Insight Enterprises, Inc.

Good day and thank you for standing by. Welcome to the Insight Enterprises first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 1 on your telephone keypad. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Glynis Bryan, our CFO. 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 March 31, 2022. I'm Glynis Bryan, Chief Financial Officer of Insight, and joining me is Joyce Mullen, President and Chief Executive Officer. If you do not have a copy of the earnings release, or the accompanying slide presentation that was posted this morning and filed with the Securities and Exchange Commission on Form 8-K, you will find it on our website at insight.com under the Investor Relations section. Today's call, including the question and answer period, is being webcast live and can be accessed via 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 webcasts contain time-sensitive information that is accurate only as of today, May 5, 2022. This call is a property of Insight Enterprises. Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of Insight Enterprises is strictly prohibited. In today's conference call, we will refer to non-GAAP financial measures as we discuss the first quarter 2022 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. Also, 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 in this conference call are subject to risk 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. All forward-looking statements are made as of the date of this call, and except as required by law, we undertake no obligation to update any forward-looking statements made on this call, whether as a result of new information, future events, or otherwise. With that, I will now turn the call over to Joyce And if you're following along with the slide presentation, we will begin on slide four. Joyce?

Thanks so much, Glynis. Hello, everyone, and thank you for joining us today. It is my pleasure to report our performance for the quarter. We delivered a record Q1 for revenue, gross profit, and adjusted diluted earnings per share. Year-over-year net sales grew 21%, adjusted earnings from operations grew 31%, and adjusted diluted EPS grew 39%. With supply constraints somewhat easing for devices, hardware net sales grew 27% year over year, which was higher than expected. Product demand remained healthy, and hardware backlog bookings grew faster than sales, resulting in another sequential increase in our ending backlog. The demand for our services business is also healthy. Bookings grew over 20% in Q1, and we expect strong double-digit bookings growth to continue in Q2. Our cloud business continues to perform well with growth buildings growing more than 20% year over year. These points demonstrate clients are looking to Insight to provide more services than ever as inflation and labor shortages have increased their focus on digital transformation and automation projects. We're proud of these results and even prouder of the Insight teammates who work tirelessly to meet our clients' needs and expectations. As CEO, it is my privilege and responsibility to assemble a world-class leadership team. a team that will drive the transformation required to accelerate our vision of becoming a leading solutions integrator. To that end, I am extremely pleased that we have added two stellar executives to our leadership team. First, Dee Berger joined us on May 2nd as our president of North America. Dee joined us from Capgemini, where he led the North American business. With nearly 30 years of experience, Dee is a customer-centric leader and has a proven track record of building and delivering new services to customers, including cloud and digital applications, AI, and cybersecurity. Dee also has an incredibly strong reputation as an effective leader. His vast experience will be critical to transforming our sales organization and ensuring we have the appropriate capabilities to accelerate our solutions business. Another key addition to the leadership team is Suma Nallapati, who joined us on April 4th as our new CIO. Suma brings extensive experience with large-scale digital transformation and demonstrated success delivering effective and efficient IT solutions. Her knowledge of global enterprise SaaS operations, modern infrastructure, and business intelligence will guide our continued focus on automation, agility, and cybersecurity. Additionally, over the last several months, we have consolidated our services, presales, and solutions delivery organizations to drive a more seamless client experience. This consolidation also supports our increased focus on building innovative, and scalable solutions that leverage our IP and deliver differentiated value to our clients. And while we don't do everything, we are extraordinarily proud of our capabilities and our key areas of expertise. Modern workplace, modern applications, modern infrastructure, data and AI, cybersecurity, and intelligent edge. The outcomes we deliver to our clients are driven by their business needs, but in general include improving their own customer or user experience, reducing operating costs and enhancing productivity through automation, designing and implementing solutions to manage cybersecurity risk, consolidating workloads and reducing data center footprints to drive efficiency and increase sustainability, and leveraging data to build new or improved business models. For example, on slide five, a longstanding fashion retailer operating in over 30 countries wanted to streamline and secure their backend operations with an updated cloud infrastructure, while also modernizing their global e-commerce shopping experience. Our team of cloud and security experts map their needs against the client's goal to create a scalable, cost-effective, and secure hybrid cloud platform that could accommodate future growth. This engagement delivered impressive results. The client has passed all 44 controls for regulatory compliance and tripled their identity secure score, which is an Azure metric. all while improving overall efficiency and user experience. And we continue to help them with their ongoing global digital transformation, demonstrating the enduring nature of many of our client engagements. Navigating digital transformation while protecting business continuity is never simple. And because digital transformation requires an intimate understanding of our client's business, we cultivate and nurture long-term relationships like this. On slide six is an excellent example of this type of relationship with a global leader in the travel industry. Over the past three years, we've helped this client with various projects and are very familiar with their operations across 150 countries, supporting 18,000 employees around the world. This client experienced dramatic changes in demand due to the pandemic, and they needed to shift their IT spend to a more flexible usage-based model that can scale as demand returns. Our solutions experts recommended an all-in-one infrastructure solution deployed through consumption models fully managed by Insight. The results have been remarkable as this solution has dramatically reduced their support costs while at the same time improving efficiency and security. And post the initial deployment, we are providing ongoing single point of contact support for their network, compute, storage, and hyper-converged infrastructure. These types of global engagements are delivered through our more than 4,500 solutions and services experts. Our technical expertise is a key differentiator, and we continue to invest. In fact, we've added over 150 new solutions experts in the first quarter. We also continue to invest in our people by implementing programs, like our Distinguished Engineer Program. Our distinguished engineers demonstrate the highest levels of technical expertise thought leadership, and industry influence, and they are committed to mentoring and developing the next generation of highly skilled engineers and architects. As champions of people, leadership, and culture, we strive to be a place where everyone has an opportunity to reach their full potential while contributing to the sustainability of our communities. Our culture, which is based on our values of hunger, heart, and harmony, is also a key differentiator in attracting and retaining our talent. Hunger is all about delivering results like these. An example of heart is the work our teammates did to donate money and send truckloads of goods to the citizens of Ukraine over the past couple of months. Harmony is all about working together and leveraging the diversity of thought, background, and experience that we have across our teammate population. I'm proud that we ranked number 59 on Forbes Best Employers for Diversity in 2022. and have achieved a perfect score of 100 on the Human Rights Campaign Foundation's 2022 Corporate Equality Index. These values, combined with the meaningful work we do to help our clients improve their businesses, are key drivers of the Great Place to Work recognitions we have achieved, critical in this labor market. Finally, sustainability is increasingly important to our clients and our teammates, and I'm proud that this year industry was recognized for the very first time as one of Barron's 100 most sustainable companies for 2022. In summary, I'm very pleased with our Q1 results and the outlook of our business. Client demand for digital transformation solutions remains robust. We have added depth and talent to our leadership team and our services and solutions business is well positioned for continued growth. Now I'll turn the call back over to Glynis to review our first quarter financial results.