Executive Summary

Q2 2025 delivered a strong top-line beat: net sales were $12.79B, above the high end of guidance ($11.77–$12.17B) and well ahead of Wall Street consensus, with gross profit at $839.2M near the top of guidance ($800–$850M) . EPS was $0.61 non-GAAP at the upper end of guidance ($0.53–$0.63); GAAP diluted EPS was $0.16 .
Versus estimates, Ingram Micro beat on revenue and matched-to-slightly beat EPS: Q2 revenue $12.79B vs consensus ~$12.00B*, EPS $0.61 vs consensus ~$0.60* (see Estimates Context). Mix (APAC mobility, large enterprise, client/endpoint) compressed gross margin to 6.56% (down YoY), with an additional 8 bps one-time North America charge .
Guidance: Q3 2025 outlook calls for net sales $11.88–$12.38B, gross profit $815–$875M, and non-GAAP EPS $0.61–$0.73; management embeds $0.02–$0.04 EPS conservatism from the early-July ransomware incident but noted systems recovered quickly and activity normalized .
Strategic narrative: xVantage platform and Intelligent Digital Assistant (IDA) are driving efficiency and demand; self-service orders grew ~200% YoY, quotes nearly doubled YoY, and IDA opportunities rose ~50% sequentially, underpinning operating leverage despite lower-margin mix .
Potential stock catalysts: revenue beat and stable non-GAAP EPS amid margin pressure, AI/advanced solutions momentum (servers/storage, GPUs), and conservative but achievable Q3 guide following cyber event normalization .

What Went Well and What Went Wrong

What Went Well

Top-line outperformance across all geographies; Q2 net sales beat the high end of guidance with 10.9% YoY growth, led by APAC (+16.2% YoY), North America (+13.7% YoY), and return to growth in LatAm (+0.8% YoY) .
xVantage adoption accelerating: self-service orders up ~200% YoY; quotes created on the platform nearly doubled YoY; IDA contributed tens of thousands of opportunities worth hundreds of millions of dollars, up ~50% sequentially .
Advanced Solutions momentum and GPUs for emerging AI use cases, especially in APAC; strong server, storage, and cybersecurity sales; double-digit growth in server and storage and renewed networking growth .

Quote: “We were pleased that we exceeded the high end of our net sales guidance and landed towards the top end of our gross profit and earnings per share guidance ranges.” — CEO Paul Bay

What Went Wrong

Gross margin compression to 6.56% (from 7.18% YoY) due to mix shift (client/endpoint, large enterprise, APAC), plus an 8 bps one-time held-for-sale charge in North America .
India competitiveness continued to weigh on margins in APAC; management cited a heightened competitive environment in India impacting gross margins; though improving into Q3, it remains a more competitive market .
Working capital/cash flow: adjusted free cash flow was an outflow of $(262.8)M vs $427.5M prior year; investments in receivables/inventory to capture demand and pre-buys ahead of tariffs pressured cash generation .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Net Sales ($USD Billions)	$13.34	$12.28	$12.79
Gross Profit ($USD Millions)	$936.1	$828.8	$839.2
Gross Margin %	7.01%	6.75%	6.56%
GAAP Diluted EPS ($)	$0.36	$0.29	$0.16
Non-GAAP Diluted EPS ($)	$0.92	$0.61	$0.61
Adjusted EBITDA ($USD Millions)	$418.1	$290.8	$293.9

Segment (Geographic) Breakdown — Q2 2025:

Region	Net Sales ($USD Billions)	YoY Growth	Income from Operations Margin %
North America	$4.98	+13.7%	0.66%
EMEA	$3.48	+4.8%	1.60%
Asia-Pacific	$3.48	+16.2%	1.25%
Latin America	$0.85	+0.8%	2.94%

KPIs and Operating Metrics:

KPI	Q1 2025	Q2 2025
Adjusted Free Cash Flow ($USD Millions)	$(159.1)	$(262.8)
Operating Expenses (% of Net Sales)	5.11%	5.44%
Working Capital Days	29	30 (vs 31 YoY)
Cash and Cash Equivalents ($USD Millions)	$881.6	$856.7
Total Debt ($USD Billions)	$3.48 (Q4 reference)	$3.70
Gross Leverage / Net Leverage (x)	2.0x net at Q1	2.8x gross / 2.2x net

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance / Actual	Change
Net Sales ($USD Billions)	Q2 2025	$11.77–$12.17	$12.79 (actual)	Raised/Beat (above high end)
Gross Profit ($USD Millions)	Q2 2025	$800–$850	$839.2 (actual)	At upper end
Non-GAAP Diluted EPS ($)	Q2 2025	$0.53–$0.63	$0.61 (actual)	At upper end
Net Sales ($USD Billions)	Q3 2025	N/A	$11.88–$12.38	New
Gross Profit ($USD Millions)	Q3 2025	N/A	$815–$875	New
Non-GAAP Diluted EPS ($)	Q3 2025	N/A	$0.61–$0.73	New
Tax Rate (non-GAAP)	Q3 2025	N/A	~30%	New
Shares (diluted, millions)	Q3 2025	N/A	~235.5	New
Dividend per Share ($)	Q3 2025	$0.076 (Q2)	$0.078	Raised 2.6%

Notes: Mgmt embeds $0.02–$0.04 EPS conservatism in Q3 for ransomware impact .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
xVantage/IDA & AI-enabled go-to-market	Q1: 12M advanced searches; self-service orders tripled YoY; thousands of dormant customers reactivated; IDA driving hundreds of millions incremental revenue	Self-service orders up ~200% YoY; quotes nearly doubled YoY; IDA opportunities up ~50% sequentially; platform architecture and AI factory highlighted	Strengthening
Mix & Margin	Q4: margin pressure from client/endpoint, APAC, enterprise mix, India charges ; Q1: gross margin down 62 bps YoY due to mix; OpEx leverage improved	Gross margin 6.56% (YoY down); 8 bps one-time charge; like-for-like margins holding; OpEx leverage from xVantage	Mixed (margin pressure, leverage improving)
Client/Endpoint (PC refresh, smartphones)	Q1: ~15% growth; desktop/notebook refresh; smartphone strength; tempered for Q2 guide	Q2: strong CES growth; NA desktop/notebook refresh; APAC mobility (China smartphones) strength	Still strong, moderating into Q3
Advanced Solutions & GPUs (AI)	Q1: networking returned to growth; server/cybersecurity strong	Q2: mid-single-digit growth in Advanced Solutions; GPUs for AI (APAC/NA deals); double-digit server/storage growth; networking rebounding	Improving
SMB demand	Q4: SMB weaker ; Q1: SMB muted; cautious outlook	Q2: SMB returned to modest growth; xVantage helping shorten cycles and re-engage customers	Gradual recovery
Tariffs & pre-buys	Q1: pre-buys ahead of potential tariffs; dynamic pricing; pass-through nature	Q2: continued inventory buy-ins; working capital investments; cautious Q3 seasonality	Ongoing management
Cybersecurity incident	N/A in Q1	Early-July ransomware incident; no impact on Q2; conservative Q3 guide includes $0.02–$0.04 EPS impact; systems restored quickly	One-time event, normalizing

Management Commentary

Platform execution: “We were pleased that we exceeded the high end of our net sales guidance... We had growth across all lines of business, particularly in Client and Endpoint Solutions... and continued growth in Cloud.” — CEO Paul Bay .
AI-enabled selling: “IDA… uses advanced AI and machine learning… In Q2, through IDA alone, we brought in tens of thousands of opportunities… valued at hundreds of millions of dollars, up nearly 50% sequentially.” — CEO Paul Bay .
xVantage adoption metrics: “Self-service orders… grew nearly 200% year over year… quotes… nearly doubling versus the prior year… reactivated nearly 2,000 dormant customers... generated ~40% higher sales.” — CEO Paul Bay .
Mix/margin dynamics: “Gross profit… $839M or 6.56% of net sales. Included… a one time impact of $10.5M (8 bps) associated with held for sale accounting… The remaining YoY decline in gross margin was driven by a mix shift towards lower margin… client and endpoint… large enterprise… and APAC.” — CFO Mike Zilis .
Q3 guide and cyber impact: “We are guiding net sales of $11.88–$12.38B… non-GAAP diluted EPS $0.61–$0.73… This guidance assumes a potential $0.02 to $0.04 impact related to the ransomware incident.” — CFO Mike Zilis .

Q&A Highlights

Q3 revenue mix and APAC mobility: Management expects tempered growth in client/endpoint (mid-single digits), stronger servers/storage, higher single-digit cloud; APAC smartphones likely less strong in Q3, with some stimulus/tariff-related pull-forward difficult to quantify .
North America demand cadence and “pull-forward”: No material pull-forward beyond PC refresh; Q3 guide reflects tempered CES vs Q2 while desktop/notebook refresh remains robust into early Q4 .
Pricing/competition: Pricing rational but heightened competitiveness persists; India pressure halved sequentially in Q2 and normalizing into Q3; like-for-like margins stable; APAC expected to remain higher growth while EMEA faces macro headwinds .
Cash flow/working capital: YTD cash use reflects inventory/receivable investments to capture growth and pre-buys; expect neutral-to-some outflow in Q3, with Q4 cash generation as inventory converts to receivables and collections .
AI hardware exposure: Increasing GPU-related opportunities (APAC and new NA authorizations); strongest growth in servers, followed by storage and networking; served via VARs and national solution providers across mid-market and enterprise .

Estimates Context

Metric	Q1 2025 Consensus	Q1 2025 Actual	Q2 2025 Consensus	Q2 2025 Actual
Primary EPS ($)	0.5687*	0.61	0.5991*	0.61
Revenue ($USD Billions)	$11.62*	$12.28	$12.00*	$12.79
# of EPS Estimates	12*	—	12*	—
# of Revenue Estimates	13*	—	13*	—

Values retrieved from S&P Global.*
Interpretation: Q2 beat revenue consensus meaningfully and met/slightly beat EPS consensus; Q1 also exceeded both revenue and EPS consensus, indicating estimate models may need to reflect stronger client/endpoint demand and APAC mobility, alongside advancing servers/storage momentum.

Key Takeaways for Investors

Revenue momentum is robust and broad-based; the mix remains skewed to lower-margin, lower-cost-to-serve CES/APAC/enterprise, compressing gross margin, but xVantage-driven OpEx leverage supports EPS stability .
AI-linked Advanced Solutions (servers/storage, GPUs) are building; networking rebounding; this mix shift should gradually support margin normalization as SMB demand improves and cloud contribution grows .
Q3 guidance is conservative due to the early-July cyber incident; systems recovered quickly and activity normalized, with embedded $0.02–$0.04 EPS impact; monitor execution vs top and bottom ranges .
Cash flow headwinds from tariff-related pre-buys and growth investments should ease with normal Q4 seasonality; watch working capital days and inventory turns as leading indicators .
Dividend increase (to $0.078) underscores confidence and disciplined capital allocation; leverage remains manageable (gross 2.8x; net 2.2x) following significant debt repayments .
Near-term trading: revenue beat and sustained EPS at upper-end guidance support; margin trajectory and ransomware overhang may cap upside until Q3 prints de-risk; upside if Advanced Solutions/cloud outgrow CES and SMB accelerates .
Medium-term thesis: platform advantages (xVantage/IDA) improving sales efficiency and customer engagement, potentially driving higher-quality revenue mix and operating leverage over time .

Ingram Micro Holding Corp (INGM)·Q2 2025 Earnings Summary