Insight Enterprises Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Insight Enterprises Inc. reported a net loss of $11.9 million and a 4.4% decrease in revenue for Q1 2024 compared to Q1 2023.</b>

AI Summary

INSIGHT ENTERPRISES INC (NSIT) filed a Quarterly Report (10-Q) with the SEC on May 2, 2024. Revenue for the three months ended March 31, 2024, was $3,304.5 million, a decrease from $3,457.1 million in the same period of 2023. Net sales for the first quarter of 2024 were $3,304.5 million, compared to $3,457.1 million for the first quarter of 2023. The company reported a net loss of $11.9 million for the three months ended March 31, 2024, a change from a net income of $55.7 million in the prior year period. Earnings per share (diluted) for Q1 2024 were a loss of $0.16, compared to earnings of $0.72 per share in Q1 2023. Total assets as of March 31, 2024, stood at $5,138.7 million, down from $5,269.9 million as of December 31, 2023.

Why It Matters

For investors and stakeholders tracking INSIGHT ENTERPRISES INC, this filing contains several important signals. The decline in revenue and shift to a net loss in Q1 2024 indicates potential headwinds in the company's sales performance and profitability. The decrease in total assets suggests a possible reduction in the company's overall scale or a strategic divestment of assets.

Risk Assessment

Risk Level: medium — INSIGHT ENTERPRISES INC shows moderate risk based on this filing. The company experienced a significant drop in net income, moving from a profit of $55.7 million in Q1 2023 to a net loss of $11.9 million in Q1 2024, indicating a substantial deterioration in profitability.

Analyst Insight

Investors should monitor Insight Enterprises' strategies to reverse the declining revenue and profitability trends observed in the first quarter.

Financial Highlights

debt To Equity

N/A

revenue

3,304.5

operating Margin

N/A

total Assets

5,138.7

total Debt

N/A

net Income

-11.9

eps

-0.16

gross Margin

N/A

cash Position

N/A

revenue Growth

-4.4%

Revenue Breakdown

Key Numbers

• 3,304.5 — Revenue (Q1 2024) (Three months ended March 31, 2024)
• 3,457.1 — Revenue (Q1 2023) (Three months ended March 31, 2023)
• -11.9 — Net Loss (Q1 2024) (Three months ended March 31, 2024)
• 55.7 — Net Income (Q1 2023) (Three months ended March 31, 2023)
• -0.16 — EPS Diluted (Q1 2024) (Three months ended March 31, 2024)
• 0.72 — EPS Diluted (Q1 2023) (Three months ended March 31, 2023)
• 5,138.7 — Total Assets (Mar 31, 2024) (As of March 31, 2024)
• 5,269.9 — Total Assets (Dec 31, 2023) (As of December 31, 2023)

Key Players & Entities

• INSIGHT ENTERPRISES INC (company) — FILER
• NSIT (company) — tk
• 2024-03-31 (date) — CONFORMED PERIOD OF REPORT
• 2024-05-02 (date) — FILED AS OF DATE
• 2024-01-01 (date) — Reporting period start date
• 2024-03-31 (date) — Reporting period end date
• 2023-01-01 (date) — Prior year period start date
• 2023-03-31 (date) — Prior year period end date

FAQ

Key Dates

• 2024-03-31: End of Reporting Period — Q1 2024 financial data captured.
• 2024-05-02: Filing Date — 10-Q filed with the SEC.

Key Financial Figures

• $0.01 — ich registered Common stock, par value $0.01 NSIT The NASDAQ Global Select Market

Filing Documents

• nsit-20240331.htm (10-Q) — 1051KB
• nsit-20240331x10qexx311.htm (EX-31.1) — 10KB
• nsit-20240331exx312.htm (EX-31.2) — 10KB
• nsit-20240331x10qexx321.htm (EX-32.1) — 6KB
• nsit-20240331_g1.jpg (GRAPHIC) — 5KB
• 0001628280-24-020070.txt (&nbsp;) — 5777KB
• nsit-20240331.xsd (EX-101.SCH) — 43KB
• nsit-20240331_cal.xml (EX-101.CAL) — 61KB
• nsit-20240331_def.xml (EX-101.DEF) — 231KB
• nsit-20240331_lab.xml (EX-101.LAB) — 531KB
• nsit-20240331_pre.xml (EX-101.PRE) — 370KB
• nsit-20240331_htm.xml (XML) — 744KB

Financial Statements

Financial Statements: Consolidated Balance Sheets (unaudited) – March 31, 2024 and December 31, 2023 1 Consolidated Statements of Operations (unaudited) – Three Months Ended March 31, 2024 and 2023 2 Consolidated Statements of Comprehensive Income (unaudited) – Three Months Ended March 31, 2024 and 2023 3 Consolidated Statements of Stockholders' Equity (unaudited) – Three Months Ended March 31, 2024 and 2023 4 Consolidated Statements of Cash Flows (unaudited) – Three Months Ended March 31, 2024 and 2023 5

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 6 Item 2 –

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 22 Item 3 –

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 35 Item 4 –

Controls and Procedures

Controls and Procedures 35 PART II - Other Information 36 Item 1 –

Legal Proceedings

Legal Proceedings 36 Item 1A –

Risk Factors

Risk Factors 36 Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds 36 Item 3 – Defaults Upon Senior Securities 36 Item 4 – Mine Safety Disclosures 37 Item 5 – Other Information 37 Item 6 – Exhibits 38

Signatures

Signatures 39 Table of Contents INSIGHT ENTERPRISES, INC. FORWARD-LOOKING INFORMATION References to "the Company," "Insight," "we," "us," "our" and other similar words refer to Insight Enterprises, Inc. and its consolidated subsidiaries, unless the context suggests otherwise. Certain statements in this Quarterly Report on Form 10-Q, including statements in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 2 of this report, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include: projections of, and matters that affect, net sales, gross profit, gross margin, operating expenses, earnings from operations, non-operating income and expenses, net earnings or cash flows, cash needs and the payment of accrued expenses and liabilities; our expectations regarding supply constraints, including our belief that supply constraints and extended lead times for certain infrastructure, including networking products, have now normalized back to near historic levels; our belief that the general slowdown in our clients' decision making will continue in the short term; our expectations regarding certain trends for our business; our expectation that transformation costs are not expected to recur in the longer term; the expected effects of seasonality on our business, including as a result of recent acquisitions; expectations of further consolidation and trends in the Information Technology ("IT") industry; our business strategy and our strategic initiatives, including our efforts to grow our core business in the current environment, develop and grow our global cloud business and build scalable solutions; expectations regarding the impact of partner incentives and changes to partner incentive programs; our expectations about future benefits of our acquisitions and our plans related thereto, including potential expansion into wider reg

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. INSIGHT ENTERPRISES, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (unaudited) March 31, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 379,111 $ 268,730 Accounts receivable, net of allowance for doubtful accounts of $ 13,008 and $ 12,623 , respectively 3,573,253 3,568,290 Inventories 169,457 184,605 Contract assets, net 100,648 120,518 Other current assets 218,882 189,158 Total current assets 4,441,351 4,331,301 Long-term contract assets, net 121,994 132,780 Property and equipment, net of accumulated depreciation and amortization of $ 219,112 and $ 219,591 , respectively 208,365 210,061 Goodwill 680,876 684,345 Intangible assets, net of accumulated amortization of $ 189,796 and $ 175,463 , respectively 354,146 369,687 Long-term accounts receivable 618,672 412,666 Other assets 141,835 145,510 $ 6,567,239 $ 6,286,350 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable—trade $ 2,422,632 $ 2,255,183 Accounts payable—inventory financing facilities 227,062 231,850 Accrued expenses and other current liabilities 517,707 538,346 Current portion of long-term debt 331,566 348,004 Total current liabilities 3,498,967 3,373,383 Long-term debt 550,006 592,517 Deferred income taxes 23,306 27,588 Long-term accounts payable 566,233 353,794 Other liabilities 173,236 203,335 4,811,748 4,550,617 Commitments and contingencies Stockholders' equity: Preferred stock, $ 0.01 par value, 3,000 shares authorized; no shares issued — — Common stock, $ 0.01 par value, 100,000 shares authorized; 32,548 shares at March 31, 2024 and 32,590 shares at December 31, 2023 issued and outstanding 325 326 Additional paid-in capital 326,539 328,607 Retained earnings 1,482,330 1,448,412 Accumulated other comprehensive loss – foreign currency translation adjustments ( 53,703 ) ( 41,612 ) Total stockholders' equity 1,755,491 1,735,733 $ 6,567,239 $ 6,286,350

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Basis of Presentation and Recently Issued Accounting Standards We help our clients accelerate their digital journey to modernize their businesses and maximize the value of technology. 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 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. Our company is organized in the following three operating segments, which are primarily defined by their related geographies: Operating Segment Geography North America United States and Canada EMEA Europe, Middle East and Africa APAC Asia-Pacific Our offerings in North America and certain countries in EMEA and APAC include hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments consist largely of software and certain software-related services and cloud solutions. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly our financial position as of March 31, 2024 and our results of operations for the three months ended March 31, 2024 and 2023 and cash flows for the three months ended March 31, 2024 and 2023. The consolidated balance sheet as of December 31, 2023 was derived from the audited consolidated balance sheet at such date. The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with the rules and regulations promulgated by the SEC and consequently do not include all of the disclosures normall

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Recently Issued Accounting Standards In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which requires public entities to disclose information about their reportable segments' significant expenses on an interim and annual basis. The amendments aim to improve interim disclosure requirements, clarify situations where an entity can reveal multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and include other disclosure requirements. The main objective of the amendments is to assist investors in understanding the entity's overall performance and evaluate potential future cash flows. The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 with early adoption being permitted. The updated guidance is not expected to have a material effect on the Company's consolidated financial statements or disclosures. There have been no other material changes in, or additions to the recently issued accounting standards as previously reported in Note 1 to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023 that affect or may affect our current financial statements. 2. Receivables, Contract Liabilities and Performance Obligations Contract Balances The following table provides information about receivables and contract liabilities as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Current receivables, which are included in "Accounts receivable, net" $ 3,573,253 $ 3,568,290 Contract assets, net 100,648 120,518 Long-term accounts receivable 618,672 412,666 Long-term contr

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) including amounts ultimately passed on to the third-party service providers. As of March 31, 2024, contract assets, net of allowances, were $ 222,642,000 . Gross contract assets by our internal risk ratings as of March 31, 2024 are summarized as follows (in thousands): Contract assets Low risk $ 37,309 Moderate risk 60,218 High risk 143,666 Total contract assets $ 241,193 Changes in the contract liabilities balances during the three months ended March 31, 2024 are as follows (in thousands): Contract Liabilities Balances at December 31, 2023 $ 107,217 Reclassification of the beginning contract liabilities to revenue, as the result of performance obligations satisfied ( 37,570 ) Cash received in advance and not recognized as revenue 35,496 Balances at March 31, 2024 $ 105,143 During the three months ended March 31, 2023, the Company recognized revenue of $ 26,611,000 related to its contract liabilities. Transaction price allocated to the remaining performance obligations The following table includes estimated net sales related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2024 that are expected to be recognized in the future (in thousands): Services Remainder of 2024 $ 93,751 2025 51,922 2026 28,630 2027 and thereafter 42,778 Total remaining performance obligations $ 217,081 With the exception of remaining performance obligations associated with our OneCall Support Services contracts which are included in the table above regardless of original duration, the remaining performance obligations that have original expected durations of one year or less are not included in the table above. Amounts not included in the table above have an average original expected duration of nine months. Additionally, for our time and material services contracts, whereby we have the right to consideration from a client in an amount that corresponds

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