On August 1, 2024, Insight Enterprises Inc (NSIT, Financial) released its 8-K filing detailing the financial results for the quarter ended June 30, 2024. Insight Enterprises Inc is a Fortune IT provider engaged in helping businesses of all sizes, large enterprises, governments, schools, and healthcare organizations. The company operates through three geographic segments: North America, EMEA, and APAC, with the majority of its revenue generated from the North America segment.
Performance Overview
Insight Enterprises Inc (NSIT, Financial) reported a mixed performance for Q2 2024. The company posted a gross profit increase of 5% year-over-year to $453.4 million, with gross margin expanding by 260 basis points to 21.0%. However, net sales decreased by 8% year-over-year to $2.2 billion. Despite the decline in sales, the company managed to grow its consolidated net earnings by 9% to $87.4 million.
Key Financial Achievements
Insight Enterprises Inc (NSIT, Financial) achieved several notable financial milestones:
- Gross profit increased by 5% year-over-year to $453.4 million.
- Cloud gross profit grew by 21% year-over-year.
- Insight Core services gross profit increased by 12% year-over-year.
- Consolidated net earnings grew by 9% to $87.4 million.
- Diluted earnings per share (EPS) increased by 5% year-over-year to $2.27, missing the analyst estimate of $2.39.
Segment Performance
By segment, the performance was as follows:
| Segment | Net Sales | Gross Profit | Earnings from Operations |
|---|---|---|---|
| North America | $1.7 billion (down 9%) | $354.1 million (up 3%) | $101.8 million (up 7%) |
| EMEA | $368.9 million (down 6%) | $79.1 million (up 10%) | $21.0 million (up 29%) |
| APAC | $60.4 million (flat) | $20.1 million (up 12%) | $8.3 million (up 19%) |
Income Statement Highlights
Insight Enterprises Inc (NSIT, Financial) reported the following key metrics from its income statement:
- Consolidated net sales: $2.2 billion (down 8% year-over-year)
- Gross profit: $453.4 million (up 5% year-over-year)
- Earnings from operations: $131.1 million (up 11% year-over-year)
- Adjusted EBITDA: $141.4 million (up 3% year-over-year)
- Diluted EPS: $2.27 (up 5% year-over-year)
- Adjusted diluted EPS: $2.46 (down 4% year-over-year)
Commentary
"Our strategy to focus on cloud, services, and the fastest growing areas of the market has delivered improved economics to our shareholders and supports our transformation to become the leading Solutions Integrator," stated Joyce Mullen, President and Chief Executive Officer. "We delivered double-digit cloud and Insight Core services gross profit growth and expanded gross margin, year over year. We also grew Adjusted EBITDA, year over year, despite a choppy product demand environment," Mullen stated.
Analysis
Insight Enterprises Inc (NSIT, Financial) demonstrated resilience in a challenging market environment by focusing on high-growth areas such as cloud services and core services. The company's ability to expand its gross margin and increase net earnings despite a decline in net sales highlights its strategic shift towards more profitable segments. However, the decrease in adjusted diluted EPS and net sales indicates potential challenges in product demand and market conditions.
Overall, Insight Enterprises Inc (NSIT, Financial) has shown strong financial management and strategic focus, which could position it well for future growth, especially if it continues to capitalize on high-margin services and cloud solutions.
Explore the complete 8-K earnings release (here) from Insight Enterprises Inc for further details.
