.3 million reflecting cost control measures taken in response to COVID-19.

APAC’s selling and administrative expenses increased 24%, or $4.1 million, for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, and increased approximately 310 basis points year over year as a percentage of net sales to 16.8%. Excluding the effects of fluctuating foreign currency exchange rates, selling and administrative expenses increased 21% compared to the first nine months of last year. The year over year increase was primarily driven by increased selling and administrative expenses as a result of the acquisition of Ignia, effective September 1, 2016. Excluding Ignia, selling and administrative expenses were relatively flat year over year.

Severance and Restructuring Expenses. During the three months ended September 30, ~~2017, North America, EMEA and APAC~~2020, we recorded severance expense, net of adjustments, of approximately ~~$398,000, $53,000 and $43,000, respectively.~~$808,000. During the nine months ended September 30, ~~2017, North America, EMEA and APAC~~2020, we recorded severance expense, net of adjustments, of approximately ~~$2.0 million, $4.1 million and $104,000, respectively.~~$10.0 million. The ~~North America~~ charges ~~for the nine months ended September 30, 2017~~in all three operating segments primarily related to ~~severance actions taken to realign~~a realignment of certain roles and responsibilities ~~subsequent to~~and for North America and EMEA, the acquisition of Datalink. The EMEA charges for the nine months ended September 30, 2017 primarily related to headcount reductions in France, Germany and the Netherlands as part of our cost reduction and restructuring initiatives. The APAC charges for the nine months ended September 30, 2017 primarily related to severance actions taken subsequent to the acquisition of Ignia.PCM. Current period charges were partially offset

~~INSIGHT ENTERPRISES, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS (continued)~~

by adjustments for changes in estimates of previous accruals as cash payments were made. Comparatively, during the three months ended September 30, ~~2016, North America and EMEA~~2019, we recorded severance expense, net of adjustments, of approximately ~~$643,000 and $145,000, respectively.~~$2.7 million. For the nine months ended September 30, ~~2016, North America, EMEA and APAC~~2019, we recorded severance expense, net of adjustments, of approximately ~~$2.5 million, $487,000 and $115,000, respectively.~~

~~Loss on Sale of Foreign Entity~~.On July 19, 2017, we concluded the sale of our operations in Russia, formerly a part of our EMEA operating segment. We incurred a loss on the sale of the foreign entity of approximately $3.6 million, including a $2.9 million charge upon the release of our cumulative translation adjustment account balance as of the sale date.

~~Acquisition-related Expenses~~. During the three and nine months ended September 30, 2017, we incurred $106,000 and $3.3 million, respectively, in direct third-party transaction costs related to the acquisitions of Caase.com, which was completed on September 26, 2017, and Datalink, which was completed on January 6, 2017. Comparatively, during the three and nine months ended September 30, 2016, we incurred $741,000 in direct third-party transaction costs related to the acquisitions of Ignia, which was completed on September 1, 2016, and Datalink. See Note 10 to the Consolidated Financial Statements in Part I, Item 1 of this report for further discussion of the acquisitions.

~~Non-Operating~~ ~~(Income) Expense.~~

~~Interest Income.~~ Interest income for the three and nine months ended September 30, 2017 and 2016 was generated from interest earned on cash and cash equivalent bank balances. The increase in interest income for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016 was primarily due to higher interest rates earned on such balances and to higher average interest-bearing cash and cash equivalent balances during the nine months ended September 30, 2017.

~~Interest Expense.~~ Interest expense primarily relates to borrowings under our financing facilities and imputed interest under our inventory financing facility. Interest expense for the three months ended September 30, 2017 increased 121%, or $3.0 million, compared to the three months ended September 30, 2016. Interest expense for the nine months ended September 30, 2017 increased 117%, or $7.5 million, compared to the nine months ended September 30, 2016. These increases were due primarily to higher average daily balances on our debt facilities in 2017 as a result of our increased borrowings to fund our acquisition of Datalink and to fund working capital needs given the growth in our business year over year. Imputed interest under our inventory financing facility was $1.9 million and $4.7 million for the three and nine months ended September 30, 2017, respectively, compared to $1.1 million and $2.5 million for the three and nine months ended September 30, 2016, respectively. The increases were a result of an increase in usage, the addition of Datalink to the facility and an increase in our average incremental borrowing rate used to compute the imputed interest amounts during the 2017 periods. For a description of our various financing facilities, see Note 3 to our Consolidated Financial Statements in Part I, Item 1 of this report.

~~Net Foreign Currency Exchange Losses~~. These losses result from foreign currency transactions, including foreign currency derivative contracts and intercompany balances that are not considered long-term in nature. The change in net foreign currency exchange losses is due primarily to the underlying changes in the applicable exchange rates, partially mitigated by our use of foreign exchange forward contracts to offset the effects of fluctuations in foreign currencies on certain of our~~non-functional~~ ~~currency assets and liabilities.~~

~~Other Expense, Net~~. ~~Other expense, net, consists primarily of bank fees associated with our cash management activities.~~$3.7 million.

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AND RESULTS OF OPERATIONS (continued)

~~Income Tax Expense.~~ ~~Our effective tax rate of 36.8%~~Earnings from Operations.Earnings from operations increased 38%, or $17.1 million, for the three months ended September 30, ~~2017 was higher than our effective tax rate~~2020, compared to the three months ended September 30, 2019. Earnings from operations increased 9%, or $15.0 million, for the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019. Our earnings from operations and earnings from operations as a percentage of ~~35.0%~~ net sales by operating segment were as follows for the three and nine months ended September 30, 2020 and 2019 (dollars in thousands):

	Three Months Ended September 30,										Nine Months Ended September 30,
	2020		% of Net Sales			2019		% of Net Sales			2020		% of Net Sales			2019		% of Net Sales
North America	$	54,244		3.5	%	$	39,306		2.6	%	$	148,653		3.1	%	$	135,550		3.3	%
EMEA		4,843		1.4	%		3,110		0.9	%		31,073		2.7	%		29,631		2.6	%
APAC		2,395		6.5	%		2,006		4.8	%		8,807		7.0	%		8,397		5.8	%
Consolidated	$	61,482		3.2	%	$	44,422		2.3	%	$	188,533		3.1	%	$	173,578		3.2	%

North America’s earnings from operations for the three months ended September 30, ~~2016. Our effective tax rate~~2020 increased $14.9 million, or 38%, compared to the three months ended September 30, 2019. As a percentage of ~~35.6%~~ net sales, earnings from operations increased by approximately 90 basis points to 3.5%. The increase in earnings from operations was primarily driven by an increase in gross profit and decrease in acquisition and integration related expenses, partially offset by increases in selling and administrative expenses when compared to the three months ended September 30, 2019.

North America’s earnings from operations for the nine months ended September 30, ~~2017~~2020 increased $13.1 million, or 10%, compared to the nine months ended September 30, 2019. As a percentage of net sales, earnings from operations decreased by approximately 20 basis points to 3.1%. The increase in earnings from operations was primarily driven by an increase in gross profit in excess of increases in selling and administrative expenses and severance and restructuring expenses when compared to the nine months ended September 30, 2019.

EMEA’s earnings from operations for the three months ended September 30, 2020 increased $1.7 million, or 56%, compared to the three months ended September 30, 2019. As a percentage of net sales, earnings from operations increased by approximately 50 basis points to 1.4%. The increase in earnings from operations was primarily driven by an increase in gross profit, partially offset by the increase in selling and administrative expenses compared to the three months ended September 30, 2019.

EMEA’s earnings from operations for the nine months ended September 30, 2020 increased $1.4 million, or 5%, compared to the nine months ended September 30, 2019. As a percentage of net sales, earnings from operations increased by approximately 10 basis points to 2.7%. The increase in earnings from operations was primarily driven by an increase in gross profit, partially offset by the increase in selling and administrative expenses compared to the nine months ended September 30, 2019.

APAC’s earnings from operations for the three months ended September 30, 2020 increased $389,000, or 19%, compared to the three months ended September 30, 2019. As a percentage of net sales, earnings from operations increased by approximately 170 basis points to 6.5%. The increase in earnings from operations was primarily driven by an increase in gross profit when compared to the three months ended September 30, 2019.

APAC’s earnings from operations for the nine months ended September 30, 2020 increased $410,000, or 5%, compared to the nine months ended September 30, 2019. As a percentage of net sales, earnings from operations increased by approximately 120 basis points to 7.0%. The increase in earnings from operations reflects an increase in gross profit and reduction in severance and

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

restructuring expenses, partially offset by an increase in selling and administrative expenses when compared to the nine months ended September 30, 2019.

Non-Operating (Income) Expense.

Interest Expense, Net. Interest expense, net primarily relates to borrowings under our financing facilities and imputed interest under our inventory financing facilities and our convertible senior notes, partially offset by interest income generated from interest earned on cash and cash equivalent bank balances. Interest expense, net for the three months ended September 30, 2020 increased 18%, or $1.4 million, compared to the three months ended September 30, 2019. Interest expense, net for the nine months ended September 30, 2020 increased 88%, or $14.6 million, compared to the nine months ended September 30, 2019. The increase was due primarily to higher average daily balances under our ABL facility in comparison to our facilities in the prior year and imputed interest under our convertible senior notes. The higher average daily balances under our ABL facility are largely the result of the PCM acquisition. Imputed interest under our convertible senior notes, which were issued in August 2019, was $2.6 million and $7.6 million for the three and nine months ended September 30, 2020, respectively. Imputed interest under our convertible senior notes was $1.2 million for both the three and nine months ended September 30, 2019. Imputed interest under our inventory financing facilities was $3.2 million and $8.8 million for the three and nine months ended September 30, 2020, respectively, compared to $2.7 million and $8.6 million for the three and nine months ended September 30, 2019, respectively. The increases were a result of expanded use of the facilities, including the addition of PCM, in part as a result of extended payment terms during the 2020 periods. For a description of our various financing facilities, see Note 5 to our Consolidated Financial Statements in Part I, Item 1 of this report.

Income Tax Expense.Our effective tax rate of 23.8% for the three months ended September 30, 2020 was lower than our effective tax rate of ~~36.8%~~27.2% for the ~~nine~~three months ended September 30, ~~2016.~~2019. The ~~increase~~decrease in our effective tax rate for the three months ended September 30, ~~2017~~2020 compared to the three months ended September 30, ~~2016~~2019 was due ~~primarily~~ to the ~~loss on~~rate impact of acquisition-related costs which did not recur in 2020 and the ~~sale~~beneficial impact of ~~a foreign entity~~certain income tax regulations issued during the ~~three~~current quarter. Our effective tax rate of 23.8% for the nine months ended September 30, ~~2017 beingnon-deductible~~2020 was lower than our effective tax rate of 25.4% for ~~tax purposes.~~the nine months ended September 30, 2019. The decrease in our effective tax rate for the first nine months ~~ended September 30, 2017~~of 2020 compared to the first nine months ~~ended September 30, 2016~~of 2019 was due primarily to the ~~recognition~~remeasurement of ~~$2.3 million~~acquired net operating losses to be carried back to higher tax rate years under the CARES Act and the rate impact of ~~tax benefits on the settlement of employee share-based awards during the first nine months of 2017~~acquisition-related costs which did not recur in ~~accordance with a new accounting standard, which was adopted effective January 1, 2017. See further discussion in Note 1 to the Consolidated Financial Statements in Part I, Item 1 of this report.~~2020.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Liquidity and Capital Resources

The following table sets forth certain consolidated cash flow information for the nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 (in thousands):

   Nine Months Ended
September 30,
   2017    2016
Net cash used in operating activities
   $ (323,560 )    $ (124,850 )
Net cash used in investing activities
   (201,321 )    (18,633 )
Net cash provided by financing activities
   538,963    125,858
Foreign currency exchange effect on cash and cash equivalent balances
   19,447    5,342




Increase (decrease) in cash and cash equivalents
   33,529    (12,283 )
Cash and cash equivalents at beginning of period
   202,882    187,978




Cash and cash equivalents at end of period
   $ 236,411    $ 175,695

	Nine Months Ended September 30,
	2020			2019
Net cash provided by operating activities	$	462,094		$	168,595
Net cash used in investing activities		(12,875	)		(681,209	)
Net cash (used in) provided by financing activities		(489,087	)		514,442
Foreign currency exchange effect on cash, cash equivalent and restricted cash balances		718			(3,960	)
Decrease in cash, cash equivalents and restricted cash		(39,150	)		(2,132	)
Cash, cash equivalents and restricted cash at beginning of period		116,297			144,293
Cash, cash equivalents and restricted cash at end of period	$	77,147		$	142,161

Cash and Cash Flow

Our primary uses of cash during the nine months ended September 30, 2017 were to acquire Datalink and Caase.com for an aggregate of approximately $186.9 million, net of cash and cash equivalents acquired, to fund working capital requirements and for capital expenditures. Operating activities used $323.6 million in cash during the nine months ended September 30, 2017, compared to $124.9 million of cash used in operating activities during the nine months ended September 30, 2016. Both the 2017 and 2016 results are affected by individually significant transactions at the beginning of each period, whereby a single significant payment to a supplier was due and paid in January, but the related receivable was collected from a client in the fourth quarter of the previous year, as discussed in more detail below. Additionally, higher working capital needs associated with higher sales resulted in a higher use of cash to pay down our accounts payable balances during the nine months ended September 30, 2017. We typically pay our partners on average terms that are shorter than the average terms we grant to our clients in order to take advantage of supplier discounts. Further, the decrease in accounts payable reflected as cash used in operating activities during the nine months ended September 30, 2017 was also affected by the increased use of our inventory financing facility in 2017 to facilitate the purchase of inventory from various suppliers. Increases in accounts payable under this facility are reflected as cash provided by financing activities, as discussed below. During the nine months ended September 30, 2017, we had net borrowings under our inventory financing facility of $45.6 million,

•

Our primary uses of cash during the nine months ended September 30, 2020 were to pay down our debt balances and to fund our working capital requirements.

•

Operating activities provided $462.1 million in cash during the nine months ended September 30, 2020, compared to $168.6 million during the nine months ended September 30, 2019 partially driven by a non-recurring item in the third quarter of 2020. In the fourth quarter of 2020, we expect that this non-recurring item will reverse, and we will use cash from operating activities for the quarter. Our cash cycle is inverted which allows us to generate more cash flows from operating activities in sequential periods of declining sales, particularly of our hardware offerings.

•

We had net borrowings under our inventory financing facilities of $114.3 million during the nine months ended September 30, 2020, compared to net repayments of $96.5 million during the nine months ended September 30, 2019.

•

Net repayments under our ABL facility during the nine months ended September 30, 2020 were $570.9 million. Net borrowings under our ABL facility and our prior senior revolving credit facility and ABS facility combined during the nine months ended September 30, 2019 were $338.2 million.

•

Capital expenditures were $20.7 million and $16.9 million for the nine months ended September 30, 2020 and 2019, respectively.

•

We acquired vNext in February 2020 for $6.4 million and received proceeds from the sale of a property held for sale of $14.2 million in the nine months ended September 30, 2020.

•

During the nine months ended September 30, 2020, we repurchased an aggregate of $25.0 million of our common stock, pursuant to a repurchase program approved in February 2020. During the nine months ended September 30, 2019, we repurchased an aggregate of $27.9 million of our common stock

~~INSIGHT ENTERPRISES, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS (continued)~~

~~up from $29.5 million in during the nine months ended September 30, 2016.~~ We also had combined net borrowings under our revolving facility and ABS facility that increased our outstanding long-term debt by $504.9 million, including the expansion of our revolving facility by $175.0 million in the form of an incremental Term Loan A (“TLA”) to fund, in part, the acquisition of Datalink. Capital expenditures were $15.9 million in the nine months ended September 30, 2017, an increase of 64% compared to the total capital expenditures made in the prior year period, reflecting planned investments in IT infrastructure upgrades, our global web site and our digital marketing platforms. Cash and cash equivalent balances in the nine months ended September 30, 2017 and 2016 were positively affected by $19.4 million and $5.3 million, respectively, as a result of foreign currency exchange rates.

~~We anticipate~~expect that cash flows from operations, together with the funds available under our financing facilities, will be adequate to support our presently anticipated cash and working capital requirements for operations ~~as well as other strategic investments~~ over the next 12 months. We ~~currently do not intend nor foresee~~believe that we have a ~~need~~strong balance sheet and healthy liquidity position. The Company had capacity of up to ~~repatriate any foreign undistributed earnings. We expect existing domestic cash and cash flows from operations to continue to be sufficient to fund~~$1.2 billion under our domestic operating cash activities and cash commitments for investing and financing activities, such as capital expenditures and debt repayments, for at least the next 12 months. See further discussion under the heading “Undistributed Foreign Earnings” later in this section.

~~Net cash used in operating activities.~~ ~~Cash flows from operations for the nine months ended September 30, 2017 and 2016 reflect our net earnings, adjusted fornon-cash~~ items such as depreciation, amortization, stock-based compensation expense and write-offs and write-downs of assets, as well as changes in asset and liability balances. Net earnings for the nine months ended September 30, 2017 was also adjusted for the loss on sale of our Russia business, which included a~~non-cash~~ charge for the release of our cumulative translation adjustment balance upon sale of the foreign entity. In both periods, exclusive of the acquisition of Datalink’s accounts receivable balances and the assumption of Datalink’s accounts payable balances on January 6, 2017, we anticipated the cash inflows from decreases in accounts receivable and cash outflows from decreases in accounts payable due to the seasonal changes in net sales from the fourth quarter to the third quarter. However, the 2017 results are also affected by a single significant payment to a supplier of approximately $160 million that was due and paid in January 2017 for which the related receivable was collected from the client in the fourth quarter of 2016, as noted previously. In the first quarter of 2016, we had a similar experience with a payment to a supplier of approximately $60 million that was due and paid in the first quarter of 2016, but the related receivable was collected from the client in the fourth quarter of 2015. In addition, the cash outflows from decreases in accounts payable were higher than the prior year period due to higher working capital needs associated with higher sales during the third quarter of 2017 and the increased use of our inventory financingABL facility discussed previously. For both periods, the increase in inventories is primarily attributable to an increase in inventory levels at September 30 to support specific large enterprise client engagements and increased hardware sales near period end that are in transit to clients as of September 30, ~~such that delivery was not deemed~~2020. For the remainder of 2020, we plan to ~~have occurred until the product was received by the client~~be prudent in ~~early October.~~our use of cash, deferring discretionary capital investments and using available cash to fund business operations and pay down our inventory financing facilities.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Net cash provided by operating activities

•

Cash flow from operating activities in the first nine months of 2020 was $462.1 million compared to $168.6 million in the first nine months of 2019.

•

The increase in cash flow from operating activities was partially driven by a non-recurring item in the third quarter of 2020. A payment of $107.0 million that was due to be paid to a partner in the third quarter of 2020 was deferred in response to COVID-19 and will be paid in the fourth quarter of 2020. Our cash cycle is inverted which allows us to generate more cash flows from operating activities in sequential periods of declining sales, particularly of our hardware offerings.

•

The significant decreases in both other assets and accrued expenses and other liabilities for the three months ended September 30, 2020 resulted from a single significant transaction in 2019 with no comparable activity in the current year.

Our consolidated cash flow operating metrics were as follows:


	Three Months Ended September 30,						Three Months Ended September 30,
	2017			2016			2020			2019
Days sales outstanding in ending accounts receivable (“DSOs”) (a)		78			77			108			111
Days inventory outstanding (“DIOs”) (b)		13			12			10			11
Days purchases outstanding in ending accounts payable (“DPOs”) (c)		(54	)		(57	)		(93	)		(80	)

Cash conversion cycle (days) (d)		37			32			25			42

~~(a)~~

(a)

Calculated as the balance of current accounts receivable, net at the end of the quarter divided by daily net sales. Daily net sales is calculated as net sales for the quarter divided by 92 days.

~~(b)~~

(b)

Calculated as average inventories ~~(excluding inventories not available for sale)~~ divided by daily costs of goods sold. Average inventories is calculated as the sum of the balances of inventories at the beginning of the quarter plus inventories at the end of the quarter divided by two. Daily costs of goods sold is calculated as costs of goods sold for the quarter divided by 92 days.

~~(c)~~

(c)

Calculated as the sum of the balances of accounts payable – trade and accounts payable – inventory financing ~~facility~~facilities at the end of the quarter divided by daily costs of goods sold. Daily costs of goods sold is calculated as costs of goods sold for the quarter divided by 92 days.

~~(d)~~

(d)

Calculated as DSOs plus DIOs, less DPOs.

Our cash conversion cycle was 37 days in the third quarter of 2017, up 5 days from the third quarter of 2016. The increase resulted from the net effect of a one day increase in DSOs and three day decrease in DPOs due to the timing of client receipts and supplier payments during the respective quarters and a one day increase in DIOs due to investment in inventory for specific client engagements.

•

Our cash conversion cycle was 25 days in the third quarter of 2020, down 17 days from the third quarter of 2019.

•

The net changes were a result of a 3 day decrease in DSOs, a 1 day decrease in DIOs and a 13 day increase in DPOs. Excluding the impacts of software netting, the decrease in DSOs was due to better collections experience on our accounts receivable. Excluding the impacts of software netting, the increase in DPOs was primarily due to the extension of terms (certain of which are temporary) on our inventory financing facilities and timing of transactions during the respective quarters, including deferral of payments to certain partners in response to COVID-19.

•

We intend to use cash generated in the remainder of 2020 in excess of working capital needs, given current market conditions, to pay down our inventory financing facilities.

We expect that cash flow from operations will be used, at least partially, to fund working capital as we typically pay our partners on average terms that are shorter than the average terms we grant to our clients in order to take advantage of supplier discounts. We intend to use cash generated in the remainder of 2017 in excess of working capital needs to pay down our debt balances and to support our capital expenditures for the year. We also may use cash to fund potential acquisitions to add select capabilities within our current geographic operating segments.

~~Net cash used in investing activities~~. Capital expenditures were $15.9 million and $9.7 million for the nine months ended September 30, 2017 and 2016, respectively. We expect capital expenditures for the full year 2017 to be between $20.0 million and $22.0 million, primarily for technology and facility related upgrade projects. During the nine months ended September 30, 2017, we acquired Datalink in North America and Caase.com in EMEA for an aggregate of approximately $186.9 million, net of cash and cash equivalents acquired.

~~Net cash provided by financing activities~~. During the nine months ended September 30, 2017, we had net combined borrowings under our revolving facility and our ABS facility that increased our outstanding long-term debt balance by $504.9 million, including the expansion of our revolving facility by $175.0 million in the form of an incremental TLA to fund, in part, the acquisition of Datalink. We also had net borrowings under our inventory financing facility of $45.6 million during the nine months ended September 30, 2017. Comparatively, during the nine months ended September 30, 2016, we had net combined borrowings under our revolving facility and our ABS facility that increased our outstanding debt balance by $153.5 million and had net borrowings under our inventory financing facility of $29.5 million.

~~Financing Facilities~~

~~Our revolving facility and our ABS facility contain various covenants customary for transactions of this type, including limitations on the payment of dividends and the requirement~~39

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Net cash used in investing activities

•

Capital expenditures were $20.7 million and $16.9 million for the nine months ended September 30, 2020 and 2019, respectively.

•

We acquired vNext in February 2020 for $6.4 million and received proceeds from the sale of a property held for sale of $14.2 million in the first nine months of 2020.

•

We expect capital expenditures for the full year 2020 to be in a range of up to $25.0 million, of which approximately $1.0 million will be used to ready our global corporate headquarters, and the remaining amount will be used primarily for technology-related upgrade projects.

•

We have decided to defer the buildout of our new global corporate headquarters until early 2021.

Net cash (used in) provided by financing activities

•

During the nine months ended September 30, 2020, we had net repayments under our ABL facility that decreased our outstanding long-term debt balance by $570.9 million.

•

During the nine months ended September 30, 2019, we had net combined borrowings under our ABL facility, our prior senior revolving credit facility and our ABS facility that increased our outstanding long-term debt balance by $338.2 million.

•

We had net borrowings under our inventory financing facilities of $114.3 million during the nine months ended September 30, 2020 compared to net repayments of $96.5 million during the nine months ended September 30, 2019.

•

During the nine months ended September 30, 2020, we repurchased an aggregate of $25.0 million of our common stock, pursuant to a repurchase program approved in February 2020. In comparison, during the nine months ended September 30, 2019, we repurchased an aggregate of $27.9 million of our common stock.

Financing Facilities

that we comply with maximum leverage and minimum fixed charge ratio requirements, comply with a minimum receivable requirement and meet monthly, quarterly and annual reporting requirements. If we fail to comply with these covenants, the lenders would be able to demand payment within a specified time period. At September 30, 2017, we were in compliance with all such covenants. Further, the terms of the ABS facility identify various circumstances that would result in an “amortization event” under the facility. At September 30, 2017, no such “amortization event” had occurred.

Our consolidated debt balance that can be outstanding at the end of any fiscal quarter under our revolving facility, our TLA and our ABS facility is limited by certain financial covenants, particularly a maximum leverage ratio. The maximum leverage ratio is calculated as aggregate debt outstanding divided by the sum of the Company’s trailing twelve month net earnings (loss) plus (i) interest expense, excluding~~non-cash~~ ~~imputed interest on our inventory financing facility, (ii) income tax expense (benefit), (iii) depreciation and amortization,(iv) non-cash~~ ~~stock-based compensation, (v) extraordinary ornon-recurringnon-cash~~ losses or expenses and (vi) certain cash restructuring and acquisition-related charges and synergies, not to exceed specified caps (“adjusted earnings”). The maximum leverage ratio permitted under the agreements is 3.50 times our trailing twelve-month adjusted earnings. We anticipate that we will be in compliance with our maximum leverage ratio requirements over the next four quarters. However, a significant drop in the Company’s adjusted earnings would limit the amount of indebtedness that could be outstanding at the end of any fiscal quarter to a level that would be below the Company’s consolidated maximum facility amount. Based on the maximum permitted leverage ratio as of September 30, 2017, the Company’s debt balance that could have been outstanding under our revolving facility and our ABS facility was the full amount of the maximum borrowing capacity of $768.4 million, of which $216.0 million was outstanding under our revolving facility, $168.4 million was outstanding under our TLA and $160.0 million was outstanding under our ABS facility at September 30, 2017. Our debt balance as of September 30, ~~2017~~2020 was ~~$549.7~~$296.1 million, including our ~~capital~~finance lease obligations for certain IT equipment and other financing obligations.

•

Our objective is to pay our debt balances down while retaining adequate cash balances to meet overall business objectives.

•

Our convertible senior notes are subject to certain events of default and certain acceleration clauses. As of September 30, 2020, no such events have occurred.

•

Our ABL facility contains various covenants customary for transactions of this type, including complying with a minimum receivable and inventory requirement and meeting monthly, quarterly and annual reporting requirements. The credit agreement contains customary affirmative and negative covenants and events of default. At September 30, 2020, we were in compliance with all such covenants.

We also have agreements with financial intermediaries to facilitate the purchase of ~~September 30, 2017, the current portion of our long-term debt includes $12.0 million in amortization payments due through September 30, 2018~~inventory from various suppliers under ~~our TLA. The remaining $3.3 million of current debt relates to our capital leases~~certain terms and ~~our other financing obligations acquired from Datalink.~~conditions.

•

These amounts are classified separately as accounts payable – inventory financing facilities in our consolidated balance sheets.

•

Our inventory financing facilities have an aggregate availability for vendor purchases of $500.0 million, of which $368.0 million was outstanding at September 30, 2020.

INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Undistributed Foreign Earnings

Cash and cash equivalents held by foreign subsidiaries are generally subject to U.S. income taxation upon repatriation to the United States. We do not provide for U.S. income taxes on the undistributed earnings of those of our foreign subsidiaries where earnings are reinvested and, in the opinion of management, will continue to be reinvested indefinitely outside of the United States. As of September 30, ~~2017,~~2020, we had approximately ~~$193.4~~$56.7 million in cash and cash equivalents in certain of our foreign subsidiaries, ~~where we consider undistributed earnings of these foreign subsidiaries to be indefinitely reinvested. As of September 30, 2017, the majority of our foreign cash resides~~primarily residing in ~~the Netherlands,~~Australia, Canada and ~~Australia.~~the Netherlands. Certain of these cash balances will be remitted to the United States by paying down intercompany payables generated in the ordinary course of ~~business. This repayment would not change our policy to indefinitely reinvest earnings of our foreign subsidiaries. We intend to use undistributed earnings for general~~ business ~~purposes in the foreign jurisdictions as well as to fund our capital expenditures and potential acquisitions.~~or through actual dividend distributions.

~~INSIGHT ENTERPRISES, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS (continued)~~

Off-Balance Sheet Arrangements

~~Off-Balance~~ ~~Sheet Arrangements~~

We have entered intooff-balance sheet arrangements, which include indemnifications. The indemnifications are discussed in Note 810 to the Consolidated Financial Statements in Part I, Item 1 of this report and such discussion is incorporated by reference herein. We believe that none of ouroff-balance sheet arrangements have, or are reasonably likely to have, a material current or future effect on our business, financial condition or results of operations.

Recently Issued Accounting Standards

The information contained in Note 1 to the Consolidated Financial Statements in Part I, Item 1 of this report concerning a description of recently issued accounting standards which affect or may affect our financial statements, including our expected dates of adoption and the estimated effects on our results of operations and financial condition, is incorporated by reference herein.

Contractual Obligations

~~At September 30, 2017,~~

There have been no material changes in our reported contractual obligations, ~~were~~ as ~~follows (in thousands):~~described under “Contractual Obligations” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2019.

   Payments due by period
      Less than    1-3    3-5    More than
   Total    1 Year    Years    Years    5 Years
Long-term debt^(a)
   $ 544,438    $ 12,031    $ 197,188    $ 335,219    $ —
Capital lease obligations and other financing agreements, including interest payments
   6,227    3,563    2,664    —      —
Inventory financing facility^(b)
   224,072    224,072    —      —      —
Operating lease obligations^(c)
   59,936    16,461    23,570    11,580    8,325
Severance and restructuring obligations^(d)
   3,742    3,742    —      —      —
Other contractual obligations^(e)
   49,440    15,347    23,601    8,364    2,128










Total
   $ 887,855    $ 275,216    $ 247,023    $ 355,163    $ 10,453

~~(a)~~

Reflects the $160.0 million outstanding at September 30, 2017 under our ABS facility as due in June 2019, the date at which the facility matures, $216.0 million outstanding at September 30, 2017 under our revolving facility as due in June 2021, the date at which the facility matures, and $168.4 million outstanding at September 30, 2017 under our TLA. The TLA requires amortization payments of 5%, 7.5%, 10%, 12.5% and 15% of the original principal balance in years one through five, respectively, to be paid quarterly through March 31, 2021, with the remaining balance of $107.2 million due at maturity on June 23, 2021. See further discussion in Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report.

~~(b)~~

~~As of September 30, 2017, this amount has been included in our contractual obligations table above as being due in less than 1 year due to the30-~~ to~~60-day~~ ~~stated vendor terms. See further discussion in Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report.~~

~~(c)~~

As there were no material changes in our operating lease obligations during the quarter ended September 30, 2017, amounts included in the table reflect our operating lease obligations as of June 30, 2017 less the estimated payments made in the third quarter of 2017. Amounts in the table above exclude~~non-cancellable~~ ~~rental income of approximately $1.6 million due in less than one year and a total of approximately $2.0 million due in years one through three.~~

INSIGHT ENTERPRISES, INC.

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS (continued)~~

~~(d)~~

As a result of approved severance and restructuring plans, we expect future cash expenditures related to employee termination benefits. See further discussion in Note 4 to the Consolidated Financial Statements in Part I, Item 1 of this report.

~~(e)~~

~~The table above includes:~~

Estimated interest payments of $3.4 million during the 12 months ending September 30, 2018 and $2.6 million during the nine months to maturity in 2019, based on the current debt balance at September 30, 2017 of $160.0 million under our ABS facility, multiplied by the weighted average interest rate for the quarter ended September 30, 2017 of 2.14% per annum.

~~II.~~

Estimated interest payments of $5.8 million during the 12 months ending September 30, 2018, 2019 and 2020, and $4.4 million during the nine months to maturity in 2021, based on the current debt balance at September 30, 2017 of $216.0 million under our ABS facility, multiplied by the weighted average interest rate for the quarter ended September 30, 2017 of 2.70% per annum.

~~III.~~

Estimated interest payments of $4.5 million during the 12 months ending September 30, 2018, $4.1 million during the 12 months ending September 30, 2019, $3.6 million during the 12 months ending September 30, 2020 and $2.3 million during the nine months to maturity in 2021, based on the projected average debt balance under our TLA, multiplied by the weighted average interest rate for the quarter ended September 30, 2017 of 2.74% per annum.

~~IV.~~

~~Amounts totaling $261,000 through 2018 for other contractual obligations.~~

~~We estimate that we will owe $6.9 million in future years in connection with the obligations to perform asset-retirement activities that are conditional on a future event as of September 30, 2017.~~

The table above excludes $3.9 million of unrecognized tax benefits, including $276,000 related to accrued interest, as we are unable to reasonably estimate the ultimate amount or timing of settlement. See further discussion in Note 6 to the Consolidated Financial Statements in Part I, Item 1 of this report.

~~Although we set purchase targets with our partners tied to the amount of supplier reimbursements we receive, we have no material contractual purchase obligations with our partners.~~

~~INSIGHT ENTERPRISES, INC.~~

Item 3. Quantitative ~~andQualitative~~and Qualitative Disclosures About Market Risk.

~~There~~

Except as described below, there have been no material changes in our reported market risks, as described in “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of our Annual Report on Form10-K for the year ended December 31, ~~2016.~~2019.

Although our convertible senior notes are based on a fixed rate, changes in interest rates could impact the fair market value of such notes. As of September 30, 2020, the fair market value of our convertible senior notes was $399 million. For additional information about our convertible senior notes, see Note 5 to our Consolidated Financial Statements in Part I, Item 1 of this report.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, as of the end of the period covered by this report, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined underRules 13a-15(e) ~~and15d-15(e)~~and 15d-15(e) of the Securities Exchange ~~Act)~~Act of 1934, as amended (the “Exchange Act”)) and determined that as of September 30, ~~2017~~2020 our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Change in Internal Control over Financial Reporting

There was no change in ~~our~~the Company’s internal control over financial reporting (as such term is defined inRules 13a-15(f) ~~and15d-15(f)~~and 15d-15(f) under the Exchange Act) ~~during~~in the most recent fiscal quarter ~~ended September 30, 2017~~ that has materially affected, or is reasonably likely to materially affect, ~~our~~the Company’s internal control over financial reporting.

Inherent Limitations of Internal Control Over Financial Reporting

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

INSIGHT ENTERPRISES, INC.

Part II – OTHER INFORMATION

Item 1. Legal Proceedings.

For a discussion of legal proceedings, see “– Legal Proceedings” in Note 810 to the Consolidated Financial Statements in Part I, Item 1 of this report, which section is incorporated by reference herein.

Item ~~1A.Risk~~1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors”, in our Annual Report on Form10-K for the year ended December 31, ~~2016, which could materially affect our business, financial condition or future results.~~2019 (the “Annual Report”) and the risks relating to the impact of the COVID-19 pandemic described below. The risks described in our Annual Report ~~on Form10-K~~and below are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or operating results.

36The recent novel coronavirus (“COVID-19”) global pandemic has adversely affected, and is expected to continue to adversely affect, our business, results of operations and financial condition. The widespread outbreak of any other illnesses or communicable diseases could also adversely affect our business, results of operations and financial condition.

We could be negatively impacted by the widespread outbreak of an illness, any other communicable disease or any other public health crisis that results in economic and trade disruptions, including the disruption of global supply chains. To date, the COVID-19 pandemic has adversely affected, and is expected to continue to adversely affect, our business, results of operations and financial condition.

In late 2019, there was an outbreak of a new strain of coronavirus, COVID-19, which has since spread globally. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. In an effort to protect the health and safety of our teammates, we took proactive action to adopt social distancing policies at our locations globally, including working from home where possible, limiting the number of teammates attending in-person meetings, reducing the number of people in our locations at any one time, and suspending teammate travel.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and workforce participation, and initially created significant volatility and disruption of financial markets. As a result of the COVID-19 pandemic and the related responses from government authorities, our business operations, financial performance and results of operations have been, and continue to be, adversely impacted. For example, we observed a pronounced impact of COVID-19 on our third quarter financial results when compared to internal budgets, and anticipate demand for our products and services will continue to be impacted in the fourth quarter as clients continue to evaluate the impact of COVID-19 on their businesses, their profitability and liquidity. While we did not experience a decline in booking trends year over year in October 2020 we anticipate that the declining trend, which began in April 2020, may continue into the fourth quarter of 2020. In the short run we took steps to accelerate and complete our integration with PCM and to reduce discretionary operating expenditures, such as certain teammate benefits and variable compensation, and travel related expenditures. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Quarterly Overview – Recent Developments – Impact of COVID-19 to our Business” for additional information.

INSIGHT ENTERPRISES, INC.

Additionally, our business operations, financial performance and results of operations have been and could be further adversely impacted in a number of ways, which may include, but is not limited to, the following:

•

disruptions to our operations, including any closures of our offices and facilities; restrictions on our operations and sales, marketing and distribution efforts; and interruptions to our other important business activities;

•

further reduced demand for our products and services due to disruptions to the businesses and operations of our clients;

•

interruptions, availability or delays in global shipping to transport our products;

•

a slowdown or stoppage in the supply chain for our products;

•

limitations on employee resources and availability, including due to sickness, government restrictions, the desire of employees to avoid contact with large groups of people or mass transit disruptions;

•

the ability of our clients to pay for our products, services and solutions;

•

the willingness of clients in the travel, hospitality, retail and other industries significantly impacted by the pandemic to continue with current and expected projects;

•

a fluctuation in foreign currency exchange rates or interest rates could result from market uncertainties;

•

an increase in the cost or the difficulty to obtain debt or equity financing could affect our financial condition or our ability to fund operations or future investment opportunities;

•

changes to the carrying value of our goodwill and intangible assets; and

•

an increase in regulatory restrictions or continued market volatility could hinder our ability to execute strategic business activities, including acquisitions, as well as negatively impact our stock price.

The spread of COVID-19 has caused us to modify our business practices (including teammate travel, teammate work locations, and cancellation of physical participation in most meetings, events and conferences), and we anticipate taking further actions as may be required by government authorities or that we determine are in the best interests of our clients, partners and teammates. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus, and our ability to perform critical functions could be harmed. Further, should any key teammates become ill from COVID-19 and unable to work, the attention of the management team could be diverted.

The potential effects of the COVID-19 pandemic may also impact our other risk factors discussed in in Part I, Item 1A, “Risk Factors”, in our Annual Report. The ultimate extent of the impact of the COVID-19 pandemic on our business operations, financial performance and results of operation, including our ability to execute our business strategies and initiatives in the expected time frame, will depend on future developments, which are highly uncertain, continuously evolving and cannot be predicted. This includes, but is not limited to, the duration and spread of the COVID-19 pandemic, its severity, the actions taken to contain the virus or treat its impact, such as restrictions on travel and transportation, and how quickly and to what extent normal economic and operating conditions can resume.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

There were no unregistered sales of equity securities during the three months ended September 30, ~~2017.~~2020.

We have never paid a cash dividend on our common stock, and we currently do not intend to pay any cash dividends in the foreseeable future. Our ~~revolving~~ABL facility ~~our ABS facility, our TLA and our inventory financing facility contain restrictions on~~contains certain covenants that, if not met, restrict the payment of cash dividends.

INSIGHT ENTERPRISES, INC.

Issuer Purchases of Equity Securities

~~We did not~~

Period	(a) Total Number of Shares Purchased		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2020 through July 31, 2020		—	$	—		—	$	25,000,004
August 1, 2020 through August 31, 2020		—		—		—		25,000,004
September 1, 2020 through September 30, 2020		—		—		—		25,000,004
Total		—	$	—		—

On February 26, 2020, we announced that our Board of Directors had authorized the repurchase ~~shares~~of up to $50 million of our common ~~stock during the three months ended~~stock. There is no stated expiration date for this share repurchase plan. As of September 30, ~~2017.~~2020, $25 million remained available for repurchases under this share repurchase plan.

In accordance with the share repurchase plans, share repurchases may be made on the open market, subject to Rule 10b-18 or in privately negotiated transactions, through block trades, through 10b5-1 plans or otherwise, at management’s discretion. The amount of shares purchased and the timing of the purchases will be based on market conditions, working capital requirements, general business conditions and other factors. We intend to retire the repurchased shares.

Item 3. Defaults ~~UponSenior~~Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

3745

INSIGHT ENTERPRISES, INC.

Item 6. Exhibits.

      Incorporated by Reference
Exhibit
Number

Exhibit Description
   Form    File No.    Exhibit
Number    Filing
Date    Filed
Herewith
    3.1    Amended and Restated Certificate of Incorporation of Insight Enterprises, Inc.    10-K    000-25092    3.1    February 17, 2006
    3.2    Certificate of Amendment of Amended and Restated Certificate of Incorporation of Insight Enterprises, Inc.    8-K    000-25092    3.1    May 21, 2015
    3.3    Amended and Restated Bylaws of Insight Enterprises, Inc.    8-K    000-25092    3.2    May 21, 2015
    4.1    Specimen Common Stock Certificate (P)    S-1    33-86142    4.1    January 20, 1995
  31.1    Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rule13a-14                X
  31.2    Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rule13a-14                X
  32.1    Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                X
101    Interactive data files pursuant to Rule 405 ofRegulation S-T                X

Incorporated by Reference

Exhibit

Number

Exhibit Description

Form

File No.

Exhibit

Number

Filing

Date

Filed/Furnished

Herewith

3.1

Amended and Restated Certificate of Incorporation of Insight Enterprises, Inc.

10-K

000-25092

3.1

February 17, 2006

3.2

Certificate of Amendment of Amended and Restated Certificate of Incorporation of Insight Enterprises, Inc.

8-K

000-25092

3.1

May 21, 2015

3.3

Amended and Restated Bylaws of Insight Enterprises, Inc.

8-K

000-25092

3.2

May 21, 2015

4.1

Specimen Common Stock Certificate (P)

S-1

33-86142

4.1

January 20, 1995

10.1

Executive Employment Agreement between Insight Enterprises, Inc. and Joyce Mullen dated as of September 15, 2020

10.2

First Amendment to Credit Agreement, dated as of July 31, 2020, by and among Insight Enterprises, Inc., the subsidiaries of Insight Enterprises, Inc. party thereto as borrowers and grantors, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto.

10-Q

000-25092

10.2

August 6, 2020

31.1

Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rule 13a-14

31.2

Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rule 13a-14

32.1

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

(P) Paper exhibit.

INSIGHT ENTERPRISES, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	November 3, 2020
~~Date: November 7, 2017~~		INSIGHT ENTERPRISES, INC.

		By:	/s/ Kenneth T. Lamneck
			Kenneth T. Lamneck
			President and Chief Executive Officer
			(Duly Authorized Officer)

3947

Title of each class		Trading Symbol		Name of each exchange on which registered
Common stock, par value $0.01		NSIT		The NASDAQ Global Select Market


	September 30, 2017			December 31, 2016			September 30, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	236,411		$	202,882		$	75,237		$	114,668
Accounts receivable, net of allowance for doubtful accounts of $9,628 and $9,138, respectively		1,483,234			1,436,742
Accounts receivable, net of allowance for doubtful accounts of $15,406 and $10,762, respectively								2,267,718			2,511,383
Inventories		235,313			148,203			158,400			190,833
Inventories not available for sale		56,322			68,619
Other current assets		151,032			127,159			225,052			231,148

Total current assets		2,162,312			1,983,605			2,726,407			3,048,032
Property and equipment, net of accumulated depreciation and amortization of $330,192 and $308,127, respectively		77,530			70,910
Property and equipment, net of accumulated depreciation and amortization of $250,205 and $236,330, respectively								127,580			130,907
Goodwill		131,552			62,645			425,800			415,149
Intangible assets, net of accumulated amortization of $35,198 and $22,982, respectively		105,140			20,707
Deferred income taxes		40,175			52,347
Intangible assets, net of accumulated amortization of $103,102 and $73,492, respectively								253,078			278,584
Other assets		62,583			29,086			294,445			305,507

	$	2,579,292		$	2,219,300
							$	3,827,310		$	4,178,179
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable—trade	$	682,946		$	1,070,259		$	1,275,187		$	1,275,957
Accounts payable—inventory financing facility		224,072			154,930
Accounts payable—inventory financing facilities								367,997			253,676
Accrued expenses and other current liabilities		151,206			151,895			319,397			352,204
Current portion of long-term debt		15,344			480			1,422			1,691
Deferred revenue		99,338			61,098

Total current liabilities		1,172,906			1,438,662			1,964,003			1,883,528
Long-term debt		534,385			40,251			294,722			857,673
Deferred income taxes		915			900			40,572			44,633
Other liabilities		44,336			26,044			265,122			232,027
								2,564,419			3,017,861
		1,752,542			1,505,857

Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, 3,000 shares authorized; no shares issued		—			—
Common stock, $0.01 par value, 100,000 shares authorized; 35,792 shares at September 30, 2017 and 35,484 shares at December 31, 2016 issued and outstanding		358			355
Preferred stock, $0.01 par value, 3,000 shares authorized; 0 shares issued								—			—
Common stock, $0.01 par value, 100,000 shares authorized; 35,090 shares at September 30, 2020 and 35,263 shares at December 31, 2019 issued and outstanding								351			353
Additionalpaid-in capital		315,078			309,650			358,567			357,032
Retained earnings		536,052			459,537			939,857			841,097
Accumulated other comprehensive loss – foreign currency translation adjustments		(24,738	)		(56,099	)		(35,884	)		(38,164	)

Total stockholders’ equity		826,750			713,443			1,262,891			1,160,318
							$	3,827,310		$	4,178,179
	$	2,579,292		$	2,219,300


	Nine Months Ended September 30,
	2017			2016
Cash flows from operating activities:
Net earnings	$	76,515		$	63,590
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization of property and equipment		19,430			20,785
Amortization of intangible assets		12,643			9,312
Provision for losses on accounts receivable		3,429			1,401
Write-downs of inventories		1,991			2,297
Write-off of property and equipment		378			—
Non-cash stock-based compensation		10,134			8,308
Deferred income taxes		(209	)		3,424
Loss on sale of foreign entity		3,646			—
Gain on sale of real estate		—			(338	)
Changes in assets and liabilities, net of acquisitions and sale of foreign entity:
Decrease in accounts receivable		108,284			133,289
Increase in inventories		(73,186	)		(59,707	)
Decrease (increase) in other assets		320			(22,713	)
Decrease in accounts payable		(442,328	)		(278,097	)
Decrease in deferred revenue		(13,871	)		(6,645	)
(Decrease) increase in accrued expenses and other liabilities		(30,736	)		244

Net cash used in operating activities		(323,560	)		(124,850	)

Cash flows from investing activities:
Purchases of property and equipment		(15,906	)		(9,714	)
Proceeds from sale of foreign entity		1,517			—
Proceeds from sale of real estate, net		—			1,378
Acquisitions, net of cash and cash equivalents acquired		(186,932	)		(10,297	)

Net cash used in investing activities		(201,321	)		(18,633	)

Cash flows from financing activities:
Borrowings on senior revolving credit facility		923,216			534,920
Repayments on senior revolving credit facility		(707,216	)		(506,420	)
Borrowings on accounts receivable securitization financing facility		2,844,389			1,947,000
Repayments on accounts receivable securitization financing facility		(2,723,889	)		(1,822,000	)
Borrowings under Term Loan A		175,000			—
Repayments under Term Loan A		(6,562	)		—
Repayments under other financing agreements		(5,176	)		(1,309	)
Payments on capital lease obligations		(614	)		(270	)
Net borrowings under inventory financing facility		45,641			29,456
Payment of debt issuance costs		(1,123	)		(3,360	)
Payment of payroll taxes on stock-based compensation through shares withheld		(4,703	)		(2,159	)
Repurchases of common stock		—			(50,000	)

Net cash provided by financing activities		538,963			125,858

Foreign currency exchange effect on cash and cash equivalent balances		19,447			5,342

Increase (decrease) in cash and cash equivalents		33,529			(12,283	)
Cash and cash equivalents at beginning of period		202,882			187,978

Cash and cash equivalents at end of period	$	236,411		$	175,695

	Nine Months Ended September 30,
	2020			2019
Cash flows from operating activities:
Net earnings	$	119,252		$	116,457
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		51,375			29,096
Provision for losses on accounts receivable		8,093			2,695
Non-cash stock-based compensation		11,754			11,895
Deferred income taxes		(2,883	)		2,501
Amortization of debt discount		12,091			2,322
Other adjustments		4,087			3,633
Changes in assets and liabilities:
Decrease in accounts receivable		247,659			68,057
Decrease (increase) in inventories		28,002			(17,946	)
Decrease (increase) in other assets		19,643			(99,681	)
Decrease in accounts payable		(4,842	)		(39,191	)
(Decrease) increase in accrued expenses and other liabilities		(32,137	)		88,757
Net cash provided by operating activities		462,094			168,595
Cash flows from investing activities:
Proceeds from sale of assets held for sale		14,218			—
Purchases of property and equipment		(20,688	)		(16,922	)
Acquisitions, net of cash and cash equivalents acquired		(6,405	)		(664,287	)
Net cash used in investing activities		(12,875	)		(681,209	)
Cash flows from financing activities:
Borrowings on senior revolving credit facility		—			242,936
Repayments on senior revolving credit facility		—			(242,936	)
Borrowings on ABL revolving credit facility, net of initial lender fees		2,111,674			986,754
Repayments on ABL revolving credit facility		(2,682,562	)		(454,544	)
Borrowings on accounts receivable securitization financing facility	—				2,364,500
Repayments on accounts receivable securitization financing facility	—				(2,558,500	)
Net borrowings (repayments) under inventory financing facilities		114,321			(96,472	)
Proceeds from issuance of convertible senior notes	—				341,250
Proceeds from issuance of warrants	—				34,440
Purchase of note hedge related to convertible senior notes	—				(66,325	)
Repurchases of common stock		(25,000	)		(27,899	)
Other payments		(7,520	)		(8,762	)
Net cash (used in) provided by financing activities		(489,087	)		514,442
Foreign currency exchange effect on cash, cash equivalents and restricted cash balances		718			(3,960	)
Decrease in cash, cash equivalents and restricted cash		(39,150	)		(2,132	)
Cash, cash equivalents and restricted cash at beginning of period		116,297			144,293
Cash, cash equivalents and restricted cash at end of period	$	77,147		$	142,161

Operating Segment		Geography
~~Operating Segment~~North America		~~Geography~~
~~North America~~		United States and Canada
EMEA		Europe, Middle East and Africa
APAC		Asia-Pacific


		Page
PART I -		Financial Information


Item 1 –		Financial Statements:


		Consolidated Balance Sheets (unaudited) -– September 30, ~~2017~~2020 and December 31, ~~2016~~2019			1


		Consolidated Statements of Operations (unaudited) -– Three and Nine Months Ended September 30, ~~2017~~2020 and ~~2016~~2019			2


		Consolidated Statements of Comprehensive Income (unaudited) -– Three and Nine Months Ended September 30, ~~2017~~2020 and ~~2016~~2019			3


		Consolidated Statements of Stockholders’ Equity (unaudited) – Three and Nine Months Ended September 30, 2020 and 2019		4

		Consolidated Statements of Cash Flows (unaudited) -– Nine Months Ended September 30, ~~2017~~2020 and ~~2016~~2019			4
	6

		Notes to Consolidated Financial Statements (unaudited)			5
	7

Item 2 –		Management’s Discussion and Analysis of Financial Condition and Results of Operations			20
	26

Item 3 –		Quantitative and Qualitative Disclosures About Market Risk			36
	42

Item 4 –		Controls and Procedures			36
	42

PART II -		Other Information
	43

Item 1 –		Legal Proceedings			36
	43

Item 1A –		Risk Factors			36
	43

Item 2 –		Unregistered Sales of Equity Securities and Use of Proceeds			37
	44

Item 3 –		Defaults Upon Senior Securities			37	45

Item 4 –		Mine Safety Disclosures		45

Item 5 –		Other Information		45

Item 6 –		Exhibits		46

~~Item 4 – Mine Safety Disclosures~~Signatures					37

~~Item 5 – Other Information~~			37

~~Item 6 – Exhibits~~47			38

~~Signatures~~			39

	Common Stock						Treasury Stock						Additional Paid-in			Accumulated Other Comprehensive			Retained			Total Stockholders'
	Shares			Par Value			Shares			Amount			Capital			Loss			Earnings			Equity
Balances at June 30, 2019		35,781		$	358			—		$	—		$	325,263		$	(40,028	)	$	793,990		$	1,079,583
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes		11			—			—			—			(266	)		—			—			(266	)
Stock-based compensation expense		—			—			—			—			4,098			—			—			4,098
Equity component of convertible senior notes, net of deferred tax of $14,819 and issuance costs of $1,700		—			—			—			—			44,731			—			—			44,731
Issuance of warrants related to convertible senior notes		—			—			—			—			34,440			—			—			34,440
Purchase of note hedge related to convertible senior notes, net of deferred tax of $16,047		—			—			—			—			(50,278	)		—			—			(50,278	)
Repurchase of treasury stock		—			—			(541	)		(27,899	)		—			—			—			(27,899	)
Retirement of treasury stock		(541	)		(5	)		541			27,899			(4,919	)		—			(22,975	)		—
Foreign currency translation adjustments, net of tax		—			—			—			—			—			(8,903	)		—			(8,903	)
Net earnings		—			—			—			—			—			—			27,132			27,132
Balances at September 30, 2019		35,251		$	353			—		$	—		$	353,069		$	(48,931	)	$	798,147		$	1,102,638
Balances at June 30, 2020		35,070		$	351			—		$	—		$	354,431		$	(48,376	)	$	900,950		$	1,207,356
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes		20			—			—			—			(377	)		—			1			(376	)
Stock-based compensation expense		—			—			—			—			4,513			—			—			4,513
Foreign currency translation adjustments, net of tax		—			—			—			—			—			12,492			—			12,492
Net earnings		—			—			—			—			—			—			38,906			38,906
Balances at September 30, 2020		35,090		$	351			—		$	—		$	358,567		$	(35,884	)	$	939,857		$	1,262,891

	Three Months Ended September 30, 2020
	North America		EMEA		APAC		Consolidated
Major Offerings
Hardware	$	1,028,045	$	138,685	$	6,421	$	1,173,151
Software		306,925		165,301		16,191		488,417
Services		223,198		37,294		14,418		274,910
	$	1,558,168	$	341,280	$	37,030	$	1,936,478
Major Client Groups
Large Enterprise / Corporate	$	1,043,303	$	242,925	$	15,416	$	1,301,644
Small and Medium-Sized Businesses		312,080		13,647		16,197		341,924
Public Sector		202,785		84,708		5,417		292,910
	$	1,558,168	$	341,280	$	37,030	$	1,936,478
Revenue Recognition based on acting as Principal or Agent in the Transaction
Gross revenue recognition (Principal)	$	1,477,716	$	320,445	$	31,256	$	1,829,417
Net revenue recognition (Agent)		80,452		20,835		5,774		107,061
	$	1,558,168	$	341,280	$	37,030	$	1,936,478

	September 30,		December 31,
	2020		2019
Current receivables, which are included in “Accounts receivable, net”	$	2,267,718	$	2,511,383
Non-current receivables, which are included in “Other assets”		137,431		154,417
Contract liabilities, which are included in “Accrued expenses and other current liabilities” and “Other liabilities”		80,734		84,814

	Increase (Decrease)
	Contract
	Liabilities
Balances at December 31, 2019	$	84,814
Reclassification of the beginning contract liabilities to revenue, as the result of performance obligations satisfied		(53,454	)
Cash received in advance and not recognized as revenue		49,374
Balances at September 30, 2020	$	80,734

	Services
Remainder of 2020	$	54,939
2021		64,346
2022		25,076
2023 and thereafter		16,763
Total remaining performance obligations	$	161,124


	September 30, 2017			December 31, 2016
Senior revolving credit facility	$	216,000		$	—
Term Loan A (less unamortized debt issuance costs of $936)		167,502			—
Accounts receivable securitization financing facility		160,000			39,500
Capital leases and other financing obligations		6,227			1,231

Total		549,729			40,731
Less: current portion of long-term debt		(15,344	)		(480	)

Long-term debt	$	534,385		$	40,251

	September 30, 2020			December 31, 2019
ABL revolving credit facility	$	—		$	570,706
Convertible senior notes due 2025		293,469			284,836
Finance leases and other financing obligations		2,675			3,822
Total		296,144			859,364
Less: current portion of long-term debt		(1,422	)		(1,691	)
Long-term debt	$	294,722		$	857,673

	September 30, 2020			December 31, 2019
Liability:
Principal	$	350,000		$	350,000
Less: debt discount and issuance costs, net of accumulated accretion		(56,531	)		(65,164	)
Net carrying amount	$	293,469		$	284,836

Equity, net of deferred tax	$	44,731		$	44,731

Leases	Classification	September 30, 2020		December 31, 2019
Assets
Operating lease assets	Other assets	$	81,481	$	74,684
Finance lease assets	Property and equipment^(a)		2,326		3,297
Total lease assets		$	83,807	$	77,981
Liabilities
Current
Operating lease liabilities	Accrued expenses and other current liabilities	$	20,556	$	19,648
Finance lease liabilities	Current portion of long-term debt		1,422		1,691
Non-current
Operating lease liabilities	Other liabilities		67,421		60,285
Finance lease liabilities	Long-term debt		1,253		2,131
Total lease liabilities		$	90,652	$	83,755

Lease cost	Classification	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Operating lease cost ^{(a) (b)}	Selling and administrative expenses	$	6,460	$	19,412
Finance lease cost
Amortization of leased assets	Selling and administrative expenses		324		972
Interest on lease liabilities	Interest expense, net		24		84
Total lease cost		$	6,808	$	20,468

	Operating leases			Finance leases			Total
Remainder of 2020	$	6,021		$	564		$	6,585
2021		22,194			1,077			23,271
2022		19,099			645			19,744
2023		13,477			449			13,926
2024		8,430			45			8,475
After 2024		28,999			—			28,999
Total lease payments		98,220			2,780			101,000
Less: Interest		(10,243	)		(105	)		(10,348	)
Present value of lease liabilities	$	87,977		$	2,675		$	90,652

	September 30, 2020		September 30, 2019
Weighted average remaining lease term (years)
Operating leases		6.13		6.19
Finance leases		2.45		1.69
Weighted average discount rate (%)
Operating leases		3.43		3.65
Finance leases		3.46		4.85

	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,360	$	19,444
Leased assets obtained in exchange for new operating lease liabilities	$	577	$	23,178


	Number			Weighted Average Grant Date Fair Value		Fair Value
Nonvested at January 1, 2017		1,067,557		$	25.37
Granted(a)		331,250			44.29
Vested, including shares withheld to cover taxes		(413,807	)		24.69	$	18,258,878	^(b)

Forfeited		(58,900	)		30.94

Nonvested at September 30, 2017(a)		926,100			32.13	$	42,526,512	^(c)

	Number			Weighted Average Grant Date Fair Value		Fair Value
Nonvested at January 1, 2020		923,400		$	45.58
Granted^(a)		322,506			57.78
Vested, including shares withheld to cover taxes		(368,377	)		42.54	$	15,670,905	^(b)
Forfeited		(73,284	)		51.66
Nonvested at September 30, 2020 (a)		804,245			51.31	$	45,504,182	^(c)

/s/ Glynis A. Bryan

Glynis A. Bryan

Chief Financial Officer

(Principal Financial Officer)