NSIT - Earnings call transcript Q4 2020 | Insight Enterprises, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Insight Enterprises Fourth and Full Year 2020 Operating Results Conference Call. At this time all participants are in a listen-only mode. After the speaker presentation there will a question-and-answer session. [Operator Instructions]. I would now like to hand the conference over to Ms. Officer. Financial Chief Bryan, Glynis Thank you. go ma'am. Please ahead,

Glynis Bryan

Officer. quarter Shelby. the Ken President Insight you, be I'm the for Glynis Executive Welcome XX, Financial and ended Today, and everyone joining for discussing joining the results operating of you Bryan, thank company’s full Enterprises XXXX. Lamneck, will year December and we Thank and Officer earnings Insight, Chief call. conference is me Chief

this today’s morning at If will X-K, not measures adjusted be posted as Relations archived release diluted a as capital. earnings can time. we earnings that measures non-GAAP and a of Securities to copy refer question-and-answer our adjusted express accessed discuss available time-sensitive only you and approximately February it on call, limited interest of return call by to share, Form page the An EBITDA, earnings adjusted. measures in year filed the financial you associated conference webcast our or accurate the written Enterprises. is insight.com the refer today’s depreciation, call adjusted of and consent website today, Exchange and rebroadcast is we information completion XX, earnings remain taxes, amortization call This section. financial XXXX. before Relations Insight include prohibited. be any a will and website and after retransmission, contain period, adjusted that including do measures In without This of Non-GAAP conference have our fourth Today’s operations, of Insight Investor and Any find on also full the to adjusted will is insight.com. conference of as Investor the in as the being call on with is at redistribution, two to call live property of was such per to invested from discussed XXXX be Commission our on call, form, this referring and strictly of the When referred results. copy under for we will will call the quarter website non-GAAP webcast hours Enterprises,

a find please measures in terms. highlighted the the results will unless reconciliation today. currency, of You actual note earlier accompanying rates GAAP that U.S. Also, adjusted all release for presentation these discussed dollar press issued as in included are and slide growth amounts constant and

on With the statements me today’s differ and about to let with subsequent SEC. to press to with risks following made that turn Finally, most the Ken? All call. cause could along that periodic slide this are greater over release discussed call These conference reports materially. and be you uncertainties are the forward-looking recently I in now remind made And we filings risks results will today’s during Ken. on our call subject forward-looking Slide will statements that will in begin and in filed X. are detail our that, you’re presentation, if

Kenneth Lamneck

their experience today This us and company as and fourth full a operating finances communities so to to as quarter through work saw is others XXXX year each joining past as across to for you actions We bravely their COVID-XX values difficulties while difference discuss did our of society our in navigated workers faced pandemic a heart, results. deserving teammates and social the our tirelessly, thank demonstrated of COVID-XX. we share teammates everyone, the Insight the it have and of Hello we challenging one from and time, a our most year who further make and demonstrated and fight as fair our harmony. globe whole, the essential company around and the distribution had together donated our hunger, printing by day against equipment warehouse XD core issues we was face talent, shields. living values they of complex attention, center and justice a reported needed at This to important of

we So donation never could and of our deliveries, sanitizing the while helping quarter, most In have economy teammates the pressing proud monetary the of client's sourcing, be our IT be to pleased plan in focused to been advance, more support been through in donations fourth teammates and environment the many for answering family. demand incredible crisis. and Insight display as continued to and business our investment recovers. I required challenged hand part to culture needs not on with the have

cloud quarter, gross this helped fourth us growth in pushed including our year-over-year. the XX%. of the positive solutions, of integration margins and acceleration synergies, And the we drove adjusted combined of which growth double-digit effect warranty from cost PCM operations XX% with earnings to During achieve

from XX% flatten earnings solutions. Gross up compared up XX%, to last higher the of was GAAP and our billion period PCM quarter then per XX basis basis acquisition and basis results included of same diluted were cloud per XX. $X August reflecting fourth the expanded from XXXX. consolidated year-over-year, Adjusted sales million, margin share operations warranty year. $X.XX, year-over-year, year-over-year full results, operations net were fourth year-over-year. XXXX of mix Adjusted up share the points was closed on and on earnings quarter the the XX, for Specifically, earnings XX% XXXX, in X.X a having XX were earnings to GAAP XX%

billion, sales then we partially offset PCM and over was XXXX. reported business including during chain in Slide of year Moving was the But XXXX negative net and overall the of and of year our XXXX. the challenges certain X% full impact on results for to X, it full for of the demand by supply COVID-XX X.X an increase XXXX record

profit as a to focus compared XX% new in record XXXX. team's XX XX.X%, mix for help to services by gross improve margins points growing Cloud on Our XX% the to our solutions of percent company. increased and gross basis a

also basis service year-over-year gross XX% We profit to gross expanded points profit. consolidated of XXX

for XX% and cash a adjusted an diluted per company. was GAAP Our business record a full XXXX a On Adjustability $X.XX acceleration XXXX from to another earnings XXXX. generated XX% for us. Onto year for On gross full of represents $XXX growth expansion synergies XXXX. over XXXX, record an basis operations line earnings increase XXXX, GAAP increased Slide year combined the margin of including PCM acquisition discipline, the XX%. was for from operations XXXX earnings million the cost operations basis drove top share to results share $X.XX from compared expense and XX% for X, related per flow continued the over with of in up increase in

XXX XXXX year in adjusted XXX for Finally full million XXXX. compared EBITDA million the to was

we Slide we're on we our all pleased look with were circumstances. in X, under back proactive XXXX we approach Next to and as challenging business our before accomplished year

pandemic SAP for synergies. remote ensured safety integration retiring prioritized completely uncertain ERP felt most We workplaces into XXXX, As With the accelerating the We platform, wellbeing cost they in our of of supported and their closure most and during forced and PCM completed our the began of Insight’s roughly March teammates. of XX,XXX X was also some in these we and the systems work health enabled safety XXXX, our teammates important. times. COVID-XX

other essential in of and full with COVID-XX. We annualized run from are our help year we approximately ahead supplied across critical year savings clients solutions enabling previously Expertise allowed committed functions. Initially, million rate XX exiting other hardware solution challenges cost us one adapt by and to our areas work new to the schedule. presented home IP

Our digital the a customers. innovation environment platform connected solutions provide to detect their work employees for clients work -- help and prevent created solution our and a safe

see to North year relationships our hardware region the the with experience We grow engagement online creatively modernize mix sales. of digital hardware marketing. client began half and In bookings we recover in of with net continue the the reach America, highest to and second strong to

have positioned invested market our to as business place also as in a our to in drive talent help recover the to salesforce results clients ensure digital technical sales We and we environment. key well are highly compete in the continues outcomes to

diversity leadership including best recognitions practices. Foundation more social for world's with focus for Forbes America's and Forbes XXX in Fast development employers, of of XXX best than more recognized Company for culture, employers inclusive XX continued XXXX Awards several on Campaign benefits best Insight in to number LGBTQ year, List out on number inclusion, Human and XX key veterans. business teammate recognized Our XXX Fortune’s and Insight workplaces Rights on Changing this Ideas number good World be and acknowledged, for

was Canada solution Arizona, In recognized these Austria. work as regionally we United in top Kingdom, and Insight Italy XXX placements, to global recognized the and the three to number place best Phoenix, national were the Australia, Chicago, addition in providers. also

Insight the information was recognized recently Admired in Insight. XXXX, of choice technology on of the industry as employer prestigious the list first was seven Companies. service by time for Most Fortune’s placing World's This this receiving award an for number Additionally, Fortune,

Slide to on X. Now

we deliver the our IT against to XXXX, challenges clients. solutions navigated we strategy of As execute to continue to our

innovation architects, and technical for consultants deploy process recognized with consultancies With commercial constraints [indiscernible] the and maintains QX An to and team, to and were manage devices, Forrester fit models settings no which network the issues. new them. to and their performer strong in engineers, of solutions published design of computer connectivity. efforts that XXXX. manage was helped this vehicles, expertise Our deployed in current building Insight XXXX global solutions Digital Innovation innovative identify in computer or vision Insight by mobile across team Digital computers Innovation manufacturer vision expertise a Edge the highlighting vision named generators Forrester of example production our a to way the is hardware platform limited

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high our will optimize believe focus for operational outcomes with supply we're and investing today and them clients On -- transform services optimization competency of in as long-term organized business we and solution these include priorities, shareholders, critical manage forward priorities experience continuing our in three our intelligent is to Slide continuing our areas ensure scaling to markets, that market the to clients providing client end to deliver lastly, clients, segments Our the relentless in business with through value order and XX, we XXXX, execution imperatives operating which innovate key developing deliver and drive our our into clients, as committed for for by edge, remain expanding will to growth excellence. that our solutions move on help that partners for and We capture around better foundation strategic products the key our long-term teammates. our in cloud and such chain five-year and the share future. area the we

operational digital our continue XXXX, IT to deliver to these marketing and client have automation. includes a with XX% these market strong of percent critical robust to gross scalable future EBITDA To scale margins process reminder, go we XX% we that to invested expand are on platform a optimize increase of infrastructure to of and continuous and great business to to a As globally, an our plan also strategy a faster range services capital the than GP the between to goals at capabilities, experience XX% systems in X% invest areas CAGR, transformation X% support total and optimizing goal return to and profit processes, growth. In grow X.X%, to as XX%. a XX%, a market while culture

We we business provider expertise successfully intelligent clients an well-respected reseller with company from as our deep technology continue transformed to multiple IT make to as most. technology a areas and meaningful our value a across progress solution

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Glynis Bryan

operations services for meet We which operations. the the focused earnings billion flow have PCM to you, and and XX% to $X.X of controlling year-over-year. integration operating debt investments, our of from clients to our majority fund adjusted XXXX helped we selling margins earnings available Thank products, strong and discretionary business hardware cash the solutions level our from of on capital costs our And XX year-over-year. demand us record growth. this generated drive allowed infrastructure drive we were reduced Ken. to growth, points facility Today, recessionary growth environment on of up gross complement In particularly where future basis accelerated focused current

are expectations of volumes resilience the capital installed ahead business. return us XX%. versus cash invested expectations and management down flow COVID-XX, of original significantly discipline earnings we deliver with our helped demonstrates and This our cash in While adjusted the across performance our due on stronger performance business to model, our have performance

on to Slide realize we client channel last on X% higher continued down top to Moving were Despite quarter and hardware going XXXX. year, on across the to did decreases the services also imbalances not fourth billion hardware to on in in the net fourth America top into line and supply growth bookings ship sales. sales the -- North XX, due $X.X year-to-year for due quarter requirements

solutions, driven XXXX. fourth the year a with will gross earnings North margins the X% backlog up basis of year-over-year we also warranty elevated include which As we and strong $XX grew in decreased in from to growth that drove profits. flare year-over-year exit expect X% for and administrative XX% year-over-year. first half services year-over-year, the Selling XX was up America increase and Gross million. points cloud expenses adjusted by in results in result, These operations year-over-year profit XX% gross quarter

COVID-XX our earnings record chain Moving on on sales XX% warranty XX.X%. The on hardware XX, the of Margin demand, including a XXXX consecutive challenges. full offset certain the in profit to from by year-over-year, grew full year benefit year. synergy the our sales Expense grow and America earnings results year sales. points fifth adjusted year-over-year was us North which operations the XX acceleration allowed America impact and cloud makes to faster -- full in net much North in than business. annual Gross PCM for are double-digit and from in for the including also Digital new the basis year Slide of control benefit net partially of increased on grew recorded growth in a marking North PCM XX% XX% America particularly supply year-over-year. Gross of

X% sales, currency declined constant net Slide constant to and $XX in sales in constant on to Gross Adjusted the margins increase in net than EMEA the in sales. slower was operations services also on X% an profit fourth from declined Moving up currency. higher currency. due XX, million primarily X% in earnings quarter

our the effect results and to tariffs chain the full and than XXXX UK increased in UK cloud business December billion profit year-over-year software is in faster year-over-year up and Europe applied time. the cooperation offset agreement be between we've solutions. EU. will the the taxes impacted XXXX. X% business up a BREXIT in grew well materially region our the some goods including existing wrapped year $XX today. net this X% reported to million. trading constant region operated sales across on of clients positioned Under EMEA and the For sector in came not Strong across EMEA the healthy migration $X.X mix higher services our for model operations by We into the on shipped arrangement, in constant that growth duties public We believe sales. presence with from currency general and of continued constant there do XX% Gross serve XX, not negotiations new earnings in partially and of UK supply is currency. the has currency with Adjusted between sales clients cloud other to sales, EU December, and believe local new our to to was BREXIT Mainland and and customs position

XX% increased million to categories in in year-over-year sales APAC to gross earnings currency from XX% the the and $XX $XX This region. higher net to quarter. led adjusted to $X of across profit operations million quarter, and fourth Moving in due Slide sales on constant the all on of million XX, respectively,

increase year in compared in and operations Insight’s Slide in and result, spend full $XX the as professional year-over-year sales net from services. constant XX% discretionary for hardware disciplined software team X% our up XX% managing the year For primarily was by driven was a business delivered in to adjusted earnings declined currency. by XXXX. in The in on decreases constant currency XX, was million full a offset decline The APAC partially

profitability. cash around our Before I and some I'd taxes impacting to and business on provide color like strategy to mix go how our flow, is

long-term earlier, optimize profit X%, than noted key deliver we year invested including sales total a increased Ken meaningful progress to As EBITDA and line of profit. make of imperatives growth on capital, services return XXXX, ownership of top market, our are margin, In expand the value of faster full percentage as grow gross towards the PCM. goals, reporting these gross

adjusted basis integration our strong of to lower points cash XXX than consolidated plans. margins of also our EBITDA gross recession. and expectations of services than adjusted acceleration drove We sales, which the basis of generation, product finally percentage offsetting due our than We our more stronger expected profit by margin our earnings effects delivered And of GP XX services flow to due grew points faster a XX%, up PCM ROIC expanded as XX%. XXXX, ahead with XX% a our gross year-over-year year-over-year in to

to new for services annual gross primary growth record As was result, a driver our a expansion of XX.X%. margin the year-over-year

made as decrease million items rate tax Moving to state of cash compared operations our $XXX income, Act well a XX.X% $XXX rate XXXX. to tax performance for in on our of taxes, related state CARES XXXX Slide tax net in effective generated tax was million in XX, flow out by cash available offsetting our Rounding the The compared credits. and in rates, to XXXX XXXX. as XXXX to other was on in our XX.X%, benefits our tax result

more inverted, previously, As where management million with sales $XXX of we cash helped when quarter meaning paid drive and we has clients. allows is of slightly the in XXXX, in range have disciplined another to experienced this end along cash payments partners declined have which above our drive our highlighted from the our short the provided flow This sequentially. receive flow year, practices, we our terms cycle We this our we cash to cash top outlook. dynamic generation us

expect to following XX flow year-over-year. mix we such normalize conversion will and investments decrease million. collection of aging business $XXX We we will days effect as expect XXXX that cycle our cycle cash use conversion tight fourth accounts year our inventory, the to to be between in payment cash performance XXXX quarter, hardware, deployed shift grows, $XXX cash see the financing of PCM In we inventory of in for operations cash improved down the flow The our discipline items, full in days, recently the term, eight and was the year-over-year our practices more expanded from expanded as million as negotiated Insight’s from including around facilities, of our receivables benefited business. our

one net we the XXXX, buildings, million. the proceeds During saw of of in net $XX million proceeds the of fourth $XX two quarter fourth for quarter of and another

of France a company million to of lastly, closed was of the cash schedule. for the four million of for proceeds at $XX cash XX, to buildings $XX year, ratio, the the times At common have exiting $XX compares year fixed XXXX on XXXX. $XXX we full $X debt facilities $XXX to invested on this proceeds a We XXXX. February we shares position of with of the interest. XX-months million. purchase all investments. spent our balance cash acquire XXXX the sale our million was ahead had our PCM quarter XXXX buildings end in is in these is first failed debt December primarily in million balance over the We EBITDA, from was foreign end Total acquire a $XX of paid of total million. $XXX our taxes, the we've all sale million. net million, And used million CAPEX January our consulting of net of digital of [ph] of in stock year in $XXX at test technology these which resonant of the and of covenant compliance significantly over capital coverage well down which or the primary includes of agreement, incurred comfort. one within level year, end the to charge of a million flow $XXX we're debt XX, debt our from leveraged our of EBITDA and which cash trailing had of coverage We of of to Under down at XXXX at and and substantially just subsidiaries expenditures, ABL Slide On a outstanding

XXst, times As our requirements under one at we're minimum are requirement we of can December we just and five time, and against of capital needs. the confident support liquidity

pandemic, Moving positioning on preserve conditions XXXX market as took to to XX, improve. Slide and emerge to in profitability the reminder, we healthy business help our during competitive our a actions while as

not our volume spending travel. right our of bonus, business reduced discretionary such course we as and XXXX. to delivery commission, certain related variable rep due and incurred with in sales We COVID across were aligned financial trends sized and operational Specifically, XXXX expenses in impacts on platforms results,

one As rely we $XX service, our year back million grow which needs run year faster sales accelerated savings existing these PCM office -- in we stated of continue positioned to market timeline. the than the as of integration to we us ahead to our of on grow exit the plans organizations. around will and We rate XXXX, with work

-- expense improved into market discretionary increases XXXX, the conditions these and in expenses to combined we variable As expect business. and see in

to invest business in and growth. XXXX we in continue support our technical resources sales addition, In to

will a we of result, in be expect amortization XXXX. As net currently excluding approximately sales expense XX.X% SG&A

to steps balance in as IT Our outlook. in Ken. market will we us -- in good compete is a Ken IT back our sheet have review I'll the believe XXXX our emerge call XXXX. to XXXX capital we recovers, to the turn sufficient help growth we access to healthy, in to the support now the position took

Kenneth Lamneck

our you respect our outlook, the believe With we XXXX growth sales business We're Thank team's across compete. expect each we which strongly to and recover between our pleased net and XXXX markets X% Glynis. with is to poised to X%. in in resilience deliver of

convertible shows cost we earnings for severance average Thank million joining share the for again for $X.XX on full XXXX. XXXX diluted and XX expenses. us expense outlook assist the excludes be tax that XX XX% modeling, assumes want a million, and issuance page XX costs debt of build up Capital and adjusted actions, outlook to XX To by team. our million their intangibles our million of posted non-cash to rate for in between no and our This to including effective XXXX. of corporate questions. XX year on between full expected everything interest Insight, your they such for amortization will acquisition you related or do of assumes expect for That that debt culture again million with also the and have to the for discount, an restructuring thank my teammates schedule our XX count We across open and website of part quarter to expenditures share today the convertible incredible $X.XX. XX% now past an by per XX of wanting including as and Relations expense world display this be discount concludes comments the expense of of year lines new year once daily XX acquisition Investor full the interest million approximately year approximately million approximately shares. non-cash approximately expense out of for million and issuance headquarters, part the reported This for amortization of resiliency your the we related an

Operator

[Operator Instructions].

Matt of from Sheerin question Stifel. first Your is

Matthew Sheerin

everyone. backlog an about also good seeing start you premise in about we could morning, just better regarding that hardware commentary client And hardware, year? And about the so into for you. talking you and and you Ken we increase about projects? continuous got your and like in backlog to sounds thank as part strength are than talk first that question, lifts When going any on should or bookings My could question infrastructure about be QX Yes, of there. bookings devices is in seasonal talk are you've assume trends, it it some seasonal

Kenneth Lamneck

for Yeah, good Matt, thanks question it.

As infrastructure networking well. devices, in seeing certainly far as storage as the that hardware, we servers, the as are well across as

So I'd QX. And fully as say quarter into backlog elevated were with we did of much to that come couldn't and it's the pretty end as due as of at we balanced of seeing. increases that the did that the existing course, be far we're course, in supported mention, shortages booking

there chain are is certainly leading some continued a well. through we're market navigating that point from supply to although of view QX [indiscernible], So the still as that in constraints

Matthew Sheerin

Okay, so…

Glynis Bryan

Just one Matt. second

So expect seasonally will QX last be not QX than be stronger We're we saying QX stronger than of QX. that going to is that do year.

clear. to Just be

Matthew Sheerin

in mean Very Okay. of helpful. You of growth, year-on-year sort flattish? terms

and great. still infrastructure And others are your of just the sort tell? coming through you visibility to years, and that of talking back companies early of projects side, of then the about and in visibility some lot competitors improve getting terms it thing. that should still distributors shutdowns seeing of doing really can that is Okay, -- on the not bigger a because Are any

Kenneth Lamneck

occur become cloud of you sure. towards recover the the and your certainly the that not There become And off any are digital. Matt will we got for solution, more tell projects the be software in a our forever. these has to order premise isn't more to second at when company the what to believers make what that, just early course, talking it's all that that year about on we that business that to are environment. too clear that that we becoming And look drives pandemic digital. you or cycles that And it half in for put is of you've talked It's is infrastructure, modernize can't becoming in also isn't whether sure companies digital,

where much was ago. So that's we course, we do projects anywhere, that's mature or of to first of view lot a see a from But coming these working clients certainly collaboration it going on. than forefront support from was year, that's last year still as more completely point many how a addressing the people of focus

list their we the and forward. again, at they're environments companies top understand are more is think at going And now how how compete So the of look to to I digital. become effectively starting do going

Matthew Sheerin

And my SG&A us for the you XX.X. model, year the -- Okay, the regarding thank just gave you. question, percentage last your at

like that again into looks hardware, are margin would skew year up be or a So toward continuing could this you be like that growth little surprising, backing in could given margin services? see strong bit little more it to looks and a gross mix gross the

Glynis Bryan

XXXX than saw going that would in we growth the to about flat specifically gross to higher Matt, XXXX. your is be in we point year-over-year, anticipate margin seeing hardware

Matthew Sheerin

So flattened Thank okay. Great. year-on-year, you.

Operator

next is of Adam from question Tindle James. Your Raymond

Adam Tindle

us embedded I numbers? year morning. to to assumptions just if a this I'm in quantify those good wanted to they much the can guidance lapping X% still And very maybe strong just backlog the assumption? and for could thanks category, growth. some What wondering if for are in Okay, the that give grow, in embedded the start X% you on in X% it to X% you're year-over-year you possible, contributes think XXXX that of confidence to how that and particular, devices

Kenneth Lamneck

general from we forecast overall the economists these depending to think look you're that X% basically be the Yeah, how range. the as course typically to but that growth. region X% GDP that X% in as of see again, What cycles, and will grow about, X% it X% talking IT far is faster what than we in are GDP growth, most viewing anywhere the growth for is to I so in will so X% at

So should to rest services. the certainly, being you software hardware, the growth of look of XX% start to that's certainly regards come we devices, makeup being how business, we at it and our see. when the of our conclusions to have In that

same the is I front, category that. in way. there's infrastructure of So I a devices certainly that talked and lot the of But of growth to, about devices There's hearing a coming There's partners spend course. not on do in of of OEM you're in It's feel the the the XX%, sort believe only think constraints that certainly hardware largest specifically all they we lot segment. also segment, device sort plus ASP, refresh in the increased its seeing went XX% marketplace. Notebooks. that, from as significantly significantly of a is as think away they the have company pretty being XX% saw of come and now being you're of last course, of a the I Notebook Notebook that significantly you XX% year And course, being Desktop rate. higher balance driving Notebooks, higher with what's category the that,

Notebook I where have, they're maybe what might that sweated little there to and seeing many they also cycle, and course, years, a four these on a of at we're is devices bit that wear think that improve especially to looking So starting before. our clients, tear that OEM was as seeing as is that, more asset talked are we shorten partners than

for that the gives devices. So around reason certainly sort us optimism of

is the to always in than other overall the that that always market see devices channels thing The does. always the That's better out. do fact you'll seem proven

that So we track data. certainly

contributor won't do be last be substantial in as was be believe model. year, will will as we there to So but it growth -- a that it devices that growth

Adam Tindle

help and to represents X% way much backlog, in dollars? how X% in that Okay, the it much how with maybe is any or us to

Kenneth Lamneck

tremendous get wouldn't going that in are you I areas said, granular quarter. we contributor know, and of that certainly, there's, And to Adam, but so positive is that. as seeing the be Chrome we backlog Yeah, on constrained second as certainly like are a probably that forth, and indications it through

Adam Tindle

thought flat your about remarks, Matt’s about being clarification, a think and saying QX, in think, seasonal mid-single-digits response you terms I as question, you in Ken up I say Glynis talked you just prepared in were And year-over-year. heard talking QX, believe Understood. QX of but to I I above seeing I then, were

remarks your did say catch So help with maybe prepared just me that mid-single-digits or out incorrectly? I did in you

Kenneth Lamneck

from right. with scene. is QX, said And that in is you to you at in know, of in got I pretty No, strong a it QX, in that QX course, indicated I seasonal quarter year’s to year-over-year last quarter what seeing, mid-single-digit translates that the flattish us improvement is bookings What which as and be the rates booking range. improve this COVID coming juncture were on we

Adam Tindle

me, one times, continued total balance yes, bright helpful. their the to one is it a is its And sense, leverage getting Yes, healthy. cash around sheet has last been spot, make flow now for

flow coming. XXX With think does revisit acquisition that at about just you PCM priorities, the allocation talked I maybe backdrop it more capital point? as million the make operating size of this cash sense another for

Kenneth Lamneck

Yeah, been strategy. on part we'll to certainly the our look always M&A front, of key a it continue has

pay to certainly and focus to year the that So and continue focus invest but point both this view. do to in point facing at to doing for on of organically continuing in started in now, debt last view half on to client of a investing which resources we'll continue of down, business sales, stage, the do we technical sales back we're the

been And that's certainly look for bit that And priority in to dollars seeing well. a little So returning, as a us. shareholders. the SG&A always you're course, of back at then, we'll increase

So those continue to be our priorities.

Adam Tindle

Thanks Ken. Very helpful.

Operator

Your question Coster Morgan. next Paul is JP from of

Paul Chung

Hi, Chung for Thanks Coster. is question. my Paul thanks. on This for taking

think maybe kind large we cash is we say the free inflow year. cash like flow, half, of When seen normalization of the in in XXXX? seasonality in come bit you about some on a this usage performance year. as and your kind this that then of cash expect then improvement And should of very kind great DSOs, So, second down cables XQ

Glynis Bryan

driven around Yes, on we and the the wouldn't that because anticipate the change business flow, by in the cash that's the seasonal business. demands the seasonality

a assumption would be that Paul. So good

Paul Chung

is guidance, and spread larger the little the bit Okay, on than then sales usual. outlook a just

assume of half you see guidance gets some this end in assume indicators I hit as the range baking that distributed? COVID kind uncertainty, are then the are kind vaccine some the widely of acceleration top of but to second to of you need more So what and there's a

Kenneth Lamneck

it Yeah, everybody's to other right think gaining U.S. indicated got that half. is with I to there in certainly will that be Certainly, momentum, regards and the Paul, the due second fact stronger, you've countries. think the vaccine I the across

There in and out are looks that pretty vaccine So variants there concerning. optimistic. question still that certainly are

growth the IT, big the we sort last in of at So and when run what to sort that back end high of meet the teens the of are. might what rate. of look But substantial decline sort rebound in guidelines occurred in our during that lower It rebounded XXXX, needed in the saw you XXXX. was in economy

if X% is get think very, that, I I think very like So the doable. we anything

the So that's with sort of how we came modeling. up

this in correct of wider you're range. think sort I there's why So a

Paul Chung

be that, why your free normalization so lastly, this mean, up, be know you if of guidance, you'd to cash that, up, us? Okay, of help and I sales margins kind then on flow, slightly the CAPEX so year, your spend some I just what your up of flow some some are spending expected driving free I your do just flat, be flat, but is if know but why was to wouldn't you cash HQ just on couldn’t kind you the expect could follow-up

Glynis Bryan

end of growth that into growth. grow, because because we as as Ultimately, up we we go cycle. cycle grow, that it's inverted start to cash the to partly we we So have as flow using return more cash

in outstanding under into $XXX debt had had the QX end we ABL of of had what's driver. we debt, we million QX, debt going at that's no and QX as you our no under saw primary So ABL. And sorry, our the

that that of of business also So into into first that's driving was of XXXX backlog a XXXX. the also flow some will half the seeing through going that in the growth use cash you're going

Paul Chung

Thank you that's helpful. Okay, very much.

Operator

from is and question next Your Sidoti of Co. Lebiedzinski Anthony LLC.

Anthony Lebiedzinski

morning you taking guys. Thank good the Yes, for question.

far Chromebooks any you seeing for are as constraints? the other So, referenced, are you that as those supply chain primarily or

Kenneth Lamneck

displays than of shortage would Chromebook think more has I Certainly overall pretty glass significantly. course just sorts of we that certainly Chromebooks. the affect increased seeing and no notebooks probably is buying are and Anthony Yeah, biggest

concerning. also there's we're that. using that's So so much areas costs of seeing But -- not the are because helping it's that other

sort here last turvy been real consistent hasn't been right. for almost have processes It of the tipsy Our months, supply. XX

that bit to concern. be a little of So continues a

Apple I the think is future in gets own to as that of more their using alleviated course silicon. times committed

seen use You've announced and their silicon has own going announced to OWN their they're Silicon. devices, Microsoft use going their they're in Samsung surface

memory term of that longer goes we're next well that's that for of shortages more here but that recovery also think or alleviate a that than the signs of as of certainly sort two. and I seeing is more course used. There's course does occurring what are of So, -- some quarter

seeing are You devices themselves. the fact automotive they get enough complain about can't

and but a lot a goes supply the certainly reason normally flow. focus of are on certainly that. products this not stage, there's at improving infrastructure is like it chain would also across lead this full flowing times lead times it stage, by stretching are definitely at but alarm it and It's impacted So not for

Anthony Lebiedzinski

Got it.

the Thanks as Ken. as And then the first to half far for back at the the expecting color, that. just looking that year, belt? that little integrated, be so you for could ability had better as as had seen than you're it for that fully a far guidance appreciate just Okay. Definitely you've and to as wondering now as that talk now have PCM win customers a PCM your under you've but you new growth customers your from bit just while, far versus you've half, if existing

Kenneth Lamneck

the And that, of on Yeah other COVID course, optimistic for we Anthony, XXXX during question. really especially was year heavy much a this for integrated are fact environment growth PCM, where last were reasons, think we the I is doing year remotely. one the of of good

white to and So interface EDI imagine glove our over systems and operating transactions. you internally can new and platforms people web the of numbers to clients

That's XXXX. of So you we us internally now all expect enter of size. acquisition certainly do that when an you'd focused behind that very a lot well as

So, that that's our a clients and understand all those fully all certainly our of of our we reporting PCM tools. all of their believe systems, teammates of lot now

degree much an example. at this time operating last year certainly higher they as operated a than they're certainly efficiency So of

growth So us and for of also gives optimism business. that acceleration the certainly

Anthony Lebiedzinski

best you. Thank of luck. Got And it, alright.

Operator

Instructions]. [Operator

Your B. of Riley Securities. next is question Wiesenberger Marc from

Marc Wiesenberger

customer you successfully increase if to able about could those Thank where customer you, and good morning. of or these scope you across and things? could cohorts your you were some scale share cohorts Wondering if talk gains quantify wallet with

Kenneth Lamneck

cloud saw you business and I to is talked we of software public GPB for has us. certainly now strong GPB certainly where gained, when the we looked XX% We total certainly at be revenues cloud our continued Yeah, mean, again, GP. and

we're and lot we grow what there's And there. space to continuing in a to are the more continuing opportunity public QX we the share that certainly but gaining we data view, that in a growth, nicely fourth we know then about business invest we so area, what sector heavily XX% in sector very of in on good From we of So parts from saw a was And in public for much from came really that remaining continues of our those the they to pretty up our specifically the was sets, quarter client commercial comparison saw sector, in revenues were XX% of our point sets from that total represents range quarter grow business year-over-year. the and down and our areas. have the enterprise quarter our business X% clients are in that, public sets view. point

which so sort what how And sort again those was and saw from we QX market's where we significant categories. of of improvement that's out, a in played QX saw in the

Marc Wiesenberger

kind respective might evolve on within kind and of the and the changing would Great. in kind the XXXX if to business And, the the the in Thank that P&L? any you. of you and those maybe how talk that about you seasonality see expect impacts priorities and fourth quarter through impact typical cohorts, of we could of priorities the

Kenneth Lamneck

so. Yeah, think I don’t

it a more you are priorities, the perspective? about client from talk you when think I talking about

Marc Wiesenberger

Correct.

Kenneth Lamneck

on board and of focused ability improve Yeah, continually work across so they see their what the it's in course, anywhere. continued from for how to general clients we collaborate

a top way. secure priority certainly very to continues in a be that So

know, is So client's as list right. well of top every the security you

of So and becoming others lots course chances and there. a take clients to And of of the of any lot we've them a become mentioned more are of driving virtual, attention The remote more I getting none course digital. going earlier from all is exposed are dollars. front. more as substantial security ourselves is we security certainly course, Of of

digital, they there more oriented. in become priorities how they become more how e-commerce new So and

modernize significantly. then I public dovetails or nicely as innovation our because be that's And whether got area again helping the cloud. pretty digital clients private mentioned, So very to it is where you've of that course, infrastructure,

closely cohorts our certainly two those together experience. improving So -- client work our

is are certainly those everybody big the the certainly clients security our course work home everything being focused so AI focused all on. forth that as key collaboration Again, by are well digital as driven and key -- areas from So of drivers. of we're are and and on,

Marc Wiesenberger

involved term early, wondering gain the business? Great. me, And as for of how it's percent how private is very kind and total with starting aspirations of with a and that traction, XG I evolve but to and could Insight Thank still medium industrial IoT know on one final you. any IoT networks one I'm

Kenneth Lamneck

to cloud we've engaged the one We is that's believe love, of largest we we centers by certainly Yeah, comes evolve cloud, few cloud, know the we which clouds. centers to Mark very is the driven which the public intelligent and key that moving question. three as a It's there's a on. There's in know edge said, edge, are players, that data. as good very strongly from AND private will everything the data intelligent down area,

recover. edge little to bit more back to bit IoT XXXX, I the from and do in prioritization that muted COVID a will more clients, XXXX, we to continue do but become big our drive way. a things a we saw lot believe probably has a as in that that of of AI, little intelligent of our but accelerating in that that course enabled set expect start So through

positioned of that very, through And workforce very our digital edge that the managed supporting well in a and really again, at So, active believe also help where services. clients comes connected is do we emergence innovation where IoT. that's team for very we're that's to through

seeing, area some area a a good are spots but bright So future that's us growth for certainly company. in as we we believe that

Marc Wiesenberger

Great. very Thank much. you

Operator

is Colicchio Vincent question of Barrington from final Research. Our

Vincent Colicchio

were improve of sort is did Yeah. supply status of Ken, most at sequentially my issue, or answered, all constraint the it just that quo?

Kenneth Lamneck

little demand pretty improving I environment this it much booking through quo. stretched Yeah rates. to a bit the there. we QX our it and all as anticipate hope improve Certainly is sort that degree. see and think, status would probably Vincent. We're can seeing at And that in We got a of

think I on putting that. So that's more constraints

quarter ASP I increases sort it's we're through seeing as basis. going this on huge be little second catastrophic and constraints certainly But of a touch into So certainly daily something where think quarter. a situations monitoring, we're to of on bit this not Again, supply and go driving well. all type that

Vincent Colicchio

be clear, one savings you And are the then complete cost with last just for PCM? to

Glynis Bryan

Yes.

Vincent Colicchio

Okay, thank you.

Kenneth Lamneck

Thank you.

Operator

Ladies no questions queue. concludes in are this other participation. Thank and gentlemen, you today's There your conference call. for

now You may disconnect.

Insight Enterprises (NSIT) 12 Feb 212020 Q4 Earnings call transcript