Executive Summary

Q3 delivered broad-based growth and clean execution: net sales $12.60B (+7.2% YoY), non-GAAP EPS $0.72 (flat YoY) at the high end of guidance; GAAP EPS $0.42; Adjusted EBITDA $342.2M (+3% YoY) .
Results beat S&P Global consensus: Revenue +3.3% vs est., EPS +6.4% vs est.; EBITDA modest beat; mix-driven gross margin down 29 bps YoY but up 34 bps sequentially, with PCs and server/storage momentum offsetting softness in virtualization and infrastructure software .
New Q4 guide implies continued YoY growth: net sales $14.0–$14.35B, gross profit $935–$990M, non-GAAP EPS $0.85–$0.95; tax rate ~33%, 235.9M diluted shares .
Catalysts: accelerating AI commercialization (Xvantage, IDA, new Gemini-based Sales Briefing Agent), improving SMB trajectory, and “normal” budget flush into Q4; small July ransomware impact quantified ($0.02–$0.03 EPS; 1.0–1.5% of net sales) now behind the company .

What Went Well and What Went Wrong

What Went Well
- Broad-based top-line growth: +7.2% YoY; growth across all regions; APAC +12.5% YoY, LatAm +13.0% YoY; FX added ~1 pt to total company sales growth .
- AI and platform execution: Xvantage’s IDA drove “hundreds of millions” of incremental revenue with international IDA revenue >100% growth; launched enterprise AI agent on Google’s Gemini; narrative positions INGM at center of AI enablement .
- Sequential margin improvement and disciplined OpEx: gross margin +34 bps QoQ; OpEx leverage improved (5.13% of sales vs 5.33% LY); Adjusted EBITDA +3% YoY to $342.2M .
What Went Wrong
- Mix pressure on margins: gross margin 6.90% vs 7.19% LY (−29 bps) due to lower-margin endpoints, server/storage (AI enablement), large enterprise, and APAC mix .
- Product/category softness and timing: Advanced Solutions −4.5% YoY (virtualization/infrastructure software weak; a large Europe project didn’t repeat); Cloud −4% YoY (ex-divestiture, low single-digit growth) .
- Working capital drag and FCF negative: cash used in ops −$146.0M; Adjusted FCF −$109.9M (better than typical Q3 seasonality but still negative); net working capital days 32 vs 29 LY; LatAm withholding tax −$0.03 EPS .

Financial Results

Headline results by quarter (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Net Sales ($USD Billions)	$12.28	$12.79	$12.60
Gross Profit ($USD Millions)	$828.8	$839.2	$869.6
Gross Margin (%)	6.75%	6.56%	6.90%
Income from Operations ($USD Millions)	$200.9	$142.8	$223.5
Operating Margin (%)	1.64%	1.12%	1.77%
Net Income ($USD Millions)	$69.2	$37.8	$99.5
Diluted EPS ($)	$0.29	$0.16	$0.42
Non-GAAP Net Income ($USD Millions)	$144.2	$142.3	$168.7
Non-GAAP EPS ($)	$0.61	$0.61	$0.72
Adjusted EBITDA ($USD Millions)	$290.8	$293.9	$342.2

Execution vs prior quarter’s Q3 guidance (given Aug 6)

Metric	Q3 2025 Guidance (Low–High)	Q3 2025 Actual	Outcome
Net Sales ($USD Billions)	$11.88–$12.38	$12.60	Above high end
Gross Profit ($USD Millions)	$815–$875	$869.6	Within range (near top)
Non-GAAP Diluted EPS ($)	$0.61–$0.73	$0.72	At high end

Actual vs S&P Global consensus (Q3 2025)

Metric	Consensus	Actual	Surprise
Revenue ($USD Billions)	$12.207*	$12.604*	+3.3%
Primary EPS ($)	$0.676*	$0.720*	+6.4%
EBITDA ($USD Millions)	$313.7*	$318.2*	+1.4%

Values with asterisks (*) retrieved from S&P Global.

Regional breakdown (Q3 2025)

Metric	North America	EMEA	Asia-Pacific	Latin America
Net Sales ($USD Billions)	$4.4	$3.7	$3.5	$1.0
YoY Growth (%)	+3.3%	+5.5% (FX +5%)	+12.5% (FX −2%)	+13.0% (FX +1%)
Income from Operations ($USD Millions)	$79.1	$62.0	$67.5	$31.0
Operating Margin (%)	1.79%	1.69%	1.90%	3.21%

KPIs and balance sheet (Q3 2025)

KPI	Q3 2025
Cash used in operations ($USD Millions)	$(146.0)
Adjusted Free Cash Flow ($USD Millions)	$(109.9)
Net Working Capital Days	32 days (vs 29 LY)
Gross Leverage / Net Leverage	2.8x / 2.2x
Cash & Equivalents ($USD Millions)	$802.6
Total Debt ($USD Billions)	~$3.8 (LT $3.06B + ST $0.74B)
Dividend per share	$0.08 (up 2.6%)

Notes on mix and adjustments: Lower gross margin YoY driven by mix (endpoints; server/storage AI enablement; large enterprise; APAC); Q3 includes ~$5.5M loss on sale of CloudBlue and another non-core business; restructuring costs $3.5M; non-GAAP excludes amortization, FX, integration/transition, stock/cash comp, and other items per reconciliations .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($USD Billions)	Q4 2025	N/A	$14.0–$14.35	New
Gross Profit ($USD Millions)	Q4 2025	N/A	$935–$990	New
Non-GAAP Diluted EPS ($)	Q4 2025	N/A	$0.85–$0.95	New
Tax Rate (Non-GAAP)	Q4 2025	N/A	~33%	New
Diluted Shares (M)	Q4 2025	N/A	235.9	New
Dividend	Q4 2025	$0.078	$0.08 (+2.6%)	Raised

Reference (execution vs prior Q3 guide): Q3 actuals vs Q3 guide were above/at top-end as shown earlier .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
AI/Platform (Xvantage, IDA)	Platform traction; Xvantage framing; Q2 emphasized resilience and platform post-IPO; continued investment .	IDA drove “hundreds of millions” revenue; international IDA >100% growth; launched Sales Briefing Agent on Gemini; AI Enable program scaling .	Accelerating adoption and monetization
PCs/Endpoints	Q1: PCs/tablets strength (NA, EMEA) ; Q2: client & endpoint strong .	PC refresh in mid-to-late innings; ~25% of shipments “AI PCs” today—could extend cycle into 2026 .	Refresh maturing; AI PC tailwind emerging
Advanced Solutions	Q1: servers/networking growth ; Q2: momentum; server/storage strength .	Advanced Solutions −4.5% YoY; servers/storage double-digit up; virtualization/infrastructure software soft; one large Europe deal didn’t repeat .	Mixed; compute strong, software timing softer
Cloud	Q1: cloud growth in EMEA/APAC ; Q2: higher mix recorded net; investment .	Cloud −4% YoY; ex-divestiture: low single-digit growth; guide implies mid-to-upper single-digit in Q4 .	Reaccelerating ex-divestiture
Working Capital/FCF	Q1: strategic inventory investment; negative adj. FCF . Q2: heavier AR/Inventory; adj. FCF −$262.8M .	Inventory sequentially down; below-normal seasonal build; expect “solid” Q4 cash flow; NWC 32 days vs 29 LY .	Improving trajectory into Q4
Macro/Tariffs/Rate	Q1 noted macro cost dynamics .	SMB improving as inflation tempers; tariffs more certain; Fed move supportive .	Macro tailwinds modestly improving
Security/Ransomware	— (incident in early July occurred after Q2 close; company statement issued) .	Impact contained: ~1.0–1.5% of net sales and $0.02–$0.03 EPS; operations restored quickly .	Resolved; minimal residual impact

Management Commentary

CEO Paul Bay (strategy and AI positioning): “In the third quarter, the opportunity around AI accelerated… we are empowering customers to capitalize… offering a unified platform to buy integrated hardware, software, cloud, and services… uniquely positioned… through our proprietary Xvantage platform and customer-facing AI Enable program.”
CEO on AI factory and IDA: “Xvantage was architected… with a proprietary AI factory… IDA contributed hundreds of millions of dollars in incremental revenue… non-U.S. IDA-driven revenue grew by more than 100%.”
CFO Mike Zilis (mix and margins): “Gross margins were down 29 bps YoY due to higher mix of lower margin client/endpoint and server/storage… offset by sequential improvement of 34 bps; OpEx leverage improved to 5.13% of sales.”
CFO on category/regional performance: “Client and endpoint nearly +13% FX-neutral; servers and storage strong; networking modest; cloud −4% YoY but ex-divestiture up low single digits; APAC and LatAm low-teens FX-neutral growth; NA ~+3%.”
CFO on Q4 outlook: “Guide implies gross margins in high 6s (~6.8% mid-point)… client & endpoint mid-single-digit growth, Advanced Solutions low-single-digit, Cloud mid-to-upper single-digit.”

Q&A Highlights

Margins trajectory: Management expects Q4 gross margins in the “high 6s,” with continued mix effects from low-margin AI/compute balanced by SMB improvement and cloud growth .
Working capital and FCF: Inventory declined sequentially; below-normal seasonal working capital build in Q3; management points to a “solid” Q4 cash flow similar to last year’s seasonality .
Cycle positioning: PC refresh in later innings, but AI PCs (~25% of shipments now) could extend cycle into 2026; servers solid, networking moderate .
Budget flush/macro: Expect normal Q4 budget flush; SMB spending improving with tempering inflation and rate backdrop .
Ransomware impact clarified: Total Q3 effect ~1.0–1.5% of sales and $0.02–$0.03 EPS; minimal operational disruption .

Estimates Context

Versus S&P Global consensus, INGM beat on revenue (+3.3%), beat on Primary EPS (+6.4%), and modestly beat on EBITDA (+1.4%) for Q3 2025. Values retrieved from S&P Global.
Implications: With Q4 non-GAAP EPS guided to $0.85–$0.95 and revenue guided to $14.0–$14.35B, consensus EPS and revenue estimates for Q4 may need to move higher if not already reflecting this guidance; watch for cloud reacceleration and sustained server/storage strength per management’s mix commentary .

Key Takeaways for Investors

Mix-driven, but durable growth: Strong compute and endpoint demand and SMB recovery underpin top-line; margin cadence to remain mix-sensitive as AI GPU/server deals scale at lower margin but solid ROIC .
AI monetization is becoming tangible: IDA and the new Gemini-powered agent show direct revenue/efficiency contributions, a differentiator among channel peers; expect narrative support from incremental AI use-cases .
Cloud to reaccelerate ex-divestiture: Management expects mid-to-upper single-digit cloud growth in Q4; prior headwinds tied to divestiture and net-revenue mix should abate, aiding margin stability .
Cash flow improving into year-end: Sequential inventory reduction and below-normal seasonal build in Q3 set up for typical strong Q4 FCF; leverage stable at 2.8x gross / 2.2x net; dividend increased to $0.08 .
Execution vs guidance remains solid: Q3 revenue above the high end; EPS at the high end; Q4 guide implies continued YoY growth—positive estimate revision risk if macro/SMB tailwinds persist .
Watch list: virtualization/infrastructure software softness, EMEA macro softness, and potential margin dilution from large GPU/AI enablement projects; offset by SMB strength and platform-driven OpEx leverage .
Trading setup: Into Q4 print, catalysts include AI commercialization updates, cloud reacceleration, and Q4 cash generation; risks include mix pressure to margins and any macro wobble in Europe .

Appendix: Additional Data Points

Company reiterated non-GAAP definitions and provided reconciliations (Adjusted Income from Ops, Adjusted EBITDA, non-GAAP net income/EPS, Adjusted FCF, ROIC) .
Loss on sale of CloudBlue and another non-core business impacted NA results by $5.5M and ~12 bps of operating margin .
Dividend payable Nov 24, 2025; record date Nov 10, 2025 .

Citations: Press release and 8-K Q3 (including guidance and reconciliations) ; press release duplicate -; Q3 call transcript -; Q2 8-K (Q3 guidance and mix) -, -; Q1 8-K (trend context) -, -; AI agent press release . Values marked with asterisks were retrieved from S&P Global.

Ingram Micro Holding Corp (INGM)·Q3 2025 Earnings Summary