What Insight Enterprises (NSIT) Said on Its Q3 Earnings Call

Key Points

• Q3 results exceeded expectations: Revenue rose 22% to $2.4 billion, adjusted EPS climbed 34% to $3.59, and adjusted EBITDA increased 22%, driven by strong infrastructure, hardware and cloud demand.
• Insight raised its 2026 outlook: It now expects gross profit growth of 12.5% to 14% and adjusted diluted EPS of $13.55 to $13.75. For Q4, it anticipates slower growth amid macroeconomic, memory-pricing and supply-chain uncertainty.
• The company is investing in AI while pursuing cost savings: Insight expanded its AI initiatives, including an OpenAI Center of Excellence, and expects a voluntary separation program to generate about $30 million in annualized gross savings.

Insight Enterprises NASDAQ: NSIT reported 22% revenue growth in the third quarter of 2026 and raised its full-year outlook, as demand for infrastructure hardware, cloud services and devices helped the technology solutions provider exceed its expectations.

Revenue for the quarter ended September 30 rose to $2.4 billion from a year earlier, while gross profit increased 20%. Adjusted diluted earnings per share climbed 34% to $3.59, and adjusted EBITDA increased 22% to $177 million.

President and CEO Jack Azagury said demand remained healthy across key markets, though the company was monitoring a “mixed and evolving macroeconomic environment.” Chief Financial Officer James Morgado said Insight expects growth to moderate in the fourth quarter as it laps prior-year acquisitions and works through changes to Google’s partner program.

Infrastructure and cloud demand drive growth

Hardware revenue rose 32% in the third quarter, with infrastructure revenue up more than 50% and devices revenue up more than 30%. Infrastructure hardware gross profit also increased more than 50%, supported by demand for servers, storage and networking as clients prepared their technology environments for artificial intelligence, Azagury said.

Device unit sales rose by a low-single-digit percentage, alongside price increases, Azagury said. Morgado said the company’s measures indicated the broader market declined on a unit basis.

Cloud gross profit rose 26% to $164 million, driven by software-as-a-service growth and security software from Insight’s Sekuro acquisition. Morgado said cloud growth moderated because of an anticipated decline in Google Cloud resale business, while the Microsoft business remained strong.

Insight Core Services gross profit increased 21% to $95 million. Morgado said acquisitions contributed to the increase, along with modest, improving organic growth and margin expansion. Services revenue rose 17%, with acquired businesses growing faster than the organic business.

Total gross margin declined 30 basis points to 21.4%, reflecting revenue mix and lower hardware margins, partially offset by cloud growth. Hardware gross margin fell 100 basis points from a year earlier because of device pricing and client mix.

Gross profit grew in all three regions: 15% in North America, 22% in Europe, the Middle East and Africa, and 121% in Asia-Pacific. Morgado attributed the Asia-Pacific increase to Sekuro and organic growth, while AI infrastructure projects in the U.K. and United Arab Emirates supported the EMEA result.

Company raises full-year outlook

Insight increased its 2026 gross profit growth forecast to 12.5% to 14% and projected adjusted diluted earnings of $13.55 to $13.75 per share, excluding stock-based compensation. Morgado said the midpoint of the earnings range represents approximately 27% growth.

The company expects full-year gross margin of about 21.5% and operating cash flow of $300 million to $400 million. Its earnings outlook also excludes acquisition-related intangible amortization, severance, restructuring, voluntary separation and transformation expenses.

For the fourth quarter, Insight expects hardware gross profit growth in the high single digits, Core Services gross profit growth in the mid-teens and cloud gross profit growth in the mid-20% range. Morgado said the outlook takes a prudent approach because of uncertainty around memory pricing, supply chain disruption and the broader economy.

Hardware backlog remained elevated entering the fourth quarter, with bookings early in the period effectively replacing shipments, Morgado said. He added that the company would monitor whether that pattern continues.

AI investment and operating discipline

Azagury outlined progress on Insight’s One Insight transformation, which focuses on AI infrastructure and services, a more integrated operating model, and investment in talent. He said OpenAI named Insight an advanced partner and that the company established a dedicated OpenAI Center of Excellence.

Insight also created a cybersecurity solution line and is forming a global solution and partner organization. Adrian Gregory, currently EMEA president, will lead the new organization beginning January 1; his successor in EMEA will be announced before then, Azagury said.

The company initiated a voluntary separation program focused primarily on mid- and back-office functions. Morgado said it expects approximately $30 million in annualized gross savings. Azagury said Insight intends to invest in growth priorities while reducing selling, general and administrative expenses as a percentage of gross profit each year.

Insight repurchased $75 million in shares during the quarter and intends to use the remaining $74 million under its authorization before year-end. It ended the quarter with approximately $1.5 billion in total debt and a net leverage ratio of 1.6.

Azagury said acquisitions were not a focus this year, but could form part of the company’s strategy going forward. Insight plans to discuss its priorities, capital allocation and three-year financial targets at a virtual investor and analyst briefing on December 2.

About Insight Enterprises (NASDAQ:NSIT)

Insight Enterprises, Inc is a global technology solutions provider that helps businesses and public-sector organizations plan, acquire, implement and manage information technology. The company offers hardware, software and cloud solutions, along with consulting, systems integration, managed services and technical support.

Its portfolio includes workplace and data-center technologies, cloud and data-center modernization, cybersecurity, networking, data and artificial intelligence solutions, and software licensing and asset management.

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