Insight Enterprises, Inc. (NASDAQ:NSIT) (the "Company") today reported financial results for the quarter ended June 30, 2024. Highlights include:

Gross profit increased 5% year over year to $453.4 million with gross margin expanding 260 basis points to 21.0%
- Insight Core services gross profit grew 12% year over year
- Cloud gross profit grew 21% year over year
Consolidated net earnings grew 9% to $87.4 million, year over year
Adjusted earnings before interest, tax, depreciation and amortization ("EBITDA") grew 3% to $141.4 million, year over year
Diluted earnings per share of $2.27 increased 5% year over year
Adjusted diluted earnings per share of $2.46 decreased 4% year to year

In the second quarter of 2024, net sales decreased 8%, year to year, and gross profit increased 5%, year over year to $453.4 million. Gross margin expanded 260 basis points compared to the second quarter of 2023 to 21.0%. Earnings from operations of $131.1 million increased 11% compared to $118.6 million in the second quarter of 2023. Adjusted earnings from operations of $131.1 million increased 1% compared to $129.7 million in the second quarter of 2023. Consolidated net earnings were $87.4 million, or 4.0% of net sales, in the second quarter of 2024, and Adjusted consolidated net earnings were $86.7 million, or 4.0% of net sales. Diluted earnings per share for the quarter was $2.27, up 5%, year over year, and Adjusted diluted earnings per share was $2.46, down 4%, year to year.

"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.

KEY HIGHLIGHTS

Results for the Quarter:

Consolidated net sales for the second quarter of 2024 of $2.2 billion decreased 8%, year to year, when compared to the second quarter of 2023. Product net sales decreased 11%, year to year, while services net sales increased 8%, year over year.
- Net sales in North America decreased 9%, year to year, to $1.7 billion;
  - Product net sales decreased 11%, year to year, to $1.4 billion;
  - Services net sales increased 5%, year over year, to $329.6 million;
- Net sales in EMEA decreased 6%, year to year, to $368.9 million; and
- Net sales in APAC was flat, year to year, at $60.4 million.
Excluding the effects of fluctuating foreign currency exchange rates, consolidated net sales decreased 8%, year to year, with decreases in net sales in North America and EMEA of 9% and 6% year to year, respectively, while net sales in APAC increased 1%, year over year.
Consolidated gross profit increased 5% compared to the second quarter of 2023 to $453.4 million, with consolidated gross margin expanding 260 basis points to 21.0% of net sales. Product gross profit decreased 3%, year to year, and services gross profit increased 11%, year over year. Cloud gross profit grew 21%, year over year, and Insight Core services gross profit increased 12%, year over year. By segment, gross profit:
- increased 3% in North America, year over year, to $354.1 million (20.4% gross margin);
- increased 10% in EMEA, year over year, to $79.1 million (21.5% gross margin); and
- increased 12% in APAC, year over year, to $20.1 million (33.3% gross margin).
Excluding the effects of fluctuating foreign currency exchange rates, consolidated gross profit was up 5%, year over year, with gross profit growth in North America, EMEA and APAC of 3%, 10% and 13%, respectively, year over year.
Consolidated earnings from operations increased 11% compared to the second quarter of 2023 to $131.1 million, or 6.1% of net sales. By segment, earnings from operations:
- increased 7% in North America, year over year, to $101.8 million, or 5.9% of net sales;
- increased 29% in EMEA, year over year, to $21.0 million, or 5.7% of net sales; and
- increased 19% in APAC, year over year, to $8.3 million, or 13.7% of net sales.
Excluding the effects of fluctuating foreign currency exchange rates, consolidated earnings from operations were up 11%, year over year, with increased earnings from operations in North America, EMEA and APAC of 7%, 30% and 21%, year over year, respectively.
Adjusted earnings from operations increased 1% compared to the second quarter of 2023 to $131.1 million, or 6.1% of net sales. By segment, Adjusted earnings from operations:
- decreased 1% in North America, year to year, to $103.4 million, or 6.0% of net sales;
- increased 9% in EMEA, year over year, to $19.2 million, or 5.2% of net sales; and
- increased 20% in APAC, year over year, to $8.4 million, or 14.0% of net sales.
Excluding the effects of fluctuating foreign currency exchange rates, Adjusted consolidated earnings from operations were up 2%, year over year, with increased Adjusted earnings from operations in EMEA and APAC of 9% and 21%, year over year, respectively, partially offset by a decrease in Adjusted earnings from operations in North America of 1%, year to year.
Consolidated net earnings and diluted earnings per share for the second quarter of 2024 were $87.4 million and $2.27, respectively, at an effective tax rate of 25.5%.
Adjusted consolidated net earnings and Adjusted diluted earnings per share for the second quarter of 2024 were $86.7 million and $2.46, respectively. Excluding the effects of fluctuating foreign currency exchange rates, Adjusted diluted earnings per share decreased 4% year to year.

In discussing financial results for the three and six months ended June 30, 2024 and 2023 in this press release, the Company refers to certain financial measures that are adjusted from the financial results prepared in accordance with United States generally accepted accounting principles ("GAAP"). When referring to non-GAAP measures, the Company refers to them as "Adjusted." See "Use of Non-GAAP Financial Measures" for additional information. A tabular reconciliation of financial measures prepared in accordance with GAAP to the non-GAAP financial measures is included at the end of this press release.

In some instances, the Company refers to changes in net sales, gross profit, earnings from operations and Adjusted earnings from operations on a consolidated basis and in North America, EMEA and APAC excluding the effects of fluctuating foreign currency exchange rates. In addition, the Company refers to changes in Adjusted diluted earnings per share on a consolidated basis excluding the effects of fluctuating foreign currency exchange rates. These are also considered to be non-GAAP measures. We believe providing this information excluding the effects of fluctuating foreign currency exchange rates provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. In computing these changes and percentages, the Company compares the current year amount as translated into U.S. dollars under the applicable accounting standards to the prior year amount in local currency translated into U.S. dollars utilizing the weighted average translation rate for the current period. The performance measures excluding the effects of fluctuating foreign currency exchange rates should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

The tax effect of Adjusted amounts referenced herein were computed using the statutory tax rate for the taxing jurisdictions in the operating segment in which the related expenses were recorded, adjusted for the effects of valuation allowances on net operating losses in certain jurisdictions.

GUIDANCE

For the full year 2024, the Company expects Adjusted diluted earnings per share to be between $10.60 and $10.90. We expect to deliver low double digit gross profit growth and expect that our gross margin will be in the 19% to 20% range.

This outlook assumes:

interest expense of $60 to $62 million;
an effective tax rate of 26% for the full year;
capital expenditures of $35 to $40 million; and
an average share count for the full year of 35.1 million shares.

This outlook excludes acquisition-related intangibles amortization expense of approximately $69 million, assumes no acquisition or integration related expenses, transformation or severance and restructuring expenses, net and no significant change in our debt instruments or the macroeconomic environment. Due to the inherent difficulty of forecasting some of these types of expenses, which impact net earnings, diluted earnings per share and selling and administrative expenses, the Company is unable to reasonably estimate the impact of such expenses, if any, to net earnings, diluted earnings per share and selling and administrative expenses. Accordingly, the Company is unable to provide a reconciliation of GAAP to non-GAAP diluted earnings per share for the full year 2024 forecast.

CONFERENCE CALL AND WEBCAST

The Company will host a conference call and live webcast today at 9:00 a.m. ET to discuss second quarter 2024 results of operations. A live webcast of the conference call (in listen-only mode) will be available on the Company's web site at http://investor.insight.com/, and a replay of the webcast will be available on the Company's web site for a limited time following the call. To access the live conference call, please register in advance using the event link on the Company's web site. Upon registering, participants will receive dial-in information via email, as well as a unique registrant ID, event passcode, and detailed instructions regarding how to join the call.

USE OF NON-GAAP FINANCIAL MEASURES

The non-GAAP financial measures are referred to as "Adjusted". Adjusted earnings from operations, Adjusted net earnings and Adjusted diluted earnings per share exclude (i) severance and restructuring expenses, net, (ii) certain executive recruitment and hiring related expenses, (iii) amortization of intangible assets, (iv) transformation costs, (v) certain acquisition and integration related expenses, (vi) gains and losses from revaluation of acquisition related earnout liabilities, (vii) certain third-party data center service outage related expenses and recoveries, and (viii) the tax effects of each of these items, as applicable. Transformation costs represent costs we are incurring to transform our business, to help us achieve our strategic objectives, including becoming a leading solutions integrator. The Company excludes these items when internally evaluating earnings from operations, tax expense, net earnings and diluted earnings per share for the Company and earnings from operations for each of the Company's operating segments. Adjusted diluted earnings per share also includes the impact of the benefit from the note hedge where the Company's average stock price for the second quarter of 2024 was in excess of $68.32, which is the initial conversion price of our convertible senior notes (the "Convertible Notes"). Adjusted EBITDA excludes (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization of property and equipment, (iv) amortization of intangible assets, (v) severance and restructuring expenses, net, (vi) certain executive recruitment and hiring related expenses, (vii) transformation costs, (viii) certain acquisition and integration related expenses, (ix) certain third-party data center service outage related expenses and recoveries, and (x) gains and losses from revaluation of acquisition related earnout liabilities. Adjusted return on invested capital ("ROIC") excludes (i) severance and restructuring expenses, net, (ii) certain executive recruitment and hiring related expenses, (iii) amortization of intangible assets, (iv) transformation costs, (v) certain acquisition and integration related expenses, (vi) certain third-party data center service outage related expenses and recoveries, (vii) gains and losses from revaluation of acquisition related earnout liabilities, and (viii) the tax effects of each of these items, as applicable.

These non-GAAP measures are used by the Company and its management to evaluate financial performance against budgeted amounts, to calculate incentive compensation, to assist in forecasting future performance and to compare the Company's results to those of the Company's competitors. The Company believes that these non-GAAP financial measures are useful to investors because they allow for greater transparency, facilitate comparisons to prior periods and the Company's competitors' results and assist in forecasting performance for future periods. These non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

FINANCIAL SUMMARY TABLE (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)

	Three Months Ended June 30,							Six Months Ended June 30,
	2024			2023			change	2024			2023			change
Insight Enterprises, Inc.
Net sales:
Products	$	1,726,435		$	1,945,609		(11%)	$	3,690,390		$	3,913,254		(6%)
Services	$	435,227		$	403,987		8%	$	850,757		$	760,289		12%
Total net sales	$	2,161,662		$	2,349,596		(8%)	$	4,541,147		$	4,673,543		(3%)
Gross profit	$	453,365		$	433,190		5%	$	894,293		$	824,505		8%
Gross margin		21.0	%		18.4	%	260 bps		19.7	%		17.6	%	210 bps
Selling and administrative expenses	$	317,234		$	318,243		—%	$	654,668		$	628,244		4%
Severance and restructuring expenses, net	$	4,868		$	(3,770	)	*	$	7,095		$	32		> 100%
Acquisition and integration related expenses	$	190		$	106		79%	$	1,471		$	157		> 100%
Earnings from operations	$	131,073		$	118,611		11%	$	231,059		$	196,072		18%
Net earnings	$	87,444		$	80,482		9%	$	154,471		$	130,454		18%
Diluted earnings per share	$	2.27		$	2.17		5%	$	4.01		$	3.51		14%

*Sales Mix*							**							**
Hardware		54	%		56	%	(11%)		51	%		57	%	(13%)
Software		26	%		27	%	(13%)		30	%		27	%	9%
Services		20	%		17	%	8%		19	%		16	%	12%
		100	%		100	%	(8%)		100	%		100	%	(3%)

North America
Net sales:
Products	$	1,402,732		$	1,582,454		(11%)	$	2,989,038		$	3,132,890		(5%)
Services	$	329,625		$	314,712		5%	$	648,141		$	598,240		8%
Total net sales	$	1,732,357		$	1,897,166		(9%)	$	3,637,179		$	3,731,130		(3%)
Gross profit	$	354,107		$	343,142		3%	$	703,950		$	658,286		7%
Gross margin		20.4	%		18.1	%	230 bps		19.4	%		17.6	%	180 bps
Selling and administrative expenses	$	248,192		$	252,285		(2%)	$	511,112		$	501,105		2%
Severance and restructuring expenses, net	$	3,922		$	(4,685	)	*	$	5,541		$	(1,598	)	*
Acquisition and integration related expenses	$	180		$	106		70%	$	1,461		$	157		>100%
Earnings from operations	$	101,813		$	95,436		7%	$	185,836		$	158,622		17%

*Sales Mix*							**							**
Hardware		60	%		61	%	(11%)		56	%		62	%	(13%)
Software		21	%		22	%	(12%)		26	%		22	%	18%
Services		19	%		17	%	5%		18	%		16	%	8%
		100	%		100	%	(9%)		100	%		100	%	(3%)

EMEA
Net sales:
Products	$	292,256		$	328,280		(11%)	$	631,822		$	705,731		(10%)
Services	$	76,617		$	63,446		21%	$	149,892		$	112,999		33%
Total net sales	$	368,873		$	391,726		(6%)	$	781,714		$	818,730		(5%)
Gross profit	$	79,142		$	72,047		10%	$	154,175		$	132,935		16%
Gross margin		21.5	%		18.4	%	310 bps		19.7	%		16.2	%	350 bps
Selling and administrative expenses	$	57,264		$	54,913		4%	$	120,569		$	104,818		15%
Severance and restructuring expenses	$	861		$	867		(1%)	$	1,399		$	1,569		(11%)
Acquisition and integration related expenses	$	10		$	—		*	$	10		$	—		*
Earnings from operations	$	21,007		$	16,267		29%	$	32,197		$	26,548		21%

*Sales Mix*							**							**
Hardware		34	%		34	%	(5%)		34	%		36	%	(11%)
Software		45	%		50	%	(15%)		47	%		50	%	(10%)
Services		21	%		16	%	21%		19	%		14	%	33%
		100	%		100	%	(6%)		100	%		100	%	(5%)

APAC
Net sales:
Products	$	31,447		$	34,875		(10%)	$	69,530		$	74,633		(7%)
Services	$	28,985		$	25,829		12%	$	52,724		$	49,050		7%
Total net sales	$	60,432		$	60,704		—%	$	122,254		$	123,683		(1%)
Gross profit	$	20,116		$	18,001		12%	$	36,168		$	33,284		9%
Gross margin		33.3	%		29.7	%	360 bps		29.6	%		26.9	%	270 bps
Selling and administrative expenses	$	11,778		$	11,045		7%	$	22,987		$	22,321		3%
Severance and restructuring expenses	$	85		$	48		77%	$	155		$	61		> 100%
Earnings from operations	$	8,253		$	6,908		19%	$	13,026		$	10,902		19%

*Sales Mix*							**							**
Hardware		17	%		21	%	(22%)		14	%		19	%	(25)%
Software		35	%		36	%	(2%)		43	%		41	%	1%
Services		48	%		43	%	12%		43	%		40	%	7%
		100	%		100	%	—%		100	%		100	%	(1%)

*		Percentage change not considered meaningful
**		Change in sales mix represents growth/decline in category net sales on a U.S. dollar basis and does not exclude the effects of fluctuating foreign currency exchange rates

FORWARD-LOOKING INFORMATION

Certain statements in this release and the related conference call, webcast and presentation are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including those related to the impact of inflation and higher interest rates, the Company's future financial performance and results of operations, including gross profit growth, Adjusted diluted earnings per share, and Adjusted selling and administrative expenses, as well as the Company's other key performance indicators, the Company's anticipated effective tax rate, capital expenditures, and expected average share count, the Company's expectations regarding cash flow, the Company's expectations regarding supply constraints and shipment of backlog, future trends in the IT market, the Company's business strategy and strategic initiatives, which are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. There can be no assurances that the results discussed by the forward-looking statements will be achieved, and actual results may differ materially from those set forth in the forward-looking statements. Some of the important factors that could cause the Company's actual results to differ materially from those projected in any forward-looking statements include, but are not limited to, the following, which are discussed in the Company's filings with the Securities and Exchange Commission (the "SEC"), including in the "Risk Factors" sections of the Company's most recently filed periodic report on Form 10-K and subsequent filings with the SEC:

actions of our competitors, including manufacturers and publishers of products we sell;
our reliance on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can change significantly in the amounts made available and in the requirements year over year;
our ability to keep pace with rapidly evolving technological advances and the evolving competitive marketplace;
general economic conditions, economic uncertainties and changes in geopolitical conditions, including the possibility of a recession or a decline in market activity as a result of the ongoing conflicts in Ukraine and Gaza;
changes in the IT industry and/or rapid changes in technology;
our ability to provide high quality services to our clients;
our reliance on independent shipping companies;
the risks associated with our international operations;
supply constraints for products;
natural disasters or other adverse occurrences, including public health issues such as pandemics or epidemics;
disruptions in our IT systems and voice and data networks;
cyberattacks, outages, or third-party breaches of data privacy as well as related breaches of government regulations;
intellectual property infringement claims and challenges to our registered patents, trademarks and trade names;
potential liability and competitive risk based on the development, adoption, and use of Generative Artificial Intelligence;
legal proceedings, client audits and failure to comply with laws and regulations;
risks of termination, delays in payment, audits and investigations related to our public sector contracts;
exposure to changes in, interpretations of, or enforcement trends related to tax rules and regulations;
our potential to draw down a substantial amount of indebtedness;
the conditional conversion feature of the Convertible Notes, which has been triggered, and may adversely affect the Company's financial condition and operating results;
the Company is subject to counterparty risk with respect to certain hedge and warrant transactions entered into in connection with the issuance of the Convertible Notes;
increased debt and interest expense and the possibility of decreased availability of funds under our financing facilities;
possible significant fluctuations in our future operating results as well as seasonality and variability in client demands;
potential contractual disputes with our clients and third-party suppliers;
our dependence on certain key personnel and our ability to attract, train and retain skilled teammates;
risks associated with the integration and operation of acquired businesses, including achievement of expected synergies and benefits; and
future sales of the Company's common stock or equity-linked securities in the public market could lower the market price for our common stock.

Additionally, there may be other risks that are otherwise described from time to time in the reports that the Company files with the SEC. Any forward-looking statements in this release, the related conference call, webcast and presentation speak only as of the date on which they are made and should be considered in light of various important factors, including the risks and uncertainties listed above, as well as others. The Company assumes no obligation to update, and, except as may be required by law, does not intend to update, any forward-looking statements. The Company does not endorse any projections regarding future performance that may be made by third parties.

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Net sales:
Products	$	1,726,435		$	1,945,609		$	3,690,390		$	3,913,254
Services		435,227			403,987			850,757			760,289
Total net sales		2,161,662			2,349,596			4,541,147			4,673,543
Costs of goods sold:
Products		1,536,270			1,749,448			3,307,854			3,522,177
Services		172,027			166,958			339,000			326,861
Total costs of goods sold		1,708,297			1,916,406			3,646,854			3,849,038
Gross profit		453,365			433,190			894,293			824,505
Operating expenses:
Selling and administrative expenses		317,234			318,243			654,668			628,244
Severance and restructuring expenses, net		4,868			(3,770	)		7,095			32
Acquisition and integration related expenses		190			106			1,471			157
Earnings from operations		131,073			118,611			231,059			196,072
Non-operating expense (income):
Interest expense, net		14,190			9,405			26,747			19,753
Other (income) expense, net		(469	)		(60	)		(1,232	)		692
Earnings before income taxes		117,352			109,266			205,544			175,627
Income tax expense		29,908			28,784			51,073			45,173
Net earnings	$	87,444		$	80,482		$	154,471		$	130,454

Net earnings per share:
Basic	$	2.69		$	2.43		$	4.74		$	3.91
Diluted	$	2.27		$	2.17		$	4.01		$	3.51

Shares used in per share calculations:
Basic		32,565			33,101			32,580			33,403
Diluted		38,567			37,039			38,501			37,123

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED)

	June 30, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	256,307		$	268,730
Accounts receivable, net		4,143,400			3,568,290
Inventories		145,456			184,605
Contract assets, net		89,179			120,518
Other current assets		265,141			189,158
Total current assets		4,899,483			4,331,301

Long-term contract assets, net		119,332			132,780
Property and equipment, net		211,852			210,061
Goodwill		872,785			684,345
Intangible assets, net		460,809			369,687
Long-term accounts receivable		648,162			412,666
Other assets		140,390			145,510
	$	7,352,813		$	6,286,350

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable – trade	$	2,973,317		$	2,255,183
Accounts payable – inventory financing facilities		218,553			231,850
Accrued expenses and other current liabilities		487,556			538,346
Current portion of long-term debt		331,997			348,004
Total current liabilities		4,011,423			3,373,383

Long-term debt		663,075			592,517
Deferred income taxes		52,357			27,588
Long-term accounts payable		608,298			353,794
Other liabilities		170,115			203,335
		5,505,268			4,550,617
Stockholders' equity:
Preferred stock		—			—
Common stock		326			326
Additional paid-in capital		334,573			328,607
Retained earnings		1,569,774			1,448,412
Accumulated other comprehensive loss – foreign currency translation adjustments		(57,128	)		(41,612	)
Total stockholders' equity		1,847,545			1,735,733
	$	7,352,813		$	6,286,350

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)

	Six Months Ended June 30,
	2024			2023
Cash flows from operating activities:
Net earnings	$	154,471		$	130,454
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		46,451			29,148
Provision for losses on accounts receivable		5,196			2,585
Provision for losses on contract assets		3,038			—
Non-cash stock-based compensation		16,900			16,663
Gain on revaluation of earnout liabilities		(24,207	)		—
Deferred income taxes		(3,535	)		(1,231	)
Amortization of debt issuance costs		2,590			2,430
Other adjustments		(289	)		(2,801	)
Changes in assets and liabilities:
Increase in accounts receivable		(598,219	)		(368,612	)
Decrease in inventories		34,366			14,596
Decrease in contract assets		42,911			1,570
(Increase) decrease in long-term accounts receivable		(235,690	)		12,704
Increase in other assets		(52,087	)		(49,151	)
Increase in accounts payable		734,222			420,349
Increase (decrease) in long-term accounts payable		237,652			(10,251	)
Decrease in accrued expenses and other liabilities		(70,806	)		(10,493	)
Net cash provided by operating activities:		292,964			187,960
Cash flows from investing activities:
Proceeds from sale of assets		3,970			15,515
Purchases of property and equipment		(18,644	)		(13,202	)
Acquisitions, net of cash and cash equivalents acquired		(264,374	)		—
Net cash (used in) provided by investing activities:		(279,048	)		2,313
Cash flows from financing activities:
Borrowings on ABL revolving credit facility		2,451,966			2,259,356
Repayments on ABL revolving credit facility		(2,872,410	)		(2,214,246	)
Net (repayments) borrowings under inventory financing facilities		(12,987	)		30,848
Proceeds from issuance of senior unsecured notes		500,000			—
Payment of debt issuance costs		(7,854	)		—
Repurchases of common stock		(35,000	)		(217,108	)
Repayment of principal on the Convertible Notes		(16,895	)		—
Earnout and acquisition related payments		(18,296	)		(10,748	)
Other payments		(9,147	)		(9,161	)
Net cash used in financing activities:		(20,623	)		(161,059	)
Foreign currency exchange effect on cash, cash equivalents and restricted cash balances		(5,728	)		3,050
(Decrease) increase in cash, cash equivalents and restricted cash		(12,435	)		32,264
Cash, cash equivalents and restricted cash at beginning of period		270,785			165,718
Cash, cash equivalents and restricted cash at end of period	$	258,350		$	197,982

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Adjusted Consolidated Earnings from Operations:
GAAP consolidated EFO	$	131,073		$	118,611		$	231,059		$	196,072
Amortization of intangible assets		17,357			8,285			32,282			16,595
Gain on revaluation of earnout liabilities		(25,148	)		—			(24,207	)		—
Other*		7,810			2,812			13,708			10,998
Adjusted non-GAAP consolidated EFO	$	131,092		$	129,708		$	252,842		$	223,665

GAAP EFO as a percentage of net sales		6.1	%		5.0	%		5.1	%		4.2	%
Adjusted non-GAAP EFO as a percentage of net sales		6.1	%		5.5	%		5.6	%		4.8	%

Adjusted Consolidated Net Earnings:
GAAP consolidated net earnings	$	87,444		$	80,482		$	154,471		$	130,454
Amortization of intangible assets		17,357			8,285			32,282			16,595
Gain on revaluation of earnout liabilities		(25,148	)		—			(24,207	)		—
Other*		7,810			2,812			13,708			10,998
Income taxes on non-GAAP adjustments		(734	)		(3,032	)		(6,173	)		(7,233	)
Adjusted non-GAAP consolidated net earnings	$	86,729		$	88,547		$	170,081		$	150,814

GAAP net earnings as a percentage of net sales		4.0	%		3.4	%		3.4	%		2.8	%
Adjusted non-GAAP net earnings as a percentage of net sales		4.0	%		3.8	%		3.7	%		3.2	%

Adjusted Diluted Earnings Per Share:
GAAP diluted EPS	$	2.27		$	2.17		$	4.01		$	3.51
Amortization of intangible assets		0.45			0.22			0.84			0.45
Gain on revaluation of earnout liabilities		(0.65	)		—			(0.63	)		—
Other		0.20			0.08			0.36			0.30
Income taxes on non-GAAP adjustments		(0.02	)		(0.08	)		(0.16	)		(0.19	)
Impact of benefit from note hedge		0.21			0.17			0.41			0.27
Adjusted non-GAAP diluted EPS	$	2.46		$	2.56		$	4.83		$	4.34

Shares used in diluted EPS calculation		38,567			37,039			38,501			37,123
Impact of benefit from Note hedge		(3,322	)		(2,516	)		(3,275	)		(2,413	)
Shares used in Adjusted non-GAAP diluted EPS calculation		35,245			34,523			35,226			34,710

Adjusted North America Earnings from Operations:
GAAP EFO from North America segment	$	101,813		$	95,436		$	185,836		$	158,622
Amortization of intangible assets		15,588			7,766			28,734			15,551
Gain on revaluation of earnout liabilities		(20,684	)		—			(20,219	)		—
Other*		6,712			1,757			11,862			9,094
Adjusted non-GAAP EFO from North America segment	$	103,429		$	104,959		$	206,213		$	183,267

GAAP EFO as a percentage of net sales		5.9	%		5.0	%		5.1	%		4.3	%
Adjusted non-GAAP EFO as a percentage of net sales		6.0	%		5.5	%		5.7	%		4.9	%

Adjusted EMEA Earnings from Operations:
GAAP EFO from EMEA segment	$	21,007		$	16,267		$	32,197		$	26,548
Amortization of intangible assets		1,660			408			3,330			820
Gain on revaluation of earnout liabilities		(4,464	)		—			(3,988	)		—
Other		1,013			1,007			1,691			1,843
Adjusted non-GAAP EFO from EMEA segment	$	19,216		$	17,682		$	33,230		$	29,211

GAAP EFO as a percentage of net sales		5.7	%		4.2	%		4.1	%		3.2	%
Adjusted non-GAAP EFO as a percentage of net sales		5.2	%		4.5	%		4.3	%		3.6	%

Adjusted APAC Earnings from Operations:
GAAP EFO from APAC segment	$	8,253		$	6,908		$	13,026		$	10,902
Amortization of intangible assets		109			111			218			224
Other		85			48			155			61
Adjusted non-GAAP EFO from APAC segment	$	8,447		$	7,067		$	13,399		$	11,187

GAAP EFO as a percentage of net sales		13.7	%		11.4	%		10.7	%		8.8	%
Adjusted non-GAAP EFO as a percentage of net sales		14.0	%		11.6	%		11.0	%		9.0	%

Adjusted EBITDA:
GAAP consolidated net earnings	$	87,444		$	80,482		$	154,471		$	130,454
Interest expense		16,859			11,056			32,128			22,744
Income tax expense		29,908			28,784			51,073			45,173
Depreciation and amortization of property and equipment		7,208			6,200			14,169			12,553
Amortization of intangible assets		17,357			8,285			32,282			16,595
Gain on revaluation of earnout liabilities		(25,148	)		—			(24,207	)		—
Other*		7,810			2,812			13,708			10,998
Adjusted non-GAAP EBITDA	$	141,438		$	137,619		$	273,624		$	238,517

GAAP consolidated net earnings as a percentage of net sales		4.0	%		3.4	%		3.4	%		2.8	%
Adjusted non-GAAP EBITDA as a percentage of net sales		6.5	%		5.9	%		6.0	%		5.1	%

Includes transformation costs of $5.6 million and $6.2 million for the three months ended June 30, 2024 and 2023, respectively and $7.9 million and $10.3 million for the six months ended June 30, 2024 and 2023, respectively.

INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)

	Twelve Months Ended June 30,
	2024			2023
Adjusted return on invested capital:
GAAP consolidated EFO	$	454,782		$	400,367
Amortization of intangible assets		51,918			33,658
Gain on revaluation of earnout liabilities		(24,207	)		—
Other⁵		38,811			24,999
Adjusted non-GAAP consolidated EFO		521,304			459,024
Income tax expense¹		135,539			119,346
Adjusted non-GAAP consolidated EFO, net of tax	$	385,765		$	339,678
Average stockholders' equity²	$	1,706,754		$	1,602,902
Average debt²		835,041			737,496
Average cash²		(268,885	)		(161,900	)
Invested Capital	$	2,272,910		$	2,178,498

Adjusted non-GAAP ROIC (from GAAP consolidated EFO)³		14.81	%		13.60	%
Adjusted non-GAAP ROIC (from non-GAAP consolidated EFO)⁴		16.97	%		15.59	%

¹		Assumed tax rate of 26.0%.
²		Average of previous five quarters.
³		Computed as GAAP consolidated EFO, net of tax of $118,243 and $104,095 for the twelve months ended June 30, 2024 and 2023, respectively, divided by invested capital.
⁴		Computed as Adjusted non-GAAP consolidated EFO, net of tax, divided by invested capital.
⁵		Includes transformation costs of $14.2 million and $21.1 million for the twelve months ended June 30, 2024 and 2023, respectively. Includes certain third-party data center service outage related expenses, net of recoveries of $1.6 million for the twelve months ended June 30, 2024.

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Insight Enterprises, Inc. Reports Second Quarter Results