UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31,September 30, 2023
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number: 0-25092
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INSIGHT ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Delaware86-0766246
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
2701 E. Insight Way, Chandler, Arizona 85286
(Address of principal executive offices) (Zip Code)
(480) 333-3000
(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, par value $0.01NSITThe NASDAQ Global Select Market
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 x
No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes x
No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-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 Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filero
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o
No x
The number of shares outstanding of the issuer’s common stock as of April 28,October 27, 2023 was 33,262,388.32,576,831.


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INSIGHT ENTERPRISES, INC.
QUARTERLY REPORT ON FORM 10-Q
Three Months Ended March 31,September 30, 2023
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INSIGHT ENTERPRISES, INC.
FORWARD-LOOKING INFORMATION

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 Form 10-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: 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; our future responses to and the potential impact of coronavirus strain COVID-19 (“COVID-19”) on our Company; our expectations regarding current supply constraints, including our belief that supply constraints and extended lead times for certain infrastructure, including networking and infrastructure products may impact results intohave now normalized back to near historic levels; our belief that the latter part ofgeneral slowdown in our clients' decision making will continue in the short term; our expectations regarding the device market, including the expectation for devices net sales to be down in total for 2023 and possibly into 2024;when compared to 2022 in North America; 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 the impact of partner incentives; our expectations about future benefits of our acquisitions and our plans related thereto, including potential expansion into wider regions; 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 and our expectation that we will incur additional acquisition expenses in executing such strategy; our expectations regarding the impact of inflation, including our expectation that higher interest rates and higher interest expense will continue for the remainder of 2023, and 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; our expectation that our gross margins will improve as our mix of services and solutions increase; our liquidity and the sufficiency of our capital resources, the availability of financing and our needs or plans relating thereto; our expectation that no significant holders of our convertible senior notes (the “Notes”) will not convert their Notes in the near term; the 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 tax rates; adequate provisions for and our positions and strategies with respect to ongoing and threatened litigation and expected outcomes; our ability to expand our client relationships; our expectations that pricing pressures in the IT industry will continue; our plansintention to use cash flow from operations forgenerated in the remainder of 2023 in excess of working capital needs to pay down debt, repurchase shares of our common stock, to make capital expenditures,senior secured revolving credit facility and fundinventory financing facilities and for strategic 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 that future income will be sufficient to fully recover deferred tax assets; our exposure to off-balance sheet arrangements; 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 Form 10-K for the year ended December 31, 2022 and in "Risk Factors" in Part II, Item 1A of this report:
actions of our competitors, including manufacturers and publishers of products we sell;
our reliance on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can change significantly in the amounts made available and in the requirements year over year;
our ability to keep pace with rapidly evolving technological advances and the evolving competitive marketplace;
general economic conditions, economic uncertainties and changes in geopolitical conditions, including the possibility of a recession or as a result of the ongoing war between Russia and Ukraine;
changes in the IT industry and/or rapid changes in technology;
our ability to provide high quality services to our clients;
accounts receivable risks, including increased credit loss experience or extended payment terms with our clients;
our reliance on independent shipping companies;
the risks associated with our international operations;


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INSIGHT ENTERPRISES, INC.
supply constraints for products;
the duration and severity of the coronavirus strain COVID-19 pandemic and its effects on our business, results of operations and financial condition, as well as the widespread outbreak of any other illnesses or communicable diseases;


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INSIGHT ENTERPRISES, INC.
natural disasters or other adverse occurrences;
disruptions in our IT systems and voice and data networks;
cyberattacks, outages, or third-party breaches of data privacy and securityas well as related breaches of government regulations;
intellectual property infringement claims and challenges to our registered trademarks and trade names;
legal proceedings, client audits and failure to comply with laws and regulations;
failure to comply with the terms and conditions of our commercial and public sector contracts;
exposure to changes in, interpretations of, or enforcement trends related to tax rules and regulations;
our potential to draw down a substantial amount of indebtedness;
the conditional conversion feature of the Notes, which has been triggered, and may adversely affect the Company’s financial condition and operating results;
the Company is subject to counterparty risk with respect to certain hedge and warrant transactions entered into in connection with the issuance of the notesNotes (the "Call Spread Transactions");
increased debt and interest expense and the possibility of decreased availability of funds under our financing facilities;
risks associated with the discontinuation of LIBOR as a benchmark rate;
possible significant fluctuations in our future operating results as well as seasonality and variability in client demands;
our dependence on certain key personnel and our ability to attract, train and retain skilled teammates;
risks associated with the integration and operation of acquired businesses, including achievement of expected synergies and benefits; and
future sales of the Company’s common stock or equity-linked securities in the public market could lower the market price for our common stock.
Additionally, there may be other risks described from time to time in the reports that we file with the Securities and Exchange 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.


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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
INSIGHT ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
March 31,
2023
December 31,
2022
September 30,
2023
December 31,
2022
ASSETSASSETSASSETS
Current assets:Current assets:Current assets:
Cash and cash equivalentsCash and cash equivalents$175,726 $163,637 Cash and cash equivalents$244,324 $163,637 
Accounts receivable, net of allowance for doubtful accounts of $14,336 and $15,161, respectively3,087,105 3,272,371 
Accounts receivable, net of allowance for doubtful accounts of $14,295 and $15,161, respectivelyAccounts receivable, net of allowance for doubtful accounts of $14,295 and $15,161, respectively3,072,096 3,272,371 
InventoriesInventories265,570 265,154 Inventories184,200 265,154 
Other current assetsOther current assets217,415 199,506 Other current assets209,628 199,506 
Total current assetsTotal current assets3,745,816 3,900,668 Total current assets3,710,248 3,900,668 
Property and equipment, net of accumulated depreciation and amortization of $215,418 and $214,981, respectively200,969 204,260 
Property and equipment, net of accumulated depreciation and amortization of $222,288 and $214,981, respectivelyProperty and equipment, net of accumulated depreciation and amortization of $222,288 and $214,981, respectively205,511 204,260 
GoodwillGoodwill493,724 493,033 Goodwill559,365 493,033 
Intangible assets, net of accumulated amortization of $146,893 and $142,297, respectively196,879 204,998 
Intangible assets, net of accumulated amortization of $163,608 and $142,297, respectivelyIntangible assets, net of accumulated amortization of $163,608 and $142,297, respectively219,963 204,998 
Other assetsOther assets323,140 309,622 Other assets383,129 309,622 
$4,960,528 $5,112,581 $5,078,216 $5,112,581 
LIABILITIES AND STOCKHOLDERS’ EQUITYLIABILITIES AND STOCKHOLDERS’ EQUITYLIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:Current liabilities:Current liabilities:
Accounts payable—tradeAccounts payable—trade$1,711,878 $1,785,076 Accounts payable—trade$1,722,189 $1,785,076 
Accounts payable—inventory financing facilitiesAccounts payable—inventory financing facilities410,126 301,314 Accounts payable—inventory financing facilities269,207 301,314 
Accrued expenses and other current liabilitiesAccrued expenses and other current liabilities415,519 433,789 Accrued expenses and other current liabilities394,865 433,789 
Current portion of long-term debtCurrent portion of long-term debt346,672 346,228 Current portion of long-term debt349,058 346,228 
Total current liabilitiesTotal current liabilities2,884,195 2,866,407 Total current liabilities2,735,319 2,866,407 
Long-term debtLong-term debt168,875 291,672 Long-term debt323,917 291,672 
Deferred income taxesDeferred income taxes28,728 32,844 Deferred income taxes33,441 32,844 
Other liabilitiesOther liabilities305,132 283,590 Other liabilities359,491 283,590 
3,386,930 3,474,513 3,452,168 3,474,513 
Commitments and contingenciesCommitments and contingenciesCommitments and contingencies
Stockholders’ equity:Stockholders’ equity:Stockholders’ equity:
Preferred stock, $0.01 par value, 3,000 shares authorized; no shares issuedPreferred stock, $0.01 par value, 3,000 shares authorized; no shares issued— — Preferred stock, $0.01 par value, 3,000 shares authorized; no shares issued— — 
Common stock, $0.01 par value, 100,000 shares authorized; 33,261 shares at March 31, 2023 and 34,009 shares at December 31, 2022 issued and outstanding333 340 
Common stock, $0.01 par value, 100,000 shares authorized; 32,577 shares at September 30, 2023 and 34,009 shares at December 31, 2022 issued and outstandingCommon stock, $0.01 par value, 100,000 shares authorized; 32,577 shares at September 30, 2023 and 34,009 shares at December 31, 2022 issued and outstanding326 340 
Additional paid-in capitalAdditional paid-in capital317,283 327,872 Additional paid-in capital327,251 327,872 
Retained earningsRetained earnings1,310,178 1,368,658 Retained earnings1,357,804 1,368,658 
Accumulated other comprehensive loss – foreign currency translation adjustmentsAccumulated other comprehensive loss – foreign currency translation adjustments(54,196)(58,802)Accumulated other comprehensive loss – foreign currency translation adjustments(59,333)(58,802)
Total stockholders’ equityTotal stockholders’ equity1,573,598 1,638,068 Total stockholders’ equity1,626,048 1,638,068 
$4,960,528 $5,112,581 $5,078,216 $5,112,581 
See accompanying notes to consolidated financial statements.
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INSIGHT ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
202320222023202220232022
Net sales:Net sales:Net sales:
ProductsProducts$1,967,645 $2,310,287 Products$1,890,154 $2,169,197 $5,803,408 $6,828,726 
ServicesServices356,302 340,563 Services376,132 365,157 1,136,421 1,099,855 
Total net salesTotal net sales2,323,947 2,650,850 Total net sales2,266,286 2,534,354 6,939,829 7,928,581 
Costs of goods sold:Costs of goods sold:Costs of goods sold:
ProductsProducts1,772,729 2,107,209 Products1,697,543 1,956,679 5,219,720 6,199,783 
ServicesServices159,903 164,780 Services159,873 178,417 486,734 512,790 
Total costs of goods soldTotal costs of goods sold1,932,632 2,271,989 Total costs of goods sold1,857,416 2,135,096 5,706,454 6,712,573 
Gross profit:Gross profit:Gross profit:
ProductsProducts194,916 203,078 Products192,611 212,518 583,688 628,943 
ServicesServices196,399 175,783 Services216,259 186,740 649,687 587,065 
Gross profitGross profit391,315 378,861 Gross profit408,870 399,258 1,233,375 1,216,008 
Operating expenses:Operating expenses:Operating expenses:
Selling and administrative expensesSelling and administrative expenses310,001 297,640 Selling and administrative expenses309,793 308,253 938,037 911,894 
Severance and restructuring expenses3,802 1,372 
Severance and restructuring expenses, netSeverance and restructuring expenses, net2,923 720 2,955 2,784 
Acquisition and integration related expensesAcquisition and integration related expenses51 — Acquisition and integration related expenses4,292 4,449 1,646 
Earnings from operationsEarnings from operations77,461 79,849 Earnings from operations91,862 90,279 287,934 299,684 
Non-operating (income) expense:Non-operating (income) expense:Non-operating (income) expense:
Interest expense, netInterest expense, net10,348 8,068 Interest expense, net12,013 11,713 31,766 29,164 
Other expense (income), net752 (2,843)
Other (income) expense, netOther (income) expense, net(203)1,790 489 (741)
Earnings before income taxesEarnings before income taxes66,361 74,624 Earnings before income taxes80,052 76,776 255,679 271,261 
Income tax expenseIncome tax expense16,389 17,993 Income tax expense19,805 19,460 64,978 68,130 
Net earningsNet earnings$49,972 $56,631 Net earnings$60,247 $57,316 $190,701 $203,131 
Net earnings per share:Net earnings per share:Net earnings per share:
BasicBasic$1.48 $1.62 Basic$1.85 $1.64 $5.76 $5.80 
DilutedDiluted$1.34 $1.53 Diluted$1.62 $1.58 $5.13 $5.53 
Shares used in per share calculations:Shares used in per share calculations:Shares used in per share calculations:
BasicBasic33,706 34,974 Basic32,574 34,952 33,127 35,003 
DilutedDiluted37,207 36,981 Diluted37,203 36,340 37,149 36,714 
See accompanying notes to consolidated financial statements.
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INSIGHT ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
202320222023202220232022
Net earningsNet earnings$49,972 $56,631 Net earnings$60,247 $57,316 $190,701 $203,131 
Other comprehensive gain, net of tax:
Other comprehensive loss, net of tax:Other comprehensive loss, net of tax:
Foreign currency translation adjustmentsForeign currency translation adjustments4,606 1,865 Foreign currency translation adjustments(12,326)(30,577)(531)(49,313)
Total comprehensive incomeTotal comprehensive income$54,578 $58,496 Total comprehensive income$47,921 $26,739 $190,170 $153,818 
See accompanying notes to consolidated financial statements.
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INSIGHT ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Stockholders'
Equity
SharesPar ValueSharesAmount
Balances at December 31, 202234,009 $340 — $— $327,872 $(58,802)$1,368,658 $1,638,068 
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes165 — — (7,922)— — (7,920)
Stock-based compensation expense— — — — 6,896 — — 6,896 
Repurchase of treasury stock— — (913)(117,129)— — — (117,129)
Retirement of treasury stock(913)(9)913 117,129 (8,668)— (108,452)— 
Excise tax on stock repurchases— — — — (895)— — (895)
Foreign currency translation adjustments, net of tax— — — — — 4,606 — 4,606 
Net earnings— — — — — — 49,972 49,972 
Balances at March 31, 202333,261 $333 — $— $317,283 $(54,196)$1,310,178 $1,573,598 
Balances at December 31, 202134,897 $349 — $— $368,282 $(27,094)$1,167,690 $1,509,227 
Cumulative effect of accounting change— — — — (44,731)— 17,789 (26,942)
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes175 — — (6,599)— — (6,597)
Stock-based compensation expense— — — — 5,007 — — 5,007 
Foreign currency translation adjustments, net of tax— — — — — 1,865 — 1,865 
Net earnings— — — — — — 56,631 56,631 
Balances at March 31, 202235,072 $351 — $— $321,959 $(25,229)$1,242,110 $1,539,191 
Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Stockholders'
Equity
SharesPar ValueSharesAmount
Balances at June 30, 202332,568 $326 — $— $318,078 $(47,007)$1,297,558 $1,568,955 
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes— — — (388)— — (388)
Stock-based compensation expense— — — — 9,548 — — 9,548 
Excise tax on stock repurchases— — — — 13 — — 13 
Foreign currency translation adjustments, net of tax— — — — — (12,326)(1)(12,327)
Net earnings— — — — — — 60,247 60,247 
Balances at September 30, 202332,577 $326 — $— $327,251 $(59,333)$1,357,804 $1,626,048 
Balances at June 30, 202235,093 $351 — $— $327,282 $(45,830)$1,331,294 $1,613,097 
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes— — — (127)— — (127)
Stock-based compensation expense— — — — 6,090 — — 6,090 
Repurchase of treasury stock— — (270)(25,008)— — — (25,008)
Retirement of treasury stock(270)(3)270 25,008 (2,519)— (22,486)— 
Foreign currency translation adjustments, net of tax— — — — — (30,577)— (30,577)
Net earnings— — — — — — 57,316 57,316 
Balances at September 30, 202234,828 $348 — $— $330,726 $(76,407)$1,366,124 $1,620,791 
Balances at December 31, 202234,009 $340 — $— $327,872 $(58,802)$1,368,658 $1,638,068 
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes202 — — (9,394)— — (9,392)
Stock-based compensation expense— — — — 26,211 — — 26,211 
Repurchase of treasury stock— — (1,634)(217,108)— — — (217,108)
Retirement of treasury stock(1,634)(16)1,634 217,108 (15,537)— (201,555)— 
Excise tax on stock repurchases— — — — (1,901)— — (1,901)
Foreign currency translation adjustments, net of tax— — — — — (531)— (531)
Net earnings— — — — — — 190,701 190,701 
Balances at September 30, 202332,577 $326 — $— $327,251 $(59,333)$1,357,804 $1,626,048 
Balances at December 31, 202134,897 $349 — $— $368,282 $(27,094)$1,167,690 $1,509,227 
Cumulative effect of accounting change— — — — (44,731)— 17,789 (26,942)
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes201 — — (6,830)— — (6,828)
Stock-based compensation expense— — — — 16,524 — — 16,524 
Repurchase of treasury stock(270)(25,008)(25,008)
Retirement of treasury stock(270)(3)270 25,008 (2,519)(22,486)— 
Foreign currency translation adjustments, net of tax— — — — — (49,313)— (49,313)
Net earnings— — — — — — 203,131 203,131 
Balances at September 30, 202234,828 $348 — $— $330,726 $(76,407)$1,366,124 $1,620,791 
See accompanying notes to consolidated financial statements.
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INSIGHT ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
March 31,
Nine Months Ended
September 30,
2023202220232022
Cash flows from operating activities:Cash flows from operating activities:Cash flows from operating activities:
Net earningsNet earnings$49,972 $56,631 Net earnings$190,701 $203,131 
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortizationDepreciation and amortization14,663 13,314 Depreciation and amortization44,698 42,204 
Provision for losses on accounts receivableProvision for losses on accounts receivable1,484 1,031 Provision for losses on accounts receivable3,754 4,295 
Non-cash stock-based compensationNon-cash stock-based compensation6,896 5,007 Non-cash stock-based compensation26,211 16,524 
Deferred income taxesDeferred income taxes(4,284)(1,715)Deferred income taxes(9,062)(5,554)
Amortization of debt issuance costsAmortization of debt issuance costs1,213 1,623 Amortization of debt issuance costs3,649 4,894 
Other adjustmentsOther adjustments2,122 (106)Other adjustments(1,356)933 
Changes in assets and liabilities:Changes in assets and liabilities:Changes in assets and liabilities:
Decrease (increase) in accounts receivableDecrease (increase) in accounts receivable197,918 (103,326)Decrease (increase) in accounts receivable201,628 (230,049)
Increase in inventories(1,146)(57,876)
(Increase) decrease in other assets(22,794)4,111 
Decrease (increase) in inventoriesDecrease (increase) in inventories75,124 (51,526)
Increase in other assetsIncrease in other assets(69,869)(14,926)
Decrease in accounts payableDecrease in accounts payable(76,783)(137,144)Decrease in accounts payable(57,882)(171,257)
Decrease in accrued expenses and other liabilities(9,101)(65,789)
Increase (decrease) in accrued expenses and other liabilitiesIncrease (decrease) in accrued expenses and other liabilities6,146 (4,554)
Net cash provided by (used in) operating activities:Net cash provided by (used in) operating activities:160,160 (284,239)Net cash provided by (used in) operating activities:413,742 (205,885)
Cash flows from investing activities:Cash flows from investing activities:Cash flows from investing activities:
Proceeds from sale of assetsProceeds from sale of assets15,515 1,318 
Purchases of property and equipmentPurchases of property and equipment(9,106)(25,745)Purchases of property and equipment(29,070)(59,270)
Acquisitions, net of cash and cash equivalents acquiredAcquisitions, net of cash and cash equivalents acquired(82,875)(68,248)
Net cash used in investing activities:Net cash used in investing activities:(9,106)(25,745)Net cash used in investing activities:(96,430)(126,200)
Cash flows from financing activities:Cash flows from financing activities:Cash flows from financing activities:
Borrowings on ABL revolving credit facilityBorrowings on ABL revolving credit facility1,016,980 1,151,440 Borrowings on ABL revolving credit facility3,416,737 3,825,923 
Repayments on ABL revolving credit facilityRepayments on ABL revolving credit facility(1,140,774)(831,440)Repayments on ABL revolving credit facility(3,382,444)(3,433,629)
Net borrowings under inventory financing facilities108,257 6,692 
Net (repayments) borrowings under inventory financing facilitiesNet (repayments) borrowings under inventory financing facilities(32,451)23,017 
Repurchases of common stockRepurchases of common stock(117,129)— Repurchases of common stock(217,108)(25,008)
Earn out paymentsEarn out payments(10,748)— 
Other paymentsOther payments(7,988)(6,738)Other payments(9,614)(12,798)
Net cash (used in) provided by financing activities:Net cash (used in) provided by financing activities:(140,654)319,954 Net cash (used in) provided by financing activities:(235,628)377,505 
Foreign currency exchange effect on cash, cash equivalents and restricted cash balancesForeign currency exchange effect on cash, cash equivalents and restricted cash balances1,652 969 Foreign currency exchange effect on cash, cash equivalents and restricted cash balances(1,074)(12,710)
Increase in cash, cash equivalents and restricted cashIncrease in cash, cash equivalents and restricted cash12,052 10,939 Increase in cash, cash equivalents and restricted cash80,610 32,710 
Cash, cash equivalents and restricted cash at beginning of periodCash, cash equivalents and restricted cash at beginning of period165,718 105,977 Cash, cash equivalents and restricted cash at beginning of period165,718 105,977 
Cash, cash equivalents and restricted cash at end of periodCash, cash equivalents and restricted cash at end of period$177,770 $116,916 Cash, cash equivalents and restricted cash at end of period$246,328 $138,687 
See accompanying notes to consolidated financial statements.
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1.    Basis of Presentation and Recently Issued Accounting Standards
We help our clients accelerate their digital journey to modernize their business and maximize the value of technology. We serve these clients in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). As a Fortune 500-ranked solutions integrator, we enable secure, end-to-end digital transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 35 years of broad IT expertise. We amplify our solutions and services with global scale, local expertise and our e-commerce experience, enabling our clients to realize their digital ambitions at every opportunity. Our company is organized in the following three operating segments, which are primarily defined by their related geographies:
Operating SegmentGeography
North AmericaUnited States and Canada
EMEAEurope, Middle East and Africa
APACAsia-Pacific
Our offerings in North America and certain countries in EMEA and APAC include hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments are largely software, certain software-related services and cloud solutions.
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly our financial position as of March 31,September 30, 2023 and our results of operations for the three and nine months ended March 31,September 30, 2023 and 2022 and cash flows for the threenine months ended March 31,September 30, 2023 and 2022. The consolidated balance sheet as of December 31, 2022 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 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 Form 10-K for the year ended December 31, 2022.
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.
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Recently Issued Accounting Standards
In September 2022, the Financial Accounting Standards Board ("FASB") issued ASU No. 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50)”. This standard is intended to address requests from stakeholders for information about an entity’s use of supplier finance programs and their effect on the entity’s working capital, liquidity, and cash flows. The guidance was effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on roll-forward information requirement, which is effective for fiscal years beginning after December 15, 2023. The Company adopted this standard effective January 1, 2023, with the exception of the roll-forward information requirement. The adoption did not have a material effect on the Company's disclosures.
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 on Form 10-K for the year ended December 31, 2022 that affect or may affect our current financial statements.
2.    Receivables, Contract Liabilities and Performance Obligations
The following table provides information about receivables and contract liabilities as of March 31,September 30, 2023 and December 31, 2022 (in thousands):
March 31,
2023
December 31,
2022
September 30,
2023
December 31,
2022
Current receivables, which are included in “Accounts receivable, net”Current receivables, which are included in “Accounts receivable, net”$3,087,105 $3,272,371 Current receivables, which are included in “Accounts receivable, net”$3,072,096 $3,272,371 
Non-current receivables, which are included in “Other assets”Non-current receivables, which are included in “Other assets”181,782 161,837 Non-current receivables, which are included in “Other assets”237,018 161,837 
Contract liabilities, which are included in “Accrued expenses and other current liabilities” and “Other liabilities”Contract liabilities, which are included in “Accrued expenses and other current liabilities” and “Other liabilities”108,186 102,057 Contract liabilities, which are included in “Accrued expenses and other current liabilities” and “Other liabilities”109,342 102,057 
Changes in the contract liabilities balances during the threenine months ended March 31,September 30, 2023 are as follows (in thousands):
Increase (Decrease)
Contract
Liabilities
Balances at December 31, 2022$102,057 
Reclassification of the beginning contract liabilities to revenue, as the result of performance obligations satisfied(26,611)(56,429)
Cash received in advance and not recognized as revenue32,74063,714 
Balances at March 31,September 30, 2023$108,186109,342 
During the threenine months ended March 31,September 30, 2022, the Company recognized revenue of $31,452,000$67,984,000 related to its contract liabilities.
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The following table includes estimated net sales related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31,September 30, 2023 that are expected to be recognized in the future (in thousands):
ServicesServices
Remainder of 2023Remainder of 2023$88,421 Remainder of 2023$34,034 
2024202436,634 202456,893 
2025202517,345 202521,173 
2026 and thereafter2026 and thereafter8,287 2026 and thereafter10,205 
Total remaining performance obligationsTotal remaining performance obligations$150,687 Total remaining performance obligations$122,305 
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 March 31,September 30, 2023 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 23 months.
The majority of our backlog historically has been and continues to be open cancellable 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 cancellable purchase orders, which do not qualify for revenue recognition, in the table above.
3.    Assets Held for Sale
During the nine months ended September 30, 2023, we completed the sale of our properties in Montreal, Canada and Sheffield, United Kingdom for total net proceeds of approximately $15,476,000. We recognized a net gain on sale of approximately $6,813,000, reported in severance and restructuring expenses, net. During the nine months ended September 30, 2022, we had no assets held for sale.
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
3.4.    Net Earnings Per Share
Basic EPSearnings per share ("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”) and certain shares underlying the Notes and the warrants relating to the Call Spread Transactions.Transactions, as applicable. A reconciliation of the denominators of the basic and diluted EPS calculations follows (in thousands, except per share data):
Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
202320222023202220232022
Numerator:Numerator:Numerator:
Net earningsNet earnings$49,972 $56,631 Net earnings$60,247 $57,316 $190,701 $203,131 
Denominator:Denominator:Denominator:
Weighted average shares used to compute basic EPSWeighted average shares used to compute basic EPS33,706 34,974 Weighted average shares used to compute basic EPS32,574 34,952 33,127 35,003 
Dilutive potential common shares due to dilutive RSUs, net of tax effectDilutive potential common shares due to dilutive RSUs, net of tax effect314 330 Dilutive potential common shares due to dilutive RSUs, net of tax effect278 201 275 243 
Dilutive potential common shares due to the NotesDilutive potential common shares due to the Notes2,310 1,677 Dilutive potential common shares due to the Notes2,774 1,187 2,533 1,468 
Dilutive potential common shares due to the WarrantsDilutive potential common shares due to the Warrants877 — Dilutive potential common shares due to the Warrants1,577 — 1,214 — 
Weighted average shares used to compute diluted EPSWeighted average shares used to compute diluted EPS37,207 36,981 Weighted average shares used to compute diluted EPS37,203 36,340 37,149 36,714 
Net earnings per share:Net earnings per share:Net earnings per share:
BasicBasic$1.48 $1.62 Basic$1.85 $1.64 $5.76 $5.80 
DilutedDiluted$1.34 $1.53 Diluted$1.62 $1.58 $5.13 $5.53 
For the three and nine months ended March 31,September 30, 2023, 84,13765,000 and 72,000, respectively, of our RSUs were excluded from the diluted EPS calculations because their inclusion would have been anti-dilutive. For the three and nine months ended March 31,September 30, 2022, 13,00067,000 and 39,000, respectively, of our RSUs were excluded from the diluted EPS calculations and certain potential outstanding shares from the warrants related to the Call Spread Transactions were excluded from the diluted EPS calculations because their inclusion would have been anti-dilutive.
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
5.    Debt, Inventory Financing Facilities, Finance Leases and Other Financing Obligations
Debt
Our long-term debt consists of the following (in thousands):
March 31,
2023
December 31,
2022
ABL revolving credit facility$168,822 $291,599 
Convertible senior notes due 2026346,647 346,199 
Finance leases and other financing obligations78 102 
Total515,547 637,900 
Less: current portion of long-term debt(346,672)(346,228)
Long-term debt$168,875 $291,672 
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
September 30,
2023
December 31,
2022
ABL revolving credit facility$323,906 $291,599 
Convertible senior notes due 2025347,541 346,199 
Finance leases and other financing obligations1,528 102 
Total672,975 637,900 
Less: current portion of long-term debt(349,058)(346,228)
Long-term debt$323,917 $291,672 
On July 22, 2022, we entered into the Third Amendment to the Credit Agreement (as amended, the "credit agreement") to modify our senior secured revolving credit facility (the “ABL facility”), increasing the maximum borrowing amount from $1,200,000,000 to $1,800,000,000, including a maximum borrowing capacity that could be used for borrowing in certain foreign currencies of $350,000,000 and extending the maturity date. From time to time and at our option, we may request to increase the aggregate amount available for borrowing under the ABL facility by up to an aggregate of the U.S. dollar equivalent of $750,000,000, subject to customary conditions, including receipt of commitments from lenders. The ABL facility is guaranteed by certain of our material subsidiaries and is secured by a lien on certain of our assets and certain of each other borrower’s and each guarantor’s assets. The ABL facility now provides for an uncommitted first-in, last-out revolving facility in an aggregate amount of up to $100,000,000. 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 now matures on July 22, 2027. As of March 31,September 30, 2023, eligible accounts receivable and inventory permitted availability to $1,587,950,000$1,547,321,000 of the full $1,800,000,000 facility amount, of which $168,822,000$323,906,000 was outstanding.
The 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.
Convertible Senior Notes due 2025
In August 2019, we issued $350,000,000 aggregate principal amount of Notes that mature on February 15, 2025. The Notes bear interest at an annual rate of 0.75% payable semiannually, in arrears, on February 15th and August 15th 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 (the “market price trigger”); (2) during the five business day period after
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
any five days consecutive trading day period (the “measurement period”) in which the trading price 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.
The Notes exceeded the market price trigger of $88.82 in the firstthird quarter of 2023 and as such, the Notes are convertible at the option of the holders through June 30, 2023. All of the Notes remain outstanding at MarchDecember 31, 2023. The notesNotes are convertible at the option of the holders at March 31,September 30, 2023 and, if converted, we are required to settle the principal amount of the Notes in cash. As such, the Notes balance net of unamortized debt issuance costs areis classified as a current liability. If the Notes continue to exceed the market price trigger in future periods, they
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
will remain convertible at the option of the holders, and the principal amount will continue to be classified as current.
Upon conversion, we will pay cash equal to the principal amount of the Notes, plus shares of our common stock for any additional amounts due. The conversion rate will initially be 14.6376 shares of common stock per $1,000 principal amount of the 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 Notesnotes 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 March 31,September 30, 2023, 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.
The Notes are subject to certain customary events of default and acceleration clauses. As of March 31,September 30, 2023, no such events have occurred.
The Notes consist of the following balances reported within the consolidated balance sheets (in thousands):
March 31,
2023
December 31,
2022
September 30,
2023
December 31,
2022
Liability:Liability:Liability:
PrincipalPrincipal$350,000 $350,000 Principal$350,000 $350,000 
Less: debt issuance costs, net of accumulated amortizationLess: debt issuance costs, net of accumulated amortization(3,353)(3,801)Less: debt issuance costs, net of accumulated amortization(2,459)(3,801)
Net carrying amountNet carrying amount$346,647 $346,199 Net carrying amount$347,541 $346,199 

In January 2022, we filed an irrevocable settlement election notice with the note holders to inform them of our election to settle the principal amount of the Notes in cash. As a result of this election, at period ends where the market price, or other conversion triggers are met, the Notes will be classified in our consolidated balance sheet as current.

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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The remaining life of the debt issuance cost accretion is approximately 1.871.37 years. The effective interest rate on the principal of the Notes is 0.75%.
Interest expense resulting from the Notes reported within the consolidated statement of operations for the three and nine months ended March 31,September 30, 2023 and 2022 is made up of contractual coupon interest and amortization of debt issuance costs.
In September 2023, an individual Note holder exercised their option to convert their Notes in the aggregate principal amount of $16,895,000, which will be settled in January 2024. As a result, the principal amount of the Notes will be settled in cash with additional amounts due being settled in shares of our common stock.
Convertible Note Hedge and Warrant Transaction
In connection and concurrent with the issuance of the Notes, we entered into 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.
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
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.
Inventory Financing Facilities

We have an unsecured inventory financing facility with MUFG Bank Ltd (“MUFG”) for $280,000,000. During 2022, we increased our maximum availability under our unsecured inventory financing facility with PNC Bank, N.A. (“PNC”) from $300,000,000 to $375,000,000, including the $25,000,000 facility in Canada (the "Canada facility"). We also increased our unsecured inventory financing facility with Wells Fargo in EMEA (the "EMEA facility") to $50,000,000. The inventory financing facilities will remain in effect until they are terminated by any of the parties. In the second quarter of 2023, the Company transitioned the reference rate for invoices issued in U.S. Dollars under the PNC facility from LIBOR to the Term Secured Overnight Financing Rate ("Term SOFR") benchmark provisions. If balances are not paid within stated vendor terms (typically 60 days), they will accrue interest at prime plus 2.00% on the MUFG facility, Canadian Dollar Offered Rate plus 4.50% on the Canada facility and LIBOR,Term SOFR, EURIBOR, or SONIA, as applicable, plus 4.50% and 0.25% on the PNC (other than the Canada facility) and EMEA facilities, respectively. The PNC facility allows for an alternative rate to be identified if LIBOR is no longer available. Amounts outstanding under these facilities are classified separately as accounts payable – inventory financing facilities in the accompanying consolidated balance sheets and within cash flows from financing activities in the accompanying consolidated statements of cash flows.
As of March 31,September 30, 2023, our combined inventory financing facilities had a total maximum capacity of $705,000,000, of which $410,126,000$269,207,000 was outstanding.
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
6.    Income Taxes
Our effective tax raterates for the three and nine months ended September 30, 2023 were 24.7% and 25.4%, respectively. For the three months ended March 31,September 30, 2023, and 2022 were 24.7% and 24.1%, respectively. Ourour effective tax rates wererate was higher than the United States federal statutory rate of 21.0% due primarily to state income taxes and higher taxes on earnings in foreign jurisdictions, partially offset by the release of reserves for uncertain tax positions whose statute expired during the quarter. For the nine months ended September 30, 2023, our effective tax rate was higher than the United States federal statutory rate of 21.0% due primarily to state income taxes and higher taxes on earnings in foreign jurisdictions, partially offset by excess tax benefits on the settlement of employee share-based compensation and tax benefits related to research and development activities.
Our effective tax rates for the three and nine months ended September 30, 2022 were 25.3% and 25.1%, respectively. Our effective tax rates were higher than the United States federal statutory rate of 21.0% due primarily to state income taxes and higher taxes on earnings in foreign jurisdictions, partially offset by tax benefits related to research and development activities.
As of March 31,September 30, 2023 and December 31, 2022, we had approximately $15,806,000$13,387,000 and $14,814,000, respectively, of unrecognized tax benefits. Of these amounts, approximately $2,124,000$1,640,000 and $1,642,000, respectively, related to accrued interest. In the future, if recognized, the remaining liability associated with uncertain tax positions wouldcould affect our effective tax rate. We do not believe there will be any changes to our unrecognized tax benefits over the next 12 months that would have a material effect on our effective tax rate.
We are currently under audit in various jurisdictions for tax years 20152016 through 2020.2021. 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 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.
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
6.7.    Share Repurchase Program
On May 6, 2021, we announced that our Board of Directors had authorized the repurchase of up to $125,000,000 of our common stock. On September 19, 2022, we announced that our Board of Directors had authorized the repurchase of up to $300,000,000 of our common stock, including $50,000,000 that remained available from the prior authorization. On May 18, 2023, we announced that our Board of Directors authorized the repurchase of up to $300,000,000 of our common stock, including $100,000,000 that remained available from the prior authorization. As of March 31,September 30, 2023, approximately $99,958,155$200,020,373 remained available for repurchases under thisour share repurchase plan. 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 three months ended March 31,September 30, 2023, we did not repurchase any shares of our common stock. During the three months ended September 30, 2022, we repurchased 913,445270,080 shares of our common stock on the open market at a total cost of $117,129,000$25,008,025 (an average price of $128.23$92.59 per share).
During the nine months ended September 30, 2023, we repurchased 1,633,620 shares of our common stock on the open market at a total cost of $217,108,000 (an average price of $132.90 per share). During the threenine months ended March 31,September 30, 2022, we did not repurchase anyrepurchased 270,080 shares of our common stock.stock on the open market at a total cost of $25,008,025 (an average price of $92.59 per share).
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
8.    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 March 31,September 30, 2023, we had approximately $27,984,413$27,742,939 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 March 31,September 30, 2023. Accordingly, we have not accrued any liabilities related to such performance bonds in our consolidated financial statements.
The Company has a minimum required purchase commitment of approximately $100,467,000 pursuant to an agreement primarily related to cloud services. The total purchase commitment is required to be met or exceeded during a 5-year period, starting October 1, 2023 through September 30, 2028. If total purchases do not meet the required commitment by September 30, 2028, the shortfall must be prepaid by the Company and can be used for further purchases through September 30, 2029.
The Company has a minimum required purchase commitment of approximately $40,000,000 pursuant to an agreement primarily related to software as a service. The total purchase commitment is required to be met during a 4-year period, starting November 30, 2022 through November 29, 2026.
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.
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Management believes that payments, if any, related to these indemnifications are not probable at March 31,September 30, 2023. 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
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
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.
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 incidental to the 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 alleged non-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 required. If accruals are not required, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of possible loss can be 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 any legal 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 PCMvarious litigation matters including various disputes related to PCM’s acquisition of certain assets of En Pointe Technologies in 2015.2015 (the “PCM Earnout Litigation”). 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 pursuingpursued various counterclaims. The disputes arePCM Earnout Litigation was being heard by multiple courts and arbitrators in several different jurisdictions including California, Delaware and Pakistan. In May 2023, the Company settled all claims related to the PCM Earnout Litigation and the parties began the process of dismissing each of the related claims and counterclaims in the various courts and jurisdictions. On July 14, 2023, the Company funded an escrow pursuant to which $10,550,000 would be paid to the plaintiffs over a period of 36 months beginning after all of the cases have been dismissed. The Company cannot determine with certaintyfull amount of the costs or outcome of these matters. However, thesettlement payment had been previously reserved. The Company is not involved in any pending or threatened legal proceedings, including the PCM litigation matters,Earnout Litigation, that it believes would reasonably be expected to have a material adverse effect on its business, financial condition or results of operations.
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
8.9.    Segment Information
We operate in three reportable geographic operating segments: North America; EMEA; and APAC. Our offerings in North America and certain countries in EMEA and APAC include IT hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments are largely software, certain software-related services and cloud solutions.
In the following table, revenue is disaggregated by our reportable operating segments, which are primarily defined by their 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 March 31,September 30, 2023 and 2022 (in thousands):
Three Months Ended March 31, 2023Three Months Ended September 30, 2023
North AmericaEMEAAPACConsolidatedNorth AmericaEMEAAPACConsolidated
Major OfferingsMajor OfferingsMajor Offerings
HardwareHardware$1,155,639 $162,890 $10,316 $1,328,845 Hardware$1,153,722 $136,567 $10,866 $1,301,155 
SoftwareSoftware394,797 214,561 29,442 638,800Software409,139 163,918 15,942 588,999 
ServicesServices283,528 49,553 23,221 356,302Services298,011 53,911 24,210 376,132 
$1,833,964 $427,004 $62,979 $2,323,947 $1,860,872 $354,396 $51,018 $2,266,286 
Major Client GroupsMajor Client GroupsMajor Client Groups
Large Enterprise / CorporateLarge Enterprise / Corporate$1,293,533 $309,063 $21,402 $1,623,998 Large Enterprise / Corporate$1,311,849 $270,355 $21,388 $1,603,592 
CommercialCommercial372,025 4,790 17,025 393,840 Commercial342,585 4,340 18,867 365,792 
Public SectorPublic Sector168,406 113,151 24,552 306,109 Public Sector206,438 79,701 10,763 296,902 
$1,833,964 $427,004 $62,979 $2,323,947 $1,860,872 $354,396 $51,018 $2,266,286 
Revenue Recognition based on acting as Principal or Agent in the TransactionRevenue Recognition based on acting as Principal or Agent in the TransactionRevenue Recognition based on acting as Principal or Agent in the Transaction
Gross revenue recognition (Principal)Gross revenue recognition (Principal)$1,725,177 $401,343 $53,884 $2,180,404 Gross revenue recognition (Principal)$1,738,705 $330,505 $42,908 $2,112,118 
Net revenue recognition (Agent)Net revenue recognition (Agent)108,787 25,661 9,095 143,543 Net revenue recognition (Agent)122,167 23,891 8,110 154,168 
$1,833,964 $427,004 $62,979 $2,323,947 $1,860,872 $354,396 $51,018 $2,266,286 
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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Three Months Ended March 31, 2022Three Months Ended September 30, 2022
North AmericaEMEAAPACConsolidatedNorth AmericaEMEAAPACConsolidated
Major OfferingsMajor OfferingsMajor Offerings
HardwareHardware$1,451,319 $210,623 $11,646 $1,673,588 Hardware$1,404,207 $151,505 $16,563 $1,572,275 
SoftwareSoftware341,547 272,402 22,750 636,699 Software396,921 184,361 15,640 596,922 
ServicesServices271,639 48,408 20,516 340,563 Services298,709 43,708 22,740 365,157 
$2,064,505 $531,433 $54,912 $2,650,850 $2,099,837 $379,574 $54,943 $2,534,354 
Major Client GroupsMajor Client GroupsMajor Client Groups
Large Enterprise / CorporateLarge Enterprise / Corporate$1,438,729 $353,904 $21,429 $1,814,062 Large Enterprise / Corporate$1,473,014 $295,565 $25,075 $1,793,654 
CommercialCommercial441,159 18,421 14,659 474,239 Commercial424,600 11,898 18,048 454,546 
Public SectorPublic Sector184,617 159,108 18,824 362,549 Public Sector202,223 72,111 11,820 286,154 
$2,064,505 $531,433 $54,912 $2,650,850 $2,099,837 $379,574 $54,943 $2,534,354 
Revenue Recognition based on acting as Principal or Agent in the TransactionRevenue Recognition based on acting as Principal or Agent in the TransactionRevenue Recognition based on acting as Principal or Agent in the Transaction
Gross revenue recognition (Principal)Gross revenue recognition (Principal)$1,970,921 $506,862 $47,018 $2,524,801 Gross revenue recognition (Principal)$1,990,277 $358,697 $46,763 $2,395,737 
Net revenue recognition (Agent)Net revenue recognition (Agent)93,584 24,571 7,894 126,049 Net revenue recognition (Agent)109,560 20,877 8,180 138,617 
$2,064,505 $531,433 $54,912 $2,650,850 $2,099,837 $379,574 $54,943 $2,534,354 
Nine Months Ended September 30, 2023
North AmericaEMEAAPACConsolidated
Major Offerings
Hardware$3,474,488 $431,677 $34,108 $3,940,273 
Software1,221,263 574,539 67,333 1,863,135 
Services896,251 166,910 73,260 1,136,421 
$5,592,002 $1,173,126 $174,701 $6,939,829 
Major Client Groups
Large Enterprise / Corporate$3,927,258 $868,937 $69,639 $4,865,834 
Commercial1,074,360 12,739 54,030 1,141,129 
Public Sector590,384 291,450 51,032 932,866 
$5,592,002 $1,173,126 $174,701 $6,939,829 
Revenue Recognition based on acting as Principal or Agent in the Transaction
Gross revenue recognition (Principal)$5,231,815 $1,083,933 $147,422 $6,463,170 
Net revenue recognition (Agent)360,187 89,193 27,279 476,659 
$5,592,002 $1,173,126 $174,701 $6,939,829 


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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Nine Months Ended September 30, 2022
North AmericaEMEAAPACConsolidated
Major Offerings
Hardware$4,415,000 $517,512 $44,467 $4,976,979 
Software1,115,475 669,760 66,512 1,851,747 
Services881,311 150,066 68,478 1,099,855 
$6,411,786 $1,337,338 $179,457 $7,928,581 
Major Client Groups
Large Enterprise / Corporate$4,509,731 $955,858 $77,934 $5,543,523 
Commercial1,314,733 49,631 50,159 1,414,523 
Public Sector587,322 331,849 51,364 970,535 
$6,411,786 $1,337,338 $179,457 $7,928,581 
Revenue Recognition based on acting as Principal or Agent in the Transaction
Gross revenue recognition (Principal)$6,087,854 $1,254,980 $152,708 $7,495,542 
Net revenue recognition (Agent)323,932 82,358 26,749 433,039 
$6,411,786 $1,337,338 $179,457 $7,928,581 
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 and nine months ended March 31,September 30, 2023 or 2022.
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 consider to be a reasonable reflection of the utilization of services provided to or benefits received by the operating segments.
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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 March 31, 2023Three Months Ended September 30, 2023
North AmericaEMEAAPACConsolidatedNorth AmericaEMEAAPACConsolidated
Net sales:Net sales:Net sales:
ProductsProducts$1,550,436 $377,451 $39,758 $1,967,645 Products$1,562,861 $300,485 $26,808 $1,890,154 
ServicesServices283,528 49,553 23,221 356,302 Services298,011 53,911 24,210 376,132 
Total net salesTotal net sales1,833,964 427,004 62,979 2,323,947 Total net sales1,860,872 354,396 51,018 2,266,286 
Costs of goods sold:Costs of goods sold:Costs of goods sold:
ProductsProducts1,387,962 347,633 37,134 1,772,729 Products1,401,472 272,083 23,988 1,697,543 
ServicesServices130,858 18,483 10,562 159,903 Services125,543 22,604 11,726 159,873 
Total costs of goods soldTotal costs of goods sold1,518,820 366,116 47,696 1,932,632 Total costs of goods sold1,527,015 294,687 35,714 1,857,416 
Gross profitGross profit315,144 60,888 15,283 391,315 Gross profit333,857 59,709 15,304 408,870 
Operating expenses:Operating expenses:Operating expenses:
Selling and administrative expensesSelling and administrative expenses248,820 49,905 11,276 310,001 Selling and administrative expenses244,154 54,435 11,204 309,793 
Severance and restructuring expensesSeverance and restructuring expenses3,087 702 13 3,802 Severance and restructuring expenses2,650 271 2,923 
Acquisition and integration related expensesAcquisition and integration related expenses51 — — 51 Acquisition and integration related expenses970 3,322 — 4,292 
Earnings from operationsEarnings from operations$63,186 $10,281 $3,994 $77,461 Earnings from operations$86,083 $1,681 $4,098 $91,862 
Three Months Ended March 31, 2022Three Months Ended September 30, 2022
North AmericaEMEAAPACConsolidatedNorth AmericaEMEAAPACConsolidated
Net sales:Net sales:Net sales:
ProductsProducts$1,792,866 $483,025 $34,396 $2,310,287 Products$1,801,128 $335,866 $32,203 $2,169,197 
ServicesServices271,639 48,408 20,516 340,563 Services298,709 43,708 22,740 365,157 
Total net salesTotal net sales2,064,505 531,433 54,912 2,650,850 Total net sales2,099,837 379,574 54,943 2,534,354 
Costs of goods sold:Costs of goods sold:Costs of goods sold:
ProductsProducts1,625,775 449,632 31,802 2,107,209 Products1,618,297 309,218 29,164 1,956,679 
ServicesServices138,646 17,031 9,103 164,780 Services148,844 18,584 10,989 178,417 
Total costs of goods soldTotal costs of goods sold1,764,421 466,663 40,905 2,271,989 Total costs of goods sold1,767,141 327,802 40,153 2,135,096 
Gross profitGross profit300,084 64,770 14,007 378,861 Gross profit332,696 51,772 14,790 399,258 
Operating expenses:Operating expenses:Operating expenses:
Selling and administrative expensesSelling and administrative expenses235,220 52,326 10,094 297,640 Selling and administrative expenses249,745 47,527 10,981 308,253 
Severance and restructuring expensesSeverance and restructuring expenses304 1,068 — 1,372 Severance and restructuring expenses683 35 720 
Acquisition and integration related expensesAcquisition and integration related expenses— — 
Earnings from operationsEarnings from operations$64,560 $11,376 $3,913 $79,849 Earnings from operations$82,262 $4,210 $3,807 $90,279 


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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Nine Months Ended September 30, 2023
North AmericaEMEAAPACConsolidated
Net sales:
Products$4,695,751 $1,006,216 $101,441 $5,803,408 
Services896,251 166,910 73,260 1,136,421 
Total net sales5,592,002 1,173,126 174,701 6,939,829 
Costs of goods sold:
Products4,206,071 920,956 92,693 5,219,720 
Services393,788 59,526 33,420 486,734 
Total costs of goods sold4,599,859 980,482 126,113 5,706,454 
Gross profit992,143 192,644 48,588 1,233,375 
Operating expenses:
Selling and administrative expenses745,259 159,253 33,525 938,037 
Severance and restructuring expenses1,052 1,840 63 2,955 
Acquisition and integration related expenses1,127 3,322 — 4,449 
Earnings from operations$244,705 $28,229 $15,000 $287,934 
Nine Months Ended September 30, 2022
North AmericaEMEAAPACConsolidated
Net sales:
Products$5,530,475 $1,187,272 $110,979 $6,828,726 
Services881,311 150,066 68,478 1,099,855 
Total net sales6,411,786 1,337,338 179,457 7,928,581 
Costs of goods sold:
Products4,998,871 1,099,027 101,885 6,199,783 
Services429,869 52,222 30,699 512,790 
Total costs of goods sold5,428,740 1,151,249 132,584 6,712,573 
Gross profit983,046 186,089 46,873 1,216,008 
Operating expenses:
Selling and administrative expenses728,833 151,225 31,836 911,894 
Severance and restructuring expenses1,472 1,310 2,784 
Acquisition and integration related expenses1,646 — — 1,646 
Earnings from operations$251,095 $33,554 $15,035 $299,684 



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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The following is a summary of our total assets by reportable operating segment (in thousands):
March 31,
2023
December 31,
2022
September 30,
2023
December 31,
2022
North AmericaNorth America$5,285,303 $5,219,480 North America$5,345,620 $5,219,480 
EMEAEMEA898,680 939,327 EMEA894,489 939,327 
APACAPAC171,296 153,232 APAC151,290 153,232 
Corporate assets and intercompany eliminations, netCorporate assets and intercompany eliminations, net(1,394,751)(1,199,458)Corporate assets and intercompany eliminations, net(1,313,183)(1,199,458)
Total assetsTotal assets$4,960,528 $5,112,581 Total assets$5,078,216 $5,112,581 
We recorded the following pre-tax amounts, by reportable operating segment, for depreciation and amortization in the accompanying consolidated financial statements (in thousands):
Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
202320222023202220232022
Depreciation and amortization of property and equipment:Depreciation and amortization of property and equipment:Depreciation and amortization of property and equipment:
North AmericaNorth America$5,648 $4,420 North America$6,064 $5,769 $17,207 $14,918 
EMEAEMEA596 807 EMEA726 531 1,925 2,006 
APACAPAC109 162 APAC112 149 323 465 
6,353 5,389 6,902 6,449 19,455 17,389 
Amortization of intangible assets:Amortization of intangible assets:Amortization of intangible assets:
North AmericaNorth America7,785 7,348 North America7,718 8,468 23,269 23,172 
EMEAEMEA412 457 EMEA822 404 1,642 1,291 
APACAPAC113 120 APAC108 114 332 352 
8,310 7,925 8,648 8,986 25,243 24,815 
TotalTotal$14,663 $13,314 Total$15,550 $15,435 $44,698 $42,204 

9.10.    Acquisition

Effective August 17, 2023, we acquired 100 percent of the issued and outstanding shares of Amdaris Group Limited (“Amdaris”) for a preliminary cash purchase price, net of cash and cash equivalents acquired, of approximately $82,875,000, excluding the estimated fair value of an earn out, reported in other liabilities, with a range of payouts through 2026 of $0 to $54,391,000. Amdaris, an award-winning software development and digital services specialist, provides innovative software development, application support, managed services and consultancy services to the customers in the United Kingdom with service delivery centers located in several eastern European countries. Amdaris has been recognized as a Microsoft Gold Certified Partner. We believe this acquisition expands our global Modern Apps and Data & AI areas of solutions expertise as a leading solutions integrator and enhances our technological capabilities and scale to deliver an even broader range of customized services and solutions to clients in EMEA.

The preliminary fair value of net assets acquired was approximately $34,060,000, including $41,291,000 of identifiable intangible assets, consisting primarily of customer relationships that will be amortized using the straight line method over the estimated economic life of ten years. 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 finalization of the fair value of the non-cash


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INSIGHT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
working capital could lead to an adjustment of the purchase price allocation. Goodwill acquired approximated $68,634,000,which was recorded in our EMEA operating segment.

We consolidated the results of operations for Amdaris within our EMEA operating segment beginning on August 17, 2023, the effective date of the acquisition. Our historical results would not have been materially affected by the acquisition of Amdaris 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 consolidated statement of operations.

In June 1, 2022, we acquired 100 percent of the issued and outstanding shares of Hanu Software Solutions, Inc. and Hanu Software Solutions (India) Private Ltd. (collectively, “Hanu”) for a cash purchase price, net of cash and cash equivalents acquired, of approximately $83,555,000,$90,106,000, including $15,307,000 attributed to an earn out agreement but excludingand including hold backs for representations and warranties of approximately $8,501,000 to$6,358,000, the majority of which will be paid in future periods. We finalized the earn out and paid $10,748,000 in April 2023 and expect to pay the remaining amount due in May 2023. Hanu, a global leading cloud technology services and solutions provider, provides cloud solutions in the areas of applications and infrastructure, data and artificial intelligence, and cloud security to clients. Hanu is recognized as one of Microsoft’s top public cloud service partners globally. We believe this acquisition strengthens our service capabilities as a cloud solutions provider and is also a strategic investment in expanding our presence in India.

The preliminary fair value of net assets acquired was approximately $22,326,000,$20,183,000, including $24,750,000 of identifiable intangible assets, consisting primarily of customer relationships that will be amortized using the straight line method over the estimated economic life of ten years. The preliminary purchase price was allocated using the information currently available. Goodwill acquired approximated $69,923,000 which was recorded in our North America operating segment.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

We have not finalized the purchase price allocation in relation to this acquisition as work on certain liabilities, including tax related balances, is not yet complete. We do not believe that thein May 2023. The completion of this work willdid not materially modify thealter our preliminary purchase price allocation. We expect to complete our purchase price allocation prior to June 1, 2023.

We consolidated the results of operations for Hanu within our North America operating segment beginning on June 1, 2022, the effective date of the acquisition. Our historical results would not have been materially affected by the acquisition of Hanu 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 consolidated statement of operations.
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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 Form 10-Q. We refer to our customers as “clients,” our suppliers as “partners” and our employees as “teammates.”
Quarterly Overview
Today, every business needs to be a technology business. We help our clients accelerate their digital journaljourney to modernize their business and maximize the value of technology. We serve these clients in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). As a Fortune 500-ranked solutions integrator, we enable secure, end-to-end digital transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 35 years of broad IT expertise. We amplify our solutions and services with global scale, local expertise and our e-commerce experience, enabling our clients to realize their digital ambitions at every opportunity. Our offerings in North America and certain countries in EMEA and APAC include hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments consist largely of software and certain software-related services and cloud solutions.
On a consolidated basis, for the three months ended March 31,September 30, 2023:
Net sales of $2.3 billion decreased 12%11% compared to the three months ended March 31,September 30, 2022. The decrease in net sales reflects a decrease in hardware and software net sales, partially offset by an increase in services net sales. We believe hardware sales have declined throughout the industry. Excluding the effects of fluctuating foreign currency exchange rates, net sales decreased 11% compared to the firstthird quarter of 2022.
Gross profit of $391.3$408.9 million increased 3%2% compared to the three months ended March 31,September 30, 2022. Excluding the effects of fluctuating foreign currency exchange rates, gross profit also increased 5%2% compared to the firstthird quarter of 2022.
Compared to the three months ended March 31,September 30, 2022, gross margin expanded approximately 250220 basis points to 16.8%18.0% of net sales in the three months ended March 31,September 30, 2023. This expansion primarily reflects an increase in higher margin services net sales, particularly cloud net sales compared to the same period in the prior year.
Earnings from operations decreased 3%increased 2%, year toover year, to $77.5$91.9 million in the firstthird quarter of 2023 compared to $79.8$90.3 million in the firstthird quarter of 2022. The decreaseincrease was primarily due to increases in gross profit partially offset by increases in selling and administrative expenses, and severance and restructuring expenses, partially offset by increased gross profitnet and acquisition and integration related expenses in the current quarter. Excluding the effects of fluctuating foreign currency exchange rates, earnings from operations decreasedincreased 1% year toover year.
Net earnings and diluted earnings per share were $50.0$60.2 million and $1.34,$1.62, respectively, for the firstthird quarter of 2023. This compares to net earnings of $56.6$57.3 million and diluted earnings per share of $1.53$1.58 for the firstthird quarter of 2022. ExcludingDiluted earnings per share increased 3% year over year, and excluding the effects of fluctuating foreign currency exchange rates, diluted earnings per share decreased 11%also increased 3% year toover year.


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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
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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
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.
Details about segment results of operations can be found in Note 89 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.
COVID-19, Supply Chain Constraints and Inflation Update

TheSupply constraints that have had an industry-wide impact since the beginning of the COVID-19 pandemic has negatively impactedcontinued to ease in the global economy, disrupted global supply chains and reduced workforce participation.three months ended September 30, 2023. We saw minimal negative impact of COVID-19 on our first quarter 2023 financial results; however, supply constraints for certain products have persisted. We anticipatebelieve that continuedthe remaining supply constraints and extended lead times for certain infrastructure, including networking and infrastructure products mayhave now impact results intonormalized back to near historic levels. However, we have continued to see a general slowdown in our clients' decision making, which we believe will continue in the latter part of 2023 and possibly into 2024.short term. In addition, inflation has resulted in higher interest rates on all of our variable rate facilities compared to the firstthird quarter of 2022 and we expect these higher rates and higher interest expense will continue for the remainder of 2023.

Since the initial outbreak, new variants of COVID-19 that We are significantly more contagious than previous strains have emerged. The spread of these new strains initially caused many government authorities and businesses to reimplement prior restrictions in an effort to lessen the spread of COVID-19 and its variants; however, while many of these restrictions have been lifted, uncertainty remains as to whether additional restrictions may be initiated or again reimplemented in responses to surges in COVID-19 cases. 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 limitedactively monitoring changes to the duration and spread of the COVID-19 pandemic and its severity; the emergence and severity of its variants; the availability and efficacy of vaccines (particularly with respect to emerging strains of the virus) and potential hesitancy to utilize them; the reduction in travel and increase in teammates working from remote locations and other protective actions taken to contain the virus or treat its impact; general economic factors, such as increased inflation;global macroeconomic environment, including those creating supply chain constraints; labor supply issues;constraints and how quicklyhigher interest rates, 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 whatassessing the potential effects of any such alterations or modificationsimpacts these challenges may have on our business, includingcurrent results, financial condition and liquidity. We are also mindful of the effectspotential impact these conditions could have on our clients, teammates,partners and prospects or on our financial results infor the remainder of 2023 and beyond. Accordingly, our current results and financial condition discussed herein may not be indicative of future operating results and trends.

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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 Form 10-K for the year ended December 31, 2022. 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, 2022.
Results of Operations
The following table sets forth certain financial data as a percentage of net sales for the three and nine months ended March 31,September 30, 2023 and 2022:
Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
202320222023202220232022
Net salesNet sales100.0 %100.0 %Net sales100.0 %100.0 %100.0 %100.0 %
Costs of goods soldCosts of goods sold83.2 85.7 Costs of goods sold82.0 84.2 82.2 84.7 
Gross profitGross profit16.8 14.3 Gross profit18.0 15.8 17.8 15.3 
Selling and administrative expensesSelling and administrative expenses13.3 11.2 Selling and administrative expenses13.7 12.2 13.5 11.5 
Severance and restructuring expenses and acquisition and integration related expensesSeverance and restructuring expenses and acquisition and integration related expenses0.2 0.1 Severance and restructuring expenses and acquisition and integration related expenses0.2 — 0.2 — 
Earnings from operationsEarnings from operations3.3 3.0 Earnings from operations4.1 3.6 4.1 3.8 
Non-operating expense, netNon-operating expense, net0.4 0.2 Non-operating expense, net0.6 0.5 0.4 0.4 
Earnings before income taxesEarnings before income taxes2.9 2.8 Earnings before income taxes3.5 3.1 3.7 3.4 
Income tax expenseIncome tax expense0.7 0.7 Income tax expense0.8 0.8 1.0 0.8 
Net earningsNet earnings2.2 %2.1 %Net earnings2.7 %2.3 %2.7 %2.6 %
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 quarter, 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 and related to product versus services sales are, 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 incentive requirements, which occur regularly, could impact our results of operations to the extent we are
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requirements, which occur regularly, could impact our results of operations to the extent we are unable to shift our focus and respond to them.For a discussion of risks associated with our reliance on partners, see “Risk Factors – Risks related to Our Business, Operations and Industry – We rely on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can change significantly in the amounts made available and the requirements year over year,” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022.

Net Sales. Net sales of $2.3 billion for the three months ended March 31,September 30, 2023 decreased 11%, year to year, compared to the three months ended September 30, 2022, reflecting decreases in each of our operating segments. Net sales of $6.9 billion for the nine months ended September 30, 2023 decreased 12%, year to year, to $2.3 billion compared to the threenine months ended March 31,September 30, 2022, also reflecting decreases in each of our North America and EMEAoperating segments.

Our net sales by operating segment were as follows for the three and nine months ended March 31,September 30, 2023 and 2022 (dollars in thousands):
Three Months Ended
March 31,
%
Change
Three Months Ended
September 30,
%
Change
Nine Months Ended
September 30,
%
Change
2023202220232022%
Change
20232022%
Change
North AmericaNorth America$1,833,964 $2,064,505 (11)%North America$1,860,872 $2,099,837 (11)%$5,592,002 $6,411,786 (13)%
EMEAEMEA427,004 531,433 (20)%EMEA354,396 379,574 (7)%1,173,126 1,337,338 (12)%
APACAPAC62,979 54,912 15 %APAC51,018 54,943 (7)%174,701 179,457 (3)%
ConsolidatedConsolidated$2,323,947 $2,650,850 (12)%Consolidated$2,266,286 $2,534,354 (11)%$6,939,829 $7,928,581 (12)%
Our net sales by offering category for North America for the three and nine months ended March 31,September 30, 2023 and 2022 were as follows (dollars in thousands):
Three Months Ended
March 31,
%
Change
Three Months Ended
September 30,
%
Change
Nine Months Ended
September 30,
%
Change
Sales MixSales Mix20232022Sales Mix20232022%
Change
20232022%
Change
HardwareHardware$1,155,639 $1,451,319 (20)%Hardware$1,153,722 $1,404,207 (18)%$3,474,488 $4,415,000 (21)%
SoftwareSoftware394,797 341,547 16 %Software409,139 396,921 %1,221,263 1,115,475 %
ServicesServices283,528 271,639 %Services298,011 298,709 — %896,251 881,311 %
$1,833,964 $2,064,505 (11)%$1,860,872 $2,099,837 (11)%$5,592,002 $6,411,786 (13)%
Net sales in North America decreased 11%, or $230.5$239.0 million, for the three months ended March 31,September 30, 2023 compared to the three months ended March 31,September 30, 2022, primarily driven by a decrease in hardware net sales. Hardware net sales decreased by 20%18%, year to year. This decrease was partially offset by an increase in software and services net sales increases of 16% and 4%3%, respectively, year over year. The net changes for the three months ended March 31,September 30, 2023 were the result of the following:
The decrease in hardware net sales was due to lower volume of sales primarily to large enterprise and corporate clients. This decline was driven by devices. Consistent with industry trends, we continue to expect devices net sales to be down in total for 2023 when compared to 2022.
The increase in software net sales was primarily attributabledue to deviceshigher volume of software licensing, partially offset by the continued migration of on-premise software to cloud solutions, reported net in services net sales.
Services net sales were flat, reflecting an increase in cloud solutions offset by a decrease in Insight Delivered services net sales.
Net sales in North America decreased 13%, or $819.8 million, for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, driven by


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a decrease in hardware net sales. Hardware net sales decreased by 21%, year to year. This decrease was partially offset by software and services net sales increases of 9% and 2%, respectively, year over year. The net changes for the nine months ended September 30, 2023 were the result of the following:
The decrease in hardware net sales was consistent with our expectations as well as with declines observed throughout the industry.primarily due to lower volume of sales to large enterprise and corporate clients due to lower demand. This decline was driven by devices.
The increase in software net sales was primarily due to higher volume of software licensing, partially offset by the continued migration of on-premise software to cloud solutions, reported net in services net sales.
The increase in services net sales was primarily due to an increase in fees for cloud solutions.solutions partially offset by a decrease in Insight Delivered services net sales.
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Our net sales by offering category for EMEA for the three and nine months ended March 31,September 30, 2023 and 2022 were as follows (dollars in thousands):
Three Months Ended
March 31,
%
Change
Three Months Ended
September 30,
%
Change
Nine Months Ended
September 30,
%
Change
Sales MixSales Mix20232022Sales Mix20232022%
Change
20232022%
Change
HardwareHardware$162,890 $210,623 (23)%Hardware$136,567 $151,505 (10)%$431,677 $517,512 (17)%
SoftwareSoftware214,561 272,402 (21)%Software163,918 184,361 (11)%574,539 669,760 (14)%
ServicesServices49,553 48,408 %Services53,911 43,708 23 %166,910 150,066 11 %
$427,004 $531,433 (20)%$354,396 $379,574 (7)%$1,173,126 $1,337,338 (12)%
Net sales in EMEA decreased 20%7%, or $104.4$25.2 million, for the three months ended March 31,September 30, 2023 compared to the three months ended March 31,September 30, 2022. Excluding the effects of fluctuating foreign currency exchange rates, net sales in EMEA decreased 13%, year to year. Net sales of hardware and software decreased by 23%10% and 21%11%, respectively, year to year, partially offset by an increase in services net sales of 2%23%, year over year. The net changes for the three months ended March 31,September 30, 2023 were the result of the following:
The decrease in software net sales was primarily due to continued migration of on-premise software to cloud solutions, reported net in services net sales.
The decrease in hardware net sales was primarily due to lower volume of sales to large enterprise and corporate clients, partially offset by higher sales to public sector clients.
The increase in services net sales was primarily due to increases in Insight Delivered services net sales, including from Amdaris, which we acquired on August 17, 2023 and in fees for cloud solutions.
Net sales in EMEA decreased 12%, or $164.2 million, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Excluding the effects of fluctuating foreign currency exchange rates, net sales in EMEA also decreased 12%, year to year. Net sales of hardware and software decreased by 17% and 14%, respectively, year to year, partially offset by an increase in services net sales of 11%, year over year. The net changes for the nine months ended September 30, 2023 were the result of the following:
The decrease in software net sales was primarily due to continued migration of on-premise software to cloud solutions, reported net in services net sales.
The decrease in hardware net sales was primarily due to lower volume of sales to public sector, clientslarge enterprise and decline in sales of devices.corporate clients.
The increase in services net sales year over year was primarily due to an increaseincreases in Insight Delivered services net sales, including from Amdaris, and in fees for cloud solutions.
Our net sales by offering category for APAC for the three months ended March 31, 2023 and 2022 were as follows (dollars in thousands):
Three Months Ended
March 31,
%
Change
Sales Mix20232022
Hardware$10,316 $11,646 (11)%
Software29,442 22,750 29 %
Services23,221 20,516 13 %
 $62,979 $54,912 15 %
Net sales in APAC increased 15%, or $8.1 million, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. Excluding the effects of fluctuating foreign currency exchange rates, net sales in APAC increased 21%, year over year. Net sales of software and services increased by 29% and 13%, respectively, year over year.
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These increasesOur net sales by offering category for APAC for the three and nine months ended September 30, 2023 and 2022 were as follows (dollars in thousands):
Three Months Ended
September 30,
%
Change
Nine Months Ended
September 30,
%
Change
Sales Mix2023202220232022
Hardware$10,866 $16,563 (34)%$34,108 $44,467 (23)%
Software15,942 15,640 %67,333 66,512 %
Services24,210 22,740 %73,260 68,478 %
 $51,018 $54,943 (7)%$174,701 $179,457 (3)%
Net sales in APAC decreased 7%, or $3.9 million, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Excluding the effects of fluctuating foreign currency exchange rates, net sales in APAC decreased 4%, year to year. Net sales of hardware decreased by 34%, year to year. This decrease was partially offset by a decreaseincreases in hardwaresoftware and services net sales of 11%2% and 6%, respectively, year toover year. The net changes for the three months ended March 31,September 30, 2023 were the result of the following:
The decrease in hardware net sales was primarily the result of lower volume of sales to large enterprise clients.
The increase in software net sales was due to higher volume of sales to public sectorlarge enterprise and corporate clients, partially offset by lower volume of sales to public sector clients and the continued migration of on-premise software to cloud solutions, reported netsolutions.
The increase in services net sales.sales was primarily due to higher volume sales of Insight Delivered services.
Net sales in APAC decreased 3%, or $4.8 million, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Excluding the effects of fluctuating foreign currency exchange rates, net sales in APAC increased by 2%, year over year. Net sales of hardware decreased 23%, year to year. This decrease was partially offset by increases in software and services net sales of 1% and 7%, respectively, year over year. The net changes for the nine months ended September 30, 2023 were the result of the following:
The decrease in hardware net sales was primarily the result of lower volume of sales to large enterprise and corporate clients.
The increase in services net sales was primarily due to higher volume sales of Insight Delivered services and an increase in fees for cloud solutions.
The decreaseincrease in hardwaresoftware net sales was primarily the result of lowerdue to higher volume of sales to large enterprise clients.
The percentageand corporate and public sector clients, partially offset by the continued migration of net sales by category for North America, EMEA and APAC were as follows for the three months ended March 31, 2023 and 2022:
North AmericaEMEAAPAC
Three Months Ended
March 31,
Three Months Ended
March 31,
Three Months Ended
March 31,
Sales Mix202320222023202220232022
Hardware63 %70 %38 %40 %16 %21 %
Software22 %17 %50 %51 %47 %42 %
Services15 %13 %12 %%37 %37 %
100 %100 %100 %100 %`100 %100 %
Gross Profit. Gross profit increased 3%, or $12.5 million, for the three months ended March 31, 2023 comparedon-premise software to the three months ended March 31, 2022, with gross margin expanding approximately 250 basis points to 16.8% for the three months ended March 31, 2023 compared to 14.3% for the three months ended March 31, 2022.
Our gross profit and gross profit as a percentage of net sales by operating segment were as follows for the three months ended March 31, 2023 and 2022 (dollars in thousands):
Three Months Ended March 31,
2023% of Net Sales2022% of Net Sales
North America$315,144 17.2 %$300,084 14.5 %
EMEA60,888 14.3 %64,770 12.2 %
APAC15,283 24.3 %14,007 25.5 %
Consolidated$391,315 16.8 %$378,861 14.3 %
North America's gross profit for the three months ended March 31, 2023 increased 5%, or $15.1 million, compared to the three months ended March 31, 2022. As a percentage of net sales, gross margin expanded approximately 270 basis points to 17.2% for the first quarter of 2023. The year over year net increase in gross margin was primarily attributable to the following:
A net increase in product margin of 77 basis points, year over year, and an increase in services margin of 188 basis points compared to the same period in the prior year.cloud solutions.
The increase in services margin during the current quarter reflects an increase in fees for cloud solutions and an increase in margin contribution from Insight Core services (consisting of Insight Delivered and managed services).
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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, 2023 and 2022:
North AmericaEMEAAPAC
Three Months Ended
September 30,
Three Months Ended
September 30,
Three Months Ended
September 30,
Sales Mix202320222023202220232022
Hardware62 %67 %39 %40 %21 %30 %
Software22 %19 %46 %49 %31 %29 %
Services16 %14 %15 %11 %48 %41 %
100 %100 %100 %100 %100 %100 %
North AmericaEMEAAPAC
Nine Months Ended
September 30,
Nine Months Ended
September 30,
Nine Months Ended
September 30,
Sales Mix202320222023202220232022
Hardware62 %69 %37 %39 %19 %25 %
Software22 %17 %49 %50 %39 %37 %
Services16 %14 %14 %11 %42 %38 %
100 %100 %100 %100 %100 %100 %
Gross Profit. Gross profit increased 2%, or $9.6 million, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022, with gross margin expanding approximately 220 basis points to 18.0% for the three months ended September 30, 2023 compared to 15.8% for the three months ended September 30, 2022. Gross profit increased 1%, or $17.4 million, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, with gross margin expanding approximately 250 basis points to 17.8% for the nine months ended September 30, 2023 compared to 15.3% for the nine months ended September 30, 2022.
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, 2023 and 2022 (dollars in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023% of Net Sales2022% of Net Sales2023% of Net Sales2022% of Net Sales
North America$333,857 17.9 %$332,696 15.8 %$992,143 17.7 %$983,046 15.3 %
EMEA59,709 16.8 %51,772 13.6 %192,644 16.4 %186,089 13.9 %
APAC15,304 30.0 %14,790 26.9 %48,588 27.8 %46,873 26.1 %
Consolidated$408,870 18.0 %$399,258 15.8 %$1,233,375 17.8 %$1,216,008 15.3 %


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North America's gross profit for the three months ended September 30, 2023 was relatively flat, increasing $1.2 million, compared to the three months ended September 30, 2022. As a percentage of net sales, gross margin expanded approximately 210 basis points to 17.9% for the third quarter of 2023. The year over year net expansion in gross margin was primarily attributable to the following:
An increase in services margin of 213 basis points compared to the same period in the prior year.
The increase in services margin reflects an increase in fees for cloud solutions, an increase in margin contribution from Insight Core services (consisting of Insight Delivered and managed services) and an increase in software maintenance.
North America's gross profit for the nine months ended September 30, 2023 increased 1%, or $9.1 million, compared to the nine months ended September 30, 2022. As a percentage of net sales, gross margin expanded approximately 240 basis points to 17.7% for the nine months ended September 30, 2023. The year over year net expansion in gross margin was primarily attributable to the following:
A net increase in product margin of 46 basis points, year over year, and an increase in services margin of 194 basis points compared to the same period in the prior year.
The increase in services margin reflects an increase in fees for cloud solutions and an increase in margin contribution from Insight Core services.
The increase in product margin is due in part to a shift away from lower margin devices towards higher margin infrastructure sales and also sales of software at higher margins partially due to changes in product and client mix.

EMEA's gross profit for the three months ended March 31,September 30, 2023 decreased 6%increased 15%, or $3.9$7.9 million, year toover year (increasing 1%7% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended March 31,September 30, 2022. As a percentage of net sales, gross margin expanded 210320 basis points, year over year. The year over year net expansion in gross margin was attributable to the following:

A net increase in product margin of 7099 basis points and an increase in margin from services net salesmargin of 137222 basis points.
The increase in product margin is primarily the result of sales of hardware and software at higher margins than in the same period in the prior year.
The increase in services margin is primarily the result of higher fees from cloud solutions and an increaseexpansion in net sales of software maintenance.margin on Insight Core Services, including from Amdaris.

EMEA's gross profit for the nine months ended September 30, 2023 increased 4%, or $6.6 million, year over year (also increasing 4% when excluding the effects of fluctuating foreign currency exchange rates), compared to the nine months ended September 30, 2022. As a percentage of net sales, gross margin expanded approximately 250 basis points, year over year. The year over year net expansion in gross margin was attributable to the following:

A net increase in product margin of 67 basis points and an increase from services margin of 184 basis points.
The increase in product margin is primarily the result of sales of hardware and software at higher margins than in the same period in the prior year.
The increase in services margin is primarily the result of fees from cloud solutions and an expansion in margin on Insight Core Services, including from Amdaris.


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APAC's gross profit for the three months ended March 31,September 30, 2023 increased 9%3%, or $1.3$0.5 million, year over year (increasing 14%6% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended March 31,September 30, 2022. As a percentage of net sales, gross margin contracted 120expanded approximately 310 basis points, year toover year. The year toover year net declineexpansion in gross margin was primarily attributable to the following:

A decrease in product margin of 56 basis points and a declineAn increase in services margin of 68308 basis points.
The declineexpansion in product margin was due to higher volume of software net sales with public sector clients at lower margins than in the prior year period.
The contracted services margin was driven by lowerhigher margins on Insight Core services and lowera higher percentage of cloud solutions recognized on a net basis.

APAC's gross profit for the nine months ended September 30, 2023 increased 4%, or $1.7 million, year over year (increasing 8% when excluding the effects of fluctuating foreign currency exchange rates), compared to the nine months ended September 30, 2022. As a percentage of net sales, gross margin expanded approximately 170 basis points, year over year. The year over year net expansion in gross margin was primarily attributable to the following:

An expansion in services margin of software maintenance partially offset175 basis points.
The expansion in services margin was driven by higher volumemargins on Insight Core services and a higher percentage of cloud solutions recognized on a net basis.
Operating Expenses.
Selling and Administrative Expenses. Selling and administrative expenses for the three months ended September 30, 2023 were relatively flat, increasing $1.5 million compared to the three months ended September 30, 2022 (also flat when excluding fluctuating foreign currency exchange rates). Selling and administrative expenses increased $12.4$26.1 million, or 4% (increasing 6%3% (also increasing 3% when excluding fluctuating foreign currency exchange rates), for the threenine months ended March 31,September 30, 2023 compared to the threenine months ended March 31,September 30, 2022.
Selling and administrative expenses increased approximately 210150 basis points as a percentage of net sales in the three months ended March 31,September 30, 2023 compared to the three months ended March 31,September 30, 2022. The overall net increase in selling and administrative expenses reflects an increase in other expenses of $9.1 million and an $8.4 million increase in personnel costs, including teammate benefits, year over year.$3.0 million. The increase in other expenses was driven by an increasecosts incurred related to a third-party data center service outage partially offset by a decrease in service agreement fees and third partythird-party transformation costs incurred in the current quarter to support our strategic plan. On July 29, 2023, a third-party data center that hosts network environments for certain Insight managed services clients, experienced a security incident that resulted in a service outage at the data center. The incident did not impact any of Insights' information systems, credentials, or data. To support our clients that were impacted, the Company paid for certain equipment and services required to resolve the outage.
Selling and administrative expenses increased approximately 200 basis points as a percentage of net sales in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.The overall net increase in selling and administrative expenses reflects an increase in personnel costs, including teammate benefits of $19.5 million, and a $13.3 million increase in other expenses, year over year. The increase in personnel costs reflects an increase in overall teammate headcount and the impact of merit increases in the current year period. The increase in other expenses was driven by costs incurred related to a third-party data center service outage and an increase in third-party transformation costs incurred in the current year period to support our strategic plan.These increases were partially offset by a $7.1$5.8 million decrease in professional fees, year to year.
Severance and Restructuring Expenses, Net. During the three months ended March 31, 2023, we recorded severance and restructuring expense, net of adjustments, of approximately $3.8 million. Comparatively, during the three months ended March 31, 2022, we recorded severance and restructuring expense, net of adjustments, of approximately $1.4 million. The charges primarily related to a realignment of certain roles and responsibilities.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Severance and Restructuring Expenses, Net. During the three months ended September 30, 2023, we recorded severance and restructuring expense, net of adjustments, of approximately $2.9 million. Comparatively, during the three months ended September 30, 2022, we recorded severance and restructuring expense, net of adjustments, of approximately $0.7 million. The charges in both periods primarily related to a realignment of certain roles and responsibilities.
During the nine months ended September 30, 2023, we recorded severance and restructuring expense, net of adjustments, of approximately $3.0 million, reflecting a net gain on sale of property due to restructuring of $6.8 million. This gain was offset by severance expense, net of adjustments, of approximately $9.8 million. Comparatively, during the nine months ended September 30, 2022, we recorded severance and restructuring expense, net of adjustments, of approximately $2.8 million. The charges in both periods primarily related to a realignment of certain roles and responsibilities.
Acquisition and integration related expenses. During the three months ended September 30, 2023, we recorded acquisition and integration related expenses of approximately $4.3 million. During the three months ended September 30, 2022, we had no significant comparable activity. The expenses in the current year period related primarily to the acquisition of Amdaris in August 2023. As the Company executes its acquisition strategy, we expect to incur additional acquisition expenses.
During the nine months ended September 30, 2023, we recorded acquisition and integration related expenses of approximately $4.4 million. During the nine months ended September 30, 2022, we recorded acquisition and integration related expenses of approximately $1.6 million. The expenses in the current year period related primarily to the acquisition of Amdaris in August 2023. The expenses in the prior year period primarily related to the acquisition of Hanu in June 2022.
Earnings from Operations. Earnings from operations decreased 3%increased 2%, or $2.4$1.6 million, for the three months ended March 31,September 30, 2023 compared to the three months ended March 31,September 30, 2022. Our earnings from operations and earnings from operations as a percentage of net sales by operating segment were as follows for the three and nine months ended March 31,September 30, 2023 and 2022 (dollars in thousands):
Three Months Ended March 31,Three Months Ended September 30,Nine Months Ended September 30,
2023% of
Net Sales
2022% of
Net Sales
2023% of
Net Sales
2022% of
Net Sales
2023% of
Net Sales
2022% of
Net Sales
North AmericaNorth America$63,186 3.4 %$64,560 3.1 %North America$86,083 4.6 %$82,262 3.9 %$244,705 4.4 %$251,095 3.9 %
EMEAEMEA10,281 2.4 %11,376 2.1 %EMEA1,681 0.5 %4,210 1.1 %28,229 2.4 %33,554 2.5 %
APACAPAC3,994 6.3 %3,913 7.1 %APAC4,098 8.0 %3,807 6.9 %15,000 8.6 %15,035 8.4 %
ConsolidatedConsolidated$77,461 3.3 %$79,849 3.0 %Consolidated$91,862 4.1 %$90,279 3.6 %$287,934 4.1 %$299,684 3.8 %
North America's earnings from operations for the three months ended March 31,September 30, 2023 decreased $1.4increased $3.8 million, or 2%5%, compared to the three months ended March 31,September 30, 2022. As a percentage of net sales, earnings from operations increased by approximately 3070 basis points to 3.4%4.6%. The increase in earnings from operations was primarily driven by the decrease in selling and administrative expenses. This was partially offset by increases in severance and restructuring expense, net and acquisition and integration related expenses when compared to the three months ended September 30, 2022.


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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
North America's earnings from operations for the nine months ended September 30, 2023 decreased $6.4 million, or 3%, compared to the nine months ended September 30, 2022. As a percentage of net sales, earnings from operations increased by approximately 50 basis points to 4.4%. The decrease in earnings from operations was primarily driven by increasesthe increase in selling and administrative expenses and severance and restructuring expenses,expenses. This was partially offset by an increase in gross profit when compared to the threenine months ended March 31,September 30, 2022.
EMEA's earnings from operations for the three months ended March 31,September 30, 2023 decreased $1.1$2.5 million, or 10%60% (decreasing 4%65% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended March 31,September 30, 2022. As a percentage of net sales, earnings from operations increaseddecreased by approximately 60 basis points to 0.5%. The decrease in earnings from operations was driven by an increase in selling and administrative expenses and acquisition and integration related expenses, partially offset by an increase in gross profitcompared to the three months ended September 30, 2022.
EMEA's earnings from operations for the nine months ended September 30, 2023 decreased $5.3 million, or 16% (also decreasing 16% when excluding the effects of fluctuating foreign currency exchange rates), compared to the nine months ended September 30, 2022. As a percentage of net sales, earnings from operations decreased by approximately 10 basis points to 2.4%. The decrease in earnings from operations was driven by the decrease in gross profit, partially offset by a decreasean increase in selling and administrative expenses and acquisition and integration related expenses, partially offset by an increase in gross profitcompared to the threenine months ended March 31,September 30, 2022.
APAC's earnings from operations for the three months ended March 31,September 30, 2023 increased $0.1$0.3 million, or 2%8% (increasing 5%9% when excluding the effects of fluctuating foreign currency exchange rates), compared to the three months ended March 31,September 30, 2022. As a percentage of net sales, earnings from operations decreasedincreased by approximately 80110 basis points to 6.3%8.0%. The increase in earnings from operations was driven by an increase in gross profit partially offset by an increase in selling and administrative expenses compared to the three months ended March 31,September 30, 2022.
APAC's earnings from operations for the nine months ended September 30, 2023 was flat (increasing 3% when excluding the effects of fluctuating foreign currency exchange rates), compared to the nine months ended September 30, 2022. As a percentage of net sales, earnings from operations increased by approximately 20 basis points to 8.6%. Earnings from operations reflects an increase in gross profit offset by an increase in selling and administrative expenses compared to the nine months ended September 30, 2022.
Non-Operating (Income) Expense.
Interest Expense, Net. Interest expense, net primarily relates to borrowings under our financing facilities and the Notes and imputed interest under our inventory financing facilities, partially offset by interest income generated from interest earned on cash and cash equivalent bank balances. Interest expense, net for the three months ended March 31,September 30, 2023 increased 28%3%, or $2.3$0.3 million, compared to the three months ended March 31,September 30, 2022. The increaseThis was primarily due to higher interest rates under our ABL facility.facility partially offset by increased interest income and decreased imputed interest under our inventory financing facilities. Interest expense, net for the nine months ended September 30, 2023 increased 9%, or $2.6 million, compared to the nine months ended September 30, 2022. The increase in the nine months ended September 30, 2023 was due to higher interest rates under our ABL facility, partially offset by higher interest income and decreased imputed interest under our inventory financing facilities.
Imputed interest under our inventory financing facilities was$4.0 $3.2 million and $10.7 million for the three and nine months ended March 31,September 30, 2023, respectively, compared to $4.3$3.8 million and $11.9 million for the three and nine months ended March 31, 2022.September 30, 2022, respectively. The decreases in imputed interest under our inventory financing facilities was a result of lower average daily balances under the facilities during the periods. For a description of our various

Other Expense (Income), Net. Other expense (income), net changed $3.6 million, from other income, net of $2.8 million in the three months ended March 31, 2022, compared to other expense, net of $0.8 million in the three months ended March 31, 2023. The change primarily related to foreign currency exchange losses resulting from foreign currency transactions, including foreign currency derivative contracts and intercompany balances that are
27


not considered long-term in nature. Seefinancing facilities, see Note 125 to our Consolidated Financial Statements in Part II,I, Item 81 of our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information.this report.

Income Tax Expense. Our effective tax rate of 24.7% for the three months ended March 31,September 30, 2023 was lower than our effective tax rate of 25.3% for the three months ended September 30, 2022. The decrease in the effective tax rate for the three months ended September 30, 2023 was primarily due to the release of reserves for uncertain tax positions whose statute expired during the quarter, partially offset by higher taxes on earnings in foreign jurisdictions.

Our effective tax rate of 25.4% for the nine months ended September 30, 2023 was higher than our effective tax rate of 24.1%25.1% for the threenine months ended March 31,September 30, 2022. The increase in ourthe effective tax rate for the nine months ended September 30, 2023 was primarily due to a reductionhigher taxes on earnings in research and development and other tax credits,foreign jurisdictions, partially offset by higher excess tax benefits on the settlement of employee share-based compensation in the current year period.year.



Table of Contents
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 threenine months ended March 31,September 30, 2023 and 2022 (in thousands):
Three Months Ended
March 31,
Nine Months Ended
September 30,
2023202220232022
Net cash provided by (used in) operating activitiesNet cash provided by (used in) operating activities$160,160 $(284,239)Net cash provided by (used in) operating activities$413,742 $(205,885)
Net cash used in investing activitiesNet cash used in investing activities(9,106)(25,745)Net cash used in investing activities(96,430)(126,200)
Net cash (used in) provided by financing activitiesNet cash (used in) provided by financing activities(140,654)319,954 Net cash (used in) provided by financing activities(235,628)377,505 
Foreign currency exchange effect on cash, cash equivalent
and restricted cash balances
Foreign currency exchange effect on cash, cash equivalent
and restricted cash balances
1,652 969 
Foreign currency exchange effect on cash, cash equivalent
and restricted cash balances
(1,074)(12,710)
Increase in cash, cash equivalents and restricted cashIncrease in cash, cash equivalents and restricted cash12,052 10,939 Increase in cash, cash equivalents and restricted cash80,610 32,710 
Cash, cash equivalents and restricted cash at beginning of periodCash, cash equivalents and restricted cash at beginning of period165,718 105,977 Cash, cash equivalents and restricted cash at beginning of period165,718 105,977 
Cash, cash equivalents and restricted cash at end of periodCash, cash equivalents and restricted cash at end of period$177,770 $116,916 Cash, cash equivalents and restricted cash at end of period$246,328 $138,687 
Cash and Cash Flow
Our primary uses of cash during the threenine months ended March 31,September 30, 2023 were to fund repurchases of our common stock and pay down the ABL facility.acquisition of Amdaris.
Operating activities provided $160.2$413.7 million in cash during the threenine months ended March 31,September 30, 2023, compared to cash used in operating activities of $284.2$205.9 million during the threenine months ended March 31,September 30, 2022.
Capital expenditures were $9.1$29.1 million and $25.7$59.3 million for the threenine months ended March 31,September 30, 2023 and 2022, respectively.
During the threenine months ended March 31,September 30, 2023, we repurchased $117.1$217.1 million of our common stock compared to no$25.0 million of repurchases during the threenine months ended March 31,September 30, 2022.
Net repaymentsborrowings under our ABL facility during the threenine months ended March 31,September 30, 2023 were $123.8$34.3 million compared to net borrowings of $320.0$392.3 million during the threenine months ended March 31,September 30, 2022.
We had net borrowingsrepayments under our inventory financing facilities of $108.3$32.5 million during the threenine months ended March 31,September 30, 2023 compared to net borrowings of $6.7$23.0 million during the threenine months ended March 31,September 30, 2022.
We anticipate that cash flows from operations, together with the funds available under our financing facilities, will be adequate to support our expected cash and working capital requirements for operations as well as other strategic investments over the next 12 months and beyond. We expect existing cash and cash flows from operations to continue to be sufficient to fund our operating cash activities and cash commitments for investing and financing activities, such as capital expenditures, strategic acquisitions, repurchases of our common stock, debt repayments and repayment of our inventory financing facilities for the next 12 months. We currently expect to fund known cash commitments beyond the next 12 months through operating cash activities or other available financing resources.
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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
currently expect to fund known cash commitments beyond the next 12 months through operating cash activities or other available financing resources.
Net cash provided by (used in) operating activities
Our cash conversion cycle is inverted, meaning on average we pay our partners on terms shorter than we receive payments from our clients. This means we generate more cash in our operations in periods of sequential decline in sales and particularly in hardware net sales.
Cash flow provided by operating activities in the first threenine months of 2023 was $160.2$413.7 million compared to cash used in operating activities of $284.2$205.9 million in the first threenine months of 2022.
The increase in cash flow from operating activities was primarily driven by the decline in hardware net sales in the current year period and changes in partner mix.

Our consolidated cash flow operating metrics were as follows:
Three Months Ended
March 31,
Three Months Ended
September 30,
2023202220232022
Days sales outstanding in ending accounts receivable (“DSOs”) (a)
Days sales outstanding in ending accounts receivable (“DSOs”) (a)
120 103 
Days sales outstanding in ending accounts receivable (“DSOs”) (a)
125 111 
Days inventory outstanding (“DIOs”) (b)
Days inventory outstanding (“DIOs”) (b)
12 15 
Days inventory outstanding (“DIOs”) (b)
15 
Days purchases outstanding in ending accounts payable (“DPOs”) (c)
Days purchases outstanding in ending accounts payable (“DPOs”) (c)
(99)(77)
Days purchases outstanding in ending accounts payable (“DPOs”) (c)
(99)(80)
Cash conversion cycle (days) (d)
Cash conversion cycle (days) (d)
33 41 
Cash conversion cycle (days) (d)
35 46 
(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 9092 days.
(b)Calculated as the balance of inventories 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 9092 days.
(c)Calculated as the sum of the balances of accounts payable – trade and accounts payable – inventory financing 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 9092 days.
(d)Calculated as DSOs plus DIOs, less DPOs.
Our cash conversion cycle was 3335 days in the firstthird quarter of 2023, down 811 days from the firstthird quarter of 2022.
The net changes were a result of a 2219 day increase in DPOs and a 36 day decrease in DIOs, partially offset by a 1714 day increase in DSOs. The increase in DPOs is primarily due to the impacts of netting on certain transaction streams (agent net revenue) that flow through accounts payable on a gross basis while flowing through our income statement on a net basis. The increase is also due to changes in partner mix, including an increasepartially offset by a decrease in the balances onuse of our inventory financing facilities which have longer payment terms than discount vendors.facilities. The increase in DSOs is primarily due to the impacts of netting on certain revenue streams (agent net revenue) that flow through accounts receivable on a gross basis while flowing through our income statement on a net basis. The decrease in DIOs is due to a return to normalized inventory levels.
Our cash conversion cycle is impacted by netted costs that we apply to our services net sales to appropriately record net sales that we earn as an agent. These netted costs, while excluded from both net sales and cost of goods sold, are processed
29

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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
and applied to accounts receivable and accounts payable in each reporting period. As a result, our DSO and DPO calculated on the basis of unadjusted net sales and unadjusted cost of goods sold are inherently inflated. Netted costs were $1.7 billion and $1.3$1.6 billion in the firstthird quarter of 2023 and 2022, respectively. Adjusting our


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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
cash conversion cycle calculation by adding netted costs to both daily net sales and daily cost of goods sold results in a reduction to our cash conversion cycle from 3335 days down to 2325 days in the firstthird quarter of 2023 and from 4146 days down to 3031 days in the firstthird quarter of 2022.
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 to take advantage of supplier discounts.
We intend to use cash generated in the remainder of 2023 in excess of working capital needs to pay down our ABL facility and inventory financing facilities to fund repurchases of our common stock and for strategic acquisitions.
Net cash used in investing activities
We acquired Amdaris for approximately $82.9 million, net of cash and cash equivalents acquired and excluding earn outs and hold backs in the nine months ended September 30, 2023.
We acquired Hanu for approximately $68.2 million, net of cash and cash equivalents acquired and excluding earn outs and hold backs in the nine months ended September 30, 2022.
Capital expenditures were $9.1$29.1 million and $25.7$59.3 million for the threenine months ended March 31,September 30, 2023 and 2022, respectively. The majority of the capital expenditures in the first threenine months of 2022 were used for our global corporate headquarters with no comparable activity in the first threenine months of 2023.
We received proceeds from the sale of assets, including our properties held for sale, of $15.5 million in the nine months ended September 30, 2023.
We expect capital expenditures for the full year 2023 to be in a range of $55.0$40.0 to $60.0$45.0 million.
Net cash (used in) provided by financing activities
During the threenine months ended March 31,September 30, 2023, we had net repaymentsborrowings under our ABL facility that decreasedincreased our outstanding long-term debt balance by $123.8$34.3 million.
During the threenine months ended March 31,September 30, 2022, we had net borrowings under our ABL facility that increased our outstanding long-term debt balance by $320.0$392.3 million.
We had net borrowingsrepayments under our inventory financing facilities of $108.3$32.5 million during the threenine months ended March 31,September 30, 2023 compared to net borrowings of $6.7$23.0 million during the threenine months ended March 31,September 30, 2022.
During the threenine months ended March 31,September 30, 2023, we repurchased $117.1$217.1 million of our common stock.
During the threenine months ended March 31,September 30, 2022, we did not repurchase anyrepurchased $25.0 million of our common stock.
We paid $10.7 million, the majority of the earnout associated with the Hanu acquisition, in the nine months ended September 30, 2023.

Financing Facilities
Our debt balance as of March 31,September 30, 2023 was $515.5$673.0 million, including our finance lease obligations for certain IT equipment and other financing obligations.
We expanded the maximum borrowing capacity under our ABL facility in July 2022 from $1.2 billion to $1.8 billion.
Our objective is to pay our debt balances down while retaining adequate cash balances to meet overall business objectives.


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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
The Notes are subject to certain events of default and certain acceleration clauses. As of March 31,September 30, 2023, 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 March 31,September 30, 2023, we were in compliance with all such covenants.
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INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
We also have agreements with financial intermediaries to facilitate the purchase of inventory from various suppliers under certain terms and 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 $705.0 million, of which $410.1$269.2 million was outstanding at March 31,September 30, 2023.
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. As of March 31,September 30, 2023, we had approximately $142.3$206.0 million in cash and cash equivalents in certain of our foreign subsidiaries, primarily residing in Canada and 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 or through actual dividend distributions.
Off-Balance Sheet Arrangements
We have entered into off-balance sheet arrangements, which include indemnifications. The indemnifications are discussed in Note 78 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 our off-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
ThereOther than as described in Note 8 to the Consolidated Financial Statements in Part I, Item 1 of this report, there have been no material changes in our reported contractual obligations, as described under “Cash Requirements From 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, 2022.
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INSIGHT ENTERPRISES, INC.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
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 Form 10-K for the year ended December 31, 2022.
Although our Notes are based on a fixed rate, changes in interest rates could impact the fair market value of such Notes. As of March 31,September 30, 2023, the fair market value of our Notes was $732$753.1 million. For additional information about our Notes, see Note 45 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 under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and determined that as of March 31,September 30, 2023 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, as appropriate, to allow timely decisions regarding required disclosure.
Change in Internal Control over Financial Reporting
There was no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) in the most recent fiscal quarterthree months ended September 30, 2023 that has materially affected, or is reasonably likely to materially affect, 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.
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INSIGHT ENTERPRISES, INC.
Part II – OTHER INFORMATION
Item 1. Legal Proceedings.
ForThere are no material pending legal proceedings to which we are a discussionparty or of which any of our property is the subject. From time to time, we are party to various routine legal proceedings incidental to the business, see “– Legal Proceedings” in Note 78 to the Consolidated Financial Statements in Part I, Item 1 of this report, which section is incorporated by reference herein.report.
Item 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 Form 10-K for the year ended December 31, 2022 (the “Annual Report”), which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K 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.
Item 2. Unregistered Sales of Equity Securities, and Use of Proceeds.Proceeds, and Issuer Purchases of Equity Securities.
There were no unregistered sales of equity securities during the three months ended March 31,September 30, 2023.
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 ABL facility contains certain covenants that, if not met, restrict the payment of cash dividends.
Issuer Purchases of Equity Securities
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
January 1, 2023 through January 31 2023201,747 $104.08 201,747 $196,088,653 
February 1, 2023 through February 28, 2023119,677 130.32 119,677 180,492,491 
March 1, 2023 through March 31, 2023592,021 136.03 592,021 99,958,155 
Total913,445 913,445 
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, 2023 through July 31 2023— $— — $200,020,373 
August 1, 2023 through August 31, 2023— — — 200,020,373 
September 1, 2023 through September 30, 2023— — — 200,020,373 
Total— — 
On May 6, 2021, we announced that our Board of Directors had authorized the repurchase of up to $125,000,000 of our common stock. On September 19, 2022, we announced that our Board of Directors had authorized the repurchase of up to $300,000,000$300.0 million of our common stock, including the $50,000,000$50.0 million that remained available from the prior authorization. On May 18, 2023, we announced that our Board of Directors authorized the repurchase of up to $300.0 million of our common stock, including $100.0 million that remained available from the prior authorization. As of March 31,September 30, 2023, approximately $99,958,155$200.0 million remained available for repurchases under this share repurchase plan.
In accordance with the share repurchase plan, 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 number 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.


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INSIGHT ENTERPRISES, INC.
Item 3. Defaults Upon Senior Securities.
Not applicable.
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INSIGHT ENTERPRISES, INC.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Not applicable.Rule 10b5-1 Trading Plans
During the three months ended September 30, 2023, none of our directors or executive officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (each as defined in Item 408(a) of Regulation S-K).
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INSIGHT ENTERPRISES, INC.
Item 6. Exhibits.
Incorporated by Reference
Exhibit
Number
Exhibit DescriptionFormFile No.
Exhibit
Number
Filing
Date
Filed/Furnished
Herewith
3.110-K000-250923.1February 17, 2006
3.28-K000-250923.1May 21, 2015
3.38-K000-250923.2May 21, 2015
4.1Specimen Common Stock Certificate (P)S-133-861424.1January 20, 1995
10.1X
10.2X
31.1X
31.2X
32.1X
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL documentX
101.SCHInline XBRL Taxonomy Extension Schema DocumentX
101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentX
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentX
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentX
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentX
104Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)X
Incorporated by Reference
Exhibit
Number
Exhibit DescriptionFormFile No.
Exhibit
Number
Filing
Date
Filed
Herewith
3.110-K000-250923.1February 17, 2006
3.28-K000-250923.1May 21, 2015
3.38-K000-250923.2May 21, 2015
31.1X
31.2X
32.1*
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL documentX
101.SCHInline XBRL Taxonomy Extension Schema DocumentX
101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentX
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentX
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentX
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentX
104Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)X
(p)Paper exhibit.*    Furnished herewith.
35

Table of Contents
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:MayNovember 2, 2023INSIGHT ENTERPRISES, INC.
By:/s/ Joyce A. Mullen
Joyce A. Mullen
President and Chief Executive Officer
(Duly Authorized Officer)
By:/s/ Glynis A. Bryan
Glynis A. Bryan
Chief Financial Officer
(Principal Financial Officer)
By:/s/ Rachael A. Crump
Rachael A. Crump
Global Corporate ControllerChief Accounting Officer
(Principal Accounting Officer)
36