INSIGHT ENTERPRISES INC (NSIT)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the condensed consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. We refer to our customers as “clients,” our suppliers as “partners” and our employees as “teammates.”

Quarterly Overview

Today, every business is a technology business. At Insight, we accelerate transformation by unlocking the power of people and technology. We turn complexity into clarity, helping our clients achieve meaningful business outcomes and drive real results at scale. We serve these clients in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). As a Fortune 500-ranked Solutions Integrator, we deliver secure, end-to-end digital transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 38 years of broad IT expertise. We amplify our solutions and services with global scale, local expertise and our e-commerce experience, enabling our clients to realize their digital ambitions in multiple ways. Our offerings in North America and certain countries in EMEA and APAC include hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments consist largely of software and certain software-related services and cloud solutions.

On a consolidated basis, for the three months ended June 30, 2026:

•Net sales of $2.4 billion increased 15% compared to the three months ended June 30, 2025. The increase was primarily due to increases in hardware and services net sales as well as continued net revenue recognition in instances where Insight is the agent, partially offset by a decrease in software net sales. Excluding the effects of fluctuating foreign currency exchange rates, net sales increased 14% compared to the second quarter of 2025.

•Gross profit of $521.6 million increased 18% compared to the three months ended June 30, 2025, primarily driven by increases in cloud solution offerings and Insight Delivered services. Excluding the effects of fluctuating foreign currency exchange rates, gross profit increased 17% compared to the second quarter of 2025.

•Compared to the three months ended June 30, 2025, gross margin expanded approximately 60 basis points to 21.7% of net sales in the three months ended June 30, 2026. This expansion reflects higher margin contributed by services net sales, including both cloud solution offerings and Insight Delivered services, compared to the same period in the prior year.

•Earnings from operations increased 51%, year over year, to $131.0 million in the second quarter of 2026 compared to $86.5 million in the second quarter of 2025. The net change reflects an increase in gross profit, partially offset by an increase in selling and administrative expenses. Excluding the effects of fluctuating foreign currency exchange rates, earnings from operations increased 50% year over year.

•Net earnings and diluted earnings per share were $77.6 million and $2.57, respectively, for the second quarter of 2026. This compares to net earnings of $46.9 million and diluted earnings per share of $1.46 for the second quarter of 2025. The increase in net earnings was primarily due to an increase in earnings from operations in the second quarter of 2026. Diluted earnings per share increased 76% year over year, primarily as a result of an increase in net earnings and a decrease in dilutive shares outstanding in the second quarter of 2026. Excluding the effects of fluctuating foreign currency exchange rates, diluted earnings per share increased 74% year over year.

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INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

In discussing financial results for the three and six months ended June 30, 2026 and 2025, the Company refers to certain financial measures that are adjusted from the financial results prepared in accordance with United States generally accepted accounting principles (“GAAP”). When referring to non-GAAP measures, the Company refers to them as “Adjusted.” See the "Use of Non-GAAP Financial Measures" section below for additional information and a reconciliation of such non-GAAP measures to the most directly comparable GAAP financial measures.

Throughout the “Quarterly Overview” and “Results of Operations” sections of this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we refer to changes in net sales, gross profit, selling and administrative expenses, diluted earnings per share and earnings from operations on a consolidated basis and in EMEA and APAC, as applicable, excluding the effects of fluctuating foreign currency exchange rates, which are financial measures that are adjusted from our financial results prepared in accordance with GAAP. In addition, we refer to changes in Adjusted earnings from operations in EMEA and APAC excluding the effects of fluctuating foreign currency exchange rates. These are also considered to be non-GAAP measures. We believe providing this information excluding the effects of fluctuating foreign currency exchange rates provides valuable supplemental information to investors regarding our underlying business and results of operations, consistent with how we, including our management, evaluate our performance. In computing the changes in amounts and percentages, we compare the current period amount as translated into U.S. dollars under the applicable accounting standards to the prior period amount in local currency translated into U.S. dollars utilizing the weighted average translation rate for the current period. The performance measures excluding the effects of fluctuating foreign currency exchange rates should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

Details about segment results of operations can be found in Note 9 to the Condensed Consolidated Financial Statements in Part I, Item 1 of this report.

Our discussion and analysis of financial condition and results of operations is intended to assist in the understanding of our condensed consolidated financial statements, including the changes in certain key items in those condensed consolidated financial statements from period to period and the primary factors that contributed to those changes, as well as how certain critical accounting estimates affect our condensed consolidated financial statements.

Supply Chain, Demand and Inflation Update

We believe inflation contributed to sustained high interest rates on all of our variable rate borrowing facilities in the first half of 2026 consistent with the prior year. Interest rates are expected to hold steady and continue to remain higher than historical rates throughout most of 2026. We are actively monitoring changes to the global macroeconomic environment, including those impacting our supply chain, demand for our products whether due to tariffs or otherwise and interest rates, and assessing the potential impacts these challenges may have on our current results, financial condition and liquidity. Currently, our supply chain is impacted by the global memory chip shortage, which has resulted in lower overall supply and increased pricing and may result in further constrained overall supply and upward pressure on pricing. Additionally, international conflicts, including the war in Iran, may impact supply chain and increase inflation. We are mindful of the potential effects these conditions could have on our clients, partners and prospects in 2026 and beyond.

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INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Critical Accounting Estimates

Our condensed consolidated financial statements have been prepared in accordance with GAAP. For a summary of significant accounting policies, see Note 1 to the Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results, however, may differ from estimates we have made. Members of our senior management have discussed the critical accounting estimates and related disclosures with the Audit Committee of our Board of Directors.

There have been no changes to the items disclosed as critical accounting estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.

Results of Operations

The following table sets forth certain financial data as a percentage of net sales for the three and six months ended June 30, 2026 and 2025:

We generally experience some seasonal trends in our net sales. Software and certain cloud net sales are typically seasonally higher in our second and fourth quarters. Business clients, particularly larger enterprise businesses in the United States, tend to spend more, particularly on product, in our fourth quarter. Sales to the federal government in the United States are often stronger in our third quarter, while sales in the state and local government and education markets are also often stronger in our second quarter. Sales to public sector clients in the United Kingdom are often stronger in our first quarter. These trends create overall variability in our consolidated results.

Our gross profit across the business and related to product versus services sales are, and will continue to be, impacted by partner incentives, which can and do change significantly in the amounts made available and the related product or services sales being incentivized by the partner. Incentives from our largest partners are significant and changes in the incentive requirements, which occur regularly, could impact our results of operations to the extent we are unable to effectively shift our focus and efficiently respond to them. For a discussion of risks associated with our reliance on partners, see “Risk Factors – Risks related to Our Business, Operations and Industry – We rely on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can and do change significantly in the amounts made

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FIN

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the Consolidated Financial Statements and notes thereto included in Part II, Item 8 of this report. Our actual results could differ materially from those contained in forward-looking statements due to a number of factors, including those discussed in “Risk Factors” in Part I, Item 1A and elsewhere in this report.

Overview

Today, every business is a technology business. At Insight, we accelerate transformation by unlocking the power of people and technology. We turn complexity into clarity, helping clients achieve meaningful business outcomes and drive real results at scale. We serve these clients in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). As a Fortune 500-ranked Solutions Integrator, we deliver secure, end-to-end digital transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 37 years of broad IT expertise. We amplify our solutions and services with global scale, local expertise and our e-commerce experience, enabling our clients to realize their digital ambitions in multiple ways. Our offerings in North America and certain countries in EMEA and APAC include hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments consist largely of software and certain software-related services and cloud solutions.

Full year 2025 financial and operational highlights included the following:

•We reported gross profit of $1.8 billion and record gross margin of 21.4%, primarily driven by margin expansion in North America and EMEA.

•We generated cash flows from operations of $303.8 million.

•We strengthened our capabilities through two strategic acquisitions: Inspire11, enhancing our AI and data expertise, and Sekuro, expanding cybersecurity and digital resilience across APAC.

On a consolidated basis, for the year ended December 31, 2025:

•Net sales of $8.2 billion decreased 5% compared to 2024.

•Gross profit of $1.8 billion was relatively flat compared to 2024.

•Consolidated gross margin expanded approximately 110 basis points to a record 21.4% of net sales in 2025. This increase reflects expansion in margin from services net sales, primarily from growth in other agency transactions and Insight Core services.

•Earnings from operations decreased to $334.9 million in 2025, a decrease of 14% compared to the prior year, which represented 4.1% of net sales.

•Our effective tax rate in 2025 was 30.3%, compared to our effective tax rate of 25.0% in 2024.

•Net earnings and diluted net earnings per share were $157.3 million and $4.86, respectively, in 2025. In 2024, we reported net earnings of $249.7 million and diluted net earnings per share of $6.55.

The results of operations for 2025 include the following items:

•severance and restructuring expenses, net of $37.1 million, $27.6 million net of tax;

•acquisition and integration related expenses of $3.6 million, $3.0 million net of tax; and

•the repurchase of approximately 1.2 million shares of the Company’s common stock for an aggregate cost of $151.1 million.

The results of operations for 2024 include the following items:

•severance and restructuring expenses, net of $31.6 million, $24.2 million net of tax;

•acquisition and integration related expenses of $2.7 million, $2.5 million net of tax; and

•the repurchase of approximately 1.0 million shares of the Company’s common stock for an aggregate cost of $200.0 million.

In discussing financial results for 2025 and 2024, the Company refers to certain financial measures that are adjusted from the financial results prepared in accordance with GAAP. When referring to non-GAAP measures, the Company refers to them as “Adjusted.” See the "Use of Non-GAAP Financial Measures" section below for additional information and a reconciliation of such non-GAAP measures to the most directly comparable GAAP financial measures.

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INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Throughout the “Overview” and “Results of Operations” sections of this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we refer to changes in net sales, gross profit,earnings from operations and Adjusted earnings from operations in EMEA and APAC excluding the effects of fluctuating foreign currency exchange rates, which are also considered to be non-GAAP measures. We believe providing this information excluding the effects of fluctuating foreign currency exchange rates provides valuable supplemental information to investors regarding our underlying business and results of operations, consistent with how we, including our management, evaluate our performance. In computing the changes in amounts and percentages, we compare the current period amount as translated into U.S. dollars under the applicable accounting standards to the prior period amount in local currency translated into U.S. dollars utilizing the weighted average translation rate for the current period. The performance measures excluding the effects of fluctuating foreign currency exchange rates should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

Net of tax amounts referenced above were computed using the statutory tax rate for the taxing jurisdictions in the operating segment in which the related expenses were recorded, adjusted for the effects of valuation allowances on net operating losses in certain jurisdictions.

During 2025, we generated $303.8 million of cash from operating activities and primarily utilized cash for strategic acquisitions, to repurchase shares of our common stock, to repay debt, to fund the cash settlement of a portion of warrants (the "Warrants") relating to certain hedge and warrant transactions (the "Call Spread Transactions") entered into in connection with the issuance of our convertible senior notes that matured in 2025 (the "Convertible Notes") and for payment of earnouts and other acquisition related payments. We had net borrowings of $818.8 million under our ABL facility. We ended the year with $358.0 million of cash and cash equivalents and $1,361.3 million of debt outstanding under our long-term debt facilities.

Details about segment results of operations can be found in Note 20 to the Consolidated Financial Statements in Part II, Item 8 of this report.

Our discussion and analysis of financial condition and results of operations is intended to assist in the understanding of our consolidated financial statements, including the changes in certain key items in those consolidated financial statements from year to year and the primary factors that contributed to those changes, as well as how certain critical accounting estimates affect our consolidated financial statements.

Supply Chain, Demand and Inflation Update

We believe inflation contributed to sustained high interest rates on all of our variable rate borrowing facilities throughout 2025, consistent with the prior year period. While these interest rates are expected to continue to moderately decrease going forward, we continue to anticipate higher than historical rates in 2026. We are actively monitoring changes to the global macroeconomic environment, including those impacting our supply chain, demand for our products whether due to tariffs or otherwise and interest rates, and assessing the potential impacts these challenges may have on our current results, financial condition and liquidity. We are also mindful of the potential effects these conditions could have on our clients, partners and prospects as we enter 2026.

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INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

RESULTS OF OPERATIONS

The following table sets forth certain financial data as a percentage of net sales for the years ended December 31, 2025 and 2024:

Our gross profit across the business and related to product versus services sales are, and will continue to be, impacted by partner incentives, which can and do change significantly in the amounts made available and the related product or services sales being incentivized by the partner. Incentives from our largest partners are significant and changes in the incentive requirements, which occur regularly, could impact our results of operations to the extent we are unable to effectively shift our focus and efficiently respond to them. For example, recent changes in incentives for certain cloud-based solutions adversely impacted our results of operations in 2025. For a discussion of risks associated with our reliance on partners, see “Risk Factors – Risks related to Our Business, Operations and Industry – We rely on our partners for product availability, competitive products to sell and marketing funds and purchasing incentives, which can and do change significantly in the amounts made available and the requirements year over year,” in Part I, Item 1A of this report.

Our results of operations include the results of Infocenter, Inspire11 and Sekuro from their respective acquisition dates.

2025 Compared to 2024

Net Sales. Net sales decreased 5%, or $0.5 billion, in 2025 compared to 2024. Net sales of products (hardware and software) decreased 7%, year to year, while net sales of services increased 2%, year over year, in 2025 compared to 2024. Our net sales by operating segment for 2025 and 2024 were as follows (dollars in thousands):

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INSIGHT ENTERPRISES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (continued)

Our net sales by offering category for North America for 2025 and 2024 were as follows (dollars in thousands):

Net sales in North America decreased 6%, or $400.0 million, in 2025 compared to 2024. This net decrease reflects decreases in software and services net sales, partially offset by an increase in hardware net sales. Net sales of hardware increased 2%, year over year. Net sales of software and services decreased 27% and 2%, respectively, year to year. The net changes were primarily the result of the following:

•The decrease in software net sales was primarily due to a significant multiyear transaction in the first quarter of 2024 with no comparable transaction in 2025, changes in certain vendor relationships (shifting us from a principal to an agent r

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