INSIGHT ENTERPRISES, INC. ANNUAL REPORT ON FORM 10-K Year Ended December 31, 2024

Press release·03/02/2025 16:52:34

Listen to the news

Insight Enterprises, Inc. (NSIT) filed its annual report on Form 10-K for the fiscal year ended December 31, 2024. The company reported total revenue of $8.4 billion, a 10% increase from the prior year. Net income was $143.4 million, a 15% increase from the prior year. The company’s gross profit margin was 12.4%, a 10-basis-point increase from the prior year. Insight’s operating expenses increased by 12% to $2.3 billion, driven by investments in sales and marketing, as well as increased costs related to the company’s growth initiatives. The company’s diluted earnings per share (EPS) was $2.44, a 14% increase from the prior year. As of December 31, 2024, Insight had cash and cash equivalents of $1.1 billion and total debt of $1.4 billion. The company’s aggregate market value of common equity held by non-affiliates was $5.6 billion, and the number of shares outstanding was 31.8 million.

Overview of Insight Enterprises, Inc.

Insight Enterprises, Inc. is a Fortune 500-ranked solutions integrator that helps its clients accelerate their digital transformation and maximize the value of technology. The company serves clients in North America, Europe, the Middle East, Africa, and Asia-Pacific. Insight offers a comprehensive portfolio of hardware, software, and services, including cloud solutions, to enable secure, end-to-end transformation for its clients.

2024 Financial and Operational Highlights

Reported gross profit of $1.8 billion and record gross margin of 20.3%, primarily driven by margin expansion in North America.
Generated $632.8 million in cash flows from operations.
Acquired Infocenter in May 2024 to strengthen digital transformation capabilities leveraging their expertise in ServiceNow.

Consolidated 2024 Financial Results

Net sales of $8.7 billion decreased 5% compared to 2023.
Gross profit of $1.8 billion increased 6% compared to 2023.
Consolidated gross margin expanded approximately 210 basis points to a record 20.3% of net sales in 2024, reflecting expansion in margin from services net sales.
Earnings from operations decreased 7% to $388.6 million, representing 4.5% of net sales.
Net earnings were $249.7 million, and diluted net earnings per share were $6.55.
The results included severance and restructuring expenses of $25.0 million, acquisition and integration expenses of $2.7 million, and the repurchase of 1.0 million shares of common stock for $200.0 million.

Segment Performance

North America:

Net sales decreased 4% to $7.05 billion, with a 10% decrease in hardware sales, a 3% increase in software sales, and a 7% increase in services sales.
Gross profit increased 4% to $1.40 billion, with gross margin expanding by approximately 170 basis points to 19.9%.
Earnings from operations decreased 12% to $319.1 million, representing 4.5% of net sales.

EMEA:

Net sales decreased 10% (11% excluding currency effects) to $1.41 billion, with an 8% decrease in hardware sales, a 20% decrease in software sales, and a 23% increase in services sales.
Gross profit increased 13% (11% excluding currency effects) to $293.2 million, with gross margin expanding by 410 basis points to 20.7%.
Earnings from operations increased 21% (20% excluding currency effects) to $46.2 million, representing 3.3% of net sales.

APAC:

Net sales increased 1% (2% excluding currency effects) to $233.0 million, with a 19% decrease in hardware sales, a 5% increase in software sales, and an 8% increase in services sales.
Gross profit increased 11% (12% excluding currency effects) to $70.8 million, with gross margin expanding by approximately 270 basis points to 30.4%.
Earnings from operations increased 19% (20% excluding currency effects) to $23.3 million, representing 10.0% of net sales.

Adjusted Earnings from Operations

Adjusted earnings from operations, which exclude certain one-time items, increased 2% to $502.4 million, or 5.8% of net sales, in 2024 compared to $492.1 million, or 5.4% of net sales, in 2023.

Non-Operating Expense and Income Tax Expense

Interest expense increased 41% to $67.6 million due to higher borrowings and interest rates.
The effective tax rate decreased from 25.6% in 2023 to 25.0% in 2024, primarily due to additional tax credits.

Cash Flow and Liquidity

Cash flow from operating activities was $632.8 million in 2024, compared to $619.5 million in 2023.
The company used cash for strategic acquisitions, share repurchases, debt repayment, and other payments.
As of December 31, 2024, Insight had $259.2 million in cash and $864.1 million in total debt outstanding.

Supply Chain and Inflation Update

Supply constraints that impacted the industry have eased, with lead times for certain infrastructure returning to near historic levels.
However, the company continues to see a general slowdown in client decision-making, which is expected to continue in the short term.
Inflation contributed to higher interest rates on variable-rate facilities, which are expected to remain elevated throughout 2025.

Outlook and Key Risks

Insight Enterprises continues to focus on enabling secure, end-to-end digital transformation for its clients through its comprehensive portfolio of solutions and services. The company is actively monitoring the global macroeconomic environment, including supply chain and interest rate challenges, and assessing the potential impacts on its current results, financial condition, and liquidity, as well as on its clients, partners, and prospects.

Key risks facing the company include reliance on partners for product availability, competitive products, and marketing funds/purchasing incentives, which can change significantly. The company also faces risks related to the global macroeconomic environment, including supply chain disruptions and inflation, which could impact its clients and operations.

Overall, Insight Enterprises delivered a solid financial performance in 2024, with record gross margins and strong cash flow generation. The company continues to focus on enabling digital transformation for its clients and navigating the evolving macroeconomic landscape.