0000932696-25-000019
SEC filingNet sales decreased 4% YoY to $2.0B, while gross margin expanded 100 bps to 21.7%, with flat operating income.
For the three months ended September 30, 2025, Insight Enterprises reported consolidated net sales of $2.0 billion, a 4% decrease compared to the same period in 2024. The decline was primarily driven by a 5% drop in North America net sales, partially offset by a 2% increase in EMEA. Excluding foreign currency effects, consolidated net sales decreased 5% year-over-year. Gross profit was flat at $434.2 million, but gross margin expanded approximately 100 basis points to 21.7% of net sales, reflecting a higher contribution from services net sales. Earnings from operations were essentially flat at $93.1 million compared to $92.9 million in the prior year, as increases in selling and administrative expenses and acquisition-related costs were offset by lower severance and restructuring expenses. Net earnings declined to $50.9 million from $58.2 million, primarily due to a 40% increase in interest expense. Diluted earnings per share, however, increased 7% to $1.62, benefiting from a reduction in dilutive shares outstanding.
North America net sales decreased 5% to $1.625 billion, driven by a 26% decline in software net sales and a 3% decline in services, partially offset by a 2% increase in hardware. The software decline was attributed to changes in vendor relationships (shifting from principal to agent) and continued migration of on-premise software to cloud solutions. Services decreased due to partner program changes and lower Insight Delivered services. Hardware growth was driven by higher commercial client demand. North America operating income rose 3% to $83.6 million, with operating margin expanding 40 basis points to 5.1%.
EMEA net sales increased 2% to $319.8 million, but declined 3% on a constant currency basis. Services net sales surged 30%, driven by Insight Delivered services and agency net sales, while software grew 2% and hardware fell 11%. EMEA operating income decreased 33% to $4.5 million, with operating margin contracting 70 basis points to 1.4%, due to higher selling and administrative expenses.
APAC net sales were flat at $58.8 million, but increased 2% on a constant currency basis. Hardware and services grew 5% and 4% respectively, while software declined 7%. APAC operating income decreased 7% to $4.9 million, with operating margin down 70 basis points to 8.4%, driven by higher acquisition and integration expenses.
Management noted that inflation has contributed to sustained high interest rates on variable-rate borrowings, which are expected to remain above historical levels through the remainder of 2025. The company is actively monitoring macroeconomic conditions, including supply chain, demand, tariffs, and interest rates. No specific forward guidance was provided in the MD&A section. The company expects cash flows from operations and available financing facilities to support working capital, strategic acquisitions, and debt repayment over the next 12 months. Capital expenditures for full-year 2025 are expected to be approximately $25.0 million.