Insight Enterprises, Inc.

Good day and thank you for standing by. Welcome to the Insight Enterprises Inc. Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. Thank you. I would now like to hand the conference over to your speaker today, Glynis Bryan, Chief Financial Officer. Please go ahead.

Thank you. Welcome, everyone, and thank you for joining the Insight Enterprises Earnings Conference Call. Today, we will be discussing the company's operating results for the quarter ended September 30th, 2021. I'm Glynis Bryan, Chief Financial Officer of Insight, and joining me is Ken Ramnik, President and Chief Executive Officer. Today, we also welcome Joyce Mullen, President, Insight North America, who will succeed Ken as her President and Chief Executive Officer, effective January 1st, 2022. If you do not have a copy of the earnings release of the accompanying slide presentation that were posted this morning in front of the Securities and Exchange Commission on Form 8K, you will find them on our website at insight.com under Investor Relations section. Today's call, including the question and answer period, is being webcast live. and can be accessed by the investor relations page of our website at insight.com. An archived copy of the conference call will be available approximately two hours after completion of the call and will remain on our website for a limited time. This conference call and the associated webcast contain time-sensitive information that is accurate only as of today, November 4, 2021. This call is a property of Insight Enterprises. Any redistribution, retransmission, or rebroadcast of this call in any form without the express and consent of Inset Enterprises is strictly prohibited. In today's conference call, we will be referring to non-GAAP financial measures as we discuss the third quarter 2021 financial results. When discussing non-GAAP measures, we will refer to them as adjusted. You will find a reconciliation of these adjusted measures to our actual GAAP results included in either the press release or the accompanying slide presentation issued earlier today. Please note that unless highlighted as constant currency, all amounts and growth rates discussed are in U.S. dollar terms. As a reminder, all forward-looking statements that are made during the conference call are subject to risks and uncertainties that could cause our actual results to differ materially. These risks are discussed in today's press release and in greater detail in our most recently filed periodic reports and subsequent filings with the SEC. With that, I will now turn the call over to Ken, and if you're following along with the slide presentation, we will begin on slide four. Ken?

Thank you, Glynis. Good morning and thank you for joining us today in what will be my last earnings conference call as President and CEO of Insight. I'm delighted to hand this responsibility off to Joyce on future calls and I'm confident about Insight's future under her strong and capable leadership as she steps into the role of President and Chief Executive Officer on January 1st. As we all support Joyce in her transition to this new role at Insight, we remain committed to delivering on her financial objectives and long-term priorities. As a reminder, our long-term priorities are to continue to innovate to capture share in high-growth areas, grow with solutions that drive business outcomes for clients, expand and scale our strategic clients and markets, and demonstrate client obsession by optimizing client experience with operational excellence. Now turning to the third quarter of 2021 and operating results on slide five. We had an excellent quarter driven by 26% top-line growth, including hardware growth of 36% compared to prior year. We delivered a double-digit increase in adjusted earnings from operations up 30% compared to last year's third quarter. Hardware booking trends continued strong throughout third quarter, while supply constraints did not ease up as originally anticipated throughout the supply chain. We continue to support our clients by helping them better forecast their IT needs. We exited the third quarter with elevated hardware backlog above levels at the start of the quarter. We expect about 50% of this backlog will shift in Q4. We're pleased to see the pipeline for future sales continue to build to healthy levels into 2022. Clients continue to focus on business agility and continuity by leveraging the cloud solutions, a trend that increased in pace during the pandemic. Through our deep expertise delivering digital solutions, we've grown sales of both SaaS and infrastructure service mid to high-divided sales growth for the quarter. This drove cloud gross profit to 21% of total gross profit, up more than 200 basis points year over year for the trailing 12 months. Over the last 18 months, we've seen a rapid acceleration of digitalization. IT has gone from supporting the business to becoming the business in many industries. For our clients, challenges arise and growth can be impaired if necessary investments in technology and transformation strategy are deferred or poorly implemented. It incited me to bring a wealth of knowledge and share best practices that help point our clients in the right direction to reimagine how they work. And a recent example of this in slide six, we helped a client migrate their on-premises data centers to the cloud as part of a shift to digital headquarters. Our client, a food services chain with 250 locations across the U.S., India, and Thailand, recognized that eliminating its physical headquarters would require replacing on-premises data centers with a cloud solution. Because our client has a long-standing relationship with Insight, they knew we offered the expertise and experience to advise and support every step of the migration process. The Insight professional services team worked with the client on a cloud economics assessment to better understand which workloads would be moved as part of the migration and which cloud solution provider would be the best fit. The Insight team walked the client through the right-sizing process to determine the configuration needs for its new cloud-based data center. At Insight, what started as a professional service engagement now includes ongoing managed services, providing our client greater flexibility, better redundancy and resiliency, and improved operation and automation for net new workloads that have migrated to the cloud. Whether our clients are reimagining their workplace or looking to evolve with IT in today's digital-first business climate, organizations are seeking more guidance on how to navigate these key changes. These include the shift to the intelligent edge, multi-cloud and hybrid environments, and managing spend as they move from traditional IT procurement to as-a-service consumption models. On slide seven, one example of innovation changing the way our clients do business is in wireless connectivity, which has become an increasingly critical part of everyday life. We combine innovative services and strategic partnerships to offer a full suite of integrated network and security solutions to our clients. We achieved the designation of 5G for enterprise branch specialization from CradlePoint, a global leader in cloud-delivered LTE and 5G wireless edge solutions. With this designation, we're positioned to sell CradlePoint's comprehensive portfolio of 5G solutions. These capabilities are pivotal to delivering fast and consistent communication required for edge computing. Through these efforts, our clients are enhancing their business through 5G secure connections and taking a step towards the future. The Insight CreativePoint partnership represents our commitment to offering innovative services in a way that takes the complexity of adopting next-generation technologies by assessing the unique needs of our clients, building a strategy to embrace the best solutions, and then delivering and supporting those solutions for lasting success. Our end-to-end skill set across our broad portfolio promises a faster, more strategic way to implement innovative technologies. We will continue to make the strategic investments and go-to-market solution areas in order to achieve our long-term priorities and drive value for our shareholders. Our long-term priorities are aligned to deliver on our financial commitments. We continue to be pleased with the execution this year and remain optimistic about the prospects for the supply chain and market recovery continuing to strengthen into 2022. Today, we increased our outlook for 2021 from our previously issued guidance, which reflects continued progress towards these goals, as well as our long-term goals that we outlined at our Investor Day in late 2019. I'll now hand the call back over to Glynis to review the details of our financial performance.