NSIT - Earnings call transcript Q4 2024 | Insight Enterprises, Inc.

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Operator

Hello, everyone, and welcome to today's Insight Enterprises Fourth Quarter 2024 Operating Results Call. My name is Seb, and I'll be the operator for your call today. [Operator Instructions]. I will now hand the floor to Ryan Miyasato to begin. Please go ahead.

Unknown Executive

Welcome, everyone, and thank you for joining the Insight Enterprises earnings conference call. of discussing year operating and and ended Miyasato, Relations be quarter for I'm Chief will me Investor full joining James and December Director Financial Executive we Officer; the Mullen, Morgado, results company's the Ryan is and Today, Joyce and Chief President Officer. Insight, XX, XXXX,

copy website and of When time-sensitive strictly retransmission expressed fourth the quarter will the is consent This non-GAAP non-GAAP written accurate as XXXX. This of the call, we Commission you not have call, including this associated will be conference the Enterprises. release, February approximately as Insight Form slide call XXXX accompanying adjusted. also measures, Relations to can we the of discuss property remain them redistribution, the and conference X was will do results. prohibited. In on rebroadcast the for and in call we a posted available Investor earnings Insight financial financial find conference Exchange Investor If of completion without this today's discussing hours our Enterprises will period, archived question-and-answer will page and be insight.com presentation and year measures referring of refer section. Today's morning webcast at form Securities the the of live X-K, call accessed is to you with website filed on or only full X, website Any contain call that is on under copy of via being the and information time. or call webcast a any Relations our of that as be it the our after the at today, limited is An insight.com.

growth that make in earlier the of as find relate accompanying Please a note otherwise presentation to these GAAP the release terms. issued in growth slide we period of actual unless today. today both highlighted currency, dollar on and constant amounts comparisons press are will results corresponding our all unless and year, measures reconciliation U.S. Also, discussed adjusted last to included all the You call the noted. rates

except forward-looking are reminder, date to we are this risks this and cause filed will statements statements periodic our Joyce, during greater begin as in required of of today's on conference call, call, the are and on uncertainties the all future results information, subsequent materially. that, now filings are statements forward-looking with in most law, to our the forward-looking are events slide X. presentation, will with call made I as that detail a and or subject call Slide otherwise. With this the and These over new turn as discussed and that result you made actual following SEC. by undertake update a to to release Joyce? differ obligation along press whether As of if in risks could reports made no any recently we All

Joyce Mullen

for you thank us and everyone, joining morning, Good Ryan. much, very today. you Thank

As we with results closed we expectations. consistent out delivered our XXXX,

the a growth QX offset changes modest are in and hardware program a previously cloud, Here partner core Insight X%, of driven services was partially XX% increase impact profit the we've by by in in highlights. and Gross the up decline discussed.

drove in time devices. as grew we in hardware first X improvement For gross the profit quarters,

provided in was were completed from in flow SG&A will have $X.XX buying earnings Gross resulting per the Cash XXX build range We full adjusted share patterns per October. million, margin points expect discussed of last client actions share near expanded the and earnings high operations year quarter. and XX.X% the $XXX XXXX. basis end diluted during we we

refresh the clients as to demand the XXXX, reductions. In grew annualized double Insight digits, over the corporate caution the quarters. their in Services Partner for as our by as changes, created us and on our due acquisitions. in growth influence profit last forward investment acquisitions. prolonged requiring business. America, million as decision-making. service their enterprise X delayed expected $XX took driven approximately double Despite grew SaaS reflecting particularly the from to which client our and cloud expect areas. headwinds large and pivot across flow consumption. We North critical digits, Corp Revenue continue increased exercise had hardware, macroeconomic and steps We program gross device contributions environment, key grew clients gross priorities from infrastructure steady now cycle in cash Cloud XXXX program changes hand, with profit Commercial other we declined XXXX. demand, cloud a offerings from well to our

deliver We in and and infrastructure scale important and expertise continued our ServiceNow augmenting in existing strength Azure, particularly areas flexible building seeing our support which GCP, clients, to AWS traction with AI in offerings, our we're we and hybrid needs. Furthermore, structural the across our for our effectiveness multi-cloud areas synergies the programs build revenue initiated enhance drive AI, unique to to acquisitions. and cross-sell clients, We of cloud of strategic improvements business.

collaboration back the in drive integration a acquisitions profitability, our Google's our lead We for for office opportunities and order of some practice cost focused which our to synergies. ultimately and on partner program partnership services pivoted gain growth our to We priorities, GCP better ecosystem capabilities, driving with a to to go-to-market stronger accelerated also us. will expanding align growth with focused deeper launched We on share.

momentum encouraged are in are business. the we Finally, by we seeing bookings the

in strengthening rely helping our will expertise clients their across cases, We are industries businesses second, we is solutions from program over recent scratch. already security accessible help with the excel. to billion are we both. A recently consumer the become for environment I a divested to a of This to establish so meant make $XX an the of changer. for their overnight. the implemented cybersecurity our Gen areas deploying critical client data provided needed company first, share are: game AI, prepare We examples health almost employees. actionable. The clients data security built program the and preparing and unwavering global example cybersecurity of The commitment that solutions comprehensive architected environment true and And many up. entire that We adoption in our was across most numerous is from multiple to deliver products their and our support. XX,XXX Security-as-a-Service secure and included XX/X enterprise a will ensuring leading the the on solution integrator, delivered capability all domain ground posture states

application measures. security and Additionally, device testing implemented we conducted security consolidated endpoint and cloud tools,

engagement, resilience and of debuted a stadium. enables threat major Australia the fan critical AI XXXX, how in both fan in test and for matches They with is the client partnered approach manages engagement role analysis Insight an This setting ASHes preparing data enhance an international X,XXX real-time and half. weekly than integrating and in Our foundation monitoring more times in remotely events. Cricket different the automation-intensive feature solutions. app. developing Microsoft with more in the Insight the personalized solution Insight to January of and detection Cricket while example thousands at played oversees This in strong of feature women's comprehensive match security even live through AI-driven Australia and deliver for cutting immediate we response environment. In industry, while and and a ongoing tickets value very

manual consumer to delivering business to many delivering from Storage to while expertise Year Cricket users. of Cisco, challenges our future digital continues Xx partners. fans, helping AI-powered across strategic notable previous millions different from support Pure to their previously Key its Dell, received of we is modernize numerous architecting prepare Lenovo, solution concurrent infrastructure. include at some We NetApp, technology. In automated technology company digital results partner tests awards updates, health solutions instant Intel, the Partner insights millions XXXX, required modernizing but Cricket awards complex transformation. From for Insight users workload others. Broadcom, the the and for cost, a now There impactful infrastructure include NVIDIA, and a clients recognitions list Australia Our supporting and and of Google, here, we for processing achieving Australia's demonstrate full and are Microsoft, in to those HP, too industries establishing cloud practice adoption. digital security half

earnings You can in the find presentation. more details

various recognized and its great ambition for Moreover, intelligent from our map, Newsweek, culture Employers, a invested including road including multi-cloud work the workplace agreements solutions Insight workplaces to XXXX, with leading strategy, Google into AI Services entered edge their strategic to difficult we our and and Amazon leading manage AI, America's and navigated with collaboration Forbes and become new countries. In These alignment cloud, organizations, cloud in a numerous greatest Web position places clients Best has data integrator. of to Incyte environment Microsoft, agreements in been solutions. as in more our Additionally, data, strategies. cyber effectively help strengthen provider

partnerships hyperscalers with never best been Our the have including companies, world's technology stronger.

portfolio from adapt demand. We momentum solid has upon. been business EBITDA selling to new and and providers cycle refresh to solutions device cloud we clients. the results anticipation their partner initiatives services capabilities. throughout particularly pricing in by to expect the clients. on be gain The margins. relevant we've and equipment need Our never program infrastructure delivered to our in the investments mid-market and prioritize foundation refreshed age made to to workload solution is servers corporate And will anticipate adjusted and investments changes and expanded And structural XXXX, year clients the and our as technical and networking profitability in look significant that focusing This to more of our a as build we rearchitected

deliver to we shareholder value. With XXXX financial share in AI year clients' to operating well We full and profitable details to that, solutions, James? our traction and products as in services expect as James and grow QX expect I'll we for XXXX. and over call key driving infrastructure. of our growth year, increase to growth services as and further this from outlook our opportunities investments, the turn performance And the

James Morgado

and Joyce, morning, everyone. you, Thank good

increased SADA our the while million, offer for clients with as Our related was of gross Gross decline in Gross margin Cloud acquisition QX grew agreements. SG&A X% and net decrease The and legacy margin XX% $X.X Insight per profit adjusted higher well of weakness a reflecting acquisitions. decline XX%. This the as was in offset by higher in resulted did partially partner that primarily and of profit legacy XX%, expenses cloud America. expense XX%, revenue and was a gross Infrastructure diluted our a devices impact. Overall, as partners' contracted and was down basis a well expectations and in XXXX X% higher Net of in was and to by XX.X%, and driven fell expected, from of the as X.X%. that gross moderate was Hardware large mid-single deeper enterprise X% product profit pivot not on-prem was due decline related $X.XX recent tax to by in favorable basis cloud product, share SG&A decrease declines short earnings of continued year our And XX software decrease the to partially declined EBITDA line in anniversary and to to changes enterprise hardware, in Insight acquisitions million, materialize XXX profit down points challenging of to our services. hardware an onetime to our an software. Diving billion, reflecting reflects decline North corporate we Core is quarter. primarily of growth agency up core and services was interest The gross from offset XX%. driven with $XXX expectations revenue down items key as in X%, year. points were growth, increase the on-prem primarily benefit results was practice million on-prem to increase buybacks, a entering shifted our Hardware core growth increase revenue the an in consolidation of The double-digit share enterprise mix acquisitions. by adjusted little were $XX mid-market agreements a increase and $XXX digits. align services Microsoft digits, debt while of of impact in absorbed Services Insight was cloud. Adjusted mid-single priorities. a an the the an a X%. due

Gross However, margin the throughout year of basis with points that goals. our consistent are there were many XXX spots XX.X%. long-term bright many expanded to

SG&A of invest fastest-growing We over the our completed from actions areas Services capabilities. Insight in our in continue and second expanding the row. operations gross technical our a the in million and year sales to grew profit expanded cash expertise XX%, was We Core talent, our market. with $XXX for go-to-market flow

Moving X%. Net and was Despite decrease margin to increased expanded $X.X XX.X%. full we this revenue on XXX a gross year billion, X% points decline, basis profit results. to by XXXX gross of by

profit results initiatives. profitability services pricing margin gross Our and well by were gross cloud and and driven our as as

cloud X% profit in in XX%, On Our organic basis, due of reflecting million, acquisitions. gross grew increase the year. higher was an Service. Infrastructure SG&A SaaS as an $XXX expenses and Adjusted recent declined SG&A a to growth

adjusted year. margin points per earnings EBITDA basis and diluted last were Our $X.XX, XX X.X%, to expanded share flat adjusted over

we of flow in XXXX. cash compared from year, $XXX to million the $XXX For generated operations million

shares. to anticipate $XXX $XXX returns cash range million XXXX, In we to $XXX in repurchase XXXX, million growth from of hardware we million. As the flow in operations spent

to remaining for investments. share repurchase while shares repurchase intend balancing As of organic million We QX, our of the program. and $XXX have inorganic opportunistically we end

on capital the XX.X% ago. months to reflecting million was year return the of for total million recent debt to QX compared trailing a of year XX end the We the invested $XXX adjusted exited with XX.X% $XXX Our ago, year a compared at acquisitions.

we year, spent from flow acquisitions cash on repurchases and share last the operations. million by funded Over $XXX

full As entire the facility, we $X.X ABL end was of which amount had capacity available. our the under of the QX, to access of billion

meet ample our needs. liquidity have to We

We million we February have of that intend ABL utilizing settle outstanding to by mature our notes XXXX, $XXX which facility. convertible in

the in year. we have a value. remainder shareholder QX total of dilution notes portion expect we settling associated the Considering and period, of multiyear financing associated lower will a substantially we go-forward by over addition, end of In the warrants convertible the will and and warrants settle improve which cost our

XXXX performance metrics our Day QX to that shows relative in described the Investor presentation XXXX. Our October at we through our

of XX.X% profit and margin gross XX%. Adjusted here's EBITDA adjusted growth of Services XX%. free EPS of flow cash of of Adjusted gross growth For net a the X.X%. was flat. XXX%. XXXX, diluted profit percentage adjusted of status. Cloud as Adjusted Core ROIC income

factors and the towards As and of XXXX, following the the expect in we be look our weighted heavily will more considered profitability toward growth second year. we have -- half our guidance

of in we delivered reminder, comparisons first strong a in XXXX, the As challenging. quarter exceptionally XXXX results, making

We hardware to expect profit the in mid-single digits. gross grow

the space. profit impact We first slightly down XX% long-term of to expected particularly to guidance $XX decline to includes and and due half. Insight to flat We Google and with enterprise an the large enterprise expect grow demand clients million corporate enterprise agreements be XX%. Core pivot Services, subdued, to the Enterprise gross our of our our corporate to This from to Microsoft remain cloud Resale is and approximate mid-market agreements. in within anticipate range

would this we mid-teens. Excluding impact, in the to expect grow cloud

behind As we impact largely exit year, we the the will believe be us.

be impact warrants. This amortization transformation not year, to of single the the capital And change no and or Joyce. expense and tariffs and as digits $XX for diluted expenditures excludes tax growth expect continue assumes acquisition-related gross than including no anticipate of We be is an for does expenses notes to operating notes. I average expenses, XX%. guidance earnings convertible from from share turn primarily of to meaningful settling the assumes debt between and convertible any impact An count of borrowing includes and acquisition-related million to and approximate $X.XX associated contemplate the or interest between our impact related million will associated due expense with costs back higher the will settlement rate notes. settling warrants. interest per the $XX convertible shares, to the and effective to these $XX manage an expense the million factors XX guidance to we intangible outlook profit. Considering gross approximately margin low year of to call of profit XX% approximately adjusted million expect the outlook exception our which in macroeconomic now instruments includes full in will million slower deliver $XX of our XX% the severance $XX.XX, This to our full for settling $X.XX million, associated restructuring follows: notes growth full gross with year, net we convertible the $XX that share

Joyce Mullen

we recap, positive digits. double a million. challenging from expanded, Gross business and environment. despite year, XX from To grew of reflecting in profit Insight delivered $XXX and James. favorable the strategic for Thanks, results operations at gross mix the over EBITDA Core areas margin Cloud Cloud of services benefits Insight acquisitions. cash and and strong Adjusted flow Court expanded our points basis margin was Services

remains for to delivering to data, positioned into are transition our uniquely clear: consistently and demand accelerating, clients. we is growth exceptional solutions As to across AI by our value returns. the integrator and share become cloud, solutions as leading cyber goal XXXX, capture transformation market we The

our these structural to in our initiatives, and acquired pricing improve while teammates costs, clients to our each teams for improvements built develop commitment to to and our We increase thank partners better deliver times. market-leading nearshore our serve other. clients, discipline effectively made invested e-commerce business portfolio have and commitments commerce and We've challenging platforms businesses to our in to cross-sell our clients, around capabilities partners opportunities. I managing our on their and offshore upgraded and would to go-to-market profitability and services our cloud unwavering like

my to open in insight continued their your Our them journeys comments, the our collaboration we for and line now clients with to for help innovative solutions and concludes transformational support and our trusting will delivering their for partners clients. This questions.

Operator

[Operator Instructions].

JPMorgan. Cardoso is from at first question The Joseph

Joseph Cardoso

it Google relates wanted first changes Maybe we little to just cloud into deeper a your dig to as here, bit see businesses. the and if Microsoft can one particularly for program the

guys do headwind impact the relates that And can those you maybe businesses for those that unfold out between through then are just larger better follow-up. expect XXXX. years? the like of the where And or you to quarters to how to expect you or are actions cloud And taking on do trying you called the headwinds? X kind a you ramp those take understand as of touch have we kind as Just to it going or to I progress of then offset guys kind

Joyce Mullen

Yes. you. thank Joe,

has impact more enterprise really talked So towards million James the is that heavily agreements. $XX about weighted

amount about the So we and CSP agreements. space for and are together agreements biggest quite seen put also been our But been business for enterprise the us. that into business. support digging hero and actions because making very we underway ensuring a are those that a from fair obviously, around program Google And that the talked that The the changes corporate time, significant, year. them transition activity has mitigation of in activity. We've has were primarily great is lot we and some to down of change. of around accelerate medium last into segment Microsoft recently much plan small doubling They motion CSP that with

we're to and actually agreements of encouraged that, roll by most enterprise the that So transition year bit and the probably off. -- happen as XXXX into see expect a we throughout

done, other specifically one we've The -- that thing more thing, Joe.

So it. space, this since corporate call we the medium and is as

that there. we that I supporting and or very over We is past, see really very, cloud so about platform. there, those we the And And obviously, in terrific economically. don't we've our excited to really decade customer renewal have clients. satisfaction It's really, digital and important made improvements the rates are commerce invested a engagement know,

helpful. also that's So

Joseph Cardoso

it am maybe XXXX. then a math year to touch operating just I margins better it looks correctly so, the the softer asking gross OpEx tracking I'm as the if of growth. like it. outlook. you expansion. And next envelope correctly, of for doing like profit the there? maybe the expected this outpace first, I just then to is implied math follow-up, And guess, is the drivers can my way are this on is the OpEx maybe looks relative of more doing the bit and Got And back If on

this of over target I think you so, growth. than past of the gross profit had year growing or kind

outlook can And in what's the just you you curious this expect just for of gross year? And that and actions that So of those the over that some efficiency on next are profit then share this at context outsized where maybe of the cost driving kind provided? discussed we of call kind you embedded And into are prior the outlook you've initiatives and in with fully obviously, itself. that like the those? quarter

James Morgado

gross if to Yes. I'll would Joe, profit. Joyce actually, the start anything operating our add. that we like as year progresses, expect OpEx and slightly improve. you'd Thanks, grow Joe. at what would than is to But we're there's leverage looking And slower

One in see the leverage. the that in the OpEx on described expect big of than the terms year, would should A profit. is year couple us slightly But factors slower we year, we changes improve. operating that. things in the we But an program of impact as progresses, earlier of to give the grow having gross for full confidence that

$XX of the is taken. First million actions that we've

specific, hit it realize sales on have our you head our We XXXX. annualized support we'll to starting than have is technical anniversary all at it Also, as tried our functions. count as basis to OpEx, both was Also, expect in hitting either look or enter talent. just lower their shortly. We've date and reductions count The be our around been you there, at preserve look if for our that head be we head to XXXX. point an capacity very acquisitions count,

you'll year OpEx the see normalized a So progresses. as more

Operator

comes next Our Raymond from question Adam Tindle at James.

Adam Tindle

about of wanted bit to at the which of the little the the me. what of and know you a based start would to in now and be when device you growth on green guess you newer talking turn you there. question you're just cycle here mentioned and magnitude what which revisit could little that great then I I described was as some think part a second bit timing Joyce, year, maybe And device the seeing hardware see the thinking you XXXX, would QX, were shoots XXXX be that to is cycle.

Joyce Mullen

Yes.

start that as you expected know, refresh cycle we -- had had device earlier. we So

growth around in X commercial some seen saw precursor a top the now that line and particular. this quarters particularly other on in as we row have to devices sector well in business, the generally as public quarter in a segments, We nice improvement

And coverage and so it about better we pipeline to are -- devices, cetera. when et though we feeling think comes

So we feeling are better about it.

of be that of refresh the have complete time kicked think out we're would I requirements vast by just the the XX of majority anticipated running the Windows that support we kind time. in

that So saying our it to our improvement, we're this we're that's seeing it, we're why because that as will in are optimistic bookings. we it likely of just And to feeling we talking speed I it's eventually We're XXXX. But for business, I over probably and and as that said, space. cautious a to see pipeline enterprise bleed expect seeing and we've through it coverage been commercial also, quite bit we're corporate optimistic, some about time. we are seeing lead on our and we but in to in the said,

Adam Tindle

as maybe a Understandable. just James, follow-up.

XXXX, quantifying you've the for moving that some parts and pretty ask about all but in think in as EPS think to of could up maybe guidance I given you're parts, of sum we helpful the growth, various is moving just modest incurring light color headwinds your which commendable. terms we

the cetera, for earnings cash the the wondering of million, given just just on thinking restructuring $XX unpack of could XXXX what's kind financing strong. the et summarize you from you If buckets tailwinds headwinds, touch of it's in flow just benefit costs, should about be bridge incremental if understand could on also so with maybe that, underlying major we can XXXX. and I'm And kind going been we business. what for and so and

James Morgado

Adam. Yes. Thanks,

the think I prepared terms called of So in out in we headwinds, remarks. it

is pivot. First around this foremost and

encouraging signs, have but that clearly have we side. to on do We work

probably year. And one that that's headwinds so with of we're this largest the faced

which ABL, to really sits of If a expense and is through well, below that's you when EFO, ABL, is today that our one is simply plus a a the convert go using our at and look the cash bit. And shifting as SOFR a items at convertible us nominal headwind factor of interest this that settling the notes rate. the you

And of a so that headwind. bit creates a

and of count that reason We portion settle in count. warrants share have our cash, is we we're the going have effect of for terms associated them with convert. with has though, as with cash, are we share to of -- the And that, that that, settle those reducing that largely Adam, this offsets warrants a

So below has -- those rate QX. sort line items offset had Tax some of favorable the we in

So go above are XX% are rate that but and somewhere pop encouraging. back we there our still It to they is of encouraging. back some also historical early, line, between XX%. If areas the up we are

which I say think commercial we're remarks. that the this we've enterprise, entering business. think Joyce know the now. then terms services there should year, then that growth on and I several be we prepared called would commented segment you tailwinds them corporate out of business, quarters And ultimately in of up will the move our in into some from that.

think been through I -- encouraging. has pivot they've services going history the I the Sato's of on in been the the the their ever year portfolio, bolstered that business quite has by we're acquisitions. Even focus with had that think, best entering that the and we've company been

think [indiscernible]. And anything Joyce, of I tailwinds if so know we set to will have I there's that partner don't headwinds help primarily the program the offset a that us around some are some the of of changes.

Joyce Mullen

A other would things I couple of add.

by. which talk quarter, So -- encouraged infrastructure we're growth also actually some didn't in about also we we actually we it saw earlier, the but Adam, saw

little was growth, big for and overall there. to that us. bit refresh. aging like a a out networking for great. servers a digits is the terrific see really of which is So in Servers There's we feel addition ripe double bunch which actually of to networking grew

software our initiatives IaaS are -- in, expect then terms in of couple of going built with cloud like that in profitability and And growth very our was to like a we've that or And to ServiceNow the a areas hardware cross-selling better a really our growth of but And that picture. The to now. are capabilities bunch kicked technologies and ago going focused so built have team new about of business, is time. We've really like just has we like in applied and really, and reduced they years specifically, we partners. that the like think that remain as and part our have same well. services our -- so that with also services made infrastructure a say SaaS expertise to or around business specifically much particular, I'd that approach continue or over deep alignment helped drive grow those to all business worked of very, our on of I specialty we sales program scope the final thing Google very improving Microsoft.

feeling really promising is well. So we're as that like

think has together I I'll that to those the things what confidence give James the So outlook provided. deliver us all taken

Adam Tindle

That's helpful. And cash flow real quick, James.

James Morgado

Yes.

look But guidance, had look of So very percentage to you we've are very, returning that terms that if key hardware has outside by back years, as couple of strong guide, some our the at cycle. improvements in being well last typical if primarily clearly at been a driven been guidance. in down. driver of -- has that cash our cash The the we you historical flow. flow cash flow, long-term net hardware a It's cash income. And conversion of obviously, improvement

hardware we our back have historical to growth and return a flow cash bit range. business, enter kind bring our so been a going the see cash a in into of And that's XXXX, flow going normal -- we to boost it's that's of of as to

Operator

Our Anthony is next Sidoti. question from Lebedynski from

Anthony Lebiedzinski

-- and we I tariffs just on your reflected your joined how think is about the little of much whether should bit overall, guidance? business uncertainty of that call But I apologize. late. a potential the how in existing

Joyce Mullen

Anthony. Thank you,

pass are to been at have out. ways the we been on the would X few is that understand way news of clients. to with very, the Sunday. tariff OEM ago cost through We modeled reach have really this We've did we the impact And clear impacts working the on tariffs to clients. was how trying we of partners all exposure closely would we our rates over essence, very in incremental pretty and that our figure that our products, a sort various to years the the worked this when which their

generally resulting impact. current right as they is much don't category stand, the with we whatever in see a expect impacted. And So increase tariffs, ASP elasticity now, we

that expect words, about have what of numbers other big change, on tariff to impact sense don't XX% a have those in would impact demand. we the pretty good So a If know that. we change, those we

our tariffs contemplating from the I but so impact exists. -- minimal contemplates current tariffs And think, that and guidance,

Anthony Lebiedzinski

know a there. dynamic Understood. I remains situation it

mostly talked in far you think about, there opportunities as Or think structure to opportunities? your out structural you do other that the Now guys some the tapped the of you as business? are business you're improvements improve those of

Joyce Mullen

around our mean, if terms that out. services, of the out find out targets. the best -- you [indiscernible] and terms topped there I profitability of look We and can we find best not so there are we've are got in the of Anthony, those we we in profitability hardware of best can benchmark best software, of that and

that So those as we continue leverage and sure. talked in to a also growth James have that us is our more to this improve room should little growth. we we with about, OpEx bit plan of think also for have allows And

have lot for we opportunity So still. a improvement of

James Morgado

I this out year. the on know and than I on saying the to in it the would but that I of there -- half. the the half the of want In remarks, commented be stronger but it comment that profile a particular, thought such would question, first second in way would year you pan QX. terms in I out ask I prepared put Anthony, didn't anyway

really 'XX. Our of had strong We year. from QX, comparison results are strong QX facing we in previous the really

stronger word as like think of the of would profile as second so year anymore. be use profile I on don't we can the a would the year. quite much because first we we than QX the the comment year. facing compares, that not tough of know seasonality the half. looks goes seasonality what is expect -- a normal And half I'm we and And But with this that builds sure

Joyce Mullen

an program. the outsized and of impact compares Tough

James Morgado

Program changes, yes.

Anthony Lebiedzinski

understood Yes, that. with I

you Okay. the of the seeing are All bookings -- in solid right. Well, business. did you enjoys that say some momentum at but beginning also,

thinking for that, the half translates to are So as you them? think that revenue, back when that is more that. of is about that you timing as far also Or -- how

Joyce Mullen

the to improve demand throughout expect would we yes, year. Sorry,

Yes. So yes, James [indiscernible].

Operator

[Operator Instructions].

on We have the call. no further questions

So I Joyce will for remarks. concluding any hand back to

Joyce Mullen

your Thank questions for of and you you very much your to all interest.

our forward Our Operator, clients you about sharing excited require the journey close a very and increasingly of this fragmented can on to integrator. are you navigate trusted adviser the ahead leading opportunities progress us, to help we become them our call. continued to Thank landscape. solutions I and complicated the look much. And

Operator

joining much Quarter Call. Fourth you Thank for Insight very Enterprises today's

You may now disconnect.

Operator

I'll will ahead. welcome for Fourth Insight the operator Miyasato everyone, today. and Hello, your now My [Operator Operating be the Call. floor to begin. Instructions]. I Enterprises to XXXX hand Ryan go name and to is Results Seb, today's call Please Quarter

Unknown Executive

Insight joining ended the Welcome, earnings XXXX, quarter Chief results Executive Investor and company's Chief XX, and and Officer. and and Morgado, be the Insight, Ryan Miyasato, Today, will Financial everyone, December of is Relations full conference we the for Officer; President operating me thank for Enterprises discussing year call. you James Director Joyce joining Mullen, and I'm

do and the page our remain be period, and including copy Investor you Investor accessed Relations Commission at as webcast X, call, of the we the information as discuss limited redistribution, measures, measures Insight contain of is archived associated non-GAAP approximately with them the to we and Insight via hours conference Form referring time. live call or expressed this retransmission a a on non-GAAP today, today's rebroadcast will for refer the call financial call, When available be accompanying earnings and XXXX. This Enterprises question-and-answer of X will the website financial of year will the Any XXXX is conference was only written call of property morning Exchange copy also completion section. Today's presentation This be we find website adjusted. is conference February at strictly prohibited. In results. any If the after our of slide filed as consent posted fourth will of being in you to of quarter accurate webcast on call is discussing on this without An full the insight.com. and insight.com or form Securities website that release, the can the X-K, and not it time-sensitive will call our Enterprises. under have that the Relations

measures issued will adjusted comparisons all that today. to relate actual of otherwise noted. constant and Please find are You amounts presentation in Also, both corresponding year, in terms. discussed slide period these of included growth as results on reconciliation to last accompanying the press today release make note a the rates earlier and we the U.S. our call the unless all currency, highlighted unless growth GAAP dollar

otherwise. With subject materially. this a X. discussed forward-looking if or and As are the greater that and our are following made over obligation begin law, cause and that along new statements and the Slide now statements required whether call, reports are I are These to forward-looking with will will forward-looking no filed update that, SEC. to our of this today's by this of we except as conference events all slide on a filings call recently we could made in reminder, as Joyce, presentation, result turn with press to actual future call, information, to in call in Joyce? and uncertainties you during undertake any of risks risks on statements made most date periodic the All release are results detail the differ subsequent as

Joyce Mullen

for Thank you everyone, you us very today. thank and Good morning, much, joining Ryan.

delivered closed we with our expectations. out consistent results XXXX, As we

changes services previously the growth increase and partially are decline in of by discussed. the driven QX a modest we've highlights. by up profit XX% hardware Here offset impact Gross was in the in Insight cloud, core a and X%, program partner

in gross devices. in grew improvement drove we as hardware time first X the quarters, profit For

will expect client from we adjusted completed million, in earnings share of quarter. per actions Cash buying XX.X% XXX and per the Gross and October. $X.XX expanded range the $XXX margin full operations share near discussed during resulting the build have basis end were SG&A last was diluted in we We patterns XXXX. earnings points provided flow year high

their North approximately consumption. We America, which clients exercise continue in and influence prolonged We XXXX, annualized from Revenue in $XX macroeconomic expect environment, particularly caution million priorities reductions. In the to investment well forward due decision-making. double to hardware, declined our as Partner Services as large in XXXX a cloud digits, program critical areas. hand, gross cash had last the SaaS Cloud grew our device and demand, and Commercial delayed increased quarters. to from profit business. growth demand corporate profit steps key Corp clients X us cycle the the pivot and their changes as on contributions now over took our changes, Insight grew enterprise XXXX. client other refresh double by offerings expected requiring our program infrastructure Despite headwinds we service grew reflecting for with cloud the acquisitions. created from as steady flow acquisitions. gross driven digits, across

support We and traction augmenting in AI we're which continued strength deliver to building important flexible in with Azure, GCP, our expertise and and offerings, our ServiceNow AWS areas existing clients, infrastructure scale unique effectiveness synergies and in seeing strategic our particularly the clients, programs our areas to build enhance improvements We cloud drive of revenue for business. AI, structural acquisitions. hybrid we across the and multi-cloud cross-sell of to needs. Furthermore, initiated our

We a drive launched our our ultimately the practice to We accelerated some focused office lead with program also a for partner deeper capabilities, our expanding will profitability, on go-to-market collaboration share. We of to opportunities stronger our cost on and Google's acquisitions driving with align order growth synergies. GCP priorities, better back ecosystem integration focused us. and partnership growth to gain to for pivoted services which in

by business. momentum are the seeing Finally, in we we the bookings are encouraged

deliver products secure rely in become critical our preparing leading changer. data and are is solutions data and their recently entire unwavering billion recent so we The the needed most Gen both. A built XX/X strengthening $XX second, cybersecurity the true up. already This ground comprehensive our will client health was the businesses scratch. expertise I helping the XX,XXX integrator, actionable. AI, on prepare cases, And multiple solution share employees. and excel. program for solutions of security help from almost an divested all ensuring provided capability many that to commitment with environment our We is areas company for to establish global to meant overnight. the game industries from delivered clients and of our numerous We their cybersecurity environment accessible that implemented enterprise We their example security will across over clients a in and the examples posture make across first, support. we of The deploying to domain architected adoption Security-as-a-Service program the included consumer a are: are a states

and application cloud measures. Additionally, device security tools, conducted consolidated testing implemented security we and endpoint

the cutting in an This an and ongoing remotely resilience how strong solution and we both client major half. different They in Insight weekly the January immediate partnered in deliver app. matches international Australia while and played a for the detection and to and Insight in more women's environment. In very with threat of AI-driven data This solutions. preparing automation-intensive times at Our manages comprehensive and real-time XXXX, setting industry, even security X,XXX while Australia with developing fan fan foundation than feature value the of is example the integrating monitoring approach stadium. critical events. Cricket and ASHes engagement, thousands through of AI enables test Microsoft enhance debuted live response role personalized oversees tickets for in more Insight engagement a feature in analysis match Cricket and

There Google, cloud at notable of is practice health instant challenges some digital but concurrent those expertise to business technology for solution Year in recognitions NVIDIA, here, Storage Dell, list We results impactful of partners. Lenovo, Pure many Cricket automated clients full AI-powered required company insights Australia's infrastructure. partner a too previous to to users numerous digital demonstrate fans, across half our delivering support Microsoft, security the and Our awards Insight NetApp, Xx modernizing we from of its adoption. infrastructure to a establishing others. Key and XXXX, architecting modernize transformation. From and the consumer are and supporting include Intel, millions continues for now awards we complex Broadcom, industries Cisco, include prepare delivering strategic to Partner achieving Cricket for from HP, and processing workload Australia helping the technology. In different manual solutions while users. updates, millions future previously digital received cost, tests their

more find details earnings can the presentation. You in

clients with agreements strengthen help These in strategic cloud, Microsoft, data Services road their Insight multi-cloud provider as AI, new and been invested intelligent workplace leading Best solutions. countries. In navigated map, agreements in Employers, Incyte great has Moreover, integrator. cyber solutions workplaces of our collaboration a data, including into with and more places our edge to Google ambition XXXX, organizations, difficult cloud environment to and the strategies. recognized Additionally, manage Newsweek, its Forbes a for effectively we and including in various Web America's from entered greatest to culture and alignment numerous our AI position strategy, Amazon work become leading

partnerships Our been companies, with the never stronger. best have technology hyperscalers including world's

we've technical mid-market and the networking workload to age look been portfolio services to by to need device foundation And momentum margins. and throughout cycle initiatives clients. of in and expanded the XXXX, solid refreshed solution program new capabilities. This to infrastructure rearchitected will and equipment and investments solutions more selling and investments partner our servers profitability is and structural and gain from clients be EBITDA as never a that the changes to corporate cloud business providers on in And to in anticipation refresh their significant year prioritize we adjusted adapt anticipate relevant demand. We Our particularly expect results as our focusing build clients. upon. we delivered the The our to made pricing has

shareholder for to in solutions, well expect as share We infrastructure. and expect our services to year and as key XXXX grow and services that, products performance of operating profitable clients' opportunities we year, AI deliver and XXXX. growth to the outlook financial value. With I'll growth James details driving full the we to over as turn And increase our in further call this investments, QX traction James? and from our

James Morgado

you, morning, Joyce, everyone. and Thank good

align an grew XX%, margin XXXX debt acquisitions XX increase as pivot The onetime decrease share related contracted SG&A points higher Microsoft resulted primarily was expense from higher fell a $XXX points our $X.XX not the basis cloud. Adjusted tax favorable mid-market cloud in million, Insight gross legacy increase adjusted due decrease revenue of reflects million interest offset hardware as decline X.X%. acquisitions. was Services changes to as enterprise hardware, expenses an while in priorities. in And million, in Cloud as and decrease from enterprise $XXX primarily a Gross the the an by of XXX and were gross Insight a for growth profit double-digit XX% growth, moderate quarter. were and line our driven product, share materialize partially our large results while of X%. our and software. Diving The the and an expectations key services software North of acquisition well anniversary Gross by product QX was Net and was that decline was well primarily to recent margin Insight our Infrastructure and in mix profit little of expected, of gross an the in cloud billion, a higher practice and in buybacks, increase absorbed Our is diluted adjusted decline up driven to $X.X to as due items partners' reflecting by clients per offer on-prem SG&A partially Core and weakness of $XX declines the and Hardware challenging in XX%. down we and growth agreements. in XX%, with a X% revenue of the offset X%, net mid-single was increased earnings America. The benefit profit decline core in profit on-prem to down enterprise partner was revenue was of gross continued our X% shifted that down on-prem with expectations year. acquisitions. entering year the short agency X% in a a impact related digits, declined impact. Overall, a Hardware This agreements to EBITDA to did legacy digits. was corporate services core services. XX%. deeper mid-single basis to XX.X%, SADA of reflecting by was of increase devices consolidation

the consistent However, year that bright our spots goals. XXX XX.X%. Gross are throughout margin many of were with long-term there many to points expanded basis

our and second invest completed million and expertise cash of expanding our was in $XXX in expanded our operations talent, from the year gross our over capabilities. Insight XX%, the profit We in Services with sales a fastest-growing areas go-to-market Core continue SG&A for row. We market. grew actions to technical the flow

XX.X%. on Moving X%. to we a XXX of billion, year decrease increased full X% basis gross to was profit revenue points results. $X.X and margin Net Despite XXXX this by decline, by gross expanded

and profit as profitability and margin and results gross our cloud gross driven initiatives. as were pricing services by Our well

profit declined Our X% SaaS SG&A growth and reflecting acquisitions. $XXX increase Adjusted an an due cloud was gross a Infrastructure grew higher On recent in to SG&A the basis, as organic Service. XX%, in million, year. of expenses

per Our year. basis over X.X%, $X.XX, adjusted margin points share diluted were XX last to EBITDA expanded adjusted flat and earnings

$XXX million in XXXX. to operations we year, of compared the million For generated flow $XXX from cash

we million XXXX, XXXX, $XXX operations the shares. in flow repurchase returns growth hardware we anticipate of from cash $XXX million million. spent In As in to to range $XXX

repurchase we As our remaining QX, of intend shares million investments. opportunistically and balancing while organic program. inorganic We share of the to repurchase for end have $XXX

with end exited a capital on recent compared XX.X% compared of at a of total year million return for invested $XXX ago, ago. reflecting was to Our QX trailing the $XXX year adjusted debt months the XX the We XX.X% acquisitions. to year million the

million funded flow cash operations. repurchases Over spent share on the acquisitions and year, last we from by $XXX

of to the facility, ABL which As amount billion $X.X of end of the access the available. entire QX, had full we capacity our under was

liquidity our ample needs. to meet have We

February we our million We settle of $XXX notes XXXX, in to ABL outstanding facility. have which intend by that convertible mature utilizing

QX notes convertible end will in settling have warrants expect a remainder multiyear improve will of the substantially our value. In which lower of period, associated settle the and the and a dilution go-forward warrants by addition, financing over portion of total and shareholder associated we cost we Considering the year. we

XXXX. our at performance presentation metrics October described QX Investor Day relative through the in our shows we XXXX to that Our

margin Cloud ROIC of and For XX.X% the profit Adjusted net gross of Core EPS XXXX, XXX%. flow here's growth X.X%. income growth of flat. adjusted percentage of XX%. cash adjusted XX%. EBITDA Services Adjusted diluted of was Adjusted a gross as profit free status. of

XXXX, be and we in profitability the half we weighted and toward As guidance considered factors will expect look following the the -- towards have of heavily more year. our growth our second

XXXX the making first comparisons in As of quarter exceptionally XXXX, delivered a in reminder, we strong challenging. results,

profit We expect mid-single grow digits. to hardware the gross in

to subdued, particularly guidance profit with is We We enterprise clients in half. Insight corporate XX% XX%. to gross range be cloud within down Services, Microsoft long-term remain our impact corporate anticipate expect expected and to the approximate to due demand our flat This first from of large and to Core agreements our grow to the decline slightly pivot $XX to includes the enterprise mid-market and million of and agreements. an Google Resale enterprise Enterprise space.

to cloud the Excluding this impact, we mid-teens. in would expect grow

us. the believe As we largely will be year, the impact we exit behind

diluted Joyce. expense $XX of This to we profit adjusted full tax approximately we rate follows: the acquisition-related the convertible that approximate of year, shares, will and approximately expenses million million for impact of net is to XX% costs warrants. expense million, year intangible no tariffs will our million with and primarily no debt $XX and in average settling gross acquisition-related $XX as settling warrants. This convertible in including full does for to between the to for from to to growth factors $X.XX growth from settling the XX%. low the to to convertible back turn the associated convertible And now than between An or outlook associated of gross severance full guidance expect meaningful earnings $XX of change not slower notes notes. transformation call effective We assumes million year, the expenditures profit. Considering interest the deliver and any associated and our of be outlook manage excludes operating expenses, $X.XX an count settlement notes the expect macroeconomic due XX will the an single impact or continue instruments margin anticipate of the these includes digits to with capital per amortization million our share share and gross XX% borrowing guidance interest assumes $XX.XX, contemplate and includes which our exception be $XX related higher expense notes. I impact restructuring

Joyce Mullen

and Gross double Thanks, profit delivered challenging Adjusted cash flow results Court of acquisitions. services $XXX Cloud strategic our we margin favorable positive Services Core margin Insight was in million. points mix expanded from business of James. XX grew gross To reflecting recap, year, areas and from for at expanded, and despite EBITDA basis benefits Insight over operations the digits. the Cloud and environment. a strong

remains by AI value positioned into and is returns. to clear: cyber data, leading for accelerating, to market capture become transition our we XXXX, consistently uniquely across to exceptional cloud, integrator delivering As demand goal solutions transformation share our and The as the clients. we solutions growth are

costs, capabilities nearshore pricing We commitments these effectively to our structural commitment offshore portfolio on our our partners to invested unwavering businesses thank managing upgraded cloud and serve business like profitability services improve cross-sell to to our have opportunities. I and and develop made and and platforms to increase improvements deliver teams in our clients, to go-to-market their in clients market-leading acquired while each around teammates clients, and for would built e-commerce challenging and our our times. to our partners We've initiatives, commerce discipline our better other.

for questions. solutions journeys for to open delivering Our to will in with our concludes support their now them their continued transformational and the we and trusting insight and clients your our my collaboration clients. This partners for help innovative line comments,

Operator

Instructions]. [Operator

from is Joseph at question Cardoso JPMorgan. first The

Joseph Cardoso

to we businesses. it here, program Maybe wanted changes as little cloud see into for your Google and to relates particularly dig deeper bit Microsoft can one the just if the first a

those expect kind to as do then it I guys businesses years? follow-up. called kind are or unfold between take Just the relates where have out can on that understand how impact you kind just better the you you do cloud that quarters like headwinds? trying a taking we touch then of going of to And the guys the or those you headwind to X And larger expect for through you of are as maybe actions And or to ramp to those offset XXXX. progress

Joyce Mullen

Joe, thank you. Yes.

weighted towards enterprise So James heavily agreements. talked that the really more impact is has $XX about million

segment the quite and has of about digging Google underway us. around down business. primarily change. transition from making changes a CSP those talked are very been and enterprise hero much and mitigation agreements. accelerate But some the motion of seen for been So into that amount fair were that They has for great support biggest small them last we a is significant, together business corporate agreements our plan obviously, and activity. We've doubling with in that that we lot medium that put also the space The are Microsoft to program activity year. because around actions ensuring recently we And the time, CSP of into

So we're see encouraged as happen agreements transition into we that and by roll and -- probably XXXX to the bit off. enterprise throughout expect a year that, the of actually most

that thing, -- more one specifically Joe. thing we've other done, The

is and as we So space, medium this call corporate since it. the

supporting It's so I we customer satisfaction have see we've past, platform. about digital and know, economically. really, the and the is there. in renewal there, are a And very, over invested engagement commerce made obviously, important clients. those excited really that really our to we And very rates improvements We cloud or terrific decade that don't

helpful. also that's So

Joseph Cardoso

the on follow-up, more relative If outlook. like I'm then implied envelope correctly, the this Got looks XXXX. tracking year it to next just doing math of it. softer maybe the And operating a are my can math the the maybe as guess, the if bit am for it And and is back just the is this the expected first, asking on you is outpace there? way And of touch better OpEx profit maybe drivers of OpEx like I gross to correctly growth. expansion. I so, doing then looks margins

gross year the over I think of of growth. target kind had growing than past or so, you profit this

just this are gross discussed cost into fully where share with maybe you next of curious over and expect just some outsized of this you So those? in outlook you've then embedded of for the of call And outlook that the what's the and prior driving the provided? profit efficiency can on like we the you that are year? And that kind itself. context actions those initiatives at And quarter obviously, in that kind

James Morgado

Yes. improve. And add. than as if gross Joyce I'll would to start and what expect would slightly our year you'd that OpEx the is at to Thanks, operating looking profit. leverage Joe. we're anything Joe, But like we grow progresses, actually, there's slower

of gross in give would year the described full couple as that earlier for things the operating program OpEx profit. confidence to But year, year, big on we in we terms A grow us improve. an factors One the see leverage. the is progresses, that we impact slower should in changes slightly the expect the of that. But than of having

First is the of taken. million we've $XX actions that

preserve look specific, expect to Also, it realize acquisitions in all capacity to and our we'll basis support point to hit we have starting be as head that both head you for around head count, talent. tried OpEx, if our enter shortly. either have or very been We've anniversary XXXX. functions. our hitting as date XXXX. reductions there, count technical Also, just our it our sales at their on you look than We be is at count annualized an The lower was

So as normalized a progresses. year see OpEx more the you'll

Operator

at Adam question Our Raymond next comes James. from Tindle

Adam Tindle

the was wanted start could turn me. little bit timing bit now of newer device revisit which to I hardware magnitude be shoots and the and you the talking and of when to thinking you you XXXX described Joyce, which would to cycle a cycle. in see think a great I what maybe question green you guess then seeing of the know the little on you're is here what as would that based there. year, you just second part QX, some about at the growth were And mentioned be XXXX, that device

Joyce Mullen

Yes.

So cycle -- device start that had we you earlier. know, we refresh expected as had

precursor devices generally around this and seen as quarter business, some in quarters the sector commercial in a that the well row line to saw we nice segments, particular. in improvement We have particularly other X in on top a growth public now as

-- to though think we and cetera. pipeline et when are about it we better so feeling comes And coverage devices,

about feeling it. we better So are

vast by anticipated in time of complete XX of be of I have the requirements kicked think out refresh running majority kind that that would support Windows the we we're the just the time.

saying will said, our why in to corporate coverage we've in it probably space. And that's time. seeing as about bookings. for talking of we're We're lead that to we're optimistic also, this improvement, our we seeing are pipeline see commercial we're we're So said, speed the and over we are enterprise because and been cautious seeing quite it it that and it, through eventually it's I just but likely I that XXXX. But feeling and to we bleed as some we expect our a bit business, to on in optimistic,

Adam Tindle

just Understandable. a follow-up. as James, maybe

in I the about guidance to moving the think that some think all and for but given you're in just which of sum you've of headwinds your growth, pretty as light moving helpful color parts, various we quantifying commendable. is ask parts terms modest we incurring XXXX, up could EPS maybe

the you summarize major of we the If million, buckets XXXX bridge can also should I'm wondering restructuring about the And et what's touch and it's earnings from cetera, underlying just cash so on kind going maybe understand just been incremental kind XXXX. if flow and that, financing $XX strong. for in could so you could on just and costs, benefit unpack we with given headwinds, of business. be thinking for of the what tailwinds

James Morgado

Yes. Thanks, Adam.

in think out terms the called of it I So we prepared in remarks. headwinds,

First and pivot. this around is foremost

but that clearly on have encouraging side. have work we We signs, to do

that's one headwinds so And that with probably year. of we're largest the faced this

plus us convertible ABL, nominal one the really of as shifting of using and look a that our EFO, cash rate. today the which factor bit. sits is expense headwind that go the below well, our that's the at notes simply and SOFR is a through is you this at convert a to items ABL, And when If you interest settling a

creates so a a that And headwind. bit of

we of And portion the warrants as and warrants largely our share we're going We of that offsets have settle effect that, is of them settle that, we reducing associated with are share in has cash, though, a cash, terms this count with Adam, convert. for with those that have reason that to -- the count.

has had line -- the So Tax items in we some those QX. below sort favorable rate of offset

XX%. If the still It they we that also of rate some our above So line, XX% between back up go areas we are historical encouraging. somewhere early, there to encouraging. and back but are are is pop

several now. that should enterprise, services the them on think called remarks. Joyce which our I and the then we're And segment that that. entering we think business, we've know of the in out of terms ultimately be move from would some prepared will growth in you up I commercial then this say there quarters into year, commented business. corporate tailwinds

ever their we've been with encouraging. of think entering focus the I in bolstered that had been best has pivot by quite been that on I the the they've the has acquisitions. Even portfolio, and that through company history year we're -- think, Sato's the the services business going

to program And don't offset of changes. headwinds tailwinds around think primarily will so us I there's [indiscernible]. I of are if that Joyce, the have set some we the that the partner anything some of help know a

Joyce Mullen

A other I add. things would of couple

encouraged we didn't but also we the infrastructure actually saw in So talk by. Adam, we're which some we -- also it quarter, actually saw about growth earlier,

servers us. and of So there. for to in which which digits refresh. is actually aging bunch we feel really terrific addition to like that big for little out ripe overall the grew Servers networking is a bit double see was There's a networking great. of a growth,

specifically really, and built SaaS to -- now. with are of And bunch or focused the Google team about worked cross-selling and like very partners. they was around initiatives so that like new that we business to picture. The deep remain much that sales business, the that capabilities as I in, are really with of growth grow then well. we And very profitability has and that better our so services in going expertise approach applied that of scope improving technologies very, couple program time. that And specialty but the to years and built or I'd over software those or expect of particular, in alignment part our terms ago like like growth infrastructure drive a kicked a business Microsoft. our and hardware made is We've areas to think to just ServiceNow reduced cloud our same thing say we have a we've specifically, also continue final services our of have of all -- in really our like going IaaS helped on a

is So as that well. really we're feeling promising like

deliver to I what all taken I'll James together confidence So give think those the us that the outlook provided. things has

Adam Tindle

cash And real That's James. helpful. flow quick,

James Morgado

Yes.

guidance, has of net terms the had income. So of we've are driver we cash being down. It's -- well cash that our flow, strong very, outside some hardware historical in conversion if our you a been flow. that But if cash years, that you very cash typical a at primarily look to And in guide, percentage last has clearly back by hardware at been long-term returning couple guidance. improvements improvement of driven look as the flow The obviously, cycle. key of

it's bit going a going cash our -- we business, see enter growth we been the bring of our XXXX, of hardware to in to to kind that's range. And historical a normal flow as boost return flow a and back cash have so of that's into

Operator

from Anthony Our Sidoti. is next question Lebedynski from

Anthony Lebiedzinski

is reflected guidance? your But that little just on how I existing how bit uncertainty a of late. I about the the in we business should tariffs whether overall, -- of apologize. think call and much joined your potential

Joyce Mullen

Thank Anthony. you,

is are the modeled clear rates trying been impacts our to tariff figure very, working all that have impact We on Sunday. We've that various we have ways incremental out. we OEM that the years really their X when to closely very our products, the way did partners of the this this the pretty news to was to been with would and we over at pass tariffs reach understand cost sort would And of exposure clients. which how in few the ago a our the clients. through essence, we on worked

tariffs, see they we stand, resulting impact. don't current whatever expect in increase right elasticity as much the impacted. And is generally now, with a So ASP we category

in would numbers about that. the change, impact don't a of we know on So change, have that demand. we those tariff impact good XX% other big have pretty what a those If words, to sense expect we

guidance, that contemplating exists. the And think, our tariffs -- so impact current but minimal from tariffs contemplates and I

Anthony Lebiedzinski

situation Understood. there. remains a I it know dynamic

structural your of think as do improvements about, Or the opportunities? of you as are you structure business improve tapped opportunities the talked other some mostly there think Now out guys the you're those that to in far you business?

Joyce Mullen

of so can targets. the in those got mean, the not out. software, our best services, of in terms we we we've hardware find can and terms of are there best look you we best benchmark and [indiscernible] topped Anthony, the there and of around if out We that best of out that find -- are profitability I profitability

us room have to to that leverage with more we bit sure. James this we growth should So also we improve allows have also And our that OpEx plan talked those a is in little as continue growth. of for about, and think

So have improvement lot for a still. opportunity we of

James Morgado

would in profile you there know to particular, it prepared half saying that the ask in and the second -- year I I the this first I than comment that year. would half. be way it on I pan a I anyway question, put in didn't QX. Anthony, stronger but on such out would remarks, the of thought In want out of the terms the but commented

of year. previous Our are we strong comparison facing QX, We results the really really QX in from 'XX. strong had

a that -- comment looks and what the we so with And expect facing that tough of half. as normal a the year. quite of seasonality of builds word on anymore. the stronger second as don't we we be would And the like seasonality use is not would year But know think profile can year. we the this I first I'm much profile compares, half because sure goes QX the than

Joyce Mullen

an impact and the program. compares outsized Tough of

James Morgado

yes. changes, Program

Anthony Lebiedzinski

Yes, I understood that. with

seeing beginning Well, some are business. you at that did right. also, -- the of All say solid the momentum but you enjoys bookings Okay. in

Or when more that as of thinking as timing that. back also that, think translates that for about to are how that half is -- them? you So far is revenue, you the

Joyce Mullen

we would to demand throughout the yes, year. Sorry, expect improve

Yes. So yes, James [indiscernible].

Operator

[Operator Instructions].

on We have call. the questions no further

hand Joyce So to concluding I for back will remarks. any

Joyce Mullen

you very of and questions Thank interest. your to for your you much all

to landscape. become require adviser clients a and progress forward and the trusted call. we increasingly ahead the to us, of you Thank help And very about this Our our complicated look Operator, continued our journey fragmented close navigate can integrator. on sharing are them to solutions excited leading much. the opportunities I you

Operator

much today's very Fourth joining Enterprises' you Insight for Thank Quarter Call.

may You disconnect. now

Insight Enterprises (NSIT) 6 Feb 252024 Q4 Earnings call transcript