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What changed in INSIGHT ENTERPRISES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of INSIGHT ENTERPRISES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+254 added−240 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-22)

Top changes in INSIGHT ENTERPRISES INC's 2024 10-K

254 paragraphs added · 240 removed · 213 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

61 edited+10 added−15 removed33 unchanged
Biggest changeInsight continues to receive recognitions that we believe demonstrate the success of our strategy to attract, develop, and retain qualified and motivated teammates. • Fortune #20 best places to work (2023); • Insight was recognized as an employer of choice in Forbes Best Workplaces and World’s Best Employers lists (2023); • We maintained our achievement of earning a perfect score on the Human Rights Campaign Foundation’s Corporate Equality Index; and • Fortune World’s Most Admired Companies list (2021).
Biggest changeInsight continues to receive recognitions that we believe demonstrate the success of our strategy to attract, develop, and retain qualified and motivated teammates. • Insight was recognized in Forbes World’s Best Employers List (2024); • We were also named one of Forbes’ Best Large Employers for 2024; • We achieved a perfect score on the Human Rights Campaign Foundation’s Corporate Equality Index and the Disability Equality Index (2023-2024); and • Additionally, we received numerous Great Place to Work recognitions globally. 8 INSIGHT ENTERPRISES, INC.
For a discussion of risks associated with our reliance on partners, see “Risk Factors – Risks related to Our Business, Operations and Industry – We rely 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 the requirements year over year,” in Part I, Item 1A of this report.
For a discussion of risks associated with our reliance on partners, see “Risk Factors – Risks related to Our Business, Operations and Industry – We rely on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can and do change significantly in the amounts made available and the requirements year over year,” in Part I, Item 1A of this report.
Put Clients first Our primary goal is to put our clients first, becoming the partner they cannot live without, by delivering essential value for their transformation needs. We help our clients make the complex simple and look beyond the problems they are facing today to drive outcomes that energize future success.
Put Clients first Our primary goal is to put our clients first, becoming the partner they cannot live without, by delivering essential value for their technology transformation needs. We help our clients make the complex simple and look beyond the problems they are facing today to drive outcomes that energize future success.
Champion our culture We see our strong culture as a driver for growth. We are purpose-driven and values-led and are focused on championing our teammates to deliver exceptional client experience. We are building on this foundation, developing a culture of high performance, and continuing to push forward our culture of diversity and inclusion.
Champion our culture We see our strong culture as a driver for growth. We are purpose-driven and values-led and are focused on championing our teammates to deliver exceptional client experience. We are building on this foundation, developing a culture of high performance, and continuing to push forward our culture of harmony, diversity and inclusion.
We are shaping the future of work at Insight with a focus on (1) enhancing teammate engagement and culture, (2) attracting and developing top technical and strategic talent globally, (3) developing a high-performance culture, and (4) driving diversity programs that enhance inclusion and belonging globally.
We are shaping the future of work at Insight with a focus on (1) enhancing teammate engagement and culture, (2) attracting and developing top technical and strategic talent globally, (3) developing a high-performance culture, and (4) driving diversity programs that enhance teammate inclusion globally.
Drive profitable growth We relentlessly pursue high performance, operational excellence and profitable growth. We are transforming our sales capabilities and aligning our incentives to focus on our solutions portfolio. We will continue to streamline our account coverage to match skills with client needs and propensity to buy services.
Drive profitable growth We relentlessly pursue high performance, operational excellence and profitable growth. We are transforming our sales capabilities and aligning our incentives to focus on our solutions portfolio. We continue to streamline our account coverage to match skills with client needs and propensity to buy services.
Mullen joined Insight in October 2020 as our President of the North America Region. Prior to joining Insight, Ms. Mullen spent 21 years at Dell Technologies, a technology company, in a variety of sales, service delivery, and IT solutions roles. Ms.
Mullen joined Insight in October 2020 as our President of the North America Region. Prior to joining Insight, Ms. Mullen spent 21 years at Dell Technologies, a technology company, in a variety of sales, service delivery, and IT solutions leadership roles. Ms.
Crump has held controller positions with several public multinational companies in the software, medical services and semiconductor industries. Prior to joining Insight, Ms. Crump served as the Senior Director Controller, Global Accounting at Amkor Technology, Inc. a semiconductor product packaging and test services provider, from 2006 to 2016. Rob Green, Chief Digital Officer, Age 56 Mr.
Crump has held controller positions with several public multinational companies in the software, medical services and semiconductor industries. Prior to joining Insight, Ms. Crump served as the Senior Director Controller, Global Accounting at Amkor Technology, Inc. a semiconductor product packaging and test services provider, from 2006 to 2016. Rob Green , Chief Digital Officer, Age 57 Mr.
As a Fortune 500-ranked solutions integrator, we enable secure, end-to-end digital transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 35 years of broad IT expertise. We amplify our solutions and services with global scale, local expertise and our e-commerce experience, enabling our clients to realize their digital ambitions in multiple ways.
As a Fortune 500-ranked solutions integrator, we enable secure, end-to-end digital transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 36 years of broad IT expertise. We amplify our solutions and services with global scale, local expertise and our e-commerce experience, enabling our clients to realize their digital ambitions in multiple ways.
Building upon the strong foundation of our traditional technology business, we bring innovative and scalable solutions — a combination of services and product — that accelerate transformation and produce meaningful outcomes for our clients. To achieve our ambition, teammates are focused on our strategic objectives — put clients first, deliver differentiation, champion our culture, and drive profitable growth.
Building upon the strong foundation of our traditional technology business, we bring innovative and scalable solutions — a combination of services and products — that accelerate transformation and produce meaningful outcomes for our clients. To achieve our ambition, teammates are focused on our strategic objectives — put clients first, deliver differentiation, champion our culture, and drive profitable growth.
We help them modernize their business by offering solutions that maximize the value of technology and enable secure, end-to-end transformation solutions and services. 4 INSIGHT ENTERPRISES, INC. Deliver differentiation We deliver differentiation through our innovative and scalable solutions, exceptional technical talent and a compelling portfolio built on over 35 years of IT experience.
We help them modernize their business by offering solutions that 4 INSIGHT ENTERPRISES, INC. maximize the value of technology and enable secure, end-to-end transformation solutions and services. Deliver differentiation We deliver differentiation through our innovative and scalable solutions, exceptional technical talent and a compelling portfolio built on over 36 years of IT experience.
Through a combination of acquisitions and organic growth, we continued to increase our geographic coverage and expand our technical capabilities. Our acquisitions were as follows: Prior to 2018, we acquired Software Spectrum, Inc. (2006), Calence, LLC (2008), MINX Limited (2008), Ensynch, Inc. (2011), Inmac GmbH (2012), Micro Warehouse BV (2012), BlueMetal Architects, Inc.
Through a combination of acquisitions and organic growth, we continued to increase our geographic coverage and expand our technical capabilities. Our acquisitions were as follows: Prior to 2019, we acquired Software Spectrum, Inc. (2006), Calence, LLC (2008), MINX Limited (2008), Ensynch, Inc. (2011), Inmac GmbH (2012), Micro Warehouse BV (2012), BlueMetal Architects, Inc.
We believe that we are well positioned in this highly fragmented global market with sales locations in 19 countries and our deep experience delivering IT solutions across the globe. Our Strategy Our ambition is clear — we aspire to be the leading solutions integrator, setting the pace and defining a new category in our industry.
We believe that we are well positioned in this highly fragmented global market with sales locations in 20 countries and our deep experience delivering IT solutions across the globe. Our Strategy Our ambition is clear — we aspire to be the leading solutions integrator, setting the pace and defining a new category in our industry.
Hanu also has a recruiting and development academy which expanded our technical expertise in India; 3 INSIGHT ENTERPRISES, INC. • 2023 - Amdaris Group Limited ("Amdaris"), a service provider with core expertise in providing software application and development services for clients, which adds to Insight’s global application and Data & AI practices.
Hanu also has a recruiting and development academy which expanded our technical expertise in India; • 2023 - Amdaris Group Limited ("Amdaris"), a service provider with core expertise in providing software application and development services for clients, which added to 3 INSIGHT ENTERPRISES, INC. Insight’s global application and Data & AI practices.
We consider that we are emerging as a leader in our industry in digital marketing, striving to deliver an outstanding service experience to our clients. We implemented business intelligence tools that enable us to track performance in this area and demonstrate the return on our partners’ investments with us.
We believe we are emerging as a leader in our industry in digital marketing, striving to deliver an outstanding service experience to our clients. We implemented business intelligence tools that enable us to track performance in this area and demonstrate the return on our partners’ investments with us.
Amdaris also specializes in customized solutions for cloud, mobile, data analytics and web helping clients digitally transform faster; and • 2023 - SADA Systems, LLC ("SADA"), a Google cloud service provider with engineering capabilities across the entire Google Cloud stack specializing in Google Cloud priority workloads.
Amdaris also specializes in customized solutions for cloud, mobile, data analytics and web application development helping clients digitally transform faster; • 2023 - SADA Systems, LLC ("SADA"), a Google cloud service provider with engineering capabilities across the entire Google Cloud stack specializing in Google Cloud priority workloads.
We refer to our customers as “clients,” our suppliers as “partners” and our employees as “teammates”. Our Market The worldwide total addressable market for enterprise IT spend is forecasted to be $4.7 trillion by 2027 according to Gartner, a leading IT research and advisory company.
We refer to our customers as “clients,” our suppliers as “partners” and our employees as “teammates”. Our Market The worldwide total addressable market for enterprise IT spend is forecasted to be $4.9 trillion by 2027 according to Gartner, a leading IT research and advisory company.
Mullen also serves on the board of directors as well as the nominating and governance and compensation & human resources committees of The Toro Company. Jennifer Vasin, Chief Human Resources Officer, Age 49 Ms. Vasin was appointed Chief Human Resources Officer of Insight in February 2022. Ms.
Mullen also serves on the board of directors as well as the nominating and governance and compensation & human resources committees of The Toro Company. Jennifer Vasin , Chief Human Resources Officer, Age 50 Ms. Vasin was appointed Chief Human Resources Officer of Insight in February 2022. Ms.
Heart – We are teammates. We take care of each other, our clients and our communities. Harmony – We are a team of individuals who seek out unique perspectives and value differences and diversity. We believe that these values strengthen the overall Insight experience for our clients, partners and teammates.
Heart – We are teammates. We take care of each other, our clients and our communities. Harmony – We are a team of individuals who work well together, seek out unique perspectives and value differences and diversity. We believe that these values strengthen the overall Insight experience for our clients, partners and teammates.
Our competition primarily includes: • Systems integrators and digital consultants such as ePlus, Presidio, World Wide Technology, EPAM, Perficient, Accenture, Atos and Capgemini; and • Solution providers, value-added resellers and direct marketers such as CDW, Cognizant, Zones, Connection, SHI, Softchoice, Computacenter, Bechtle, SoftwareONE and Crayon.
Our competition primarily includes: • Systems integrators and digital consultants such as ePlus, Presidio, World Wide Technology, EPAM, Accenture, Atos and Capgemini; and • Technology providers, value-added resellers and direct marketers such as CDW, Cognizant, Zones, Connection, SHI, Softchoice, Computacenter, Bechtle, and SoftwareONE.
The information contained on our web site is not included as a part of, or incorporated by reference into, this Annual Report on Form 10-K. The SEC also maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. 12 INSIGHT ENTERPRISES, INC.
The information contained on our web site is not included as a part of, or incorporated by reference into, this Annual Report on Form 10-K. The SEC also maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.
Additional detailed sales mix information by operating segment can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and in Note 19 to the Consolidated Financial Statements in Part II, Item 8 of this report. Our Competition The IT industry is very fragmented and highly competitive.
Additional detailed sales mix information by 6 INSIGHT ENTERPRISES, INC. operating segment can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and in Note 19 to the Consolidated Financial Statements in Part II, Item 8 of this report. Our Competition The IT industry is very fragmented and highly competitive.
The Company is organized in the following three operating segments, which are primarily defined by their related geographies: Operating Segment* Geography Percent of 2023 Consolidated Net Sales North America United States and Canada 80% EMEA Europe, Middle East and Africa 17% APAC Asia-Pacific 3% * Additional detailed segment and geographic information can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and in Note 19 to the Consolidated Financial Statements in Part II, Item 8 of this report.
The Company is organized in the following three operating segments, which are primarily defined by their related geographies: Operating Segment* Geography Percent of 2024 Consolidated Net Sales North America United States and Canada 81% EMEA Europe, Middle East and Africa 16% APAC Asia-Pacific 3% * Additional detailed segment and geographic information can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and in Note 19 to the Consolidated Financial Statements in Part II, Item 8 of this report.
Sales of product from our top five manufacturers/publishers as a group (Microsoft, Cisco Systems, Dell, Lenovo, and HP Inc.) accounted for approximately 51% of our consolidated net sales during 2023. We obtain incentives from certain product manufacturers, software publishers and distribution partners based typically upon our volume of sales or purchases of their products and services.
Sales of product from our top five manufacturers/publishers as a group (Microsoft, Cisco Systems, Dell, HP Inc. and Lenovo) accounted for approximately 50% of our consolidated net sales during 2024. We obtain incentives from certain product manufacturers, software publishers and distribution partners based typically upon our volume of sales or purchases of their products and services.
These teammates are included in the above table on the basis of the primary operating segment they provide direct services or back office support to. Our teammates in the United States are not represented by a labor union.
These teammates are included in the above table on the basis of the primary operating segment for which they provide direct services or back office support. Our teammates in the United States are not represented by a labor union.
For a discussion of risks associated with our IT systems, see “Risk Factors – Risks related to Our Technology, Data and Intellectual Property – Disruptions in our IT systems and voice and data networks could affect our ability to service our clients and cause us to incur additional expenses,” in Part I, Item 1A of this report.
For a discussion of risks associated with our internal and customer-facing systems, see “Risk Factors – Risks related to Our Technology, Data and Intellectual Property – Disruptions in our systems and voice and data networks could affect our ability to service our clients and cause us to incur additional expenses,” in Part I, Item 1A of this report.
Morgado worked for Juniper Networks, Inc., Cisco Systems, Inc., The Stephenz Group, Inc., Aramark Uniform Services, and Citigate Cunningham, Inc. in various positions within Finance. Joyce A. Mullen, President and Chief Executive Officer, Age 61 Ms. Mullen was appointed President and Chief Executive Officer and a director of Insight effective January 1, 2022. Ms.
Morgado worked for Juniper Networks, Inc., Cisco Systems, Inc., The Stephenz Group, Inc., Aramark Uniform Services, and Citigate Cunningham, Inc. in various leadership positions within Finance. 11 INSIGHT ENTERPRISES, INC. Joyce A. Mullen , President and Chief Executive Officer, Age 62 Ms. Mullen was appointed President and Chief Executive Officer and a director of Insight effective January 1, 2022. Ms.
Insight supports eleven teammate resource groups, which represent various diverse groups of teammates and boast 1,900+ active members. • Our leaders carefully review and monitor our Teammate Pulse Survey results year over year and create action plans to increase teammate engagement. • A charitable foundation funded by the Company, its teammates and its partners provides financial support in crisis situations to support teammates and their families. • Insight offers teammates paid days off to either volunteer their time to charitable organizations in the communities where they live and work or to use for mental health. 8 INSIGHT ENTERPRISES, INC.
Insight supports eleven teammate resource groups, which represent various diverse groups of teammates and boast 1,600+ active members. • Our leaders carefully review and monitor our annual Teammate Pulse Survey results and create action plans to increase teammate engagement. • A charitable foundation funded by the Company, its teammates and its partners provides financial support in crisis situations to support impacted teammates and their families. • Insight offers teammates paid days off to either volunteer their time to charitable organizations in the communities where they live and work or to use for mental health.
Purchases from Microsoft and TD Synnex accounted for approximately 27% and 12%, respectively, of our aggregate purchases in 2023. No other partner accounted for more than 10% of purchases in 2023.
Purchases from Microsoft and TD Synnex accounted for approximately 27% and 10%, respectively, of our aggregate purchases in 2024. No other partner accounted for more than 10% of purchases in 2024.
On a consolidated basis, product (hardware and software) and services represented approximately 46% and 54%, respectively, of our gross profit in 2023. This compares to 51% and 49%, respectively, of our gross profit in 2022 and 2021.
On a consolidated basis, product (hardware and software) and services represented approximately 43% and 57%, respectively, of our gross profit in 2024. This compares to 46% and 54%, respectively, of our gross profit in 2023 and 51% and 49%, respectively, of our gross profit in 2022.
Our Partners We partner with market leaders offering the top technology brands as well as emerging entrants in the marketplace. During 2023, we purchased and resold products and software from over 8,000 partners. Approximately 69% (based on dollar volume) of these purchases were directly from manufacturers or software publishers, with the remaining balance purchased through distributors.
Our Partners We partner with market leaders offering the top technology brands as well as emerging entrants in the marketplace. During 2024, we purchased and resold products and software from over 6,000 partners. The majority (based on dollar volume) of these purchases were directly from manufacturers or software publishers, with the remaining balance purchased through distributors.
We believe that these incentives (or partner funding) and other marketing assistance allow us to increase our marketing reach and strengthen our relationships with leading manufacturers and publishers. We are focused on understanding our partners’ objectives and developing plans and programs to grow our mutual businesses.
We believe that these incentives (or partner funding) and other marketing assistance allow us to increase our marketing reach and strengthen our relationships with leading manufacturers and publishers. 7 INSIGHT ENTERPRISES, INC. We are always focused on understanding our partners’ changing objectives and developing plans and programs to grow our mutual businesses.
Our teammates by job function were as follows: Job Function Number of Teammates Sales 3,839 Skilled, certified consulting and service delivery professionals 6,487 Total sales and client facing teammates 10,326 Management, support services and administration 3,689 Distribution 422 For a discussion of risks associated with our dependence on certain personnel, including sales personnel, see “Risk Factors – General Risk Factors – We depend on certain key personnel,” in Part I, Item 1A of this report.
Our teammates by job function were as follows: Job Function Number of Teammates Sales 3,722 Skilled, certified consulting and service delivery professionals 6,415 Total sales and client facing teammates 10,137 Management, support services and administration 3,705 Distribution 482 For a discussion of risks associated with our dependence on certain personnel, including sales personnel, see “Risk Factors – General Risk Factors – We depend on certain key personnel,” in Part I, Item 1A of this report.
For example: • software and certain cloud sales are typically higher in our second and fourth quarters; • business clients, particularly larger enterprise businesses in the United States, tend to spend more in our fourth quarter and less in the first quarter; • sales to the federal government in the United States are often stronger in our third quarter, while sales in the state and local government and education markets are stronger in our second quarter; and • sales to public sector clients in the United Kingdom are often stronger in our first quarter. 9 INSIGHT ENTERPRISES, INC.
For example: • software and certain cloud sales are typically higher in our second and fourth quarters; • business clients, particularly larger enterprise businesses in the United States, tend to spend more, particularly on product, in our fourth quarter; • sales to the federal government in the United States are often stronger in our third quarter, while sales in the state and local government and education markets are also often stronger in our second quarter; and • sales to public sector clients in the United Kingdom are often stronger in our first quarter.
Typical outcomes for our clients include scaling their infrastructure foundation for innovation, increasing workload agility, resiliency and flexibility, improving visibility and control of 5 INSIGHT ENTERPRISES, INC. data assets, delivering better user and customer experiences, and enabling purposeful digital transformation. Cybersecurity – Mitigate risks and secure business assets.
Typical outcomes for our clients include scaling their infrastructure foundation for innovation, increasing workload agility, resiliency and flexibility, improving visibility and control of 5 INSIGHT ENTERPRISES, INC. data assets, delivering better user and customer experiences, and enabling purposeful digital transformation. Cybersecurity – Enhance resilience, mitigate risk and safeguard critical assets.
Prior to Atos, he held roles at Hewlett-Packard Development Company, L.P., Fujitsu ICL, and Petroleum Shipping Ltd. James A. Morgado, Senior Vice President of Finance, Age 51 Mr. Morgado joined Insight in January 2022 as Senior Vice President of Finance.
Prior to Atos, he held roles at Hewlett-Packard Development Company, L.P., Fujitsu ICL, and Petroleum Shipping Ltd. James A. Morgado , Chief Financial Officer, Age 52 Mr. Morgado joined Insight in January 2022 as Senior Vice President of Finance and was promoted to Chief Financial Officer in January 2025.
Our top five partners as a group for 2023 were Microsoft, TD Synnex (a distributor), Cisco Systems, Ingram Micro (a distributor), and Dell, and approximately 60% of our total purchases during 2023 came from this group of partners.
Our top five partners as a group for 2024 were Microsoft, TD Synnex (a distributor), Google, Cisco Systems and Ingram Micro (a distributor), and approximately 55% of our total purchases during 2024 came from this group of partners.
We believe our six key areas of solutions expertise are critical to our clients' success and to our identity as a solutions integrator: • Modern platforms/infrastructure • Cybersecurity • Data & Artificial Intelligence ("AI") • Modern Workplace • Modern Apps • Intelligent Edge Each of the six key areas of solutions expertise are described below: Modern Platforms/Infrastructure – Architect and modernize multicloud and networking solutions.
We believe our key areas of solutions expertise are critical to our clients' success and to our identity as a solutions integrator: • Hybrid Multicloud • Cybersecurity • Data & Artificial Intelligence ("AI") • Digital Workplace • Intelligent Applications Each of the key areas of solutions expertise are described below: Hybrid Multicloud – Architect and modernize multicloud and networking solutions.
Our Solutions Mix Our solutions generally include hardware, software and services, including cloud solutions. On a consolidated basis, product (hardware and software) and services represented approximately 83% and 17%, respectively, of our consolidated net sales in 2023. This compares to 86% and 14%, respectively, of our consolidated net sales in both 2022 and 2021.
On a consolidated basis, product (hardware and software) and services (including cloud solutions) represented approximately 81% and 19%, respectively, of our consolidated net sales in 2024. This compares to 83% and 17%, respectively, of our consolidated net sales in 2023 and 86% and 14%, respectively, of our consolidated net sales in 2022.
For the previous four years, he served as the Vice President of Finance for Synopsys, Inc., an enterprise software engineering company focused on electronic design automation, where he was responsible for Corporate Planning, FP&A, Treasury, Procurement and Supply Chain Finance. Prior to Synopsys, Mr.
Prior to joining Insight, from November 2017 to December 2021, he served as the Vice President of Finance for Synopsys, Inc., an enterprise software engineering company focused on electronic design automation, where he was responsible for Corporate Planning, FP&A, Treasury, Procurement and Supply Chain Finance. Prior to Synopsys, Mr.
As of December 31, 2023, we employed 14,437 teammates. Our teammates by operating segment were as follows: Operating Segment Number of Teammates North America 10,957 EMEA 2,946 APAC 534 Certain of our teammates provide services to clients and/or provide back-office support in offshore locations such as Armenia, India, Moldova, the Philippines, and Romania.
As of December 31, 2024, we employed 14,324 teammates. The number of teammates by operating segment were as follows: Operating Segment Number of Teammates North America 11,019 EMEA 2,809 APAC 496 Certain of our teammates provide services to clients and/or provide back-office support in offshore locations such as Armenia, India, Moldova, the Philippines, and Romania.
(2015), Ignia, Pty Ltd (2016), Datalink Corporation (2017), and Caase Group B.V. (2017). Our acquisitions from 2018 through today included: • 2018 – Cardinal Solutions Group, Inc. (“Cardinal”), a digital solutions provider that strengthened our digital innovation capabilities; • 2019 – PCM, Inc.
(2015), Ignia, Pty Ltd (2016), Datalink Corporation (2017), Caase Group B.V. (2017), and Cardinal Solutions Group, Inc. (2018). Our acquisitions from 2019 through today included: • 2019 – PCM, Inc.
During 2023, sales of Microsoft and Cisco Systems products accounted for approximately 17% and 10% of our consolidated net sales, respectively. No other manufacturer’s or publisher’s 7 INSIGHT ENTERPRISES, INC. products represented 10% or more of our consolidated net sales in 2023.
During 2024, sales of Microsoft and Cisco Systems products accounted for approximately 18% and 11% of our consolidated net sales, respectively. No other manufacturer’s or publisher’s products represented 10% or more of our consolidated net sales in 2024.
Prior to joining the Company, he served as Chief Executive Officer for North Europe and APAC at Atos, an IT services and consulting company. Prior to being named Chief Executive Officer in February of 2022, Mr.
Adrian Gregory , President – Insight EMEA, Age 51 Mr. Gregory joined Insight in January 2023 as President of the EMEA region. Prior to joining the Company, he served as Chief Executive Officer for North Europe and APAC at Atos, an IT services and consulting company. Prior to being named Chief Executive Officer in February of 2022, Mr.
Our modern platforms solutions expertise is about adopting and building modern platforms from cloud (multicloud and hybrid) to data center to edge. We architect and deliver modern infrastructure solutions, provide management and support spanning cloud and data center platforms, modern networks, and edge technologies, to enable our clients' businesses digital transformation.
Our hybrid multicloud solutions are about adopting and building modern platforms from edge to data center to cloud (multicloud and hybrid). We architect and deliver modern infrastructure solutions, provide management and support spanning multiple cloud and data center platforms, modern networks, and edge technologies, to enable our clients to digitally transform their businesses.
We are focused on driving improvements in sales productivity through increased innovation and enhancements to our e-commerce and IT systems with the goals of improved client satisfaction and attracting new clients, while increasing overall business efficiency.
We are focused on driving improvements in sales productivity and client experience through increased innovation and enhancements to our customer-facing e-commerce, cloud and managed services platforms and internal systems with the goals of continuously improving client satisfaction, consistently attracting new clients and increasing overall business efficiency.
Our Information Technology Systems We have committed significant resources to the IT systems that we own and use to manage our business and believe that our success is dependent upon our ability to provide prompt and efficient service to our clients based on the accuracy, quality and utilization of the information generated by our IT systems.
Our Information Technology Systems We have committed significant resources to the digital systems that we develop, deploy and use to manage our business. Our success, in part, depends on our ability to provide prompt and efficient service and support to our clients based on the accuracy, quality and utilization of these systems.
Our Solutions Expertise We are differentiated in our ability to combine the power of our technology expertise with our technical services capabilities to create solutions to deliver meaningful client outcomes at scale. We adapt quickly to new innovative technology trends such as Generative Artificial Intelligence ("GenAI"). We invest internally as well as through acquisitions to advance our technical capabilities.
Our Solutions Expertise We are differentiated in our ability to combine our expertise in technology integration with our technical services to create solutions that deliver meaningful client outcomes at scale. We adapt quickly to innovative technology trends such as Gen AI.
We have strong solutions expertise in six high growth areas of the IT market that allows us to drive digital transformation and business outcomes for our clients. The solutions areas are pivotal to our strategy of becoming the leading solutions integrator.
We invest internally as well as through acquisitions to advance our technical capabilities and better serve the needs of our clients. We have strong solutions expertise in high growth areas of the IT market that allows us to drive digital transformation and business outcomes for our clients.
Our Intellectual Property We do not maintain a traditional research and development group, but we recognize the importance of intellectual property and its ability to differentiate us from our competitors.
The supply chain constraints that previously existed in recent years have largely normalized across all product categories. 9 INSIGHT ENTERPRISES, INC. Our Intellectual Property We do not maintain a traditional research and development group, but we recognize the importance of intellectual property and its ability to differentiate us from our competitors.
Our cybersecurity solutions expertise relates to automating and connecting modern platforms securely (network, security and automation). We prioritize security in our architecture design and deployment to cloud services and IT transformation. This way, clients can integrate security across platforms, business units and operations. We also help clients manage security initiatives that are required to protect their business.
Our cybersecurity solutions focus on automating and securely connecting modern platforms, including networks, security systems, and automation tools. We prioritize security in our architecture design and deployment for cloud services and IT transformations, enabling clients to integrate security seamlessly across platforms, business units, and operations. Our expertise extends to managing essential security initiatives that protect businesses.
Manager, Amazon Business Public Sector from December 2019 to June 2021 and General Manager, Amazon Business Marketplace from January 2016 to December 2019. Prior to joining Amazon, Mr. Green held various executive level roles within the Oracle Corporation. Adrian Gregory, President – Insight EMEA, Age 50 Mr. Gregory joined Insight in January 2023 as EMEA President.
Green had previously spent eight years in various roles with Amazon, an online retailer and web services provider, including as General Manager, Amazon Business Public Sector from December 2019 to June 2021 and General Manager, Amazon Business Marketplace from January 2016 to December 2019. Prior to joining Amazon, Mr. Green held various executive level roles at Oracle Corporation.
Our most recent acquisitions of Amdaris and SADA, enhance these areas of expertise and enhance the services that are most meaningful to our clients.
Our most recent acquisitions of Amdaris, SADA and Infocenter enhance our areas of expertise and expand the capabilities of our services, creating the opportunity to deliver more value for our clients.
Green was appointed Chief Digital Officer of Insight in December 2023. Mr. Green joined Insight in August 2021 as Senior Vice President, eCommerce and was appointed Senior Vice President, Digital Transformation in July 2023. Mr. Green had previously spent eight years in various roles with Amazon, an online retailer and web services provider, including as General 11 INSIGHT ENTERPRISES, INC.
Green was appointed Chief Digital Officer of Insight in December 2023. Mr. Green joined Insight in August 2021 as Senior Vice President, eCommerce and was appointed Senior Vice President, Digital Transformation in July 2023. Mr.
His responsibilities encompassed leading integration of mergers and acquisitions, digital and cloud solutions, business applications, consulting, strategy, and transformation. Most recently, he led Capgemini's global business lines in the North America market, with prior leadership roles spanning business services and engineering, U.S. strategy and portfolio, consulting, and innovation and digital services. Samuel C.
Most recently, he led Capgemini's global business lines in the North America market, with prior leadership roles spanning business services and engineering, U.S. strategy and portfolio, consulting, and innovation and digital services. Samuel C. Cowley , General Counsel and Secretary, Age 64 Mr. Cowley joined Insight in June 2016 as our General Counsel. Prior to joining Insight, Mr.
We believe our addressable market represents approximately $730 billion in annual sales and for the year ended December 31, 2023, our net sales of $9.2 billion represented approximately 1% of that highly diverse market. Based on our peer analysis of market data, we believe the top ten most comparable global solution providers represent less than 20% of the market.
We believe our addressable market represents approximately $780 billion in annual sales and for the year ended December 31, 2024, our net sales of $8.7 billion represented approximately 1% of that highly diverse market.
The SADA acquisition positions Insight to further benefit from the growing trend of multicloud adoption and GenAI, accelerating Insight’s progress toward its strategic objective of growing cloud services and solutions. Our Purpose and Values Our purpose: We accelerate digital transformation by unlocking the power of people and technology.
The SADA acquisition positioned Insight to further benefit from the growing trend of multicloud adoption and Gen AI, accelerating Insight’s progress toward its strategic objective of growing cloud services and solutions; and • 2024 - Infocenter.io ("Infocenter"), is a leader in digital transformation, leveraging their deep expertise in ServiceNow’s comprehensive suite of capabilities.
Information about our Executive Officers The following are our current executive officers: Glynis A. Bryan , Chief Financial Officer, Age 65 Ms. Bryan joined Insight in December 2007 as our Chief Financial Officer. Prior to joining Insight, Ms.
Information about our Executive Officers The following are our current executive officers: Dee Burger , President North America, Age 55 Mr. Burger joined Insight in May 2022 as President of the North America region. Prior to joining Insight, Mr.
Our Backlog The majority of our backlog historically has been and continues to be open cancelable purchase orders; however, we have not experienced significant cancellations historically. Our backlog has fluctuated significantly in the past few years, primarily due to the mix of products available and our client's responses to supply chain constraints.
These trends create overall variability in our consolidated results. Our Backlog We do not believe that backlog as of any particular date is predictive of future results. Our backlog has fluctuated significantly in the past few years, primarily due to the mix of products available and our client's responses to supply chain constraints.
We use a common set of core IT applications to run our business, across all of our operating segments, having migrated EMEA onto the same core systems as North America and APAC in early 2022. 10 INSIGHT ENTERPRISES, INC.
We use a common set of core applications to run our business, across all operating segments.
Dee Burger , President North America, Age 54 Mr. Burger joined Insight in May 2022 as President of the North America business. Prior to joining Insight, Mr. Burger worked at Capgemini, a global leader in consulting, technology services and digital transformation, for 29 years in a diverse range of roles.
Burger worked at Capgemini, a global leader in consulting, technology services and digital transformation, for 29 years in a diverse range of roles. His responsibilities encompassed leading integration of mergers and acquisitions, digital and cloud solutions, business 10 INSIGHT ENTERPRISES, INC. applications, consulting, strategy, and transformation.
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Typical outcomes for our clients include improving threat detection, containment and neutralization, minimizing large scale security teams through simplified security management, implementing governance and maintaining compliance, better management and mitigation of organizational risk and effective and thorough responses to security incidents. Data and AI – Leverage analytics and AI to transform business operations and user experiences.
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The Infocenter acquisition increases our relevance to our clients driving digital transformation in their organizations. Our Purpose and Values Our purpose: We accelerate digital transformation by unlocking the power of people and technology.
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Our data and AI solutions expertise pertains to innovating on top of modern platforms with strategic and secure solutions delivered through reference architectures, leveraging GenAI, and enhanced through our intellectual property. We modernize data platforms and architectures and build data analytics and AI solutions that transform our clients’ business operations and user experiences.
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We excel in threat protection, incident response, and compliance, offering rapid and effective incident response services to mitigate security breaches and minimize impact. Our clients typically benefit from enhanced threat detection, streamlined security management, effective governance and compliance, improved risk management, and comprehensive responses to security incidents.
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Typical outcomes for our clients include enabling scalability at high speed, preparing data estates and access to support the adoption of GenAI, increasing visibility and data-driven decision making, optimizing resources and costs via new operational efficiencies and providing opportunities to grow revenue with new offerings. Modern Workplace – Create a productive, flexible and secure workplace.
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Data and AI – Drive more value, faster, with integrated AI, data platforms and business intelligence. Insight’s data and AI solutions leverage our deep expertise in data readiness and both traditional and generative AI to help clients innovate and grow. We excel in planning, building, and optimizing modern data platforms and architectures, ensuring effective data analytics and AI solutions.
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Our modern workplace solutions expertise deals with helping clients navigate workplace changes along with employee needs for seamless work experiences. Great companies know their people are the key factor — improving attraction and retention, providing great collaborative experiences through technology, leading through change.
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We deliver strategic and secure solutions, enhanced through our intellectual property, that transform business operations and user experiences. Clients working with Insight benefit from rapid scalability, well-prepared data estates for Gen AI adoption, increased visibility and informed decision-making, optimized resources and costs, and new revenue opportunities.
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Typical outcomes for our clients include elevating employee and user experiences, increasing return on workplace technology investments, enhancing protection for users and business data to reduce risk, boosting productivity and mobile capabilities, simplifying IT lifecycle management and enabling and securing “work anywhere” operations in the hybrid work environment.
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We are differentiated by our repeatable methodologies and agile, user-centric approach, which consistently enable clients to achieve their business goals and find greater value from their AI investments. Digital Workplace – Create a productive, flexible and secure workplace. Our digital workplace solutions focus on helping clients navigate workplace changes and meeting employee needs for seamless work experiences.
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Modern Apps – Create new product experiences and transform legacy applications to drive increased business value. Our modern apps solutions expertise is about helping clients migrate and modernize strategically. The number of applications in use is growing exponentially — and using them to differentiate business identities, unlock new revenue streams and create great user experiences is critical.
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We offer a range of services, including endpoint management, identity and access controls, and organizational change management. Our solutions elevate employee and user experiences, increase return on workplace technology investments, enhance data protection, boost productivity and mobile capabilities, and simplify IT lifecycle management.
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Typical outcomes for our clients include future-proofing critical business applications, increasing innovation and organizational agility, accelerating business growth and product sales, and leveraging GenAI to optimize operations, increase productivity and deliver differentiated client experiences. Intelligent Edge – Gather and utilize data in the most efficient way to enable real-time decision-making and affect pivotal outcomes.
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Insight excels in providing excellent collaborative experiences through technology, leading through change, and enabling secure work from anywhere operations. Intelligent Applications – Improve developer productivity and application scalability and maintenance with enhanced software quality and speed to market. Our intelligent applications solutions address our clients' unique business challenges by transforming and modernizing applications.
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Our Intelligent edge solutions expertise is where all our capabilities come together. It is the combination of industry-based business outcomes, our intellectual property, our technology provider legacy, and the ability to deploy tens of thousands of devices and build secure platforms. Our capabilities and portfolio allow for large-scale intelligent edge solutions.
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Our approach focuses on enhancing the developer experience, integrating applications seamlessly, and infusing AI to drive innovation. We help clients navigate the complexities of app modernization, ensuring their legacy systems are updated and optimized for today’s digital landscape.
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Typical outcomes for our clients include, improving decision making and business intelligence, increasing responsiveness to customer and market demands, optimizing operational processes and gaining predictive capabilities, creating new revenue streams, driving differentiation, and scaling and expanding business operations to new areas. 6 INSIGHT ENTERPRISES, INC. We deliver our solutions expertise to our clients through consulting, managed and life-cycle services.
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By leveraging our expertise, clients benefit from improved application performance, streamlined development processes, and cutting-edge AI capabilities that enhance functionality and user experience. We empower businesses to achieve greater efficiency, organizational agility, and competitive advantage through intelligent application solutions. Our Solutions Mix Our solutions generally include hardware, software and services, including cloud solutions.
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These trends create overall seasonality in our consolidated results such that sales and profitability are expected to be higher in the second and fourth quarters of the year. Historically we have experienced higher net sales in our second quarter, however, with the addition of SADA, we now anticipate our fourth quarter will be our highest quarter for net sales.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeNon-compliance with requisite procurement, billing or ordinance-specific administrative rules, procedures, and processes could subject our contracts to protest or make them voidable regardless of whether we bear any responsibility for non-compliance. This could also subject us to debarment, suspension, or disqualification from doing business with governmental entities, and could also result in civil, criminal, and administrative liability.
Biggest changeNon-compliance with requisite procurement, billing or ordinance-specific administrative rules, 19 INSIGHT ENTERPRISES, INC. procedures, and processes could subject our contracts to protest or make them voidable regardless of whether we bear any responsibility for non-compliance.
Our substantial indebtedness could have important consequences, that could have a material adverse effect on our business, financial condition and results of operations, including the following: • requiring us to dedicate a substantial portion of our cash flow from operations to debt service payments on our and our subsidiaries’ debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes; • requiring us to comply with restrictive covenants in our senior secured debt facility, which limits the manner in which we conduct our business; • limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate; • placing us at a competitive disadvantage compared to any of our less-leveraged competitors; • increasing our vulnerability to both general and industry-specific adverse economic conditions; and • limiting our ability to obtain additional debt or equity financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements and increasing our cost of borrowing. 21 INSIGHT ENTERPRISES, INC.
Our substantial indebtedness could have important consequences, that could have a material adverse effect on our business, financial condition and results of operations, including the following: • requiring us to dedicate a substantial portion of our cash flow from operations to debt service payments on our and our subsidiaries’ debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes; 20 INSIGHT ENTERPRISES, INC. • requiring us to comply with restrictive covenants in our senior secured debt facility, which limits the manner in which we conduct our business; • limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate; • placing us at a competitive disadvantage compared to any of our less-leveraged competitors; • increasing our vulnerability to both general and industry-specific adverse economic conditions; and • limiting our ability to obtain additional debt or equity financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements and increasing our cost of borrowing.
We rely 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 the requirements year over year.
We rely on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can and do change significantly in the amounts made available and the requirements year over year.
If we fail to react in a timely manner to such changes, we may experience lower sales and, with respect to hardware, as has occurred we may have to record write-downs of obsolete inventory.
If we fail to react effectively and in a timely manner to such changes, we may experience lower sales and, with respect to hardware, as has occurred we may have to record write-downs of obsolete inventory.
The success and profitability of international operations are subject to numerous risks and uncertainties, many of which are outside of our control, such as: • political or economic instability, including the possibility of recession or financial market instability, or acts of war; • changes in governmental regulation or taxation (foreign and domestic); • currency exchange fluctuations; • changes in import/export laws, regulations, customs, duties and tariffs (foreign and domestic); • trade restrictions (foreign and domestic); • difficulties of conducting business, managing operations, and costs of staffing in certain foreign countries; • work stoppages or other changes in labor conditions; • taxes and other restrictions on repatriating foreign profits back to the United States; • extended payment terms; • seasonal reductions in business activity in some parts of the world; and • natural disasters, terrorism, civil unrest, public health issues such as pandemics or endemics and other geopolitical uncertainties. 16 INSIGHT ENTERPRISES, INC.
The success and profitability of international operations are subject to numerous risks and uncertainties, many of which are outside of our control, such as: • political or economic instability, including the possibility of recession or financial market instability, or acts of war; • changes in governmental regulation or taxation (foreign and domestic); • currency exchange fluctuations; • changes in import/export laws, regulations, customs, duties and tariffs (foreign and domestic); • trade restrictions (foreign and domestic); • difficulties of conducting business, managing operations, and costs of staffing in certain foreign countries; • work stoppages or other changes in labor conditions; • taxes and other restrictions on repatriating foreign profits back to the United States; • extended payment terms; • seasonal reductions in business activity in some parts of the world; and • natural disasters, terrorism, civil unrest, public health issues such as pandemics or endemics and other geopolitical uncertainties.
For example, cloud, security, and digital-related solutions are continuously evolving, and there is rapid development and technological evolution in areas such as IoT, edge-computing, computer vision, advanced machine learning and AI (including GenAI), automation, augmented reality, blockchain and as-a-service solutions.
For example, cloud, security, and digital-related solutions are continuously evolving, and there is rapid development and technological evolution in areas such as IoT, edge-computing, computer vision, advanced machine learning and AI (including Gen AI), automation, augmented reality, blockchain and as-a-service solutions.
Potential impacts related to conflicts, such as those ongoing in Ukraine and Gaza, include further market disruptions, including significant volatility in commodity prices, credit and capital markets, supply chain and logistics disruptions, adverse global economic conditions resulting from escalating geopolitical tensions, volatility and fluctuations in foreign currency exchange rates and interest rates, inflationary pressures on raw materials and heightened cybersecurity threats, all of which could adversely impact our business, particularly our European operations.
Potential impacts related to conflicts, such as those ongoing in Ukraine and Gaza, include further market disruptions, including significant volatility in commodity prices, credit and capital markets, supply chain and logistics disruptions, adverse global economic conditions resulting from escalating geopolitical tensions, volatility and fluctuations in foreign currency exchange rates and interest rates, inflationary pressures on raw materials and heightened cybersecurity threats, all of which could adversely impact our business, particularly our European operations. 14 INSIGHT ENTERPRISES, INC.
To fund our acquisition initiatives, we increase our total borrowings from time to time, such as with the recent acquisition of SADA. These additional borrowings have the effect of increasing our future interest expenses and require escalating amortization payments.
To fund our acquisition initiatives, we increase our total borrowings from time to time, such as with the recent acquisitions of SADA and Infocenter. These additional borrowings have the effect of increasing our future interest expenses and require escalating amortization payments.
Furthermore, if we are unable to maintain an environment for teammates that is competitive and appealing, it could have an adverse effect on engagement and retention, and a material adverse effect on our business. 23 INSIGHT ENTERPRISES, INC.
Furthermore, if we are unable to maintain an environment for teammates that is competitive and appealing, it could have an adverse effect on engagement and retention, and a material adverse effect on our business. 22 INSIGHT ENTERPRISES, INC.
In addition, our expense levels are based, in part, on anticipated net sales and the anticipated amount and timing 22 INSIGHT ENTERPRISES, INC. of partner funding, and a portion of our operating expenses are relatively fixed.
In addition, our 21 INSIGHT ENTERPRISES, INC. expense levels are based, in part, on anticipated net sales and the anticipated amount and timing of partner funding, and a portion of our operating expenses are relatively fixed.
The development, adoption, and use of GenAI technologies are complex and still in their early stages, and there are technical challenges associated with achieving the desired level of accuracy, efficiency, and reliability. For example, GenAI systems that we deploy may be flawed or may be based on datasets that are biased or insufficient.
The development, adoption, and use of Gen AI technologies are complex and still in their early stages, and there are technical challenges associated with achieving the desired level of accuracy, efficiency, and reliability. For example, Gen AI systems that we deploy may be flawed or may be based on datasets that are biased or insufficient.
Due to the constant risk of these types of attacks and incidents, we expend significant resources on information technology and data security tools, measures, and processes designed to protect our networks systems, services, and the personal, confidential or proprietary information in our possession, and to ensure an effective response to any cyber-attack or data security incident.
Due to the constant risk of these types of attacks and incidents, we expend significant resources on information technology and data security tools, measures, and processes designed to protect our networks, systems, services, and the personal, confidential or proprietary information in our possession, and to ensure an effective response to any cyber-attack or data security 17 INSIGHT ENTERPRISES, INC. incident.
The disclosure of our trade secrets could impair our competitive position and could have a material adverse effect on our business, financial condition and results of operations. In addition, our registered trademarks and trade names are subject to challenge by third parties. This may impact our ability to continue using those marks and names.
The disclosure of our trade secrets could impair our competitive position and could have a material adverse effect on our business, financial condition and results of operations. In addition, our registered trademarks and trade names are subject to challenge by third parties. This may 18 INSIGHT ENTERPRISES, INC. impact our ability to continue using those marks and names.
New and sophisticated tools and methods are constantly being developed by criminals and cyber terrorists 18 INSIGHT ENTERPRISES, INC. to penetrate and compromise systems, including computer viruses, malware, ransomware, phishing, misrepresentation, social engineering and forgery, which make it increasingly challenging to anticipate, harder to detect, and more difficult to adequately mitigate these risks.
New and sophisticated tools and methods are constantly being developed by criminals and cyber terrorists to penetrate and compromise systems, including computer viruses, malware, ransomware, phishing, misrepresentation, social engineering and forgery, which make it increasingly challenging to anticipate, harder to detect, and more difficult to adequately mitigate these risks.
A significant deterioration in our ability 14 INSIGHT ENTERPRISES, INC. to collect on accounts receivable could also impact the cost or availability of financing under our accounts receivable securitization program. Our sales to public sector clients are also impacted by government spending policies, government shutdowns, budget priorities and revenue levels.
A significant deterioration in our ability to collect on accounts receivable could also impact the cost or availability of financing under our accounts receivable securitization program. Our sales to public sector clients are also impacted by government spending policies, government shutdowns, budget priorities and revenue levels.
There can be no assurance that we will be able to adapt to, or compete effectively with, current or future distribution channels or competitors or that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations. 15 INSIGHT ENTERPRISES, INC.
There can be no assurance that we will be able to adapt to, or compete effectively with, current or future distribution channels or competitors or that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations.
If we do not invest sufficiently in new technologies, successfully adapt to industry developments and evolving client demand at sufficient speed and scale, we may be unable to develop or maintain a competitive advantage in the market and execute on our growth strategy and initiatives, which could have a material adverse effect on our business.
If we do not invest sufficiently in new technologies, effectively market our capabilities with respect to such technologies, or successfully adapt to industry developments and evolving client demand at sufficient speed and scale, we may be unable to develop or maintain a competitive advantage in the market and execute on our growth strategy and initiatives, which could have a material adverse effect on our business.
There can be no assurance that we will be able to compete effectively with current or future competitors or that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations. 13 INSIGHT ENTERPRISES, INC.
There can be no assurance that we will be able to compete effectively with current or future competitors or that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations.
In addition, any latency, disruption, or failure in our GenAI systems could result in vulnerabilities, delays or errors in our offerings and compromise the integrity, security, or privacy of the generated content and applicable infrastructure.
In addition, any latency, disruption, or failure in our Gen AI systems could result in vulnerabilities, delays or errors in our offerings and compromise the integrity, security, or privacy of the generated content and applicable infrastructure.
A natural disaster, act of terrorism, or public health issue or other adverse occurrence at any of our major sales offices could also negatively impact our business, results of operations or cash flows. 17 INSIGHT ENTERPRISES, INC.
A natural disaster, act of terrorism, or public health issue or other adverse occurrence at any of our major sales offices could also negatively impact our business, results of operations or cash flows.
Our success depends on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology and market demand to serve the needs of our clients.
Our success depends on our ability to continue to develop and implement services and solutions that 13 INSIGHT ENTERPRISES, INC. anticipate and respond to rapid and continuing changes in technology and market demand to serve the needs of our clients.
Any of the foregoing or any other reduction in revenue from public sector clients could have a material adverse effect on our business, financial condition, and results of operations. 20 INSIGHT ENTERPRISES, INC.
Any of the foregoing or any other reduction in revenue from public sector clients could have a material adverse effect on our business, financial condition, and results of operations.
For instance, while cloud-based solutions present an opportunity for us and make up a significant part of our business and future, cloud-based solutions and technologies developed by manufacturer and publisher partners are alternatively marketed directly to customers without utilizing solutions providers like us, and our partners could otherwise reduce the volume of hardware, software or services we sell, leading to a reduction in our sales and/or profitability.
For instance, while cloud-based solutions present an opportunity for us and make up a significant part of our business and future, cloud-based solutions and technologies developed by manufacturer and publisher partners are alternatively marketed directly to customers without utilizing solutions providers like 12 INSIGHT ENTERPRISES, INC. us, which can reduce the volume of hardware, software or services we sell, leading to a reduction in our sales and/or profitability.
Outside of the United States, we have operation centers in Armenia, Australia, Canada, France, Germany, India, the Netherlands, the Philippines, Ukraine and the United Kingdom, as well as sales offices throughout EMEA and APAC. In the regions in which we do not currently have a physical presence, we serve our clients through strategic relationships.
Australia, Canada, France, Germany, India, the Netherlands, the Philippines, Ukraine and the United Kingdom, as well as sales offices throughout EMEA and APAC. In the regions in which we do not currently have a physical presence, we serve our clients through strategic relationships.
These types of claims and challenges could have a material adverse effect on our business, financial condition and results of operations. 19 INSIGHT ENTERPRISES, INC. The development, adoption and use of GenAI may result in increased liability exposure and competitive risk.
These types of claims and challenges could have a material adverse effect on our business, financial condition and results of operations. The development, adoption and use of Gen AI may result in increased liability exposure and competitive risk.
This is especially true in connection with the incentive programs of our largest partners: Microsoft, Dell, Cisco Systems, HP Inc., Google and Lenovo. There can be no assurance that we will continue to receive such incentives in the future.
This is especially true in connection with the incentive programs of our largest partners: Microsoft, TD Synnex, Google, Cisco Systems, and Ingram Micro. There can be no assurance that we will continue to receive such incentives in the future.
We have currency exposure arising from both sales and purchases denominated in foreign currencies, including intercompany transactions outside the United States, and we currently conduct only limited hedging activities.
We have currency exposure arising from both sales and purchases denominated in foreign currencies, including intercompany transactions outside the United States.
As of December 31, 2023, we had $940.5 million of total long-term debt outstanding, as defined by U.S. generally accepted accounting principles (“GAAP”), and an additional $231.9 million of obligations outstanding under our inventory financing agreements.
As of December 31, 2024, we had $864.1 million of total long-term debt outstanding, as defined by U.S. generally accepted accounting principles (“GAAP”), and an additional $217.6 million of obligations outstanding under our inventory financing agreements.
In addition, a substantial number of shares of our common stock are reserved for issuance upon the exercise of stock options, upon vesting of restricted stock units, upon conversion of the Notes and upon exercise of the warrants that were issued in connection with the Call Spread Transactions.
In addition, a substantial number of shares of our common stock are reserved for issuance upon the exercise of stock options, upon vesting of restricted stock units, upon conversion of the Convertible Notes and upon exercise of the Warrants.
There are risks associated with our international operations that are different than the risks associated with our operations in the United States, and our exposure to the risks of a global market could hinder our ability to maintain and expand international operations.
There are risks associated with our international operations that are different than the risks associated with our operations in the United States, and our exposure to the risks of a global market could hinder our ability to maintain and expand international operations. Outside of the United States, we have operation centers in Armenia, 15 INSIGHT ENTERPRISES, INC.
We have experienced and could continue to experience product constraints due to the failure of suppliers to accurately forecast demand, or to manufacture sufficient quantities of product to meet demand (including as a result of shortages of product components), among other reasons. A natural disaster or other adverse occurrence at one of our primary facilities could damage our business.
We have previously experienced and could in the future experience product constraints due to the failure of suppliers to accurately forecast demand, or to manufacture sufficient quantities of product to meet demand (including as a result of shortages of product components), among other reasons. 16 INSIGHT ENTERPRISES, INC.
The interruption of the flow of products from our suppliers has and could continue to disrupt our supply chain. Our business depends on the timely supply of products in order to meet the demands of our clients.
Our business depends on the timely supply of products in order to meet the demands of our clients.
In addition, some currencies may be subject to limitations on conversion into other currencies, which can limit the ability to otherwise react to rapid foreign currency devaluations. We cannot predict with precision the effect of future exchange-rate fluctuations, and significant rate fluctuations could have a material adverse effect on our business, financial condition and results of operations.
In addition, some currencies may be subject to limitations on conversion into other currencies, which can limit the ability to otherwise react to rapid foreign currency devaluations.
At December 31, 2023, $348.0 million of our outstanding debt relates to the Notes that are convertible at the option of the holders and as a result are classified as a current liability. We also have the ability to borrow an additional $1.1 billion under our senior secured credit facility.
At December 31, 2024, $332.9 million of our outstanding debt relates to the Convertible Notes that are convertible at the option of the holders and mature in February 2025, and as a result are classified as a current liability. Additionally, pursuant to an indenture, we issued an aggregate principal amount of $500.0 million in senior unsecured notes due 2032.
We have warehouse and distribution facilities in the United States and Canada and in the United Kingdom and Germany.
A natural disaster or other adverse occurrence at one of our primary facilities could damage our business. We have warehouse and distribution facilities in the United States and Canada and in the United Kingdom and Germany.
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The conditional conversion feature of the Notes, which has been triggered, may adversely affect our financial condition and operating results. In the event the conditional conversion feature of the Notes continues to be triggered, holders of Notes will be entitled to convert the Notes at any time during specified periods at their option.
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While we currently engage in certain hedging activities to limit our exposure to currency fluctuations, we cannot predict with precision the effect of future exchange-rate fluctuations, and significant rate fluctuations could have a material adverse effect on our business, financial condition and results of operations. The interruption of the flow of products from our suppliers could disrupt our supply chain.
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If one or more holders elect to convert their Notes, we would be required to settle the principal portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
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This could also subject us to debarment, suspension, or disqualification from doing business with governmental entities, and could also result in civil, criminal, and administrative liability.
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In addition, even if holders of Notes do not elect to convert their Notes, we are required under applicable accounting rules to reclassify all of the outstanding principal of the Notes as a current rather than long-term liability, which has and could continue to result in a material reduction of our net current assets.
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We also have the ability to borrow an additional $1.8 billion under our senior secured credit facility.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity Our information security program is managed by a dedicated Chief Information Security Officer (“CISO”) who is responsible, along with his team, for leading enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes. Our CISO has served in that role since 2021 and has been in cybersecurity related roles for 25 years, including with two publicly traded companies.
Biggest changeItem 1C. Cybersecurity Our information security program is managed by a dedicated Chief Information Security Officer (“CISO”) who is responsible, along with his team, for leading enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes.
We also collaborate with 24 INSIGHT ENTERPRISES, INC. thought leaders in cybersecurity including with key vendors, clients, business partners, industry participants, and intelligence and law enforcement communities as part of our continuing efforts to evaluate and improve the effectiveness of our information security policies and procedures.
We also collaborate with thought leaders in cybersecurity including with key vendors, clients, business partners, industry 23 INSIGHT ENTERPRISES, INC. participants, and intelligence and law enforcement communities as part of our continuing efforts to evaluate and improve the effectiveness of our information security policies and procedures.
Our Board of Directors has delegated oversight of risks from cybersecurity threats through our information security program to our Audit Committee, which receives updates on an as needed basis from our CISO regarding risks from cybersecurity threats.
Our Board of Directors has delegated oversight of risks from cybersecurity threats through our information security program to our Audit Committee, which receives updates twice a year on the program and on an as needed basis from our CISO regarding risks from cybersecurity threats.
We do not believe that risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect our overall business strategy, results of operations, or financial condition over the long term.
As of the date of this report, we are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our overall business strategy, results of operations, or financial condition over the long term.
Our CISO additionally provides periodic updates to our Board of Directors, our Chief Executive Officer and other senior management members, including at least twice per year through our overall Enterprise Risk Management Program.
Our CISO additionally provides periodic updates to our Board of Directors, our Chief Executive Officer and other senior management members, including through our overall Enterprise Risk Management Program.
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Our CISO has served in that role since 2021 and has been in cybersecurity related roles for more than 25 years, including with two publicly traded companies.
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For additional information regarding cybersecurity-related risks we face, see "Risk Factors – Risks Related to Our Technology, Data and Intellectual Property – Cyberattacks, data incidents and breaches in the security (i) of our information systems and networks, (ii) of the products we sell and services we provide, and (iii) of the electronic and confidential information in our possession could materially adversely impact our financial condition, results of operations, reputation, and relationships with clients, partners, vendors, and teammates," in Part I, Item 1A of this report. 24 INSIGHT ENTERPRISES, INC.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOperating Segment Location Primary Activities Own or Lease North America Chandler, Arizona, USA Executive Office, Sales and Administration, Network Operations Center and Client Support Center Own Eden Prairie, Minnesota, USA Sales, Services and Administration Lease Hanover Park, Illinois, USA Services, Distribution and Administration Lease Lewis Center, Ohio, USA Services, Distribution and Administration Own Plano, Texas, USA Sales and Administration Lease Liberty Lake, Washington, USA Sales and Administration Lease Tampa, Florida, USA Sales and Administration Lease Conway, Arkansas, USA Sales and Administration Lease Fort Worth, Texas, USA Services, Distribution and Administration Lease Edmonton, Alberta, Canada Sales, Distribution and Administration Lease Winnipeg, Manitoba, Canada Sales and Administration Lease Montreal, Quebec, Canada Sales and Administration Lease Montreal, Quebec, Canada Distribution Lease Calgary, Alberta, Canada Distribution Lease Mississauga, Ontario, Canada Sales and Administration Lease EMEA Sheffield, United Kingdom Sales and Administration Lease Sheffield, United Kingdom Distribution Lease Uxbridge, United Kingdom Sales and Administration Lease Frankfurt, Germany Sales and Administration Lease Frankfurt, Germany Distribution Lease Vélizy, France Sales and Administration Lease Apeldoorn, Netherlands Sales and Administration Lease Chisinau, Moldova Services Lease Timisoara, Romania Services Lease APAC Sydney, Australia Sales and Administration Lease Perth, Australia Sales and Administration Lease Auckland, New Zealand Sales and Administration Lease Hong Kong Sales and Administration Lease Shanghai, China Sales and Administration Lease Manila, Philippines Operations Center Lease In addition to those listed above, we have leased sales offices in various cities across North America, EMEA and APAC.
Biggest changeInformation about significant sales, distribution, services and administration facilities in use as of December 31, 2024 is summarized in the following table: Operating Segment Location Primary Activities Own or Lease North America Chandler, Arizona, USA Executive Office, Sales and Administration, Network Operations Center and Client Support Center Own Hanover Park, Illinois, USA Services, Distribution and Administration Lease Conway, Arkansas, USA Sales and Administration Lease Fort Worth, Texas, USA Services, Distribution and Administration Lease Edmonton, Alberta, Canada Sales, Distribution and Administration Lease Winnipeg, Manitoba, Canada Sales and Administration Lease Montreal, Quebec, Canada Sales and Administration Lease Montreal, Quebec, Canada Distribution Lease Calgary, Alberta, Canada Sales, Distribution and Administration Lease Mississauga, Ontario, Canada Sales and Administration Lease EMEA Sheffield, United Kingdom Sales and Administration Lease Sheffield, United Kingdom Distribution Lease Uxbridge, United Kingdom Sales and Administration Lease Frankfurt, Germany Sales and Administration Lease Frankfurt, Germany Distribution Lease Paris, France Sales and Administration Lease Apeldoorn, Netherlands Sales and Administration Lease Chisinau, Moldova Services Lease Timisoara, Romania Services Lease APAC Sydney, Australia Sales and Administration Lease Perth, Australia Sales and Administration Lease Melbourne, Australia Sales and Administration Lease Auckland, New Zealand Sales and Administration Lease Hong Kong Sales and Administration Lease Shanghai, China Sales and Administration Lease Manila, Philippines Operations Center Lease 25 INSIGHT ENTERPRISES, INC.
Legal Proceedings For a discussion of legal proceedings, see “Legal Proceedings” in Note 16 to the Consolidated Financial Statements in Part II, Item 8 of this report, which is incorporated by reference herein. Item 4. Mine Safety Disclosures Not applicable. 27 INSIGHT ENTERPRISES, INC. PART II
Legal Proceedings For a discussion of legal proceedings, see “Legal Proceedings” in Note 16 to the Consolidated Financial Statements in Part II, Item 8 of this report, which is incorporated by reference herein. Item 4. Mine Safety Disclosures Not applicable. 26 INSIGHT ENTERPRISES, INC. PART II
At December 31, 2023, we owned or leased approximately 1.8 million square feet of office and warehouse space, and, while approximately 75% of the square footage is in the United States, we own or lease office and warehouse facilities in Canada and in 16 countries in EMEA and we lease office facilities in 7 countries in APAC.
At December 31, 2024, we owned or leased approximately 1.7 million square feet of office and warehouse space, and, while approximately 69% of the square footage is in the United States, we own or lease office and warehouse facilities in Canada and in 15 countries in EMEA and we lease office facilities in 7 countries in APAC.
For additional information on property and equipment and operating leases, see Notes 4 and 9 to the Consolidated Financial Statements in Part II, Item 8 of this report. 26 INSIGHT ENTERPRISES, INC. Item 3.
In addition to those listed above, we have leased sales offices in various cities across North America, EMEA and APAC. For additional information on property and equipment and operating leases, see Notes 4 and 9 to the Consolidated Financial Statements in Part II, Item 8 of this report. Item 3.
Removed
Information about significant sales, distribution, services and administration facilities in use as of December 31, 2023 is summarized in the following table: 25 INSIGHT ENTERPRISES, INC.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 4. Mine Safety Disclosures 27 PART II ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 ITEM 6. [Reserved] 29 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 45 ITEM 8.
Biggest changeITEM 4. Mine Safety Disclosures 26 PART II ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 27 ITEM 6. [Reserved] 28 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 46 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−1 removed5 unchanged
Biggest changeOn May 18, 2023, we announced that our Board of Directors authorized the repurchase of up to $300.0 million of our common stock, including $100.0 million that remained available from the prior authorization. As of December 31, 2023, approximately $200.0 million remained available for repurchases under this share repurchase plan.
Biggest changeDuring 2024, this repurchase authorization was substantially exhausted. On September 11, 2024, we announced that our Board of Directors authorized the repurchase of up to $300.0 million of our common stock, in addition to any amount that remained from prior authorizations. As of December 31, 2024, approximately $300.0 million remained available for repurchases under our share repurchase plan.
The graph assumes that $100 was invested on December 31, 2018 in our common stock and in each of the two Nasdaq indices, and that, as to such indices, dividends were reinvested. We have not, since our inception, paid any cash dividends on our common stock.
The graph assumes that $100 was invested on December 31, 2019 in our common stock and in each of the two Nasdaq indices, and that, as to such indices, dividends were reinvested. We have not, since our inception, paid any cash dividends on our common stock.
See further information on our share repurchase programs in Note 15 to the Consolidated Financial Statements in Part II, Item 8 of this report. 28 INSIGHT ENTERPRISES, INC.
See further information on our share repurchase programs in Note 15 to the Consolidated Financial Statements in Part II, Item 8 of this report. 27 INSIGHT ENTERPRISES, INC.
Historical stock price performance shown on the graph is not necessarily indicative of future price performance. Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Insight Enterprises, Inc.
Historical stock price performance shown on the graph is not necessarily indicative of future price performance. Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2024 Insight Enterprises, Inc.
Issuer Purchases of Equity Securities Period (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2023 through October 31, 2023 — $ — — $ 200,020,373 November 1, 2023 through November 30, 2023 — — — 200,020,373 December 1, 2023 through December 31, 2023 — — — 200,020,373 — — On September 19, 2022, we announced that our Board of Directors had authorized the repurchase of up to $300.0 million of our common stock, including $50.0 million that remained available from a prior authorization.
Issuer Purchases of Equity Securities Period (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2024 through October 31, 2024 — $ — — $ 300,000,476 November 1, 2024 through November 30, 2024 — — — 300,000,476 December 1, 2024 through December 31, 2024 — — — 300,000,476 — — On May 18, 2023, we announced that our Board of Directors authorized the repurchase of up to $300.0 million of our common stock, including $100.0 million that remained available from prior authorizations.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades under the symbol “NSIT” on The Nasdaq Global Select Market. As of February 16, 2024, we had 32,590,162 shares of common stock outstanding held by 37 stockholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades under the symbol “NSIT” on The Nasdaq Global Select Market. As of February 7, 2025, we had 31,777,678 shares of common stock outstanding held by 36 stockholders of record.
Removed
Common Stock (NSIT) $ 100.00 $ 172.00 $ 187.00 $ 262.00 $ 246.00 $ 435.00 Nasdaq US Benchmark TR Index (Market Index) 100.00 131.00 159.00 200.00 161.00 203.00 Nasdaq US Benchmark Computer Hardware TR Index (Industry Index) 100.00 183.00 325.00 440.00 324.00 482.00
Added
Common Stock (NSIT) $ 100.00 $ 108.00 $ 152.00 $ 143.00 $ 252.00 $ 216.00 Nasdaq US Benchmark TR Index (Market Index) 100.00 121.00 153.00 123.00 155.00 193.00 Nasdaq US Benchmark Computer Hardware TR Index (Industry Index) 100.00 177.00 240.00 176.00 263.00 342.00

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

100 edited+25 added−7 removed52 unchanged
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) • the impact to DPOs of the SADA and Amdaris acquisitions combined with changes in vendor mix away from discount vendors; • the benefit to DIOs of the easing of supply constraints; and • the impact to DSOs of the SADA and Amdaris acquisitions combined with an increase in other receivables including multi-year transactions. • Our cash conversion cycle is impacted by netted costs that we apply to our services net sales to appropriately record net sales that we earn as an agent.
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) • Our cash conversion cycle was 7 days in the quarter ended December 31, 2024, a decrease of 22 days when compared to the fourth quarter of 2023. • The changes in our cash conversion cycle compared to the same period in the prior year resulted from the net effect of a 58 day increase in DPOs and a 2 day decrease in DIOs partially offset by a 38 day increase in DSOs. • The changes in our cash conversion cycle year over year were primarily the result of: • The impact to DPOs of netting on certain revenue streams (agent net revenue) that flow through accounts payable on a gross basis while flowing through our income statement on a net basis including a significant agency transaction that based on its terms had not cleared by quarter end as well as changes in vendor mix; • the benefit to DIOs of the reduction in hardware sales; and • the impact to DSOs of netting on certain revenue streams (agent net revenue) that flow through accounts receivable on a gross basis while flowing through our income statement on a net basis including a significant agency transaction that based on its terms had not cleared by quarter end. • Our cash conversion cycle is impacted by netted costs that we apply to our services net sales to appropriately record net sales that we earn as an agent.
For a discussion of risks associated with our reliance on partners, see “Risk Factors – Risks related to Our Business, Operations and Industry – We rely 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 the requirements year over year,” in Part I, Item 1A of this report.
For a discussion of risks associated with our reliance on partners, see “Risk Factors – Risks related to Our Business, Operations and Industry – We rely on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can and do change significantly in the amounts made available and the requirements year over year,” in Part I, Item 1A of this report.
As of December 31, 2023, no such events have occurred. • Our ABL facility contains various covenants customary for transactions of this type, including complying with a minimum receivable and inventory requirement and meeting monthly, quarterly and annual reporting requirements. • The credit agreement contains customary affirmative and negative covenants and events of default. • At December 31, 2023, we were in compliance with all such covenants. • While the ABL facility has a stated maximum amount, the actual availability under the ABL facility is limited by a minimum accounts receivable and inventory requirement.
As of December 31, 2024, no such events have occurred. • Our ABL facility contains various covenants customary for transactions of this type, including complying with a minimum receivable and inventory requirement and meeting monthly, quarterly and annual reporting requirements. • The credit agreement contains customary affirmative and negative covenants and events of default. • At December 31, 2024, we were in compliance with all such covenants. • While the ABL facility has a stated maximum amount, the actual availability under the ABL facility is limited by a minimum accounts receivable and inventory requirement.
These amounts are classified separately as accounts payable - inventory financing facilities in our consolidated balance sheets. Notes 7 and 8 to the Consolidated Financial Statements in Part II, Item 8 of this report also include: a description of our financing facilities; amounts outstanding; amounts available and weighted average borrowings and interest rates during the year. 40 INSIGHT ENTERPRISES, INC.
These amounts are classified separately as accounts payable - inventory financing facilities in our consolidated balance sheets. Notes 7 and 8 to the Consolidated Financial Statements in Part II, Item 8 of this report also include: a description of our financing facilities; amounts outstanding; amounts available and weighted average borrowings and interest rates during the year. 41 INSIGHT ENTERPRISES, INC.
We serve these clients in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). As a Fortune 500-ranked solutions integrator, we enable secure, end-to-end transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 35 years of broad IT expertise.
We serve these clients in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). As a Fortune 500-ranked solutions integrator, we enable secure, end-to-end transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 36 years of broad IT expertise.
On July 29, 2023, a third-party data center that hosts network environments for certain Insight managed services clients, experienced a security incident that resulted in a service outage at the data center. The incident did not impact any of Insights' information systems, credentials, or data.
On July 29, 2023, a third-party data center that hosts network environments for certain Insight managed services clients, experienced a security incident that resulted in a service outage at the data center. The incident did not impact any of Insight's information systems, credentials, or data.
Our assessments in the past three fiscal years have been qualitative assessments and no quantitative assessments have been deemed necessary. Additionally, during the three years ended December 31, 2023, 2022 and 2021 we analyzed each of our reporting units and determined that no impairment charge was necessary.
Our assessments in the past three fiscal years have been qualitative assessments and no quantitative assessments have been deemed necessary. Additionally, during each of the years ended December 31, 2024, 2023 and 2022 we analyzed each of our reporting units and determined that no impairment charge was necessary.
In computing these amounts and percentages, we compare the current period amount as translated into U.S. dollars under the applicable accounting standards to the prior period amount in local currency translated into U.S. dollars utilizing the weighted average translation rate for the current period.
In computing the changes in amounts and percentages, we compare the current period amount as translated into U.S. dollars under the applicable accounting standards to the prior period amount in local currency translated into U.S. dollars utilizing the weighted average translation rate for the current period.
Incentives from our largest partners are significant and changes in the incentive requirements, which occur regularly, could impact our results of operations to the extent we are unable to shift our focus and respond to them.
Incentives from our largest partners are significant and changes in the incentive requirements, which occur regularly, could impact our results of operations to the extent we are unable to effectively shift our focus and efficiently respond to them.
We anticipate that cash flows from operations, together with the funds available under our financing facilities, will be adequate to support our cash and working capital requirements for operations as well as other strategic investments over the next 12 months and beyond.
We anticipate that cash flows from operations, together with the funds available under our financing facilities, will be adequate to support our expected cash and working capital requirements for operations, as well as other strategic acquisitions, over the next 12 months and beyond.
The net changes were primarily the result of the following: • The decrease in hardware net sales was due to lower volume of sales to large enterprise and corporate clients. • The increase in services net sales was due to higher volume of Insight Delivered services and higher sales of cloud solution offerings that are recorded on a net sales recognition basis in the services net sales category. • The increase in software net sales was primarily due to higher volume of sales to corporate and public sector clients, partially offset by the continued trend toward higher sales of cloud solution offerings.
The net changes were primarily the result of the following: • The increase in services net sales was due to higher sales of cloud solution offerings that are recorded on a net sales recognition basis in the services net sales category and increased sales of Insight Delivered services. • The increase in software net sales was primarily due to higher volume of sales to enterprise and public sector clients, partially offset by the continued migration of on-premise software toward higher sales of cloud solution offerings. • The decrease in hardware net sales was due to lower volume of sales to large enterprise and corporate clients.
Supply Chain Constraints and Inflation Update Supply constraints that have had an industry-wide impact since the beginning of 2020 continued to ease in the second half of 2023. We believe that the remaining supply constraints and extended lead times for certain infrastructure, including networking products have now normalized back to historic levels.
Supply Chain Constraints and Inflation Update Supply constraints that have had an industry-wide impact since the beginning of 2020 eased in the second half of 2023. We believe that any remaining supply constraints and extended lead times for certain infrastructure, including networking products, have now normalized back to near historic levels.
This net decrease reflects a decrease in hardware and software net sales, partially offset by an increase in services net sales. Net sales of hardware and software were down 16% and 8%, respectively, year to year, partially offset by an increase in services net sales of 16%, year over year.
This net decrease reflects a decrease in software and hardware net sales, partially offset by an increase in services net sales. Net sales of software and hardware were down 20% and 8%, respectively, year to year, partially offset by an increase in services net sales of 23%, year over year.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) RESULTS OF OPERATIONS The following table sets forth certain financial data as a percentage of net sales for the years ended December 31, 2023 and 2022: 2023 2022 Net sales 100.0 % 100.0 % Costs of goods sold 81.8 84.3 Gross profit 18.2 15.7 Operating expenses: Selling and administrative expenses 13.5 11.7 Severance and restructuring expenses and acquisition-related expenses 0.1 — Earnings from operations 4.6 4.0 Non-operating expense, net 0.5 0.4 Earnings before income taxes 4.1 3.6 Income tax expense 1.0 0.9 Net earnings 3.1 % 2.7 % Our gross profit across the business and related to product versus services sales are, and will continue to be, impacted by partner incentives, which can and do change significantly in the amounts made available and the related product or services sales being incentivized by the partner.
RESULTS OF OPERATIONS The following table sets forth certain financial data as a percentage of net sales for the years ended December 31, 2024 and 2023: 2024 2023 Net sales 100.0 % 100.0 % Costs of goods sold 79.7 81.8 Gross profit 20.3 18.2 Operating expenses: Selling and administrative expenses 15.4 13.5 Severance and restructuring expenses and acquisition-related expenses, net 0.4 0.1 Earnings from operations 4.5 4.6 Non-operating expense, net 0.6 0.5 Earnings before income taxes 3.9 4.1 Income tax expense 1.0 1.0 Net earnings 2.9 % 3.1 % Our gross profit across the business and related to product versus services sales are, and will continue to be, impacted by partner incentives, which can and do change significantly in the amounts made available and the related product or services sales being incentivized by the partner.
As of December 31, 2023, we had approximately $209.1 million in cash and cash equivalents in our foreign subsidiaries, the majority of which reside in Canada, The Netherlands, New Zealand and Australia. Certain of these cash balances will be remitted to the U.S. by paying down intercompany payables generated in the ordinary course of business or through dividend distributions.
As of December 31, 2024, we had approximately $217.0 million in cash and cash equivalents in our foreign subsidiaries, the majority of which reside in Canada, Australia, New Zealand and The Netherlands. Certain of these cash balances will be remitted to the U.S. by paying down intercompany payables generated in the ordinary course of business or through dividend distributions.
Adjusting our cash conversion cycle calculation by adding netted costs to both daily net sales and daily costs of goods sold results in a reduction to our cash conversion cycle from 29 days to 22 days in the fourth quarter of 2023 and from 40 days to 28 days in the fourth quarter of 2022, which we believe provides a more accurate reflection of our cash flow operating metrics. • We expect that cash flow from operations will be used, at least partially, to fund working capital as we typically pay our partners on average terms that are shorter than the average terms we grant to our clients in order to take advantage of supplier discounts. • We intend to use cash generated in 2024, in excess of working capital needs, to pay down our ABL facility and our inventory financing facilities as well as to fund strategic acquisitions.
Adjusting our cash conversion cycle calculation by adding netted costs to both daily net sales and daily costs of goods sold results in an increase in our cash conversion cycle from 7 days to 14 days in the fourth quarter of 2024 and a reduction from 29 days to 22 days in the fourth quarter of 2023, which we believe provides a more accurate reflection of our cash flow operating metrics. • We expect that cash flow from operations will be used, at least partially, to fund working capital as we typically pay our partners on average terms that are shorter than the average terms we grant to our clients in order to take advantage of supplier discounts. • We intend to use cash generated in 2025, in excess of working capital needs to pay down our ABL facility and inventory financing facilities, to settle a portion of the Warrants in cash, and for strategic acquisitions.
Our consolidated cash flow operating metrics for the quarters ended December 31, 2023 and 2022 were as follows: 2023 2022 Days sales outstanding in ending accounts receivable (“DSOs”) (a) 147 120 Days inventory outstanding (“DIOs”) (b) 9 12 Days purchases outstanding in ending accounts payable (“DPOs”) (c) (127) (92) Cash conversion cycle (days) (d) 29 40 (a) Calculated as the balance of accounts receivable, net at the end of the period divided by daily net sales.
Our consolidated cash flow operating metrics for the quarters ended December 31, 2024 and 2023 were as follows: 2024 2023 Days sales outstanding in ending accounts receivable (“DSOs”) (a) 185 147 Days inventory outstanding (“DIOs”) (b) 7 9 Days purchases outstanding in ending accounts payable (“DPOs”) (c) (185) (127) Cash conversion cycle (days) (d) 7 29 (a) Calculated as the balance of accounts receivable, net at the end of the period divided by daily net sales.
This net decrease reflects a decrease in hardware net sales, partially offset by increases in software and services net sales. Net sales of hardware decreased 22%, year to year. Net sales of software and services increased 7% and 2%, respectively, year over year.
This net decrease reflects a decrease in hardware net sales, partially offset by increases in software and services net sales. Net sales of hardware decreased 10%, year to year. Net sales of software and services increased 3% and 7%, respectively, year over year.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) See Note 1 to the Consolidated Financial Statements in Part II, Item 8 of this report for further discussion of our accounting policies related to sales recognition and for a detailed description of our product and services offerings.
See Note 1 to the Consolidated Financial Statements in Part II, Item 8 of this report for further discussion of our accounting policies related to sales recognition and for a detailed description of our product and services offerings.
Throughout the “Overview” and “Results of Operations” sections of “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we refer to changes in net sales, gross profit, selling and administrative expenses and earnings from operations on a consolidated basis and in North America, EMEA and APAC excluding the effects of fluctuating foreign currency exchange rates.
Throughout the “Overview” and “Results of Operations” sections of this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we refer to changes in net sales, gross profit, selling and administrative expenses and earnings from operations on a consolidated basis and in North America, EMEA and APAC excluding the effects of fluctuating foreign currency exchange rates, which are also considered to be non-GAAP measures.
The changes in net foreign currency exchange gains/losses are due primarily to the underlying changes in the applicable exchange rates, partially mitigated by our use of foreign exchange forward contracts to offset the effects of fluctuations in foreign currencies on certain of our non-functional currency assets and liabilities. Income Tax Expense.
The changes in net foreign currency exchange gains/losses are due primarily to the underlying changes in the applicable exchange rates, partially mitigated by our use of foreign exchange forward contracts to offset the effects of fluctuations in foreign currencies on certain of our non-functional currency assets and liabilities. 36 INSIGHT ENTERPRISES, INC.
As of December 31, 2023, the current portion of our long-term debt relates to the Notes and other financing obligations. • Our objective is to pay our debt balances down while retaining adequate cash balances to meet overall business objectives. • Our Notes are subject to certain events of default and certain acceleration clauses.
As of December 31, 2024, the current portion of our long-term debt primarily relates to the Convertible Notes. • Our objective is to pay our debt balances down while retaining adequate cash balances to meet overall business objectives. • The Convertible Notes are subject to certain events of default and certain acceleration clauses.
These expenses were partially offset by net gains on the sale of properties due to restructuring of $6.8 million. During 2022, we recorded severance expense, net of adjustments, totaling $4.2 million. Acquisition and Integration-related Expenses . During 2023, we incurred $7.4 million in direct third-party costs primarily related to the acquisitions of SADA and Amdaris.
During 2023, we recorded severance expense, net of adjustments, totaling $12.9 million. These expenses were partially offset by net gains on the sale of properties due to restructuring of $6.8 million. Acquisition and Integration-related Expenses . During 2024, we incurred $2.7 million in direct third-party costs primarily related to the acquisition of Infocenter.
The excess purchase price over the estimated fair value of net assets acquired is recorded as goodwill. We use various models to determine the value of assets acquired and liabilities assumed such as the cost method, market method, relief from royalty method, multi-period excess earnings and discounted cash flow methods.
The excess purchase price over the estimated fair value of net assets acquired is recorded as goodwill. We use various models to determine the value of assets acquired and liabilities assumed such as the cost method, market method, relief from royalty method, multi-period excess earnings 45 INSIGHT ENTERPRISES, INC.
As a percentage of net sales, earnings from operations increased by approximately 40 basis points to 8.5%. The increase in earnings from operations reflects an increase in gross profit, partially offset by an increase in selling and administrative expenses in 2023 compared to 2022. Non-Operating (Income) Expense. Interest Expense, net.
As a percentage of net sales, Adjusted earnings from operations increased by approximately 170 basis points to 10.5%. The increase in Adjusted earnings from operations reflects an increase in gross profit, partially offset by an increase in selling and administrative expenses. Non-Operating Expense (Income). Interest Expense, net.
The expanded gross margin for APAC in 2023 compared to 2022 was due primarily to changes in sales mix to services net sales, including Insight Core services at higher margins than product net sales. Our overall gross margins expanded in 2023 compared to 2022, as expected.
The expanded gross margin for APAC in 2024 compared to 2023 was due primarily to changes in sales mix to services net sales, including Insight Delivered services that are sold at higher margins than product net sales. Our overall gross margins expanded in 2024 compared to 2023, as expected.
As of December 31, 2023, eligible accounts receivables and inventory were sufficient to permit access to $1.7 billion of the full $1.8 billion under the ABL facility. We also have agreements with financial intermediaries to facilitate the purchase of inventory from certain suppliers under certain terms and conditions.
As of December 31, 2024, eligible accounts receivables and inventory were sufficient to permit access to the full $1.8 billion under the ABL facility of which $39.0 million was outstanding. We also have agreements with financial intermediaries to facilitate the purchase of inventory from certain suppliers under certain terms and conditions.
Netted costs were $1.8 billion and $1.6 billion in the fourth quarter of 2023 and 2022, respectively.
Netted costs were $2.2 billion and $1.8 billion in the fourth quarter of 2024 and 2023, respectively.
The results of operations for 2023 include the following items: • severance and restructuring expenses, net of $6.1 million, $4.4 million net of tax; • acquisition and integration related expenses of $7.4 million, $6.0 million net of tax; and • the repurchase of approximately 1.6 million shares of the Company’s common stock for an aggregate cost of $217.1 million. 30 INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) The results of operations for 2023 include the following items: • severance and restructuring expenses, net of $6.1 million, $4.4 million net of tax; • acquisition and integration related expenses of $7.4 million, $6.0 million net of tax; and • the repurchase of approximately 1.6 million shares of the Company’s common stock for an aggregate cost of $217.1 million.
As a percentage of net sales, earnings from operations increased by approximately 80 basis points to 4.9%. The increase in earnings from operations was primarily driven by an increase in gross profit in excess of increases in selling and administrative expenses, severance and restructuring expenses and acquisition and integration related expenses.
As a percentage of net sales, earnings from operations decreased by approximately 40 basis points to 4.5%. The decrease in earnings from operations was primarily driven by increases in selling and administrative expenses and severance and restructuring expenses, partially offset by an increase in gross profit and a decrease in acquisition and integration related expenses.
Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions, which could then result in subsequent impairment. Any such impairment charges could have a material effect on our results of operations. We completed two business combinations in fiscal 2023 and one business combination in fiscal 2022.
Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions, which could then result in subsequent impairment. Any such impairment charges could have a material effect on our results of operations.
The decrease in earnings from operations was primarily driven by increases in selling and administrative expenses and acquisition and integration related expenses, partially offset by an increase in gross profit. APAC’s earnings from operations increased 3% (increasing 6% excluding the effects of fluctuating foreign currency exchange rates), or $0.6 million, year over year, in 2023 compared to 2022.
The increase in Adjusted earnings from operations was primarily driven by increases in gross profit, partially offset by an increase in selling and administrative expenses. APAC’s Adjusted earnings from operations increased 21% (increasing 22% excluding the effects of fluctuating foreign currency exchange rates), or $4.3 million, year over year, in 2024 compared to 2023.
For a description of our various financing facilities, see Notes 7 and 8 to our Consolidated Financial Statements in Part II, Item 8 of this report. 36 INSIGHT ENTERPRISES, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Other Expense (Income), Net . Other expense (income), net, consists primarily of foreign currency exchange gains and losses.
For a description of our various financing facilities, see Notes 7 and 8 to our Consolidated Financial Statements in Part II, Item 8 of this report. Other (Income) Expense, Net . Other (income) expense, net, consists primarily of foreign currency exchange gains and losses.
We have not made any material adjustments to our financial statements as a result of business combination key assumptions not being consistent with our estimates in the past three fiscal years.
We completed two business combinations in fiscal 2024, including an acquisition in EMEA, and two business combinations in fiscal 2023. We have not made any material adjustments to our financial statements as a result of business combination key assumptions not being consistent with our estimates in the past three fiscal years.
Net sales of products (hardware and software) decreased 15%, year to year, while net sales of services increased 4%, year over year, in 2023 compared to 2022.
Net sales of products (hardware and software) decreased 8%, year to year, while net sales of services increased 9%, year over year, in 2024 compared to 2023.
We are actively monitoring changes to the global macroeconomic environment, including those impacting our supply chain and interest rates, and assessing the potential impacts these challenges may have on our current results, financial condition and liquidity.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) changes to the global macroeconomic environment, including those impacting our supply chain and interest rates, and assessing the potential impacts these challenges may have on our current results, financial condition and liquidity.
The net decrease year to year was primarily the result of the following: • The decrease in hardware net sales was due to lower volume of sales to large enterprise and corporate clients. This decrease reflects lower sales of devices throughout the year and decreases in infrastructure sales in the latter part of 2023.
The changes were primarily the result of the following: • The decrease in hardware net sales was due to lower volume of sales to large enterprise and corporate clients due to lower demand. This decrease reflects lower sales of devices and infrastructure.
Our results of operations include the results of Hanu, Amdaris and SADA from their respective acquisition dates. 2023 Compared to 2022 Net Sales. Net sales decreased 12%, or $1.3 billion, in 2023 compared to 2022.
Our results of operations include the results of Amdaris, SADA and Infocenter from their respective acquisition dates. 2024 Compared to 2023 Net Sales. Net sales decreased 5%, or $0.5 billion, in 2024 compared to 2023.
During 2022, we incurred $2.0 million in direct third-party costs primarily related to the acquisition of Hanu. See Note 20 to the Consolidated Financial Statements in Part II, Item 8 of this report for further discussion of our acquisitions. Earnings from Operations. Earnings from operations increased 1%, or $6.1 million, year over year, in 2023 compared to 2022.
During 2023, we incurred $7.4 million in direct third-party costs primarily related to the acquisitions of SADA and Amdaris. See Note 20 to the Consolidated Financial Statements in Part II, Item 8 of this report for further discussion of our acquisitions. Earnings from Operations. Earnings from operations decreased 7%, or $31.2 million, year to year, in 2024 compared to 2023.
This was partially offset by lower average daily balances under our ABL facility, higher interest income earned in 2023 and decreased imputed interest under our inventory financing facilities. Imputed interest under our inventory financing facilities decreased $2.2 million due to lower average daily balances in 2023 compared to 2022.
This was primarily due to the issuance of the Senior Notes and higher loan balances under our ABL facility. This was partially offset by higher interest income earned in 2024 and decreased imputed interest under our inventory financing facilities. Imputed interest under our inventory financing facilities decreased $3.6 million due to lower average daily balances in 2024 compared to 2023.
We are also mindful of the potential impact these conditions could have on our clients, partners and prospects for 2024 and beyond. 31 INSIGHT ENTERPRISES, INC.
We are also mindful of the potential impact these conditions could have on our clients, partners and prospects in 2025 and beyond.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Cash Requirements From Contractual Obligations At December 31, 2023, our contractual obligations for continuing operations primarily consist of: • $231.9 million under our inventory financing facilities due in 2024; • $102.4 million under operating leases, the majority of which are due from 2024 through 2027; • contingent consideration (earnout payments) associated with our acquisition of SADA, up to a maximum of $390.0 million, payable upon certain defined contingencies being met from 2024 through 2027; • contingent consideration (earnout payments) associated with our acquisition of Amdaris, up to a maximum of $54.4 million, payable upon certain defined contingencies being met from 2024 through 2026; • a purchase commitment related to cloud services of $95.8 million that must be met by September 2029; • a purchase commitment related to software as a service of $33.9 million that must be met by November 2026; • $591.5 million outstanding under our ABL facility maturing in 2027; and • $350.0 million principal amount due on the Notes maturing in 2025.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Cash Requirements From Contractual Obligations At December 31, 2024, our contractual obligations for continuing operations primarily consist of: • $217.6 million under our inventory financing facilities due in 2025; • $96.8 million under operating leases, the majority of which are due from 2025 through 2028; • remaining contingent consideration (earnout payments) associated with our acquisition of SADA, up to a maximum of $240.0 million, payable upon certain defined contingencies being met for 2025 and 2026 that would be paid in 2026 and 2027, respectively; • contingent consideration (earnout payments) associated with our acquisition of Amdaris, up to a maximum of $9.0 million, payable upon certain defined contingencies being met for 2025 that would be paid in 2026; • contingent consideration (earnout payments) associated with our acquisition of Infocenter, up to a maximum of $106.3 million, payable upon certain defined contingencies being met for the years ended April 30, 2025 and April 30, 2026 that would be paid in 2025 and 2026, respectively; • a purchase commitment related to cloud services of $78.9 million that must be met by September 2029; • a purchase commitment related to software as a service of $26.1 million that must be met by November 2026; • $39.0 million outstanding under our ABL facility maturing in 2027; • $500.0 million outstanding under our Senior Notes maturing in 2032; and • $333.1 million principal amount due on the Convertible Notes maturing in February 2025.
Net cash used in investing activities . • We acquired SADA and Amdaris for approximately $398.6 million and $82.9 million, respectively, net of cash and cash equivalents acquired and excluding earn outs and hold backs in 2023. • We received proceeds from the sale of assets, including our properties held for sale, of $15.5 million and $1.3 million in 2023 and 2022, respectively. • Capital expenditures were $39.3 million and $70.9 million in 2023 and 2022, respectively.
Additionally, we paid $5.2 million, net of cash and cash equivalents acquired, for an entity in our EMEA segment, on July 1, 2024. • We acquired SADA and Amdaris for approximately $398.6 million and $82.9 million, respectively, net of cash and cash equivalents acquired and excluding earn outs and hold backs in 2023. • We received proceeds from the sale of assets, including properties held for sale, of $13.8 million and $15.5 million in 2024 and 2023, respectively. • Capital expenditures were $46.8 million and $39.3 million in 2024 and 2023, respectively.
This increase reflects expansion in margin from services net sales, primarily from growth in cloud solution offerings, and an expansion in product margin. • Earnings from operations increased to $419.8 million in 2023, an increase of 1% compared to the prior year, which represented 4.6% of net sales. • Our effective tax rate in 2023 was 25.6%, which compares to our effective tax rate of 25.1% in 2022. • Net earnings and diluted net earnings per share were $281.3 million and $7.55, respectively, in 2023.
This increase reflects expansion in margin from services net sales, primarily from growth in Insight Delivered services and cloud solution offerings. • Earnings from operations decreased to $388.6 million in 2024, a decrease of 7% compared to the prior year, which represented 4.5% of net sales. • Our effective tax rate in 2024 was 25.0%, which compares to our effective tax rate of 25.6% in 2023. • Net earnings and diluted net earnings per share were $249.7 million and $6.55, respectively, in 2024.
These increases were partially offset by the release of reserves related to tax years whose statute expired during the current year. The effective tax rate in 2023 was higher than the federal statutory rate of 21.0% primarily due to state income taxes and higher taxes on earnings in foreign jurisdictions. These increases were offset partially by research tax credits.
The effective tax rate in 2024 was higher than the federal statutory rate of 21.0% primarily due to state income taxes and higher taxes on earnings in foreign jurisdictions. These increases were offset partially by research and transferable energy tax credits.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) 2022 Compared to 2021 For a comparison of our cash flows for the fiscal years ended December 31, 2022 and 2021, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 16, 2023.
Includes acquisition and integration related expenses of $2.9 million and $7.4 million for the years ended December 31, 2024 and 2023, respectively. 2023 Compared to 2022 For a comparison of our results of operations for the fiscal years ended December 31, 2023 and 2022, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 22, 2024.
Interest expense, net primarily relates to borrowings under our financing facilities and imputed interest under our inventory financing facilities and the Notes, partially offset by interest income generated from interest earned on cash and cash equivalent bank balances. Interest expense increased 4%, or $1.6 million, in 2023 compared to 2022 primarily due to higher interest rates under our ABL facility.
Interest expense, net primarily relates to borrowings under our financing facilities and imputed interest under our inventory financing facilities, the Convertible Notes and the Senior Notes, partially offset by interest income generated from interest earned on cash and cash equivalent bank balances. Interest expense increased 41%, or $19.7 million, in 2024 compared to 2023.
On a consolidated basis, for the year ended December 31, 2023: • Net sales of $9.2 billion decreased 12% compared to 2022. • Gross profit of $1.7 billion increased 2% compared to 2022. • Consolidated gross margin expanded approximately 250 basis points to a record 18.2% of net sales in 2023.
On a consolidated basis, for the year ended December 31, 2024: • Net sales of $8.7 billion decreased 5% compared to 2023. • Gross profit of $1.8 billion increased 6% compared to 2023. • Consolidated gross margin expanded approximately 210 basis points to a record 20.3% of net sales in 2024.
Any adverse change in these 43 INSIGHT ENTERPRISES, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) factors, among others, could have a significant effect on the recoverability of goodwill and could have a material effect on our consolidated financial statements.
Any adverse change in these factors, among others, could have a significant effect on the recoverability of goodwill and could have a material effect on our consolidated financial statements.
We expect existing cash and cash flows from operations to continue to be sufficient to fund our operating cash activities and cash commitments for investing and financing activities, such as capital expenditures, strategic acquisitions, repurchases of our common stock, debt repayments, including conversion of the Notes, and repayment of our inventory financing facilities for the next 12 months.
We expect existing cash and cash flows from operations to continue to be sufficient to fund our operating cash activities and cash commitments for investing and financing activities, such as capital expenditures, strategic acquisitions, repurchases of our common stock, early settlement of a portion of the Warrants in cash (as discussed further below), principal payment on the Convertible Notes that mature in February 2025, debt repayments and repayment of our inventory financing facilities for the next 12 months.
EMEA’s gross profit increased 5% (increased 4% excluding the effects of fluctuating foreign currency exchange rates), or $12.7 million, in 2023 compared to 2022. As a percentage of net sales, gross margin expanded 220 basis points to 16.6%.
EMEA’s gross profit increased 13% (increased 11% excluding the effects of fluctuating foreign currency exchange rates), or $33.2 million, in 2024 compared to 2023. As a percentage of net sales, gross margin expanded 410 basis points to 20.7%.
We ended the year with $268.7 million of cash and cash equivalents and $940.5 million of debt outstanding under our long-term debt facilities, including $348.0 million related to the Notes that are classified as a current liability at December 31, 2023.
We ended the year with $259.2 million of cash and cash equivalents and $864.1 million of debt outstanding under our long-term debt facilities, including $332.9 million related to the Convertible Notes that are classified as a current liability at December 31, 2024.
The year over year net increase in gross margin was primarily attributable to the following: • A net increase in product margin of 50 basis points year over year.
As a percentage of net sales, gross margin expanded by approximately 170 basis points year over year. The year over year net increase in gross margin was primarily attributable to the following: • A net increase in product margin of 15 basis points year over year.
EMEA’s earnings from operations decreased 14% (also decreasing 14% excluding the effects of fluctuating foreign currency exchange rates), or $6.1 million, year to year, in 2023 compared to 2022. As a percentage of net sales, earnings from operations decreased by approximately 20 basis points to 2.4%.
EMEA’s earnings from operations increased 21% (increasing 20% excluding the effects of fluctuating foreign currency exchange rates), or $8.1 million, year over year, in 2024 compared to 2023. As a percentage of net sales, earnings from operations increased by approximately 90 basis points to 3.3%.
We have an inverted cash cycle resulting from typically paying partners on shorter terms than we provide to our clients. This generally means in periods of declining hardware sales, and particularly of devices, we typically generate increased cash from operations.
The nominal increase in cash flow from operating activities was partially driven by a decrease in hardware net sales. We have an inverted cash cycle resulting from typically paying partners on shorter terms than we provide to our clients. This generally means in periods of declining hardware sales, we typically generate increased cash from operations.
Our earnings from operations and earnings from operations as a percentage of net sales by operating segment were as follows for 2023 and 2022 (dollars in thousands): 2023 % of Net Sales 2022 % of Net Sales North America $ 362,082 4.9 % $ 350,436 4.1 % EMEA 38,128 2.4 % 44,264 2.6 % APAC 19,585 8.5 % 19,000 8.1 % Consolidated $ 419,795 4.6 % $ 413,700 4.0 % North America’s earnings from operations increased 3%, or $11.6 million, year over year, in 2023 compared to 2022.
Our earnings from operations and earnings from operations as a percentage of net sales by operating segment were as follows for 2024 and 2023 (dollars in thousands): 2024 % of Net Sales 2023 % of Net Sales North America $ 319,068 4.5 % $ 362,082 4.9 % EMEA 46,218 3.3 % 38,128 2.4 % APAC 23,298 10.0 % 19,585 8.5 % Consolidated $ 388,584 4.5 % $ 419,795 4.6 % North America’s earnings from operations decreased 12%, or $43.0 million, year to year, in 2024 compared to 2023.
This increase was primarily due to higher margins on both hardware and software net sales compared to the prior year, partially offset by a decrease in partner funding. • An expansion in services margin year over year of 169 basis points was due to higher margins generated from increased cloud solution offerings and on Insight Core services from Amdaris.
This increase was primarily due to slightly higher margins on software net sales compared to the prior year. • An expansion in services margin year over year of 149 basis points was due to higher margins generated from increased cloud solution offerings, including margin expansion contributed by SADA and from increased sales of Insight Delivered services from SADA and Infocenter.
Our net sales by offering category for APAC for 2023 and 2022, were as follows (dollars in thousands): APAC Sales Mix 2023 2022 % Change Hardware $ 43,850 $ 57,928 (24 %) Software 88,688 86,661 2 % Services 97,294 89,689 8 % $ 229,832 $ 234,278 (2 %) Net sales in APAC decreased 2% (increased 1% excluding the effects of fluctuating foreign currency rates), or $4.4 million, in 2023 compared to 2022.
Our net sales by offering category for APAC for 2024 and 2023, were as follows (dollars in thousands): APAC Sales Mix 2024 2023 % Change Hardware $ 35,448 $ 43,850 (19 %) Software 92,965 88,688 5 % Services 104,608 97,294 8 % $ 233,021 $ 229,832 1 % Net sales in APAC increased 1% (increased 2% excluding the effects of fluctuating foreign currency rates), or $3.2 million, in 2024 compared to 2023.
Net sales of hardware decreased 24% year to year, partially offset by increases in software and services net sales of 2% and 8%, respectively, year over year.
Net sales of services and software increased 8% and 5%, respectively, year over year, partially offset by a decrease in hardware net sales of 19% year to year.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Our net sales by offering category for North America for 2023 and 2022 were as follows (dollars in thousands): North America Sales Mix 2023 2022 % Change Hardware $ 4,498,466 $ 5,738,586 (22 %) Software 1,669,046 1,552,715 7 % Services 1,214,842 1,193,091 2 % $ 7,382,354 $ 8,484,392 (13 %) Net sales in North America decreased 13%, or $1.1 billion, in 2023 compared to 2022.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Our net sales by offering category for North America for 2024 and 2023 were as follows (dollars in thousands): North America Sales Mix 2024 2023 % Change Hardware $ 4,038,341 $ 4,498,466 (10 %) Software 1,721,403 1,669,046 3 % Services 1,294,836 1,214,842 7 % $ 7,054,580 $ 7,382,354 (4 %) Net sales in North America decreased 4%, or $327.8 million, in 2024 compared to 2023.
However, if actual results are not consistent with our estimates or assumptions, it could have a material effect on our reported net sales, timing of revenue recognition and our results of operations. We have not made any material changes in accounting methodology or key assumptions used to recognize net sales during the past three fiscal years.
However, if actual results are not consistent with our estimates or assumptions, it could have a material effect on our reported net sales, timing of revenue recognition and our results of operations. We have not made any material 43 INSIGHT ENTERPRISES, INC.
However, we continue to see a general slowdown in our clients' decision making, which we believe will continue in the near term. In addition, inflation resulted in higher interest rates on all of our variable rate facilities when compared to 2022 and we expect these higher rates will continue into 2024.
Despite the easing supply constraints, we continue to see a general slowdown in our clients' decision making, which we believe will continue in the short term. Inflation contributed to higher interest rates on all of our variable rate facilities in 2024 compared to 2023.
Our net sales by offering category for EMEA for 2023 and 2022, were as follows (dollars in thousands): EMEA Sales Mix 2023 2022 % Change Hardware $ 546,621 $ 654,381 (16 %) Software 784,717 857,516 (8 %) Services 232,316 200,624 16 % $ 1,563,654 $ 1,712,521 (9 %) Net sales in EMEA decreased 9% (also decreased 9% excluding the effects of fluctuating foreign currency exchange rates), or $148.9 million, in 2023 compared to 2022.
Our net sales by offering category for EMEA for 2024 and 2023, were as follows (dollars in thousands): EMEA Sales Mix 2024 2023 % Change Hardware $ 501,111 $ 546,621 (8 %) Software 626,372 784,717 (20 %) Services 286,614 232,316 23 % $ 1,414,097 $ 1,563,654 (10 %) Net sales in EMEA decreased 10% (decreased 11% excluding the effects of fluctuating foreign currency exchange rates), or $149.6 million, in 2024 compared to 2023.
Net sales by category for North America, EMEA and APAC were as follows for 2023 and 2022: North America EMEA APAC Sales Mix 2023 2022 2023 2022 2023 2022 Hardware 61 % 68 % 35 % 38 % 19 % 25 % Software 23 % 18 % 50 % 50 % 39 % 37 % Services 16 % 14 % 15 % 12 % 42 % 38 % 100 % 100 % 100 % 100 % 100 % 100 % Gross Profit .
Net sales by category for North America, EMEA and APAC were as follows for 2024 and 2023: North America EMEA APAC Sales Mix 2024 2023 2024 2023 2024 2023 Hardware 57 % 61 % 36 % 35 % 15 % 19 % Software 25 % 23 % 44 % 50 % 40 % 39 % Services 18 % 16 % 20 % 15 % 45 % 42 % 100 % 100 % 100 % 100 % 100 % 100 % 33 INSIGHT ENTERPRISES, INC.
APAC’s gross profit increased 4% (increased 8% excluding the effects of fluctuating foreign currency exchange rates), or $2.6 million, in 2023 compared to 2022. As a percentage of net sales, gross margin increased by approximately 170 basis points year over year.
EMEA’s Adjusted earnings from operations increased 18% (increasing 16% excluding the effects of fluctuating foreign currency exchange rates), or $8.4 million, year over year, in 2024 compared to 2023. As a percentage of net sales, Adjusted earnings from operations increased by approximately 100 basis points to 4.0%.
In 2022, we reported net earnings of $280.6 million and diluted net earnings per share of $7.66.
In 2023, we reported net earnings of $281.3 million and diluted net earnings per share of $7.55.
Daily costs of goods sold is calculated as costs of goods sold for the quarter divided by 92 days.
Daily costs of goods sold is calculated as costs of goods sold for the quarter divided by 92 days. (d) Calculated as DSOs plus DIOs, less DPOs. 39 INSIGHT ENTERPRISES, INC.
Our net sales by operating segment for 2023 and 2022 were as follows (dollars in thousands): 2023 2022 % Change North America $ 7,382,354 $ 8,484,392 (13 %) EMEA 1,563,654 1,712,521 (9 %) APAC 229,832 234,278 (2 %) Consolidated $ 9,175,840 $ 10,431,191 (12 %) 32 INSIGHT ENTERPRISES, INC.
Our net sales by operating segment for 2024 and 2023 were as follows (dollars in thousands): 2024 2023 % Change North America $ 7,054,580 $ 7,382,354 (4 %) EMEA 1,414,097 1,563,654 (10 %) APAC 233,021 229,832 1 % Consolidated $ 8,701,698 $ 9,175,840 (5 %) 31 INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) • The increase in services net sales was due to increased sales of Insight Delivered services, including from Amdaris, which we acquired in August 2023, and higher sales of cloud solution offerings.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) • The decrease in hardware net sales was primarily due to lower volume of sales to public sector clients due to lower demand. • The increase in services net sales was due to increased sales of Insight Delivered services from Amdaris, which we acquired in August 2023, partially offset by declines in sales of Insight Delivered services from our EMEA organic business.
Financing for future transactions would result in the utilization of cash, incurrence of additional debt, issuance of stock or some combination of the three. See Note 20 to the Consolidated Financial Statements in Part II, Item 8 of this report for a discussion of our acquisitions of SADA in December 2023, Amdaris in August 2023 and Hanu in June 2022.
See Note 20 to the Consolidated Financial Statements in Part II, Item 8 of this report for a discussion of our acquisitions of Infocenter in May 2024, SADA in December 2023, Amdaris in August 2023 and Hanu in June 2022. 42 INSIGHT ENTERPRISES, INC.
We have not made any material adjustments to our financial statements as a result of actual results not being consistent with our estimates in the past three fiscal years. 42 INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) changes in accounting methodology or key assumptions used to recognize net sales during the past three fiscal years. We have not made any material adjustments to our financial statements as a result of actual results not being consistent with our estimates in the past three fiscal years.
Inflation We have historically not been adversely affected by inflation, as technological advances and competition within the IT industry have generally caused the prices of the products we sell to decline and product life cycles tend to be short. This requires our growth in unit sales to exceed 41 INSIGHT ENTERPRISES, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Inflation With the exception of the impact on our variable interest rate debt facilities, we have historically not been adversely affected by inflation, as technological advances and competition within the IT industry have generally caused the prices of the products we sell to decline and product life cycles tend to be short.
The year over year net increase in gross margin was primarily attributable to the following: • A net increase in product margin of 41 basis points year over year. This increase was primarily due to higher margins on both hardware and software net sales compared to the prior year.
The year over year net increase in gross margin was primarily attributable to the following: • An expansion in services margin year over year of 321 basis points primarily due to higher margins from increased sales of Insight Delivered services from Amdaris. • A net increase in product margin of 90 basis points year over year.
Events or circumstances that could trigger an impairment review include a significant adverse change in legal factors or in the business climate, unanticipated competition, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, significant declines in our stock price for a sustained period or significant underperformance relative to expected historical or projected future cash flows or results of operations.
Events or circumstances that could trigger an impairment review include a significant adverse change in legal factors or in the business climate, unanticipated competition, significant changes in the manner of our use of the acquired assets or the strategy 44 INSIGHT ENTERPRISES, INC.
Full year 2023 financial and operational highlights included the following: • We reported record gross profit of $1.7 billion and record gross margin of 18.2%, primarily driven by expansion in North America. • We generated cash flows from operations of $619.5 million. • In December 2023, we acquired SADA to strengthen our digital transformation capabilities and accelerate the growth of our cloud services and solutions. • In August 2023, we acquired Amdaris to support our EMEA services and solution offerings.
Full year 2024 financial and operational highlights included the following: • We reported gross profit of $1.8 billion and record gross margin of 20.3%, primarily driven by margin expansion in North America. • We generated cash flows from operations of $632.8 million. • In May 2024, we acquired Infocenter to strengthen our digital transformation capabilities leveraging their deep expertise in ServiceNow’s comprehensive suite of capabilities.
Our gross profit and gross profit as a percent of net sales by operating segment for 2023 and 2022 were as follows (dollars in thousands): 2023 % of Net Sales 2022 % of Net Sales North America $ 1,345,955 18.2 % $ 1,328,333 15.7 % EMEA 259,987 16.6 % 247,269 14.4 % APAC 63,583 27.7 % 60,965 26.0 % Consolidated $ 1,669,525 18.2 % $ 1,636,567 15.7 % 34 INSIGHT ENTERPRISES, INC.
Our gross profit and gross profit as a percent of net sales by operating segment for 2024 and 2023 were as follows (dollars in thousands): 2024 % of Net Sales 2023 % of Net Sales North America $ 1,401,994 19.9 % $ 1,345,955 18.2 % EMEA 293,188 20.7 % 259,987 16.6 % APAC 70,834 30.4 % 63,583 27.7 % Consolidated $ 1,766,016 20.3 % $ 1,669,525 18.2 % North America’s gross profit increased 4%, or $56.0 million, in 2024 compared to 2023.
The majority of the capital expenditures in 2023 was used to fund technology related projects. • We expect total capital expenditures in 2024 to be in the range of $50.0 to $55.0 million.
The majority of the capital expenditures in 2024 were used for our new Texas distribution facility and to fund technology related projects. • We expect total capital expenditures in 2025 to be in the range of $35.0 to $40.0 million. 40 INSIGHT ENTERPRISES, INC.
We believe this trend could continue into future periods as we focus on selling solutions and increasing our services net sales, including cloud solution offerings. Operating Expenses. Selling and Administrative Expenses. Selling and administrative expenses increased $19.6 million in 2023 compared to 2022.
We believe this trend could continue into future periods as we focus on selling solutions and increasing our services net sales. As a result of certain partner program changes, we believe we may not experience significant growth in cloud gross profit in 2025 compared to 2024. Operating Expenses. Selling and Administrative Expenses.
Net borrowings under our ABL facility were $244.7 million in 2022. • Capital expenditures were $39.3 million in 2023 compared to $70.9 million in 2022. • During 2023, we repurchased an aggregate of $217.1 million of our common stock compared to an aggregate of $107.9 million repurchased during 2022.
Net borrowings under our ABL facility were $299.6 million in 2023. • We issued $500.0 million in principal amount of Senior Notes, which we used to pay down a portion of our borrowings under our ABL facility. • Capital expenditures were $46.8 million in 2024 compared to $39.3 million in 2023. • During 2024, we repurchased an aggregate of $200.0 million of our common stock compared to an aggregate of $217.1 million repurchased during 2023.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) The results of operations for 2022 include the following items: • severance and restructuring expenses of $4.2 million, $3.2 million net of tax; and • the repurchase of approximately 1.1 million shares of the Company’s common stock for an aggregate cost of $107.9 million.
The results of operations for 2024 include the following items: • severance and restructuring expenses, net of $25.0 million, $18.6 million net of tax; • acquisition and integration related expenses of $2.7 million, $2.5 million net of tax; and • the repurchase of approximately 1.0 million shares of the Company’s common stock for an aggregate cost of $200.0 million. 29 INSIGHT ENTERPRISES, INC.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk The information contained in Note 12 to the Consolidated Financial Statements in Part II, Item 8 of this report concerning a description of market risk management, including interest rate risk and foreign currency exchange risk, is incorporated by reference herein. 45 INSIGHT ENTERPRISES, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk The information contained in Note 12 to the Consolidated Financial Statements in Part II, Item 8 of this report concerning a description of market risk management, including interest rate risk and foreign currency exchange risk, is incorporated by reference herein. 46 INSIGHT ENTERPRISES, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Other NSIT 10-K year-over-year comparisons