Insight Enterprises, Inc.

Hello, everyone. Thank you for joining us and welcome to the Insight Enterprises Q4 2025 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I will now hand the call over to Ryan Miasato, Director of Investor Relations. Ryan, please go ahead.

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 and full year ended December 31st, 2025. I'm Ryan Miyasato, Investor Relations Director of Insight, and joining me is Joyce Mullen, President and Chief Executive Officer, and James Margato, Chief Financial 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 also 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 webcast contain time-sensitive information that is accurate only as of today, February 5th, 2026. 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 be referring to non-GAAP financial measures as we discuss the fourth quarter and full year 2025 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 both the press release and the accompanying slide presentation issued earlier today. Please note that all growth comparisons we make on the call today relate to the corresponding period of last year, unless otherwise noted. Also, unless highlighted as constant currency, all amounts and growth rates discussed are in US dollar terms. As a reminder, All forward-looking statements that are made during this 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. 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 statement 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. Joyce?

Thank you very much, Ryan. Good morning, everyone, and thank you for joining us today. We are pleased with our fourth quarter results and the momentum in our business after a challenging year. Strong execution in our cloud business and strong growth in our core services business, driven by our acquisitions, enabled us to deliver record gross profit, record gross margin, and record adjusted earnings from operations margin. We delivered strong growth in adjusted earnings from operations across every geography and achieved double digit growth in adjusted to booted earnings per share. Specifically in the quarter, overall revenue was down 1% due to the netting impact of on-prem software migrating to cloud. We are pleased that our influence with partners and clients continues to expand, which you can see on our balance sheet. Total gross profit grew 9%. EMEA had strong growth driven in part by UAE and Saudi Arabia demand. Cloud gross profit increased 11% ahead of our expectations led by double digit growth in SaaS and infrastructure as a service. This performance was partially offset by the impact of the partner program changes we've previously discussed, which are now largely behind us as we begin 2026. Core services gross profit grew 16% driven by acquisitions as well as organic growth. These factors, along with incremental netting, contributed to expanded gross margin again this quarter to 23.4%. And by prudently managing our adjusted expenses, we delivered adjusted earnings from operations growth of 13% and adjusted earnings per share growth of 11%. We are encouraged by the progress in our services business. We've streamlined our services offerings, implemented discipline processes, and augmented our leadership team. Best practices from acquisitions have been adopted across the business, resulting in improved pipeline. We are also pleased with the cross-selling momentum. Core services results were strong and delivered a second consecutive quarter of organic bookings growth. Growth of core services is central to our strategy. clients expect a comprehensive approach to realizing value of their technology investments. To support those requirements, we have expanded our technology consulting capabilities, which is improving our overall performance, especially in EMEA. The Inspire 11 acquisition expands our advisory capabilities in North America and supplements our strengths in infrastructure, cloud, edge, data, and security services. We expect these advisory capabilities will also increase demand for our core solutions. I'd like to share an example of how an initial advisory engagement pulled through solutions in EMEA. Our client, a European green IT provider, is building sustainable data centers engineered and optimized for AI workloads. They engaged us to support both the build out of these data centers and the development of a SAS GenAI platform. enabling them to design, develop, and visualize AI models and their interactions. Our senior technical advisors drove the conceptual discussions and are now delivering end-to-end program leadership for this large-scale program, which includes network and data center, security, and software development work streams. The team implemented a structured governance framework, strengthened delivery performance, and ensured the client's business outcomes were met Since project inception, the client has signed an additional multi-million Euro agreement to extend both the scope and duration of the program. This is an example of how our teams can drive value, beginning with advisory discussions and expanding to include modern platform investment. Our deep expertise in platforms is also demonstrated through our engagement with Sedgwick, a global leader in claims management and risk solutions. The INSPIRE 11 team designed and implemented a modern, unified claims management platform that streamlined operations, enhanced employee productivity, and elevated customer experience. This transformation has since become a model for success within Sedgwick, sparking new innovation across other areas of the business. Recognized as one of the most successful projects the organization has delivered, it demonstrates how the value we create extends beyond a single program and continues to scale as organizations identify new opportunities for impact. As our clients look to modernize, many are hitting the same wall, legacy systems that have become so customized so heavily over the years that they've become too rigid to move at the speed of business. To stay competitive, these organizations have to get back to basics, stripping away that complexity so they can innovate again. Our teams are effective in assisting clients with this challenge. Never has innovation been more exciting than with the current AI tools and capabilities. Client interest remains strong and focused on tangible business outcomes. We are very well positioned to help clients move from hype to how. We are proving this by advancing our own internal AI transformation, developing and operationalizing use cases within Insight that we showcase and replicate with clients. In the fourth quarter, as part of our Insight AI launch, we introduced Prism, our AI platform for clients, which has received very positive feedback. Prism is a business transformation platform designed to help our clients simplify AI adoption by identifying and prioritizing high-impact use cases through a proprietary data-driven transformation index. The platform evaluates potential AI initiatives across key elements such as value, feasibility, access to data, and risk to provide a clear, actionable roadmap. PRISM enables our clients to manage the entire life cycle of an AI project from initial assessment to measurable outcomes. Our partner ecosystem is central to our success and a critical accelerator of our strategy. These partnerships strengthen our capabilities across technologies, platforms, and services, helping us to stay agile and responsive to the rapidly evolving technology landscape. In 2025, we received numerous awards and recognitions from our partners. There are too many to list here, but notable Partner of the Year awards include those from Google, Cisco, HP, HP Enterprise, Intel, Databricks, and others. We were also the first partner to build out, demonstrate, and launch the Cisco Secure AI Factory with NVIDIA. You can find more details in the earnings presentation. Additionally, our portfolio of offerings and technical expertise have been recognized by leading industry analysts, including Gartner, IDC, and Forrester. These recognitions span software, AI and cloud capabilities, and workspace solutions, reflecting the breadth of our end-to-end solutions integrator capabilities. Insights more than 6,600 technical professionals bring deep, specialized expertise across the major platforms that are most critical to our clients' success. To safeguard and formalize our proprietary IP developed by our technical talent, Insight has filed more than 200 patent applications globally, resulting in more than 70 patents issued to date, covering innovations in AI, machine learning, among other things. Our teammates are the source of the value we deliver to clients. We cultivate a culture of collaboration, knowledge sharing, and continuous improvement. And Insight is consistently recognized as an employer of choice by Forbes, Fortune, and Great Place to Work. Despite the challenging backdrop in 2025, we made meaningful progress in transforming Insight into the leading AI-first solutions integrator. We pivoted our Google and Microsoft resale business towards the corporate and mid-market space. We used this transition to sharpen our focus on efficiency and improve our operating leverage, leading to record cloud gross profit of $495 million. We improved profitability in core services and increased bookings performance with our aligned structure in North America and advisory pull-through in EMEA, leading to record core services gross profit of $320 million and margin of over 32%. The increase and mix of services resulted in record total gross margin of 21.4%. We successfully integrated acquisitions and drove cross-sell and best practices across all businesses. We added Inspire11 and Securo, strengthening our technical expertise in data, AI, and cybersecurity, and expanded cross-sell and pull-through opportunities across our global client base. We applied our own client zero approach, deploying AI agents internally to improve our own productivity and building compelling reference cases for our clients. To help clients move from AI experimentation to production, we've completed hundreds of AI assessments, developed roadmap recommendations, and begun implementations. All this resulted in record adjusted earnings from operations of $504 million and margin of 6.1% in addition to adjusted diluted EPS of $9.87. As we look towards 2026, our outlook reflects cautious optimism as we anticipate subdued spending across the industry. The macro environment has largely remained unchanged and our corporate and large enterprise clients remain cautious. PC and infrastructure investments will continue at a moderate level in the near term, and we're closely monitoring industry supply chain dynamics and memory pricing. Clients are making infrastructure investments as they prepare for AI implementation. At the same time, we see opportunity in cloud modernization, security, and AI adoption, and we will continue to invest in these areas to position Insight as the leading AI first solutions integrator. Our strategy remains clear, simplify complexity for clients, deliver measurable outcomes, and accelerate time to value through integrated solutions. With that, I'll turn the call over to James. James?