Insight Enterprises Inc (NSIT) 2023 Q3 法說會逐字稿

Good morning, and thank you for attending the Insight Enterprises, Inc. Third Quarter 2023 Earnings Conference Call. My name is Elisa, and I will be your moderator. (Operator Instructions)

早安，感謝您參加 Insight Enterprises, Inc. 2023 年第三季財報電話會議。我叫 Elisa，我將擔任你們的主持人。 （操作員說明）

I would now like to pass the call to our host, James Morgado, SVP of Finance and CFO of North America. James, you may proceed.

現在我想將電話轉給我們的主持人、北美財務高級副總裁兼財務長 James Morgado。詹姆斯，你可以繼續了。

Welcome, everyone, and thank you for joining the Insight Enterprises earnings conference call. Today, we will be discussing the company's operating results for the quarter ended September 30, 2023.

歡迎大家，並感謝您參加 Insight Enterprises 的財報電話會議。今天，我們將討論該公司截至 2023 年 9 月 30 日的季度營運業績。

I'm James Morgado, Senior Vice President of Finance and CFO of Insight North America. Joining me is Joyce Mullen, President and Chief Executive Officer; and Glynis Bryan, Chief Financial Officer.

我是 James Morgado，Insight North America 財務資深副總裁兼財務長。與我一起出席的是總裁兼執行長喬伊斯·馬倫 (Joyce Mullen)；格萊尼斯‧布萊恩 (Glynis Bryan)，財務長。

If you do not have a copy of the earnings release or the accompanying slide presentation that was posted this morning, and filed with the Securities and Exchange Commission on Form 8-K, you will find it on our website at insight.com under the Investor Relations section.

如果您沒有今天早上發布並以 8-K 表形式向證券交易委員會提交的收益發布或隨附幻燈片演示文稿的副本，您可以在我們的網站 Insight.com 的“投資者”欄下找到它。關係部分。

Today's call, including the question-and-answer period, is being webcast live, and can also be accessed via the Investor Relations page of our website at insight.com. An archived copy of the conference call will be available approximately 2 hours after completion of the call and will remain on our website for a limited time.

今天的電話會議（包括問答環節）正在進行網路直播，也可以透過我們網站 Insight.com 的投資者關係頁面進行觀看。電話會議的存檔副本將在電話會議結束後約 2 小時內提供，並將在我們的網站上保留一段有限的時間。

This conference call and the associated webcast contain time-sensitive information that is accurate only as of today, November 2, 2023. This call is the property of Insight Enterprises. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Insight Enterprises is strictly prohibited.

本次電話會議和相關網路廣播包含時效性訊息，僅截至今天（2023 年 11 月 2 日）準確。本次電話會議屬於 Insight Enterprises 的財產。未經 Insight Enterprises 明確書面同意，嚴禁以任何形式重新分發、轉發或轉播本次通話。

In today's call, we will be referring to non-GAAP financial measures as we discuss the third quarter 2023 financial results. When discussing non-GAAP measures, we will refer to them as adjusted. You'll find a reconciliation of these adjusted measures to our actual GAAP results included in both the press release and the accompanying slide presentation issued earlier today.

在今天的電話會議中，我們在討論 2023 年第三季財務業績時將提及非 GAAP 財務指標。在討論非公認會計準則衡量標準時，我們稱之為調整後的衡量標準。您將在今天早些時候發布的新聞稿和隨附的幻燈片簡報中找到這些調整後的指標與我們實際 GAAP 結果的協調表。

Please note that all growth comparisons we make on the call today relate to the corresponding period of last year, unless otherwise noted. Also, unless highlighted as constant currency, all amounts and growth rates discussed are in U.S. dollar terms.

請注意，除非另有說明，我們今天在電話會議上進行的所有成長比較都與去年同期有關。此外，除非強調為固定貨幣，否則討論的所有金額和增長率均以美元計算。

As a reminder, all forward-looking statements that are made during this conference call are subject to risks and uncertainties that could cause our actual results to differ materially. These risks are discussed in today's press release and in greater detail in our most recently filed periodic reports and subsequent filings with the SEC.

謹此提醒，本次電話會議期間所做的所有前瞻性陳述均面臨風險和不確定性，可能導致我們的實際結果出現重大差異。這些風險在今天的新聞稿中進行了討論，並在我們最近提交的定期報告和隨後向 SEC 提交的文件中進行了更詳細的討論。

All forward-looking statements are made as of the date of this call and except as required by law, we undertake no obligation to update any forward-looking statements made on this call, whether as a result of new information, future events or otherwise.

所有前瞻性陳述均自本次電話會議之日起作出，除非法律要求，我們沒有義務更新本次電話會議中所做的任何前瞻性陳述，無論是由於新資訊、未來事件或其他原因。

With that, I will now turn the call over to Joyce, and if you're following along with the slide presentation, we will begin on Slide 4. Joyce?

現在，我將把電話轉給喬伊斯，如果您按照幻燈片演示進行操作，我們將從幻燈片 4 開始。喬伊斯？

Thank you very much, James. Good morning, everyone, and thank you for joining us today. Q3 met our expectations and delivered record adjusted earnings per share for the quarter. Cloud gross profit grew 17% and Insight Core Services gross profit grew 20%, demonstrating the progress we are making to becoming the leading solutions integrator.

非常感謝你，詹姆斯。大家早安，感謝您今天加入我們。第三季達到了我們的預期，並實現了該季度創紀錄的調整後每股收益。雲毛利成長了 17%，Insight Core Services 毛利成長了 20%，這表明我們在成為領先的解決方案整合商方面取得了進展。

We are also confirming our adjusted diluted earnings per share for the full year of 2023. Here are a few highlights: we achieved gross margin of 18% in Q3, reflecting both an improvement in our revenue mix as well as continued progress in our pricing and profitability initiatives; Q3 adjusted EBITDA margin expanded 130 basis points to 5.7%; we generated $414 million of operating cash flow in the first 3 quarters of the year, an increase of over $600 million from last year; and consistent with our strategy to focus on cloud and services, we acquired Amdaris, an award-winning software development and digital services company based in the U.K. I will provide more details on this acquisition later.

我們還確認了 2023 年全年調整後的稀釋每股收益。以下是一些亮點：我們在第三季度實現了 18% 的毛利率，反映出我們收入結構的改善以及定價和定價方面的持續進步。獲利措施；第三季調整後 EBITDA 利潤率擴大 130 個基點至 5.7%；今年前三季度，我們產生了4.14億美元的營運現金流，比去年增加了6億多美元；為了與我們專注於雲端和服務的策略一致，我們收購了Amdaris，這是一家總部位於英國的屢獲殊榮的軟體開發和數位服務公司。我稍後將提供有關此次收購的更多詳細信息。

These highlights demonstrate we are on the right path with our strategy and making progress towards becoming the leading solutions integrator. We remain focused on the fastest-growing areas of the market: cloud, data, AI, edge and cyber. While we have been leveraging AI to support clients' needs for a long time, we are really excited about the acceleration that Generative AI is providing to us and more importantly, to our clients.

這些亮點表明我們的策略走在正確的道路上，並在成為領先的解決方案整合商方面取得了進展。我們仍然專注於市場成長最快的領域：雲端、數據、人工智慧、邊緣和網路。雖然我們長期以來一直在利用人工智慧來支援客戶的需求，但我們對生成式人工智慧為我們，更重要的是為我們的客戶提供的加速感到非常興奮。

We've recently filed GenAI-related patents focused on customer support and sales use cases. These patents integrate large language models with third-party data to enhance support applications; recognize and leverage human sentiment, specifically for support applications; reduce hallucinations and query time, which reduces GPU usage; emulate personality types and improve search capabilities for customer support applications.

我們最近提交了 GenAI 相關專利，重點是客戶支援和銷售用例。這些專利將大型語言模型與第三方數據集成，以增強支援應用程式；識別並利用人類情感，特別是用於支援應用程式；減少幻覺和查詢時間，進而減少 GPU 使用率；模擬個性類型並提高客戶支援應用程式的搜尋功能。

Combined with our expertise, these capabilities allow us to deliver business outcomes to our clients more efficiently. We are also using GenAI internally to improve efficiencies with our development team and our back-office support functions.

結合我們的專業知識，這些能力使我們能夠更有效地為客戶提供業務成果。我們也在內部使用 GenAI 來提高我們的開發團隊和後台支援功能的效率。

Our clients need a partner they can trust to navigate new technologies and the infrastructure and workplace requirements to help them digitally transform. This is at the heart of our strategy. As a reminder, there are 4 key pillars: captivate clients, sell solutions, deliver differentiation and champion our culture.

我們的客戶需要一個值得信賴的合作夥伴來駕馭新技術、基礎設施和工作場所要求，以幫助他們實現數位轉型。這是我們策略的核心。提醒一下，有四個關鍵支柱：吸引客戶、銷售解決方案、提供差異化和捍衛我們的文化。

To illustrate this strategy in action, I'd like to talk about one of our clients who is a technology leader in the public safety industry. They were experiencing a significant increase in customer demand and needed help to meet their delivery obligations and fulfill their growing backlog. They required a partner that could design, implement and execute a large-scale deployment of their technology to tens of thousands of vehicles across multiple locations.

為了說明這項策略的實際應用，我想談談我們的一位客戶，他是公共安全產業的技術領導者。他們的客戶需求顯著增加，需要幫助來履行交付義務並完成不斷增加的積壓訂單。他們需要一個能夠設計、實施和執行大規模部署其技術到多個地點的數萬輛車輛的合作夥伴。

Leveraging our edge expertise, we implemented a customized solution combining routers, cameras and cloud software, along with our services to deploy and test the solution at the edge. At every stage, we make sure their key requirements around testing and quality assurance were satisfied.

利用我們的邊緣專業知識，我們實施了結合路由器、攝影機和雲端軟體的客製化解決方案，以及在邊緣部署和測試該解決方案的服務。在每個階段，我們都確保滿足他們在測試和品質保證方面的關鍵要求。

We quickly ramped up a successful pilot of several thousand vehicles and have since moved to a multiyear contract. The positive outcomes for our clients include faster time to market, improved customer satisfaction and accelerated revenue growth.

我們很快就成功進行了數千輛汽車的試點，並已轉而簽訂多年合約。為我們的客戶帶來的正面成果包括更快的上市時間、提高的客戶滿意度和加速的收入成長。

The success of this project has led to exploring how we can help them seamlessly deploy more of their products at the edge. This is an excellent example of how we focus on business outcomes, earn the right to do more and ultimately become the partner our clients can't live without.

這個專案的成功促使我們探索如何幫助他們在邊緣無縫部署更多產品。這是一個很好的例子，說明了我們如何專注於業務成果、贏得做得更多的權利並最終成為客戶不可或缺的合作夥伴。

Our expertise in edge solutions is part of our heritage and very important to our clients. As a solutions integrator by combining hardware, software and services, we bring even more value to our clients.

我們在邊緣解決方案方面的專業知識是我們傳統的一部分，對我們的客戶非常重要。作為將硬體、軟體和服務結合的解決方案整合商，我們為客戶帶來更多價值。

I'd like to also highlight our application development strength with a recent project we delivered for a large insurance provider. They began an initiative to develop a new customed internal claims processing application to replace their existing outdated and high-risk system. They needed help establishing a development environment that could accelerate the time to value.

我還想透過我們最近為一家大型保險提供者交付的一個專案來強調我們的應用程式開發實力。他們開始主動開發新的客製化內部索賠處理應用程序，以取代現有的過時且高風險的系統。他們需要協助建立一個可以加快實現價值的開發環境。

We introduced them to our proven agile development practices and deployed our user experience experts to guide their development efforts. The deployment included user story mapping, planning the project sprints and performing Agility Health Checks along the way. The effort ultimately concluded with the rollout of a scalable next-gen claims processing application that help them realize significant cost savings, improved claims accuracy and enable digital payments.

我們向他們介紹了我們經過驗證的敏捷開發實踐，並部署了我們的使用者體驗專家來指導他們的開發工作。部署包括使用者故事映射、規劃專案衝刺以及在此過程中執行敏捷性健康檢查。這項工作最終以可擴展的下一代索賠處理應用程式的推出而告終，該應用程式幫助他們實現了顯著的成本節省、提高了索賠準確性並實現了數位支付。

The 2 projects I highlighted were delivered by our exceptional technical team of over 6,000 dedicated experts. To augment our exceptional talent and wide-ranging capabilities, M&A remains an important element of our strategy. We are always looking to bolster our capabilities through strategic acquisitions, in line with our focus on the fastest-growing areas of the market: cloud, data, AI, edge and cyber.

我重點介紹的 2 個專案是由我們由 6,000 多名專業專家組成的卓越技術團隊交付的。為了增強我們的卓越人才和廣泛的能力，併購仍然是我們策略的重要組成部分。我們始終尋求透過策略性收購來增強我們的能力，這與我們對市場成長最快的領域的關註一致：雲端、數據、人工智慧、邊緣和網路。

In August, we acquired Amdaris an award-winning cloud and application modernization company based in the U.K. with service delivery centers located in several Eastern European countries. Amdaris has been a Microsoft Gold Certified partner for more than 10 years and has a proven track record of delivering transformative digital services.

8 月，我們收購了 Amdaris，這是一家屢獲殊榮的雲端和應用程式現代化公司，總部位於英國，服務交付中心位於多個東歐國家。 Amdaris 十多年來一直是微軟金牌認證合作夥伴，在提供變革性數位服務方面擁有良好的記錄。

Amdaris brings more than 850 teammates, 90% of whom are engineers and developers, making it an ideal addition to our existing application and data practices. Through this acquisition, we also strengthened our solutions capabilities in Europe.

Amdaris 擁有超過 850 名團隊成員，其中 90% 是工程師和開發人員，使其成為我們現有應用程式和資料實踐的理想補充。透過此次收購，我們也增強了在歐洲的解決方案能力。

I'd like to share an example of how Amdaris was able to deliver on a project and earn the right to do more. Their clients, a global recruiting firm based in the U.K. was dealing with increasing costs while developing their own custom-built CRM system. The Amdaris team stepped in to deliver the project faster with a more scalable and reliable application, all while saving costs.

我想分享一個例子，說明 Amdaris 如何能夠交付專案並贏得做更多事情的權利。他們的客戶是一家總部位於英國的全球招聘公司，在開發自己的客製化 CRM 系統時，正在應對不斷增加的成本。 Amdaris 團隊介入，透過更具可擴展性和可靠性的應用程式更快地交付項目，同時節省成本。

The success of this project has led to additional work with this client, including application development, product design and data migration support. This illustrates why Amdaris is a perfect complement to our strategy, and our strategy is working.

該專案的成功導致了與該客戶的額外工作，包括應用程式開發、產品設計和資料遷移支援。這說明了為什麼 Amdaris 是我們策略的完美補充，而我們的策略正在發揮作用。

To add to our track record of industry recognition, I'll highlight a few. We've been included in the Gartner Magic Quadrant for software asset management managed services and public cloud IT transformation services. This highlights our strength in helping clients architect, build and manage cloud solutions.

為了增加我們的行業認可記錄，我將重點放在一些。我們已被納入 Gartner 軟體資產管理託管服務和公有雲 IT 轉型服務魔力像限。這凸顯了我們在幫助客戶設計、建置和管理雲端解決方案方面的實力。

Additionally, Insight has been named EMEA Innovation Partner at this year's Canalys Forum, which recognizes outstanding performance in achieving and driving innovation. In part, this was due to our early development of Insight GPT.

此外，Insight 在今年的 Canalys 論壇上被任命為 EMEA 創新合作夥伴，該論壇表彰了在實現和推動創新方面的傑出表現。部分原因在於我們早期開發了 Insight GPT。

And since we believe our culture is a competitive advantage, we are thrilled to be recognized by Forbes as the World's Best Employer for 2023.

由於我們相信我們的文化是一種競爭優勢，因此我們很高興被《富比士》評為 2023 年全球最佳雇主。

In summary, we are making great progress towards becoming the leading solutions integrator focused on the fastest-growing areas of the market and where our clients need the most help.

總而言之，我們正在努力成為領先的解決方案整合商，專注於市場成長最快的領域以及客戶最需要幫助的領域。

With that, I'll turn the call over to Glynis to share the key details of our financial and operating performance in Q3 and outlook for 2023. Glynis?

接下來，我將把電話轉給 Glynis，分享我們第三季度財務和營運業績的關鍵細節以及 2023 年的展望。Glynis？

Thank you, Joyce. Our focus on profitability and growth in high-margin cloud and services business has contributed to the expanded margins we've seen in our results this year. And we believe we're well positioned to profitably grow our top line as macroeconomic conditions improve.

謝謝你，喬伊斯。我們對高利潤雲和服務業務的獲利能力和成長的關注促成了我們今年業績中利潤率的擴大。我們相信，隨著宏觀經濟狀況的改善，我們處於有利地位，可以實現獲利成長。

Moving on to Q3 results. Net revenue was $2.3 billion, a decrease of 11% in U.S. dollar terms and also in constant currency. The decline was primarily due to hardware, which was down 17% due to devices, partially offset by cloud growth.

繼續看第三季的結果。淨收入為 23 億美元，以美元計算和以固定匯率計算下降 11%。下降主要是由於硬體造成的，設備下降了 17%，但部分被雲端成長所抵消。

Last quarter, we expressed our belief that we had approached the bottom of the device market, and that the decline in our devices revenue would flow. Sequentially, devices were up slightly in Q3.

上個季度，我們表示相信我們已經接近設備市場的底部，並且我們的設備收入將會下降。隨後，設備數量在第三季略有上升。

Despite the 11% decline in net sales, gross profit increased 2% reflecting the hardware decline offset by [higher] Cloud and Insight Core Services growth, as well as the benefit of profitability and pricing initiatives we implemented last year. Insight Core Services gross profit was $71 million, an increase of 20%. This performance reflects growth in applications, data, digital enablement as well as networking, partially offset by a decrease in integration and other services related to [decline] in devices.

儘管淨銷售額下降了 11%，但毛利潤增長了 2%，反映出硬體下降被雲端和 Insight 核心服務成長以及我們去年實施的盈利和定價舉措帶來的好處所抵消。 Insight Core Services毛利為7,100萬美元，成長20%。這一業績反映了應用程式、數據、數位支援以及網路的成長，但部分被與設備[下降]相關的整合度和其他服務的下降所抵消。

Cloud gross profit was $96 million, an increase of 17% reflecting higher growth in SaaS and Infrastructure-as-a-Service. Gross margin was 18%, an increase of 220 basis points and reflects the higher mix of Cloud, Insight Core Services and infrastructure products, all of which transact at higher margins relative to devices. In addition, our profitability and pricing initiatives also contributed to higher hardware and services gross margin.

雲毛利為 9,600 萬美元，成長 17%，反映出 SaaS 和基礎設施即服務的更高成長。毛利率為 18%，成長了 220 個基點，反映了雲端、Insight 核心服務和基礎設施產品的更高組合，所有這些產品的交易利潤均高於設備。此外，我們的獲利能力和定價措施也有助於提高硬體和服務毛利率。

Last quarter, we accelerated cost reduction actions to better align our cost structure to the market environment. These actions were completed by mid-quarter, and we have started to see the benefit of the actions in North America where adjusted operating expenses were down 4%.

上季度，我們加快了成本削減行動，以使我們的成本結構更好地適應市場環境。這些行動已於季度中期完成，我們已經開始看到這些行動在北美帶來的好處，調整後的營運費用下降了 4%。

Our adjusted EBITDA margin expanded 130 basis points to 5.7%. And for the third quarter, adjusted diluted earnings per share was $2.37, up 19% in U.S. dollar terms and also in constant currency, and including the benefit of approximately $0.04 related to the release of certain tax reserves.

我們調整後的 EBITDA 利潤率擴大了 130 個基點，達到 5.7%。第三季度，調整後攤薄每股收益為 2.37 美元，以美元計算和固定匯率計算增長 19%，其中包括與釋放某些稅收儲備相關的約 0.04 美元的收益。

Our adjusted return on invested capital for the trailing 12 months ended September 30, 2023, was 16.8% compared to 15% a year ago, and this also demonstrates progress towards our long-term goal. Year-to-date, we generated $440 million of cash flow from operations compared to a usage of $206 million for the corresponding period in 2022.

截至 2023 年 9 月 30 日的過去 12 個月，我們調整後的投資資本回報率為 16.8%，而去年同期為 15%，這也表明我們在實現長期目標方面取得了進展。今年迄今為止，我們的營運現金流量為 4.4 億美元，而 2022 年同期的現金流量為 2.06 億美元。

We continue to evaluate our options relative to the convertible notes as well as the impact of the convertible notes on dilution and our share repurchase strategy. Our 2023 share forecast includes the net impact of share repurchases and the anticipated dilution throughout 2023. You will find the dynamics of the convertible notes illustrated in our investor presentation.

我們繼續評估與可轉換票據相關的選擇，以及可轉換票據對稀釋的影響和我們的股票回購策略。我們的 2023 年股票預測包括股票回購的淨影響和 2023 年全年的預期稀釋。您將在我們的投資者演示中找到可轉換票據的動態。

We exited Q3 with debt of $324 million outstanding under our ABL compared to $438 million outstanding as of Q3 2022. This reduction in our debt balance is after spending $217 million on share repurchases in the first 9 months of 2023 and also includes the acquisition of Amdaris in Q3, and is indicative of the strong cash flow in our business.

第三季結束時，我們的ABL 項下的未償債務為3.24 億美元，而截至2022 年第三季度，我們的未償債務為4.38 億美元。債務餘額的減少是在2023 年前9個月花費2.17 億美元進行股票回購之後，還包括收購Amdaris第三季度，顯示我們業務的現金流強勁。

As of the end of Q3, we had approximately $1.5 billion available under our $1.8 billion ABL facility. We have ample capacity to fund our business operations and capital deployment priorities including M&A.

截至第三季末，我們 18 億美元的 ABL 融資中約有 15 億美元可用。我們有足夠的能力為我們的業務營運和資本部署優先事項（包括併購）提供資金。

As Joyce mentioned, in August, we acquired Amdaris, an award-winning software development and digital services company. Amdaris significantly increases our digital and cloud enablement capabilities in EMEA. The impact on adjusted diluted EPS will be negligible in 2023.

正如喬伊斯所提到的，八月份，我們收購了 Amdaris，一家屢獲殊榮的軟體開發和數位服務公司。 Amdaris 顯著增強了我們在 EMEA 地區的數位和雲端支援能力。對 2023 年調整後稀釋每股盈餘的影響可以忽略不計。

Our presentation shows our trailing 12-month performance through Q3 2023 relative to the metrics that we laid out at our Investor Day in October 2022. We believe we're on track to hit these targets by 2027.

我們的演示顯示了我們截至 2023 年第三季的過去 12 個月的業績，相對於我們在 2022 年 10 月投資者日制定的指標。我們相信，我們預計在 2027 年實現這些目標。

We are keeping an eye on the broader market and appreciate that demand and spending patterns are volatile. With 3 quarters under our belt, hardware has started to improve but not at the level we had anticipated. We expect continued strength in software, Cloud and Insight Core Services as well as expanded margins from our pricing and profitability initiatives. Additionally, we believe we will benefit from the operating expense actions we took last quarter.

我們正在密切關注更廣泛的市場，並意識到需求和支出模式的波動性。經過三個季度的努力，硬體已經開始改善，但沒有達到我們預期的水平。我們預計軟體、雲端和 Insight 核心服務將繼續保持強勁，並透過我們的定價和獲利計畫擴大利潤。此外，我們相信我們將從上季採取的營運費用行動中受益。

Given these factors, we're maintaining our adjusted diluted EPS guidance of $9.40 to $9.60, and we recognize this is a wider range than is typical for Q4. This guidance includes gross profit growth in the low single-digit range, interest expense between $45 million and $47 million, and effective tax rate of 25% to 26% for the full year. Capital expenditures of $40 million to $45 million and an average share count for the full year of 34.8 million shares.

考慮到這些因素，我們維持調整後的稀釋後每股收益指引為 9.40 美元至 9.60 美元，並且我們認識到這一範圍比第四季度的典型範圍更大。該指引包括較低個位數的毛利成長、4,500 萬至 4,700 萬美元的利息支出以及 25% 至 26% 的全年有效稅率。資本支出為 4,000 萬至 4,500 萬美元，全年平均股數為 3,480 萬股。

This outlook excludes acquisition-related intangible amortization expense of approximately $34 million, assumes no acquisition-related or severance and restructuring and transformation expenses, and assumes no meaningful change in our debt instruments or a macroeconomic outlook.

這項展望不包括約 3,400 萬美元的收購相關無形攤銷費用，假設沒有收購相關或遣散費以及重組和轉型費用，並假設我們的債務工具或宏觀經濟前景沒有任何有意義的變化。

I will now turn the call back to Joyce.

我現在將把電話轉回給喬伊斯。

Thanks, Glynis. The long-term dynamics of the IT industry are very strong. Digital transformation is here to stay in technologies like Generative AI or accelerants. At Insight, we are staying focused on delivering outcomes our clients value most, leveraging our skills in the fastest-growing areas of the market.

謝謝，格萊尼斯。 IT產業的長期動力非常強勁。數位轉型將停留在生成式人工智慧或加速器等技術領域。在 Insight，我們始終專注於提供客戶最重視的成果，並利用我們在市場成長最快的領域的技能。

To summarize our results this quarter: Insight Core Services gross profit grew 20%; Cloud gross profit grew 17%; adjusted EBITDA margin increased to 5.7%; adjusted diluted earnings per share grew 19%; adjusted ROIC was 16.8%; and trailing 12 months free cash flow as a percentage of adjusted net income was 211%.

總結本季的表現：Insight Core Services 毛利成長 20%；雲毛利潤成長17%；調整後 EBITDA 利潤率增至 5.7%；調整後稀釋每股收益成長19%；調整後的ROIC為16.8%；過去 12 個月的自由現金流佔調整後淨利的百分比為 211%。

Our portfolio of solutions gives us the resiliency to navigate through economic cycles, and we are prepared to capture growth opportunities when spending patterns improve. We have a healthy balance sheet and our business delivers strong cash flow, giving us the capacity to fund our capital allocation priorities. In particular, acquisitions in the fastest-growing segments of the market.

我們的解決方案組合使我們能夠靈活應對經濟週期，並且我們準備在支出模式改善時抓住成長機會。我們擁有健康的資產負債表，我們的業務提供強勁的現金流，使我們有能力為我們的資本配置優先事項提供資金。特別是在成長最快的市場領域進行收購。

In closing, I want to thank our teammates for their commitment to our clients, partners and each other; our clients for trusting Insight to help them with their transformational journeys; our partners for their continued collaboration and support in delivering innovative solutions to our clients.

最後，我要感謝我們的團隊成員對我們的客戶、合作夥伴和彼此的承諾；我們的客戶信任 Insight 來幫助他們完成轉型之旅；感謝我們的合作夥伴在為客戶提供創新解決方案方面的持續合作和支持。

This concludes my comments, and we will now open the line for your questions.

我的評論到此結束，我們現在將開通您的提問熱線。

(Operator Instructions) Our first question comes from the line of Joseph Cardoso with JPMorgan.

（操作員指示）我們的第一個問題來自摩根大通的約瑟夫·卡多佐（Joseph Cardoso）。

So just starting off here, if I'm looking at the full year guide, you moderated the gross profit outlook modestly to the low end of your prior guide. I was just hoping if you could walk us through the big ticket items that are resulting in the incremental pressures impacting the guide versus, let's say, 90 days ago? And then I have a follow-up.

因此，從這裡開始，如果我查看全年指南，您會將毛利前景適度調整至先前指南的低端。我只是希望您能否向我們介紹一下與 90 天前相比，那些導致指南壓力增加的大件物品？然後我有一個後續行動。

Sure, sure. So Joe, thanks for the question. What I would say is that our device -- we're not seeing the improvement in the device segment of the market that we had anticipated. And while that doesn't necessarily drive huge gross margin, it does actually drive some gross profit dollars.

一定一定。喬，謝謝你的提問。我想說的是，我們的設備——我們沒有看到我們預期的設備市場的改善。雖然這並不一定會帶來巨大的毛利率，但它實際上確實會帶來一些毛利。

We continue to see strength in Cloud. We continue to strength in our services GP, but the hardware side of the business is not recovering as we had anticipated and specifically around the device side.

我們繼續看到雲的力量。我們繼續加強我們的服務 GP，但業務的硬體方面並沒有像我們預期的那樣恢復，特別是在設備方面。

To offset that, we have some improvements that we're making with regard to SG&A. We took some [CM] actions last quarter -- actually, this quarter. So we have a little bit of benefit this quarter. We expect to have more benefit in 2023 -- in the fourth quarter, sorry.

為了彌補這一點，我們在銷售、管理和行政費用方面進行了一些改進。上個季度我們採取了一些 [CM] 行動——實際上是本季。所以我們這個季度有一點好處。抱歉，我們預計 2023 年第四季會帶來更多收益。

Got it. And then maybe we could just touch on that part on devices. Can you just give us a little bit more color on the linearity of customer spending through the quarter, particularly as it relates to the improvement that you are seeing devices?

知道了。然後也許我們可以觸及設備上的那部分。您能否給我們更多關於本季度客戶支出線性的信息，特別是因為它與您看到的設備的改進有關？

And then maybe just more broadly, not specific to devices, are you seeing any divergence across your various customer verticals like large enterprise, SMB and public sector from an overall spending behavior standpoint?

然後，也許更廣泛地說，不特定於設備，從整體支出行為的角度來看，您是否發現大型企業、中小企業和公共部門等各種客戶垂直領域之間存在任何差異？

Joe, this is Joyce. Thank you very much for asking. So here's the thing. I mean, first of all, I want to make sure it's notable that the reason we set out on this strategy is because we know that devices are going to be inherently cyclical and that we're seeing a lot of that this year. And still, we've delivered record EPS for the quarter. So just that's kind of a backdrop.

喬，這是喬伊斯。非常感謝您的詢問。所以事情是這樣的。我的意思是，首先，我想確保值得注意的是，我們制定這項策略的原因是因為我們知道設備本質上是週期性的，而今年我們看到了許多這樣的情況。儘管如此，我們本季的每股盈餘仍然創下了紀錄。這就是一個背景。

But then in terms of devices, we have seen some sequential improvement. We expect to see some continued sequential improvements. But instead of seeing growth as we thought at the beginning of the year in Q4, we expect to see that push out a couple -- a quarter or 2 probably to the back half of the year. And we know that, that's pretty consistent with what we're hearing from our partners and what we're seeing in the market.

但在設備方面，我們看到了一些連續的改進。我們預計會看到一些持續的連續改進。但我們預計第四季度會出現成長，而不是像我們年初預期的那樣成長，可能會在下半年出現一兩個季度的成長。我們知道，這與我們從合作夥伴那裡聽到的以及我們在市場上看到的情況非常一致。

From a segment point of view, generally, we see some improvement first in the commercial space, and it takes longer for that to take hold in the enterprise space. Given the dynamics of the device market, we do believe that Windows 11, GenAI requirements, hybrid work requirements will drive refresh cycles. But again, those generally -- we see that sooner in the commercial segment and later in the enterprise segment. Public sector has been strong for us overall, and that's consistent with kind of the amount of money that's in the public sector at the moment.

從細分市場的角度來看，一般來說，我們首先在商業領域看到一些改善，而在企業領域需要更長的時間才能實現這種改善。考慮到裝置市場的動態，我們確實相信 Windows 11、GenAI 需求、混合工作需求將推動更新周期。但同樣，一般來說，我們在商業領域看到這一點較早，在企業領域則較晚。總體而言，公共部門對我們來說一直很強勁，這與目前公共部門的資金數量是一致的。

And just on the linearity piece, we didn't see any differences really throughout the quarter in terms of how July versus September transacted short of the third month of the quarter is always a strong one.

僅就線性而言，我們在整個季度中並沒有看到任何真正的差異，即 7 月與 9 月的交易方式在該季度的第三個月始終表現強勁。

The next question comes from the line of Matt Sheerin with Stifel.

下一個問題來自 Matt Sheerin 和 Stifel 的對話。

Yes. Just related to the hardware sales, I know client devices are part of it but so are infrastructure, products, storage, servers, networking. And I know you've commented that you've had good backlog, particularly on the networking side, but that the expectation where that backlog were to get worked down with improving supply. So could you give us some color on what you're seeing with those products and how that plays out in Q4 and into next year?

是的。就硬體銷售而言，我知道客戶端設備是其中的一部分，但基礎設施、產品、儲存、伺服器、網路也是其中的一部分。我知道您曾評論說，您的積壓情況良好，尤其是在網路方面，但預計隨著供應的改善，積壓情況將會得到緩解。那麼您能否告訴我們您對這些產品的看法以及第四季和明年的情況如何？

So yes, so the infrastructure backlog has largely normalized now. And we are seeing some softening in infrastructure demand. It's really, again, consistent with what we're hearing from our partners. There's a bit of uncertainty just acquisition quotes are taking longer to turn into POs, et cetera, et cetera. However, we still believe the long-term dynamics are very strong. Again, we think GenAI will be an accelerant around infrastructure. And so we're spending a lot of time, it's just the sales cycles are a little longer.

所以是的，所以基礎設施積壓現在已經基本正常化。我們看到基礎設施需求有所疲軟。這確實與我們從合作夥伴那裡聽到的情況一致。存在一些不確定性，只是收購報價需要更長的時間才能變成採購訂單等等。然而，我們仍然相信長期動力非常強勁。我們再次認為 GenAI 將成為基礎設施的促進劑。所以我們花了很多時間，只是銷售週期有點長。

Okay. And you talked about sequential growth in client devices in Q4. Would you expect the infrastructure products to be also up seasonally?

好的。您談到了第四季度客戶端設備的連續成長。您預計基礎設施產品也會季節性上漲嗎？

Well, we have a little bit of a different dynamic because we just flushed a bunch of backlog in Q3. So we would not see the same dynamic there. That's largely driven by backlog.

好吧，我們的情況有些不同，因為我們剛剛在第三季度清理了一堆積壓的訂單。所以我們不會在那裡看到同樣的動態。這主要是由積壓造成的。

Okay. So -- got it. Okay. That's helpful. And as you noted, the free cash flow has been very strong. I know the inventory has been coming down. I imagine because of the client device [slash] and also a better supply. But could you talk about expectations for working capital and inventory going forward?

好的。所以——明白了。好的。這很有幫助。正如您所指出的，自由現金流非常強勁。我知道庫存一直在下降。我想是因為客戶端設備[斜線]以及更好的供應。但您能談談對未來營運資金和庫存的預期嗎？

We would say that our inventory has largely normalized as of right now versus the big buildup that we had back in the quite constrained era. And we would expect that it would stay around this level as we move forward. Our working capital has been great at this stage given that hardware is very soft. It's improving, but it's still very soft.

我們可以說，與我們在相當有限的時代所擁有的大量庫存相比，我們的庫存目前已基本正常化。我們預計隨著我們的前進，它會保持在這個水平附近。鑑於硬體非常軟，我們現階段的營運資金非常充足。它正在改善，但仍然很軟。

We would anticipate that we'd still be in a positive working capital environment, be it hardware or to grow in the kind of low to mid-single digits. It becomes more problematic for us when hardware is growing in the 25 to 30 -- devices in particular in the 25% to 30% range like it did in '21 and '22. So we'd anticipate (inaudible) capital that we have right now.

我們預計我們仍將處於積極的營運資本環境中，無論是硬體還是中低個位數的成長。當硬體數量成長到 25 到 30 時，尤其是在 25% 到 30% 的範圍內，就像 21 世紀和 22 世紀一樣，這對我們來說就變得更加成問題。因此，我們預期現在擁有的（聽不清楚）資本。

Okay. Great. And just lastly, your comments about the pricing and profitability projects that you had in terms of customers and increasing pricing. Could you talk about that? Is that across hardware, across services? How successful has that been?

好的。偉大的。最後，您對客戶和提高定價方面的定價和盈利項目的評論。你能談談這個嗎？是跨硬體、跨服務嗎？這有多成功？

I think it's been very successful as evidenced by the gross margin appreciation that we've seen and the improvement in gross profit on declining revenues. So we have a strategy that is related to hardware trying to think about it that way. In terms of the floors that we -- pricing that we will accept from large customers and approval processes that we put in place with regard to level of gross margin relative to the size of customer, et cetera.

我認為它非常成功，我們看到的毛利率上升以及收入下降後毛利的改善就證明了這一點。因此，我們有一個與硬體相關的策略，試圖以這種方式思考。就我們從大客戶那裡接受的定價以及我們針對相對於客戶規模的毛利率水準所製定的批准流程而言，等等。

And we've also put some floors and ceilings in place around services. That has helped drive that improvement in gross margin, as well as really looking and standardizing our utilization metrics across all of our service practices. So that we are measuring it consistently, and that we can really pinpoint where we need to be focused in terms of utilization.

我們還在服務周圍設置了一些地板和天花板。這有助於推動毛利率的提高，並真正審視和標準化我們所有服務實踐中的利用率指標。這樣我們就可以對其進行一致的測量，並且我們可以真正確定在利用率方面我們需要關注的地方。

And to be fair, we've also leveraged some offshore capability to lower our overall charge-off rate. That has helped for the gross margin as well as services. So it's been a combination of various factors. I would say they're now systemic. They're not one-offs anymore.

公平地說，我們也利用了一些離岸能力來降低我們的整體沖銷率。這對毛利率和服務都有幫助。所以這是多種因素的結合。我想說它們現在是系統性的。他們不再是一次性的了。

Okay. And there have been no share issues or share loss issues because of that in terms of competitive landscape?

好的。就競爭格局而言，沒有因此而出現股份問題或股份損失問題？

I would say, if you look at our results relative to our largest reseller competitor out there, as I'm talking about it from a hardware, from a kind of client segment perspective, we definitely held our own. We've definitely held our own.

我想說，如果你看看我們相對於我們最大的經銷商競爭對手的結果，正如我從硬體、從客戶群的角度談論它一樣，我們絕對擁有自己的優勢。我們肯定已經堅持住了。

The next question comes from the line of Anthony Lebiedzinski with Sidoti.

下一個問題來自 Anthony Lebiedzinski 和 Sidoti 的對話。

This is [Stefan Gum] on for Anthony Lebiedzinski. My first question is, can you talk about the performance during the quarter for your different client groups, such as large enterprise, public sector and SMB?

我是 [Stefan Gum] 為 Anthony Lebiedzinski 主持。我的第一個問題是，您能談談本季不同客戶群（例如大型企業、公共部門和中小企業）的表現嗎？

Yes. So I think we've published all these. It's in the documents, but happy to talk about it. I think the most challenged segments for the quarter were -- or the -- is the enterprise business overall. Commercial was also pretty challenged, I would say. Public sector was strong.

是的。所以我認為我們已經發布了所有這些。它在文檔中，但很高興談論它。我認為本季面臨最大挑戰的領域是整體企業業務。我想說，商業也面臨很大的挑戰。公共部門表現強勁。

Yes, and growth.

是的，還有成長。

Yes. So I think we're happy with that because we think that's pretty consistent with the market.

是的。所以我認為我們對此感到滿意，因為我們認為這與市場非常一致。

Yes. So the public sector grew low single digits and this maybe mid -- low to mid-teen digit. And the enterprise, corporate and commercial segments were down in the double digit. Maybe teens area.

是的。因此，公共部門的成長幅度較低，可能是中低至中雙位數。企業、企業和商業部門均出現兩位數下降。也許是青少年區。

Yes, commercial was down the most.

是的，商業廣告跌幅最大。

And do you think we are at the bottom for demand for devices? Or if not, when do you expect to show positive results for devices?

您認為我們對設備的需求是否處於底層？或者，如果沒有，您預計什麼時候能在設備上顯示出正面的結果？

So we said last quarter, we thought we're at the bottom of the device market. We believe that, that was true. We saw some sequential growth that we expect to continue, largely because the compares also get a lot easier.

所以我們上個季度說過，我們認為我們處於設備市場的底層。我們相信，那是真的。我們看到了一些我們預計會持續的連續成長，主要是因為比較也變得容易得多。

The next question comes from the line of Jake Norrison with Raymond James.

下一個問題來自傑克·諾里森和雷蒙德·詹姆斯的台詞。

I'm hoping you guys could touch on the performance geographically a little more. Maybe touch on what you saw out of EMEA relative to expectations? And maybe just the overall macro environment there relative to Americas.

我希望你們能多談論地理上的表演。也許可以談談您在歐洲、中東和非洲地區看到的相對於預期的情況？也許只是相對於美洲的整體宏觀環境。

Okay. So EMEA business delivered to our expectations. I would say that maybe the mix of business was a little bit different. I think that the outlook for the EMEA region for Q4 as well as going into 2024 is likely is softer than it is anticipated to be for North America.

好的。因此，歐洲、中東和非洲業務達到了我們的預期。我想說也許業務組合有點不同。我認為歐洲、中東和非洲地區第四季以及進入 2024 年的前景可能比北美地區的預期更為疲軟。

We did do an Amdaris, the Amdaris acquisition in EMEA. So as we look into 2024, we would see some growth coming through from that. And by the time you add interest expense is not necessarily material to total Insight results, but you will see kind of improvement in services gross margin associated with that acquisition.

我們確實在歐洲、中東和非洲地區進行了 Amdaris 收購。因此，當我們展望 2024 年時，我們會看到一些成長。當您添加利息費用時，不一定會對 Insight 的整體結果產生重大影響，但您會看到與該收購相關的服務毛利率有所改善。

And we think that, that acquisition will also help with regard to data and cloud-related sales that drive combined good services business outcomes for our clients. So we think that the acquisition should be very beneficial to EMEA as we go into 2024, especially in light of a softer economic environment that's forecast in EMEA for next year.

我們認為，此次收購也將有助於數據和雲端相關銷售，從而為我們的客戶帶來全面良好的服務業務成果。因此，我們認為，隨著 2024 年的到來，此次收購應該對歐洲、中東和非洲地區非常有利，特別是考慮到歐洲、中東和非洲地區預計明年的經濟環境將更加疲軟。

Perfect. And then on the topic of M&A, can you just please opine on your sort of M&A outlook or what you're thinking about for fiscal '24 just after coming off the Amdaris acquisition?

完美的。然後，關於併購主題，您能否談談您的併購前景，或者您在完成 Amdaris 收購後對 24 財年的想法？

So we've been pretty consistent in talking about focusing on acquisitions that help us improve our capabilities in the fastest-growing areas of the market: cloud, data, AI, edge, cyber. So nothing has changed there.

因此，我們一直在談論專注於收購，以幫助我們提高我們在市場成長最快的領域的能力：雲端、數據、人工智慧、邊緣、網路。所以那裡沒有任何改變。

We're really pleased by the acquisition in EMEA, and we remain very, very focused on looking for other acquisitions that can be -- can offer great capabilities to our clients. So we're still very, very focused on.

我們對歐洲、中東和非洲地區的收購感到非常高興，我們仍然非常非常專注於尋找其他可以為我們的客戶提供強大功能的收購。所以我們仍然非常非常專注。

We also have the capacity, of course, on the balance sheet, I think, like Glynis talked about. So no change in the strategy there. We are also -- we do believe that the transactions and the valuations have come down this year. So it's making it a bit more possible to do things like Amdaris.

當然，我認為，我們在資產負債表上也有能力，就像格萊尼斯談到的那樣。所以那裡的策略沒有改變。我們也確實相信今年的交易和估值有所下降。因此，它讓像 Amdaris 這樣的事情變得更有可能。

The next question comes from the line of Vincent Colicchio with Barrington Research.

下一個問題來自 Barrington Research 的 Vincent Colicchio。

Yes. Joyce, it was mentioned that offshore was levered to boost margins. Will that become an increasing focus for the company going forward?

是的。喬伊斯，有人提到離岸槓桿是為了提高利潤率。這會成為公司未來日益關注的焦點嗎？

Yes. For specific services, Glynis mentioned the work that we're doing to improve the structural profitability of our services business. We're pretty pleased with the work we've done so far there. And as you might remember, we bought Hanu about a year ago, 1.5 years ago, and we have been working to figure out how to leverage those global capabilities in all 3 regions.

是的。對於具體服務，Glynis 提到了我們為提高服務業務的結構性獲利能力所做的工作。我們對迄今為止所做的工作非常滿意。您可能還記得，我們​​大約一年前，即 1.5 年前收購了 Hanu，我們一直在努力找出如何在所有 3 個地區利用這些全球能力。

So for specific offers and specific capabilities, we expect to continue to leverage India. And we expect -- we have been doing that for quite some time, by the way, for our own internal back office primarily in Manila, and now we're doing that both in Manila and in India.

因此，對於特定的產品和特定的能力，我們希望繼續利用印度。順便說一句，我們預計，我們已經為我們自己的內部後台（主要在馬尼拉）這樣做了相當長的一段時間，現在我們在馬尼拉和印度都這樣做。

And I came on the call a little late, you may have mentioned, but the use of AI to improve productivity and programming, is that -- how far off is that in the future? Is there a line of sight to that?

你可能已經提到，我參加電話會議的時間有點晚了，但是使用人工智慧來提高生產力和編程，這在未來還有多遠？有視線嗎？

The future is now, Vince. It's happening now. So we are -- we've been really, really excited about the work that we've done. We launched Insight GPT about -- I want to say, about 6 weeks after Microsoft did the OpenAI announcement in February.

未來就是現在，文斯。現在正在發生。所以我們——我們對我們所做的工作感到非常非常興奮。我想說，在微軟 2 月發布 OpenAI 公告大約 6 週後，我們推出了 Insight GPT。

We've been using internal use cases to help educate our clients on what the opportunities and possibilities are in their environment, and that's driven a lot of interest and a lot of client meetings and a lot of assessments. And that's also driven some very significant opportunities to improve quality of data and data estates for our clients, so they can leverage these analytics capabilities.

我們一直在使用內部用例來幫助我們的客戶了解他們的環境中存在哪些機會和可能性，這激發了他們的極大興趣，並進行了大量的客戶會議和評估。這也為我們的客戶帶來了一些非常重要的機會來提高數據和數據資產的質量，以便他們可以利用這些分析功能。

And also -- and certainly some use case development and application development. So this is absolutely an accelerant, we think, over the long term or medium term, and we're seeing it start now.

當然還有一些用例開發和應用程式開發。因此，我們認為，從長期或中期來看，這絕對是一種促進劑，而且我們現在就看到它開始了。

Yes. I'm curious about its ability to improve programming productivity. Any thoughts on that?

是的。我很好奇它提高程式效率的能力。對此有什麼想法嗎？

Yes. Well, we have -- so the leader of Amdaris gave me a number that is very exciting in terms of software developer productivity improvement. But I mean -- and we're hearing this over and over again from our partners as well. But somewhere in the 100 to 100-plus x improvement in terms of productivity is something that we're aiming for. I wouldn't say we're there yet, but we have seen already significant improvement in productivity in the 20%, 30%, 40% range. Primarily around quality checks, quality auditing and just development time.

是的。嗯，我們已經——所以 Amdaris 的領導者給了我一個在軟體開發人員生產力提高方面非常令人興奮的數字。但我的意思是——我們也從我們的合作夥伴那裡一遍又一遍地聽到這一點。但我們的目標是在生產力方面提高 100 到 100 倍以上。我不敢說我們已經實現了這一點，但我們已經看到生產力已經顯著提高了 20%、30%、40% 的範圍。主要圍繞品質檢查、品質審核和開發時間。

There are no additional questions registered at this time. (Operator Instructions) There are no further questions at this time. We will now conclude the call if the team has any further remarks?

目前沒有登記任何其他問題。 （操作員說明） 目前沒有其他問題。我們現在結束通話，團隊還有什麼進一步的意見嗎？

That concludes today's conference call. Thank you all for your participation. You may now disconnect your lines.

今天的電話會議到此結束。感謝大家的參與。現在您可以斷開線路。