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Ingram Micro Holding Corp (INGM)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered an across-the-board beat vs guidance and Street: net sales $12.28B (+8.3% YoY), gross profit $828.8M, and non-GAAP diluted EPS $0.61 at the high end of guidance; Street consensus for revenue ($11.62B*) and EPS ($0.569*) was exceeded, with FX-neutral revenue growth ~11% .
  • Mix shifted toward lower-margin client/endpoint, large enterprise customers, and Asia-Pacific; gross margin fell 62 bps YoY to 6.75%, though operating expense leverage improved (OpEx 5.11% of sales vs 5.87% LY) .
  • Management raised the quarterly dividend 2.7% to $0.076 and repaid an incremental $125M of term loans; Q2 2025 guidance calls for net sales $11.77–$12.17B, gross profit $800–$850M, and non-GAAP EPS $0.53–$0.63, assuming ~29% non-GAAP tax rate and ~235.2M diluted shares .
  • Catalysts: execution on AI-powered Xvantage (12M advanced searches, tripled self‑service orders; IDA driving “hundreds of millions” of incremental revenue), plus a revenue/EPS beat and dividend increase .

What Went Well and What Went Wrong

What Went Well

  • “We were very pleased with our first quarter performance… net sales were up 11% year-over-year on a constant currency basis, with earnings per share at the high end of our guidance.” – CEO Paul Bay; non‑GAAP EPS hit $0.61 and revenue was above guidance .
  • Platform execution: Xvantage recorded 12M advanced searches in Q1, tripled self‑service orders YoY, and IDA enabled tens of thousands of proactive engagements per month, “driving hundreds of millions” in incremental revenue .
  • Regional breadth: North America and Asia-Pacific grew double digits; cloud contributed ~15% of total gross profit despite ~1% of net sales, underscoring margin accretion from higher‑value categories .

What Went Wrong

  • Gross margin compressed to 6.75% (−62 bps YoY) on mix shift to lower‑margin client/endpoint, large enterprise customers, and Asia-Pacific; Asia margins pressured by mobility mix and India competition .
  • SMB demand remained “more muted,” lengthening sales cycles in higher‑margin categories; management taking a conservative view near term .
  • Cash used in operations rose to $200.4M and adjusted free cash flow was −$159.1M, reflecting seasonal working capital and pre‑buys ahead of potential tariffs; FX losses elevated .

Financial Results

Quarterly Comparison vs Prior Periods and Street

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$11.76 $13.34 $12.28
Non-GAAP Diluted EPS ($)$0.72 $0.92 $0.61
Gross Margin (%)7.19% 7.01% 6.75%
Adjusted Income from Ops Margin (%)2.16% 2.29% 1.87%
Adjusted EBITDA ($USD Millions)$331.6 $418.1 $290.8

Street consensus vs actual:

  • Q1 2025: Revenue $12.28B vs $11.62B*; Non-GAAP EPS $0.61 vs $0.569*.
  • Q4 2024: Revenue $13.34B vs $13.21B*; Non-GAAP EPS $0.92 vs $0.912*.
  • Q2 2025: Revenue $12.79B vs $12.00B*; Non-GAAP EPS $0.61 vs $0.599*.
    Values with asterisk (*) retrieved from S&P Global.

Q1 2025 Regional Performance

RegionNet Sales ($USD Billions)Income from Operations ($USD Millions)Op Margin (%)
North America$4.4 $84.4 1.90%
EMEA$3.4 $57.3 1.67%
Asia-Pacific$3.6 $46.3 1.28%
Latin America$0.8 $23.0 2.86%

Q1 2025 KPIs and Balance Sheet Highlights

KPIQ1 2025
Working capital days29
Cash used in operations ($USD Millions)$200.4
Adjusted free cash flow ($USD Millions)$(159.1)
Net foreign currency exchange loss ($USD Millions)$23.7
Term loan repayment ($USD Millions)$125
Net debt / Adjusted EBITDA (x)2.0x
Dividend per share ($)$0.076

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($USD Billions)Q1 2025$11.43–$11.83 Actual: $12.28 Beat
Gross Profit ($USD Millions)Q1 2025$785–$835 Actual: $828.8 In-range (upper)
Non-GAAP Diluted EPS ($)Q1 2025$0.51–$0.61 Actual: $0.61 At high end
Non-GAAP Tax Rate (%)Q1 2025~30% Actual: N/A disclosedN/A
Net Sales ($USD Billions)Q2 2025N/A$11.77–$12.17 New
Gross Profit ($USD Millions)Q2 2025N/A$800–$850 New
Non-GAAP Diluted EPS ($)Q2 2025N/A$0.53–$0.63 New
Non-GAAP Tax Rate (%)Q2 2025N/A~29 New
Diluted Shares (Millions)Q2 2025N/A~235.2 New
Quarterly Dividend ($/share)Q2 2025$0.074 (prior) $0.076 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
AI/Xvantage platform adoptionRolled out in 16 countries; automation efficiencies; networking expected to rebound 12M advanced searches; tripled self‑service orders; IDA driving “hundreds of millions” incremental revenue; XI with 51M interactions (U.S.), IDC recognition; rolling out in 20 countries Accelerating adoption, measurable revenue impact
Tariffs/macroPrepared for elevated tariffs; pass‑through model; watching demand elasticity Conservative Q2 guide; minimal price changes seen (peripherals); SKU‑level tariff monitoring; pass‑through persists Prudent stance; limited Q1 pricing impact
SMB vs EnterpriseSMB down double digits; enterprise strength SMB “more muted” but early green shoots; enterprise outperforms Gradual SMB improvement
Networking/server/cloudNetworking down in 2024 but expected to rebound; server/storage strong; cloud resilient Networking returns to low single-digit growth; servers/cyber strong; cloud ~15% of gross profit Momentum improving
India competitionFraud-related cleanup and heightened competition pressured margins Hypercompetitive market stabilizing; FX‑neutral mid‑single-digit growth; EPS impact moderating into Q2 Stabilizing, cautious growth
Working capital disciplineSeasonal patterns; strong Q4 cash flow; debt paydown WC days improved to 29; pre‑buys ahead of tariffs; term loan repayment $125M Continued discipline with opportunistic inventory

Management Commentary

  • “Our proven execution during periods of market volatility gives us confidence in our long-term strategy, which is playing out in the traction on our Xvantage platform.” – CEO Paul Bay .
  • “Our sustained investments in innovation are driving efficiencies and operating leverage… Aided by real-time analytics and frictionless quoting through our AI-powered Xvantage platform.” – CFO Mike Zilis .
  • “IDA uses machine learning and AI models… driving hundreds of millions in year-over-year incremental revenue.” – CEO Paul Bay .
  • “For the full fiscal year 2025, we expect OpEx as a percentage of net revenue to remain above 5% as we continue to invest in our Xvantage platform.” – CFO Mike Zilis .

Q&A Highlights

  • Mix/“pull forward”: PC refresh showed some pull‑in but “not material”; Q2 guide assumes mid‑single‑digit client/endpoint growth; networking modestly positive .
  • Pricing: Minimal price increases observed; peripherals/accessories most affected; certainty and predictability favored .
  • Capital structure/cash flow: Net debt/Adj. EBITDA improved to 2.0x; capital returns via dividend; buybacks not viable currently; opportunistic tuck‑in M&A .
  • India and SMB: India impact moderating to roughly half of Q1’s EPS headwind in Q2; SMB showing early signs of growth participation .

Estimates Context

  • Q1 2025: Actual revenue $12.28B vs Street $11.62B*; non-GAAP EPS $0.61 vs $0.569*. Beat on both.
  • Prior quarters: Q4 2024 revenue $13.34B vs $13.21B*; EPS $0.92 vs $0.912*. Slight beat. Q2 2025 revenue $12.79B vs $12.00B*; EPS $0.61 vs $0.599*. Beat.
    Values retrieved from S&P Global.
    Actuals cited above: Q4 2024: $13.34B revenue, $0.92 EPS ; Q1 2025: $12.28B, $0.61 ; Q2 2025: $12.79B, $0.61 .

Key Takeaways for Investors

  • Q1 beat underlines demand breadth; FX‑neutral revenue grew ~11% with EPS at high end of guidance .
  • Margin compression is mix-driven (client/endpoint, enterprise, APAC) and partially offset by OpEx leverage; watch mix normalization and SMB recovery for margin relief .
  • Xvantage/AI is moving the needle: material productivity gains and revenue generation metrics (IDA, XI), supporting a structurally higher ROIC over time .
  • Balance sheet actions (−$125M term loan) and dividend increase signal confidence amid tariff uncertainty; FCF seasonality and pre‑buys likely continue near term .
  • Q2 guide implies continued top-line growth and mid‑single-digit EPS growth at midpoint; monitor tariffs’ demand elasticity and pricing behavior .
  • India competitive dynamics are stabilizing; incremental improvement expected in back half, reducing EPS drag vs early 2025 .
  • Tactical: Near-term narrative likely driven by execution against Q2 guidance, mix shifts (servers/networking/cloud vs client/endpoint), and Xvantage KPIs; positioning for estimate upward revisions if SMB and higher‑margin segments trend better.

Notes: Values with asterisk (*) retrieved from S&P Global.