Insight sees mixed bag in Q1

Insight’s Q1 results for the three months to end March show something of a mixed bag.

The "solutions integrator" saw a12% decrease in net revenue to $2.1bn but gross margin hit 19.3% on the back of an 80-basis point increase over the comparable period last year. Adjusted earnings per share was $2.06, down 13% year over year.

However, there were brighter spots. The firm hit its own expectations in hardware (servers and storage showed positive momentum) and is seeing momentum in AI-driven solutions. There have also been profitability improvements in IaaS and SaaS.

Although Insight’s quarterly commentary underlines the “increased volatility and uncertainty” in the market, Joyce Mullen, President and Chief Executive Officer, believes this represents a specific opportunity for Insight with its “low share position in a large and fragmented market”. Mullen’s view is that the firm can pick off opportunities where buyers want to escape complex contracts and find solutions to specific business problems with new suppliers.

In services, Insight’s Core Services revenue was down 2% as large enterprise clients “delayed services projects due to lack of market clarity”. The lag between a hardware sale and the services attached to that was a primary driver of the decline. However, it does sound like progress is being made specifically in Consulting where Insight is learning from its acquisitions in terms of methodologies and slick execution of projects. 

One of those acquisitions was made by the EMEA business in summer of last year when is scooped up Brighton-based NWT. Furthermore, Mullen indicates more services acquisitions could be on the horizon.

As for the rest of the year, Insight says growth and profitability will be more heavily weighted towards H2 as it navigates partner program changes.

Posted by: Kate Hanaghan at 10:00

Tags: results   M&A   hardware   AI