Insight Enterprises (NSIT) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $2.2 billion, down 8% year-over-year, mainly due to hardware and software declines, while gross profit rose 5% to $453.4 million and gross margin expanded 260 bps to 21.0% due to a higher mix of services.

• Net earnings increased 9% to $87.4 million, with diluted EPS up 5% to $2.27; Adjusted diluted EPS was $2.46, down 4% year-over-year.

• Cloud gross profit grew 21% to $139 million and Core Services gross profit rose 12% to $81 million, driving margin expansion.

• Recent acquisitions (Infocenter, Amdaris, SADA) enhanced service capabilities and cross-selling opportunities.

• Recognized by Forbes and other organizations for diversity, workplace, and security achievements.

Financial highlights

• Q2 adjusted EBITDA was $141.4 million, up 3% year-over-year; adjusted EBITDA margin reached 6.5%.

• Year-to-date gross profit was $894 million, up 8%; net earnings rose 18% to $154 million.

• Cash flow from operations was $46 million in Q2 and $293 million for the first half, up from $188 million a year ago.

• Gross margin for Q2 was 21.0%, up from 18.4% a year ago; EFO margin was 6.1%.

• Interest expense increased 51% in Q2 due to higher loan balances and new senior notes issuance.

Outlook and guidance

• Full-year 2024 guidance: Adjusted diluted EPS $10.60–$10.90, low double-digit gross profit growth, gross margin 19%–20%.

• Interest expense expected at $60–$62 million, effective tax rate 26%, capex $35–$40 million, average share count 35.1 million.

• SADA expected to be accretive in H2 after being dilutive in H1; cloud and services to remain strong.

• Guidance excludes acquisition-related amortization and assumes no major restructuring or macro changes.

• Cash flows and available financing expected to cover operational and strategic needs for the next 12 months and beyond.