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Ingram Micro Holding Corp (INGM)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered a return to year-over-year revenue growth: net sales $13.34B (+2.5% YoY; +3.3% FX-neutral), while non-GAAP diluted EPS was $0.92; excluding discrete India items, EPS would have been $0.99, above the high end of guidance, though gross margin declined 51 bps to 7.01% on mix and India impacts .
  • Cloud and Client & Endpoint Solutions led growth; server and storage were up double digits, while networking remained soft; large enterprise demand strengthened globally, with SMB and public sector softer .
  • Balance sheet and cash flow were a bright spot: cash from operations $310.0M and adjusted free cash flow $337.2M; FY 2024 debt repaid $483.1M (total $1.56B since 2022). Board declared a $0.074 dividend and approved up to $75M in repurchases tied to secondary offerings .
  • Q1 2025 guidance sets net sales at $11.43–$11.83B, gross profit $785–$835M, and non-GAAP EPS $0.51–$0.61, reflecting continued PC refresh tailwinds and ongoing competitive pricing pressure in India; tax rate ~30% non-GAAP .

What Went Well and What Went Wrong

What Went Well

  • Return to top-line growth with strength in Cloud and Client & Endpoint Solutions; server and storage up double digits: “we saw a return to year-over-year revenue growth… strong performance in Cloud and in Client and Endpoint Solutions” .
  • Robust cash generation and deleveraging: Q4 cash from operations $310.0M and adjusted free cash flow $337.2M; FY 2024 debt repayment $483.1M; dividend initiation and buyback authorization underscore capital returns .
  • Xvantage platform progress and operating leverage: management highlighted accelerated digital capabilities, >$600M cumulative cloud/digital investment, and efficiencies feeding OpEx leverage and throughput .

What Went Wrong

  • Gross margin compression to 7.01% (-51 bps YoY) driven by mix shift (lower-margin CES, APAC growth, enterprise customer mix) and heightened competition, notably in India .
  • Discrete India charges (inventory write-offs and GST/professional fees) and IPO-related stock-based comp reduced Q4 profitability by ~$54.4M (41 bps of sales) and ~$0.07 EPS, pulling non-GAAP EPS to $0.92 .
  • SMB and public sector remained soft across regions, tempering higher-margin services attachment; networking demand continued to lag despite sequential improvement signals .

Financial Results

Core P&L vs prior year and prior quarter

MetricQ4 2023Q3 2024Q4 2024
Net Sales ($USD Billions)$13.02 $11.76 $13.34
Gross Profit ($USD Millions)$978.7 $845.5 $936.1
Gross Margin (%)7.52% 7.19% 7.01%
Income from Operations ($USD Millions)$330.9 $218.2 $248.5
Operating Margin (%)2.54% 1.85% 1.86%
Adjusted Income from Operations ($USD Millions)$372.8 $253.9 $305.2
Adjusted EBITDA ($USD Millions)$435.4 $331.6 $418.1
Net Income ($USD Millions)$136.5 $77.0 $83.1
Net Income Margin (%)1.05% 0.65% 0.62%
Diluted EPS (GAAP)$0.61 $0.35 $0.36
Non-GAAP Diluted EPS$0.99 $0.72 $0.92

Q4 2024 actual vs guidance (from Nov. Q3 update)

MetricGuidance (Q4 2024)Actual (Q4 2024)Result
Net Sales ($USD Billions)$13.0 – $13.5 $13.34 Met
Gross Profit ($USD Millions)$935 – $985 $936.1 Met (low end)
Non-GAAP Diluted EPS$0.85 – $0.98 $0.92 Met (mid-range)
Non-GAAP Diluted EPS excl. India items—$0.99 Beat (above high end)

Regional breakdown

RegionNet Sales Q4 2023 ($B)Net Sales Q4 2024 ($B)Income from Ops Margin Q4 2023Income from Ops Margin Q4 2024
North America$4.5 $4.7 2.76% 2.47%
EMEA~$4.1 $4.1 (−1.5% YoY) 2.59% 2.23%
Asia-Pacific$3.3 $3.6 2.29% 1.49% (−56 bps India impact)
Latin America$1.0 $1.0 3.34% 4.35%

KPIs

KPIQ4 2023Q4 2024
Cash from Operations ($USD Millions)$(0.9) used $310.0 provided
Adjusted Free Cash Flow ($USD Millions)$13.4 $337.2
Net Working Capital ($USD Billions)~$4.4 ~$4.1
Dividend per Share (declared)—$0.074 (payable Mar 25, 2025)
Share Repurchase Authorization—Up to $75M through Feb 26, 2026
FY Debt Repaid ($USD Millions)—$483.1 (FY 2024); $1.56B since 2022

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($B)Q4 2024$13.0 – $13.5 Actual $13.34 N/A (actualized)
Gross Profit ($M)Q4 2024$935 – $985 Actual $936.1 N/A (actualized)
Non-GAAP Diluted EPSQ4 2024$0.85 – $0.98 Actual $0.92; $0.99 excl. India N/A (actualized)
Net Sales ($B)Q1 2025—$11.43 – $11.83 New (seasonally lower vs Q4)
Gross Profit ($M)Q1 2025—$785 – $835 New
Non-GAAP Diluted EPSQ1 2025—$0.51 – $0.61 (tax ~30%) New
DividendQ1 2025$0.074 declared in Q4 $0.076 (raised 2.7%) in Q1 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Current Period (Q4 2024)Trend
AI/digital platform (Xvantage)Launched in 14 countries; >$600M cloud/digital investment; efficiency and automation gains Continued traction; 16 countries; examples of cycle-time cuts and SMB productivity; operating leverage emphasis Strengthening
Product performance (PC refresh, networking, server/storage)PC refresh improving through 2024; networking soft; server/storage expectations solid PC/endpoint strong; networking still soft but improving; server/storage up double digits Mixed; PC up, networking improving
Regional trendsAPAC growth (mobility); NA and LatAm softer; EMEA flat NA returned to growth; APAC strong but India competitive; EMEA muted; LatAm stable with FX headwinds NA improving; India pressure
Tariffs/macroCompetitive pricing noted but pockets only Tariff pass-through feasible; demand elasticity uncertain; financing may offset; some vendors diversifying manufacturing Elevated focus
Regulatory/legal (India matter)Not highlighted in Q3 callDiscrete India charges (inventory write-offs, GST/pro fees); aggressive bidding environment in India pressuring margins New/ongoing headwind
Working capital/cash flowSeasonal inventory build in Q3; plan for dividend; large debt paydowns Strong Q4 FCF; leverage down >0.4x since Q3; dividend initiated; buyback authorization Improving balance sheet

Management Commentary

  • “We saw a return to year-over-year revenue growth… driven by strong performance in Cloud and in Client and Endpoint Solutions” — CEO Paul Bay .
  • “Excluding the two discrete items in India… non-GAAP diluted EPS… would have been $0.99, above the high end of our guidance range” — CFO Mike Zilis .
  • “Xvantage… reduced [complex cybersecurity quote] cycle time by over 80%… enabling redeployment to proactive sales” — CEO Paul Bay .
  • “We will be paying a quarterly dividend… and… authorized share repurchases up to $75M” — CFO Mike Zilis .

Q&A Highlights

  • Enterprise mix and PC cycle: Large enterprise strength was global; PC refresh driven by Windows and new systems; early AI PC contribution modest .
  • Tariffs: Ingram typically passes tariffs through; demand impact depends on price elasticity; financing solutions may offset; vendors diversifying manufacturing footprints .
  • Margin dynamics and India: Mix shift (CES, enterprise, APAC) dilutes gross margins; India bidding environment highly competitive; no notable one-time costs embedded in Q1 guide .
  • SMB and public sector: SMB down double digits through most quarters with improving pipeline into back half; public sector down globally in Q4 with potential recovery ahead .
  • Working capital and FCF: Seasonal collections in Q1 after Q4 sales; long-term goal to convert ≥30% of EBITDA to FCF, tempered by mix and growth investments .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable due to S&P Global daily request limits at the time of retrieval; comparisons are anchored to company guidance and actuals. Values retrieved from S&P Global were unavailable; therefore, no consensus figures are presented.
  • Notably, non-GAAP EPS of $0.92 fell within guided $0.85–$0.98, and would have been $0.99 excluding discrete India items (above the high end), with net sales and gross profit meeting guidance ranges .

Key Takeaways for Investors

  • Mix headwinds drove margin compression, but underlying demand improved, with PC refresh and enterprise strength; cloud and server/storage momentum support medium-term margin recovery as mix shifts back to Advanced Solutions and Cloud .
  • Discrete India charges and competitive pricing in India are transitory but meaningful—monitor India margin trajectory and any progress on settlements/recoveries .
  • Cash generation and deleveraging continue to be a differentiator; dividend initiation and targeted buybacks add shareholder return optionality while term loan repayments persist .
  • Q1 2025 guide implies seasonal moderation vs Q4 yet sustained YoY growth, with EPS range reflecting continued mix and India pricing pressures; watch guidance updates and networking recovery signals .
  • Xvantage is increasingly a structural advantage—evidence of cycle-time reductions, reactivation of dormant customers, and self-serve orders scaling; anticipate OpEx leverage as deployments broaden .
  • For near-term trading, an upside EPS surprise excluding India items and capital return actions are positive catalysts; margin narrative hinges on mix normalization and India competition easing .
  • Medium-term thesis: as Advanced Solutions and Cloud expand, gross margins should trend higher; continued automation and restructuring savings underpin operating leverage .