In This Article:
-
Net Revenue: $2.1 billion, a decrease of 12%.
-
Hardware Revenue: Increased 1%, the first increase in 10 quarters.
-
Gross Profit: Decreased 8% due to partner program changes and a decline in on-prem software and agent services.
-
Gross Margin: 19.3%, an increase of 80 basis points.
-
Adjusted EBITDA: $111 million, a decrease of 16% with a margin contraction of 30 basis points to 5.3%.
-
Adjusted Diluted Earnings Per Share: $2.06, down 13%.
-
Cash Flow from Operations: $78 million for the quarter.
-
Cloud Gross Profit: $103 million, a decrease of 3%.
-
SaaS and Infrastructure as a Service Growth: Increased 17%, excluding partner program changes.
-
Adjusted SG&A: Declined 5% due to integration of recent acquisitions.
-
Total Debt: $961 million at the end of Q1.
-
Adjusted Return on Invested Capital: 14.9% for the trailing 12 months.
-
Share Repurchase Program: $300 million remaining.
-
Guidance for Full-Year 2025: Gross profit growth in the low-single-digits, gross margin approximately 20%, adjusted diluted EPS between $9.70 to $10.10.
Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Insight Enterprises Inc (NASDAQ:NSIT) delivered adjusted earnings from operations and adjusted diluted earnings per share in line with expectations.
-
Hardware revenue increased for the first time in 10 quarters, driven by strong performance in servers and storage.
-
The company reported a 17% growth in SaaS and Infrastructure as a Service gross profit, despite partner program changes.
-
Insight Enterprises Inc (NASDAQ:NSIT) is leveraging AI technologies to deliver quick assessments and improve project scoping, enhancing client engagement.
-
The company has been recognized with several accolades, including Google Partner of the Year for Google Workspace and Intel US Data Center Partner of the Year.
Negative Points
-
Net revenue decreased by 12%, primarily due to a 13% decline in product revenue.
-
On-prem software revenue was down 32% due to a difficult comparison with a large transaction in Q1 2024.
-
Insight Core services revenue decreased by 2% as large enterprise clients delayed services projects.
-
Cloud gross profit decreased by 3% due to declines in legacy Microsoft Enterprise agreements and Google Cloud business.
-
The macro environment has deteriorated, resulting in increased volatility and uncertainty, impacting client spending patterns.
Q & A Highlights
Q: Given the tougher macro environment, what gives you confidence in maintaining the same outlook as 90 days ago? A: Joyce Mullen, President and CEO, explained that despite the uncertainty, there are reasons for optimism, such as good momentum in hardware and AI interest, strong performance from recent acquisitions, and effective management of partner program changes. They remain optimistic about the need for technology investments to modernize infrastructure. James Morgado, CFO, added that Q1 results aligned with expectations, providing confidence for the first half of the year.