Insight Enterprises Reports 12% Decline in Net Sales for Q1 2025

Insight Enterprises, Inc. reported a significant decline in financial performance for the first quarter of 2025, with net sales totaling $2.1 billion, a decrease of 12% compared to $2.4 billion in the same period last year. The decline was attributed to reduced sales in software and services, although hardware sales saw a slight increase. Gross profit also fell by 8% to $406.5 million, resulting in a gross margin of 19.3%, which reflects an improvement of approximately 80 basis points from the previous year. The company's earnings from operations decreased by 40% to $60.1 million, while net earnings dropped to $7.5 million, or $0.22 per diluted share, down from $67 million and $1.74 per diluted share in the prior year.

The company's financial results were impacted by several factors, including a net loss of $15.2 million related to the revaluation of the earnout liability from the acquisition of Infocenter, and a $25.1 million loss from the revaluation of warrant settlement liabilities. Selling and administrative expenses increased slightly, reflecting higher costs associated with the Infocenter acquisition and severance expenses, which totaled $7 million for the quarter. The overall decrease in profitability was compounded by a rise in interest expenses, which increased by 24% due to the issuance of senior notes and the maturity of convertible notes.

Operationally, Insight Enterprises experienced a decrease in customer engagement, with net sales in North America declining by 11%, while EMEA and APAC segments saw decreases of 17% and 3%, respectively. The company reported a total of 31,928,216 shares outstanding as of April 25, 2025. Despite the challenges, the company continues to focus on its strategic initiatives, including the integration of Infocenter, which is expected to enhance its service offerings and drive future growth.

Looking ahead, Insight Enterprises anticipates that cash flows from operations, along with available financing, will be sufficient to meet its working capital needs and support strategic acquisitions over the next 12 months. The company is also monitoring macroeconomic conditions, including inflation and interest rates, which could impact its operations and financial performance. Insight remains committed to leveraging its partnerships and expanding its service offerings to navigate the current market challenges effectively.