Executive Summary

Q2 2025 revenue declined 3% year over year to $2.091B, gross margin expanded to a record Q2 level of 21.1%, and adjusted EPS was $2.45, flat y/y; GAAP EPS was $1.46, down 36% y/y, reflecting higher interest expense and non-GAAP adjustments .
Versus Wall Street consensus, Insight modestly missed revenue ($2.091B actual vs $2.154B estimate*) and slightly missed adjusted EPS ($2.45 actual vs $2.47 estimate*), while adjusted EBITDA was near consensus ($138.2M actual vs $139.5M estimate*) .
Management maintained full-year 2025 adjusted EPS guidance at $9.70–$10.10 and gross margin ~20%, with interest expense of $75–$80M, tax rate 25–26%, capex $30–$35M, and average share count ~32.4M, signaling second-half improvement in hardware and cloud as partner-program headwinds normalize .
Hardware grew for the second consecutive quarter (+2% y/y; +4% in North America), while cloud gross profit fell 5% due to partner program changes; core services gross profit declined 3% on delayed large enterprise projects—key stock narrative remains margin resilience and H2 trajectory under an “AI-first” strategy .

What Went Well and What Went Wrong

What Went Well

Record profitability metrics for Q2: gross margin at 21.1% (+10 bps y/y) and adjusted EFO margin at 6.2%; management highlighted prudent expense control and resilience despite program changes .
Hardware momentum continued: hardware revenue +2% y/y (North America +4%), with growth in both devices and infrastructure; commercial client revenue grew 8%, fifth consecutive quarter of Commercial growth .
Strategic AI execution: “We are adapting our ambition to become the leading AI-first solutions integrator,” with hundreds of agents deployed, >200 client AI assessments quarter-over-quarter, Gartner recognition in generative AI consulting and implementation services .

What Went Wrong

Top-line softness: consolidated net sales down 3% y/y to $2.091B; product net sales −4% as on-prem software −14% y/y; services net sales −2% y/y .
Profit pressure in GAAP terms: earnings from operations −34% y/y to $86.5M; GAAP net earnings −46% y/y to $46.9M; higher interest expense (net interest: $22.35M vs $14.19M y/y) weighed on GAAP EPS .
Core services softness: Insight Core services gross profit −3% on project delays among large enterprise clients; cloud gross profit −5% y/y from partner program changes (expected H1-weighted headwind) .

Financial Results

Sequential performance

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Billions)	$2.073	$2.104	$2.091
Gross Profit ($USD Millions)	$439.6	$406.5	$442.3
Gross Margin %	21.2%	19.3%	21.1%
GAAP EPS ($)	$0.99	$0.22	$1.46
Adjusted EPS ($)	$2.66	$2.06	$2.45
Adjusted EBITDA ($USD Millions)	$141.1	$111.3	$138.2
Cash from Operations ($USD Millions)	$215.1	$78.1	($177.1)

Notes:

Q2 y/y revenue −3%; gross margin +10 bps; GAAP EPS −36%; Adjusted EPS flat .

Q2 2025 actuals vs prior-year and consensus

Metric	Q2 2024	Q2 2025 Actual	Wall St. Consensus*
Revenue ($USD Billions)	$2.162	$2.091	$2.154*
Adjusted EPS ($)	$2.46	$2.45	$2.47*
Adjusted EBITDA ($USD Millions)	$141.4	$138.2	$139.5*

Result: Miss on revenue (−$63M vs consensus) and slight miss on adjusted EPS (~$0.02), adjusted EBITDA essentially in line .
Values marked with * are retrieved from S&P Global.

Segment revenue and mix (Q2 2025 vs Q2 2024)

Segment Net Sales ($USD Millions)	Q2 2024	Q2 2025
North America	$1,732.4	$1,684.3
EMEA	$368.9	$348.6
APAC	$60.4	$58.6
Total	$2,161.7	$2,091.5

Sales Mix (%)	Q2 2024	Q2 2025
Hardware	54%	57%
Software	26%	23%
Services	20%	20%

KPIs and margin metrics

KPI	Q2 2024	Q2 2025
Gross Margin %	21.0%	21.1%
Adjusted EFO Margin %	6.1%	6.2%
Cloud Gross Profit ($USD Millions)	$129.7	$123.0
Insight Core Services Gross Profit ($USD Millions)	$80.9	$78.0
Operating Cash Flow ($USD Millions)	—	($177.1)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance (Q2 release)	Change
Adjusted Diluted EPS	FY 2025	$9.70–$10.10 (Q1 PR)	$9.70–$10.10	Maintained
Gross Profit	FY 2025	Low single-digit growth (Q1 PR)	Approximately flat vs 2024	Lowered
Gross Margin	FY 2025	~20% (Q1 PR)	~20%	Maintained
Interest Expense	FY 2025	$70–$75M (Q1 PR)	$75–$80M	Raised
Effective Tax Rate	FY 2025	~25–26% (Q1 PR)	~25–26%	Maintained
Capital Expenditures	FY 2025	$35–$40M (Q1 PR)	$30–$35M	Lowered
Average Diluted Share Count	FY 2025	32.9M (Q1 PR)	32.4M	Lowered

Management added color on second-half trajectory: hardware GP expected mid-single-digit growth; core services low-single-digit growth; cloud flat to slightly down for the year, improving as program impacts normalize by Q4 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI/technology initiatives	Built expertise in GCP, ServiceNow, AWS; record gross margin; cautious clients in macro	“AI-first solutions integrator”; Gartner recognition; hundreds of agents; >200 AI assessments; internal AI for SG&A leverage	Strengthening adoption and positioning
Partner program changes	Cloud GP +3% in Q4; FY24 +21% despite program shifts	Cloud GP −5% y/y; $70M gross headwind H1-weighted; normalization expected exiting Q4	H1 headwind, easing in H2
Hardware demand	Q4 device/infrastructure stability; FY24 services strength	Hardware +2% y/y; NA +4%; bookings support H2 acceleration	Improving
Services project delays	Q1 core services GP −4%	Core services GP −3%; large enterprise infrastructure projects paused; modest H2 improvement expected	Soft but stabilizing
Macro (tariffs/interest)	Caution persisted in Q4	Macro uncertainty remains; interest rates elevated; tariffs and supply chain noted	Persistent headwind
Public sector	Q4 EMEA/APAC margins improved	Public sector revenue down primarily due to netting; services momentum; SLED focus	Mixed performance

Management Commentary

“In Q2, we executed well and met our expectations… Total gross margin of 21.1% and adjusted earnings from operations margin of 6.2%, both Q2 records” .
“We are adapting our ambition to becoming… the leading AI-first solutions integrator” .
“Hardware revenue grew 2%… North America grew 4%. Commercial client revenue grew 8%… underlying SaaS and IaaS business grew double digits… offset by partner program changes” .
“Cloud gross profit was $123M, a decrease of 5% due to partner program changes… We continue to anticipate some headwinds in Q3; by the time we exit Q4, we expect the impact to be largely normalized” .

Q&A Highlights

Guidance drivers: CFO detailed H2 lift from hardware (bookings supportive), cloud underlying growth (~high-teens y/y) with program headwinds easing, and OpEx growing slower than GP—supporting full-year adjusted EPS maintenance .
Cost discipline amid PC upcycle: CEO emphasized AI-driven productivity (automation of internal processes) enabling flat headcount with growth, not expecting a repeat of peak PC cycles but highlighting necessity to upgrade Windows fleets .
Services delays rationale: Enterprises are preserving spend for AI infrastructure and data readiness; Insight expects pragmatic MVP projects to scale sequentially as strategies solidify .
Segment outlook: Hardware GP mid-single-digit growth; core services low-single-digit growth; cloud flat to slightly down for FY, improving in H2; public sector mixed with SLED focus .

Estimates Context

Q2 2025 actuals vs S&P Global consensus: revenue $2.091B vs $2.154B estimate* (miss), adjusted EPS $2.45 vs $2.47 estimate* (slight miss), adjusted EBITDA $138.2M vs $139.5M estimate* (near in-line) .
Management expects H2 hardware acceleration and cloud normalization (exiting Q4) while core services modestly improve; consensus trajectories may reflect improved second-half mix and operating leverage .
Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

Margin resilience amid top-line softness: Record Q2 gross margin and stable adjusted EPS despite program changes and delayed projects—focus near-term on H2 margin sustainability .
Hardware/commercial demand as H2 driver: Bookings and commercial momentum point to sequential improvement; monitor corporate/enterprise ramp through Q3/Q4 .
Cloud normalization by year-end: Underlying SaaS/IaaS growth remains healthy; program headwinds expected to be largely normalized by Q4—watch Q3 cloud trajectory .
Services recovery is key to multiple expansion: Core services softness tied to enterprise caution; AI MVPs and advisory pull-through should gradually support recovery—track project starts and services GP .
Capital allocation and liquidity intact: $76M repurchase in Q2; access to full $1.8B ABL capacity with ~$1B available—ample liquidity for opportunistic buybacks and M&A .
Full-year guide intact but with mix shifts: Adjusted EPS maintained; gross profit outlook trimmed to “flat”; interest expense bracket wider—monitor execution vs updated cost and capex contours .
AI-first positioning could be a medium-term differentiator: Recognitions, internal AI leverage, and multi-cloud advisory depth build strategic moat—observe conversion of pipeline to revenue across H2/H1’26 .

References:

Q2 2025 press release and detailed financial tables .
Q2 2025 earnings call transcript and Q&A .
Q2 2025 Form 10-Q (selected financial statements; debt/liquidity detail) .
Prior quarters: Q1 2025 press release (trend and guidance) ; Q4 2024 press release .
Share repurchase announcement (May 27, 2025) .

Footnote: Values marked with * are retrieved from S&P Global.

INSIGHT ENTERPRISES INC (NSIT)·Q2 2025 Earnings Summary