Insight Enterprises, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated net sales increased 22% year over year to $2.4 billion for the quarter ended September 30, 2026.
• Gross profit increased 20% year over year to $523.2 million, while gross margin contracted 30 basis points to 21.4%.
• Consolidated net earnings decreased 57% year over year to $22.2 million (0.9% of net sales).
• Adjusted consolidated net earnings increased 28% year over year to $107.3 million (4.4% of net sales).
• Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) increased 22% year over year to $177.4 million.
• Diluted earnings per share (EPS) decreased 54% year over year to $0.74; Adjusted diluted EPS increased 34% year over year to $3.59.
• Cash flows provided by operating activities were $128.4 million.
• Selling and administrative expenses increased 29% year over year to $428.6 million; Adjusted selling and administrative expenses increased 19% year over year.
• Earnings from operations decreased 26% year over year to $68.7 million (2.8% of net sales); Adjusted earnings from operations increased 23% year over year to $166.9 million (6.8% of net sales).
• The effective tax rate for the quarter was 49.9%.

Guidance and Future Outlook:

• Insight raised its full-year 2026 outlook.
• Gross profit growth is now expected to be between 12.5% and 14.0%, with gross margin expected to be approximately 21.5%.
• Adjusted diluted earnings per share for the full year is now expected to be between $13.55 and $13.75 (midpoint of $13.65), representing approximately 27% growth compared to the full year 2025 adjusted diluted EPS of $10.75.
• Full-year 2026 outlook assumptions include: interest and other expenses of approximately $95 million; an effective tax rate of approximately 25.5%; capital expenditures between $20 million and $30 million; and an average share count of approximately 30.0 million shares.
• The outlook excludes acquisition-related intangibles amortization expense of approximately $83.4 million, non-cash stock-based compensation, and acquisition, integration, transformation, or severance and restructuring expenses.

Business Segments and Product Lines:

• Product net sales increased 22% year over year; Services net sales increased 20% year over year.
• Hardware product net sales increased 32% year over year; Software product net sales decreased 3% year over year.
• Cloud gross profit increased 26% year over year; Insight Core services gross profit increased 21% year over year.
• Infrastructure hardware gross profit increased more than 50% year over year.
• North America: Net sales increased 22% to $2.0 billion; Product sales up 24%, Services sales up 15%. Gross profit increased 15% to $393.6 million (19.8% margin). Adjusted earnings from operations increased 13% to $132.0 million (6.7% margin).
• EMEA: Net sales increased 6% to $338.0 million. Gross profit increased 22% to $90.5 million (26.8% margin). Adjusted earnings from operations increased 52% to $18.4 million (5.5% margin).
• APAC: Net sales increased 104% to $120.0 million. Gross profit increased 121% to $39.0 million (32.5% margin). GAAP earnings from operations decreased more than 100% to a loss of $22.3 million; Adjusted earnings from operations increased 156% to $16.5 million (13.7% margin).
• Expenses related to acquisitions completed in the fourth quarter of 2025 were not present in the comparable prior-year period.

Market and Competitive Landscape:

• The company reported broad-based momentum across its business and strategic growth priorities.
• Management highlighted strong performance in infrastructure hardware, Cloud, and Insight Core Services.
• The company noted reliance on partners for product availability, competitive products, and marketing funds, which can change significantly.
• Risks include actions of competitors, including manufacturers and publishers of products sold.

Risks and Challenges:

• Earnings from operations decreased due to higher earnout valuation adjustments, higher severance and restructuring costs, and costs associated with a voluntary separation program initiated in the third quarter of 2026.
• Forward-looking statements cite risks including inflation, higher interest rates, supply constraints, tariffs, trade policies, geopolitical conditions, and the war in Iran.
• Risks include the ability to keep pace with rapidly evolving technological advances, including generative and agentic AI.
• Risks include reliance on independent shipping companies, international operations (including expansion into the Middle East), and potential contractual disputes.
• Risks include cyberattacks, data privacy breaches, and intellectual property infringement claims.
• Risks include the transition of the new Chief Executive Officer and the integration of acquired businesses.

Management Commentary and Tone:

• Jack Azagury, President and Chief Executive Officer, stated, "We delivered another strong quarter, with broad-based momentum across our business."
• Management emphasized that gross profit increased 20%, adjusted earnings from operations grew 23%, and adjusted diluted earnings per share increased 34%.
• The tone was confident regarding strategic growth priorities, specifically noting gross profit growth of more than 50% in infrastructure hardware and more than 20% in Cloud and Insight Core Services.

Other Key Points:

• The company raised full-year 2026 guidance.
• The company initiated a voluntary separation program in the third quarter of 2026, contributing to higher severance and restructuring costs.
• Significant changes in earnout valuation adjustments impacted the quarter's GAAP results.
• The company excluded the effects of fluctuating foreign currency exchange rates for certain performance measures, noting APAC sales growth of 93% excluding currency effects.
• The company hosts a conference call and webcast to discuss results.
• The company's convertible senior notes matured in February 2025.
• The company reported a net loss on revaluation of warrant settlement liabilities in the prior year period (nine months ended September 30, 2025), which was not present in the current period.
• The company reported a benefit from a note hedge in the current period where the average stock price exceeded $68.32.